Dorset business leaders react to Labour's autumn budget

Chancellor Rachel Reeves told parliament on Wednesday afternoon, October 30, that Labour’s first budget in 14 years will raise £40bn over the next year. 

Her plans will see the tax burden reach an historic high, while borrowing increases by an average £32.3 billion a year as spending increases by around £70 billion annually over the next five years. 

Ian Girling, Dorset Chamber chief executive, said many businesses across the county “will have concerns” about the budget. 

Ms Reeves has raised the employment allowance from £5,000 to £10,500, which she said means “865,000 employers won’t pay any national insurance at all next year, and over one million will pay the same or less as they did previously”. 

Ian Girling

Mr Girling said this serves as “some comfort” for small businesses but warned it is “highly likely this will impact on recruitment, which will have a knock-on effect in terms of future business growth”. 

Dorset-based Coles Miller Solicitors managing partner Neil Andrews added this “overlooks their essential role as engines of job creation and economic growth”. 

He added: “Businesses can (and may) relocate, restructure or shut down due to rising costs. They’ll need to keep their advisers close as they react to changes in an increasingly regulated environment. 

“Changes to employer’s NI and capital gains tax won’t be felt immediately by the average person – but these rising business costs will eventually be passed on to consumers." 

Coles Miller Solicitors managing partner Neil Andrews (Image: PR)

Nigel Smith, managing partner of Dorset law firm Ellis Jones Solicitors, added: “If this was meant to be a no tax increase budget, I’d hate to see one when the Chancellor was really trying.” 

He added: “The increase in employer National Insurance contributions will have an inevitable impact on many of the 27 million working people in the private sector. 

“It will have unintended consequences, including pressure on wages, increased prices and in the worst case scenario it could lead to some businesses to fail.” 

Not Just Travel directors (Image: PR)

Ms Reeves also told the Commons: “Air passenger duty has not kept up with inflation in recent years so we are introducing an adjustment, meaning an increase of no more than £2 for an economy class short-haul flight.” 

Steve Witt, co-founder of Bournemouth-based travel company Not Just Travel, said: "There is already a lot of tax on travel so we're grateful it wasn't increased further. Would we rather it didn't happen? Of course. 

"However, we appreciate that the government has to fund investment, and so a fair and proportionate amount won't significantly impact anyone's travel plans."