No 10 denies plan to scrap national insurance is ‘unfunded’ but cannot name cost

Downing Street rejected Labour’s characterisation of plans to scrap national insurance contributions as unfunded, but could not say how much the pledge would cost.

In the spring Budget, Chancellor Jeremy Hunt announced a 2p cut in national insurance and outlined a “long-term ambition” to abolish it altogether.

Sir Keir Starmer used Prime Minister’s Questions on Wednesday to attack Rishi Sunak’s “completely unfunded £46 billion promise to scrap national insurance”, repeatedly pressing the PM on whether the policy would hit the NHS, the state pension or result in income tax rises.

Labour said it was “deeply concerning” that Mr Sunak declined to rule out any of those moves to fund the plan.

Mr Sunak’s spokesman, grilled on whether the ambition would really cost £46 billion, suggested the Office for Budget Responsibility (OBR) watchdog could not yet put a number on the long-term plan.

“That is obviously not a costing made by the OBR,” the official said, but could not name the actual price tag.

“That’s a question for the OBR which will assess policies as and when they are announced at future fiscal events.”

But he indicated that would not happen at the next fiscal event, saying: “It’s Government policy, but it doesn’t have a specific timetable and that is why the OBR is not costing it.

“We’re going to make progress on it over a period of time. We’ll make progress on this ambition at a number of fiscal events. As and when that progress is made, the OBR will put a figure on the announcements as and when they are made. But that number is not a static figure.”

Chancellor of the Exchequer Jeremy Hunt has said his ambition to scrap national insurance contributions will be ‘the work of many parliaments’ (James Manning/PA)

The spokesman added: “We’ve always said that we will do so in a manner that is prudent. We want to make significant progress in the next parliament.”

Asked why Mr Sunak refused to rule out NHS cuts and income tax rises to fund the plan to eliminate national insurance, his spokesman said: “He’s previously said that this commitment will be met without increasing borrowing or cutting spending.

“The Prime Minister has spoken at length about his ambition to cut tax.”

Pat McFadden, Labour’s national campaign coordinator, said: “The Prime Minister was given three chances today to rule out cuts to the NHS, cuts to the state pension or income tax increases to pay for his completely unfunded £46 billion plan to scrap National Insurance. It will be deeply concerning for the whole country that he pointedly refused to do so.

“In the week when Liz Truss has been busy reminding everyone of the consequences of unfunded Tory promises, the British public deserve answers. It’s time for Rishi Sunak to come clean and stop avoiding the question on everyone’s lips: how is he going to pay for it?”