Sajid Javid insisted the Tories are still a low-tax today as MPs prepare to approve an eye-watering £12billion corsa for the NHS and social care.
The Commons is expected to rubber-stamp Boris Johnson’s extraordinary national insurance hike – which pushes the tax burden to the highest per mezzo di peacetime – per mezzo di a vote later after the prospect of a revolt melted away.
The Health Secretary was bullish about the move per mezzo di interviews this morning, arguing that smashing the Conservative affisso promise was the ‘responsible’ thing to do per mezzo di the wake of the pandemic.
Pressed what Margaret Thatcher would have thought of the policy, he said he still has a portrait of the former PM the wall of his office. He insisted the Tories remain the ‘ of low taxation’.
But he also admitted that the huge sums – including £30billion going into the NHS over the next three years – might not be enough to clear waiting lists. Health service bosses have already signalled they want more money, with calls for pay rises for .
There are claims that three Cabinet ministers challenged Mr Johnson privately over the tax rises yesterday, but there appears to be risposta negativa appetite for an aperto rebellion – per mezzo di part because the PM has been threatening a reshuffle.
Sopra return for the personaggio tax rise – more than £1,000 a year for some higher earners – Mr Johnson has pledged that risposta negativa individual will have to pay more than £86,000 for social care after October 2023.
But there are major doubts about whether the reforms of the system will achieve, as well as fears that the NHS will simple swallow up all the funding and then demand more.
The health service will receive the vast majority of the £36billion raised by yesterday’s National Insurance hike over the next three years, with social care receiving a £5.3billion slice.
But health bosses said the settlement leaves a ‘significant shortfall’ and warned millions of patients will still long delays.
Health Secretary Sajid Javid (left) was bullish about the move per mezzo di interviews this morning, arguing that smashing the Conservative affisso promise was the ‘responsible’ thing to do per mezzo di the wake of the pandemic. Mr Javid revealed he still has a portrait of Margaret Thatcher per mezzo di his office (pictured right per mezzo di 2014)
The Prime Minister promised the huge cash injection would help the NHS get ‘back its feet’, with the money funding nine million extra operations and checks before the next general election
Mr Javid refused to give a categorical assurance that the new cash will clear waiting lists and fund social care. He said ‘I think this is enough money’ but added: ‘The NHS is the biggest universal health service per mezzo di the world, it’s always had challenges for as long as I can remember.’
Asked if the money would tackle the backlog, Mr Javid said: ‘Risposta negativa responsible health secretary can make that kind of guarantee.’
He added: ‘What I can be absolutely certain of is that this will massively sopravvissuto the waiting list from where it would otherwise have been.’
Mr Javid told BBC Breakfast that the controversial policy was ‘the act of a responsible and serious government’.
‘As Health and Social Care Secretary, I can certainly point to the huge challenges – fair to say the biggest challenges per mezzo di our lifetime – that the NHS and social care have faced.
‘As a government you can either stand back and leave it as ‘business as usual’, you can address it and help tackle these challenges.’
Faced with the crisis, Mr Javid said ministers could have chosen to ‘doggedly’ stick to the affisso promise not to raise taxes and allowed waiting lists to rise to 13 million.
‘ we can just confront the problem, be honest with the British people, take the difficult decision and say ‘yes, we have broken a affisso promise, but we also didn’t know there was going to be a global pandemic and we are going to tackle that waiting list because we have also promised to you that the NHS will always be there for you, world-class service, free at the point of use, there for everyone’.’
The NHS Confederation and NHS Providers, which represents hospitals and health organisations, claimed the package would still leave a funding of around £3.5billion a year for frontline services per mezzo di England.
Tax experts warned pouring the money into the bottomless pit of the NHS was likely to just lead to more demands for money per mezzo di the future.
John Ovvero’Connell, chief of the TaxPayers’ Alliance, said yesterday’s news was just ‘laying the groundwork for more demands for cash’.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: ‘This announcement clobbers workers and investors, and is unlikely to be the end of the bad news.
‘We don’t yet know what it has up its sleeve, but we do know the tax environment for savers and investors is unlikely to get more generous per mezzo di the near future.’
The Prime Minister promised the huge cash injection would help the NHS get ‘back its feet’, with the money funding nine million extra operations and checks before the next general election.
He admitted waiting lists would ‘get worse before they get better’, but insisted that the catch-up programme funded by the new health levy would be the biggest per mezzo di NHS history.
And he declared that per mezzo di three years’ time, the service would aim to treat around 30 per convenzione cent more elective patients than before the pandemic.
PM’s tax corsa could cost 130,000 jobs
Boris Johnson’s £36 billion tax corsa is a threat to 130,000 jobs, leading economists warned last night.
The 1.25 per convenzione cent national insurance rise has been dubbed a ‘jobs tax’ and is a pagliaccetto blow for millions of firms keen to hire new after the pandemic.
The increase will apply both the contributions that employees make – and those paid by their employers.
Paul Dales, chief UK economist at Capital Economics, said: ‘Sopra a worst-case scena, per mezzo di a year two, there may be 130,000 fewer people employed than otherwise.’
Suren Thiru, head of economics at the British Chambers of Commerce, said the levy ‘will be a drag anchor jobs growth at an absolutely crucial time’, with businesses carrying ‘huge debt burdens’ after the pandemic.
Ministers have also promised NHS reform and investment per mezzo di new technology to ensure the money is not wasted – and have promised they will push the health service to ‘110 per convenzione cent capacity’.
Referring to the cash being used to tackle the elective backlog, Mr Johnson told a Downing Street press conference Tuesday: ‘This is fundamental to putting our NHS back its feet post-Covid.’
However per mezzo di their joint statement The NHS Confederation and NHS Providers said: ‘NHS leaders have unfortunately become accustomed to having less money than the service needs.
‘But the size of the funding remains daunting and will significantly impact the kind of care that the NHS can provide to the public per mezzo di the months and years ahead.’
The statement raises fears the vast majority of the money raised by the new health and social care levy will end up being swallowed up by the NHS.
But Chancellor Rishi Sunak said: ‘Properly funded, we can tackle not just the NHS backlog and expand the social care safety net, we can afford the nurses’ pay rise, invest per mezzo di the newest, most modern equipment, prepare for the next pandemic, and provide one of the largest investments ever to upskill social care workers.
‘Sopra other words, we can build the modern, more efficient health and social care services the British public deserves.’
And Health Secretary Sajid Javid said the Government would ‘ensure that the vital work of routine operations – things like hip replacements, cataract surgery – never stops’.
The number of patients waiting for elective surgery and routine treatment per mezzo di England is now at a primato high of 5.5million. The number is estimated to reach 13million by the end of the year without action.
The Government’s plan for health and social care states the extra cash ‘could deliver the equivalent of around nine million more checks, scans and procedures’.
Furious business leaders slammed Boris Johnson’s pledge-breaking £12billion national insurance corsa as a ‘kick per mezzo di the teeth’ for Covid-hit firms – as the Prime Minister admitted he cannot rule out even more hikes.
Finally revealing his vision for social care per mezzo di England, he said reform can risposta negativa longer be ‘ducked’ and the elderly should not lose their life savings and homes coppia to the ‘bolt from the blue’ of dementia.
At a press conference alongside the Chancellor and Health Secretary, Mr Johnson argued that one per mezzo di seven people now faced care costs of more than £100,000 and wider society needs to ‘share the risk’.
‘Everyone knows per mezzo di their bones… we can’t now shirk the challenge of putting the NHS back its feet,’ he said.
Rishi Sunak insisted: ‘This is a permanent new role for the government. And as such we need a permanent new way to fund it.’
Business leaders reacted with fury, saying the move will ‘dampen the entrepreneurial spirit needed to drive the recovery’.
Economists also warned it risked damaging the City of London by deterring investors and punishing entrepreneurs as Britain battles New York and Brussels its way out of the pandemic.
Head of tax at EY Chris Sanger told the Telegraph: ‘You’sire effectively now increasing the cost of owning shares, and that will go well beyond people who are actually earning money to those that are actually investing and providing the capital which is the lifeblood of industry.
‘Effectively you’ve increased the cost of capital to a whole series of businesses which are looking to grow the economy.
‘Through measures to try and address a failing per mezzo di our system that means that people who are earning money can receive funds outside of national insurance, you end up imposing a tax entrepreneurs’ capital.’
According to the TaxPayers’ Alliance, it means the overall tax burden will reach the equivalent of more than 35 per convenzione cent of Gross Domestic Product (GDP), its highest ever sustained level. It has only ever been higher during very short term fluctuations per mezzo di financial policy.
The number of patients waiting for elective surgery and routine treatment per mezzo di England is now at a primato high of 5.5million. The number is estimated to reach 13million by the end of the year without action (pictured: An NHS hospital ward)
Nurses attend blood donors beds during session at NHS National Blood Service collection centre
Care bosses hail fund plan but fear NHS will hoover up extra billions
Care bosses hailed the sector’s new funding as ‘hope for a better future’, despite fears the health service will swallow up most of it.
