'It is unfair to tax work twice'

Hunt explains how he will ditch NI

- Robert Kellaway

JEREMY Hunt fleshed out his ambition to scrap national insurance yesterday as the economy bounced back from recession.

Gross domestic product rose by 0.2% in January, following a decline of 0.1% in December, said the Office for National Statistics.

Strong retail sales drive growth in January, with consumers making the most of post-Christmas sales and spending more in supermarkets.

The Chancellor said: "While the last few years have been tough, today's numbers show we are making progress in growing the economy - part of which makes it possible to bring down National Insurance contributions by £900 this coming year.

"But if we want the rate of growth to pick up more we need to make work pay, which means ending the unfairness of taxing work twice." Mr Hunt later told the Treasury Select Committee getting rid of NI "won't happen in one Parliament but it's a long-term ambition.

"If we do that, that will be the biggest tax simplification of our lifetimes".

The Chancellor said it will not be funded by borrowing or by cuts to public services.

He said: "So that means that ultimately depends on the growth of the economy. Now I can't predict the rate at which it will grow.