UK politicians fight over insurance price hike

Chancellor Alistair Darling has
denied Conservative claims that Labour’s planned rise in National Insurance
would lead to job losses.

He said he believed the economy
would be growing – and new jobs being created – by the time of the increase in
2011.

But the Tories have pledged to
cancel the bulk of the hike and say they have no plans to introduce any other
tax rises, including on VAT, if elected.

The Liberal Democrats said the
Tories were “treating people like fools”.

Under Labour plans, National
Insurance (NI) contributions for both employees and employers would increase by
1 per cent from April 2011.

But if they win the election, the
Tories plan to scrap the rise for anyone earning less than $69,350 a year, and
also reduce the tax burden on firms.

The Tories say Labour’s actions
would be a tax on jobs, but, Mr Darling denied this was the case and insisted
employment would continue to grow.

“The last time NI went up was
in 2002… employment after that went up,” he said.

“Why? Because the economy was
growing after that. Now if you look at the Budget overall and you look at what
we are doing in terms of supporting the economy and the other measures to help
businesses and so on, we believe that employment is going to start to
grow.”

The Tories, however, have unveiled
a new campaign poster claiming the NI increase would “stamp out”
economic recovery.

Calling it Labour’s “favourite
stealth tax”, they say they have calculated that the revenue the Treasury
received from NI had risen by 22 per cent in real terms since 2001-02 – five
times the growth in income tax receipts over the same period.

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