New tax is a drag on jobs and growth
Suren Thiru, head of economics at the British Chambers of Commerce, said the new 1.25% national insurance contribution introduced by Boris Johnson would be a “drag anchor on jobs growth at an absolutely crucial time”. “Firms have been hammered by 18 months of Covid-related restrictions and have built up huge debt burdens,” he said. “This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery. Elsewhere, Lord Bilimoria, President of the Confederation of British Industry (CBI), said that although there is “genuine consensus” that social care reforms and greater investment are long overdue, businesses “are already set to be hit by a substantial rise in corporation tax in 2023.” He went on to say that the dividend tax would dampen investment which “plays a critical role in supporting businesses and enabling growth across the whole economy”.