London Chamber of Commerce and Industry’s Reaction to the Autumn 2025 Budget

London businesses needed certainty from the Budget after last year’s tax rises but the only certainty they received was higher costs. Rather than making tough decisions on public expenditure, the Chancellor has again shifted the burden onto businesses and the public, intensifying the pressures they are already facing.

Our members are particularly concerned about the impact of the proposed tourist tax on the capital’s competitiveness. It risks undermining London’s recovery, could impact visitor numbers to the capital and comes at a time when many businesses are struggling.  It is essential that any revenue raised from this levy is ringfenced for projects that directly support London’s tourism and hospitality sectors, with businesses having a direct say in how funds are used. 

The planned increases to the National Living Wage and National Minimum Wage in April 2026 will add further cost pressures at a time when many firms are already stretched. While employers remain committed to paying staff fairly, these rises, without accompanying support or offsetting measures, will be extremely challenging to absorb, especially for SMEs. Similarly, ending National Insurance exemptions on salary-sacrificed pension contributions above £2,000 from 2029 will further increase employment costs and leave employees worse off.

The Government recommitted to its programme of business rate reform. Though LCCI members welcome reform in principle, especially permanently lower multipliers for retail, hospitality and leisure properties, but we are concerned that it will be funded via a higher multiplier on properties with a rateable value of £500,000 and above, which does not take into account disproportionately high London property prices.

We do, however, welcome the Government’s reforms to simplify and modernise the apprenticeship system, something LCCI has long campaigned for. The introduction of short courses from April 2026, alongside changes to levy expiry rules, funding for SME apprenticeships, improved co-investment arrangements, and a more streamlined set of apprenticeship standards, are positive steps that could make the system more flexible and responsive to employers’ needs. These reforms have the potential to support skills development effectively, provided they are implemented with genuine industry input.

We also welcome the announcement of the DLR extension to Thamesmead. The Chancellor noted that London would take the lead in funding this, so greater certainty over the long-term funding arrangements will be essential to give businesses and communities confidence that the project will be delivered. Likewise, the commitment to progress the Lower Thames Crossing, ensuring the publicly funded phase can be completed and enabling the private sector to take forward construction and long-term operation, is a positive development.

London’s businesses needed a Budget that backed growth and restored confidence. There were some positive announcements but they are largely left facing higher costs and greater uncertainty. There is no economic growth without business and the Government must listen to London businesses to truly understand what they need to invest, hire and grow.

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