'National insurance hike is tax on jobs,' says Bethnal Green and Bow MP

Rushanara Ali, MP for Bethnal Green & Bow

Bethnal Green and Bow MP Rushanara Ali said the government's health and social care levy “does nothing to fix the social care crisis” - Credit: House of Commons

The MP for Bethnal Green and Bow has condemned the government’s health and social care levy.

The policy aims to fund £12bn investment in the NHS and social care, but Labour MP Rushanara Ali described it as a “tax on jobs” which “does nothing to fix the social care crisis”. 

Prime minister Boris Johnson's proposals, which will see national insurance contributions rise 1.25 percentage points from 12 per cent to 13.25pc - the equivalent of a 10 per cent hike - were passed by the House of Commons on Wednesday (September 8) by 319 votes to 248. 

Mr Johnson defended the policy, claiming it was a “broad-based and progressive measure” and that the government was “taking the tough decisions that the country wants to see”. 

Ms Ali, who voted against the levy, said it was “unfair and a tax on jobs”. 

She said: “Whilst our NHS and social care system desperately needs increased funding, this is not the right way to achieve that.  

“Those with the broadest shoulders should be contributing much more but instead the 10 per cent increase in national insurance unfairly targets young people and low earners.  

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“A care worker earning minimum wage doesn’t get a pay rise under this plan, but does get a tax rise.” 

The tax will be introduced from April 2022 as a rise in national insurance – paid both by employers and workers – before becoming a separate tax on earned income from 2023. 

According to the government, the proceeds from the tax will mostly be spent on efforts to clear the NHS backlog created by Covid, with another portion going toward reform of the social care system. 

In 2019, the Conservative Party manifesto included a pledge not to increase national insurance.  

Ms Ali said: “The prime minister has broken his promise by forcing through the biggest rise in taxes on families for over 50 years, with no thought to the impact on working people.  

“This levy does nothing to fix the social care crisis, missing the long-term plan of reform and investment our NHS and social care system needs.”