Keir Starmer provides strongest trace but of Budget tax hike for employers

Keir Starmer has given his strongest signal yet that the Government could hike national insurance for employers in the Budget.

The Prime Minister insisted the Labour manifesto promised not to raise taxes on “working people” but dodged questions on whether that extends to employers national insurance contributions (NICs). It comes after days of persistent rumours that the Government is preparing for tax rises ahead of the Budget on October 30.

Pressed on whether the vow applied to employers, Mr Starmer told BBC Breakfast: “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. So we set that out in the manifesto.”

Asked again whether it was just employees, he said: “We were very clear in the manifesto that what we were saying is that we’re not going to raise taxes for working people. 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.”

Mr Starmer repeated his warning that the Budget is going to be “tough” as the focus had to be rebuilding the country. Government’s never usually confirm Budget details ahead of time but Mr Starmer and Chancellor Rachel Reeves have laying the ground for tough choices for months.

At a glitzy investment summit in London yesterday, Ms Reeves told big businesses: “You know that there’s a £22billion black hole over and above anything that we knew about going into the election that we need to fill, and that’s not just for one year, but that persists throughout the forecast period.

“The precondition for bringing investment into a country is economic and fiscal stability. So we are going to need to close that gap between what the Government is spending and what you’re bringing in through tax receipts.

“I have been really clear that the first of our fiscal rules is that we will pay for day-to-day spending through tax receipts. At the moment, we’re not on track to be able to do that by the end of the parliament, because of that black hole, and so decisions will need to be made.”

But she insisted that the Government would stick to its manifesto commitments, including the vow not to hike taxes on working people.

Labour’s General Election manifesto said: “We will ensure taxes on working people are kept as low as possible. 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.”

Mr Starmer and Rachel Reeves, along with other top figures, repeatedly said the party wouldn’t put up taxes on “working people” during the campaign – a mantra that has not changed.

But the Tories have claimed the Government would be breaching its manifesto if it puts up NICs for employers. The Institute for Fiscal Studies boss Paul Johnson also said: “It seems to me that would be a straightforward breach of a manifesto commitment.

“I went back and read the manifesto and it says very clearly we will not raise rates of national insurance. It doesn’t specify employee national insurance.”