Some Conservatives want a cut in income tax, rather than National Insurance. They argue it’s more likely to be noticed by voters – and therefore a better election strategy.
But a cut in the basic rate of income tax would be more expensive, because it affects more people – including those who make money from property, as well as some pensioners.
In contrast, National Insurance affects just those in work.
So, a cut in the basic rate of income tax from 20p to 19p would cost the Treasury around £7bn a year. A 1p cut in National Insurance would cost the Treasury around £4.7bn per year.
(The 2p cut that’s likely to be announced today will cost around £9bn a year).
And, as my coleague Dharshini just explained, an NI cut would only partially offset income tax thresholds being frozen until 2028-29.
That means that while you may get a pay rise, it could drag you into a higher tax bracket.