Matt Haycox Daily

News for Business Owners, By Business Owners!

‘A global pandemic was in no-one’s manifesto’

Johnson pushes through with health and social care levy

By Ricky Browne

So the promise was worth less than the paper it was written on.

But even though the introduction of a new health and social care levy (not called a tax, but who is that kidding) to raise £36 billion over three years, is probably supported by a majority of voters – the break from the manifesto pledge will not go down well.

Johnson was flanked by Javid and Sunak in Parliament and then at a news conference afterwards

The argument is that the pandemic, which has been more costly than anyone could have imagined, has made this tax necessary – and therefore breaking that manifesto pledge.

“This is not something I do lightly. But a global pandemic was in no-one’s manifesto,” Johnson told parliament today.

“I believe that the people understand that in their bones” he said.

POUNDS AND PENCE

The money will be raised by an increase in the National Insurance tax by 1.25 percent, plus an additional 1.25 percent tax on share dividends.

As a result, employees who earn £30,000 per year, will now pay an additional £255 per year, or about £20 per month.

The new tax kicks in next year from April. In 2023 it will be marked as a separate levy.

As a result, no one with assets of less than £20,000 will have to pay anything for their social care, and no one will have to pay more than £86,000 in their lifetime for their social care.

Currently, anyone with savings of more than £23,250 don’t receive any support from the Government for their social care – -meaning that many people need to sell their homes, if they have one, to afford the cost. But with the new tax, people with savings between £20,000 and £100,000 will get some support.

But to begin with, most of the money raised will funnel straight to the NHS was it tries to catch up with the backlog in operations that the pandemic has intensified.

So on one hand you have Conservative MPs who are against the move, because of breaking that pledge – and possibly losing votes as a result – united with Labour, who you would think would support this, against the move because they say it unfairly hits the younger generation and the more poorly paid.

‘READ MY LIPS’

The proposal is “a sticking plaster over gaping wounds” said Labour leader Keir Starmer, as Johnson gave a look of annoyed disbelief.

“The government has messed up the whole system” he said.

“Read my lips The Tories can never again claim to be the party of low tax” Starmer said — linking Johnson’s promise to a similar promise made by US President George Bush 30 years ago, when he said: “Read my lips, no new taxes” and then lost his next election campaign.

Starmer in Parliament today

Starmer noted the problems that the NHS and social care had from before the pandemic. The argument is not strong, however as that in itself is no reason to not do something about it now. It rather underlines the necessity to do something, even if it does mean the government breaking one of its principle manifesto promises.

Johnson questioned why Labour doesn’t have an alternative plan, accusing him of having “absolutely no plan”.

Matt Hancock dared to stand up to make a statement in parliament, receiving much ridicule. He supported the new tax, but it appeared that few people wanted to hear anything from the disgraced former Health Minister.

In a news conference afterwards with Health Secretary Sajid Javid and Chancellor Rishi Sunak, Johnson said he certainly didn’t want any more tax increases during his term – but left the door open for the chancellor to increase them if necessary.

He said the tax would protect people from “catastrophic” cost, and was very Conservative in its nature.

THE GAMBLE

So the gamble by Johnson is that his massive majority in parliament will more than make up for any resistance from some of his own MPs and the opposition – and that the move, while breaking the principle manifesto promise, will be popular with the public all things considered.

Doing it now, instead of waiting for a date closer to the next election, is a smart move, as the public will likely have moved on from the issue by then.

Will the Gambler break even?

Would Conservative voters switch to Labour because of the abandonment of the manifesto promise – when in all likelihood Labour would have wanted to do the same thing if they were in power?

And Labour standing against the tax increase looks like a self-inflicted wound, as you would expect Labour to support any effort to better fund the NHS and social care. The argument that the method of taxation is not as equable as it could be seems like a minor issue.

MPs will vote on the plans tomorrow.

Share:

Facebook
Twitter
Pinterest
LinkedIn

Related Posts