Back in late 2021, the Conservatives announced an increase to national insurance called the Health and Social Care levy. The increase in tax, and break of their election manifesto pledge to not raise taxes, would be a special 1.25 percent tax on taxpayer income ring-fenced for the stated purpose.
The levy came into force in April 2022, but was swiftly removed in November 2022. This then started the precipitous cuts to National insurance which led to the most common form paid by most (Class 1 main rate deducted from PAYE) to fall from 13.25 percent down to the 8 percent we have today. The Chancellor (at the moment) has signalled his intentions to remove NIC altogether if he gets the chance - but the removal will likely be a merging of it with income tax - something that would mean pensioners would end up paying more in tax. So, will the Conservatives be bringing back the Health and Social Care levy?
Well, Labour is considering one. A core party pledge for Starmer's party is to expand the NHS and up its funding. Aside from applying VAT to certain private healthcare services but this wouldn't be enough to fund the millions of employees working for the largest employer in Europe.
The near £50 billion home that would left in the Treasury from a complete removal of NICs would need to filled, so Labour cannot compete with the Tories on that. A non-profit healthcare insurance provider covering the majority of the UK population is one idea being considered. The provider would be funded by increasing general taxes (income tax). The least contested way to do this would be to add a penny on to income tax. Another is to copy the Conservatives and remove NICs altogether, replace it with a dedicated ring-fenced NHS levy, which everyone pays including aforementioned pensioners - as well as investment, property and self employment incomes.
Labour is expected to present its election manifesto on Thursday 13th June, likely a few days before the Conservatives are thought to be publishing their own. The dates could be in doubt as the initial draft of Labour's manifesto has been rebuffed by one of Labour's main supporters, the Unite trade union. They have refused to endorse it on the basis it does not go far enough to support oil and gas workers.
Meanwhile, Sir Ed Davey's Liberal Democrats, who are hoping to quadruple the number of seats they hold this July, and have slated tomorrow (June 10th) as their manifesto release date, will likely be introducing a scheme for free movement in Europe for people under 35.
Next week will be interesting as we finally get to see what changes to could be in store post-July election... as long as the manifesto promises pledged are kept.