Conservatives push to stop Labour’s Jobs Tax

Today [Tuesday 3 December 2024] the Conservatives are pushing to stop Labour from driving through their Job's Tax.  

The Conservatives have tabled an amendment to block Labour's National Insurance Contributions Bill to try and prevent this damaging tax rise on working people going through.  

The Conservatives' Amendment argues that increasing National Insurance is a clear breach of the Labour manifesto commitment made to the British public during the election campaign this year that ‘we will not increase National Insurance'.  

It also repeats the warning from Britain's businesses that Labour's tax on jobs plan will lead to “lower growth, lower wages for working people, fewer jobs and the closure of business”.  

As a result, the amendment calls to block this Bill.  

Our resolute opposition to Labour's Jobs Tax comes as businesses, charities and working people across the country sound the alarm over the damage it will do to them.  

It also comes as the Office for Budget Responsibility has forecasted that Labour's NICs increase “lowers real wages and profits, and workers and firms reduce labour supply and demand in response, reducing labour supply by around 50,000 average-hours equivalents”, whilst Bloomberg warns as many as 130,000 jobs could be lost whilst CBI Chairman Rupert Soames said Labour had “milked” business as “the cash cow”. 

It also comes as part of the Conservative Party's wider opposition to Labour's Budget of Broken Promises, with the Party also opposing their Finance Bill last week.    

The full text of the Reasoned Amendment tabled by the Conservatives reads as follows: 

“That this House declines to give a Second Reading to the National Insurance Contributions (Secondary Class 1 Contributions) Bill because it breaks the manifesto commitment of the Labour Party that ‘we will not increase National Insurance' and it will lead to lower growth, lower wages for working people, fewer jobs and the closure of businesses.”    

Should Labour choose to vote down this amendment they will confirm to the British public that they are all too happy to press ahead with their Jobs Tax, despite the many warnings of the significant damage it will do.  

The Conservatives will also highlight that Labour could tax business more in the future, after Keir Starmer disagreed with his Chancellor when he failed to rule out more borrowing and more taxes.   

Mel Stride MP, Shadow Chancellor of the Exchequer, said:     

“Broken promises have consequences. This National Insurance increase means lower wages, fewer jobs, the closure of businesses and lower growth.  

“Labour MPs now have the opportunity to do the right thing and stick with their manifesto pledge by voting against this bill. If they fail to do so, they will once again confirm to the public that Labour is a party of broken promises that does not understand how to grow the economy and is not on the side of business.”   

ENDS   

Notes to Editors 

·         Labour's manifesto promised not to raise National Insurance. ‘We will ensure taxes on working people are kept as low as possible. Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT' (The Labour Party, Labour Party Manifesto 2024, 13 June 2024, link). 

·         The Office for Budget Responsibility said the increase to National Insurance will lower ‘real wages and profits' as well as reduce the labour supply. ‘The increase in employer NICs, which we estimate will reduce the level of potential output by 0.1 per cent at the forecast horizon…the NICs rise increases employer payroll costs by just under 2 per cent. We assume this lowers real wages and profits, and workers and firms reduce labour supply and demand in response, reducing labour supply by around 50,000 average-hours equivalents' (OBR, Economic and Fiscal Outlook, 30 October 2024, link. 

·         Labour's National Insurance Jobs Tax could lead to the loss of 130,000 jobs. New analysis by Bloomberg shows the impact of Labour's Jobs Tax will be felt mostly through a reduction in hours – which may cost 130,000 British jobs (Bloomberg UK, 28 November 2024, link). 

·         Chair of the Confederation of British Industry, Rupert Soames, said ‘business has been milked as the cash cow'. SOAMES: ‘But there is no doubt here, that in this Budget, business has been milked as the cash cow' (BBC News, 25 November 2024, link).