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Shadow chancellor Mel Stride has said that the rise in employers’ National Insurance contributions (NICs) could have a “devastating” impact on Jewish charities.
Asked by the JC at a parliamentary press gallery lunch in Westminster on Thursday, Stride said that the measures taken by Rachel Reeves in the budget were “completely the wrong way to go”.
He added: “What it's going to mean is that those charities are either going to have to scale back what they're doing, or they're going to have to go out and raise a whole load of money, which is going to be very difficult, to cover the costs.”
In October’s budget, the Chancellor announced that employers’ NICs would increase to 15 per cent from 13.8 and the salary threshold at which they would be payable would drop from £9,100 to £5,000.
“This is simply a transfer from the voluntary charitable sector over to Rachel Reeves and the Treasury, and I think it's completely wrong”, Stride said.
The former work and pensions secretary under Rishi Sunak criticised the fact the government had committed to provide compensation to the public sector for the impact of the measures, but not organisations serving the public sector.
He claimed that cancer charity Marie Curie, for instance, “got an extra £3 million NI bill coming their way.”
Stride said that although the government claimed the changes would raise £25 billion, he estimated that the amount raised by the treasure would end up being “about £10 billion tax raised, but it's going to have a really devastating effect on charities, I’m afraid”.
However, Stride, who clung onto his constituency of Central Devon by just 61 votes in July’s general election, refused to commit the Conservative Party to reversing the changes brought in by Labour, “I'm not going to stand up here today and make pledges” he said.
A number of Jewish charities have warned about the consequences of the planned increase in NICs.
The Jewish Leadership Council warned last month that warned that the rise in employers' NICs will impose significant financial burdens on Jewish charities fighting antisemitism, which are already stretched due to the increase in Jew-hate.
Jewish Care, the largest health and social care organisation for the Jewish community in London and the Southeast, said that the measures will “actively harm” the care sector.
At the Confederation of British Industry conference last month, Rachel Reeves said she had been offered “no alternatives” to the measures she took, adding: “We have asked businesses and the wealthiest to contribute more. I know those choices will have an impact. But I stand by those choices as the right choices for our country: investment to fix the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.”
At Treasury Questions in Parliament on Tuesday, Exchequer Secretary James Murray said the government recognised that the NICs change was a “tough one” but needed to allow the government to invest, including in “a record set of promises on home building.”
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