Prime Minister’s controversial £12bn national insurance tax hike clears the Commons

By Gavin Cordon, Reporter8th September 2021News EnglandAdult Care, Business / Funding / Finance, Government / Politics, Local Authorities, News England, Social Care, Top Stories

Boris Johnson has secured MPs’ backing for his controversial £12 billion tax hike to pay for health and social care despite seeing his Commons majority cut.

The House voted by 319 to 248 in favour of the 1.25 percentage point increase in national insurance contributions amid deep unhappiness among many Tory MPs.

It meant the Government’s working majority of more than 80 was reduced to 71, with a number of Conservatives apparently choosing to abstain while others made clear they were only voting with the greatest reluctance.

It reflected the concern within the Tory ranks that Mr Johnson was not only abandoning a manifesto promise not to raise the main rates of taxes but that he was taking the tax burden to record peacetime levels.

There was dismay also that a scheme to place a lifetime cap of £86,000 on social care costs in England would primarily benefit elderly households in the more affluent parts of the South at the expense of working families elsewhere.

In the Commons debate, the leader of the Northern Research Group of Tory MPs, Jake Berry, warned that by listing the levy on people’s payslips as a health and social care charge, it would “never go down, it can only go up”.

“No party is ever going to stand at an election and say I’ve got a good idea, vote for me, I’ll cut the NHS tax,” he said.

“It is fundamentally un-Conservative and in the long term it will massively damage the prospects of our party because we will never outbid the Labour Party in the arms race of an NHS tax.”

Former minister Steve Baker said the party was facing a “generational crisis” due to its inability to fund promises dating back more than a century.

“Now the Conservative Party, at some stage in our lifetimes, is going to have to rediscover what it stands for because I have to say at the moment we keep doing things we hate, because we feel we must,” he said.

Earlier at Prime Minister’s Questions, Mr Johnson attempted to quell the backlash, suggesting the insurance industry could protect people from having to sell their homes to pay for the cost of care, amid claims the £86,000 cap would not be enough.

Labour leader Sir Keir Starmer said that someone with assets of £186,000 – including their home – could still be forced to find £86,000 under the Government’s proposals.

“Where does the Prime Minister think that they are going to get that £86,000 without selling their home?” he said.

Mr Johnson replied: “This is the first time that the state has actually come in to deal with the threat of these catastrophic costs, thereby enabling the private sector, the financial services industry, to supply the insurance products that people need to guarantee themselves against the costs of care.”