Boris Johnson is under mounting pressure to delay or scrap April’s National Insurance rise after George Osborne joined criticism of the hike.
The welfare-slashing ex-Chancellor warned the 1.25-point rise will come “at a time when real incomes are shrinking” in a warning shot to the Prime Minister.
Mr Osborne, who cut billions from Britain’s poorest, added: “Boris got the big judgment call on Omicron right… On the economy, I’m less clear.”
Angry Tory MPs are putting mounting pressure on No10 to scrap the rise, which together with a freeze on income tax thresholds will leave the average household £600 a year worse off.
On Tuesday the PM’s official spokesman insisted “the levy coming in in April” was still the plan.
But today he refused FOUR times to guarantee the levy will go ahead on time. And he refused TWICE to deny Boris Johnson has had discussions about scrapping the National Insurance hike. Grilled by reporters today, Boris Johnson launched a furious defence of the hike - saying it was “absolutely vital” to fix the Covid backlog and the “right thing to do”.
But he too did not give a cast-iron guarantee the move would go ahead as planned.
Staff will pay 13.25% on what they earn above a £797-a-month threshold from April 6 - up from 12% now - in a bid to raise £12bn a year for NHS and social care.
At the same time, April will see the start of a four-year freeze on income tax thresholds. The 20p band will start at £12,570 and 40p band at £50,270.
Combined, the Resolution Foundation says these measures will leave the average household £600 a year worse off, or 1.4% of their disposable income, in 2022/23.
However, these tax hikes will hit wealthier households harder than poorer ones - cutting more than £2,500 from the richest twentieth, compared to less than £300 cut from the poorest quarter.
Energy bill rises also due in April could bring gas and electricity fees to 12% of the entire budget for Britain’s poorest households - up from 8.5% last year.
Ex-minister David Davis has publicly demanded a rethink while Lord Frost, who quit the Cabinet over tax rises, said it was “never necessary or justified”.
Boris Johnson’s official spokesman was grilled repeatedly today on whether the National Insurance rise will go ahead as planned.
Asked if the PM has had any discussions about delaying the rise, he replied: “Umm, err… there are no plans to delay the levy.
“Erm, I’ve said on a number of occasions now what that levy will achieve - addressing the backlog in our NHS and fixing the long-standing problems with our social care.”
Asked a second time he replied: “I’m not getting into individual discussions the Prime Minister has on specific policies. There are no plans to change the levy or alter the levy.”
Asked if the PM guaranteed the levy will go ahead as planned in April, he replied: “Like I say, there are no plans to remove or delay the levy.
“It’s vital we are responsible with the public finances to avoid burdening future generations with higher debt.”
Asked a second time, he replied: “I can only repeat what I’ve said I’m afraid.”
Asked a third time, he replied: “I’m just simply saying our position hasn’t changed, there are no plans to remove or delay the levy.”
Asked if it was fair to interpret that No10 was not ruling out a delay he replied: “I will leave that to you.”
In a report published today, the Commons Treasury Committee warned that the rise in employer national insurance contributions would drive up inflation.
The committee pointed to an OBR forecast, stating that "the policy mix chosen at this Budget will act as a boost to inflation, identifying in particular the increase in employer National Insurance Contributions, and the large fiscal loosening that took place in the Spending Review".
Mr Johnson's aim for higher wage growth risks a "wage price spiral" if productivity doesn't rise, the MPs said.
Splits are emerging among top Tories over the hike amid alarm about the looming cost of living crisis for families.
Work and Pensions Secretary Therese Coffey insisted on Thursday it would go ahead despite behind-the-scenes lobbying from some Tories for it to be scrapped.
"It should go ahead. That’s what’s been decided,” she told Times Radio.
But the Prime Minister's authority has taken a battering over the ongoing Downing Street partygate saga, giving angry Tories more leverage to press for the tax rise to be scrapped.
Labour has slammed the National Insurance hike, only a small fraction of which will fund a plan for social care in its first three years.
Shadow Chief Secretary to the Treasury Pat McFadden said earlier: “With inflation at its highest level in three decades, the cost of living crisis is only going to get worse in the coming months.
"The Prime Minister and Chancellor are whacking up business and working people's taxes at the worst possible time. With even their own Conservative MPs outraged, they should think again before the National Insurance rise hits hard in April.
"People are already feeling the crunch from cost of living, but the triple whammy of an imminent rise in the energy price cap, real wages falling and Tory tax rises coming down the tracks are going to make this crisis even worse.”
