BORIS Johnson faces a Tory backlash over plans to hike National Insurance to help fund England’s social care reforms as Cabinet talks over the final details of the policy continue.
The Tory leader is set to break a manifesto commitment by increasing National Insurance, risking unrest within his Cabinet and on the backbenches.
Johnson, Health Secretary Sajid Javid and Chancellor Rishi Sunak have been thrashing out the details, as the UK Government prepares to announce the plans.
There is anger over the proposals in Scotland, which could see the country hit with a £1 billion tax bombshell to fund England’s social care situation.
The SNP shadow chancellor Alison Thewliss said the Tories must guarantee that Scotland receives every penny it is due through Barnett consequentials.
Downing Street sources insisted details of the social care plans were still being worked out last night and that a day for the announcement was yet to be confirmed.
Former minister Jake Berry, leader of the Northern Research Group of Tory MPs, warned against a policy which appeared aimed at elderly voters in affluent southern seats.
Rossendale and Darwen MP Berry 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 told BBC Radio 4’s Today that as National Insurance was not paid by people who are retired there was also a question of intergenerational fairness.
“It doesn’t seem fair to me – particularly following this pandemic where so many people have taken great sacrifices to keep people safe, it’s particularly hit the youngest, particularly hit those in work – that we then ask those in work to pay for people to have protection in care.”
He suggested income tax may be a fairer way to raise revenue rather than the “jobs tax” of increased National Insurance contributions.
“When I was sat round that Cabinet table and Sajid Javid was the chancellor of the exchequer writing the Conservative Party manifesto, he was a great believer in not racking up the jobs tax and I just wonder why he’s had a sort of Damascene conversion when becoming the Health Secretary to seeing the jobs tax as the way forward.”
Reports have suggested that lifetime contributions on care will be capped at about £80,000 and National Insurance will be increased by 1.25% to raise between £10 billion and £11 billion per year.
Tory former Cabinet minister Sir John Redwood warned against a “stupid” tax rise.
“A tax on jobs when you want to promote more and better paid employment is particularly stupid,” he said.
Redwood added that “if an elderly person goes to live permanently in a care home it often makes sense for them to sell their former home”.
“Otherwise it would cost them money to pay the tax on it whilst unoccupied and in need of maintenance.”
Tory former chancellors Lord Hammond, Lord Clarke and Lord Lamont have all criticised the plan to increase National Insurance.