Budget: Employers’ national insurance hike expected as Labour ‘ask businesses to help out’
The amount employers pay in national insurance is set to rise in next week’s budget to raise money for public services, Sky News understands.
Reports have suggested it could be increased by up to two percentage points and will – in part – be used to help fund the NHS.
A government source told Sky News: “There is a universal consensus that the NHS needs more money.
“That means asking businesses to help out.
“The choice is investment versus decline. She [Rachel Reeves] is choosing not to ask working people to pay the price for their [Conservatives’] failures.”
Politics latest:
Tories accuse government of ‘broken promises’ over budget rule change
According to The Times newspaper, Chancellor Rachel Reeves is also expected to make a Âsignificant cut to the earnings Âthresholds at which employers start making national insurance contributions.
The combined measures are expected to raise about £20bn and will represent the Âbiggest tax rise in the budget.
The burden will reportedly fall entirely on the private sector, with public sector Âemployers such as government departments and the NHS being reimbursed by the Treasury to avoid cuts.
On Friday, much of the budget chat focused on Labour’s definition of a “working person”.
The party’s manifesto said it would not increase taxes on working people, including VAT, national insurance, and income tax.
Read more:
What are Labour’s fiscal rules
Apology for slave trade ‘not on the agenda’, says No 10
This has prompted repeated questions about who the government considers to fall under that umbrella and therefore would not impose tax rises on.
During a broadcast interview at a Commonwealth summit in Samoa, Sir Keir Starmer told Sky News he does not consider people who have an income from assets such as shares of property to be working people.
“They wouldn’t come within my definition,” he said.
👉 Click here to follow Electoral Dysfunction wherever you get your podcasts 👈
Reacting to questions from journalists, Ms Reeves said the prime minister is a “working person”.
Speaking to LBC, she said: “The prime minister gets his income from going out to work and working for our country.
“He’s a working person. He goes out to work.”
Treasury minister James Murray told Sky News that “a working person is someone who goes out to work and who gets their income from work”.
Pushed further on whether a working person could also get income from shares or property, Mr Murray added: “We’re talking about where people get their money from, and so working people get their money from going out to work.
“And it’s that money that we’re talking about in terms of those commitments we made around income tax, around national insurance.
“That’s what’s important to focus on, where people are getting their money from, getting their money from going out to work.”
Most RWAs remain isolated and underutilized instead of composable, DeFi-ready building blocks. It’s time to change that.
Thousands of savers face potential losses after a $2.7 million shortfall was discovered at Ziglu, a British crypto fintech that entered special administration.
Politics
Heidi Alexander says ‘fairness’ will be government’s ‘guiding principle’ when it comes to taxes at next budget
Another hint that tax rises are coming in this autumn’s budget has been given by a senior minister.
Speaking to Sunday Morning with Trevor Phillips, Transport Secretary Heidi Alexander was asked if Sir Keir Starmer and the rest of the cabinet had discussed hiking taxes in the wake of the government’s failed welfare reforms, which were shot down by their own MPs.
Trevor Phillips asked specifically if tax rises were discussed among the cabinet last week – including on an away day on Friday.
Politics Hub: Catch up on the latest
Tax increases were not discussed “directly”, Ms Alexander said, but ministers were “cognisant” of the challenges facing them.
Asked what this means, Ms Alexander added: “I think your viewers would be surprised if we didn’t recognise that at the budget, the chancellor will need to look at the OBR forecast that is given to her and will make decisions in line with the fiscal rules that she has set out.
“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.”
Ms Alexander said she wouldn’t comment directly on taxes and the budget at this point, adding: “So, the chancellor will set her budget. I’m not going to sit in a TV studio today and speculate on what the contents of that budget might be.
“When it comes to taxation, fairness is going to be our guiding principle.”
Read more:
Reeves won’t rule out tax rises
What is a wealth tax and how would it work?
👉Listen to Politics at Sam and Anne’s on your podcast app👈      
Afterwards, shadow home secretary Chris Philp told Phillips: “That sounds to me like a barely disguised reference to tax rises coming in the autumn.”
He then went on to repeat the Conservative attack lines that Labour are “crashing the economy”.
Please use Chrome browser for a more accessible video player
Chris Philp also criticsed the government’s migration deal with France
Mr Philp then attacked the prime minister as “weak” for being unable to get his welfare reforms through the Commons.
Discussions about potential tax rises have come to the fore after the government had to gut its welfare reforms.
Sir Keir had wanted to change Personal Independence Payments (PIP), but a large Labour rebellion forced him to axe the changes.
With the savings from these proposed changes – around £5bn – already worked into the government’s sums, they will now need to find the money somewhere else.
The general belief is that this will take the form of tax rises, rather than spending cuts, with more money needed for military spending commitments, as well as other areas of priority for the government, such as the NHS.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike