Chancellor Rachel Reeves has refused to rule out another tax raid on businesses despite widespread backlash from the private sector over her decision to hike National Insurance.
Earlier today, the Chancellor outlined her plans to “kickstart economic growth” in the UK, which included the expansion of a third runway at Heathrow and the creation of a “British Silicon Valley”.
During a speech in Oxfordshire this morning, Reeves offered an olive branch to the business community following her controversial Autumn Budget decisions, which included raising the National Living Wage.
However, she stopped short of committing to no more tax rises on employers in future fiscal statements with the upcoming Spring Budget only weeks away on March 26.
When asked by a journalist if the Labour Government can guarantee no more tax rises on business, Reeves responded: “I’m not going to write five years’ worth of budgets in the first six months of office”.
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The Chancellor has refused to rule out further tax hikes in following Budgets
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She noted that her October 30 fiscal statement “was a once in a generation Budget” to course correct the struggling economy that was inherited from the last Conservative Government.
Businesses have spoken out particularly over Labour’s decision to raise the employer National Insurance contributions from 13.8 per cent to 15 per cent, which comes into effect from April 2025.
A survey of chief financial officers at 52 leading retailers by the British Retail Consortium (BRC) found businesses have serious concerns about trading this year in the wake of the tax raid.
When asked how they would be react to the increases in employers’ National Insurance contributions, two-thirds stated they would raise prices (67 per cent) on consumers.
Supermarkets have came out against the Government’s tax agenda gbnewsHelen Dickinson, Chief Executive at the BRC, said: “With the Budget adding over £7bnILLION to their bills in 2025, retailers are now facing into the difficult decisions about future investment, employment and pricing.
“As the largest private sector employer, employing many part-time and seasonal workers, the changes to National Insurance have a disproportionate effect on both retailers and their supply chains, who together employ 5.7 million people across the country.
“Retailers have worked hard to shield their customers from higher costs, but with slow market growth and margins already stretched thin, it is inevitable that consumers will bear some of the burden.
“The majority of retailers have little choice but to raise prices in response to these increased costs, and food inflation is expected to rise steadily over the year. Local communities may find themselves with sparser high streets and fewer retail jobs available.”
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