Rees-Mogg ‘urges Johnson to abandon National Insurance rise’ as concern grows over cost of living crisis

Pressure has been building on Boris Johnson to tackle financial strain on households

Jacob Rees-Mogg has called on Boris Johnson to abandon the planned hike in national insurance, exposing the tensions at the heart of government amid warnings over a looming cost of living crisis.

The leader of the House of Commons was reported to have spoken out against the tax rise at a cabinet meeting on Wednesday, saying it could not be justified amid rising inflation and uncertainty over energy prices.

The move will add to the sense of Tory unease at the manifesto-busting 1.25 percentage point increase in national insurance, after Lord Frost, who had expressed concern over taxation and Covid measures, quit the government in December.

A cabinet insider told the Financial Times that Mr Rees-Mogg felt “finding the savings would be more frugal and responsible” than raising taxes.

However, Rishi Sunak, the chancellor, was said to have refused to change course at the cabinet meeting on Wednesday as it would mean having to find the money to tackle the NHS backlog and social care reforms elsewhere.

Mr Rees-Mogg avoided reference to his dissent during business questions in the Commons on Wednesday as the Labour frontbench suggested he should “cross the floor” of the chamber in protest at tax hikes.

Earlier this year, the cabinet minister signalled his opposition against the move, citing George Bush Sr’s promise not to create new taxes in his bid to be the US president — before he went on to raise taxes and lose the next election to Bill Clinton.

“Voters remembers these words after president Bush had forgotten them,” the cabinet minister wrote in a national newspaper in September.

Grant Shapps, the transport secretary, refused to be drawn on the exchange on Thursday morning, telling Sky News: “Cabinets take place in private, so I’m not going to get commenting on cabinet meeting content.

“We have plans to catch up on the backlog in NHS care which has come about unfortunately through coronavirus and that plan is being put into place. It is also true to say we want to make sure that we relieve tax pressures on [the] public as and when we can.”

Asked whether the government could change course on the national insurance rise, the cabinet minister added: “We’re absolutely committed to doing two things — one catching up on the backlog in the NHS and that’s why we have this national insurance increase, specifically for that purpose. And two sorting out the long-term issue of social care.

“So no we’re absolutely committed to making those changes — it’s an historic change that I think will bring a lot of security to families up and down the country.”

The hike in national insurance will come after inflation hit 5.1 per cent, more than double the UK’s 2 per cent target. Households are set to suffer another blow in April as the energy price cap is expected to be raised.

The Resolution Foundation said the combined effect of rising bills and taxes would cost an average of £600 per household.

The National Insurance rise was announced in September as a means to tackle the staggering NHS backlog and eventually be used to fund social care, raising an expected £12 billion a year. The proposal, however, was met by backlash from Tory MPs as being “un-conservative”. Ten Tory MPs voted against the proposals and many more abstained.

The prime minister and chancellor are facing growing pressure in their party to tackle the cost of living crisis before it gets worse.

Some 20 Tory MPs and peers signed a letter in the Sunday Telegraph asking them to help consumers facing “fuel poverty” as gas and electricity payments continue to rocket.