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Commons Leader Jacob Rees-Mogg called for the April tax rise to be scrapped to ease the looming cost-of-living crisis.
But in an apparent swipe at his colleague, the Chancellor said it would be irresponsible to “duck difficult decisions”.
Mr Sunak emphasised that he understands “people’s anxiety and concern about rising prices and inflation”, but argued the 1.25 percent increase is fundamental to keeping the NHS stable.
He said: “If you take a step back and look at why we’re in this situation, it’s because we’re facing an unprecedented level of backlogs in the NHS and we as a government don’t think it’s acceptable, we don’t want families to be waiting years and years to get the treatment they need.”
Mr Rees-Mogg had urged Boris Johnson to drop the tax increase Challenge during Wednesday’s Cabinet meeting, but allies insist the Commons Leader is a strong supporter of the Prime Minister.
Mr Rees-Mogg told MPs yesterday that Conservatives “have always believed in fiscal good sense” and “recognised that taxpayers’ money must be spent wisely”.
But while he added that there is “no magic money tree”, he side-stepped subject of the plan to increase NI contributions.
Mr Johnson yesterday said that the new health and social care levy will be “very important for the NHS to clear these backlogs, enable them to deal with Covid right now and to catch up”.
However, economists are predicting that the average family faces a £1,200 hit in April due to bigger energy bills and tax rises. Bills are expected to go up by around £500 when the price cap is adjusted.
Customers also face a further £100 rise to cover the costs of many of the country’s failed energy firms.
Freezes on income tax thresholds, combined with the NI increase, will cost around £600 per household.
But Transport Secretary Grant Shapps said the decision on NI had already been made collectively.
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He insisted that there is a “very, very good case” for the tax strategy to support the backlog in the NHS from coronavirus and overhaul social care.
He said: “There’s a very, very good case, I think everybody will agree, for both catching up with the backlog coronavirus has created in NHS operations and procedures and for solving a historic, rather unforgivable situation where, if you happen to come down with certain types of illnesses – particularly things like dementia – you can end up losing your home because social care doesn’t look after you.
“We made the decision as a government to look after those things and we set out how we’ll do it, which is a NI increase.”
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