Rishi Sunak to target sick in bid to fill £46billion black hole in tax plan

10 March 2024 , 08:59

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Rishi Sunak claims slashing benefits can help scrap National Insurance (Image: PA)

Rishi Sunak plans to batter the long-term sick after being accused of acting like Liz Truss over his plans for £46billion unfunded tax cut.

The PM says he wants to abolish National Insurance if the Tories stay in power - fuelling claims of recklessness. Now he has suggested that it can be achieved by slashing benefits. It is estimated National Insurance Contributions (NICs) raise £46billion for the public purse every year..

In an interview with the Sunday Times he said he had set his sights on the 2.5 million working age people signed off as unfit to work. The former Chancellor - who oversaw the Treasury for over two years before becoming PM - has whined that the current tax system is fundamentally unfair.

After days of being accused of lining up a blitz similar to Ms Truss and Kwasi Kwarteng's disastrous mini-budget, Mr Sunak now claims a benefit clampdown could do the trick. He told the Sunday Times: "We should be encouraging everyone who can to work ... supporting them into that [to bring] fairness to the entire system, but also to make sure that we can sustainably keep cutting taxes.

"We now have almost 2.5 million working-age people who have been signed off as unfit to work or even look for work or think about working and I don't think that's right."

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The former Chancellor, who himself increased National Insurance Contributions (NICs) in 2022 to raise vital cash for the NHS, now believes it is a "double taxation on work". Mr Sunak, who faces an uphill struggle ahead of this year's general election, said the current system is "unnecessarily complex".

He said: "So our long-term ambition is to end that unfairness, to keep cutting NICs until it's gone, because that is the best way to reward hard work, simplify the tax system and build the kind of society that I think is right."

After Chancellor Jeremy Hunt's Budget fell flat on Wednesday, there is speculation that there would be another mini-budget later in the year just before the election. Labour has warned that letting the Tories action Mr Sunak's plan could be disastrous. Darren Jones, Shadow Chief Secretary to the Treasury, warned if mortgage rates increase as much now as they did in the period around Ms Truss kamikaze mini-budget, rates could spike by up to 2.4%.

That would leave mortgage holders up to £312 worse off a month. He said: “The Conservatives clearly haven't learned anything since Liz Truss sent people's mortgages spiralling, with the Chancellor just this week floating unfunded plans that would leave a £46 billion black hole in the public finances.

“Labour have iron-clad fiscal rules that will guide how we spend taxpayers' money and we will never make unfunded promises like the Tories recklessly do."

Dave Burke