Getting waiting lists down is a priority for Wes Streeting (Image: PA)
NATIONAL insurance will go up for employers in this week’s Budget as the Chancellor searches for cash for the NHS.
Health Secretary Wes Streeting vowed he would not write a “blank cheque for the NHS” and pledged a “laser-like focus on getting better value for taxpayers’ money”.
Rachel Reeves is expected to announce employers’ national insurance will rise by up to two percentage points. When combined with a lowering of the point at which bosses have to make contributions, this is expected to raise around ￡20billion.
The NHS budget is expected to go up by as much as four per cent. Mr Streeting, writing in today’s Sunday Express, says his “number one priority is to cut waiting lists”.
But critics last night warned that Labour will unleash a “tax on jobs” and breach its manifesto if it goes ahead with the tax rise.
Other revenue-raisers are expected to include closing inheritance tax loopholes, increasing capital gains tax on shares and extending income tax thresholds.
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The Prime Minister was forced to deny he was “plotting a war against Middle Britain” and that he misled the British public ahead of the election.
Labour pledged in its manifesto not to “increase taxes on working people” and stated it would “not increase national insurance”.
Tory leadership candidate Robert Jenrick said: “It turns out Labour’s manifesto was another dodgy dossier. Starmer and Reeves lied to the British public through their teeth.
“The coming tax rises on working people and their decisions to scrap winter fuel payments is a slap in the face for ordinary people.’
Former Chancellor Jeremy Hunt said that increasing national insurance is a “jobs tax that is paid by working people” that will result in “fewer jobs and lower wages”.
The Institute of Economic Affairs warned that workers could face pay cuts if companies try to keep their staff costs fixed.
It said that a business that employed 10 people earning ￡30,000 would see its national insurance contributions increase from ￡28,842 to ￡33,022 if the rate went up by two points. If it reduced wages to stop an increase in costs, workers would face a ￡361 pay cut.
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Tom Clougherty, the think tanks’s executive director, cautioned: “When we tax businesses, it is often workers who end up bearing the burden in the form of lower wages.”
Former Business Secretary Sir Jacob Rees-Mogg said: “It is the most anti-growth Government since the 1970s and has learnt nothing from the historic failures of socialism.
Daniel Herring, of the Centre for Policy Studies, agreed that an increase in employers’ national insurance is “a tax on working people and a tax on jobs”.
He warned: “By making it more expensive to employ people, the Chancellor is only adding to the burden on businesses and workers, limiting the opportunities for pay increases and making it harder for businesses to grow.”
John Longworth, chairman of the Independent Business Network, said higher national insurance rates will “encourage employers not to take on new people”.
When the Prime Minister was asked if he was “plotting a war against Middle Britain”, he said his Government was “fixing the foundations” of the country and “dealing with the inheritance that we’ve got, including the ￡22billion black hole”.
He insisted the Government intends to “keep the promises” made in the manifesto. The PM said Labour had been “really clear” that the Government “wouldn’t be increasing taxes on working people”.
But Shadow Treasury minister Nigel Huddleston said: “Despite saying loud and clear they would not raise tax on working people, Starmer himself is now embarrassingly trying to fudge the definition taking the British people for fools.”