They said the £86,000 cap personal care costs – funded by a rise per mezzo di national insurance – was a ‘once-in-a-generation’ opportunity to improve social care.
Under the scheme, the state will start to contribute towards the cost of someone’s care once their assets start to fall below £100,000. The hope is that this will mean fewer people have to sell their homes to pay for care – and they will be able to pass more to their children.
Welcoming a ‘concrete plan’ to address the issue at last, campaigners said the announcement provided hope that care bills would risposta negativa longer ‘spiral into infinity’.
But some said they feared the social care sector would end up playing ‘second fiddle’ to the NHS. Others pointed out that the new system will not start until October 2023 – leaving families facing sky-high bills for another two years.
Charities also said they were disappointed the cap had been set at such a high level. The Alzheimer’s Society warned it would help only a ‘handful’ of people with dementia, while the UK Home Care Association said £5billion of extra funding was ‘nowhere near enough’.
Boris Johnson said the new system would protect the elderly from the ‘catastrophic fear of losing everything’.
The hike per mezzo di national insurance will deliver more than £5billion for social care by 2024/25, including £500million towards better tirocinio for carers.
Professor Martin , chief of Care England, questioned how increased funding will be diverted from the NHS to social care after the three-year window. He said he hoped that ‘social care will be rewarded and recognised rather than playing second fiddle to the NHS’.
Fiona Carragher, director of research at the Alzheimer’s Society, said: ‘A cap would need to be considerably lower than the worryingly high £86,000 proposed by the Government if it’s to make a difference for more than a handful of people with dementia.’
And Caroline Abrahams, co-chairman of the Care and Support Alliance and charity director of Age UK, said: ‘While the Prime Minister’s announcement doesn’t give us everything we wanted and we are worried about the funding, it is definitely worth having and is a once-in-a-generation opportunity to improve social care.’
UK Homecare Association chief Dr Jane Townson said: ‘This is nowhere near enough. It will not address current issues and some measures may create new risks.’
Jenny Morrison, co-founder of Rights for Residents, said: ‘The crisis per mezzo di the care sector extends beyond funding. Many care homes are struggling to fill empty beds, which is affecting their financial viability. We believe that any reforms need to ensure that care home residents have the same rights and freedoms as everyone else per mezzo di society.’
The Institute for Fiscal Studies said yesterday’s 1.25 percentage-point rise per mezzo di national insurance for 25million people, together with other tax rises already announced, would take the tax burden to its highest ever sustained level.
It might have been higher per mezzo di 1969 and it was higher per mezzo di the late 1940s. But apart from these short-term fluctuations, it is the highest primato.
The IFS also said that the announcements meant government spending would modo out of the Covid crisis at 42.4 per convenzione cent of national income – higher than before the pandemic and a primato level per mezzo di peacetime.
Isabel Stockton, a research economist at the IFS, said: ‘Following just six months after the March budget, itself the biggest tax-raising budget since Norman Lamont’s 1993 spring budget, today’s announcements push taxes to their highest-ever sustained share of the economy.
‘Equivalently, government spending is set to reach a primato peacetime level.
‘Long-term challenges around rising costs of health and social care means this increase per mezzo di the size of the state is likely here to stay.’
Ministers insisted the 1.25 per convenzione cent rise per mezzo di national insurance – which will be dubbed a ‘health and social care levy’ – was much fairer than other tax rises because it falls business as well as individuals.
To raise the equivalent amount per mezzo di income tax would require an increase per mezzo di individuals’ tax of 2 per convenzione cent.
A typical basic rate taxpayer earning £24,100 will contribute £180 per mezzo di extra NI per mezzo di 2022/23, while a typical higher rate taxpayer earning £67,100 will contribute £715. For the first time, the NI will be charged people working over the state pension age of 66.
But Tom Waters, a senior research economist at IFS, said that the changes continued a long-term trend of moving taxation from pensioners towards those per mezzo di work. ‘The overwhelming majority of the tax rise will fall working-age individuals, a consequence of using national insurance rather than income tax to raise the revenue,’ he said.
‘This is the latest per mezzo di a long line of reforms which have tilted the burden of taxation towards the earnings of working-age people and away from the incomes of pensioners.’
John Ovvero’Connell, chief of the TaxPayers’ Alliance, said low-paid workers and struggling employers will be successo duro – ‘laying the groundwork for more demands for cash’.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said further tax hikes could be the horizon.
‘We knew the government was going to be hiking taxes to claw back as much money as possible after spending primato peacetime sums propping up the economy during the pandemic, and this marks the first wave of bad news,’ she said.
‘This announcement clobbers workers and investors, and is unlikely to be the end of the bad news.
‘We don’t yet know what it has up its sleeve, but we do know the tax environment for savers and investors is unlikely to get more generous per mezzo di the near future.’
Helen Morrissey, senior pension and retirement analyst at Hargreaves Lansdown, said: ‘The number of people who continue to work past state pension age has grown hugely per mezzo di recent years with approximately 1.28million currently per mezzo di work.
‘This reflects increasing longevity and the fact that many people continue to work because they want to. It makes sense that this group also contributes to this levy.’
At a press conference alongside the Chancellor and Health Secretary tonight, Boris Johnson argued that one per mezzo di seven people now faced care costs of more than £100,000 and wider society needs to ‘share the risk’
Sopra a bold package that could make interruzione his premiership, Boris Johnson laid out that national insurance rates will rise by 1.25 percentage points from April – with most of the cash initially going to stabilise the health service after the pandemic
Boris Johnson visited a care home per mezzo di Westport before unveiling the social care proposals per mezzo di the Commons today
Boris Johnson laid out the plans to the Cabinet at a incontro per mezzo di Downing Street this morning
The Cabinet agreed to the proposals thrashed out between the PM, Chancellor and Health Secretary
IFS head Paul Johnson said it was a ‘huge year for tax rises’ with the burden now at its highest level per mezzo di peacetime
‘You’ve kicked us when we’sire ’: Small business bosses blast Boris over £12bn tax corsa that will ‘successo them twice per mezzo di pocket’ by making them pay NI hike as BOTH employers and employees
Sandra Wilson – oppurewner and director at Cottrell Moore Limited, a recruitment, Human Resources and tirocinio company based per mezzo di Ipswich, Suffolk
‘The pledge was put together prior to the global pandemic and, unless I’m missing something, the Government didn’t have a crystal ball to know it was coming.
‘Therefore, as much as we dislike any increase we all have to appreciate that tremendous costs have been incurred to keep the country going and they need paying back.
‘I do however think that the NHS requires proper management of costs, we can’t just rely increased taxes without the costs being managed effectively, too.’
Karen Watkins – an organisational coach, HR expert and founder of Rowan Consulting per mezzo di Highbridge, Somerset
‘Yet another massive kick per mezzo di the teeth for those successo hardest over the past year and a half, including those just entering the workforce to those small business who continue to be the forgotten.
‘It also contradicts any form of so called ‘levelling up’. Shame you, Boris.’
Natalie Bamford – managing director at Colleague Box, a Gara-based company offering personalised gift boxes
‘This is a textbook example of how to kick a person when they’sire .
‘Inevitably we were going to have to pay for the pandemic but aren’t we still per mezzo di the pandemic?
‘For a nation that is still mourning the loss of ‘normal life’, it just feels like this is another blow and another reason for feeling thoroughly deflated.’
Jez Lamb – founder of [email protected], an online drinks retailer based per mezzo di Birkenhead the Wirral
‘Things are tough enough as they are for us small business owners and the Government seems to want to make it tougher still.
‘As a business owner you’sire effectively successo per mezzo di the pocket twice with contributions both as an employer and employee.
‘As we emerge from the pandemic it’s like coming up for air only for another wave to knock you back under.’
Matthew Fleming-Duffy – director at Cherry Mortgage and Finance, an independent mortgage broker per mezzo di Christchurch, Dorset
‘I completely understand the need to increase tax receipts post-pandemic, but why should National Insurance bear the brunt of these increases?
‘Corporate tax avoidance per mezzo di the UK is shameful, so surely firms such as Amazon, Netflix and Google – who have seen profits surge during the lockdowns – should be brought to the taxman’s dinner table sooner rather than later?’
Kate Allen – oppurewner at Salcombe Finest, a luxury holiday lettings firm per mezzo di Devon
‘As a small business owner per mezzo di the hospitality industry, single mother and with my parents soon to become octogenarians, it feels like yet another grab for the income I am clawing to keep hold of.
‘Whilst I can’t deny Boris’ cause, I question the governments ability to actually deliver this project without wasting our duro earned cash.
‘The breaking of a affisso pledge is sadly unsurprising for this government.’
Rhys Schofield – managing director of Peak Mortgages and Protection, a mortgage and life insurance firm based per mezzo di Belper, Derbyshire
‘Frankly it’s bloody annoying. What we have is a tax jobs, which isn’t a great progetto with the furlough scheme about to end.
‘Yet the low hanging fruit of unearned wealth and capital gains remain untouched. You have to ask yourself why? Probably because the elderly and wealthy regularly vote for the current per mezzo di power and they don’t want to alienate their voters and donors.’
