The national insurance increase for businesses is met with concern from retailers.
- Chancellor Rachel Reeves admits the rise won’t be easy for employers to handle.
- The increase will see national insurance contributions go up to 15% by April 2025.
- Major retail leaders warn of potential job losses and price increases.
- Reeves emphasises Labour’s commitment to avoiding tax hikes on workers.
Chancellor Rachel Reeves has faced significant backlash following the announcement of an impending national insurance increase set for implementation in April 2025. In her keynote speech delivered at the Labour Party Conference 2024 in Liverpool, she stated that businesses, charities, and local authorities would find the adjusted rates challenging to integrate into their financial frameworks. She claimed, “I’m not going to pretend that it’s going to be easy for businesses.”
The Labour Party had assured during the general election that it would refrain from increasing taxes on workers, an assurance emphasised by Reeves who noted, “Over the last few years it has been working people that have had to bear the brunt of tax increases.” This increase represents a strategic shift in fiscal policy aimed at enhancing national revenue without placing further burden on individual taxpayers.
Reeves is currently under pressure from the retail sector, with nearly 80 retail executives, including prominent figures like AllSaints CEO Peter Wood and H&M Country Manager Henrik Nordvall, endorsing a letter presented by the British Retail Consortium (BRC). This letter expresses grave concerns about the anticipated economic repercussions, predicting inevitable job losses and higher consumer prices. It was highlighted that the retail industry could incur additional costs nearing £7 billion annually due to these changes.
During her address at The Yorkshire Post’s Great Northern Conference in Hull, Reeves discussed Labour’s broader ambitions for regional development, indicating plans for increased investments to boost connectivity and opportunities in the North of England. This strategic focus aims to address regional imbalances and stimulate local economies as part of Labour’s growth agenda.
The national insurance hike poses significant challenges, yet Labour remains committed to safeguarding workers’ interests amidst economic reforms.
