Prime Minister Johnson is already facing backlash for his plans to hike National Insurance to pay for social care reform. Former Cabinet Minister and Tory MP, John Redwood, warned against a “stupid” tax rise today. He said: “A tax on jobs when you want to promote more and better paid employment is particularly stupid.” Sir John argued that social care for the elderly should be funded in other ways, adding: “If an elderly person goes to live permanently in a care home it often makes sense for them to sell their former home”.
He continued: “Otherwise it would cost them money to pay the tax on it whilst unoccupied and in need of maintenance.”
On the Coffee House Shots podcast last Friday, editor of The Spectator Fraser Nelson warned that voters will not forgive Mr Johnson for the National Insurance hike.
He highlighted that the need for social care reform has been a political issue since Tony Blair was in Number 10, but said Mr Johnson will use COVID-19 as an excuse for the tax hike.
Mr Nelson said: “The Government was elected to power on the promise it would not raise income tax or national insurance.
“It says it doesn’t want to just freeze taxes, it wants to lower taxes. In office, it switches to a very different agenda – to increase taxes and increase public spending. To basically switch to a big government conservatism model.
“Sure you can blame the pandemic, as Johnson will do. But this isn’t about looking at the cost of the pandemic, this is about funding long term care, a conundrum which faced Tony Blair when he was elected in 1997.
“So what he is doing is using Covid to bait and switch, and I suspect voters will not forgive the Conservatives very quickly for this.”
One of the key concerns surrounding the National Insurance rise is intergenerational fairness.
Experts fear that the approach will make those on lower incomes fork out while many wealthier home owners will not be affected.
Chief Executive of the Resolution Foundation, Torsten Bell, highlighted in a tweet today how the tax rise could be unfair.
He said: “The landlord with hundreds of properties pays exactly zero pence, while workers foot the bill.
“The 66-year-old on £50,000 pays nothing, the 25 year old on £20,000 coughs up £100.”
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Mr Nelson added that the plan amounts to a “bung for the middle class” and said he has “great moral problems” with the move.
Labour Party leader Keir Starmer has also come out against the plan, claiming it would “wrongly punish” young people.
He told The Mirror: “We do need more investment in the NHS and social care. But National Insurance, this way of doing it, simply hits low earners, it hits young people and it hits businesses.
“We don’t agree that is the appropriate way to do it. Do we accept that we need more investment? Yes we do. Do we accept that NI is the right way to do it? No we don’t.”
Secretary of State for Justice, Robert Buckland, appeared to acknowledge that young people will be hit hardest by the proposed hike.
He said that everyone must contribute to funding social care.
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Mr Buckland told ITV News: “All of us at some stage are going to be elderly, and therefore this is an inter-generational issue and that means that all of us have a responsibility to shoulder that burden.”
Former Prime Minister, Sir John Major, has joined a growing group of Conservatives warning against the widely-expected move, branding it “regressive”.
Sir John, speaking at the FT Weekend Festival, said: “The Government are going to have to take action to deal with social care and that is going to mean an increase in taxation.
“I don’t think they should use National Insurance contributions, I think that’s a regressive way of doing it. I would rather do it in a straightforward and honest fashion and put it on taxation.”
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