Boris Johnson confirms 1.25% UK National Insurance rise - breaking manifesto vow

[07-09-2021 02:59 PM]

Ammon News - Boris Johnson today confirmed a tax rise for millions of British workers as he broke his manifesto promise in a long-overdue bid to reform social care, Mirror reported.

The Prime Minister had claimed he had a "clear plan prepared" to fix the care crisis in 2019 - and six months later won an election promising not to hike income tax, VAT or National Insurance Contributions (NICs).

Yet today he abandoned his vow. He confirmed NICs will rise 1.25% for both employers and employees UK-wide in April 2022 to raise £12bn a year for both health and care, according to Mirror.

That's expected to cost around £180 a year for a worker on £24,100; £255 for a worker on £30,000; and £715 for a worker on £67,100. Firms will have to contribute too.

From April 2023, the rise will be charged at the same rate but change status to a 'Health and Social Care Levy' that appears on Brits' payslips. From this point it will also apply to workers who are over pension age, which NICs do not.

From October 2023 the money will be partly used to fund a new £86,000 cap on the amount people must pay for care over their lifetimes - and a new-style £20,000 floor, which saves people from paying for their care once assets fall below a certain level.

Boris Johnson today defended his betrayal, saying many governments had ducked social care reform and adding: "I accept this breaks a manifesto commitment which is not something I do lightly, but a global pandemic was in no one’s manifesto."

But Tories were already furious at the breaking of the Tories' manifesto pledge - and now the details of the plan have been unveiled, they will spark further outrage.

It emerged just £5.3billion of £36billion raised in the first three years (2022/23-2024/25) will go on social care. Much of the rest will go on clearing Covid backlogs in the NHS.

Of that, half of it will go towards new costs caused by the cap and floor - leaving around £2.5bn for workforce, training, councils and better integration with the NHS.

Meanwhile, hundreds of thousands of people in England look set to miss out on the £86,000 cap on lifetime payments.

The Prime Minister revealed the cap will only apply to those "starting care" after October 2023 - not those already in the system.

Only in October 2023 will new entrants to the care system start racking up spending towards the £86,000 cap, meaning no one will start actually benefiting from it before the next election.

Likewise, the absolute floor - the level at which someone's assets has to drop before they no longer have to fund any of their care - will actually fall from £23,250 to £20,000.

There will be a new floor where those whose assets drop below £100,000 start getting help. But it will be "tapered" - meaning they still have to pay some kind of contribution until their assets drop below £20,000.

Labour's Keir Starmer demanded the Prime Minister guarantee "no one, under his plan, will have to sell their own home to fund social care" - given some homes cost less than £100,000.

The party leader fumed of Boris Johnson: "He's 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'd pay for it without raising taxes before the pandemic."

In a bid to head off a Tory revolt, Boris Johnson also announced a 1.25% hike in every rate of dividends tax from April 2022 - meaning shareholders contribute too.

But Keir Starmer said "tinkering and fiddling with the dividend won't do that" and called for tax hikes to be spread more broadly across "stocks, shares, dividends and property".

Labour's leader added: "A poorly paid care worker will pay more tax for the care they're providing, without a penny more in their pocket.

"My sister is a poorly paid care worker, so I know this first hand."

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