National insurance - people have short memories

[MumofCandR]

I don't understand the outrage over the national insurance increase in the budget. Only 2 years ago (April 2022) Rishi Sunak increased employee NI to 13.25%, 5.25% higher than it is today - fact. Only in January this year it was 12%, today it sits at 8% - fact. This was a very clever move by the conservatives to pull the wool over everyone's eyes. On the one hand, best case scenario it would increase their vote share as they floundered in popularity (didn't work), worst case they would leave the next government with an impossible hole to fill and the NHS underfunded laying the foundations for privatisation, and setting the conditions for any subsequent government to fail - very, very devious. And people seem to have fallen for this machivelian move, memories are incredibly short. So much consternation over a 1.2% increase for employers? This doesn't even bring NI near to where it started out less than 12 months ago, if businesses are this sensitive to a minor % increase in NI then there's far more to worry about the sustainability and viability of these in the first place, surely - AIBU?

That was a cost to employees, this is a cost to employers, the argument against being that it affects employers anility to pay wage increases or to employ people at all.

Personally, of all the things they "had" to do or could have done, I don't think it's too awful, but it's not the same as the former increase.

For many businesses it's not just the hike in NI. Business rate relief for retail and hospitality has been cut to just 40% (previously 75%), also minimum wage set to increase in a few months time. It's a lot of added costs in a short space of time for small businesses, especially if you're just starting out.

I agree. If it had not been reduced, a large part of the finance gap (aka black hole) would not be there.

The rest I'd have accounted for by the temporary fuel duty cut and the higher than otherwise interest rates caused by Liz Truss's fiscal event.

Who in their right mind would start a business now? Such a shame because small business contribute massively to growth

The NI rises are costing charities £1.4 billion

That's £1.4 billion less for good causes.

In the round though, costs to employees are costs to employers and cost to goods and services, whichever way it's cut/presented.

Couple the ERNI increase alongside the NMW increase, what do you expect those "non-viable" businesses to do?
They have two options.. pass the cost onto customers so we feel the impact anyway or for those businesses that can't really do that.. close down?
All well and good saying they're not viable so should close but when the bulk of that is care homes and nurseries what's the plan?

Sounds like a big number right.... Don't be deceived. If employers were to increase wages by the same % amount it would be considered a pittance, and people would be more likely to focus on the pittance of a wage increase v how much less was going to charity... All about perspective, smoke and mirrors really.

You are not wrong. It was completely irresponsible of the previous government to cut NI at a time when the country was still borrowing lots of money after Covid and the energy price shock.

My main complaint about the current government is that, while they've done the necessary thing to increase taxes, they're actually going to borrow even more, because they haven't increased taxes enough to pay for all the things they want to spend on.

Britain can't keep borrowing more and more with no consequence for ever. At some point it will all come crashing down.

I think you are making a good point here regarding pay rises.

Labour's problem was always going to be the short memories that voters seem to have when it comes to politics.

There is a great expectation for them to fix everything straight away but when they try something/anything to do that then everyone is complaining like mad.

And to those who say they should have upped income tax (which in some ways I think they should have done) - the furore over that and their subsequent "broken promises" would have been insane.

The truth is that public services are in a dire mess and money has to be raised somehow.

Don't worry, you will get your wish soon and there will be no private sector.

I hope you have a plan b to fund the NHS and the rest of the public sector when the private sector has been destroyed.

I'm sure you are clever enough to find the cash from somewhere, just as clever as all the entrepreneurs who will be leaving the UK and setting up elsewhere.

But at least you and your Labour goverment will be happy.

Agree people have short memories indeed.

Please tell me what is dopey about it????

I do have some sympathy for this but workers deserve a fair trade.

Don't worry, they will all be on benefits soon as there won't be any jobs left. So it will be very fair for them as they will be paid for doing nothing.

It's not a dopey answer but it is quite a childish one.

Of course no one is advocating for the private sector not to exist that's just a ridiculous thing to say.

There is no perfect answer or route out of the situation the country finds itself in Years of underinvestment in public services and a belief that profit and share holders are king has led us to where we are.

Something had to be done. Maybe all of the new measures are a disaster. Only time will tell.

It is obvious that they are a disaster, there is no maybe.

Have you read the hatred on here for the private sector and for anyone who is rich???

Socialists are too stupid to realise that without the sectors of society that they hate, there will be no pubic sector and no country.

@IMustDoMoreExercise

You are speaking it absolutes and sound ridiculous. People would be more likely to discuss if you didn't go to extremes.

Socialists don't hate the private sector. Far from it. Labour isn't even that socialist.
But they really couldn't win.

The Tory mess has to be fixed. It was always going to be painful.

People have very short memories indeed.

Labour are being held to completely different standards by part of the electorate who are determined to ignore the fact that the Tories left things in a dire state. And they’re completely ignoring the decisions that the Tories made which were infinitely worse - but that was OK because somehow everything is Labour’s fault….even though they’ve only been in government for three months.

I didn’t even vote for Labour and I’m sick of the political contortions which ignores everything that has gone before.

Seriously?
Are you really trying to suggest that this is how so-called socialists view the world in 2024?
And on here? MN seems to be full of people earning 6 figure salaries, sending their kids to private schools and enjoying the good things in life. At least that seems to be the majority of posters.

I think you are just spouting tired old cliches about left wing voters which are just out dated now and it just comes across as bitter and angry.

Perhaps you can tell us exactly how the recent budget is going to affect you personally so we can understand where your anger is coming from.

You fail to mention the reduction in the threshold for paying ERs NI ... by 50%ish! Coupled with the NMW increases.
Wait until nurseries, old people's homes, GPs start shutting in droves.
At least they deferred the start date, like the stamp duty.

I was waiting for the budget to make a decision of if I was taking on two more staff, I've decided no. I'm a reluctant employer anyway, I have three staff and it took me years to take them on.

I was already worried about the day one employee rights, the NI hike is a pittance compared to what the wrong employee would mean. I don't pay minimum wage anyway and review yearly so that's not an issue.

Having people work from home more than one day a week each wouldn't really work for the business. Two of my employees don't want any wfh hours anyway as I've made extensive adjustments for disabilities which they can't replicate at home.

It's just a shame that I keep turning contracts down as I don't have capacity for more.