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7th September 2021
It seems that the government is considering financing increased expenditure on social care by increasing National Insurance contributions.
This, according to Larry Elliott in this piece in the Guardian is fraught with difficulty: it imposes higher costs on businesses; it worsens inter-generational equity, by effectively taxing the young to subsidise the elderly.
Of course, it could be financed in other ways - out of taxation for example - but that would fall more squarely on individuals, and governments are reluctant to do this, even if it would make sense.
For some, increasing national insurance to pay for social care is the exact opposite of levelling up. It does not take tax from unearned income much of which flows to the richest in society.
The General Secretary of the TUC, Frances O'Grady, speaks out hereagainst the prospect of National Insurance increases to fund social care, arguing that instead the government should be taxing the rich instead.
Raising National Insurance to fund social care is fraught with political risk https://t.co/66Ua27qm89
— Guardian Business (@BusinessDesk) September 3, 2021
Telegraph tomorrow publishes a load of intel on PM’s social care reforms.
— Ben Riley-Smith (@benrileysmith) September 2, 2021
Expected next week... breaks manifesto pledge by raising tax on c.25m... in order to cap lifetime care costs (at higher than expected)... No10-No11 at loggerheads on exact tax rise... Big political gamble. pic.twitter.com/Pc9LgOHaAZ
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