The government’s desire to scrap National Insurance may take “several parliaments” to materialize as policy confusion grows, a minister has admitted.

Jeremy Hunt in the Budget earlier this week National Insurance cut by 2p and said the government intended to scrap the payments entirely, calling it “unfair” and “double taxing” jobs.

However, the chancellor conceded his plans after backlash and questions from Labor over how to fund tax repeal It’s not going to happen “soon.”

Speaking to Sky News this morning, Finance Minister Gareth Davies admitted that implementation of the policy would likely take “several parliaments” – probably at least a decade – to come to fruition.

He said: “Our starting point is that we think there is a fundamental unfairness that if you have a job you pay two taxes; you pay income tax and you pay national insurance contributions.”

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“So what we want to do, and what we have demonstrated over the last two fiscal exercises, is we want to reduce National Insurance contributions to a level that over time eliminates inequities.

“The long-term goal may take several councils, but the long-term goal is to eliminate this injustice.”

mixed message

Davis’ comments added to confusion surrounding the policy after the two ministers appeared to contradict each other this week.

Finance Minister Bim Afolami said Sophie Rich’s Political Center On Wednesday, the government wanted to “abolish” National Insurance altogether.

But on Thursday, Work and Pensions Secretary Mel Stride said his “understanding” was that the government wanted to reduce national insurance and taxes more broadly over time.

Hunt said that while the government wanted to “end” the inequity of taxing companies twice with other income taxed once, this would only happen “when it is possible to lower taxes without increasing borrowing while prioritizing public services.” , the government will do this.”

He also suggested that income tax and national insurance could be merged.

Asked whether the government wanted to merge income tax and national insurance, Davies said: “We will keep all those things under review but we want to remove the unfairness of having two taxes on working people.”

According to the Office for Budget Responsibility, an independent public finance forecaster, income tax revenue will be £251 billion in 2022-23, while national insurance revenue will be £177 billion.

How much will it cost?

labor The chancellor has been asked to reveal how much his plans to scrap National Insurance will cost, after its own estimates suggested the move could cost £46bn a year, equivalent to £230bn over five years of parliament.

The party believes that this move Turns out it could cost more than £45bn of unfunded tax cuts Liz Truss announced the plan in her 2022 mini-budget, sparking economic chaos and upending her tenure as prime minister.

Darren Jones MP, Labour’s shadow treasurer, said: “Another day, another new demand from the finance minister for his £46bn of unfunded tax cuts.

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“But we still haven’t heard anything about how they plan to pay for it. If they are going to continue to confirm that this is their policy, they should explain where the money will come from.

“Another five years under Rishi Sunak risks a repeat of the disastrous Liz Truss experiment, which crashed the economy and sent mortgages soaring for working-class people.”

A No 10 source said the government would “make progress as quickly as possible”, noting that cuts to National Insurance had already been made.

The Treasury also said Davis’ timetable reflected existing positions.