BA owner joins chorus of alarm over national insurance rise

The owner of British Airways has joined a succession of London-listed companies to sound the alarm over the impact of the budget, as the declared cost to businesses tops half a billion pounds.
International Airlines Group expects the “direct hit” from the rise to national insurance imposed on employers to add between €25 million and €30 million to its annual costs.
Lord Rose of Monewden, chairman of Asda, said the changes were “unhelpful” and had “hit business hard”. He said the supermarket chain would do “all it could” to absorb the expected £100 million increase to its annual tax bill but predicted that “it’s going to be inflationary to a degree”.
Serco, the outsourcer that collects Britain’s bins and transports prisoners, expects the changes announced by Rachel Reeves, the chancellor, to cost the company about £20 million a year. It said that it was “actively exploring” ways to offset the costs.
Analysts at Deutsche Bank described the changes to national insurance and the minimum wage as the “elephant in the dining room” for the leisure sector. They expect operators to raise prices with Greggs, the baker, among the companies most exposed as it employs 30,000 staff and has an operating margin below 10 per cent.
Deutsche expects Greggs to face an extra £45 million of costs in the 2025 financial year. It also forecast a £38 million hit to Mitchells and Butlers, the pub chain behind All Bar One and Harvester.
The Restaurant Group — the owner of Wagamama and Barburrito among others — said that its profits would be cut by a quarter as a result of the national insurance increase. It expects that the changes will add nearly £9 million in costs, with increases to the minimum wage adding a further £8 million.
From next April employers will have to pay national insurance at 15 per cent on salaries above £5,000, instead of the current level of 13.8 per cent on salaries above £9,100. The minimum wage will be lifted from £11.44 to £12.21 an hour for those aged 21 and over.
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The Treasury has said that the tax rise should contribute an extra £25 billion to the public purse, although that figure has been disputed.
Sainsbury’s, BT, Marks & Spencer, the Primark-owner Associated British Foods and JD Wetherspoon have also warned that jobs could be cut, hiring reduced and prices raised in response to the extra cost, which they have each calculated to be between £60 million and £140 million.