Rachel Reeves sounded triumphant as she delivered Labour’s first Budget in 14 years. ‘Invest, invest, invest,’ the Chancellor said. She claimed hers was a Budget for growth and prosperity and, that most of all, it was a Budget to help working people. But the Office for Budget Responsibility – the body set up 14 years ago by George Osborne to judge fiscal events – doesn’t seem to agree. Its report, published immediately after the Chancellor delivered her Budget, makes for grim reading.
The stand-out chart in the OBR’s report shows the effect the increase in employer National Insurance contributions will have on Britain’s labour force. Reeves gets much of her £40 billion tax rises from increasing the amount employers will have to pay to employ staff. Put simply: it’s a tax on jobs.
The OBR report calls out the effect this will have on the workforce: ‘The increase in employer NICs announced in this Budget reduces the participation rate by 0.1
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