Tag Archives: Gus Williams

Business, Business Finance, Economy & Jobs News, FInance, Wales

Labour costs loom ahead of new financial year

Businesses feel under pressure to raise their prices due to labour costs, according to Chambers Wales South East, South West and Mid’s first Quarterly Economic Survey of the year.

 

85% of businesses in Wales stated that labour costs, including salaries, pay settlements and contractors, were a key business pressure in the first quarter of the year, with the concern rising from 81% in Q4 of 2024.

 

Increases to the National Minimum Wage (NMW) and Employer National Insurance Contributions (NICs) from 1 April and 6 April respectively are also factoring into businesses’ plans to raise prices of their goods or services by up to 15% to cover costs. 44% of Welsh businesses surveyed shared that they plan to raise prices because of both NMW and NICs, while 10% suggest that they will increase prices because of the National Insurance increase only.

 

More than three quarters of businesses in Wales (76%) revealed that the size of their workforce remained constant in the last three months, with the number attempting to recruit in Q1 falling to 40%, compared to 45% in the previous quarter. More than half of Welsh businesses (58%) expect the size of their workforce to remain constant in the next quarter, while 23% plan to increase their workforce.

 

The Quarterly Economic Survey for Q1 also showcased the successes and confidence of businesses as they began the new calendar year, with 39% experiencing an increase in export sales and bookings, 28% increasing investment plans for plant, machinery, technology and equipment, and 45% predicting that turnover will improve.

 

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said: “In our recent Quarterly Economic Surveys, including this survey for Q1, recurring concerns for businesses centre around labour costs and taxation. As changes are set to come into effect in April, businesses in Wales are having to review their goods and services prices, ongoing costs and recruitment plans.

 

“While there have been glimmers of optimism in exporting and some aspects of investment this quarter, firms will require reassurance and action from government to avoid stagnating and unlock growth. The Office of Budget Responsibility’s revised growth forecasts suggest that economic growth is less certain this year but will be a longer-term achievement.”

Business, Business Advice, Business Finance, Economy & Jobs News, Politics, South Wales

Chambers Wales South East, South West and Mid comments on Spring Statement 2025

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“As expected, there was not much in terms of new announcements in the Chancellor’s Spring Statement today. The OBR forecasts highlight economic concerns already familiar to most businesses in Wales. Inflation concerns have not yet disappeared and there are worries about business and consumer confidence.

“Infrastructure and housing falls within the remit of the Welsh Government and like the rest of the UK, Welsh businesses support the prioritisation of simplifying the planning system but are keen to see the proof of this with spades in the ground. The industrial strategy and increased defence spending we hope will have a positive impact in Wales where the manufacturing and defence industries have a significant presence. Infrastructure investments are proven to boost economic investment, and channelling more spending out of the civil service and directly into infrastructure and increasing the amount of funding available to Wales is also welcome, providing the right projects are chosen.

“It is difficult to see any significant improvement in confidence and investment driving economic growth without capital investment led by the government. The government remains bound by fiscal rules that I would argue ignore the economic impact of borrowing to fund capital investments. Part of the problem has been the lack of any robust return on investment analysis on government spending.

“Consumer confidence remains hamstrung by a two-tier economy. The success of healthcare, welfare, and employment reforms will hang on whether they manage to improve overall employment and wage growth; this will be a big test over the next 12 months. The government has been clear that this is how it expects to be judged in the long term.

“Business owners are facing significant headwinds, the full impact of which we are yet to see. The economy could break out of these headwinds but the government will need to lead the way – just cutting spending will not change much, reform needs to achieve change.

“Global trade remains the government’s other major challenge. At the moment the government is trying to balance its relationship with the US and EU and whether events will force them off the fence one way or another remains to be seen. With domestic demand static, growth may be dependent on how the global trade environment now evolves.”

Business, Business Advice, Business Finance, Economy & Jobs News, Politics

The Budget – key next steps for businesses

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, shares the key next steps for businesses in Wales following the Autumn Budget.

 

National Insurance and National Minimum Wage increases

“Businesses should look at their budget planning for next year and cashflow forecasts. Both of these increases will impact the next round of staff wage increases and the increases to National Minimum Wage don’t just impact those at the bottom, but put upward pressure on those above. Getting this right can take time and require a few rounds of review and revision to get right and ensure all the potential knock on impacts are carefully considered. Businesses will need to consider the impact of these increases to pricing, cashflow and working capital.”

 

Employee Rights Bill

“Although we don’t have fixed dates yet, businesses with staff currently on zero hours contracts may want to include this consideration in their planning for next year and think about the impact of those staff who are able and want to move onto fixed contracts.  Both the tax and National Minimum Wage increases along with the proposed Employee Rights Bill will have impact on future staff planning and recruitment.”

 

Business owners considering selling or retiring

“The increases to Business Asset Disposal start from 5 April 2025, so those business owners already thinking about exiting may wish to consider the impact on their timeline.”

 

Businesses looking to acquire

“As above, the changes in Business Asset Disposal Relief in 2025 may provide an immediate opportunity to look at potential acquisitions you would like to make.”

 

Capital Allowances

“Capital Allowances are set to remain in place as they are. Those businesses who were concerned about certainty can now act and plan with confidence that the rules should remain the same for the foreseeable future.”

 

Inheritance Tax, business property relief and Business Asset Disposal Relief changes

“A common issue we see is business owners leaving it too late to plan effectively for retirement or exit in a way that maximises the value of their business or meets all of their retirement and exit objectives. Achieving this can require several years of planning to align the short-term and long-term business and financial objectives. Ensuring you plan further ahead can help minimise the impact and risks of tax changes.”

 

The government’s growth strategy

“The Budget identified important sectors that the government will be looking to support with specific initiatives. Businesses operating in these sectors may want to keep an eye out for further announcements and engage in any consultations. The Chambers will of course be contributing and help facilitate these. The sectors identified are:

  1. advanced manufacturing
  2. clean energy industries
  3. creative industries
  4. defence
  5. digital and technologies
  6. financial services
  7. life sciences
  8. professional and business services”

 

The industrial strategy can be found on the government’s website.

 

Farmers

“Generational small farmers will feel particularly aggrieved by the changes to agricultural land relief for Inheritance Tax and some intense lobbying will be taking place before these come into effect. Whether that lobbying will have any impact we will wait and see. As with the changes to business property relief, farmers will need to consider their succession planning and seek advice to ensure they have a workable plan in place that meets their objectives.”

Wales-specific impacts

“The increases to funding for the Welsh Government will be rolled into the next Welsh Government budget planning this December. Support for business will be a part of those discussions, and the Chamber will continue to be a voice for members and businesses as a part of the Welsh Government budget planning process.”