Highest taxes since Second World War National Insurance tax calculator: how much you will pay Inside the Cabinet meeting that crushed Tory rebellion Jeremy Warner: Now is the worst possible moment to lift taxes Coronavirus latest news: Vaccine passports ‘go against Boris Johnson’s DNA’ but will end the pandemic, minister insists MPs have voted through Boris Johnson’s proposals to raise National Insurance to fund his new health and social care plan.
The Prime Minister’s blueprint includes billions more for the NHS that will be funded by the NICS increase and see taxes reach their highest level since the Second World War. Mr Johnson today insisted that richest will pay more under the plans, adding that nurses’ salaries are “exactly what this funds”. He described it as “astonishing” that Labour MPs voted against the bill, but they were not alone as a number of Tories also refused to back the proposals.
Jake Berry lambasted what he described as a “Trojan horse for an NHS tax” – a sentiment echoed by Steve Baker, who called on Tories to “rediscover what we stand for”. Follow the latest updates below. And that’s it for another day… Boris Johnson staved off discontent in the Tory party and rumours of a rebellion that never came to pass, as the health and social care levy was comfortably waved through Parliament by 319 votes to 248.
In their 2019 manifesto, the Conservatives promised to raise National Insurance, yet Mr Johnson said that a pandemic “was in no one’s manifesto” and pointed to what many of his own MPs acknowledged is an urgent need to reform the health and social care system. While Labour voted against the plans, claiming that they will punish the poorest in society and hit low-paid workers hardest, many on the opposite side of the House noted that Labour did not have a “viable alternative” of its own.
The challenge now for Mr Johnson will be to justify one of two breaches of the 2019 manifesto within the space of a day. It is a gamble which could well pay off if the disparities in social care are fixed, and the NHS is able to clear the immense backlog brought about by the Covid crisis and the reduction of services to urgent care for so many months.
However many Tories voiced their apprehension about a worst-case scenario in which the plan does not effect substantial change and the cash disappears into an “NHS black hole”. Mr Johnson may have to wait until the next election until the result of his bet comes in. Telegraph readers would have acted differently from the PM – 71 per cent of you said that you would vote against the proposals, and that this tax raid does not do what it claims, while 20 per cent of you backed Boris’s plan and nine per cent would have abstained.
Make sure to come back tomorrow to follow all of the latest on what promises to be another eventful day in Westminster. Reaction pours in as National Insurance rise approved “Care workers will pay extra tax under Boris Johnson’s plans. Shop assistants, postal workers, teachers and nurses will too. Landlords won’t,” writes Labour MP Gerald Jones. Meanwhile Angela Eagle described the proposals as “manifesto-busting” and “half-baked”. NI raise defended by Downing Street as ‘progressive and fair’
The Government has been criticised for raising the additional revenue from national insurance contributions, which are levied on more low-paid workers, writes Tony Diver. But Downing Street said its funding model was a “progressive and fair way to raise money,” and pointed to figures showing top rate taxpayers, who make up 2 per cent of those affected, will be contributing around one fifth of the total tax paid. The top 14 per cent of earners will pay around half of the cost, Mr Johnson’s spokesman said.
From April 2022, employees will begin to pay the levy through an increase in their national insurance contributions. From April 2023, the levy will be listed as an additional line in workers’ pay slips. Johnson staves off rebellion as health and social care reform voted through MPs have voted through Boris Johnson’s proposals to raise National Insurance to fund his new health and social care plan. The Prime Minister’s blueprint includes billions more for the NHS that will be funded by the NICS increase and see taxes reach their highest level since the Second World War.
Mr Johnson today insisted that richest will pay more, adding that nurses’ salaries are “exactly what this funds”. He described it as “astonishing” that Labour MPs voted against his plans, but they were not alone as a number of Tories also refused to back the proposals. Jake Berry lambasted what he described as a “Trojan horse for an NHS tax”, and confirmed with a “heavy heart” he would not support the Government, a sentiment echoed by Steve Baker, who called on Tories to “rediscover what we stand for”.
BREAKING: Johnson’s NI tax rise passes through the Commons Boris Johnson’s health and social care plan has been passed by 319 to 248. MPs are voting on the plans We should expect a result soon… Steve Barclay: ‘This will directly improve people’s lives’ “This levy will enable the biggest catch-up in the history of the NHS, a comprehensive long-term solution to the social care challenge,” Mr Barclay concludes.
“This will directly improve people’s lives. The Prime Minister said yesterday you can’t fix health without fixing social care, and you can’t fix social care without removing the fear of losing everything to pay for it.” Steve Barclay urges MPs to support ‘long-term, sustainable’ plan Steve Barclay, chief secretary to the Treasury, says that Boris Johnson’s plans will bring health and social care together “on a long-term and sustainable footing”.
If left uncheck, the NHS backlog could reach 13 million patients, Mr Barclay says. “The country is facing a longstanding challenge to the social care system. We have set out the illustrative analysis in terms of the impact of this from a distributional point of view, and we’ve also said we will say more on that because it will evolve by 2023. “This money could not be raised by taxes on wealth. That case was demolished by the chair of the Treasury select committee, who highlighted that to raise the revenue required requires a broad-based approach.”
Labour raises concerns over social care working conditions As the debate comes to a close, Labour’s Bridget Phillipson praises the “sharp and insightful contributions” that have been given throughout today’s debate. “What has been set out does nothing to improve the working conditions facing social care workers, many of whom will now be facing a tax rise,” she says.
