The Chancellor must deliver “a much more business-friendly Budget” later this month if the UK is to be set on the path to growth, according to a leading lawyer.
While not spelling out any details, Rachel Reeves’s set-piece speech this week made it clear that tax increases are on the way in an attempt to repair the hole in the UK’s public finances.
It came against the backdrop of an expected downgrade in the Office for Budget Responsibility’s productivity forecasts, leaving the Chancellor with a £20 billion gap in her tax and spending plans.
Richard Swain, head of the Southampton office of national law firm Clarke Willmott and a partner in the corporate team, says the Chancellor’s reference to “necessary choices” means it is inevitable that the Government will look to implement revenue-raising measures in the Budget on 26th November.
But he has cautioned her against implementing any significant or new tax-increasing measures aimed at businesses.
“Activity in terms of people wanting to buy and sell businesses slowed down markedly after the spring Budget, which saw the announcement of an increase in the rate of Employers’ National Insurance contributions,” he says.
“There have been definite signs that things were improving more recently and our pipeline of work pre-Christmas and into 2026 is looking busy, particularly in areas such as healthcare and financial and professional services.
“We would like to see a much more business-friendly Budget this time. Business is the engine room of the economy and it is what will deliver the growth which everyone craves.
“Simply loading extra costs and burdens on business in order to help fill the gap in the public finances will not work because ultimately, the overall tax take will only go down if businesses are adversely affected.
“Ideally, we need to see measures that not only maintain or even reduce the current tax burden on business, but which also incentivise entrepreneurs to look for growth opportunities and to engage in M&A activity.”
Richard Swain says businesses are also concerned about the anticipated raft of new employment legislation.
Among other fundamental changes, the Employment Rights Bill is expected to introduce a “day one” right not to be unfairly dismissed – removing the current two-year service requirement. This could make employers more cautious about taking on new staff.
“While we all applaud the motives of wanting to protect employees, to include those on zero hours contracts, it could prove very damaging for everyone if the net effect of the new legislation is that employers are far less inclined to recruit given how difficult it may become to dismiss underperforming staff.”
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