The government has announced that it plans to invest £36 billion into the National Health Service over the next three years which will help address a backlog of cases as a result of the coronavirus pandemic. The plan will also reform the adult social care system, as promised in the Conservatives’ 2019 manifesto.
The plan includes a 1.25 per cent increase in National Insurance from April 2022, with the funds raised by the increase ringfenced to pay for Health and Social Care. Exemptions to the Levy will mean that the lowest earners and companies with lower profits don’t have to pay. The highest 14 per cent of earners will be paying around half the revenues of the Levy, and no-one earning less than £9,568 will pay a penny. Unlike Income Tax or VAT, an increase in NICs ensures businesses contribute alongside employees and the self-employed.
Taxpayers will benefit from a cap on the cost of care in old age of £86,000. People with assets of less than £20,000 will not have to pay for their care at all. The care support will come into force from October 2023. Before that, the money will be used to boost the budget of the National Health Service, allowing it to provide additional services to address the backlog of cases which has resulted from the Covid pandemic.
Speaking in the House, Prime Minister, Boris Johnson said:
”You can’t fix the Covid backlogs without giving the NHS the money it needs. You can’t fix the NHS without fixing social care, you can’t fix social care without removing the fear of losing everything to pay for it, and you can’t fix health and social care without long-term reform. The plan I am setting out today will fix all of these problems together.”
Commenting on the Health & social care reforms and the increase to national insurance set out by the Prime Minster this week, Robin Walker MP for Worcester said:
“We set out protecting the NHS as our number one spending commitment in our 2019 manifesto and tackling the long-term problems of adult social care featured highly on the Prime Minister’s agenda from the day he entered Downing Street. It has been an aspiration for over a decade to deliver reforms to social care to ensure that nobody needs to lose their home to pay for care and I have argued at election hustings in every election in which I have stood that this needs to be delivered on.
“Raising taxes is never preferable but given the unique context of the Coronavirus pandemic and its impact on public finances it has been necessary in this instance. Not only will this allow us to meet our number one spending priority of investment in the NHS, it will also enable the longstanding cross-party commitment to the Dilnott reforms to social care to be delivered, meaning an end to the tragedy of people losing their homes to pay for care. In particular, I am looking forward to an end to the tragic situation in which people affected by dementia stand to lose their life’s savings and their homes to pay for their care.
“Of course as a Conservative MP, I do not like to be in the position of putting up taxes but I recognise that my constituents expect us to take difficult decisions in order to protect our NHS, support livelihoods and meet the generational challenge of fixing social care. The opposition always call for more spending on health and social care but they have never set out how to provide the means for delivering it. The economy is recovering well from the pandemic, backed by the unprecedented levels of support for jobs and incomes which this Government has provided. We are now in a position to provide the support needed to the social care system, with this Levy does.”
Health and Social Care Secretary, Sajid Javid said:
”Our nurses, doctors and care workers have worked tirelessly throughout the pandemic in our hour of need.
“But the pandemic has taken its toll – waiting times are longer than ever before and social care is under even greater pressure.
”This additional funding is a critical investment in our country’s future – it will give the NHS the extra capacity it needs to get back on its feet and is a vital first step in the reform of our broken care system.”