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07th Sep 2021

People could face £255 tax rise as PM set to unveil overhaul of social care sector

Kieran Galpin

Rishi Sunak

Johnson to hike up National Insurance prices, despite saying he wouldn’t

Boris Johnson is set to address the “catastrophic costs” for social care users in England with reform proposals later today that will hit young people and low-income earners hard.

The Prime Minister is expected to breach election promises and raise National Insurance (NI) by about 1.25 percentage points in a move that is dividing the Commons. There has been pushback from both Labour and Conservative MP’s who believe this is not the right way to cover the costs.

A 1.25 percentage point increase to NI would mean someone on a £30,000 salary would pay an additional £255 per year.

Vaccines Minister Nadhim Zahawi told BBC Breakfast the plans to “deal with a broken social care system” represented “truly historic and ambitious reform”.

“One-in-seven people pay £100,000 or more for their social care, so in my view that nettle has to be grasped,” he said.

Johnson will be joined by Chancellor Rishi Sunak and Health Secretary Sajid Javid for a press conference later on Tuesday.

The BBC reports that the money raised from the NI increase will be fenced off somehow. The money will be targeted initially at the health service itself then will switch to social care after three years.

Former Labour health secretary and Mayor of Greater Manchester Andy Burnham said a national insurance rise was “flawed” and “unfair”. He suggests that ministers should instead ask all pensioners to make a contribution of 10% of their estate, topped up by rises in other taxes, such as capital gains tax.

He told BBC Radio 4’s Today programme he wanted “to introduce the NHS principle to social care – everyone would be required to contribute, but everyone would benefit”.

Burnham said “for the vast majority of people they’d have peace of mind at a lower cost” and “I don’t see how you can do this without asking pensioners to make a contribution”.

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