UK (Parliament Politics Magazine) – Chancellor Rachel Reeves faces a judicial review over her move to impose National Insurance hikes on care homes, risking further burden on the NHS.
As reported by The Telegraph, care homes are taking legal action against the Chancellor’s National Insurance rise, which could create a £1 billion shortfall in her tight budget.
What do private providers warn about the National Insurance hike?
A judicial review is set to be initiated by private care providers over Ms. Reeves’ decision to impose the full cost of increased employer contributions.
According to care providers, the decision risks destabilising the care sector, forcing the NHS to bear the brunt of the rising demand.
What does Reeves’ tax move mean for the care sector?
Legal action comes after the £26bn NIC increase takes effect on Monday, raising concerns over potential job losses and fears of widespread layoffs and company shutdowns.
According to the Treasury, the move to include care homes in the National Insurance hike was essential to support public service recovery.
Chancellor Rachel Reeves has allocated funds to offset the tax burden on the public sector, but has excluded private companies delivering public services from the compensation plan.
She rejected calls to exempt the care sector from the tax increase, with Labour pushing its MPs to vote down a Lords amendment requesting an exemption.
What did Martin Green say about the impact of the NI hike on care homes?
Private care homes, through Care England, are planning to launch a legal review to secure an exemption from the National Insurance increase.
Prof Martin Green, the group’s chief executive, said, “This Judicial Review marks a critical moment for adult social care. The decision to increase National Insurance Contributions without exempting the care sector is a political signal that social care remains an afterthought.”
He stated, “Successive governments have reinforced a damaging divide between the NHS and social care through policy, legislation and funding,” adding, “But the reality is clear – when social care crumbles, the NHS follows.”
Mr Green raised concerns that government policies had already “pushed providers to the edge,” with consequences “felt by millions.”
He continued, “We are standing up for a sector that has been routinely overlooked, and for the interconnected system of care that underpins the health and wellbeing of this country.”
What did Edward Argar say about Labour’s NIC tax on the NHS?
The Tories, in their findings, stated the money could have been better spent to ease the burden on A&E and frontline healthcare services.
The shadow health secretary Edward Argar, stated, “Labour’s NICs jobs tax has piled more costs onto the NHS, meaning a huge amount of money that should have gone on improving frontline health services for patients, and recruiting more nurses and staff, is simply having to go straight back to the Treasury to pay for these tax hikes.”
He added, “With Labour, what they give with one hand they’re taking away with the other. Their choice to impose this tax hike on the NHS, as well as hospices, social care providers and charities, leaves them having to prioritise paying an increased tax bill, instead of being able to recruit additional frontline staff to care for patients.”
Another analysis by the Tories shows that the National Insurance hike will cost car makers £200 million annually, while also grappling with tough US tariffs.
What did Andrew Griffith say about Labour’s impact on British businesses?
Andrew Griffith, the shadow business secretary, stated, “This week lays bare two of Labour’s worst blunders – failing to fix our US trade relationship and slamming businesses with a punishing jobs tax.”
He continued, “British firms are already on their knees – now Labour delivers a one-two punch that could flatten them. They don’t understand that it’s business, not big government, that drives growth. If they don’t reverse course fast, working people will pay the price.”
What did the government spokesman say about the budget and NHS waiting lists?
A government spokesman stated, “This Government delivered a once-in-a-Parliament Budget that took necessary decisions on tax to stabilise the public finances, including the NHS, which has now seen waiting lists fall five months in a row.”