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Increase taxes not national insurance to fund social care, says Jeremy Hunt

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Taxpayers should pay more to fund social care, according to the former health secretary Jeremy Hunt, who suggested this should be through a tax increase rather than a national insurance rise that “disproportionately targets” the young.

The government is close to announcing a plan to increase national insurance rates by at least one percentage point, to fund its solution for the long-term funding of the crumbling social care system, with a final decision expected to be made within days.

The rise is expected to be described as a “health and social care levy”, in an attempt to suggest it is not a straightforward increase to national insurance contributions – something that was ruled out in the Conservatives’ 2019 manifesto.

Allies of the health secretary, Sajid Javid, have denied reports he has been pushing for a bigger increase, of two percentage points.

Hunt signalled his objection to the plan, because the money would come from young workers, but not the earnings of people over state pension age.

In an interview with BBC Radio 4, he said: “Since older people are the biggest beneficiaries, it’s fair they should make a contribution.” Several cabinet ministers share Hunt’s view.

Writing in the Telegraph, Hunt said: “It is a wonderful miracle that we are living longer, but one with dramatic consequences for NHS and care spending. A 50-year-old man costs the NHS just under £500 on average – but by the time he is 85, that rises to nearly £4,000. Our hospitals will be 40% busier in 15 years’ time, according to one study.”

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Meanwhile, the justice secretary, Robert Buckland, said any future social care plan must be “adequately funded” but that no final decision had been taken by the government on how this was to be achieved.

Hunt, who was health secretary between 2012 and 2018 and led on social care policy for his final six months in the role, said a national insurance rise would mean the proposals would be funded primarily by young, working-age people, and instead recommended the imposition of a “health and social care premium”.

Rise in national insurance could fund post-Covid boost for NHSRead more

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An increase of one percentage point on national insurance would cost someone on average earnings of £29,536 a year £199.68 annually.

The government has said proposals for a long-term plan to reform the social care system will be set out this year in response to estimates from NHS providers that they will require a £10bn boost over the next three years to tackle the backlog caused by the pandemic and to address social care issues.

Asked on Radio 4 whether cuts could be made elsewhere to fund plans for social care instead of raising taxes, Hunt said: “The sums are eye-watering. They’re far bigger than the chancellor can find down the back of a sofa.”

He added: “We need to bite the bullet and say there needs to be a tax rise because I think the number one priority of the electorate is to have good health and care services, and they understand that those pressures, irrespective of the pandemic, are only going to increase in the years ahead.”

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Buckland told BBC Breakfast: “I’m confident that something will come forward very, very soon because a lot of us have been waiting anxiously.

“What we said in the manifesto about social care is no one has a monopoly of wisdom about these issues and the British public are sensible enough to know that when it comes to the issue of social care we have got to find some way in which it will be adequately funded.”

One source in Westminster suggested the government was keen to rush the necessary legislation through in the three weeks before the Commons breaks for the party conference season. Final details are to be thrashed out on Friday, with health service leaders fearing the final figure could be only half of what they are demanding. An announcement could come as soon as Monday.

Boris Johnson claimed to have plans to fix the long-term funding of the crumbling social care system ready when he entered Downing Street in 2019.

The proposal is widely expected to be based on the decade-old Dilnot review, which proposed imposing a lifetime cap on the amount individuals would have to pay for care. The independent commission chaired by the economist Andrew Dilnot suggested £25,000-£50,000 as an appropriate level, but today’s figure could be closer to £100,000.

In England, social care is generally not provided free of charge. Typically, only those with savings and assets worth less than £23,250 can get help from their council. Raising that floor is also expected to be part of the new plan. There is currently no overall limit on costs, meaning thousands every year sell their homes to pay for social care.