BORIS Johnson has abandoned his pledge not to raise the main rates of tax, as he set out plans to overhaul adult social care and deal with the Covid backlog in the NHS.

In a Commons statement, the Prime Minister announced a new UK-wide 1.25% health and social care levy based on National Insurance contributions.

The Northern Echo:

He said the additional revenue would pay for the biggest catch-up programme in the history of the NHS in England, with £12 billion a year to help deal with the backlog of cases built up during the pandemic.

It will also cover the reform of the social care system in England, ending what Downing Street described as “unpredictable and catastrophic” care costs faced by many families.

From October 2023, anyone with assets under £20,000 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.

Scotland, Wales and Northern Ireland will receive an additional £2.2 billion in additional health and social care spending from the levy.

The Northern Echo:

In addition to the health and social care levy, there will also be a 1.25% increase in the dividend tax – to ensure those who receive their income from shares also contribute.

Initially, National Insurance contributions will increase by 1.25% from April 2022 as systems are updated.

From 2023, the health and social care levy element will then be separated out and the exact amount employees pay will be visible on their pay slips.

It will be paid by all working adults, including those over the state pension age – unlike other National Insurance contributions.

The Northern Echo:

Downing Street said that a typical basic rate taxpayer earning £24,100 would contribute £3.46 a week, while a higher rate taxpayer on £67,100 would pay £7.15 a week.

The Prime Minister’s official spokesman said that only a broad-based tax like National Insurance or income tax could raise the kind of sums needed to deal with the problem.

He argued that National Insurance represented a fairer solution as employers – who also benefited from a healthy workforce – would contribute.

“This is a progressive and fair way to raise money,” the spokesman said.

The Northern Echo:

Mr Johnson accepted his plans broke his 2019 election manifesto pledges but he blamed the Covid-19 pandemic for the change of approach.

The Prime Minister told MPs: “No Conservative government ever wants to raise taxes and I’ll be honest with the House, I accept that this breaks a manifesto commitment – which is not something I do lightly.

“But a global pandemic was in no-one’s manifesto, Mr Speaker.

“I think the people of this country understand that in their bones and they can see the enormous steps that this Government and the Treasury have taken.”

He went on: “This is the right, the reasonable and the fair approach – enabling our amazing NHS to come back strongly from the crisis, tackling the Covid backlogs, funding our nurses, making sure people get the care and treatment they need in the right place at the right time, and ending a chronic and unfair anxiety for millions of people and their families up and down this country.”

Stockton North MP Alex Cunningham said: “It’s now been over two years since Boris Johnson promised us a plan to fix the social care system, so it’s hugely disappointing that his proposals today do nothing of the sort.

"Rather than a sustainable long-term plan based on progressive taxation, the Prime Minister’s plans to straddle workers, particularly low earners and young people, with National Insurance rises. His plan is a tax rise on jobs that doesn’t stop large care bills, nor delivers the quality care that people are entitled to.

“The Labour party has always said it will work with the Government to deliver a plan that not only genuinely fixes social care but is also built on fair funding in which those with the broadest shoulders pay more – not the working families now set for an unfair tax rise.

"People deserve to know that there is a real, comprehensive plan in place to look after them and their loved ones into older age.”

Andy McDonald, MP for Middlesbrough, said: “Today’s social care announcement by the Government shows their absolute disregard for working people. Having promised to lower taxes in their manifesto they have done the complete opposite in raising national insurance. This is a tax on working people and businesses and as ever, this Government continues to protect the privileged and the wealthy.  

“Instead of placing the burden on working people, we need a root and branch reform of social care. Our NHS deserves nothing less and those using our social care services deserve nothing less. Today’s proposals by the Tories fall woefully short.”