Why Boris Johnson faces a backlash over ‘regressive’ plans to hike National Insurance

While we may be about to enjoy a September heatwave, summer recess is over, and Boris Johnson faces a growing backlash from his own MPs over plans to raise National Insurance.

In the Conservatives’ 2019 manifesto (which you can find online here), under the section titled ‘Boris Johnson’s Guarantee’ he wrote: “We will not raise the rate of income tax, VAT or National Insurance.”

The Prime Minister’s latest U-turn has provoked outrage among his own cabinet, and presented a handy line of attack for Labour.

If you’re still catching up with this story, let’s run through the key questions.

What are the Government’s plans?

Well, we still don’t know for sure. The PM was locked in talks with his Health Secretary Sajid Javid and Chancellor Rishi Sunak over the weekend, and a day for the announcement is yet to be confirmed (rumours are that it could be as soon as Tuesday).

Reports in the papers suggest the hike in NI could be around 1.25%.

Why is a tax rise needed?

It stems back to another promise Mr Johnson made, when he took power back in July 2019: “I am announcing now, on the steps of Downing Street, that we will fix the crisis in social care once and for all with a clear plan we have prepared.”

The social care crisis needs funding, fast. But there are more immediate problems too.

Reports suggested that £5.5 billion more funding has been agreed for NHS shortfalls later this year. Much of this is about helping to clear the backlog caused by the pandemic.

It could be that the extra cash will be used for this backlog first, then switched to fund social care in the years ahead.

Why is it so controversial?

Aside from the question of breaking manifesto pledges, hiking NI will hit the pockets of hard-working people across the nation, of all ages.

While the ultimate benefit is that more elderly people will be able to keep their homes rather than sell them off to fund their care, there is growing anger that everyone else will have to pay for it.

Remember, if you’re retired you don’t pay NI.

Jake Berry, leader of the Northern Research Group of Tory MPs, told Radio 4’s Today: “It doesn’t seem fair to me – particularly following this pandemic where so many people have taken great sacrifices to keep people safe, it’s particularly hit the youngest, particularly hit those in work – that we then ask those in work to pay for people to have protection in care.”

Other, more traditionally hard-line Tories, such as Sir John Redwood, have branded the move a “tax on jobs” and “stupid”, while former PM Sir John Major said it was “regressive” and called for an increase on general taxation instead.

What are Labour saying?

Labour leader Sir Keir Starmer has made his views clear on the matter. “We do need more investment in the NHS and social care but National Insurance, this way of doing it, simply hits low earners, it hits young people and it hits businesses,” he told the Mirror.

“We don’t agree that is the appropriate way to do it. Do we accept that we need more investment? Yes we do. Do we accept that NI is the right way to do it? No we don’t.”

Given the opposition, will it actually go ahead?

It’s looking unlikely that the PM will row back at this stage, but it’s a risky strategy.

The Tories could lose their reputation as the low-taxes party, and it gives Labour the opportunity to go on the attack on an issue that’s likely to resonate among the ‘red wall’ seats it lost at the last election.

One small crumb of comfort for Mr Johnson is a YouGov poll that shows that two-thirds of Britons support a one-point NI hike and prefer it to an income tax rise.

Expect to see more open warfare among MPs over the coming days - the heatwave could soon turn stormy.

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