A senior Labour cabinet MP has warned that there will be “consequences” for businesses amid the Chancellor’s National Insurance contributions hike.
Lucy Powell the leader of the House of Commons admitted the economy is “disappointing” and claims that the government is “starting to turn the oil tanker around.”
During Rachel Reeves Autumn Budget the Chancellor announced there will be a £25 billion hike for employers’ national insurance, Powell admitted that this will have “consequences” for businesses across the country and insists this will help the NHS.
The Chancellor told voters that she will not make any “apologies” for the controversial decisions that Labour has made since the general election.
Tom Barrett, financial wellbeing expert at CABA told LondonLovesBusiness.com this month the Chancellor’s NI hike could lead “to job losses” and businesses may have to make difficult decisions that could “affect the overall workforce.”
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Powell told Sky News on Sunday, “We inherited this big black hole in the public finances, which we had to put right, so fixing the foundations of the economy.
“But we also have a fundamental view that in order to have a growing economy over the medium and long-term, you also have to have a healthy economy and a healthy society as well.
“Because it’s no coincidence that we’ve got seven million people waiting for an operation in this country and we’ve got such high numbers of people out of work, inactive and on sickness benefits and so on, in this country.
“And that’s why we took the decision in the Budget, it was a difficult decision, and it’s had consequences for businesses, I understand that, with the national insurance rise, but we took the decision to put a record level of investment into our National Health Service to bring down those waiting lists.
In September and October the Office for National Statistics (ONS” warned that the econonmy ahd contracted by 0.1% and for October, November and December the Bank of England governor Andrew Bailey is expecting no growth at all.
Powell told Sky News, “Obviously it’s disappointing, these figures. Of course, we want to see these things happening faster. We want to see more growth in the economy, and we want to see that faster, really so that it can be felt by ordinary people around the country.
“But this is a bit like turning round some huge oil tanker and the underlying problems that the country faces, which are unprecedented and huge – which is why people voted for change, because they could see, quite honestly, going into that election, the country was going down the Swanee.
“We had living standards falling for the first time in our history going into that general election.
“We’ve had public services, particularly health and education, absolutely on their knees in dire states of investment.
“Coming into Government, we’ve had to really take some very difficult decisions. The inheritance and the public finances were even worse than we thought… but we are starting to turn that oil tanker around.”
Nicholas Hyett, Investment Manager at Wealth Club warned last week that the UK is is between a “r and a hard place, Bailey in-between, recession and stagflation, risk on every screen.”
