“The idea that this budget does not increase taxes on workers is an ‘economic fantasy’, according to a free-market think tank.

“Tom Clougherty, executive director at the Institute of Economic Affairs, said ‘heavier burdens on business and more borrowing for public-sector capital spending… does not inspire much confidence in [the government’s] approach’.

“On the employer NICs rise, he said businesses would see their costs rise and it would be workers who pay the price ‘in the form of lower wages, reduced benefits and fewer job opportunities’. The freeze for the next few years on income tax and NI thresholds will mean ‘the effects of fiscal drag will continue to eat into our pay cheques for the next four years’, he added.

“Clougherty warned that the government risks ‘getting stuck managing Britain’s relative decline, with no clear plan to break free of it’.”