Survey suggests 'impacts already being felt' ahead of National Insurance rise

Two thirds of business leaders across Somerset say they're worried about this year's financial prospects - up from around half in a previous poll.

The Somerset Chamber of Commerce has given an update on its initial polling of members - which found many are considering pay freezes, job cuts and holding-off on investments.

The poll cites the impact of plans for a National Insurance rate rise from April - a rise of 13.8% to 15% - which the Chancellor and Prime Minister have defended calling it a 'responsible' action for the county's finances

Somerset's Chamber says businesses in the county – both members and non-members – can still take part in its survey 'to provide an accurate and evidenced understanding of the issue so it can lobby at the highest level'.

David Crew, Managing Director of Somerset Chamber, said: “Many businesses across a number of sectors are telling us of their significant concerns about the affordability of the NI increases and the wider impacts this will have on businesses and consumers, who will no doubt feel the pain of these additional costs to business.

“An accurate understanding and informed view is important if we are to lobby on behalf of Somerset businesses as the voice of business, both locally, nationally and through the British Chambers of Commerce at the highest level of Government.

“Businesses completely understand that taxation and investment in public services is vital. But the view of many we talk to is that this was not at all a budget for business but a blunt taxation tool that has been inflicted on employers in what is already a challenging economic climate.”

David added: “I would urge all businesses to complete this survey, whether they are members of the chamber or not.

“It is so important that we have the weight of replies so we can talk about this issue with the utmost authority, credibility and influence.”

"In the recent Budget, the Chancellor also announced that employers will start paying National Insurance on more of an employee’s earnings with the threshold reducing from £9,100 to £5,000. The employment allowance will go up from £5,000 to £10,500.

"Questions in the survey cover the level of concern about the NI increase and impact on monthly wages, business and cash flow.

"All responses will be treated in confidence and the results anonymised before being shared with other organisations."

The survey closes at midday on January 31 and can be found here

Another Survey, the NatWest Growth Tracker, is reporting 'subdued confidence' across South West firms.

Faye Long, Chair of the NatWest South West Regional Board, said: "South West companies ended 2024 on a weaker footing than generally seen throughout the year, but they were optimistic regarding growth prospects in 2025.

"In their view, most of the weakness observed in December stemmed from the Autumn Budget announcement, which caused anxiety among clients and led them to restrict purchases. Local firms reduced output volumes and payroll numbers amid the upcoming increases in employer National Insurance and the minimum wage. Some panellists indicated that their suppliers are already charging more for inputs as a result of future increases in staff costs. A pick-up in cost pressures underpinned a sharper upturn in selling prices at a time when staying competitive is crucial to support sales."