Rachel Reeves unveils National Insurance shake-up but it may 'breach manifesto'

Ms Reeves has dropped her strongest hint yet that she is planning to raise employer national insurance contributions in the Autumn Statement.

Rachel Reeves has seemingly confirmed a National Insurance hike - as critics slam the move as a Labour Party manifesto breach. Ms Reeves has dropped her strongest hint yet that she is planning to raise employer national insurance contributions in the Autumn Statement.

The chancellor used the government’s international investment summit at London’s Guildhall on Monday to warn of tax rises to come in this month’s announcement. “We will stick to the commitments we made in our manifesto,” she said.

“But you know there is a £22bn black hole over and above anything we knew about going into the election that we need to fill, and that’s not just a one year, that persists throughout the forecast period. So we are going to need to sort of close that gap between what government is spending and bringing in through tax receipts.

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"But we are going to be a government that sticks to our manifesto commitments, including that one [on not raising taxes on working people].” Reeves’s message was underlined by Keir Starmer, who told the summit in his keynote speech: “Our public services need urgent care, our public finances need the tough love of prudence – challenges we can’t ignore.

"Because we know, just as every leader here knows, that those early weeks and months are precious, and no matter how many people advise you to ignore it, that you must run towards the fire to put it out, not let it spread further.”

“Unless you put Britain on a stable economic and financial path, we’re not going to be able to get that investment in,” she said. “And that will mean some difficult decisions, including on taxation. But businesses get that. They know that we have got to pay for day-to-day spending through tax receipts, they want to see a path to balance the books, but we’ve got to do it in a way that is also ensuring that we remain competitive in the global economy.”

Paul Johnson, the head of the Institute for Fiscal Studies, told Times Radio on Monday that such a move would count as a “straightforward breach” of the manifesto. “I went back and read the manifesto and it says very clearly, we will not raise rates of national insurance,” he said.