‘We will see closures’: The industries hit the hardest by national insurance hike

Published

8 months ago

April 5, 2025

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The cost of having staff is going up this Sunday as the increase in employers’ national insurance kicks in.

Chancellor Rachel Reeves announced in the October budget employers will have to pay a 15% rate of national insurance contributions (NIC) on their employees from 6 April – up from 13.8%.

She also lowered the threshold at which employers pay NIC from £9,100 a year to £5,000 a year, meaning they start paying at an earlier point on staff salaries.

This is on top of the national minimum wage rising, the business relief rate for hospitality, retail and leisure reducing from 75% to 40% and the rising cost of ingredients and services.

Sky News spoke to people working in some of the industries that will be hardest hit by the rise in NIC: Nurseries, hospitality, retail, small businesses and care.

NURSERIES

Nearly all (96% of 728) nurseries surveyed by the National Day Nurseries Association (NDNA) said they will have no choice but to put up fees because of the NIC rise, leaving parents to pick up the shortfall.

The NDNA has warned nurseries could close due to the rise, with 14% saying their business is at risk, 69% reducing spending on resources and 39% considering offering fewer places with government-funded hours as 92% said they do not cover their costs.

Sarah has two children, with her youngest starting later this month, but they were just informed fees will now be £92 a day – compared with £59 at the same nursery when her eldest started five years ago.

“I’m not sure how we will afford this. Our salaries haven’t increased by 50% during this time,” she said.

“We’re stuck as there aren’t enough nursery spaces in our area, so we will have to struggle.”

Karen Richards, director of the Wolds Childcare group in Nottinghamshire, has started a petition to get the government to exempt private nurseries – the majority of providers – from the NIC changes as she said it is unfair nurseries in schools do not have to pay the NIC.

She told Sky News she will have to find about £183,000 next year to cover the increase across her five nurseries and reducing staff numbers is “not off the table” but it is more likely they will reduce the number of children they have.

Joeli Brearley, founder of the Pregnant Then Screwed campaign group, told Sky News: “Parents are already drowning in childcare costs, and now, thanks to the national insurance hike, nurseries are passing even more fees on to families who simply can’t afford it.

“It’s the same story every time – parents pay the price while the government looks the other way. How exactly are we meant to ‘boost the economy’ when we can’t even afford to go to work?”

Purnima Tanuku, executive chair of the NDNA, said staffing costs make up about 75% of nurseries’ costs and they will have to find £2,600 more per employee to pay for the NIC rise – £47,000 for an average nursery.

“The government says it wants to offer ‘cheaper childcare’ for parents on the one hand but then with the other expects nurseries to absorb the costs of National Insurance Contributions themselves,” she told Sky News.

“High-quality early education and care gives children the best start in life and enables parents to work. The government must invest in this vital infrastructure to make sure nurseries can continue to deliver this social and economic good.”

HOSPITALITY

The hospitality industry has warned of closures, price rises, lack of growth and shorter opening hours.

Dan Brod, co-owner of The Beckford Group, a small southwest England restaurant and country pub/hotel group, said the economic situation now is “much worse” than during COVID.

The group has put plans for two more projects on hold and Mr Brod said the only option is to put up prices, but with the rising supplier costs, wages, business rates and NIC hike they will “stay still” financially.

He told Sky News: “What we’re nervous about is we’re still in the cost of living crisis and even though our places are in very wealthy areas of the country, Wiltshire, Somerset and Bath, people are feeling the situation in their pockets, people are going out less.”

Mr Brod said they are not getting rid of any staff as their business strongly depends on the quality of their hospitality so they are having to make savings elsewhere.

“I’m still optimistic, I still feel that humans need hospitality but we’re not valued as an industry and the social benefit is never taken into account by government.”

Aktar Islam, owner/chef at two Michelin-starred Opheem in Birmingham, said the NIC rise will cost him up to £120,000 more in staff costs a year and to maintain the financial position he is in now they would have to make “another million pounds”.

He got emails from eight suppliers on Thursday saying they were raising their costs, and said he will have to raise prices but is concerned about the impact on diners.

The restaurateur hires four commis chefs to train each year but will not be able to this year, or the next few.

“It’s very short-sighted of the government, you’re not going to grow the economy by taxing hospitality out of existence, these sort of businesses are the lifeblood of our economy,” he said.

