Jeremy Hunt to cut National Insurance from 12% to 10% from January
For those who know their Christian calendar, January 6 is Epiphany the day the three Kings brought gold, frankincense and myrrh to the baby Jesus.
The Chancellor will be hoping that his valuable Christmas gift to taxpayers next year on January 6 of a two percent cut in National Insurance contributions (NICs), will be enough to solve the Government’s two huge political problems.
The first of these problems is to ensure that Rishi Sunak’s Government actually survives until the next election and is not brought down by Tory plotting.
The second is to engineer a miraculous turnaround in the polls to allow the Conservatives to pull off an election victory which currently nobody expects or at the very least minimise the defeat which currently is looking like it will be of historic proportions.
Mr Hunt had to do all this but still, somehow keep enough back to have a bumper giveaway budget next spring.
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READ MORE: National Insurance slashed from 12% to 10% in £450 saving for average earners
In his 52-minute speech, Mr Hunt started reeling off his 110 supply-side reforms to help grow the economy and “make work pay”.
Among the highlights, there was the major reform to out-of-work benefits which will see the stopped for people who refuse to work.
There was the guarantee of the pension triple lock, tax cut for the self-employed and the massive increase in the living wage now worth 30 percent more since 2010.
Then he had his tax discount for businesses investing in Britain and he finished off with a flourish of a two percent cut in National Insurance Contributions (NICs).
Unusually, Mr Hunt even managed to work in some good gags – his “two Jeremys” one with Starmer about how they had both tried to get a Jeremy in as Prime Minister (in reference to himself and Corbyn) even had the Labour leader laughing.
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But the question at the end of it all was whether this was enough.
The answer came quickly from discontented Tory MPs: “No!”
One former minister was brutal: “I hated it. Nothing of long term substance for the British people at all.”
While Mr Hunt got a predictably decent cheer, the plotting continued and the texted messages gave faint praise at best.
One Conservative MP agreed that they were “nice measures but not enough to offset other issues.”
The MP added: “I mean clearly welcome NI being cut. However, tomorrow we have the migration numbers.”
And it is the immigration figures tomorrow which are worrying MPs most of all.
They are expected to be at record levels and for a party elected on a Brexit ticket of taking back control of Britain’s borders they represent a disaster.
But for others, the tax cuts just did not go far enough.
One Tory MP told Express.co.uk: “They won’t cut it in my opinion.”
Another, Dudley North’s Marco Longhi, went on the record to say what he had hoped for.
He said: “I welcome any tax cuts so for those I am grateful.
“My priority has always been to provide a real acceleration of growth in our economy, so that is why I have always supported abolishing IR35 and increasing significantly the VAT threshold.
“This would have boosted the SME sector substantially – the engine of our economy in a non-inflationary way.
“I will continue to campaign for these measures and all those stated in the New Conservatives plan.”
Overall there was a feeling of being “underwhelmed”.
Then others still pointed out the Office of Budget Responsibility’s note that the overall tax burden is set to increase further because of the so-called “fiscal drag” of not raising the threshold at which higher tax rates are paid.
It will increase by 0.7 percent to 37.7 percent putting Britain on a record level of tax since the Second World War.
“Just not good enough,” said one MP.
This means that without some serious revision in the spring next year, Mr Sunak could find 40 or more Tory MPs who signed the “Tax Pledge” organised by former party chairman Sir Jake Berry voting against a Budget which in effect increases tax.
Inevitably, there was some chat about what Hunt’s statement meant for the election date.
His emergency legislation for a tax cut on January 6 was seen as making May a possibility again.
But others were sceptical.
One MP said: “Honestly, there was not enough here to win back the thousands of voters we have lost since 2019 and that means we will lose the next election badly.”
It makes January 2025 still a favourite for the election date.
In some ways Hunt gave what MPs expected but “nothing more” and it appears on first look that he has failed to solve either of the political problems faced by the Prime Minister at the moment.
The only question now is whether the Government can hold together long enough for Mr Hunt to have another go in the Budget or whether plotting Tory MPs will try to pull the trigger of a leadership vote before.
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