London Daily

Focus on the big picture.
Wednesday, Jul 23, 2025

Boris Johnson stakes reputation on £12bn fix for health and social care

MPs likely to pass PM’s healthcare levy on Wednesday, pushing tax burden to record peacetime level

MPs are set to usher in a historic £12bn healthcare levy on Wednesday, pushing the tax burden to a record peacetime level as Boris Johnson stakes his political reputation on attempting to fix the creaking health and care systems.

Setting out the radical plan for a carved-out healthcare tax, Johnson willingly conceded that the 1.25 percentage point increase in national insurance contributions (NICs) – to be rebadged a health and social care levy – would break an explicit manifesto promise.

But Downing Street is gambling that presenting the plan as a response to the Covid pandemic, with emphasis on tackling the NHS backlog, will convince voters it is necessary.

“I’ll be absolutely frank with you – this levy will break our manifesto commitment. But a global pandemic wasn’t in our manifesto either,” Johnson said. He declined to rule out further tax increases later in the parliament.

Under the proposals, patients entering the social care system from October 2023 will not have to pay more than £86,000 over their lifetime. More means-tested support will also be provided for those with assets of between £20,000 and £100,000.

Keir Starmer, the Labour leader, attacked the proposals as “a sticking plaster over a gaping wound”, saying the revenue raised was too little to solve longstanding challenges in the NHS and social care, and a NICs increase was unfair on working families. But the prime minister taunted Labour for not putting forward its own proposals, saying that a “plan beats no plan”.

Paul Johnson, director of the Institute for Fiscal Studies thinktank, said the move would mean “taxes will reach their highest sustained level in the UK” in the coming years – underlining the extent to which the current government has ditched the Tories’ traditional role as the party of low taxes and a small state. He added that creating a new levy, instead of increasing income tax, “will mean yet more quite unnecessary complexity”.

The free-market Adam Smith Institute condemned the plans as “morally bankrupt”, saying the government was asking “poorer workers to bail out millionaire property owners”. It condemned the plan as “a kick in the teeth for all the young working people of this country who have already been hard done by the pandemic”.

Meanwhile, social care providers and charities warned that the extra resources would not be sufficient to improve standards for the more than a million adults receiving social care.

Richard Kramer, chief executive of disability charity Sense, said: “We welcome the immediate investment into social care but we don’t have confidence that this is the long-term, sustainable and sufficient funding plan that was promised.

“Will the money really find its way back into social care after 2025? We need a commitment from government that this money will be ringfenced, or we will never find our way out of this crisis.”

Less than one in every six pounds of the money raised will go to social care in the first three years of the plan. The health and social care secretary, Sajid Javid, declined to say what proportion would go to the NHS after that, saying it depended on “a lot of assumptions” about the future impact of Covid and the scale of missed NHS treatments.

“I don’t want to say after three years it will be exactly this split,” he said. “What we do know is we’re going to be certainly able to deal with a huge amount of the backlog over the next three years, and more, proportionally, of the levy will go to adult social care.”

Javid also refused to say whether the NHS backlog would be cleared in this period, saying: “We’re going to try and tackle as much of the backlog as we can.” He added that without the extra resources, NHS waiting lists could surge to 13 million.


The £14bn-a-year package of tax increases is expected to raise £36bn over the next three years, once the costs to the government of paying the higher NICs rate for its own employees is taken into account.

In an effort to avoid the charge that the burden is falling unfairly on younger voters, the government also announced that from 2023-24 workers over the state pension age would pay the new levy.

Dividend tax will also be increased by 1.25 percentage points to avoid the charge that company owners who pay themselves through dividends will be able to dodge the new levy.

In a historic shift, the chancellor announced that as of 2023-24 the revenue from the tax increase will be hypothecated – allocated by law – to pay for health and social care. It will appear as a separate line on workers’ payslips.

Conservative MPs are widely expected to support the proposals when they vote on Wednesday, though many are privately irked by the speed with which they have been rushed through and the chaotic leaks of recent days. Labour will vote against the plan.

After months of tense negotiations between Johnson, Javid and the chancellor, Rishi Sunak, the cabinet were only shown the details of the plan on Tuesday morning, when they were presented with a printed document at their first in-person meeting since last year.

Sceptical cabinet ministers appeared to have been won over by tweaks to the proposals – including the new levies on working pensioners and dividends – as well as the threat of an imminent reshuffle.

Johnson repeatedly declined the opportunity to rule out reshuffling his top team on Tuesday, though many at Westminster now believe he will wait until after the Cop26 climate summit in November.

Allies of the chancellor have made clear he would not be raising taxes at this point in the economic cycle were it not for the prime minister’s personal promise to tackle social care.

One senior Tory source suggested that while Downing Street had won the immediate battle and would see its proposals waved through on Wednesday, the cumulative impact of a string of unpopular decisions on issues including vaccine passports and aid cuts mean backbench discomfort was growing. “It would be naive to think that there is not going to be a long-term cost to this at some point,” the source said.

Newsletter

Related Articles

0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×