‘No magic money tree’: Johnson and Sunak confirm controversial tax hike will go ahead

UK

Boris Johnson and Rishi Sunak have doubled down on a controversial hike to National Insurance, following reports the prime minister was having second thoughts about the policy.

Mr Johnson is under pressure from some Conservative MPs to scrap or at least delay the increase to win back support as he awaits the findings of Whitehall and police inquiries into claims of lockdown-busting parties held in Downing Street.

But Mr Johnson, together with Chancellor Rishi Sunak, has now made a firm commitment to go ahead with the 1.25 percentage point increase in April, which they say will tackle backlogs in the NHS caused by the pandemic and reform social care.

Writing in The Sunday Times, they hailed the “progressive” policy and insisted there was “no magic money tree” to provide the needed funding.

“We must clear the COVID backlogs, with our plan for health and social care – and now is the time to stick to that plan. We must go ahead with the health and care levy. It is the right plan,” they said.

“It is progressive, in the sense that the burden falls most on those who can most afford it.

“Every single penny of that £39 billion will go on these crucial objectives – including nine million more checks, scans and operations, and 50,000 more nurses, as well as boosting social care.”

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Mr Johnson and Mr Sunak said they are both “tax-cutting Conservatives” and said they “believe passionately that people are the best judges of how to spend their own money”.

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PM says it is ‘vital’ that COVID backlog is funded

The prime minister and chancellor wrote: “We want to get through this Covid-driven phase, and get on with our agenda, of taking advantage of our new post-Brexit freedoms to turn the UK into the enterprise centre of Europe and the world.

“We want lighter, better, simpler regulation, especially in those new technologies in which the UK excels. We are also Thatcherites, in the sense that we believe in sound money. There is no magic money tree.”

In April, national insurance is due to rise by 1.25 percentage points for workers and employers.

From 2023, it is due to drop back to its current rate, with a 1.25% health and social care levy then applied to raise funds for improvements to care services.

Political opposition to the change has come from all sides of the Commons, as MPs fear the impact that cost of living pressures could have on stretched household budgets.

Inflation is at a 30-year high after the coronavirus pandemic and the energy price cap is due to lift in the spring, possibly increasing bills by 50%.

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