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MPs have voted 319 to 248 for a 1.25 percentage point rise in National Insurance for workers and employers to help fund health and social care. Boris Johnson hopes the tax increase will raise £12billion a year. The prime minister said his plan would deal with “catastrophic costs” faced by those who need care.
The key proposals of the new plan are:
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People will no longer pay more than £86,000 in care costs - not including food and accommodation - over their lifetime from October 2023
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Once people have reached this cap, ongoing costs for personal care will be paid for by local authorities.
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Those with between £20,000 and £100,000 in assets will get means-tested help towards costs from their local council.
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Those with less than £20,000 will not have to pay towards care costs from their assets but might have to contribute from their income.
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The tax will be raised through a 1.25 percentage point rise in National Insurance - which working people and their employers pay - from next April.
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Income from share dividends - earned by those who own shares in companies - will also see a 1.25% tax rate increase.
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The NI rise will cost £255 a year for someone earning £30,000, and £505 a year for someone on £50,000.
The prime minister said most of the £36 billion funds raised by the tax rise would go towards catching up on the backlog in the NHS created by Covid. While £5.4 billion over the next three years - will also go towards changes to the social care system, with more promised after that.
The UK-wide tax will be focused on funding health and social care in England, but Scotland, Wales and Northern Ireland will also receive an additional £2.2 billion to spend on their services. From 2023, the increase in National Insurance will become a separate levy, while the National Insurance rates will return to their previous level.
Source: BBC News, 8 September 2021
See also: The Guardian - Social care backlash grows after MPs vote through tax plan
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Social care has not been guaranteed extra money next year, and bosses fear that budgets might be cut despite Boris Johnson’s tax rises. The cap will come into force in October 2023 and will take almost half the extra £5.4 billion earmarked for social care over the next three years, so it remains unclear how much extra will be spent next year. There are fears the Treasury may claw back the extra money through cuts to council budgets at the spending review next month.
Bosses in the struggling elderly care sector said the lack of immediate help was a “yawning gap” in the government’s proposal, with most of the £12 billion a year raised by the new tax going to the NHS.
Social care will get £2.9 billion over three years for current services, similar to recent emergency annual bailouts. Ministers are still believed to determine how much of the money will be spent over the three years. Officials insist social care will get some extra money in 2022-23, but social care leaders fear it will not be enough to make a meaningful difference.
The breakdown is thought to be contingent on a spending review next month in which local government is likely to face further cuts. Councils have been forced for the past decade to reduce social care funding. Sally Warren, director of policy at the King’s Fund think tank, said: “There is a real risk that extra money for social care will get lost if local government doesn’t get enough funding for all its services in the spending review.”
According to the Health Foundation, public spending on adult social care has been cut by £86 million, and per-person spending is now lower than it was a decade ago. The annual cash shortfall in social care is estimated to be between £6 billion and £14 billion.
Source: The Times, 9 September 2021
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In a letter published in The Times, Paul Burstow, chairman of the Social Care Institute for Excellence and the chair of the Mental Health and Smoking Partnership, welcomes the introduction of a cap on care costs and a more generous means test, but states that these “do not add up to comprehensive reform.”
Burstow states that “most of the new funding will go to the NHS [and] the underinvestment in social care will continue,” and warns that social care is likely to “get little extra funding in the short term despite the urgent need for it.” He argues that this is a missed opportunity for investment in social care and concludes that “without a cash-backed plan, social care will once again be the poor relation to the health sector.”
Source: The Times, 9 September 2021
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According to an internal Whitehall analysis, the UK government is braced for the “catastrophic” impact of the end of the temporary uplift to the main welfare benefit next month.
The £20-a-week increase to universal credit was introduced at the start of the coronavirus pandemic. The additional funding, which costs £6 billion a year, will end on October 6. Chancellor Rishi Sunak is said by colleagues to be opposed to a permanent rise in the welfare bill. Some senior Conservative MPs have voiced their opposition to ending the uplift, including six of the party’s former work and pensions secretaries.
A well-placed Whitehall official said the government’s analysis highlighted the deep impact of reversing the change. “The internal modelling of ending the UC [Universal Credit] uplift is catastrophic. Homelessness and poverty are likely to rise, and food banks usage will soar. It could be the real disaster of the autumn.”
The Department for Work and Pensions indicated the additional money would not be extended. “The uplift to Universal Credit was always temporary. It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so,” it said.
Jonathan Reynolds, shadow work and pensions secretary, said many people were still unaware that the increase was about to be withdrawn: it came after a wider four-year benefits freeze. “It means that half a million people are set to be pushed into poverty, and the country will be less resilient and able to respond to difficult times in future,” Reynolds said.
Labour is expected to force a parliamentary debate on universal credit next Wednesday — with many Tory MPs expected to voice concerns.
Source: Financial Times, 9 September 2021
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Tobacco control groups are urging the government to regulate synthetic nicotine e-cigarette products as drugs, requiring them to be regulated similarly to products using nicotine derived from tobacco.
The letter sent to the Food and Drug Administration (FDA) was signed by several organisations, including the Campaign for Tobacco-Free Kids, the American Academy of Pediatrics, and the American Lung Association. The groups argued that e-cigarette manufacturers are using a loophole to avoid government regulations.
Matthew Myers, President of the Campaign for Tobacco-Free Kids, said many of the companies denied approval from the FDA for vaping products using nicotine derived from tobacco are now turning to synthetic nicotine since it does not require the same authorisation.
Public health groups have been pushing the FDA to change synthetic nicotine regulations for several years and have sent at least three letters. The FDA did not provide a timeline for responding to the writers of the letter.
Source: Fox 23, 8 September 2021
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An ordinance banning the sale of flavoured tobacco within city limits has passed its first hurdle after the city’s government operations committee unanimously voted on Wednesday (8 September) to send it to the Bangor City Council.
If enacted by the council, the drafted legislation would prohibit the sale or marketing of all flavoured tobacco and nicotine products in the city on 1 January 2022, including menthol cigarettes and e-cigarette flavours that have a taste or smell other than that of tobacco.
Retailers who continue to sell or market such products will receive a warning, followed by a $50 to $100 fine if they commit another violation within two years after the warning. Each subsequent offence within the two years would result in a punishment of $300 to $1,000. The city manager would oversee enforcing the policy against retailers. Before becoming law, the ordinance must pass two readings by the Bangor City Council.
Source: Bangor Daily News, 09 September 2021
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