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The Weekly paper of the New Communist Party of Britain

Robbing Peter to pay Paul

by New Worker correspondent

TUESDAY afternoon saw Prime Minister Boris Johnson announce in the House of Commons a scheme which he claimed would resolve the UK’s long-running social care crisis. He even quoted Karl Marx, by saying that the burden of the increased tax based on an increase in National Insurance for his “health and social care levy” would be based on the “from each according to his ability” to pay more tax, stressing that the planned increase would also apply to income from dividends. The Daily Telegraph was furious at Johnson breaking a manifesto promise not to raise taxes, which promptly saw them proffer advice on how to avoid the increase.

But as we might expect, things are not that simple. ‘Comrade’ Johnson’s tax rise comes in the form of a 1.25 percentage point rise in National Insurance Contributions (NIC) that is a tax on workers’ incomes under a different name.

Workers presently pay 12 per cent NICs on annual incomes between £6,515–£50,270. That will increase to 13.25 per cent, ie roughly a 10 per cent rise hidden by language. The increase on higher incomes of over £1,000 per week is two percentage points, which means the rich pay a much lower percentage of their total income despite Johnson’s rhetoric. Another attack on incomes come with the news that the pensions ‘triple lock’ has been suspended for a year and for the first time those of pension age who are still working will have to pay National Insurance.

Johnson said that his new scheme will ensure that nobody will ever have to pay more than £86,000 for social care in the course of their life, which sounds good, but a cap of that nature only benefits those who have that sort of money to spend in the first place.

Even the free-market Adam Smith Institute was moved to complain that: “Today’s announcement marks a historic betrayal from a supposedly Conservative Government that promised to not raise taxes…it’s morally bankrupt to ask poorer workers to bail out millionaire property owners. This is a kick in the teeth for all the young working people of this country who have already been hard done by the pandemic.” They would of course be complaining much more if millionaire property owners had been taxed in favour of young working people.

Unions were also not impressed, Christina McAnea, General Secretary of Unison, which represents hundreds of thousands in the NHS and care sector, said: “General taxation should be the solution for social care, not national insurance hikes. The focus on funding instead of reform is a cart-before-the-horse approach.”

She deplored the fact that the announcement said nothing about low pay, adding: “Decent pay for undervalued employees must take centre stage along with a long-term workforce strategy and improved standards of care.”

This theme was taken up by Rachel Harrison from the GMB, who also laid into Johnson. She said: “Care workers have been waiting more than two years for this so-called plan,” but warned that: “The workforce looks set to plummet to 170,000 vacancies, 10 per cent of all roles – by the end of the year.” This is the highest ever staffing black hole, which will worsen with nearly 70,000 workers planning to leave due to rules on mandatory vaccinations.

She concluded by pointing out that: “Any credible plan for the future of social care must give a proper pay rise to the people doing the work – that’s how you start tackling the massive understaffing crisis.”

Unite took a slightly bolder stance. Assistant General Secretary Gail Cartmail said: “The regeneration of social care needs to have a much wider financial base than the focus on National Insurance which falls on those of working age, particularly the young, and is not paid by the retired who may own a house and have other savings.”

Doubtless with more hope than expectation, she demanded that: “A ‘wealth’ tax should be seriously considered as part of a broad-based approach to underpin the reform of social care, which also needs to see that those working in the sector are paid the equivalent of their NHS counterparts.”