Boris Johnson is under increasing pressure from his own party not to impose a national insurance hike that shatters manifestos to pay for social care.
Former Prime Minister Sir John Major on Saturday (September 4th) joined in warning the Conservatives against the widely anticipated move targeting workers and employers, saying it is “regressive”.
Instead, he called on the Prime Minister to take the “straightforward and honest” approach of raising general taxes.
Here’s everything you need to know about it.
Is national insurance increased?
The government is preparing to announce its long-awaited plan this week on how to reform and fund social care, and will also include measures to fund NHS efforts to tackle the massive backlog caused by the coronavirus pandemic.
Johnson, Health Secretary Sajid Javid and Chancellor Rishi Sunak discussed details of the reforms.
The Sunday Times reported that lifetime contributions on care will be capped at around £ 80,000 and national insurance will be increased by 1.25% to raise between £ 10 billion and £ 11 billion a year.
Number 10 insisted on Sunday (September 5) that details of social protection plans were still being worked out, but Vaccine Minister Nadhim Zahawi did not rule out raising taxes to fund social care .
When asked if people should pay more taxes to get better social services, Zahawi said the government was “committed to reform” the welfare system for adults.
When asked specifically if people should pay more taxes, he told the BBC’s The Andrew Marr Show: “We will present our proposals and I am very happy to come back to your program when details are released for. discuss how we will pay for better and reformed adult social care.
A source close to Health Secretary Sajid Javid this week strongly denied pushing for an increase in national insurance of up to 2%.
But they did not dispute that he had pleaded for an increase of more than 1%, which Chancellor Rishi Sunak reportedly opposed.
What did Sir John Major say?
Sir John, speaking at the FT Weekend Festival, said: “The government is going to have to take action to deal with social protection and that is going to mean higher taxes.
“I don’t think they should be using national insurance contributions, I think it’s a regressive way of doing it. I prefer to do it in a straightforward and honest manner and put it on taxation. “
Any tax increase would be a violation of the Conservative 2019 manifesto, which contains a personal ‘guarantee’ from Johnson not to increase income tax, VAT or national insurance.
A significant number of Conservatives agree that some kind of tax hike is needed but, like former health secretary Jeremy Hunt, are calling for it not to take the form of a national insurance increase .
Why are the plans controversial?
Critics argue that an increase in income tax, VAT or national insurance would disproportionately affect younger and lower-income workers, while retirees would pay no extra.
Conservative MP Marcus Fysh said he was “alarmed by the apparent direction of movement” of the government, warning against a “socialist approach to social protection”.
“I don’t think it’s conservative to penalize working-age people and their employers with higher taxes on their work when our manifesto promised not to,” he wrote in The Sunday Telegraph.
Labor has expressed opposition to an increase in national insurance, but Sir Keir Starmer will come under pressure to define how he will finance welfare reforms.
Shadow Foreign Secretary Lisa Nandy said Labor supported the ‘general principle’ of raising taxes for the rich to pay for the NHS and clawback of social services.
A second election promise is expected to be broken quickly, as ministers prepare to announce that the state’s triple lockdown on pensions will be temporarily replaced with a ‘double lockdown’.
Indeed, wage distortions during the coronavirus crisis could mean retirees get a payment increase of up to 8%, while workers face tighter times.
A version of this article originally appeared on our sister title, NationalWorld
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This notice was published: 2021-09-05 09:47:40