Boris Johnson announces 1.25% national insurance increase
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The Prime Minister announced a new “health and social care levy” to tackle the social care crisis ignored by successive governments for years. The tax hike will see Britons and employers paying an additional 1.25 percent in national insurance a year.
It means someone earning £24,100 a year will be forced to cough up an extra £180 to the taxman, while someone earning £67,100 will pay an extra £715.
Mr Johnson risks leaving Tory backbenchers and Conservative voters seething after pledging at the last election not to raise national insurance.
The 2019 document promised: “We will not raise the rate of income tax, VAT or national insurance.”
Conceding he was going back on his word when addressing MPs in the Commons, he said breaking a manifesto commitment was “not something I do lightly”.
Boris Johnson has unveiled his tax plan for health and social care (Image: PARLIAMENT.TV)
However, he added: “A global pandemic was in no-ones manifesto.”
In a bid to hide the fact he has broken his 2019 promise, from 2023 the tax will be outlined separately on workers’ payslips.
On top of paying income tax and national insurance, the “health and social care levy” will be visible.
Until then the funding will come from a hike in national insurance payments.
As well as helping to fix funding for the social care crisis, the extra money will also go towards helping tackle the NHS backlog caused by the coronavirus pandemic.
Waiting lists are now at a record high with 5.5 million people in England awaiting treatment.
The Prime Minister admitted he was breaking a manifesto commitment (Image: PARLIAMENT.TV)
Boris Johnson said the plan would help clear the NHS backlog (Image: PARLIAMENT.TV)
There are fears the number is set to rise even further and could hit as high as 14 million by next autumn.
The Prime Minister told the Commons: “We must now help the NHS to recover to be able to provide this much-needed care to our constituents and the people we love.
“We must provide the funding to do so now.
“We not only have to pay for the operations and treatments that people decided not to have during the pandemic, we need to pay good wages for the 50,000 nurses who have enabled that treatment and who can help us tackle waiting lists that could otherwise expand to 13 million over the next few years.”
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National Insurance increase (Image: EXPRESS)
Mr Johnson announced the plans to MPs after being signed off by the Cabinet this morning.
The Prime Minister’s official spokesman said there was “strong agreement” from ministers, despite a number understood to be uneasy about breaking the manifesto pledge.
The official said: “The Cabinet agreed to the proposals set out.
“There was strong agreement that this is a long-standing issue, particularly on the social care side, which had been ducked for too long and which needed to be addressed.”
Under the plans, from October 2023, anyone with assets under £20,000 will have their care costs fully covered by the state, while those with between £20,000 and £100,000 will be expected to contribute to their costs but will also receive state support.
No one will have to pay more than £86,000 for care costs in their lifetime.
How national insurance works (Image: EXPRESS)
In addition to the health and social care levy, there will also be a 1.25 percent increase in the dividend tax – to ensure those who receive their income from shares also contribute.
It will be paid by all working adults, including those over the state pension age – unlike other National Insurance contributions.
Sir Keir Starmer attacked the plan in the Commons, accusing Mr Johnson of using the pandemic as an excuse to raise taxes.
The Labour leader said: “He is putting a sticking plaster over gaping wounds which his party inflicted.
“He made that commitment on social care before the pandemic and he said he would pay for it without raising taxes before the pandemic.”