Tax rise plan

Boris risking Tory backlash over plan to hike NICs

The Prime Minister wants to raise taxes to pay for social care

Boris Johnson is facing a backbench revolt over looming plans to increase National Insurance Contributions to help pay for an increased spending on social care. 

Speculation over an NIC rise has been around for weeks and the Prime Minister could make an announcement as early as next week.

However, the proposal is causing a rift in the Tory party which pledged in its 2019 election manifesto that it would not raise taxes.

Downing Street will argue that the pandemic has changed the political and economic outlook substantially and that new circumstance demand new responses.

Mr Johnson is likely to soften any rise in NICs with a pledge to limit the amount individuals have to pay for support in old age and protect them from having to sell family homes to settle the bills.

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But he is also facing a battle within Cabinet over what sort of hike to introduce. While the PM is proposing 1%, Chancellor Rishi Sunak wants 1.5%, and Health Secretary Sajid Javid says the costs involved require a 2% increase.

Five Cabinet ministers have said they will oppose any increase in the tax at all, according to The Times.

Federation of Small Businesses national chairman Mike Cherry, who recently called for a cut in NICs, said:  “Breaking a manifesto promise by increasing NICs just at the moment when firms are struggling to get back on their feet would be devastating for small businesses and the local communities they serve.

“NICs act as a jobs tax, making it harder for small firms to provide opportunities and invest to improve productivity. If this hike happens, fewer jobs will be created by the UK’s small business community over the crucial months ahead.

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