Retailers urge John Healey to undo Reeves’s High Street tax raid and ‘turn the tide’ on job cuts

High Street retailers have urged John Healey to roll back Rachel Reeves’ employer National Insurance raid to ‘turn the tide’ on unemployment.

The British Retail Consortium (BRC) estimates that the policy has, together with rises in minimum wages, cost the sector £6.5billion and 115,000 jobs.

Reeves’ raid, announced in 2024, saw the annual salary threshold at which NICs must be paid by employers cut from £9,100 to £5,000. The change in April 2025 also saw the NICs rate rise from 13.8 per cent to 15 per cent.

The High Street reeled as employers were liable to pay the tax on many more workers, including young people employed on a part-time basis.

The BRC estimates the threshold change cost £1.74billion.

Now, the trade body, which represents major retailers, including Sainsbury’s and Tesco, has written to the Chancellor to ask him to raise the threshold to £6,000 to help firms hire more as it would undo some damage.

As the country battles a ‘crisis’ of young people who are not ‘earning or learning’, BRC chief executive Helen Dickinson said the sector ‘is uniquely placed to play a central role’.

Businesses are issuing pleas ahead of the Budget in October after the Government said it was ‘committed to restoring high streets and bringing back hope across Britain’.

Dickinson said that thriving shopping streets are ‘essential to achieving stronger growth and raising living standards’, but firms have been held back.

Higher employment costs, energy bills, packaging taxes and business rates have ‘reduced the industry’s capacity to invest, create opportunities for young people and support growth’, she said.

The October 28 Budget could be a ‘turning point’ to ‘help deliver Government’s missions on growth, jobs and thriving high streets’.

Retailers also want the Government to act on the extra levies on energy bills and to ease business rates increases.

Meanwhile, the Association of Convenience Stores urged the Government to ‘keep the cost of employment under control and ensure workplace reforms support, rather than limit, job creation’.

Retailers are concerned that workers’ rights reforms will mean more red tape and administrative costs that make it harder to employ staff on a flexible basis, including students and Christmas temporary workers.