Chancellor Rachel Reeves unveiled the government’s budget plan, outlining spending and taxation strategies for the coming years. The announcement has received a lukewarm welcome from businesses right across Surrey, especially those in the social care and hospitality industries. Other important measures are breaking the two-child benefit cap. They include a freeze on income tax thresholds until 2031 and a new per-mile tax for electric and hybrid vehicles starting in 2028.
Michelle Wilson is a care manager of Home Instead, a domiciliary care agency operating in Epsom and Dorking. She addressed the media detailing how the proposed budget would devastate the social care sector. In her comments, she acknowledged that the large increase in minimum wage is a good thing for workers but said it creates a significant burden for providers.
The immediate effect of raising the minimum wage is a clear benefit to the labor force, Wilson stated. But providers are still reeling from this year’s National Insurance hike. Without fees to match, costs were burdened with inflationary pressures.
Wilson said that this year’s budget would be ‘poisonous’ to independent social care providers. “We see this year’s budget as a bit of a double hit on social care,” she added. “It’s already a very competitive market. The minimum wage increase will compound the challenge to be competitive. In addition to changing how states can use funds, I expect it will pose shortages-related obstacles with recruitment and retention.
By comparison, Martin Groves, the River Cottage landlord of the Hot Blossom flavoured cider pub in Farnham took a more measured approach. He applauded some elements in the budget and criticized others. He says it might have been a lot worse, especially for businesses like his. “There’s some good points and bad points,” Groves stated. “We always expected taxes to go up at some stage to pay for all the various outings that have gone on through Covid, so I’m not completely surprised.”
The budget has landlords worried too Recently, Toronto landlords expressed alarm at the potential effects of the budget on the rental market. Business owner Steve Lane of Robinsons Property warned the budget was bad news for landlords. He noted a real absence of market inventory. Similarly, many individual landlords further down the ownership chain are exiting the market and pulling back on their investments.
The market is already under considerable strain. New punitive taxes on electric vehicles and other onerous hikes could scare away interested investors. Lane explained.
Now, businesses have to adjust to the ramifications of this shocking budget announcement. They have to be savvy about their operational expenditures while pursuing a sense of sustainability amid a grim economic environment.
