[UK] Prime minister could announce National Insurance hike as soon as next week

UK prime minister Boris Johnson is expected to announce a rise in national insurance payments to fund social care as soon as next week when parliament returns from its summer recess, despite this being a breach of the 2019 Tory manifesto, Sky News reports.

Reporting from both The Times and The Daily Telegraph broke the prospective announcement and said national insurance is the favoured approach but reports vary about how much the rise could be.

The Times said Health Secretary Sajid Javid is pushing for a 2 per cent increase, while Chancellor Rishi Sunak is arguing against any increase above 1 per cent.

The Daily Telegraph said Number 10 wants a one percentage point rise, but the Treasury is pushing to go higher, possibly to 1.25 per cent.

Speaking to Sky News, Justice Secretary Robert Buckland said no decisions had yet been made and stressed the need for reforms to be "resilient for the long-term".

He said, "This isn't just a change for a Parliament, this has got to be a generational change."

Adding, "We know the challenge, the work is going on, and I'm sure that we'll hear the outcomes very soon.

"No final decisions have been made."

"We will work as quickly as possible in order to get that certainty that, I think, so many people have been looking for so long."

The sums required to properly fund social care are such that it has been clear for some time that tax rises were on the horizon.

A national insurance (NI) hike is reportedly seen as the most palatable for the public but the increase would break a manifesto commitment.

Therefore the change may be pitched as a "health and care premium".

A rise in NI would hit younger and lower earners harder, leading to questions about fairness.

The level to set the hike at is also in question, given that the money is needed to fund both the NHS and social care. A 1 per cent rise would generate £10-12bn.

However, NHS leaders are asking for that for the health service alone, making it clearer why reports of Sajid Javid pushing for a 2 per cent rise have begun to circulate.

Those close to the health secretary deny the allegations and have played down Mr Javid’s support of the £10bn request from NHS bosses.

Other cabinet ministers are uncomfortable about the prospect of breaking a manifesto commitment altogether which could set a constraint on how high the hike will be and lead to disappointment for all.

Social care is in desperate need of funding reform however any plan to increase national insurance payments will be likely to disproportionately hit millions of younger people.

It will also break a promise made by the Conservatives before the 2019 general election guaranteeing there would be no increase to the rate of income tax, VAT, or national insurance.

The promise was confirmed in July by Business Secretary Kwasi Kwarteng, telling Sky News, "That's what it says in the manifesto, I don't see how we could increase national insurance.

"But you know things have been very flexible over the last 18 months, we've lived through an unprecedented time, we've been spending huge amounts of money that we never thought was possible, and it's up to the chancellor and the Treasury, and the wider government, to decide a budget."

In a statement, Munira Wilson - Liberal Democrats spokesperson for health and social care - said the increase of two percentage points was "unfair and unjust".

"Sajid Javid is putting the burden on the same people who have been the hardest hit by the pandemic, and Boris Johnson has today broken his manifesto promise not to raise taxes.

"Has it really taken all this time, to make a decision to rip-off the people who can least afford to shoulder the burden of social care?"

UK prime minister Boris Johnson is expected to announce a rise in national insurance payments to fund social care as soon as next week when parliament returns from its summer recess, despite this being a breach of the 2019 Tory manifesto, Sky News reports.

Reporting from both The Times and The Daily Telegraph broke the prospective announcement and said national insurance is the favoured approach but reports vary about how much the rise could be.

The Times said Health Secretary Sajid Javid is pushing for a 2 per cent increase, while Chancellor Rishi Sunak is arguing against any increase above 1 per cent.

The Daily Telegraph said Number 10 wants a one percentage point rise, but the Treasury is pushing to go higher, possibly to 1.25 per cent.

Speaking to Sky News, Justice Secretary Robert Buckland said no decisions had yet been made and stressed the need for reforms to be "resilient for the long-term".

He said, "This isn't just a change for a Parliament, this has got to be a generational change."

Adding, "We know the challenge, the work is going on, and I'm sure that we'll hear the outcomes very soon.

"No final decisions have been made."

"We will work as quickly as possible in order to get that certainty that, I think, so many people have been looking for so long."

The sums required to properly fund social care are such that it has been clear for some time that tax rises were on the horizon.

A national insurance (NI) hike is reportedly seen as the most palatable for the public but the increase would break a manifesto commitment.

Therefore the change may be pitched as a "health and care premium".

A rise in NI would hit younger and lower earners harder, leading to questions about fairness.

The level to set the hike at is also in question, given that the money is needed to fund both the NHS and social care. A 1 per cent rise would generate £10-12bn.

However, NHS leaders are asking for that for the health service alone, making it clearer why reports of Sajid Javid pushing for a 2 per cent rise have begun to circulate.

Those close to the health secretary deny the allegations and have played down Mr Javid’s support of the £10bn request from NHS bosses.

Other cabinet ministers are uncomfortable about the prospect of breaking a manifesto commitment altogether which could set a constraint on how high the hike will be and lead to disappointment for all.

Social care is in desperate need of funding reform however any plan to increase national insurance payments will be likely to disproportionately hit millions of younger people.

It will also break a promise made by the Conservatives before the 2019 general election guaranteeing there would be no increase to the rate of income tax, VAT, or national insurance.

The promise was confirmed in July by Business Secretary Kwasi Kwarteng, telling Sky News, "That's what it says in the manifesto, I don't see how we could increase national insurance.

"But you know things have been very flexible over the last 18 months, we've lived through an unprecedented time, we've been spending huge amounts of money that we never thought was possible, and it's up to the chancellor and the Treasury, and the wider government, to decide a budget."

In a statement, Munira Wilson - Liberal Democrats spokesperson for health and social care - said the increase of two percentage points was "unfair and unjust".

"Sajid Javid is putting the burden on the same people who have been the hardest hit by the pandemic, and Boris Johnson has today broken his manifesto promise not to raise taxes.

"Has it really taken all this time, to make a decision to rip-off the people who can least afford to shoulder the burden of social care?"