• But businesses will face higher employment costs in terms of the above inflation rise in the NMW and the NLW, the higher rate of employer NICs and the lower NICs threshold for employers. [...] Likewise, increases in the NMW and the NLW benefit workers in the lowest wage jobs, which is largely in the two bottom deciles of the income distribution. [...] The right-hand side shows the proportion of the employee’s wage that they would have to pay and the left-hand side shows the percentage increase in employer’s tax bill relative to the old national insurance rate and thresholds. [...] (22) NIESR Response to the Autumn 2024 Budget Figure 8: The impact of the new Employer National Insurance Rate and Thresholds Source: NIESR Calculations and Survey of Personal Incomes The changes to employers’ NIC, combined with the rise in NMW/NLW and the new policies in Employment Rights Bill, will represent substantial new costs to SMEs (Small and medium sized enterprises) which are already str. [...] However, these deals seem to be structurally the same as the ones agreed by the previous government, which is to say with a substantial degree of HM Treasury oversight and the delegation of responsibility without the requisite transfers of resources and decision-making powers.
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