BoJo Breaks Promise With $50 Billion Tax Hike To Bail Out NHS

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by Tyler Durden
Tuesday, Sep 07, 2021 - 08:35 AM

In a decision that could risk becoming UK PM Boris Johnson's "read my lips" moment - a reference to President George HW Bush's broken campaign promise not to raise taxes, which contributed to his loss to Bill Clinton in the '92 presidential race - the PM has decided to push through an increase in the national insurance levy on workers and employers - while also hiking a levy on investment dividends to try and offset some of the pressure on workers.

Johnson says the hikes will raise £36 billion ($50 billion) over three years to benefit the NHS, which has been overwhelmed by the COVID pandemic, forcing Britons to wait months for basic health care and critical procedures. Johnson said Monday that the “tough decision" - which is opposed by many in his own party - is necessary to help the NHS work through a growing wait list crisis in hospitals, while carrying out other long-promised reforms to government social care.

The plan will increase national insurance contributions (NICs) by 1.25 percentage points for both employers and employees. Additionally, a 1.25% levy on investment dividends will also apply, and working pensioners will also be subjected to the levy - measures that are being added to combat accusations of generational unfairness, and claims that BoJo's government is putting too much pressure on workers.

To avoid dedicating more money to pensioners, MPs are expected to scuttle a big increase in payouts planned for next year (another breach of one of Johnson's manifesto promises from before he succeeded PM Theresa May).

Jacob Rees-Mogg, leader of the Tories in the House of Commons, warned this week that BoJo risked the "read my lips moment",as we noted above, by pressing ahead with the levy increases, which BoJo had also promised not to do before taking over as PM. Then again, that was before the pandemic.

Most of the money will be put towards eliminating the backlog on treatment, since the current waiting list of 5.5MM could grow to 13MM if nothing is done.

Among their biggest worries, Tories are concerned that too much of the money will go to the NHS, leaving little left over to finance increases in social care for pensioners and the elderly.

“This is bollocks”, fumed one backbench Conservative MP. “It’s awful, it’s terrible, it’s shocking. What the government is doing is extraordinarily bad policy."

"We are taking money away from those accruing capital to give to those with it. It's a totem for a government without ideology, without consistency and without interest in the right governance. They will regret this in time."

Although Labour opposes the national insurance increase, calling it a "tax on workers", most Tory critics accept that they do not have the numbers to defeat Johnson’s plan.

Moreover, the increase comes ahead of a budget battle that's expected in October as Johnson works to devise and pass a budget with more planned spending increases for social care and other programs.

BoJo unveiled his plan, which was first leaked to the press last week, during his speech to parliament Tuesday morning. The debtae in Parliament continues, which readers can watch live below: