Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government what assessment they have made of the effect of rising labour costs on businesses operating in the hospitality and retail sectors, and what steps they are taking to ensure employment remains viable in those sectors.
Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts. A full Impact Assessment on NMW was published and received a Green ‘fit for purpose’ from the Regulatory Policy Committee on Tuesday 4 February 2025.
The Government will protect the smallest businesses by increasing the Employment Allowance to £10,500. This means that this year, 865,000 employers will pay no NICs at all, more than half of employers see no change or gain overall from this package and employers will be able to employ up to four full-time workers on the National Living Wage and pay no employer NICs.
The Hospitality Sector Council and the Retail Sector Council continue to consider key issues and opportunities, including employment and how to encourage growth across both sectors.