Chancellor Rachel Reeves is taking some big risks with her first Budget, according to the director of the Institute for Fiscal Studies (IFS) Paul Johnson.
Writing in the Times last week, Johnson said the chancellor’s decision to raise employer national insurance contributions to 15% would hurt workers more than a direct increase in income tax.
He argued that it would potentially hurt employment and wages, leading to more companies seeking to make use of contract workers and self-employed people.
“Despite a whopping 70 policy decisions listed in the budget red book comprising £74bn of spending increases and £41bn of tax rises in the final year of the forecast, I rather suspect there is a lot more to come from this chancellor,” Johnson wrote.
“She needs to spend the coming months developing something that looks a lot more like a coherent strategy for the details of tax and spending than we saw this time around.”
Johnson delivered the keynote address at DG Publishing’s Private & Public Pensions Summit on 27 November 2024 at Pennyhill Park in Surrey. He opened the summit with a talk on the true state of the UK’s finances in light of the October Budget.
He also discussed what the changes meant for the pensions sector, given the government’s aim to get pension money to contribute to some of its key objectives.
For more information about the 2024 event and to register for the 2025 conference, visit the DG Publishing website.
Further reading
Budget 2024: National insurance hike ‘terrible news’ for pension adequacy efforts (30 October 2024)
Budget 2024: ‘Devil is in the detail’ of tax change implications (30 October 2024)
