Fri, 21 January 2022

Newsletter sign-up

Subscribe now
The House Live All
By Luke Tryl
Brexit
Environment
Press releases
By Women in Westminster

Grant Shapps Defends National Insurance Rise After Rumours Of Cabinet Cost Of Living Tensions

Grant Shapps Defends National Insurance Rise After Rumours Of Cabinet Cost Of Living Tensions
3 min read

Grant Shapps has defended government plans to raise National Insurance this April after his Cabinet colleague Jacob Rees-Mogg reportedly called for it to be scrapped.

The transport secretary said ministers “have a collective responsibility” and have “made our decisions” despite pressure to reverse the policy and ease the looming cost of living crisis.

The 1.25% tax rise – estimated to net an extra £12billion a year – will be used by the Treasury to pay for the Health and Social Care Levy, but with rising energy bills and continued high inflation detractors say it will place further financial burden on households.

According to The FT, Rees-Mogg, the Commons leader, is understood to have urged Boris Johnson to ditch the planned increase in employee contributions at yesterday’s Cabinet meeting.

The Chancellor Rishi Sunak is reported to have robustly defended the levy, as well as the mitigations the government has put in place to help those facing extra costs from April – citing the universal credit taper cut and a £500million household support fund.

This morning Shapps insisted the government will go ahead with the National Insurance rise. 

"We've made our decisions. We have a collective responsibility," Shapps told BBC Radio 4's Today programme.

He would not comment on the specifics of discussions in Cabinet, but defended the levy as a way to help ease the NHS backlog and solve “a historic, rather unforgivable situation where, if you happen to come down with certain types of illnesses, particularly things like dementia, you can end up losing your home”.

"We made the decision as a government to look after those things and we set out how we'll do it, which is a National Insurance increase,” Shapps added.

As well as criticising the tax rise, Rees-Mogg is understood to have questioned the productivity of civil servants who are working from home. The Times reported that he suggested significant savings could be made by reducing the number of officials.

His comments make him the latest, and most senior, Tory MP to join a growing cost of living revolt, with multiple backbenchers using Prime Minister’s Questions and a Commons statement from Johnson yesterday to call on more to be done to ease the pressures facing households.

Deputy Labour leader Angela Rayner, who took Keir Starmer's place at PMQs after he tested positive for Covid, added to Labour's consistent criticism of the National Insurance rise. 

"The Prime Minister and his Chancellor have presided over economic mismanagement, low growth and neglect of our public services," she told MPs in the Commons. 

"And their resolution to fix this? Whacking more taxes on working people.

"Combine the tax rise with soaring energy prices and the average family faces a hit of £1,200 – this is an iceberg right ahead, so will he finally stop and change course – or will he plough on to what will be a disaster for thousands of families?"

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Read the most recent article written by Alain Tolhurst - “Pork Pie” Plot Tory MPs Accused Of “Self-Indulgence” And “Student Politics”

Categories

Political parties