National insurance rise ‘set to squeeze budgets’, warns CBI
The Confederation of British Industry (CBI) has warned the government that the planned rise in national insurance will squeeze budgets and affect economic growth.
The rise will see employers, employees and the self-employed pay 1.25p more in the pound from April 2022. From April 2023, the extra tax will be collected as part of the new Health and Social Care Levy.
Prime Minister Boris Johnson and Chancellor Rishi Sunak recently confirmed the rise, stating that it ‘must go ahead’.
The CBI said that the rise risks ‘curtailing growth at a critical moment in the recovery’ from the coronavirus (COVID-19) pandemic.
A spokesperson for the CBI said:
‘If the government goes ahead as planned, then it is incumbent on them to use the March Budget to bring forward more ambitious plans to raise the longer-term growth potential of the economy.’