Challenge emerges to Tory NI claims

George Osborne

Tory claims that Labour’s impending 1% rise in National Insurance would
remove 57,000 jobs from the economy have been challenged by earlier research
undertaken by George Osborne’s own economic adviser, according to the

The FT cites a 2007 paper by three economists, including Osborne confidant
Rupert Harrison, in The Economic Journal which deals with the effects of taxes
on unemployment. Applying the methodology to National Insurance results in
27,000 lost jobs, the FT claims, far fewer that current Tory estimates.

On Tuesday the Tory party unveiled its manifesto in which it detailed a plan
to increase the thresholds on National Insurance. The party claimed the measures
would soften the worst effects of the rise, due next year. However, employers
would still face some uplift in contributions for their workers.

The Labour manifesto claimed that raising National Insurance was a fairer way
of increasing revenues than hiking up VAT. However, neither party has ruled out
a rise in VAT.

The FT quotes chancellor Alistair Darling saying the research undermined Tory

Read more:

manifesto and National Insurance

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