NEXT boss uses his Lordship to table National Insurance amendments
NEXT boss Lord Simon Wolfson has utilised his position in the House of Lords to table amendments aimed at phasing in changes to National Insurance (NI) hikes.
In the Autumn Budget, the Government increased the rate of National Insurance paid by employers from April and also reduced the threshold that employers start paying from £9,100 to £5,000. This is set to hit the retail sector particularly hard.
Lord Wolfson, who has been a Conservative peer since 2010, supported Baroness Noakes’s amendments to the bill, according to The Telegraph. The proposed amendments have been introduced to enable "a phased introduction of the reductions to the secondary threshold" of National Insurance.
The NEXT boss previously called on Chancellor Rachel Reeves and the Government to stagger the tax changes over time, rather than introduce them in April, otherwise, jobs or hours would have to be cut.
"The Government did need to raise taxes. I’ve got nothing against lowering the threshold for NI in principle but the speed at which it is going to happen, the lack of consultation, that is the problem," Lord Wolfson told the BBC at the time.
Earlier this month, NEXT said it would raise prices by 1% after revealing its wage costs would increase by £70 million. Several of Britain’s biggest retailers have warned they could be forced to cut thousands of jobs and increase prices as they prepare for the insurance hikes.
According to the British Retail Consortium (BRC), two-thirds of leading retailers warned they will be forced to hike prices to cope with the increase in National Insurance.
67% of 52 Chief Financial Officers surveyed for the BRC said they would raise prices in response to increases in employers’ National Insurance Contributions from April. Just over half (56%) said they would be reducing their paid number of hours and overtime, while 46% said they have to reduce headcount in stores and 31% said the increased costs would lead to further automation.
Marks & Spencer recently revealed it will be facing a £120 million hit to its wage bill from recent Budget measures. Meanwhile, fellow retail giant Tesco also said it would look to minimise price hikes as the sector has been left reeling from Budget moves to hike national insurance contributions (NICs) and minimum wages.
New Look, a cornerstone of the UK high street since 1969, is set to increase the rate of its store closure programme ahead of tax increases this April. It has revised its store estate twice in the past six years and downsized its portfolio by almost half from 600 stores in 2018.
A spokesman for the Treasury said: "We delivered a once-in-a-parliament budget to wipe the slate clean and deliver the stability businesses so desperately need, while not increasing taxes in people’s payslips.
"By bringing back political and financial stability, we are creating the conditions for economic growth. We have also ensured 850,000 businesses will either pay less or no employer national insurance at all next year — more than half of employers see no change or gain overall — and employers will be able to employ up to four full-time workers on the national living wage and pay no employer NICs."