Boris Johnson is facing Tory alarm over his ‘Poll Tax 2.0’ tax raid today after a government impact assessment admitted it could hammer families and jobs.
The PM has been hit with another wave of concerns about the dramatic £12billion-a-year national insurance hike, intended to bail out the NHS and revolutionise social care.
Conservatives have warned it could cost Mr Johnson the next election after a poll showed an immediate slump in support, with fears it is a ‘gift’ to Labour in Red Wall seats.
One MP told the Sunday Telegraph they were already receiving mail from constituents comparing the move to Margaret Thatcher’s disastrous attempt to reform local rates.
An impact assessment produced by HM Revenue & Customs for the Treasury last week fuelled the nerves.
Boris Johnson (pictured last week) has been hit with another wave of concerns about the dramatic £12billion-a-year national insurance hike, intended to bail out the NHS and revolutionise social care
Conservatives have warned it could cost Mr Johnson the next election after a poll showed an immediate slump in support
‘There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce,’ it said.
It added that the would be a ‘significant’ impact on the behaviour of companies and individuals.
‘The measure is anticipated to have a significant macroeconomic impact, with consequences including but not limited to for earnings, inflation and company profits,’ the assessment said.
‘Behavioural effects are likely to be large, and these will include decisions around whether to incorporate or not, and business decisions around wage bills and recruitment.’
Former party leader Sir Iain Duncan Smith is spearheading mounting protests at the ‘chaotic’ tax hike plan.
Tory MPs in seats seized from Labour in the North and Midlands cautioned it could spell ‘doom’ for the party.
One said privately: ‘This is a Red Wall tax in all but name and it’s a gift to Labour.’
Research from the TaxPayers’ Alliance has suggested the new NI levy will disproportionately affect workers in the North and Midlands, as well as working people compared to the retired.
Rebels now claim there are as many as 100 Tory MPs in a so-called ‘awkward squad’ organising against the plans.
They claimed revolts in further votes on the plans this week be far worse than last week’s capitulation, where just five Tories voted against.
Senior Tory MP Marcus Fysh told the Mail on Sunday: ‘Without much greater explanation and concessions, the Government faces a potentially much greater rebellion from the Tory benches this week.’
Branding the tax rise plans ‘ill-thought-out’, he added that the Tories abandoned their ‘hard-earned’ reputation as the party of low taxes ‘at our peril’.
But Health Secretary Sajid Javid said it would not have been right ‘doggedly’ to stick to Conservative manifesto promises in the light of the ‘unprecedented strain’ on the NHS after the pandemic.
Speaking on Trevor Phillips On Sunday on Sky News, Mr Javid said it is ‘not at all’ the case that the Government was shifting the responsibility of social care on to councils, and said the changes would make the system ‘stronger’.
‘Already today, spending on adult social care (is) in normal times around £20billion a year, that’s a combination of funding from central government and locally raised funds,’ he said.
‘What we’ve announced this week is a top-up on that to provide as I say more workplace training, this new system of a cap, and better means testing.’
He added: ‘It will remain a combination of funds and each year will be determined based on need, but the changes that we’ve announced will make it a stronger system and local authorities will continue to play a hugely important role in that.’
Defending tax rises, Mr Javid said: ‘I wasn’t prepared to see as the Health Secretary where, for example with the NHS, with the growth that we’ve seen in the waiting list, I wasn’t prepared to see that waiting to be any higher than it needs to be.
‘I want that waiting list to be tackled, and the way to do that is to make sure that the resources are there and we’re also making sure of the right reforms.’
Rebels claim revolts in further votes on the plans this week be far worse than last week’s capitulation, where just five Tories voted against
Leaders of the group are set to meet Chancellor Rishi Sunak tomorrow ahead of further votes on the NI proposals on Tuesday in a debate on the Health and Social Care Levy Bill.
In the hugely controversial move last week, the Prime Minister ordered Tory MPs to vote though a 1.25 per cent rise in NI from next April, initially to raise £36billion in three years mostly to combat Covid-related NHS waiting lists and then to fund radical reforms to help spare people having to sell their homes to fund social care.
Mr Johnson justified the move by insisting his Government ‘will not duck the tough decisions needed to get NHS patients the treatment they need and to fix our broken social care system’.
But the NI rise – breaking a clear manifesto pledge in the 2019 election manifesto that delivered Mr Johnson an 80-strong majority in the Commons – has plunged his party into a bitter civil war and identity crisis.
Writing in the MoS today, David Mellor – who served in Margaret Thatcher’s government – criticises Mr Johnson for committing a ‘fundamental breach’ of Conservative principles.
There were also complaints that last week’s vote was only won because Tory whips ‘bullied’ new MPs into believing the measure amounted to a ‘vote of confidence’ in Mr Johnson and the Government could fall if it was defeated.
And there was anger over claims No 10 deliberately fuelled rumours of a reshuffle to deter rebels hopeful of a ministerial job or promotion.
Source: Daily Mail UK