Rachel Reeves’ maiden Budget has seen the value of the pound plunge, with economists accusing the Treasury of “doublethink” over its “nonsense” insistence that National Insurance Contributions have not gone up.
Despite vowing in the run-up to the General Election that Labour would not hike taxes, the Chancellor’s Budget has seen £40bn worth of tax rises.
Particularly galling for Britain’s business owners is the eye-watering increase in National Insurance Contributions (NICs) for employers.
Besides the economic gut punch of raising employer NICs to 15 percent of worker’s earnings, the Treasury’s 170-page Budget document says twice that the Government is “not increasing the basic, higher or additional rates of income tax, National Insurance contributions (NICs) or VAT”.
Economists at the Institute for Fiscal Studies (IFS) have queued up to lambast the new Chancellor and the Treasury’s Budget document.
Taking to X, Helen Miller, the IFS’s deputy director and head of tax, wrote that the claim that NICs wouldn’t rise was “ridiculous”.
She added to her social media post: “This is clearly not true. They are very definitely raising NICs!!!”.
Meanwhile, Ben Zaranko, a senior IFS economist, said in a his own X post: “Is this nonsense even consistent with the civil service code?! Some doublethink [in] the Treasury document…
“‘We are not increasing National Insurance Contributions. But also, we are raising £26bn extra per year from National Insurance Contributions’.”
According to the Civil Service code “honesty”, “objectivity” and “impartiality” are central values.
The Telegraph reported Lord Nick Macpherson, former permanent secretary to the Treasury, arguing that it was “less than clear” that the Treasury’s language breaches the code.
He said: “The Treasury would argue that given the context they were referring to NICs paid by employees (‘working people’).”
The outlet also reported that a Treasury source said the IFS’ economists were referring to a section that was “clearly labelled” ‘Protecting Working People’. They said it “clearly intended to highlight there will be no increase to employee NICs”.
Express.co.uk has contacted the Treasury for comment.
