Budget Shock: How the Autumn Budget Affects Businesses
On October 30th, Chancellor Rachel Reeves presented an Autumn Budget that has left many companies scrambling. They’re sounding alarms about potential job cuts and worrying that profit margins might take a pretty good hit.
CBI Chief Says Businesses Were “Off Guard”
Rain Newton‑Smith, the head of the Confederation of British Industry, called the new measures a surprise. “It caught firms totally off guard,” she said, pointing out that a company’s profits aren’t a bad thing—higher earnings mean you can invest in growth.
- Higher national insurance contributions for employers
- Lowered threshold for when those contributions start
- Rising National Living Wage
- Stakeholders worrying about the new Employment Rights Bill
These changes have piled on a heavy burden that many businesses can’t afford to shoulder.
Growth Depends on Those in the Office
Newton‑Smith reminded the CBI audience that real progress is pulled by decisions made in boardrooms across the UK. “CFOs are asking themselves: Can we afford to invest? Can we afford to expand? Can we afford to take a chance on new talent?”
After the Budget, the answer from many firms is still “not yet.” The new national insurance rules, combined with the lowered threshold, the higher living wage, and potential costs tied to the Employment Rights Bill, leave a lot of hands empty.
Government’s Defense
A government spokesperson defended the Budget as a “once‑in‑Parliament” approach aimed at wiping the slate clean. “We chose tough decisions to fix public finances and strengthen the country’s footing. The alternative was more austerity, more decline, and more instability that would have hurt businesses and employees even more.”
In short, businesses are feeling the pinch, and the path forward hinges on whether they can brave the extra costs and keep the engines of growth turning.
