Sunak looks at national insurance holidays

RISHI SUNAK is considering national insurance holidays for companies as part of an economic “recovery” stimulus package in July, The Daily Telegraph has learnt.

The Chancellor’s focus is on measures to stem the expected surge in unemployment and boost economic growth. Tax rises which have been under discussion in the Treasury, including raising income tax and VAT, are likely to be delayed until after growth recovers, sources close to the discussions said yesterday.

“This will not be a consolidation

Budget – tax rises won’t happen until the recovery is in train,” one source said last night. “If you raise taxes while the economy is struggling at 1 per cent, you could choke off economic growth.”

Discussions over what an economic stimulus package could look like have been ongoing between the Treasury, the Department for Business, Energy and Industrial Strategy, and No 10 for weeks.

The focus will be on stemming unemployment, sources close to the talks said. Options include tax incentives or subsidies for employers who hire new staff, job guarantees for young people and a big focus on skills retraining. Another option under consideration is giving employers who hire new staff a National Insurance holiday, similar to a policy introduced by the coalition government in 2010.

Pledges to boost infrastructure made in the Conservative manifesto are also likely to be brought forward, including updating the UK’S broadband infrastructure.

The source said: “Infrastructure projects are a big job creator – that makes them quite appealing.”

The recovery measures are likely to be announced in a “statement” by the Chancellor in July, as opposed to a full Budget. The Treasury said it is still under discussion what format any update from the Chancellor could be.