Rishi Sunak has issued a strong hint that there could be further cuts in national insurance rates in next week’s budget.
The prime minister told reporters gathered at the Scottish Tory conference in Aberdeen on Friday that he wanted to make life easier for working people across the UK, particularly at a time when the Scottish National party government was raising income taxes from April for anyone in Scotland earning above £28,850.
“I’m very conscious that, whilst the SNP is making life harder for hard-working people by putting their taxes up, I want to make life easier for people,” Sunak said, months after the government cut national insurance contributions – paid by workers across the UK – from 12% to 10% in January.
That reduction in NICs was a “significant tax cut worth £450 for someone on average earnings of £35,000,” Sunak added. “I believe in a country and a society where hard work is rewarded. That’s something that’s really important to me.”
Sunak said Alister Jack, the Scottish secretary, had been pressing the chancellor, Jeremy Hunt, to cut NICs again in next week’s budget. “For the very reasons outlined, I press hard that it is national insurance as opposed to income tax,” Jack said.
There have been weeks of speculation that Hunt could announce personal tax cuts in his spring budget next week. Sunak’s comments are the first strong hint that such a move might come in the form of a further national insurance cut rather than 1p or 2p off the basic rate of income tax.
However, in the past week tight fiscal forecasts have left Hunt with a much smaller scope for giveaways, instead considering unexpected tax rises such as copying Labour’s idea of abolishing the non-dom status, which gives tax breaks to those living in the UK but who claim that their permanent home (“domicile”) is abroad.
Separately on Saturday, Hunt took a fresh run at trying to drum up support for British companies and revive the country’s stock market, by forcing pension funds to disclose how much money they were investing in UK businesses versus those overseas.
The Treasury said the proposed policy would help employers compare schemes and make informed choices about where to store and grow their cash. They said it would also focus pension managers’ minds on “securing good returns for savers”.
“British pension funds appear to contribute less to the UK economy than international counterparts do as they invest less in our domestic businesses,” Hunt said. “These requirements will help focus minds on how to improve overall returns and outcomes for savers.”
The Treasury did not confirm whether the new pension fund disclosure rules would extend investments in national infrastructure schemes, which the government is also trying to encourage. City regulators are expected to launch a consultation on the proposals later this spring.
It comes weeks after Hunt hinted that he may roll out a British Isa that gave savers the opportunity to buy a certain amount of UK company shares without paying tax, in further efforts to drum up interest in the London stock market.
Currently, the government charges a 0.5% tax, known as the share purchase stamp duty, for any shares bought in the UK.
