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Fact check: Labour Rise of national insurance payments
Checked on May 29, 2025
1. Summary of the results
Labour has implemented a significant rise in National Insurance contributions, specifically:
- Employer NI rates increased from 13.8% to 15% [1]
- The threshold for payments reduced from £9,100 to £5,000 per year [1]
- The changes will take effect from April 6, 2025 [2]
- The rise is projected to generate £25.7 billion annually by 2029/30 [3]
2. Missing context/alternative viewpoints
*Economic Impact:
- The Office for Budget Responsibility estimates:
- 2% increase to employers' payroll costs [2]
- 60% of costs will be passed to workers and consumers through lower wages and higher prices [2]
- 40% will be absorbed by businesses as reduced profits [2]
- 76% of the employers' NICs increase will ultimately be passed on to employees through lower wages [4]
Business Opposition:
- Key business leaders have voiced strong concerns:
- Rain Newton-Smith (CBI) and Kate Nicholls (UK Hospitality) warn it could "hobble" economic growth [5]
- Particularly concerning for sectors with high staffing costs, like hospitality [5]
- Small businesses are expected to be disproportionately affected compared to larger corporations [1]
**3. Potential misinformation/bias in the original statement**
Political Context:
- There's controversy over Labour's manifesto pledge:
- Labour claimed their promise not to increase National Insurance only applied to "working people," not employers [3]
- The manifesto commitment was not clearly defined, leading to disputes [4]
Government Positioning:*
- Chancellor Rachel Reeves has framed this as a "difficult" but necessary choice to fund public services [1]
- The Institute for Fiscal Studies suggests a 1% increase could raise £8.5bn annually, though with complex economic consequences [5]
This situation demonstrates how political promises and economic policies often involve nuanced interpretations and complex trade-offs between government revenue, business interests, and worker welfare.
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