Chancellor Rachel Reeves admits national insurance rise won’t be ‘easy’ for businesses as she defends Budget

Chancellor Rachel Reeves has said the increase in employers’ national insurance contributions announced in the Budget will not be “easy” for businesses to absorb.

Rachel Reeves

Source: HM Treasury

Rachel Reeves said ‘I’m not going to pretend that it’s going to be easy for businesses’

At a conference in Hull, Reeves said: “I’m not going to pretend that it’s going to be easy for businesses, or indeed for charities or local authorities, to absorb, especially, the national insurance increase.

“But we made a commitment during the general election… that we wouldn’t increase taxes on working people because over the last few years, it has been working people that have had to bear the brunt of tax increases.”

She said Labour had kept its campaign promise not to increase national insurance, income tax or VAT on employees but admitted the party had to raise some taxes on employers and the “wealthiest in society”.

Many businesses have warned of increased labour costs, which could result in fewer staff and higher prices, amid a huge backlash from the new policies outlined in the budget.

Reeves said: “I have now set the envelope for government spending for the next few years so I’m not going to need to come back and top that up, either with more borrowing or more taxes.

“Now, I can’t write five years’ worth of Budgets in just five months – we don’t know what might happen in the future in terms of shocks to the economy – but I can give businesses the confidence in this budget we have wiped the slate clean, we will never have to do a budget like this again.”

The Telegraph reported that senior retail sources believe consumer confidence has been hit by the budget and demand for seasonal workers has declined.

Research from job platform Adzuna found the number of Christmas jobs advertised dropped by more than 30% from 31,843 roles in November 2021 to 21,576 this November.

The figure for 2024 is also down several thousand from 24,699 in 2023.

Accountancy firm Ridgefield managing director Simon Thomas said: “We have noticed through our payroll and bookkeeping services that we are seeing similar trends emerge among our clients, with many scaling back hiring or automating roles to manage rising employment costs.

“Seasonal hiring has faced significant challenges, particularly in industries such as retail, hospitality, and logistics.”

What are shellshocked retail c-suites doing to mitigate the Budget?

Anonymous#CommentAvatarLabel Commented on: 4 December 2024 09:51
Whenever you read that business will pay you must read YOU will pay as no business will allow any government to steal their profits as they will and are already stopping any investment in growth, slashing employment costs, closing businesses, and most of all pushing up prices to pay for the insane raft of tax increases so that all of the people who voted for labour and everyone else pay for those tax increases.

Labour contributed more than £13 billion to the mythical black hole and then said well all of the pay rises we gave were not our fault. Yes it was!

She recently said she would not be back to increase taxes in this Parliament and has now changed it to I can’t set a budget for 5 years which is code for more tax increases as the most important part of the economy is GROWTH and given that government can’t grow the economy as only business can do that this government will see negative growth which in turn will drive more tax increases to match their spending.

The western world is laughing at us and has already decided that the Labour government are not fit for purpose which is the same view of the more than 3 million people who signed the petition to get them out believe after just 5 months of a Labour government .

Welcome to the U.K. in the 1970s where Labour trashed the economy driven by unions and they are going to repeat that period followed by a loss at the next election and austerity .

Just 9 million voted for Labour and they have now realised they made a huge mistake.
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Anonymous#CommentAvatarLabel Commented on: 4 December 2024 09:35
Would the last person left in the U.K. please turn the lights out when you leave .
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Anonymous#CommentAvatarLabel Commented on: 4 December 2024 09:32
The crass stupidity of any elected politician to say they know it’s not going to be easy for businesses and then to repeat the pathetic lie that they kept to their promise of not raising taxes for working families is gross incompetence as it is those very same people that will suffer from a loss of jobs, rising interest rates, rising food costs and indeed every other cost will increase as businesses increase their prices .

It is the most moronic actions by an inexperienced champagne socialist government I have ever witnessed.

This budget is a disaster and this useless government will bring this country to its knees.
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