James Wild MP has called on government to rethink £25 billion Jobs Tax. In his role as a Shadow Treasury Minister, James closed an opposition day debate on Employer National Insurance Contributions.
James highlighted the impact of the changes to Employer National Insurance Contributions resulting in lower wages, higher prices and fewer jobs.
James also drew upon the the Conservative Government's track record for success, creating 4 million jobs, cutting youth unemployment, 1 million more disabled people got into work and we had the fastest growing economy in the G7.
Speaking in Parliament James said:
"We have heard today about the need for investment in public services, on which all Opposition Members agree. I am happy to highlight our record of record investment in the NHS and climbing up the international education league tables. That progress is now under threat from the Government’s proposals. We would have made different choices from this tax-raising Budget.
Our plans would have grown the economy faster—the OBR downgraded growth after the Budget. Our plans would have delivered £12 billion of welfare savings, but those plans were put in the deep freeze by the Labour party. We would have improved productivity in the public sector by getting back to pre-covid levels, saving £20 billion a year.
Labour Members asked for our ideas, so there they are. Some 4 million jobs were created under Conservative Governments from 2010 on. Youth unemployment was cut by 40%, 1 million more disabled people got into work and we had the fastest growing economy in the G7. By contrast, Labour is breaking promises made only a few months ago and choosing to put up taxes, despite the damage to the economy and to working people. The Chancellor’s pledge not to raise further taxes has dropped like a stone; we have seen this movie—they will be back for more. I urge hon. Members to support our motion."
Please see below the full text of James speech:
It is a pleasure to close this debate on behalf of His Majesty’s loyal Opposition. I recognise that many Members have not been able to speak because of the level of concern in the earlier debate about Labour’s family farm tax.
In this debate, we have heard talk of difficult decisions, but Labour Members seem to be in denial about the real-world impact of those decisions on the organisations in their constituencies that have to make difficult decisions about wages or jobs. Today, Labour Members have an opportunity to stand with their constituents.
This debate is fundamentally about trust and the promises made by the Labour party. At the election, Labour’s manifesto promised:
“Labour will not increase taxes on working people, which is why we will not increase National Insurance”.
It was clear to everyone what that meant. The IFS said that this measure would be a “straightforward breach” of the Labour manifesto, but Labour then chose to break its promise by introducing this £25 billion a year jobs tax.
Once again, we have heard the tired claims blaming a fantasy £22 billion black hole—claims debunked by the independent OBR, as well as by my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez), who pointed out that the Government’s £1 billion pay deals for their union paymasters created a lot of that hole. The voters are not fooled, and they know what Labour said and did: it broke its promise to the British people.
What has been the impact of this £25 billion jobs tax? Business confidence is plummeting, and output has already reduced for the first time in over a year. The Chief Secretary to the Treasury and Labour Members have again claimed that the impact of this measure is limited, but even in the very limited impact assessment he referred to, HMRC estimates that 940,000 businesses will lose out in net terms, with an average annual tax increase of £800 per employee. The average employer losing out will see its liabilities increase by £26,000 a year, and it is working people who will pay the price with lower wages, higher prices and fewer jobs.
Many hon. Members have spoken about the impact on charities and organisations in their constituencies. My thrill-seeking hon. Friend the Member for Hamble Valley (Paul Holmes), who I am glad is still in one piece, spoke about the hit to hospices that provide vital care, which will see higher costs amounting to tens of millions of pounds. Charities will face a bill that is £1.4 billion higher. Marie Curie alone will have a £3 million hit to its costs. The Royal College of General Practitioners has warned that the extra costs could force surgeries to make redundancies or close altogether. Adult social care providers will see a £2.8 billion hit in the next financial year.
Despite the warnings from hospices, care homes, dentists, nurseries, pharmacies and others, there has been cold comfort from the Minister. There has been no clarity on whether support will be provided—no clarity on when support might come, how much it might amount to or if it will come at all. As my hon. Friend the Member for Rutland and Stamford (Alicia Kearns) said, given the impacts on these groups, the Government should rethink their proposals.
Although 800 jobs a day were created under the Conservatives from 2010, Labour’s jobs tax is expected to see jobs lost and fewer jobs created. Bloomberg estimates that as many as 130,000 jobs could be lost, but perhaps most concerning is the impact on the lowest paid. The OBR estimates that 80% of the cost of these measures will be paid by reducing wages. Lowering the level at which employer NICs are levied, from £9,100 a year to £5,000 a year, will hurt part-time, female and younger workers in particular. The OBR expects this measure to raise £17.7 billion a year on average. No wonder the CBI has warned that two thirds of its members are reducing their plans to take on staff. The British Retail Consortium has also warned of a £2.3 billion hit, meaning that job losses are inevitable. Of course, this tax will also push up inflation. Tesco, Lidl and all the major retailers have said so—a more expensive weekly shop is the price of this measure.
We have heard today about the need for investment in public services, on which all Opposition Members agree. I am happy to highlight our record of record investment in the NHS and climbing up the international education league tables. That progress is now under threat from the Government’s proposals.
We would have made different choices from this tax-raising Budget. Our plans would have grown the economy faster—the OBR downgraded growth after the Budget. Our plans would have delivered £12 billion of welfare savings, but those plans were put in the deep freeze by the Labour party. We would have improved productivity in the public sector by getting back to pre-covid levels, saving £20 billion a year. Labour Members asked for our ideas, so there they are.
Some 4 million jobs were created under Conservative Governments from 2010 on. Youth unemployment was cut by 40%, 1 million more disabled people got into work and we had the fastest growing economy in the G7. By contrast, Labour is breaking promises made only a few months ago and choosing to put up taxes, despite the damage to the economy and to working people. The Chancellor’s pledge not to raise further taxes has dropped like a stone; we have seen this movie—they will be back for more. I urge hon. Members to support our motion.
