SIR ROCCO FORTE: National Insurance tax hike is bad for Britain and the Conservative Party

A few weeks ago, the accounting team of the hotel group I manage informed me of a curious instruction they had received from the government.

From this month, and for a whole year and maybe more, each payslip issued had to carry a special message.

Officials said they wanted to make sure our staff understood that an increase in National Insurance contributions paid by workers and businesses “helps fund public services”.

My accounting team was told the message should read: ‘1.25% increase in NIC funds for NHS, health and social care’.

Officials said they wanted to make sure our staff understood that an increase in National Insurance contributions paid by workers and businesses ‘helps fund public services’, writes Sir Rocco Forte (pictured)

HMRC had left them with the distinct impression that this was some sort of legal requirement.

I couldn’t believe my ears. Were we operating in Britain or Communist China?

It is outrageous that the government is telling employers to act as its propaganda mongers on what so many see as an unjustifiable tax hike.

I told the team that such a message would be added to my company payslips above my corpse. We will certainly not comply with it and I hope other employers will join us in boycotting it.

The Institute of Directors says this is an effort to justify a deeply unpopular and regressive tax on jobs. Sir Edward Troup, who headed HMRC, even questioned whether the request fell within the tax authorities’ legal powers.

Fundamentally, the National Insurance hike that comes into effect on Wednesday is the wrong move if we want to grow the economy and represents another depressing attack on business.

For companies and their staff, this is not a “1.25% increase” as the government wants employers to describe it.

Yes, the overall rate will increase from 13.8% to 15.05% of a person’s salary for the employer and from 12% to 13.25% for the employee.

But in reality, this means that the amount paid to HMRC in pounds and pence will increase by more than 10%. In other words, the taxman is asking employers to help disguise a big tax roundup as a small increase in our bills.

It’s at a time when employers are trying to recover from the devastation of Covid and families are facing a cost of living crisis.

The measures announced in the spring statement will shield some low earners from the worst effects of the National Insurance hike.  But they are nowhere near far enough and have only reversed a sixth of the tax hikes that Mr Sunak introduced during his tenure.

The measures announced in the spring statement will shield some low earners from the worst effects of the National Insurance hike. But they are nowhere near far enough and have only reversed a sixth of the tax hikes that Mr Sunak introduced during his tenure.

According to a recent survey, 89% of employers said they did not want the government to raise National Insurance rates this month. Only seven per cent were happy Chancellor Rishi Sunak is moving forward. Many senior Tories, including Cabinet Minister Jacob Rees-Mogg and Treasury Select Committee Chairman Mel Stride, have called for the hike to be scrapped.

Moreover, everyone knows that raising taxes will not solve social care problems, as ministers have claimed, but will rather go down the bottomless pit of an unreformed National Health Service.

This is a completely anti-conservative policy and contrary to the idea of ​​the small-state, low-tax approach that we would expect from a conservative government. Indeed, Mr. Sunak managed to raise taxes more in two years than Gordon Brown in ten years.

The measures announced in the spring statement will shield some low earners from the worst effects of the National Insurance hike. But they are nowhere near far enough and have only reversed a sixth of the tax hikes that Mr Sunak introduced during his tenure.

Take the plan to raise the headline corporate tax rate from 19% to 25% from 2023. This undoes all the good work done by former Tory Chancellor George Osborne, who cut corporation tax to every budget.

Capital gains tax, meanwhile, jumped 35% from £10.8billion to a record £14.6billion last year, following a increased tax on entrepreneurs selling businesses. Mr Sunak last year also froze income tax thresholds, dragging more people into the net of higher-rate taxes, and froze the lifetime allowance on retirement savings . Meanwhile, the retail trade has been devastated by a decision to scrap VAT refunds on purchases made in this country by foreign tourists, many of whom now flock to Paris.

Overall, the tax burden on UK citizens and businesses will reach 36.3% of our total economic output by 2027. This is the highest rate since the 1940s and compares to 33% in 2020 when Mr Sunak became chancellor.

All this at a time of great danger to the economy. Families are facing a cost of living crisis, and sharp rises in oil and gas prices have in the past tended to trigger stagflation – when prices soar and economic output slumps in same time. What we need is lower taxes as part of a concerted strategy to stimulate growth.

As someone who supported the government, I find their attitude to business disconcerting.

Alongside Mr Sunak, for example, we have Michael Gove attacking the housing construction industry as a cartel, when draconian planning laws are the real obstacle to solving the lack of affordable housing.

Slowly but surely, the government is abandoning its support for free enterprise in favor of essentially socialist policies.

If ministers don’t change course soon, the Conservative Party will haemorrhage votes from its right-wing rivals – just as it did on Brexit.

Incredibly, polls taken since the spring statement suggest people are now more likely to trust Labor to handle taxes and public spending than the Tories.

Now is not the right time to change prime ministers, as some have suggested, but the government needs to fundamentally rethink its direction. What irritates me as a longtime Conservative voter and as a supporter of the Prime Minister’s leadership campaign is the anti-Conservative behavior of the government. The restriction of our civil liberties and the damage to businesses that we have seen during the pandemic were just the beginning. I find it difficult to articulate a single conservative policy followed by this government.

He was elected to deliver Brexit, which did not just mean cutting ties with Europe but rather seizing the opportunities of our new position. Instead of reducing regulation, it increases it; instead of cutting taxes, he raised them.

Ministers are imposing a huge burden on the taxpayer in the form of energy taxes in a mad rush to go green without considering the overall cost and our energy security. With its environmental fanaticism, the government is becoming increasingly intrusive as it dictates everything from how we heat our homes to the cars we drive.

His time would be better spent reforming the NHS, which has successfully coped with Covid but not because of his leadership.

The people on the front lines, the doctors, nurses and paramedics are the heroes. I compare them to the troops in the trenches of the First World War, sent by incompetent generals to be slaughtered.

DURING it all, the system has failed millions of patients waiting for routine care. Waiting lists in England have fallen from 4.4 million to 5.8 million. Health spending levels are consuming ever greater amounts of national resources as the NHS continues to demand more money from taxpayers, which is inevitably given to it. Yet nothing changes.

It’s these issues – not the lockdown parties in Downing Street – that will have me and millions of others looking for someone else to vote the next time a local or national election comes up. .

To regain our trust, it is time for the Conservative Party to become Conservative again.

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