The Conservatives are set to place tax cuts at the centre of their agenda, in an attempt to reinvigorate their general election campaign.
The shadow chancellor, George Osborne, will pledge to reverse part of Labour’s planned increase in national insurance contributions. The 1 per cent rise for those earning more than £20,000 is worth £7bn.
Osborne will claim that seven out of 10 workers will be better off if this “tax on jobs and the middle classes” is scrapped.
The Tories are expected to announce that it would be paid for by cancelling some projects in the next financial year, and efficiency savings.
This is the first time the Tories have offered a direct tax cut to the electorate. The rises in National Insurance are central to the government’s plan to reduce the deficit.
Commentators have noted that, coupled with the Conservatives’ stated priority of reducing the deficit, tax cuts can only mean drastic cuts in public spending, which the party has so far been reluctant to spell out.
Responding to the plans, Liam Byrne, chief secretary to the Treasury, said: “They have entirely lost sight of cutting the deficit.
“Rather than making more promises he can’t afford, the test for George Osborne is to tell people how he’ll pay for the ones he’s got.”
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