As tax bills are set to climb, what Teesside MPs think about National Insurance hike to pay for care

A hike in National Insurance to help pay for soaring health and social care demands has sparked mixed reception from Teesside MPs.

Plugging multi-million pound holes due to high demands in children’s and adult social care has been a repeated topic at dozens of Teesside council meetings.

Now the Government has set out how it will increase National Insurance by 1.25% next April in a bid to overhaul social care and help fund the NHS for the next three years to recover from covid.

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Here is how National Insurance contributions will change with a 1.25% increase, according to figures from Hargreaves Lansdown:

  • £10,000 salary: £52 paid now; £57 with 1.25% increase – £5 extra each year
  • £20,000 salary: £1,252 paid now, £1,382 with 1.25% increase – £130 extra each year
  • £30,000 salary: £2,452 paid now; £2,707 with 1.25% increase – £255 extra each year
  • £40,000 salary: £3,652 paid now; £4,032 with 1.25% increase – £380 extra each year
  • £50,000 salary: £4,852 paid now; £5,357 with 1.25% increase – £505 extra each year

The nation’s ageing population is adding demand to care alongside a shortage of care workers.

This is also having a knock on effect on the front line health service.

Struggling care providers reeling from the pandemic have also made louder calls for social care reform.

Top up grant funding for social care during the pandemic has been passed down to councils.

But the option of adding a 2% social care levy to council tax bills has led Labour leaders in Stockton to repeatedly accuse central government chiefs of passing the buck on funding social care.

Stockton Council earmarked almost £74m of its £188m budget towards adults and health last year.

(Image: Ian Cooper / Teesside Live)

Stockton North MP Alex Cunningham said it had been more than two years since Boris Johnson promised to fix the social care system.

The Labour MP added: “It’s hugely disappointing that his proposals today do nothing of the sort.

“Rather than a sustainable long-term plan based on progressive taxation, the Prime Minister’s plans to straddle workers, particularly low earners and young people, with National Insurance rises.

“His plan is a tax rise on jobs that doesn’t stop large care bills, nor delivers the quality care that people are entitled to.

“The Labour party has always said it will work with the Government to deliver a plan that not only genuinely fixes social care but is also built on fair funding in which those with the broadest shoulders pay more – not the working families now set for an unfair tax rise.

“People deserve to know that there is a real, comprehensive plan in place to look after them and their loved ones into older age.”

Extra costs

In the Conservative 2019 manifesto, the party said it would “urgently seek cross party consensus” to bring in long term reform to the social care system – and that any solution agreed will “guarantee that no one needing care has to sell their home to pay for it”.

However, the party also pledged not to raise National Insurance, VAT or income tax ahead of winning the election.

Prime Minister Boris Johnson said he didn’t break the promise lightly – telling the House of Commons the “pandemic was in nobody’s manifesto”.

Labour leader Keir Starmer accused the government of putting “a sticking plaster over a gaping wound” and placing the burden on working people struggling to get by.

Increasing National Insurance by 1.25% would see a worker paid £30,000 annually put an extra £255 into their contributions.

An equivalent rise would mean a £130 annual contribution for someone paid a salary of £20,000.

Social care is means-tested at the moment.

It means you must have savings and assets of less than £23,250 to receive help from a local authority – and have a very high level of need.

This leaves many people paying for their own care in later life.

Fixing the problem

Mr Johnson told the Commons that the money raised would help the NHS recover from the “massive pressures” the pandemic had placed upon it as well as growing waiting lists.

He warned waiting lists “would get worse before they get better” in the health service.

On social care, he said from next April the 1.25% health and social care levy on income and share dividend tax rates increased by the same amount to raise an extra £36bn.

The chamber was told anyone with assets of less than £20,000 would have their care costs fully covered by the state – with those with assets between £20,000 and £100,000 receiving some means tested support.

Mr Johnson said: “You can’t fix the covid backlogs without giving the NHS the money it needs, and you can’t fix the NHS without fixing social care.

“You can’t fix social care without removing the fear of losing everything to pay for social care – and you can’t fix social care and health without long term reform.”

“Stop kicking the can down the road”

Labour says it agrees with the need for reform, but has criticised the proposed rise in NI nationally – fearing it would unfairly target young people and lower earners.

Backlash has also come from some Tory quarters over concerns it would not be a fair way of raising the money.

Stockton South MP Matt Vickers pointed to how he’d volunteered in hospital during the pandemic – adding it was time to “stop kicking the can down the road” on social care.

Matt Vickers at the University Hospital of North Tees

The Conservative MP said: “I’m acutely aware of the problems caused by the pandemic that have created huge waiting lists which need to be tackled urgently.

“The debate over funding for care and care homes has gone on way too long and it’s time to stop kicking the can down the road. We need to ensure funding is there so that our elders can get the care and respect they deserve in older life.

“Therefore I welcome the debate about how we put appropriate funding in place to support our NHS and help to pay for our long-needed reforms to social care.”

Andy McDonald
(Image: Ian Cooper / Teesside Live)

But Middlesbrough MP Andy McDonald believed the social care announcement showed an “absolute disregard for working people”.

He added: “Having promised to lower taxes in their manifesto they have done the complete opposite in raising national insurance.

“This is a tax on working people and businesses and as ever, this Government continues to protect the privileged and the wealthy.

“Instead of placing the burden on working people, we need a root and branch reform of social care.

“Our NHS deserves nothing less and those using our social care services deserve nothing less.

“Today’s proposals by the Tories fall woefully short.”

Conservatives Middlesbrough South and East Cleveland MP Simon Clarke and Redcar MP Jacob Young have been contacted for comment on the health and social care proposals.

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