Higher taxes could worsen the plight of low-paid frontline workers by £ 1,000

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Higher national insurance payments will leave low-wage frontline workers potentially over £ 1,000 a year worse off, while also depriving businesses of the money they need to invest, the latest analyzes show.

The combination of higher National Insurance Contributions (NICs), cuts to universal credit and a freeze on the personal income tax allowance, would take £ 1,040 a year from the average supermarket worker, according to Plowing. The retail sector is the UK’s largest private sector employer. For hotel workers, nurses and social workers, the hit is bigger, at around £ 1,100.

Keir Starmer said the numbers showed the impact of government policies on people’s daily lives and suggested that the Conservatives “put the rich before the workers who have to foot the bill.”

The Labor leader was scathing about last week’s announcement of a 1.25 percentage point increase in NICs, saying it would not solve the social services crisis, eliminate the backlog of our NHS and would not protect homeowners from having to sell their homes to pay for care ”.

In a speech to Alliance Manchester Business School on Monday, Tony Danker, chief executive of business lobby group CBI, will warn that raising corporate taxes and lowering investment is not a plan for growth economic.

“After the pandemic, we in business believe we have to pay our fair share to meet Covid debts,” Danker will say. “This is why many business leaders have accepted the staggering six point increase in corporate income tax announced in March. “


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But he will say that there is now a real risk that the government will continue to look to corporate taxes to “bear the burden” and the choice of national insurance to finance social care is the latest example.

“I am deeply concerned that the government thinks that taxing businesses – perhaps more politically acceptable – is inconsequential on growth,” he said. ” It’s not. Raising corporate taxes too much has always been doomed to failure, as it hinders new investment. “

A government spokesperson said: ‘This government has always supported business – including through our £ 400 billion jobs plan – and we have shown that we are committed to supporting business investment, by extending the annual increase in the investment allowance by one year and by introducing the super-deduction. – the biggest corporate tax cut in two years in modern British history.

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