Announcing the rise yesterday (7 September), prime minister Boris Johnson said it would raise £36 billion over the next three years for the health and social care budget. Employers will pay 15.05% in national insurance contributions on employees’ earnings over £170 per week from April 2022, compared to 13.8% employer NICs currently. Employee NICs will increase from 12% between £180 and £967 per week and 2% thereafter, to 13.25% and 3.25% respectively. MPs will hold a vote in the Commons later on whether to push ahead with the health and social care levy, as it has been branded. The announcement was met with anger from many employers and lobby groups, with the Recruitment and Employment Confederation calling it a “tax on jobs”. Suren Thiru, head of economics at the British Chambers of Commerce, referred to the fact that organisations will be making difficult decisions around redundancy as the Coronavirus Job Retention Scheme comes to a close at the end of this month. [pullquote]An anti-jobs, anti-small business, anti-start-up manifesto breach” – Mike Cherry, FSB[/pullquote]He said that the levy will be “a drag anchor on jobs growth at an absolutely crucial time”, with businesses carrying “huge debt burdens”. Charles Cotton, senior reward and performance adviser at the CIPD, said: “Like pension auto-enrolment and the introduction of the national living wage, most organisations will probably accept higher costs in the short term. However, for this position to be sustainable in the medium to longer term, employers need to reduce their costs by improving employee productivity, so now is as good as anytime to explore how the various ways they can boost staff performance. “We don’t predict that employers will have to increase salaries for all workers in response to a cut in their take home pay. Nor do we forecast that benefits will be cut in the coming months. However, some low-waged workers may feel the cut more acutely, especially those already suffering from financial distress, so that is why it’s important that HR has helped their employers create a financial wellbeing policy to manage and mitigate this risk.” Groups supportinThe government’s national insurance hike of 1.25% percentage points, announced yesterday, has continued to provoke negative reactions from business groups and employers.