Chancellor Rachel Reeves truly has no idea what’s going on in the country. In her latest statement, she declared there’s no correlation between rising National Insurance rates and unemployment. However, she didn’t answer the question of what the correlation is with the consistently rising unemployment rate. Because she has no answer.
There is a direct correlation between rising National Insurance rates and rising unemployment rates. Large companies are limiting hiring, while smaller businesses are resorting to part-time employment. Both rising tax rates and the fact that National Insurance rates place a very heavy burden on employers mean that hiring is no longer as intense as it used to be. Even in large corporations like McDonald’s, where skill and experience are hardly required, getting a job is now almost impossible. McDonald’s, once the easiest place to get a job, has now switched to an online application system to control its workforce.
The same is true at Tesco, Lidl, Aldi, Morrison, and other large supermarkets. The number of full-time employees in these establishments is almost zero. Only managers have the right to work full-time, and sometimes a small number of workers are employed on a contractual basis. All large businesses have started hiring part-time workers to avoid paying taxes and meeting the NI (Non-Performing Tax) requirements.
Small companies, on the other hand, have started employing their spouses and children. If they own a restaurant, they learn to be chefs and waiters. After gaining experience, they dismiss the chefs and waiters and take over the grill themselves. Their spouses and children manage the restaurant. They sometimes hire two workers, but most of these workers are paid below market rates.
In small businesses, there are almost no company owners who pay taxes on their employees. They even have to register their full-time employees as part-time to avoid taxes.
Chancellor Rachel Reeves doesn’t know this because she’s not in the thick of it. Not even on the fringes of it.