Totnes MP Anthony Mangnall has voted to increase NI contributions to fund social care

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Totnes MP Anthony Mangnall has voted to increase NI contributions to fund social care

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Totnes MP Anthony Mangnall has voted with the Government to add a levy to National Insurance contributions in order to fund social care.

The move, which breaks a key Conservative manifesto promise not to raise taxes, will be felt by the poorest the most, but as it is a tax on earnings and not wealth, the richest in the country will pay nothing extra.

Anthony Mangnall, Conservative MP for Totnes 

The Health and Social Care levy will add 1.25 percentage points onto National Insurance, from 12 percent to 13.5 percent. The levy will also apply to pensioners who work, unlike national insurance. It is thought the tax rise will raise £12 billion.

South Hams residents who feel like they have no hope of ever owning their own home, or are struggling with not being able to find affordable rental properties due to rocketing property values and stagnant wages, will probably not be too pleased to be having to pay hundreds of pounds more a year because, as the Prime Minister says, paying for social care can leave those better off without the “ability to pass on anything to their children”.

Mr Johnson said his plan - which includes capping care costs in England at £86,000 - was broad-based and progressive according to the economic think tank the Institute for Fiscal Studies.

"The plan deals - after decades - with catastrophic costs faced by millions of people, the risks that they face, the threat they could face the loss of their homes, their possessions, their ability to pass on anything to their children," he said.

Sir Keir Stamer, the Labour Party leader, said the tax was unfair on working people, adding: "Under his plan, a landlord renting out dozens of properties won't pay a penny more, while their tenants in work will face tax rises of hundreds of pounds a year.

"A care worker earning the minimum wage doesn't get a pay rise under this plan but does get a tax rise. In what world is that fair?"

Most of the money raised by this levy will come from those earning less than £50,000. If you earn the average wage in the South Hams (£30,500) you will lose out on £261 a year. If you earn the minimum wage over the age of 23 (£18,069) you will lose out on £106 a year. If you earn the minimum wage between the age of 18-20 (£13,304) you will lose out on £47 a year. Find out how much more you’ll have to pay using this National Insurance calculator

It has also been pointed out that it will give graduates (when student loans payments are taken into account) earning over £27,295 pay a marginal rate of 42.25 percent (33.25 percent for non-graduates) and graduates earning over £50,270 pay 52.25 percent (43.25 percent for non-graduates up to £100k).

No one is doubting that the money is needed, public spending has been cut repeatedly in the last decade, but opposition MPs are calling for a Wealth Tax rather than this levy on national insurance.

During the pandemic, the richest people in the UK (there are now 171 billionaires) added £106,000,000,000 to their wealth collectively, up nearly 25 percent since May 2020.

Richard Burgeon MP, Labour East Leeds, has called for the levy to be scrapped and instead to put a tax on wealth over 100 million pounds.

He said on Twitter:

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