To ask the Chancellor of the Exchequer, with reference to page 21 of the Plan for Change document, CP1210, published on 5 December 2024, what estimate she has been made of the potential impact of (a) changes to the level of employer National Insurance contributions and (b) the freezing of income tax thresholds on Real Household Disposable Income per person.
Answered on
9 January 2025
The Office for Budget Responsibility's October 2024 Economic and Fiscal Outlook (EFO) contains forecasts and assessments of government policy.
The OBR’s forecast does not decompose policy impacts on Real Household Disposable Income (RHDI) per capita by individual policies. Accounting for the total impact of Budget measures including employer NICs, the OBR forecast RHDI per capita to rise at an annual average rate of 0.5% per year over the parliament. The OBR sets out in detail the impact of the employer NICs changes on wages in paragraph 3.11 of the EFO.
The OBR have assessed the impacts of fiscal drag from freezing Income Tax thresholds in their March 2024 EFO.