Jeremy Hunt Says It Would Take "Many Parliaments" To Abolish National Insurance
Jeremy Hunt addressed the Treasury Select Committee on Wednesday (parliament.tv)
3 min read
Chancellor Jeremy Hunt has said abolishing National Insurance will be the work of "many Parliaments" after he used his Spring Budget statement last week to hint he was considering reform to the tax on workers.
The Chancellor was speaking at an appearance in front of the Treasury Select Committee on Wednesday, a week after introduced a measure to cut to National Insurance, alongside a slew of tax reforms including scrapping the controversial "non-dom" status, tax relief for creative industries and long called-for reform of child benefit thresholds were among headline measures in Hunt's plans.
Hunt also hinted to MPs in the Commons last week that it was his mission to eventually abolish National Insurance altogether, but today conceded this would be the work of "many Parliaments". The Conservative party is widely expected to lose the next election.
"We've been very clear this is a long term ambition to make work pay in the British economy. It is the right thing for economic growth," he said.
"It will be the work of many Parliaments and we will make progress but only when it's affordable to do so. When we can do so, because the economy is growing. And we won't do so at the expense of public services, and we won't do so by borrowing.
"But the evidence that we're committed to doing this is the fact that we managed to take 2p off national insurance in the Budget and 2p in the Autumn Statement."
The headline National Insurance measure of last week's Spring Budget had been heavily trailed in the press, initially by The Times, ahead of the Chancellor's Commons statement. Today the Chancellor insisted that the details were not intentionally leaked to newspapers.
Hunt was also challenged throughout the Select Committee hearing over the rate of tax which British people were paying. Economic analysts have said the overall level of tax will continue to increase if the government is to keep already ailing public services from collapsing.
But Hunt argued that increases in taxation had been exacerbated by the pandemic and that since arriving at the Treasury in 2022, he had reduced the "tax burden" by 0.6 per cent.
He insisted that he would not back a proposal to reduce the rate of tax if it meant cutting funding for the health service. "I would vote against it," he said.
The Chancellor said he would have liked to have introduced measures in the Spring Budget such as more help for those trying to get on the housing ladder, and did not rule out further help in future fiscal events for first time buyers.
"It is difficult unless you are absolutely confident that property prices are back on the up, because otherwise you are encouraging people to get onto the housing ladder with the prospect of house prices falling and, therefore, then falling into negative equity," he explained.
"I didn't judge that it was the right time for those kinds of measures. But is that something I would like to return to in future fiscal events? Absolutely."
The Chancellor also confirmed the measures to axe the non-dom tax regime would take effect in April 2025, which would be after the next general election.
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