| Business' reaction to NI increase 21:28 - Nov 25 with 3400 views | Zx1988 |
One for the older heads on the forum.
With all the complaining and doom and gloom coming from Big Business about the Employer's NI increase, I recall listening to someone a few months ago (I want to say Mandelson, perhaps) discussing the introduction of National Minimum Wage back in 1999, and the complaints from Business back then.
I recall him talking about the threatened million-plus redundancies which never came to pass, and there seems to be similarities between the messaging now, and what Mandelson was saying happened back in 1999.
I was 11 back then, so don't remember a bit of it.
Those of you who do remember: are there contrasts between then and now? Or does the noise coming from business at the moment seem to have more weight to it than did the scaremongering about NMW? |  |
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| Business' reaction to NI increase on 21:54 - Nov 25 with 2842 views | SuperKieranMcKenna |
The timing off the back of such a severe inflationary environment could certainly challenge some SME’s where often margins are slim. Whilst the mega profits of oil majors make good headlines, the reality is more UK businesses failed during the inflationary crisis than during the GFC. Given SME’s form the majority of our economy we shouldn’t dismiss their concerns. It’s possible there is alarmism not helped by the media, but UK growth projections are fairly weak, and aren’t going to be helped by (probable) increased trade wars and geopolitical conflicts. It might be a case of a good policy badly timed, we will have to see how it plays out. | | | |
| Business' reaction to NI increase on 22:17 - Nov 25 with 2780 views | Pinewoodblue |
No real comparison. Minimum wage was something new and there was a lot of scaremongering. The impact of increases in employer NIC is real, many employers are concerned they may have to find a way to reduce costs. The only obvious way is to increase productivity and the only way to do that is to reduce employee numbers.
The only way to fund the cost of Labour’s long term plans is to increase the tax take by increasing the size of the economy. Currently it looks as if growth will be less than it would have been under the previous clowns.
The only plan seems to be blame the Tories , there is only so long that will work. |  |
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| Business' reaction to NI increase on 22:19 - Nov 25 with 2767 views | Zx1988 |
| Business' reaction to NI increase on 22:17 - Nov 25 by Pinewoodblue |
No real comparison. Minimum wage was something new and there was a lot of scaremongering. The impact of increases in employer NIC is real, many employers are concerned they may have to find a way to reduce costs. The only obvious way is to increase productivity and the only way to do that is to reduce employee numbers.
The only way to fund the cost of Labour’s long term plans is to increase the tax take by increasing the size of the economy. Currently it looks as if growth will be less than it would have been under the previous clowns.
The only plan seems to be blame the Tories , there is only so long that will work. |
How widespread was the impact of NMW? Did it serve to drag up the pay of a good chunk of low-paid workers, or was it more a case of forcing the outliers to catch up with the rest of the pack in terms of pay? | |
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| Business' reaction to NI increase on 22:24 - Nov 25 with 2742 views | redrickstuhaart |
Businesses moan when profits are hit.
Most will be just fine.
Such a shame this was all necessary due to the previous government's unjustifiable bribe / NI cut though. | | | |
| Business' reaction to NI increase on 22:31 - Nov 25 with 2715 views | Pinewoodblue |
| Business' reaction to NI increase on 22:19 - Nov 25 by Zx1988 |
How widespread was the impact of NMW? Did it serve to drag up the pay of a good chunk of low-paid workers, or was it more a case of forcing the outliers to catch up with the rest of the pack in terms of pay? |
From memory there was an assumption that the minimum wage would lead to everyone expecting an increase. If a companies lowest paid employees had an increase those paid more would want their wages increased to maintain any differential. | |
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| Business' reaction to NI increase on 22:31 - Nov 25 with 2715 views | Cafe_Newman |
Republic of Ireland flag makers will be the first to bemoan the impact of Britain's latest land grab. |  | | |
| Business' reaction to NI increase on 23:32 - Nov 25 with 2608 views | Nthsuffolkblue |
| Business' reaction to NI increase on 22:17 - Nov 25 by Pinewoodblue |
No real comparison. Minimum wage was something new and there was a lot of scaremongering. The impact of increases in employer NIC is real, many employers are concerned they may have to find a way to reduce costs. The only obvious way is to increase productivity and the only way to do that is to reduce employee numbers.
