Earlier this week, the Prime Minister’s proposed plans to increase NI contributions by 1.25% were approved by MPs, and as of April 2022, individuals will begin to pay the surplus as part of their monthly contributions.
The increase comes from an ongoing concern for the NHS, and will be mostly used to fund the backlog caused by COVID-19 and help with the ‘unpredictable and catastrophic costs’ facing the social care system.
Below highlights how the increase will affect individuals dependent on their personal circumstances and income.
Boris Johnson, the UK’s Prime Minister, addressed the increase whilst speaking to MPs in The Commons:
“No Conservative government wants to raise taxes, I accept this breaks a manifesto commitment. It’s not something I do lightly, but a global pandemic wasn’t in anyone’s manifesto. This is the right, reasonable and fair approach. I think the people of this country understand that, and they can see the enormous steps that this government and the Treasury have taken.”
As expected, members and leaders of other political parties have raised their concerns and opposing opinions around the increase.
What's are the opposing opinions of the increase?
Since the announcement, there’s been an uproar of discussion and opposing opinions, primarily coming from fellow political parties who aren’t convinced that this is right way to go in order to ‘fix’ social care.
Labour leader, Keir Starmer, questioned the PM’s new plan, raising concerns around the possibility that people might have to continue selling their homes to fund care – despite the NI increase. He stated his alternative as so:
“The alternative is obvious: a timetable, a plan to clear waiting lists just as we did under the last Labour government, a comprehensive report planned for social care…”
Adding to Starmer’s argument against the rise, Angela Rayner - Labour's Deputy Leader - stated:
"This is not a plan to fix social care. Describing it as such is an insult to everyone who works in social care and everyone who relies on social care."
Other arguments came from Liberal Democrats leader, Ed Davey - a carer himself - who said that the proposal was an 'unfair tax;' and SNP Westminster leader Ian Blackford, who referred to the move as the 'Prime Minister's poll tax on Scottish workers to pay for English social care.'
What do the British Public think?
Much like leaders of the opposing parties, the British Public have themselves, shared their thoughts about how the NI increase might affect them and those around them.
According to research by YouGov , Brits are currently split 44% to 43% on the increase, with the latter opposed. Of the general public, 24% are strongly opposed, and only 13% strongly support - indicating a disappointment and lack of confidence in the change.
Unsurprisingly, Conservative voters are more accepting of the previous Tory election manifesto pledge not to increase NI, with only 40% deeming it unacceptable, compared to a significant 69% of Labour voters who believe it unacceptable. Of the general population, less than a third (32%) of people deem the break in manifesto promises acceptable.
The same research from YouGov, interestingly, found that the majority of Brits aged 65+ found the rise in NI contributions 'fair', despite the fact that it will, in fact, be younger generations that feel the biggest financial impact of the rise.
Who does this affect the most?
All UK workers will pay the mandatory surplus, with a hope that this extra money can help to transform the country's social care system. However, there seems to be some extra disadvantages for both younger and self-employed workers - both of which also struggled financially during the pandemic.
Whilst the rise goes against manifesto promises, the PM noted that the unprecedented arrival of the COVID-19 pandemic is something that needs to be taken into consideration going forward, and it wasn’t present in anyone’s manifesto at the time that any promises were made.
Younger workers - many of whom experienced job loss or a struggle to find work during the pandemic - will be the hardest hit by the increase, paying an average of around £12,600 extra over the course of their working lives. This, compared to the 0% increase faced by pensioners, seems somewhat unfair and poorly planned.
Similarly, self-employed workers experienced struggles during the pandemic, and are still feeling the effects of it now. Government support was limited and delayed, and many were forced to take on other jobs to get by.
Another potential issue that could come from the rise is the effect it could have on the recovering job market. Just like individuals, businesses will be affected by the NI increase, and the surplus in payments might lead to businesses being unable to make new hires, or fulfil financially-driven benefits, pay increases and more. This, in turn, could dampen the recovery of the job market and leave many without work.
So, what does this mean for the future of social care?
There's currently no telling the difference that the rise in NI contributions will make, and whether or not it will be a successful attempt to somewhat correct the current state of social care in the country.
However, with the majority (even if only by a %) of Brits supporting the rise, there's hope that the decision will be one that helps the NHS back on its feet, and provides the funds for improvements that social care needs.
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