National Insurance: Laura Kuenssberg issues warning to Boris Johnson
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BBC’s Laura Kuenssberg has warned of a “bumpy” face-off as Boris Johnson is considering an increase in national insurance rates, which would break the Tory manifesto commitment of not raising taxes. Mr Johnson is said to be considering a two percent raise of the contributions amidst concerns from members of his own party about the impact such a break could have on younger voters. The BBC Political Editor told BBC Politics Live: “We pick up there for where we left off again with lots of conservatives including cabinet ministers really worried about what they’ve been reading and hearing.
“One Tory Minister even said to me, ‘this is not the right way to go about it and it is not the right thing to do’.
She went on: “But I think the last 48 hours of have shown Number 10 that it is going to be pretty bumpy trying to get this through.
“Because Boris Johnson is planning to break one promise, saying that he would not increase taxes in order to keep the other, trying to fix social care.”
Boris Johnson is said to be considering an increase in National Insurance rates to pay for a major overhaul in social care.
The rumoured tax hike would break a Tory promise made before the 2019 election, which was not to “raise the rates of income tax, National Insurance or VAT”.
Health Secretary Sajid Javid is pushing for this 2 percent increase in National Insurance contributions due to rising concerns over the state of social care in the UK.
However, small businesses have warned of this “devastating” increase, which would impact severely on their recovery from the pandemic.
Suren Thiru from the British chambers of commerce has told BBC Breakfast this morning: “Raising national insurance tax-essentially tax and jobs would have the potential to limit the recovery in jobs or sort of wider recovery.
“Because it makes the cost of employing someone that much more expensive at a time that is dissipating loads of other costs at the same time.
“We want the government to look at ways of boosting the wider recovery because that will help live the tax revenue needed to help support public services but also the wider economy.”
Former minister Jake Berry, leader of the Northern Research Group of Tory MPs, warned against a policy that appeared aimed at elderly voters in affluent southern seats.
Mr Berry said: “It doesn’t really seem to me reasonable that people who are going to work in my own constituency in east Lancashire, probably on lower wages than many other areas of the country, will pay tax to support people to keep hold of their houses in other parts of the country where house prices may be much higher.”
Former Tory Cabinet minister Sir John Redwood warned against a “stupid” tax rise.
“A tax on jobs when you want to promote more and better-paid employment is particularly stupid,” he said.
IFS senior research economist Stuart Adam said: “Choosing to increase NICs rates would mean that just 1.4 percent of additional revenue came from families that contain a pensioner – who now make up 23 percent of all families.
“In contrast, these families would contribute 13.8 percent of additional revenue if the basic and higher rates on income tax were increased.”
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