A rise in national insurance may cover the cost of a social-care plan.
A rise in national insurance to pay for social care remains on the table, according to Downing Street. Boris Johnson, Rishi Sunak, and Sajid Javid, the Health Secretary, are allegedly close to agreeing on a 1p hike in NI contributions to raise up to £10 billion a year.
In the autumn, the government is likely to unveil its long-awaited social care reform measures.
Yesterday, No 10 did not refute the reports, claiming that “no decisions” had been made.
“The Prime Minister has been clear that we will set out details later this year and that no decisions have been made,” a spokesperson for Mr Johnson said.
“However, we are and will continue to make proposals in this area this year.”
However, Business Secretary Kwasi Kwarteng openly dismissed the plan, indicating conflicts within the Cabinet.
He cited the Tory manifesto promise that NI, income tax, and VAT would not be raised during this Parliament.
“That’s what the manifesto says,” Mr Kwarteng replied. I don’t think we’ll be able to raise national insurance.
“However, you are aware that things have been extremely flexible during the last 18 months. We’ve lived through a period unlike any other.
“We’ve been spending enormous sums of money that we never imagined imaginable, and the Chancellor, the Treasury, and the rest of the Government must decide on a budget.
“I don’t believe we’ll enact national insurance in that case.”
There was considerable hope that a social care plan would be unveiled before the summer, but the three primary decision-makers – the Prime Minister, the Chancellor, and the Health Secretary – are all self-isolating.
Any increase in national insurance could be criticized since it would disproportionately affect the young.