'Unfair and lacking imagination': Boris Johnson's planned National Insurance hike blasted by Preston MP Sir Mark Hendrick

Sir Mark, a Labour and Co-operative MP, spoke out after Prime Minister Boris Johnson abandoned his pledge not to raise the main rates of tax, setting out plans to overhaul adult social care and deal with the Covid backlog in the NHS.

In a Commons statement the Prime Minister announced a new UK-wide 1.25% health and social care levy based on National Insurance contributions.

He said the additional revenue would pay for the biggest catch-up programme in the history of the NHS in England, with £12 billion a year to help deal with the backlog of cases built up during the pandemic.

It will also cover the reform of the social care system in England, ending what Downing Street described as “unpredictable and catastrophic” care costs faced by many families.

Mr Johnson acknowledged the new health and social care levy breached a Tory election commitment but told MPs “a global pandemic was in no-one’s manifesto”.

From October 2023, anyone with assets under £20,000 have their care costs fully covered by the state, while those with between £20,000 and £100,000 will be expected to contribute to their costs but will also receive state support. No-one will have to pay more than £86,000 for care costs in their lifetime.

Sir Mark said: "Basically what the Government's decided is that only people working, particularly younger people, should pay for the social care needs of older people and I don't think that is really fair because I think there are lots of people with income who are not working - obviously well off people and also other people who may be on fairly generous pensions incomes who will probably be beneficiaries and they are not being asked to contribute at all,."

He continued: "I do think the Government should have been more imaginative looking at income tax for this and at more creative solutions."

Sir Mark added that it was particularly harsh when the Government had spent billions awarding PPE ( Personal Protective Equipment) to certain companies "much of which wasn't used and didn't work properly".

Noting that many people had lost jobs, would be on reduced Universal Credit or saw furlough coming to an end, he said there was still a need to find a solution to the cost of social care.

He said: "We've been talking about it for several parliaments and still the Government has not really come up with a solution that meets the needs of most people and is fair. The opposition has offered to work with the Government on this issue and there was a great deal of consensus in the select committee report on social care but the Government is ignoring that and just going ahead with its own plans."

Scotland, Wales and Northern Ireland will receive an additional £2.2 billion in additional health and social care spending from the levy.

In addition to the health and social care levy, there will also be a 1.25% increase in the dividend tax – to ensure those who receive their income from shares also contribute.

Initially National Insurance contributions will increase by 1.25% from April 2022 as systems are updated.

From 2023, the health and social care levy element will then be separated out and the exact amount employees pay will be visible on their pay slips.

It will be paid by all working adults, including those over the state pension age – unlike other National Insurance contributions.

Downing Street said that a typical basic rate taxpayer earning £24,100 would contribute £3.46 a week, while a higher rate taxpayer on £67,100 would pay £7.15 a week.

The Prime Minister’s official spokesman said that only a broad-based tax like National Insurance or income tax could raise the kind of sums needed to deal with the problem.

He argued that National Insurance represented a fairer solution as employers – who also benefited from a healthy workforce – would contribute.

“This is a progressive and fair way to raise money,” the spokesman said.

* Comment is also being sought from South Ribble MP Katherine Fletcher, Wyre and Preston North MP Defence Secretary Ben Wallace and Cat Smith, Lancaster and Fleetwood MP. Chorley MP Lindsay Hoyle and Ribble Valley MP Nigel Evans are unable to comment due to their roles as Speaker and Deputy Speaker of the Commons.

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