UKIP economic spokesman Patrick O’Flynn has called on the Conservatives to withdraw an incorrect claim that they are guaranteeing no rise in a key tax for the next five years.
Tory minister Matthew Hancock today pushed out an online claim that the Conservatives would guarantee “no increases in National Insurance – nor an increase in its ceiling”.
Yet the Conservatives do plan to substantially increase the National Insurance ceiling in parallel with promised rises in the threshold for the 40% income tax rate.
In the 2011 Budget, George Osborne confirmed that the Upper Earnings Limit for NI would continue to be aligned with the point at which higher rate tax becomes payable.
Mr O’Flynn said: “We have looked closely at the Conservative costings on their tax pledges and they only come close to working if the NI ceiling continues to rise in line with the higher rate threshold for income tax.
“In effect, pushing up the amount of income on which NI is payable at the 12% main rate rather than at the 2% additional rate claws back half the benefit to a taxpayer of raising the threshold for paying income tax at 40% instead of 20%. So by 2020 someone earning £50,000 will be paying an extra £761.50 in NI each year.
“Neither George Osborne nor any other Treasury minister has indicated that this arrangement as regards the ceiling for the main rate of NI is to be discontinued nor identified any source of finance to fund such a policy change even if they had it in mind.
“So it is simply incorrect for the Tories to claim they are guaranteeing no rise in the NI ceiling and I call on Mr Hancock and any other senior Conservative who has made or transmitted this claim to now withdraw it. As things stand voters are at grave risk of being sold a false fiscal prospectus.”