Sector warns Labour that raising employer national insurance contributions will be ‘tax on jobs’: Chancellor Rachel Reeves has warned businesses that taxes will have to rise as she faced accusations of breaking a manifesto pledge on national insurance. Reeves argued that political and economic stability was more important to business investment than tax levels as she insisted Labour had never promised not to raise employer national insurance contributions. UKHospitality chief executive Kate Nicholls has warned such a move would be “a tax on jobs”, meaning fewer people hired, lower pay rises and fewer benefits for workers. Prime minister Sir Keir Starmer said he was “determined to get our economy moving through the shock and awe of investment”, but senior business leaders at the International Investment Summit expressed nervousness about his plans for tax rises. Craig Beaumont, executive director at the Federation of Small Businesses, which represents more than 500,000 small and medium-sized enterprises, said: “Hiking new costs on to jobs by small employers is simply not what a pro-growth Treasury would do.” Sir Keir warned of “tough love” for public finances in the Budget on 30 October, as he and Reeves prepared the ground for tax rises. The prime minister said suggestions of capital gains tax rising to 39% were “wide of the mark” but argued that other tax rises would not deter investment in Britain. “Tax is not the first thing businesses and investors are raising with me,” he said. Reeves insisted “businesses get the need for tax rises to balance the books”. “I don’t regard it as a dilemma between returning the economy to a path of stability on the one hand and attracting investment on the other,” she said. “The precondition for bringing investment into a country is economic and fiscal stability.” Arguing that recent policy upheavals had “put off investors”, Reeves promised a “business tax roadmap” at the Budget to give certainty for the years ahead, including a commitment not to increase corporation tax. Reeves fuelled growing expectations that she would increase the national insurance contributions made by employers, worth up to 13.8% of a worker’s salary. She said that employers’ contributions were “not in the manifesto”, arguing: “We were really clear in our manifesto that we weren’t going to increase the key taxes paid by working people.” Labour’s manifesto stated: “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.” Paul Johnson, director of the Institute for Fiscal Studies, said raising employer contributions “would be a straightforward breach of a manifesto commitment”.