The only way to fund the cost of Labour’s long term plans is to increase the tax take by increasing the size of the economy. Currently it looks as if growth will be less than it would have been under the previous clowns.
The only plan seems to be blame the Tories , there is only so long that will work. |
I find "the obvious way to increase productivity is to reduce employee numbers" an odd concept.
Surely fewer employees decreases productivity unless you are paying a lot of employees to do nothing! |  |
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| Business' reaction to NI increase on 00:23 - Nov 26 with 2556 views | bournemouthblue |
| Business' reaction to NI increase on 23:32 - Nov 25 by Nthsuffolkblue |
I find "the obvious way to increase productivity is to reduce employee numbers" an odd concept.
Surely fewer employees decreases productivity unless you are paying a lot of employees to do nothing! |
My first thought also, why are our productivity levels so far?
Is it a British culture of winging it and not being overly keen on training or infrastructure? |  |
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| Business' reaction to NI increase on 07:38 - Nov 26 with 2249 views | Pinewoodblue |
| Business' reaction to NI increase on 23:32 - Nov 25 by Nthsuffolkblue |
I find "the obvious way to increase productivity is to reduce employee numbers" an odd concept.
Surely fewer employees decreases productivity unless you are paying a lot of employees to do nothing! |
Ask any owner of a small business what they expect to happen when NIC employer costs increase. They will, I suspect, in the first instance look to maintain business levels but with fewer employees. | |
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| Business' reaction to NI increase on 08:28 - Nov 26 with 2172 views | Swansea_Blue |
In short, yes there were threats of mass redundancies that didn’t materialise. It’s probably a different landscape now coming off the back of Covid/inflation/low growth & confidence. So the fuss over nothing last time may not be relevant to today and it may have an impact. Or it may not of course. Depends on the business and sector, presumably. Organisations like supermarkets, food producers and the finance sector have seen big jumps in profits through 2024. Whereas businesses on failing high streets or pubs are likely to find it harder, as they’re going to struggle whatever the rate is.
I predict some failures, which will be jumped on by the right wing press as evidence Labour are wrecking the country. And others where nothing happens which will be jumped on by Labour to show it wasn’t an issue. Then there’ll be two groups of people coalescing around each of those positions arguing that their side is right and the others are lying. |  |
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| Business' reaction to NI increase on 08:34 - Nov 26 with 2146 views | Guthrum |
| Business' reaction to NI increase on 00:23 - Nov 26 by bournemouthblue |
My first thought also, why are our productivity levels so far?
Is it a British culture of winging it and not being overly keen on training or infrastructure? |
Or possibly just comparing them to places like China where, even if you place full credence upon official figures, workers have to accept living in factory barracks and gruelling labour conditions. |  |
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| Business' reaction to NI increase on 10:54 - Nov 26 with 1991 views | crouchendyachtclub |
| Business' reaction to NI increase on 07:38 - Nov 26 by Pinewoodblue |
Ask any owner of a small business what they expect to happen when NIC employer costs increase. They will, I suspect, in the first instance look to maintain business levels but with fewer employees. |
By their nature as small businesses, most would notice a reduction in a full fte proportionally more than they would a small reduction in profits or their customers will in tiny uplift in price. This is going to the consumer, not the business. | | | |
| Business' reaction to NI increase on 11:01 - Nov 26 with 1973 views | itfc48 |
| Business' reaction to NI increase on 07:38 - Nov 26 by Pinewoodblue |
Ask any owner of a small business what they expect to happen when NIC employer costs increase. They will, I suspect, in the first instance look to maintain business levels but with fewer employees. |
Or hire remote workers from outside of the UK. | | | |
| Business' reaction to NI increase on 11:04 - Nov 26 with 1957 views | usm |
Big Business moan about every decision politicians make, but they get on with it.
No difference here.
