Businesses under Budget black cloud - chamber

The government has said the National Insurance rise is necessary to fund public services and fix a "black hole" in public spending plans

Businesses in Shropshire are being squeezed from the aftermath of the Budget with a "black cloud" hanging over employers, according to the latest findings by the Shropshire Chamber of Commerce.

Tax increases, employment rules and rising inflation were impacting business owners, the chamber's quarterly survey revealed.

Nearly three quarters of the firms that responded said they expected to increase prices over the next three months – a rise of 16% on the previous quarter.

The Treasury said it was delivering the stability businesses needed to invest and grow.

Business owners were asked about sales forecasts, international trade, recruitment, training, cashflow, and confidence levels, the chamber said, and one of the biggest concerns was the rise in employer National Insurance contributions next month.

Rosie Beswick, policy analyst for the chamber, said: "It is abundantly clear from the results of this survey that businesses across the county are feeling squeezed from several directions right now.

"The November Budget still hangs over them like a black cloud, and is causing worry for many – 73% said the chancellor's decisions were now having a negative impact on their business.

"Increased taxes such as April's upcoming rise in employer National Insurance are blunting recruitment, and stalling investment. And the introduction of further employment rules is adding to employers' woes."

'Challenging year ahead'

The rate of companies looking to invest in plant and machinery fell by 11%, and there was a 7% fall in employers planning to invest in training in the coming months, the chamber said.

The survey also revealed a fall in both current sales and future orders, and a 5% reduction on companies seeking to take on staff.

Last month a survey of UK employers carried out by the Chartered Institute of Personnel and Development (CIPD) reported companies were planning to cut jobs or recruit fewer people ahead of the National Insurance rises.

Chief executive of the chamber Ruth Ross said: "It is clear that there is a very challenging year ahead for many businesses in the county."