'We're being penalised for making things in Britain'

The owner of a famous Derbyshire clothing firm says the rise in National Insurance (NI) contributions paid by employers could lead to higher prices and fewer job opportunities.

Christopher Nieper is chief executive of David Nieper, which has been making clothes in Alfreton since 1961.

He says the increase in NI contributions, which was announced in the Budget in the autumn and is due to come into effect in April, would cost the firm "at least £300,000 extra" each year.

"For me, that's almost a fine, or penalty for making things in Britain," he told the BBC.

"The rising National Insurance contributions send a clear message: 'Don't manufacture in Britain'.

"If costs keep climbing, businesses face tough choices - close factories, move offshore and reduce jobs."

At the moment businesses pay a rate of 13.8% on employees' earnings above a threshold of £9,100 a year.

In the Budget, Chancellor Rachel Reeves announced this rate would increase to 15% from April and the threshold would be reduced to £5,000.

Reeves said the increase was "difficult" but the right choice in order to fund public services.

However Mr Neiper said: "We need policies that encourage job creation, not ones that push work overseas.

"Our success has been because of the great contribution of local people and so we have to hang on to British manufacturing - but please make it easy for us.

"Don't penalise us for employing people."

Mr Nieper said the past four years had been "very" challenging for his business.

He said the effects of Covid, the rise in inflation following the outbreak of war in Ukraine, and the rise in the National Minimum Wage had pushed costs up "massively."

"The country is actually manufacturing inflation for itself - we are inflicting pain on our own economy and it's a vicious circle," he said.

"We will definitely survive. I will make absolutely sure we do, but it has to come at a cost.

"So if it means that we have to hire fewer people or halve our apprenticeship programme then we have to do that.

"And if we have to put up prices, which creates more inflation we'll have to do that, too."

A Treasury spokesperson said changes announced in the most recent Budget would deliver "stability" for businesses "while not increasing taxes on working people".

"We are creating the conditions for growth with business investment in October to November up 4.5% compared to this time last year," they said.

"Capping the rate of corporation tax, establishing a National Wealth Fund and creating pension mega funds is just the start of our Plan for Change which will get Britain building, unlock investment and support business so we can make all parts of the country better off."

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