Afternoon summary
Rishi Sunak has hinted that there could be further cuts in national insurance rates in next week’s budget because it allowed Westminster to help workers in Scotland hit by Holyrood’s income tax rises. (See 3.49pm.) But, speaking at the Scottish Conservative conference in Aberdeen, he suggested the government was unlikely to extend the windfall tax on energy profits, even though this option is reportedly being considered. (See 3.06pm.)
Sunak hints at further cuts to national insurance in budget next week
Rishi Sunak has hinted there could be further cuts in national insurance rates in next week’s budget because it allowed Westminster to help workers in Scotland hit by Holyrood’s income tax rises.
The prime minister told reporters in Aberdeen he was “very conscious” that he wanted to make life easier for people across the UK while the Scottish National party government at Holyrood wanted “to make life harder”.
Sunak said Alister Jack, the Scottish secretary, had been pressing the chancellor, Jeremy Hunt, to cut national insurance 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.
In a signal that tax policy will also be a key general election battleground in Scotland, Sunak said the UK government’s cut of 2p in national insurance rates in January helped workers in Scotland while ministers in Edinburgh were raising income tax for everyone earning above £28,850 from April.
That national insurance reduction was a “significant tax cut worth £450 for someone on average earnings of £35,000,” Sunak said. He went on:
I believe in a country and a society where hard work is rewarded. That’s something that’s really important to me.
The prime minister was asked whether it was fair for Scottish employees if the chancellor, Jeremy Hunt, cut income rates in England, Wales and Northern Ireland, since that decision would simply widen the tax gap between Scotland and the rest of the UK. He replied:
It’s also important to us to be a government that delivers for people in every part of the United Kingdom. And I’m very conscious that, whilst the SNP is making life harder for hardworking people by putting their taxes up, I want to make life easier for people.
It is a union tax cut. It’s a tax cut for everyone in work and the contrast between what we’re doing and what the SNP government is doing could not be starker.