Budget 2025: “small tactical wins, but lacking in strategic direction and transformation”

Suffolk Chamber of Commerce has welcomed specific aspects of the Chancellor of the Exchequer’s second Budget, highlighting a number of successes in its lobbying campaigns on behalf of its thousands of members and the wider business community in the county.

In particular, the Chamber applauded the following items in yesterday’s announcements:

Overall business tax burden. No more significant business taxes were announced (although the increase to the Minimum Wage has added to business cost pressures)

Apprenticeship funding. Extension of the age cap for fully funded apprenticeship training for SMEs from under-21s to under-25s

R&D Tax Credits. Launch of a pilot of a new targeted advance assurance offer for firms claiming R&D Tax Relief to improve confidence among SMEs applying for such support

Business Rates reform. Shift from two to five Business Rates Multipliers, resulting in lower multipliers for the smallest firms, with additional reductions for those in the retail, hospitality and leisure sectors

Capital allowances. From January 1st 2026, there will be a 40% allowance to allow businesses to write off more of their upfront investment costs

Agricultural and Business Property Relief for Inheritance Tax. Spouses and partners will no longer be worse off as any unused allowance for the 100% rate of relief will now be transferable between spouses and civil partners

Gambling Tax. The exclusion of the horseracing sector, so important to the west Suffolk economy, from increases in the Gambling Tax

However, Suffolk Chamber expressed concern that in other respects, the Budget was a missed opportunity, particularly at this stage in the Parliament, to introduce more fundamental reforms to boost longer-term business investment and growth plans.

The Chamber highlighted the absence of any business tax reduction programme, including the replacement of Business Rates with a taxation system based on outputs, such as sales or turnover.

Doug Field OBE, chair of Suffolk Chamber’s Economy Group and director at MyBigSky, said: “The general sentiment among businesses in the county is one of relief, as compared to the tax hikes in 2024, businesses have come off relatively unscathed. That said, the impact of the freezing of Income Tax thresholds and other measures will be watch closely as to how deeply that impacts on personal spending decisions.”

Simon Hurren, private client partner at Scrutton Bland, a Suffolk Chamber patron, picked up on the widely anticipated cap on the tax benefits for salary sacrifice pension contributions: “which has been confirmed with a cap of £2,000 applied and any further amounts sacrificed being subject to National Insurance Contribution (NIC). Whilst the Chancellor highlighted this impacting those in financial services who sacrifice their substantial bonuses, it will also be a further cost to employers and will impact those employees looking to do the right thing and save for the future.

“The highest cost is to the basic rate taxpayers who will suffer an 8% NIC cost compared to higher and additional rate taxpayers who will only suffer 2%.”

Mags Humphrey, chair of Suffolk Chamber’s Bank of England Panel and group finance director at Broadwater Mouldings Ltd., expressed concern about the disappointing estimates beyond this year for growth and productivity from the Office for Budget Responsibility.

“This rather gloomy forecast mirrors the evidence we heard from our recent meeting with the Bank. The Chamber believes that sustained and sustainable growth will only pick up when business leaders and entrepreneurs have the liberating confidence that the Government has a clearly articulated plan for the rest of this Parliament.

“Sadly, this was little evidence of such thinking from Rachel Reeves yesterday.”

Suffolk Chamber also reiterated its belief that the most legitimate role of the State – overcoming market failure in investing in major infrastructure projects – to both create supply chain and skills uplift opportunities and boost business confidence should encourage the Government to advance key projects here in Suffolk and the East of England.

John Dugmore, Suffolk Chamber’s chief executive, said: “This must mean the Government revisiting its earlier decisions and giving the go-ahead to major capital projects such as the Ely/Haughley rail junctions and improvements to the A14 in Suffolk, including the Copdock Interchange.”

Paul Simon, head of public affairs at the Chamber, summarised the Budget as being full of “small tactical wins, but lacking in strategic direction and transformation.”