Keir Starmer has refused to rule out raising National Insurance for employers in the budget at the end of October.
The prime minister was asked repeatedly on Tuesday whether his manifesto commitment ruling out an increase in National Insurance extended to employers or focussed specifically on employees. But Starmer told the BBC that Labour’s manifesto was very clear the government will not hike taxes for “working people” — adding that the budget was “going to be tough, of course”.
Labour did address NI in its manifesto for the July general election. On page 21, the party said: “Labour will not increase taxes on working people, which is why we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT.”
However, the party was not explicit anywhere about employer National Insurance.
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But the manifesto passage has been interpreted in other ways, with one expert calling into question whether Labour is about to commit a “straightforward breach” of its election promise on tax.
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Speaking to Times Radio on Monday, Institute for Fiscal Studies director Paul Johnson said the pledge would “almost certainly” have to be broken in some way if Labour wants to fill its public spending gap.
The proposed measure, he said, would raise around £17 billion. That is “a big chunk of money from a relatively small proportionate change in a very big tax”, Johnson added.
The prime minister was asked twice on Tuesday morning if he would rule out putting up National Insurance for employers, refusing to do so each time.
Keir Starmer said: “We were very clear in the manifesto that we wouldn’t be increasing tax on working people and we expressly said that was income tax, that was NICS etc. So we set that out in the manifesto.”
When asked to clarify whether employers could still face a tax rise on 30 October, he replied: “It’s very clear from the manifesto that what we’re saying is we’re not going to raise tax on working people…
“We intend to keep the promises we made in the manifesto. I’m not going to reveal the details of the budget, you know that’s not possible. But what I will say is where we made promises in our manifesto, we 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 we need in our economy so it’s consistent with the summit we had yesterday and this money that’s now coming in. Which will be a real game-changer for our country.”
Speaking on Sunday, business secretary Jonathan Reynolds told Sky News that Labour’s promise not to increase national insurance was specifically “a reference to employees.”
Josh Self is Editor of Politics.co.uk, follow him on X/Twitter here.
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