Small businesses have called for the government to “significantly increase” the employment allowance to prevent them from having to shut down following the budget.
Chancellor Rachel Reeves is set to raise national insurance contributions paid by employers – despite promising not to increase the tax “for working people” – to help fill a £40bn black hole during the Labour government’s budget on Wednesday.
The government has already announced the national living wage, the minimum someone aged 21 and over can be paid, will also increase from April by 6.7% to £12.21 an hour while 16-20 year olds will be paid £10 an hour – a 16.3% rise.
Small business owners have told Sky News the combination of high costs over the past few years and the raising of the minimum wage and employers’ national insurance contributions will hit some businesses hard.
Michelle Ovens, founder of Small Business Britain – which champions the UK’s 5.1 million small businesses – warned more and more will fail if they continue to face this kind of pressure without help from the government.
Hospitality is among the industries that will be hardest hit, she said, while a hair salon owner was close to tears as he described how the changes could be “the nail in the coffin” for his industry.
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Ms Ovens and Tina McKenzie, policy chair for the Federation of Small Businesses, both called for the government to increase the employment allowance to help relieve pressure and save businesses.
Companies with a national insurance bill of less than £100,000 a year can be exempt from paying the first £5,000 of employers’ national insurance contributions under a programme called the employment allowance.
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Increasing the amount small business owners will be exempt from paying national insurance on would help soften the blow, they said.
Image: Rachel Reeves
‘We’ve had enough’
Extending business rates relief would also help small businesses, Ms McKenzie added. The hospitality industry has been given a 75% discount on business rates since 2020, but that is due to end next April.
Toby Vickers, founder of the Salon Employers Association and managing director of The Chapel Salons in London and the South East, said the years of increasing VAT, employers’ national insurance and the minimum wage have made his industry “unsustainable” and the latest changes could be “the final nail in the coffin”.
On the verge of tears, Mr Vickers told Sky News’ Business Live programme: “It means that potentially people are going to lose their homes, and lose their apprenticeships and lose their opportunity to grow because you [the government] haven’t listened.”
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1:20
Business owner on the budget: ‘I am shaking’
‘Small businesses are the lifeboat’
Sanjay Aggarwall, owner of spice tin gift set company Spice Kitchen, in Liverpool, told Sky News the 50% increase in maximum bus fares to £3 has added to the concerns about potential customers having less to spend, as his warehouse team rely on public transport to get to work.
He said he would tell the chancellor: “Small and medium-sized businesses are the lifeboat of this country and employ 61% of the nation’s workforce, so really need to be front and centre in terms of decision making.”
Image: Sanjay Aggarwall and his mum Sashi Aggarwal co-found Spice Kitchen spice kits. Pic: Spice Kitchen
Ms Ovens, from Small Business Britain, told Sky News: “Small businesses have seen high costs across the board over the last few years, so raising the minimum wage again will hit some, though not all, businesses hard.
“Around 16% of small business staff are on minimum wage, and this is concentrated in industries such as hospitality, which will get a double hit from the rise in national insurance too.
“To keep these essential stalwarts of our high streets and communities, we need to see both a rise in employment allowance and a continuation of business rates relief to help with these. If we keep adding pressure to small businesses, we will see a continuation to the growing trend of business failures.
“We hope to see more in the budget to recognise the essential role small businesses play in the economy and growth.”
Ms McKenzie, from the Federation of Small Businesses, said: “Raising employer national insurance contributions at the same time as employers adjust to a higher national living wage is why the government should step up and significantly increase the employment allowance – reducing tax employers pay on wages is how you get sustainable rises staff actually feel in their pockets.”
Sky News has contacted the Treasury for a comment.
How much have America, Britain and the rest paid Ukraine in aid since the Russian invasion? And do they have any hope of getting money back in return?
These are big questions, and they’re likely to dominate much of the discussion in the coming months as Donald Trump pressurises his Ukrainian counterparts for a deal on ending the war. So let’s go through some of the answers.
First off, the question of who has given the most money to Ukraine rather depends on what you’re counting.
