Tax rises ‘for 25 million people to fund social care reforms’

Friday, 3rd September 2021, 8:03 am
Boris Johnson (Getty Images)
Boris Johnson (Getty Images)

The Government could break a manifesto promise and increase taxes for 25 million people to fund the long-awaited social care reforms, according to reports.

The plans could be revealed as soon as next week when Parliament returns from its summer recess, both The Times and The Daily Telegraph suggest.

National insurance increase ‘favoured approach’

Both papers said increasing national insurance is the favoured approach to fund the changes, although they said disagreements remain in the Cabinet about the scale of the rise. The rise could impact 25 million people, according to reports.

However, former Tory health secretary Jeremy Hunt, who is currently chair of the Health and Social Care Select Committee, suggested in an article for Telegraph the Government should instead create a “new health and care premium”.

Any rise in national insurance is expected to face criticism as it is likely to disproportionately hit millions of younger people.

Pre-recess Boris Johnson faced increasing pressure to offer details on his plan for social care reform, which he said was ready when speaking on the steps of Downing Street in 2019.

At the 2019 general election, the Conservatives pledged in their manifesto not to raise the rate of income tax, VAT or national insurance. But the idea of increasing national insurance was floated earlier this year.

‘I don’t see how we could increase national insurance’

When asked if there could be no national insurance hike, Business Secretary Kwasi Kwarteng told Sky News in July: “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.”

‘Disagreements over scale of increase’

Mr Johnson, Chancellor Rishi Sunak and Health Secretary Sajid Javid are the three main players involved in the decision.

The Times said Mr Javid has pushed for a 2% increase to help fully fund the plan, adding Mr Sunak was arguing against any increase of more than 1%.

The Daily Telegraph said it had been told Number 10 favours a one percentage point rise but the Treasury is pushing to go higher, possibly by up to 1.25 percentage points.

Both papers said no final decision has been taken and discussions are ongoing.

A version of this article originally appeared on NationalWorld.com