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Motive behind Earnings Tax proposed rename of National Insurance

Monday , 5, June 2017 Leave a comment

A few years ago, Ben Gummer wanted to rename National Insurance to Earnings Tax.

Brought in by the indomitable Lloyd George in 1911, National Insurance contributions were introduced to provide insurance against illness and unemployment and it’s often said that ‘it pays for the health service’.

The reality, of course, is that it doesn’t and that’s what the MP for Ipswich wants to address.

“A sensible first step would be just to be honest about what National Insurance is, which is a tax. It’s a tax on your earnings and we should just be plain about that.

“Since 1911 the the link between welfare and benefits and National Insurance has been broken and now it just goes into the pot like everything else does.”

Mr Gummer wants National Insurance to be called the Earnings Tax and he has proposed the change in the House of Commons.

National Insurance is paid by all workers aged between 16 and retirement age. We pay 12% per cent on earnings between £149 and £797 a week; after that you pay an extra 2%.

 

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