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Liz Truss vows to reverse National Insurance rise ‘immediately’

·3-min read
Liz Truss vows to reverse National Insurance rise ‘immediately’

Liz Truss has vowed to immediately reverse the rise in National Insurance contributions if she becomes prime minister, saying the measure would help ease the cost-of-living crisis.

The Foreign Secretary’s campaign team said she would accelerate the reversal of the National Insurance rate rise by six months.

Ms Truss has pledged to use a September emergency budget to scrap the increase brought in by her rival Rishi Sunak when he was chancellor.

It is understood that Ms Truss would seek to implement the change within days, rather than wait until April in line with usual Treasury rules.

Her leadership rival Mr Sunak has contrasted his "clear-eyed realism" with Ms Truss's "starry-eyed boosterism", arguing that her promised tax cuts would further fuel inflation.

It comes after the Bank of England warned of the longest recession since the financial crisis in 2008, with inflation forecast to hit 13 per cent later this year.

There are growing calls for the new premier to urgently increase the amount of support available to the most vulnerable families, with a new report commissioned by former prime minister Gordon Brown suggesting Government help has failed to address their needs.

Ms Truss vowed to "immediately" address the cost-of-living crisis by lowering the tax burden.

"Despite the Bank of England's stark assessment this week, I do not believe in resigning our great country to managed decline or accepting the inevitability of a recession," the Foreign Secretary wrote in The Sunday Telegraph.

"I would hit the ground running by bringing in an emergency budget, charting a firm course to get our economy growing in order to help fund our public services and NHS.

"I would use this to immediately tackle the cost-of-living crisis by cutting taxes, reversing the rise on national insurance and suspending the green levy on energy bills".

Rishi Sunak at an event in Edinburgh, as part of the campaign to be leader of the Conservative Party (PA)
Rishi Sunak at an event in Edinburgh, as part of the campaign to be leader of the Conservative Party (PA)

Earlier on Sunday, Ms Truss insisted that tax cuts, rather than “handouts”, would help families with skyrocketing bills this summer.

She told the Financial Times: "Of course, I will look at what more can be done.

"But the way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts."

Trade minister Penny Mordaunt denied that Ms Truss had ruled out expanding payments to hard-hit families.

“What she is looking at though is enabling people to keep more of the money that they earn,” she saud.

“It makes no sense to take money off of people and then to give it back in very, very complicated ways.”

But Tory Party co-chairman Oliver Dowden, who is backing Mr Sunak, said that Ms Truss tax pledges were “insufficient”.

He told BBC News: "You're going to see energy bills going up to almost £4,000 and if you look at the idea of the tax cuts, this idea of reversing the National Insurance contributions, that's only going to benefit someone working full time on the national living wage by less than £60. Contrast that with whoever the Prime Minister is, they're going to get a benefit of about £1,800.

"So this isn't the way to help people through this very difficult period".

Mr Dowden added: "We have been clear that we will provide that direct support and the tax cuts just will not be sufficient."