Boris Johnson has cast doubt over whether he will stick with a proposed hike in National Insurance, despite No.10 insisting it will go ahead.
The prime minister is under pressure from members of his own Cabinet to scrap the 1.25 percentage point rise due in April, just as the cost of living crisis starts to bite for millions across the country.
The national insurance increase, which was announced last autumn, is forecast to raise £12billion a year to tackle the NHS backlog caused by Covid, as well as a pay rise for staff and a long-term plan for social care.
However, prominent members of the Cabinet, including Rishi Sunak, are said to be distancing themselves from the proposal, with the chancellor reportedly branding it the “prime minister’s tax”.
Former Brexit Secretary David Davis — who called on Johnson to resign last week — also urged the prime minister to scrap the rise, telling the BBC Radio 4’s Today programme: “They didn’t know at the time that by April we would have the highest inflation rate in 30 years, they didn’t know that interest rates would be going up, council tax would be going up, the fuel price is about to jump by £700 a year for the average family.
“Therefore they didn’t know quite what pressure there would be on ordinary people.”
Asked by reporters today whether the rise would go ahead in April, the prime minister repeatedly stopped short of confirming the move — instead saying that the government “had to look at all the ways we can address cost of living”.
“We’ve got to make that investment in our NHS,” he said.
“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.”
His comments came at the same time as his official spokesman was defending the National Insurance increase in a briefing to journalists.
He said: “This levy is first and foremost to deal with tackling the massive backlog which we have seen caused by this global pandemic.
“It then seeks to address the long-standing problem of fixing our social care system, which unfairly penalises a small minority and of course, it also helps fund a pay rise for NHS staff which the public massively want to see.
“So this is the right approach to tackle this long-standing problem.”
Asked about reports that the whole Cabinet would back a move to delay the rise, he said: “Cabinet took a collective decision to take this action, to put money into our NHS, to tackle the backlogs, to resolve the long-standing problem of social care and to fund a pay rise for nurses.
“The Cabinet stands behind that decision.”
The prime minister has faced opposition to the proposal since it was first floated last year.
Business secretary Kwasi Kwarteng said back in July that the government should not raise national insurance, highlighting that it would break the Conservative party manifesto not to increase taxes during this parliament.
And in comments leaked to the press earlier this month, Commons leader Jacob Rees-Mogg told cabinet that the rise should be ditched as inflation and energy bills rise.
However, Johnson was backed by education secretary Nadhim Zahawi who said increasing national insurance contributions to pay for social care is “the right thing to do” because it will “finally create a system of adult social care that is sustainable and deliverable without breaking families”.
Last week the Resolution Foundation thinktank said the number of households suffering from “fuel stress” — spending at least 10 per cent of their family budget on energy bills – is set to treble overnight to 6.3 million households when the new energy price cap comes into effect on April 1.
The price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity. It is expected to rise by more that 50 per cent in April to around £2,000 per year.
