The UK’s fiscal targets
This briefing looks at the UK's fiscal targets and wider policy for managing the public finances.

The National Insurance Contributions (Reduction in Rates) Bill [Bill 12 of 2023-24] was introduced on 23 November 2023.
National Insurance Contributions (Reduction in Rates) Bill 2023-24 (294 KB , PDF)
The National Insurance Contributions (Reductions in Rates) Bill 2023-24 was introduced on 23 November 2023. The Bill, with its explanatory notes, is published on the Bill’s page on Parliament.uk. The page also provides details of the Bill’s parliamentary progress.
The Bill completed its remaining stages in the House of Commons on 30 November. It was agreed, unamended, without a division. The Bill completed its scrutiny in the House of Lords on 12 December, and received Royal Assent on 18 December.
The Bill implements three changes to National Insurance contributions (NICs) which were announced by Chancellor Jeremy Hunt in the 2023 Autumn Statement.
These changes are:
These measures would extend and apply to the whole of the UK.
The Office for Budget Responsibility (OBR) estimate that taken together these changes to NICs would reduce tax receipts by £9.4 billion in 2024/25, rising to £10.0 billion by 2028/29.
The OBR estimate this tax cut will benefit around 27 million employees and over 2 million self-employed people overall.
The OBR has assessed the impact of the three changes to NICs to be as follows:
The OBR note that this tax cut offsets just under a quarter of the series of personal tax rises that the Government announced in the 2021 Spring Budget 2021 and the 2020 Autumn Statement. The main personal tax rises from these fiscal events were the freeze in the personal allowance and the higher-rate threshold for the period 2022/23 to 2027/28; and, the freeze in the threshold for employer NICs for the period 2023/24 to 2027/28.
Freezing tax allowances and thresholds, rather than increasing them in line with inflation, means that, as taxpayers’ nominal earnings rise, more of their income is taxed, and more of what is taxed falls into higher tax bands. This is known as ‘fiscal drag’. The OBR estimates that these personal tax rises will raise a combined £44.6 billion in 2028/29. The Library briefing Fiscal drag: An explainer discusses this phenomenon in more detail.
The Library briefing National Insurance contributions: an introduction gives an overview of the National Insurance system.
National Insurance Contributions (Reduction in Rates) Bill 2023-24 (294 KB , PDF)
This briefing looks at the UK's fiscal targets and wider policy for managing the public finances.
On Wednesday 11 February 2025 there will be a Westminster Hall debate on the impact of planned changes to employer National Insurance contributions on police forces. The debate will start at 4.30pm and will be led by Esther McVey MP.
This briefing note explains the system of referendums on council tax increases in local authorities. It sets out the legislative framework and the thresholds that have been set in previous years.