Sir Keir Starmer has refused to rule out increases to national insurance for employers.
A key tenet of the Labour Party’s manifesto was promising to not raise national insurance, VAT and income tax.
But when asked by Conservative leader Rishi Sunak if the commitment on national insurance applies to both employer and employee contributions, Sir Keir dodged the question.
Rishi Sunak pressed Keir Starmer on tax and fiscal rules
During the first Prime Minister’s Questions in four weeks, Sir Keir also refused to answer whether he agreed with Chancellor Rachel Reeves’s comment that she was against changing the fiscal rules.
Asked by Mr Sunak whether national insurance will increase for employers, Sir Keir said: “We made an absolute commitment in relation to not raising tax on working people.”
Not satisfied with the prime minister’s answer, Mr Sunak said he did not think “even Lord Alli is buying any of that nonsense”, in reference to the Labour donor who has given tens of thousands of pounds in donations and gifts to Sir Keir and leading Labour MPs.
The former prime minister asked Sir Keir the same question on national insurance again, but he simply said: “We set out our promises in the manifesto.”
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Could chancellor ‘find’ more money?
National insurance contributions are the UK’s second-largest tax, and are expected to raise just under £170bn in 2024-25 – about a sixth of all tax revenue, according to the Institute for Fiscal Studies (IFS).
They are paid by employees and the self-employed on their earnings, and by employers on the earnings of those they employ – at a higher rate than employees pay.
National insurance is not paid by employers on pension contributions they make to employees, which is what experts have said could be targeted.
Rachel Reeves said in November she would not ‘fiddle the figures to get different results’. Pic: PA
With the government’s first budget coming up on 30 October, all eyes are on whether Ms Reeves will change the fiscal rules – the restrictions governments put in place to constrain how much they can borrow to fund public spending.
A report by the centre-left Institute for Public Policy Research (IPPR), which carries significant influence in the Treasury, has called on Ms Reeves to target “public sector net worth” as her debt measure to unlock up to £57bn for investment.
Read more:
How fiscal rules are impeding investment
Is a Rachel Reeves U-turn coming?
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Mr Sunak asked Sir Keir twice if he agreed with Ms Reeves’ previous comment that she was “not going to fiddle the figures or make something to get different results” when asked if she would consider changing the debt target, set by the Conservatives.
The prime minister would not directly answer as he deflected by criticising the Tory government’s record and saying he would fix the economy as he highlighted investment the Labour government has already secured.