Boris Johnson proposes 1.25% tax hike to pay for health and social care reforms

September 7, 2021 17

LONDON (UPI) — British Prime Minister Boris Johnson proposed a plan Tuesday to hike taxes in order to pay for health and social care in the country.

The plan would levy a 1.25% tax on earned income for all workers as well as shareholder dividends beginning in April, initially paid as an increase on the National Insurance rate before becoming a separate tax on earned income in 2023.

The government estimated the tax will raise nearly $49.6 billion within the next three years, which Johnson said will be “legally ring-fenced” to ensure it is only used for health and social care costs.

Parliament will vote on the new proposals Wednesday.

Speaking at the House of Commons on Tuesday, Johnson said it would be “wrong for me to say that we can pay for this pandemic without taking the difficult but responsible decisions about how we finance it.”

He added that “everyone will contribute according to their means” under the new tax.

“You can’t fix the NHS without fixing social care. You can’t fix social care without removing the fear of losing everything to pay for social care and you can’t fix health and social care without long-term reform,” said Johnson.

On Tuesday, Johnson also announced the social-care reforms will include capping the amount individuals can pay for care during their lifetimes to roughly $118,500 by October 2023.

Under Britain’s current system people must pay for their own care if they have savings and assets greater than $32,000.

Labor leader Keir Starmer criticized the plan saying it broke the pledge by Johnson and Conservatives during the past election cycle to not raise National Insurance, income tax or VAT.

“Read my lips — the Tories can never again claim to be the party of low tax,” he said.

Liberal Democrat leader Ed Davey said the tax was “unfair” and the plan failed to provide solutions for staffing shortages, care for working-age adults and unpaid family carers.

Reporting by Daniel Uria

United Press International

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