Employment engagement experts Love2shop react to Budget 2023

Following the Chancellor’s budget statement this afternoon, Frank Creighton, Director of Business Development at Love2shop, said: 

Unfortunately, I anticipate the Chancellor’s rise in corporation tax will have a detrimental impact on budgets and the business sector’s appetite to invest. 

Ideally, we wanted to see decisions that would ease the pressures faced by business and households by increasing consumer spending power. For business, that would have meant allowing them to retain more profit in return for commitments to invest in growth and action to increase salaries. 

The CBI has already indicated it is concerned about the negative impact of this tax rise on investment. Meanwhile according to data from the National Institute for Economic and Social Research, the six-point rise is likely to see business investment decrease, with a knock-on effect of households and reducing GDP. 

The Chancellor did introduce some tax relief, which he claimed would reduce the tax burden on business by £9 billion, however that relief was very specifically targeted and many businesses will not see those benefits. 

This budget could have helped business to get more money circulating in the economy by buying in services and increasing wages. This would have helped individuals loosen their purse strings and begin to feel more confident spending, all of which helps the wider economy grow and increases the Chancellor’s tax receipts long-term. 

The potential negative impact of this Corporation Tax increase on salary budgets will make retaining top talent critical. Our Employee Value Report provides insight into how undervalued employees across the UK currently feel about this. It found that about 10 million people – one-third of the UK workforce – are already considering new employment as they feel underappreciated by their current employer.  

The budget statement did include measures to help older workers to return to the workforce. It also offered greater support for working families by investing in childcare and extending free hours to children over 9 months old.   

While these measures will remove barriers to employment for those who want to work, business will still need to attract people to fill existing vacancies. 

That means creating effective employee value strategies that create desirable workplaces and offer meaningful reward and recognition programmes. With the right investment, business can attract new talent that was previously excluded from the market. 

By re-engaging with new and existing employees to show them their contributions are valued and vital for business – and supporting that message with cost-effective rewards and benefits – you can increase staff recruitment and retention rates without stretching budgets.  

Here’s hoping that the removal of the lifetime pension allowance will also encourage more people not to retire early, too.  

This approach will give business the space to plan strategically to grow its way out of the current economic climate more positively. 

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