Jeremy Hunt looks set to announce a 2p cut to national insurance in today’s budget, despite warnings that it will leave those earning £19,000 or less worse off.

According to multiple reports, the Chancellor has opted for the drop, worth £450 on average, rather than reduce income tax.

The UK Government is set to bring forward emergency legislation next week to enable the cut to come into effect in April, prompting speculation of a May election.

It will be the second cut in a year. 

At last week's Scottish Conservative conference, Rishi Sunak hinted that he was set to opt for a reduction in National Insurance as unlike income tax it is UK-wide.

The Prime Minister described it as a "union tax cut."

He told reporters last Friday: “I’m very conscious that, whilst the SNP is making life harder for hard-working people by putting their taxes up, I want to make life easier for people.”

READ MORE: Budget: Jeremy Hunt set to extend windfall tax to pay for NI cut

Mr Hunt is also reportedly set to freeze fuel duty for another year at a cost of about £5 billion.

It’s understood the Chancellor will look to raise money by extending the windfall tax on oil and gas as well as a new levy on vaping and a hike in tobacco duty. He is also expected to reduce the scope of non-dom tax relief.

Tax breaks for people with second homes let out as holiday rentals will also be reduced.

He is also reportedly considering cutting projected increases for future public spending to 0.75%.

While this would give him an extra £5 billion a year it would lead to austerity level spending cuts.

In their pre-budget analysis, the Resolution Foundation think tank said the combination of a second 2p cut to National Insurance on top of the 2p reduction which came into effect in January would be worth up to £1,500 a year for employees.

But, combined with freezes in the thresholds at which national insurance is paid, it will mean that the biggest net beneficiaries are those earning £50,000, who gain a net £1,200.

They said those earning £19,000 or less will actually be worse off overall as they lose more from the threshold freeze than they gain from rate cuts.

Those paid £16,000 or more than £60,000 will lose almost £500 a year.

Adam Corlett, principal economist at the thinktank, said: “There are huge questions about whether Britain can really afford £20 billion of tax cuts this year, given the insufficient outlook for public spending and the need to reduce our national debt.

“But the Chancellor has at least opted for a better approach than cutting income tax rates – prioritising workers who face higher tax rates than landlords and pensioners.

“But, while this is going to be a tax-cutting election year, it is sandwiched between significant past and future tax rises, with the Budget likely to only add to the number of tax increases coming in after the election.”

Both No 10 and the Treasury refused to comment on the reports.

The Chancellor attended a pre-Budget audience with the King on Tuesday. While this is traditionally private, pictures of the two men were released by Buckingham Palace.

READ MORE: Budget: SNP in call for new hospitality 'mini enterprise zones'

Meanwhile, Scotland’s Deputy First Minister has urged the Chancellor to increase funding for capital projects in his Spring Budget.

Shona Robison said: “Today the Chancellor must not repeat the mistakes of the autumn statement – where £27 billion of fiscal headroom was used to fund tax cuts – and instead prioritise the investment needed for Scotland’s people and public services.

“Key to that is funding for infrastructure. We’ve already committed £6.3 billion of capital spending as part of the 2024-25 Scottish Budget, underpinning high-quality public services, creating jobs and supporting the economy.

“However, we are expecting a real-terms cut to our UK capital funding of almost 10% over five years, totalling around £1.6 billion – enough to build a large hospital.

“Likewise, our financial transactions budget – key to delivering affordable housing – has been cut by 62%.

“With the UK now in recession, capital investment to kick-start economic activity is needed now more than ever. Infrastructure is vital for jobs, economic growth and the path to net zero.

“That’s why I am urging the Chancellor to deliver the capital funding Scotland needs.”

A spokesman for the UK Government said: “The Scottish Government is currently receiving a record £41 billion per year funding settlement from the UK Government – the largest in the history of devolution and one that was further topped up by decisions taken at Autumn Statement.

“It can also borrow up to £450 million for capital investment on top of this record funding, and the UK Government has agreed to inflation-proof that limit going forward.”

Shadow Scottish Secretary Ian Murray, meanwhile, said Scots are facing the highest tax burden in decades “because of the mess the Tories and the SNP have made of public finances”.

“Ordinary people didn’t cause this crisis, but they are being made to pay for it under the SNP and the Tories.

“Now, Scots face the highest tax burden anywhere in the UK, and the slowest growth in disposable income, while at the same time the SNP and Tories oppose a windfall tax on the oil and gas giants who are raking in billions of pounds of profits every month.”