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National Insurance rise must be delayed as companies begin to slam brakes on recruitment – Make UK

Published: 1 March 2022 - James Mead

Britain’s manufacturers are calling on the Government to delay the proposed National Insurance increase until the economy is in a more robust position and, instead, bring much more focus much on boosting revenue through higher levels of economic growth.


The call was made by Make UK on the back of a survey showing not just a significant impact on recruitment, but, escalating costs across the board which are showing no signs of respite and threatening to increase further. Having called the proposal ‘illogical and ill-timed’ when it was announced, Make UK believes that now is not the time to add further self-imposed costs which will add to the ever-growing cost burden on business and damage investment and job prospects.


Commenting, Make UK Chief Executive, Stephen Phipson, said:

“The proposed increase remains illogical and, will be even more ill-timed given how circumstances have rapidly changed since it was announced. The cost burden on business is continuing to escalate and, while some of these increases are due to global events, Government must avoid shooting business in the foot with an entirely self-imposed decision.

“Instead, business needs to see a far greater emphasis from all parts of Government on boosting enterprise and economic growth, topics we hear little or nothing about. If we are to return to long-term average growth levels and boost the prospects of all UK Regions we need a laser-like focus on how to achieve this as a policy goal.”


According to the survey, around three in five companies (60.3%) say the rise will have a moderate or significant impact on recruitment.

Furthermore, the rise promises to add to inflationary pressures with almost three quarters of companies (71.5%) of companies saying they will pass on, or are very likely to pass on, the rise to customers. On the flip side just over one in four companies (28.5%) say they will absorb the rise which, combined with other cost increases, is likely to put even more downward pressure on margins and damage investment.

The survey shows a broad impact of escalating costs with over half of companies (54.2%) seeing a major increase in the cost of raw materials and more than a third of companies (37.4%) seeing a major increase in the cost of energy. Almost 10% of companies say that increases in both these indicators represent a ‘threatening increase’ with a quarter of companies (23.7%) saying that it will take more than two years to resolve energy related costs for their business.

The impact of higher energy costs in particular is leading companies to take a range of steps for their business. Almost half (47.3%) have adjusted their business practices to reduce energy consumption which could be seen as positive. On the downside, however, almost one in five companies (16.8%) have been forced to temporarily halt production.

Other costs are also continuing to escalate with almost 40% of companies seeing a major increase in wages or other employment costs, while just over a third of companies (34.4%) have seen a major increase in logistics, transport or other distribution costs.

The survey also shows data which will add to the ‘great resignation’ debate with almost three fifths of companies (56.9%) seeing an increase in early retirement.


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