Rishi Sunak’s tax grab from workers is ‘absolutely unnecessary’, senior Tory says

LONDON, ENGLAND - JANUARY 19: Rishi Sunak, Chancellor of the Exchequer, leaves parliament after attending PMQs on January 19, 2022 in London, England. The Prime Minister faces MPs in the House Of Commons as speculation over a vote of no confidence in his leadership mounts. (Photo by Leon Neal/Getty Images)
Rishi Sunak has faced widespread criticism over his plans to increase National Insurance from April this year. (Getty)

A senior Conservative MP has branded Rishi Sunak's plan to hike taxes for working people this year "absolutely unnecessary".

The chancellor is set to raise National Insurance contributions in April in order to pay for a multibillion-pound investment in social care.

Sunak has repeatedly rejected calls, including from a growing number of MPs in his own party, to axe the increase amid the growing cost-of-living crisis triggered by soaring energy bills and inflation.

Experts have warned the tax hikes, which mean working people will pay 1.25p more per pound earned, risk deepening the crisis for millions of Brits, with some predicting this year will be "catastrophic" for low-income families.

Writing on Twitter on Tuesday, senior Conservative MP David Davis - who called for the prime minister to resign last Wednesday - said the planned rises should be scrapped after new figures revealed the government borrowed £13bn less this year than forecast.

File photo dated 6/9/2016 of Boris Johnson (left), then Foreign Secretary and now Prime Minister, and David Davis who has urged Boris Johnson to resign, telling the Prime Minister at PMQs
David Davis is one of many Tory MPs to oppose plans to increase National Insurance this year. (Getty Images)

"Today's figures show borrowing £13bn less than expected," Davis wrote.

"These numbers show it is absolutely unnecessary to increase National Insurance in April.

"In fact, to protect our growth rate and ordinary family budgets, it is necessary for us to NOT increase NI."

Watch: Johnson 'committed' to NI tax hike in April despite pressure to scrap move

On Monday, Boris Johnson repeatedly refused to rule out axing rises to National Insurance when challenged by journalists - dodging the question seven times.

Pressed on Johnson's refusal to answer the question, a spokesperson for the prime minister said there were "no plans" for a U-turn.

"There are certainly no plans to change the approach which will see the levy come into force this year in order to raise the additional money to help tackle the backlog and deal with social care," they said on Tuesday.

Earlier this month, cabinet minister Jacob Rees-Mogg was reported to be pushing for the government to drop the tax rises - with Labour also calling for the hike to be scrapped.

Shadow chancellor Rachel Reeves said: "If we were in government, we would not be going ahead with it now."

Shadow Chancellor Rachel Reeves MP speaking at the Fabian Society New Year conference, at Friends House in central London. Picture date: Saturday January 15, 2022. Photo credit should read: Matt Crossick/Empics
Shadow Chancellor Rachel Reeves says Labour are calling for planned rises in National Insurance contributions to be scrapped. (PA Images)

She added: “You’ve now got a chorus of Conservative MPs as well as the Labour Party saying ‘Do the right thing, think again on National Insurance’.

A Treasury spokesperson on Tuesday said: “The independent Office for Budget Responsibility is responsible for producing official forecasts for the economy and public finances.

“It’s vital that we are responsible with the public finances to avoid burdening future generations with even higher debt.

“The Health and Social Care Levy will provide a necessary, permanent source of funding needed to support the NHS and fix the broken social care system, benefiting people across the country.”

Other measures to cut costs for Brits, such as scrapping VAT on energy bills, have also been rejected by the government.

The prime minister described the idea as a "blunt instrument" which would benefit people who can afford rising bills.

However, there are reports the government are considering a £500 one-off payment for low-income households amid the spiralling costs of living.

It comes as Paul Johnson, the director of the independent think tank the Institute for Fiscal Studies (IFS), warned earlier this month tax rises, fuel prices, and inflation could create a situation for many that could be worse than the financial crisis.

Watch: IMF urges 'targeted support' for UK households hit by cost of living surge