British businesses are grappling with the harsh reality of Labour’s recent budget announcement, as company owners across various sectors reveal the significant impact of Rachel Reeves’s tax measures on their operations.
The hospitality sector appears particularly vulnerable, with Owen Morgan, co-founder of 44 Restaurant Group, describing the budget as “anti-business” and “anti-growth”. His Spanish restaurant chain faces the daunting task of finding £700,000 in savings merely to maintain current operations, leading to inevitable job cuts.
Growth-oriented enterprises are experiencing severe setbacks. Lindi Mngaza’s Birmingham-based Explode Social Media, employing 15 people, has been forced to halt its 2025 expansion plans. The combination of increased National Insurance contributions and wage requirements has created significant uncertainty around future hiring decisions.
The property sector is equally affected, with Malcolm Young, chairman and chief executive of The Wilky Group, indicating a pause in investment plans. His serviced office business, operating for three decades, faces unprecedented challenges with exponential increases in rates, utilities, and employment costs that cannot be recovered through rent adjustments.
Export-focused businesses are not immune to these challenges. Plum Play, a Lincolnshire-based children’s toy manufacturer serving over 60 countries, is shifting its recruitment strategy towards consultants rather than permanent employees. Managing Director Paul Schaffer expresses disappointment in Labour’s approach, noting that the company must prioritise automation and technology investments over workforce expansion.
The sentiment among small and medium-sized enterprises (SMEs) is particularly concerning. Matt Hopkins, founder of IND!E Pop Up, representing over 17,000 SMEs, criticises policymakers for being “disconnected from the daily realities of running a small business,” highlighting the growing divide between government policy and business needs.
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