August Budget: ‘National Insurance rise will make life harder’

The owner of a small business in south London has said the rise in National Insurance (NI) announced in the Budget will be “horrendous” for her firm’s overheads.

Sally Butcher, owner of Persepolis, a Middle Eastern shop and restaurant in Peckham, said the increased cost would result in her having to work more hours each week.

Setting out the Budget, Chancellor Rachel Reeves announced that NI contributions would rise from 13.8% to 15%, and the threshold at which businesses start paying NI on a workers’ earnings would be lowered from £9,100 to £5,000.

“Realistically, when things like this happen, what it means is that my husband and I have to work harder because we can afford less staff shifts,” Mrs Butcher said.

“I already work a 90 hour week,” added Mrs Butcher, who has run the business on Peckham High Street for almost 23 years.

“What it means is those extra half shifts where I think, ‘I’ll just get someone else in and go to the pub’, means actually I’ll stay behind, I’ll work that shift.”

She said the NI changes will make “my life much, much harder and the lives of millions of restauranteurs and small business owners up and down the country.

“It’s making it less easy to offer employment and give out jobs to those who need it. We actually have to really review our staffing resources – keep a tight reign.”

However, Kieron Williams, Labour leader of Southwark Council, defended the Budget, telling BBC London there were changes to business rates “that I think will really benefit many small business owners”.

“I think the decision to invest in increasing the minimum wage up to a real living wage, is such an important one for residents though,” he added.

“In the cost of living crisis, people having a decent wage that they can afford to live on is fundamentally important.

“And there are many other announcements in there that will help us deliver the growth and prosperity that allow small businesses to get on.”

Customers inside Persepolis had mixed views about the Budget.

Ivar Grey, 76, said he was concerned whether small businesses like Mrs Butcher’s restaurants would get enough support from the government, and also questioned the 4.1% rise in the state pension from next year.

“It’s nice to give the pensioners 4.1% but many pensioners don’t need it,” he said.

“I think it would be a lot nicer on the pensions if they’d focussed the money on those in the greatest need.”

“I’m a great believer in the people who need the support should get the support,” he continued.

“People like myself, frankly, don’t need the 4%. It’s very nice, I’ll buy another bottle of wine, but it would be a lot nicer if the people who needed it got it.”

Meanwhile, Claire Grey, Mr Grey’s cousin, said she would sit down with the papers tomorrow to read about what the government was “taking away as well as giving”.

“They took away the winter fuel allowance, but I never felt I deserved that anyway,” she said.

“They’re in a rotten situation. I just hope that they’ve got enough good plans that they can mend a few things that are broken.”

Setting out the Budget, Reeves told MPs it had been “a moment of fundamental choice for Britain”.

“I have made my choices. The responsible choices. To restore stability to our country. To protect working people,” she said.