Boris Johnson will today brace Britain for a manifesto-busting £10billion tax raid to bail out the NHS and ‘fix’ social care.
He will defy critics in the Cabinet and beyond by pushing up national insurance on 25million workers and millions of firms.
The move will cost employees on £30,000 a year an extra £255 in tax, roughly £5 a week.
Mr Johnson warned last night the NHS ‘cannot recover’ from the pandemic without a massive cash injection.
Nancy Griffiths outside the home of her neighbours who she knew for 32 years in Kingston upon Thames, Surrey. They had to sell it to pay for care
And he said it was time to end the scandal of pensioners having to sell their homes to fund care in later life.
The tax rise of 1.25 percentage points shatters his solemn 2019 election vow not to raise national insurance.
It has sparked a furious backlash from Tory MPs and business leaders, who warn it will act as a ‘tax on jobs’.
In a second move, ministers will also break their manifesto pledge to keep the state pension ‘triple lock’.
It will be suspended for a year, with pensioners given 2.5 per cent, rather than the 8 per cent rise they would have received – costing them £4 a week.
Mr Johnson last night said the ‘enormous strain’ placed on the NHS by the pandemic, coupled with the ‘broken’ care system mean he could not ‘duck the tough decisions’.
David and Violet Edwards on their wedding day. They lived in their home for 33 years until David died in 2018 ages 92
Cash will be poured into the NHS to allow it to operate at 110 per cent of capacity to help it start clearing a waiting list that has soared to more than five million during the pandemic and is on course to hit 13million by the end of this year.
The NHS will also be ordered to undergo a major efficiency drive. Ministers hope the money will clear the waiting list backlog by the time of the next election.
The proceeds of the tax rise of 1.25 percentage points will then be used to fund a new cap of £80,000 on the cost of social care, reducing the risk that people will have to sell their homes to pay for help.
Assets below £100,000 will be protected from the state – a huge increase on the current system in which people have to fund all their care costs if they have assets of more than just £23,350.
Tory MPs yesterday warned there was a danger that the entire sum would be swallowed by the NHS, leaving nothing for social care.
The concern is said to be shared by Chancellor Rishi Sunak, who has sought guarantees he will not be asked for more money for the sector in future.
Barbara Brand-Cotti moved her family to the Lincolnshire countryside when her daughter Holly, now 44, was only seven
It also emerged that the tax hike will be known as the ‘Health and Social Care Levy’ and will appear as a separate line on tax statements.
Ministers have agreed the levy will be ‘legally ringfenced’ to prevent it being siphoned off for other purposes by future governments.
Unlike normal national insurance, working pensioners will also pay the new levy to tackle complaints it places an unfair burden on the young.
The ‘median worker’ earning £24,000 a year will pay an extra £3.50 a week in tax, according to sources.
The Prime Minister last night insisted the package could resolve the crisis in both the NHS and social care. ‘The NHS is the pride of our United Kingdom, but it has been put under enormous strain by the pandemic. We cannot expect it to recover alone,’ he said.
‘We must act now to ensure the health and care system has the long-term funding it needs to continue fighting Covid and start tackling the backlogs, and end the injustice of catastrophic costs for social care.
'My Government will not duck the tough decisions needed to get NHS patients the treatment they need and to fix our broken social care system.’
The tax rise will cost an extra £130 for a worker on £20,000 a year. A worker earning £40,000 will pay an extra £380, while someone with a salary of £60,000 will pay an additional £630.
It is likely to be introduced in April next year, with legislation coming this autumn.
The decision to raise national insurance has alarmed Cabinet ministers, with one branding it ‘idiotic’.
Downing Street is confident the PM will be able to face down any Cabinet revolt over the issue.
But ministers are braced for a battle with Tory MPs over the breaking of a manifesto pledge.
Mr Sunak last night appealed for unity as he warned Tory MPs: ‘It’s fair to say we’ve got a tough autumn ahead.’
In 2017, Barbara (pictured, seated) had a stroke and the next year she was put into social care and daughter Holly (centre) has an outstanding debt of £100,000 for her mother’s care
Former Cabinet minister Jake Berry questioned why low earners in the North should pay more tax to help wealthier pensioners ‘keep hold of their homes’.
The chairman of the Northern Research Group of Tory MPs said: ‘It doesn’t really seem to me reasonable that people who are going to work in my own constituency in east Lancashire, probably on lower wages than many other areas of the country, will pay tax to support people to keep hold of their houses in other parts of the country where house prices may be much higher.’
He warned that national insurance was a ‘jobs tax’
