Labour was accused of ‘crushing’ the economy as figures revealed employers have laid off one worker every nine minutes since the Budget.
Business leaders have warned that the Government’s £25billion hike in employers’ National Insurance (NI) contributions – which started yesterday – could trigger tens of thousands of job losses in the coming months.
The Office for Budget Responsibility (OBR) said last month that it now expects unemployment to hit 1.6million this year – 160,000 higher than it forecast at the Budget.
Analysis of company announcements reveals employers have shed 25,000 jobs in the five months since the October Budget – equal to 160 per day, or one every nine minutes. Those cutting jobs include major employers such as Sainsbury’s, BT and Santander. They face increased NI bills running into tens of millions of pounds a year. Conservative leader Kemi Badenoch yesterday warned the NI hike – dubbed a ‘jobs tax’ – was ‘crushing’ the economy.
‘The jobs tax starting today is making people out there poorer,’ she said.
‘It’s ruining our economy, it’s crushing it, inflation is up, growth has been halved to 1 per cent . . . we need to fix this.’
Writing in the Daily Mail, Shadow Chancellor Mel Stride said families would be an average of £3,500 worse off by the end of the decade as a result of employers passing on the tax through reduced wages and higher prices.
‘The only thing this tax will truly achieve is to make Britain a less competitive, less investable and less dynamic economy,’ he said. ‘It feeds into a wider vision of managed decline – where sluggish growth, higher costs and shrinking opportunity become the new normal. Let this be a lesson: only businesses create jobs and prosperity. Governments don’t.
Labour was accused of ‘crushing’ the economy as figures revealed employers have laid off one worker every nine minutes since the Budget
Employers have shed 25,000 jobs in the five months since the October Budget – as the Office for Budget Responsibility said last month that it now expects unemployment to hit 1.6million this year
The PM Keir Starmer congratulated the Chancellor Rachel Reeves after delivering her Spring Statement last month
‘Labour’s crusade against private enterprise always ends the same way – with ordinary working people paying the price.’
Treasury minister Darren Jones yesterday defended the NI hike, saying it was needed to fund record NHS investment. ‘We recognise that businesses don’t want to pay additional taxes,’ he told the BBC.
‘We designed the scheme to protect smaller businesses, so over 50 per cent of businesses in the country will pay the same or less than they did before, and it was in the context of having to get a grip of the public spending mess we’d inherited from the Conservatives and not to break our promise to working people on their payslips.’
The NI hike increases the employer’s rate from 13.8 per cent to 15 per cent. But Chancellor Rachel Reeves also slashed the threshold at which they start paying it from earnings of £9,100 to just £5,000, dragging tens of thousands of part-time workers into the system. Shevaun Haviland, of the British Chambers of Commerce, said the NI hike was members’ ‘number one’ concern.
