National Insurance bust-up as Sunak wipes hands clean of divisive hike: Its PMs tax

Sunak grilled by Marr over National Insurance rise in October

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It comes as Boris Johnson remains under pressure from his own backbenches to step down as Prime Minister following the “partygate” scandal. The Chancellor has been viewed as one of several potential leadership contenders to replace him.

Announced in September 2021, National Insurance contributions are set to rise by 1.25 percent from April this year to pay for health and social care service.

But Tory MPs who have met with Mr Sunak over the cost of living crisis have been “left with the impression” that he is trying to distance himself from the National Insurance hike.

A source told the Mail on Sunday: “Rishi referred to it as ‘the Prime Minister’s tax’, which seemed quite pointed, to put it mildly.

“We were left with the impression that he didn’t want to be associated with it.”

The tax hike is expected to bring in an extra £12billion, and will go towards clearing the backlog of patients waiting for treatment on the NHS due to the coronavirus pandemic.

It is part of a raft of measures, including a pledge to invest £36billion over the next three years in the NHS, and a promise that no one will pay more than £86,000 for social care from October 2023, regardless of their assets.

At the time, Mr Johnson described the package as the “biggest catch-up programme” in the health service’s history.

However, the National Insurance rise is said to have drawn the ire of backbenchers, at a time when it was becoming clear that the cost of living was on the rise.

Ten Tory MPs rebelled against the Government when the rise was put to a vote, with a further 44 abstaining.

Now, Mr Johnson and Mr Sunak are under pressure from backbenchers again to scrap the rise altogether.

Earlier this week, the Office for National Statistics revealed that the consumer price index had soared to 5.4 percent inflation – the highest in thirty years.

Last year, supply chain issues and shortages around the world due to the pandemic caused a rise in inflation, leading to a rise on household bills.

The issue is said to have been raised in particular by Red Wall Tory MPs, who fear voters in their constituencies turning away from the party because of higher costs.

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It comes as a growing number of backbench Tory MPs are believed to be considering sending letters of no confidence in Mr Johnson’s leadership to the 1922 Committee.

Earlier in the week, a group of around 20 Red Wall MPs were said to have met discretely to coordinate their letters in the so-called “pork pie plot”.

In his Autumn Budget speech, Mr Sunak told the House of Commons: “Taxes are rising to their highest level as a percentage of GDP since the 1950s.

“I don’t like it, but I cannot apologise for it – it’s the result of the unprecedented crisis we faced and the extraordinary action we took in response.”

He added: “My goal is to reduce taxes. By the end of this Parliament, I want taxes to be going down not up.”

With reference to the National Insurance hike, a source told the Mail on Sunday at the time: “The Chancellor did not want to do this. He doesn’t think we should be increasing taxes when people are struggling to get back on their feet, and particularly not when we said we wouldn’t.

“So he has made sure he has played hardball over how the money is spent. After it comes into effect in April, it will have to cover a lot of the cost of sorting out the NHS. He is not going to just hand over endless amounts of money.”

Mr Johnson and Mr Sunak are now said to be discussing proposals to alleviate the cost of living crisis, including a potential one-off £500 payment to families.

A Government spokesperson told the paper: “We’ve taken decisive and historic action, with our Health and Social Care Levy due to raise around £13billion a year for the NHS and social care.

“It is a progressive tax with those earning more paying more. This will benefit people up and down the country, including by tackling the backlog that the pandemic has created on NHS operations and procedures, strengthening the adult social care system so that people do not have to bear the financial risks of catastrophic care costs themselves, and funding a three per cent pay rise for nurses.”

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