, Labour’s Shadow
Paymaster General, responding to the Chancellor’s
comments on his NICs plans in his morning interviews, said:
“Jeremy Hunt’s promises of £46billion of unfunded tax cuts would
leave a gaping black hole in the public finances.
“This exposes the clear risk of five more years of the
Conservatives - they will gamble with the public finances and
working people will be be forced to pay the price.
“This Tory government clearly hasn't learned anything since
crashed the economy and sent people’s mortgages
spiralling.
“Labour will never play fast and loose with the nation’s
finances. It’s time for change. It’s time for a general
election.”
Ends.
Notes to editors
wants to deliver £46bn of
unfunded tax cuts
Hunt has said he wants to abolish NICs. In an email to Tory
members he said “I’d like to end the unfairness where people in
work are paying tax twice on their earnings.”
Treasury Minister confirmed this in his LBC
interview the evening [6 March 2024].
After Hunt’s changes main rate NICs will be at 8%. Self-employed
NICs will be at 6%.
The Treasury’s policy costings table (Table 5.1) reveals that a
2p cut in main rate employee NICs costs £9.99bn in 2028/29, and a
2p cut in main rate self-employed
NICs costs £760m:https://assets.publishing.service.gov.uk/media/65e8578eb559930011ade2cb/E03057752_HMT_Spring_Budget_Mar_24_Web_Accessible__2_.pdf
In addition, according to HMRC it costs £1.45bn to cut the
employee additional rate by 1p, and £270m to cut the
self-employed additional rate by 1p:
https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-january-2023#national-insurance-contributions-rates
That means that it would cost many tens of billions to abolish
NICs entirely:
£39.96bn to abolish employee NICs main rate, going from 8p to 0p
£2.28 to abolish self-employed NICs, going from a 6p rate to 0p
£2.9bn to abolish employee NICs additional rate, going from 2p to
0p
£0.54bn to abolish self-employed NICs additional rate, going from
2p to 0p
That means that in total wants to deliver £46bn of
unfunded tax cuts
That is £1bn more than the £45bn of unfunded tax cuts in the
disastrous Truss mini-budget.
