Ministers debate national insurance hike to fund social care reforms

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Shadow chief secretary to the Treasury Bridget Phillipson said: “Boris Johnson still hasn’t come forward with the plan for social care he promised over two years ago, and instead they’re proposing a manifesto-breaking tax rise that would hit working people and businesses hard.”

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

“Sajid Javid is putting the burden on the same people who have been hardest hit by the pandemic, and Boris Johnson has today broken his manifesto promise not to raise taxes,” the MP said.

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

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