It was New Year’s Eve 2024, and with clubbing no longer high on my radar, I chose a low-key evening at a lovely Indian restaurant, Memsaab, in my hometown of Nottingham with my partner. Having spent the last few years living in London, it was nice to unwind ‘back home’ in Woodborough, Nottinghamshire for the Christmas period.
On New Year’s Eve, we drove into town for dinner, and I recalled to my partner how street parking after 6pm used to be just £1 and free after 8pm. To my shock, the cost for three hours of on-street parking at 7pm (now chargeable until 10pm) was £8.40.
This stark increase made me reflect on the broader policy direction we seem to be heading in. As a business owner, the logical approach would be to encourage as many people as possible into city centres, increasing footfall, spending, and boosting the local economy. Instead, policies like these seem to be pricing people out of city centres, contributing to their decline.
The impact of short-sighted policies
This issue ties directly into the latest tax changes from Rachel Reeves, specifically the increase in Employer’s National Insurance contributions. This policy not only stifles business growth but also disproportionately affects lower-paid jobs due to the shift in the threshold and which it is payable. Employer NICs will start at a lower threshold than now, at £5,000 instead of £9,100, and the rate will rise from 13.8% to 15%. It discourages investment and, ultimately, harms job creation. As a result, Next the clothing retailer expects their costs to rise with increases in wages and taxes, by £73m a year – ultimately meaning they’re likely to focus on automated checkouts like Uniqlo – and potentially reducing jobs. This then means a loss in taxes collected, and potentially the need to pay out in benefit support – a disaster.
You can’t tax your way into prosperity. Similarly, you can’t increase parking fees by 740% in five years and expect city centres to thrive. It’s no wonder our high streets are struggling.
Strategic investment, not punishment
To clarify, I’m not opposed to car-free zones where appropriate. In fact, I advocate for areas like Oxford Street and Soho in London to be pedestrianised, which could boost investment. However, Nottingham lacks the same level of public transport infrastructure and remains a car-reliant city.
Comparing the UK’s trajectory with Ireland’s reveals a clear contrast. Over the last generation, Ireland has experienced significant economic growth, leading to a budget surplus that has allowed strategic investments. Part of this success stems from their pro-business policies, including low corporation tax (12.5% and now increased to 15%), which attracted major companies like Facebook, Google, and Apple, along with the jobs and prosperity they bring.
Meanwhile, the UK seems to have nothing left to offer businesses. I suspect my generation is increasingly considering emigration, seeking opportunities where growth is encouraged rather than hindered. A strategic tax reform in the U.S., for example, could easily trigger a brain drain from the U.K, with the UK losing its skilled workforce — a disaster for public finances given the higher taxes paid by top earners.
Investment must be targeted
I can understand the growing appeal of Reform UK, especially as the standard of living continues to decline. However, let’s not forget that Nigel Farage was a key driver of Brexit, a decision still costing the UK significantly – and so, this is not the answer.
Investment must be smart and targeted. Just this week, I spoke with Michael Payne MP about flood defence spending, where every £1 invested generates approximately £8 in economic benefit. Take Hebden Bridge as an example: beyond the direct flood damage to shops, reduced footfall due to flood risks further damages the local economy, but trying to get funding for a community flood mitigation scheme is almost impossible.
Levelling up
The country needs genuine levelling up, not just political slogans. The North requires better connectivity, improved public transport, and strategic investment — but taxing businesses into oblivion is not the solution.
We need a stronger, more pragmatic relationship with the EU, even if the benefits we once had, such as our membership and veto rights, are long gone. More importantly, we must create an environment where businesses can thrive.
The reality for entrepreneurs
In the 12 years I’ve been in business, I’ve witnessed increasing pressures on entrepreneurs. We’ve faced:
- Dividend taxes
- Increased Corporation Tax
- Mandatory Employer Pension Contributions
- Rising Employer National Insurance Contributions
It’s no wonder businesses are struggling. If you’re taking the risks, enduring sleepless nights, and managing the stress of running a company, you need the opportunity to grow — not be shackled by ever-increasing taxes – this is aside from the vast increase in energy costs, insurance costs, and material costs.
Rachel Reeves, Keir Starmer — Let’s Talk Business
Rachel Reeves, Keir Starmer — you’ve reached out to regulators for advice. Now it’s time to hear directly from entrepreneurs. Let’s meet and have a real conversation about how we can build a stronger, fairer economy — one where businesses can succeed, communities can thrive, and the UK can become a leader once again, ultimately, the better we do, the more tax you collect.
