Kemi Badenoch has escalated her party’s criticism of the government’s latest Budget, accusing it of using the private sector to “milk” additional funds, specifically targeting the rise in National Insurance (NI) contributions by employers.
During her second appearance at Prime Minister’s Questions, Badenoch, the Conservative leader, questioned how the government would assist local councils with the increased financial strain caused by the NI hike, particularly in relation to the rising costs of social care.
The Budget, unveiled last month by Chancellor Rachel Reeves, includes an increase in employer NI contributions from 13.8% to 15% starting in April 2025. Additionally, the payment threshold for NI will be lowered from £9,100 to £5,000 per year. Reeves defended the changes, stating that the £25 billion annual increase in revenue was necessary to ensure public finances remained stable.
In response to this, Sir Keir Starmer, leader of the Labour Party, remarked that while the Conservatives had pledged extra investment for schools and the NHS, the government had failed to present a clear plan for how to fund it. “The magic money tree is back,” Starmer quipped, pointing to the lack of clarity on financing these commitments.
A key concern raised by Badenoch was the impact the NI rise would have on local councils, especially regarding social care costs. She asked if the government would consider lifting the cap on council tax to help fill what she claimed was a £2.4 billion shortfall in local government finances. The council tax cap currently limits local authorities from increasing taxes by more than 5% without a local referendum.
In reply, Prime Minister Rishi Sunak noted that the Budget had already allocated £600 million to address the pressures on adult social care. He also dismissed the idea of lifting the council tax cap, with a spokesperson later confirming that there were no plans to alter this policy.
Further tensions arose when Liberal Democrat leader Sir Ed Davey asked whether the government would exempt GPs and healthcare providers from the National Insurance rise. Starmer assured MPs that GPs would receive the necessary resources, with further funding arrangements to be detailed later in the year.
As the session drew to a close, Badenoch continued her criticism of Labour, accusing the opposition of offering “nothing but platitudes” and labeling their Budget proposals as ideologically driven. She claimed that Labour’s “tax mess” had left cabinet ministers scrambling for public sector bailouts.
Sunak, in turn, reminded Badenoch that her party had overseen “fourteen years of low growth” and criticized former Prime Minister Liz Truss’s “mini-budget,” adding, “No thank you very much” when asked for advice on managing the economy.
