Boris Johnson is facing a mounting Tory backlash over his plan to hike National Insurance to pay for social care reform.
He was warned it will cause ‘significant damage’ to the Conservative Party and could see the tax burden hit a 70 year high.
The levy is intended to provide a funding boost to the health service and overhaul help for the elderly.
The levy is expected to consist of an increase of at least one per cent on employee and employer National Insurance contributions (NICs), hitting millions of workers in the pocket.
Ministers, MPs and Conservative grandees have all warned Mr Johnson not to go ahead with the ‘idiotic’ move because it will break a key 2019 Tory election manifesto pledge not to raise taxes.
There are also growing fears of a hammering at the ballot box at future elections from younger workers who will be disproportionately affected by the hike.
Lord Hammond, the Tory former chancellor, said today he believes asking young workers to ‘subsidise older people who’ve accumulated wealth during their lifetime’ is ‘wrong’ and ‘would provoke a very significant backlash’.
Claims are that the tax burden will hit a 70-year high if National Insurance contributions are increased. The number would be the highest recorded since 36.1% in 1951 at the end of Clement Attlee’s Labour administration.
The Taxpayer’s Alliance said a one per cent increase would see the tax burden hit 35.4% of GDP by 2024/25 compared to 34% in the last financial year.
The Trade Union Council has called for Sir Keir Starmer, Labour Party leader, to argue in favour of an increase in capital gains tax instead, stating that it is ‘not right’ to hit young people ‘when ministers are leaving the wealthy untouched’.
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