According to Sir Alec Shelbrooke, MP for Wetherby and Easingwold, small businesses in York and North Yorkshire are already reducing staff and freezing recruitment in response to rising employer National Insurance (NI) contributions.
From April, employer NI contributions will increase from 13.8% to 15%, while the threshold for employee salaries subject to the tax will drop from £9,100 to £5,000. Public sector organisations will receive grants to offset the cost, but businesses will bear the full impact.
Shelbrooke warned that many small businesses have acted preemptively, making redundancies or halting hiring plans to manage the additional costs. Larger firms in York, Harrogate, and Leeds are freezing pay for senior roles to cover higher wages for lower-paid staff on the National Living Wage.
He also raised concerns about removing Agricultural Property Relief from inheritance tax, which could force multi-generational farming families to reconsider their operations, impacting local food supply chains and rural economies.
This week, the issue will be discussed at North Yorkshire Council’s Thirsk and Malton area committee.
