Rishi Sunak: ‘Cut benefits to fund National Insurance abolition plan’

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Chancellor Rishi Sunak has said in a pitch to voters ahead of the general election that benefits cuts could be used to fund the scrapping of workers’ National Insurance Contributions (NICs) by the end of the next parliament. suggested.

Mr Sunak, who is trailing Labor by double digits in most opinion polls, said he believed “significant progress” would be made towards abolishing the NIC in the next parliament, after the Chancellor proposed abolishing it in the spring budget. He claimed to be able to see it.

in sunday times Mr Sunak said in an interview that he would consult on a new plan to cut working-age benefits “to ensure that tax cuts remain sustainable”.

jeremy hunt I used his stuff. budget It plans to cut National Insurance by 2p from April, with a vague promise to eventually abolish it completely and create a simpler tax system.

Mr Sunak underlined his determination to scrap the “unnecessarily complex” system, which pays both income tax and national insurance contributions (NICs).

“All that money ends up going into the same pot to fund public services. So…our long-term ambition is to end that inequity and keep cutting NICs until they’re gone. Because that’s the best way to reward hard work, simplify the tax system, and build the kind of society I think is right,” he said.

Plans to end double taxation on workers by scrapping National Insurance have been attacked as an unfunded promise, with Labor saying it would cost the Treasury around £46bn.

Paul Johnson, director of the Institute for Fiscal Studies, a well-regarded independent think tank, said the pledge was “worthless on paper unless it is accompanied by some sense of how it will be funded”. .

But Mr Sunak said: “We reduced NICs by a third over two events over six months. So this shows we are making progress and we can make further progress, but we need to stick to our plan. That’s important, so we can make significant progress toward that goal in the next Congress.”

Key to funding this pledge could be cuts to the welfare bill, which the Office for Budget Responsibility says will rise from £261.5bn in 2022-23 to £360.1bn in 2028-29. This is expected to increase.

Mr Sunak said: “There are currently around 2.5 million people of working age who are deemed unfit to work, look for work or even consider working, and I don’t think that’s right.” Told.

“We have three times as many people out of work now than we did 10 years ago. I don’t think the system is working properly.”

A similar move in November, followed by a 2p cut to National Insurance, appears to have done little to restore the Conservatives’ election hopes.

The Opinium poll gives Labor a 16-point lead, with Sir Keir Starmer’s party on 41% and the Conservatives on 25%.