Whilst Jeremy Hunt’s cut to National Insurance may grab the headlines, the real story of today’s Budget was hidden in the official forecasts accompanying it.
These forecasts point to a disaster for Britain’s labour force. The UK already had one of the worst post-lockdown workforce recoveries in the world, with a record 2.8 million people off work due to long-term sickness. But today the OBR said things are only going to get worse.
Spending on welfare now makes up the second biggest portion of your tax bill – narrowly pipped to the post by our NHS
The OBR gave the Chancellor credit for expanding childcare provision, attempting to reform welfare and reducing personal tax rates – which it says will boost the labour supply by 300,000 people.
But the forecasters said ‘the post-pandemic rise in economic inactivity is likely to prove more persistent than we previously thought’. They pointed to figures first reported by The Spectator which show a third of the working-age inactive population cite long-term illness as the reason they can’t look for work.
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