The rise in National Insurance is classist and will impact lower-income students the most.
Boris Johnson finally got social care sorted. Predictably, though, he’s done it in a way that only someone cloaked in Eton-Oxbridge privilege would countenance as being fair.
National insurance will rise by 1.25 percentage points in 2022/23. The UK government has initiated this surcharge to fix the growing crisis in our NHS and adult social care system. The real question is, though: who will pay? Landlords with a portfolio of rental properties? No, don’t be daft. People who actually work in the social care system? Why, of course! Make no mistake, this is a deliberate choice to fund social care by hitting the poorest the hardest.
While income tax is collected on a person’s total income, national insurance is collected only on a person’s earned income. This means that income from property will not be charged under the health and social levy, because national insurance is effectively a tax on jobs, a tax on the working class. The real scandal here is one concerning wealth, inequality and yes, class.
An unnamed MP noted: “we are asking people on low incomes to pay more tax so that privileged kids can inherit expensive houses”. This is because the levy will partially fund a cap on care costs, designed to prevent those requiring social care from having to sell their assets. The widening of inequality is not intergenerational, but within our generation. Students that work longer hours will have to pay the most, and the students who fund their studies through employment, rather than the bank of mum and dad, are often working class. Indeed, it is students who earn more than £184 a week, and likely work the longest hours, that pay national insurance contributions in the first place.
The NatWest Student Living Index found that students in Glasgow spent on average the second longest number of hours in work of any city in the UK. Combined with soaring energy bills and a cut to universal credit that will hit families in Glasgow the hardest, it is once again the poorest who will suffer the most. This is all the more tragic given the low likelihood that the money raised from this levy will reach the social care system at all. Initially, it will be used to support the NHS in its recovery from the pandemic, but history shows us that the NHS budget only tends to increase, and without further tax rises or borrowing, this simply means social care will not receive its share of funding.
Boris Johnson then, a leader who can only really do good news, may find himself in a bit of political turmoil. Tax rises are not a vote winner, and he is setting himself up for disappointment if there is no demonstrable improvement in the operation of our social care system within the next few years. The UK government is obsessed with focus groups, and Johnson’s framing of the levy as primarily for social care feels like a short-term reaction to increased scrutiny about his ‘plan’ to fix social care when he took office, even when such a plan still doesn’t seem to exist.
It’s not as if there aren’t progressive ways to raise the money required for social care either. Margaret Hodge MP suggested abolishing the upper earnings limit on national insurance contributions, equalising the rates of capital gains tax and income tax, or equalising rates of dividend and income tax. But this is politics I suppose; the Tories are punishing those who tend not to vote for them.
So let’s talk about class. The Tories are choosing to make poor people poorer. This is grinding down, not levelling up. Class matters. This tax on jobs shows it.
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