Chancellor admits national insurance increase ‘will have consequences’ – London Business News | Londonlovesbusiness.com

The Chancellor delivered Labour’s first Budget in 14-years on Wednesday and has admitted that people’s wages might not increase as a direct result of her £40 billion tax hike.

Rachel Reeves has admitted in that as a result of the decision to increase National Insurance workers will most likely receive lower pay rises.

The Chancellor said, “I said that [national insurance hike] will have consequences.

“It will mean that businesses will have to absorb some of this through profits and it is likely to mean that wage increases might be slightly less than they otherwise would have been.

“But, overall, the Office of Budget Responsibility forecast that household incomes will increase during this parliament.

“That is a world away from the last parliament, which was the worst Parliament ever for living standards.”

The former Chancellor Jeremy Hunt has warned that things is going to get tougher for ordinary people.”

Hunt added, “We are going to have lower living standards, we are going to have higher prices, fewer jobs, more expensive mortgages, life is going to get tougher for ordinary people.”

Speaking to BBC Breakfast Hunt said, “If she had wanted to do this, before the election she should have said so, we could have had this debate.

“I think what is making people very angry this morning is that she said 30 times before the election that she wouldn’t increase taxes beyond what was spelled out in the Labour manifesto and many people believed her.

“Many people thought this was a new Labour prospectus, not a traditional tax and spend prospectus, and they have woken up to a Chancellor who has given us the biggest tax-raising Budget in history.”

He warned that the increase in taxes during the Budget will hamper a “successful” and “strong economy.”

He added, “We are going to have lower living standards, we are going to have higher prices, fewer jobs, more expensive mortgages, life is going to get tougher for ordinary people.”