Many West Midlands businesses will cut jobs or even relocate overseas if Chancellor Rachel Reeves’s autumn budget fails to address key economic pain points, new research has found.
This week Reeves refused to rule out further tax increases in order to close a fiscal gap of up to £50bn.
Worryingly for small and medium-sized businesses, she did not signal any intent to reverse the increase to employers’ National Insurance contributions (NIC) that she announced last year.
Jobs cuts and relocating overseas
The BOSS (Business Owners Sentiment Survey) report, which takes in the views of 500 UK business owners with turnovers of £5 million and above, found:
- 56% of respondents would consider moving their business overseas if taxes are increased
- 56% would consider leaving the UK if a wealth tax is introduced
- 52% would relocate overseas if Capital Gains Tax (CGT) rates rise
- 46% say higher CGT would deter them from starting a new business
- 56% are concerned about the Budget’s impact on their business
Staffing plans in the West Midlands are also under pressure:
- 44% of respondents surveyed anticipate a hiring freeze over the next 12 months
- 38% expect to make redundancies
- 46% of businesses surveyed are either making or planning staff reductions due NIC increase announced in October 2024
- 32% of those surveyed have already reduced headcount as a result of the NIC increase
- 28% plan further cuts unless relief measures are introduced in the upcoming Budget
- 18% say they will reduce staff even if the Chancellor announces additional support.
Ambition undimmed despite headwinds
Despite all this, many business owners in the West Midlands are pursuing ambitious plans for growth abroad, with 34% of those surveyed looking to expand into the US within five years and 50% are looking to expand within Europe.
Stephen Drew, regional managing partner at S&W, which commissioned the research, said: “Business owners in the West Midlands are under pressure. Rising employment costs and the threat of increased taxation are forcing many to consider hiring freezes, redundancies and even relocating abroad.
“At the same time, their ambition remains undimmed, with many actively planning international expansion. The Autumn Budget must deliver meaningful change – supporting businesses to retain talent, invest locally and continue driving growth both here and overseas.”
