Boris Johnson says NI rise needed to support NHS after Covid – UK politics live news

Here is a summary of the plans, based on an embargoed briefing from No 10 given earlier.

• The NHS is getting £36bn over the next three years “to fund the biggest catch-up programme in the NHS’s history, tackling the Covid backlogs”. Adult social care will be reformed to stop people facing “unpredictable and catastrophic costs”. And health and social care will be brought closer.

How it is funded

• A new UK-wide 1.25% “health and social care levy” will come in from April 2022, based on national insurance contributions. It will be paid by working adults, including people over the state pension age (unlike normal national insurance, which is not paid by pensioners).

• Initially from April 2022 national insurance contributions rates will go up by 1.25%. But from April 2023, once tax systems have been updated, the levy will be separated, so that the levy will appear as a separate line on pay slips. At this point working adults above state pension age will start contributing.

How much will people pay

• The system is progressive, No 10 says. Those who earn more will pay more, A typical basic rate taxpayer earning £24,100 will pay £180 a year, or £3.46 per week. A typical higher rate taxpayer earning £67,100 – in the top 15% of earners – will pay £7.15 a week.

• Additional rate tax payers (those paying the highest rate) will contribute 20% of the revenue, even though they are just 2% of taxpayers.

• Higher rate taxpayers – 14% of the total – will pay half the revenue.

• 6.2 million people earning less than £9,568 will not have to pay.

• Dividend tax is going up too by 1.25%, to ensure people who receive income through dividends make the same contribution. These people are more likely to be higher earners.

• Big businesses will pay the most of the extra revenue coming from the increase to employers NICs, with 70% of the money coming from the biggest 1% of employers – those with more than 250 employees.

• 40% of all businesses (mostly small business) will not have to pay anything extra.

• No 10 says that, because employers also contribute, raising NICs is fairer than raising income tax. To raise this money from income tax, income tax would have to go up by 2%. A typical basic rate taxpayer would pay around £230 a year, instead of £180. For a higher rate taxpayer, that would be £1,090 instead of £750.

International precedents

• No 10 says France, Germany and Japan have all increased social security contributions to fund social care.

Support for the NHS

• The NHS will get an extra £12bn a year for investment in frontline care over the next three years, No 10 says.

• The new funding is expected to fund an extra 9 million checks, scans and operations.

• By 2023-24 activity levels in the NHS will be 110% of what was planned.

Reforms to adult social care

• Currently anyone with assets over £23,250 has to pay their care costs in full. That means around one in seven people pay more than £100,000. From October 2023 the system will change and anyone with assets worth less than £20,000 will have their care costs fully covered by the government. Anyone with assets between £20,000 and £100,000 will be expected to contribute to the cost of care, but will also be eligible for state support covering some of the costs. This support will be means tested.

• No one will ever have to pay more than £86,000 for care in their lifetime – roughly equivalent to three years of care.

• The system will be made fairer, so that people who pay for their own care do not have to pay more than state-funded individuals for equivalent care.

• The NHS and the care system will also be brought closer together.

Devolved governments

• Scotland, Wales and Northern Ireland will get an extra £2.2bn in health and social care spending as a result of the levy. No 10 says there is “a clear union dividend from this policy”.

Here is my colleague Heather Stewart’s story about the plan.

Johnson says no Conservative ever wants to raise taxes.

And he admits he is breaking a manifesto promise. “Yes, I accept that this breaks our manifesto commitment,” he says.

But he says no-one foresaw a global pandemic.

Johnson insists health reform and social care reform have to go together.

You can’t fix the Covid backlogs without giving the NHS the money it needs, and you can’t fix the NHS without fixing social care, you can’t fix social care without removing the fear of losing everything to pay for social care, and you can’t fix health and social care without long-term reform.

Johnson says it is not enough to put more money in.

The system needs to be changed too, he says.

When the Covid crisis broke, there were 30,000 people in hospital who could have been treated better elsewhere, he says.

He says people were in hospital because they or their relatives were worried about the cost of care in a residential home.

The fear that a condition like dementia could lead to the total liquidation of their assets, and their home, affects millions, he says.

He says the insurance system cannot address this, because demand would be too low to ensure insurance could be available at an affordable price.

He says the government will put a limit on the amount people need to pay.

And it will work with the industry to encourage it to provide insurance for care costs, he says.

• People with assets worth less than £20,000 will not have to pay for their social care, he says.

• People with assets worth between £20,000 and £100,000 will be eligible for some means-tested support, he says.

Johnson says a white paper on integrating health and social care will be published later this year.

Johnson says people want to know why income tax is not being increased instead.

But it is not paid by business, he says. So if income tax were increased, it would be double the rate.

And capital gains tax in total raises less than the sum this new levy will raise, he says.

Johnson says the highest earning 14% will pay around half the revenue from the levy.

Johnson says the government will put more money into the NHS. But it will also fix the long-term problems of social care.

And it would be wrong to say the government can pay for this without explaining how it can fund this, he says.

He says from next April there will be a new 1.25% health and social care levy, hypothecated by law.

It will not pay for pay awards for middle management. It will go straight to the frontline, he says.

Boris Johnson is opening his statement.

He says Covid has placed “massive pressures on our NHS”.

Thousands of people did not come forward for treatment. These are people who know – your aunt, your neighbour, your colleague at work, he says.

The government needs to go beyond the record funding for the NHS already provided, he says.

This is from Nick Macpherson, a former Treasury permanent secretary.

Boris Johnson will be starting his Commons statement on social care within the next few minutes.

This is from ITV’s Paul Brand.

This is from Chris Thomas, a health and care expert at the IPPR thinktank, on the PM’s latest Twitter thread. (See 11.44am.)

This is from my colleague Heather Stewart.

Boris Johnson (or, to be more accurate, the person who manages his Twitter account), has posted four tweets this morning about the announcement he will make at 12.30pm. They imply the national insurance increase is primarily needed to rescue the NHS after Covid, in line with the message being given out by Downing Street last night. (See 9.48am.)

At the Downing Street briefing the prime minister’s spokesman also denied that the government is planning a “firebreak” lockdown in October. (See 10.42am.) But the spokesman gave a statement that also implied that contingency plans for such an outcome might well be in the filing cabinet. He said:

No, it is not true that the government is planning a lockdown or firebreak around the October half-term …

We have retained contingency plans as part of responsible planning for a range of scenarios, but these kind of measures would only be reintroduced as a last resort to prevent unsustainable pressure on our NHS.

I think we’ve been clear throughout that we will take action, and indeed we have done when necessary to protect our NHS.

But under the previous occasions when that action has been required, we have been without the significant defences that our vaccination programme provides us – we’re now in a much different phase.

The spokesman seemed to be making a distinction between “planning” something (ie, wanting or expecting it to happen) and having plans for something (as a last resort, which is what governments should be doing).

We are getting three Commons statements today, starting at 12.30pm; from Boris Johnson, then Jacob Rees-Mogg, leader of the Commons, then Thérèse Coffey, the work and pensions secretary.

Johnson’s will cover social care. We do not know yet what Rees-Mogg will say, but there has been speculation that Downing Street will schedule a vote on social care this week, and that is the sort of thing Rees-Mogg would need to announce to MPs in a statement. The Telegraph’s Ben Riley-Smith posted this on Twitter last night.

We expect Coffey will use her statement to confirm that the pension triple lock is being abandoned this year.