Personal Finance

Boris Johnson ‘fully committed’ to national insurance rise

Downing Street has insisted Boris Johnson is “fully committed” to introducing a controversial national insurance rise in the spring, despite reports that he is “wobbling” on the issue.

The manifesto-breaking rise of 1.25% in national insurance contributions (NICs) was presented by Johnson as a way of tackling the NHS backlog and reforming social care.

Rightwing Conservatives who are opposed to rising taxes are seeking to exploit the prime minister’s current weakness by urging him to scrap it or delay its introduction.

A government source told the Times that Johnson is “wobbling” over the rise, adding that he “would do anything to survive” his current difficulties over Downing Street parties. And sources told the Guardian that the Treasury is becoming increasingly alarmed that Johnson may be preparing to scrap the rise, scuppering public finances.

But, pressed on those reports on Friday, a No 10 spokesperson said: “The prime minister and chancellor are fully committed to introducing the health and social care levy in April.

“We’ve spoken before about why we are doing that – in order to give the NHS the funds it needs to tackle the backlog that has built up, as well as tackling the long-term issue of social care.”

Speculation about the planned NICs rise was fuelled this week when Johnson’s refused to offer a cast-iron guarantee that it would go ahead amid growing concerns about cost-of-living pressures.

And defence minister James Heappey told the BBC’s Question Time on Thursday that the government is “in listening mode” when it comes to assessing the policy.

On Friday, however, both No 10 and the technology minister, Chris Philp, offered a stern defence of the tax rise, insisting it will be enacted as planned.

Philp denied any delay is being considered, telling LBC the “plan is to proceed as intended”.

He said the rise, and subsequent introduction of the health and social care levy from 2023, will provide £36bn over three years to fund the NHS and social care.

Opposition to the change has come from all sides of the Commons, as MPs fear the impact that increasing financial demands could have on stretched household budgets at a time of high inflation and soaring energy costs.

Former minister Robert Halfon said the government should look at different ways to support struggling families, including further possible cuts to overseas aid, rather than ploughing ahead with the NICs rise.

Labour is also opposed to the rise. Speaking to reporters on a visit to Glasgow, its leader, Keir Starmer, said: “The prime minister needs to act on this.

“We’ve got a very serious issue here, with everybody facing prices going up, whether that’s fuel, energy bills at home, inflation going up to something like 6%, the worst it’s been since the John Major years.

“And at that very moment, Boris Johnson and his government want to impose a tax hike on people in April.”

The proposed 1.25% rise for workers and employers is due to begin in April after it was agreed by cabinet and voted on by MPs, with only five Tory MPs voting against, and 37 not voting.

From 2023, the contribution is due to drop back to its current rate, with a 1.25% health and social care levy then applied to raise funds for improvements to care services.

In the 2019 Tory election manifesto the party had ruled out increasing national insurance if returned to power.


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