UPDATE: 20th June 2022
On July 6th the Personal Threshold for National Insurance Contributions will increase from £9,568 to £12,570. This means 30 million people will have their take-home pay boosted by up to £330 and keep more of what they earn.
Find out how these changes could help you: Estimate how the National Insurance contributions changes will affect you - GOV.UK (www.gov.uk)
30 March 2022
I note the Opposition held a debate recently regarding the National Insurance Contributions Increase and I believe it important to emphasise the words of the Chief Secretary of the Treasury;
“We are faced with a serious challenge on the cost of living. The Government entirely accept that and are working to address it, but we must address it in a smart and financially sustainable way. That is why, this financial year and next, we will provide over £20 billion to help the public with the cost of living.”
You can read the full debate here: National Insurance Contributions Increase - Hansard - UK Parliament
At the time of writing, I am minded that there are currently more than 6 million people waiting for elective care in England and more than 300,000 people are waiting longer than a year. Through my work as the MP for Bosworth, I am also reminded daily by constituents who are struggling for social care or suffering in pain due to the pressures on our local health services and the need for access to services, who are experiencing delays in medical treatment.
I am therefore pleased the Government have set out a clear plan to tackle the backlog which was exasperated by the pandemic, but also the most pressing of issues including reform of social care.
The Health and Social Care Levy (HSCL), will be effectively introduced from April 2022 when NICs for working age employees, self-employed, and employers will increase by 1.25 percentage points. I have spoken with colleagues at the Treasury about the introduction of a HSCL, and I understand that they viewed this measure as a difficult but necessary one. The Levy will be legislatively separated from 2023 when NICs rates will return to 2021-22 levels. Dividend tax rates will also be increased by 1.25 percentage points to fund the Plan for Health and Social Care.
The decision to base the Levy on NICs was made with the view that every individual should contribute according to their means, and that the cost of improving the health and social care systems should be shared between individuals and businesses. For individuals, the Levy will be progressive. A typical basic rate taxpayer earning £24,100 will contribute £180 in 2022-23, while a typical higher rate taxpayer earning £67,100 will contribute £715. With the NICs system set up to fund social security, increasing contributions to invest in the NHS is not new. It is worth noting that France, Germany and Japan have all increased social security contributions to fund social care provision – the latter two with specific social care levies.
Governments have recognised the importance of tackling our social care issues for a long time, and with my background working in GPs and Hospitals, I am pleased this Government is taking action for reform to meet the demands that we are facing now, and in the future. You may be aware that I am a member of the Health and Social Care Committee and I signed up to a report called: MPs call for £7bn annual increase in social care funding as a starting point for reform – doing nothing ‘no longer an option’ - Committees - UK Parliament – with the latter ‘no longer doing nothing’ ringing true to me.
On as wider note, I am pleased the UK economy continues to build back quicker and stronger than previously forecasted, and it is encouraging to know that the economy grew above its pre-pandemic size for the first time in November 2021. Nonetheless, I believe it is now important to ensure the money raised from the NI contributions is spent wisely and appropriately. The public will rightly demand the backlog is dealt with and reform demonstrated accordingly. I will continue my discussions with our local NHS Leadership and with Ministers in Westminster, and probing in my role on the Health Select Committee.