British Prime Minister Boris Johnson announced on Tuesday he is raising taxes to pay for the cost of care for the elderly and disabled people, breaking a key election pledge.
In a statement to the House of Commons, Johnson announced a new UK-wide 1.25 percent health and social care levy, which is based on National Insurance contributions.
The move has been controversial even in his own party, as it goes against a pledge Johnson personally made in the Conservative Party’s election manifesto in 2019, in which he promised not to raise income tax, VAT, or National Insurance.
“We must now help the NHS to recover to be able to provide this much-needed care to our constituents and the people we love. We must provide the funding to do so now,” he said.
The prime minister said he accepted his plans broke his 2019 election manifesto pledges, but blamed the COVID-19 pandemic for the change of approach.
“No Conservative government ever wants to raise taxes,” he told MPs. “But a global pandemic was in no-one’s manifesto.”
Keir Starmer, leader of the main opposition Labour Party, attacked the prime minister and the Conservative party for breaking their promise, saying “the Tories can never again claim to be the party of low tax.”
Paul Johnson, director of the Institute for Fiscal Studies, an economic think tank, said this is a “huge year for tax rises.” He said the rises are permanent and “reflect the long-term costs of ageing through health and social care.”
The new tax hike has attracted strong criticism from business groups and advocates of free markets.
The British Chambers of Commerce (BCC) said businesses “strongly oppose” the rise in National Insurance contributions.
“This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery,” said Suren Thiru, the BCC’s head of economics, in a statement emailed to The Epoch Times.
John Macdonald, head of government affairs at the Adam Smith Institute, called it “a historic betrayal from a supposedly Conservative government.”
Calling it “morally bankrupt,” he said the hike is “a kick in the teeth for all the young working people of this country who have already been hard done by the pandemic.”
Professor Len Shackleton, a fellow at the Institute of Economic Affairs, urged the government to think again and “steer away from taking on some open-ended commitment by the taxpayer.”
“Families with a lot of capital at risk from prolonged need for social care should have the responsibility to insure rather than look to—often much poorer—workers to support them,” he said.
