The Bank of England Governor today joined Britain’s biggest retailers including Tesco, Asda and Sainsbury’s warning that job cuts are “inevitable” after Rachel Reeves’s tax-hiking Budget. The Mail has the story.
Andrew Bailey said dozens of businesses – including Tesco, Asda and Sainsbury’s – had been “right” to sound the alarm in an open letter to the Chancellor.
Ms. Reeves unveiled an extraordinary £25 billion hike in employers’ National Insurance Contributions in the Budget last month. The rate has been raised and the threshold at which firms must pay has been cut, with Ministers adamant it was the only way to prop up public services.
But the OBR projected that the fiscal package would boost inflation and unemployment.
In the letter today, the companies cautioned that the huge tax increase, together with packaging levies and increases to the national minimum wage could cost retailers more than £7 billion a year.
“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,” the letter said.
“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 bosses of Aldi, Amazon U.K., Boots, Lidl, JD Sports, Primark, Morrisons and Greggs were also among those signing.
Giving evidence to the Treasury Select Committee this morning, Mr. Bailey said: “I saw the BRC’s (British Retail Consortium’s) letter and I think they’re right to say, I think there is a risk here that the reduction in employment could be more. Yes, I think that’s a risk.”
Worth reading in full.
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