TAX AND SPEND TORIES
■ PM BREAKS MANIFESTO VOW WITH 1.25% NI RISE ■ £5.4bn TO FUND SOCIAL CARE OVER THREE YEARS ■ PENSIONS TRIPLE LOCK ‘TEMPORARILY’ SCRAPPED
BORIS JOHNSON has admitted breaking his election pledge not to raise taxes – to spend £36billion ‘catching up’ on a record NHS waiting list because of Covid and revolutionising social care.
National Insurance will go up 1.25 percentage points to raise £5.4billion to fund care for the elderly and ill. The prime minister will also axe the pension triple lock for a year, telling MPs: ‘No
Conservative government ever wants to raise taxes and I’ll be honest – I accept this breaks a manifesto commitment, which is not something I do lightly. But a global pandemic was in no-one’s manifesto. This is the right, the reasonable and the fair approach.’
The rise in NI from April 2022 will see a worker on £25,100 pay £180 more a year, while those on £67,100 will pay £715 extra.
But wealthy retired people or landlords earning more than £100,000 from rent will pay nothing extra, with critics saying younger, poorer workers are hit most.
Mr Johnson appeared to combat that by also raising tax on dividends by 1.25 per cent. And workers above state pension age will also pay some NI for the first time. The measures will take the UK tax burden to its ‘highest sustained level’, the Institute for Fiscal Studies said.
But Mr Johnson told the commons his government was ‘beginning the biggest catch-up programme in NHS history’.
Most of the £36billion raised over three years will aim to clear the queue of 5.5million waiting for NHS treatment but will include £5.4billion for social care.
Health secretary Sajid Javid said it was ‘right’ most of the cash would go to the NHS at first but ‘ over time more and more will start going into social care’.
Mr Johnson said his long-awaited plan would end the ‘chronic and unfair anxiety for millions of people and their families’ about paying for care in old age.
People with less than £20,000 assets will have costs covered by the government. Those with between £20,000 and £100,000 will have some expenses paid.
The cost anyone will pay towards care in their lifetime will be capped at £86,000 in England, irrespective of their assets.
From April 2023, National Insurance will return to its current rate but a new 1.25 per cent tax will be brought in, marked on wage slips as Health and Social Care Levy.
Labour called the plan a ‘sticking plaster’ which failed to address fundamental problems such as staff shortages, poor pay and lack of support for unpaid carers.
Opposition leader Sir Keir Starmer said: ‘The quality of care received will not improve – there is no plan for that.’
Former Labour health secretary Andy Burnham said he ‘appreciated the government is trying to do something’ but said the plans did ‘nothing to invest the workforce in social care – the single biggest thing that would raise standards’.
The rise comes weeks before 6million people lose a temporary £20 a week Covid crisis boost to Universal Credit.
One Tory told of frustration in the party that rich members of the government were ordering ‘a tax rise on the poorest paid while cutting £20 a week off them soon after. It’s amazing they cannot see how unfair it will seem.’
The proposals will be put to MPs today and are expected to pass.
The PM also announced a white paper of proposals for integrating social care with the NHS would be published later.
Work and pensions secretary Therese Coffey said yesterday the triple lock – guaranteeing pensions rise by inflation, earnings or at least 2.5 per cent – will not apply this year because of an eight per cent wages leap as lockdown ended.