Watch as Chancellor defends National Insurance hike and tells Sunderland businesses the money will help fix the HNS

In the Autumn budget the Chancellor announced that National Insurance will increase from 13.8% to 15% from April 2025.

The Treasury said the increase would generate £25bn per year for public finances.

While the decision placed the burden of contributions on the employer rather than the employee, it raised concern amongst small businesses, including here in Sunderland, that it could lead to job losses with small profit margins making it difficult to cover the additional costs.

During a visit to Sunderland on Thursday (December 12) in an exclusive interview with the Echo the Chancellor defended the decision, citing the necessity to improve public services and in particular the NHS.

She said: “We increased employer’s National Insurance and that money will go towards addressing the public finance challenges but also we will put £25bn into the National Health Service.

“This is essential to bring down hospital waiting lists and times that have got totally out of control.”

The Chancellor also highlighted the increase in the threshold at which small businesses need to pay National Insurance.

She added: “I would say to small businesses in Sunderland to have an urgent look at the employment allowance because we have more than doubled the size of employment allowance, which is the threshold before you start paying National Insurance.

“That means if you are a small business that is paying four people full time at the national minimum living wage, from next April you won’t pay any National Insurance whatsoever.

“There are a million small businesses who be paying less or the same National Insurance because of that support that was put in at the budget to help smaller businesses who I know will struggle more than larger companies to pay higher levels of National Insurance.”