Boris Johnson expected to breach manifesto national insurance and triple lock pledges
Prime minister Boris Johnson is expected to breach two key Tory manifesto pledges next week, according to reports.
Johnson is set to hike national insurance and limit the rate of uplifts to millions of pensioners’ state pensions, The Times reports.
The NI increase is expected to be one percentage point and estimated to raise £13bn. A cap of between £50,000 and £80,000 on the amount an individual pays for social care is also expected to be announced.
The funds raised are set to be funnelled into the NHS to help the health system clear a swelling backlog of work built up since the onset of the pandemic and to overhaul England’s ailing social care system.
Reports emerged yesterday suggesting health secretary, Sajid Javid, has been pushing Johnson to increase NI by at least two percentage points.
Javid is believed to be concerned that hiking the tax by any lower amount would not yield enough money to tackle the NHS backlog and fix the broken social care system.
The Conservatives promised not to increase VAT, income tax or NI in their election manifesto in 2019.
Johnson is also expected to announce a triple lock-lite next week, breaching another promise to maintain the annual pension uplift in full.
Under the triple lock, the state pension rises by whichever is highest out of inflation, wages or 2.5 per cent.
It is expected the calculation determining how much the state pension rises by will only include inflation and 2.5 per cent.
Statistical distortions caused by the furlough scheme have resulted in annual total pay rising 8.8 per cent.
Johnson, Javid and chancellor Rishi Sunak were set to announce the NI hike before the summer recess. However, the three were forced to self-isolate after Javid tested positive for Covid, scuppering the plans.
Tory ministers are concerned the tax hike could increase employers’ costs, possibly prompting a spike in redundancies.
Others have suggested a general election should be called if the trio press ahead with the plans.
One cabinet minister told The Times: “This has been cooked up by a cabal, I’m concerned. Nobody wants to put an undue burden on one part of society.”
“I understand you can’t make an omelette without breaking eggs but there are other fairer models out there.” Another cabinet minister said: “Politically and ideologically looking at tax is not where we should be.”
Damian Green, a Tory MP and former cabinet minister, said: “My main concern is that we produce a practical solution that is fair across the generations.
“So older people won’t have to fear losing their homes, and working-age people won’t have to pay for their own care and the care of their parents’ generation. Whatever happens people will be paying more, so there is no point trying to deny that.”
National insurance only applies to working people beneath the state pension age. The rate at which workers pay the tax depends on the level of their earnings.