The Labour leader was asked by the BBC whether the party’s election manifesto ruled out a rate rise only for employees or for both staff and employers.
Starmer said: “We were very clear, what we were saying is we won’t raise tax for working people.”
He was then asked to confirm if it was on any rate at all and the PM would not budge on revealing any details of the Autumn Statement.
He added: “It [no raises on income tax or NICs] 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.
“It’s 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. And so it’s consistent with the [investment] summit we had yesterday, and this money that is now coming in, which will be [a] real game-changer.”
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The Prime Minister spoke after the Government’s planned creation of 38,000 UK jobs at the International Investment Summit.
This is part of the National Wealth Fund and a new British Growth Partnership, which aims to boost investment into the UK by removing regulations to welcome private investment.
However, Chancellor Rachel Reeves said at the summit that contributions would not rise just for “working people”.
Current employment policy means employers pay 13.8% in NICs on all earnings above £175 per week and they do not make the payment on pension contributions.
How a National Insurance rise could affect you
The knock-on implications of employers paying higher NICs could mean smaller wage increases and dents to employees’ pension contributions, according to Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.
Morrissey said: “If, for example, it added employer NICs of 2% on contributions, it would add £17.25 per year to the cost of paying into the pension of someone earning £35,000 per year and receiving the auto-enrolment minimum of 3% from their employer. Spread that across a couple of hundred employees, then the figures get big fast.
“The concern is that employers may look to mitigate these costs with smaller wage increases, which will impact people’s ability to meet their day-to-day living costs. There’s also the potential that it will deter them from boosting their contributions beyond auto-enrolment minimums.
“A shift to a 5% employer contribution could cost them an extra £11.50 (£28.76) per year per employee earning £35,000 per year – it’s a shift that we are concerned could prove unaffordable for many businesses and this will impact their workers long term too. It will also make it less likely that employers will offer salary sacrifice arrangements on their workplace pensions due to the cost.”
Morrissey added: “In the Labour Party manifesto, it stated it would not raise National Insurance for working people.
“Looking to hike them for employers rather than employees may look like it’s hitting this brief, but it’s a move that will impact businesses and their workers alike and bring future challenges should Government want to boost auto-enrolment minimums in the future.”
