Rachel Reeves under pressure to soften Budget tax raid on bosses amid warnings it would strangle growth
RACHEL Reeves is under pressure to soften a Budget tax raid on bosses amid warnings it would strangle growth.
Insiders believe the Chancellor could now back away from raising employer National Insurance Contributions (NICs).
It comes amid furious claims such a rise would breach Labour’s manifesto.
Ms Reeves was instead said to be considering a lesser move to levy NICs on firms’ pension contributions.
She was also believed to be eyeing a £1billion inheritance tax grab on shares in small and medium-sized firms currently exempt from the levy.
Ministers are considering raising fuel duty despite warnings it would contradict their vow to protect working people.
Health Secretary Wes Streeting said the mooted employer NIC rise would not break Labour’s election pledges.
He did not deny that an extended freeze to income tax thresholds would drag an extra million workers into paying higher rates.
It came as a report warned taxing businesses would further damage UK competitiveness on the world stage.
Britain ranks 30th out of 38 OECD nations for competitiveness and could plunge further.
Daniel Herring, from The Centre for Policy Studies, said: “There’s a real danger that Britain could end up with one of the least competitive and most anti-growth tax systems in the OECD if the expected tax rises come to fruition.”
Tina McKenzie, from the Federation of Small Businesses, said the Budget must deliver “on the growth promises in the election”.
She said: “The Chancellor should back small firms to deliver more jobs, better pay and fire up our economy.”