Chancellor Rachel Reeves announced her new shadow budget today. It was met with furious support and opposition from small business owners and civic leaders throughout the Indy region. Here’s what’s for the first time in the budget — and how they’ll affect millions. It goes beyond raising the minimum wage, committing to lifting the two-child benefit cap – starting in April 2026 – and introducing a long-term freeze on tax thresholds.
Jane Calcott, a director of the Kettering Food Bank On behalf of Food Bank Jane Calcott said they welcomed news of the budget proposal. She noted that removing the two-child benefit cap would “make an enormous difference to large families” and could alleviate some of the pressures faced by food banks. Calcott pointed out that families with three or more kids on average are down £100 a week. The recent loss is a serious blow to their fiscal stability.
On the other-hand small business owners such as Jenni Smith, owner of Duston Village Bakery opposed the raise in minimum wage. She said that her alternative would be “to increase the rates” to offset increased costs of labor. Additionally, Smith opened up about her own struggles. She no longer makes cakes from scratch because she now has to run her bakery to cut back on labor hours.
“It’s the minimum wage that kills us massively; I’ve got 16 staff for a little small business.” – Jenni Smith
Miranda Richardson, landlady of The Squirrels pub is 100% behind Smith. She’s certain that raising the wages would do a disservice to her hardworking staff. She is irritated by the lack of VAT relief across the hospitality sector. Most importantly, she reiterated the importance of these resources for businesses looking to rebound from the pandemic.
“VAT was huge in hospitality and a reduction for us was a massive thing – and nothing; that’s what we wanted, that’s what we needed.” – Miranda Richardson
For many, like Crown Pub owner Mark Gee from Wellingborough, those frustrations ran deeper. He in recent days called the state of the hospitality sector “a bit of a disaster” after the budget announcement. Gee drove home the point that minimum wage hikes are theoretically beneficial for low-income, young, and seasonal workers. He contended that these increases place an undue burden on small businesses.
“No relief at all on VAT, which kind of kills you really, because anything you do to try and make [money], you get taxed on.” – Mark Gee
Holistically, as much as the specifics of MMC were welcomed, Martin Mason stressed a need for more support to be channeled toward British manufacturing in general. He praised the introduction of free, quality apprenticeships for under-25s. He complained that the budget did not do enough to protect home grown industry. Mason had not forgotten the many challenges that came with COVID-19 and Brexit. He worries that these hurdles have hampered the healing of local businesses.
“Anything to support British manufacturing has got to be a bonus, but it didn’t seem there was an awful lot there for business.” – Martin Mason
At the same time, Mike Carson, a 59-year-old long-time automotive industry worker, expressed his frustration at recent budgets. He described being “punished” by the current economy and government actions. Carson noted that his ambition to retire at the end of this year will now have to be postponed due to these budget changes.
“My ambition was to retire at the end of this year, but that’s going to have to be delayed, not just because of changes to the budget, but they are a big contributing factor.” – Mike Carson
The Chancellor’s decision to tax big and spend big has clearly sparked a range of responses from those affected by these fiscal measures. Supporters claim families and youth stand to gain under the plan with larger child allowances and access to free apprenticeships. Small business owners across the country are concerned that increasing costs will prevent them from succeeding.