Boris Johnson defends tax hike as NI rise comes into force

It's come at a time when many households are struggling with the cost of bills, food and fuel

Author: Liam ArrowsmithPublished 6th Apr 2022

The Prime Minister has defended the decision to hike up national insurance, arguing the manifesto-breaking rise is "necessary, fair and responsible".

From Wednesday, national insurance contributions are going up by 1.25%, to cover the cost of the pandemic on the NHS and to reform social care in England.

The UK Government predicts the tax rise will raise £39 billion over the next three years.

"We must be there for our NHS"- Johnson

Boris Johnson said: "We must be there for our NHS in the same way that it is there for us.

"Covid led to the longest waiting lists we've ever seen, so we will deliver millions more scans, checks and operations in the biggest catch-up programme in the NHS' history.

"We know this won't be a quick fix, and we know that we can't fix waiting lists without fixing social care.

"Our reforms will end the cruel lottery of spiralling and unpredictable care costs once and for all and bring the NHS and social care closer together.

"The levy is the necessary, fair and responsible next step, providing our health and care system with the long term funding it needs as we recover from the pandemic."

The Conservative Party promised not to "raise the rates of incom tax, national insurance or VAT" in it's 2019 election manifesto- which helped Mr. Johnson secure a landslide majority.

But senior minister argue the impact of the coronavirus crisis meant that promise could no longer be kept.

The administration has since increased the tax burden to its highest point in 70 years.

Chancellor defends tax rise

The Chancellor has also stepped in to defend the tax rise, and said the Government would "not shy away from the difficult decisions" to fix social care and slash NHS waiting times.

He said the levy would also be used to cap the cost of care so "people no longer live in fear of losing everything".

Under the current system, those with assets of more than £23,250 pay their care costs in full.

From April 2023 onwards, the NI rate will decrease back to the 2021-22 level, with a new 1.25% health and social care levy legally introduced.

But under a reformed system from October 2023, anyone with assets under £20,000 will have their care costs fully covered by the state, DHSC said.

The cost of care will then be capped at £86,000, with the point at which people meet the full cost of their care rising from £23,350 to £100,000, nearly four times higher than the current system, according to health officials.

The Government argues the levy is progressive, with the highest 15% of earners paying more than half the revenues.

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