National insurance could rise for millions to fund social care reforms

3 September 2021, 07:56 | Updated: 3 September 2021, 08:10

Sajid Javid wants a 2% increase to national insurance.
Sajid Javid wants a 2% increase to national insurance. Picture: Alamy

By Emma Soteriou

Health Secretary Sajid Javid wants to increase national insurance by two per cent to help fund social care reforms, it has emerged.

Around 25 million people will be expected to pay extra as a result of the increase.

It comes after the Conservatives pledged in their 2019 general election manifesto not to raise the rate of income tax, VAT or national insurance.

However, the idea of increasing national insurance has been floated since earlier this year, but there has been a cabinet divide on the scale of the rise.

There are concerns from the Health Secretary that a one per cent rise for employers and employees, which would mean an extra £10 billion, would not be enough.

Meanwhile, Chancellor Rishi Sunak is said to have been against pushing the increase any higher than one per cent.

The government is expected to announce the changes as soon as next week, according to reports in The Times and The Telegraph.

Read more: Govt denies parents face tax on disposable nappies in fight against single-use plastic

Read more: Taxpayers will bear Covid costs for decades, MPs warn

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Any rise in national insurance is expected to face criticism as it is likely to disproportionately hit millions of younger people.

Former Tory Health Secretary Jeremy Hunt, who is currently chair of the Health and Social Care Select Committee, suggested in an article for Telegraph that the government should instead create a "new health and care premium".

The newspaper said it had been told that No10 favours a one percentage point rise but the Treasury is pushing to go higher, possibly by up to 1.25 percentage points.

Despite reports, no final decision is said to have been taken as of yet, with discussions ongoing.

Read more: Care boss: Government is 'picking at the edges' of the 'fundamental' problem in adult social care

Munira Wilson, the Liberal Democrats spokesperson for health and social care, said in a statement that the reported increase was "unfair and unjust".

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

"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?"

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