Chancellor Rachel Reeves is under mounting pressure to cancel Labour’s planned increase in National Insurance Contributions (NICs) for employers, set to take effect on April 6. Critics, including Conservative MP Mel Stride, have warned the policy will decimate jobs, stunt economic growth, and drive up inflation, with businesses fearing mass layoffs and rising operational costs.
Under the proposed changes, employers’ NICs will rise from 13.8% to 15%, while the threshold for contributions will drop from £9,100 to £5,000, pulling more low-paid workers into the tax net. The hospitality, retail, and social care sectors are expected to suffer the worst impacts, with industry leaders warning of higher prices, job losses, and business closures.
Stride slammed the policy as a “ticking time bomb”, arguing that it “makes it more expensive to employ part-time and low-wage workers”, particularly in industries already struggling with tight margins. The British Retail Consortium has predicted up to 160,000 part-time retail jobs could be lost over the next two years due to increased labor costs.
The Government insists the tax hike will raise up to £25.7 billion annually to fund public services. However, Stride contends that increased government borrowing will “swallow up the money raised”, leading to higher debt interest rather than improved public spending.
With just a month until implementation, businesses and local councils are bracing for the financial strain, while Conservatives have offered to support Labour in scrapping the tax if brought to a Commons vote. Critics argue that if Reeves is serious about delivering “growth, growth, growth”, she must reconsider the policy before it cripples businesses and stunts economic recovery.
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