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Businesses worry Budget will increase their problems

John Lavery John Lavery stands in a white uniform with a blue logo that says fish city. He is smiling. Behind him there are three large fish on the wall and a blue certified sustainable seafood sign.John Lavery
John Lavery owner of Fish City in Belfast City Centre believes the budget is a disaster for small businesses

Businesses in Northern Ireland have said they will face fresh pressures following the Labour Party's first Budget in 14 years.

Chancellor Rachel Reeves set out her plans on Wednesday, but one business owner in Belfast said it was "a disaster of a Budget for small businesses".

Many employers will have to make a bigger contribution to National Insurance (NI) covering more of the people they employ and the national living wage will also increase.

Businesses have said say the chances of people getting a job or a pay rise may be hit as a result of the extra financial burden employers face and some could raise prices to cover the cost.

'We have squeezed everywhere that we can'

Reeves told the BBC she hoped the Budget, which includes massive tax increases, would be a one-off.

"This is not the sort of Budget we would want to repeat," she told the BBC's political editor Chris Mason.

"But this is the Budget that is needed to wipe the slate clean and to put our public finances on a firm trajectory."

John Lavery, the owner of Fish City in Belfast city centre said he was worried about the pressures the Budget would put on his business and the measures he would have to take to manage costs.

“It’s been a disaster of a Budget for small businesses, but especially hospitality,” Mr Lavery told BBC News NI.

He said he would need to find an extra £35,000 to meet the requirements of the budget.

“We have squeezed everywhere that we can, I don't know where we’re going to find the additional money,” Mr Lavery said.

He added that he would have to look at other ways to save money such as increasing prices or letting staff go, which he would be “very reluctant” to do.

“It’s with great reluctance I have to look at our labour and maybe have to make some harsh and difficult decisions, which brings me no joy," he said.

“It’s very difficult to see where to make any further savings."

The chancellor's announcement also included a £1.5bn funding package for Stormont.

The funding for next year consists of £1.2bn for day-to-day spending and £270m for infrastructure investment.

Steven is standing in his café. He wears clear glasses and has fair hair and hair on his face. He's wearing a black hoodie. The café has exposed brick walls and brown wooden tables and chairs.
Mr Orr says he might not be able to hire new staff

Steven Orr started his bagel business with his wife, Kirsty, about three years ago during the coronavirus pandemic.

They opened their first permanent store in Belfast city centre a week ago.

Mr Orr said he was worried the announcement could affect his hiring plans.

"For most people in hospitality, employee costs is the biggest cost," he said.

"Rent and electric are big but employee costs are the single biggest cost we pay.

"For a lot of us, we are either going to not hire new people, or try to do more in less time with the people that we have which is always pretty difficult when you're busy anyway."

Mr Orr said that his shop was beside Ulster University and had lots of student employees.

But he said costs were going to go up to hire those staff.

He said he did not think employers should bear the brunt of the need for increased tax revenues.

"For the past few years, everyone has referred to the cost-of-living crisis, but it feels more like the cost-of-business crisis as it's the businesses that have the increased wages, electricity on the commercial side went up so much more than the residential side, every ingredient has gone up," he said.

"Then people complain when you have to put your prices up.

"It's hard - we've only known it to be hard times over the last three years."

'No way for practices to meet the extra costs'

Alan sits on a black chair looking straight on. He is wearing a blue and white striped shirt, his hair is grey.
Alan believes there is a risk the budget will have a negative impact on GP practices

It is not just high street businesses which have said they could face challenges.

Dr Alan Stout, who is a GP and chairman of the British Medical Association (BMA) Northern Ireland Council, said GP surgeries would be negatively affected by the Budget.

“There are two big impacts to GP practices, the national insurance increase and the minimum wage increase, and there is no way for practices to meet the extra costs,” Dr Stout said.

He said practices across the country were already under pressure.

In County Londonderry a GP practice recently announced it would close with more than 2,300 patients being transferred to surgeries in the surrounding area.

Dr Stout said the extra costs were "not viable” and there was a risk more surgeries would have to close.