Senior business executives have raised significant concerns with Chancellor Rachel Reeves regarding the challenging economic landscape and the impact of her tax-raising Budget during a private meeting of the British Chambers of Commerce business council.
The quarterly gathering in south London drew 19 high-level representatives from prominent organisations including SSE, NatWest, Heathrow, Drax, DP World, BP and Aviva. The mood was notably pessimistic, with only three executives expressing optimism about economic improvement within the next year.
During the meeting, business leaders highlighted the substantial effects of increased employers’ national insurance contributions on investment and recruitment strategies. The £25 billion rise in contributions, coupled with enhanced workers’ rights and an anticipated £2.7 billion increase in business rates over the next two years, has created significant uncertainty within the corporate sector.
Martha Lane Fox, president of the British Chambers of Commerce, emphasised the harsh reality facing businesses, noting that millions of firms must now navigate increased costs that will inevitably impact investment and recruitment decisions. The ripple effects are expected to influence the broader economy significantly.
The Chancellor defended her budgetary decisions, citing the necessity to restore fiscal stability following a discovered £22 billion deficit in public finances after Labour’s election victory in July. However, concerns are mounting within government circles about the wider implications of these tax increases, particularly their effect on public services, charities, and the childcare sector.
Reeves maintained that her Budget aimed to provide stability and lay foundations for growth, despite acknowledging the difficult decisions involved. The government has pledged to implement reforms and boost investment to stimulate economic recovery, though business leaders remain cautious about the immediate economic outlook.
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