Widespread falls in hiring and increases in redundancies are a textbook demonstration of how tax can destroy economic activity. Labour’s National Insurance rise is proving economic theory before our eyes, says Matthew Kilcoyne

Sometimes the data tells a story so clear it hurts. The latest CIPD survey gives us exactly that – a textbook demonstration of how tax policy destroys the very economic activity it seeks to tax. It’s the Laffer curve stepping out of theory and into reality, and it’s happening right before our eyes.

Let’s be clear about what we’re seeing. A third of British firms are planning to cut jobs or freeze hiring. Nearly half will raise prices. A quarter are scaling back investment plans. This isn’t just businesses complaining – it’s the market speaking, and we’d do well to listen.

The trigger? Labour’s planned National Insurance hike from 13.8 per cent to 15 per cent above £5,000. A simple tax increase that’s proving anything but simple in its effects. The government might call it “delivering........

© City A.M.