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National Insurance hike: Rishi Sunak poised for huge U-turn THIS WEEK as crisis soars

The Chancellor is thought to be considering increasing the threshold for paying the extra 1.25 percentage point rise to help with the cost of living crisis. On Wednesday, he will deliver his Spring Statement to MPs in the House of Commons, outlining the state of the economy.

Currently anyone earning more than £9,900 a year is required to pay the National Insurance increase from next month, but Mr Sunak is under intense pressure to review the tax rise.

There are concerns raging inflation and soaring energy bill will cripple families up and down the country.

Backbench Conservatives, opposition MPs, and a series of pressure groups are pushing for a rethink from the Government.

Even members of the Cabinet are understood to have lobbied on the matter, with Brexit minister Jacob Rees-Mogg urging the party to “get back” to being a “tax-cutting Government”.

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On Sunday, Mr Sunak avoided answering questions on the repayment threshold for National Insurance, instead defending the requirement for an increase.

He said the 1.25 percent rise – dubbed the health and social care levy – was necessary to prevent the “unpalatable, unacceptable situation” of ever longer waiting lists for NHS treatment.

However, he added: “Going forward my priority is to cut tax and put money back in people’s pockets.

“You saw that at the Autumn Budget, I was very clear about that and the direction of travel over the rest of the Parliament is that.”

A senior Tory MP told The Telegraph a change in the repayment threshold would be the best way to avoid whacking the lowest paid with more tax without the need for a full U-turn on the plan.

“It is a way of doing something that doesn’t look like you are abandoning the NI increase but softens the impact on low earners,” they said.

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Labour has been demanding a full reversal on the increase.

Their position has made it far harder for the Chancellor to bin the levy without being accused of caving to the Opposition.

Some Tories however remain concerned that if Mr Sunak increased the repayment threshold, the burden would only fall on those who earn the most.

They fear if would lead to the Conservatives gaining a reputation of punishing those who earn more.

Increasing the threshold “helps lower earning people, but if you are then not raising as much, you have to raise taxes elsewhere”, a Whitehall source told the Telegraph.

“The Tory party explicitly becomes a party against people who are doing well for themselves.”

They added: “It’s crackers that Sunak has been saying ‘I’m a low tax guy’ when he keeps putting stuff up.

“I get that none of these other chancellors have had a pandemic to deal with, but they did have the financial crash and Black Wednesday.”



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