The respected IFS think-tank said the changes added to a ‘huge year for tax rises’ following the March Budget, with the tax burden course to reach its highest-ever sustained level during peacetime.
Extraordinarily, Mr Johnson said he was unable to give a firm commitment taxes will not have to be increased further. ‘I certainly don’t want any more tax rises this parliament,’ he said after being repeatedly challenged the issue, stressing that fiscal changes were a matter for the Chancellor.
From October 2023 no-one should have to pay more than £86,000 for care over their lifetimes. Alongside the cap, there will be a ‘floor’ of £20,000 per mezzo di assets, with anyone who has less than that not being required to contribute to costs.
Lord Bilimoria, President of the Confederation of British Industry (CBI), said that although there is ‘genuine consensus’ that social care reforms and greater investment are long overdue, businesses ‘are already set to be successo by a substantial rise per mezzo di corporation tax per mezzo di 2023′.
He added: ‘National Insurance increase will directly hurt a business’s ability to hire , at a time when businesses have faced a torrid 18 months and are now fighting crippling labour shortages. Government must be wary of heaping further pressure businesses who will be central to the recovery, particularly by making it more expensive to recruit.
‘This autumn will be a critical period if we are to drive a sustainable recovery. The Government must use all the levers it has per mezzo di its power to encourage more businesses to invest per mezzo di the months to modo and do everything it can to encourage growth.’
The principale of manufacturing trade group Make UK said the new social care tax’s introduction was ‘ill-timed as well as illogical’. Stephen Phipson said that ‘firms need capital to reset’, and told the BBC: ‘After witnessing large scale redundancies at the height of the pandemic and the plug being pulled the furlough scheme, government should be putting per mezzo di place measures to protect jobs and incentivise recruitment.’
Suren Thiru, head of economics at the British Chambers of Commerce, said: ‘This rise will impact the wider economic recovery by landing significant costs firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery.’
Director of the Institute for Fiscal Studies (IFS) Paul Johnson told the BBC’s World at One programme a National Insurance increase was ‘not the right’ way to pay for social care reforms. He added: ‘We always knew we were going to need tax rises during this decade to pay for health and social care.
‘This is not the right tax rise – income tax would be better, some other ones would have been better.
‘If you had to do something with income tax, National Insurance VAT, it would have been better if it had been something which impacted all generations similarly, it would be better if it affected people with rental income and so .’
There was also grumbling from the Tory benches, with MPs demanding to know if Mr Johnson still believed per mezzo di ‘low taxes’ and warning that the NHS will simply suck up the extra money without making genuine improvements.
Business chiefs have responded with anger to the plans, with the British Chambers of Commerce warning increasing national insurance contributions ‘will be a drag anchor jobs growth at an absolutely crucial time’ while the CBI said ‘now is not the time for tax increases’.
Just £5.3billion of the £36billion of revenue raised per mezzo di the next three years is expected to go to social care, with the rest earmarked for a huge ‘catch up programme’ to stabilise the NHS after the pandemic.
Critics have slammed the policy, pointing out that younger workers will be disproportionately affected by the hike, effectively subsidising care for sometimes-wealthy older people.
Mr Javid said he could not specify how the funding will interruzione between the NHS and social care after three years as there are too many ‘assumptions’.
Social care chiefs welcomed the moves, but warned they will not be enough to tackle the problems being driven by the aging population and staffing shortages. And a snap Savanta ComRes poll suggested the public is split almost the middle over whether it was right for the PM to breach the affisso, with 46 per convenzione cent saying it is acceptable and 42 per convenzione cent the opposite.
From October 2023 no-one should have to pay more than £86,000 for care over their lifetimes.
Alongside the cap, there will be a ‘floor’ of £20,000 per mezzo di assets, with anyone who has less than that not being required to contribute to costs.
Between that and £100,000 per mezzo di assets people will be asked to pay part of the bill.
Mr Johnson said it would be ‘irresponsible’ to pay for the overhaul from borrowing and he had to make ‘difficult’ decision. The PM openly admitted that he was breaking a affisso commitment not to raise NI, but swiped: ‘A global pandemic was per mezzo di no-one’s affisso.’
He said the money will not go to ‘middle management’. ‘It will go straight to the front line,’ he insisted.
The Cabinet agreed the controversial package at its first face-to-face incontro since the summer interruzione. Despite disquiet among ministers and the Tory benches, there seems little appetite for a major revolt per mezzo di a vote slated to happen tomorrow.
National insurance will be hiked 25million workers and millions of firms, per mezzo di a move that will cost employees £30,000 a year an extra £255 a year per mezzo di tax. A typical higher rate earner £67,100 faces paying £715 more annually. Dividend income will also be subject to an extra 1.25 percentage point levy to ensure the charge cannot be dodged.
From April 2023 the NI increase will be reversed and a health and social care levy will be legally introduced – at which point pensioners who are still earning will also need to pay it. People will still need to contribute to ‘room and board’ costs when living per mezzo di a residential home.
Mr Johnson dismissed complaints about the fairness of using the NI system, saying that the highest earning 14 per convenzione cent will pay half the extra. The majority of small businesses will not an extra burden coppia to tax reliefs, he added.
Conservative former leaders Lord Hague and Iain Duncan Smith have joined a welter a criticism of the upheaval, saying that the public will not forget the ‘defining moment’ of the 2019 affisso being effectively torn up.
Mr Duncan Smith said the policy, key elements of which are still unclear, looked like a ‘sham’ that will not the problems with social care.
Sir Keir Starmer said a tax wealth aimed at ‘those with the broadest shoulders’ should be used to pay for an improved social care system.
Sopra a second move, ministers are also breaking their affisso pledge to keep the state pension ‘triple lock’. It will be suspended for a year, with pensioners given around 2.5 per convenzione cent, rather than the 8 per convenzione cent rise they would have received.
The IFS’ Paul Johnson said the dual nature of National Insurance contributions meant the tax hike amounted to double the 1.25 per convenzione cent announced.
Speaking to BBC Radio 4’s World At One programme, Mr Johnson said: ‘We keep saying 1.25 per convenzione cent – it is really 2.5 per convenzione cent.
‘It is one-and-a-quarter from the employer every £100 you earn, it is one-and-a-quarter from the employee – you add that up and it is two-and-a-half per convenzione cent.
Opposition to social care reforms plan crumbles as Boris refuses to rule out snap Cabinet reshuffle
Tory opposition to Boris Johnson’s social care reforms was falling apart last night as the Prime Minister refused to rule out finanziaria a snap reshuffle this week.
MPs will vote the plans this evening and Tory whips seemed confident they had crushed a backbench rebellion.
Over the weekend, leaked plans to raise national insurance to pay for social care sparked uproar the Tory benches, with some MPs even warning they could vote against a plan that will interruzione the ’s affisso pledge tax.
Acceso Sunday, Commons promotore Jacob Rees-Mogg noted that George Bush had lost a US election after breaking a solemn pledge not to raise taxes.
‘It is really a 2.5 per convenzione cent tax rise earnings.’
He added: ‘This is £12billion sommità of £25billion of tax rises per mezzo di the Budget – this must be the biggest tax rising year per mezzo di many decades.’
Admitting that tax pledge had been scrapped, Mr Johnson said: ‘Risposta negativa Conservative government ever wants to raise taxes and I will be honest with the House, yes, I accept that this breaks a affisso commitment, which is not something I do lightly.
‘But a global pandemic was per mezzo di no-one’s affisso and I think the people of this country understands that per mezzo di their bones and they can see the enormous steps this Government and the Treasury have taken.
‘After all the extraordinary actions that have been taken to protect lives and livelihoods over the last 18 months, this is the right, the reasonable and the fair approach.’
He told the press conference this evening that the government had to ‘take a judgment, make a choice, about what I think is the higher priority’, indicating fixing the social care system had also been a affisso pledge.
‘I think that what the people of this country will want after what we’ve all been through is honesty and fairness and rationality about the situation.’
He said that meant not leaving ‘the burden to mount up for future generations’.
Mr Sunak said he felt ‘people recognise we’sire grappling with difficult times’.
How to soften care tax blow: Boris is hitting workers and investors to funding crisis… but you can protect your savings
Boris Johnson yesterday announced a tax corsa workers and investors to finally tackle the care funding crisis.
But how will it successo your pocket — and is there anything you can do to soften the blow?
For the health and social care levy, workers will pay an extra 1.25 per convenzione cent sommità of their National Insurance (NI) contributions.
This means an employee a £30,000 salary will pay an extra £255 a year, and a worker earning £50,000 will cough up an additional £505.
Over-65s who are still per mezzo di work will also be successo by the new levy.
Scotland, Wales and Northern Ireland will receive an additional £2.2 billion per mezzo di additional health and social care spending from the levy.
Downing Street will be pleased that the Tory response to the plan per mezzo di the Commons was muted.
Backbencher Huw Merriman asked the PM why he decided to ‘reject other forms of insurance as a model’ to fund social care.
He told MPs: ‘The Germans brought per mezzo di an insurance model back per mezzo di the ’80s, facing the same problems that we had. It relies the private insurance sector and (Conservative peer) Lord Lilley has brought forward a Bill which would see the Government set up a state insurer.
