Chancellor Jeremy Hunt has acknowledged that ending National Insurance Contributions (NICs) will not happen in the next parliament, describing it as a 'long-term ambition'. Speaking to the Treasury committee, he said scrapping the tax would be 'the work of many Parliaments' and depend on economic growth.
In his recent Budget, Hunt announced a 2p cut in NICs from April, with the eventual aim of abolition. Labour has criticised the move, warning it would create a £46bn funding gap for the state pension and NHS. Leader Sir Keir Starmer accused the government of an 'unfunded £46 billion promise' and questioned whether it would be paid for by cuts to pensions or the NHS.
Hunt rejected claims of scaremongering, arguing that NICs revenue does not directly determine spending on the state pension or NHS. He also defended the Budget's spending plans, stating that efficiency savings would avoid austerity-style cuts, despite the Institute for Fiscal Studies predicting a £20bn gap to meet fiscal rules.
The 2p NICs cut cleared its first Commons vote with a majority of 261, while an SNP amendment warning of public service cuts was defeated. Hunt also faced questions on housing policy, saying it was not the right time for measures due to uncertainty over property prices.
