The Independent Business Network (IBN) has delivered a scathing verdict on Chancellor Rachel Reeves’ 2024 budget, describing it as an “anti-growth, anti-wealth” package that disregards the government’s supposed commitment to economic expansion.
While Reeves champions the need to “invest” the IBN argues that her tax policies and burdensome regulations will stifle investment opportunities, increase joblessness, and ultimately make Britain poorer.
Despite expressing cautious approval for some aspects, such as the decision to hold Corporation Tax steady and maintain Enterprise Investment Scheme (EIS) relief, the IBN slammed the Chancellor’s move to increase Employers’ National Insurance Contributions. The organisation calls it a “jobs tax” that will hurt family-run businesses and Small to Medium Enterprises (SMEs) particularly hard, particularly in combination with a substantial hike in the minimum wage. This combination of tax increases and higher wage costs, the IBN claims, could lead to inevitable job losses across the country.
The IBN was similarly critical of the overall economic growth forecast, predicting that the budget’s “statist perspective” and emphasis on government spending will lead the nation into long-term decline. “Growth will be outstripped by inflation year on year,” the IBN warns, arguing that this will leave the public increasingly impoverished and the economy too weak to support robust public services, even as the UK contends with continuous waves of migration.
Although the IBN supports a decision to adjust fiscal rules, permitting borrowing to fund infrastructure investment, it remains sceptical that public spending can act as a genuine substitute for private sector enterprise. “A typically statist perspective,” the IBN remarks, asserting that Reeves’ focus leans heavily towards government-led spending rather than encouraging private enterprise.
The business network also hit out at Reeves’ decision to increase Capital Gains Tax, which it claims will dissuade entrepreneurs and harm pension funds, potentially impacting the housing market as well as reducing stock market activity. The IBN called for more radical reforms to support the nation’s beleaguered high streets, arguing that the lack of changes to business rates leaves shops under considerable strain.
The organisation urged the government to consider restructuring the Treasury, advocating for a split approach with one department handling national accounts and another focusing on economic policy with an emphasis on growth. They insist that reducing the tax burden over the parliamentary term and shrinking the civil service are essential steps for a healthier economy, adding that the Chancellor’s proposed 2% cut to the state “barely scratches the surface” of necessary reductions.
In its closing statement, the IBN called for a renewed focus on private enterprise over public sector expansion, warning that, without robust reforms, Reeves’ policies could continue to undermine Britain’s economic standing.
