Some of the UK's largest retailers and hospitality businesses, such as Tesco, Costa Coffee, and the Co-op, met with Chancellor John Healey on Tuesday morning at No 11. They urged him to reduce the cost of employing young people in his upcoming first budget.
Sector leaders, including Stuart Machin of M&S and Simon Roberts of Sainsbury's, discussed the impact of increased employers' National Insurance contributions (Nics). Businesses are seeking a partial reversal of a previous decision to lower the Nics earnings threshold from £9,100 to £5,000 annually, proposing it be raised to £6,000 to help create jobs and ease inflation.
Helen Dickinson, chief executive of the British Retail Consortium, stated that retailers' taxes have risen by 20% in two years, including an additional £6.5bn in new employment costs. She added that any new costs would be passed on to consumers and make job creation more difficult.
Separately, it has been reported that Mr Healey has rejected calls from Labour MPs and thinktanks to equalise capital gains tax (CGT) and income tax rates in the budget. Economists have suggested such a move could raise £11.3bn annually, but the Chancellor reportedly fears it could deter inward investment, though a smaller increase in CGT remains a possibility.