Cllr Rachel Bentley has demanded the Chancellor ‘immediately scrap her jobs tax’ as new research revealed that employees in London face an estimated hit of more than £4,500.
The North Bermondsey Councillor has warned that high streets could be ‘on the brink’, following the tax hike which came into force just a month ago.
The rise in employers’ National Insurance means employees in London face an estimated hit of almost £4,541 by the end of the decade as the jobs tax gets passed down to them as lower real wages, Liberal Democrat research has found.
At the Spring Statement, the OBR reported that 76% of the rise in employers’ national insurance would be passed down to workers through lower real wages.
The research by the Liberal Democrats has found that London workers will be experiencing a hit of nearly £727 in the next year on average.
Read more related news:
Rachel Reeves plans for your pension which is ‘dangerous and misguided’
Amy Downes, who runs two independent cafés in Southwark, says the recent rise in employer National Insurance contributions is a constant source of worry.
“We talk about it most days,” she says.
With already razor-thin margins and rising costs across the board, Amy explains that the increase is making it even harder to keep the business afloat. “We don’t make much money as it is”.
“Now it’s not just about tightening belts, it’s affecting whether we can afford to hire new staff or offer pay rises to the team we already have.”
For Amy, the implications go beyond the bottom line: “when small businesses can’t invest in people, that has an immediate knock-on effect on the local economy,” she adds. “It’s disheartening. We want to grow, but we’re being pushed to a point where just staying open is the priority.”
Cllr Rachel Bentley, Southwark Liberal Democrat Deputy Group Leader and Local Economy Spokesperson said, “The Chancellor’s jobs tax means stretched Southwark households face another financial battering in the middle of a cost-of-living crisis.
“After years of Conservative economic vandalism, this Labour government is now pushing local businesses to the brink of closure and risking more shops boarding up their fronts on our struggling high streets.
“The Chancellor must immediately scrap her jobs tax and overhaul the broken business rates system. This is the only way to unleash the growth potential of Southwark’s high streets and protect local household finances.”