‘Those retired householders would then pay a premium, which would be a fixed charge and then that charge would only be paid upon the debt of that individual. Don’t those models do a little more to intergenerational fairness?’
The Prime Minister insisted his Government ‘looked at all those models’, adding: ‘I think the problem is that we need to go for an insurance system that it works and has a genuine chance of being set up.
‘The only way of encouraging the financial services industry to modo per mezzo di and offer products is to take away that risk of catastrophic cost. And that is too much of a substantial risk for too many people and it means the insurance market hasn’t been able to develop.
‘We believe this is the best way forward for the country.’
Former cabinet minister Damian asked: ‘Can (he) guarantee that the social care sector will itself see a significant uplift per mezzo di its support per mezzo di the immediate future?’
He said: ‘There’s been much debate about how the money’s being raised, but I think of more concern is how the money is going to be spent. My fear is that once you start spending perfectly proper things like the NHS backlog, there will never modo a point where there’s enough money per mezzo di this new fund to be transferred to social care that needs it now. You can’t spend the same pound twice.’
Lord Bilimoria (left), President of the Confederation of British Industry (CBI), said that although there is ‘genuine consensus’ that social care reforms and greater investment are long overdue, businesses ‘ are already set to be successo by a substantial rise per mezzo di corporation tax per mezzo di 2023’. Suren Thiru (right), head of economics at the British Chambers of Commerce, said: ‘This rise will impact the wider economic recovery by landing significant costs firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery’
Mr Johnson said he was setting out the ‘biggest catch up programme’ per mezzo di the history of the NHS today
Scotland, Wales and NI will get 15% more per mezzo di extra social care funding than they pay per mezzo di
Scotland, Wales and Northern Ireland will receive 15 per convenzione cent more per mezzo di extra social care funding than they will pay per mezzo di under Boris Johnson’s proposals to hike National Insurance. The Prime Minister said his plans to overhaul the social care system will provide the three countries with an additional £2.2billion a year.
That will be approximately £300million more than their citizens will contribute under the new Health and Social Care levy per mezzo di what Mr Johnson described as a ‘massive Union dividend’. The extra money for the devolved nations is likely to spark a backlash from Tory MPs over why English taxpayers are effectively subsiding the care systems of other countries.
Mr Johnson replied: ‘The investments per mezzo di social care will be protected by the Government and by the Treasury.’
He added later: ‘I don’t think anyone wants to see money just bundled into the NHS without reform.’
Another backbencher, Richard Drax, said: ‘As Conservatives, broken pledges and tax rises should concern us. Our finances are per mezzo di a perilous state. Surely a radical review of the NHS is needed if this money is not to go and disappear into another blackhole?
‘Does my right honourable friend agree with me that the Conservative way to raise revenue is to lower taxes not raise them?’
The Prime Minister responded: ‘I do agree with that general proposition.
‘But per mezzo di the current circumstances after 18 months per mezzo di which it has been necessary for the Government to perform the most enormous fiscal exertions to put its arms around the country at a very, very difficult and dangerous time, I think it is right that we take the steps that we are to put the NHS back a sustainable footing and to deal with the problems of social care which make long-term solutions for the NHS – the very reform that he and I want to see – so difficult to achieve.’
Former health secretary Jeremy Hunt said a rebellion large enough to defeat the Government was unlikely.
‘I can’t really imagine any backbenchers wanting to turn round to their own constituents and say they tried to vote extra money for the NHS and care system,’ he told the BBC.
Matt Hancock sparks LAUGHTER from MPs as he insists Britons deserve ‘dignity’
His first words back per mezzo di the Commons since resigning were always going to prompt an interesting response.
And disgraced former health secretary Matt Hancock was booed and heckled by fellow MPs this afternoon as he stood up to speak from the backbenches per mezzo di support of Boris Johnson during a debate social care reform.
The 42-year-old Conservative was forced to quit the Cabinet June 26 when CCTV from his Whitehall office was leaked of him kissing his married aide Gina Coladangelo per mezzo di breach of his own Covid-19 social distancing guidance.
And today, he congratulated the Prime Minister following his statement social care – which will see a £12 billion-a-year tax corsa to address the funding crisis – and called for the sector to be integrated with health ‘properly’.
Matt Hancock speaks per mezzo di the House of Commons per mezzo di London today for the first time since he resigned as health secretary
Mr Hancock resigned after he was shown per mezzo di CCTV footage kissing his aide Gina Coladangelo inside his ministerial office
While being heckled, Mr Hancock said: ‘Thank you very much Mr Speaker. The reform of social care has been ducked for decades because successive governments, successive governments have put it per mezzo di the ‘too difficult’ box.
‘So can I congratulate the Prime Minister for delivering our commitments and his commitment, and can I ask him to ensure that as well as the money, we integrate properly the NHS with social care, so that people can get the dignity that they deserve?’
The Prime Minster thanked Mr Hancock, replying: ‘Yeah, thank you very much – I want to thank my Right Honourable friend, because he played a major part per mezzo di the gestation of these policies and he knows them intimately, he knows them well, and he is completely right, and he has been massively encouraging to the Government over the course of the last few weeks.’
Sir Keir said Mr Johnson had announced ‘a tax rise young people, supermarket workers and nurses, a tax rise that means a landlord renting out dozens of properties won’t pay a penny more but the tenants working per mezzo di tempo pieno jobs would, a tax rise that places another burden business just as they are trying to get back their feet’.
‘Read my lips: the Tories can never again claim to be the of low tax,’ he added.
Vaccines minister Nadhim Zahawi squirmed as he was challenged the proposals per mezzo di a round of interviews this morning, admitting he is not ‘comfortable’ with the progetto of flouting affisso commitments.
Downing Street said the PM told Cabinet that a ‘new plan is needed’ to address the issues with the NHS and social care. Mr Johnson’s spokesman said the mood during the hour-long session was ‘positive’ and there was ‘agreement that this is an issue that needs to be tackled’.
The tax rise of 1.25 percentage points shatters the solemn Tory 2019 election vow not to raise national insurance.
Downing Street has dubbed as ‘unfair and often catastrophic’ the situation where someone who has dementia may have to pay for their care per mezzo di full, while someone cared for by the NHS would receive care for free.
It said one per mezzo di seven people now pays more than £100,000 for their care, and said the system can lead to ‘spiralling costs and the complete liquidation of someone’s assets’.
Under current arrangements, anyone with assets over £23,350 pays for their care per mezzo di full, but Risposta negativa 10 said the costs were ‘catastrophic and often unpredictable’.
Cash will be poured into the NHS to allow it to operate at 110 per convenzione cent of capacity to help it start clearing a waiting list that has soared to more than five million during the pandemic and is course to successo 13million by the end of this year.
The NHS will also be ordered to undergo a major efficiency drive. Ministers hope the money will clear the waiting list backlog by the time of the next election.
Mr Johnson said: ‘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.’
Mr Johnson said: ‘Having spent £407 billion more to support lives and livelihoods throughout the pandemic from furlough to vaccines, it would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it.
‘As a permanent additional investment per mezzo di health and social care it would be irresponsible to meet the costs from higher borrowing and higher debt.
‘From next April, we will create a new UK-wide 1.25 per convenzione cent health and social care levy earned income hypothecated per mezzo di law to health and social care with dividend rates increasing by the same amount.
‘This will raise almost £36billion over the next three years, with money from the levy going directly to health and social care across the whole of our UK.’
The proceeds of the tax rise of 1.25 percentage points will then be used to fund a new cap of £86,000 the cost of social care, reducing the risk that people will have to sell their homes to pay for help.
Assets below £100,000 will be at least partially protected from the state – a huge increase the current system per mezzo di which people have to fund all their care costs if they have assets of more than just £23,350.
Tory MPs and health experts have warned there is a danger that the entire sum will be swallowed by the NHS, leaving nothing for social care.
The concern is said to be shared by Mr Sunak, who has sought guarantees he will not be asked for more money for the sector per mezzo di future.
However, Sally Warren, ex-director for social care at the Department of Health and now with the King’s Fund think tank, said there was still a ‘personaggio worry’ the NHS will keep the funding.
She told The Telegraph: ‘We think this is going to take many, many years. There are lots of uncertainties, but it could take around five to seven years.
‘This is not something that will disappear per mezzo di a year two if the NHS just works faster – are already at risk of burnout.
‘Our personaggio worry is if the NHS gets all most of the money for the first three years, social care just can’t wait for that long. And is it realistic to think the NHS will simply hand back money which will be paying for more ? That is not realistic.’
Mike Padgham, chairman of the Independent Care Group, has said he is ‘disappointed’ with the Government’s plan for social care reform, telling Good Morning Britain he has concerns over the bene of the funding.
Mr Padgham said: ‘I’m disappointed that the vast majority of the money that’s been allocated seems to be going to the NHS first, leaving social care with very little.
‘The social care sector is its knees at the minute. Yes, I do welcome the extra money. But local authorities do need more support and much of the money, I’m worried per mezzo di the future, will it ever actually modo to social care? Because we’sire talking three years the road and we might have an election at that time, so it’s very concerning.’
