Politics
Sir Keir Starmer refuses to rule out increasing national insurance for employers in budget
Sir Keir Starmer has refused to rule out raising national insurance for employers in the upcoming autumn budget.
The prime minister would only say Labour’s manifesto promised not to increase national insurance “for working people” when asked if he was going to break a pledge by increasing the tax for employers in the 31 October budget.
“We were very clear in the manifesto, that we wouldn’t be increasing tax on working people,” he told the BBC.
“It’s very clear from our manifesto that what we were saying is we’re not going to raise taxes for working people.
“What I will say is where we made promises in our manifesto. We’ll be keeping those promises.”
National insurance contributions are the UK’s second-largest tax, and are expected to raise just under £170bn in 2024-25, about a sixth of all tax revenue, according to the Institute for Fiscal Studies (IFS).
They are paid by employees and the self-employed on their earnings, and by employers on the earnings of those they employ – at a higher rate than employees pay.
National insurance is not paid by employers on pension contributions they make to employees, which is what experts have said could be targeted.
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During the election campaign, now Chancellor Rachel Reeves explained “working people are people who go out to work”.
She told Sky News: “Sort of by definition, really, working people are those people who go out and work and earn their money through hard work.”
The government has been facing questions over whether it will raise national insurance contributions for employers over the past week after former prime minister Rishi Sunak asked Sir Keir if their commitment applies to both employer and employee contributions at last Wednesday’s Prime Minister’s Questions.
Sir Keir dodged the question twice by saying his government made “an absolute commitment” to not raise taxes on working people.
Business Secretary Jonathan Reynolds then gave a large hint to Sky News’ Sunday Morning with Trevor Phillips programme the government will be putting up the tax for employers.
“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,” he said.
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Ms Reeves then gave her strongest hint yet she is planning to hike up the tax for employers.
Speaking at the government’s international investment summit on Monday, she said: “We will stick to the commitments we made in our manifesto.
“But you know there is a £22bn black hole over and above anything we knew about going into the election that we need to fill, and that’s not just a one year, that persists throughout the forecast period.
“So we are going to need to sort of close that gap between what government is spending and bringing in through tax receipts. But we are going to be a government that sticks to our manifesto commitments, including that one [on not raising taxes on working people].”