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Yahoo
2 days ago
- Business
- Yahoo
Rachel Reeves only has herself to blame for this recession
Companies were hammered by a steep rise in employment taxes. Business rates went up sharply as reliefs were wound down. The living wage was pushed up, and stamp duty breaks were slashed. Against that dismal backdrop, it is probably a miracle that the GDP figures for April published today recorded only a 0.3 per cent month-on-month decline in output. The Chancellor Rachel Reeves will shamelessly try to blame that on the tariff war started by president Trump. But the blunt truth is this. The unfolding recession was entirely predictable – and she has only herself to blame. April was always going to be a tough month for anyone struggling to run a business in the UK. Employer National Insurance went up, and we saw the initial impact of that in the annual loss of 274,000 jobs in the employment data reported earlier this week. Likewise, one of the biggest rises in the living wage was imposed, and we saw the effect of that in declining hours worked in sectors such as shops and restaurants, which need lots of modestly paid staff. Business rates went up sharply, as reliefs were wound down, with many pubs facing an extra £12,000 or more in the amount that they have to pay to the local council, and closures are now running at 100 a month. Stamp duty went up as reliefs were phased out, and we have already seen the consequences of that in the 0.4 per cent decline in home prices reported by Halifax last week. In the background, industrial electricity prices have remained by far the highest in the world, forcing factories to close their doors. One by one Reeves has taken the major sectors of the British economy – property, hospitality, retailing and manufacturing – and whacked them with huge extra charges. Sure, it didn't help that the US imposed tariffs on the UK along with its other major trading partners. And yet, in reality, the sharp fall in output witnessed in April was entirely self-imposed. It took an extraordinary level of incompetence, and a breath-taking level of arrogance, to sequence such a punishing round of tax increases so that they all kicked in at the same time. It is not as if Reeves was not warned of the devastating impact of her tax rises on businesses. The M&S boss Stuart Machin called for the NI rise to be phased in back in February but was ignored. The British Beer and Pub Association called for help with business rates, but no one at the Treasury paid any attention. Rightmove called for stamp duty relief to be extended, and so did many other estate agents, but the Government didn't listen. The list goes on and on. Time and time again, businesses have told the Chancellor that her policies are killing their trade, only to be ignored. As it has turned out, however, they were completely right, and today's GDP figures have proved that. It is going to get much worse over the next few months. We have only seen the start of the fall in employment after the NI rise. After all, if your wage bill is out of control, it takes time to slim staff numbers. There are procedures to follow before you dismiss someone, and most small companies will rely on natural wastage, and simply not replace people, instead of risking the cost of an employment tribunal. Stamp duty has only just gone up, and it will take buyers a while to figure out they can no longer afford to move. Meanwhile, retail sales are falling again, and the inevitability of more tax rises on business in the autumn is deterring investment. Reeves chose to ignore the warnings that her tax raids would crash the economy. She will now have to reap the consequences of those decisions – and unfortunately so will the rest of us. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Daily Mail
23-04-2025
- Business
- Daily Mail
UK private sector output shrinks for the first time since 2023
Private sector output in Britain has shrunk for the first time in around 18 months as US tariff measures have hurt global confidence. The closely-watched S&P Global's latest 'flash' UK composite purchasing managers' index (PMI) fell from 51.5 in March to 48.2 in April, the first decline since October 2023. It represents the lowest reading in nearly two-and-a-half years and is far below the 50.4 anticipated by economists. Any number under 50 indicates a contraction in business activity. The manufacturing PMI plunged from 45.3 the previous month to just 44.0, its worst performance for almost three years, as heightened trade tensions dampened export volumes. Since President Donald Trump returned to office, he has imposed a 10 per cent baseline tariff on all US goods imports and a 25 per cent duty on foreign steel and aluminium products entering the US. He has also slapped a massive 145 per cent levy on most products imported from China and announced - but suspended - 'reciprocal' tariffs on dozens of countries like India and Vietnam. China and Canada have subsequently introduced retaliatory measures, with the former nation implementing a 125 per cent tariff on US goods. S&P Global said the combination of tariff-related uncertainty and worries about the economic outlook has led to a 'wait-and-see approach to major spending decisions among clients.' Consequently, new work gained by British private sector companies dropped for the fifth consecutive month and from abroad at the fastest pace since the Covid-19 pandemic in May 2020. Chancellor Rachel Reeves declared last October that Employer National Insurance contributions would go up in April from 13.8 per cent on annual salaries above £9,100 to 15 per cent on wages exceeding £5,000. This was preceded a few days earlier by a 6.7 per cent hike in the National Living Wage to £12.21 per hour and the National Minimum Wage for 18-20-year-olds soaring by 16.3 per cent to £10 per hour. Many major UK firms have warned that the changes will force them to slash jobs, limit wage growth, or slow new hires. The S&P claimed staffing levels decreased for the seventh successive month in April, with cuts observed in both the service and manufacturing sectors. Chris Williamson, chief business economist at S&P Global Market Intelligence, said: 'While recent months have been characterised by UK businesses treading water, broadly stagnating since last autumn's Budget, businesses are reporting more of a struggle to keep their heads above water in April.' Williamson added that subdued output and confidence levels will pressure the Bank of England to reduce interest rates in May.
