Labour Faces Uphill Battle to Rebuild Business Confidence After Budget Fallout
LONDON – Labour is facing a critical challenge to restore trust with business leaders following a post-election budget that has sparked widespread concern, according to prominent figures who previously backed the party. The shift in sentiment comes after Labour campaigned as “the natural party of business” and pledged to be “the most pro-business government this country has ever seen,” attracting support from high-profile individuals like billionaire John Caudwell, a former conservative donor.
Prior to the July election, Labour actively courted the business community, receiving endorsements from over 120 business leaders who stated the party had “shown it has changed and wants to work with business to achieve the UK’s full economic potential.” However, the subsequent budget, featuring a £25 billion increase in employers’ National Insurance, has prompted a “desperate loss of faith” from many in the sector, according to Caudwell.
“I think people were shocked at the level of negative components for businesses,” Caudwell stated.The budget also included a 6.7% increase to the National Living Wage, and a 16% rise for workers aged 18 to 20.
While acknowledging the need to strengthen public finances, Caudwell argued that certain aspects of the budget were “very unfair,” disproportionately impacting businesses employing large numbers of low-wage workers who faced the combined burden of increased wage costs and National Insurance contributions. The party’s ability to address these concerns will be crucial as it seeks to maintain and expand its relationships within the business community.
