The Budget must help business to grow. Business West
15th October 2024
By Ian Mean, Business West Gloucestershire director
It is very easy to criticise the government's new Employment Rights Bill at the first reading of its 145 pages.
I must admit that the companies I have talked to - especially SMEs - are concerned at how these reforms might affect their business.
But I think we must not rush to attack the ideas embodied in the proposed legislation, which we knew were round the corner from Labour's pre-election manifesto.
In my view - from conversations with companies - they are far more concerned about the government's first Budget on October 30.
However, I am not dismissing the views of our own British Chambers of Commerce (BCC), of which Business West is a major player.
The BCC said of the employment reforms: "This is the biggest shake-up of employment law in decades. These are huge changes and businesses must be engaged and supported on them every step of the way."
I agree. But let's also remember that a lot of these reforms do not come into force for two years. There is, therefore, room for pause for thought on some of the more contentious issues that would worry business.
Most decent companies already do a lot of the things in the bill, like flexible working. And most value their staff like never before in a very competitive recruitment environment.
So, our companies are holding back on everything in terms of investment in people and plant, until they see what bombshells are going to be dropped on them in the Budget.
In her first speech, Chancellor Rachel Reeves promised to fix Britain's economic foundations.
But the Institute of Fiscal Studies is now suggesting she will have to raise taxes by as much as £25 billion, with increases in capital gains tax and employer national insurance contributions said to be being considered.
I am no economist. But surely if companies are encouraged to invest and take on more people there is a real tax gain for the Exchequer?
These employment reforms must take second place to the growth of our businesses. Our economy has lots of untapped potential. The Budget must help business to grow - not hinder it.
For more information, go to https://www.businesswest.co.uk/ or call 01275 373 373.
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