You can’t keep hiking taxes, Cabinet big guns tell Boris
Javid says plan is ditched... but No10 may stick with it if virus surges again
CABINET ministers have warned Boris Johnson that the burden on taxpayers cannot keep rising amid Tory anger over plans to increase national insurance.
Commons Leader Jacob Rees-Mogg said ‘higher rates of expenditure’ could not continue and taxes could not be put up indefinitely.
In a speech this week, International Trade Secretary Liz Truss will say the Conservatives need to do more to fight the further expansion of the state.
And yesterday Health Secretary Sajid Javid said Tory governments should try to keep tax rises as low as possible.
It came as the Liberal Democrats said they would be stepping up campaigning in constituencies where they hope to unseat Tory MPs.
Last week, an opinion poll showed a Labour lead for the first time since January – as critics branded the NI rise to fund social care ‘poll tax 2.0’.
Many backbenchers fear they will lose their seats thanks to the Prime Minister’s decision to put up national insurance by 1.25 percentage points to pay for an £86,000 cap on care bills.
Mr Rees-Mogg delivered his warning on taxes after he was asked whether it was right to end a boost to Universal Credit, which is due to end later this month.
He said: ‘Yes, it was a temporary measure that provided £9billion of extra support to people through the pandemic, but it’s right that we get back to normal.
‘All the money the Government spends is taxpayers’ money that is either paid for in taxes this year or paid in taxes by future generations to repay borrowing, and therefore we can’t go on with higher levels of expenditure.’
Miss Truss will warn this week that unless the Tories do not guard against the expansion of the state and embrace free enterprise Britain will end up poorer.
In a speech that will be seen as a warning against further tax rises, she is expected to urge the party to ‘face facts’, adding: ‘The path to economic revival does not lie in retreating and retrenching from the global marketplace, or inexorably growing the size of the state.
‘That would leave us poorer, less free and consign us to decline.’
It is believed Miss Truss was among a handful of ministers who spoke out against the NI rise in a Cabinet meeting last week. A source close to her told The Sunday Telegraph: ‘Liz thinks free enterprise and free trade are the true Conservative way to level up, not bigger government.’
Mr Javid, who has denied reports he wanted an NI increase of 2 per centage points rather than the agreed figure, said more rises should be a ‘last resort’.
He said: ‘We should always be trying to keep taxes as low as we can and making sure we recognise that when we have tax, any tax, you are taking away hard-working people’s money and every single penny should be spent wisely.
‘If we have to spend more, we should always be trying first to see where we can make savings.
‘Tax rises should always be the last resort. It’s been right to do it on this occasion but we should always try to avoid it.’
Meanwhile, the CBI business group will warn today that higher corporate taxes will hold growth back. The 1.25 percentage point
‘Should always be the last resort’
rise in NI was a blow to firms, which pay it along with their staff.
Director general Tony Danker said ministers must ‘flip business taxation on its head’ and reward firms that invest, adding: ‘After the pandemic, we in business believe we should pay our share to tackle the debts of Covid.
‘That is why many business leaders accepted the jaw-dropping six-point corporate tax increase announced in March.
‘I am deeply worried the Government thinks taxing business is without consequence to growth. It’s not. Raising business taxes too far has always been self-defeating as it stymies investment.’
‘Damaging and discriminatory’
VACCINE passports may be brought in if Covid hospitalisations go up – despite the Health Secretary saying they would ‘not be going ahead’.
Sajid Javid was congratulated by Tory backbenchers and the hospitality industry yesterday morning for ending speculation about the proposal.
However, last night No10 insisted the Government had simply decided not to bring them in as planned for nightclubs and other crowded venues at the end of the month.
It is understood that Boris Johnson’s winter Covid plan – due out tomorrow – will warn that vaccine passports could be required if the NHS faces being overwhelmed.
It will set out details of when and how passports could be introduced, and will warn that other restrictions, such as mandatory maskwearing, may have to be reintroduced if the pandemic continues. Changes such as compulsory home working and reintroducing social-distancing are not being ruled out.
It was unclear last night how decisions would be made to reimpose restrictions.
Yesterday, another 29,173 cases were recorded, as well as 56 deaths within 28 days of a positive test.
Mark Harper, chairman of the Covid Recovery Group of Tory MPs, said the end of vaccine passports should be permanent, tweeting: ‘I welcome Savid Javid confirming that vaccine passports are not going ahead now.
‘I’m pleased he has listened to the compelling case against them.
‘They shouldn’t be kept in reserve. They are pointless, damaging and discriminatory.’
Vaccine passports allow people access to venues if they have had both Covid jabs. They will be introduced in Scotland for clubs and large venues next month.
In a national research programme in April, revellers were allowed into clubs so data could be gathered on how events could be permitted to reopen safely.
But following a Tory backlash against vaccine passports, Mr Javid said yesterday the idea had been shelved for England.
He told the BBC’s Andrew Marr ‘I’ve never liked the idea of saying to people you must show your papers to do what is just an everyday activity. We’ve looked at it properly, and whilst we should keep it in reserve, I’m pleased to say we will not be going ahead with plans for vaccine passports.’
He said that while he was ‘not anticipating’ any more lockdowns, it would be ‘irresponsible to take everything off the table’.
His announcement on the passports came a week after vaccines minister Nadhim Zahawi told the same show the end of September was the right time to start the vaccine passport scheme for sites with large crowds.
Deputy Labour leader Angela Rayner said: ‘Days ago, the vaccine minister stood before Parliament to confirm the introduction of Covid passports – now they’ve been scrapped.
‘This is the culmination of a summer of chaos from ministers. They need to get a grip before winter.’
Mr Javid told Times Radio the passports were ‘a huge intrusion into people’s lives’, adding: ‘We don’t think it is necessary at this point. We’re keeping it in reserve, but we’re not going to go ahead.’
The hospitality sector welcomed the news that the passports will not be introduced in England.
Michael Kill, chief executive of the Night Time Industries AssociShow:
ation, said: ‘We hope businesses will be able to plan for the future with some degree of certainty... and rebuild a sector that has consistently been at the sharp end of this pandemic.’
He added that the Government had ‘grossly underestimated some logistical and ethical challenges’.
Sacha Lord, night time economy adviser for Greater Manchester and co-founder of the Parklife festival, said the plans were ‘untenable and illogical’ and aspects were ‘discriminatory and legally questionable’. He added: ‘We can now move forward without vague regulations.’
■ COVID jabs for children could begin in schools in just nine days.
The UK’s four chief medical officers have been preparing advice for ministers on whether children aged 12 to 15 should be vaccinated.
The jabs could begin on September 22 after an announcement this week, according to The Observer.
The Mail welcomes reports that many of the Covid restrictions stifling our economy are to be lifted. But they are heavy with caveats.
PCR tests for incoming travellers from amber and green-list countries are to set be scrapped (but no date has been given).
health Secretary Sajid Javid said plans to introduce discriminatory vaccine passports have been scrapped (but Downing Street says they could yet be revived).
And Boris Johnson promised to roll back the emergency legislation that has curbed our fundamental freedoms (but it appears some draconian powers may be retained).
This is no time for half measures. Figures last week showed the nascent recovery is stalling, far too many employees have taken home-working to be a right, and new taxes due in April – including the health and social care levy – will be a further serious drag on growth.
Companies, especially in the travel and hospitality industries, need certainty – not endless promises of jam tomorrow. Talking the talk isn’t good enough any more. Words must be matched by deeds.