Ministers debate national insurance hike to fund social care reforms

·4-min read
Health Secretary Sajid Javid (Steve Parsons/PA) (PA Wire)
Health Secretary Sajid Javid (Steve Parsons/PA) (PA Wire)

A Cabinet minister has stressed the need to ensure social care reforms are “adequately funded” as the Government considers a manifesto-breaking national insurance hike to cover the costs.

With a long-awaited announcement of reforms touted as soon as next week, ministers have been debating how high a tax rise is needed to fund the NHS and social care.

A source close to Health Secretary Sajid Javid strongly denied he had pushed for an increase to national insurance as high as 2%, but did not dispute that he had argued for a rise of more than 1%.

The Prime Minister had pledged not to raise taxes or national insurance as part of his party’s 2019 manifesto (Dominic Lipinski/PA) (PA Wire)
The Prime Minister had pledged not to raise taxes or national insurance as part of his party’s 2019 manifesto (Dominic Lipinski/PA) (PA Wire)

Chancellor Rishi Sunak is said to be arguing against an increase higher than 1%, with any rise being a breach of the Conservative’s 2019 manifesto.

Conservative former health secretary Jeremy Hunt urged the Government to “bite the bullet” and announce a tax hike, but warned against a national insurance increase by saying it “disproportionately targets the young”.

With two manifesto pledges seemingly at odds, Justice Secretary Robert Buckland chose to stress the commitment to long-term reform social care.

“I’m confident that something will come forward very, very soon because a lot of us have been waiting anxiously,” he told BBC Breakfast.

“What we said in the manifesto about social care is no-one has a monopoly of wisdom about these issues and the British public are sensible enough to know that when it comes to the issue of social care we have got to find some way in which it will be adequately funded.”

The Times reported that five Cabinet ministers would oppose the hike to national insurance.

Former health secretary Jeremy Hunt (Kirsty O’Connor/PA) (PA Wire)
Former health secretary Jeremy Hunt (Kirsty O’Connor/PA) (PA Wire)

Multiple newspapers have reported that new plans could be revealed next week when Parliament returns from its summer recess.

Mr Hunt, chairman of the Commons Health and Social Care Committee, said the “eye-watering” sums required are far bigger than what the Chancellor “can find down the back of a Treasury sofa”.

He told BBC Radio 4’s Today programme: “I’m really arguing that we need to bite the bullet and say there has to be a tax rise of some sort.”

He wrote in the Telegraph that a “rise in income tax feels very unconservative” and “national insurance disproportionately targets the young”, so instead argued for a new “health and care premium”.

Prime Minister Boris Johnson has faced criticism for a delay in setting out the reforms, having said his plan was ready when speaking on the steps of Downing Street in 2019.

During the general election that year, the Tories pledged not to raise the rate of income tax, VAT or national insurance.

Downing Street did not deny a tax raise was being considered, but it was stressed that no decisions have been made.

Labour’s Bridget Phillipson warned the move would hit working people and businesses hard (Nigel Roddis/PA) (PA Archive)
Labour’s Bridget Phillipson warned the move would hit working people and businesses hard (Nigel Roddis/PA) (PA Archive)

Social care providers urged the Government to be “ambitious” and go further than questions of funding.

Mike Padgham, chairman of the Independent Care Group, said a tax rise must be “only the very start” and be part of a system overhaul, including tackling the staffing crisis.

He said: “Capping care costs, however it is done, is only the beginning. A good beginning but just the start.”

Vic Rayner, chief executive of the National Care Forum, said the upcoming proposals must “provide long-term ambition for people and communities rather than quick fixes”.

“Reform must move beyond the narrow focus on capping costs if we are to have a proper public debate,” she added.

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Rachel Harrison, GMB national officer, said any additional money must be ring-fenced “to improve the pay, terms and conditions of carers”.

Nick Sanderson, chief executive of Audley, which runs retirement villages and provides home care, said a “welcome cash injection” is just one part of the puzzle.

He added: “We need to see a systematic shift in thinking which reduces the need for care in the first place.

“Independence, wellbeing and keeping people out of care homes for as long as possible, if not forever, must be prioritised over the propping up of a broken system.”

Labour warned the Prime Minister against “hitting low earners, young people and business” with a tax rise.

Munira Wilson, the Liberal Democrats’ spokesperson for health and social care, said a 2% national insurance rise would be “unfair and unjust”.

“Has it really taken all this time, to make a decision to rip off the people who can least afford to shoulder the burden of social care?”, the MP asked.

A Government spokeswoman said: “We are committed to bringing forward a long-term plan to reform the social care system and we will set out proposals this year.”

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