Social care reform plans facing Tory tax backlash

Boris Johnson will unveil his long-term plans for social care and the NHS as early as Tuesday, amid rows over how to pay for multi-billion pound funding.

The PM said he had a plan to reform social care when he took power in 2019, but has yet to announce the detail.

Now, reports of an increase in National Insurance to cover the cost – which would break his commitment not to raise taxes – has led to anger from Tory MPs.

A source has also told the BBC an extra £5.5bn will be announced for the NHS.

The senior government figure said the money would help tackle the backlog following the Covid pandemic, as well as upcoming winter pressures, ahead of new funding beginning in April.

The BBC’s political editor, Laura Kuenssberg, said the NHS portion of the announcement was expected later on Monday.

Organisations representing the NHS have warned services may have to be cut unless NHS England receives an extra £10bn in funding next year.

Meetings to discuss the social care plan for England have been taking place between ministers across the weekend, according to government sources.

But while a deal is said to be “close”, Laura Kuenssberg said it “sounded like haggling was still going on” over how to solve the funding issue.

And she said a delay in reaching an agreement had “created plenty of space for a backlash before the details have even emerged”.

The rumoured increase in National Insurance has particularly angered some Conservative MPs, with one cabinet minister telling the BBC: “It is the wrong thing to do, and the wrong way to go about it”.

Former minister and Tory MP Jake Berry also said it would not be a “fair and equitable way” to secure the money.

He told BBC Radio 4’s Today programme the rise would disproportionately affect people who are working, and that people “on lower wages than many others in the country” would end up “paying tax to support people to keep hold of their houses in other parts of the country where house prices may be much higher”.

But it is widely accepted that major changes are needed to social care – which helps older and disabled people with day-to-day tasks such as washing, dressing, eating and medication – due an to ageing population and failures to address issues in the past.

Defence Minister James Heappey said too many governments had “ducked the opportunity” to fix the system, leading to the “social contract in the UK to be broken”.

He told BBC Breakfast: “The social contract is that whilst you are of working age, you pay your taxes to pay for those who aren’t working in anticipation that when you yourself are retired, those who are of working age at that time will do the same for you.

“That social contract has become dangerously out of balance.”

Mr Heappey would not confirm if National Insurance would be part of the government’s proposals, but he said any plan would have pros and cons, and it was up to MPs to “fiercely debate” them when final detail is announced.

Earlier this week, the government did not deny newspaper reports that it was considering increasing National Insurance contributions by at least 1% to improve social care and tackle the NHS backlog.

National Insurance is paid by workers until they reach the state pension age and by employers. For someone on average earnings of £29,536 a year, a 1% increase in National Insurance would cost them £199.68 annually.

Some Tories accept that a tax rise is needed – but say it should not be National Insurance because that could hit younger and lower income workers harder, while pensioners would not have to pay.

However, during the last election, the Conservatives made a manifesto commitment not to raise National Insurance, income tax or VAT.

Labour has also voiced its opposition to an increase to National Insurance, with its leader, Sir Keir Starmer, ruling out his party’s support.

He told the Daily Mirror newspaper: “We do need more investment in the NHS and social care but National Insurance, this way of doing it, simply hits low earners, it hits young people and it hits businesses.

“We don’t agree that is the appropriate way to do it. Do we accept that we need more investment? Yes we do. Do we accept that NI is the right way to do it? No we don’t.

“But we will look at what [the government puts] forward because after eleven years of neglect we do need a solution.”

The social care system is devolved across the four nations, meaning governments need to develop separate solutions.

In England, social care is generally not provided for free. Typically, only those with savings and assets worth less than £23,250 can get help from their council.

There is no overall limit on costs, meaning thousands every year end up selling their homes to pay.

Personal care, such as help with washing and dressing, is free in Scotland for those assessed by their local authority as needing it. Those in a home still have to contribute towards accommodation costs.

The Scottish National Party said the UK government at Westminster should guarantee Scottish workers would not pay for an “England-only policy”.

Some care costs are capped in Wales, and home care is free for the over-75s in Northern Ireland.