Increased Employers NI is not good for business or for jobs but business will go on. [Post edited 26 Nov 2024 11:06]
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| Business' reaction to NI increase on 11:08 - Nov 26 with 1937 views | leitrimblue |
| Business' reaction to NI increase on 22:31 - Nov 25 by Cafe_Newman |
Republic of Ireland flag makers will be the first to bemoan the impact of Britain's latest land grab. |
They could try. We just waiting across the border with our pitchforks at the ready. First man crossing that border wearing a bowler hat and stinking of lemon curd is gonna get it  |  | | |
| Business' reaction to NI increase on 11:32 - Nov 26 with 1879 views | jontysnut |
| Business' reaction to NI increase on 00:23 - Nov 26 by bournemouthblue |
My first thought also, why are our productivity levels so far?
Is it a British culture of winging it and not being overly keen on training or infrastructure? |
Yes part of the answer is improving the skills, training, health and well-being and motivation of the workforce rather simply trying to do more with less. Tesco was moaning about paying more but they expect to have an educated workforce on tap, who are looked after when they are ill and are able to travel to work on decent roads and transport. |  | | |
| Business' reaction to NI increase on 12:35 - Nov 26 with 1795 views | LeoMuff |
| Business' reaction to NI increase on 11:04 - Nov 26 by usm |
Big Business moan about every decision politicians make, but they get on with it.
No difference here.
Increased Employers NI is not good for business or for jobs but business will go on. [Post edited 26 Nov 2024 11:06]
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Exactly, We need to drastically upgrade infrastructure in every sector and sort out the NHS, this is only going to come from large investment so taxes will need to rise.
Business is by far the best area to raise tax as most folk are struggling and won’t sustain personal tax raises, business won’t like it but I’m not sure how they are supposed to raise tax income in the short term without this. |  |
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| Business' reaction to NI increase on 12:43 - Nov 26 with 1774 views | GeoffSentence |
I know of one business, that is putting their fees up to cover the cost of the employer NI contributions, that is the reason they are giving anyway. Probably be more doing similar, |  |
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| Business' reaction to NI increase on 13:40 - Nov 26 with 1725 views | OldFart71 |
I think the current gripe isn't just about the minimum wage as this has been increasing virtually every year, which is really no more than someone receiving a pay rise. I think it's the combination of the minimum wage increase by more than inflation and the increase by 1.2% on N.I. and the lowering of the point at which a Company has to pay it from around £9,000 down to £5,000. What with increase in rents and rates all on top of the minimum wage increase it's one hell of a hit. But that doesn't seem to stop bosses getting huge bonuses etc and neither will it in future. All that will happen and is happening as we see in Supermarkets is that staff numbers are cut, hours are cut and workers expected to do more. | | | |
| Business' reaction to NI increase on 15:12 - Nov 26 with 1665 views | Deano69 |
| Business' reaction to NI increase on 22:24 - Nov 25 by redrickstuhaart |
Businesses moan when profits are hit.
Most will be just fine.
Such a shame this was all necessary due to the previous government's unjustifiable bribe / NI cut though. |
Depends what size businesses you are talking about.
Many wont be fine at all |  |
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| Business' reaction to NI increase on 15:27 - Nov 26 with 1641 views | TractorWood |
| Business' reaction to NI increase on 12:43 - Nov 26 by GeoffSentence |
I know of one business, that is putting their fees up to cover the cost of the employer NI contributions, that is the reason they are giving anyway. Probably be more doing similar, |
Exactly it's just more fuel for inflation.
Any theoretical additional tax receipts will just be wasted and we are back to square one. |  |
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| Business' reaction to NI increase on 15:51 - Nov 26 with 1606 views | Deano69 |
| Business' reaction to NI increase on 12:43 - Nov 26 by GeoffSentence |
I know of one business, that is putting their fees up to cover the cost of the employer NI contributions, that is the reason they are giving anyway. Probably be more doing similar, |
I know many that have had to.
Since 1999 the hourly NMW rate has gone up 3.5 times the starting point. Guess what, so has the average price of a loaf of bread. Not the most conclusive gauge, but has anyone found themselves loads of disposable income sloshing around despite earning treble what you did 25 years ago...?
