Kent reacts to Labour budget

Businesses in Medway say they might have to lay off staff.  Oliver Leader de Saxe reports.

Transcript

00:00This budget raises taxes by £40 billion.

00:03Businesses reeling, voters divided, the voluntary sector exasperated.

00:09But does Labour's first budget in more than a decade actually mean more cash for Kent?

00:17Well, for the working man and those in need, the budget might bring welcome relief.

00:22Minimum wage has skyrocketed, meaning you could be earning more than a grand extra a year.

00:30But not everyone on Rochester High Street thinks this will pay off.

00:35I think that's good for people on minimum wage, but it's not good for small businesses

00:40because they've obviously got to pay that minimum wage and probably less people will get employed.

00:45I'm happy that it's gone up.

00:48The cost of living rises, it needs to, especially for the younger people trying to get into the play,

00:55finding places to live, the apprentices.

00:56The 16 to 18 year olds, good for them. For people over that limit, I think it's just going to have a knock-on effect

01:05on small coffee shop businesses because they've got to pass that cost on.

01:11The burden for these cost of living measures is on employers.

01:16With national insurance contributions for businesses rising to 15%,

01:23combined with the new minimum wage, there are worries smaller businesses will feel the brunt.

01:30We're looking, you know, £140 to £160 a week extra costs without actually any other way of...

01:40The only way we can actually find that money is to absorb it from our margin, from our own wages,

01:47from being self-employed and such like.

01:49So, yeah, it's a bit of a bummer.

01:51Clearly what's going to happen is all small businesses will just have to tighten their belts,

01:56lay off staff, reduce margin, reduce expectations,

02:01or what we will have to do next year is not take a holiday.

02:03So that'll be it.

02:04And even charities and food banks here in Chatham are fearing for the worst.

02:10As an employer, it's not good.

02:12We're getting hit twice, so we've now got to pay more national insurance contributions

02:16and the minimum wage has gone up.

02:17So we struggle. We're struggling as it is.

02:20So for us to add that additional cost is just madness for us.

02:24You know, we might end up having to make cuts ourselves and there might be job losses.

02:28The government say they have to make difficult decisions to balance the books.

02:33And while this budget will be welcomed by those struggling to make ends meet,

02:38it's clear not everyone here in Kent is a fan of the taxman.

02:44Oliver Leader, the Saks 4 KMTV in Rochester.