Are Labour about to break a manifesto promise?
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The government’s being accused of breaking promises made in its election manifesto if it raises national insurance contributions for businesses, but Keir Starmer says its pledges were “very clear”.
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In brief…
- Labour promised to not raise taxes for working people, or raise national insurance, but ambiguity in its manifesto is now being scrutinised.
- The News Agents say the November budget must be an end to the “vague” Labour government, which has yet to begin “setting its legacy”.
- The results of increasing employers’ national insurance contributions could bring huge financial benefits, but could also play into narratives about untrustworthy MPs.
What's the story?
"Labour will not increase taxes on working people, which is why we will not increase national insurance."
This is one of the promises in the Labour election manifesto that is currently under intense scrutiny as the government's first budget approaches.
The scrutiny comes after rumours that Rachel Reeves, the chancellor of the exchequer, is expected to raise national insurance contributions made by businesses when she delivers the Labour budget in November.
Keir Starmer has said the manifesto promise was "very clear", but at the same time has refused to comment on the speculation over the rise.
Working people currently pay 8% of their income in national insurance on everything they earn over £12,500, employers pay 13.8%.
Emily Maitlis says the term 'working people' is doing "a lot of heavy lifting", and asks whether employers count as working people themselves.
Lewis Goodall describes the Labour government as one "in desperate need of money," with both Starmer and Reeves having spoken repeatedly about the £22 billion fiscal "black hole" they inherited from the previous Tory government.
It’s estimated the government could raise £17 billion from increasing employers' national insurance contributions by 2%, leaving them just £5bn short of filling that hole.
"We are talking about real money," Lewis adds.
Are Labour about to break their election manifesto tax pledge?
Is this an end to Labour's 'vague' policies?
In the run up to the 2024 election, Rishi Sunak accused Keir Starmer and the Labour Party of having "no plan" and "no principles".
And to some extent, he was right. The current government campaigned on relatively vague promises, and apart from cutting winter fuel benefits, has yet to implement any real policy change.
This, The News Agents say, must change with the party's first budget.
"Vagueness worked for them going into the election, because it meant they got all the barnacles off the boat," says Lewis.
"It meant that the Conservatives found it very, very hard to pin them down on anything."
But this approach has seen "diminishing returns" for Labour since taking power, he adds.
"The budget is clearly a moment of definition, and it is a moment when trade-offs are going to have to happen."
Emily says that since Keir Starmer entered 10 Downing Street there has been "no story" to Labour's time in government, and no "sense of setting their legacy".
"At some point they do need to be able to say: This is what Labour stands for – we're going to get the infrastructure right, we're going to build this, we're going to sort that."
What does Labour mean when it says 'working people'?
What's The News Agents take?
If the days of a vague Labour leadership are to end, Emily and Lewis say, it will all hinge on the nuances of what was promised in its manifesto.
"In the lead up to the general election, it was this emphasis on working people, and they never said a single phrase without adding in working people," says Lewis.
"And so I guess the only question really is, how do you define working people.
"Lots of people work very hard, and they're also very rich, so they clearly didn't mean anyone who works. What they meant, I think you have to assume, is people who were on average incomes, although they never said that."
Emily says the perceived lack of action has led to people letting their "fears run away with them," but believes perspectives would likely change if Labour explains the benefits to the country that could be achieved by the 1% or 2% raise in national insurance contributions from employers.
The News Agents suggest the impact on employers may result in hesitancy to hire new staff or increase the salary of those already on the payroll.
However, with the Conservatives and the Tory press already "getting their attack lines" ready, will the British public care that Labour may have broken their election promises?
"There is a narrative out there about politicians breaking their promises and, given there is already a narrative about Starmer being slippery, I do think it's potentially politically dangerous for him."
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