Increasing national insurance contributions (NICs) to pay for social care would provoke a “very significant backlash” for Boris Johnson, the former chancellor Philip Hammond has said.
Hammond is among a number of senior Conservatives who oppose the planned rise to fund an overhaul of social care, including the former prime minister John Major, the former lord chancellor David Gauke and the former Tory leader Iain Duncan Smith.
Critics in the party and across the Commons have suggested that the rise would be disproportionately loaded on to younger and lower-paid workers, though it would allow the chancellor, Rishi Sunak, to apply the tax across the whole of the UK and include business contributions.
The plan is likely to include an £80,000 lifetime cap on care contributions and an increase in NICs of more than 1% – which would raise about £10bn per year, initially directed at shortening NHS waiting times, which have worsened during the pandemic.
The Treasury has traditionally opposed hypothecated taxes, where tax rises are announced with the revenue earmarked for a specific department, but Sunak is said to be reconciled to branding the rise as an NHS and social care tax.
Sunak is likely to address Tory MPs on Monday as the final details are thrashed out for an announcement expected early this week.
Speaking to Times Radio, Hammond said: “An increase in national insurance contributions is asking young working people, some of whom will never inherit the property, to subsidise older people who’ve accumulated wealth during their lifetime and have a property, and, on any basis, that has got to be wrong.
“I think that if the government were to go ahead with the proposed increase in national insurance contributions, breaking a manifesto commitment in order to underwrite the care costs of older people with homes, I think that would provoke a very significant backlash. I think it would cause the government – the Conservative party – significant damage.”
The peer, who was chancellor between 2016 and 2019, also said he would “vote against” the legislation in the House of Lords if the opportunity arose.
“Economically, politically, expanding the state further in order to protect private assets by asking poor people to subsidise rich people has got to be the wrong thing to do,” he said.
Speaking at the FT Weekend Festival on Saturday, Major called the move “regressive”, while Smith told the Sunday Telegraph that the Conservative party would “end up, if we’re not careful, as a high-tax, high-spend party and the problem not solved.”
Labour has voiced its opposition to an increase to NICs, but has not set out how they would fund reform.
The shadow foreign secretary, Lisa Nandy, said the party supports the “broad principle” of increasing taxes for the wealthy to pay for NHS and social care.
The Labour frontbencher said the prime minister would “load the entirety of the cost of social care on to supermarket workers [and] delivery drivers, who are already suffering with high childcare costs, high housing costs and who kept us going through the pandemic”.
“I think that’s a really difficult ask of a group of people who haven’t done well under this Conservative government over the last 11 years,” she told Sky’s Trevor Phillips on Sunday.
