Boris Johnson is expected to announce a rise in national insurance payments to fund social care, despite this being a breach of the 2019 Tory manifesto.
The Tories pledged in their manifesto not to increase national insurance, income tax or VAT.
A rise in national insurance to help pay for social care has not been ruled out in the long term but is not expected in plans due this year, a Government minister has said.
In July, this year, Business Secretary Kwasi Kwateng was asked if there could be no national insurance hike.
He told Sky News: “That’s what it says in the manifesto, I don’t see how we could increase national insurance, but you know things have been very flexible over the last 18 months, we’ve lived through an unprecedented time, we’ve been spending huge amounts of money that we never thought was possible and it’s up to the Chancellor and the Treasury, and the wider Government, to decide a budget.”
He said he believes a social care plan will come “by the autumn”.
“I don’t think we’ll put up national insurance in that specific…” he said.
The tax rise would be used for an overhaul of social care and to tackle the NHS backlog. It will mean about 25 million people paying extra money to the Government.
Reports in The Times and The Daily Telegraph say the plans could be revealed as soon as next week.
The Daily Telegraph said Number 10 wants a one percentage point rise but the Treasury is pushing to go higher, possibly 1.25 percentage points.
The Labour leader, Sir Keir Starmer, has called the potential national insurance rise a “jobs tax”. The shadow chancellor, Rachel Reeves, signalled last month that the party could oppose it, saying: “I don’t think national insurance is the way to do this.”
James Ball Tweeted: “Using national insurance – a tax not paid by older adults – to pay for social care is yet more generational robbery. There is absolutely no reason this couldn’t (and shouldn’t) at least come from income tax, which is paid by people of all ages – if they are earning.”
“National insurance” doesn’t pay for health or social care. It just goes in the same tax pot as everything else, but isn’t paid by older adults – EVEN IF THEY ARE STILL WORKING – and also is more generous to high earners. The name at this point is just a sales con.”
“(7) The “hard earned” wealth of most retirees is mostly comprised of accumulation of property wealth and rent from a younger generation as a result of the former, by volume at least. (8) Inheritance tax is on the unearned windfall of your heirs, not on you. And starts at £350k.”
“A tax hike on National Insurance hey. A tax that people stop paying at 65. Wonder why Boris Johnson is doing that.”
“I have zero problems with paying more national insurance for social care, but I want transparency in return. I want to know where every penny is going. That’s the deal.”
Ben Riley-Smith Political Editor, The Daily Telegraph tweeted: “THE POLITICS: DowningSt’s gamble is essentially this: it’s middle of parliament; we have a poll lead; we need to act on this; voters will back tax rise linked to healthcare; 80seat majority makes rebellion win unlikely; if it all lands well Tories eat into Labour’s lead on NHS”
“TAX HIKE NUMBERS: 32 million adults are in employment. Around 26 million pay national insurance (per @resfoundation estimates). Still unclear exactly how much raised (depends on where NI rise ends up and OBR forecasts) but in region of £10bn+ a year.”
The NHS budget must increase by around £10 billion and anything less could see trusts forced to cut services, the leaders of two major organisations representing the health service’s frontline have warned.
Almost half of the money will be needed to cover ongoing coronavirus-related costs, NHS Providers and the NHS Confederation said.
Billions will also be needed to recover care backlogs, the organisations said, as they published a report detailing the costs facing the health service in England.
They said that of their total £10 billion estimate, some £4.6 billion will be required to cover ongoing costs linked to the virus, while between £3.5 and £4.5 billion would be needed to tackle backlogs in care.
They said there must also be “appropriate allowance for lost efficiency savings”.
Their joint report – entitled A Reckoning: The Continuing Cost Of Covid-19 – warns that coronavirus has resulted in a rise in the NHS’s day-to-day running costs which they said is “for the long term”.
Factors include infection control measures, higher staff absence rates due to illness or self-isolation, expanding services to deal with increased demand, and providing more personal protective equipment (PPE) for staff.
The report states that these “will be with us for the duration of the three-year period likely to be covered by this autumn’s CSR (comprehensive spending review).”
The two bodies said the report is based on a survey of England’s 213 hospital, mental health, community and ambulance trusts, which together spend almost two-thirds of the NHS budget.
Chris Hopson, chief executive of NHS Providers, said: “The NHS has consistently demonstrated that, when it is properly funded, it delivers for patients and the nation as a whole.”
He added: “Covid-19 is a once-in-a-generation, global shock, the seismic impact of which is unlike anything the service has experienced in its 73-year history.
“The Government has said that we must learn to ‘live with Covid’. That means they must fully recognise the extent, length and cost of the impact of Covid-19 on the NHS.”
Matthew Taylor, chief executive of the NHS Confederation, said: “Trust leaders are worried that anything short of £10 billion next year will force them to cut services.
“They are worried that, despite best efforts at the frontline, the 13 million waiting list they are desperate to avoid will become inevitable. And this backlog will take five to seven, not two to three, years to clear.
“They worry they won’t be able to provide prompt, high quality, safe care to all who need it as the pressure we have seen in ambulance trusts and A&E departments this summer will worsen and become more widespread across more of the year.
“They worry that all the advances made on mental health over the last decade could go into reverse. And they worry that all the planned improvements in the NHS Long Term Plan in areas like cancer and cardiac care set will be put at risk.”
Related: ‘Life should be better than this’: Turmoil looming over households facing cuts to Universal Credit
