Treasury's "Problematic" National Insurance Cut Claim May Breach Whitehall Rules
Chancellor Jeremy Hunt in Downing Street (Alamy)
5 min read
Government has been accused of making misleading claims after a Treasury social media post about how much money workers will take home as a result of the cut to National Insurance has been viewed as a breach of civil service rules.
On Sunday, a post by the Treasury on X, the social media website formerly known as Twitter, stated that an average worker "now earns an extra £450" due to the government decision to reduce National Insurance contributions by two per cent. The policy, announced in the Autumn Budget, came into effect on Saturday.
A community note added to the Treasury post by X's moderators said it was "misleading" because it does not take into account the full tax picture, like the impact of tax thresholds being frozen on workers' take home pay. Olly Bartrum, a senior economist at the Institute for Government think tank, said on X that the department "pushing this stuff out with no mention of larger income tax rises is really dishonest".
Alex Thomas, a programme director at the IfG specialising in the civil service, said it was a "problematic" post which appeared to breach Whitehall guidance stating that commucation "should be objective and explanatory" and should not "oversell" government policy.
“That tweet, to me, is overselling the position on cutting taxes overall," he told PoliticsHome.
“I found the Treasury tweet to be on the problematic side of that line and I would have thought that the director of communications would like to look quite carefully at that. It’s not the most outrageous thing in the world, but there are ways they could have presented that differently."
Hannah Smith, at fact-checker at Full Fact, told PoliticsHome the Treasury tweet misses "important context" as it ignores the impact of other taxes on people's finances.
"It is true that someone earning £35,000 a year, roughly the median full-time annual earnings in the UK, will pay around £450 less in National Insurance this year than they would have if the main rate stayed the same," Smith said.
"However, this figure only looks at the impact of the National Insurance reduction in isolation.
"According to the Institute for Fiscal Studies (IFS), when you also factor in ongoing freezes to National Insurance and income tax thresholds, the savings for someone on the average salary are substantially smaller."
Last week, the IFS estimated that by 2027-28, a person earning the average wage of £35,000 will be paying around £440 a year more in direct tax overall as a result of all tax policy taken together.
The Prime Minister's spokesperson rejected claims that the Treasury social media post was misleading and dishonest.
“We have been transparent about how this weekend’s cuts to National Insurance contributions will benefit different earners," they told reporters.
"The average employee earning £35,400 will save £450 a year and we have produced a calculator that will enable people to check how much they will save. These changes are for an individual on the average salary and we know that personal taxes will be lower in the UK than in other G7 countries based on the latest OCD data.”
On Sunday, Labour's Shadow Financial Secretary to the Treasury James Murray wrote to the Treasury's Permanent Secretary James Bowler about the "misleading" post, which he said failed to follow the important principles" of civil service "propriety".
"It is important that the public trusts HM Treasury Communications and can be confident they are accurate and not misleading or partial. I would therefore be grateful if you could confirm you will withdraw these communications, or if you will be replacing them to reflect the points the above," he wrote.
It is the latest case in the space of just a few weeks of the government being accused of making misleading claims about the progress it has made in achieving policy aims.
Earlier this month, statistics watchdog the Office for Statistics Regulation said it would investigate the claim by the Prime Minister and other Cabinet ministers that the government had cleared the so-called "legacy" backlog of asylum claims.
Last week, Sunak's X account posted: "I said that this government would clear the backlog of asylum decisions by the end of 2023. That’s exactly what we’ve done."
However, the Home Office said that Sunak was referring to asylum claims made before the end of June 2022, or what the government refers to as "legacy" cases, and that the overall number of cases waiting to be dealt with stood at over 98,000. The department also said there were 4,500 "complex" cases dating back to pre-June 2022 which needed further work by officials.
In December, the Prime Minister's claim that he had reduced public debt was challenged by the chair of the UK Statistics Authority, Sir Robert Chote.
In November, Sunak posted to social media that “debt is falling”, with No.10 pointing to the Office for Budget Responsibility forecasting that debt as a percentage of GDP would be falling by 2027-2028.
Chote argued, however, that the "average person in the street" would have interpreted the Prime Minister's claim as meaning that debt was already falling and that actions taken by the government were the reason why, "neither of which is the case".
In a letter to the Liberal Democrats, Chote said: “This has clearly been a source of confusion and may have undermined trust in the government’s use of statistics and quantitative analysis in this area."
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