Rishi Sunak and Boris Johnson have vowed to push ahead with a hike to National Insurance – despite claims the prime minister was “wobbling” over whether to U-turn on the issue.
The prime minister and the chancellor said they were “tax-cutting Conservatives” but the health and social care levy remained “the right plan”.
The 1.25 percentage point rise in national insurance is due to come into effect in April, with rumours swirling that numerous cabinet ministers had voiced opposition to the plans. Mr Johnson was reportedly mulling whether to scrap the tax hike over fears of a leadership challenge sparked by the partygate scandal.
In a joint article for the Sunday Times, Mr Sunak and Mr Johnson said they were both “Thatcherites” and wished to cut taxes before the next general election.
They wrote: “We must clear the [Covid] backlogs, with our plan for health and social care — and now is the time to stick to that plan.
“We must go ahead with the health and care levy. It is progressive: the burden falls most on those who can most afford it.
“Every single penny of that £39 billion will go on these crucial objectives – including nine million more checks, scans and operations, and 50,000 more nurses, as well as boosting social care.”
They add: “We are also Thatcherites, in the sense that we believe ... there is no magic money tree.”
A Government source told the newspaper that plans to cut VAT on fuel, which would have cost more than £2 billion a year, have also been scrapped.
From 2023, National Insurance is due to drop back to its current rate, with a 1.25 per cent health and social care levy then applied to raise funds for improvements to care services.
However, MPs fear that the rise comes at a difficult time for millions of families amid a growing cost-of-living crisis.
Inflation is at a 30-year high after the Covid pandemic and the energy price cap is due to lift in the spring, possibly increasing bills by 50 per cent.
