According to the Confederation of British Industry, tax increases introduced in last month’s budget make it harder for employers to hire.
Rain Newton-Smith, CBI’s chief executive, will tell the CBI annual conference today, 25 November, that employers will be less willing to “take a risk” with a new hire because of the increased national insurance contributions and the lower threshold.
She will say, “The sharp drop in the national insurance threshold and the rise of the national insurance caught us all by surprise.”
The Employment Rights Bill could be costly for businesses, especially with the increase in the national living wage and its expansion.
Newton-Smith warns Rachel Reeves, the chancellor of England’s government that businesses will have to reduce their investment in training and development.
She will tell you that “[Firms] look with heavy hearts at cutting training and investments, delaying decarbonisation projects or passing on costs to the customers.”
“Profits don’t mean extra cash for companies to stuff into a pillowcase. Profits are an investment. Profits are investment. You’re hitting growth. “Businesses should never be subjected to tax increases like this again.”
The CBI issued its warning today after a group of retailers warned the chancellor that they would incur extra costs amounting to PS7bn, which would result in job losses, increased prices and even store closures.
Newton-Smith’s speech will urge the government, in her address today, to look at reforms to improve economic growth. For example, she will ask for more flexibility when using apprenticeship levy funds to fund wider training.
Reeves, who will speak at the conference today, will tell CBI she has “no alternative” than to raise public money through tax increases led by employers.
“We asked the businesses and wealthiest to contribute even more.” I know that these choices will have an effect. “But I will stand by these choices as being the right ones for our country. Investment to fix the NHS, rebuild Britain and ensure that working people do not face higher taxes on their payslips,” She will say.
