British Prime Minister Boris Johnson walks outside Downing Street in London, UK on August 18, 2021.
Hannah McKay | Reuters
UK Prime Minister Boris Johnson will announce plans to raise taxes on Tuesday to fund health care and welfare reforms in the country.
By raising the social security rate (an income tax) by an estimated 1.25%, Johnson’s administration aims to address crises in welfare funding and National Health Service waiting lists, the latter of which is rising amid escalating pressures on health services around the world The Covid-19 pandemic has shot up.
The increased rate could reportedly net more than £ 10 billion ($ 13.8 billion) a year.
Johnson will announce the changes in a statement to the House of Commons on Tuesday. The prime minister’s spokesman confirmed to Sky News Tuesday morning that cabinet ministers had approved the plans.
Under UK National Insurance, workers and employers pay a levy that finances certain welfare programs such as state pensions, statutory sick pay and maternity allowance. People over the statutory retirement age do not pay the fee, which effectively lowers their tax burden.
For workers earning between £ 797 and £ 4,189 per month, Social Security payments are 12% of their earnings. Additional income over £ 4,189 per month will be taxed at 2%. These payments are made in addition to income tax.
Meanwhile, UK newspaper The Sun reported Tuesday that cabinet sources said “the most profitable” participants in the stock market would also be subject to new tax increases, which the BBC said would come in the form of higher taxes on shareholder dividends.
England’s NHS will receive a £ 5.4 billion cash injection over the next six months to bolster its response to the Covid-19 crisis, the government said on Monday. Of this funding, £ 1 billion will be used to help reduce the treatment backlog left by the pandemic.
In August, an analysis conducted by the Nuffield Trust found that nearly 1.2 million people in England had to wait more than six months to access key NHS services such as cardiology and brain surgery.
It is expected that the funds generated by the higher social security rate will also be used for the overhaul of social welfare in England.
Sky News reported that the reforms will include a cap on the cost of care over a lifetime, capping the amount at £ 86,000, although that may not include the price of nursing home accommodation.
Currently, people in England have to pay for their own care if they have savings and assets over £ 23,350, which means that social care is rarely funded by the state. According to Sky, that threshold is expected to rise to around £ 100,000 as part of the reforms.
A restructuring of the country’s social welfare system has long been expected, with people often being forced to sell their homes to cover care costs.
In his first speech as Prime Minister in 2019, Johnson said his administration would “resolve the welfare crisis once and for all” and vow to “give every elderly person the dignity and security they deserve”.
However, the prime minister’s plans have been criticized by some lawmakers from his own Conservative party, many claiming they would break promises the party made prior to the election to form a majority government.
Ahead of the country’s last general election in 2019, Johnson promised on the Conservative manifesto not to raise income tax, sales tax or social security.
House of Commons Chairman Jacob Rees-Mogg wrote in his column for the Sunday Express over the weekend that Johnson’s tax turnaround could cost Conservative votes. Following the famous quote from former US President George HW Bush: “Read my lips: no new taxes,” Rees-Mogg argued that “voters remembered these words after President Bush forgot them”.
Economy Secretary Kwasi Kwarteng, Trade Secretary Liz Truss and Justice Secretary Robert Buckland are also said to be concerned about the plans, as are many conservative lawmakers who are not members of Johnson’s cabinet, the Guardian reported.