What Boris Johnson's tax hikes mean for your finances after he unveils biggest social care reforms in a generation

BORIS Johnson went for broke yesterday with a £36billion tax raid to save the Covid-ravaged NHS and end social care injustice.

Rolling the dice on his premiership, he tore up his 2019 manifesto to launch the biggest tax hike in a generation on wages and shareholder profits.

It sparked fears it may cost him votes but a Tory rebellion appeared to fizzle out.

The PM vowed to end the scourge of catastrophic care costs clobbering families and causing millions to fear financial ruin.

Under his reforms, he said social care would be capped at £86,000 and anyone with less than £100,000 would get help.

Yet MPs and experts said they were worried the NHS would snaffle the £12billion a year raised by tax rises, with social care left “playing second fiddle”.

Senior Tory MP Damian Green added: “It is absolutely essential that social care gets its fair slice of the cake.”

Mr Johnson said yesterday that the Covid-induced NHS crisis and state of social care left him no option but to put up taxes.

Q&A

Q: HOW much of the £36billion being raised by the new taxes will go to social care?

A: Less than £5billion will go to social care in the first three years, with the rest of the cash being used to clear NHS Covid backlogs.

Q: WHEN does the new regime come into place?

A: It will kick in from October 2023, but you’ll start paying the new taxes from next April.

Q: I’M already paying for social care — will this help me?

A: No. This will only apply to new cases from April 2023.

Q: WILL it stop people having to sell their home to pay for social care?

A: The new £86,000 cap means, in theory, most people will not have to sell their home to pay for care. Those with less than £100,000 in assets or savings will get extra government means tested support.

Q: HOW does it compare to past proposals?

A: The plans are less generous than was suggested by Sir Andrew Dilnot’s report ten years ago, which wanted the lifetime cap placed at £35,000. But it is better than Theresa May’s dementia tax which wanted the cap linked to the value of a pensioner’s home.

Q: HOW will the PM make sure the money for social care is not just swallowed by the NHS?

A: Ministers could not guarantee that the cash raised from the new levy will go to social care from April 2024.

Q: WHICH region benefits most from the care plan?

A: Critics, including Red Wall Tories, point out traditional Tory heartlands will benefit most. A family living in the North East will have around £60,000 of inheritance protected, compared to an average of £414,000 in London and the South East.

He said the cash raised would first go towards starting to clear the NHS backlog. No10 expects this to be about 2024. The cash would then go to social care which, he said, would get an extra £5.4billion over the next three years.

Under the plan, which applies only in England, nobody will pay more than £86,000 towards care bills in their lifetime.

Anyone with less than £20,000 in assets will not have to use savings or borrow against their home to pay fees. People with between £20,000 and £100,000 will get means-tested support.

There will also be a consultation on how best to reform social care so it integrates the nation’s patchwork of homes with the NHS.

Mr Johnson told MPs it was time for governments to stop shirking the thorny issue of social care and finally face up to their responsibility.

He told a packed Commons his plan would quell the anxiety that affects millions of people up and down the country.

He added: “The fear that a condition like dementia — nature’s bolt from the blue — could lead to the total liquidation of their assets, their lifetime savings, their home, the loss of everything that they might otherwise pass on to their children.”

Later outside No10 the PM, flanked by Chancellor Rishi Sunak and Health Secretary Sajid Javid, said the time was ripe for reform.

He said: “We are doing something that frankly should have been done a long time ago — and share the risk of these catastrophic care costs so everyone is relieved from the fear of financial ruin.”

Yet according to the plan’s small print, some 950,000 adults already receiving care will not benefit as the reforms are not backdated.

We are doing something that frankly should have been done a long time ago.

Mr Javid said those on the other side of the October 23 start date would not benefit. He said: “I understand the concerns but it’s important we get on with the change.”

Former Health Secretary Jeremy Hunt backed the plan.

He said: “I can’t imagine any backbenchers wanting to turn round to their own constituents and say they tried to vote down extra money for the NHS and care system.”

Fiona Carragher, of the Alzheimer’s Society, said it had waited a long time for this historic moment. However, she called the £86,000 cap “worryingly high”.

It should be lower, she added, if it was intended to help more than a handful of people with dementia.

Prof Martin Green, chief executive of Care England, said it “hoped that social care will be rewarded and recognised rather than playing second fiddle to the NHS”.

He added: “It is essential that money reaches the front line.”

Dr Rhidian Hughes, of the Voluntary Organisations Disability Group, said he was concerned that, despite the welcome step forward, the Government’s approach to policy making could leave disabled people living in England behind.

He said: “We would encourage government to prioritise solutions that work for everyone and enable older and disabled people to lead independent and fulfilling lives.”

It is essential that money reaches the front line.

The reforms are based on a model suggested by economist Sir Andrew Dilnot a decade ago. Last night, he said the extra cash was welcome but would not be enough.

He told Times Radio there was every chance the Government might find it needed to raise more money or borrow more in three or four years. He said health spending had risen every year since 1948.

The Resolution Foundation think-tank said the Department for Health’s budget had grown at twice the overall rate of public spending since 2004.

By 2024/25 it is set to account for 40 per cent of day-to-day spending, up from 28 per cent 20 years ago.

Sun readers give their verdict

RICHARD Chappell, 53, is a gas fitter of Newton Aycliffe, Co Durham, where the Tories won for the first time since 1931 in the last election:
“This is hitting hard-working people where it hurts. It is peanuts to the rich but for me it will mean I have to work more, or make cutbacks in the home.
“They should be taxing the big corporations who are paying CEOs massive wages, not the working people.”

MUM-of-one Charlotte Caleb, 31, is a record label boss, from Hertford:
“We had to sell my gran’s home as she has advanced dementia. It sold for £400,000 and that paid for a nice care home for four years but now the money has run out and she’s in a state-funded one.
“While I would welcome a cap on care costs, I am really against a rise in National Insurance because it’s hitting the wrong people.”

DAD-of-two Lee Chambers, 36, from Preston, Lancs, is a director of a training company:
“As a millennial, I look at our grandparents’ generation and how much care costs for them and I am already thinking there won’t be the support there for me.
“But it’s a kick in the teeth for business owners already on their knees.”

JANE Raca, 57, from Birmingham, is mum to James, 22, who has cerebral palsy:
“My son will never walk, talk, get married or work. He needs two people with him at all times to keep him safe.
“Now, he is an adult, he is totally dependent on the state.
“We must find the money.
“Social care’s in a dire state.”

WAYNE Emmins is a warehouse worker in Redruth, Cornwall:
“I broke my hip in June 1998 and have been on the NHS waiting list since 2018.
“On my income, paying out even a couple of extra quid is a lot but if it means faster surgery, I’ll make the sacrifice.
“My family all graft and people need surgery faster.”

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