National Insurance Contributions Increase

Kim Johnson Excerpts

Tuesday 8th March 2022 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab)]

Listening to Members on the Government Benches this afternoon makes me believe that they are living in an alternative universe, because during this pandemic, the number of billionaires has increased and the richest 1% have increased their wealth exponentially, while more are suffering in-work poverty and are increasingly reliant on food banks. We are the fifth richest country in the world, and that should not be happening.

A recent report from Oxfam found that an annual wealth tax on billionaires and multimillionaires in the UK could pay the salaries of £50,000 new nurses, permanently increase universal credit by £20 a week and build 35,000 new affordable homes. It also said that the revenue could cover the cost of the health and social care levy twice over every year, completely eliminating the need to raise national insurance and place the financial burden on those least likely to afford it. What have the Tories actually done? They have chosen to hit the lowest paid and the youngest the hardest. The very key workers who kept our country going throughout the pandemic are now struggling to put food on the table. Research by the Bakers, Food and Allied Workers Union showed that 40% of its members were eating less because of a lack of cash, and nearly 10% had run out of food altogether because of a lack of money.

The choices that this Government have made are driving working people into food poverty, so does the Minister agree that their record of giving bankers a billion-pound tax break while voting to raise taxes on working people and cut social security and pensions in real terms is an absolute disgrace? Inflation is predicted to rise above 8%, but benefits are increasing by only 3%. This is the worst time to increase national insurance contributions, as it will hit working people hardest and mean that they will have to decide whether to eat or heat.

My constituency has some of the highest child poverty rates in the country, rocketing to 29.3% compared with the national average of 19.1%. One quarter of children in my constituency live in absolute poverty, although more than half of those families have at least one parent in work. Our NHS and social care systems are on their knees after a decade of Tory cuts. They should be funded by a wealth tax on the super-rich, not by a tax rise on the poor, who are already being hit hardest by the crushing cost of living crisis that is expected to worsen after April with a 54% increase in the cost of energy, food and fuel.

Instead of supporting and resourcing local government to provide gold standard in-house social care services with decent pay and conditions for workers, the Tories have systematically defunded councils for 12 years. They have cut £450 million in Liverpool alone, with a further £34 million of cuts in the pipeline. No matter how the Government try to dress it up, the perfect storm of low pay, insecure work and tax hikes on working people means that the finances of millions of families across the country are on the brink of catastrophe.

We cannot allow the Government to continue to turn a blind eye to the skyrocketing levels of poverty that they are presiding over. We must take urgent action to reverse the cuts to public services and local government, implement a £15 an hour minimum wage to boost the income of the lowest earners, reverse the cuts to social security and pension payments, and scrap the national insurance contributions hike. The worst of the cost of living crisis is yet to come. Enough is enough: it is time to make the wealthy pay their fair share and alleviate the burden on the working classes.