A bulk of British businesses have pointed the blame at Rachel Reeves amid rising fears they will not survive the next five years. Unsustainable costs as a direct result the Chancellor’s tax-raid Budget is the reason lifeblood firms give when quizzed about their short-term future.
The nationwide snapshot is the clearest sign yet that confidence has rapidly ebbed away from once-buoyant firms. The new report, conducted by personalised workwear, uniform and PPE supplier MyWorkwear, polled 114 business leaders and the results reveal a bleak outlook on the eve of a new financial year. It shows 72% of businesses surveyed are actively concerned about the upcoming increase to employers’ National Insurance contributions and increases in minimum wage, set to kick in on April 6, with more than 68% expecting to pass these cost rises onto their customers.
Tellingly, results revealed that nearly half of businesses (44%) answered ‘yes’ when asked whether they had concerns that their business would struggle to survive the next five years because of escalating costs.
More than 60% of respondents indicated they were planning on investing in automation and technology instead of people, echoed by 57% saying they had shelved plans for recruitment and 28% admitting they have made plans for redundancies.
MyWorkwear, a branded workwear provider, is facing increased costs of £100,000.
Co-Managing Director James Worthington said: “We tend to be a pretty good barometer for economic sentiment and the findings of our report strongly echo the feedback we’re hearing from customers that they are struggling, and concern is growing about the future of the UK economy.
“As well as increasing costs from employers’ national insurance contributions and increased minimum wage, the report also noted that inflation rates are a huge concern, as well as a lack of skilled labour.”
Ms Reeves is due to deliver her Spring Statement in the House of Commons tomorrow amid widespread concern at the stuttering economy.
The UK economy shrank unexpectedly by 0.1% in January, according to official figures.
The economy had zero growth between July and September last year before picking up in the final three months of 2024.
The Government has made economic growth a key political priority. However, the Bank of England has slashed its growth forecast for the year ahead.
Last month it said it expected the economy to grow by 0.75% this year, down from its previous estimate of 1.5%.
Mr Worthington added: “The inflation rates we are experiencing ourselves are causing us to look at new commercial activities and new pricing structures to try and find ways to absorb the price hikes that are in addition to our usual standard annual price increase”.
The Office for Budget Responsibility – which oversees the Government’s spending plans and performance – is expected to downgrade its forecasts for the health of the economy over the coming years in a further blow to Labour’s plans.
Meanwhile, millions of households are set to be hit with another wave of bill increases in April, with council tax, broadband, water, energy, and phone contracts all rising.
A new survey by Ocean Finance found that 73% are worried about affording essential bills, while 42% say they have already cut back on heating and food to keep on top of soaring costs. One quarter have avoided checking their bank balance because they are so stressed about looming increases
Consumer money expert Fiona Peake said: “April is shaping up to be an expensive month, with Brits forking out even more to keep the lights on and the WiFi running. These bill increases will come as another financial gut punch to households already stretched to their limits.”
