Shadow Chancellor Mel Stride fears people will find it harder to get a job behind a bar (Image: Jonathan Buckmaster)
A tax bomb hitting employers this coming week will cost Britain’s struggling pubs nearly ￡180million and make it harder to get a job behind a bar, Shadow Chancellor Mel Stride has warned. He warned pubs are expected to face an average blow of ￡4,000 as a result of Chancellor Rachel Reeves’s shock decision to increase employers’ National Insurance contributions.
Mr Stride visited the Two Chairmen pub in Westminster, which Ms Reeves was spotted outside on the night of the Budget with celebrating Treasury staffers.
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“The jobs tax is far more than small beer,” Mr Stride warned. Labour stated in its manifesto it would “not increase National Insurance”. But as of Sunday, instead of businesses paying 13.8% on employees’ earnings above ￡9,100 a year, they must pay 15% on wages above ￡5,000.
Mr Stride said: “Labour’s broken promise to not raise National Insurance is hitting businesses and working families hard, with the hospitality sector amongst those hit hardest. Pubs, restaurants, and low-wage sectors are facing job cuts, higher costs, and reduced growth – having already been clobbered with a 140% rise in business rates.”
Mel Stride weighs in on the future of local pubs
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Citing analysis by the British Beer and Pub Association (BBPA), he claimed the “Chancellor’s reckless anti-business jobs tax will cost pubs ￡4,000 on average” and result in “lower wages and higher prices for all”.
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He is worried about the tax hike will make it harder for people to get a job behind a bar, saying it “disproportionately affects those on lower incomes who are earning less, typically younger people, typically people getting their first job”.
Emma McClarkin, chief executive of the BBPA, said: “With six pubs closing a week on average and making just pennies on a pint, they simply don’t have the luxury of absorbing yet more fees - including soaring employment costs.
“Government must phase in these employment costs as they will dent business which, ultimately, hurts working people. Phasing them in would make an enormous difference for companies and provide confidence to businesses in the commitment to unlock growth.”
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Shadow Chancellor Mel Stride at the Two Chairmen, where Chancellors traditionally celebrate Budgets (Image: Jonathan Buckmaster)
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A Government spokesperson said: “We are a pro-business Government, and we know the vital importance of small businesses to our economy and have already achieved a great deal in a short period of time, including protecting the smallest businesses from the employer National Insurance rise and late payments, protecting 250,000 retail, hospitality and leisure business properties from paying full business rates and capping corporation tax.
“We delivered a once-in-a-parliament Budget that took necessary decisions on tax to stabilise the public finances, including the NHS which has now seen waiting lists fall five months in a row. We are now focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets.”