Rees-Mogg ‘urges Johnson to abandon National Insurance rise’ as concern grows over cost of living crisis
The leader of the House of Commons was said to have spoken against the tax rise at a cabinet meeting on Wednesday, saying it could not be justified amid rising inflation and uncertainty over energy prices.
Rishi Sunak, the chancellor, was said to have refused to change course as it would mean having to find the money elsewhere.
A cabinet insider said Mr Rees-Mogg felt “finding savings would be more frugal and responsible” than raising taxes, according to the Financial Times.
The Telegraph said three government sources had confirmed that the exchange took place.
Grant Shapps, the transport secretary, refused to be drawn on the exchange on Thursday morning, telling Sky News: “Cabinets take place in private, so I’m not going to get commenting on cabinet meeting content.
“We have plans to catch up on the backlog in NHS care which has come about unfortunately through coronavirus and that plan is being put into place. It is also true to say we want to make sure that we relieve tax pressures on [the] public as and when we can.”
Asked whether the government could change course on the national insurance rise, the cabinet minister added: “We’re absolutely committed to doing two things — one catching up on the backlog in the NHS and that’s why we have this national insurance increase, specifically for that purpose. And two sorting out the long-term issue of social care.
“So no we’re absolutely committed to making those changes — it’s an historic change that I think will bring a lot of security to families up and down the country.”
The 1.25 per cent increase in National Insurance is due in April, when the cost of living crisis is set to peak.
It will come after inflation hit 5.1 per cent, more than double the UK’s 2 per cent target. Households are set to suffer another blow in April as the energy price cap is expected to be raised.
The Resolution Foundation said the combined effect of rising bills and taxes would cost an average of £600 per household.
The National Insurance rise was announced in September as a means to fund social care. It was expected to raise £12bn.
The proposal was met by backlash from Tory MPs as being “un-conservative”. Ten Tory MPs voted against the proposals and many more abstained.
Mr Rees Mogg is said to have privately warned against the change in September as he was concerned like many in his party after the chancellor put Britain on course for the highest tax burden since the 1950s.
The prime minister and chancellor are facing growing pressure in their party to tackle the cost of living crisis before it gets worse.
Some 20 Tory MPs and peers signed a letter in the Sunday Telegraph asking them to help consumers facing “fuel poverty” as gas and electricity payments continue to rocket.