National Insurance: Ministers debate tax hike to fund social care reforms

A senior minister has stressed the need to ensure that welfare reforms are “adequately funded” as the UK government is considering increasing national insurance to cover the cost.

With a long-awaited announcement of reforms touted as early as next week, ministers debated how much a tax hike would need to fund the NHS and welfare.

A source close to Health Minister Sajid Javid strongly denied that he had pushed for national insurance to be increased by up to 2%, but did not deny that he argued for an increase of more than 1%.

Chancellor Rishi Sunak is said to argue against an increase of more than 1%, with any increase being a violation of the Conservative Manifesto of 2019.

Conservative former Health Secretary Jeremy Hunt called on the government to “bite the bullet” and announce a tax hike, but warned against an increase in national insurance, saying it “targets the youth disproportionately”.

With two Manifesto pledges seemingly at odds, Attorney General Robert Buckland decided to emphasize commitment to long-term welfare reform.

“I am confident that something will come out very, very soon because many of us have been eagerly waiting for it,” he told BBC Breakfast.

“What we said about welfare in the Manifesto is that no one has a monopoly of wisdom on these issues and the British public is sensible enough to know that when it comes to welfare we have to find a way of how it is going to be adequately financed. “

The Times reported that five cabinet ministers would oppose the National Insurance increase.

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

Mr. Hunt, chairman of the Commons Health and Welfare Committee, said the “intoxicating” sums required are far greater than what the Chancellor can “find in the back of a Treasury Department”.

He told BBC Radio 4’s Today program: “I am really arguing that we have to bite the bullet and say there has to be some kind of tax hike.”

He wrote in the Telegraph that “an income tax hike would feel very unconservative” and that “National Insurance targets the youth disproportionately,” advocated a new “health and care premium” instead.

Prime Minister Boris Johnson has been criticized for delaying reforms after saying his plan was ready in a speech on the steps of Downing Street in 2019.

In this year’s parliamentary elections, the Tories pledged not to increase income tax, VAT or social security.

Downing Street does not deny that a tax hike is being considered, but it has been stressed that no decisions have been made.

Social service providers urged the government to be “ambitious” and go beyond funding issues.

Mike Padgham, chairman of the Independent Care Group, said a tax hike should be “just the beginning” and part of a system overhaul, including addressing the workforce crisis.

He said, “Capping maintenance costs, however they are done, is just the beginning. A good start, but only the beginning.”

Vic Rayner, chairman of the National Care Forum’s board of directors, said the upcoming proposals should “provide long-term ambition for people and communities rather than quick fixes.”

“Reform needs to go beyond the narrow focus on cost containment if we are to have a real public debate,” she added.

Rachel Harrison, GMB National Officer, said any additional money must be earmarked “to improve the pay and conditions of caregivers.”

Nick Sanderson, chairman of the board of directors of Audley, which operates retirement homes and home care, said a “welcome cash injection” was only part of the puzzle.

He added: “We need a systematic rethink that reduces the need for care from the outset.

“Independence, wellbeing and keeping people out of nursing homes for as long as possible, if not forever, must take precedence over supporting a broken system.”

Labor warned the Prime Minister against “hitting low-wage earners, young people and businesses” with a tax hike.

Munira Wilson, Liberal Democrats spokeswoman for health and social affairs, said a 2% increase in social security was “unfair and unjust”.

“Has it really taken all this time to make the decision to rip off the people who can least afford to bear the burden of welfare?” Asked the MP.

A government spokesman said: “We are determined to come up with a long-term plan to reform the social welfare system and will come up with proposals this year.”

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