Replace National Insurance hike with wealth tax on richest 1%, Sunak told

Rishi Sunak has been urged to scrap the planned National Insurance contributions (NICs) hike planned to take place in April and instead levy a wealth tax on the richest 1% ahead of the Spring Statement due to be delivered later today.

A petition launched by Richard Burgon MP last week, warning that millions of households face “huge increases” in their bills and calling for an annual tax of 1.5% on wealth over £5m to raise £14bn a year, has received more than 60,000 signatures.

Commenting on the proposal, Burgon said: “With these National Insurance hikes, the Tories are engaging in simple class warfare, letting the wealthiest off the hook while forcing millions of people ever deeper into a cost-of-living crisis. There is an alternative to this tax hike on working people which is to make the very richest pay more through a wealth tax.”

Sunak will deliver his Spring Statement this afternoon. The Chancellor is expected to announce a cut in fuel duty of at least 5p per litre and a Treasury press release on Tuesday promised “further plans” to help households with rising costs.

He is facing calls to either defer or cancel the planned NICs hike from both the opposition party and within his own party. Labour is demanding that Sunak scrap the NICs increase and has criticised the Conservatives for presiding over more than a decade of low growth.

“It is because the Conservatives are the party of low growth, that they are now the party of high tax,” Labour’s Pat McFadden said today. Labour has also pointed out that Sunak has raised more tax than any Chancellor in the past 50 years.

The ‘Alliance for Full Employment‘ warned earlier in March that the UK is facing “the worst cost-of-living crisis for half a century” and called on Sunak to use the statement to help households in these “extraordinarily difficult times”.

Labour leaders in the alliance, including Gordon Brown, Welsh First Minister Mark Drakeford, eight Labour metro mayors and more than 70 local authority leaders, wrote to the Chancellor with five demands for the Spring Statement.

Boris Johnson announced his plan for social care last year, which included raising £12bn a year largely funded through the hike in NICs in April this year. MPs backed the 1.25 percentage-point increase in September.

He was warned by the Institute of Directors in January that the increase would exacerbate inflation and threaten jobs. The Office for National Statistics released February’s inflation figures this morning, showing that the consumer price index (CPI) rose from 5.5% in January to 6.2% – representing a 30-year high.