Businesses fear that increases to the National Minimum Wage and an increase in employer National Insurance contributions may be the final nails in the coffin for struggling firms. "The UK’s minimum wage is up 37% since 21/22," says Rachel Watkyn OBE, the founder of Sussex-based Tiny Box Company, the UK’s largest sustainable packaging business . "It was £8.
91 per hour three years ago. Inflation for the same time period at 21.58%.
This doesn’t include the employer NI burden. Even at 1% that’s just under an 8% salary rise. "Small businesses cannot put prices up to mirror due to uncontrollable cheap imports that don’t pay into the UK tax system in any way, so small businesses who account for 61% of all UK employment will be forced to lay staff off.
"The disregard for small businesses by Labour is staggering." Many small businesses are concerned that increased wage bills following Labour's first budget since 2010 will make already difficult conditions worse. Manchester based Peninsula provides HR, employment law, health and safety advice and support to more than 40,000 small businesses across the UK, and they are already reporting an increase in calls from clients concerned ahead of budget.
Kate Palmer, Employment Services Director at Peninsula, explains: “Many small business owners are already struggling to keep their heads above water and the additional costs anticipated in today’s budget, including tax hikes, will be enough to cripple some, resulting in layoffs a.