Business leaders are stepping up calls to delay the forthcoming National Insurance increase after research showed many firms believe support provided by the UK Government in response to Plan B measures is not sufficient.
A survey of 700 companies by the British Chambers of Commerce (BCC) found that three out of five said ministers did not adequately assess the impact of Plan B Covid-related measures on businesses.
Many firms said their business suffered a loss of revenue due to Plan B.
Two out of three respondents reported absences due to illness or self-isolation in the last month, and of those, half said they had to reduce output or activity as a result.
BCC director general Shevaun Haviland said: “These figures lay bare the serious impact that Omicron and the Plan B restrictions have had on our economy.
“Whilst the financial support offered by the Treasury was welcome it is clear than many firms still found it was not entirely sufficient.
“Many also told us that they felt the impact of the measures should have been more thoroughly assessed.
“Significant numbers of firms in the business to consumer sector also reported a large loss of revenue following the announcement, whilst output from manufacturers was hit especially hard by absences from illness.
“We now need to see plans for dealing with any future variants made public, along with assessments of the impact of any measures required and what support would accompany those measures.
“Businesses will only truly be able to enter a phase of ‘living with Covid’ when they have the confidence that a plan is in place should further complications arise.
“Our members are telling us they are being squeezed by rising wages due to fierce competition for staff, and that the incoming NICs increase will compound this at the worst possible time.
“I am really concerned that if this tax increase is not postponed, we will see a stranglehold put on the economic recovery just when it needs to be powering up.”
Shadow business secretary Jonathan Reynolds said: “The Government’s tax rise in the midst of a cost-of-living crisis is bad for businesses, consumers and families. Businesses are already facing a spike in upfront costs off the back of a difficult trading period, now is not the time for a tax on jobs and workers that could hurt economic recovery.
“Labour would deal with the cost-of-living crisis and offer security – giving every household at least £200 off their energy bills, bring forward a £600 million contingency fund to help businesses hit by energy costs and we would not be going ahead with a rise in national insurance at the worst possible time.”