Rishi Sunak outlines government help for ’significant’ price hikes
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Rishi Sunak, alongside the Prime Minister, said the increase in National Insurance (NI) was the “right plan” and “must go ahead” despite opposition. The Government said the changes, announced at last year’s Budget, are expected to raise £12billion a year, and will help to clear the NHS backlog. However, MP for Tonbridge and Malling and Chairman of the Foreign Affairs Committee Tom Tugendhat wrote a scathing take-down of the NI rise.
Mr Tugendhat said: “This spring may bring warmer weather but colder homes across our country
“For the past two years, this has felt too much like a dream. Locked away with few chances to enjoy the company of friends and family many of us have been able to save, but others have struggled.
“Work has dried up and bills have come in. Now those bills are rising, and not in isolation.
“National Insurance has always been misnamed. It’s not insurance, it’s another tax on income and employment.
“It’s a way of taking money from today’s taxpayers to pay for today’s needs. There is no savings pot that can rise or fall with investments.
“This rise will be no different. It means shaving today’s pay packets to fund a social care programme we’re planning to roll out late next year.
“But it won’t apply to everyone.
“Although the Institute for Fiscal Studies said that half of all those born in the prosperous 1980s will inherit over £136,000, those born earlier, and those in tougher towns, will inherit less.”
Mr Tugendhat went on to cite analysis from the Resolution Foundation think tank which showed that the average 25-year-old today will pay an extra £12,600 over their working lives from the employee tax, and added: “How much their boss will hold back to pay the employer’s half is hard to say.”
“Let’s be clear, this isn’t just about a per cent here or a pound there, this is about the lives of our friends, our neighbours, and us, ourselves. Poverty – even small squeezes on home finances – can put pressure on relationships and test families.
“The real-world consequences are lasting and immensely damaging.”
In a formal analysis, the Office for Budget Responsibility concluded that in addition to the 1.25 per cent National Insurance Contributions (NICs) rise directly levied on employees, 80 per cent of the equivalent increase on employers’ contributions will be “passed through to workers via lower nominal wages”.
Dennis Reed, from Silver Voices, a campaign group supporting senior citizens, has also lashed out at Mr Sunak and told Express.co.uk that the National Insurance rise will not fix the social care crisis.
He said: “Our main concern is that it has been sold on a lie basically because every time you hear the Government talk about this National Insurance rise they say it will fix the social care crisis.
“For the first two years, social care gets nothing and after that, there is no guarantee that social care will get any money to solve the crisis. If they do get a couple of billion pounds three or four years down the road, it is just a drop in the ocean compared to the money that is needed to fix the social care crisis.
“I am not saying the waiting list problem does not need to be solved but to sell the tax on the basis of solving social care is selling it on a lie.”
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Mr Tugendhat added that the government needs “policies that encourage opportunity and employment. That means freeing people to direct their efforts, and assets, where they think best.
“I’m a believer in low taxes. Not as an ideology but because it recognises that personal and financial freedom is intrinsically linked. The job of politicians should not be to take control, but give it back so that people can decide for themselves.”
On January 29 Mr Tugendhat became the first MP to say he would run to replace Prime Minister Boris Johnson in a Tory leadership contest, in an interview on Times Radio.
While his chances at the leadership seem slim, with Ladbrokes placing his odds at 12/1, he appears to have some support in Parliament, with one former Cabinet minister telling the Guardian: “Tom would be my first choice.”
Mr Tugendhat made waves on social media after making a raw and personal speech in the Commons last August, expressing his fury at the chaos of the Kabul evacuation and the approach of world leaders towards it.
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