‘Losing faith’: Just one in four bosses has confidence in government
Just one in four bosses has confidence in the government to deliver economic growth, in a sign firms are “losing faith” in ministers’ strategy.
A London Chamber of Commerce and Industry (LCCI) snap poll found 81 per cent of business leaders said they were not confident the government will address firms’ concerns.
While 77 per cent of the 200 bosses and LCCI members surveyed revealed they were not confident the government will deliver on its commitment to economic growth.
Chief executive Karim Fatehi said: “This snap survey has confirmed our worst fears; the business community views the combined package of increased employer NICs, cuts to business rates relief and the employment rights bill as a serious threat to their operations.
“It also shows that London businesses are fast losing faith in the government’s economic growth strategy.
“Having weathered a cost-of-living crisis, soaring inflation, higher borrowing costs, and trade tensions, businesses need operating conditions conducive to economic growth, rather than measures that curtail their ability to invest in their business, hire new people and train staff.”
Firms and bosses also cited their disappointment with Chancellor Rachel Reeves’ Budget measures, with 78 per cent of businesses of all sizes warning that increased employer national insurance contributions (NICs) would negatively affect their company.
‘Perfect storm’ for bosses
Some 45 per cent of respondents predicted a hiring freeze, while 47 per cent of those polled forecasted lower pay for staff over the coming years.
While 38 per cent of respondents predicted changes in the government’s employment rights bill would mean a hiring freeze, while 16 per cent feared it would lead to redundancies.
More than three quarters of businesses were also concerned the government had not meaningfully engaged with firms over the package of workers’ rights measures, while family businesses expressed concern over inheritance tax (IHT) changes.
Over 20 per cent of family businesses indicated that they were likely to wind up their family businesses instead of passing it on due to the changes in the Budget, the LCCI found.
Fatehi added: “The government has indicated that it is taking tough decisions to help repair public finances.
“Whilst we agree with this sentiment, the policies announced in the Budget and employment rights bill have created a perfect storm for businesses in the capital.
“Curtailing their ability to invest, innovate and drive prosperity across the entire country will result in the government being unable to deliver the long-term growth which it has made a cornerstone of its strategy.”
A government spokesperson said: “This government was elected on a pledge to grow the economy, and the Chancellor’s Budget will fix the foundations, unleash private investment and give British businesses the stability and opportunities they need to thrive.”
They added: “Thanks to our changes, more than half of employers will either see a cut or no change in their national insurance bills, business rates for retail, hospitality and leisure have been permanently cut, and corporation tax has been capped at 25 per cent.
“This is on top of work to tackle barriers to trade and take forward £63bn of private sector investment.”