Retailers have called on the government to reverse recent changes to employer National Insurance contributions (NICs) and to reconsider an upcoming deposit return scheme, warning these measures are putting significant pressure on businesses and consumers.
The increase in employer NICs, implemented by Chancellor Jeremy Reeves in 2024, raised the rate from 13.8% to 15%. Additionally, the threshold at which employers must begin paying NICs was lowered from £9,100 to £5,000 annually. Retail industry representatives argue that this reduction in the threshold has had a disproportionate effect on their sector, especially on entry-level and part-time positions.
Steve Machin, representing retail interests, emphasized that many retail jobs are part-time or involve only occasional shifts, making the lower threshold particularly burdensome. He also highlighted the impact on suppliers within the farming and food manufacturing industries, noting that regulatory constraints have often transferred additional costs down the supply chain to retailers. Machin warned that these increased expenses are ultimately being passed on to consumers at point of sale.
In addition to NIC concerns, retailers have voiced strong opposition to a new deposit return scheme, slated to begin soon. The scheme would require a 20 pence charge on every bottle or can of drink, refundable upon return and recycling of the packaging. Machin described this policy as "patently ridiculous," arguing that it places further financial strain on businesses without clear benefits to retailers.
Machin also addressed proposed changes to the Employment Rights Act aimed at cracking down on so-called "low-hours contracts," cautioning that reforms should be carefully designed to avoid effectively banning Saturday jobs, which many rely on as supplementary income.
Responding to these concerns, a spokesperson for HM Treasury reiterated the government’s commitment to supporting the retail sector. The spokesperson stated that the chancellor is focused on fostering long-term growth by encouraging business investment and expansion, which in turn would create jobs across the country.
The Treasury highlighted recent measures including reductions in business rates, a cap on corporation tax, and a £4.3 billion package aimed at helping businesses manage costs and sustain investment. The spokesperson declined to comment directly on the NIC threshold or deposit scheme amid ongoing policy discussions, noting that fiscal decisions are formally announced by the chancellor at scheduled events.
As retailers urge a reversal of recent tax changes and further scrutiny of environmental policies, the government faces continued pressure to balance fiscal responsibility with the economic realities faced by the retail and supply industries.