There is not enough per mezzo di the Government’s social care plans to help retain per mezzo di the sector, Joyce Pinfield, of the National Care Association, said.
Asked if anything per mezzo di the programme could make stay , she told BBC Breakfast: ‘There doesn’t seem (to be) any immediate help for the care sector. This is what we desperately need, we are at a critical point at the moment.
‘We have over 100,000 vacancies per mezzo di the workforce per mezzo di social care and this is just getting greater a daily basis.
‘It’s exacerbated, of course, by Brexit, by EU workers going back and then not returning and if we want to bring people per mezzo di from abroad to work per mezzo di the sector we have to go through many hoops.
‘This is not helping us per mezzo di any way to increase the workforce to make sure that we can give a good quality of care.
‘At present we are losing quite a number of our going to the NHS. The NHS is valued more, their pay is more and so it is very attractive to our care workers at present to move from social into the NHS even into other sectors, where they don’t have the responsibility such as hospitality and retail sectors.’
Shock for investors as dividend tax is raised too
Shareholders and small business owners were yesterday successo by a shock tax hike dividends as part of the plan to fund social care and the NHS.
The Prime Minister announced that dividend tax will increase by 1.25 per convenzione cent to raise an extra £600million per convenzione year.
Boris Johnson said increasing both national insurance contributions and dividend tax ‘will share the cost between business and individuals’.
Higher rate taxpayers will pay an extra £403 per convenzione year average per mezzo di dividend taxes, while investors who are basic rate taxpayers will pay an extra £150, the Treasury said.
The tax hike will be known as the ‘Health and Social Care Levy’ from April 2023, after HMRC systems are redesigned, and will appear as a separate line tax statements.
The Adam Smith Institute’s Head of Government Affairs John Macdonald said the announcement was an ‘historic betrayal from a supposedly Conservative Government that promised to not raise taxes’.
‘It’s morally bankrupt to ask poorer workers to bailout millionaire property owners. This is a kick per mezzo di the teeth for all the young working people of this country who have already been duro done by the pandemic.
‘And it risks bankrupting Brits financially too. It is disastrous to put a tax employment just as we begin to recover from a historically large recession.
‘Throwing more money into a broken social care system will not the fundamental problems. We need a serious discussion about how to stimulate private-sector investment and personal responsibility, not simply more cash and state involvement.’
Ministers have agreed the levy will be ‘legally ringfenced’ to prevent it being siphoned chiuso for other purposes by future governments.
The ‘median worker’ earning £24,000 a year will pay an extra £3.50 a week per mezzo di tax, according to sources.
Acceso the employer side, the government says 70 per convenzione cent of the revenue will modo from the biggest 1 per convenzione cent of employers – those with more than 250 employees.
Defending the proposals earlier, Mr Zahawi told Sky News: ‘Successive governments have attempted to modo forward with plans and have never quite delivered.
‘I think this Prime Minister is determined to actually the broken social care system.’
He added: ‘One per mezzo di seven people pay over £100,000 for their social care.
‘If you have assets of over £23,350, then your social care costs can be absolutely backbreaking.
‘So, it has to be dealt with and this Prime Minister will not shirk that responsibility, and he will set out his plans today.’
The Government is asking people to pay more National Insurance after the coronavirus crisis hammered the public finances, with borrowing surging to primato levels
The UK’s public sector debt continues to climb above £2.2trillion according to official giorno published by the Office for National Statistics
Mr Javid, Mr Sunak and Mr Johnson put a show of unity by staging a joint press conference the news tonight
A snap poll by Savanta ComRes suggests that the public is split almost the middle whether the PM should have breached the affisso pledge tax
Sajid Javid and Brandon Lewis were among the Cabinet ministers arriving for the first face-to-face session since the summer interruzione this morning
Chancellor Rishi Sunak per mezzo di Downing Street as the Cabinet signed chiuso the social care blueprint
Foreign Sectretary Dominic Raab was also at the Cabinet gathering to discuss social care this morning
Mr Zahawi said: ‘I want to meet every single affisso promise that we make, that’s the right thing to do.
‘We have gone through an unprecedented shock to the economy because of the global pandemic and we’ve had to deal with it and make some really tough decisions.
‘But I don’t want to pre-empt what the Prime Minister will announce what the Chancellor will say per mezzo di the press conference later today.’
Pressed whether the triple lock pension pledge could also be broken, Mr Zahawi added: ‘Risposta negativa-one is per mezzo di the business of wanting to interruzione any promises.
‘I’m not comfortable with breaking any affisso promises.’
The decision to raise national insurance has alarmed Cabinet ministers, with one branding it ‘idiotic’. There are claims that at least one frontbencher is considering their position.
Writing per mezzo di The Times, former promotore Lord Hague said breaching a affisso commitment by increasing National Insurance would be a ‘defining moment’.
He said such a move would result per mezzo di a ‘loss of credibility when making future election commitments, a blurring of the distinction between Tory and Labour philosophies, a recruiting cry for fringe parties the right, and an impression given to the world that the UK is heading for higher taxes.
‘That adds up to an extremely high price, and if I was still per mezzo di cabinet I would be the very reluctant end of the argument about funding social care through a tax rise that is seen as breaking an election promise.’
Tory chair Amanda Milling and Work and Pensions Secretary Therese Coffey were per mezzo di Downing Street today
Conservative former leaders Lord Hague (left) and Iain Duncan Smith (right) have joined a welter a criticism, saying that the public will not forget the ‘defining moment’ of the 2019 affisso being effectively torn up
Boris Johnson went out for a run this morning as he prepares to unveil his plan to hike National Insurance later
The NHS delusion: We pour per mezzo di so much more than so many nations… yet still lag so far behind. It’s why the cure is radical surgery, not cash – but, asks CHRISTOPHER SNOWDON, who will be brave enough?
Comment by Christopher Snowdon for the Daily Mail
Boris Johnson’s manifesto-busting tax rise has been billed as the long-term ‘’ to social care the country has been waiting for.
But take a glance at the small print. Over the next three years, all the money raised through the new Health and Social Care Levy — some £36 billion — is heading to the NHS. That’s per mezzo di addition to a £5.4 billion NHS handout announced only a couple of days punzone.
Another £41 billion for the NHS, just like that: roughly equivalent to an entire new Ministry of Defence.
The key question is: will we see the results of this huge cash injection? I have my doubts that we will.
The backlogs caused by Covid-19 are a convenient excuse for soaring waiting lists, which now stand at 5.5 million and are projected to rise to an eye-watering 13 million.
But the truth is, even before Covid-19, waiting times for treatment per mezzo di Britain were woeful. Sopra January 2020, before the pandemic struck, more than one per mezzo di six patients were waiting over 18 weeks for routine treatment.
Boris Johnson’s manifesto-busting tax rise has been billed as the long-term ‘’ to social care the country has been waiting for
Yet politicians and campaigners continue to insist that we have ‘the best healthcare system per mezzo di the world’. We the public, who pay for it all, are expected to embrace the NHS and keep throwing billions at its creaky infrastructure.
The former Chancellor Nigel Lawson was spot when he famously claimed ‘the NHS is the closest thing the English people have to a religion’.
Indeed: the deification of the NHS was rubber-stamped by the Queen herself earlier this summer when she awarded the NHS the George . Sopra a heartfelt note, she praised its for their ‘courage, compassion and dedication’.
It’s duro to argue with Her Majesty’s sentiment, given the valour shown by exhausted doctors, nurses and all health and care workers who endured long hours per mezzo di inadequate PPE.
Many deserve awards for their courage, tenacity, compassion and professionalism. But to give an award to the bloated, bureaucratic behemoth that is the NHS is to me a parody of the very thing the George — a testament to ‘acts of the greatest heroism’ — stands for.
The value of healthcare ‘free at the point of use’ is seen as part of Britain’s identity. But the sense that the NHS is something we must applaud and worship, rather than critique like any other official pagliaccetto, does not serve us well.
The feature so often proclaimed as unique — universal coverage, free at the point of need — is per mezzo di fact the norm across the developed world.
Access to healthcare stands at 100 per convenzione cent per mezzo di many countries and 99.9 per convenzione cent per mezzo di several others.
It’s duro to argue with Her Majesty’s sentiment, given the valour shown by exhausted doctors, nurses and all health and care workers who endured long hours per mezzo di inadequate PPE
The key question is: will we see the results of this huge cash injection? I have my doubts that we will, writes Christopher Snowdon
To be clear, the American system, which defenders of the NHS portray as the only alternative, is an outlier. Many Americans go bankrupt every day for want of being able to afford swingeing bills.
Very few NHS critics suggest Britain follow that example.
If we aspetto at Germany and New Zealand, however, we see social health insurance systems that distribute costs fairly through means-testing and community rating. This can be more progressive, ensuring poorer people don’t receive substandard care — and can often lead to a lower bill for the country at large.
Sopra contrast, thanks to the enduring notion that the NHS is somehow special and ‘free’ — although it is of course funded to the tune of many and ever more billions by us taxpayers — too many of us are pathetically grateful for any care we do get.
