PARLIAMENTARY WRITTEN QUESTION
(4 December 2024)

To ask the Chancellor of the Exchequer, what comparative assessment her Department has made of the potential impact of proposed increases to employer national insurance contributions on (a) full-time and (b) part-time workers.

Asked by:
Damian Hinds (Conservative)

The Office for Budget Responsibility’s October 2024 Economic and Fiscal Outlook expects that the Employer National Insurance Contributions package will lead to a reduction in the participation rate of 0.1 per cent from 2025-26 onwards. Overall, once the impact of all budget measures are taken into consideration, the OBR expect the employment level to increase from 33.1 million in 2024 to 34.3 million in 2029.

Employers have a choice about how they respond to the NICs increase. The Government recognises that employers may respond by increasing employees’ wages more slowly than they would have otherwise, alongside absorbing pressures through prices, efficiencies or lower profits.

The Government is protecting the lowest paid by increasing the National Living Wage. This limits the ability of employers to pass on increases in costs to those on lower pay. The Government has also introduced important protections for workers as part of the Plan to Make Work Pay.

Answered by:
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1 January 1970