Tory voters will ‘evaporate’ unless the National Insurance increase is scrapped, warns David Davis

Tory voters will “evaporate” unless the National Insurance increase is scrapped, former cabinet minister David Davis has warned.  

He joins a chorus of prominent ministers calling for the hike scheduled for April to be called off amid concerns about how it will impact the price of living crisis.  

Mr Davis told the BBC’s Radio 4 Today programme: “One of the things that came up on every doorstep I went to in all the swing all the northern seats around me was – ‘Jeremy Corbyn going to put taxes up, therefore, I’m going to vote for you’. 

“And what are we going to do? Put taxes up. What do you think’s going to happen? Those votes, they’re going to evaporate.

“So for our own political interest, but more importantly for the national interest – we should keep taxes down. 

“We should cancel National Insurance increase.” 

Mr Davis warned that the National Insurance hike could actually have the reverse impact on raising funds because “it might even have a negative effect because it shocks growth out of the economy”. 

The former Brexit minister questioned the data used to arrive at the decision to increase the taxes, and said after the pandemic, the balancing act should be treated as a war loan.  

He said: “Let’s go back to the fundamentals – the whole basic strategy behind this is built on some confusions.  

“Number one, we cannot in any single year balance up the impact of Covid. We simply can’t.  

“We’re talking about hundreds of billions – over £400billion – have to treat that effectively like a war loan. 

He added: “National Insurance always sounds terribly popular because people think is just paying for health care.  

“And so it’s the one popular tax. Unfortunately, it’s the one that does most damage to growth, and actually most damages ordinary families.  

“So you end up harming ordinary families.”   

Former housing secretary Robert Jenrick has said the Government should postpone a national insurance hike that he approved last year.

Mr Jenrick, who was in the position until September 2021, said the hike should be delayed and the Government should “exploit Britain’s gas reserves”.

Writing in the Sunday Telegraph, Mr Jenrick said the Government was “turning its mind” to a cost of living crisis “lamentably slowly”.

“Alleviating the cost-of-living challenge requires us to confront hard realities,” he said.

“First, it means recognising the need for the Government to intervene to help those facing brutal decisions as to what they must do without. But these should be targeted measures that are focused on low- and middle-income families. The size of the state is already the largest in my lifetime, and growing.”

“In the medium term we need to address our exposure to volatile energy markets by increasing domestic output, and this involves utilising the oil and gas that our islands have been blessed with. It is absurd that we have foregone cheap, reliable energy in the name of saving the planet, only to import it at higher prices from abroad – in the process, ceding jobs and creating vulnerabilities to unsavoury actors.”

He said the quickest way to “alleviate pressures on household budgets would be to postpone the hike” which would “also show the Government’s Conservative instincts remain”.

But increasing national insurance contributions to pay for social care is “the right thing to do”, according to another Cabinet minister.

Education Secretary Nadhim Zahawi told BBC Radio 4’s Today programme: “On the national insurance, the £36 billion is necessary because successive governments… of every colour have not dealt with this.

“It is really important to remember that the highest earners, the 14% who earn the most are paying 50% – they are paying half of that contribution, and the lowest earners, 6.1 million of the lowest earners pay nothing, so it is as progressive as we can make it to deal with a problem that breaks many an individual in their old age.

“So it is really important to just focus on why we are doing this, why I think it is the right thing to do, because it will finally create a system of adult social care that is sustainable and deliverable without breaking families.”

Pressed on suggestions the move could “shock” the economy and prevent the tax rise from raising the predicted sums, Mr Zahawi replied: “I think the Treasury have done the work on this and it is the right thing to do.

“We will of course make sure we review any policy we introduce – if it is not working, then we will look at it. I absolutely believe it is the right thing to do.”

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