Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, what assessment he has made of the potential impact of increased operating costs on the (a) employment retention and (b) pay levels of small businesses.

The Government recognises the need to protect the smallest employers.

The Government has doubled the Employment Allowance, meaning that more than half of businesses with NIC liabilities will either gain or will see no change this year. As well as this, a Business Growth Service will make it easier for businesses across the UK to get the advice they need.

The National Minimum Wage increases that came into effect on the 1^st April 2025 follow the recommendations of the Low Pay Commission. To inform its recommendations, the Low Pay Commission considered the impact on business, competitiveness and the labour market, and undertook extensive research and stakeholder engagement. The Government’s Impact Assessment¹, includes a detailed assessment of the impact of the rates on small and micro businesses, including the increase in pay levels and possible wider impacts on competitiveness and employment.

¹The National Minimum Wage (Amendment) Regulations 2025 - Impact Assessment