A “double whammy” of tax and wage increases announced in the Budget and Labour’s pledge to limit the number of branded items of school uniform and will lead to parents paying more for clothing, suppliers have told i.
In the party’s first Budget last week the Chancellor took the decision to raise minimum wages in April, with hourly rates for over-21s set to go up to £12.21 an hour, and increase the employer national insurance rate from 13.8 per cent to 15 per cent.
Labour has pledged to bring down the cost of school by “limiting the number of branded items of uniform and PE kit that schools can require”.
And those in the schoolwear industry have said that parents may end up paying more as a result of the changes.
Matthew Easter, chairman of the Schoolwear Association, said the combination of the Budget and uniform pledge were already causing enormous stress for those in the industry.
He said: “Our industry is made up of small, family-run businesses that are the backbone of high streets across the country. The government’s plans to cap school-specific items are already causing enormous stress and uncertainty for our members.”
Labour has said it is introducing the policy to keep costs down for parents, but Mr Easter said would likely remove school-specific PE kits first, he said, which would mean some families going for more expensive brands like Nike or Adidas.
Mr Easter added: “This places additional social pressure on students to conform to the latest fashion trends, exacerbating the divide between the haves and the have nots.”
He said it could lead to other parents then shopping for branded items, which would be more expensive.
Jim McNicolas, managing director at Clive Mark, which runs six shops for over 400 schools in the Midlands, said the business is already operating on “razor-thin margins” and “simply can’t absorb additional costs like larger retailers can”.
Speaking to i, he said the Budget changes and the school uniform plans were a “double-whammy hit”.
“With all of our sales coming from school uniform items, the introduction of a cap, combined with an increase in NI contributions, will significantly squeeze our profit margins and we risk having to recoup these costs from elsewhere to stay afloat, which will be the worst outcome for everyone and is precisely what the government aims to avoid with this cap.”
In September last year, Labour pledged to strengthen existing statutory guidance in an effort to reduce the burden on families struggling with the cost of living crisis.
Under proposals announced by the party at the time, parents would only have to buy a maximum of three branded items of uniform and PE kit.
But this level of detail is not in the Labour Party’s manifesto, which only commits to limiting the number of branded items of uniform and PE kit schools require.
Statutory government guidance on uniforms, which came into effect in Autumn 2022, already tells state schools in England to keep branded items to “a minimum” and to limit their use to “low-cost or long-lasting items”.
On October 30, Reeves announced that the employers’ national insurance (NI) rate will increase, as well as the threshold at which employers starting paying the tax will drop from £9,100 to £5,000.
To help protect smaller employers, the government also increased the employment allowance from £5,000 to £10,500 per year, allowing eligible businesses to reduce their NI liabilities until the allowance is used up.
The government estimated that 1m employers will pay the same or less in NI contributions than they did previously.
Rachelle Earwaker, senior economist Joseph Rowntree Foundation (JRF) said many families would struggle if uniform prices were increased.
She said: “The cost of living crisis is far from over for many families. Millions of low-income households are behind on their bills or can’t afford enough food due to the high cost of essentials and insufficient support.
“We know many families are having to take out loans to buy school uniforms. They would struggle if prices for items like school uniform were to increase further.
“People should check if they are eligible for benefits that could entitle them to additional help towards the cost of school uniforms but ultimately the government needs to do more to tackle the hardship so many people are feeling.”
A government spokesperson said: “We have committed to legislate to limit the number of expensive branded items that schools can require to keep costs down for hardworking families.
“This is whilst we address a £22bn fiscal black hole by making difficult choices to fix the foundations of the country, restore our public services that have been left to crumble, and deliver the economic stability businesses need to thrive.”
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