Key facts
- UK Chancellor John Healey is considering tax cuts to reduce business costs and boost youth employment.
- Retail and hospitality firms want a partial reversal of the National Insurance Contributions (NICs) threshold change.
- Businesses are lobbying for the NICs threshold to be raised to £6,000 from £5,000.
- Healey met with leaders from Tesco, Costa Coffee, Co-op, Marks & Spencer, and Sainsbury's.
- Healey has rejected calls to equalize capital gains tax rates with income tax rates.
- Healey's budget statement is scheduled for October 28.
UK Chancellor John Healey is reportedly considering measures to reduce business costs, particularly employers' national insurance contributions (NICs) and business rates, to encourage the hiring of young people. This comes ahead of his budget statement scheduled for October 28.
Leaders from major retailers and hospitality businesses, including Tesco, Costa Coffee, the Co-op, Marks & Spencer, and Sainsbury's, met with Healey to urge him to cut the cost of employing young workers. They specifically requested a partial reversal of the decision by Healey's predecessor, Rachel Reeves, to lower the NICs earnings threshold from £9,100 to £5,000 a year. Businesses argue this change has contributed to a decline in high street jobs for young and part-time workers, and a rise in youth unemployment.
Industry representatives are advocating for the NICs threshold to be raised to £6,000, believing it would help create jobs and alleviate inflationary pressures on high streets. Sources close to the meeting expressed optimism that Healey was receptive to these proposals. Healey has previously vowed to ease the cost of doing business amid pressures from rising energy bills.
Meanwhile, Healey has reportedly rejected calls from Labour MPs and thinktanks to equalize capital gains tax (CGT) rates with income tax rates in the upcoming budget. While some economists suggest this equalization could raise significant revenue, Healey is said to fear it might deter inward investment. CGT rates were previously increased by Rachel Reeves in 2024.