A reduction in national insurance would be a “union tax cut”, the prime minister has said ahead of the budget next week.
Rishi Sunak told journalists at the Scottish Conservative conference in Aberdeen on Friday that while he could not comment on what the chancellor Jeremy Hunt will announce on 6 March, he could see the case for trimming the levy – which is paid by workers across the UK – over income tax.
When asked about the fact a cut in the headline rate of income tax may not benefit voters in Scotland if the SNP government chooses not to pass it on, he said national insurance had been cut in January because it is a “tax on work” and benefits all parts of the nation.
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“I’m sure people will appreciate that I can’t comment on any fiscal policy in advance of the budget,” he said.
“But to your broader point, the chancellor and UK government chose to cut national insurance, for lots of reasons but first and foremost because it’s a tax on work and I believe in a country and society where hard work is rewarded.”
He added: “It’s also important to us to be a government that delivers for people in every part of the United Kingdom.
“It’s a union tax cut and a tax cut for everyone in work and the contrast between what we’re doing and what the SNP are doing couldn’t be starker.
“I want to make life easier for people, I want to give them the peace of mind there’s a brighter future for them and their families.”
Some Conservative MPs have been pushing for a pre-election cut to income tax in the hope of boosting the Conservatives flagging popularity.
It was also one of the promises of Mr Sunak’s leadership campaign.
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In Scotland, where the Conservatives are up against the SNP in all of the seats they hold and are targeting, the prime minister has dubbed the SNP the “high tax capital of the United Kingdom”, with Scots earning around £28,000 a year already paying more income tax than those who live in England due to policy decisions at Holyrood.
MSPs passed the final budget for the next financial year this week, including a new income tax band being created, which will see those on a salary between £75,000 and £125,140 paying 45%; while a 1% increase to the highest rate of tax – for those earning more than £125,140 – will take it to 48p in the pound.
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In passing the budget, deputy first minister Shona Robison insisted Scotland’s tax system was “progressive” and will provide £500m in funding for the NHS.
Scotland Secretary Alister Jack confirmed he had been lobbying the chancellor for a cut in national insurance – rather than income tax.
Mr Sunak would not comment on reports the government is considering raising revenue by increasing the windfall tax on oil and gas companies, or may force “non-doms” to pay UK tax on foreign income – both ideas Labour has put forward.
