Thinktank: Cut National Insurance

By Kate McCann

A LEADING thinktank is calling on politicians to cut National Insurance in order to lift low and middle-income workers out of financial hardship.

Liberal research group CentreForum warned all three major political parties that tinkering around the edges with a 10p tax rate and increases in the personal allowance will cost more and help fewer people than a major rethink on National Insurance. Adam Corlett, economics researcher and report author, said: "It’s crucial to get these expensive tax cuts right, and they should be focused as far as possible on poorer workers. The policy case for favouring National Insurance cuts is clear and could take the absolute poverty line out of all direct tax."

Government insiders would not be drawn on the proposal, and a Treasury spokesman instead cited plans to raise the personal allowance to £10,000, adding: "We are cutting tax for 25m people and taking 2.7m out of income tax altogether by 2014." In December, chancellor George Osborne announced that anyone under the age of 21 will pay no National Insurance, a move that was welcomed by employers.

Source City AM