Boris Johnson unveils £12bn tax rise for health and social care

Boris Johnson has announced a £12bn annual tax increase to fund higher health and social care spending that his critics said was unfair and inadequate.

Most of the money will be raised by a 1.25 percentage point increase in national insurance contributions for employers and employees. The plan breaks Johnson's election pledge to fix Britain's long-running social care crisis without increasing taxes.

The increase will also be paid by pensioners who work and there will be an equivalent 1.25-point increase in the taxation of dividends to place some of the burden on the better off.

The plan to raise national insurance was trailed in recent weeks, prompting criticism from some of Johnson's Tory backbenchers that it would force young working people to pay for often affluent pensioners' social care.

No individual in England will have to pay more than £86,000 for their care over their lifetime, Johnson told MPs in a statement short of detail.

Johnson promised before the 2019 election that he had a plan ready to go to solve the UK's social care problems. Care workers are underpaid, services are stretched and citizens face a lottery that can force their assets to be liquidated if they get dementia.

But the plan was finalised at the last minute after arguments between 10 Downing Street and the Treasury and after Tory MPs expressed anger over the broken election promise and the details of the plan. The deal also provides very little extra money for social care with almost all the £36bn raised in the first three years going to the National Health Service.

Johnson told the House of Commons: "I accept this breaks a manifesto commitment, which is not something I take lightly. But a global pandemic was in no one's manifesto."

Angela Rayner, deputy leader of the opposition Labour party, said: "This is not a plan to fix the crisis in social care. A care worker on the minimum wage will pay more tax for the care they are providing every day without a penny more in their pay packet or a secure contract. A super-rich landlord won’t pay a penny more but their tenants will."