Paul Johnson, of the Institute for Fiscal Studies, agrees, saying that any rise would be a “straightforward breach of a manifesto commitment”.
Strangely, it appears that the Chancellor and Prime Minister are relying on the fact that their commitment applies only to “working people”. I fear that this reveals their lack of understanding about business, and the importance of competitive tax rates to workers themselves. In what world do additional costs for business not have an impact on the wages and conditions for working people?
In 2021, the Office for Budget Responsibility highlighted this effect by stating that a rise in Employer National Insurance contributions would be “passed through entirely on to real wages”. What’s more, if passed on to pension contributions, that would simply lead to employers cutting their contributions and benefits.
Lloyds Bank has said that it would be a “handbrake” on investment, UK Hospitality said it was a “tax on jobs” that “makes it harder to employ people and to take a risk on recruitment and expansion”. The Federation of Small Businesses said it would be “one way of shrinking small business employment”, PWC has said it would end up being an “employee tax after all” and the IFS has been clear that any rise in NICs is “felt by working people” and employers.
And it’s not only the business groups – the Chancellor appears to agree with them as well. Back in 2021 she said that a rise in Employer NICs would “saddle employers and workers with a jobs tax”. Even more remarkable is the fact that in 2022 she also warned that such a rise meant that “employees will be hit twice” and said it was “poorly thought through”.
What has led to her Damascene conversion to the idea that such a rise won’t hurt working people and therefore isn’t a manifesto breach? It simply beggars belief that Labour are considering it.
It appears that the new Labour Government’s first Budget will mean lower growth, lower wages, and fewer jobs – with working people paying the price. It’s a bad sign they are abandoning their manifesto promises so quickly. This is shaping up to be one of the most damaging Budgets in memory.
Jeremy Hunt is the shadow chancellor
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National Insurance raid will be a disaster – and even the Chancellor knows it[/gpt3]
Paul Johnson, of the Institute for Fiscal Studies, agrees, saying that any rise would be a “straightforward breach of a manifesto commitment”.
Strangely, it appears that the Chancellor and Prime Minister are relying on the fact that their commitment applies only to “working people”. I fear that this reveals their lack of understanding about business, and the importance of competitive tax rates to workers themselves. In what world do additional costs for business not have an impact on the wages and conditions for working people?
In 2021, the Office for Budget Responsibility highlighted this effect by stating that a rise in Employer National Insurance contributions would be “passed through entirely on to real wages”. What’s more, if passed on to pension contributions, that would simply lead to employers cutting their contributions and benefits.
Lloyds Bank has said that it would be a “handbrake” on investment, UK Hospitality said it was a “tax on jobs” that “makes it harder to employ people and to take a risk on recruitment and expansion”. The Federation of Small Businesses said it would be “one way of shrinking small business employment”, PWC has said it would end up being an “employee tax after all” and the IFS has been clear that any rise in NICs is “felt by working people” and employers.
And it’s not only the business groups – the Chancellor appears to agree with them as well. Back in 2021 she said that a rise in Employer NICs would “saddle employers and workers with a jobs tax”. Even more remarkable is the fact that in 2022 she also warned that such a rise meant that “employees will be hit twice” and said it was “poorly thought through”.
What has led to her Damascene conversion to the idea that such a rise won’t hurt working people and therefore isn’t a manifesto breach? It simply beggars belief that Labour are considering it.
It appears that the new Labour Government’s first Budget will mean lower growth, lower wages, and fewer jobs – with working people paying the price. It’s a bad sign they are abandoning their manifesto promises so quickly. This is shaping up to be one of the most damaging Budgets in memory.
Jeremy Hunt is the shadow chancellor
[/gpt3]
