Coalition proposals for a universal flat-rate pension effectively remove the last justification for our National Insurance system. Whether we like it or not, the contributory principle underlying National Insurance Contributions (NICs) will shortly be superfluous.
In any case, NICs are riddled with anomalies, complexity and a lack of cohesion. They can reward the profligate while penalising the thrifty. They can discourage saving. They can be unfair. They can impose high marginal rates on low earners. They have been used to disguise tax increases.
They should be merged into the income tax system once an overall tax cut is affordable.
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