Labour's National Insurance manifesto pledge does NOT include employer contributions, Rachel Reeves admits

Reeves made clear that the party's manifesto pledge not to hike National Insurance Contributions (NICs) only related to those paid by employees, not by employers.

This raises the very real prospect of either employers' NICs being increased from 13.8 per cent in the Budget, or taxing employers on staff pension contributions, which are currently not taxed.

Reeves was interviewed by GB News' Political Editor Christopher Hope on the margins of the Government's investment summit in the City of London's Guildhall - where £60billion worth of deals were unveiled.

Hope pointed out that "your manifesto says: 'We will not increase National insurance,' but you're looking at increasing employers' National insurance".

He asked Reeves: "Are you breaking a manifesto pledge with that?"

The Chancellor replied: "You have read our manifesto and it says in black and white we will not increase taxes on working people. National insurance, income tax and VAT."

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Hope asked: "Not employers'?"

Reeves replied: "That was not in the manifesto. And we will stick to everything in our manifesto, including, for example, of capping corporation tax at its current level of 25 per cent for the duration of this Parliament, so that businesses know when they make investments in Britain, what returns they will get on their profits.

"That's a really important principle for me that businesses know what returns they can make on their investments here in Britain."

Reeves has said the Labour Government inherited a £22bn “black hole” from its predecessors, causing speculation about how she will raise funds.

Earlier this year, the last Conservative government cut the starting rate for NICs for 27 million workers from 12 per cent to 10 per cent on 6 January - and again to 8 per cent on April 6.

Employers' NICs are calculated at a rate of 13.8 per cent and based on the value of taxable benefits provided in the previous financial year.

Currently, employers do not pay National Insurance on pension contributions to their workers' pensions,

The Institute for Fiscal Studies estimated last week that if employer NICs were introduced on pension contributions at the full 13.8 per cent rate, it would raise about £17billion a year.