Labours Budget Delivers Growth in Unemployment26 Feb 2025 08:24
“UP TO 160,000 part-time shop workers are at risk of losing their jobs because of Rachel Reeves’s tax raid, bosses have warned.
Retailers are preparing to wield the axe as they brace for higher costs caused by the Chancellor’s Budget, with the British Retail Consortium (BRC) predicting that more than one in 10 part-time roles could be scrapped over the next three years.
Fears of industry-wide job losses are mounting ahead of a £25bn increase in employer National Insurance (NI) in April, alongside a 6.7pc increase in the National Living Wage. Combined, these two policy measures will add £5bn to the retail sector’s wage bill this year, the BRC warned, piling pressure on the industry to cut costs.
Separate findings from the Confederation of British Industry (CBI) reveal that retailers are already scaling back investment at their fastest pace in nearly six years, highlighting the growing pessimism across the sector.
Part-time workers are particularly at risk because the tax rise not only increases the rate at which employers pay NI but also lowers the threshold at which they have to start paying the tax.
From April, businesses will have to pay NI for any employee earning more than £5,000, down from the current level of £9,100, making it significantly more expensive to employ part-time staff.
Of the 1.5m part-time roles in the retail sector, as many as 160,000 could be lost as a result of Ms Reeves’s Budget measures, the BRC said, adding that young workers are most likely to suffer from the cuts.
The lobby group also raised concerns over how Angela Rayner’s Employment Rights Bill, which is designed to crack down on zero-hour contracts, will increase costs.
Helen Dickinson, the BRC’s chief executive, said: “Retailers face a mountain of costs from the Budget and while they continue to absorb costs where they can, higher prices and job losses are inevitable.”
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