Hunt hints at another National Insurance tax cut

Jeremy Hunt has hinted at another possible National Insurance cut before the general election.

The chancellor defended the UK's record tax levels, which he said were necessary to cover the costs of protecting the public from pandemic costs and soaring energy bills.

Mr Hunt claimed taxes would go up under a Labour government to plug a "black hole" in their economic plans.

Labour said its policies were "fully funded" and claimed Mr Hunt's plan to eventually abolish National Insurance altogether would create a "black hole" in the UK's finances.

The economy will be a key issue at the general election – and both the main parties are trying to shape the narrative, despite the date of the vote not being announced yet.

The backdrop to Mr Hunt’s highly political speech in Westminster read "Labour's Tax rises".

On National Insurance, Mr Hunt said: “If we can afford to go further, responsibly, to reduce the double tax on work this Autumn that is what I will do."

It remains unclear whether there will be an Autumn Statement before the next general election, which must be held by January 2025.

The chancellor announced 2p would be cut from National Insurance in last year's autumn statement and again in the spring budget.

The government said that the two combined cuts mean a worker on £35,000 will save about £900 a year.

Although Mr Hunt repeated his aspiration to scrap national insurance altogether, he dodged questions about the unfreezing of tax thresholds.

This is one of the main reasons people are paying more tax. As people have seen their pay go up, more have found themselves in higher tax bands because the thresholds have not increased.

He tried to frame the election as a choice between his party – whom he said wanted to reduce the tax burden – and Labour who he argued would increase taxes.

Tax levels have increased under the Conservatives – something Mr Hunt blamed on the pandemic and cost of living support.

Defending the fact the UK has the highest tax levels in 70 years, and that tax levels have increased under his stewardship, Mr Hunt said rises had been "necessary" due to “two global shocks in quick succession”.

Mr Hunt also criticised the Labour Party for trying to “scare pensioners” by “misrepresenting” his pledge to work towards abolishing National Insurance Contributions.

The Labour Party has previously claimed that the pledge to abolish National Insurance is a “£46bn unfunded tax plan”, which poses a “threat to the state pension”.

“It is a lie, it is fake news and it is an absolute disgrace to try to win this election by scaring pensioners”, said Mr Hunt.

Labour have also argued that the pledge to abolish National Insurance would cost £46bn and would have to be paid for by raising income tax. Pensioners do not pay National Insurance, but they do pay income tax.

Now the Conservatives have produced calculations – which Labour dismissed as a “dodgy dossier”.

Mr Hunt claimed his opponents would have to put up taxes by £10bn a year by 2028-29 in order to meet its spending commitments.

The BBC is still analysing the figures, but it's clear many of the calculations include assumptions from special advisers - who are appointed by ministers and are more political than other civil servants.

The documents includes, for example, assumptions that internal staff are less efficient that external staff - and that services would cost more when run by the public sector.

Some of the calculations include caveats that cheaper options are available, costings are "uncertain" and that they often don't include potential benefits.

Labour has also argued some of the calculations misrepresent its policies - and include unfair spending commitments it would not need.

Shadow Chancellor Rachel Reeves has said it's "a bit rich" for Jeremy Hunt to suggest that taxes would go up under a Labour government.

Speaking to BBC Radio Essex ahead of the Chancellor's speech today in London, Ms Reeves said: "Taxes under the Tories now are at a 70-year high.

"And under their plans, they’re due to go up in each of the next 5 years, taking the tax burden for the average family in Essex and elsewhere up by £870.

"So it's under the Tories that taxes are going up - you can’t trust the Tories when it comes to mortgages, when it comes to taxes, and indeed when it comes to our public services."

A Labour spokesperson dismissed Mr Hunt's claims as "desperate".

“All of Labour’s policies are fully costed and fully funded," they said.

"Unlike the Conservatives who crashed the economy, Labour will never play fast and loose with the public finances.

“Jeremy Hunt would be better spent getting Rishi Sunak to confirm the date of the election, rather than putting out any more of these dodgy dossiers.”