Taunton's Mr Miles Tea Room feels national insurance impact

Chancellor of the exchequer Rachel Reeves MP announced in her first budget on October 30 that she would be increasing the amount of national insurance paid by employers from April 2025, as well as reducing the threshold at which such contributions had to begin being paid.

Taunton and Wellington MP Gideon Amos used a parliamentary debate on the budget to claim that Mr Miles Tea Room would have to cut its staff hours, postpone investment and reduce its opening hours if these changes were made.

Mr Amos also used the debate to criticise the Conservatives’ record on supporting small business, arguing its Brexit deal had made life much harder for small and medium-sized enterprises (SMEs).

Speaking in the House of Commons on Monday evening (November 25), Mr Amos said: “There are very serious effects of the rise in national insurance contributions on small businesses, particularly the many small businesses whose rateable value is more than £51,000.

“That is quite typical for SMEs in a high street in this country – at the smaller end, I would suggest.

Mr Amos then read verbatim a statement from “the owner of Mr Miles Tea Room”, located on High Street in Taunton – describing it as “a superb place to go in my constituency”.

READ MORE: Inside Mr Miles – Taunton's quintessential English tearoom

The statement read: “Firstly, all my staff will now see a reduction in the hours they will be scheduled. As a result, no doubt, some will leave.Mr Miles in Taunton (Image: Google Maps)

“Where many of my employees already earn over the current minimum wage, I will not be able to increase their pay rates by as much as I have done in the past.

“Secondly, any full-time employees who leave our employment will only be replaced by potentially two or three part-time employees.

“Thirdly, I will not be investing in any capital equipment in my kitchen or new decor in my restaurant.

“Fourthly, there is a serious potential for me to operate on shortened trading hours, thus reducing the vibrancy of the town centre.

“I was cautiously optimistic that a new Labour government couldn’t possibly be worse than the previous Tory one in terms of lack of support for SMEs.

“Sadly, in the space of three short months this government has already proved my optimism was misplaced, and there will be many casualties over the next 12 months as the new measures take effect.”

Mr Amos – the Liberal Democrats’ official spokesman for housing and planning – said that the Tories’ criticism of the new government’s budget were hollow given their dismal economic record in the last few years.

He said: “The Conservatives had a very clear and pithily described policy on business: it began with f, had k in the middle and ended with the word ‘business’.

“And believe me, they delivered on that policy with their post-Brexit trade deal.

“In case the message had not been rammed home hard enough, they confirmed it with a budget that played helter-skelter chaos with the economy.”

Fellow Lib Dem MP Anna Sabine – who represents Frome and East Somerset – said that a root and branch reform of business rates was needed to provide SMEs with stability and encourage them to expand.

Ms Sabine – who also owns a café in Bath – said: “For the last nine years, small businesses and local high streets have felt the burden of economic instability and other pressures.

“The shops and businesses that still exist have fought hard to protect themselves, and they have in many ways defied the odds.

“They have had to adapt to changing consumer trends, compete with the rise of online retail giants, navigate covid-19, and survive the mini-budget and the subsequent impact on mortgage rates and disposable income, which is still being felt.

“While still feeling the impact of all this, some businesses will in the short term have to pay both high business rates and national insurance contributions.

“While permanently lowering business rates for retail, hospitality and leisure is a step in the right direction, it is still not enough to help our flourishing high streets thrive again, and we know that many important small businesses fall outside these categories.

“We want to see a complete overhaul of the business rates system. Instead of targeting small businesses, which are the backbone of our high streets and local communities, we want to replace business rates with a new, fairer levy on commercial property owners rather than their tenants.”