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Rising National Insurance Costs Lead to Hiring Freeze and Store Closures, Says The Entertainer CEO
The Entertainer, a major UK retailer, has announced a hiring freeze at its head office due to increased operating costs, a decision linked to the government’s planned National Insurance (NI) rate hike. Chief Executive Andrew Murphy explained that the company’s financial outlook has been severely impacted by the changes, leading to a reevaluation of its expansion plans.
From April 2024, the UK government will raise the NI rate for employers from 13.8% to 15%, while reducing the tax threshold from £9,100 to £5,000. This policy change is expected to generate an additional £25 billion annually to help stabilize public finances after the previous government’s revenue cuts.
Speaking on BBC Radio 4’s Today programme, Murphy expressed understanding of the government’s long-term objectives but criticized the approach. “There’s no argument with the government’s ultimate goals… simply the balance with which they pursued them,” he said. Murphy also highlighted that the increased NI rates had altered The Entertainer’s financial viability assessments, forcing the company to scale back plans for new store openings, and ultimately leading to store closures.
The increased costs have raised concerns across the business sector, with other major companies, such as Sainsbury’s and Marks & Spencer, warning that the higher NI rates could lead to higher prices for consumers. Sainsbury’s CEO, Simon Roberts, said the supermarket chain would face an additional £140 million in costs, adding, “It is going to feed through into higher inflation.”
The Labour Party has defended the NI increase, with Chancellor Rachel Reeves stating that the move is necessary to ensure the country’s public finances are put on a more stable footing. “We’ve got to raise the money to put our public finances on a firm footing,” she said in response to business concerns.
As some businesses reconsider their operations, there are signs that rising costs could prompt companies to seek expansion outside the UK. Arnab Basu, CEO of Kromek, pointed to planned US corporate tax cuts and lower energy costs as factors making the US an attractive investment destination. Similarly, George Weston, CEO of Associated British Foods (parent company of Primark), suggested that tax increases could shift the company’s focus to growth outside the UK.
The Treasury defended the NI changes, emphasizing that they are vital for economic recovery. “This government is committed to delivering economic growth by boosting investment and rebuilding Britain,” a spokesperson said.
The Entertainer’s move highlights a growing trend of UK businesses reassessing domestic investments as they face rising operational costs and a changing tax landscape.
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UK Rental Prices See First Decline in Over Five Years, But London Sees Continued Rise
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Amazon Moves Toward Same-Day Drone Deliveries in Darlington, UK
Amazon is taking significant steps toward launching same-day drone deliveries in the UK, starting with its warehouse in Darlington, County Durham. The company is seeking approval from the Civil Aviation Authority (CAA) to operate drones in the airspace around the site, marking a potential breakthrough for its Prime Air service in the country.
A public meeting is being held in Darlington this week to discuss the proposal, as Amazon works to gain the necessary permissions to begin drone operations. If approved, the service would allow customers within a 7.5-mile radius of the warehouse—excluding restricted flight zones—to receive packages by drone. However, before deliveries can begin, Amazon representatives will assess each customer’s property to ensure there is adequate space for the drone to land. Customers will also need to set up a lightweight landing pad in their gardens for the drone to identify and land safely.
This move comes after Amazon received CAA approval in August 2023 for beyond-line-of-sight drone testing at a separate UK location. The company has already conducted Prime Air deliveries in parts of the United States, such as Texas and Arizona, and in Italy. However, the service was temporarily halted after test crashes in Oregon led to a software update. Amazon had originally planned to launch drone deliveries in the UK and Italy by the end of 2024, but that timeline has since been delayed, and no specific launch date for the Darlington service has been set.
Amazon’s history with drone deliveries dates back to a successful pilot in Cambridge in 2016. However, its UK drone programme was scaled back in 2021, and subsequent trials in places like Italy, California, and Oregon have faced challenges, including two drone crashes in Oregon during rainy conditions. Despite these setbacks, Amazon insists that the accidents were not the primary reason for the service pause, and the company is addressing the issue with an updated software system.
The UK is actively supporting the expansion of commercial drone services. Royal Mail has been testing drone deliveries to remote areas, including the Shetland Islands, and has extended its programme in Orkney until at least February 2026. Additionally, BT has invested £5 million in creating a 165-mile “drone superhighway” across southern and central England, enabling beyond visual line of sight flights under new CAA regulations.
While Amazon has not specified a launch date for the Darlington service, the company views this development as an exciting step forward. With regulatory approval and infrastructure in place, Amazon hopes to move closer to fully launching its Prime Air service in the region, continuing its efforts to collaborate with local residents and authorities.
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