Minister Defends Tax Hikes Amid Business Backlash: ‘The Alternative Was More Austerity’

Jess Phillips has defended Labour’s controversial decision to hike up taxes after the latest backlash from the business sector.

Chancellor Rachel Reeves hiked up National Insurance contributions for employers in her Budget last month by £25bn.

But the head of Confederation of British Industry (CBI) is set to tell business leaders on Monday that these measures are undermining Labour’s attempts to get people back into work, as employers will be more reluctant to “take a chance” on new hires.

So Sky News presenter Kay Burley said to the Home Office minister on Monday: “It’s not gone well this Budget has it?”

Phillips replied: “The alternative choice was most austerity.

“So if we want investment into our NHS, that gets Britain working, that stops the millions of people who are currently out of work, that takes investment.

“Difficult decisions have to be made.

“I wouldn’t want anyone, any business, to feel like they couldn’t be investing in their staff.”

The MP for Birmingham Yardley continued: “But the alternative was more austerity and I’m telling you now that services in Birmingham couldn’t have taken any more austerity and it would have made our city, our country, sicker.”

“But the CBI says as a direct result, it’s taking people’s jobs,” Burley noted.

Phillips replied: “Look, I mean, I think we will have to wait and see.

“We are also investing hundreds of millions into new jobs. So I think the difficult decisions have to be made, and time is going to have to tell how that plays out but we are investing in growth in this country.

″And huge investment into the kind of industries where people can have good jobs for life.”

Reeves is expected to tell businesses on Monday that they have offered “no alternatives” to her plans.

She will say: “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.”

Labour raised taxes by £40bn in the Budget in a bid to close the £22bn black hole the party claims the Tories left behind in the public finances, and to boost public services.