What does the pledge mean? 

National Insurance contributions (NICs) are paid by both employees and employers—and whether Labour’s manifesto pledge to “not increase National Insurance” applied to both these groups has been fiercely disputed.

Labour’s manifesto did not specify whether its commitment referred to both employees and employers’ NICs, or just one of these. However the pledge appears to be part of a wider commitment to not increase taxes on “working people”, a term which isn’t explained in the manifesto and which Labour politicians have subsequently failed to consistently define. 

Because the manifesto did not clearly explain who its commitments on National Insurance and working people applied to, there has been much confusion and controversy over what the pledges actually meant.  

This kind of ambiguity isn’t good enough—as we’ve written elsewhere, commitments that are subject to interpretation are a recipe for confusion, and risk fuelling cynicism among voters. As we set out in our manifesto standards ahead of the election, manifestos should define things clearly and consistently and be phrased in a way that a reasonable person is likely to understand.

We’ve assumed this pledge can be read as a commitment which lasts throughout this parliament.

What progress has been made?

Given the confusion over the scope of this pledge, we can’t say definitively whether it has or hasn’t been kept.

Labour’s first Budget was set out on 30 October 2024. In it, the Chancellor of the Exchequer Rachel Reeves announced an increase to the rate of employers’ NICs alongside a reduction in the threshold at which employers begin paying contributions on employee earnings.

Some, including the Institute for Fiscal Studies think tank, have claimed that the increase in employers’ NICs represents a breach of Labour’s commitment, as the manifesto didn’t specify that it only applied to employee NICs. 

Labour however has argued that its commitment not to increase National Insurance applied to “working people”, not employers. And it’s also been noted that during the election campaign the Conservatives themselves warned Labour had only ruled out rises to employee, not employer, NICs.

The Office for Budget Responsibility has forecast that from 2026 onwards approximately 76% of the employers’ NICs increase will be ultimately passed on to employees in the form of lower wages—so while the amount of NICs employees pay has not increased, many will likely still be impacted by changes to employers’ NICs. And it’s been pointed out that some workers employed by “umbrella companies” will see the increase in employer NICs taken directly from their earnings.