A fresh row has erupted just weeks before Rachel Reeves‘ national insurance tax hike comes into effect after the Treasury’s headline figures were scrutinized.

When announcing her 1.2 per cent hike to employers’ national insurance contributions (NIC) at the Autumn Budget, Reeves said it would raise “£25bn per year by the end of the forecast period.” 

The Office for Budget Responsibility (OBR) later interrogated these figures and calculated just £23.8bn would be raised in 2025, with £5.5bn in indirect costs.

In 2026, costs are expected to jump to £9.1bn, dragging NIC revenue down to £14.6bn.

Shadow Chancellor Mel Stride slammed the “jobs tax” as a “ticking timebomb that will lead to fewer jobs, lower wages and higher prices.” 

Stride told City AM: “Given the Chancellor’s reckless tax hike won’t even raise the £25bn she said it would, Rachel Reeves must urgently think again.

“Labour promised the fastest growing economy in the G7 but the Chancellor’s Budget is killing growth stone dead.”