Country will pay a great price for hidden taxes

Four months on, that promise is looking more hollow by the minute.

Today, we report on how a group of Britain’s largest retailers has warned jobs will be lost and prices will rise due to the National Insurance rise announced last month in the Budget.

More than 70 businesses, including Tesco, Asda and Sainsbury’s, have written a letter to Chancellor Rachel Reeves warning that the extra taxes meant price hikes were a 'certainty'.

The Chancellor, no doubt hoped that, by taxing businesses rather than individuals, she could raise the money to honour Labour's spending commitments, without ostensibly breaking her pledge not to increase taxes on the average worker.

But that would be to greatly underestimate the intelligence of 'working people'. While extra taxes on business may not show up immediately on their payslips, most people are savvy enough to realise that if they feed through to higher taxes at the checkout, or worse still they cost them their jobs, then a hike in employee National Insurance contributions is very much a 'tax on working people'.

It is the same story with the increase in Inheritance Tax on farmers. While it may take a little longer for this to feed through in higher food prices, the damage this tax rise could potentially do to a vital and already struggling sector could be even more devastating in the longer term. A country which cannot feed itself will always be at the mercy of world events.

One wonders if, in private, the Prime Minister and the Chancellor do not regret being more open with voters about the costs they would have to face after the election. And wonder whether a simple, transparent increase in income tax or VAT would, in the long term, have been less painful than all these hidden taxes which are now coming to the surface. 

The Chancellor is learning the hard lesson that while it is easy to make attractive-sounding promises in opposition, delivering them in Government is far more difficult.