Cutting National Insurance is ‘the right thing to do’ but ‘will not compensate for the increasing tax burden’,…

22 November 2023, 19:56

Rachel Reeves has told LBC that the decision to cut National Insurance was “the right move”, but warned that it “will not compensate for the increasing tax burden on working people”.

Speaking to LBC’s Iain Dale, the Shadow Chancellor said he has previously campaigned against increasing National Insurance, a tax on “working people”.

Ms Reeves told LBC that if elected to power, the Labor government would retain today’s national insurance cut (two per cent), and would vote in favor of legislation passing it.

“Taxes on working people have increased very rapidly. “In fact, if you add up all the tax increases on personal taxation – income tax and National Insurance it equates to a 10p increase in NI,” she said.

“What he did today was cut it by 2p, but of course it doesn’t cancel out the 10p increase.”

As for the Chancellor’s Autumn Statement overall, Ms Reeves said it represented the Tories’ “eleventh growth plan in 13 years”.

Speaking after Jeremy Hunt’s Autumn Statement he said: “The Chancellor claims the economy has ‘turned a corner’, yet the truth is that growth under the Conservatives has reached a standstill.”

Mr Hunt unveiled long-awaited tax cuts to help Britons struggling with the cost of living and ‘Get Britain Forward’.

Rachel Reeves explains how she will inspire ‘sick and tired’ Tory voters to choose Labor

The Chancellor hopes to revive Tory fortunes ahead of the imminent general election by promising 110 measures to help the economy, including cuts to national insurance.

He cut National Insurance by two percentage points from January, saving workers £35,000 on wages of £450.

The Chancellor said: “If we want people to get up early in the morning, if we want people to work at night, if we want an economy where people put in extra effort and work hard, then we need to recognize that “Everyone benefits from their hard work.” Of us.

“So today, Mr Speaker, I am going to cut the main 12% rate on Employees’ National Insurance. “If I reduce it by 1 per cent to 11%, that would be an extra £225 in the average worker’s pocket every year.

Follow the latest Autumn Statement news on the official LBC app Global Player

“But instead, I’m going to go ahead and cut the Employee National Insurance main rate by 2 percentage points, from 12% to 10%. This change will help 27 million people.”

But Shadow Chancellor Rachel Reeves said the situation for working people was “worse” despite Mr Hunt’s announcements. He said that the British public “will not be fooled”.

Under the Tories, he said, Britain had become “a world follower, not a world beater”.

Mr Hunt also said he was scrapping Class 2 National Insurance paid by many self-employed workers, which would save the average self-employed person £192 a year.

He further announced self-employed people who pay “Class 4” National Insurance at a rate of 9% on all earnings between £12,570 and £50,270 were cut by 1 percentage point to 8% from April. Will go.

For pensioners, he announced that the triple lock will remain in place, meaning the state pension will increase by 8.5 per cent.

Autumn Statement live: Chancellor’s 110-point plan unveiled including stimulus for workers, businesses and pensioners

Benefits will also rise by 6.7% and duty on beer, wine and spirits in pubs and bars is being reduced – and bar holidays will be increased to 75% of business rates.

Mr Hunt said the country needed “not a bigger state but a more productive state” and said the UK economy was set to grow by 0.6% this year, according to the OBR’s forecast.

Mr Hunt told MPs: “Following the global pandemic and the energy crisis, we have made difficult decisions to get our economy back on track.”

A Downing Street spokesperson said: “The Chancellor said his statement supports business and rewards workers for driving Britain forward.”

Follow the latest Autumn Statement news on the official LBC app Global Player

The government has already announced an increase in the national living wage from £10.42 to £11.44 from April, with the policy also covering workers aged 21 and over rather than 23 and over .

Read more: Prime Minister hints at ‘cautious’ tax cuts ahead of this week’s autumn statement, but says there are no ‘story’ answers on the economy

Read more: Autumn budget tax cuts would be ‘politically risky’ for the Tories, top economist tells LBC

This will mean a £1,800 annual pay rise for a full-time employee on the living wage next year, while 18 to 20 year olds will get a £1.11 per hour increase to £8.60.

Treasury Chief Secretary Ms Trott has already hinted that workers could be within the scope of the tax cuts. He said the government would focus on “cutting taxes for individuals”.

The government’s approach to cutting taxes is expected to be coupled with an effort to get people off benefits and into work.

Prime Minister Rishi Sunak plans to launch a ‘work from home’ campaign to help sick Britons get benefits and jobs.

Under the plans, which will be launched as part of a series of measures in Wednesday’s autumn statement, hundreds of thousands of disabled Britons will be told to look for jobs they can do from home.

This includes Britons with mobility and mental health problems. If not, their benefits could be reduced by around £4,700 a year. This will apply to all new benefit claimants from 2025.

Meanwhile, existing claimants will reportedly be assured that their benefit entitlements will not be reassessed if they look for a job they can do from home.

‘Is he making excuses or promises – which is the PM better at?’: Nick Ferrari challenges Treasury chief secretary Laura Trott

Speaking to LBC’s Nick Ferrari on Breakfast, Treasury Chief Secretary Laura Trott claimed Rishi Sunak is making progress on all five of his pledges.

When told the Prime Minister had failed to keep most of the promises he made at the beginning of the year, Ms Trott told Nick: “I would refute that.”

He said that halving inflation was “really a significant achievement”, that “during the year we have seen growth”, and that small boat transits have “reduced significantly”.

“They weren’t easy goals, but we’ve made progress on every one of them,” he said.