Both Prime Minister Keir Starmer and Chancellor Rachel Reeves have dropped hints that employer NICs could rise, despite the Labour Party’s election manifesto ruling out increases in National Insurance, income tax and VAT.
Speaking to BBC Breakfast this morning (15 October), the Prime Minister insisted that Labour would not break its manifesto promise regarding NICs, saying that the pledge referred to taxes on ‘working people’.
He said “We were very clear the manifesto that we wouldn’t be increasing tax on working people.
“We expressly said that that was income tax, that was NICs etc. So we set that out in the manifesto.”
Pressed further on the issue, he added: “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’ll will be keeping those promises.
“This is going to be a budget that’s going to be tough, of course, but the focus will be on rebuilding our country and ensuring that we get the growth needed in economy.”
Yesterday (14 October), the Chancellor also indicated that a rise in employer NICs was being considered.
Speaking to reporters at the Government’s international investment summit in London, 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].”
Rachel Reeves will deliver her inaugural Budget on 30 October.
