Brace for a reality check: a lukewarm spring forecast from Rachel Reeves signals more headaches than hope for many businesses. On Tuesday, Reeves delivered a deliberately calm outlook to steady nerves amid global volatility and a run of budgets that have already nudged up taxes. Yet for business owners facing rising costs, the absence of concrete relief or bold policy moves felt like a letdown.
Key policy shifts are still coming, including the long-anticipated changes to the business rates system set to take effect on 1 April. But the forecast offered little reassurance for firms grappling with higher employment costs from last year and provided scant clarity on the defence investment plan that many in industry have pinned their hopes on. The Guardian spoke to a diverse group of bosses about what Reeves’ speech means for their bottom lines and day-to-day operations.
Lincoln Green, independent brewer
Anthony Hughes, owner of Lincoln Green Brewing Company in Nottingham, welcomed the mention of longer-term economic improvements. He said, as a small business owner, there’s a natural urge to believe in a brighter future. But he also pointed to ongoing pressures: last year’s rise in employer National Insurance and a recent tax increase on non-draught alcohol have kept margins tight. Hughes operates the brewery plus six pubs in the East Midlands, employing around 80 people. He noted that inflation remains above the Bank of England’s 2% target and that customer footfall has dipped. He described a quieter dining-out scene with fewer people able to spend on pints. Reeves spoke of real wage growth and falling inflation, but Hughes sees a disconnect between the vision presented and the daily reality he faces. He remains critical of the business rates situation, calling the current rating methodology “obscene,” and lamenting that, despite a January support package, the looming rates shake-up continues to bite pubs hard. He summed up the sentiment many small operators feel: “It was almost a ‘jam tomorrow’ statement. The policies necessary to deliver that future aren’t evident to me.”
Kaymet, tray manufacturer
Mark Brearley, who runs Kaymet in London, emphasized that while stability sounds appealing, many businesses are in emergency mode due to soaring energy costs. Industrial energy prices are still roughly 70% higher than before the Ukraine conflict, with gas prices up around 60%. The situation could worsen if tensions in the Middle East push oil and gas higher again, increasing costs at home. Brearley noted that energy concerns were already a major worry for metals manufacturers even before current geopolitical shocks. At Kaymet, gas and electricity costs surged 58% after a long-term contract renewal. He described the impact as a sudden, overwhelming hit—like a dam breaking. Although Kaymet’s customers include Harrods and Selfridges and the company exports widely, Brearley argued that Reeves was right to keep a macroeconomic focus given global turbulence, but he stressed that higher employment costs from the previous year continue to hurt smaller firms. He added, “Thousands of businesses out there have real day-to-day issues, and a lot of our rising costs are a result of government-related decisions. It’s no news just when we wanted some.”
Cohort, defence technology group
Andrew Thomis, CEO of Cohort, which owns several firms spanning sonar systems for the Royal Navy to data products for military training, welcomed Reeves’ nod to defence spending. He highlighted the importance of a fresh commitment to a £1 billion military helicopter project and urged the government to deliver a formal defence investment plan. Cohort, which employs about 1,600 people across its Reading headquarters and sites in Australia, Germany, and Portugal, needs clear directions to inform future production decisions. The government’s stated aim to raise defence spending to 5% of GDP by 2035 adds urgency to this. Thomis warned that substantial investment is required to sustain the industry’s production pace, but without concrete direction and financial support, he fears a cash squeeze could derail plans.
Philip Morris & Son, department store
John Jones, who runs Philip Morris & Son in Hereford, traced the day’s mood to a stale, political back-and-forth rather than tangible policy help. He cited escalating business rates as a major drain on profit, with costs rising by 46% over a three-year revaluation cycle—equating to roughly £9,000 this year, £18,000 next year, and £27,000 the year after. He criticized Reeves for not addressing the missteps on rates that have affected retailers specifically, noting that while pubs received some relief, shops have not. He also pointed to a separate challenge: crime and shoplifting, which he says is blighting retailers but not pubs. He referenced a recent figure indicating 5.5 million shoplifting incidents costing the sector £400 million, underscoring the daily losses retailers endure. Jones argued that while pubs appear to have benefited from the government’s reforms, retailers have not, leaving him frustrated and feeling overlooked.
Hercules, construction recruiter
Brusk Korkmaz, CEO of Hercules, welcomed Reeves’ attempt to offer more stability for businesses. The Gloucestershire-based firm, which employs about 1,700 people and places workers on infrastructure projects like HS2, has largely avoided a downturn driven by the housing market’s slump. He said the speech conveyed a longer-term perspective, which he sees as essential for planning, but he remained cautious, recalling past commitments that governments have reversed or delayed any major projects. Korkmaz cautioned against retreats from large initiatives and emphasized the need for consistent, sustained investment to enable long-term planning.
Overall, while Reeves’ spring forecast aimed to project steadiness amidst a storm, the reaction from the business community underscored a shared tension: macroeconomic optimism tempered by real-world cost pressures and a desire for tangible, timely policy measures. The question remains for many: will future policy deliver the certainty and relief these companies need to invest with confidence, or will they keep weathering the squeeze with cautious, wait-and-see preparations? Would you agree with the cautious business sentiment, or do you see opportunities hiding in these challenges? Share your thoughts in the comments.
