PM JOHNSON’S decision to bloc with Chancellor Sunak to see that National Insurance Contributions are raised in April by £12.9 billion has widened the split in the Tory Party, well beyond the attempts by the Met Police to keep the different factions from publicly, politically cutting each others throats and splitting irreparably what has always been the united party of the UK ruling class – the Tory Party.
Yesterday, The Sunday Telegraph slammed Johnson and Sunak saying: ‘It beggars belief that the Tories remain committed to raising National Insurance Contributions (NICs) in April.
‘It would be a calamitous mistake which will become a lightning rod for all that has gone wrong with Boris Johnson’s administration, and given the flagrant breach of a manifesto promise, could help cost them the next general election. This is hardly the government’s only tax increase, of course: They are also increasing Corporation Tax from 19% to 25% in 2023, and are pushing through myriad stealth grabs by freezing thresholds at a time of elevated inflation.’
However, an article in The Sunday Times declared: ‘A planned £12bn rise in National Insurance from April is ‘‘the right plan’’ and ‘‘must go ahead’’, Boris Johnson and Rishi Sunak have said.’
The Sunday Times continued the now united PM and Chancellor declare: ‘We must stick to our recovery plan – tax will rise to pay for it. The rise – which applies to employees and employers – will help clear the NHS backlog.’
In fact, the changes to National Insurance will see an employee on £20,000 a year pay an extra £89 in tax. Someone on £50,000 will pay £464 more.
The increase will have a higher impact on the lower-paid and will drive up inflation when household budgets are under pressure from rising energy prices and food bills.
Even business leaders have warned that firms could offset the tax rise by raising prices, driving up inflation, at a time when the rate at which prices are rising is already at a 30-year high, reaching 5.4% this month.
Robert Halfon, chairman of the Commons Education Select Committee, was among the Conservative MPs to call for the government to reconsider the move last week.
Senior backbench Tory MPs Robert Jenrick and Mel Stride have called for the increase to be delayed, with Jenrick saying that 2022 would already be ‘exceptionally hard’ for families.
Labour leader Sir Keir Starmer said the increase was the ‘wrong thing to do’, coming at a time when inflation is at its highest level in 30 years.
Despite confirming the tax rise, Johnson and Sunak described themselves in The Sunday Times as ‘tax-cutting Conservatives’ and ‘Thatcherites’, meaning that the poorest people would be paying all the taxes, not the rich.
Both leaders stated that: ‘There is no magic money tree.’
The Federation of Small Businesses (FSB) said the rise means ‘the end for a lot of small firms’. Meanwhile, the government confirmed on Friday that it intended to pauperise graduates and that the earnings threshold at which graduates in England start repaying student loans would be frozen in April.
The freeze, which would see a graduate earning £30,000 repay £113 more a year than expected, has been described as a ‘stealth’ tax rise for those affected.
Ben Waltmann, senior research economist at independent research institute the IFS, said the decision ‘effectively constitutes a tax rise by stealth on graduates with middling earnings’. He said: ‘This will be a further hit to the real incomes of these graduates on top of the rising cost of living, the freeze in the personal allowance, and the hike in National Insurance rates.’
Waltmann added that graduates with the lowest earnings do not reach the repayment threshold for student loans and will be unaffected by the freeze, while those with the highest earnings will find they will be repaying their loans quicker.
Meanwhile, PM Johnson is posing as the liberator of the Ukraine, pledging that near-bankrupt Britain will send troops to Eastern Europe to prevent ‘Russian aggression’.
In fact, UK intervention in Eastern Europe to try and intimidate Russia and allow NATO to recruit the Ukraine will cost the British taxpayers hundreds of billions of pounds and further bankrupt the UK capitalist economy.
There can be no disguising the fact that UK capitalism is reaching the end of its road and needs to be put out of its misery by a socialist revolution.
The UK workers have got the strength to do the job. With huge class struggles developing in the UK, British workers and youth must join and build the WRP and the Young Socialists to lead the developing British socialist revolution to its victory.
With UK capitalism on its knees there is not a moment to lose!