An unearthed video of Rachel Reeves laying into the Tories for putting up National Insurance has come back to haunt the chancellor.
She and Keir Starmer have both repeatedly refused to rule out increasing the NI rate paid by employers in the forthcoming Budget.
But speaking in the Commons in 2021, Reeves, who was then shadow chancellor, said: “It is so worrying that at this crucial time, the prime minister and chancellor concocted a new jobs tax to arrive in the spring.
“Despite all of their election promises to cut National Insurance contributions, they’re actually raising them against the strong advice of business and trades unions.
“The Conservative government’s actions will make each new recruit more expensive and increase the costs to business.
“The decision to saddle employers and workers with a job tax takes money out of people’s pockets when our economic recovery is not yet established or secure, and only adds to the pressure on businesses after a testing year and a half.”
Labour’s election manifesto said: ”[We] will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income tax, or VAT.”
However, speaking on Monday, Reeves insisted that putting up the employers’ rate of NI would not break that pledge.
She said: “We are going to need to sort of close that gap between what government is spending and bringing in through tax receipts. But we are going to be a government that sticks to our manifesto commitments, including that one.”
Asked directly on Monday whether it would break the manifesto promise, the prime minister told the BBC: “It was very clear from the manifesto that what we were saying was we’re not going to raise tax for working people. And it 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.”
Meanwhile, the chancellor today dropped another huge hint that taxes will rise in the Budget on October 30.
She told a cabinet meeting that “there would have to be difficult decisions on spending, welfare, and tax”.
A Labour spokesperson said: “The chancellor told cabinet the Budget would focus on putting the public finances on a strong footing and being honest with the British people about the scale of the challenge.”