‘I'm not going to tie my hands further': Rachel Reeves refuses to rule out more National Insurance hikes for employers

30 October 2024, 19:50 | Updated: 30 October 2024, 21:02

Rachel Reeves has refused to rule out further National Insurance hikes for employers.

Speaking to The News Agents podcast on the day of her historic Budget, the Chancellor said “I'm not going to tie my hands further than I already have done” but promised, “we're not going to need to do another budget like this again.”

Reeves announced £40bn in tax rises as part of the autumn Budget, with the Chancellor hiking employers' National Insurance contributions, freezing fuel duty and raising the minimum wage.

Labelling the £40bn rise announced on Wednesday a "difficult choice", Reeves said that “any chancellor standing here would face this reality".

Reeves also announced historic investments in the NHS and a £500 million boost to homes.

The Chancellor also increased employers' National Insurance contributions, with a 1.2% hike to 15% from April 2025, raising £25bn in total for the government.

Listen to the full interview on The News Agents podcast on Global Player.

Amid a host of tax hikes, the Chancellor also chose to knock a penny off a pint at the pub, raised Carer's Allowance and the National Living Wage, as well as injecting £226bn into the day-to-day running of the NHS.

Speaking to the News Agents, Reeves confirmed Labour will not increase National Insurance, Income Tax and VAT for so-called “working people.”

She said: “Our commitment to those taxes of working people was for the duration of this Parliament, and we will stick by that.... National Insurance, Income Tax and VAT, we won't increase those taxes on working people for the five years of this Parliament.

Read more: Chancellor's Budget sees taxes raised by £40bn as Reeves freezes fuel duty and announces Carer's Allowance shake-up

“Our commitment in our manifesto was really clear. It was about the taxes that working people paid. We have stuck with those manifesto commitments today despite the massive black hole in the public finances, I've also committed to only have one budget a year.

“The last government kept coming back every few months with another budget, another fiscal event, another mini budget, and picking the pockets of people every time. I don't want to do that; I've set this budget that is now there for a year.

Rachel Reeves announced increase in employers’ national insurance contributions

“We won't come back in the spring, asking for more money. We want to give business and families the confidence to plan for the future, knowing that tax rates aren't going to be chopped and changed every few months.”

However, the Chancellor refused the chance to commit to no further NI hikes for employers.

She continued: “I'm not going to tie my hands further than I already have done.“This is a significant budget. It wipes the slate clean. We're not going to need to do another budget like this again.

“This budget clears up the mess left by the party that sits opposite us now on the opposition benches. It now puts our public finances on a firm footing.”

Martin Lewis explains the increase in stamp duty with Shelagh Fogarty

The Chancellor also confirmed a notable increase in Capital Gains Tax as part of Wednesday's announcement.

It came despite fears she would seek to end the freeze to raise funds in the Budget, after she warned of a £22 billion.

Reeves' 2024 Budget - key points at a glance:

• Employers' NI contributions raised by 1.2% to 15%
• Freeze to Fuel Duty
• 1p off a pint at the pub
• National Living Wage to increase from £11.44 an hour to £12.21
• Carer's weekly earnings limit to rise from £151 to £181
• £22.6bn for NHS day-to-day operations
• Lower rate Capital Gains Tax will increase from 10% to 18%