Thank you for contacting me about the increase in National Insurance to fund the NHS and social care.
Many people have contacted me about the increased costs of National Insurance Contributions announced and debated in Parliament this week. Some are supportive whilst others are against.
Unlike Income Tax or VAT, an increase in NICs ensures businesses contribute alongside employees and the self-employed. People earning less than the Primary Threshold / Lower Profits Limit in 2021-22 will not pay the Levy, and the Levy will not apply to Class 2 or 3 NICs. This means that the highest 14 per cent of earners will be paying around half the revenues of the Levy, and that no-one earning less than £9,568 will pay a penny. Dividend tax rates will also be increased by 1.25 per cent to fund the Plan for Health and Social Care.
Nonetheless, this is a huge change in taxation which, under normal circumstances, I would oppose, however, I can tell you that specifically with the NHS, we are already in a serious situation with regards to the rising backlog of operations.
Our local NHS Trust has done a sterling job with emergency operations during the pandemic; however, most non-urgent operations haven’t been performed for over a year. As we all know we have seen a heroic effort in our two local hospitals with dealing with Covid admissions, which are still very high even today, with around 70 people in hospital with Covid and 12 in ICU (as of 7.09.2021).
Whilst the backlog operations aren’t life threatening, they are operations that relieve relentless pain and improve health and wellbeing. Hips, knees, and cataracts, all reduce the quality of life for people when they need replacements.
We are currently experiencing 5 or 6 people per week contacting my office complaining that their operations have been cancelled or postponed. The risk of doing nothing is too high, so it is imperative that we act now; otherwise, the backlog in 6 months or a year’s time will be several times greater. Doing nothing is not an option.
The rise is also intended to start dealing with the crisis in social care. Social care has needed fixing for several decades now and this rise in NI Contributions will start the process of improving social care for many people. In a nutshell, currently if you have over £23,000 in assets, you pay for the social care you need with people having to sell their homes often to pay the full cost of care.
The new proposals see that cap rise to £100,000 in assets before you pay the full costs, in addition to the cap on the total amount of care you pay for at £86,000 (NB: this cap is for care and doesn’t include accommodation nor foods costs).
This is still not a perfect situation; however, it is a giant step forward from the current situation and sets us on the road to fix the social care system within our country.
It is for the above reasons that I support and voted for the change to NI Contributions this week.
Thank you again for taking the time to contact me.
Craig Whittaker MP