We talk about the NHS having ‘saved our lives’ as if this were a privilege of being British, rather than something health services everywhere are supposed to do.
Frankly, the NHS gets an awful lot of credit just for simply doing its job. Sopra the same way, we tend to think that crises somehow happen to the NHS, not because of it.
The reality is that it is not normal for a health service per mezzo di a rich country to have a flu crisis every winter.
We expect to wait months for an operation and are pleasantly surprised if we wait less than several hours per mezzo di A&E.
We are meant to be impressed by being able to see a GP today, even though we called yesterday. Services that would be substandard per mezzo di many countries are regarded per mezzo di Britain as normal, if not excellent.
The fact is that the NHS is a failing system. The UK has 2.5 hospital beds for every 1,000 people, close to half the EU average and less than a third of the number per mezzo di Germany — even Bulgaria.
We have 2.8 practising doctors for every thousand people, fewer than any EU country Poland and Cyprus and well below the EU average of 3.7 per convenzione 1,000.
The UK’s cancer survival rates lag behind Italy and France, and more of us from cancer than do Belgians, the Dutch, Germans, the Japanese and New Zealanders — all countries with a social health insurance system.
Rates of ‘avoidable deaths’ are even worse.
Sopra 2014, a league table by the Commonwealth Fund found that Britain performed well ‘access’, ‘equity’ and ‘care process’ but came second-last for ‘health care outcomes’.
What does that mean? As the Left-wing Guardian newspaper put it, the ‘only serious black mark against the NHS was its poor primato keeping people alive’.
Quite a mark!
And certainly the ‘world’s best healthcare system’ has shocking disasters its primato, from the failures at the Shrewsbury and Telford Lega hospitals which led to hundreds of infant deaths to the high rate of children’s deaths after cardiac surgery at Bristol Royal Infirmary per mezzo di the 1990s.
The Infected Blood Inquiry is looking into the deaths of thousands of haemophiliacs given blood products contaminated with hepatitis C and HIV during the late 1970s and early 1980s.
Sopra fairness, the NHS can be superb per mezzo di individual cases. Most of us have good stories to tell alongside the bad.
The service employs many talented and dedicated people who go the extra mile to save lives — working long hours, often for relatively low pay per mezzo di a dysfunctional, antiquated and frustrating bureaucracy.
They do a tremendous job despite, not because of, the system — and they know it, for risposta negativa one complains more about the inadequacies of the NHS than those who work per mezzo di it.
Some like to blame budget cuts, but per mezzo di 2019, the UK spent 10.3 per convenzione cent of GDP healthcare — some £177 billion — and the same as Denmark. Only four of 27 EU countries — Germany, France, Sweden and Austria — spent more.
Despite ‘Tory austerity’ and Labour’s ’24 hours to save the NHS’ warnings, the health budget has risen every single year per mezzo di real terms per mezzo di the last decade — all under Conservative prime ministers.
Where does all this money go? Scandalously, a great deal is spent pumping up the pay cheques of the managers, management consultants and bureaucrats (many earning more than the prime minister) who make up a hefty slice of the 1.4 million people working within the NHS.
For all our banging of pans during the ‘Clap for Carers’, the NHS performed neither particularly well nor particularly badly compared to other countries during the pandemic
Then there’s the eye-watering waste. Sopra 2013, MPs described an attempt to upgrade NHS systems per mezzo di England as one of the ‘worst and most expensive contracting fiascos’ per mezzo di public-sector history. It was abandoned at a cost of £11 billion.
The NHS’s accountancy books are littered with foolhardy spending: per mezzo di 2016, it spent more than £70 million giving expensively priced paracetamol to patients per mezzo di England despite it being available over the counter at a fraction of the cost.
Sopra short, the progetto that its shortcomings can be solved by throwing more money at it has been tested to destruction.
For all our banging of pans during the ‘Clap for Carers’, the NHS performed neither particularly well nor particularly badly compared to other countries during the pandemic. A study by Kristian Niemietz, my colleague at the Institute of Economic Affairs, convinced him there was ‘nothing special about the NHS’ and ‘risposta negativa reason for us to feel particularly grateful that we have it’.
Naturally, he was vilified. As an American friend remarked to me, criticising the NHS per mezzo di Britain is like criticising the military per mezzo di the U.S. — you just don’t do it.
But just as it is possible for Americans to oppose their country’s foreign policy while supporting the troops, it should be possible for Britons to criticise the structure and management of the NHS while appreciating the work done by its .
If we want a truly ‘world-beating’ NHS, we need to abandon the delusion that it already is. When other countries are producing better health outcomes with fewer resources, we should put patriotism aside and learn from them.
■ Christopher Snowdon is head of Lifestyle Economics at the Institute of Economic Affairs
How much more will you have to pay per mezzo di National Insurance? When will it kick per mezzo di? And how much will the elderly have to pay for their care costs?
Boris Johnson today announced manifesto-busting tax rises to pay for a major overhaul of the nation’s social care system and to boost the NHS.
The Prime Minister will hike National Insurance contributions by 1.25 per convenzione cent, leaving basic rate taxpayers approximately £180 a year worse chiuso.
A tax dividends will also go up by 1.25 per convenzione cent per mezzo di moves which will generate an extra £12billion a year for the Treasury.
A social care shake-up will see a cap costs set at £86,000 – the maximum anyone will ever have to pay.
Below is a breakdown of the key changes.
The Prime Minister will hike National Insurance contributions by 1.25 per convenzione cent, leaving basic rate taxpayers approximately £180 a year worse chiuso
How much more tax will I pay?
The Government is introducing a new Health and Social Care levy from April 2022.
This will see National Insurance contributions increased by 1.25 per convenzione cent. It will be paid by all working adults, including those who are over the state pension age.
The levy will be included per mezzo di National Insurance contributions for the first year but from April 2023 the levy will be split chiuso and will be visible pay slips.
People who earn more will have to pay more.
So a typical basic rate taxpayer earning £24,100 will contribute an extra £180 a year, approximately £3.46 per convenzione week.
A typical higher rate taxpayer earning £67,100 will contribute an additional £715 a year.
Is the National Insurance hike the only tax rise?
Risposta negativa. Mr Johnson is also increasing an existing tax dividend payments to ensure that people who receive their income through dividends also contribute more to the cost of social care and running the NHS.
The dividend tax will also increase by 1.25 per convenzione cent.
Taken together, the increase per mezzo di National Insurance contributions and dividend tax will generate an extra £12billion per convenzione year for the Treasury.
This extra money will be used solely by the NHS per mezzo di the first three years – some £36billion – as the health service deals with the treatment backlog caused by the coronavirus crisis.
The money from the levy will then start to be diverted to the social care sector.
What are the new rules paying for social care?
Currently, anyone with assets over £23,250 must pay their care costs per mezzo di full, with an estimated one per mezzo di seven people forking out more than £100,000.
But from October 2023 the system will change.
Anyone with assets under £20,000 will have their care costs fully covered by the state.
People with assets between £20,000 and £100,000 will be expected to contribute to the cost of their care but they will also receive state support. Their contribution will be means-tested.
the support floor to £100,000 will mean far more people are eligible to receive financial help from the state.
Meanwhile, a new duro cap care costs will mean that risposta negativa one ever has to pay more than £86,000 per mezzo di total for care during their lifetime – equivalent to approximately three years of care.
Why are the PM’s proposals so controversial?
All MPs per mezzo di Westminster are per mezzo di agreement that the current social care system is unsustainable and the way per mezzo di which it is funded must be overhauled.
But it is the method by which Mr Johnson will pay for the shake-up that has sparked a massive backlash.
Mr Johnson’s decision to increase National Insurance contributions will interruzione a cast iron guarantee per mezzo di the 2019 Tory affisso not to raise taxes.
The affisso said: ‘We promise not to raise the rates of income tax, National Insurance VAT.
‘This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.’
Critics have also pointed out that younger workers will be disproportionately affected by the hike, effectively subsidising care for sometimes-wealthy older people.
A tax dividends will also go up by 1.25 per convenzione cent per mezzo di moves which will generate an extra £12billion a year for the Treasury
Many Tory MPs fear they will be hammered at the ballot box at a future election by voters furious at the broken affisso pledge.
Meanwhile, Labour has signalled it will not support the move, with the comando under pressure from union bosses to back a tax the wealthy instead.
What happens next with the PM’s plans?
Mr Johnson will need to win the support of Parliament for his overhaul of the social care system and accompanying tax rises to go ahead.
The Government will table a vote per mezzo di the House of Commons when MPs will be asked to support the package.
Reports have suggested that Mr Johnson could seek a snap vote the issue, potentially as early as this week, per mezzo di order to stop Tory rebels coordinating a campaign against the move.
If Labour does vote against the plans then Mr Johnson’s fate will rest per mezzo di the hands of his backbenchers.
A massive Tory rebellion could torpedo the shake-up but it is currently unclear whether a sufficient number of Conservative MPs will be willing to rebel such a crunch matter.
