Johnson may ditch NI rise in bid to save his job
Boris Johnson may order a suspension of the planned rise in national insurance in order to win support from his backbench MPs.
The Prime Minister once again hesitated when asked about his commitment to the 1.25 percentage point increase for employers and employees from April. He has repeatedly refused to confirm that the rise will go ahead.
Sources in Westminster say Tory MPs are demanding the increase is withdrawn or postponed as a condition of continuing to back Mr Johnson’s premiership following a number of scandals.
They also believe it is right to help those struggling to cope with a rise in the cost of living.
With the report by civil servant Sue Gray on the Downing Street parties due to be published soon, one source said that Mr Johnson was “wobbling, I think he would do anything to survive”. The report is now expected on Monday.
Mr Johnson avoided answering the question during a broadcast interview and again during a visit to north Wales, when asked whether he could confirm that the tax rise will go ahead, stressing instead the need to raise money for the NHS.
While Mr Johnson appears to be in favour of abandoning the NI increase, it would provoke a split with Rishi Sunak, the Chancellor, who needs to find ways to avoid more government borrowing.
However, official figures this week showed a £13 billion windfall from lower-than-expected borrowing. Business secretary Kwasi Kwarteng and leader of the commons Jacob Rees-Mogg are understood to be among those urging Mr Sunak to use the additional leeway to ease pressure on households.
Mel Stride, Tory chairman of the Treasury select committee, said during a radio interview that there was an “opportunity now to not go ahead with the national insurance rise in April, principally, firstly, because of the cost of living pressures that there are”.
He continued: “Secondly, it is an inflationary measure in itself and that would have knock-on consequences for the servicing costs of the national debt, for example, so it would have a negative fiscal impact in that sense.”
The former Treasury minister said he would like to see the rise delayed by a year, pointing to estimates that Mr Sunak would have about £13 billion more in the coffers than forecast. “That is . . . almost exactly the same amount as the cost of not raising national insurance.”
Downing Street insisted there was no plan to delay what is initially a health and social care levy intended to raise £12bn a year to tackle the backlog of NHS treatments as well bolster funding for the social care system over the long term.
The levy provides for a temporary 1.25 percentage point increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions for the 2022 to 2023 tax year and revenue raised will go directly to support the NHS and equivalent bodies across the UK.