One of the Prime Minister’s closest allies has said that the Prime Minister became “uncharacteristically angry” following a heated exchange at Cabinet over tax rises.
At Cabinet on Wednesday, sources have told Chamber that Jacob Rees-Mogg, the Leader of the Commons, questioned the timing of the tax rise as inflation and energy bills are set to soar. In what the Times has called “an impassioned defence”, the Prime Minister defended his policy to raise national insurance to fund health and social care. Pointing to two people that the Prime Minister knows who have had cancer treatment delated during the pandemic, he told Cabinet that those who opposed his policy were running contrary to public opinion.
Speaking to Times Radio, the Chair of the Northern Research Group, Jake Berry said that many Conservative MPs were concerned about the electoral effect this was having on their voters “If people are feeling poorer and they haven’t seen levelling up in their community they will be looking for change.”
Tax hikes:
A health and social care levy of 1.25% is due to be added to employees’ National Insurance contributions from April. An additional £12bn is expected to be raised each year with money raised being used to ease pressure on the NHS and then be pumped into the social care system. With the pressures caused by the Omicron variant, many are worried that the NHS will swallow most of the additional spending, leaving social care with little extra revenue.
Although the Chancellor Rishi Sunak has said that he wants to cut taxes before the next election, the National Insurance hike puts the country on course for its “highest overall tax burden since 1950”. Rees-Mogg’s latest call for the government to abandon the plans “reflects unease among Tory MPs about high levels of tax”. Given the Prime Minister’s robust defence this week at Cabinet, it does not look like the Prime Minister is about to budge.
Energy bills:
In January 2019, a price cap for the most expensive gas and electricity tariffs was introduced in the UK. Due to be announced next month and introduced on 1 April, the energy price cap is due to be reviewed. With senior Conservative MPs calling for Government to intervene in a bid to ensure customers pay a fair price, this is likely to cost the Treasury significantly.
Inflation:
The Bank of England has predicted inflation will rise to 6% this spring, suggesting “the people selling some of these things have had problems getting enough of them.
“This block in the supply caused prices to rise.”
Travel costs:
Petrol and diesel have hit their highest levels since 2012 with the RAC predicting that petrol could reach 150p a litre this year if oil prices increase further.
Rail fares are due to rise as well, by 3.8% in March seen as the biggest increase for almost a decade.
