Image source, Gordon Brooks

Betty, 88, has dementia and has lived in a care home since December 2016. She has sold her house to cover the tens of thousands of pounds needed to pay for her care.

But as she is already in a home, she will not benefit from the government's plans to cap costs at £86,000. It will come into force in England from October 2023, but it will not be backdated.

Betty's son, Gordon Brooks, from Gosport, Hampshire, describes his mother's £4,300-a-month fees as "horrendous". To pay for them, her house was sold and the proceeds were invested in shares.

But Gordon fears the money set aside to pay for her care will now be hit by further taxation.

As part of the proposals, shareholders will also have to pay another 1.25% of the profits they make in tax.

"We invested it to gain more and make it last longer but if the investment is taxed further it diminishes it, so it's a double whammy," he said.

Read more here.

Image source, Getty Images

Increasing National Insurance rates for employers, sole traders and employees could cause 50,000 more people to be left out of work, according to the Federation of Small Businesses (FSB).

It warns the annual employer National Insurance contribution for a business with five employees paid a £31,000 average salary would rise to £16,500.

The FSB has estimated the total cost of the rise to small business would be £5.7bn.

FSB National Chair Mike Cherry said: “The government’s regressive jobs tax hike will put jobs at risk, stifle start-ups and prevent new jobs from being created.

“It could mean 50,000 more people out of work after it takes effect in April. That means 50,000 livelihoods harmed – 50,000 people who would otherwise be at work in our economy.

“Combined with other rising employment costs – and firms having to make tough decisions about the futures of those who have been supported by the job retention scheme – that 50,000 figure could easily end up being a good deal greater."

Conservative Paul Bristow, who sits on the Health and Social Care Select Committee, says he has been hearing from people who are stuck on waiting lists pending treatment.

People need to understand that if we are going to face up to the "enormous challenge" in the NHS then it needs to be paid for he argues.

He says he supports the PM's plan and will be "marching through the lobby" to support the government this evening.

The backlogs won't be brought under control unless issues of staffing and innovation are addressed, he says.

Now is the time for the NHS to grasp new ways of doing things, he argues, and this new tax needs to be accompanied by reform.

Simon Browning
Business reporter

Image source, Getty Images

The government is planning to overhaul the Covid travel traffic-light system with changes set to be announced within weeks, the BBC has been told.

Green and amber categories could be removed and replaced with a system that will allow fully vaccinated travellers to go to countries with similarly high levels of vaccination as the UK, without the need for quarantine.

Sources said the red category was set to remain, meaning travellers returning from a red country will still have to quarantine in a government-approved hotel.

The Daily Telegraph first reported that the government was planning to scrap the traffic-light system.

The government declined to comment on the plans but said: “Our international travel policy is guided by one overwhelming priority - protecting public health.

"The next formal checkpoint review will take place by 1 October 2021.”

The government has asked senior travel industry leaders to make proposals for international travel to replace the current system, which was devised by ministers to limit the transmission of Covid from overseas and stop new variants coming into the country.

One of the key demands from travel industry bosses is the removal of Covid testing as a requirement when re-entering the UK, which they say is a very expensive barrier to customers booking.

Labour's Dame Angela Eagle says the 1.25% tax proposal is a "budget in all but name" which was sprung on the House with minimal warning, leaked to newspapers over the weekend but with no details to MPs.

She says the government has "ushered in the largest tax rise in generations" which "continues the shift in tax liabilities away from those who make their income by owning assets to those who work" and "leaves wealth largely unscathed".

She says: "It will exacerbate the unfairness and inequality which scars our society and was highlighted by the Covid pandemic's unequal effect on the poor and the vulnerable."

The PM's announcements are totally inadequate for the scale of the task - all those who work in care have got is a tax rise and no pay rise, she says.

Conservative Jake Berry praises the government for grasping the nettle but says he doesn't believe using national insurance is the right way to reform social care.

He says low earners will be disproportionately affected and in his constituency, where property prices are low, people will have had to pay the equivalent of 50% of their property's value in care fees before they hit the £86,000 cap.

It would be "brilliant" if ministers could look at the regional disparities in house prices, he says.

National Insurance is effectively a tax on jobs, he argues, when a "cocktail of funding" is necessary to tackle the issue..

It is fundamentally "un-Conservative", he says, and the way to fund public services is to grow the economy.

"Throwing other people's money down a bottomless pit doesn't become a good idea when you put NHS in front of it."

He says he won't support the government in the vote tonight.

Alison Thewliss for the SNP says the prime minister is proposing that Scottish people's National Insurance contributions are used to fund England-only policies.

She says: "As things stand Scots, Welsh and Northern Irish stand to be taxed twice - firstly for the health and social care system that they actually receive by their own government and then again for the NHS and health and social care in England for services that they don't have access to."

She says the UK government is proposing taxing Scottish people to pay for their "chaotic mishandling of health and social care".

She says the government is "undermining our recovery by putting a tax on employers, punishing working people on low pay by cutting their universal credit and hiking taxes on their meagre wages."

