Colchester businesses and residents react to the UK budget

Chancellor of the Exchequer Rachel Reeves unveiled the UK economy’s budget moving forward today, with the Labour government planning to “restore stability” and begin a “decade of national renewal”.

During the unveiling in the House of Commons, it was announced that minimum wage for adults over 21 will rise to £12.21 an hour from April.

Chancellor of the Exchequer Rachel Reeves holds up her ministerial red box, as she poses for the media outside 11 Downing Street, London, before delivering her Budget in the Houses of Parliament. Picture date: Wednesday October 30, 2024. (Image: Lucy North/ PA Wire)

Firms will pay National Insurance on workers’ earning more than £5,000 from April, which is down from £9,100 currently, with the rate increasing from 13.8 per cent to 15 per cent.

Other highlights include employment allowance - which allows companies to reduce their National Insurance liability – increasing from £5,000 to £10,500, and the cap on single bus fares in England rising from £2 to £3 in January.

Carers allowance will also increase from £81.90 per week to the equivalent of 16 hours at the National Living Wage per week, and a 5p cut to fuel duty on petrol and diesel, which was due to end in April 2025, has been kept for another year.

Some Colchester business owners and residents were satisfied with the budget.

James Keatley, 44, is the co-owner of The Fat Cat pub in Butt Road.

Business owner - James Keatley (Image: Public) He said: “Minimum wage has already been hiked over the last four years which puts more money on the price of a pint by taking 1p off duty we will not see.

“VAT hasn't gone up but the fact inflation has gone up the government will be seeing more VAT revenue.

“The employment allowance threshold is a big help and will help offset the general n.i.c raise, and we welcome that.

“All in all, its not a bad budget, it's the previous hikes in previous years of inflation and minimum wage that is still the challenge we have in front of us”

Karen Morovic, a Senior Associate Solicitor in Birkett Long’s HR and Employment Team, in Sheepen Road, has offered her reaction.

Birkett Long employee - Karen Morovic (Image: Birkett Long) She said: “With employers still digesting the significant increase in workers’ rights proposed in the Employment Rights Bill, the budget did not provide immediate relief for businesses.

“The Chancellor recognised a burden on businesses in her speech, but little was shown in the detail.

“Given that she is now expecting businesses to cover more than half of the tax rises announced in the budget today.

“The obvious question is how will employers adapt to this? Time will tell.”

Kelly Howe is the company director of Move Plus (South East) Limited, an asset management provider for housebuilders in the UK, based in Severalls Business Park.

Office location - Move Plus (South East) at Severalls Business Park (Image: Public) She said: “If times are not hard enough for businesses with rising utilities and overall costs, this is just another blow for all business owners.

“Luckily in our industry, the property market continues to remain quite buoyant, however there are further concerns on how the change of stamp duty for investors could influence this.”

Colchester motorist, Andrea Taylor, 52, has reacted the 5p cut to fuel duty from today’s budget.

Reacted - Andrea Taylor (Image: Newsquest) “I think any cut on fuel is good, it seems we pay so much more thanks other countries and especially in Colchester, where the roads aren’t so good.

“We are having to pay on costs on our own cars to repair damage…. any saving has got to be a good one.”

James Clarke, chief executive of Essex-based charity Action for Family Carers, 57, said he noticed and was glad that the carers were one of the first groups Ms Reeves mentioned.

He said: “It was a pleasant surprise and great news for carers.”

Charity chief executive - James Clarke (Image: Action for Family Carers) Castle Ward Councillor Mark Goacher would have liked to seen “more investment in public transport.

He said: “For transport, it is good there is still a cap on bus travel expenses.

“In terms of bus travel, it would have been nice to see if she raised fuel duty a bit to invest into public transport more than she has done.

“The budget as a whole…the big news is that £25 billion is being raised through employers' National Insurance contributions.

Councillor Mark Goacher (Image: Newsquest) “To be honest, I think what Rachel Reeves has done is a good thing, one of the big taxes has to go up if you want to invest in public services.”

Colchester Council leader David King, while praising the promises to invest in the NHS and public services, was concerned over the assistance given to cash-strapped councils.

He said: “While today’s funding announcements are positive for some, they fall well short of addressing the significant financial pressures faced by local authorities.

“The additional £1.3 billion for local authority budgets will help support some essential services. But it is only around one per cent.  

“And contrasts with the extra budget pressures posed by the 6.7 per cent increase in the living wage and the 1.2 per cent rise in employer national insurance contributions.

“These changes will impact our core staff budgets and add further strain to our already stretched resources.”

 Without a long-term financial settlement from the Government, it is unsustainable to expect us to continue doing more with less.

“We need greater funding certainty through multi-year settlements to drive economic growth, create jobs, and build homes – all achievable with stable, long-term financial plans.”