AN MP has rejected claims that an increase in National Insurance will cost the Tees Valley almost £50m.

Figures produced by the Conservatives show the 0.5 per cent rise due to take effect from April 2011 would cost employees more than £80 on average a year.

The Tories claim the change will cost employers a similar amount.

The figures were published yesterday by James Wharton, Conservative candidate for Stockton South.

He said: “As a result of its appalling handling of the economy, Labour is going to pick the pockets of businesses and employees in the Tees Valley to the tune of nearly £50m.

“Small businesses and families will be paying the penalty for Labour’s failure to control public finances.

Furthermore, Labour intends to take this money out of the economy at a time when Gordon Brown’s unemployment toll continues to rise.”

Mr Wharton added: “It is the job of all Conservative governments to clean up after Labour chancellors run out of money. We need to close the gap between what the Government is spending and what it is taking in tax.

“Only the Conservatives have the political will to get spending under control.”

However, Stockton South MP Dari Taylor branded the report as “complete nonsense”.

She said: “The rich earning more than £100,000 will pay more, but basic rate taxpayers will pay marginally less.

“The Chancellor is proposing to increase the minimum income at which National Insurance is paid so that it is in line with income tax.

“We estimate that this means a worker earning £20,000 will be £155 richer.”

She said businesses in the North-East had been “more than compensated” for the increase by initiatives such as the car scrappage scheme.

She added: “I think we are seeing a local Tory party desperately trying to get a headline when there is no headline to be had.”