Business leaders in Devon have expressed concerns about employment costs ahead of the government’s Budget announcement scheduled for Wednesday, with several indicating they are postponing expansion plans until the fiscal event occurs.
A publisher from Tavistock said he is deferring the filling of two open positions at his company due to the financial burden of hiring. The concerns stem from National Insurance contribution increases that took effect in 2025 and rises in the National Minimum Wage, which businesses have reported struggling with over the past two years. Representatives from various sectors, including hospitality, maintenance services, and human resources, gathered at the Devon Business Show hosted by Devon Chamber of Commerce to voice their concerns to policymakers.
Employers called for the government to reduce the costs associated with hiring staff. A representative from a Plymouth-based HR firm emphasized that small businesses form the foundation of the economy and requested tax relief measures. The hospitality sector specifically campaigned for a reduction in VAT from 20% to 10%, arguing that lower taxes would enable businesses to pass savings to customers, potentially increasing consumer spending and ultimately benefiting government revenues.
Charity organizations also reported feeling the economic strain, with reduced fundraising capability affecting their ability to support families. Chancellor John Healey has indicated that tax decisions will be addressed during the Budget but has not ruled out future increases, citing elevated government borrowing costs.
The government stated it remains committed to supporting business growth, pointing to existing measures including business rates cuts, a cap on corporation tax, £4.3 billion in bill rise support, and National Insurance relief for employers hiring workers under 21 and apprentices under 25. Devon Chamber of Commerce leadership expressed hope for measured Budget decisions that would allow regional businesses to expand.
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