UK raises taxes to tackle health, social care crisis

(File photo) British Prime Minister Boris Johnson.

British Prime Minister Boris Johnson yesterday set out plans to raise taxes on workers, employers and some investors to try to fix a health and social care funding crisis, angering some in his governing party by breaking an election promise. After spending huge amounts of money to fight the Covid-19 pandemic, Johnson is returning to an early pledge to address Britain’s creaking social care system, where costs are projected to double as the population ages over the next two decades. He also moved to try to tackle a backlog in Britain’s health system, which has seen millions waiting months for treatment from the state-run National Health Service, after resources were refocused to deal with those suffering from the coronavirus. “It would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it,” Johnson told parliament. “It would be irresponsible to meet the costs from higher borrowing and higher debt,” he said, outlining tax increases that broke a promise made in the Conservative Party’s election manifesto not to increase such levies to fund social care. British politicians have tried for years to find a way to pay for social care, though successive Conservative and Labour prime ministers have ducked the issue because they feared it would anger voters and their own parties. Ignoring loud disquiet in his party, Johnson outlined what he described as a new health and social care levy that will see the rate of national insurance payroll taxes paid by both workers and employers rise by 1.25 percentage points, with the same increase also applied to the tax on shareholder dividends. Johnson has tried to cool anger within his Conservative Party, for decades seen as a defender of low taxes, over the hikes, which several lawmakers fear could lose them support at the next election, due to take place in 2024. He explained that elderly Britons would no longer face crippling costs that have forced many to sell their homes to pay for their care, and said he could never have predicted the coronavirus pandemic which has further stretched services. “You can’t fix health and social care without long term reform. The plan I’m setting out today will fix all of those problems together,” he said, to jeers and laughter from opposition Labour Party lawmakers. “I accept that this breaks a manifesto commitment which is not something I do lightly, but a global pandemic was in no one’s manifesto.” Labour leader Keir Starmer was quick to pounce on the fears which have swept through the Conservatives since snippets of the new policy found their way into the media.