National insurance hike ‘won’t raise a single penny’ for public services, top Tory warns

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A HIKE to national insurance kicking in next month may not raise a “single penny” for public services, a senior Tory warns.

Businesses were dealt the £25 billion ‘Jobs tax’ raid at the Budget with the increased contributions as confidence among entrepreneurs taking a hit.

a man in a suit and tie is walking down the street — Mel Stride fears not a “single penny” will be raised from upcoming national insurance hike

But shadow Chancellor Mel Stride has raised the prospect that the cash will not end up in the Treasury coffers as planned by Chancellor Rachel Reeves.

His warning shot comes just days ahead of the Spring Statement with experts saying the financial headroom could be wiped out.

Pointing to findings from the Office of National Responsibility, he says that there will be an estimated loss of £9.6 billion due to economic damage.

He also says £5.1 billion will be needed to compensate public sector workers with the remaining potentially lost to higher borrowing costs combined with lower growth projections.

Mr Stride said: “The Labour Chancellor promised £25 billion from her Jobs Tax, but we’re likely to end up with less money for our public services because of Labour’s economic mismanagement.

“The OBR had already highlighted the economic damage Labour’s tax hike will cause, and now we see that higher borrowing costs and lower growth will rob the country of much of the remaining revenue.

“This tax is a burden on businesses and workers, and a ticking timebomb that will cripple the economy – with hardworking families hit the hardest.

“If Labour grips welfare, they can cancel their reckless ‘Jobs Tax’ before it bites.”

Figures show that almost a third of businesses affected by the hike are planning to cut jobs or freeze hiring.

It comes on the back of 160,000 part-time retail jobs are on the cusp of going in the next two years due to a rise in Labour costs.

The Treasury hit back saying: “This is a fantasy – the independent OBR confirmed these changes will generate revenue we need to fix our crumbling public services.

“After inheriting a £22 billion black hole from the previous government, we’ve fixed the public finances and now we’re going further and faster to kickstart economic growth, so working people have more money in their pockets.”