'Morally wrong to make our children pay' Javid defends massive tax hike which begins today

6 April 2022, 00:02 | Updated: 6 April 2022, 09:10

Sajid Javid has defended today's National Insurance hike.
Sajid Javid has defended today's National Insurance hike. Picture: Alamy/LBC

By Sophie Barnett

The Health Secretary has defended today's rise in National Insurance for millions of workers, saying it is "morally wrong" to make future generations pay for the impact of the Coronavirus pandemic.

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Speaking to Nick Ferrari at Breakfast, Sajid Javid said the only way to pay for the NHS was through a rise in taxes, branding borrowing as "economically dangerous" post pandemic.

Explaining what the funding would be put towards, he told Nick: "This levy, its going to contribute to a additional £39billion pounds, additional, on top of what was already planned pre pandemic into the NHS and social care.

"Why do we need that? It’s because I think we can all see that the impact of the pandemic has been huge in terms of the pressures on the NHS and social care and that impact is sadly going to continue for many years as the NHS catches up and as does social care.

"This funding in the NHS, it will mean it can operate at some 130 per cent of normal sort of pre pandemic activity levels, it will pay for some nine-million more scans, tests and procedures. It will be the biggest catch up fund in the history of the NHS.

"For adult social care it means that the first time the Government has actually grabbed hold of the real serious problems, put it on a sustainable funding path, meaning that more people will get support with their care costs, should they need adult social care.

"And everyone will be protected from the catastrophic costs of care."

He added that borrowing money would mean debt that future generations pay for stating: "I think it would be morally wrong to ask our children to pay for our health care and social care."

National Insurance contributions will increase by 1.25% on Wednesday to cover a reform to the social care system and tackle the NHS backlog caused by the coronavirus pandemic.

From April 2023 onwards, the NI rate will decrease back to the 2021-22 level, with a new 1.25% health and social care levy legally introduced.

Mr Johnson said the increase will raise almost 36 billion pounds over the next three years to help reduce the Covid-induced backlog.

"We must be there for our NHS in the same way that it is there for us," Mr Johnson said.

"Covid led to the longest waiting lists we've ever seen, so we will deliver millions more scans, checks and operations in the biggest catch-up programme in the NHS' history.

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"We know this won't be a quick fix, and we know that we can't fix waiting lists without fixing social care.

"Our reforms will end the cruel lottery of spiralling and unpredictable care costs once and for all and bring the NHS and social care closer together.

"The levy is the necessary, fair and responsible next step, providing our health and care system with the long term funding it needs as we recover from the pandemic."

Read more: National Insurance rise: How much more will you need to pay?

The hike in National Insurance comes just days after Ofgem raised the price cap of gas and electricity, seeing it soar by 54 per cent on Friday to £1,971 for an average home.

Experts predict it will be around £2,700-a-year from October.

There were calls for the National Insurance hike to be delayed due to growing pressures on household finances and the ongoing cost of living crisis driven by rising inflation and soaring energy prices, but the Government says it has been forced to go ahead with the levy.

The Conservative Party 2019 election manifesto, which helped Mr Johnson deliver a landslide majority, pledged "not to raise the rates of income tax, national insurance or VAT".

But senior ministers have argued that the impact of the coronavirus crisis meant that tax promise to the electorate could no longer be kept.

Health Secretary Sajid Javid said the pandemic had placed "unprecedented pressure on the NHS" and pushed up waiting times.

"This investment will go into tackling those backlogs and will help make sure everyone can get the care and treatment they need," he said.

According to the Department for Health and Social Care (DHSC), the number of people waiting for elective care in England has risen from 4.4 million before the pandemic to six million.

DHSC said the extra cash from the NI hike will reduce waiting times and deliver millions more scans, tests and operations, while reforming the way routine services are delivered so the NHS is fit for the future.

Mr Javid added: "We can't have business as usual, which is why we are rolling out surgical hubs and community diagnostic centres up and down the country to deliver millions more scans, checks and operations.

"This vital funding will ensure the NHS is equipped to not only reduce waiting times but also tackle the big challenges we face, from cancer to heart-disease and dementia."

The health and social care levy will also be used to cap the cost of care in the UK, so people "no longer live in fear of losing everything".

Under the current system, those with assets of more than £23,250 pay their care costs in full.

But under a reformed system from October 2023, anyone with assets under £20,000 will have their care costs fully covered by the state, DHSC said.

The cost of care will then be capped at £86,000, with the point at which people meet the full cost of their care rising from £23,350 to £100,000, nearly four times higher than the current system, according to health officials.

The Government argues the levy is progressive, with the highest 15% of earners paying more than half the revenues.