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National Insurance: I have no problem with tax hike, says Boris Johnson

Boris Johnson says he has “absolutely no problem” with raising National Insurance (NI) to tackle the NHS’ post-pandemic backlog.

The prime minister said it was “unquestionably the right thing for our country” as the health service was the “biggest priority” for people.

But Labour’s Sir Keir Starmer said it was “the wrong tax at the wrong time”.

The NI hike came into force on Wednesday, and is expected to raise £39bn over the next three years.

As well as funding NHS services, the money will also go towards social care.

Speaking to reporters during a hospital visit in Hertfordshire, Mr Johnson said there were now six million people on NHS waiting lists, adding: “We have got to give our doctors and nurses the funding to deal with that.

“We’ve got to do the difficult things, we’ve got to take the big decisions, the right decisions, for this country.”

But the Labour leader criticised not just the tax, but its timing.

Speaking in Lancashire, Sir Keir said: “In the middle of the worst cost of living crisis for decades, today the government chooses to increase taxes on working people.”

He agreed NHS backlogs needed to be addressed, but claimed the government would use the money raised to pay for its “incompetence and failure” over Covid fraud and unused equipment – not for health care.

The leader of the Liberal Democrats, Sir Ed Davey, joined the criticism, saying increasing NI was an unfair way of raising the cash needed for health and social care.

“It doesn’t tax the unearned income of very wealthy people, it doesn’t tax the income of landlords,” he told BBC Breakfast.

“It puts all the burden on working people – that is wrong.”

But Health Secretary Sajid Javid told the same programme it would be “morally wrong” to expect future generations to pay for the funding that was needed now.

“The choice for us as a country is we either put that money in ourselves now, and if we don’t do it ourselves, we will have to borrow it,” he said.

“And that is mortgaging the future of our children and our grandchildren.”

He added: “Why should our children pay for our healthcare and our adult social care? They are going to have enough challenges as they grow older.”

Cost of living crisis

The plan to raise National Insurance was first announced in September.

The tax hike will see employees, employers and the self-employed all pay 1.25p more in the pound on NI for a year.

Then the extra tax will be collected as a new Health and Social Care Levy from April 2023.

The government said the changes would raise £12bn a year, which would initially go towards easing pressure on the NHS after Covid.

A proportion of the levy will then be moved to fund social care over the next three years.

But the move has come in for criticism from opposition parties, some Tory MPs and campaigners, as well as businesses, especially the timing of the increase.

The National Insurance rise will, ministers like to say, provide a much needed boost to health and social care.

They claim it will pay for the care cap and boost NHS capacity to help tackle the backlog in England – it is up to the rest of the UK to decide how they spend the proceeds.

But the truth is it will only contribute to that.

Rising inflation, staff shortages, and ageing equipment and buildings, mean the health and care system is going to suck up the £39bn raised over the next three years by the hike and then some more.

It is also worth bearing in mind the government had already committed to rises for the NHS up until 2024 under a funding settlement agreed by Theresa May’s government.

This had brought the increases to something close to the 4% health had historically got, although the rising inflation that is being seen will whittle that away from now on.

And that came after a decade of the budget rising by little more than 1% – an unprecedented squeeze for the health service.

The National Insurance rise is not quite all it seems.

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