Updated: Aug 20, 2021
A minister has sought to cool talk that National Insurance will be hiked to pay for social care reform with the government facing a backlash from Conservative MPs.
Paul Scully, the business minister, described multiple reports that the government was set to increase National Insurance contributions as "not something I recognise" in an interview with Sky News on Tuesday morning.
Prime Minister Boris Johnson, Chancellor Rishi Sunak and Health Secretary Sajid Javid have agreed to raise the tax by one percentage point — a penny in the pound — in order to fund a long-term plan for social care, according to The Times.
However, raising National Insurance contributions would be felt hardest by young people and low-paid workers, economists like Torsten Bell, chief executive of the Resolution Foundation, have warned.
Bell said it was a "terrible way to raise the funds required," telling The Guardian: "Why we would target a tax rise on the groups who have been hardest hit by the economic impact of this pandemic, while exempting older and wealthy individuals, is completely beyond me."
Employees first start making National Insurance contributions at the age of 16 but the over-67s do not, even if they are still in work.
It would also be a clear breach of the Conservative party's 2019 manifesto promise not to increase National Insurance.
Scully, the Tory MP for Sutton and Cheam, told Sky he was "not going to get involved in speculation" but repeated "it's not something I recognise".
"What we do want to happen is we come up with a comprehensive program to tackle social care," he said.
"This issue has been around a long time and really do need to get to grips with it. That's what the Prime Minister and the Health Secretary are really determined to do."
The question of how to reform social care has been in the government's in-tray for several years and Johnson is under pressure to deliver after promising to "fix the crisis in social care once and for all" when he first became Prime Minister over two years ago.
Speaking at a coronavirus press conference on Monday night, he hinted that an announcement was imminent, saying a plan "won’t be too long, I assure you".
"On the long awaited plans to deal with social care and how to how to cover all that, a problem that has bedevilled governments for at least three decades, you've just got to wait a little bit longer," Johnson said in response to The Sun.
But any move to raise National Insurance will likely irk swathes of Conservative MPs and set them up for a showdown with Downing Street when Parliament returns from its summer recess.