Sajid Javid has called for a cut in national insurance to boost the UK’s recovery from the coronavirus crisis.

The MP and former chancellor has said that early hopes of a V-shaped recovery from the pandemic have “proved optimistic”.

As well as killing more than 42,000 people in the UK and almost 470,000 worldwide, the virus has resulted in many thousands of business being closed in an effort to limit its spread.

Millions of people are surviving on the government’s furlough scheme, which pays up to 80% of a person’s wage.

In a joint report with the Centre for Policy Studies (CPS), a right-leaning thinktank, Mr Javid said a “significant temporary” reduction in national insurance would make it cheaper for employers to hire staff.

He said that “some long-term damage to the economy” was “unavoidable” but ministers must make it easier for businesses to employ people.

The report – After The Virus – says: “If we want to support and stimulate employment, then axiomatically the best option is to cut the payroll tax – employer’s National Insurance.

“Tax employment less, and all other things being equal you will end up with more of it.”

Other recommendations made in the report include temporarily cutting VAT and bringing forward “shovel ready” infrastructure projects, with Mr Javid arguing that the “only way out of this crisis is growth”.

Mr Javid, a Conservative MP, joins former Labour chancellor Alistair Darling in calling for an emergency VAT cut to boost consumer spending.

Robert Colvile, CPS director, said: “This is a vision for growth driven by a private sector with the incentives and flexibility to invest and create jobs, empowered by an infrastructure revolution.”

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