National Insurance rise to be reversed from 6 November, Kwasi Kwarteng announces | Politics News
Prime Minister Kwasi Kwarteng has announced that the increase in National Insurance for April will be postponed from November 6.
A 1.25% increase was introduced under former prime minister Rishi Sunak, but during the Tory leadership race Liz Truss has pledged to change it.
Mr Kwarteng announced a “small budget” on Friday.
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“Taxing our way to prosperity has never worked,” he said.
“To raise living standards for all, we need to be uncompromising about growing our economy. Tax cuts are crucial to this.”
The Treasury said most employees will receive a cut of their national insurance contributions directly through their November employer’s payroll, although some may be delayed. to December or January.
In a tweet, Mr Kwarteng called it a “worker tax cut”.
The tax increase was introduced with the immediate aim of addressing the NHS backlog and funding activities to improve the social care sector in the coming years.
However, Ms. Truss argued her party was wrong to break its 2019 manifesto pledge not to raise taxes and said additional money could be raised through joint taxation.
The government tabulated legislation in the Commons on Thursday to enact the tax changes.
MPs are expected to vote on repealing the health and social care tax after they return from party conferences in October.
Downing Street said the Repeal Bill was part of the government’s commitment to a “low tax, high growth” economy.
“This is delivering on the commitment the Prime Minister has made on the campaign trail of (the Tory leader),” a No 10 spokesman said.
The move comes ahead of Prime Minister Kwarteng’s “financial event” on Friday when he will give more detail on the government’s tax cut plan, including the scrapping of a corporate tax hike.