PM says it was ‘very clear’ in Labour manifesto that government would not raise taxes on working people

Keir Starmer told the BBC Labour intended to keep its manifesto promises. Photograph: Peter Nicholls/Getty Images

Keir Starmer has twice refused to rule out a rise in employers’ national insurance contributions in the budget, stressing Labour’s manifesto promise was that it would not raise taxes on working people.

His words came as the chancellor, Rachel Reeves, gave a strong hint on Monday that the rise was in her sights at the end of October, suggesting that executives would understand the need for such decisions.

Speaking to the BBC in Downing Street, the prime minister said Labour was “very clear in the manifesto that we wouldn’t be increasing tax on working people”, citing income tax and national insurance. “It wasn’t just the manifesto. We said it repeatedly in the campaign, and we intend to keep the promises that we made in our manifesto.

“It’s going to be a budget that’s going to be tough, of course, but the focus will be on rebuilding our country and ensuring that we get the growth we need in our economy. And so it’s consistent with the [investment] summit we had yesterday, and this money that is now coming in, which will be real gamechanger.”

Introducing national insurance on employer pension contributions could raise as much as £17bn a year for the exchequer, while putting up regular employer national insurance by 1p would raise about £8.5bn.

Paul Johnson, the director of the Institute for Fiscal Studies, has said hiking employers’ national insurance contributions would directly violate Labour’s manifesto commitment. “I went back and read the manifesto and it says very clearly, we will not raise rates of national insurance,” he said.

The measure was also criticised by the head of the Confederation of British Industry, Rain Newton-Smith, who told BBC Radio 4’s Today programme that it could make it “harder for businesses to create the jobs and the growth” to fund public services.

Starmer was speaking a day after the government’s investment summit, where he said £63bn of international investment in areas such as renewable energy, datacentres and artificial intelligence was part of a long-term vision for Britain.

But asked how those investment decisions would help Britons feel better off in the short term, Starmer promised there would be tangible immediate benefits in the form of new jobs.

“What I’ve got to do is make sure that translates into jobs, well-paid, secure jobs in different parts of the country,” he said. “So many people say to me, what I want is a secure job, a well-paid job, a skilled job that’s going to last for decades to come.

“Many times, if there’s been investment into this country – and there hasn’t been enough, frankly, in recent years – it’s gone only to some places. The north-east, the north-west, parts of Scotland and other places have not felt the benefit. What we’re doing is getting the investment in but also, being clear, it’s got to be in different parts of the country.”

Starmer also said he hoped to eventually double the investment he had secured for building new homes, after announcing £550m of private sector impact investment funds from Schroders, Man Group and Resonance that will go into housebuilding.

“We’ve said as a government we’re going to fix the foundations, rebuild our country, and expressly saying ‘now is the time to back us’,” he told the BBC. “Companies and investors are coming in today saying ‘here’s half a billion pounds’. We want to raise that, by the way, I want that to be up over £1bn before too long.”