Some of Britain’s largest companies have announced that they could be at risk after one major announcement made in Labour’s October budget.
Chancellor Rachel Reeves announced plans for a £25.7billion change to employers’ national insurance contributions in last month’s budget, which would increase the rate of the tax and the threshold at which firms must pay.
Ms Reeves too noted that there is set to be an increase in the national minimum wage for over-21s from £11.44 to £12.21 per hour from April 2025.
But now, a host of businesses including Asda, Sainsbury’s and Tesco have claimed that these measures could put them at risk of closures.
They argue that changes such as national insurance rises, packaging levies and an increase to the national minimum wage could cost the industry more than £7,000,000,000 every year.
A letter written to the government by the British Retail Consortium, and signed by many companies, read: ‘We appreciate the government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this.
‘But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.
‘For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale.’
Aldi, Amazon, Boots, Lidl, JD Sports, Primark, Morrisons and Greggs also signed off the letter.
Prime Minister Keir Starmer defended his government’s latest announcements in the budget this weekend, arguing that the ‘tough decisions’ are needed to stabilise the British economy.
He said: ‘Make no mistake, I will defend our decisions in the budget all day long. I will defend facing up to the harsh reality of fiscal reality.
‘I will defend the tough decisions that would be necessary to stabilise our economy and I will defend protecting the pay slips of working people, fixing the foundations of our economy and investing in the future of Britain and the future of Wales, finally turning the page on austerity once and for all.’
This year has been a challenging year for retail and the British high street.
In just the first six months of this year, 6,945 shops closed their doors.
The hospitality sector has too been struggling, so much that Keir Starmer recently announced a U-turn on the pub garden smoking ban which could have ‘destabilised’ and industry ‘already under immense pressure.’
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