Rishi Sunak has been issued a stark warning after being accused of “dropping the ball” with his economic policies.
A 1.25 percentage point rise in NI took effect on Wednesday, as the Government attempt to relieve the burden on the NHS following the Covid-19 pandemic.
And GB News’ Economics and Business Editor Liam Halligan believes that this hike, coupled with further economic policy changes later this year, is a risky move.
Liam said: “The Institute for Fiscal Studies, a very influential, respected body, they’ve said when you combine the combination of the threshold increase, with the rise of headline rate on National Insurance for workers, if you earn more than £38,000 you pay more, if you earn less then you pay less.
“For the really less well-off and those that aren’t working, I think that’s where Rishi Sunak dropped the ball."
State pension and benefits will rise by 3.1 percent on April 11, but Mr Halligan doesn’t believe that is a big enough rise.
Economics and Business Editor, Liam Halligan
GB News
Rishi Sunak has been slammed for the latest tax hike
Peter Byrne
The host of GB News' On The Money added: “The benefits are only going up by 3.1 percent as of today across the board and inflation is forecast to getting on for eight percent this year.
“So these benefits rises are well below the rate of inflation because we traditionally put up benefits in the spring by the rate of inflation the previous the last September which is 3.1 percent.
“For me, this is the risky part of the Spring Statement. You’ve got tax rises, big inflation numbers, cost of living numbers coming through and yet benefits for the poorest in society, the most vulnerable households, those benefits are going up much, much less than the rate of inflation.
“I think that is very risky from the Tories.”
Liam added that this would be of particular concern in so-called Red Wall seats.
Alongside the NI hike comes a 1.5 percent in dividend tax. This means that for every £1000 divided received, an extra £12.50 will need to be paid.
State pension and benefits will also rise by 3.1 percent on April 11.
While in July, Chancellor Rishi Sunak said last month he would be increasing the threshold for paying NI by £3,000 from July.
In his Spring Statement announcement, he said: "From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance.
"That’s a £6billion personal tax cut for 30 million people across the United Kingdom."
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