“They think if a hospitality business closes another will open but people know it’s tough, why would they want to do that? It’s not going to happen.”

The chef sent hundreds of his “at home” kits to fellow chefs this week for their staff as an acknowledgement of how much of a “s*** show” the situation is – “a little hug from us”.

RETAIL

Some of the UK’s biggest retailers, including Tesco, Boots, Marks & Spencer and Next, wrote to Rachel Reeves after the budget to say the NIC hike would lead to higher consumer prices, smaller pay rises, job cuts and store closures.

The British Retail Consortium (BRC), representing more than 200 major retailers and brands, said the costs are so significant neither small or large retailers will be able to absorb them.

Andrew Bailey, the governor of the Bank of England, told the Treasury committee in November that job losses due to the NIC changes were likely to be higher than the 50,000 forecast by the Office for Budget Responsibility (OBR).

Nick Stowe, chief executive of Monsoon and Accessorize, said retailers had the choice of protecting staff numbers or cancelling investment plans.

He said they were trying to protect staff numbers and would be increasing prices but they would likely have to halt plans to increase store numbers.

Helen Dickinson, head of the BRC, told Sky News the national living wage rise and NIC increase will cost businesses £5bn, adding more than 10% to the cost of hiring someone in an entry-level role.

A further tax on packaging coming in October means retailers will face £7bn in extra costs this year, she said.

“This huge cost burden will undoubtedly reduce investment in stores and jobs and is likely to lead to higher prices,” she added.

SMALL BUSINESSES

A massive 85% of 1,400 small business owners surveyed by the Federation of Small Businesses (FSB) in March reported rising costs compared with the same time last year, with 47% citing tax as the main barrier to growth – the highest level in more than a decade.

Just 8% of those businesses saw an increase in staff numbers over the last quarter, while 21% had to reduce their workforce.

Kate Rumsey, whose family has run Rumsey’s Chocolates in Wendover, Buckinghamshire and Thame, Oxfordshire, for 21 years, said the NIC rise, minimum wage increase and business relief rate reduction will push her staff costs up by 15 to 17% – £70,000 to £80,000 annually.

To offset those costs, she has had to reduce opening hours, including closing on Sundays and bank holidays in one shop for the first time ever, make one person redundant, not replace short-term staff and introduce a hiring freeze.

The soaring price of cocoa has added to her woes and she has had to increase prices by about 10% and will raise them further.

She told Sky News: “We’re very much taking more of a short-term view at the moment, it’s so seasonal in this business so I said to the team we’ll just get through Q1 then re-evaluate.

“I feel this is a bit about the survival of the fittest and many businesses won’t survive.”

Tina McKenzie, policy chair of the FSB, said the NIC rise “holds back growth” and has seen small business confidence drop to its lowest point since the first year of the pandemic.

With the “highest tax burden for 70 years”, she called on the chancellor to introduce a “raft of pro-small business measures” in the autumn budget so it can deliver on its pledge for growth.

She reminded employers they can claim the Employment Allowance, which has doubled after an FSB campaign to take the first £10,500 off an employer’s annual bill.

CARE

The care sector has been warning the government since the October that budget care homes will be forced to close due to the financial pressures the employers’ national insurance rise will place on them.

Care homes receive funding from councils as well as from private fees, but as local authorities feel the squeeze more and more their contributions are not keeping up with rising costs.

The industry has argued without it the NHS would be crippled.

Raj Sehgal, founding director of ArmsCare, a family-run group of six care homes in Norfolk, said the NIC increase means a £360,000 annual impact on the group’s £3.6m payroll.

In an attempt to offset those costs, the group is scrapping staff bonuses and freezing management salaries.

It is also considering reducing day hours, where there are more staff on, so the fewer numbers of night staff work longer hours and with no paid break.

Mr Sehgal said: “But what that does do unfortunately, is impact the quality you’re going to be able to provide, at a time when we need to be improving quality, but something has to give.

“The government just doesn’t seem to understand that the funding needs to be there. You cannot keep enforcing higher costs on businesses and not be able to fund those without actually finding the money from somewhere.”

He said the issue is exacerbated by the fact local authority funding, despite increasing to 5%, will not cover the 10% rise.

“It’s going to be a really, really tough ride. And we are going to see a number of providers close their doors,” he warned.

Nadra Ahmed, executive co-chair of the National Care Association, said those who receive, or are waiting to access, care as well as staff will feel the impact the hardest.

