Member

The Government and other official predictions were as follows: 940,000 employers will see an increase, 250,000 a decrease and another 820,000 no change. Employers will have to pay for updating software and become familiar with change. The changes will raise £23.7 billion in 2025-26, rising to an estimated £25.071 billion in 2029. Output, the Government suggest, will decrease by 0.1%. The following is a rather dire prediction, even on the Government’s terms: the increased business costs will lead to lower wages; 0.2% will be added to CPI inflation in the near term, and employers will pass on part of the cost. The impact on individuals will depend on employers’ behavioural response. The figures refer to the OBR’s October 2024 economic and fiscal outlook on households and families. This simply tells us that, depending on employers’ behavioural response, individuals may be impacted indirectly by changes to secondary class 1 NIC rates, secondary thresholds, and so on. We do not have any specific information. Indeed, since then, official figures have suggested that the sums raised by this tax raid will not bring in anything like the £23.8 billion estimated for 2025-26 or the £25.7 billion in 2029. On account of behavioural changes, the indirect consequences of wages, and the impact on labour supply and profits, the gain will be a mere £16 billion in 2029.