Kwarteng: No U-turn on National Insurance tax rise
- Published
There will be "no U-turn" on a planned National Insurance hike intended to fund health and social care, Business Secretary Kwasi Kwarteng has said.
The planned rise has faced criticism from MPs, including calls from Conservatives for it to be scrapped.
Critics have said that the increase will have a higher impact on the lower-paid and contribute to inflation.
But the government has said it is needed to help the NHS recover after the pandemic.
Mr Kwarteng told the 成人快手 on Thursday that there would be "no U-turn" on the rise.
"We're totally committed to funding the NHS, clearing the backlog of the NHS, and also funding social care and the way to do that is through this tax rise.
"That's how we're going to get the revenue to pay for the backlog and to pay for a sustainable social care system," he said.
Inflation pressures
It comes after a Treasury Select Committee report warned that the planned rise would contribute to a rise in inflation.
Mel Stride, a Conservative MP and the committee chairman, told the 成人快手 that there was an "opportunity now to not go ahead with the National Insurance rise in April", and that he would prefer to see it delayed for a year.
On Monday, Conservative MP David Davis told the 成人快手 Radio 4 Today programme that the policy was based on the "wrong data", adding that policy makers did not know that by April the UK would have the highest inflation for 30 years, or that interest rates, council tax and fuel prices would be rising when formulating the policy.
"They didn't know what pressure there would be on ordinary people," he said.
Under the plans, employees, employers and the self-employed will all pay 1.25p more in the pound for National Insurance (NI) from April 2022 for a year, when the extra tax will be collected as a new Health and Social Care Levy.
The increase will see an employee on 拢20,000 a year pay an extra 拢89. Someone on 拢50,000 will pay 拢464 more.
People earning under 拢9,880 a year, or 拢823 a month, won't have to pay National Insurance, or the new levy when it is introduced.
The government says the changes are expected to raise 拢12bn a year, which will go initially towards easing pressure on the NHS .
A proportion will then be moved into social care system over the next three years.
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