Boris Johnson has admitted he cannot rule out further tax hikes after announcing a £12 billion-a-year national insurance raid for health and social care.
The Prime Minister is pushing up contributions by 1.25%, insisting it is ‘fundamental to putting the NHS back on its feet’.
Without the increase, he said, the health service will not be able to deal with the record backlog of care – which currently stands at 5.5 million people.
Mr Johnson said that the backlog would ‘get worse before it gets better’, but said that the new funds raised would enable the health system to ramp up services and deal with the waiting list.
The tax will raise almost £36 billion over the next three years, with the majority of funds to go to the health service. But NHS leaders have warned that the money ‘falls short of what is needed’.
Flanked by Health Secretary Sajid Javid and Chancellor Rishi Sunak, Mr Johnson told a Downing Street press conference that the NHS is ‘our national priority’.
He added: ‘Unless we do this, we can’t deal with the backlog in the way that the British public need.
‘This is fundamental to putting our NHS back on its feet post-Covid.’
How will the NHS and social care plans affect me?
The Government has set out its plans for the biggest catch-up programme in the history of the NHS in England and an overhaul of the social care sector.
– What has been announced?
The Government has pledged to invest £36 billion over the next three years to help the NHS recover from the coronavirus pandemic and reform the adult social care system so people no longer face catastrophic care costs.
The majority will go to the NHS, with social care receiving £5.3 billion over the next three years.
From October 2023, nobody will pay more than £86,000 for their social care – regardless of their assets.
The Government will fully cover the cost of care for those with assets under £20,000, and contribute to the cost of care for those with assets of between £20,000 and £100,000.
– Why is this happening?
The NHS waiting list is at an all-time high as the nation recovers from the coronavirus pandemic.
The social care sector has been in need of substantial reform for years, and workforce and sustainability issues have been exacerbated by the recent crisis.
– How will it work?
It will be funded through a UK-wide health and social care levy from April 2022, based on national insurance contributions paid by working adults.
Between 2022 and 2023 national insurance rates will rise by 1.25 percentage points. From April 2023, the levy will appear as a separate entry on individuals’ pay slips. It is at this point that working adults above pension age will chip in.
The Government is also increasing the rate of dividend tax by 1.25 percentage points to ensure people who receive income from dividends make the same contribution.
– How much will I have to pay?
Those who earn more will pay more, Prime Minister Boris Johnson has said.
For example, a basic rate taxpayer earning £24,100 will contribute £180 a year and a higher rate taxpayer earning £67,100 will contribute £715 a year.
– How will the NHS benefit?
Most of the money in the first three years will go towards the NHS, and is expected to fund an extra nine million checks, scans and operations, as well as help the NHS focus on innovation.
– What about social care?
Social care will receive £5.3 billion between 2022-23 and 2024-25.
Less than half of this will fund the minimum floor and cap.
Around £500 million will go towards workforce training and skills, while money will also go towards 700,000 new training places, increasing local authority payment rates, integration and quality.
The Government has not provided a full breakdown for the money.
– When will social care get the money?
The social care sector will receive some of the extra money in the next financial year and throughout the three-year window.
But more money will be diverted to the sector after the three years as people hit the cap.
It is unclear how much more money the sector will receive at this point.
– What about Scotland, Wales and Northern Ireland?
The devolved nations will receive an additional £2.2 billion in extra health and social care spending from the levy.
The PM was repeatedly asked to rule out further hikes.
He told reporters that was a matter for the Chancellor, but added: ‘I certainly don’t want any more tax rises in this Parliament. If you want me to give that emotional commitment, of course that’s the case.’
He said: ‘There are not many people in the Conservative Party… or indeed in Government or indeed in the Conservative Party… who are more dedicated to cutting taxes, bearing down on taxes where we can, than the three people standing before you today, I absolutely assure you of the truth of that.’
Mr Sunak said: ‘None of us standing here wants to be in a situation where we are raising taxes.’
He added that the ‘only alternative would be to borrow more indefinitely’, but he branded this ‘irresponsible at a time when our national debt is already the highest it has been in peacetime’.
The Chancellor went on: ‘And it would be dishonest, borrowing more today just means higher taxes tomorrow.’
NHS Providers and NHS Confederation, which represent NHS organisations, said that the additional funds ‘do not go far enough’ and mean that the ‘threat of long delays will remain’.
In a joint statement, Matthew Taylor, chief executive of NHS Confederation and Saffron Cordery, deputy chief executive of NHS Providers, said: ‘No-one should be in any doubt that this extra funding is welcome, but the Government promised to give the NHS whatever it needed to deal with the pandemic, and, while it makes a start on tackling backlogs, this announcement unfortunately hasn’t gone nearly far enough.
‘Health and care leaders are now faced with an impossible set of choices about where and how to prioritise care for patients.
‘The Health and Social Care Secretary Savid Javid has already warned that the 5.5 million waiting list could spiral to 13 million, and this funding shortfall means the threat of long delays will remain.
‘NHS leaders have unfortunately become accustomed to having less money than the service needs. But the size of the funding gap remains daunting and will significantly impact the kind of care that the NHS can provide to the public in the months and years ahead.’
Amanda Pritchard, chief executive of the NHS in England, said: ‘It’s absolutely right that NHS staff, who have worked tirelessly throughout the pandemic to care for hundreds of thousands of Covid patients in hospital, get strong backing to recover routine services and begin to tackle the Covid backlog.
‘The pandemic is still with us and we will have to live with the impact of Covid for some time, so the additional funding confirmed this week will help meet those additional costs, and give the NHS clarity for the coming years while delivering millions more of the vital checks, tests and operations that patients need.’
A YouGov poll found voters were split in their views on the national insurance rise.
Some 44% of those surveyed supported the move, while 43% were opposed.
Among Conservative voters there was 59% support and 34% opposition, while only a third of Labour supporters backed the move, with 55% in opposition.
The measure was far more popular among those aged over 65 – with 68% supporting it and 23% opposing – than in the 18-24 age range, where 26% backed the move and 47% opposed it.
Just 22% of 18-24 year-old thought the tax rises were fair, a proportion that rose to 60% among over-65s.
Some 53% of those surveyed said it was unacceptable for the Prime Minister to break a manifesto commitment, while 32% said it was acceptable.
YouGov surveyed 1,869 British adults.
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