She asks why so few Tory MPs have made contributions along the lines of the Cabinet minister who on Sunday told the Telegraph: “Putting up National Insurance would be morally, economically and politically wrong. It kicks in at a low level and there are all kinds of exemptions which benefit the rich. “If you get all your income from investments and property you don’t pay a penny but if you work your guts out for minimum wage you get clobbered.”
Spend more concerning than tax, says David Simmonds David Simmonds, the Conservative MP for Ruislip, Northwood and Pinner, explains that he is more concerned with the spending of the funds rather than the raising of them. “I have more than happy to look my constituents in the eye and say I voted to raise taxes if we have something to show for it,” he says, noting a need for social care reform that has existed for more than two decades.
However he echoes warnings about the money simply “falling into an NHS black hole”. ‘Throwing money into the NHS black hole is not the solution’ South Dorset Tory MP Richard Drax says “alarm bells are ringing” for him over the Government’s direction of travel “and I don’t like being bounced into this decision”. He says: “We cannot just go on spending the taxpayers’ money willy-nilly. This is not our money. It is money earned by people working their socks off to provide for their family, their friends, their employees and for the health and prosperity of this country.
“Throwing money into the National Health Service black hole is not the solution and parties of all colours over the years have failed to tackle the NHS issue – which needs radical reform, of the NHS and of course social care.” In the final seconds of his remarks, Mr Drax says:
Where is the vision of this Singapore-style, low-tax economy, attracting the best to this country generating the wealth and prosperity that we need? To generate the revenue we need, we lower taxes – that is proven – we don’t raise them. Because if we do, all we do is damage our economy and we have less money to spend on the things we need like social care and the NHS.
Peter Bone: I could vote for or against National Insurance measures Peter Bone says he will make his decision after listening to the shadow minister and the minister. “I have no idea, as of now, what I’m going to do tonight.” Peter Bone: Social care must be sorted ‘separately and properly’ Angela Richardson, Tory MP for Guildford, says there is an “enormous backlog” in the NHS and the health and social care proposals are “responsible and fair – our constituents understand fairness”.
But Conservative Peter Bone says: “There should have been a health bill, there should have been a social care bill, we should have been able to debate the principles of that and then immediately afterward vote on the ways and means. “If this was a Budget people would read the red book and for five days they would unpick the budget and then we’d vote on the ways and means motion.”
Mr Bone says that while he supports the idea of more money for the NHS through National Insurance, he is “very, very unhappy with the procedure” and notes the care bill has not yet been introduced. “Social care should be paid for separately. We should have the bill, we should debate it, it should go through the committee stage, go through the Lords and then it should be paid for. I have no idea what clever-clogs in Number 10 thought it was a great idea to mix these two up. Social care should be done separately and properly.”
Peter Bone: Social care must be sorted ‘separately and properly’ Angela Richardson, Tory MP for Guildford, says there is an “enormous backlog” in the NHS and the health and social care proposals are “responsible and fair – our constituents understand fairness”. But Conservative Peter Bone says: “There should have been a health bill, there should have been a social care bill, we should have been able to debate the principles of that and then immediately afterward vote on the ways and means.
“If this was a Budget people would read the red book and for five days they would unpick the budget and then we’d vote on the ways and means motion.” Mr Bone says that while he supports the idea of more money for the NHS through National Insurance, he is “very, very unhappy with the procedure” and notes the care bill has not yet been introduced.
“Social care should be paid for separately. We should have the bill, we should debate it, it should go through the committee stage, go through the Lords and then it should be paid for. I have no idea what clever-clogs in Number 10 thought it was a great idea to mix these two up. Social care should be done separately and properly.” ‘The least worst option’ Kevin Hollinrake, the Conservative MP for Thirsk and Malton, agrees that Johnson’s proposals constitute “the least worst option”.
He says that over the years, constituents have asked him why parties cannot work together in the national interest, whether on the so-called ‘death tax’ or ‘dementia tax’. “The reality is this one of many challenges we are going to face in the next few decades,” Mr Hollinrake says, highlighting an Office for Budget Responsibility warning that by 2060 the UK’s debt to GDP ratio could be 400 per cent of GDP if there are no changes to tax.
“We must sort this across the House so we do have a long-term solution.” ‘We need to act now and the Government is acting now’ In the next 20 years the population of England alone will increase by 10 per cent and the numbers of over-75s will increase by 60 per cent, an extra 2.5 million people, notes Bexhill and Battle’s Conservative MP Huw Merriman. “The system is creaking and in my constituency a third of my constituency are over the age of 65. This tells us that we need to act now.
“I do have concerns about the action that we are taking but I would say that we need to act now and the Government is acting now.” Mr Merriman expresses a trifecta of concerns: the focus on healthcare at the expense of social care; the “intergenerational unfairness” of the National Insurance increase; and the very principle of a rise in tax. “That being said we do need to act now, I will be supporting the Government, but I do want to see these measures I’ve just touched on really developed before it’s too late.”
Mike Wood: ‘There is no hidden pot of money’ Mike Wood, the Tory MP for Dudley South, says the result of the 2019 general election was largely down to voters’ belief that his party would take the “difficult choices needed”. He says “something needs to be done” about the current health and social care crisis, and “the only decision we have to take is how can we pay for it”.
“I don’t think in the long term that borrowing to pay for it is a very sensible option. And there are very few taxes that can raise anything like enough money to meet what is needed.” Mr Wood decries the “fanciful ideas” of wealth taxes from some Labour backbenchers – saying there is no “hidden pot of money that can just be raided”. He says the fairest way is to have a levy on National Insurance so that those who earn more pay more.