A snap poll among over 700 members of the Institute of Directors reveals that 67% of business leaders hold a negative view of the Autumn Budget, with many questioning whether it truly supports the government’s growth objectives. Here, we break down the responses from industry leaders, trade bodies, and public figures, capturing their key reactions to the budget’s strengths and shortcomings.
What did Membership Bodies Have to Say?
The National Union of Students (NUS) welcomed the government’s allocation of an additional £300 million for further education institutions, recognising it as a step toward improving educational resources for colleges and sixth forms. Despite this, the National Society of Apprentices voiced concerns about the limited increase in apprentice wages, which rose to £7.55 per hour – a significant 18% rise from the prior rate of £6.40. However, this figure is still only two-thirds of the national minimum wage scheduled for April 2025, underscoring the persisting pay gap for young apprentices.
Annabel May of the National Society of Apprentices remarked, “Young adult workers are still getting a raw deal on pay. Their bills aren’t any cheaper, but they have to make ends meet with less,” pointing to a broader issue of pay equity for younger workers.
The Trades Union Congress (TUC) expressed disappointment, characterising the budget as lacking the ambition needed to rebuild Britain’s social and economic fabric. The TUC argued that government spending policies fall short of adequately addressing the economic recovery needs post-pandemic, calling for a more comprehensive investment approach to combat inequality and boost productivity.
Unite, the UK’s leading union, criticised the budget for failing to provide a transformative vision for the UK’s industrial economy. Unite’s response emphasised the need for long-term investments in sustainable industries and worker rights, reflecting concerns that the current budgetary allocations may not be enough to position the UK as a competitive, innovative economy within the G7.
Similarly, Unison highlighted that while the budget shows some commitment to bolstering public services, it lacks the necessary scale to rejuvenate them after years of austerity. Unison labeled the budget a “grown-up budget,” but one that still falls short of fully addressing what it described as “Tory failings” in public sector funding.
Views from Trade Bodies
The British Chambers of Commerce (BCC) described the budget as “tough for business,” focusing on the rise in National Insurance Contributions (NICs) for employers. They cautioned that this increase, alongside other tax hikes, would elevate operational costs for businesses, potentially hindering investment and growth, especially for small and medium-sized enterprises (SMEs).
Similarly, the CBI acknowledged the government’s efforts to stabilize public finances but expressed concern over the hike in employer NICs. They argued that this measure could burden businesses, making it more expensive to hire staff or offer pay raises. The CBI emphasized the necessity of a strong partnership between the government and businesses to unlock the investment required for sustainable economic growth.
Financial Commentary: Transparency and Trade-offs
Financial analyst, Martin Lewis, describes the Autumn 2024 Budget as a “political budget,” balancing public service investment with selective tax increases. He commends the Chancellor’s transparency in announcing a £40 billion tax rise but critiques the strategic decision to shift the National Insurance increase onto employers rather than employees. This move, he notes, may be rooted in a political promise to avoid direct tax hikes on workers, yet it places added pressure on businesses, potentially affecting hiring and wage growth in the long term.
On the topic of pensions, Lewis points out that the widely advertised £470 increase only applies to those receiving the full new state pension, leaving many pensioners with a smaller increase than expected. He also highlights the lack of measures to address winter fuel payment means testing, which could leave vulnerable households without sufficient cost-of-living support. Overall, he sees the budget as prioritising electoral commitments over a fully balanced approach, with businesses and certain groups potentially shouldering a disproportionate share of the burden.
Final Thought
The Autumn 2024 Budget has elicited a spectrum of responses, reflecting the trade-offs inherent in fiscal policy. While increased funding for education and public services is praised, concerns over tax burdens and insufficient support for private sector growth are clear. The government’s challenge lies in balancing fiscal responsibility with the need to foster an environment conducive to sustainable economic growth and social equity.
For more of Chamber UK’s budget analysis, please click here.