RACHEL Reeves has provoked fury after admitting her Budget tax raid on business will hit workers in the pocket.
The Chancellor conceded that hard-working employees will be affected by their bosses paying more National Insurance to the tune of £25billion unless firms soak up the costs.
Reeves conceded that employees will be affected by bosses paying more National Insurance[/caption]
It came as the Tories said the average working household could face an annual £2,238 tax grab — up by around £200 on their previous estimate.
The row over tax hikes — totalling £40billion — erupted as it emerged Ms Reeves told voters three months before the election: “We don’t need higher taxes, what we need is growth.”
But she said yesterday: “I said that it will have consequences.
“It will mean that businesses will have to absorb some of this through profits and it’s likely to mean that wage increases might be slightly less than they otherwise would have been.”
Tory leadership contender Robert Jenrick claimed the Budget had been a “Halloween horror show”.
He added: “This was the biggest political heist in modern British history.”
He told Sky News: “£40billion of tax rises hurting people across this country and just three months ago the Labour Party won an election on a pledge not to raise taxes. I’m afraid Rachel Reeves is acting like a compulsive liar.”
The charity sector has expressed concerns over the impact of the National Insurance haul from employers.
National Council for Voluntary Organisations boss Sarah Elliott warned it will put “another strain” on them.
Meanwhile, Paul Johnson of the Institute for Fiscal Studies warned the raid will not raise “anything like” £25billion.
The Budget measures mean that by 2028 weekly wages will have risen by just £13 in real terms in two decades.
Mike Brewer of the Resolution Foundation said: “The short-term effect of these changes will be better-funded public services.
“But families are also set for a further squeeze on living standards as the rise in employer National Insurance dampens wage growth.”
