Conservatives will reverse the bulk of the government’s planned increase in National Insurance by cutting £6bn of “waste” from the public sector, shadow chancellor George Osborne has announced.
Mr Osborne said the change would save taxpayers earning between £7,100 and £45,400 up to £150 a year and would save employers money in reduced contributions.
The 1p National Insurance rise on people earning more than £20,000, announced by chancellor Alistair Darling in 2008 and 2009, is due to come into effect in April 2011 and forms a centrepiece of the government’s programme to rein in Britain’s record deficit.
The shadow chancellor said ministers had already identified in last week’s Budget £11bn in wasteful expenditure which could be cut from Whitehall departments.
But he said Mr Darling did not intend to start cutting this spending until 2011. A Conservative government would begin cutting back in 2010, he said.
Mr Osborne said savings on health and overseas aid would be recycled to the front line, while there would be no cuts in Ministry of Defence budgets until after a strategic defence review, to be held later this year.
But he said all other departments would be expected to cut back on waste - covering areas such as administration, procurement, energy bills and staff sickness - as soon as the Tories came to office.
“Not a single penny will come from the frontline services that people depend on,” Mr Osborne told a press conference in Westminster.
A spokeswoman for chancellor Alistair Darling said the promise was being made “on a wing and a prayer”.
“The Tories are plain wrong on saying Labour isn’t making efficiencies until 2011. Our hugely ambitious efficiency plan is delivering £35bn of savings by the end of 2010-11.”