PM expected to increase national insurance payments to fund social care – reports

The prime minister is expected to announce a rise in national insurance payments to fund social care, despite this being a breach of the 2019 Tory manifesto.

Reports in The Times and The Daily Telegraph say the plans could be revealed as soon as next week when parliament returns from its summer recess.

Both newspapers said national insurance is the favoured approach, but there are varying reports of how much the rise could be.

The Times said Health Secretary Sajid Javid is pushing for a 2% increase, while Chancellor Rishi Sunak is arguing against any increase of more than 1%.

The Daily Telegraph said Number 10 wants a one percentage point rise, but the Treasury is pushing to go higher, possibly 1.25 percentage points.

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Speaking to Sky News, Justice Secretary Robert Buckland insisted no decisions had been made and stressed the need for reforms to be “resilient for the long-term”.

He said: “This isn’t just a change for a Parliament, this has got to be a generational change.”

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He added: “We know the challenge, the work is going on, and I’m sure that we’ll hear the outcomes very soon.

“No final decisions have been made.”

“We will work as quickly as possible in order to get that certainty that, I think, so many people have been looking for so long.”

Analysis by Rob Powell, political correspondent

The sums required to properly fund social care are such that for some time tax rises have been viewed as the only game in town.

A national insurance (NI) hike is seen as the most sellable to the public, but the increase would break a manifesto commitment.

That’s why the change may be dressed up under the guise of a “health and care premium”.

There are questions of fairness though, as a rise in NI would hit younger and lower earners harder.

Then you get to what level to set the hike at, given the money is needed to fund both the NHS and social care.

A 1% rise would generate £10-12bn.

With NHS leaders asking for that for the health service alone, it’s not hard to see why reports of Sajid Javid pushing for a 2% rise have started to circulate.

Those close to the health secretary deny those allegations and play down that he is fully supportive of the £10bn request from NHS bosses.

Other cabinet ministers are queasy about the prospect of breaking a manifesto commitment at all, though.

That could set a constraint on how high the hike can go and mean someone, or possibly everyone, will end up disappointed.

Social care is in desperate need of funding reform, but any plan to increase national insurance payments is likely to disproportionately hit millions of younger people.

It will also break a promise made by the Conservatives ahead of the 2019 general election, which guaranteed there would be no increase to the rate of income tax, VAT, or national insurance.

This promise was confirmed in July by Business Secretary Kwasi Kwarteng, who told Sky News: “That’s what it says in the manifesto, I don’t see how we could increase national insurance.

“But you know things have been very flexible over the last 18 months, we’ve lived through an unprecedented time, we’ve been spending huge amounts of money that we never thought was possible, and it’s up to the chancellor and the Treasury, and the wider government, to decide a budget.”

Munira Wilson, the Liberal Democrats spokesperson for health and social care, said in a statement the increase of two percentage points was “unfair and unjust”.

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

“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?”