The budget, which Reeves has branded as a sober attempt to “restore economic stability” through “fixing the foundations” of the British economy, was in large part aimed at redressing the UK government debt and investing in key areas of the economy.

Thanks to Labour’s pledge to only borrow in order to invest, and its guarantee to voters that it would not raise taxes on ‘working people’, the budget has instead seen Reeves increase tax on business, wealth, private schools, and tighten belts across several governmental departments.

While there was surprise at the extent of the £40bn tax hike, which followed months of discussion over the alleged £22bn ‘black hole’ left in government finances by successive Conservative governments, the measures have been met with little enthusiasm from print and packaging bosses.

Key among the measures is a 1.2 percentage point rise in National Insurance (NI) contributions from business, to 15% overall, from April 2025 while reducing the threshold for contributions from £9,100 to £5,000.

This alone is predicted to raise £25bn a year by the end of parliament.

The UK’s smallest businesses will see a reprieve, with the employment allowance – the amount of NI waived for small enterprises – rising to £10,500 from £5,000.

Other initiatives include a rise in the minimum wage (National Living Wage) to £12.21, an inflation-busting raise of 6.7%, and the increase in capital gains tax (CGT) on the sale of assets from 10% to 18% at the lower rate, and 18% to 24% at the higher rate.

One unexpected reprieve in personal taxation was announced with the 2028/29 end to frozen income tax thresholds, an earlier deadline than expected – meaning that workers will have to suffer fewer years of being dragged up into higher tax brackets – assuming, of course, they receive raises.

The tax hike will go to fund an ongoing reduction in the UK’s budget deficit – which Labour aims to slash from £26bn in 2025-26 to £5.2bn by 2026-27, before moving to surplus by 2027 – and will see a £100bn boost in capital investment over the next five years in transport, housing, research and development, and targeted investment in key sectors. 

Construction was one major beneficiary, with £5bn pledged over 2025-26 to go towards the government’s ambitions to build 1.5m new homes.

The government has likewise promised an additional £22.6bn towards the NHS’ day-to-day spending, alongside capital expenditure in increasing NHS capacity, rebuilding schools and roads, and expanding prisons.

Printweek went out to the industry to gather thoughts and reaction from stakeholders:

Charles Jarrold, chief executive, BPIF: 

“This budget was always going to be tough for business, with the government’s pre-election commitment not to raise taxes on working people combined with the need to raise significant revenue, and it therefore tries to strike a very difficult balance. Unfortunately, as anticipated, much of the burden falls on businesses.  

“There are some positives for the sector, such as the retention of full expensing, the retention of the annual investment allowance, and no increase in headline corporation taxes. On the other hand, the unwelcome news is the increase to Employer NICs and the threshold reduction, will be challenging for many in our industry, and confirmation of another very significant increase in the National Minimum Wage, all of which have really significant cost consequences for hard pressed businesses.

“Combined with the reforms set out in the Employment Rights Bill, the cost of employment could be set to grow. This could have long term impacts on recruitment, pay, employment levels and, ultimately, UK productivity and growth.

“We do welcome the re-commitment to an Industrial Strategy is welcome, albeit more sector based that we would really like. This now needs to pick up speed, set out clear plans and deliver some real growth which will then benefit UK Print.”

Brendan Perring, general manager, IPIA:

“It seemed a measured, calm, and considered budget, given the overall pressures that are on the government.

“Sluggish growth in the aftermath of Covid, and the need to balance the budget off the back of all the money that was spent to save businesses – including in the print industry – has left the government without a huge amount of ‘wiggle room’. That’s certainly our impression from our meetings with the department for business and trade.

“The single biggest ‘pro’ for our industry is the £5bn pledge towards housebuilding investment, which will have a positive knock-on effect for the print industry, both directly through hoardings, graphics, and estate agents’ boards, but also through all the secondary industries that follow the construction market.

“That said, what will be more difficult to bear is the rise in NI. That will put additional pressure on SME printers by effectively increasing their wage bills – though it is positive that it won’t affect the worker. In one sense, Labour has kept its pledge to not directly raise taxes on working people, but employers will now be more circumspect about providing direct wage increases.

“If we look at the wider macroeconomic picture, the government has two choices: they could either borrow and increase the national debt to properly run the NHS and fund the infrastructure and industrial strategy, but the national debt is at a historic high.

“People can take their view on it, but it seems a sensible plan to raise the money rather than extend the national debt further – but that is a longer term view, and in future budgets we would want to see the government outline how they’re going to invest in foundational industries, like print, in the UK.

Billy Hutchinson, managing director, Lesters Packaging:

“The budget is a car crash. [The NI raise] only pushes us further towards automation and robotics, and encourages employers to reduce head counts.

“For us as an entrepreneurial business that looks to invest heavily and grow – we’re having obstacles thrown in our way by Labour that we wouldn’t have had with the Conservatives. To my mind, it’s just going to slow down the economy, give people uncertainty, make lending an issue, and I just think overall it’s not a good situation.

“[The tax rises] are going to be counterproductive to what they’re trying to achieve: those that are smart, will just get smarter at moving their money around.”

Michael Green, managing director, Moss UK:

“The increase in NI, and increase in minimum wage above inflation is not going to help SMEs with their growth and investment plans.

“At a basic level, it’s a negative hit to everybody’s payroll, and is going to cost us well over £100,000. 

“For smaller businesses, it’s not great – we can absorb it, but that is money that we could have used to invest or explore new markets. I understand that the country[‘s finances] have a problem, but I don’t think this is going to help us terribly.

“At the end of the day, it depends on the strength of your balance sheet. If you’re on really slim margins, it will hurt – and that will mean putting up prices to some extent. There are plenty of businesses that have gone to the wall over the past three years trying to absorb all the various hits we’ve had, and you can’t do it.

“No budget is going to be perfect. I’m not sure it’s the best way to get growth out of the economy: SMEs are the growth engines of the economy, and it’s hurt us rather than helped us.

“But we’re a resilient sector – we’re entrepreneurial, and entrepreneurs find a way. It’s not great, but I’m not going to wring my hands.”

Dick Searle, chief executive, The Packaging Federation

“I met quite a few of the shadow cabinet before the election: they said they were going to be the most business-friendly government ever.

“I think the budget proves the reverse. If their objective is growth, they’ve shot themselves in the foot.

“Most growth is driven by smaller companies, and smaller companies are going to get absolutely hammered by what they’re proposing with NI.

“It’s not just about our businesses, but also about the economy at large. We [businesses] have to absorb £25bn: it might have an impact on pay increases, and on consumer confidence too.

“Overall, it’s very disappointing. This was a government that promised a “new dawn” for business. As far as I can see, it’s a new storm for business.”