NI plans won’t lead to job cuts say Tories

The Conservatives

The Conservative party says it won’t cut any jobs to curb the rise in national insurance should it win the election.

To fund their pledge to limit the rise in national insurance, the Tories plan to cut spending on IT projects, office costs, contracts and recruitment to save £12 billion in the public sector.

Conservative leader David Cameron said hiring freezes, not job cuts, would be used to save money.

Labour plans to raise national insurance by 1% for people earning more than £20,000 a year next year.

Gordon Brown, Alistair Darling and Lord Mandelson mocked the Tory calculations saying they were worked out on the “back-of-an-envelope”.

Half of the £12 billion savings would be re-spent by government departments, say the Tories, but the remaining £6 billion would allow them to stop the national insurance rise.

Sir Peter Gershon, who defected from Labour to the Conservatives in December, is leading the party’s efficiency review. He told the Financial Times that around £9.5 billion could be saved from cutting IT costs, renegotiating contracts and curbing consultants, while £1 billion to £2 billion could be saved by curbing recruitment.

Meanwhile, Cameron told the Today programme on Radio 4 that the plan is “doable” and “deliverable”.

Cameron said: "It's not talking about people losing their jobs, it's talking about not filling vacancies as they arise."

He said about 400,000 jobs became available in the public sector each year as people leave and that not replacing people was a way of saving money relatively quickly.  

He denied it was a "plan to fire people".

Labour says the Conservatives’ plans are built on a “myth”. Chancellor Alistair Darling said the Tory spending cuts would mean that tens of thousands of jobs would be lost in the public sector and also the private sector where firms depend on government contracts.

On the fourth day of campaigning the Tories are due to also make announcements about cutting excessive public sector pay and clamping down on benefit cheats.

Meanwhile, the Liberal Democrats are due to outline their "manifesto for consumers". This includes plans to stop banks charging customers unfairly for going over their overdraft limit or bouncing a cheque and capping interest rates on credit cards and store cards.