Boris Johnson confirms rise in national insurance for health and social care – UK politics live news | Politics

Boris Johnson spend more than an hour and a half taking questions from MPs, but there was very little evidence from what was said of opposition to his plans from Conservative MPs. All those backbenchers who were happy to denounce the proposals in recent days, either on or off the record, were either absent, or quiet, or else had had a mysterious change of heart.

The most striking example came near the end of the session when Marcus Fysh got his chance go ask a question. At the weekend Fysh published an article in the Sunday Telegraph strongly critical of the government. Here is an excerpt.

I am alarmed at the apparent direction of travel of the government.

I do not believe it is Conservative to penalise individuals of working age and their employers with higher taxes on their employment when our manifesto promised not to.

I do not believe it is Conservative to take a socialist approach to social care and its funding when insurance-based and fairly contributive alternatives exist and operational reform has not been set out.

There was a lot more in the article, which ended: “I just hope to goodness it wakes up before it is too late.”

But when Fysh rose in the chamber, the Sunday Telegraph was a distant memory. Instead he asked:

Will my right honourable friend work with me to examine ways that I can see of getting the finance, the technology and the political sectors together to actually do this in a way that can be less of a burden on the taxpayer?

Johnson, who seemed as if he could hardly believe his luck, said that he would, and that he agreed with Fysh about wanting to see the financial services industry step in to help people insure themselves against the costs of social care.

Jonathan Reynolds, the shadow work and pensions secretary, is responding to Coffey.

He starts by saying he believes governments should keep their promises.

The triple lock is about offering a long-term pension guarantee, he says.

It has made a significant contribution to restoring the value of pensions, he says.

He says the government has also broken manifesto promises on national insurance, and on international aid.

He challenges Coffey to explain the thinking behind her decision. And he asks why the government could not continue to include earnings in the triple lock, while making allowance for the impact of furlough.

He says Labour cannot support what is being proposed without having an explanation of that kind.

Thérèse Coffey, the work and pensions secretary, is now making a statement to MPs about pensions. She says she has to make an annual statement to the Commons about uprating the state pension.

She says average earnings are now rising at 8.8%. The increase for May to July is likely to be over 8%.

This means an adjustment to the triple lock is needed, she says.

She says she will change it so that pensions rise in line with inflation or by 2.5%. Inflation is likely to be the higher of those two figures, she says.

Under the triple lock, pensions are supposed to rise in line with average earnings, or inflation, or 2.5%, whichever is higher. But Coffey says that it would be unfair to apply that this year because the 8% rise in earnings is a “statistical anomaly” created by the large number of people who saw their earnings fall during lockdown.

In response to a complaint from his Labour shadow, Thangam Debbonaire, about the government rushing the vote on the government’s national insurance hike, Rees-Mogg claims what is happening is routine. He says a vote on a ways and means resolution is needed before legislation can be introduced.

Rees-Mogg ignores Debbonaire’s comment about how the leader of the Commons is asking MPs to vote for a tax rise that he seemed to oppose at the weekend.

Jacob Rees-Mogg, the leader of the Commons, has just told MPs that there will be a vote tomorrow on a way and means resolution relating to social care. He does not say it explicitly, but this means a vote on the tax increase just announced by the PM.

A ways and means resolution is a procedure to approve a new tax.

These are from the Institute for Fiscal Studies, the tax and spending thinktank.

Paul Johnson, director of the IFS, told BBC Radio 4’s The World at One that this should really be seen as a 2.5% national insurance hike, and that this was “the biggest tax rising year in many decades”. He explained:

We keep saying 1.25% – it is really 2.5%. It is one-and-a-quarter from the employer on every £100 you earn, it is one-and-a-quarter from the employee – you add that up and it is two-and-a-half per cent. It is really a 2.5% tax rise on earnings.

This is £12bn on top of £25bn of tax rises in the budget – this must be the biggest tax rising year in many decades.

These are from Torsten Bell, head of the Resolution Foundation thinktank, on today’s announcement from Johnson.

Bell has also posted a useful thread on the PM’s statement with more detail, starting here.

Back in the Commons Boris Johnson claims that his plans are bringing “the magic of averages to the rescue of millions”. He is referring to social insurance, and the way pooling risk can reduce the liability to an individual.

Johnson was quoting Churchill, who used the phrase to describe the National Insurance Act of 1911.

Rishi Sunak, the chancellor, has formally announced the start of the spending review. It will decide government spending priorities for the three years starting from 2022-23, and the outcome will be announced on Wednesday 27 October, alongside an autumn budget.

The Treasury has published more details here, and here is the letter (pdf) that Sunak has sent to cabinet colleagues setting out his priorities for the spending review.

Back in the Commons, in response to a question from Labour’s Ben Bradshaw, Boris Johnson again criticises the opposition for not having its own proposal. “A plan beats no plan,” he says.

The government has now published a policy document giving more details of the plans announced by the PM. It runs to 33 pages and it is here (pdf).

Back in the Commons Boris Johnson told MPs a few minutes ago that wages are now going up in low-income occupations “in exactly the way that those of us who campaigned for Brexit hoped”.

(My colleague Larry Elliott made the same argument in a recent column.)

A typical higher rate taxpayer earning £67,100 – in the top 15% of earners – will pay an extra £715 per year under these plans, according to No 10. A post earlier said it was £7.15 a week. That was a result of a misunderstanding at the briefing, but the earlier post has now been corrected. See 12.50pm.

Matt Hancock, the former health secretary, congratulates Johnson on delivering on his promise to reform care. He stresses the importance of integrating health and social care.

His intervention prompts a lot of jeering from the opposition.

Johnson thanks Hancock, and says he played a “major part” in developing the plans when he was in office.

Sir Ed Davey, the Lib Dem leader, says he has been a carer for most of his life. He says the Tories failed to implement the Lib Dem plan legislated for in 2014. But there is no plan here to fill vacancies in the care sector, or to help disabled adults. The PM “doesn’t have a clue about fairness”, he says.

Johnson says Davey is calling for more funding, but then attacking him for providing it.

And he says the plan will help all adults needing care.

Jon Trickett (Lab) says the cap will be Johnson’s poll tax. He says in his constituency the average home is worth £130,000; in Johnson’s it is worth £500,000. He says that means the new rules will protect much bigger inheritances in constituencies like Johnson’s.

Dame Margaret Hodge (Lab) says this is the least progressive option available for raising the money. It is unfair between individuals, unfair between generations and unfair between assets and income. Why did the PM not raise income tax or capital gains tax, or try a dividend tax?

Johnson says other taxes would not have raised enough.

Andrea Leadsom (Con) says millions of people concerned about the costs of social care will be relieved by this announcement.