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Chancellor set to raise National Insurance for employers to fund public services

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THE Chancellor is poised to announce a significant increase in National Insurance contributions for employers, aiming to generate £20 billion in additional funding for public services, including the NHS in England.

The Budget, set for Wednesday, will likely feature a lowered threshold for employer contributions to National Insurance, allowing these combined measures to become the largest revenue drivers in the upcoming Budget. However, Chancellor Rachel Reeves is not expected to apply the increase to employers’ pension contributions.

Currently, employers pay 13.8% on earnings over £175 a week. A two-point hike to 15.8% would yield an estimated £18 billion annually, though the threshold adjustment may push that figure higher.

A government source commented: “There is a universal consensus that the NHS needs more money. That means asking businesses to help out. The choice is investment versus decline.”

Tough choices for NHS funding

Speaking at a news conference during the Commonwealth Heads of Government Meeting in Samoa, Prime Minister Sir Keir Starmer remarked that the government is prepared to make “tough decisions” to support the NHS. However, he declined to provide further Budget details.

National Insurance represents the UK’s second-largest revenue stream after income tax, encompassing contributions from employees, the self-employed, and employers. The Chancellor has signaled that while the Labour manifesto promised not to increase National Insurance for “working people,” this was intended to shield employee contributions, not those of employers.

Wider budget implications and business concerns

As Labour prepares for its first Budget in nearly 15 years, concerns are rising about the potential for further tax changes, including a freeze on income tax thresholds, a possible hike in taxes on asset sales, and revisions to inheritance tax.

In a recent International Monetary Fund meeting, Reeves underscored the need for responsible spending, hinting that a return to austerity is off the table. Instead, she emphasized that day-to-day expenses must align with tax receipts, given the current state of critical services like the NHS and prisons.

Yet the potential impact of these changes has sparked concerns among businesses, who argue that a National Insurance hike could dampen job creation and wage growth, ultimately hampering economic expansion. The government, however, maintains that these funds are essential to rescue the NHS, even as critics argue the increase is a “tax on jobs” and breaches the Labour manifesto.

Addressing the housing crisis

In addition to healthcare funding, the Chancellor is expected to unveil a £500 million initiative to build up to 5,000 affordable homes in England, aimed at addressing the national housing crisis. This will be accompanied by a consultation to limit Right to Buy, protecting council housing stock for future generations.

Meanwhile, the Fire Brigades Union has called on Reeves to deliver a Budget that ends what they describe as the “catastrophic austerity era.” In a letter to the Chancellor, Union leader Matt Wrack warned of potential strike action if the Budget does not provide substantial funding, citing severe hardship among firefighters due to prolonged real-term pay cuts.

As Wednesday approaches, Labour faces the task of balancing its commitment to economic growth with the urgent demands of public services. The Conservatives, however, have criticized the impending National Insurance hike, accusing Labour of redefining the term “working people” as the Budget deadline looms.

 

Climate

Blue sea creatures wash up on Welsh beaches including Tenby

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VISITORS to Welsh beaches have been warned not to touch unusual blue sea creatures which have washed ashore along parts of the coastline.

Hundreds of velella velella, commonly known as by-the-wind sailors, have been reported on beaches in Anglesey, Gwynedd and Tenby.

The small, bright blue marine creatures are free-floating hydrozoans and are related to Portuguese man o’ war, sea anemones and corals.

They get their name from a small sail-like structure on their body, which catches the wind and carries them across the surface of the sea.

One was spotted on Tenby South Beach on Tuesday (Jun 16), where beachgoer Maxine Allinson described it as “fantastic” and “like a crystal”.

Marine experts say the creatures are often seen after changes in currents or stormy weather, which can push large numbers ashore at the same time.

Although they are much smaller and less dangerous than Portuguese man o’ war, they do have stinging cells.

Their sting is usually mild, but people are being advised not to pick them up, especially as contact with the face, lips or sensitive skin could cause pain or tingling.

Experts also warn that the stinging cells can remain active even after the creatures appear to be dead on the beach.

The advice is to admire them from a safe distance and leave them where they are.

Caption: Maxine Allinson spotted a velella velella on Tenby South beach Tuesday

 

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Local Government

Mayor to hold drop-in session for Haverfordwest residents

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HAVERFORDWEST residents will have the chance to raise ideas, concerns and local issues directly with the town’s mayor this week.

Cllr Randell Izaiah Thomas-Turner will hold a Talk to Your Mayor session on Thursday, from 12:00pm until 2:00pm.

The initiative is aimed at giving residents an opportunity to speak directly with the mayor about matters affecting the town and wider community.

Cllr Thomas-Turner said communication and engagement were “vital”, adding that the session was about listening to local people, working together, and ensuring every voice had the opportunity to be heard.

Anyone wishing to book an appointment is asked to contact the Haverfordwest Town Council town clerk.

The mayor said: “Together, we can continue building a stronger and more connected community. Together we can make Haverfordwest the best in the west.”

 

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News

Senedd rejects Reform call to end Welsh Government international spending

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THE SENEDD has rejected a Reform UK motion calling for an end to all Welsh Government international spending, after a heated debate which saw several Members walk out of the chamber.

The motion, tabled by Reform MS Llŷr Powell, was defeated by 48 votes to 37 on Wednesday (Jun 17).

An amended motion, backing Wales’ reputation as an “internationalist, tolerant and outward-looking nation”, was then passed by the same margin.

The debate followed warnings from Hub Cymru Africa and other campaigners that ending international spending would damage Wales’ global reputation and undermine projects linking Welsh communities with partners overseas.

Reform argued that Welsh Government money should be focused on domestic pressures, including the NHS, schools, transport and the cost of living.

Welsh Conservative leader Darren Millar backed the Reform motion, saying foreign relations and international development were matters for the UK Government rather than Cardiff Bay.

But Plaid Cymru and Welsh Government speakers rejected that argument, saying Wales’ international work supported trade, public services, education, health partnerships and the country’s reputation abroad.

The debate became heated after comments by Reform MS Joe Martin, who criticised overseas schemes including beekeeping and tree-planting projects in Uganda.

Several MSs left the Siambr during his contribution, with the Llywydd later urging Members to reflect on the tone of the debate.

Hub Cymru Africa had said before the vote that Wales’ international solidarity budget represented a tiny fraction of overall spending and helped deliver work in public health, climate action, women’s empowerment and sustainable development.

The organisation said the vote was an opportunity for the Senedd to reaffirm Wales’ place in the world.

 

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