You are currently browsing the daily archive for September 6, 2021.

Both houses of Parliament returned from summer recess today.

The Commons debated on whether to raise tax on National Insurance (Social Security, to my American readers) by 1% to meet ‘social care’ needs. I put that in quotes because, as ITV’s Robert Peston wrote on Sunday, September 5, there is no social care programme from the Conservatives yet, so proceeds from the tax increase will be used for the NHS, post-pandemic. Emphases in purple mine:

Election manifestos are contracts with voters. Under our parliamentary system, their promises are supposed to be broken only in exceptional and extreme circumstances.

Boris Johnson‘s manifesto, his contract with us that he effectively signed in December 2019, said “I guarantee we will not raise the rate of income tax, VAT or National Insurance“.

barring a full-scale cabinet revolt that forces a climbdown – he will break that guarantee, with a rise of 1.25% in the rates of national insurance paid by employees and employers to raise more than £10bn a year.

So does the Covid-19 crisis, and its deleterious impact on the public finances, represent the kind of crisis that most people would see as rendering the manifesto null and void, as in effect triggering what in business would be called a “force majeure” clause?

Strikingly, I cannot find a single member of Boris Johnson’s cabinet who argues national insurance should rise

This does not look like laser-like targeted help, a rare example of benign hypothecation. For most ministers, the NI rise is billions being poured into a huge and fuzzy health-and-care black hole, without even the fig leaf of a half-plan to ensure the money is spent properly.

Spending the money properly is an important consideration. The NHS, laudable as it is in principle, needs looking at with regard to how it runs on a day-to-day basis.

Last week, an NHS blog post for senior management made the rounds in the UK. Guido Fawkes picked up on it today.

Amazingly, it was written by a senior manager at the Nursing and Midwifery Council. She has a degree in American Studies.

Perhaps I’m dated, but aren’t nurses and midwives there to care for patients’ health and new mothers’ wellbeing?

If tax has to be raised, then let us ensure it is spent on patient care.

Returning to Robert Peston’s article, here are the three reasons why government ministers are concerned about this tax rise:

On the one hand, it is supposed to put the social care system – long-term care for the elderly and frail – on a sustainable financial footing.

Which would be all very well, except there has been no published government report on Johnson’s watch of the social care sector’s needs, despite his assurance that such a plan exists.

Second, most of the new billions will be going in the first few years to the NHS, to help it catch up with the backlog of millions of operations, procedures and treatments, that have been delayed by the invasion of Covid-19

Third, ministers and the PM’s MPs recognise that national insurance is not necessarily the fairest tax to use to raise funds for services that are predominantly of use to the oldest, since it isn’t levied on those who reach retirement age, and is levied even on young people with very low earnings.

This matters, given that both the financial crisis of 2007-9 and the Covid-19 crisis had the most damaging economic impact on young people, and the finances of the older generation largely improved.

Johnson wants to be seen as a One Nation PM.

But in taxing the young disproportionately, he looks like someone penalising younger Labour voters to protect older Tory ones.

Incidentally, today’s debate on the National Insurance Contributions Bill was unrelated to the proposed tax rise:

Returning to financing the NHS with a rise in National Insurance: an increase of 1% sounds small, but it isn’t. The first tweet is from the Economics Editor for the Financial Times. James McKintosh is from The Wall Street Journal:

No one interviewed on GB News — whether Liberal Democrat, Labour-leaning journalists or Conservatives — thought that raising tax on National Insurance was a good idea.

On Sunday morning, Dehenna Davison, the first Conservative MP for Bishop Auckland in the north of England, held up a copy of the 2019 party manifesto which clearly says that the main three taxes will not be increased. Arlene Foster, former DUP MP, must be happy she’s out of Westminster:

Guido Fawkes has come up with more opposition:

Robert Peston says that Boris is likely to get his way and use a cabinet reshuffle as a threat to comply:

The rumours of a Thursday reshuffle may be the PM’s Stalin-lite threat to colleagues to back him or risk demotion or even exile to the backbenches.

But even without that threat, Johnson’s not in serious trouble. Remember he picked his cabinet for loyalty not backbone.

Boris is gambling on Keir Starmer’s weakness as Leader of the Opposition.

However, Starmer won’t always be Labour leader. The next one will remember this and pin it on low-taxation Conservatives at the next election; we can be sure of that:

Johnson will get his tax. And whether he likes it or not, it will always have his name on it.

Boris, a keen student of history, would do well to remember what happened to Bush I when he ran for re-election in 1992. In 1988, he promised ‘no new taxes’. Taxes went up under his watch. Bill Clinton won in 1992 with ‘It’s the economy, stupid’ and served two terms.

My message to Boris is ‘Danger, Will Robinson. Danger’.

© Churchmouse and Churchmouse Campanologist, 2009-2021. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Churchmouse and Churchmouse Campanologist with appropriate and specific direction to the original content.
WHAT DOES THIS MEAN? If you wish to borrow, 1) please use the link from the post, 2) give credit to Churchmouse and Churchmouse Campanologist, 3) copy only selected paragraphs from the post — not all of it.
PLAGIARISERS will be named and shamed.
First case: June 2-3, 2011 — resolved

Creative Commons License
Churchmouse Campanologist by Churchmouse is licensed under a Creative Commons Attribution 2.0 UK: England & Wales License.
Permissions beyond the scope of this license may be available at https://churchmousec.wordpress.com/.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,533 other followers

Archive

Calendar of posts

September 2021
S M T W T F S
 1234
567891011
12131415161718
19202122232425
2627282930  

http://martinscriblerus.com/

Bloglisting.net - The internets fastest growing blog directory
Powered by WebRing.
This site is a member of WebRing.
To browse visit Here.

Blog Stats

  • 1,660,784 hits