LONDON (AFP, REUTERS) - Breaking an election pledge not to raise taxes, British Prime Minister Boris Johnson on Tuesday (Sept 7) announced hefty new funding to fix a social care crisis and a pandemic surge in hospital waiting lists.
The government said the tax hike brings Britain into line with France, Germany and Japan, which have all raised social insurance levies to help care for rapidly ageing populations.
Johnson conceded that the 1.25 per cent levy on UK national insurance contributions – paid both by workers and their employers – violated Conservative manifesto promises ahead of the December 2019 election.
“It is not something I do lightly,” he told parliament, after an uproar among many Conservative backbenchers and reports of a cabinet rift over the plan. “But a global pandemic was in no one’s manifesto.”
The coronavirus pandemic has fuelled a record backlog of 5.5 million routine procedures on the state-run National Health Service (NHS), rising to 13 million by the end of the year if left unchecked, the government said.
It announced an initial package of 5.4 billion pounds (S$10.1 billion) in extra funding for the NHS to help clear the backlog over the coming months.
The new national insurance levy will then raise 36 billion pounds over the next three years for the NHS, before it is targeted directly to funding elderly care.
“It would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it,” Johnson told parliament.
“It would be irresponsible to meet the costs from higher borrowing and higher debt,” he said.
At present, anyone with assets over 23,250 pounds has to pay in full should they need to go into a care home, for instance if they develop dementia.
That has led to many elderly Britons being forced to sell their homes and liquidate their life savings.
Under the new plan, from October 2023, anyone with assets of 20,000 to 100,000 pounds will contribute to their care but will also get means-tested support.
No one will have to pay over 86,000 pounds over their lifetime.
Johnson, who entered Downing Street in 2019 claiming to have a plan ready on social care, said successive governments had ducked the electorally tricky challenge for too long.
“There cannot be any more dither or delay,” he said. “You can’t fix the NHS without fixing social care.”