National Insurance: Low income Britons to be 'disproportionately’ hit by tax hike

GB News: Stephen Dorrell talks about National Insurance for social care

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Specifically, the former MP criticised the policy’s impact on low income households and young people. Taxpayers over the age of 16 pay National Insurance contributions to qualify for certain benefits and the state pension. Britons need to be earning above £184 a week to pay it or be self-employed and making a profit of at least £6,515 annually.

Prime Minister Boris Johnson, the Chancellor Rishi Sunak and current Health Secretary Sajid Javid are reportedly finalising plans to introduce either a one or 1.25 percent in National Insurance.

As Westminster is back in session after the summer, the Government plans are set to be met with political scrutiny as Labour has come out against the proposed tax hike.

Outside of the Westmister bubble, the move has already been met with criticism over the effect it will have on poorer Britons, particularly young people.

Speaking on GB News’ The Great British Breakfast, former Health Secretary Stephen Dorrell outlined why increasing the amount people pay in National Insurance would affect those with lower-incomes the hardest.

READ MORE: Self-employed warned of NI hike: ‘Have to raise taxes’

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National Insurance: Hike will be ‘disproportionately levied’ on lower income Britons (Image: GETTY)

He said: “National Insurance doesn’t go into a special fund for specific expenditure, it’s part of general Government taxation.

“I was also a former Treasury Minister and I can assure you that within the Treasury no real distinction is drawn between revenue raised from National Insurance and other taxes.

“More importantly in terms of our society, National Insurance isn’t paid by people above retirement age.

“It isn’t paid by people on high incomes or isn’t paid on their higher income.

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“It’s therefore disproportionately levied on relatively lower incomes and younger people, and I don’t think that’s a fair way of paying for social care.”

Mr Dorell is not the only former Minister to come out against the Prime Minister and Chancellor’s social care funding plans.

Speaking on Times Radio, former Chancellor Phillip Hammon predicted there would be a “significant backlash” from the public and within the Conservative Party if the National Insurance hike was to go ahead.

“If the government were to go ahead with the proposed increase in national insurance contributions, breaking a manifesto commitment in order to underwrite the care costs of older people with homes, I think that would provoke a very significant backlash,” he explained.

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National Insurance: The former Health Secretary slammer the Government’s plans (Image: GB NEWS)

Many independent think-tanks and experts have also taken aim at Mr Johnson for going back on his election pledge to keep National Insurance at the same level

John O’Connell, the Chief Executive of the TaxPayers’ Alliance, believes the Government is not being honest about the impact the hike would have on everyday Britons.

He said: “This tax hike on working people would fly in the face of all the Prime Minister’s promises.

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National Insurance: Young people will be hit the hardest by the proposal (Image: GETTY)

“Suggesting this rise is the only sustainable solution for social care is smoke and mirrors.

“Receipts will end up being used for day-to-day spending, while taxpayers will be left paying the highest tax bills in a generation.

“Taxpayers will not tolerate being hoodwinked into yet more Tory tax rises.”

Later this week, the Prime Minister is set to argue in favour of the National Insurance hike as a means of addressing England’s social care crisis.

William Murphy

William Murphy

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