Martin McTague, National Chair of the Federation of Small Businesses commented: “This is clear and decisive action to support growth. The decision to reverse all four of these tax rises will support livelihoods, jobs and small businesses across the UK. Removing taxes on jobs, investment and growth is the right thing to do, and FSB has campaigned long and hard for this decision.
The Chancellor is making clear he will let small businesses do what they do best: create jobs and support their local communities.
Director General of the British Chambers of Commerce, Shevaun Haviland, said: “After months of campaigning, today’s Government announcement to reverse the increase to the National Insurance Contribution (NIC) is a big win for the British Chambers of Commerce and the business community. This is much needed support for businesses during these difficult times.
“There are a range of other challenges that must be addressed including labour shortages, supply chain disruption, and rising raw material costs. Tomorrow’s mini budget from the Chancellor is now a critical moment. To truly revitalise our economy for the difficult months ahead then tomorrow must bring a clear long-term plan that gives business the confidence to grow.”
Michelle Ovens CBE, founder of Small Business Britain said: “Small businesses need all the help they can get right now, so this move to reverse the national insurance rise will no doubt be received positively by business owners across the country, providing a boost that will go some way to help the many small firms out there struggling with cash flow. It is also good to see the immediacy of the action taken.”
Chief Economist of the Institute of Directors, Kitty Ussher, said: “Businesses right across the country will be applauding the Government's realisation that raising employers' national insurance was a mistake. As the Institute of Directors has consistently and repeatedly argued from the outset, this was quite simply a tax on jobs, which businesses had to pay regardless of whether they are profitable. And the public agreed – the petition we launched at the beginning of the year attracted over 189,000 signatures.
“Many of our members told us that the impact of the increase was that they would have no choice but to push up prices, making inflation even worse. Others said the rise in the cost of employing people meant they would think twice about taking new staff on, or potentially make the difficult decision to let colleagues go. An independent report we commissioned from NIESR confirmed that the tax would reduce the UK’s international competitiveness and hit hardest those parts of the economy that suffered most from the pandemic. And even the Treasury itself said it would have ‘significant macroeconomic impact’.
Verity Davidge, Director of Policy, Make UK, said: “The Chancellor has clearly recognised the difficult situation companies are facing in response to eye watering increases in costs across the board. This is a welcome common sense reversal of a proposal which was both illogical and ill-timed when it was announced and, is even more so now given it is a tax on jobs. With the cost of employment in particular sky-rocketing this will put cash back in the pockets of businesses and consumers at a time when they are burning through their cashflow at a rate of knots.
“Therefore, at a time when business is already facing unprecedented energy and other supply-side costs, this is a hugely important change that can improve the situation for SMEs trying to grow in very difficult circumstances.”
Chief Executive, British Independent Retailers Association, Andrew Goodacre, added: "We have been concerned for some time about the rising costs of running a business. We therefore welcome this reversal of the NI increases as it will reduce the burden on employers as well as employees. Together with the recent energy support package, we hope the consumer confidence and business confidence return in readiness for the most important trading time of the year."