Next boss warns it will be tough to find first jobs

The tax changes announced in the Budget will “make it harder for people to enter the workforce”, according to the boss of retail giant Next.

Lord Wolfson told the BBC that the increase in National Insurance paid by businesses would particularly hit the retail sector and mean entry-level jobs are “particularly hard hit”.

He called on the government to spread the tax changes over time rather than implementing them in April, otherwise jobs or hours would have to be cut.

But a Treasury spokesman said the budgetary measures were meant to “clean the slate” and provide stability to businesses.

In last October’s Budget, the Government increased the rate of National Insurance (NI) paid by employers from April, and also reduced the threshold at which employers must pay from £9,100 to £5,000.

Businesses are also facing a rise in the national living wage in April at twice the rate of inflation.

Lord Wolfson, a Conservative peer, said the changes would have the biggest impact on employers who have large numbers of low-paid or part-time employees.

The next pay bill is set to increase by £70 million, and Lord Wolfson said this would lead to cuts in the number of hours staff work – either through fewer workers or fewer hours per employee.

He called on the Government to reduce the NI limit over time, rather than the few months’ notice that employers received in the October Budget.

He said that while the tax increase for a £60,000-a-year job is around 2%, the tax increase for a part-time salaried employee is around 6.5%.

“So the ax has hit particularly hard on those entry-level, National Living Wage jobs, and that’s where the pain will be felt most.”

Lord Wolfson said this is not just a matter of concern for retailers, but for the entire economy. This year 13 applications were received for each Christmas job vacancy – a 50% increase on last year.

“My concern is that it’s going to be harder for people to enter the workforce,” he said.

“It is very difficult to see how such a large increase in the cost of entry-level work would result in anything other than a reduction in the number of opportunities available.”

But a Treasury spokesman said more than half of employers would see either a cut or “no change” to their National Insurance bills.

He said he was “creating the conditions” for economic growth through measures including limiting the corporation tax rate and establishing a national wealth fund.

The NI and minimum wage measures have sparked criticism from UK companies, who argue that the changes are contrary to the government’s aim of promoting economic growth.

Earlier this month, British Chambers of Commerce said confidence has “fallen”More than half of the companies plan to raise prices in the next three months due to “pressure from rising costs and taxes.”

Last year, Next was one of the signatories A letter to Chancellor Rachel Reeves from UK retailers Call for reconsideration of budget measures.

The letter said job losses in the high street were “inevitable” and also warned that prices would rise and shops would close.

Next made profits of more than a billion pounds last year, while other big retailers with large workforces – such as Tesco and Sainsbury’s – also made bumper profits. Lord Wolfson acknowledges that it is those “broad shoulders” that the Chancellor insisted will bear the brunt of the tax increases required to rebuild public services.

“The Government needed to raise taxes. In principle I have nothing against lowering the threshold for NI, but the speed at which it is going to happen, the lack of consultation, that is the problem.”

Lord Wolfson is also concerned about the new Workers’ Rights Bill.

It promises to give greater protection against unfair dismissal and “exploitative” zero-hours contracts, with employees able to request a guaranteed hours contract based on the number of hours worked over a period. But this could create problems for retailers.

“We offer staff extra hours in the run-up to Christmas. If the law meant those hours would have to be contractually binding forever it would be impossible for us to be able to do that at all.”

He has some advice for the Chancellor in his efforts to boost growth and business confidence. Start in your backyard.

“In the last five years the government has appointed more than 100,000 civil servants.

“We can’t spend more than 40% of GDP on the public sector. It has to become more efficient and if the government is committed to doing that – and can deliver it – then I think it will boost business confidence. “Will do more than anything else.”