Labour to oppose Boris Johnson's 'unfair' national insurance increase

7 September 2021, 06:01

Keir Starmer will oppose Boris Johnson's proposed 1.25 per cent increase in national insurance, saying it will 'hit working people hard'
Keir Starmer will oppose Boris Johnson's proposed 1.25 per cent increase in national insurance, saying it will 'hit working people hard'. Picture: Alamy

By Daisy Stephens

Labour leader Sir Keir Starmer has told the Prime Minister his party will oppose plans to increase national insurance to fund social care.

In a letter to Boris Johnson, who is set to reveal his plans to fix the crumbling social care system in the Commons on Tuesday, Sir Keir said Labour supported tax increases to overhaul the system.

But he said that a national insurance rise would "hit working people hard, including low earners and young people" and disproportionately impact businesses that had been damaged by the pandemic.

Read more: Tax increase: PM promises to 'not duck tough decisions' to fix social care

Read more: NHS to get £5.4 billion boost to tackle Covid and patient backlog

Sir Keir said: "The taxes that pay for social care should be fair across the generations and all forms of income.

"Those with the broadest shoulders should pay more - not the working families now set for an unfair tax rise."

He added: "We've said that this additional investment will need to be funded through tax rises - but increasing national insurance contributions isn't the right way to do it.

"It would hit working people hard, including low earners and young people, and would place a huge burden on businesses just as they're trying to get back on their feet."

Shadow health secretary Jonathan Ashworth said a long-term plan for social care is "long overdue".

He added: "The Prime Minister must set out how he will bring down waiting lists quickly, support the NHS workforce, fix crumbling hospitals and deliver modern equipment to speed up diagnosis of deadly diseases, and crucially, ensure more people can access the social care they need."

Reports have suggested that lifetime contributions on care will be capped at about £80,000 and national insurance will be increased by 1.25 per cent to raise between £10 billion and £11 billion per year.

But the reported proposals have faced backlash from Tory backbenchers among others.

Former minister Jake Berry, leader of the Northern Research Group of Tory MPs, warned against a policy which appeared aimed at elderly voters in affluent southern seats.

The Rossendale and Darwen MP said: "It doesn't really seem to me reasonable that people who are going to work in my own constituency in east Lancashire, probably on lower wages than many other areas of the country, will pay tax to support people to keep hold of their houses in other parts of the country where house prices may be much higher."

Read more: National Insurance social care increase: How will it impact you?

Read more: James O'Brien's take on why the PM is concerned about social care funding

Another former minister, Sir John Redwood, warned against a "stupid" tax rise.

"A tax on jobs when you want to promote more and better paid employment is particularly stupid," he said.

Sir John added that "if an elderly person goes to live permanently in a care home it often makes sense for them to sell their former home".

"Otherwise it would cost them money to pay the tax on it whilst unoccupied and in need of maintenance."

Rachel Harrison, GMB union national officer, said: "We all know our crumbling social care system desperately needs more cash.

Read more: PM faces 'significant Tory backlash' over plan to boost social care from tax increase

"But raising regressive national insurance - which takes money from the pockets of the lowest-paid workers, is not the way to do it."

Sir Keir added that Labour would work with the Government on a long-term plan if it would "genuinely fixes the crisis in social care and has a fair funding model".