Tax rises should be postponed, if not stopped altogether

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Chancellor of the Exchequer, Rishi Sunak (PA Wire)

Although Prime Minister Boris Johnson is still insistent on increasing national insurance contributions in April, the economic situation makes it clear that this should be at least postponed, if not stopped altogether.

Chancellor Rishi Sunak has more headroom than seemed likely last autumn when the increase was announced, and will still have a decent chance of meeting his long-term fiscal targets if he chooses to scrap the increase. Tax revenues are coming in higher than forecast, with the economy growing faster than expected and the impact of higher inflation boosting tax returns.

While the deficit is still huge (£147bn), it is £13bn less than the Office for Budget Responsibility expected. And indeed £13bn is actually rather larger than the annual amount that the rise in national insurance was expected to bring in – £36bn over the next three years.