London Daily

Focus on the big picture.
Sunday, Jul 05, 2026

No 10 weighs up plan to fix UK social care system with tax rise

No 10 weighs up plan to fix UK social care system with tax rise

Prime minister, chancellor and health secretary discussing manifesto-breaking move, say Whitehall sources
Downing Street is considering plans for a manifesto-breaking tax rise that would be earmarked to pay for fixing the social care system, according to Whitehall sources.

One option being weighed up by ministers is an increase in either income tax or employee national insurance, which could be branded as a social care levy or precept.

The Conservative manifesto promised no increase in national insurance or income tax, but these are deemed the only taxes with a broad enough revenue base to raise the sums required.

The concept of a social care precept already exists for council tax, with local authorities permitted by the Treasury to use it to raise money to fund the creaking system.

Boris Johnson, the prime minister, claimed in 2019 that he had a plan to “fix the crisis in social care once and for all”. No such plan has since emerged, but negotiations have been ongoing in recent weeks between Johnson, the chancellor, Rishi Sunak, and the new health secretary, Sajid Javid, and meetings are expected to continue over the weekend.

Several government sources insisted no final decision had yet been made and it was unclear whether an outcome would emerge before MPs leave Westminster for the summer recess next week.

The current system, widely viewed as unfair, results in some families facing crippling costs of hundreds of thousands of pounds for a loved one to be cared for.

Any deal between Johnson, Sunak and Javid is expected to be modelled on the decade-old Dilnot report, which proposed a lifetime cap on care costs of £25,000 -£50,000, with the balance met by the state.

The plan would be expected to cost £7-10bn a year, or more if the “floor” – the level of household savings at which the state steps in to meet an individual’s care costs – was raised from the current level of £23,000.

The Treasury has traditionally opposed hypothecated taxes, where revenue is allocated for a particular purpose, but it is understood that Sunak would not object to an increase in an existing tax being branded as a levy to pay for social care.

A one percentage point increase in the basic and higher rates of income tax would raise £5.7bn in the next financial year, and just over £7bn by 2024-25.

Javid has insisted he is not ideologically opposed to the idea of a tax increase to tackle the social care crisis. “In all my time in politics I haven’t let ideology blind me to doing the practical and the obvious. I think that’s as far as I’d go,” he told the Telegraph.

When the prime minister was asked about proposals for higher salt and sugar taxes this week, after a government-commissioned review, he said: “I am not, I must say, attracted to the idea of extra taxes on hard-working people.”

But he is also believed to be keen to deliver on the promise he made on the steps of Downing Street two years ago next week. Asked about the issue on Thursday, he said proposals would be published “before too long”.

The 2019 Conservative manifesto promised to build a cross-party consensus on social care reform. Speaking in January last year, Johnson said: “Now we have the majority we need, we are going to get on with this so people can get the care they need in their old age but don’t have to sell their home.” He added: “We have got to think very carefully about how we do it because there are lots of quite important moral and social issues contained in it.”

While there is cross-party agreement that the existing system of funding and delivering social care is unsustainable, governments of all stripes have failed to get to grips with the issue for fear of creating financial losers.

Theresa May set out radical plans for reforming the system in the 2017 manifesto but they were quickly branded a “dementia tax” and her advisers were forced to adapt them on the hoof while she continued to insist “nothing has changed”.

When Andy Burnham was Labour health secretary he sought cross-party support for reforms that would have the costs of care partly met through a “fair care contribution”, potentially levied on patients’ estates after they had died. But the talks fell apart, and the attempt at a consensus approach resulted in the Tories accusing Labour of planning a “death tax”.
Newsletter

