Tories’ fury as Boris and Rishi insist they won’t spike NI hike
BORIS JOHNSON and Rishi Sunak set themselves on a collision course with Tory MPs and business leaders last night after defying calls to delay a controversial £12billion National Insurance hike.
The Prime Minister and his Chancellor sought to face down mounting opposition to the 1.25 percentage point tax rise by insisting it was the ‘right plan’ and it would go ahead in April.
In a joint article, they said: ‘We must go ahead with the health and social care levy.’
Mr Johnson and Mr Sunak were forced into the rare step of a joint declaration after the Daily Mail and The Mail on Sunday led calls for the tax hike to be ditched – prompting other newspapers to follow suit. The demand was swiftly taken up by business leaders and MPs.
Last night, senior Tory MPs reacted in fury to the move.
Former Cabinet Minister John Redwood branded it a huge mistake with people already facing a big hit from their gas and electricity bills in a few weeks’ time. Mr Redwood pointed out that the tax rise breached a clear Tory manifesto pledge and said the PM and Chancellor ‘will find that the party is extremely angry about it’. But he signalled that the fight against the tax hike would go on, calling on the PM to ‘cancel it immediately’.
Senior Tory colleague Robert Halfon said: ‘If they want to raise money for the NHS – which I agree with – we should be taxing millionaires, not millions of workers.’
The NI tax hike vow comes as household energy bills are expected to rise by nearly 50 per cent from April, with industry experts predicting that the average annual cost will rise from the current level of £1,277 to £1,897.
Last night, Mike Cherry – national chairman of the Federation of Small Businesses, said: ‘This regressive tax hike will hit lower earners and struggling community small businesses the hardest, leaving less cash in people’s pockets to spur our recovery.’
Only last week, the Prime Minister was said to be ‘wobbling’ on the tax hike as part of a desperate bid to placate Right-wing Tories.
And just a week ago, Mr Sunak was said by Tory MPs to be distancing himself from the increase, describing it as ‘the PM’s tax’. However, in a joint article for The Sunday Times, the two men insisted that it would go ahead.
But in a bid to keep Tory rebels on side, they pledged to cut taxes before the next Election. They wrote: ‘We believe passionately that people are the best judges of how to spend their own money.’
The 1.25 percentage point rise in NI, for both employers and employees, was one of the main factors behind the shock resignation of Brexit Minister Lord Frost last month.
Reports last night said that despite Mr Sunak’s private concerns, the move will be chalked up as a victory for the Chancellor, who has insisted that inflation leaves little headroom for fiscal loosening.
The consumer price index measure of inflation rose to 5.4 per cent in December, the highest rate since records began in 1997, according to the Office for National Statistics.
The Chancellor is said to believe that it would be ‘fiscally irresponsible’ to change course because the result would be more borrowing.
Reports last night said that plans to cut VAT on fuel have been ditched too, in what will be interpreted by MPs as a second win for the Chancellor.