Labour leader Sir Keir Starmer has told the Prime Minister his party will oppose plans to increase national insurance to fund social care, saying it would unfairly punish young people and low earners.
In a letter to Boris Johnson, who is set to unveil plans to reform the social care system today (September 7), Sir Keir said Labour supported tax increases to overhaul the system, but ruled out the party’s backing for a rise in national insurance.
“We do need more investment in the NHS and social care. But National Insurance, this way of doing it, simply hits low earners, it hits young people and it hits businesses,” said Sir Keir.
“The taxes that pay for social care should be fair across the generations and all forms of income. Those with the broadest shoulders should pay more – not the working families now set for an unfair tax rise.”
He added: “We’ve said that this additional investment will need to be funded through tax rises – but increasing national insurance contributions isn’t the right way to do it.
“It would hit working people hard, including low earners and young people, and would place a huge burden on businesses just as they’re trying to get back on their feet.”
Reports have suggested that lifetime contributions on care will be capped at about £80,000 and national insurance will be increased by 1.25%. This would mean someone on a £30,000 salary would pay an additional £255 per year.
But any tax rise could prove controversial, as under its ‘triple tax lock’ manifesto, the government has pledged not to raise income tax, VAT or National Insurance.
The care sector has welcomed reports that the PM intends to make good on his promise to fix the social care system, but stressed that funding must only be the start of reform.
Vic Rayner, CEO of the National Care Forum, said reform must “move beyond the narrow focus on capping costs”, adding: “The wait for social care reform has been far too long. We owe it to everyone who receives care and support now and will need it in the future to have a social care system that can be a source of individual and national pride.
“To get there we need an ambitious reform agenda with people at the heart of it and underpinned by sustainability, innovation and investment in the incredible workforce. The Government must act now to prioritise social care.”