Boris Johnson has abandoned his pledge not to raise the main rates of tax, as he set out plans to overhaul adult social care and deal with the Covid backlog in the NHS.
In a Commons statement, the Prime Minister announced a new UK-wide 1.25% health and social care levy based on National Insurance contributions.
He said the additional revenue would pay for the biggest catch-up programme in the history of the NHS in England, with £12 billion a year to help deal with the backlog of cases built up during the pandemic.
It will also cover the reform of the social care system in England, ending what Downing Street described as “unpredictable and catastrophic” care costs faced by many families.
From October 2023, anyone with assets under £20,000 have their care costs fully covered by the state, while those with between £20,000 and £100,000 will be expected to contribute to their costs but will also receive state support.
No-one will have to pay more than £86,000 for care costs in their lifetime.
Scotland, Wales and Northern Ireland will receive an additional £2.2 billion in additional health and social care spending from the levy.