Watford businesses hit out at National Insurance policy

While many businesspeople had sympathy with the economic situation the government inherited, almost all warned that this is not the answer.

Chancellor Rachel Reeves confirmed in her Budget that the rate employers pay in National Insurance contributions will rise to 15 per cent on a worker’s earnings above £175.

In addition, the threshold when employers start paying the tax will be reduced from £9,100 per annum to £5,000.

Tony Vico, owner of Watford's Home Improvement Centre, which has around 50 staff, called it a “tax on employed people”.

Speaking from his Market Street base, the 59-year-old said: “The threshold change is costing us £615 a year per employee as a new tax and that’s without what they’re adding on the top.”

Tony Vico (Image: Matthew Evans)

A Watford local, Tony continued: “I think the government hasn’t got a clue what it’s doing.

“What they should be doing is taxing people like me more. Anyone paying more than 40% tax, over that threshold, put another two pence on the pound for people earning that much.

“Don’t hurt businesses because then you’re stopping them growing and you’re stopping them investing.”

John Cao, the 54-year-old owner of Ocean Bells Coffee, was also critical: “It is going to be very hard. Costs are increasing a lot.”

The coffee shop in the town centre employs eight people. Cao said that he was looking to hire more staff but since the Budget has put those plans on ice.

Jon Cao (Image: Matthew Evans)

He said: “Normal people are going to pay the price, it is punishing them, particularly the lower paid.

“The government said they were going to support business, but this is definitely not a pro-business government.”

Across Watford, businesses spoke of how they might account for the National Insurance rise. They are reluctant to put prices up but at the same time don't want to stop investing in their staff.

This balance is something that Qaisam Saud, general manager of Heavenly Desserts Watford, seemed particularly concerned about. 

He said: “We will pass on some of this to customers, though we have to be careful not to lose them.”

Qaisam Saud (Image: Matthew Evans)

The 25-year-old added: “We are a luxury business at the end of the day, so people mainly come to us when they have disposable income to spare. 

“It’s a chain reaction. If people are spending their money on vital goods, then it may hurt us and other high-end places.”

Paz Gilbert, an employee at a local nursery school, was more sympathetic: “They [the government] cannot help but put up taxes because of the situation we’re going through.”

Paz Gilbert (Image: Matthew Evans) She added: “Like it or not, hospitals, transport and everything, they need to do something to fix them. But of course, where are they getting the money? They tax the people.”

Watford's Labour MP Matt Turmaine said the Budget would "fix the foundations of our economy and start to fill the £22 million black hole left by the Conservatives".

He added it was a "tremendous" Budget and said the Chancellor "kept her promise not to raise VAT, income tax, or national insurance on ordinary working people, and they will feel that benefit in their pay packets".

The MP also said he was "delighted to see the extra investment in the NHS and in schools, which is particularly  pertinent for Watford, and will help to get those waiting lists down".