Jonathan Reynolds has refused to rule out a rise in employers’ National Insurance (NI) contributions at the Budget.
The business and trade secretary said Labour’s manifesto pledge not to raise NI applies to employees, but would not say whether this covered employers.
Speaking to Sky News ahead of the government’s flagship investment summit on Monday, Reynolds said: “We have very clear manifesto pledges on taxation and the Chancellor has also been clear that this will be a Budget for growth.”
But he was asked by host Sir Trevor Phillips: “You made a pledge – no rise in National Insurance. I’m asking you, does that apply to both employees’ NI and employers’ NI?”
Reynolds insisted: “That pledge, it was taxes on working people, so it was specifically in the manifesto, a reference to employees and to income tax.”
He also referenced a specific commitment on corporation tax – but he said he would not say anything more on NI ahead of the Budget on 30 October.
“There’s a lot already in the manifesto, but you have to wait for the details of a Budget. This will be a Budget for growth and the stability that is necessary will be wired into it,” he added.
Phillips also highlighted previous comments from Reynolds in 2022, where he described a rise in NI as a “tax on jobs for employers at the worst possible time”.
The cabinet minister stressed: “Labour will back business to keep British firms competitive – across the board there will be an increase in the investability of the business environment.”
Shadow exchequer secretary Gareth Davies said: “Labour should be setting the conditions for business investment, but instead they are opening the door for a punishing tax rise on business and working people.
“Regardless of what they say, raising employer NI is a clear breach of the Labour manifesto and a tax on working people. No amount of obfuscation can hide this.”
While shadow work and pensions secretary Mel Stride argued that a move to increase the levy “totally counter to their manifesto that assured us they would not be putting up NI”.
He added: “Unless they’re to argue that employers’ NI is not the same thing as NI, which is an absurdity to argue, then they’re going to be breaching their manifesto commitment.”