Ukraine crisis puts Sunak under new pressure to axe national insurance rise

Ukraine crisis puts Sunak under new pressure to axe national insurance rise

Chancellor Rishi Sunak is under renewed pressure from MPs and business groups to rethink plans to increase national insurance next month, as fears grow that Russia’s invasion of Ukraine will dramatically worsen the cost of living crisis and plunge the economy into “stagflation”.

Both Tory and Labour MPs believe Sunak can still be persuaded to ditch the 1.25 percentage point rise – announced last September to fund the NHS and social care – and want him to use the potentially devastating effects of events in Ukraine on prices as justification for what they say is an urgently needed U-turn.

Former cabinet minister David Davis said on Saturday that history showed big rises in oil and gas prices tended to trigger stagflation – when prices soar and economic output collapses at the same time. What was needed, he said, was lower taxation as part of a concerted strategy to stimulate growth.