“As providers see further shortfalls in the commissioning of care services, they will start to limit what they can do to ensure their viability or, as a last resort exit the market,” she said.

“This is very short-sighted, with serious consequences, which alludes to the understanding of this government.”

Government decided to ‘wipe the slate clean’

A Treasury spokesperson told Sky News the government is “pro-business” but has “taken the difficult but necessary decisions to wipe the slate clean and properly fund our public services after years of declines”.

“Our budget choices have already delivered an NHS with falling waiting lists, a £3.7bn rescue package for social care, and vital protection for Britain’s small businesses,” they said.

“We’re making tough choices today to secure a better tomorrow through our Plan for Change. By investing in economic growth and early years education while capping corporation tax, we’re putting more money in working people’s pockets and giving every child the best start in life.”

Business

Events group CloserStill’s owner picks banks for £1bn sale

Published

7 hours ago

December 7, 2025

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The owners of one of Britain’s biggest trade show operators has picked bankers to oversee a sale next year which could fetch well over £1bn.

Sky News has learnt that Providence Equity Partners, which has backed CloserStill Media since 2018, has hired Jefferies and The Raine Group to orchestrate talks with potential buyers.

City sources said this weekend that CloserStill’s earnings trajectory meant that £1bn was likely to be the minimum price tag offered by prospective new owners of the business.

The company operates more than 200 specialist events, in sectors including healthcare and technology.

In September, it acquired Billington Cybersecurity, an operator of shows in the US.

CloserStill’s performance has, like many of its peers, rebounded since the nadir of the Covid pandemic, when many conference organisers feared for their survival.

Alongside Searchlight, another private equity firm, Providence also owns Hyve, another major events organiser.

Other players in the sector include Clarion, which is owned by Blackstone and which conducted an aborted sale process earlier this year.

Bidders for CloserStill are expected to include trade rivals and other financial investors.

Providence has been contacted for comment.

Business

Piers Morgan’s Uncensored nears £100m valuation after stake sale

Published

1 day ago

December 6, 2025

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Piers Morgan's Uncensored nears £100m valuation after stake sale

Piers Morgan, the broadcaster and journalist, is raising tens of millions of dollars of funding from heavyweight investors as he seeks to turn Uncensored, his YouTube-based venture, into a broad-based global media business.

Sky News can exclusively reveal that Mr Morgan is in the process of finalising a roughly $30m (£22.5m) fundraising for Uncensored that will give it a pre-money valuation of about $130m (£97m).

The new investors are understood to include The Raine Group, the New York-based merchant bank, and Theo Kyriakou, the media mogul behind Greece’s Antenna Group, owner of a stake in London-based digital venture The News Movement.

Michael Kassan, a marketing veteran, is understood to be advising the business on advertising-related matters and may also invest in a personal capacity, according to insiders.

A number of family offices from around the world are also said to be in talks to become shareholders in Uncensored.

Joe Ravitch, the prominent American banker and Raine co-founder who has advised in recent years on the sale of Chelsea and Manchester United football clubs, is said to be joining the Uncensored board as part of the capital-raising.

The move comes nearly a year after Mr Morgan announced his departure from Rupert Murdoch’s British empire through a deal which handed him full control and ownership of his Uncensored YouTube channel.

Allies of Mr Morgan said this weekend that some details of the fundraising were likely to be confirmed publicly in the coming days.

While the size of his personal stake in the business was unclear this weekend, insiders said the crystallisation of a $130m valuation would mean that Mr Morgan’s economic interest was, on paper, worth tens of millions of pounds.

“The ambition is to grow this into a billion dollar company within a few years,” said one person close to the discussions with investors.

“With the scale of audiences now being driven to digital channels and the commercial opportunities there, that is definitely achievable.”

The former Mirror editor, whose career has also encompassed stints at ITV, with CNN in the US and Mr Murdoch’s global media conglomerates News Corporation and Fox, is now drawing up plans to transform Uncensored into a more diverse digital media group.

This is expected to include the launch of a series of ‘verticals’ attached to the Uncensored brand, including channels dedicated to subjects such as history, sport and technology.

Mr Morgan is already said to be in talks with prominent figures to spearhead some of these new strands, with a chief executive also expected to be recruited to drive the growth of the overall Uncensored business.

His appetite to establish a YouTube-based global media network has been driven by the scale of the global audiences he has drawn to some of his recent work, including interviews with the footballer Cristiano Ronaldo and the former world tennis number one Novak Djokovic.

