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U.K. Prime Minister Boris Johnson to raise taxes to address Britain’s creaking social care system | CBC News

British Prime Minister Boris Johnson set out plans Tuesday to raise taxes on workers, employers and some investors.

The move is part of an attempt to fix a health and social care funding crisis after the government spent hundreds of billions to fight the COVID-19 pandemic.

After an earlier promise not to raise taxes, Johnson is returning to a previous pledge to address Britain’s creaking social care system — which is expected to double in cost over the next two decades as the population ages.

He also moved to try to tackle a backlog in Britain’s health system. Millions of people have been waiting months for treatment from the state-run National Health Service, since resources were refocused to deal with COVID-19 patients.

British politicians have tried for years to find a way to pay for social care, though successive Conservative and Labour prime ministers have ducked the issue because they feared it would anger voters and their own parties.

Ignoring loud disquiet in his party, Johnson outlined what he described as a new health and social care levy that will see the rate of National Insurance payroll taxes paid by both workers and employers rise by 1.25 percentage points, with the same increase also applied to the tax on shareholder dividends.

He said the increases would raise about $62 billion over three years.

Backtracking on election promise

Johnson has tried to cool anger within his Conservative Party over the hikes, which several lawmakers fear could lose them support in the expected 2024 election.

He explained that with the hikes, elderly Britons would no longer face crippling costs that have forced many to sell their homes to pay for their care. He also said he could never have predicted the coronavirus pandemic which has further stretched services. In July, government reports pegged the U.K.’s COVID spending the equivalent of nearly $648 billion. 

Like many other Western leaders, Johnson is facing demands to spend more on welfare even though government borrowing has ballooned to 14.2 per cent of economic output — a level last seen at the end of the Second World War

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