Just 10 Tory MPS vote against tax rises

Manifesto-breaching plan to fund social care makes it through second reading despite backbench concern

Just 10 Conservative MPS voted against Boris Johnson’s social care tax grab last night, despite warnings that it was un-conservative and would “cost jobs”.

Despite mounting anger over the Government’s decision to hike National Insurance Contributions (NICS) by 1.25 percentage points, legislation implementing the tax change cleared its final stages in the Commons last night. The Bill passed by 307 votes to 251.

JUST 10 Conservative MPS voted against Boris Johnson’s social care tax grab last night, despite warnings that it was un-conservative and would “cost jobs”.

Despite mounting anger over the Government’s decision to hike National Insurance Contributions (NICS) by 1.25 percentage points, legislation implementing the tax change cleared its final stages in the Commons last night.

In total 10 Tory MPS voted against the Health and Social Levy Bill at second reading, an increase of five on the rebellion last week, with the legislation passing by 307 votes to 251.

It will now go to the House of Lords for further scrutiny.

Those opposed included John Baron, the MP for Basildon and Billericay, who claimed increasing NICS – which are paid by employees and employers – risked harming the ability of businesses to recover from the Covid-19 pandemic.

“Low taxes help businesses, they can encourage prosperity, they keep unemployment down – or certainly help to,” he said. “Yet here we are increasing them at a time when the recovery is still fragile after the pandemic. This will cost jobs, it will result in lower pay and it will result in higher prices.”

Mr Baron was joined by Craig Mackinlay, the South Thanet MP, who said:“my sadness is we are just reaching for the tax lever. That’s not what Conservatives do. We are going to end up with a tax take at the highest level of GDP for 70 years.”

Sir John Redwood, a former Cabinet minister, added: “Before the economy is completely opened up, before people have stabilised their businesses, before people have repaired some of the balance sheet damage which the pandemic measures did, it is not the right time to take money off people.”

Similar concerns have been voiced by Cabinet ministers, with one telling The Daily Telegraph last week they feared the plans were “the death knell of Conservatism”.

While 44 Tory MPS were recorded as not voting, several were ministers who were absent due to prior commitments, meaning the number abstaining is also likely to be similar to last week.

It means that Mr Johnson’s £12billion-a-year tax rise to fund an overhaul of the social care sector and introduce a new £86,000 cap on lifetime care costs now appears set to make it on to the statute book, despite being a clear breach of the Conservative manifesto.

However, the Prime Minister is now facing a fresh backlash after it emerged that the costs of creating a new levy separate to National Insurance could cost taxpayers up to £50million just in administrative costs.

Under the Prime Minister’s plans, NICS are due to rise in April next year, before falling back to their current levels when a new health and social care levy is introduced separately in 2023.

The Government has confirmed the new levy will appear as a separate entity on people’s payslips and will also require working pensioners to contribute for the first time.

But it has now emerged that the costs of separating the levy from NICS could cost between £40million and £50million, according to Jesse Norman, the Treasury Minister, who last night cited provisional estimates compiled by HM Revenue & Customs.

“I think it’s the set-up costs, although it may be incurred over more than one year,” Mr Norman added.

“But, as I say, it’s a very preliminary number.”

The disclosure came after Mr Norman was challenged by Dr Andrew Murrison, the Tory MP for South Wiltshire, who said that if splitting the levy was “costly” ministers should simply maintain the higher rate of NICS.

In comments that further call into question the point of a separate levy, Mr Norman also suggested the amount of money that would be raised from taxing working pensioners would be “relatively modest”.

Responding, Nigel Mills, the Tory MP for Amber Valley, said: “We are creating a whole new tax to raise less money than it cost to collect it for no real advantage than the presentational one.”

Echoing his concerns, Richard Drax, the Tory MP for South Dorset, told The Daily Telegraph: “This is taxpayers’ money and we have a reputation for being frugal and not wasting it.

“If indeed it is going to cost £50million to administer, then that is yet another reason to show the Government is going down the wrong path.”

£50m

The possible administrative costs of the Prime Minister’s plan to create a new levy separate to National Insurance