Cabinet ministers have warned Boris Johnson that the burden on taxpayers cannot keep rising amid Tory anger over plans to increase national insurance.
Commons Leader Jacob Rees-Mogg said ‘higher rates of expenditure’ could not continue and taxes could not be put up indefinitely.
Cabinet ministers have warned Boris Johnson that the burden on taxpayers cannot keep rising amid Tory anger over plans to increase national insurance
And yesterday Health Secretary Sajid Javid said Tory governments should try to keep tax rises as low as possible.
It came as the Liberal Democrats said they would be stepping up campaigning in constituencies where they hope to unseat Tory MPs.
Last week, an opinion poll showed a Labour lead for the first time since January – as critics branded the NI rise to fund social care ‘poll tax 2.0’.
Many backbenchers fear they will lose their seats thanks to the Prime Minister’s decision to put up national insurance by 1.25 percentage points to pay for an £86,000 cap on care bills.
Mr Rees-Mogg delivered his warning on taxes after he was asked whether it was right to end a boost to Universal Credit, which is due to end later this month.
He said: ‘Yes, it was a temporary measure that provided £9billion of extra support to people through the pandemic, but it’s right that we get back to normal.
Yesterday Health Secretary Sajid Javid said Tory governments should try to keep tax rises as low as possible
It is believed Miss Truss was among a handful of ministers who spoke out against the NI rise in a Cabinet meeting last week
‘All the money the Government spends is taxpayers’ money that is either paid for in taxes this year or paid in taxes by future generations to repay borrowing, and therefore we can’t go on with higher levels of expenditure.’
Miss Truss will warn this week that unless the Tories do not guard against the expansion of the state and embrace free enterprise Britain will end up poorer.
In a speech that will be seen as a warning against further tax rises, she is expected to urge the party to ‘face facts’, adding: ‘The path to economic revival does not lie in retreating and retrenching from the global marketplace, or inexorably growing the size of the state.
‘That would leave us poorer, less free and consign us to decline.’
It is believed Miss Truss was among a handful of ministers who spoke out against the NI rise in a Cabinet meeting last week.
Council rates ‘may rise by £261’
Council tax could rise by more than £250 for an average property over the next three years to fund a black hole in social care funding, Labour has warned.
Town halls have been putting up bills above the rate of inflation for a number of years to pay for care. The party claims this will have to continue despite the national insurance hike announced last week.
In the first three years of the 1.25 percentage point rise in the tax, only £5.4billion of the £36billion raised will go into the care sector. The average Band D home faces a council tax addition of £261 over the next three years, taking the annual bill to £2,159 by 2024/5, according to Labour.
Sir Keir Starmer said: ‘Working people and families face a tax hike because of the Conservatives’ failures on social care. Now they face an extra clobbering through council tax.’
A government spokesman said ‘decisive and historic action’ has been taken to ‘fix this crisis’.
A source close to her told The Sunday Telegraph: ‘Liz thinks free enterprise and free trade are the true Conservative way to level up, not bigger government.’
Mr Javid, who has denied reports he wanted an NI increase of 2 per centage points rather than the agreed figure, said more rises should be a ‘last resort’.
He said: ‘We should always be trying to keep taxes as low as we can and making sure we recognise that when we have tax, any tax, you are taking away hard-working people’s money and every single penny should be spent wisely.
‘If we have to spend more, we should always be trying first to see where we can make savings.
‘Tax rises should always be the last resort. It’s been right to do it on this occasion but we should always try to avoid it.’
Meanwhile, the CBI business group will warn today that higher corporate taxes will hold growth back. The 1.25 percentage point rise in NI was a blow to firms, which pay it along with their staff.
Director general Tony Danker said ministers must ‘flip business taxation on its head’ and reward firms that invest, adding: ‘After the pandemic, we in business believe we should pay our share to tackle the debts of Covid.
‘That is why many business leaders accepted the jaw-dropping six-point corporate tax increase announced in March.
‘I am deeply worried the Government thinks taxing business is without consequence to growth. It’s not. Raising business taxes too far has always been self-defeating as it stymies investment.’
Source: Daily Mail UK