New National Insurance rules could see 130,000 people lose their jobs

New National Insurance rules could see 130,000 people lose their jobs
-Credit: (Image: Reach Publishing Services Limited)


A National Insurance raid could see the UK economy lose 130,000 jobs, new analysis has claimed. The National Insurance rate paid by employers is set to rise which could result in job losses, analysts have warned, after the Labour Party Budget.

Research conducted by Bloomberg Economics indicates up to 130,000 jobs would be wiped out if companies responded to the tax rise by primarily cutting employment. Addressing the Confederation for British Industry’s (CBI) annual conference earlier this week, Rain Newton Smith sounded the alarm that the tax rise would “hit growth”.

She explained "[Companies] are looking with heavy hearts to cut training and investment, delay decarbonisation projects, or pass on costs to customers." Since Labour’s first budget in 14 years last month, business groups have warned that the chancellor’s £25bn increase in employer national insurance contributions (NICs) will force them to cut jobs and raise prices.

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Thousands of farmers have also protested against changes to inheritance tax. But Chancellor Rachel Reeves told the Confederation of British Industry (CBI) annual conference in Westminster that no one has offered a better solution to the challenging situation left behind by the previous, Conservative government.

“I have heard lots of responses to the government’s first budget but I have heard no alternatives,” she said this week. “We have asked businesses and the wealthiest to contribute more. I know those choices will have an impact.

"But I stand by those choices as the right choices for our country: investment to fix the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.” Ms Reeves claimed that she had been left with a £22bn “black hole” in the public finances, and would need to take action to prevent borrowing running out of control.

“We had to clear up the mess of what we had been left,” Reeves will tell the CBI. “The easiest thing I could have done is to have dodged the difficult choices. Put short-term interests before the national interest. I was not willing to do that.”