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Delay national insurance hike, firms urge

UK businesses are asking the government to delay the national insurance tax hike due this April to give them more time to recover.
UK businesses are asking the government to delay the national insurance tax hike due this April to give them more time to recover. Photo: Reuters/Matthew Childs

UK businesses have called on the government to delay the national insurance tax hike in April to give firms more time to recover from the hit from Omicron.

New figures from the British Chambers of Commerce (BCC) have revealed that more than half (54%) of British firms said that Treasury support for Plan B was inadequate in the short-term, with mounting pressure from rising wages due to competition for staff.

The data also showed that 59% of the 700 firms surveyed said the government did not adequately assess the impact of Plan B measures on businesses. While 38% of business to consumer (B2C) firms said their business suffered a loss of revenue due to the restrictions.

Some 68% of respondents reported absences due to illness or self-isolation in the last month, and of those, 50% said they had to reduce output or activity as a result.

When asked if they had experienced absences in the past month only 32% of firms reported no absences. Manufacturers were the most likely to report staff absences at 81%, followed by B2C services at 67% and business to business (B2B) services at 57%.

Read more: Reskilling staff can save UK firms £49,000 per employee, study finds

It comes as Plan B measures came to an end in England on Thursday, with a move back to Plan A. The changes now mean that mask wearing and the work from home advice have been removed.

Earlier this week, transport secretary Grant Shapps also announced that, from 11 February, there will no longer be a requirement for vaccinated passengers arriving in England to do post-arrival lateral flow tests.

“These figures lay bare the serious impact that Omicron and the Plan B restrictions have had on our economy,” Shevaun Haviland, director general of the British Chambers of Commerce, said. “Whilst the financial support offered by the Treasury was welcome it is clear that many firms still found it was not entirely sufficient.”

“The government also needs to recognise that the events of December piled further pressure on businesses who were already drowning in increased costs. These firms need to be given a chance to come up for air if we are to engineer a successful recovery in every sector and every region of the country.”

He added: “They should also commit to levy no further up-front costs on businesses for the remainder of this parliament to give businesses the confidence they need to invest and grow for the future.”

Watch: Boris Johnson refuses to guarantee National Insurance rise will go ahead