Liz Truss has insisted that the government is “committed to cutting taxes” whilst Boris Johnson and Rishi Sunak confirmed they will go ahead with plans to raise national insurance from April.
The Foreign Secretary told Sky News that the reason for the hike is the government’s spending on the Covid crisis.
“As soon as possible, we want to be in a position to lower our tax rates, we want to drive economic growth, because ultimately that is what will make our country successful,” Truss said.
She added: “But we do face a short-term issue, which is that we have spent significant amounts of money dealing with the Covid crisis that does need to be paid back.”
Meanwhile, Boris Johnson and Rishi Sunak also joined forces to support the controversial national insurance hike amid concerns about the spiralling cost of living.
Writing in The Sunday Times, the prime minister and the chancellor insisted they will follow through with the “progressive” move.
National insurance is set to increase by 1.25 percentage points for workers and employers from April.
Labour called on the Tories to “rethink” the hike, with shadow levelling up secretary Lisa Nandy warning “it’s just simply not possible for a lot of people to survive” if their tax burden grows.
And she said her party would “come forward with a much fairer taxation system”.
She told the BBC: “You can’t possibly hit people with more taxes at the moment. It’s just simply not possible for a lot of people to survive.
“The stories that I’m hearing from people across the country about the sacrifices they’re going to have to make are enormous.”
She added: “We’re hoping that the Government won’t go ahead with it.
“Well, look – we wouldn’t bring it in in the first place, let me be absolutely clear with you if there was a Labour government today there would be no rise in National Insurance, people would not be facing the prospect of seeing their incomes squeezed even more.
“With a bit of luck this won’t come in at all, we’re going to be doing everything that we can over the next few weeks to try and appeal to Tory MPs’ consciences and try and persuade the Prime Minister to rethink.
“But if we can’t do that, what we’ll do is come forward with a much fairer taxation system that doesn’t hit working people the hardest.”
The national insurance increases will mean an employee who earns £20,000 per year will pay £89 more in tax, whilst someone on £50,000 will pay £464 extra.
Critics argued the hike will hit the lower-paid the hardest and worsen the inflation effects on households facing higher prices for things like energy prices and food.
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