‘Seriously?’: Economist blasts Treasury’s ‘dubious’ tax raid tweet

[dutchman]

The department’s official social media account claims National Insurance is not rising



The Treasury has been accused of making “dubious” claims over Rachel Reeves’s Budget tax raid after declaring it was not raising National Insurance rates.

Paul Johnson [pictured], the director of the Institute for Fiscal Studies (IFS), hit out at the Treasury after it posted on social media that it was “not increasing the basic, higher or additional rates of Income Tax, National Insurance or VAT”.

It comes after the Chancellor launched a £16bn National Insurance raid on employers in her maiden Budget last month, which will make up more than half of the Treasury’s planned tax rises.

HM Treasury’s official account on the X social media site said yesterday: “Last week we committed to protecting working people in the Budget. That is why we are not increasing the basic, higher or additional rates of Income Tax, National Insurance or VAT.”

Mr Johnson posted in response: “Seriously? I know this was in the Red Book. And I’m no expert on rules covering what government depts can/cannot say. But at best this is dubious. And that’s being generous.

“Increasing NI was the central tax-raising measure in the Budget. What is the point in pushing this line?”

Mel Stride, the shadow chancellor and a former pensions secretary, said on Friday that he had written to the permanent secretary of the Treasury over “the Government’s consistent use of misleading claims relating to the National Insurance hike”.

Mr Stride said on X: “Labour promised not to raise NICs and they did. They should be honest about that.”

In his letter to James Bowler, the Treasury’s top civil servant, Mr Stride asked who had signed off the Treasury’s tweet and if he could confirm officials were not “pressured” by the Government to publish misleading information.

Civil Service guidelines on social media state that accuracy is a “point to bear in mind” with posts, Mr Stride added.

The Chancellor announced a record £41.5bn in tax rises in her Budget on Oct 30, including an extra £25bn from increases to National Insurance contributions (NICs) made by employers.

This was despite Labour’s key manifesto pledge that “we will not increase National Insurance”.

Ms Reeves has claimed that the increase to employer NICs did not compromise Labour’s manifesto promises because it is an increase only on the tax paid by employers and therefore is not a tax “on working people”.

However, Labour’s manifesto included no specification that only one part of the tax would be protected.

Analysts have warned that the employer NICs rise will be a de facto tax on workers as businesses will cut back on pay rises to cover their higher tax bills.

The Office for Budget Responsibility (OBR) warned in its Budget analysis that workers would eventually pay for four-fifths of the tax rise through lower pay.