‘Double whammy’ of benefit cut and national insurance hike ‘attack’ on key workers, Starmer says

‘As usual with this prime minister it is working people who are going to have to pay for the cost of his failure,’ says Labour leader

(Reuters)

Sir Keir Starmer has accused Boris Johnson of hitting low-paid families with a “double whammy” of a universal credit cut and a hike in tax, as the party warns that some key workers will be more than £1,000 worse off.

Launching a fresh attack on the government’s recently announced manifesto-busting plans to hike national insurance, Labour claimed the government was “putting the very wealthiest ahead of working people”.

It comes amid Tory unease over Mr Johnson’s decision to increase national insurance contributions by 1.25 percentage points while standing by plans to reduce universal credit payments to pre-pandemic levels.

According to a Labour analysis, the party said these policies – combined with plans to freeze the income tax personal allowance – represented an “attack on the key worker heroes” Britain relied on throughout the Covid crisis.

The party’s analysis suggested a social care worker could lose £1,108 next year while a Band 5 nurse was set to lose £1,159.

Sir Keir and deputy Labour leader, Angela Rayner, will highlight the impact of the cuts on Monday during a meeting in London with hospitality and retail workers also affected by the changes.

“The Conservatives’ plans to impose unfair taxes are an attack on working people and an attack on the key worker heroes who have got our country through the pandemic,” the Labour leader said.

“The government announcement on social care will not fix the crisis in social care, will not clear the backlog in our NHS and will not protect homeowners from having to sell their homes to pay for care. As usual with this prime minister, it is working people who are going to have to pay for the cost of his failure.

“Two and half million working families will face a double whammy of a national insurance tax rise and a cut to universal credit. This is the same old Tories – putting the very wealthiest ahead of working people who have to pick up the bill.”

Their warning comes as a separate Treasury analysis, reported in the Sunday Telegraph, suggested the 1.25 percentage point hike in national insurance may have “an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce”.

It added the “behaviour effects” of the manifesto-busting increase in tax – in the form of a new health and social care levy – are “likely to be large”.

Speaking on Monday, Rishi Sunak, the chancellor, however, will set out that 425,000 jobs a year are to be supported over the next four years through a combination of public- and private-sector infrastructure investment.

Setting out how £650bn will be implemented in infrastructure projects over the next decade, Mr Sunak will say: “We put a plan in place to protect jobs and businesses in their hour of need and I am immensely proud that it is working.

“Today’s announcement of 425,000 jobs supported per year over the next four years shows that we are sticking to that plan as we level up opportunities across the country.

“But this isn’t just about numbers – our Plan for Jobs is also about giving people the hope and opportunity to meet their potential as we emerge from the pandemic and the economy recovers.”

A government spokesperson said: “We’ve taken decisive and historic action, with our Health and Social Care Levy due to raise £12bn a year for the NHS and social care. It is a progressive tax with those earning more paying more.

“We have always been clear that the uplift to Universal Credit was temporary. It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.

“Universal Credit will continue to provide vital support for those both in and out of work and it’s right that the Government should focus on our Plan for Jobs, supporting people back into work and supporting those already employed to progress and earn more.”