Rishi Sunak has signalled a further cut in National Insurance in next week’s spring budget, saying it would be a “Union tax cut”.

The Prime Minister noted a National Insurance cut would apply across the UK, whereas a cut in income tax south of the border would not extend to Scotland.

With the Tories trailing far behind Labour in the polls, Chancellor Jeremy Hunt is trying to pull off a voter-friendly cut in what is likely to be his last budget before the general election.

In his autumn statement last year, he cut the main rate of NI from 12 to 10% and ensured it took effect from January, rather than the start of the new tax year in April.

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Speaking to the media at the Scottish Tory conference in Aberdeen, Mr Sunak was asked about NI cuts applying UK-wide, whereas income tax was devolved to Holyrood. 

The Prime Minister criticised the SNP for making Scotland the highest taxed part of the UK because of its different income tax and business rate regimes.

He did not confirm an NI cut would be announced on March 6, but hinted very strongly at one.

He said: “I can't comment on any fiscal policy in advance of the budget. 

“To your broader point, the Chancellor and UK government chose to cut National Insurance. 

“There are lots of reasons for that, but first and foremost it is a tax on work. 

“And I believe in a country and society where hard work is rewarded.

“That's something that's really important to me.

“It's important to Douglas [Ross, Scottish leader] and Alistair [Jack, Scottish Secretary], to all the people in the government and cutting National Insurance is rewarding hard work. 

“And it's also important to us to be a government that delivers for people in every part of the United Kingdom. 

“And I'm very conscious that once the SNP is making life harder for hardworking people by putting their taxes up, I want to make life easier for people.

“I want to give them the peace of mind that there's a bright future for them and their families. 

“So by cutting National Insurance and by delivering that tax card incredibly quickly, millions of people in Scotland started benefiting in January, and that is a significant tax cut worth £450 pounds for someone with an average earnings of £35K. 

“It is a Union tax cut. It's a tax cut for everyone at work and the contrast between what we're doing and what the SNP government is doing could not be starker.

“Alister does make that point to the Chancellor, let me reassure you on that.”

Mr Jack added: “I press hard that it’s national insurance as opposed to income tax.” 

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However Mr Sunak refused to say if the Chancellor was considering extending the windfall levy on energy companies to raise money in the budget.

Bloomberg reported on Thursday that Treasury officials had suggested the move to pay for cuts, despite the Scottish Tories hammering Labour for its plan to extend the tax.

Current UK Government policy is to tax profits at 75% until 2028.

Labour wants to increase it to 78% and extend it to 2029, something the industry has warned could cost 42,000 jobs in the North East if investment dried up.

Asked if an extension was under consideration, Mr Sunak repeatedly said he could not comment on fiscal policy in advance of the budget.

He conspicuously failed to restate his Government’s current position, but insisted he and the Chancellor were very supportive of the North Sea industries.