This government has, from its first election, relied on businesses for support at the polls – backing it and the country’s economy through one of the worst ever recessions.
However, we saw little reward in the Summer Budget – the insurance premium tax rise seems to me unjust and unwise, and the apprenticeship levy is another to hit businesses.
Despite our constant struggles as SME leaders, and my general objections to government interference with businesses, I was a supporter of the rises to the minimum wage this autumn. However, I am not a supporter of the spring ones Osborne has landed on us – a move to placate the unrest sweeping the country.
Another rise within six months is too heavy an enforced penalty for many business to pay. It’s easy for the white collar office wallahs and the professionals to applaud in theory – but only certain sectors, such as retail, manufacturing and hospitality in particular, will be hit hard.
It saddens me to hear so many people ignore the obvious outcome of such hard rises. They will not be delivering better quality of living, but will result in prices going up and money buying less.
It will not close the gap between one person and the next, but simply push wages up across the board. It will inevitably result in more hardship, more unemployment and more expectation of people having to work harder for the same money.
With 54 per cent of employers are expected to be affected, and most are quoted as saying that they hope to re-coup the costs through improved efficiency and productivity. However, the reality is that we have all been working on these measures for several years to get us through the recession. Most of us have little more to cut.
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I noted the British success story that is Poundland being quoted as saying that the majority of its employees would be affected, and it will add £4m to costs during the first year. This means the business will be saving by reducing electricity costs and “trialling a hybrid self-checkout”.
Read and learn Osborne, and indeed those proponents of the rise. What is being said is the money has to come from somewhere so people will be replaced by technology and jobs will be lost. Some 15 per cent of businesses are honest enough to come right out and say redundancies will be being made. The Office for Budget Responsibility predicts the loss of 60,000 job.
Other business leaders talk about cuts on overtime and bonuses, some say they will shorten hours, and others are looking to swop to cheaper staff who are under 25. With all this, where is the benefit to the man in the street? And all the while the strain on us beleaguered businesses will be huge.
I sincerely hope that we are going to see a really major business rate reform – and that the chancellor doesn’t stop there in the way of help to business. There is a limit to the wonders business can bring out of the bag. We have global unrest, exports in the car industry are already suffering, the threat of the Chinese markets is intensifying and interest rate increases are being threatened.
We are ruddy good – but we have our limits. A lot of give back would be very much appreciated in the Autumn Statement
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