The Chancellor insisted that the proposed move would not breach her promise not to increase taxes on “working people” in the clearest indication yet that it is, Reeves also insisted she would not back down on the controversial cut to winter fuel payments but claimed that a higher state pension would make up for it.
Paul Johnson, director of the Institute for Fiscal Studies, said on Monday that hiking employers’ national insurance contributions would be “a straightforward breach of a manifesto commitment”. One option would be to raise the rate of the levy paid on all salaries, while another would involve charging national insurance on the pension contributions made by companies on behalf of their staff.
Separately, Sir Keir Starmer dismissed reports that capital gains tax could rise as high as 39 per cent, up from a maximum of 28 per cent now, telling Bloomberg the suggestion was “wide of the mark”.
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