15 Aug 2022

SDLP duo slam Boris plan for National Insurance hike

Foyle MLA, Sinead McLaughlin, has hit out against Prime Minister Boris Johnson's plans to increase National Insurance payments.

The SDLP politician was speaking out after the Prime Minister laid out plans in the House of Commons today to increase National Insurance contributions by 1.25 per cent. A hike that is set to hit the pockets of low earners across the north of Ireland as well as Britain.

Johnson's announcement is a complete reversal from his 2019 election manifesto when he pledged that under him, he would “guarantee” that a Conservative government “will not raise the rate of income tax, VAT or National Insurance”.

The increase is said to be helping fund the cost of social care in England but no clarification has come from the Prime Minister as to how the money raised will be recirculated back to the devolved Northern Irish Assembly at Stormont.

Ms McLaughlin criticised the proposal saying it would hurt Derry especially given the city's low-wage economy.

She said: “The suggestion of increasing the standard rate of National Insurance will particularly hit the lower paid.

“This is significant for Derry, as average pay here is much lower than in most parts of the UK and Ireland. The SDLP is therefore very unhappy about what the government is expected to propose.

“The SDLP believes in fair taxation, which means that those who can best afford to pay tax should pay the most. Those on the lowest pay, should pay the least – or nothing at all.

“Unfortunately, National Insurance does not operate in this way. It hits those on lower pay much harder than those on much higher rates of pay.

“Rather than lift the National Insurance rate, it would be far better and far fairer to extend the application of the existing National Insurance rate that is paid by those on lower pay to those who are on much higher rates of pay.

“That would generate far more revenue for the government. They could also consider extending National Insurance to those well paid individuals who are continuing to work beyond the state retirement age.”

Meanwhile, SDLP leader and Foyle MP, Colum Eastwood has backed up Ms McLaughlin's stance while adding that the Prime Minister's announcement also suggested a Whitehall power grab that would see British Ministers ‘direct’ health spend in Northern Ireland.

He said: "The Tory tax rise on people in Northern Ireland to pay for social care in England is not only a further assault on devolution, it represents yet another attempt to stack the scales against young people and those least able to bear additional pressure on their finances.

"The net result of this huge policy shift is that young tenants, unable to get on the property ladder, will subsidise the social care of well-off landlords. Those struggling to make ends meet will be forced to pay to entrench the inequalities in our society.

“The hallmark of this Tory administration is piling the pain and burden of recovery on those least able to bear it. The withdrawal of the £20 universal credit uplift, the paltry spend on education recovery, the resistance to exploring universal basic incomes and services.

"While Boris Johnson’s biggest personal finance concern is who will pay for his next apartment makeover, a whole generation of young people have been locked out of home ownership, saddled with enormous tuition fee loans and now they’re forced to pay more in tax to subsidise a social care crisis they had no hand in making. It is deeply inequitable.

“I also have serious concerns about language buried in the statement which suggests that British Government Ministers will direct spending to local Health Services. Health and social care is devolved in Northern Ireland and it is for our Ministers to direct spending, not detached Tories at Westminster.”

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