Concerns Grow Over Potential Increase in Employers’ National Insurance Contributions
“Amid a £5bn surge in government borrowing driven by public sector pay raises, Chancellor Rachel Reeves has hinted at tough financial decisions ahead. The potential increase in employers’ national insurance contributions, a tax on bosses, is raising alarm among business leaders. Reeves’ chief secretary, Darren Jones, indicated that while employee taxes and VAT won’t rise, employer contributions may be on the table in the upcoming budget. This possible ‘jobs tax’ could increase employment costs, potentially leading to lower wages and hindered growth. Business organizations warn that such a move would not only hurt hiring but also break Labour’s election manifesto pledges, causing political fallout. Conservatives have criticized this potential policy shift as dishonest, arguing it could lead to higher unemployment. The financial strain comes as the Office for National Statistics reports a stark increase in government borrowing, far exceeding forecasts.”
Quotation by Nigel Holland.
- Government borrowing surged £5bn due to public sector pay raises, sparking economic concerns.
- Labour may increase employers’ national insurance contributions despite election promises.
- Businesses fear the ‘jobs tax’ could reduce hiring and depress wages.
- Conservatives label any tax hike as dishonest and harmful to employment.
- The Office for National Statistics reports a significant rise in government borrowing.