We will all be losers in this Budget – but it’s Britain’s businesses that will be hit hardest

From the very rich to the very poor, every part of society is being squeezed by the Government’s fiscal choices. But there’s one group that’s being punished more than most: the small and medium-sized business owners who keep the UK’s economic engine running.

When people talk about businesses being hit, they often imagine large multinationals worried about marginal dents to their balance sheets. The reality couldn’t be further from the truth. The backbone of the British economy is its SMEs – the employers who create jobs, pay taxes, train workers and drive innovation.

Yet they’re the ones being hit hardest by rising National Insurance contributions, a record increase in the minimum wage and now a raft of rumoured tax rises. Add in talk of an “exit tax” to penalise those who leave the UK, and the message is blunt: the Government sees entrepreneurs as a problem to be solved, not partners in growth.

When I started my own business, entrepreneurialism was something to be encouraged. People took real risks – often securing funding against their homes – to build companies that created stable employment and long-term economic benefit. Today, that culture is evaporating.

Why would tomorrow’s entrepreneurs take the leap when the Government keeps making it more unattractive and more uncertain?

Attacking business owners harms both employee and employer. When owners freeze recruitment, scale back investment or simply shut up shop because the numbers no longer stack up, it is workers and their families who suffer – the very people this Government claims it wants to help.

From what we’ve heard so far, this Budget will not resemble a strategic plan; it will be a smorgasbord of ideological changes with little connection to each other.

Effectively a scattergun approach that creates instability for everyone, and if we are all being honest, breaking the Labour manifesto might have been more honest than implementing a patchwork of measures that penalise savers, homeowners, employers and workers simultaneously.

Take the rumoured abolition of Capital Gains Tax relief on death – the so-called “death tax”. It would amount to double taxation on a person’s estate: families would face CGT on assets and then Inheritance Tax too. At one of the most painful moments in their lives, they could be hit with a bill far higher than previous generations ever faced – all on assets purchased using income already taxed during that person’s lifetime.

It’s unfair, disproportionate and deeply insensitive. Or look at the idea of an “exit tax” for those moving abroad. It’s yet another sign the Government views aspiration, mobility and success as threats. Instead of asking why business owners are considering leaving – rising taxes, declining competitiveness, constant policy churn – the answer is simply to penalise them further. The same mindset has contributed to today’s hiring slowdown and rising unemployment.

Even pensions seem to be in the Chancellor’s crosshairs. For decades, people were encouraged to save for retirement and reduce reliance on the state.

Yet at a time of rising unemployment, the Government is pursuing changes that risk punishing those who did exactly what they were told was responsible.

All of this whilst gold-plating state pensions for public servants, making it very clear that private employers continue to be penalised for employing staff. This can only lead to a reduction in employment opportunities.

Britain cannot grow if its entrepreneurs and job creators are treated as a resource to be mined rather than a community to be supported. Businesses aren’t bottomless wells of money. Most owners work extraordinary hours to build something from nothing, creating the very jobs this stagnant economy desperately needs. When costs rise relentlessly – and unpredictably – the consequences ripple through every employee, supplier and customer. We all lose when business confidence collapses.

This Budget could have restored confidence, spurred growth and rebuilt the UK’s competitive edge. Instead, it risks accelerating a brain drain, slowing job creation and deepening uncertainty.

_______________

Vipul Sheth is the MD of accountancy outsourcing specialists Advancetrack.

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us email opinion@lbc.co.uk