There has been much talk recently about how we are going to raise money to fund public services, and National Insurance Contributions (NIC) is usually the option the Treasury takes. This is predominantly because the public see NICs as something distinct from general taxation.

However, continually raising NICs hurts the income of working people, depresses wages and is generationally unfair.

NICs is only levied on those aged 65 and under, this explains to an extent why it is still seen as a contribution rather than a tax. However, with life expectancies rising and insufficient pension savings, people are working much longer. Raising NICs does not impact those that use public services the most, over 65s, which probably explains why the Tories are considering it.

That is what happens on the employee side, now for the employers. There are numerous studies which show that Employer NICs get passed onto the employee anyway through wage reductions. If we raise Employer NICs, we are just going to squeeze wages further in a time of rising inflation and a squeeze on living standards.

Instead, what we should do is look at changing NICs.

When we entered Government in 2010, we pledged to raise the personal allowance. This helped take millions of people out of Income Tax and put more money back into the pockets of hard-working people.

We should look at doing something similar with NICs. Currently, the NICs threshold is around £8,400 per year. We should raise this, as we did with Income Tax, and we should look to merge NICs and Income Tax. This would help to simplify the tax system that so many people find difficult to navigate as it is.

As well as this, in the meantime, we can expand the remit of NICs. Firstly, it should be levied on those that are over 65. Not all of NICs is targeted, so there is no reason why over 65s shouldn’t pay it.

Secondly, we could extend NICs to private pension income, property income and dividends. Wealth in Britain has grown massively over the past decades, which is fantastic for those that have managed to accumulate this wealth.

However, plenty of people haven’t, and it would be unfair to expect those to pay more NICs for their salaries, while other forms of income are ignored. These measures would help to raise between £4 to £5 billion per year for the Treasury.

Now is not the time to raise NICs, it is time to start reforming them. Taxes should not be used as a political football when the governing party needs to raise some revenue, which is why I support rolling NICs into Income Tax. In the meantime, though, NICs should be reformed to make it fairer and more equitable.

* Collingwood is a Liberal Democrat member in London who is known to the editorial team.