Boris Johnson to unveil £5.5billion health rescue package by NI rise to clear NHS backlog
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The Prime Minister agreed the plan last night with Chancellor Rishi Sunak and Health Secretary Sajid Javid. He is also expected to put together £10billion annually over the next three years, for social care improvements, as soon as tomorrow’s Cabinet meeting.
In the face of aTory revolt against his plans for a 1.25 percent NI tax rise to pay for the reforms, Mr Johnson will argue the health and care systems cannot cope without the extra taxpayers’ investment.
A Downing Street source said last night: “The Prime Minister wants to ensure that the NHS is fully prepared post-pandemic.
“That means, of course, a long-term plan for social care. It also means dealing with the repercussions of the pandemic on hospitals and other healthcare services.”
Senior Whitehall officials held a series of phone calls and online meetings last night to finalise details of this week’s announcements.
The first part of the package ‑ driving down hospital waiting lists which soared when the NHS focused on fighting coronavirus ‑ was agreed last night, while tense negotiations continued over the social care shake-up.
But a Tory rebellion was intensifying, with five Cabinet ministers and a swathe of backbenchers opposed to the Prime Minister increasing NI.
One senior Tory MP said: “It sounds like the sort of thing a Labour government would do ‑ basically just bunging up tax.
“Instead of doing the hard thing, which is reform, this would be doing the easy thing.
“It will tax younger voters most and they will be the ones who benefit least from the policy.”
They added: “I think it’s a very tricky road for a Conservative government to go down. To tax without reform would be seen as highly inflammatory in the heart of the Conservative Party.”
Mr Sunak is also expected to officially confirm as early as tomorrow that the state pension “triple lock” will be suspended temporarily because of the surge in earnings growth as his Covid job support scheme is phased out.
Treasury officials had feared that raising the pension in line with earnings could run up costs of an extra £8billion a year.
The other parts of the triple lock mechanism ‑ guaranteeing rises in line with inflation or 2.5 percent ‑ will be retained.
Many senior Tories are furious that the NI hike ‑ and the triple lock suspension ‑ will breach pledges in the party’s 2019 General Election manifesto.
Former Tory chancellor Lord Hammond yesterday warned that the tax hike would cause Conservatives “significant damage” at the polls.
He told Times Radio: “An increase in National Insurance contributions is asking young working people, some of whom will never inherit the property, to subsidise older people who’ve accumulated wealth during their lifetime and have a property. On any basis, that has got to be wrong.”
He added: “I think that if the Government were to go ahead with the proposed increase in National Insurance contributions, breaking a manifesto commitment in order to underwrite the care costs of older people with homes, I think that would provoke a very significant backlash.
“I think it would cause the Government ‑ the Conservative Party ‑ significant damage.”
Lord Hammond vowed he would “vote against” the legislation in the House of Lords if the opportunity arose.
He said: “Economically, politically, expanding the state further in order to protect private assets by asking poor people to subsidise rich people has got to be the wrong thing to do.”
Mr Johnson’s estranged former chief adviser Dominic Cummings yesterday wrote online: “Every Tory MP stood on a manifesto promise not to put up income tax and National Insurance. The PM personally guaranteed it. If you vote to break your promise, you will hear ‘You’re a liar all the same’ for years.”
Meanwhile, vaccine minister Nadhim Zahawi insisted the Government was “committed to reforming” social care.
He told the BBC’s The Andrew Marr Show: “We’ll bring forward our proposals, and I’m very happy to come back on your programme when the details are published to discuss how we will pay for better and reformed adult social care.”
Mr Zahawi also risked angering many colleagues by refusing to say that the Conservatives were a “low tax” party.
He said on Times Radio: “The Conservative Party is the party of fair taxation, making sure that we get not just the tax rate but the tax take right as well. It is not just focusing on the rate that makes a difference, it is also what we have in the coffers to pay for more police, more nurses, more doctors, the NHS.”
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Former Cabinet minister Dr Liam Fox, who was shadow Health Secretary when the Tories were in opposition two decades ago, yesterday urged the Government to revive a Tory plan which dated from that time.
The Tories’ idea would seek to encourage people to take more personal responsibility for investing in case they need social care in their old age.
Under Dr Fox’s proposals, the state would protect families from having to sell their home to cover the costs of caring for the elderly – as long as they had invested in a dedicated, pension-style fund to contribute to the care costs.
He said: “Everyone agrees that we need more money in the system.
“The question is ‘How do you do that in a fair and equitable way?’
“We’ll be looking at the Government’s plans to see whether they encourage personal responsibility and they are fair across the generations.”
He said that the scheme would “put long-term care on a sound financial footing while being fair to those who wanted to pass their assets on to the next generation but did not unduly penalise the young”.
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