The Centre for Policy Studies warmly welcomed the Chancellor's
landmark decision to raise National Insurance thresholds to the
same level as income tax, in response to the cost of living
crisis.
This policy, the Universal Working Income, was suggested by the
Centre for Policy Studies in its landmark 2018 paper Make Work Pay, and was
adopted by the Conservatives in their 2019 manifesto. At the
time, we calculated it would take 2.4 million people out of tax
altogether.
The CPS had recently argued that
increasing NI thresholds was the best way to offset the effects
of the Government's increase in National Insurance for those on
low and average incomes - but welcomed the Chancellor's decision
to go much further.
The Chancellor explicitly acknowledged the CPS's work in this
area in his statement.
Responding to the Spring Statement, Robert Colvile,
Director of the Centre for Policy Studies, said:
“We are delighted that the Chancellor has adopted our
proposal to increase the National Insurance payment threshold to
match the Income Tax threshold and create a Universal Working
Income. It is great to see CPS ideas continue to make their way
into Government and help reduce the tax burden for millions of
people.
“As the cost of living crisis deepens it is absolutely right to
protect lower earners from paying additional tax - but raising
the NI threshold to match that of income tax is also a great idea
full stop."
Notes to Editors
-
The CPS 2018 paper Make Work Pay, with the Universal Working
Income proposal can be downloaded here.
-
The CPS briefing on National Insurance threshold
‘National Insurance: A Plan to Blunt the Pain’ can
be downloaded here
