The Institute of Directors has today written to the Chancellor of the Exchequer urging the Government to scrap April’s proposed rise in National Insurance contributions.
In the letter, IoD Director General Jonathan Geldart makes the case for scrapping the tax rise by setting out five key impacts that it will have:
- It will reduce take-home pay, during a cost-of-living crisis
- It will lead to job losses
- It will damage the economy
- It will cause inflation to rise even further
- It will hit hardest those firms that have already suffered the most from the pandemic
He also references the fact that both the Institute for Fiscal Studies (IFS) and the National Institute for Economic and Social Research (NIESR) have in recent days advised that the fiscal position provides more room for manoeuvre in this regard than was previously thought, and calls on the Treasury to conduct its own assessment of the impact of the proposed rise on the economy and on business.
Mr Geldart said: “The forthcoming rise in National Insurance will have a negative and significant impact on our members and on the wider macroeconomy. In the last few months, the case against the tax rise has, to my mind, only become stronger. That’s why we are urging the Chancellor to think again about raising national insurance contributions and are asking for the opportunity to discuss the matter as soon as possible.”