Shadow chancellor George Osborne said that the move would be paid for by cutting government waste by £6bn a year, above and beyond Labour's planned cuts, starting from the 2010/11 fiscal year.
"The re-election of a Labour government under Gordon Brown – with more debt, waste and taxes – will bring us a new recession," he said. "Labour will kill the recovery with their tax on jobs. We will cut Labour waste to stop it."
According to former government advisers Sir Peter Gershon and Dr Martin Read, both of whom are now members of the Tories' Public Sector Productivity Advisory Board, savings of up to £12bn across all government departments are possible in 2010/11 without affecting front-line services.
The British Chambers of Commerce (BCC), which has campaigned for Labour's controversial NI increase to be scrapped, described the Conservatives' proposals as "an important step in the right direction".
However, BCC director general David Frost warned that, despite the "positive proposals", companies would still face higher costs from April 2011 unless further action was taken.
Frost said: "It is nonsensical for any government to ask the private sector to drive economic recovery and create jobs while simultaneously raising direct taxes on employment. To secure the recovery, we must completely eliminate this damaging 'tax on jobs'."
In addition to cutting the increase in employers' NIC, the Conservatives said they would reverse Labour's plans to raise workers NIC by 1% for everyone earning more than £20,000, by raising both the primary threshold and the upper earnings limit.
According to the Tories, this would stop the NI tax hike altogether for everyone earning under £35,000 and cut it for those earning up to £45,400 a year, meaning 70% of the working population would be better off.
Labour and the Liberal Democrats are expected to argue that if the reduction is to be funded by a fall in spending, the effect on public services will be even worse than voters fear.
Chief secretary to the Treasury, Liam Byrne, responded to the announcement, saying: "They've [the Conservatives] repeated promises for married couples, pledged tax giveaways for the richest estates and promised to sell off the banks at a 'discount' rate – rather than getting taxpayers' money back.
"Rather than making more promises he can't afford, the test for George Osborne is to tell people how he'll pay for the ones he's [already made]."
