Yahoo News Tesco, Asda, Aldi, Primark and Sainsbury’s say they will be 'forced' to cut jobs over rising costs
Big names in the retail world have warned the Chancellor they will be forced to cut jobs amid rising costs.
Retailers face more than £7 billion hit from Budget increases, after Chancellor Rachel Reeves revealed a £25.7 billion change to employers’ national insurance contributions, which would increase the rate of the tax and the threshold firms must pay. More than 70 businesses, including Tesco and Asda, wrote an open letter over changes in the Budget.
They stated price hikes are a "certainty" as policy measures include packaging levies and increases to the national minimum wage. The letter was arranged by the British Retail Consortium and was signed by many household names including Amazon, Aldi, Boots, B&Q, Currys, Greggs, JD Sports, Marks & Spencer, Next and Primark, the Manchester Evening News reports.
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The letter said: “We appreciate Government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this.
“But the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”
The group said they would "welcome" a meeting with Ms Reeves to discuss potential changes, including phasing the introduction of the national insurance lower earnings threshold, delaying timelines for packing levy implementations and revisiting business rates proposals announced in the Budget.
The letter said: “By adjusting the timings of some of these changes, the Government would give businesses time to adjust and greatly mitigate their harmful effects on high streets and consumers.”
A number of bosses in the sector warned after the changes were announced, with Sainsbury's boss Simon Roberts saying the tax hikes will affect shoppers. He said it would mean higher inflation for shoppers and Asda warned that it would face an extra £100 million in costs due to the Budget.
UK Hospitality organised another letter earlier this month with the same message. Some bosses revealed that minimum wage jobs could become “unviable” as a result of the new national insurance contributions threshold.
Prime Minister Keir Starmer defended the Budget decisions last week, calling them "tough" amid swathes of criticism.
