The British Retail Consortium (BRC) has raised concerns over significant increases in employment costs for UK retailers, attributing the surge to recent hikes in National Insurance Contributions (NICs) and the National Living Wage. These changes are projected to add over £5 billion annually to the retail sector's expenses, with an anticipated rise to £7 billion upon the introduction of the new packaging tax in October 2025.
Impact on Part-Time Employment
The reduction of the NIC threshold from £9,100 to £5,000 means more part-time and entry-level positions now incur additional taxes, diminishing the incentive for businesses to offer such roles. BRC data indicates a decline of 200,000 part-time retail jobs since 2018, reaching the lowest level since records began in 1996. Projections suggest that up to 160,000 additional part-time positions could be at risk over the next three years.
Statements from BRC Leadership
Helen Dickinson, BRC's Chief Executive, stated, "The Chancellor’s October Budget is now hitting retailers with an extra £5bn on their employment bill. When coupled with the new packaging tax in October, retailers’ costs will have spiralled by £7bn in a single year." She emphasized that with retail margins typically between 2-4%, these added costs could lead to higher prices for consumers, job reductions, and store closures.
Call for Government Action
The BRC urges the government to consider policies that facilitate employment, highlighting the importance of part-time roles as entry points into the workforce. They stress that while welfare reforms aim to increase employment, the current cost increases may hinder these objectives. The consortium advocates for the Employment Rights Bill to enhance workers' rights without impeding job creation during this critical period. Furniture News
These developments underscore the challenges faced by the UK retail sector amid escalating operational costs and the potential implications for employment and consumer prices.