Related Articles

0:00
0:00
Close
Morocco and France Advance as 2026 FIFA World Cup Enters Quarterfinals.
Historic 2026 Tour de France Opens in Barcelona With Revamped Team Time Trial.
Global Mergers and Acquisitions Approach $4 Trillion Defying Geopolitical Tumult.
Negotiators Advance 20-Point Framework for Gaza Ceasefire and Demilitarization.
OECD Warns Middle East Conflict Will Depress Global Economic Growth.
Ukrainian Drones Strike Major Oil Terminal in St. Petersburg.
World Meteorological Organization Issues Urgent Alert Over Rapidly Intensifying El Niño.
United States Commemorates 250th Anniversary With Diplomatic Summits and Global Flotilla.
Iran Begins Days-Long Funeral for Supreme Leader Khamenei Amid Strait of Hormuz Standoff.
Technology giant reports surging carbon emissions driven by artificial intelligence infrastructure demands.
Artificial intelligence adoption accelerates workforce reductions across the technology and financial sectors.
Global technology and financial conglomerates collaborate to launch a new stablecoin standard.
United States regulators lift export restrictions on a major frontier artificial intelligence model.
Royal Society Exhibition Highlights Growing Focus on Public Trust in Science
Energy Costs and Supply Chain Risks Continue to Shape UK Business Strategy
Rapid Rise in Artificial Intelligence Adoption Reshapes UK Corporate Operations, ONS Says
UK Businesses Turn Defensive as Economic Outlook Weakens, Institute of Directors Data Shows
UK Government Faces Criticism Over Late Extension of Pub Hours for England Match
Inquest Continues Into Death of Noah Donohoe as Jury Deliberates Findings
Calls for Stronger Wildlife Attraction Safety Rules After Crocodile Enclosure Injury
City Fire Under Control After Major Blaze Sends Smoke Across Urban Area
Police Investigation Continues After Officer Killed During Road Closure Duties
Blackpool Hotel Fined £120,000 After Electric Shock Incident Involving Child
Whistleblowers Allege Delays in UK Special Educational Needs Support Services
Calls Grow for Improved Support for UK Armed Forces Personnel Facing Health Conditions
Rising UK Energy Price Cap Increase Prompts Wider Concerns Over Household Pressures
UK Businesses Remain Concerned Over Global Conflict Risks to Supply Chains, ONS Finds
Office for National Statistics Reports Rising Adoption of Artificial Intelligence Across UK Businesses
Institute of Directors Reports Deepening Pessimism in UK Business Confidence Index
England Prepare for World Cup Round of 16 Match Against Mexico in Mexico City
Royal Society Summer Science Exhibition Concludes in London After Week-Long Showcase of Research
Silverstone Hosts British Grand Prix as Lando Norris and Lewis Hamilton Lead Home Crowd Expectations
Cornwall Van Dwellers Face Homelessness Risk as Council Tightens Enforcement
Police Investigate Stabbing of Iranian Journalist in London
Rare Copy of US Declaration of Independence Discovered in UK Archive
Department for Education Data Shows Persistent Literacy Gap Among Disadvantaged White Pupils
London Casino Faces Legal Action Over Alleged Tip Distribution Practices
England Records Hottest June on Record as Heatwave Disrupts Services Nationwide
UK Foreign Office Ends Overseas Education Programme for Women and Girls After Shortfall
UK Lawmakers Call for Urgent Action to Preserve Historic Outdoor Lidos
Police Criticise Extended Pub Opening Hours for England World Cup Fixture in Mexico
UK Safety Authorities Warn Parents Over AI-Generated Child Abuse Imagery Risks
Reform UK-Led Council Struggles to Attract Sponsors for Union Flag Promotion Scheme
OpenAI UK Investment Uncertainty Grows After Reported Setback on Stargate Data Centre Site
British Medical Association Warns of Severe Financial Crisis and Possible Staff Cuts
UK Devolution Debate Intensifies as Celtic Nations Prepare Breakup Contingency Plans
Starmer Signals Labour Transition as Burnham Emerges as Potential Successor
UK Government Consults International Partners on Maritime Trade Security and Energy Market Stability
Rare Revolutionary-Era Documents Discovered by UK Archives and Undergoing Authentication
UK Consumer Confidence Remains Deep in Negative Territory as Household Spending Stays Cautious
×