Politics

Boris Johnson and Rishi Sunak confirm hike in National Insurance contributions to go ahead

The Foreign Secretary has insisted the UK Government remains “committed to cutting taxes” despite the Prime Minister and Chancellor doubling down on plans to raise National Insurance.

Liz Truss said “taxes are never popular”, but significant amounts of money spent dealing with the Covid crisis “need to be paid back”.

Labour urged the UK Government to “rethink” the National Insurance rise, with shadow levelling up secretary Lisa Nandy warning “it’s just simply not possible for a lot of people to survive” if their tax burden grows.

The Prime Minister has been facing pressure from within his own party to scrap or at least delay the increase to win back support as he awaits the findings of Whitehall and police inquiries into claims of lockdown-busting parties held in Downing Street.

No 10 had still not received a copy of the highly anticipated Sue Gray report on Sunday morning.

Concerns about the Prime Minister’s decision to press on with the 1.25 percentage point rise, designed to tackle the Covid-induced NHS backlog and reform social care, were also raised by senior Tory MP Robert Halfon.

Speaking to Sky News’s Trevor Phillips On Sunday programme, he said the Government should “go back to the drawing board” and look at different ways to find money that is needed for the health service.

But Paul Johnson, director of the Institute for Fiscal Studies, said delaying or scrapping the National Insurance increase could throw up an issue of credibility with the public.

He argued that the tax hike is about trying to cover the “long-term ever-growing costs” of the NHS.

Boris Johnson and Rishi Sunak put on a united front as they made a firm commitment to go ahead with the controversial National Insurance hike despite concern from some Tory MPs about the cost-of-living crisis.

Writing in The Sunday Times, the pair insisted that it is right to follow through on the “progressive” policy.

Ms Truss told Sky News that the Government is “committed to cutting taxes”.

She acknowledged on the BBC’s Sunday Morning programme that “taxes are never popular”, but said “significant” amounts of money spent coping with the pandemic must be repaid.

“As soon as possible, we want to be in a position to lower our tax rates, we want to drive economic growth, because ultimately that is what will make our country successful,” she said.

“But we do face a short-term issue, which is that we have spent significant amounts of money dealing with the Covid crisis that does need to be paid back.”

Ms Nandy urged the Government to “rethink” the National Insurance rise, adding Labour would “come forward with a much fairer taxation system”.

She told the BBC: “You can’t possibly hit people with more taxes at the moment. It’s just simply not possible for a lot of people to survive.

“The stories that I’m hearing from people across the country about the sacrifices they’re going to have to make are enormous.”

Asked if Labour would repeal the planned tax hike, she added: “We’re hoping that the Government won’t go ahead with it.

“Well, look – we wouldn’t bring it in in the first place, let me be absolutely clear with you if there was a Labour government today there would be no rise in National Insurance, people would not be facing the prospect of seeing their incomes squeezed even more.”

The SNP has accused the UK Government of being “completely out of touch with the reality of the cost of living crisis” – after confirming it will press ahead with hiking National INsurance contributions.

The SNP’s Treasury spokesperson, Alison Thewliss, said the rise will have a “devastating impact on the lowest earners in society” who are facing a “toxic concoction of Tory cuts, soaring energy bills and the growing cost of Brexit”.

She said: “The UK Government’s decision to plough ahead with this regressive tax hike in the middle of a cost of living crisis is fundamentally wrong. 

“We know that the Tories have never understood the difficulties working class households face, but to do this at a time when families face a toxic concoction of Tory cuts, soaring energy bills and the growing cost of Brexit is cruel and callous.”

Ms Thewliss added: “There is no doubt that this UK Government are completely out of touch with the reality of the cost of living crisis.

“From the outset, the SNP has called on an emergency package of support and the implementation of a real living wage which would allow for this tax hike to be prevented. Their failure to listen will have a devastating impact on the lowest earners in society.

“The Tories should be making it a priority to find a solution that will help families throughout this crisis, however they’re too mired in sleaze and scandal – and trying to save their bosses skin – to pay any attention.

“I am therefore urging the Prime Minister and Chancellor to finally U-turn on this decision, and instead introduce a package of progressive measures that help households tackle this cost of living crisis – not make it worse.”

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