Labour’s bizarre decision to hike NI in a *different way* rather than reverse the cuts is the Moment, imo. Instead of a reversal that could be pinned on the Tories, Labour enacted a tax hike almost perfectly engineered to hit small employers of part-time workers (like care homes and child care). - ThreadSky

jamesrball.com • 31 days ago

Labour’s bizarre decision to hike NI in a *different way* rather than reverse the cuts is the Moment, imo.

Instead of a reversal that could be pinned on the Tories, Labour enacted a tax hike almost perfectly engineered to hit small employers of part-time workers (like care homes and child care).

Reposted from Jonn Elledge

Honestly, Hunt's slashing NI, twice, is starting to feel like Brown's backpedalling after the Gillian Duffy incident, or Cameron pulling the Tories out of the EPP: one of those slightly desperate rolls of the dice that ends up reshaping British politics for years.

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adamcobb.bsky.social•31 days ago

And which has already had visible consequences in public realm terms as a lot of restaurants and cafés basically took it as the final straw.

europeannick.bsky.social•31 days ago

To this, I’d like to add the government’s decision to increase several local govts’ council tax bills by 10%.

Another tax increase, to cover for the NI rate freeze for employees.

dorsetrachel.bsky.social•31 days ago

And third-sector employers, tied into SLAs which may (🤞) have factored in wage inflation but definitely didn’t factor in an employer NI increase.

jamesrball.com•31 days ago

The impact of Labour’s NI hike are only just starting to be felt, incidentally: this will get worse for them.

judeet44.bsky.social•31 days ago

Hasn't it merely gone back to near what it was before Hunt's cuts?? Did the original amount also cause mass unemployment, closure of businesses? I don't think so...

stevie2.bsky.social•31 days ago

Rachel from accounts doing as the Treasury bids.

cole0007.bsky.social•31 days ago

Hunt had a plan to get rid of NI without stating where the money would come from. It was also an uncosted £22b trap for Labour which they refused to enter. But Labour had to implement policies the electorate didn’t like to recover the money and keep the markets happy. It worked and RW were furious

tundrastyle.bsky.social•31 days ago

Hush now.

Labour are deep in thought planning which vulnerable group to hit next.

But yeh, the words “Labour” and “bizarre” seem increasingly linked.

Sigh.

twoev.bsky.social•31 days ago

To argue in favour of the NI hike: if the government’s goal is to raise wages, then hitting employers who pay low wages actually makes sense. It’s a mandatory wage rise, perhaps a business that can’t pay its employees enough *should* be hit

jamesrball.com•31 days ago

How does that work for care homes, whose pay rates are set by cash strapped local government? Or for nurseries, where government sets what their income is?

twoev.bsky.social•31 days ago

They’ll have to pay them more. We want higher wages, it should be one of the main goals of the government. When the government does something that marginally incentivises that outcome we shouldn’t then complain about the cost increase. We can’t have it both ways

jamesrball.com•31 days ago

Yes, but you can’t just tackle it by raising the tax and doing none of the other stuff. It will just lead to services failing.

jamesrball.com•31 days ago

Also: it doesn’t raise wages, it raises the cost of employing people. The effect of it in the private sector is to *suppress* wages, as is well documented and modelled by the IFS.

twoev.bsky.social•31 days ago

Employer contributions are effectively part of the pre-tax compensation. If they raised income tax and my take home went down, nobody would describe it as a wage cut. Whichever way you slice it, it increases the cost of labour, which is what the Labour Party is supposed to do

twoev.bsky.social•31 days ago

Just from a moral consideration, the solution to the problem of how to provide old age care should not be “we’ll just suppress the cost of labour rather than do anything that might increase the cost of it.”

timeforheroes.bsky.social•31 days ago

It was complete cowardice from Labour not fighting those NI cuts at the time and making it clear they were unaffordable electoral bribes.

azery.bsky.social•31 days ago

NIC-employers increase at the same time as they're increasing costs on employers through the Workers Rights bill was a really bad choice. It's basically tailor-made to cause a big spike in unemployment

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