The CBI's director-general has issued a direct pre-Budget warning to the UK Treasury, urging the Chancellor to avoid any further cost increases on business ahead of the Autumn Statement. The message is blunt: British businesses, particularly smaller ones, are carrying as much as they can carry. Any additional levy, employer contribution, or compliance burden risks tipping viable operations into loss.
The timing matters. According to the Federation of Small Businesses, nearly half of small firms in the UK reported falling confidence in Q2 2025, with employment costs and energy pricing cited as the primary pressures. In Scotland specifically, the Scottish Chambers of Commerce quarterly economic indicator has consistently flagged rising operational costs as the number-one constraint on growth for the past six consecutive quarters. These are not mood readings, they are data points that translate directly into hiring freezes, price increases, and deferred investment.
The CBI's concern centres on employer National Insurance contributions, business rates, and any further tightening of wage floor policy. A rise in employer NI, even a modest one, has an outsized effect on small employers who cannot spread the cost across thousands of staff. A sole trader running a café in Leith with four part-time staff feels a 1% NI increase very differently from a supermarket chain. That asymmetry is rarely acknowledged in Treasury modelling, but it is lived daily by the people who read this publication.
Scotland has its own fiscal levers, and the Scottish Government has used them, most notably through the small business bonus scheme, which continues to offer rates relief to around 100,000 eligible properties according to Scottish Government figures. But devolved relief can only do so much when the largest cost drivers, employer NI, energy pricing structures, and minimum wage legislation, are set at Westminster. Scottish Enterprise and Business Gateway have both expanded their cost-management advisory services this year, but advice does not replace margin.
The broader context is that this Budget arrives at a genuinely difficult moment for UK business. The Office for Budget Responsibility is expected to revise growth forecasts downward, and the Chancellor faces a tight fiscal envelope with limited room to cut taxes or offer meaningful relief. The CBI's intervention is an attempt to hold the line: not to demand giveaways, but to argue that the current cost base is already structurally challenging, and that adding to it now would be a policy error with real consequences for employment and output across Scotland and the wider UK.