Oswestry businesses say NI hike will have 'immense' impact
Businesses have told the BBC National Insurance (NI) hikes and minimum wage increases that have now come into effect will have an "immense" impact. Employers now have to pay NI at 15% on salaries above £5,000, and minimum wage has also risen from £11.44 to £12.21 for 21-year-olds.The government has said the changes will eventually raise £25bn a year and the money will be spent on public services like the NHS.But business owners in the Shropshire town of Oswestry are concerned they will have to raise prices to afford the tax increase and wage rises - risking losing out on customers.
Jolyon Iles, who co-owns bistro The Beech Tree, said the changes mean prices will have to rise "because without [that], we're going to go out of business.""The cost of drinks, food, will all have to go up to cover those costs - without that, we can't survive," he said. "It's hard enough as it is in hospitality."
Mr Iles also pointed out that minimum wage increases close the gap between wages earned by 16-year-olds and 20-year-olds. For 18, 19 and 20-year-olds, it rose from £8.60 an hour to £10 on 1 April, whilst for 16 and 17-year-olds, the National Minimum Wage rose from £6.40 an hour to £7.55."We're more inclined to employ an adult, because they're [more] experienced - and you're getting that for a smaller price difference," he said."Arguably, that makes it harder for teenagers to get into work."
NI contributions are used by the government to pay for things like benefits and the NHS.Yoss Gliksman, who runs specialist cookshop Upstairs Downstairs, said the new changes mean his business' contributions have risen by an extra £625 per month."The impact is immense," he said."We never object to an increase in wages, but it's the increase in National Insurance contributions that is really crippling business - it's a massive jump."
Robert Wolstenholme manages three sites in Oswestry - Square One Cafe Bar, Pickles gift shop, and Gillham's Delicatessen in the town centre.He said the changes "are going to cause a bit of chaos internally."With 27 employees across the three businesses, Mr Wolstenholme believes the minimum wage rise will "definitely [have] an effect on business."Similarly to The Beech Tree, he said the increases will be "passed on to the customers, unfortunately."
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