UK politics live: Starmer adamant potential national insurance hike won’t break Labour manifesto pledge
Sir Keir Starmer faced questions on if the government’s commitment not to raise national insurance covers employers’ contributions as well as those by employees
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Sir Keir Starmer has refused to rule out increasing employers’ national insurance contributions in the upcoming Budget - despite Labour’s pledge not to raise taxes on working people.
The government has faced questions on whether its commitment not to raise national insurance covers employers’ contributions as well as those by employees.
When asked for clarity in an interview with the BBC, Sir Keir said:“We were very clear in the manifesto that we wouldn’t be increasing tax on working people and we expressly said that that was income tax, that was NICs etc.”
After being further pressed on whether employers could face the tax rise in the Budget on 30 October he reiterated that Labour would not “raise tax on working people” and they would “keep promises we made in the manifesto”.
The prime minister’s stance comes after Rachel Reeves was criticised on Monday for refusing to rule out a rise in employer national insurance contributions.
Institute for Fiscal Studies director Paul Johnson said on Monday that a hike in employer NI contributions would be a “straightforward breach” of the Labour manifesto.
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What is the Labour national insurance row about?
Labour’s manifesto included a promise not to raise taxes on “working people”, including income tax, VAT and national insurance.
But the government has faced questions on whether the commitment not to raise national insurance covered employers’ contributions as well as those by employees.
At Monday’s investment summit chancellor Rachel Reeves refused to rule out hiking employers’ contributions in the October 30 Budget.
And today Sir Keir Starmer said Labour’s manifesto pledge only covered taxes on working people, further fueling speculation of a rise in national insurance contributions for employers.
Institute for Fiscal Studies director Paul Johnson saying a hike in employer NI contributions would be a “straightforward breach” of the Labour manifesto.
Jeremy Hunt, the shadow chancellor, posted on X: “It’s obvious to most people that raising national insurance would breach Labour’s manifesto pledge to … not raise national insurance!”
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Starmer refuses to rule out rise in employers national insurance contributions
The prime minister again declined to rule out increasing employers’ national insurance contributions but insisted the Government would keep its manifesto promises.
He told the BBC: “We were very clear in the manifesto that we wouldn’t be increasing tax on working people and we expressly said that that was income tax, that was NICs etc.”
He added: “It wasn’t just the manifesto, we said it repeatedly in the campaign and we intend to keep the promises that we made in our manifesto.
“So I’m not going to reveal to you the details of the Budget, you know that that’s not possible at this stage.
“What I will say is where we made promises in our manifesto, we will be keeping those promises.”
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Pinned: Reeves criticised for possible employer national insurance tax hike
Speculation that Labour is considering raising employer national insurance tax contributions has been renewed after Rachel Reeves refused to rule out the measure yesterday.
The hike would bring the levy up from its current flat rate of 13.8 per cent, with experts predicting it could raise around £17bn a year.
She said: “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,” meaning not raising taxes on working people.
A Treasury source has also previously indicated that it is the view of the government that the move would be considered as a tax on business, and not working people, saying: “The commitments in the manifesto were clear and about protecting the incomes of working people.”
The Institute for Fiscal Studies’ Paul Johnson has called this into question, saying the move would be a “straightforward breach” of the Labour manifesto. However he added that it’s unlikely the party would be unable to avoid doing this in some way.
Shadow work and pensions secretary Mel Stride said it would be “absurd” for Labour to hike national insurance for employers and claim it was not a breach of the party’s manifesto.
Speaking to Sky News, he said Labour has “boxed themselves in” by “claiming they were not going to be a party that was going to have to put up taxes”.
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