0:00
together the hole in our public finances
0:03
this year which recurs every year the
0:05
compensation schemes that they did not
0:08
fund and their failure to assess the
0:10
scale of the challenges facing our
0:12
Public Services means that this budget
0:18
billion the government's decision to
0:20
hike National Insurance was without
0:22
doubt one of the more contentious
0:24
measures in October's budget it has been
0:27
roundly chastised by the private sector
0:30
branded a land grab a significant burden
0:33
and having killed trust in the
0:34
government by key figures in business
0:37
and industry but with less than a month
0:39
before the tax hike comes into Force we
0:41
wanted to dig into what the government
0:43
is doing and why many in the business
0:45
Community have reacted to it such
0:48
consternation it all dates back to
0:50
Halloween October the 31st when the
0:54
chancellor arrived at Parliament
0:55
carrying the famous red briefcase to
0:58
deliver Labour's first budget since 2010
1:01
and indeed the first ever delivered by a
1:04
woman Her speech contained lots of
1:06
popular announcements increased money
1:08
for the country's schools a boost for
1:10
NHS funding money to help bring an end
1:13
to the obdurate series of strikes that
1:15
had brought the economy to a grinding
1:17
halt in the preceding months but about a
1:19
third of the way through her
1:21
announcement came the kicker the
1:23
Revelation how all those laudable
1:25
spending commitments were to be funded a
1:27
1.2% jump in a tax that that companies
1:30
pay on wages they give to full-time
1:33
staff known as National Insurance the
1:35
government would now look to Levy the
1:38
15% and on top of that the amount at
1:41
which the tax would kick in known as the
1:43
secondary threshold was to drop
1:47
99,100 to just £5,000 the move is
1:50
expected to raise between a massive 15
1:53
and 25 billion a year by the end of the
1:56
parliament depending on who you speak to
1:58
and how businesses react and in Her
2:00
speech to MPS the chancellor
2:02
acknowledged that it was a difficult
2:03
decision that would be felt Beyond
2:05
business but that Olive Branch hasn't
2:08
stopped several of the biggest figures
2:10
in UK business chastising Rachel Reeves
2:13
and her colleagues for not understanding
2:15
business and the government's political
2:17
opponents branding it a Jobs Tax at the
2:21
heart of the fierce reactions have been
2:23
a literally of warnings about what the
2:25
move will mean for how companies are
2:26
able to operate and by extension what it
2:30
will do to the UK economy faced with a
2:32
new cost which is what this will be
2:35
businesses have three main options they
2:39
can either raise their prices risking a
2:41
bout of inflation in the UK economy and
2:44
higher prices for consumers like me and
2:46
you at the till they can cut back on
2:48
other costs by reducing things like the
2:51
number of Staff they employ or the
2:53
amounts they spend on marketing to pay
2:55
the levy or they can swallow the cost
2:57
themselves which would eat into their
2:59
profit margins and harm their ability to
3:02
invest in the business going forward to
3:04
make better products or train up staff
3:06
not an easy choice and that decision is
3:09
even more painful for some than others
3:12
bearing the brunt of the changes will be
3:14
middling and larger firms that employ a
3:16
lot of people on cheaper wages think
3:19
sectors like hospitality and Retail this
3:21
is because the threshold reduction
3:23
represents a much larger chunk of
3:25
staff's earnings than for higher paying
3:27
Industries in sab's case it recently
3:30
warned that it was facing an additional
3:32
annual bill of over £40 million and has
3:36
since announced over 3,000 redundancies
3:39
to try and keep their costs down in
3:41
response but they are not alone cityam
3:44
was reported on a Spate of business
3:45
surveys that have found confidence among
3:48
Business Leaders to have plunged since
3:50
October taking just a couple a recent
3:53
survey from the cipd the top HR industry
3:56
body found that over a third of
3:58
businesses planed to reduce their
4:00
headcounts over the coming year while
4:02
some 42% admitted they plan to raise
4:05
their prices meanwhile a similar
4:07
business confidence audit from
4:11
icaew found business confidence to be as
4:14
low now as it was just after lr's
4:17
calamitous mini budget but just how many
4:20
of these warnings come to fruition and
4:22
the extent and manner in which the tax
4:25
will affect the wallets of the average
4:27
consumer will not be made clear until
4:29
till the weeks and months following
4:31
April the 5th what is easier to say is
4:34
that if businesses are even half right
4:37
in their assessment it won't be good
