National insurance hike to be cancelled from November 6 says Kwarteng

A 1.25% rise in National Insurance (NI) will be reversed from 6 November and the government will axe a planned levy to fund health and social care.

The funding for health and social care will now come from general taxation.

The NI rise was introduced in April under former Chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it.

New Chancellor Kwasi Kwarteng made the announcement ahead of a "mini-budget" on Friday.

"Taxing our way to prosperity has never worked," Mr Kwarteng said.

"To raise living standards for all, we need to be unapologetic about growing our economy. Cutting tax is crucial to this."

The tax cut will save nearly 28 million people an average of £330 per year, the Treasury said.

And about 920,000 firms will get a tax reduction of nearly £10,000, it added.

The NI rise was put in place to help the NHS recover from the coronavirus pandemic, and the planned social care levy was also designed to support the NHS.