Labour does not rule out backing National Insurance rise for social care

Jonathan Reynolds has not ruled out the possibility of Labour supporting a rise in the rate of National Insurance in order to fund the government’s plans for social care – but has warned that the party wants to see a “fair tax rise”.

In an interview with Sky News this morning, the Shadow Work and Pensions Secretary discussed proposals expected to be unveiled by Boris Johnson next week, in which around 25 million people will pay more in the tax.

“The Prime Minister promised a plan for social care, we know that. He also made a manifesto commitment not to raise taxes. So, one of those was a lie from what we know so far,” Reynolds told viewers today.

According to the The Telegraph, the government is set to announce a rise in National Insurance to fund social care reforms, likely capping the amount an individual will pay in care costs at between £60,000 and £80,000.

Downing Street and the Treasury are known to be in disagreement over how much the increase should be, with Downing Street preferring a 1% rise in National Insurance compared to a 1.25% increase backed by the Treasury.

“Now, if the option is to raise National Insurance we’ve got to look at that, it’s a complicated area and I think people appreciate that. But there are real issues about how fair National Insurance would be as a way to raise the money – I don’t want to vote against more money for social care but I want that to be a fair tax rise,” Reynolds said.

“I also want to see the government talk about the workforce in social care. It’s the biggest sector that doesn’t get the living wage, there are huge problems and I don’t really think we can tackle this until we take seriously the terms and conditions of the people who work in social care.”

Pressed on whether the party would support the increase in National Insurance in parliament, the Shadow Work and Pensions Secretary told viewers it “wouldn’t be reasonable to rule anything out without knowing what the plan would be”.

In his first speech as Prime Minister in July 2019, Johnson pledged to “fix the crisis in social care once and for all”, but the Conservative manifesto later that year stated that the party would not “raise the rates of income tax, National Insurance or VAT”.

“I do feel a sense of anger that the Prime Minister broadly feels that he can make it up as he goes along and it doesn’t matter what promises he’s made, what manifesto commitments he’s made – it’s week to week, headline to headline for him and, you know, I don’t think that’s good enough,” Reynolds added.

Labour has repeatedly called on the Prime Minister to bring forward a plan for social care since Johnson took office, as well as demanding that the government ensure that all care workers are paid the living wage.

The plan reportedly comes as part of a package agreed between the Prime Minister, Rishi Sunak and the Health and Social Care Secretary Sajid Javid, with new measures introduced to tackle the social care crisis alongside the NHS receiving more funding to bring record-high waiting lists.

Under the plans for social care, the government would cap the amount someone can pay towards their social care costs. This had previously been thought to be around £50,000 but reports suggest the government has modelled the impact of higher caps.

There is also expected to be a floor on the assets an individual can own, below which the government will step in to pay for care. The exact figure has not been determined, but The Telegraph reports that it could be around £100,000.