'We're trying to get on our feet... how are we going to pay it?'

As the dust settles on Labour's first Budget in more than 14 years, Greater Manchester businesses are getting to grips with what it all means. Chancellor Rachel Reeves reiterated her party's promise not to raise the VAT, national insurance or income tax on 'working people' during her 77-minute speech in the Commons on Wednesday (October 30).

But her first Budget did include overall tax rises of £40 billion - including £25.7 billion through chances to national insurance contributions paid by employers. After turbulent years in the Covid pandemic and the cost of living crisis, many businesses across Greater Manchester are looking ahead with caution.

At Salford Shopping Centre, national chains stand alongside small independent shops and salons, but multiple empty units symbolise the challenge precincts have faced in recent years. As the Manchester Evening News spoke to Nick Puri, manager at the Redd clothes store, there were no customers inside the shop.

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"This is normal - it's not very busy," he said. "It's up and down, one day to the next. It's a struggle, a challenging time. People are looking for cheap prices, good prices, sales."

Many shoppers have been forced to tighten their belts in the last few years, forcing them to change their habits. It's a situation which played a large part in voters switching to Labour in the general election earlier this year, and a key challenge for the government to fix over the next few years.

La'Bella Aesthetic, Hair and Beauty has been open at Salford Shopping Centre for three weeks. Owner Wendy Ehis says trade has been quiet so far - and she is concerned the Budget's measures could tip the balance away from her favour.

"We're still new around here," she said. "We're trying to get on our feet. Obviously [the Budget] is going to affect us. If business is slow, how are we going to pay it? People are going to be out of business, they are going to be out of a job."

Wendy wants to see entrepreneurs like her benefit from grants, rather than face extra cost pressures. "The best way is to empower small businesses," she added. "Help us to grow so that we are able to employ people. I'm very worried about it yeah."

The Budget confirmed that employers' national insurance contributions will rise by 1.2 per cent from April 2025, to 15 per cent. Meanwhile, the secondary threshold - the level at which employers start paying national insurance on each employee’s salary - will be cut from £9,100 per year to £5,000.

The national minimum wage will also go up in April. However, the Employment Allowance will double from £5,000 to £10,000. That will benefit smaller employers, including 865,000 across the country which will not pay any national insurance contributions, while more than one million will pay the same or less than before once the change comes into effect.

As a result, some of the smallest businesses at Salford Shopping Centre were not as concerned about the Budget. Meanwhile, 40 per cent business rate relief has also been extended for retail, hospitality and leisure, before the government intends to introduce lower business rates from 2026-27.

One family business told the M.E.N. they would be unaffected by the changes. Another shop owner, who asked not to be named, said his business would not be affected as much as others - although he could understand why the new government had taken the choices it had.

He said: "Every public sector has been on strike in the last two years - NHS, teachers, justice. Then there's the prison service, we're letting people out early because we don't have room for them, it's madness. Schools are crumbling with Raac. What have the Tories been doing?

"The government didn't invest in people for 14 years. That's key. Now everything is under the cosh because there were cuts everywhere."

'You either cut the hours down or cut the jobs'

On the other side of the River Irwell, businesses in Manchester are also coming to terms with what the Budget will mean for them. Hospitality venues are among the most worried, with some in the city fearing an estimated £60,000 hike in costs in the next financial year, the M.E.N. understands.

John Hamilton, owner of BarPop and The Church in the Gay Village, says the measures in Wednesday's Budget are 'hard for small businesses to swallow'. "We knew it was coming but I don't think we knew what the impact would be," he told the M.E.N.

"When they are saying 'it's OK if you've got four employees' [for the Employment Allowance] - what happens when you've got 15, 20, 30 part-timers? You've got to pay all that national insurance.

"Yes the impact is on small businesses, but it's also going to be on the employees. You either cut the hours down or you cut jobs. Where is that money coming from? Hospitality is finding it extremely hard, and this on top of it, is an extra nail in the coffin."

While business picks up at the weekend, John says city centre venues like his are particularly struggling in the middle of the week. He is hoping the Christmas period will improve their fortunes - as well as the certainty that the Budget being delivered could bring, following months of speculation about what it could have included.

John added: "We're hoping the Christmas markets will help, that will bring extra people into the city. We are hoping we don't have a bad winter and we are hoping that - now we know where everybody stands after the budget - that people will start spending again."

What the Chancellor said

Ms Reeves admitted that workers could see lower pay rises as a result of the rise in employers' national insurance contributions. She told the BBC on Wednesday: "I said that it will have consequences. It will mean that businesses will have to absorb some of this through profits and it is likely to mean that wage increases might be slightly less than they otherwise would have been.”

The Office for Budget Responsibility also suggested the measure could lead to the equivalent of around 50,000 average-hour jobs being lost. But the Chancellor insisted the tough decisions she made were necessary.

She told the BBC: "Look, what alternative was there? We had a £22 billion black hole in the public finances.” Ms Reeves insisted ministers had 'protected the smallest businesses' from the tax rise, and had stood firm on Labour’s promise not to raise the key taxes on 'working people'.

“This Budget was to wipe the slate clean after the mismanagement and the cover-up of the previous government,” Ms Reeves told Times Radio. She added: “I had to make big choices. I don’t want to repeat a Budget like this ever again, but it was necessary to get our public finances and our public services on a stable trajectory.”