I know one business that is now paying £500k a year more on their payroll than 5 years ago, they are not a business giant with millions of reserves in the bank. Its simply not sustainable. Particularly when you also start to add in the cost of energy, rents, rates, insurances which have all gone up hugely in recent years.
2.4m of the 2.7m businesses registered turnover less than £1m (1.8m turnover less than £250k), they really are straining to stay employing at the current rate. SMEs account for 99.2% of the UK’s business population.
Like most business owners, I am not laying on the sunbed choosing the colour of my next super yacht, but grafting hard and working to help keep the workforce we have. | |
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| Business' reaction to NI increase on 16:05 - Nov 26 with 1578 views | bluelagos |
I think there are comparisons and many of the outcomes will be similar.
For me, the additional cost to employ staff will make a difference for some investments - you invest X and if your returns are now slightly lower, then some projects will fail the financial hurdles needed to get the sign off.
But most existing businesses will be fine - the idea that McDonalds will decide it only needs 10 staff on a shift whereas before it had 11 - is nonsense. McD will staff as few staff as they need (to keep costs down) just as they always have. Their costs will go up - and there may be some inflationary pressure if/when businesses look to maintain their bottom line by putting prices up.
So for me - some inflation (but not much), some lower investment (but not much) and most businesses will absorb the additional cost just as they have higher fuel or supplier costs.
The question for Reeves is whether the economy will benefit from where the money raised is spent. If the NHS improvements reduce the number of long term sick, and thus get some back to work, the same businesses will benefit from more available workers and consumers with more money to spend. |  |
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| Business' reaction to NI increase on 16:20 - Nov 26 with 1503 views | Swansea_Blue |
| Business' reaction to NI increase on 16:05 - Nov 26 by bluelagos |
I think there are comparisons and many of the outcomes will be similar.
For me, the additional cost to employ staff will make a difference for some investments - you invest X and if your returns are now slightly lower, then some projects will fail the financial hurdles needed to get the sign off.
But most existing businesses will be fine - the idea that McDonalds will decide it only needs 10 staff on a shift whereas before it had 11 - is nonsense. McD will staff as few staff as they need (to keep costs down) just as they always have. Their costs will go up - and there may be some inflationary pressure if/when businesses look to maintain their bottom line by putting prices up.
So for me - some inflation (but not much), some lower investment (but not much) and most businesses will absorb the additional cost just as they have higher fuel or supplier costs.
The question for Reeves is whether the economy will benefit from where the money raised is spent. If the NHS improvements reduce the number of long term sick, and thus get some back to work, the same businesses will benefit from more available workers and consumers with more money to spend. |
That last paragraph is the bit nobody’s talking about. Same old focus on costs and ignoring the benefits. It’s not just in things like return to work either is it? There are a whole bunch of factors come into play to determine how well different sectors do. Clearer and longer term policy making could improve investment commitments. Any increases in wages at the lower end are likely to go straight back into the economy through higher consumer confidence, etc. It all has to be looked at as a whole.
For once a government has come up with a meaningful, if dull, catchphrase. We do indeed need a decade of national renewal (whether Labour can deliver on that, we’ll have to wait and see). | |
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| Business' reaction to NI increase on 16:28 - Nov 26 with 1487 views | bluelagos |
| Business' reaction to NI increase on 16:20 - Nov 26 by Swansea_Blue |
That last paragraph is the bit nobody’s talking about. Same old focus on costs and ignoring the benefits. It’s not just in things like return to work either is it? There are a whole bunch of factors come into play to determine how well different sectors do. Clearer and longer term policy making could improve investment commitments. Any increases in wages at the lower end are likely to go straight back into the economy through higher consumer confidence, etc. It all has to be looked at as a whole.
For once a government has come up with a meaningful, if dull, catchphrase. We do indeed need a decade of national renewal (whether Labour can deliver on that, we’ll have to wait and see). |
The organisations that represent businesses will be making their case - they always were going to.
The bit that makes me laugh is that Brexit will have done far more damage (5% reduction in GDP means less money in people's pockets - and more hurdles if you want overseas workers to fill gaps - and trade barriers if you are an exporter) than putting 1.5% on the cost of an employee...yet they have been largely silent on that for some reason. | |
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