Budget tax raid will mean reduced private sector pay rises, Rachel Reeves admits

On Thursday bosses warned Ms Reeves’ plans could lead to a hiring freeze and pay cuts; because corporations have become Britain’s biggest losers. his tax raid.

UKHospitality has warned that cafes, bars and restaurants employing part-time staff could see their tax bills increase by a total of £1bn due to the changes.

Brent Hoberman, founder of Lastminute.com, was among business leaders who warned that companies would “think harder about hiring more people and where they hire them from.”

“We’re not at the French level yet, but it’s a combination of some things that need to be monitored along with the new employment laws,” he said.

Paul Johnson, director of the Institute for Fiscal Studies think tank, predicted that employees’ pay packets will shrink as a result of the NIC increase, telling BBC Breakfast: “The biggest one is the National Insurance change and that’s what this does. It makes it more expensive for employers to hire you.

“The long-term effect of this is that they pay you less. This is more like when I pay for something at the store; for example to a washing machine. The retailer pays VAT to the government, but I still have to pay the VAT.”