A leading retail body has warned that up to 160,000 part-time jobs could be at risk over the next three years due to the rising cost of employment.
Part-time roles are particularly susceptible to tax changes announced at the Budget. Retailers will be taxed on any employee earning more than £5,000, down from the current level of £9,100.
Rising employer National Insurance Contributions (NICs) and the National Living Wage will add £5bn to retailers’ labour costs in 2025 alone, the BRC said, putting pressure on the industry to cut back on employment.
The body added that these effects will be “compounded by some of the proposed changes under the Employment Rights Bill.”
Aimed at tackling low pay, poor working conditions and a lack of job security, the Regulatory Policy Committee (RPC) has said the bill lacks “evidence to support the problem being addressed” and expressed concern that “the proposals [contained in the Bill] could make it more difficult for those unemployed or economically inactive to access jobs.”
“Retail is a key source of employment right across the economy. The industry and its supply chains account for a third of jobs in one-fifth of UK constituencies and retail plays a vital role in upskilling the workforce and boosting productivity growth,” Helen Dickinson, Chief Executive at the British Retail Consortium, said.
“Retail has long offered the first rung of the career ladder to hundreds of thousands of young people, playing a vital role in communities up and down the country.”
However, companies are increasingly turning to automation rather than staff as the growing power and cheaper relative cost of tech make it a more commercially viable option to deal with cost pressures.
The BRC’s figures come after The Adam Smith Institute and Night Time Economy Advisor Sacha Lord jointly issued a stark warning to the Treasury that 85 per cent of businesses in the hospitality sector are planning to cut hours or salaries.
“New tax policies and rising energy and wage costs, combined with a cost-of-living crisis, mean that while venues might still see footfall, the numbers simply don’t add up, and the pressures on the sector are now at unprecedented levels,” Sacha Lord said.
“Customers, particularly younger people, have less disposable income, while businesses face soaring costs that are pushing them to the brink, and pricing consumers out as a result. It’s a lose-lose situation, and without a considered, long-term approach, I fear we’re causing the industry irreversible damage.”