British employers do not have bottomless reserves of cash put aside in a piggy bank for the Government to draw on
AS DONALD Trump proclaims “Liberation Day” in the United States, businesses here in Britain are facing up to Cost Crunch Day.
We are being hit by huge National Insurance tax increases and a hefty rise in the National Living Wage which we pay staff.
Now, I welcome pay increases that puts more cash in the pockets of my hard-working colleagues.
But this double whammy will cost businesses like mine millions of pounds.
Across the UK, the NICs hike alone is estimated to cost retailers up to £7billion over the next year.
You don’t find that sort of cash down the back of the sofa.
The Government has said this is a tax on business rather than on workers.
But in reality, it is a tax on all of us — the Tooth Fairy doesn’t pay them.
British supermarkets like mine are already working on extremely tight profit margins in one of the most competitive markets.
We do not have bottomless reserves of cash put aside in a piggy bank for the Government to draw on.
With taxes going up, employers like me must look at how we can ease the pain and lower costs.
Sadly, this is going to hit the public.
We have 30,000 staff at Iceland and we are fortunate to have developed scale and resilience since my mum and dad set up the business half a century ago.
We don’t anticipate job cuts.
But some other businesses have said they will have to lay people off.
For smaller firms and those in particular sectors — like bars and restaurants — the NICs tax rise may make the difference between growing, going backwards or failing altogether.
It will also mean higher prices for British shoppers.
This could not come at a worse time as Trump’s tariffs are also expected to push up prices.
Massive global uncertainty
This Government came into office promising economic growth as its number one mission.
Delivery of this is clearly not going to be helped by the massive global uncertainty created by the Trump administration, though at least the UK has been spared the most punitive tariffs.
The Government is right to respond calmly, rather than with an immediate tit-for-tat.
All UK business is hoping that our national charm offensive will pay off with a comprehensive trade deal soon.
At home, there needs to be a clear recognition that only business can deliver the economic growth on which everyone’s future security and prosperity depends.
Chancellor Rachel Reeves wants to work with business to reform the planning system, and she is right.
Outdated and unfair
That’s not just about housing, it’s about enabling businesses to open new stores, serve local communities, create jobs and contribute to the economy.
And business rates remain outdated and unfair.
Government must back business or Britain’s economic recovery will remain permanently stuck in bottom gear
Richard
A modern solution like an online sales tax could level the playing field between digital giants and high street retailers.
The UK’s private enterprises are the engine driving investment, wages and growth.
Government must back business or Britain’s economic recovery will remain permanently stuck in bottom gear.
Instead, this blunt NICs hike will harm business, hit consumers and hinder growth
Richard
At Iceland, we haven’t sat back moaning about the pressures we face.
We have rolled up our sleeves and taken direct action to help our customers; launching new deals and a weekly discount to the over-60s.
We have also created the unique Iceland Food Club ethical credit scheme, providing £12million in interest-free micro-loans that have provided a lifeline to over 30,000 families.
Hinder growth
And our Second Chance Initiative has offered jobs to almost 1,000 ex-offenders.
There is no such thing as a pain-free tax rise.
Albeit, I have long pointed out that I don’t know of many top-rate taxpayers who wouldn’t agree that a slight increase would morally be the right thing to do for those less fortunate.
Instead, this blunt NICs hike will harm business, hit consumers and hinder growth.
Labour was elected on a promise to do the opposite of this.
If they get on with backing business, cutting pointless red tape, striking trade deals, and giving bosses the confidence to invest and create jobs — I think they still can.