PM under pressure to steer clear of national insurance hike

Boris Johnson is under increasing pressure within his own party not to enforce an illegal increase in social security to pay for welfare.

Former Prime Minister Sir John Major joined Conservatives on Saturday, who warned of the widely anticipated move against workers and employers, arguing that it was “regressive”.

Instead, he called on the Prime Minister to take the “straightforward and honest” approach of increasing general taxation.

The government is preparing to announce plans this week to raise funds to reform welfare and tackle the huge backlog in the NHS caused by the coronavirus pandemic.

A split appeared to have formed between senior cabinet ministers over how much to increase national insurance, with suggestions that it could be up to 2%.

Sir John said at the FT Weekend Festival, “The government will have to take action to deal with welfare and that will mean an increase in taxes.

“I don’t think they should use social security contributions, I think that’s a regressive way. I would rather do it directly and honestly and claim it for tax purposes. “

Any tax increase would be in violation of the 2019 Tory Manifesto, which contains a personal “guarantee” from Mr. Johnson not to increase income tax, sales tax, or social security.

A significant number of Tories accept that some kind of tax hike is necessary but, like former Health Secretary Jeremy Hunt, are demanding that it not come in the form of an increase in national insurance.

Critics argue that it would disproportionately affect younger and lower-income workers, while retirees would not pay extra.

Tory MP Marcus Fysh said he was “concerned about the government’s apparent direction of travel” and warned of a “socialist approach to welfare”.

“I don’t think it’s conservative to punish working-age people and their employers with higher taxes on their employment when our manifesto promised not to,” he wrote in the Sunday telegraph.

A source close to Health Minister Sajid Javid this week strongly denied that he had pushed for social security to be increased up to 2%.

But they did not deny that he had spoken out in favor of an increase of more than 1%, which Chancellor Rishi Sunak allegedly rejected.

Labor has opposed an increase in social security, but Sir Keir Starmer will come under pressure to outline how he would fund welfare reforms.

A second election promise is expected to be broken in quick succession, with ministers reportedly preparing to announce that the triple lock on state pensions will be temporarily replaced with a “double lock”.

This is because wage distortions during the coronavirus crisis could result in retirees receiving a raise of up to 8%, while workers face tighter times.

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