UK PM JOHNSON TO HIKE TAXES TO PAY FOR SOCIAL CARE; LAWMAKERS UNHAPPY

Tue 07 September 2021:

Prime Minister Boris Johnson will address lawmakers on Tuesday on his plans to fix Britain’s social care system though many in his own party are furious that he wants to pay for it by hiking taxes in a clear breach of his election pledges.

After the fiscal splurge on the COVID-19 pandemic, Johnson is now addressing Britain’s creaking social care system, whose costs will soar as the population ages.

For years, British leaders have been trying to find a way to pay for social care without endangering support by hiking taxes. In 2019, Johnson said he had a plan for social care.

Johnson wants to raise the National Insurance (NI) tax paid by around 25 million working people to subsidize care for pensioners, including wealthy retirees, according to British media.

Johnson will chair a cabinet meeting on Tuesday morning and then is expected to address parliament at around 1130 GMT. Johnson, his finance minister Rishi Sunak and health minister Sajid Javid will then hold a news conference.

“We must act now to ensure the health and care system has the long-term funding it needs to continue fighting COVID and start tackling the backlogs, and end the injustice of catastrophic costs for social care,” Johnson will say in a speech to parliament, according to extracts released by his office.

“My government will not duck the tough decisions needed to get NHS (National Health Service) patients the treatment they need and to fix our broken social care system.”

Like many other Western leaders, Johnson is facing demands to spend more on welfare after government borrowing ballooned to 14.2 percent of economic output – a level last seen at the end of World War Two.

Under the current care system, anyone with assets over 23,350 pounds ($32,305) pays for their care in full. This can lead to spiraling costs and the complete liquidation of someone’s assets.

Johnson’s office and the finance ministry have repeatedly refused to detail financing plans, but British media have reported that Johnson wants to raise the National Insurance (NI) tax paid by working people and employers.

Many lawmakers from Johnson’s Conservative Party worry this will hurt younger, low-income workers and breach his 2019 election guarantee not to raise the rate of NI.

“A tax rise suggests ministers are increasingly conscious that the country cannot live on fantasy money. That, at least, is to be welcomed,” said William Hague, a former Conservative Party leader.

“The reality of reduced take home pay to deal with a problem out of sight of most people will be unwelcome when it bites,” Hague said, adding that fringe parties would benefit from the tax rise.

The Telegraph newspaper said lawmakers could face a snap vote on the social care plans later this week.

The government said on Monday it would set aside a further 5.4 billion pounds ($7.5 billion) over the next six months to help the NHS cover additional costs from the COVID-19 pandemic and to tackle a huge treatment backlog.

-Reuters

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