Yahoo Finance Rishi Sunak's NI rise will pile on misery for struggling households, says Tesco boss
The chairman of supermarket giant Tesco (TSCO.L) has hit out at chancellor Rishi Sunak for raising national insurance at a time when households are struggling with a tightening cost of living squeeze.
National insurance (NI) contributions rose 1.25 percentage point for millions of workers in April. The changes mean those earning above £9,880 ($12,170) will be liable for 13.25% NI contributions, up from 12%. Earnings above £50,270 will be charged a rate of 3.25%, up from 2%.
However, John Allan argued the move was unfairly affecting those on modest incomes.
"If I’d been the chancellor, I wouldn’t have done it," he said. "It’s hitting people on modest incomes disproportionately and it’s absolutely the wrong time to do it. If I were in government, I’d roll that back."
Speaking on how the cost of living crisis was hitting Tesco customers, he told BBC Radio 4’s Today programme: "Many of them are struggling to both be able to heat their homes and feed their families.
"More and more of them are having to resort to food banks and we support substantially a lot of local charities and a lot of local food banks."
He also warned on "real poverty" in a generation as the number of people who are having to use food banks rise.
Read more: Sunak hints more support for cost of living squeeze could be on the way
He also called for business rates to be "pulled down" to help small and medium-sized firms.
Allan, who is also the chairman of the housebuilder Barratt (BDEV.L) and a former president of the CBI lobby group, also backed calls to impose a windfall tax on energy firms to help households who are feeling "extremely stretched" by the cost of living crisis.
The Tesco chair said there was an "overwhelming case" for a levy on the excess profits being enjoyed by energy firms as a result of the global spike in prices.
It comes as Labour MPs and campaigners have repeatedly called for a one-off tax on firms' profits. However, Sunak said the government was against a windfall tax, saying it would deter investment.
Last week, Shell (SHEL.L) renewed demands for a windfall tax on the sector after it posted profits of £7.2bn for the first three months of 2022.
It followed rival BP (BP.L), which announced an underlying profit of £5bn earlier in May, more than double last year’s figure and its biggest surplus in over a decade.
Read more: BP profits soar to highest in 10 years as calls grow for windfall tax
The chairman's comments come ahead of the Queen’s Speech later on Tuesday. The statement, which will be delivered by Prince Charles this year, is usually delivered by the monarch and lays out the UK government’s legislative agenda.
"A lot of people are feeling something of a pinch and lots of people are actually feeling extremely stretched, and I hope the Queen’s Speech will do something to address that," he added.
It comes after the chancellor hinted on Monday that additional government support to deal with the cost of living crisis could be on the way.
Watch: Tesco chairman says worst of rising food prices ‘yet to come’
