Long-time Labour Party supporter and former donor Brian Gilda has lambasted the hike in employer national insurance contributions in last month’s Budget, which he revealed would cost his Peoples car dealership business £450,000 annually.

Mr Gilda highlighted his views in an interview with The Herald, as he announced Peoples had suffered a fall in profits and turnover in its last financial year amid reduced sales of Ford cars arising partly from the US manufacturer’s decision to stop production of the Fiesta.

Peoples has ended its 42 years of Ford exclusivity, with five of its six dealerships now having representation from “cutting-edge” Chinese brands, with either the Omoda and Jaecoo marques, made by Chery, or BYD featuring alongside the US manufacturer at these sites.

Mr Gilda, chairman and managing director of Peoples, described the relationship with Ford as being like a “marriage”.

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Asked how Ford felt about the ending of the exclusivity arrangement, Mr Gilda highlighted his belief that Peoples had no choice because of production decisions taken by the US manufacturer.

He added: “They are living with it. I wouldn’t say they are particularly happy with it, but they are living with it.”

Peoples was also hit in the year to July 31 by difficulties in securing enough quality used cars at competitive prices.

It says in its strategic report in its latest accounts: “Securing quality used vehicle stock at competitive prices has been a challenge and has resulted in reduced margins.”

Mr Gilda noted that used car numbers were “coming back”.

Peoples posted a 7.6% drop in turnover to £283 million for the year to July 31, with a 32.9% fall in pre-tax profits before preference share dividends to £5.15m.

In the strategic report, Peoples says: “Ford’s decision to stop Fiesta production and go ‘all in’ on electric vehicles has proved to be challenging and as well as [commencing operations during the year with] BYD we are looking at further development with both BYD and Omoda/Jaecoo which will offer a combination of BEVs (battery electric vehicles) and ICE (internal combustion engine) vehicles with an initial concentration on ICE vehicles.”

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Mr Gilda, who together with Peoples finance director Stewart Ramsay owns 85% of the business, said of the new Labour Government’s first Budget: “It is just a shocking Budget all ways up, just to clamp that on us. A lot of small businesses are going to suffer.”

He added that, if he was looking at what had happened now compared with what Labour had talked about prior to the July election, “I would think I was in a parallel universe”.

Mr Gilda declared: “I would have preferred [higher] income tax - [it] would have been a better way of doing it because it would have affected everybody.”

Noting he had been “a Labour supporter for many years”, Mr Gilda added: “I think, were they speaking honestly and correctly prior to the election compared with what we got after the election? And that is an uncomfortable feeling.”

He highlighted his view that some things had had to change. Mr Gilda noted that he had, before Labour introduced means-testing this year, previously received the winter fuel allowance and given it to charity.

However, he added: “I am just not comfortable in terms of what has gone through from this Budget at all.”

Asked if the national insurance rise, which comes into effect in February, would affect his workforce numbers, Mr Gilda replied: “We are going to try and work around it. There is not an automatic solution for us.”

He noted that he had to be “careful” with pricing, in the context of whether the increase in national insurance could be passed on to customers, declaring: “We will clamp down on recruitment if we don’t have to recruit anyone.”

Peoples employs 356 people.

Mr Gilda, whose daughter Nicola has been with the business for around 30 years and is senior operational director, highlighted Peoples’ “outstanding” commercial vehicle sales in the year to July and “record-breaking” after-sales results.

While noting the day was “some way off”, he said that Peoples was heading in the direction of eventually selling more of Ford’s commercial vehicles than passenger vehicles.

He added that most of Peoples’ commercial vehicle sales were to “big business”, while noting the company also had joiners and plumbers as customers.

Mr Gilda flagged the strength of demand for Ford’s Transit Custom as well as the ordinary Transit van, and for the Ford Ranger.

He also noted the strength of demand for Ford Puma passenger vehicles.

Asked if profits might be up or flat in the current financial year, compared with the 12 months to July 2024, Mr Gilda replied: “It will definitely be a more difficult year as we continue to transition from the huge volumes we had with Ford to the more modest volumes and then build it back up again.”

In Scotland, Peoples’ Edinburgh dealership will offer Ford cars and commercial vehicles as well as Omoda/Jaecoo.

Peoples said its Livingston operation would “remain with Ford”, while Falkirk would be solely Omoda/Jaecoo. In north-west England, Bootle will offer Ford cars and commercial vehicles as well as BYD vehicles. Speke will have Ford cars and commercial vehicles plus Omoda/Jaecoo, and Prescott will have Ford cars and BYD.