British leader bets on tax hike to pay for elderly care
British Prime Minister Boris Johnson on Tuesday announced that he plans to deliver on his campaign pledge to deal with soaring long-term care costs that the aging UK population needs. To do this, he broke another electoral vow: not to increase taxes.
Johnson told House of Commons lawmakers his Tory government made the “difficult but responsible” decision to raise taxes to raise 36 billion pounds ($ 50 billion) over three years for social care and the National Health Service overloaded. The NHS faces a backlog of millions of delayed appointments and procedures.
Johnson said there would be no more “procrastination and delay” in social service reform.
“Governments have dodged this problem for decades,” he said.
Much of this burden of financing care for older, ill and disabled adults in Britain now falls on individuals, who often have to deplete their savings or sell their homes to pay. One in seven people end up paying more than 100,000 pounds ($ 138,000), according to the government, which calls the cost of care “catastrophic and often unpredictable.”
Meanwhile, financing care for the poor who cannot afford it places a growing burden on overwhelmed local authorities.
Johnson announced a 1.25% increase in national insurance payments made by working-age people and their employers, saying the move was “responsible, necessary and fair.”
But it breaks Johnson’s promise in the 2019 election campaign not to raise personal taxes. The increase, which takes effect in April, will cost a person paid 21,000 pounds ($ 27,500) per year about 180 pounds ($ 248) more on their annual tax bill. High income earners paid 67,000 pounds per year ($ 92,000) will pay more than triple.
The tax on income from stock dividends will also increase by 1.25% in a bid to defuse claims that the burden is only on workers.
Breaking promises is nothing new to politicians, but promises made in UK party manifestos have long been seen as binding on governments. Johnson’s plan has alarmed many Tory lawmakers – both because it involves breaking a firm campaign commitment and because the burden would fall primarily on working-age people.
Jake Berry, one of the Tory MPs representing the north of England who won Labor Party seats with pledges of investment and new jobs, said the proposed plan would help wealthy and elderly voters at the expense of younger and poorer.
And William Hague, a former Tory leader, said breaking an election promise would be “a loss of credibility when making future election pledges, a blurring of the line between Conservative and Labor philosophies, a recruiting cry for fringe right-wing parties and a feeling to the world that the UK is heading for higher taxes.
Johnson said breaking a campaign promise was “not something I do lightly. But a global pandemic was not on anyone’s manifesto. “
Under the government’s plan, which must be approved by parliament, the amount people will have to pay over their lifetimes for social care will be capped at 86,000 pounds ($ 118,500) starting in 2023, and anyone having assets of less than 100,000 pounds ($ 138,000) get some state support.
Care organizations widely welcomed the announcement, but the employers’ organization, the Institute of Directors, said it would add “additional burden to business and the cost of employing staff, just as it seeks. to recover from the pandemic “.
Some analysts have said the new tax would raise money but do little to the way expensive and inefficient care is delivered through a patchwork of largely private companies. The Institute for Public Policy Research, a center-left think tank, said the government’s announcement was “a first step on a long journey of reform.”
“Delivering quality and personalized care remains a huge challenge for our care system, as does a fair deal for social workers,” said Chris Thomas, Principal Investigator.
Attempts to reform the healthcare system have stalled UK governments. Johnson’s predecessor Theresa May, another Conservative, campaigned in a 2017 election on a plan to cut benefits for retirees and change the way they pay for long-term care. The idea was quickly called a “dementia tax” by opponents, and May ended up losing her majority in Parliament.
The changes proposed by Johnson apply in England. Scotland, Wales and Northern Ireland have separate provisions for social assistance for the elderly.
Keir Starmer, leader of the opposition Labor Party, said government reforms, coming after a decade of Tory rule that supported austerity programs, did not go far enough.
“He’s putting a plaster over the gaping wounds his party has inflicted,” Starmer said.