Business | Knowledge


THE WORLD IS CHANGING, AND BUSINESSES FEEL IT MOST


AS WE ENTER SPRING, THE CHANCELLOR OF THE EXCHEQUER HAS ANNOUNCED NEW FINANCIAL GUIDELINES


THAT WILL GOVERN HER PARTY’S SPENDING FOR THE NEXT FEW YEARS. DESPITE NO FURTHER RESTRICTIONS ON


BUSINESSES, THE IMPACT OF THE DECISIONS MADE IN THE AUTUMN BUDGET


IS STARTING TO SHOW ITS MARK. AND NOW WITH


THE MINIMUM WAGE AND NATIONAL INSURANCE CONTRIBUTION RISES IN EFFECT, ASSISTANT EDITOR, BENJAMIN AUSTIN, TOOK THE OPPORTUNITY TO


DISCUSS THEIR IMPACT ON THE CONFIDENCE WITHIN THE INDUSTRY.


Turn the clock back to October, and the newly elected Chancellor of the Exchequer has just outlined her party’s goals for the future of the British economy. There were concerns for businesses as plans to increase both the National Minimum Wage and National Insurance Contributions (NIC) were scheduled to be implemented by April 6. Now that day has been and gone, and following a much-anticipated Spring Statement, there isn’t much to ease the pressure Rachel Reeves’ budget brought. She said: “I am proud of what we have delivered in just nine months.


“Restoring stability to our public finances, giving the Bank of England the foundation to cut interest rates three times since the General Election, and increasing the National Living Wage to give three million people a pay rise.


“Now our task is to secure Britain’s future in a world that is changing before our eyes. “A changing world demands a Government that is on the side of working people. Acting in their interest. “Our plan for change is working. Defence spending is


rising. Waiting lists are falling. Wages are up. Interest rates are cut.


“The OBR confirm that our plan to get Britain building will drive growth in our economy and put more money in people’s pockets.”


THE HIT TO BUSINESSES It was announced on October 30, 2024, that Employer


NIC have increased from 13.8% to 15%, as well as the threshold for businesses paying into it for employees has been reduced from £9,100 to £5,000. The minimum wage has also increased from £11.44 to £12.21; with those on the national limit receiving a pay rise worth £1,400 a year. Anyone in full-time employment who is on minimum wage could receive an income boost of £2,500 a year. The Chancellor believes these changes will help the


workforce be ‘on average over £500 a year better off under this government’.


But with benefits supposedly coming to the worker, it has an impact on business, which was felt from the Autumn Budget, so coming into Spring, company executives waited to see if she would stick to her word and impose any more restrictions. In the end, she focused on outlining her plans for the public sector and defence spending. Responding to the Spring Statement, Rain


Newton-Smith, CEO of the Confederation of British Industry (CBI), said: “Firms are already braced for a difficult few months ahead with NICs, and National Living Wage increases. “Weaker growth this year is a serious setback, but not


a surprise given the burden businesses are shouldering after the Budget. “In its current form, the Employment Rights Bill risks imposing a significant regulatory burden on companies with damaging consequences for growth, jobs and investment.”


Rachel Reeves, Chancellor of the Exchequer, addressing parliament


24 | April/May 2025


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