Rishi Sunak has confirmed much-trailed plans for a 2p national insurance cut as the key message in the Conservative Party’s manifesto, launched today at the Silverstone motor racing circuit.

The Prime Minister said his party offered “lower taxes and protected pensions” as part of a “secure future”.

The Tories reduced employees’ national insurance from 10% to 8% in March’s Budget, following a similar cut in autumn 2023. The manifesto commits to a third 2p reduction as part of a drive to eliminate national insurance altogether.

The Tories also promised to abolish the main rate of self-employed national insurance entirely by the end of the Parliament.

The manifesto committed to cutting employee national insurance to 6% by April 2027 at an estimated cost of £10.3bn in 2029-30. The manifesto said the change would amount to a total tax reduction of £1,350 for the average worker on £35,000.

In total, the package of employee and self-employed national insurance cuts – combined with the previously announced triple lock plus tax break for pensioners, child benefit changes, stamp duty and capital gains tax measures – would amount to a £17.2bn annual cost to the Exchequer by 2029-30.

Keir Starmer said the money was not there to pay for Mr Sunak’s pledges, warning it was a “recipe for five more years of chaos” under the Conservatives.

Shaun Moore, tax and financial planning expert at Quilter, said: “With the election clock ticking the Tories must attempt a last throw of the dice and while so far, their cuts to National Insurance have had a lukewarm reception they have once again stated that they plan to cut NI by another 2p.

“The headline figure is that someone earning £50,000 today will be £749 better off under the proposed rules. Similarly, someone on around the average salary in the UK of £35,000 will be £449 better off per year. Whether this turns the dial enough for a party that is lagging badly behind in the opinion polls is yet to be seen.

“It is important to remember too that this change gives nothing to pensioners who do not pay national insurance. The Conservatives will be hoping that the ‘Triple Lock Plus’ policy, which pledges not to the tax state pension, gives pensioners enough to stop them feeling hard done by.

Mr Sunak also pledged to abolish stamp duty up to the value of £425,000 for first-time buyers and launch a “new and improved” Help to Buy scheme. But economic experts warned there are questions that need to be answered on the equity loan plans, including details of the interest rate that would kick in after a five-year interest-free period.

Holly Tomlinson, Financial Planner at Quilter, said: “The promise of a new Help to Buy equity loan scheme and a permanent uplift of the stamp duty threshold for first time buyers marks a last-ditch attempt from the Conservatives to drum up support from prospective home buyers.

"The Help to Buy equity loan would need to be carefully considered by the Conservatives to ensure it meets its intended outcomes. The government’s previous equity loan scheme had a substantial impact in terms of helping individuals, especially first-time buyers, to enter the housing market. 387,195 properties were bought using the scheme from April 2013 to May 2023, out of which 328,346 were by first-time buyers. However, the scheme’s impact was not uniformly positive.”

Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “Key pledges include another 2p cut in National Insurance and the triple lock plus. However, it’s worth emphasising that both the tax pressure on working people and the risk of more state pensions being taxed is the result of the freezing of income tax thresholds.

“It means that as people’s pay rises, they automatically pay more income tax, and risk being pushed into a higher tax bracket. Already 2.1 million people have been dragged into paying income tax because of it.

“The frozen personal allowance hasn’t just damaged pensioners. Those on low incomes also face a horrible tax bill for the first time. Another NI cut would bring down the rate of tax they pay, but doesn’t unwind the fact they’re paying this tax in the first place. There is no pledge to reverse the freeze either from the Conservatives or any other party.”