Its a nightmare Rishi Sunak must double down on tax hikes or face political suicide

Sunak grilled by Marr over National Insurance rise in October

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A slew of tax hikes will come into force in April this year, including changes to National Insurance and dividend income rates. Joseph Robertson, director of the Orthodox Conservatives Group think tank, told that the Chancellor will need to think carefully about how he approaches the tax increases to not undermine his own position.

He is often touted as a front-runner for party leadership, up against Foreign Secretary Liz Truss.

He said: “While [Liz] Truss may conceivably end up stating she intends to roll back some of the recent taxation increases as a ploy to distance herself from Johnson’s problems, Sunak will probably see that he has to avoid this tactic.”

He described how, if the Chancellor were to backtrack on taxation increases he had been instrumental in enacting, this would be “political suicide” for any designs on Tory leadership.

Mr Robertson said: “After regularly promoting increased spending and holding aloft the ‘crisis budgets’ during the last couple of years, alongside recently standing with Boris to announce the upcoming National Insurance tax hike, rolling back his own policy decisions would be political suicide.

“He will need to find a way to double down temporarily on tax measures while allowing the public to believe that there is no danger of a return to austerity based on his inordinate spending, which along with his dapper image, lends truth to his nickname in some circles as “Dishy Rishi”.”

From April 6, 2022, National Insurance payments will rise by 1.25 percent for those eligible to pay it.

Many people will see the current payment rate of 12 percent shoot up to 13.25 percent.

As the cost of living rises, some have criticised the timing of this tax hike as households are squeezed with skyrocketing energy costs and inflation.

Mr Robertson commented: “Neither Truss nor Sunak will be able to convince the public that we are not on a precipitous edge in terms of inflation, while hitting the taxpayer for six to fund the insidious ‘Net Zero’ agenda (a likely topic for any incumbent cabinet member who assumes the mantle) will be a lose-lose topic for both.

“After two years of enormous spending and Lord Agnew’s resignation over the mishandling of fraud from the Covid Business Scheme, tackling the public perception on tax hikes is likely to be a spin doctor’s nightmare.”

Boris Johnson and Mr Sunak have so far refused to budge on the National Insurance rise, although reports of the Prime Minister’s uncertainty had reached the press.

No 10 and No 11 insisted the increase was the “right plan” for the country, and will be crucial for spurring on COVID-19 recovery in the UK.

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Writing in The Sunday Times, the pair described themselves as “tax-cutting Conservatives”.

However, they then qualified: “We must go ahead with the health and social care levy. It is the right plan.”

They argued, “every single penny” of increased taxation will be funneled into propping up the NHS.

This will include “9m more checks, scans and operations, and 50,000 more nurses, as well as boosting social care”.

They described the hike as “progressive, in the sense that the burden falls most on those who can most afford it”.

The Government estimates the increase will raise around £12 billion per year, which will first be diverted into slashing the NHS backlog caused by the pandemic.

After this, money will then be more actively invested in the social care system.

The Government says the objective is to ensure no one in England pays more than £86,000 for care – although this excludes food and accommodation bills.

National Insurance contributions will then return to pre-April 2022 levels the following year, but will be replaced by a new Health and Social Care Levy.

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