Boris Johnson will break his manifesto pledge not to increase National Insurance in order to pay for social care in England, under plans that are the subject of fraught and ongoing negotiations between Downing Street and the Treasury. The Telegraph’s Ben Riley-Smith has the inside scoop: Downing Street wants a 1 per cent increase (because then they would only be putting up National Insurance by the same amount as Tony Blair back in 2002) while the Treasury wants 1.25 per cent (because that would raise more money).
Any tax rise would be politically fraught because of that manifesto promise to leave National Insurance, value-added tax and income tax flat or falling, but while it would cause a lot of gnashing of teeth in parts of the Conservative Party and press, there is no serious prospect of it failing to pass the House of Commons.
However, the detail of the policy itself is more significant than how it’s paid for. At the moment, if the value of your assets, including your home, are worth more than £23,250, you aren’t eligible for state-funded residential care. Ben reveals that the cap is set to rise to £100,000: which would mean a significant increase in the number of people who are eligible for residential care. (What’s not clear is if the threshold in eligibility for at-home care would also increase, but one government source describes it as “inevitable” that both asset thresholds would have to keep pace with one another).
That, of course, means that many more people will come into contact with the state social care system, which would, in my view, have the happy side-benefit of increasing the quality of provision from its present state. But in the short term it might be fraught for the government, as part of the reason why England’s social care system has been neglected for so long is so few people come into contact with it. That period of adjustment might well be politically painful for Downing Street.
There’s another interesting policy angle here: whisper it, but these proposals don’t look all that different from Theresa May’s, which of course proved so politically explosive back in 2017. It may be that the problem then was that May’s social care policy was launched in the heat of an election campaign and little was done to prepare the ground for it or really to explain it. But if the problem with that policy was more fundamental, the government’s social care plans could yet founder not because of a tax rise, but the detail of what it plans to do with the extra cash.
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