PM has 'absolutely no problem' with massive tax hike despite millions facing poverty

6 April 2022, 13:00 | Updated: 6 April 2022, 13:18

The Prime Minister said he has "absolutely no problem" with hiking national insurance
The Prime Minister said he has "absolutely no problem" with hiking national insurance. Picture: Alamy

By Megan Hinton

The Prime Minister said he has "absolutely no problem" with hiking national insurance to help fund the NHS, despite millions struggling with the cost of living crisis.

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Boris Johnson said the NHS is " biggest priority for the country" claiming the tax hike that comes into force today, is the "right decision".

Speaking in Welwyn Garden City, Hertfordshire, he said: "I've got absolutely no problem with it. We've got to do the difficult things.

"We've got to take the big decisions, the right decisions for this country."

It comes as experts issued stark warnings that people in the UK will starve, freeze and could consider suicide as they desperately struggle to pay soaring energy and tax bills from this month.

Today the National Insurance contributions increased by 1.25% on to cover a reform to the social care system and tackle the NHS backlog caused by the coronavirus pandemic.

From April 2023 onwards, the NI rate will decrease back to the 2021-22 level, with a new 1.25% health and social care levy legally introduced.

Mr Johnson said the increase will raise almost 36 billion pounds over the next three years to help reduce the Covid-induced backlog.

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Defending the rise, the PM added: "What we are doing today is unquestionably the right thing for our country, it's the right thing for the NHS.

"Because we've got, here in the UK, we've now got backlogs, waiting lists of six million people.

"Everybody across the country knows somebody who is waiting for cancer treatment or some sort of procedure that's crucial for their health.

"We've got to give our doctors and our nurses the wherewithal, the funding, to deal with that."

The Prime Minister said the Government would help families "in any way that we can", including the £22 billion package of measures announced to support households "through what are unquestionably tough times caused by the end of the pandemic, the global inflation problem, the energy price spike".

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The hike in National Insurance comes just days after Ofgem raised the price cap of gas and electricity, seeing it soar by 54 per cent on Friday to £1,971 for an average home.

Experts predict it will be around £2,700-a-year from October.

There were calls for the National Insurance hike to be delayed due to growing pressures on household finances and the ongoing cost of living crisis driven by rising inflation and soaring energy prices, but the Government says it has been forced to go ahead with the levy.

The Conservative Party 2019 election manifesto, which helped Mr Johnson deliver a landslide majority, pledged "not to raise the rates of income tax, national insurance or VAT".

But senior ministers have argued that the impact of the coronavirus crisis meant that tax promise to the electorate could no longer be kept.

Read more: Octopus Energy boss warns prices could rise even further this winter

Boris Johnson acknowledged households would face choices to help make ends meet.

Asked whether families should eat cheaper food, not replace clothes, turn down the thermostat or turn heating off entirely, the Prime Minister said: "People obviously are going to face choices that they are going to have to make.

"We in the Government will do everything that we can to help."

The "most important thing" that could be done was to have a "strong, robust economy in which you have a high level of security in your employment".

The question comes as Money Saving Expert founder Martin Lewis was forced to create a guide on 'how to heat the human not the home' as people desperately struggle to keep warm during the latest cold spell.

Mr Lewis said: "I felt sad asking my team to put this together, but my emailbag is full of folk so desperate they can't put the heat on, I wanted to try some help."

The list focuses of the cheapest way to keep warm, without the cost of turning on the heating, and details ways to eat hot food with many reporting that can no longer afford to cook meals.

The Government will unveil its long-awaited energy strategy on Thursday, with rising bills one of the main pressures on household finances.

Boris Johnson told reporters in Welwyn Garden City, Hertfordshire, that there was a "limit to the amount of taxpayers' money" that could be used to address the problem.

"We will do everything we can to help people with the the energy price spikes, which ... are a global thing, they are being exacerbated by what (Vladimir) Putin is doing in Ukraine. We'll have to see how long that goes on for.

"But, as we did during Covid, we will make sure we look after people to the best of our ability.

"Now, we've got to be frank with people, there's a limit to the amount of taxpayers' money we can simply push towards trying to deal with global energy price spikes.

"What we can do is make sure that we fix some of the long-term problems and I think it was a great mistake not to invest long-term in nuclear power. And I'll be saying a lot more about that tomorrow."

He said it was also possible to be "more urgent" in rolling out some renewable power generation.