The first cracks began to appear in the Tories’ National Insurance policy last week as Shadow Chancellor George Osborne admitted NIC would go up under a Conservative government as well. His remarks, on the campaign trail in Thornliebank, East Renfrewshire where Labour’s Jim Murphy is under a sustained Tory assault, were the first tacit admission that the next government will have to use National Insurance contributions to find much-needed funds. “We can’t avoid the whole national insurance rise, so people who are earning pretty high salaries – £44,000 or £45,000 – are still going to pay it, but they’re not going to pay as much as Labour,” claimed Mr. Osborne. As things stand, NI contributions for employees and employers will increase by 1 per cent from next April. The Tories have said that they would scrap the rise for employees earning up to £35,000. Labour insists the Tory plans are incompletely costed and will leave a £6 billion hole in public spending.
Meanwhile two Tory supporters who organised fellow business leaders to sign a letter that said next year’s NI increase would wreck the recovery are to get peerages. Next chief executive Simon Wolfson and JCB chairman Sir Anthony Bamford were put forward by the Conservatives to Downing Street in January. “Any suggestion that the new peerages are linked to the campaign against Labour’s jobs tax is complete nonsense”, a spokesman said when news of their imminent ennoblement broke. Both men are long-standing Tory supporters and donors and were among 23 prominent businessmen who signed an open letter voicing support for the Conservatives plan to scrap next year’s NI increase. Mr Wolfson is reported to have donated £238,250 to the Conservatives since January 2006 while Mr Bamford is reported to have given the Tories over £1million over the past five years.
