More evidence that the Budget raises taxes for workers

Six days on from the Budget, and things don’t look any better for Rachel Reeves’s claim that her Budget won’t negatively affect working people. Today and tomorrow, it is the turn of the Commons Treasury Select Committee to pick through the wreckage.

What have we learned so far?

David Miles from the Office for Budget Responsibility (OBR) doubled down on the effect of the rise in employers’ National Insurance (NI). The OBR has already estimated that three-quarters of the effect will be on wages – thereby contradicting Reeves’s claim that working people will not suffer from the rise. Miles went further, saying that many economists would argue that 100 per cent of the effect of higher employers’ NI will eventually be borne by employees. Miles also said the OBR calculates that the rise in NI will cost 50,000 jobs.

Richard Hughes, the OBR’s chair, also revealed that the body had expected bond yields to rise last week – as they did – because it guessed that the extent of the extra borrowing announced in the Budget would surprise markets.