Tesco, Aldi and Boots among DOZENS of shops warning of mass closures & job losses after Chancellor’s £7bn NI raid
DOZENS of high street chains such as Boots, Next and Tesco have
warned the Chancellor her Budget could cost retailers £7billion.
A letter to Rachel Reeves, with 79 signatories, says they are unlikely to be able to absorb hikes to National Insurance and the living wage — triggering job losses and price rises.
It adds “difficult decisions” are already being taken across the industry and supply chains.
Other businesses to sign the damning letter include Amazon, Boots, Aldi, Lidl, Ocado, Morrisons, Greggs, Currys, B&Q, Burberry, JD Sports, Holland & Barrett, Oliver Bonas and Specsavers.
The retailers blasted the Budget as having a “harmful effect” on both their customers and the vitality of high streets.
Ms Reeves has insisted large companies can absorb her mega tax raid by making cuts and accepting smaller profits.
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But hitting back at the idea, the letter says: “For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale.
“The effect will be to increase inflation, slow pay growth, cause shop closures and reduce jobs, especially at the entry level.
“This will impact high streets and customers right across the country. We are already starting to take difficult decisions in our businesses and this will be true across the whole industry and our supply chain.”
The letter adds: “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.
“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.”
Ms Reeves’ “painful” Budget saw employers’ national insurance soar by 1.2 per cent to hit an eye-watering 15 per cent from April.
It also drastically reduced the threshold at which employers start paying up from £9,100 per year to £5,000.
Retailers in Britain employ more than 3 million people directly, while 2.7 million have jobs in supply chains.
Retail is also Britain’s largest private sector employer, contributing over £1bn to the economy every year.
The BRC has demanded to meet the Chancellor “to work together on a solution”.
A spokesman for the Treasury said: “With our public services crumbling and an inherited £22 billion fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability to allow businesses to thrive.
“By doing this, more than half of employers will either see a cut or no change in their national insurance bills, there will be £22.6 billion more for the NHS and workers’ payslips will be protected from higher tax.
“This government is committed to delivering economic growth by boosting investment and rebuilding Britain.”