Boris Johnson announced in the Commons on Tuesday that millions of Britons would face tax increases in order to invest an additional £13bn in the NHS and social care. The normally low-tax Tory has broken a Conservative manifesto pledge to not raise taxes by increasing National Insurance by 1.25% to fund a new ‘health and social care’ levy. The NHS will receive a total of £36bn over the next three years, increasing its capacity by 10% by 2023/24.
National Insurance is a compulsory payment made by anyone over the age of 16 who earns more than £184 per week. The amount paid is determined by one's earnings, and payments cease at retirement age. Young people will be expected to bear the brunt of this new financial burden, but there are proposed plans that would raise the necessary funds without raising taxes on the general public.
A wealth tax would raise billions for the NHS while putting no additional strain on the public. Labour, according to Lisa Nandy, Shadow Foreign Secretary, would be willing to do so, and says the government should “make sure that [they] don't load an unsustainable burden onto people who can't bear it.” The Trades Union Congress has called for an increase in capital gains tax to raise £17 billion a year, which would fund elderly care and allow for a £10 per hour minimum wage for care staff, who often work in a thankless and exhausting job. The Conservatives are unlikely to support this approach because it would mean taxing their party donors, constituents, and themselves rather than full-time working parents, underpaid nurses, and undervalued supermarket workers. Other options include eliminating the upper earnings limit for NI contributions or taxing the estates of people who received state-funded health care.
Furthermore, the pandemic is Johnson's justification for raising taxes and breaking his election manifesto – "A global pandemic was not in anyone's manifesto," he said in Parliament yesterday – but the commitment to fixing social care was made before the pandemic, without a tax increase. Johnson, according to Opposition Leader Keir Starmer, is "putting a sticker plaster over gaping wounds inflicted by his party."
The Prime Minister has always mixed the personal and the political, portraying himself as the ‘ordinary’ man, being comical and proposing new ideas behind carefully crafted slogans such as ‘Boris Bikes’ and ‘Get Brexit Done’. He did not, however, choose a wise political strategy in instituting this new tax increase. Johnson kept MPs in the dark about breaking the manifesto until his announcement, despite the fact that a softer and more logical approach would have been to spend time building up to the announcement, talking about NHS funding and the care crisis. When it came time to announce tax increases, this would have softened the blow. According to polls, the public is willing to accept a tax increase as long as the money goes to the NHS. The Brexit red NHS bus demonstrated how much people were willing to fight for the health service, which is possibly why it is referred to as a ‘health and social care' levy to remind people of its purpose.
This decision has put a target on Johnson's back for the next election, with Labour likely to focus on a man who breaks promises, and this is just the latest in a long line. While some supporters have given the PM a pass because of Covid, many backbenchers and traditional Conservative Party members are losing faith in the leader. He needs more support than he currently has to persuade his own party and the public that he is breaking a promise for something serious and important to him. His enthusiasm may benefit him in the long run, but only if he builds support now and quickly.
The new health and social care tax shifts the burden of funding a crippling system onto an already struggling working class. The funds raised will barely make a dent in the NHS and care system crises, and Johnson has broken one of his key manifesto commitments in the process. While the tax increase was approved by the House of Commons earlier today, some Conservative MPs voted against it, demonstrating how Johnson has begun to alienate supporters and may face a backbench rebellion in the future. Only time will tell how significant an impact raising the National Insurance rate will have on saving the NHS and creating a better, more effective, and accessible care system.
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