Labour could 'scrap' tax which is 'misguided' and 'major threat to UK'
Labour Party Chancellor Rachel Reeves has been warned she "must scrap her misguided jobs tax" with the UK under "major threat" following tax changes in the Autumn Budget. The warning comes from leading economists this week.
Daisy Cooper, Liberal Democrats MP and Treasury spokesperson said: "These latest figures are concerning. The Government's misguided jobs tax is already scaring off small businesses from hiring new people and being able to better serve our communities.
"The Chancellor talks about growth but her Budget measures are acting as an anchor against just that." Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said: "The labour market continues to be challenging for many businesses, with wage growth continuing to rise as firms compete for skilled workers.
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"This is a concern as they face a significant rise in employment costs in April. To grow the economy, we need businesses and the workforce to thrive. Government must ease the cost-pressures on firms so they can invest in people."
Andrew Goodwin, chief UK economist at Oxford Economics, warned that the April increases in National Insurance contributions and the National Living Wage pose "major threats" to labour market resilience. He said: "Given these sectors are typically also the most labour-intensive, this raises the risk of significant job losses, potentially pushing up unemployment in 2025."
Changes in NIC liabilities for employers inevitably put further pressure on small businesses. Now, not only are there continuing cost increases in other areas of their business, but following the announcements from the autumn budget regarding the increase in the national minimum wage their employee costs will increase.
However, Rob Wood, chief UK economist at Pantheon Macroeconomics, has also spoken out and he said: "A payroll-tax hike worth less than one per cent of GDP is a much smaller shock than an emerging financial crisis."