The Government looks set to plough ahead with its proposed national insurance hike after the Prime Minister said “we have to pay for” NHS improvements.
Senior Conservatives, including former Brexit secretary David Davis, have called for the proposed increase of 1.25 percentage points to be scrapped in the face of cost of living pressures.
Commons Leader Jacob Rees-Mogg is understood to have called for the move, which is designed to pay for long-term social care reforms, to be abandoned, while former Brexit tsar Lord Frost quit his role at the tail end of last year in protest at Government tax increases.
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Official figures published last week showed that inflation soared to a near 30-year high of 5.4% in December, while an energy price cap rise in spring is set to stretch household budgets further.
But Boris Johnson said the “terrible strain” the coronavirus pandemic had put the health service under could only be alleviated with more funding as he defended the April tax bump.
The £36 billion that the Treasury forecasts the extra national insurance contributions will provide has been earmarked to clear the NHS backlog and then to fund social care improvements.
The Prime Minister, asked by broadcasters after a visit to Milton Keynes Hospital whether the rise would go ahead in the face of additional cost of living burdens, said: “The NHS has done an amazing job but it has been under terrible strain.
“Listen to what I’m saying: We’ve got to put that money in.
“We’ve got to make that investment in our NHS.
“What I’m telling people is, if you want to fund our fantastic NHS, we have to pay for it – and this Government is determined to do so.”
In a briefing with reporters, Downing Street defended the tax rise as the “right approach to tackle this long-standing problem”.
Following reports senior ministers would be keen to delay the increase, Mr Johnson’s official spokesman said the Cabinet “stands behind” last year’s decision to put up contributions, a move which broke a Conservative 2019 election manifesto pledge.
The Education Secretary appeared to rule himself out of supporting an internal rebellion to postpone the fiscal demands on taxpayers.
Nadhim Zahawi told LBC: “I don’t think we would be doing ourselves any favours in delaying.”
It comes after Mr Davis, who last week called for the Prime Minister to resign over his handling of the “partygate” allegations, told BBC Radio 4’s Today programme the national insurance rise would remove about 10% of the disposable income of “ordinary families” and was based on the “wrong data”.
The veteran Tory MP also argued it was “economically unwise” because it created a “disincentive to work”, would “penalise employers” and “hit the growth of the whole economy”, meaning it would be unlikely to raise the amount forecast.
Labour has regularly voiced its opposition to the national insurance increase, with leader Sir Keir Starmer pledging to take a different approach if elected to Downing Street.
On Monday, meanwhile, Mr Johnson vowed to tackle the cost of living crisis by helping “getting people into work”.
He said: “What we’ve got to do is look at all the ways we can address cost of living for people, so it is the cost of fuel, it is making sure that we deal with inflation by getting people into work, dealing with problems in the supply chain, getting people off welfare and into work, helping get our economy moving smoothly again.”
Mr Zahawi said there would be £12 billion of “mitigations over the next two years” to help less well off households through struggles caused by inflation, bill increases and other pressures.
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