Boris Johnson has insisted that his ministers support raising national insurance in April despite growing pressure for a delay.
The prime minister insisted that “we’ve got to put the money in” to fund the NHS but would not confirm that the tax would increase by 1.25 percentage points in April as planned. MPs are increasingly nervous that this will coincide with big rises in inflation and energy bills, producing a cost-of-living crisis.
Downing Street insisted that the cabinet stood by its plans. A senior minister told the Daily Mail yesterday that there would be “no objection” from anyone in the cabinet if the chancellor proposed a delay.
Rishi Sunak, the chancellor, is reportedly calling the rise “the prime minister’s tax” after Johnson insisted on social care reform last summer. In a deal last September, Sunak agreed to fund a cap on the amount people pay for care on the condition that Johnson publicly accept a tax rise to pay for it.
NHS England is grappling with a backlog of six million patients waiting for operations, an issue exacerbated but not solely caused by the pandemic. Addressing it is the “number one priority for people in this country,” Johnson said.
However, asked six times to guarantee that the tax rise would go ahead in April, he only said: “What I’m telling people is that if you want to fund a fantastic NHS we have to pay for it, and this government is determined to do so.”
He added: “We can address cost of living by making sure that we deal with inflation, by getting people into work, dealing with problems in the supply chains,”
Nadhim Zahawi, the education secretary, told LBC: “I don’t think we would be doing ourselves any favours in delaying. What we need to do is make sure that we deliver that £36 billion into the social care system that this prime minister is determined to fix, as well as of course into health care.”
Speaking to Today on BBC Radio 4, Zahawi said the rise was “as progressive as we could make it” as the top 14 per cent of earners will pay half the money raised, and 6.1 million of the lowest earners will pay nothing. “I think it’s the right thing to do because it will finally create a system of adult social care that is sustainable and deliverable without breaking families,” he said.
Last night Lord Frost, the former Brexit minister, said the rise was “never necessary or justified”. Frost, who was part of the cabinet when the tax was announced but was said to have argued against it, told the Mail: “Given the new pressures on energy prices and inflation, it’s even more important now to scrap these tax increases and focus on getting the economy growing again. Allowing people to keep more of their own money is always the best way.”
David Davis, the Conservative former cabinet minister who called for Johnson to resign last week, warned that the party’s voters would “evaporate” if the tax rise was not cancelled.
He told Today that the increase could result in less money coming in to the Treasury by choking off growth. “National insurance always sounds terribly popular because people think it is just paying for health care, and so it’s the one popular tax. Unfortunately it’s the one that does most damage to growth,” he said.
He said that at the last election voters had told him they were backing the Tories because Labour would raise taxes. “Now what are we going to do? Put taxes up. What do you think’s going to happen to those votes? They’re going to evaporate.
“So for our own political interest, but more importantly for the national interest, we should keep taxes down, should cancel the national insurance increase.”
Lord Macpherson of Earl’s Court, a former permanent secretary at the Treasury, backed the increase.
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Cabinet backs national insurance rise in April, No 10 insists