Work and Pensions Secretary ‘unaware of HMRC warning on National Insurance rise’

The Work and Pensions Secretary has admitted not being aware of a Government report warning that the rise in National Insurance could increase the likelihood of family breakdown.

Therese Coffey said she “absolutely” backs the rise of 1.25 percentage points to tackle the NHS backlog and reform social care before acknowledging she had not seen the warning from HM Revenue and Customs.

The analysis prepared for the Government and released after MPs had approved the rise said the impact would be “significant” on economic factors such as earnings, inflation and company profits.

It also warned there “may be an impact on family formation, stability or breakdown” as individuals who are currently just about managing “will see their disposable income reduce”.

Ms Coffey was asked on LBC radio if she is happy to break up families, after she insisted she “absolutely” still backs the National Insurance increase.

“I’m not sure where that comes in on your questioning,” she responded.

“I don’t know where HMRC or any… I have not seen that report.

“I expect it’s an unquoted source and we don’t look into elements like that.”

But told that the analysis came from the HMRC, she said: “I’m not aware of it; thank you for bringing it to my attention. I’m not sure I agree with the assertion that is made.”

Ministers have insisted the National Insurance rise is the fairest way to fund the changes needed in the health and social care service.

But the HMRC report said the change will disproportionately affect those whose main income comes from working, rather than from property income, pension income or savings.

Ms Coffey was also forced to defend the plans to end the £20 increase to Universal Credit amid warnings it will heap further pressure on struggling families.

The Cabinet minister told Sky News “it was a temporary measure”, adding: “It was an element there to protect people, particularly those initially coming into benefits for the first time.”

Asked if she is entirely happy with the end of the uplift, which will start to be phased out from the end of the month, Ms Coffey said “yes” and stressed the need to “accelerate our plan for jobs”.