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Monday, September 27, 2021

UK MPs back Boris Johnson’s social care tax

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LONDON — MPs voted overwhelmingly to back the British prime minister’s plan to raise taxes to fund health and social care, despite criticism from the Labour Party and economists. 

MPs on Wednesday backed the resolution in favor of a health and social care levy by 319 votes to 248 after Boris Johnson vowed it would deal with “catastrophic costs” faced by millions of people in the U.K.

The move, which Johnson has admitted breaks a manifesto promise, is intended to raise £12 billion a year to tackle backlogs in the NHS caused by the pandemic and boost social care.

It gives the green light to the biggest hike in personal taxes for decades, in the form of a 1.25 percentage point hike in British workers’ National Insurance — an effective income tax earmarked for state benefits.

In the weekly prime minister’s questions session in the House of Commons on Wednesday, Labour leader Keir Starmer pressed Johnson to say whether he stood by his promise that no one who needed care would have to sell their home. Johnson did not answer directly, but challenged Starmer to say what he would do instead. 

Paul Johnson, director of influential think tank the Institute for Fiscal Studies, said he could not agree that it was the best way to raise funds as it “exempts nearly all over pension age and those with rental and most other ‘unearned’ incomes. Less progressive than increase in income tax, or an effort to get some more from wealth/inheritance taxes.”

The proposal has also been attacked by prominent Conservatives including former party leader William Hague, but a significant parliamentary rebellion failed to materialize.

This article is part of POLITICO’s premium policy service: Pro Health Care. From drug pricing, EMA, vaccines, pharma and more, our specialized journalists keep you on top of the topics driving the health care policy agenda. Email [email protected] for a complimentary trial.

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Esther Webber

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