The business secretary has suggested the government could put up national insurance for employers in the budget without breaking its election pledges.
Jonathan Reynolds told Sunday Morning with Trevor Phillips that Labour’s promise not to increase national insurance “was specifically in the manifesto, a reference to employees”.
National insurance is paid by both employees and employers and it has been unclear whether Labour’s vow not to increase the tax included both levies.
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In Prime Minister Question’s on Wednesday, Sir Keir Starmer refused to rule out increases to the tax.
The business secretary’s comments are the clearest indication yet that such a rise is being considered.
But coming on the eve of a major investment summit, the suggestion risks a row with companies – who would be hit by such a tax rise – and may prompt questions over the government’s commitment to economic growth.
It also comes on the heels of an argument with the firm DP World over comments made by the transport secretary that caused the company to review a £1bn London port investment.
“You know that pledge was taxes on working people… there’s a lot already in the manifesto, but you have to wait for the detail of a budget… this will be a budget for growth,” said Mr Reynolds.
Shadow work and pensions secretary Mel Stride said increasing employer national insurance would amount to a “tax on jobs” and “what they should be about is growth and increasing productivity”.
