Boris Johnson was today facing a backbench revolt over plans for a £10bn National Insurance hike to pay for social care which Tory critics have branded “socialist”.
Conservative critics are to meet early next week to co-ordinate opposition to the plan, due to be finalised in the next few days by the prime minister, chancellor Rishi Sunak and health secretary Sajid Javid.
One backbencher told The Independent that Tory WhatsApp groups were buzzing with anger from “many dozens” of MPs, enough to put the PM’s 85-seat working majority at risk when the reforms come to the House of Commons.
Marcus Fysh said that MPs will pile pressure on the prime minister and chancellor to change course on proposals to increase National Insurance contributions by 1 per cent or more, which would breach the Tories’ manifesto promise not to raise the rates of NICs, income tax or VAT during the course of this parliament.
The choice of NICs to fund social care has sparked furious accusations that the prime minister is effectively asking younger and lower-paid workers – many of whom cannot afford to buy their homes – to pay for his promise that wealthy older people should not have to sell their homes to pay for care.
National Insurance is a particularly regressive tax because it is paid by workers earning as little as £9,500 a year, compared to income tax which does not kick in until £12,570, and because lower-income workers pay the 12 per cent rate on all their eligible salary while the better-off pay just 2 per cent on earnings over around £50,000. Pensioners, who stand to benefit most from the social care plan, do not pay NICs, which are also not levied on unearned income such as rents and dividends.
Mr Fysh said he had been urging Tory chancellors since he entered parliament in 2015 to introduce an insurance-based policy to fill the massive holes in funding for social care.
“I am very disappointed to see that they appear effectively to have gone for a tax-and-spend policy, with the tax falling only on those of working age,” he said.
“It’s a clear breach of our manifesto commitment and I won’t be voting for it.”
Mr Fysh said that Mr Johnson’s preferred policy of putting a £50,000 cap on an individual’s contribution towards care costs would place an open-ended burden on taxpayers, rising swiftly as the elderly population grows.
“There are lots of people who are deeply uncomfortable about this – many dozens,” he said. “I haven’t seen any comment in support of it on the WhatsApp groups. It’s all been deep concern about breaking a manifesto pledge.
“I can’t speak for how others might vote, but it isn’t something I could support.”
He suggested that a “modest” government subsidy could provide sufficient incentive for working-age people to pay for insurance to cover future care costs, while the needs of the current generation of elderly people could be funded by withdrawing the state pension from those with an income of £70,000 or more.
Former cabinet minister John Redwood said: “The government should say our tax rates are high enough. We would raise more tax if some rates were cut.
“Better social care is a priority we can afford without singling it out to require a tax rise. It seems we can afford lots of government spending people rate less highly.”
The expected announcement of a reform package for social care comes more than two years after Mr Johnson said in his first speech as prime minister in July 2019 that he was ready to implement “a clear plan we have prepared”.
In the 2019 election manifesto, he promised to “build cross-party consensus” on a plan which would garner “the widest possible support”, based on the principle that no-one would have to sell their home to pay for care. However, no cross-party consultations have taken place ahead of next week’s announcement, with opposition parties saying they have not been made aware of the details of the scheme.