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April's national insurance rise will worsen inflation and was rushed in with no regard for family finances, MPs warned last night.
In a major report, they criticised the Government for hastily bringing forward the measure without a more thorough assessment of its impact.
And the Commons Treasury committee warned the tax grab risked worsening inflation at a time when it was already at a 30-year high of 5.4 per cent.
Business leaders say that many firms – which have to pay national insurance on behalf of their employees – will have to raise prices to offset higher costs.
PM Boris Johnson has been warned that a planned National Insurance hike in April will worsen inflation
The report will add to the growing pressure on Chancellor Rishi Sunak to rethink the rise, which many Tory MPs and business groups oppose
Committee chairman Mel Stride warned: ‘While the Prime Minister’s ambition to promote high wage growth is worthy, focusing on increasing wages without improving productivity is likely to be inflationary, and risks contributing to a wage price spiral.’
The report will add to the growing pressure on Chancellor Rishi Sunak to rethink the rise, which many Tory MPs and business groups oppose.
