Business secretary Kwasi Kwarteng has said this week that the government will not go back on plans to increase National Insurance amid the cost-of-living crisis.
The government announced in September that it would raise National Insurance by 1.25 per cent from this April, in order to fund health and social care moving forward.
Ministers expect the move to raise £12 billion per year and are planning for the funds to initially go into the NHS before allocating a portion of the money to social care over the next three years.
The move has been criticised by MPs, with the Treasury Select Committee warning that it will leave those with lower incomes worse off and drive up already rampant inflation.
However, Kwarteng [pictured] talked up the importance of the increase, dubbed the ‘Health and Social Care Levy’, in helping the NHS recover from the Covid-19 pandemic.
He said: “We're totally committed to funding the NHS, clearing the backlog of the NHS, and also funding social care and the way to do that is through this tax rise.
“That's how we're going to get the revenue to pay for the backlog and to pay for a sustainable social care system.”
Mel Stride, the Conservative chair of the Treasury Select Committee, has said that he would prefer to see the National Insurance rise postponed by one year.
Elsewhere, former cabinet minister David Davis told the BBC that the National Insurance rise was being carried through based on outdated knowledge, on the grounds that policymakers did not know in September last year that inflation would be at its highest for 30 years by April 2022.
Davis said: “They didn’t know what pressure they would be on ordinary people”, pointing out that interest rates, council tax and energy prices are all going up in tandem.
Photo taken from Wikimedia Commons
