Jeremy Hunt has outlined his desire to abolish “unfair” national insurance tax – but admitted it “won’t happen any time soon”.
The chancellor described national insurance as a “tax on work” and said it he believed it was “unfair that we tax work twice” when other forms of income are only taxed once.
Mr Hunt used his budget yesterday to reduce national insurance by 2p – rather than cutting income tax as some Tory MPs had demanded.
He also indicated plans to completely scrap national insurance contributions – which brought in around £177bn in the 2022-23 period in tax – in a move Labour has branded “reckless”.
Speaking to Sky News from Liverpool this morning, Mr Hunt said: “We said we want to end that unfairness over time, it’s something we will only do when it’s possible to bring down taxes without increasing borrowing while also prioritising public services.
“If we are going to succeed as a country, we need to make work pay.”
Labour has demanded the chancellor reveal how much his plan to scrap national insurance would cost, after its own estimates suggested the move could cost £46bn a year – equivalent to £230bn over the course of a five-year parliament.
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The party argued such a move could end up being more costly than the £45bn package of unfunded tax cuts announced in by Liz Truss in her mini-budget which unleashed economic chaos and upended her premiership.
Asked how he would pay for ending national insurance, Mr Hunt said: “We are not saying this is going to happen any time soon” and suggested that income tax and national insurance could also be merged.
