It comes from the 'unsustainable' National Insurance policy already announced by the Government
Rachel Reeves is expected to unveil pension reforms this week which are intended to channel money into infrastructure and private businesses. The Chancellor is also expected to use her first Mansion House speech in the City of London to “spell out the next phase” of Labour’s plan in Government, after her key pledge in October’s Budget to “fix the foundations” of the economy.
At last month’s Budget, Ms Reeves unveiled a change to the amount employers pay in national insurance contributions , expected to raise more than £25 billion for the Treasury. As well as an increase in the rate employers pay from 13.8% to 15%, the threshold at which employers start paying the tax will be reduced from £9,100 per year to £5,000.
“There is no capacity to pass the costs onto customers. Businesses would be reluctantly forced to raise prices by 6-8%, fuelling inflation, yet could not realistically do so as our customers are at the end of their ability to pay more. Instead, many businesses would have to reconsider investment and drastically cut jobs and reduce the hours of team members.”
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