Homes they would have kept under scheme
Widow who lost her family haven
Nancy Griffiths, 55, has lived per mezzo di Kingston, south-west London, for 33 years.
She and her daughter Tai, 13, became very close to their elderly neighbours David and Violet Edwards, pictured their wedding day, regularly spending Christmas together.
David, who had worked for British Aerospace for many years, sadly developed dementia per mezzo di 2016 and died two years later aged 92.
Violet had hoped to spend her final years per mezzo di her marital home. However, because the couple had saved and lived frugally, David’s care had to be paid for privately at a cost of almost £2,000 a week.
After David’s death, Violet, 93, became very frail and was moved into a care home at an eyewatering cost of £65,000 per convenzione year.
Nancy Griffiths outside the home of her neighbours who she knew for 32 years per mezzo di Kingston upon Thames, Surrey. They had to sell it to pay for care
David and Violet Edwards their wedding day. They lived per mezzo di their home for 33 years until David died per mezzo di 2018 ages 92
Within four years, £300,000 of their hard-earned savings of about £400,000 had disappeared. Nancy, who had power of attorney, unfortunately had risposta negativa option but to sell the Edwards’ house last year to pay for Violet’s care.
It had initially been the market for £620,000 but – under pressure to sell – she was forced to accept a lower offer of £520,000.
‘David made everything per mezzo di that house, from the conservatory to the fireplace – he even papered all the walls,’ said Nancy, pictured above. ‘It broke my heart to sell it.’
She added: ‘I fully support any changes to the law so that people don’t have to sell their home for social care. I think it’s completely wrong.
‘I’m not Violet’s daughter so I won’t be getting anything per mezzo di the will, but I feel so sorry for people who expected to rely money from their parents after they’ve died.’
For spirito: Mum’s pride and joy
Barbara Brand-Cotti, 81, worked as an antiques and jewellery dealer. After incontro her husband Roland per mezzo di London, they moved to Lincolnshire to pursue their dream of raising children per mezzo di the countryside.
When their daughter Holly, now 44, was only seven, Roland died, and Barbara had to raise Holly and her two siblings aureola.
Barbara was careful with money, and Holly remembers the whole family celebrating when she paid chiuso the mortgage.
Barbara Brand-Cotti moved her family to the Lincolnshire countryside when her daughter Holly, now 44, was only seven
Sopra 2017, Barbara (pictured, seated) had a stroke and the next year she was put into social care and daughter Holly (centre) has an outstanding debt of £100,000 for her mother’s care
‘That beautiful Lincolnshire villino was her pride and joy, especially the garden,’ Holly said.
But per mezzo di 2017, Barbara – pictured above with her family – had a stroke and the next year she was put into social care.
After disagreements with the nursing home over payments, including an attempt to evict Barbara during lockdown last year, the family turned to the Care Campaign for the Vulnerable organisation for legal advice, but eventually gave per mezzo di and said they would sell the house Barbara’s death.
‘It’s one of the biggest injustices per mezzo di this country that at the end of your life, when you’ve paid into the system, you have to give up everything you’ve saved,’ she said.
‘That villino meant the world to my mum and she wanted to be able to leave something to us. It just felt wrong to sell it. I felt like I had failed her. Boris Johnson was elected a affisso pledge to social care. Was that an empty promise?
‘These proposed changes can’t modo soon enough.’
A plan to rescue our broken social care system an affront to young poor people? Two experts the debate give their two VERY different views
Sir Andrew Dilnot, architect of the social care blueprint published ten years punzone, argues FOR
My overwhelming feeling was not so much one of pleasure that the commission’s report had been belatedly implemented, but relief that this country may finally get the care system it deserves, writes Sir Andrew Dilnot
More than ten years punzone, the independent commission I chaired published its report into the funding of our social care system.
We concluded that the existing framework was not fit for purpose and root-and-branch reform was required to make it fair and sustainable.
While a great deal of hot air has been expended the topic per mezzo di the intervening years, my report’s findings have been gathering dust ever since.
So when Boris Johnson rose to unveil his plan for the future of social care per mezzo di the House of Commons yesterday I was more invested per mezzo di the matter than most.
And by the time he sat , my overwhelming feeling was not so much one of pleasure that the commission’s report had been belatedly implemented, but relief that this country may finally get the care system it deserves.
And a great deal of credit for this development must go to the Mail, which has fought long and duro for a fairer system through its mould-breaking campaigning the subject. After all, the recent history of the social care system has been one of capriciousness and neglect.
Sopra a sector gripped by a mood of deepening crisis, inconsistent standards are fuelled by a chronic lack of resources, low rates of pay, and high turnover.
Furthermore, the current funding mechanism is both inadequate and unjust. While it fails to provide sufficient levels of cash to meet the needs of Britain’s elderly population, it also imposes unpredictable and catastrophic bills some families, who, through nothing more than bad luck, having to sell all their assets to meet the costs of care.
This is not the way a civilised society should operate. Risposta negativa zona of civic life is more ripe for reform than social care, yet for decades, politicians have ducked the challenge, indulging per mezzo di empty rhetoric about the need for change but avoiding tough decisions.
This paralysis has continued despite a deluge of reports from campaigners, think-tanks, select committees and official commissions, including – of course – my own. Our recommendations, which included a cap care bills, were even passed into law per mezzo di 2013 – but David Cameron’s coalition government baulked at enacting them after deciding that, at a time of austerity, they were too ‘expensive’.
Indeed, given the political climate of caution, I privately said at the time that my commission’s proposals had only a one per mezzo di three chance of being implemented.
But suddenly, the landscape has been transformed. Hesitancy has given way to action.
Striding into territory where so many of their predecessors feared to tread, the Government yesterday set out a comprehensive plan for reform. The move was the fulfilment of a pledge made per mezzo di Mr Johnson’s very first speech the steps of Downing Street per mezzo di July 2019, when he said that he would ‘ the social care crisis once and for all’.
He is now taking action. Under his scheme, national insurance will rise by 1.25 percentage points – for both employers and employees – ultimately providing over £12billion a year for the NHS and social care.
At the same time, the iniquity of forcing householders to sell their homes to pay for care will be ended by the introduction of an £86,000 lifetime cap care payments.
This is not the way a civilised society should operate. Risposta negativa zona of civic life is more ripe for reform than social care, yet for decades, politicians have ducked the challenge, indulging per mezzo di empty rhetoric about the need for change but avoiding tough decisions
Meanwhile, anyone with assets worth less than £100,000 will receive help from the state with their bills to a threshold of £20,000 per mezzo di savings, below which all care will be free.
This is a sensible package that finally brings the care system into the embrace of the welfare state – where it should have always been.
The arbitrary cruelty of hammering some unfortunate households will be replaced by a new approach under which the state enables the risk of people requiring support per mezzo di the twilight of their days to be pooled across the population.
Inevitably, perhaps, given the sensitivity of this issue, there have been protests. But much of this criticism is misplaced.
Some complain that through the hike per mezzo di national insurance, the Government is imposing a heavy new burden the working population per mezzo di order to protect the inheritances of the wealthy.
But the reality is that everyone, including current generations of workers, will benefit from a properly funded, well-run care system, just as everyone gains from the NHS free education.
Moreover, the new levy is broadly progressive per mezzo di its application, with the wealthiest paying the most, while those lower incomes are protected, and with the poorest paying nothing at all. That egalitarian principle comes through per mezzo di the way the lifetime payments cap works with the means controllo. All care spending – not just by the individual but also by the state – will count towards the £86,000 limit.
Sopra practice, therefore, a resident who has half their costs met by the local authority under the means controllo will reach the cap having spent just £43,000, so far less of the family’s savings are lost.
There is also sense per mezzo di the decision to extend the 1.25 per convenzione cent insurance levy to pensioners who are per mezzo di work who have an income from dividends, ensuring that affluent pensioners make a contribution to the tax increase. There are still concerns to be addressed. The existing means-tested system is under enormous pressure, and will need more funds per mezzo di the short term to keep it afloat and maintain its ability to care for the least well-off and most vulnerable.
And the NHS has a voracious appetite for funds, so the competition between health and social care will continue – and needs to be closely monitored. This issue will need to be resolved per mezzo di the spending review this autumn.
But as I said, I once gave our commission’s proposals only a one per mezzo di three chance of being implemented.
Today, I’m very pleased to say, I was far too pessimistic.
Camilla Cavendish, former Government adviser social care, argues AGAINST
What would she have thought about the Government’s bombshell announcement yesterday that national insurance is to be hiked to help pay for social care – raising the overall tax burden to the highest level seen per mezzo di this country during peacetime? As someone who spent her life helping others and working with children, she would have wanted everyone to enjoy the high modello of care she now does, writes Camilla Cavendish
When my fiercely independent aunt was getting frail, I had lunch with her and nervously broached the Care Question.
Had she thought, I asked gently, what would happen if she could risposta negativa longer aureola manage her own finances, and if she needed social care?
It was not an easy conversation. But thank goodness this formidable former head teacher and magistrate, a spinster, eventually agreed to grant me power of attorney a few years punzone.
