Labour’s National Insurance tax raid ‘spells ruin’ for British pubs and restaurants, senior bosses warn – as minister admits large businesses will have to ‘suck it up’_Nhy
The bosses of major pub and restaurant chains are the latest to demand changes to Labour‘s National Insurance raid.
In a furious letter to the Chancellor, Premier Inn, Slug & Lettuce and Fuller’s have demanded tweaks to Labour’s ‘regressive’ plans – which will heap an extra £3.4bn on the sector.
They say hospitality is unfairly hit by changes and drastic consequences will include small businesses collapsing and job losses.
Rachel Reeves has hiked the rate paid by employees on their earnings while a lower threshold means thousands of part-time staff are now included in the tax for the first time.
They have called for an exemption for lower band taxpayers who work fewer than 20 hours per week to support venues who hire student bartenders and other flexible workers.
Beer casks stacked on a truck at the Fuller Smith and Turner Plc brewery. Industry bosses have warned that the Chancellor’s Budget will heap an extra £3.4bn on the hospitality sector
Rachel Reeves has increased NI contributions and lowered the threshold to include thousands of part time staff for the first time
It comes just a day after it was revealed Tesco, Britain’s largest supermarket and a major employer, would have to pay £1bn in extra costs after a nightmarish Budget for the High Street.
Signatories of the latest plea include Simon Emeny, chief executive of Fuller’s, Bob Ivell, chairman of Mitchells & Butlers, David McDowall, chief executive of Slug & Lettuce owner Stonegate Group and Dominic Paul, chief executive of Premier Inn owner Whitbread.
In her first Budget, Reeves raised the National Insurance rate paid by employers on staff wages from 13.8 per cent to 15 per cent and cut the threshold at which firms start paying it from £9,100 to £5,000 a year.
Bosses want a new employer band created from from £5,000 to £9,100 with a lower rate of 5pc – or an exemption for lower band taxpayers working fewer than 20 hours per week.
Organised by trade group UKHospitality, the letter stressed: ‘The changes to the NICs threshold are not just unsustainable for our businesses, they are regressive in their impact on lower earners and will impact flexible working practices which many older workers and parents rely upon.
‘Unquestionably they will lead to business closures and job losses within a year.’
Bosses want a new employer band created from from £5,000 to £9,100 with a lower rate of 5pc or for lower band taxpayers who work less than 20 hours per week to be exempt (file photo)
Mark Selby, chief executive and co-founder of Mexican restaurant chain Wahaca, who is backing UKHospitality’s letter, told The Mail last night: ‘It feels utterly unacceptable. Once again they seem to be hitting the very people who create the most work for the workers.’
Since the Budget, Selby has been ‘inundated’ with emails from technology companies offering him services to replace human workers with.
Luke Johnson, who made his name growing Pizza Express in the 1990s and is now chair of Gail’s Bakery, last night said the policy was ‘certain to discourage investment, growth and job creation’.
Chief Secretary to the Treasury Darren Jones said the government was looking out for small businesses and working people.
When asked if larger firms should ‘suck it up’, he told the BBC: ‘There are measures more broadly in the budget which we think are good for business, and good for growth, and good for the economy.
‘But on tax contributions, yes, it’s been designed in that way.’
£20m investment ditched
Fizzled out: Drinks tycoon Steve Perez
Fears that the major tax changes announced in the Budget would discourage investment in Britain have started to emerge.
One of the country’s leading drinks tycoons said he has scrapped a £20 million plan for his hospitality empire, blaming Labour’s inheritance tax raid.
Steve Perez, whose firm Global Brands owns VK and Hooch, said the changes – which Chancellor Rachel Reeves claims will raise £2 billion a year – led to him dropping plans to add a spa and 27 bedrooms to his
Peak Edge Hotel in the Peak District, as well as to invest in a factory in Chesterfield, The Sunday Telegraph reported.
