Tory grandee David Davis has called for the planned National Insurance hike to be scrapped in the face of a looming cost-of-living crisis, piling further pressure on ministers.
National Insurance contributions are scheduled to rise by 1.25 percentage points at the start of the new tax year in April, in a manifesto-busting bid to raise £12 billion to increase NHS funding.
But ministers are under intense pressure to scrap the tax as it awaits the findings of an investigation into lockdown parties at Downing Street, as well as accusations of Islamophobia levelled by former transport minister Nusrat Ghani.
Rishi Sunak, the chancellor, appeared to distance himself from the National Insurance changes after calling it “the prime minister’s tax”.
Tory MPs who have spoken with Sunak have reportedly been “left with the impression” that he is trying to distance himself from the tax hike.
One source told the Mail on Sunday: “Rishi referred to it as ‘the prime minister’s tax’, which seemed quite pointed, to put it mildly. We were left with the impression that he didn’t want to be associated with it.”
And an unnamed senior minister told the Daily Mail: “If the chancellor proposed to the Cabinet that he wanted to cancel the National Insurance contributions rise, there would be no objection to it.
“There would be no objection from the prime minister either because this is very much a Treasury policy.”
Speaking on BBC Radio 4’s Today programme on Monday, Davis – a former Tory Cabinet minister – said: “It was a judgment made on, frankly, quite a lot of wrong data.
“They didn’t know at the time that by April we would have the highest inflation rate in 30 years, they didn’t know that interest rates would be going up, council tax would be going up, the fuel price is about to jump by £700 a year for the average family. Therefore they didn’t know quite what pressure there would be on ordinary people.”
Davis last week told Johnson that he should resign in the Commons, echoing words levelled at Neville Chamberlain after a series of failures at the start of the second world war: “In the name of God, go!”
A government source told the Telegraph that the tax rise was unlikely to be scrapped: ”We’re sticking to our guns. Social care reform is something we wanted to tackle and has been dodged for a very long time.
“Our view is the NHS and social care levy is the best way to achieve this and to clear the backlogs post-Covid. NICs is a progressive way to do that, because every person contributes according to their means and the lowest paid are protected.”
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