Both of those athletes have collaborated with Mr Morgan by posting parts of their exchanges on social media platforms, attracting hundreds of millions of views.

Mr Morgan’s access to President Donald Trump, whom he has interviewed on several occasions, is also likely to be a factor in the timing of Uncensored’s expansion strategy.

While many ‘legacy’ news and media networks remain hamstrung by inflated cost bases, Mr Morgan’s decision to go it alone and focus on developing the Uncensored brand reflects his belief that the news and media industries are ripe for disintermediation by channels tied to prominent, and sometimes controversial, individual journalists and presenters.

The Piers Morgan Uncensored YouTube channel has 4.3 million subscribers, roughly half of whom are from the US.

Of the remaining 50%, however, only a minority are British, with a significant number based in the Middle East, South Africa and parts of Asia.

This has fuelled Mr Morgan’s view that there is journalistic and commercial mileage in creating content on issues which historically might have struggled to generate a significant international audience – such as ongoing military and political tension between India and Pakistan, and the white farmer ‘genocide’ furore in South Africa.

Under the deal he struck with Mr Murdoch in January this year, Mr Morgan has a four-year revenue-sharing agreement that involves News UK receiving a slice of the advertising revenue generated by Piers Morgan Uncensored until 2029.

Mr Morgan had returned to Mr Murdoch’s media empire in January 2022 with a three-year agreement that included writing regular columns for The Sun and New York Post, as well as presenting shows on the company’s now-folded television channel, Talk TV.

He also recently released a book, Woke Is Dead, which was published by Mr Murdoch’s books subsidiary, Harper Collins.

As part of his new arrangements, Mr Morgan also signed a deal with Red Seat Ventures, a US-based agency which partners with prominent media figures and influencers to help them exploit commercial opportunities through sponsorship and other revenue streams.

Among those Red Seat has worked with are Megyn Kelly, the American commentator, and Tucker Carlson, the former Fox News presenter.

While many well-known American news media figures are followed because of their partisanship and affiliations to either the political left or right, Mr Morgan has positioned himself as a ‘ringmaster’ who is not ideologically hidebound.

His plans come at a time of continuing upheaval in the global media industry, with Netflix agreeing a landmark $83bn deal this week to buy the Hollywood studio Warner Bros.

In the UK, Sky, the Comcast-owned immediate parent company of Sky News, is in talks to acquire ITV’s broadcasting business, while the Daily Telegraph newspaper could soon find itself as a stablemate of the Daily Mail if a proposed £500m deal is successful.

Meanwhile, Reach, the London-listed newspaper publisher which owns the Daily Express and the Daily Mirror, now has a market valuation of just £176m – less than double that of Mr Morgan’s new standalone digital media company.

When Sky News revealed Mr Morgan’s move to separate from News UK earlier this year, he said: “Owning the [Uncensored] brand allows my team and I the freedom to focus exclusively on building Uncensored into a standalone business, editorially and commercially, and in time, widening it from just me and my content.

“It’s clear from the… US election that YouTube is an increasingly powerful and influential media platform, and Uncensored is one of the fastest-growing shows on it in the world.

“I’m very excited about the potential for Uncensored.”

This weekend, he added: “I am very excited that some of the most experienced and successful players in the global media industry, like Joe, Michael and Theo, share my ambitious vision for Uncensored.

“This is the future of modern media.”

Business

Oil prices are down – so why isn’t the cost of petrol?

Published

3 days ago

December 5, 2025

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Oil prices are down - so why isn't the cost of petrol?

It’s a debate that has raged since the end of the COVID pandemic but, despite regulatory scrutiny, it’s fair to say there’s been no clear answer to accusations that UK drivers pay over the odds for fuel.

What was once a promotional loss leader for supermarkets desperate for drivers to fill their car boots with groceries, unleaded and diesel costs have been unusually high for years.

Fuel retailers say there is a simple explanation: rising costs being passed on to motorists.

But critics argue there is a reason why the Competition and Markets Authority (CMA) has consistently found that we’re paying more than we should be – and that the disparity between wholesale costs and pump prices has got worse in recent months.

So: who’s right?

What the oil data tells us

Oil prices are well down on levels seen in January (between $75 and $82 a barrel) but fuel prices are clearly not.

