Labour minister Stephanie Peacock ruled out making any changes (Image: Labour minister Stephanie Peacock)
Labour has rejected pleas from desperate charities facing a ￡1.4billion jobs tax - saying “the money does have to come from somewhere”.
Charities including those helping the very ill and elderly have warned they will need to make massive cuts after Chancellor Rachel Reeves increased National Insurance contributions for employers.
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The NHS was excluded from the rise announced in the Labour Government’s first Budget, but charities will be forced to pay even if they provide health services.
They issued a plea to the Chancellor to think again but Labour’s Stephanie Peacock, who has responsibility for charities in her role as minister for civil society, has now ruled out any changes.
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She said: “The bottom line is that we have been very clear that we want economic stability, and the money does have to come from somewhere - it is tax, borrowing or cuts.”
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Ms Peacock admitted: “I am aware, however, of the concerns of the voluntary, community and social enterprise sector about the impact that the changes will have on their organisations.”
Tory shadow minister Saqib Bhatti slammed the decision, saying: “The impact is already being felt, and it is dire.”
The National Council for Voluntary Organisations says the cost to charities will be ￡1.4billion every year and warned that organisations “may be forced to reduce staff, cut salaries, and most importantly, scale back services for the very people they strive to support”.
Marie Curie, which provides care for people who are dying, said it will have to pay ￡2.92million a year and said “the only option left will be to reduce services”.
Homelessness charities including Crisis, St Mungos and Homeless Link have warned they will lose up to ￡60million and wrote to the Chancellor saying it would have “an immediate detrimental impact on the lives of the thousands of people”.
The Carers Trust, which helps unpaid carers - including children caring for siblings or sick parents - says its services will lose ￡3million.
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Age UK says the National Insurance increase will be “the straw that breaks the camel’s back” for some local charities as well as small businesses providing social care.
And charities that help victims of crimes including violent and sexual offences said they will lose “many millions of pounds” and will have “no choice” but to lay off staff and cut services.
This warning came in a joint statement from the chief executives of Victim Support, Rape Crisis, Welsh Women’s Aid, Women’s Aid Federation England and Imkaan.
Mr Bhatti accused Labour of breaking a pre-election promise not to increase National Insurance.
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He said: “When the Chancellor delivered her Budget of broken promises, she did exactly what she promised during the election that she would not do: she significantly raised employer National Insurance. What is even more concerning is the devastating effect that this has had on the charity sector.”
Conservative MP Joe Robertson said: “The Government know the pressure created by the National Insurance contribution rise.
"They exempted the NHS because they knew the impact it would have on healthcare, but they ignored or failed to understand the contribution that charities make to health and social care.”