London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

Businesses urge Sunak to delay ‘ill-timed and illogical’ NI rise

Businesses urge Sunak to delay ‘ill-timed and illogical’ NI rise

As Ukraine crisis drives energy prices up, firms say tax rise could put Covid recovery at risk
Rishi Sunak is facing renewed pressure from business leaders to delay a planned £12bn rise in national insurance, amid warnings over soaring costs for companies and households as the Russian invasion of Ukraine drives up inflation.

The manufacturing trade body Make UK, which represents 20,000 firms of all sizes across the country, said the tax hike planned for April should be pushed back until the UK economy is in a stronger position. It warned the government that pressing ahead would risk firms slamming the brakes on recruitment and putting the economic recovery from Covid at risk.

With concerns mounting over the fallout from Vladimir Putin ordering his troops into Ukraine last week, the business lobby group said now was not the time to add further self-imposed costs on companies.

“The proposed increase remains illogical and will be even more ill-timed given how circumstances have rapidly changed since it was announced,” said Stephen Phipson, the chief executive of Make UK.

“The cost burden on business is continuing to escalate and, while some of these increases are due to global events, government must avoid adding shooting business in the foot by an entirely self-imposed decision.”

According to a survey of almost 300 manufacturing firms by Make UK, as many as three in five said the tax rise would have a moderate or significant impact on their hiring intentions. Almost three-quarters said they would pass on, or would be very likely to pass on, the rise in their costs to customers in the form of higher prices for their products and services.

It comes as the fighting in Ukraine drives up global energy prices, and as the conflict and western economic sanctions unleashed in response lead to tensions over the supply of Russian gas to Europe. Following a sharp rise in wholesale gas markets last week, economists said UK inflation could rise from the current rate of 5.5% to peak above 8% within months – the highest level for three decades.

Boris Johnson had attempted to draw a line under demands to delay or scrap the planned tax rise, arguing in a joint letter with Sunak that the policy was the right way to deal with NHS Covid backlogs and reforms to social care.

With the prime minister criticised over the “partygate” affair, senior Conservatives had urged him to tear up the plan for a 1.25 percentage point increase in national insurance contributions for both workers and employers announced last September.

However, the tax-raising plan has led to broader unrest in company boardrooms, when taken together with other steps to raise the UK’s tax burden to the highest sustained levels in 70 years.

In an intervention ahead of Sunak’s spring economic forecast later this month, the Confederation of British Industry urged the chancellor to set out a range of tax cuts and spending commitments to offset the impact on firms.

The CBI said a permanent investment deduction was necessary to help companies boost the amount they spend on productivity-enhancing technologies, machinery and buildings by £40bn a year by 2026. It said firms should be offered a 100% tax deduction against such investments from April 2023, offsetting an increase in the headline rate of corporation tax from 19% to 25% in the same month.

Tony Danker, the director general of the CBI, said: “You’ve come out of the blocks with a pretty damaging measure, which is that increase in corporation tax. So I think it is incumbent upon government now to compensate for that.”

The CBI said firms needed measures to encourage them to spend, after a period of weak business investment since the Brexit vote and during the Covid-19 pandemic. The lobby group estimates that £100bn could be added to the Treasury’s coffers by 2030 if the UK bucks current predictions and achieves a more ambitious 2.5% average growth rate for GDP over the remainder of the decade.

“Faced with a record tax burden, a cost-of-living crisis, wage pressures and the end of the super-deduction, firms will be looking to the spring statement for a clear signal that the government’s ambition will be matched by action,” Danker added.
Newsletter

Related Articles

0:00
0:00
Close
Massive Strikes in France Pressure Macron and New PM on Austerity Proposals
Trump Seeks Supreme Court Permission to Remove Fed Governor Lisa Cook
Hillary Clinton’s Reckless Rhetoric Fuels Division After Charlie Kirk’s Assassination
NASDAQ Rises to Record as Intel Soars More Than 20%, Nvidia Gains 3%
Nvidia’s $5 Billion Bet on Intel Reshapes AI Hardware Landscape
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Trump’s Quip on Biden and Google Lawsuit Revives Debate Over Antitrust Legacy
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
×