Retailers urge Healey to unwind national insurance hike to boost jobs
Retailers have called on Chancellor John Healey to unwind some of the national insurance reforms made by his predecessor in a bid to tackle the youth joblessness crisis.
The British Retail Consortium (BRC), which represents retailers including Tesco, Sainsbury’s and Marks & Spencer, has written to the Chancellor, urging him to unwind “soaring employment costs”.
At the 2024 Budget, then-Chancellor Rachel Reeves hiked the rate of employer national insurance contributions (NICs) to 15 per cent and brought the threshold at which bosses pay the tax down from £9,100 to £5,000.
The tax changes saddled retailers with more than £2.3bn in extra costs, the BRC said. Recent hikes to the national minimum wage have piled a further £4.1bn onto the sector, according to the trade body.
The Consortium has urged Healey to push the NICs threshold back up to £6,000 at next month’s Budget to encourage retailers to hire more young people.
The government has faced huge pressure in recent months to tackle the crisis of youth unemployment. Nearly 1m young people in the UK are not in employment, education or training (Neet).
“The Chancellor can turn the tide on unemployment and tackle the Neets crisis that is robbing a generation of young people of opportunity,” said BRC chief executive Helen Dickinson.
Healey urged to slash retail taxes
The retail sector has shed 115,000 jobs in the past two years, according to the trade body’s research, which found that nearly a quarter of young people get their first jobs in the sector.
Dickinson added: “Retail has always been one of the great gateways into work, giving millions of people their first job and the skills and confidence to build a career.
“Previous changes to NICs hit retail disproportionately hard and soaring employment costs are making it harder for retailers to offer the crucial entry-level roles that so many young people rely on.”
Retailers are also bracing for the government’s incoming crackdown on zero-hour contracts. Lord Wolfson, the boss of Next, has warned that these new rules will make it “much harder” for the retail giant to offer more hours to its staff.
The BRC’s letter also called on Healey to slash taxes to encourage investment in the UK’s economy. The Chancellor should cut retailers’ energy bills and exempt all shops from the high-value business rates multiplier, the group said.
On Tuesday, a group of retailers including Primark, Morrisons and Tesco told Andy Burnham to rule out a hike to the business rates multiplier facing large high street companies.
The Prime Minister has committed to easing the business rates burden facing pubs and hotels, and the Retail Jobs Alliance warned that retail stores are “integral to high street renaissance”.
Bunrham and Healey have refused to be drawn on any major fiscal plans and have insisted they will set out more details at the Budget.