Rishi Sunak to pledge benefits squeeze to fund election promise to scrap national insurance for good

9 March 2024, 20:14 | Updated: 10 March 2024, 07:00

Rishi Sunak will squeeze benefits to help scrap national insurance as part of his election offer to voters.
Rishi Sunak will squeeze benefits to help scrap national insurance as part of his election offer to voters. Picture: Alamy

By Chay Quinn

Rishi Sunak will squeeze benefits to help scrap national insurance as part of his election offer to voters.

Listen to this article

Loading audio...

The Prime Minister said he wants to make "significant progress" towards eliminating the tax during the next parliament if his party remains in power for a comeback fifth consecutive election victory.

Mr Sunak set out his intention to consult on new plans to reduce working-age benefits "to make sure that we can sustainably keep cutting taxes" in an interview with The Sunday Times.

Chancellor Jeremy Hunt used his Budget to set out a 2p cut in national insurance from April with a vague promise to eventually deliver a simpler tax system by eventually getting rid of it altogether.

Mr Sunak stressed his commitment to ending the "unnecessarily complex" system of having both income tax and national insurance contributions (NICs).

London, UK. 10th Jan, 2024. Prime Minister, Rishi Sunak, leaves Number 10 to go to Parliament for Prime Ministers Questions. He will face Sir Keir Starmer across the despatch box. Credit: Mark Thomas/Alamy Live News
London, UK. 10th Jan, 2024. Prime Minister, Rishi Sunak, leaves Number 10 to go to Parliament for Prime Ministers Questions. He will face Sir Keir Starmer across the despatch box. Credit: Mark Thomas/Alamy Live News. Picture: Alamy

"All that money ultimately goes into the same pot to fund public services. So ... our long-term ambition is to end that unfairness, to keep cutting NICs until it's gone, because that is the best way to reward hard work, simplify the tax system, and build the kind of society that I think is right," he said.

The aspiration to end the double taxation of work by scrapping national insurance was attacked as an unfunded promise by Labour, which pointed out it would cost the Exchequer around £46 billion.

The head of the respected independent Institute for Fiscal Studies think tank, Paul Johnson, said the pledge was "not worth the paper it's written on unless accompanied by some sense of how it will be funded".

But Mr Sunak said: "We've cut NICs by a third in two events over six months. So that demonstrates we are delivering and we can go further, though it's important that we stick to the plan and then we can make significant progress towards that goal in the next parliament."

A key to funding this pledge could be cutting the welfare bill, which is set to rise from £261.5 billion in 2022-23 to £360.1 billion in 2028-29 according to the Office for Budget Responsibility.

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt poses for photographs as he leaves 11 Downing Street
The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt poses for photographs as he leaves 11 Downing Street. Picture: Alamy

Mr Sunak said: "We now have almost 2.5 million working-age people who have been signed off as unfit to work or even look for work or think about working and I don't think that's right.

"We now sign off three times as many people to be out of work than we did a decade ago. That just doesn't strike me as a system that's working properly."

The 2p cut in national insurance, which follows a similar measure in November, appears to have done little to revive Tory election hopes.

Campaigners have long asked for NICs to be scrapped - arguing that it is a "double taxation"
Campaigners have long asked for NICs to be scrapped - arguing that it is a "double taxation". Picture: Alamy

An Opinium poll put Labour 16 points ahead, with Sir Keir Starmer's party on 41% and the Tories on 25%.

The survey of 2,054 UK adults from March 6 to 8 found 38% thought it was a bad Budget, while only 18% rated it as good and 44% were not sure.

The April timing of the national insurance cut has fuelled speculation about a May general election, but Mr Sunak, whose working assumption is for an election in the second half of 2024, said: "I stand exactly by what I said at the beginning of the year on timing."

More Latest News

See more More Latest News

Gordon Ramsay 'lucky to be alive' as star shows off shocking injuries after being involved 'brutal' cycling accident

Gordon Ramsay 'lucky to be alive' as star shows off shocking injuries after being involved 'brutal' cycling accident

Putin is 'not interested in genuine peace' in Ukraine, Rishi Sunak tells world in Switzerland

Putin is 'not interested in genuine peace' in Ukraine, Rishi Sunak tells world leaders in Switzerland

Kate's big comeback: Princess and William share tender moment as she re-joins royals at Trooping the Colour

Kate's big comeback: Princess and William share tender moment as she re-joins royals at Trooping the Colour

The attack, which took place in a garden east Germany on Friday night, saw the knifeman stab four people before police arrived at the scene.

German police shoot dead knifeman at Euro 2024 party after rampage leaves one dead and three injured

Businessman sues Apple after wife finds ‘deleted’ iPhone messages to prostitute

Businessman sues Apple after wife finds ‘deleted’ iPhone messages to prostitute

Olympic cyclist Sir Bradley Wiggins is bankrupt, homeless and has "lost absolutely everything", according to his lawyer.

Olympic cyclist Sir Bradley Wiggins has 'lost absolutely everything' as star faces selling medals following bankruptcy

Labour leader Sir Keir Starmer

Keir Starmer promises no capital gains tax on sales of homes as he dismisses tax hike claims

Home Secretary calls for 'urgent investigation' after shock footage emerges of police ramming escaped cow

Fury grows as shock footage shows police ramming escaped cow with squad car

Eight Israeli soldiers killed in southern Gaza - as Palestinian death toll reaches '37,000'

Eight Israeli soldiers killed in southern Gaza in deadliest attack since January

Prince Louis steals the show as he dances along to bagpipes at Trooping the Colour

Prince Louis steals the show as he dances along to bagpipes on Buckingham Palace balcony

Coventry's Radford Road, where the schoolboy was killed

Schoolboy killed in hit and run as police urgently look for driver

Police rammed the cow

Shock as police ram escaped cow on the street, as officers say it 'was hurt while being moved to safety'

Exclusive
c

Angela Rayner condemns 'intimidation' of Labour's Rosie Duffield after she cancels hustings amid 'trolling and spite'

Kate and the royals came out on the Buckingham Palace balcony for the flypast

Kate joins King Charles and other royals on Buckingham Palace balcony for RAF flypast after Trooping the Colour

Exclusive
Ben Habib has hit back at suggestions Nigel Farage could join the Conservative party

Reform deputy hits back at suggestion Nigel Farage could join Tories, after leader tells LBC he could lead merged party

Olympic rings on the Eiffel Tower in Paris

IOC gives 14 Russians and 11 Belarusians neutral status for Paris Olympics