Chancellor Rachel Reeves has defended her National Insurance raid, which is set to come into effect next month.
Speaking on GB News, Reeves defended the measure which was set out in the Autumn Budget and not mentioned in yesterday’s Spring Statement.
Employer National Insurance contributions (ENICS) will rise from 13.8 per cent to 15 per cent and the annual salary threshold at which employers behind paying NICs will decrease from £9,100 to £5,000.
Asked by GB News’s Stephen Dixon about concerns small businesses may have about the changes, Reeves insisted they will not have an adverse effect.
“On the National Insurance increase, the smallest businesses are exempt”, she said.
“If you employ, for example, four people at the National Living Wage, you won’t pay any National Insurance whatsoever.
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“I do recognise that any tax change will have consequences but the alternative was to leave the public finances in a precarious position and not put money into the NHS.
“As a result of the changes we have made, we have managed for five months in a row to bring down NHS waiting lists with an additional two million appointments in just eight and a half months of this Labour Government.
“We are delivering the change we promised on public services without increasing the taxes working people pay.
“Of course, we have got to do more to kickstart growth in our economy. It was never possible to turn things round overnight, but I do believe we are starting to move in the right direction.”
In the Spring Statement, the Chancellor suffered a blow when the budget watchdog halved its forecast for economic growth.
The Office for Budget Responsibility halved its forecast for growth in gross domestic product in 2025 from two per cent to just one per cent due to a “lack of recent momentum and waning domestic confidence”.
The watchdog’s assessment also indicated the Chancellor would have missed her goal of balancing the nation’s books in 2029/30 by £4.1 billion without action – which included the welfare cuts, trimming planned increases in Whitehall spending, and planning reforms which are expected to boost growth.
Reeves said “increased global uncertainty” had impacted both the economy and the public finances.
Reacting to the forecast, she said: “I am not satisfied with these numbers.
“That is why we on this side of the house are serious about taking the action needed to grow our economy. Backing the builders, not the blockers.”
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Speaking on GB News, Reeves defended the measure which was set out in the Autumn Budget and not mentioned in yesterday’s Spring Statement.
Employer National Insurance contributions (ENICS) will rise from 13.8 per cent to 15 per cent and the annual salary threshold at which employers behind paying NICs will decrease from £9,100 to £5,000.
Asked by GB News’s Stephen Dixon about concerns small businesses may have about the changes, Reeves insisted they will not have an adverse effect.
“On the National Insurance increase, the smallest businesses are exempt”, she said.
“If you employ, for example, four people at the National Living Wage, you won’t pay any National Insurance whatsoever.
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“I do recognise that any tax change will have consequences but the alternative was to leave the public finances in a precarious position and not put money into the NHS.
“As a result of the changes we have made, we have managed for five months in a row to bring down NHS waiting lists with an additional two million appointments in just eight and a half months of this Labour Government.
“We are delivering the change we promised on public services without increasing the taxes working people pay.
“Of course, we have got to do more to kickstart growth in our economy. It was never possible to turn things round overnight, but I do believe we are starting to move in the right direction.”
In the Spring Statement, the Chancellor suffered a blow when the budget watchdog halved its forecast for economic growth.
The Office for Budget Responsibility halved its forecast for growth in gross domestic product in 2025 from two per cent to just one per cent due to a “lack of recent momentum and waning domestic confidence”.
The watchdog’s assessment also indicated the Chancellor would have missed her goal of balancing the nation’s books in 2029/30 by £4.1 billion without action – which included the welfare cuts, trimming planned increases in Whitehall spending, and planning reforms which are expected to boost growth.
Reeves said “increased global uncertainty” had impacted both the economy and the public finances.
Reacting to the forecast, she said: “I am not satisfied with these numbers.
“That is why we on this side of the house are serious about taking the action needed to grow our economy. Backing the builders, not the blockers.”
Find Out More...