The business secretary has suggested the government could put up national insurance for employers in the budget without breaking its election pledges.
Jonathan Reynolds told Sunday Morning with Trevor Phillips that Labour’s promise not to increase national insurance “was specifically in the manifesto, a reference to employees”.
National insurance is paid by both employees and employers and it has been unclear whether Labour’s vow not to increase the tax included both levies.
The business secretary’s comments are the clearest indication yet that such a rise is being considered.
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17:21
We have ‘incredible’ investments
But coming on the eve of a major investment summit, the suggestion risks a row with companies – who would be hit by such a tax rise – and may prompt questions over the government’s commitment to economic growth.
It also comes on the heels of an argument with the firm DP World over comments made by the transport secretary that caused the company to review a £1bn London port investment.
“You know that pledge was taxes on working people… there’s a lot already in the manifesto, but you have to wait for the detail of a budget… this will be a budget for growth,” said Mr Reynolds.
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Shadow work and pensions secretary Mel Stride said increasing employer national insurance would amount to a “tax on jobs” and “what they should be about is growth and increasing productivity”.
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7:52
Labour ‘talked the economy down’
With the budget just over a fortnight away, the chancellor has also strongly hinted that she is planning to tweak the rules that dictate how much the government is allowed to borrow for spending on infrastructure investment.
Writing in The Sunday Times, Rachel Reeves said it was “time that the Treasury moved on from just counting the costs of investments, to recognising the benefits too”.
It has been reported that the Treasury is considering changing how it calculates debt by stripping out the value of assets it holds, such as transport or building infrastructure or the student loan book.
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2:43
Is a budget tax bombshell on the way?
This would bring down the headline government debt figure and allow the chancellor to borrow more money within her fiscal rule to have debt falling within a five-year forecast.
Crucially, such a move would not affect day-to-day spending so tax rises will likely still be needed to plug the hole in ongoing commitments.
But it would free up space for the Treasury take on more debt to spend on one-off projects – such as green technology, schools or hospitals – which ministers argue are essential to bring about economic growth.
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Supporters of such a change argue that the current approach fails to adequately capture the potential long-term economic benefits of borrowing to invest because of the five-year horizon within which debt must start falling.
Detractors say changing the fiscal rules in this way would amount to fiddling the figures to load the country up with liabilities.
Who knew what about the Afghan data leak? And could anyone in parliament have done more to help scrutinise the government at the time of the superinjunction? Harriet thinks so.
So in this episode, Beth, Ruth, and Harriet talk about the massive breach, the secret court hearings, and the constitutional chaos it’s unleashed.
Plus – the fallout from the latest Labour rebellion. Four MPs have lost the whip – officially for repeated defiance, but unofficially? A government source called it “persistent knobheadery”.
So is Keir Starmer tightening his grip or losing control? And how does this compare to rebellions of Labour past?
Oh and singer Chesney Hawkes gets an unexpected mention.
Responding to claims in the podcast about whether Commons Speaker Sir Lindsay Hoyle could have scrutinised the government, a Commons spokesperson said: “As has been made clear, Mr Speaker was himself under a superinjunction, and so would have been under severe legal restrictions regarding speaking about this. He would have had no awareness which organisations or individuals were and were not already aware of this matter.
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“The injunction could not constrain proceedings in parliament and between being served with the injunction in September 2023 and the 2024 General Election Mr Speaker granted four UQs on matters relating to Afghan refugees and resettlement schemes.
“Furthermore, as set out in the Justice and Security Act 2013, the Speaker has no powers to refer matters to the Intelligence and Security Committee.”
Commons Speaker Sir Lindsay Hoyle knew about Afghan data leak and should have made ministers tell MPs, Dame Harriet Harman has claimed.
Speaking to Beth Rigby on the Electoral Dysfunction podcast, the Labour peer said the Speaker – whose job she ran for in 2019 – should have asked for a key select committee to be made aware.
A spokesperson for the Speaker said he was “himself under a super-injunction” and so “would have been under severe legal restrictions”.
A massive data breach by the British military that was only made public this week exposed the personal information of close to 20,000 Afghan individuals, endangering them and their families.
Successive governments tried to keep the leak secret with a super-injunction, meaning the UK only informed everyone affected on Tuesday – three-and-a-half years after their data was compromised.
The breach occurred in February 2022, when Boris Johnson was prime minister, but was only discovered by the British military in August 2023.
A super-injunction which prevented the reporting of the mistake, was imposed in September of that year.
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The previous Conservative government set up a secret scheme in 2023 – which can only now be revealed – to relocate Afghan nationals impacted by the data breach but who were not eligible for an existing programme to relocate and assist individuals who had worked for the British government in Afghanistan.
Some 6,900 Afghans – comprising 1,500 people named on the list as well as their dependents – are being relocated to the UK as part of this programme.
Dame Harriet said: “The Speaker was warned, ‘If somebody’s going to say something which breaches this injunction, will you please shut them up straight away if an MP does this’, and he agreed to do that.
“But what he should have done at the time is he should have said but parliamentary accountability is important. I’m the Speaker. I’m going to stand up for parliamentary accountability. And you must tell the Intelligence and Security Committee and allow them to hold you to account.
“What’s happened now is now that this is out in the open, the Intelligence and Security Committee is going to look at everything. So, it will be able to see all the papers from the MoD [Ministry of Defence].”
Image: Speaker of the House Lindsay Hoyle. Pic: Reuters
Pressed on whether she meant the Speaker had failed to do his job, Dame Harriet replied: “Yes, and it’s a bit invidious for me to be saying that because, of course, at that time, Lindsay Hoyle was elected a speaker, I myself ran to be speaker, and the House chose him rather than me.
“So it’s a bit bad to make this proposal to somebody who actually won an election you didn’t win. But actually, if you think about the Speaker’s role to stand up for parliament, to make sure that government is properly scrutinised, when you’ve got a committee there, which is security cleared to the highest level, appointed by the prime minister, and whose job is exactly to do this.”
A spokesperson for the Speaker said: “As has been made clear, Mr Speaker was himself under a super-injunction, and so would have been under severe legal restrictions regarding speaking about this.
“He would have had no awareness which organisations or individuals were and were not already aware of this matter.
“The injunction could not constrain proceedings in parliament and between being served with the injunction in September 2023 and the 2024 general election, Mr Speaker granted four Urgent Questions on matters relating to Afghan refugees and resettlement schemes.
“Furthermore, as set out in the Justice and Security Act 2013, the Speaker has no powers to refer matters to the Intelligence and Security Committee.”