The NI changes are going to cost my organisation £1000 per employee

[flashbac]

The NI changes are going to cost my organisation on average £1000 per employee, The lowering of the threshold alone is going to cost around £600 extra per employee.

We are heavily regulated with fixed income. We're a not for profit. Our customers expectations are increasing. We are now most likely going to have to somehow reduce our headcount now, and payrises for April are going to be off the table.

Just shaking my head really. Our employees don't deserve this. Hard to see how this isn't a tax on jobs.

The lowering of the threshold also means employers have to pay for more workers, because part time salaries are now dragged into it.

A lot of people reading this won't care. All I can say is this NI increase will also affect you. just think about Local authorities, childcare providers and other services. Do you think it won't affect your Councils services/tax bills, to give one example?

(I'm not a Tory bot btw, before anyone starts accusing me of being one. I voted Remain, don't support the Tories at all, can't stand Boris and his cronies.)

And for that we have Thatcher to thank.

Yeah she seemed keen on closing domestic industries so we can have goods imported to us. But over 30 years on, no other government has made things better.

Once you’ve closed manufacturing industries it’s impossible to revive them. The skills and machinery are lost. You only have to look at the struggle to retain the remnants of the steel industry we still have left to get just a hint of the size of the task.

Depending exactly how its measured, the UK is around the 9th largest manufacturing exporting nation in the world.

We also make trains here and wind turbines.

85% of our economy is services, true, Germany is 80% services.

Financial Services are a huge earner for the country.

We in the West cannot compete with SE Asian/Chinese manufacturing costs.. as can be seen with EV's

It's clear that a lot of people don't have a bloody clue what manufacturing is (or how much is still done in the UK) or what constitutes services (or how much economic value they create).

I live in a larger market town, and the typical attitude from the local gammonatti is that "We don't make nothing no more" - very similar to what several are saying here. But I can think of five world class manufacturers in the town that are market leaders in their field worldwide (and that's just the ones inside the bypass). But they're not widely appreciated locally as manufacturers of that calibre because they're not the neanderthal metal-bashing industries of Ye Olde Victorian England that constitute 'manufacturing' to a certain world view. There is manufacturing taking place on the industrial estates of every town, and some of it is much higher in economic value than someone casually walking past would give credit to.

Manufacturing was 18.54% of GDP in Germany in 2023. In the UK, 8.2%.

As to trains, the UK does very little manufacturing - it's mostly assembly of components imported to Britain. Even the contract process for rolling stock for the HS2 line stipulated that the stock should at least be assembled in Britain, even if not manufactured here.

Oxford Economics puts the total value of UK manufacturing at over 500 billion, around 23% of total GDP.

We are very good at exporting part finished goods but as i said earlier, we simply cannot compete with China etc, as Germany is finding out with EVs.

But we also don't help ourselves, Oxford Solar went to the UK govt and asked for money to set up a manufacturing facility, Sunak said NO, Germany said YES.... we now import these world beating Solar panels.

We are also the most expensive place to set up a business in Europe, because of rents and business rates.
Despite the NI increases, the UKs employment costs are among the lowest in Europe.

Blair enthusiastically embraced the same ideology.

He had no choice. There was no manufacturing base left by 1997.

Financial services are very transient in nature and can very easily be offshored. My son works for one of the UK's biggest life/pensions/insurance firms and they have huge teams based offshore in places like Poland, and that's planned to grow. They're not providing services in Poland - just workers in Poland dealing with UK policyholders, UK investors, etc.

There was a massive manufacturing base in 1997. The decline continued throughout the Blair years. You really can't say we made nothing back then at all. Blair did absolutely nothing to reverse the decline, nor did the Tories after the Blair years. As said above, the UK is still in the top 10 of the World's exporters - it was higher in the World rankings in 1997!

Because it can’t be reversed. No country could reverse the wholesale destruction of industry that took well over a century to build up. When the skills have gone they’ve gone, there’s nobody left to pass them on.

There is lots of manufacturing left, but some is like ours. Our tiny SME is a bespoke remanufacturer of heat transfer technology. If you have a large capital asset, like a ship or a factory or a hotel or a hospital or a power station, it almost certainly needs to add or lose heat somewhere in its structure or manufacturing system. A cruise liner has to deliver a hot shower when the paying passenger wants one. So we are asked to clean, test, maintain or rebuild and often improve the efficiency of legacy systems. Many OEMs went under, or were bought out in the late 80s and early 90s when the margins were very tight, so we manufacture bits of kit to replace worn out items to pattern. We do one-off jobs remaking parts made by companies that have long gone, using skills that owe more to history than technology and that are being lost with each year as the old salty dogs retire.

