Rishi Sunak has issued a strong hint that there could be further cuts in national insurance rates in next week’s budget.
The prime minister told reporters gathered at the Scottish Tory conference in Aberdeen on Friday that he wanted to make life easier for working people across the UK, particularly at a time when the Scottish National party government was raising income taxes from April for anyone in Scotland earning above £28,850.
“I’m very conscious that, whilst the SNP is making life harder for hard-working people by putting their taxes up, I want to make life easier for people,” Sunak said, months after the government cut national insurance contributions – paid by workers across the UK – from 12% to 10% in January.
That reduction in NICs was a “significant tax cut worth £450 for someone on average earnings of £35,000,” Sunak added. “I believe in a country and a society where hard work is rewarded. That’s something that’s really important to me.”
Sunak said Alister Jack, the Scottish secretary, had been pressing the chancellor, Jeremy Hunt, to cut NICs again in next week’s budget. “For the very reasons outlined, I press hard that it is national insurance as opposed to income tax,” Jack said.
There have been weeks of speculation that Hunt could announce personal tax cuts in his spring budget next week. Sunak’s comments are the first strong hint that such a move might come in the form of a further national insurance cut rather than 1p or 2p off the basic rate of income tax.
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However, in the past week tight fiscal forecasts have left Hunt with a much smaller scope for giveaways, instead considering unexpected tax rises such as copying Labour’s idea of abolishing the non-dom status, which gives tax breaks to those living in the UK but who claim that their permanent home (“domicile”) is abroad.