In recent weeks, Brent crude has traded in the range of $62 to $64 per barrel and yet drivers are currently, on average, paying £1.37 a litre for petrol and £1.46 for diesel.

The average pumps costs in January stood at £1.39 and £1.45 – despite the significantly higher oil costs seen at the time.

Prices can be affected by all sorts of factors including the value of the pound versus the oil-priced dollar, but that disparity is notable.

There is another, emerging, factor to consider

It might surprise you to learn that the UK now has only four operational refineries to produce petrol and diesel after two major sites shut this year.

The decline has sparked an industry warning of a crisis due to high UK carbon charges, imposed by the government, that have made domestic fuel producers uncompetitive versus imports.

The loss of the refinery at Grangemouth this spring has been particularly acute as it left Scotland without domestic production and at the mercy of a more complicated and expensive delivery structure.

Fuel retailers say the impact has been minimal so far, mainly due to remaining UK refineries raising production.

The case for the prosecution

Quite simply, fuel price campaigners and motoring groups have long accused the industry of raising its profit margins.

Supermarkets focused price investment elsewhere as the cost of living crisis took hold but the days of Asda (before it was bought by the fuel-focused Issa brothers and private equity) leading a sector-wide fuel price war are long gone.

Reports by both the AA and RAC this week highlight price spikes despite a 5p slump in wholesale costs a fortnight ago.

The AA said: “At the height of the spike, it matched what had been seen in mid June. Then, the petrol pump average reached a maximum of 135.8p by late July.

It said that government data had since shown pump prices at levels not seen since March.

The body questioned the reasons behind that disparity and also pointed towards, what it called, a postcode lottery for pump costs with gaps of up to 9p a litre between towns only 10 miles apart.

The RAC declared on Thursday that pump prices rose at their fastest pace in 18 months during November, with diesel at a 15-month high.

The critics have also included regulators as monitoring of fuel retailers by the CMA since its original market study has consistently found that drivers have been excessively charged.

What’s the fuel industry’s position?

It pleads “not guilty”.

The bodies representing retailers make the point that the CMA and its wider critics fail to take into account huge rises in costs they have faced over the past four years – costs which are being/have been passed on across the economy.

These include those for energy, business rates, minimum wage, employer national insurance costs and record sums arising from forecourt crime.

The Petrol Retailers’ Association (PRA), which represents the majority of forecourts, told Sky News that average margins across the sector are the same today as they were a year ago at between 3% to 4% after costs.

It suggests no fuel for the fire surrounding those profiteering allegations but that rising costs have been passed on in full.

What has the regulator done?

The CMA’s road fuel market study committed to monitor the market and recommended a compulsory fuel finder scheme to help bolster competition. That was two-and-a-half years ago.

Limited data has been widely available via motoring apps ahead of the start of the official scheme, expected in spring next year, which will bring real-time pricing into a driver’s view for the first time.

The CMA hopes that by forcing each retailer to divulge their prices in real time, customers will vote with their feet.

In the regulator’s defence

The CMA could argue that government has dragged its heels in implementing its fuel finder recommendation.

While the Conservatives accepted it, Labour is now pushing it through parliament.

The regulator can only act within the powers it has been given. It would say that it can’t threaten or hand out fines until its recommendations are in play and they have been clearly flouted.

So who’s right?

This is a debate all about transparency but we clearly don’t have a full view on the complicated, and shifting, supply chain which can influence pump prices.

The CMA hopes that postcode lotteries for pump costs will ease once more drivers are aware of the ability to compare and shop around.

But the main reason why this issue remains unresolved is that the CMA’s findings have been incomplete to date.

Its determinations that pump costs have been excessive have all been made without taking retailers’ operating costs into full account.

Why we are closer to an answer

The CMA’s next market update is expected within weeks and will, for the first time, take more extensive cost data into account.

A spokesperson told Sky News: “We recommended the Fuel Finder scheme to help drivers avoid paying more than they should at the pump, and the government intends to launch it by spring 2026.

“The scheme will give drivers real-time price information, helping them find the cheapest fuel and putting pressure on retailers to compete.

“We looked closely at operating costs during our review of the market, and they formed a key part of our final report in 2023.

“As we confirmed in June, we’ve been examining claims that these costs have risen and will set out our assessment in our annual report later this month.”

The hope must be that both sides involved can accept the report’s findings for the first time, to bring this bitter debate to an end once and for all.”