@Blossomtoes asked me why we haven't sold the business so DH can retire? We have been trying for several years, but commercial teams are not keen on businesses where demand cannot be created by marketing. Our customers find their way to us, usually by word of mouth. And hiring a new MD really isn't easy because the work comes from all over in chunky projects rather than mass-manufacturing a widget that can be sold in a neat box for Amazon to deliver; we build a crate to ship. Finding someone with the engineering knowledge to understand the task, spec it, price it and find the materials, then oversee the work to the deadline who also has the commercial nous to make it pay has been uphill. We trained someone for five years, only for them to say they didn't want the sleepless nights when the business went quiet, or to go without a salary in those months. 2024 has been a very difficult year for 11 months, and for some reason December trading is off the scale busy.

We cannot compete in mainstream manufacturing & where we can, consumers don't buy it.

Look at EV's or renewables? how can western countries match their production and labour costs?

More niche stuff we can, like Oxford Solar but Sunak said NO...

The Chinese take our tech, which we gladly sell them.. mass produce it and sell it back to us and all the patriotic people buy it...

Personally? i would never buy a Lenovo laptop or a MG etc EV, no matter the saving.

If we want more UK/European manufacturing, we'll have to start buying what we do have... an VW ID3 is a great EV or a ford puma or a Vauxhall Corsa but how many would prefer to save a couple of '000 and buy a Chinese car, then moan about the decline of our manufacturing base & vote Reform.... perverse.

The cost of energy in Europe has made manufacturing here uneconomic.

I hope this link works; it's a bracing read.https://mail.hover.com/?_task=mail&_caps=pdf%3D1%2Cflash%3D0%2Ctiff%3D0%2Cwebp%3D1%2Cpgpmime%3D0&_uid=15669&_mbox=Spam&_action=show]

No it doesn't but this one does....

www.nesta.org.uk/blog/uk-household-electricity-prices-rose-to-levels-higher-than-those-in-any-eu-country/

The UK has the most expensive electricity in Europe, once standing charges are included.
Energy suppliers are now raking in huge profits, Centrica made almost 1billion from their renewables sector, the CEO of Octopus is heading towards being a billionaire....

Ofcom like Ofwat is a regulator working hand in glove with the sector encouraged by both Tory and Lab governments.

We also have some of the most expensive goods and groceries.... funnily enough, wages are among the lowest of comparable economies.

Why Labour isn't quite so keen to cut these, instead of WFA is a bit of mystery or as the BBC's World Service said this morning "People vote for change but then don't get it, so move to the extremes"

Starmer would do well to realise this.

The bit about voting for change but not getting it is the nail on the head. Both Tory and Labour over the past few decades are basically the same and they’re not doing what they promise nor what the voters want. Hence the rise of extremes nit just in the uk but across Europe too! Two cheeks of the same arse is remarkably accurate!

It’s not even slightly accurate, it’s bollocks. You have only to compare the state of public services in 2010 with now to see what complete rubbish this is.

Yes, left and right bollock…

Very insightful. 🙄

This. Not sure if people are aware but much of this base is relocating headquarters to NYC. Better investment/tax situation. Global financials have offices everywhere.

Well, you wrote it, don’t blame me for your literary efforts.

Whilst i agree that Blair was different from Thatcher/Major, he did follow the same privatisation agenda, we saw the rise of the housing association, didn't build any council housing, didn't even allow councils to keep monies raised to build new council housing.

We see it in Starmers Labour, what was the first thing they did? cut WFA and then a budget praised by Osbourne.
The increases in NI on business will have a negative effect on growth, a company boss i know, says its added 100k to his costs and will mean 1% off any pay rises.
In other news, hedge fund managers still get a sweetheart heart deal on their salaries with HMRC.

Nothing on Ofgem reform or energy pricing and by their own calculations, GB Energy will NOT reduce bills... unless there is another Ukraine.

No plan on Dentistry either, i'm not talking about actions here, 6m isn't long enough but a plan or even talks with the Dentists.... nothing at all, the NHS consultation wont even report until the spring, almost 12months after the GE.

Their plan on social care is pathetic... oh actually they haven't got one, its a long term consultation, meanwhile scrapped plans on extra funding and higher wages, so following the Tory option - do nothing.

Labour have squandered a 19pt lead over the Tories, in 5 months.

This leaves the door wide open for Reform/Farage.

I cannot tell you how disappointed i am in Labour, when i heard that water bills are going up by an average of 36%, above inflation, around 60% where i am, as we will lose the £50 rebate, i thought i may as well of voted Tory.

I’m disappointed too @financiallyiliterate, it’s not the start I hoped for but six months in it’s too early to judge. I’m hoping to feel much less disappointed this time next year.

I hope so too.

Its the lack of ambition and setting out firm plans, i certainly didn't expect a string of consultations, esp on Social Care, an area where the NI increases will hit hard & where the problems are well known... kicking the can into the long grass?