Exmouth and Exeter's small business boost

Small Business Saturday, a nationwide campaign championing the importance of shopping locally, is taking on added urgency this year as businesses across Exmouth and Exeter East face increasing economic pressures.

David Reed, MP for the constituency, has urged residents to rally around small businesses during this pivotal festive season, describing them as “the lifeblood of our economy here.” 

The call to action comes against the backdrop of Labour’s recent National Insurance changes, which are adding significant financial strain to employers.

The policy includes a 1.2% increase in National Insurance rates and a reduction of the employer threshold from £9,100 to £5,000. 

The Office for Budget Responsibility estimates that these changes will cost businesses an additional £800 per employee annually, with some employers facing liabilities of up to £26,000. 

The impact of these changes has already been stark. The week following Chancellor Rachel Reeves’ Autumn Budget saw a 64% increase in business closures compared to the same period last year.

However, Labour continues to defend their position, arguing that the measures are necessary to address long-term funding gaps and ensure a fairer tax system for workers. The party has emphasised its commitment to supporting growth through investments in skills, infrastructure, and innovation, aiming to foster a more balanced and sustainable economy in the future.

Local MP David Reed expressed concern about the policy's repercussions:  “The Labour Government has put all of that under threat with their betrayal of business which is damaging the economy and harming working people.” 

Several industry groups have also raised alarms about the broader economic impact: 

- Hospitality Sector: UK Hospitality warned that the National Insurance changes could cost the sector £3.4 billion annually, leading to closures and job losses. Their statement read:“The changes to the NICs threshold are not just unsustainable for our businesses, they are regressive in their impact on lower earners and will impact flexible working practices which many older workers and parents rely upon. Unquestionably they will lead to business closures and job losses within a year.” 

- Retail Sector: Over 80 retailers, including major brands like Aldi and Tesco, signed a letter to the Chancellor outlining the risks of increased costs: “For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level.” 

- Hiring Challenges: A survey by Helm found that six in ten businesses have put hiring plans on hold due to the increased tax burden, while 16% are planning job cuts. 

Amid these challenges, Small Business Saturday provides an opportunity for communities to show their support for local enterprises. Reed underscored the importance of shopping locally this festive season,“At this time of year, small businesses should be looking forward to the festive shopping period, but many are fearing for the future of their firms and their livelihoods because of the Jobs Tax. 

While the campaign is a valuable reminder of the importance of small enterprises, its impact is limited to a single day. The broader challenges faced by these businesses require sustained attention and systemic changes to alleviate financial pressures. 

As Reed emphasised, the significance of community support cannot be understated: “And as your local Conservative MP, I will do all I can as an effective opposition to stop Labour’s National Insurance Jobs Tax.” 

This weekend’s event is a chance to celebrate the contributions of small businesses while helping them navigate difficult times. By choosing to shop locally, residents can bolster the resilience of the high street and ensure its survival during a period of uncertainty. Every purchase at a local shop or café strengthens not only the business but also the wider community it serves. 

Small Business Saturday reminds us of the power of collective action. As shoppers explore the high streets of Exmouth and Exeter East this weekend, they contribute to the vibrancy and longevity of local enterprises. Supporting small businesses is not only an economic decision but also a commitment to preserving the unique character of the community for years to come. 

MP David Reed concludes,"We have some fantastic businesses here and it is why I hope as many people as possible can support Small Business Saturday, get out to your local high street and see what they can offer.”