The Tory National Insurance tax rise will go ahead, Liz Truss has insisted despite calls from the party’s own backbenchers to cancel the hike in the face of rising living costs.
Truss defended the government’s plan to increase national insurance contributions from April, but accepted it would not be popular with voters.
Speaking to the BBC the Foreign Secretary said the government was in a “very difficult” financial situation as a result of the Covid crisis.
She said: “Taxes are never popular, as soon a possible we want to be in a position to lower our tax rates.
“We do face a short term issue that is we have spent significant amounts of money dealing with the Covid crisis, it does need to be paid back.”
In April, national insurance is due to rise by 1.25 percentage points for workers and employers, adding £200 a year tax into low earning workers’ wages.
The move is designed to tackle the NHS backlog and then go on to fund the reform of social care in England.
Opposition parties have said that the rising cost of living, with energy prices and inflation soaring, means that now is not the right time to raise taxes.
Backbench Tory MPs have demanded a delay in the tax rise as the price of their support for the Prime Minister as he awaits the verdict of the Sue Gray report into party scandals in Downing Street during lockdown.
But Johnson and Chancellor Rishi Sunak presented a united front on Sunday in a newspaper article making a firm commitment to go ahead with the national insurance rise.
Writing in The Sunday Times, the pair insisted that it is right to follow through on the “progressive” policy.
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 the right plan.”
The SNP’s Shadow Chancellor, Alison Thewliss MP, said the rise will have a “devastating impact on the lowest earners in society” who are facing a “toxic concoction of Tory cuts, soaring energy bills and the growing cost of Brexit”.
Thewliss said: “The UK government’s decision to plough ahead with this regressive tax hike is fundamentally wrong.
“There is no doubt that this UK government are completely out of touch with the reality of the cost of living crisis.
“We know that the Tories have never understood the difficulties working class households face, but to do this at a time when families face a toxic concoction of Tory cuts, soaring energy bills and the growing cost of Brexit is cruel and callous.”
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