If you’re looking solely at the amount of military support extended since 2022, the US has provided €64bn, compared with €62bn from European nations (including the UK).
But now include other types of support, such as humanitarian and financial assistance, and European support exceeds American (€132bn in total, compared with €114bn from the US).
Divide Europe into its constituent nations, on the other hand, and none of them individually comes anywhere close to the US quantity of aid.
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That being said, simple cash numbers aren’t an especially good measure of a country’s ability to pay.
Look at US support as a percentage of gross domestic product and it comes to 0.5% of GDP. That’s almost precisely the same as the aid from the UK.
Looked at through this prism, it’s other countries which are clearly the most generous: Denmark, Estonia and much of the Baltics providing around 2% of their GDP – a far bigger amount versus their ability to finance it.
Still, compare the aid this time around with previous amounts spent in other conflicts and they are nowhere close.
Lend-Lease during WWII, aid during the Vietnam and Korean Wars, and even the first Gulf War, involved significantly bigger outlays than currently being spent on Ukraine.
That goes not just for the US but also for the UK, Germany and Japan, all of which provided more aid to the Kuwaitis and other affected nations during the first Gulf War.
Even so, it’s clear that the US and others have put significant resources towards Ukraine.
President Trump has been talking recently about recouping $500bn from Ukraine in the form of revenues from mining rare earth metals.
This is, on the face of it, slightly odd. Rare earth metals represent an obscure corner of the periodic table and play a small if important role in electronics and military manufacturing.
The entire market is small – making it essentially implausible that, even if Ukraine suddenly produced the majority of the world’s supply, the president could expect that amount of revenue back in return.
More to the point, while there are a couple of rare earth deposits in Ukraine, they have languished, unexploited, for years. They are so expensive to mine no-one has worked out how to extract the elements and make a profit at the same time.
And even if you presumed they could do, Ukraine would still be a relative minnow in global rare earths production.
Assuming, as one probably should, that Donald Trump didn’t just mean rare earths, but was talking more broadly about “critical minerals” (the two are different things, but let’s not get too pedantic here), there are also one or two other promising mine sites in the country.
There is an old, shuttered alumina plant seized from Russian oligarch Oleg Deripaska. There is a large lithium resource which could, if all went well, be the single biggest lithium mine in Europe.
Yet even taking this into account, Ukraine would still be a relatively small player in global lithium. Not nothing – but not world changing either. Certainly not enough to generate the hundreds of billions of dollars Mr Trump is seeking.
Then again, Ukraine has other resources at its disposal too: vast seams of coal in the Donbas, large iron ore reserves in the south of the country.
Both of these are in or close to Russian occupied areas – which might, from the Ukrainians’ perspective, actually be the point. Old fashioned as this stuff is, it does actually generate significant revenue. It might be Donald Trump’s best hope for some payback.
The number of convictions linked to a second Post Office IT scandal being investigated for miscarriages of justice – has more than doubled, Sky News has learned.
Twenty-one Capture cases have now been submitted to the Criminal Cases Review Commission (CCRC) for review.
They relate to the Capture computing software, which was used in Post Office branches in the 1990s before the infamous faulty Horizon system was introduced.
Hundreds of sub-postmasters were wrongly accused of stealing after Horizon software caused false shortfalls in branch accounts between 1999 and 2015.
A report last year found that there was a reasonable likelihood that the Capture accounting system, used from the early 1990s until 1999, was also responsible for shortfalls.
If the CCRC finds significant new evidence or legal arguments not previously heard before, cases can be referred back to the Court of Appeal.
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Lawyer for victims, Neil Hudgell from Hudgell Solicitors, says the next steps for the Capture cases and the CCRC are still “some months away”.
He said he is also hopeful that the first cases could be referred to the Court of Appeal before the end of this year.
Image: Lawyer Neil Hudgell described victims of the Capture IT system as ‘hideously damaged people’
“Certainly we will certainly be lobbying,” he said. “The CCRC will be lobbying, the advisory board will be lobbying any interested parties, that these are hideously damaged people of advancing years who need some peace of mind and the quicker that can happen the better.”
