Sajid Javid has defended the Government’s National Insurance hike, insisting that the money lost in the Covid pandemic must be paid back.
The new regulations, which came into place on Wednesday, mean employees, businesses and self-employed will pay an extra 1.25p per pound on everything earned past the tax-free threshold.
The NI hike has been introduced in part to relieve the burden on the NHS following the Covid-19 pandemic.
Speaking on GB News’ Breakfast with Eamonn and Isabel, Mr Javid supported the rise despite the ongoing cost-of-living crisis.
Health Secretary, Sajid Javid
GB News
People will now pay an extra 1.25p per pound on everything earned past the tax-free threshold
Dominic Lipinski
When asked why the crisis wasn’t solved by borrowing, the Health Secretary said: “We’ve had the pandemic, the pandemic has meant because the Government had provided, rightly to families, businesses and individuals it meant an additional £400billion of borrowing, that’s money that’s going to have to be paid back over the coming years.
“It is not economically sensible just to continue borrowing and borrowing, we’re still running a deficit so if it wasn’t the levy it would mean more borrowing.
“That would mean that the economy overall would be at risk at a time when the economy is creating record jobs and that is by way the best way to help people at a poverty difficult circumstances, to have an economy that is growing, that’s creating jobs with record low unemployment.
“The alternative way is if we did tax and we went for borrowing, it’s also morally wrong as well.
“We would be asking our children and grandchildren to pay for our healthcare and our care costs in old age, how can that possibly be right.”
Alongside the NI hike comes a 1.5 percent in dividend tax. This means that for every £1,000 divided received, an extra £12.50 will need to be paid.
In July, the Government will increase the threshold for paying NI by £3,000, as announced by Chancellor Rishi Sunak during his Spring Statement last month.
Watch our daily “On The Money” programme with Liam Halligan, every weekday lunchtime as we provide tips and ideas to help you beat the squeeze.
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