Chancellor Jeremy Hunt has announced another 2p cut to National Insurance contributions, following a similar move at last year’s autumn statement.

He told MPs in his Budget that the rate of national insurance for workers earning between £12,570 and £50,270 would reduce from 10 per cent to 8 per cent.

The change could save the average worker £450 a year, adding up to £900 when combined with last year’s move.

Mr Hunt was widely reported to have defied calls from some in Downing Street and many Conservative MPs to reduce income tax, which is more expensive as it also covers pensioners, but better understood by many voters.

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They were concerned another national insurance reduction would not be enough to boost Prime Minister Rishi Sunak’s party’s dire poll ratings, after the last one failed to move the dial.

Chancellor Jeremy Hunt started his Budget speech by saying that because the Government is “delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost-of living-support, but with permanent cuts in taxation”.

Mr Hunt told MPs: “Because of the progress we’ve made because we are delivering on the Prime Minister’s economic priorities we can now help families with permanent cuts in taxation.

“We do this not just to give help where it is needed in challenging times. But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”

Experts have said that a 2p reduction in national insurance contributions would not by itself be enough to stop the tax burden reaching record levels by the end of this decade.

The Institute for Fiscal Studies said the measure would not prevent taxes rising to about 37% of GDP by 2028-29.

The Resolution Foundation think tank said the biggest net beneficiaries of the national insurance cut, combined with threshold freezes, are those earning £50,000, while those earning £19,000 or less will actually be worse off.