The British government is planning a tax hike for around 25 million people to help fund social care and save the NHS after the Covid-19 pandemic
After winning the 2019 election with a big parliamentary majority, Johnson said he had a “clear plan” to fix the crisis in social care. But his agenda was soon eclipsed by the Covid-19 pandemic. Effective from next April, The government will levy a 1.25% Health and Social Care tax on earned income across the country, with dividend rates increasing by the same amount, British Prime Minister Boris Johnson said at the House of Commons.
“So today we are beginning the biggest catch-up programme in NHS history, tackling the Covid-19 backlogs by increasing hospital capacity to 110%, and enabling nine million more appointments, scans and operations,” Johnson told the lawmakers.
He said this will raise almost 36 billion pounds (about 49.7 billion US dollars) over the next three years, with money from the levy going directly to health and social care across the whole country.
He said as from October 2023 no-one starting care will pay more than 86,000 pounds (118,965 dollars) over their lifetime, and no-one with assets of less than 20,000pounds (27,666 dollars) will have to make any contributions from their savings or housing wealth, up from 14,000pounds (19,366 dollars) today.
He admitted no conservative government wants to raise taxes and this breaks a manifesto commitment.
“But a global pandemic in no-one’s manifesto” he said, adding that “People in this country understand their bones and they can see the enormous debts the government has taken.”
Conservative MP, Jeremy Hunt, hailed the government for “Taking a tough and politically difficult” decision to give the NHS and social care desperately needed funding and that it is also a big step forward in protecting families from catastrophic care costs.
“For a conservative government, raising taxes is always a last resort. We know public services are not just about funding, but standards too. But no government that wants decent healthcare can ignore demographic reality, so today’s changes will command support despite the general unpopularity of tax rises,” Hunt tweeted.
Meanwhile, Margaret Hodge, a Labour MP, criticised the prime minister for failing to truly explain how he will fix the broken social care system, calling his plan a sticking plaster and the funding behind it one of the least progressive options.
“It’s unfair between generations, individuals, and those who drive income for assets or work,” Hodge wrote on Twitter.
The need to treat Covid patients has contributed to worsening wait times for non-Covid care in Britain.
Government statics before the pandemic show that nine out of 10 people were waiting fewer than 25 weeks for treatment in England, but this time has now risen to 44 weeks. The number of NHS patients waiting for tests, surgery and routine treatment in England is a record high of 5.5 million and could potentially reach 13 million over the next few years.
National Insurance and the Effect of Social Care Tax
The government has announced an extra tax to fund social care in England, and help the NHS recover from the pandemic.
But there has been criticism – including from within the Conservative Party – that it will be unfair on younger people and the lower paid.
What Are the New Plans?
Employees, employers and the self-employed will all pay 1.25% more in the pound for National Insurance (NI) as from April 2022.
- Employees pay NI on their salaries
- Employers also pay extra NI contributions for staff
- The self-employed pay NI on their profits
But as from April 2023, National Insurance will return to its current rate, and the extra tax will be collected as a new Health and Social Care Levy.
This Levy – unlike National Insurance – will also be paid by state pensioners who are still working.
How Much Will the tax Changes Cost? How Much More Will Employees Pay?
This increase will see an employee on £20,000 a year pay an extra 130. Someone on £50,000 will pay £505 more.
People earning under £9,564 a year, or £797 a month, do not have to pay National Insurance or the new levy.
National Insurance is a UK-wide-tax. Boris Johnson’s announcement focused on funding health and social care in England, but Scotland, Wales and Northern Ireland will also receive an additional £2.2bn to spend on their services.
- Wales to get extra cash from new NHS and care tax
- What does a tax rise mean for Scotland and social care?
- Northern Ireland’s political parties criticise PM’s new tax plans
Boris Johnson Unveils £12BN-a-Year Tax Rise to Pay for NHS and Social Care
From 2023-24, once HM Revenue’s computer systems have been updated, the NICs increase will be rebadged as a health and social care levy, which will appear as a separate line on payslips.
MPs Back £12BN-A-Year Tax Hike for NHS and Social Care Amid Warnings of Staff Shortages
The £12bn-a-year tax hike to rescue the NHS and social care has been backed by MPs, but ministers were warned they would have to “relax immigration requirements” to make the plan a reality.
In a highly unusual move, the health and social care levy cleared all its commons stages in a single day, even though the national insurance rise will not kick in until next April.
Jeremy Hunt, former Conservative health secretary, criticised Labour and the Liberal Democrats for refusing to back the tax rise – but warned that a “workforce plan” was also needed.
If you put an extra £8bn into the NHS but you do not have £8bn worth of additional doctors and nurses to do the extra treatments, the risk is that that money will hit the ground without touching the sides”, he told ministers.
“The UK health tax hurting foreign nurses, migrant workers coming to the UK from outside the European Economic Area(EEA) and their dependents who have to pay an annual fee of £200 ($268) each.”
The NHS faced a shortage of nearly 88,000 workers between July and September 2017 in England alone, statistics from NHS Digital show.
“Nursing staff are increasingly caring for sicker patients with multiple long-term conditions”, says Janet Davies, general secretary of the RCN.
“This demands safe staffing levels and the right specialist skills. Yet as patients get sicker, the number of nurses continues to decline, due to years of cost-cutting and poor workforce planning.”
The government needs to address these shortages, especially as the UK has an ageing population, she says.
Immigrant Health Professionals in the United Kingdom
Immigrant health professionals have long been an important component of the United Kingdom’s healthcare workforce. Government initiatives to recruit actively from abroad have taken place periodically for decades (Young, Weir & Buchan, 2010:7). Immigrants now make up approximately 14% of the employed population in the United Kingdom, but are much more strongly represented in the health workforce, making up more than a third of medical practitioners, pharmacists, and dental practitioners, and over one fifth of nurses (Table 28).
The early 2000s witnessed a particularly strong increase in the number of immigrant healthcare workers. Identifying a shortage of doctors and nurses as a major impediment to improved healthcare, the government at the time had set explicit targets for increasing the size of the NHS workforce. The government’s health plan included additional training places for domestic candidates, but since these professionals could not join the labour market immediately, a deprotonate share of the growth in the initial years of the expansion programme came from the foreign-trained.
