'Tax on Jobs' or 'Least Worst Option'? MPs Vote on Social Care Tax Rise

Parliament approved the 1.25 per cent rise to the National Insurance social security tax to pay for Prime Minister Boris Johnson's social care plan for the elderly by 319 votes to 248 — a majority of 71.

Labour has attacked The Tories' elderly care plan as a "tax on jobs" while government backbenchers have defended the tax hike hike for social spending.

Parliament debated the proposed 1.25 per cent rise in National Insurance to pay for the government's promised social care plan on Thursday evening.

"Employers struggling to get their businesses back on track now face a tax on jobs," Labour Birmingham Selly Oak MP Steve McCabe said.

He said the tax would "hit young workers, people who will never get the opportunity to buy a house, the self-employed struggling to get back on their feet, many of them ignored by this government during the pandemic".

Several MPs on the government countered that the tax rise, while going against their Conservative principles, was the "least worst option" to stop pensioners being forced to "whittle away" their children's inheritance on rocketing care home fees.

"No decision to invest more to the scale required is going to be easy — and money must come from somewhere," said Stoke-on-Trent South MP Jack Brereton. "I think what we've arrived at is probably the least worst option".

Labour shadow treasury secretary Bridget Phillipson said the arguments made in debate were "inadequate" for "a change of this magnitude to the tax system".

"It is instead a broken promise, two-and-a-half million working households hit by the Tory double whammy of cuts to Universal Credit and an increase in National Insurance," Phillipson said.

The plan would see the government pay for an individual's care home or home help costs over £86,000 over their lifetime — although critics say that would mean many couples in areas with below-average property prices would still lose their homes to pay for care.

"Typically around one in seven must pay over £100,000 for care, with bills falling indiscriminately on some of the sickest and most vulnerable in society," Treasury Secretary Steve Barclay said.

The tax rise, which will also pay for increase National Health Service funding to cut the backlog in appointments and surgery left by the COVID-19 pandemic, was passed around 7:30pm by a vote of 319 to 248 — a majority of 71.

A Labour amendment to force Chancellor of the Exchequer Rishi Sunak to provide "an assessment of the impact of these measures on jobs and businesses, and... a distributional impact assessment of these measures on different income groups and regions" was earlier voted down by 335 to 243.

Another amendment, proposed by 15 left-wing Labour MPs from the Socialist Campaign Group and suspended former leader Jeremy Corbyn, for the treasury to assess their demand for an undefined "wealth tax" on the "super-rich" personal assets over £5 million was not voted on.

I just voted against the disgraceful Tory tax hikes on working people.

Shamefully, Tory MPs voted it through.

The Tories could have backed a Wealth Tax instead - they didn't because the Tories exist to serve the interests of the super-rich.

— Richard Burgon MP (@RichardBurgon) September 8, 2021