Tories Hint at National Insurance Abolition in Next Parliament

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The Conservative Party is eyeing significant strides towards abolishing National Insurance over the next parliamentary term if they secure re-election, according to Treasury minister Gareth Davies.

Davies, speaking to The Telegraph, expressed confidence in the government’s ability to make “significant” progress in eliminating the levy on work, though he refrained from specifying a timeframe, hinting that this move could materialize in the subsequent Parliament if the Tories retain power.

Davies took aim at Labour’s proposals to bolster workers’ rights, cautioning against measures that might restrict the flexibility offered by zero-hour contracts and suggesting potential rises in unemployment. The debate over workers’ rights is poised to become a pivotal issue in the upcoming general election, with both major parties constrained by tight public finances from making immediate costly commitments.

While Labour has criticised the Conservatives’ plan to abolish National Insurance, estimating an annual cost of £46bn, Davies remained adamant about its feasibility, citing recent cuts in the levy. Chancellor Jeremy Hunt had previously expressed ambition in abandoning the tax, albeit acknowledging the likelihood of compensatory increases in income tax.

Despite these intentions, the government’s prospects for re-election appear uncertain, with recent polls indicating dwindling support. Reform Party, on the other hand, is gaining momentum, potentially posing a significant challenge to the Conservatives’ dominance.

Davies stressed that progress towards scrapping National Insurance would be contingent upon favourable fiscal conditions and stability, ruling out resorting to borrowing. However, he acknowledged the long-term nature of this ambition and defended the use of zero-hour contracts as providing flexibility to both employees and businesses.

Labour’s proposals to end zero-hour contracts and enhance worker protections have drawn criticism from Davies, who attributed past increases in unemployment to similar policies. Nevertheless, the debate over the future of National Insurance and workers’ rights is set to dominate the political landscape as the general election approaches.