Millions of workers across the country could be £450 worse off each if Prime Minister Sir Keir Starmer U-turns on a promise not to raise taxes or workers as is feared.
Labour pledged not to raise ‘taxes for working people’ in its manifesto, which included a freeze on Income Tax, VAT or National Insurance.
But after an exchange in the Commons, there are fears that the PM had failed to comprehensively rule out such a rise in its upcoming Budget, which will be revealed on October 30.
Labour has continually pointed to a £22 billion budget deficit it says has been uncovered in the public finances and has warned of ‘painful’ changes coming in order to fix it.
Rishi Sunak asked Keir Starmer: Can [you] confirm that when [you] promised not to raise income tax, national insurance or VAT, that commitment applies to both employer and employee national insurance contributions?”
Sir Keir replied: “We made an absolute commitment in relation to not raising tax on working people.
“He, of course, was the expert’s expert on raising taxes. What did we get in return for it? We got a broken economy, broken public services, and a £22 billion black hole in the economy. We’re here to stabilise the economy, and we will do so.”
The most recent change to taxes for working people came about in January 2024, when the rate of National Insurance was cut by two percentage points from 12 to 10 percent.
This meant that a worker earning £35,000 was given £450 back into their pay packet per year on average, with the maximum increase capping off at £754 for those earning up to £100,000 per year.
If Labour were to simply reverse this change, then the average worker would lose this £450 again, up to a maximum of £745, if the government simply chose to add two percentage points back onto National Insurance.
Any tax changes will not be confirmed until October 30, when the Budget is unveiled by Rachel Reeves.