Telegraph
22-04-2025
- Business
- Telegraph
Reeves's ruinous Budget is now driving female-led firms to the wall
An unmistakable theme has recently revealed itself in my casework. Countless female business owners have been getting in touch for the first time, in a state of distress. I have been an MP for seven years. Let me tell you, these are the type of people who never email. They are busy juggling businesses and family with exhausted determination, avoiding politics if they can. Capable, unfussy, utterly reliable. The kinds who keep shows on roads – now reluctantly turning to their MP for help. The numbers had been crunched, and a fear of the new financial year had begun to set in. These women's businesses, built on years of graft and grit, were about to be hammered by Labour. One woman running a small after-school club for two decades has seen her Employer National Insurance Contributions leap from £10,851 to over £26,000. A nursery provider is now facing £30,000 in extra payroll costs every month, thanks to minimum wage hikes and National Insurance changes. A hair salon has seen its business rates rocket from £7,500 to over £18,000. The owner asked, 'How much money does the Government think we make?!' The October Budget was deeply pernicious. Due to the lowering of employer national insurance thresholds, the jobs tax is hitting hardest sectors where profit margins are tight, where staff are often part-time, and where wages make up the lion's share of costs. Since women often run people-facing services that employ small platoons of female staff – care homes, nurseries, salons, after-school clubs – they are especially vulnerable to Labour's tax changes. On top of that come other sector-specific issues. Many high street salons saw continued business rates relief – now cut – as a lifeline. They also face a challenge with the VAT regime. A salon that employs its staff directly is pulled into VAT, which cannot be reclaimed on the biggest cost it faces: wages. Yet those operating entirely with self-employed stylists can often sidestep VAT. Two businesses that appear identical to a customer operate under completely different tax burdens. The looming Employment Rights Bill is encouraging more salons down the self-employed avenue, ironically giving stylists fewer rights. And while salons that are not PAYE-registered cannot take on apprentices, those which are now cannot afford to keep them. It is not just happening in hair and beauty. Construction firms – a vital route for young people entering the workforce – are shedding apprentices rapidly. Two traditional routes into skilled employment for working-class girls and boys are quietly collapsing under the weight of bad policy. Is this the future Labour promised? A generation of working people priced out of trades? As small firms shut up shop, they are leaving empty units behind on our high streets. Those spaces are too often being filled by businesses that skirt the rules; shadow operations exploiting workers and avoiding tax. Legitimate, tax-paying firms simply cannot compete as dodgy barbers, nail salons and vape shops fill the void. Customers lose high quality services they rely on and the skilled people who give a town soul and identity. The Chancellor's Budget is also colliding disastrously with the Education Secretary's childcare reforms. Private nurseries, overwhelmingly run by women, have effectively seen a cap placed on the fees they can charge parents, while the Government's own funding for so-called 'free' hours fails to cover their costs. Meanwhile the state is opening rival provision in schools, which will likely fail to offer the vital non-termtime care many working parents need. The childcare scaffolding that supports mums in returning to work is being kicked away. What is happening in early years mirrors the chaos being wreaked by Labour's introduction of VAT on school fees. As Government destroys business, the pot shrinks to fund new state nurseries and school places for those pushed out of the collapsing private sector. Socialism at work. The women approaching me are not activists. They are not political operators. But they are asking difficult questions. Why is a supposedly pro-worker Government making it harder to employ people? Why should they keep playing by the rules when the system punishes them for doing so? I worry equally for every small businessperson – man or woman – who is fighting to stay afloat. But tomorrow, I will lead a parliamentary debate focused on the hair and beauty industry – where over 80 per cent of the workforce are women, 86 per cent of businesses are female-owned, and 40 per cent of employees work part-time. I find identity politics utterly loathsome. However, I must point out the impact – not just the irony – of a Chancellor celebrating herself for being the first woman to hold that office, while simultaneously hammering the sectors that employ, serve, and are typically led by women.
BBC News
26-02-2025
- Health
- BBC News
Bosham hospice to receive £141k government funding boost
A hospice in West Sussex is to receive a funding boost from the government, but has warned of a "funding gap" due to rising costs in delivering specialist Wilfrid's Hospice in Bosham is to receive £141,670, which will be used to pay for capital costs such as infrastructure, it Howell, chief executive of the hospice, welcomed the funding, but said its running costs were more than £26,000 per for Care, Stephen Kinnock, said it was the "largest investment in a generation". The funding is part of a scheme which will see hospices across England receive the first £25m of a one-off £100m government Howell said: "We are extremely grateful to receive our share of this grant, but we are still left with a funding gap due to the ever-increasing costs of running our specialist services."One cause of those rising costs is the recent increase in Employer National Insurance contributions, which means that the hospice will have to find an extra £240,000 a year, on top of the £9m we need to run our services."She added that demand for palliative and end-of-life care was increasing due the ageing and growing the £26,000 per day running costs, 16% comes from government funding, Ms Howell Kinnock said the funding boost would ensure hospices were able to deliver care in better, modernised facilities."From upgrading patient rooms to improving gardens and outdoor spaces, this funding will make a real difference to people at the end of their lives," he additional £75m will be available from April as part of the scheme, a Department of Health and Social Care spokesperson added.