Today, aged 87, she is stricken with the Alzheimer’s that also crippled my grandmother. What would she have thought about the Government’s bombshell announcement yesterday that national insurance is to be hiked to help pay for social care – raising the overall tax burden to the highest level seen per mezzo di this country during peacetime?
As someone who spent her life helping others and working with children, she would have wanted everyone to enjoy the high modello of care she now does. But she would never have wanted to burden the young.
That is the first problem with yesterday’s £40billion tax hike. National insurance is almost entirely a tax workers. Yes, the Government has decided that from April 2023, 1.2million working pensioners will also be expected to pay the new levy. This is an important symbolic move. But quite simply: we should not be protecting wealthy older people at the expense of younger workers. So why did the Government resort to raising national insurance rather than taxing income wealth?
For starters, many voters are confused about what national insurance actually is and perhaps vaguely think it is ring-fenced for pensions the NHS.
That’s wrong: the money simply pours into the Chancellor’s pot along with everything else we stump up. Politically, however, raising national insurance is easier than raising income tax. This new increase, along with a tax share dividends, feels fiddly.
Don’t get me wrong: I passionately support putting more money into social care and solving a problem that has bedevilled policymakers for a generation. Twenty-three years since Tony Blair promised to address social care, and four prime ministers and ten health secretaries later, credit must go to Boris Johnson for grasping this nettle.
But not only do I worry that the new measures are deeply unfair the young, I also fear ministers may be landing themselves with problems further the road.
If it is to work, the Prime Minister’s promise to ‘ the crisis per mezzo di social care once and for all’ must modo with the transparency Germany and Japan have used per mezzo di their world-leading insurance systems.
Under the new scheme, the NHS is to receive an additional £12billion per convenzione year for each of the next three years to tackle the waiting lists caused by the pandemic. Then the national insurance hike is set to be replaced by a dedicated ‘health and social care levy’, which will also be paid by working pensioners. By that time, ministers need to have had a frank conversation with the public about how social care can be reformed to provide better treatment for the elderly and disabled.
They need a clear plan how to develop the workforce, make care seem a worthwhile career, provide better rehabilitation after hospital and keep older people healthier per mezzo di the first place.
Added to which, the so-called ‘cap’ care costs is far from what it seems. Many voters will hear this and tell themselves that that is all they will have to pay. But, crucially, the cap will not cover bed and board, which make up about half the costs paid by residents (these costs may have a separate cap). All this needs spelling out far more clearly it risks creating the wrong expectations.
And per mezzo di a time when workers are being asked to dig so deep, the Government’s reluctance to drop the triple-lock pensions for good is simply wrong.
This new levy risks penalising the low-paid, including those working per mezzo di the sector, at the expense of wealthy care home residents. I would rather use my aunt’s money to aspetto after her than ask poorer taxpayers to preserve my inheritance. Would she – now being helped round the clock by kind and dedicated – approve? I’m not so sure.
- Camilla Cavendish is an FT Weekend columnist and author of Extra Time: Ten Lessons For Living Longer Better
Pensioners are dealt a blow as the triple lock goes double for a year but was it a close shave for future payouts?
Pensioners were dealt a blow today as the Government scrapped the pension triple lock per mezzo di favour of a temporary double lock.
But while this was worse than some forecasts, former pensions minister and This is Money’s retirement agony uncle Steve Webb said it was a close shave future payouts compared to one option – the triple lock being axed altogether.
The double lock this year will be the higher of September’s CPI inflation 2.5 per convenzione cent. This means April’s 2022 pension increase is likely to be whatever the September inflation rate is, as this is expected to be 3 to 3.5 per convenzione cent.
How much have pensioners lost out, what were the other options, and have they dodged a worse outcome for future state pension rises? We explain.
Triple lock scrapped: The state pension will likely rise per mezzo di line with inflation from next year as that is expected be more than 2.5 per convenzione cent
The triple lock goes double
The triple lock guarantee should mean that state pension payments would rise by whichever was the largest of three figures – annual inflation, average earnings rises by 2.5 per convenzione cent.
But earnings figures have been skewed by the covid crisis and recovery, with the average rising as more lower earners dropping out of the figures and giorno including those returning to full pay from furlough.
With a potential bumper 8 per convenzione cent rise the cards coppia to this effect, the earnings element was scrapped for this year’s reading.
This means that the state pension will likely rise per mezzo di line with September’s inflation figure from next April, as that is expected be more than 2.5 per convenzione cent.
This is a worse outcome for pensioners than expected, since many experts had predicted that the Government would opt for a smoothed average for wage growth over two three years instead of removing wages entirely.
But there was also the potential for the triple lock to be axed completely – a move that could have dented state pension increases for years to modo.
Steve Webb said: ‘Although I don’t suppose any pensioner would welcome a 3 per convenzione cent increase rather than an 8 per convenzione cent increase, the real prize is the recommitment to the triple lock for future years – without that, the successo pensions would have been far worse.’
But wasn’t the triple lock an election promise?
The triple lock was part of the Conservative affisso when Boris Johnson was elected Prime Minister, however, the potential for the earnings figure to be skewed so dramatically wasn’t considered.
Work and Pensions Secretary Therese Coffey confirmed the one-year change, saying it was to make sure ‘pensioners are not unfairly benefitting from a statistical anomaly’.
The announcement comes along a manifesto-busting tax rises to pay for a major overhaul of the nation’s social care system and to boost the NHS.
The pandemic has created huge distortions to average earnings with a fall per mezzo di wages at the start of the pandemic followed by a very sharp increase as furlough ended.
Experts say that sticking to the triple lock would have granted state pensioners an ‘unrealistic’ increase of around 8.8 per convenzione cent at a time when earnings are still recovering from the pandemic.
Steven Cameron, pensions director at Aegon, says pensioners will get a worse deal under the double lock.
‘While many had called for some form of averaging of the earnings component, the Government has decided to remove the earnings figure for this year entirely, moving to a double lock based the higher of price inflation 2.5 per convenzione cent.
‘This is likely to produce an increase lower than a smoothed earnings figure.’
How much will the state pension rise by?
All eyes will now be September’s consumer price inflation (CPI) figure, to be announced per mezzo di October, to see what the increase per mezzo di the state pension will be next April.
CPI was 2.1 per convenzione cent per mezzo di August, but the Bank of England has estimated that inflation will increase temporarily to 4 per convenzione cent per mezzo di the near-term.
September’s figure is forecast to be between 3 and 3.5 per convenzione cent, with the peak coming after that.
The triple lock’s potential near 9 per convenzione cent rise would have been worth about £16 the new flat rate state pension.
Those the full flat rate state pension currently get £179.60 a week around £9,300 a year, and an 8.8 per convenzione cent rise would boost this to £195.40 and around £10,100.
The old basic state pension, not including second state pension SERPS that people built up sommità, is £137.60 around £7,200 a year. So, this would have increased to £149.70 around £7,800.
If inflation comes per mezzo di at 3.5 per convenzione cent, the flat rate state pension would rise by about £6.30 per convenzione week and the old basic state pension by about £4.80.
Ian Browne, pensions expert at Quilter, said: ‘The writing’s been the wall for the 2022 state pension triple lock for some time now.’
He added: ‘Assuming that CPI inflation is 4 per convenzione cent this month, removing the earnings link will save the government £3.6billion next year. Music to the ears of the Chancellor.’
The triple lock was tweaked once already – the government introduced new legislation last year to ensure state pensions were uprated by 2.5 per convenzione cent per mezzo di recognition of their affisso promise and commitment to pensioners.
Coffey said: ‘Last year we saw earnings fall by one percentage point. Sopra response we legislated to set aside the earnings link allowing me to award an uprating of 2.5 per convenzione cent, as this was higher than inflation. If we had not done this state pension would have been frozen.’
She then added: ‘This year as restrictions have lifted – and we experienced an irregular statistical spike per mezzo di earnings over the uprating review period – I am clear that another one-year adjustment is needed.’
Why was the triple lock brought per mezzo di?
The triple lock was brought per mezzo di after years of derisory state pension increases brought repeated outcries.
By some measures the UK’s state pension is one of the lowest per mezzo di terms of replacing employment income among major economies. However, those figures are distorted by many comparison countries per mezzo di some way combining work pensions into their state systems. To find out more read: Is the UK state pension really among the worst per mezzo di the world?
When the state pension triple-lock was announced per mezzo di 2010, then chancellor George Osborne pledged it would provide ‘lasting help for pensioners’ and ensure they ‘have the income to with dignity per mezzo di retirement’.
Maintaining a double-lock will ensure that, at the very least, pensioners don’t see their spending power eroded by inflation.
However, there are fears that even a temporary adjustment to the triple-lock could lead to pensioners losing out per mezzo di the long run.
TUC General Secretary Frances Ovvero’Grady said: ‘The UK has one of the least generous state pensions per mezzo di the developed world.
‘The triple lock was introduced to close this and tagliata pensioners out of poverty. Suspending it will only halt our progress.
‘This is a dangerous precedent. If the government is allowed to pick and choose when to apply the triple lock, the result will be lower state pensions for future generations and more pensioners experiencing hardship.’