The Courier & Advertiser (Fife Edition)
PM’ s national insurance rise branded a ‘poll tax’ on low-income families
Boris Johnson’s proposal to raise national insurance to fund social care in England has been branded a “poll tax” on low-earning families in Scotland – and sparked a backlash among Conservatives.
The SNP’s Westminster leader, Ian Blackford, said the prime minister must go back to the drawing board.
It also caused unrest among Tory backbenchers and party veterans who fear a backlash from voters in former Labour-voting regions.
It emerged in recent days that the prime minister is lining up a national insurance increase to fund social care reforms south of the border.
The tax power is reserved to Westminster, meaning it would apply across the UK.
This triggers extra payments for devolved governments to make up for the additional cost, but it has led to claims that working families are being burdened while wealthier earners are not.
Mr Blackford, MP for Ross, Skye and Lochaber, said: “It’s not acceptable for Westminster to endlessly add to the growing burden that young people face, while stripping them of the benefits that previous generations enjoyed.
“Nor is it acceptable to effectively impose a new Tory poll tax on Scottish families – who would be forced to pay for a crisis in England caused by the failure of Westminster governments it didn’t vote for.
“Boris Johnson must go back to the drawing board and think again.”
Former chancellor Philip Hammond, now a lord, said: “Expanding the state further in order to protect private assets by asking poor people to subsidise rich people has got to be the wrong thing to do.”
And former prime minister Sir John Major said raising the levy would be regressive.
The former Tory cabinet minister Sir John Redwood warned against a “stupid” tax rise.
“A tax on jobs when you want to promote more and better paid employment is particularly stupid,” he said.
The move also goes against Mr Johnson’s election manifesto not to raise income tax, VAT or national insurance.
National insurance contributions are based on weekly financial thresholds, with 0% due on the first £184 earned, 12% on sums between £184.01 and £967, and 2% on remaining earnings.
According to the Office for National Statistics, the average weekly wage in Great Britain is £576, with a weekly national insurance contribution amounting to £47.04 (8.16%).
So anyone whose primary earnings are above the £967 2% threshold, or just over £50,000 a year, ultimately pays a proportionately lower rate than those who have the bulk of their earnings in the 12% threshold.
As such, much of the criticism of the proposal revolves around the unfair impact a national insurance hike would have on young and lower income workers.
The government has agreed £5.4 billion more funding to cover NHS shortfalls later this year, including to help clear the backlog caused by the pandemic.
But Downing Street sources said details of the social care plans were still being worked out and that a day for the announcement was yet to be confirmed.