UK retail trade warns of inflation and job losses due to budget and seeks meeting with Reeves

Britain's biggest retailers have written to Finance Minister Rachel Reeves to warn her that last month's budget will make both higher prices and job losses a certainty and hit investment.

The letter, coordinated by trade body British Retail Consortium and signed by 79 retail bosses including those at Tesco, Marks & Spencer, Sainsbury's, Next, Asda, Morrisons, Kingfisher, Amazon UK and Boots, called for a meeting with Reeves to discuss his concerns and work on a solution.

The Labor government's budget statement on October 30 increased employers' contributions to National Insurance, or social security, by 1.2 percentage points to 15% from April next year, and also lowered the threshold when companies start pay at £5,000 from £9,100 per year. It also increased the minimum wage for most adults by 6.7% since April.

The letter said the UK retail industry, which has three million direct jobs and 2.7 million more in its supply chain, was facing a £7 billion ($8.8 billion) increase in annual costs from 2025, when higher business rates and the impact of new taxes on packaging are also taken into account.
“It will not be possible to absorb such significant cost increases in such a short period of time. The effect will be to increase inflation, slow wage growth, cause store closures and reduce jobs, especially at the entry level,” he said .

Retailers want the government to phase in the new lower income threshold for National Insurance, delay the introduction of packaging taxes and review and introduce proposed changes to business rates.
On Saturday, Prime Minister Keir Starmer said he would defend decisions made in the budget “all day long”.