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Tory revolt over health and care levy quelled but would-be rebels warn of ‘massive damage’

“Ministers saw off a significant Tory rebellion against the creation of a new health and social care tax last night after they were warned that it would do “massive damage” to the Conservative Party’s prospects. The House of Commons approved the creation of a new tax to fund a £12 billion-per-year package for social care despite dozens of Tory MPs either voting against or not registering a vote. The levy, which is the biggest personal tax rise in two decades, was approved by 319 votes to 248 with Labour opposing it. Five Conservative MPs, including Esther McVey, Sir Christopher Chope and Sir John Redwood, voted against the proposal and a further 37 did not vote. The latter figure will include some MPs who had permission not to attend and were paired with members of the opposition.” – The Times

  • Shock for investors as dividend tax is raised too – Daily Mail
  • People may need to take out insurance to avoid having to sell their home, hints Johnson – Daily Telegraph
  • Nearly 300,000 on adult social care ‘waiting lists’ in England – The Guardian

More:

  • Experts say move has permanently shifted the Tories away from ‘low-tax’ – Daily Mail
  • Starmer lambasts Johnson for breaking manifesto pledges on social care – The Guardian

>Yesterday: MPs Etc.: The five Conservative MPs who voted against the Health and Social Care levy

Young graduates to pay 52pc effective tax rate after National Insurance rise

“Hundreds of thousands of graduates face a 42.25 per cent marginal tax rate due to Boris Johnson’s social care raid, as ministers were on Wednesday accused of blighting the financial prospects of the young. The decision to hike National Insurance Contributions (NICs) by 1.25 percentage points means that university leavers will from next year face an ever-steeper tax take. From April 2022, a graduate on more than £27,250 will face paying 13.25 per cent in NICs, 20 per cent in income tax and 9 per cent on their student loan repayments on every pound they earn over this amount. This applies to those who enrolled at university after 2012, when tuition fees were hiked to £9,000. The marginal tax rate then jumps to 52.25 per cent for graduates earning between £50,270 and £100,000.” – Daily Telegraph

  • Over 50,000 Brits will lose jobs because of PM’s £12bn-a-year tax bomb, bosses warn – The Sun
  • Federation of Small Businesses says health policy will also stop new roles from being created – FT
  • Cummings says hike won’t fix waiting lists – Daily Mail
  • Javid: We are still the party of low taxes and Thatcher – The Times

>Yesterday: ToryDiary: Minutes of a Downing Street meeting

Care sector leaders become increasingly concerned about limited resources set out in proposals

“Boris Johnson has won the backing of MPs for his controversial health and social care plan, amid a growing backlash from experts and professionals who warned it will fail to fix the urgent crisis in the care system. Despite the concerns of some Conservative MPs about breaching their manifesto commitment not to increase national insurance contributions (NICs), a motion approving the £12bn a year package passed by 319 votes to 248 on Wednesday evening, a majority of 71. But after care sector leaders had more time to scrutinise the plans, they said they had become increasingly concerned about the meagre resources set out in the proposals – while Labour warned some patients could still end up having to sell their homes in order to pay for their care. “Boris Johnson’s claim that this was about ‘fixing’ social care was misleading because the body of the plan was about NHS recovery,” said Nadra Ahmed, the executive chairman of the National Care Association, which represents independent care operators.” – The Guardian

  • ‘Kick in the teeth’ for care homes as they must pay NI tax but NHS is exempt – Daily Telegraph
  • System will now absorb more than £450 million a day – The Sun
  • Social care will unravel without extra cash now, warn councils – The Times
  • Health and social care will devour 40pc of all public spending by next year – Daily Telegraph

More:

  • NHS hiring dozens of managers on up to £270,000 – The Times
  • Concerns raised over how cash from National Insurance tax rise will be used – Daily Telegraph
  • Health Service chiefs say they need at least another £3.5 billion a year – Daily Mail

>Yesterday: Damian Green MP in Comment: I worry that the spending switch from the NHS to social care may never happen.

Allister Heath: Shameful Tory betrayal guarantees the total victory of socialism in Britain

“This is a seminal moment in British politics, one that could turn out to be as toxic, as poisonous and as destructive as the ERM crisis, the Iraq dossier or the bank bailouts. The damage wreaked by the Government’s juvenile approach to policymaking will be immense and long-lasting, even if it doesn’t immediately register in opinion polls. Promising not to raise or to cut taxes was always the one weapon Labour couldn’t match, the most powerful way to remind voters that the socialists would steal their money; now any such pledge would remind voters that the Tories are utterly untrustworthy. The scale of Johnson’s shift to the Left is staggering: his tax increases combined are the largest in half a century. The Treasury’s claim that it is hiking National Insurance by 1.25 percentage points is sub-Brownite spin: the tax rate on labour income has actually jumped by 2.5 percentage points.” – Daily Telegraph

  • Small businesses are collateral damage in social care tax hike – Nils Pratley, The Guardian
  • Tories are no longer the party of business – Iain Martin, The Times

>Yesterday: Ryan Bourne’s column: The battle for spending control and lower taxes appears to be lost

Ministers braced for ‘catastrophic’ end to welfare uplift

“The UK government is braced for the “catastrophic” impact of the end of the temporary uplift to the main welfare benefit next month, according to an internal Whitehall analysis. The £20-a-week increase to universal credit was introduced at the start of the coronavirus pandemic. The additional funding, which costs £6bn a year, will end on October 6. Chancellor Rishi Sunak is said by colleagues to be opposed to a permanent rise in the welfare bill. Some senior Conservative MPs have voiced their opposition to ending the uplift, including six of the party’s former work and pensions secretaries. A well-placed Whitehall official said the government’s own analysis highlighted the deep impact of reversing the change. “The internal modelling of ending the UC uplift is catastrophic. Homelessness and poverty are likely to rise, and food banks usage will soar. It could be the real disaster of the autumn.”” – FT

  •  Single mum ‘won’t have money to buy kids’ food or school shoes’ after £20 cut – The Sun

‘Council and prison funding’ faces squeeze as Sunak clamps down on Whitehall spending

“Local authorities and prisons could see their budgets cut after Rishi Sunak called on government departments to find five per cent savings in their day to day spending. With the Chancellor due to set out departmental spending for the next three years alongside the Budget on October 27, there are growing fears that existing spending envelopes will be squeezed to pay for further Covid-19 support. In a report published on Wednesday, the Resolution Foundation noted that the Treasury had only signalled a £14billion increase in day-to-day resource spending by 2024-25 compared to its plans set out in March last year. It suggested that most of this spending would be largely swallowed up by the drive to clear NHS backlogs and reform social care, adding that any further Covid-19 related costs would likely have to come from existing envelopes rather from additional borrowing.” – Daily Telegraph

  • Chancellor rules out fresh tax rises in next Budget  – Daily Mail

Comment:

  • Pandemic mutual aid has shown us an altogether different way of doing politics – Rachel Shabi, The Guardian

>Today: Philip Booth in Comment: Beware of the return of inflation

‘Firebreak’ lockdown ‘not considered at this point’ insists Javid

“Sajid Javid has moved to hose down fears a “firebreak” lockdown will be needed this October half-term to crush any new Covid wave. The health secretary insisted he “hasn’t even thought about” bringing back restrictions but didn’t rule out doing so entirely. He was responding to claims from a Sage scientist that the Government is already bracing to reintroduce curbs next month. Boffins fear the return of schools this week could quickly drive a new surge in Covid cases among unvaccinated kids. There are concerns the NHS may struggle to spike with another spike at the same time as clearing the backlog from previous lockdowns. Experts also worry a sustained winter wave combined with the annual flu season will create a Christmas nightmare for the health service. There have been reports ministers are considering extending the October half-term by a week to slow the spread among kids.” – The Sun

  • Zahawi admits Covid passports plan ‘goes against everything I believe in’ – Daily Mail
  • A-Level and GCSE exams could be cancelled next year – The Sun

Scotland:

  • Sturgeon’s vaccine passports plan is an ‘absolute sham’, say Tories – Daily Telegraph

French minister rebuffs Patel crackdown on Channel migrants

“France’s interior minister has issued a comprehensive rebuff to a series of initiatives proposed by UK home secretary Priti Patel to combat cross-Channel clandestine migration. In a letter to Patel seen by the Financial Times, Gérald Darmanin rejected proposals for a joint Franco-British command centre to deal with the problem; described plans for a joint intelligence unit on smuggling gangs as “premature”; rejected the possibility of a bilateral deal on migrant returns; and warned of the dangers of forcing migrant boats back towards the French coast. The letter marked a setback for Patel’s efforts to press France into taking new action to prevent clandestine crossings after several reports on Tuesday indicated she would use a meeting with Darmanin on Wednesday to threaten to withhold £54m that the UK in July agreed to pay France to step up its patrols of its coast. The pair met after a meeting of G7 interior ministers in London as part of the UK’s chairing of the group of leading industrialised economies.” – FT

  • Home Secretary sanctions ‘pushback’ tactics to turn away migrant boats at sea – Daily Telegraph
  • French anger at plan to block Channel migrants from British waters – The Times
  • Tory MPs urge her to send arrivals back to France after influx of boats this week – The Guardian

France:

  • France bans sale of inflatable dinghies from Channel towns in bid to stop migrant crossings – Daily Mail
  • UK should make it ‘harder’ for illegal migrants by changing internal law, says French MP – Daily Express
  • Calais MP warns ‘nothing can stop’ migrants trying to cross the Channel – Daily Mail

Climate change promises dropped from UK-Australia trade agreement

“Ministers have bowed to pressure from Australia to drop binding climate change commitments from a UK-Australian trade deal, a leaked government memo suggests. In a concession condemned by environmental groups the Department for International Trade is understood to have agreed to Australian demands not to include commitments to limit global warming to two degrees under the Paris climate change agreement. Trade lawyers warned last night that the omission would leave the UK with “no remedies” if future Australian governments failed to act to reduce carbon emissions in line with those of the UK. Last month Scott Morrison,the Australian prime minister, refused to commit to targeting net-zero emissions by 2050, a key aim of the Cop26 climate change conference in Glasgow in November. Britain is leading attempts to corral large industrialised countries into further commitments.” – The Times

  • Deal also criticised for allowing import of beef produced to lower standards – The Guardian

More:

  • Britain eyes up £5 billion in new investment deals – Daily Express

News in Brief:

  • Has the time come for a Boomer Bedroom Tax? – Henry Hill, CapX
  • Assetocracy: the inversion of the welfare state – Fraser Nelson, The Spectator
  • Merkel’s reign of failure – Peter Franklin, UnHerd
  • Why the “special relationship” needs to end – Sebastian Milbank, The Critic