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In December the government said it would offer ‘redress’ to Post Office Capture software victims
‘We didn’t talk about it’
Among those submitted to the CCRC – Pat Owen’s Capture case was the first.
Her family have kept her 1998 conviction for stealing from her post office branch a secret for 26 years.
Image: Juliet Shardlow shows Sky News paperwork which could explain discrepancies logged by Capture
Speaking to Sky News they have opened up for the first time about what happened to her.
Pat was a former sub-postmistress, who was found guilty and given a two-year suspended sentence.
She died in 2003 from heart failure.
Image: David Owen and his wife Pat in happier times
Her daughters describe her as coming home from court after her conviction “a different woman”.
“We didn’t talk about it,” said Juliet Shardlow. “We didn’t talk about it amongst ourselves as a family, we didn’t talk about it with the extended family.
“Our extended family don’t know.”
Image: Juliet Shardlow said her mum Pat was a different person after her conviction
David Owen, Pat’s husband, said she lost a lot of weight after her conviction and at 62 years old “looked like an old gal of 90”.
Capture evidence never heard in court
Pat’s family kept all the documents from her case safe for over two decades and now a key piece of evidence may turn the tide on her conviction, and potentially help others.
A document summarising the findings of an IT expert described the computer Pat used as having “a faulty motherboard”.
It also stated that this “would have produced calculation errors and may have been responsible for the discrepancies subsequently identified by Post Office Counters’ Security and Investigation team.”
An MP has accused Meta of turning Facebook Messenger into “Jeffrey Epstein’s private island” by enabling end-to-end encryption.
The Science, Innovation and Technology Committee grilled tech giants X, TikTok, Google and Meta today as part of an inquiry into online misinformation and harmful algorithms.
“Twenty years ago, someone like Gary Glitter had to go to the other side of the world to prey on children,” said Labour MP Paul Waugh to Chris Yiu, one of Meta’s directors of public policy.
“Someone like Jeffrey Epstein had to create his own private paedophile island.
“Now, these monsters, all they have to do is go on to set up a group on Facebook Messenger.”
Mr Waugh was referring to Facebook Messenger’s recent implementation of end-to-end encryption, meaning that no one, not even Facebook, can see the contents of encrypted messages.
Law enforcement agencies also cannot see the messages, which is a constant source of tension between tech companies and governments.
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Just last week, Apple removed one of its highest-security tools for users over an alleged request by the Home Office to be able to see its encrypted user data.
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What the Apple security announcement means for your data
“Isn’t it true that you’ve turned Facebook Messenger into Epstein’s own paedophile island and a place where you can do what you want without getting caught?” asked Mr Waugh.
Mr Yiu denied this was the case and said the issue of online child sexual abuse material needed a “whole of society response” where tech companies and law enforcement agencies worked cooperatively.
He also argued end-to-end encryption is a “fundamental technology designed to keep people safe and protect their privacy”.
The select committee’s inquiry is investigating the spread of harmful content online, sparked by last August’s riots.
The widespread unrest took hold across the country after three young girls were stabbed to death in Southport.
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Online network behind far right riots
In the days that followed, illegal content and disinformation spread “widely and quickly” online, according to the communications regulator Ofcom.
The committee chair Chi Onwurah said Elon Musk, owner of X, was invited to the evidence session but the billionaire did not reply formally.
MP Emily Darlington also quizzed the Meta representative about the company’s recent changes to its content guidelines.
She read out numerous examples of Meta users posting racist, antisemitic and transphobic comments online and asked Mr Yiu how Meta justified allowing those posts to stay online.
“We have received feedback that […] some areas of debates were being suppressed too much on our platform and that some conversations, whilst challenging, should have a space to be discussed,” he said.
X’s representative also faced questions from the MPs, with Ms Darlington asking why verified X users were able to post comments calling politicians rapists and threatening to “rise up and shoot” public figures.
Wifredo Fernandez, X’s senior director for Government Affairs, said he would ask the X team to review the posts.