Treasury accused of peddling ‘untrue nonsense’ in Budget document

Economists criticise language that claims National Insurance contributions are ‘not increasing’

The Treasury has been accused of making “nonsense” claims that are “clearly not true” in a document setting out Rachel Reeves’ maiden Budget.
Economists at the Institute for Fiscal Studies (IFS) criticised the language used by the Treasury in its 170-page-long Budget document.
It states two times that the Government is “not increasing the basic, higher or additional rates of income tax, National Insurance contributions (NICs) or VAT”.
However, Ms Reeves’s department makes clear in the same paper that National Insurance contributions for employers will rise by 1.2 percentage points to 15pc.
The document projects the measure will raise £25.7bn from employers, a cost which the Treasury admits will in part be borne by workers through lower wages.
Helen Miller, IFS’s deputy director and head of tax, described the claim that National Insurance contributions would not rise as “ridiculous”.
Writing on X, she said: “This is clearly not true. They are very definitely raising NICs!!!”.
Ben Zaranko, a senior economist at the think tank, said in a separate post: “Is this nonsense even consistent with the civil service code?! Some doublethink [in] the Treasury document…
“‘We are not increasing National Insurance Contributions. But also, we are raising £26bn extra per year from National Insurance Contributions’.”
The Civil Service code lists “honesty”, “objectivity” and “impartiality” as core values.
Lord Nick Macpherson, former permanent secretary to the Treasury, said it was “less than clear” if the language could be seen as a breach of the code.
He said: “The Treasury would argue that given the context they were referring to NICs paid by employees (‘working people’).”
Not raising taxes on “working people” was a key Labour manifesto pledge. However, Ms Reeves on Wednesday admitted that private sector workers would be paid less because of the tax rise on employers.
The Office for Budget Responsibility warned the “majority” of the UK’s more than 30 million employees would pay for the tax rise on employers through lower wages.
Under a section on “protecting working people”, the Treasury said in Ms Reeves’ Budget document: “The Government has committed to not increase taxes on working people, which is why it is not increasing the basic, higher or additional rates of income tax, NICs or VAT.”
The criticism from the IFS’s economists comes as Labour faces accusations of breaching its manifesto.
John O’Connell, chief executive of the TaxPayers’Alliance, said Ms Reeves “should be apologising for what is clearly a manifesto breach that will do huge harm to taxpayers”.
The Treasury was contacted for comment.