Business leaders in Greater Manchester have warned Chancellor Rachel Reeves that plans to increase National Insurance payments for employers will hit job creation in the area.
Members of the Greater Manchester Chamber of Commerce have written to Ms Reeves to ask for the increases to be phased in and have also complained that the Government appears to be concentrating efforts to drive growth in the area around London rather than boosting the North.
Chamber president Emma Holt and representatives of local areas around Greater Manchester have welcomed moves to boost growth in Stockport and the area around Old Trafford, but say the National Insurance raise and changes to thresholds on when it will be paid run counter to the Government’s growth agenda.
The Government increased employer national insurance contributions in its October Budget, in a move designed to raise more money in taxes to spend on improvements to public services like the NHS. But many companies and business groups have criticised the plans for making it more expensive to hire people.
Ms Holt said: “Without a doubt the rise in Employers National Insurance Contributions is the main cause for concern with businesses alongside the new Minimum Wage rates leading to significant increases in employment costs. This isn’t just affecting larger businesses; small and medium-sized businesses are facing additional costs of tens of thousands of pounds annually moving forward. The NIC changes will have a disproportionate impact on part-time and workers in lower skilled jobs which is neither welcome nor wanted.
“Many businesses are reassessing their recruitment plans, with some considering workforce reductions or price increases, which contradicts the government’s goals for growth, employment, and low inflation. The Government clearly wants growth and needs the revenue to deliver this. Naturally, we all desire growth, fair wages, and a prosperous economy. But the whole environment that business operates in has to be right and these measures will have the opposite effect making things more challenging and growth less likely.
“We understand that this increase will not be reversed but have suggested a phased introduction rather than implementing it all in April or some form of incentive to reduce the amount paid by business if they recruit staff. The letter is from the whole Presidential team at the Chamber largely made up of business owners and leaders right across Greater Manchester and from all size of business and sectors. It shows the strength of feeling about this and the unifying effect it has had on the people who will, at the end of the day, be the ones responsible for driving growth."
The letter - which is signed by Ms Holt and Chamber representatives from Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Trafford and Wigan - asks Ms Reeves for a meeting to discuss local businesses’ concerns.
