For a Party that has continually said that reducing the deficit is the most important issue facing the country and that we are all going to have to tighten our belts for the foreseeable future while hammering every other party for not agreeing with its Age of Austerity diagnosis, then the obvious question for the Conservatives is can the UK afford today’s announcement of a National Insurance reduction?
As the Conservative's say of other parties when they announce new spending plans, if you spend it on one area (National Insurance reduction) where do you take the money away from.
According to the BBC ‘The Tories said the independent think tank the Institute for Fiscal Studies had put the cost of the move at £5.6bn in 2011-12. Over time, the IFS estimated that higher wages in response to the cut in employers' contributions would reduce the net cost to £4.3bn.
But the IFS also said that diverting efficiency savings into offsetting the NI hike "means that they are not available to contribute to the task of reducing government borrowing that the Conservatives have set such store by".
No doubt the announcement will get good headlines and secure a few more votes, we all want to pay less tax, but if your gonna have credibility on economic matters something all parties are struggling with then you need consistency. Either the deficit is so bad we are all gonna be squeezed till our eyes water or things aren’t as bad as the politicians and economists say and there is room for manoeuvre –I know the parties are in Election mode but make up your mind folks.Any source
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