PM's plan to hike national insurance rate passes Commons vote

The government majority was cut to 71

Published Last updated

Boris Johnson has secured MPs’ backing for his controversial £12 billion tax hike to pay for health and social care despite seeing his Commons majority cut.

The House voted by 319 to 248 in favour of the 1.25 percentage point increase in national insurance contributions amid deep unhappiness among many Tory MPs.

It meant the Government’s working majority of more than 80 was reduced to 71, with a number of Conservatives apparently choosing to abstain while others made clear they were only voting with the greatest reluctance.

It reflected the concern within the Tory ranks that Mr Johnson was not only abandoning a manifesto promise not to raise the main rates of taxes but that he was taking the tax burden to record peacetime levels.

There was dismay also that a scheme to place a lifetime cap of £86,000 on social care costs in England would primarily benefit elderly households in the more affluent parts of the South at the expense of working families elsewhere.

In the Commons debate, the leader of the Northern Research Group of Tory MPs, Jake Berry, warned that by listing the levy on people’s payslips as a health and social care charge, it would “never go down, it can only go up”.

“No party is ever going to stand at an election and say I’ve got a good idea, vote for me, I’ll cut the NHS tax,” he said.

“It is fundamentally un-Conservative and in the long term it will massively damage the prospects of our party because we will never outbid the Labour Party in the arms race of an NHS tax.”

Former minister Steve Baker said the party was facing a “generational crisis” due to its inability to fund promises dating back more than a century.

“Now the Conservative Party, at some stage in our lifetimes, is going to have to rediscover what it stands for because I have to say at the moment we keep doing things we hate, because we feel we must,” he said.

Earlier at Prime Minister’s Questions, Mr Johnson attempted to quell the backlash, suggesting the insurance industry could protect people from having to sell their homes to pay for the cost of care, amid claims the £86,000 cap would not be enough.

Labour leader Sir Keir Starmer said that someone with assets of £186,000 – including their home – could still be forced to find £86,000 under the Government’s proposals.

“Where does the Prime Minister think that they are going to get that £86,000 without selling their home?” he said.

Mr Johnson replied: “This is the first time that the state has actually come in to deal with the threat of these catastrophic costs, thereby enabling the private sector, the financial services industry, to supply the insurance products that people need to guarantee themselves against the costs of care.”

Tory misgivings were underlined by an analysis by the Resolution Foundation think tank which argued the system was generationally unfair because the bulk of the money would come from working-age people.

It said the £86,000 cap would be of most benefit to those in the more affluent South of England, as they would see a greater share of their total assets protected while higher care costs meant they were also more likely to reach the limit and benefit from state support.

However, it warned that many people might still need to sell their home to pay for care if they did not have significant other assets.

Resolution Foundation chief executive Torsten Bell said Mr Johnson had “turned his back on low taxes in favour of an NHS-dominated state”.

He added: “The tax rises that will pay for a bigger NHS are generationally unfair, excluding rich retirees while prioritising wealthy landlords over their tenants.

“And while the social care cap will prevent people being hit with catastrophic costs, it will benefit southern households far more than those living in Red Wall seats.”

However, Downing Street insisted that it represented a “progressive” approach to the issue of funding adult social care.

“Diseases like dementia affect families up and down the country,” the Prime Minister’s official spokesman said.

“This is an approach that provides certainty for people up and down the country, it is an approach which is progressive, which sees those who have more pay more.”