Next: Lord Wolfson warns Budget will make it ‘harder’ to enter workforce
The boss of retail giant Next has warned that tax rises announced in the Budget will make it “harder and harder for people to enter the workforce”.
Lord Wolfson told the BBC that the government’s move to hike national insurance (NI) would disproportionately hit entry-level jobs.
“The axe has fallen particularly hard on those entry-level, national living wage jobs, and that’s where the pain is going to be felt the most.”
In October’s Budget, Chancellor Rachel Reeves moved to increase the rate of national insurance paid by employers from April, while reducing the threshold that employers start paying it from £9,100 to £5,000.
“It’s very difficult to see how such a big increase in the cost of entry-level work is going to result in anything other than a reduction in the number of opportunities available,” the retail boss said.
Lord Wolfson, who is a Conservative peer, called on the government to stagger the tax changes over time to mitigate the threat of job losses.
“The government did need to raise taxes. I’ve got nothing against lowering the threshold for NI in principle but the speed at which it is going to happen, the lack of consultation, that is the problem.”
In November, Next, alongside Tesco and Greggs, co-signed a letter from UK retailers to Reeves calling for a rethink on the Budget measures.
The letter warned prices would rise and that high street job losses were “inevitable”. Earlier this month, Next announced that UK growth was likely to slow “as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy”.
Wolfon’s comments come as fresh data revealed retail sales fell 0.3 per cent in December, despite analysts pencilling in growth of 0.4 per cent.
Commenting on the surprise flop in sales, Kris Hamer, director of insight at the British Retail Consortium, said: “Higher employer national insurance contributions, higher national living wage, and a new packaging levy will heap pressure on an industry that is already paying more than its fair share of tax.”