Plans to announce the National Insurance hike in July were put on hold after the Cabinet threatened a revolt. It had been hoped that the Prime Minister would consider other options after colleagues warned against the manifesto U-turn and the fact that the young and those on lower income will pay relatively more.
The suggestion that National Insurance will be increased to pay for care has been criticised because it will only apply to the 26 million people in active employment while those working over state pension age will or retired will pay nothing at all.
An increase in income tax, or a removal of the National Insurance exemption for those above state pension age, would arguably be fairer and would share the cost more equally.
In an interview with Radio 4, former health secretary Jeremy Hunt agreed a National Insurance rise was unfair in nature.
“Since older people are the biggest beneficiaries, it’s fair they should make a contribution,” he said. Instead, he suggested an alternative tax rise, which doesn’t “disproportionately target the young”.
Representative body the Independent Care Group, whilst welcoming the reform, echoed Hunt’s sentiments. Chairman Mike Padgham said, “Personally, I think an increase in income tax might be a fairer way to do it, but no doubt the details will be ironed out in the future.”
He said the ICG had waited 30 years for reform, with 1.5m people currently not getting the care they need.
As part of the National Insurance rise, the NHS would benefit, receiving around half the funds raised, in order to help cut down wait times. According to reports, the hike could raise around £10bn a year for the Treasury.