She says: "The people of Scotland must have the choice to take the fastest road out of here to independence."

The charity Dementia UK says it needs "further clarity on what the care and support system should look like to allow people with dementia and their families to live with comfort and dignity".

Paul Edwards, director of clinical services says: "Care services and families need immediate funding and support. The health and social care systems should be working together so that no person with dementia is unnecessarily admitted into care or hospital; this brings distress to the wider family and pressures on the already overworked health and social care staff.

"We need a health and social care system which works for every family with dementia. Publication of the White Paper outlining how this integration is to be achieved needs to be brought forward at the earliest opportunity.”

Alison Thewliss, the SNP's Treasury spokesperson, says the party is clear that "raising National Insurance is a blunt tool to fund social care likely to disproportionately hit young people and lower earners".

She says the SNP will propose an amendment to examine the impact of the tax by age, income, wealth and on place of residence.

"It's the people who can least afford this and who have worked hardest through this pandemic that this government should be thanking - not taxing," she says.

She called for more analysis of the policy before the government goes ahead with it.

Mixed reactions to plan to reform systempublished at 14:33 British Summer Time 8 September 2021

14:33 BST 8 September 2021

Alison Holt
Social affairs correspondent

From those who work in, commission services or have their lives shaped by the care they get, the reactions to the prime minister's plans to reform this crumbling system have been mixed.

The fact there is a plan is welcome because it means there is something to work with, but charities, councils and the people who run home care and care homes are worried by the lack of a vision of what a future care system should be trying to achieve.

And there is even more concern about the money.

One senior local Conservative politician described the mood in local government to me in one word - "despair".

Councils are facing a significant increase in people asking for help already, but there is no extra money now.

There's scepticism about whether the funding given to the NHS in the short term will actually be released to social care in three years' time.

The politician said the authority feared that as the new levy comes in, their costs will go up as they expect more people will be eligible for council support (with more generous means-testing) and wage bills will rise for them and care providers.

They worry that people believe the social care system is fixed now, but the situation may have just got worse.

Mel Stride, Conservative MP and chair of the Treasury Select Committee, praises the government's "courage" and calls the proposals "sensible" and "realistic".

He adds that "no party wishes to break manifesto promises" but accuses Labour of trying to pretend the coronavirus pandemic and the "huge contraction of the economy" never happened.

He argues that the only other options for funding social care would have been either to cut from other areas or borrow more money. He says tax rises are the better alternative.

Shadow chancellor Rachel Reeves says Labour understands how hard people work for their wages and is calling for the government to amend its plan to bring in a new tax of 1.25% to pay for health and social care.

She says: "The government is rushing this through without publishing proper analysis on the impact on jobs, on different parts of the country on different incomes.. That's why we've put forward what we can - an amendment calling for an assessment on jobs."

These are still precarious times with many businesses not yet back to full capacity and some unsure as to how they will repay Covid loans, she adds.

"This is a tax on jobs, it is a tax on the economic recovery and we will not support it," Reeves says.

Back in the House of Commons, Financial Secretary to the Treasury Jesse Norman hits back at Labour criticism by accusing the party of having "absolutely nothing to offer on this topic".

He says the government's cap on care costs recognises "higher care costs in different parts of the country".

He adds that means testing support for care costs "will have more impact in lower wealth regions" such as the North East.

After a period of confusion over what Labour would do ahead of tonight's vote over the new health and social care tax plans, a spokesman for leader Sir Keir Starmer confirms the party will vote against the hike.

"The reason why we're voting against the proposals is because they don't fix social care, they won't clear the backlog and it's an unfair tax rise," the spokesman explains.

He rejected the suggestion it would leave Labour vulnerable to claims that it was voting against £36bn for health and social care.

"No, for two reasons: when it comes to what people will experience, by the next general election the government - as Boris Johnson admitted when Keir Starmer asked him today - will not have cleared the backlog when it comes to the NHS.

"And the guarantee that was in the manifesto that you won't have to pay for care wasn't committed to by the prime minister.

"Those are the two key tests that there are as to whether this is something that should be supported and on that basis we are very clear that it is not something that we will be supporting tonight."

Image source, Getty Images

Following suggestions from the Resolution Foundation think tank that social care plans will benefit those in the South more than the North of England, Downing Street said the issues people face are seen across the country.

The prime minister's official spokesman said: "Diseases like dementia affect families up and down the country. "This is an approach that provides certainty for people up and down the country, it is an approach which is progressive, which sees those who have more pay more."

The foundation, which focuses on people with low incomes, wrote in an analysis of the policy that the £86,000 cap on care costs "will be of most benefit to those in the South of England".

"Not only will they see a greater share of their total assets protected by the cap, higher care costs mean they are also more likely to reach the cap and then receive state support," it said.

But it added that "the expanded means test will do relatively more to curtail pensioners’ spending on care costs in lower-wealth parts of the UK like the North East, where only 29% of individuals aged 70+ have sufficient assets that they might receive no state support, compared to almost half in the South West".

Labour's Dame Angela Eagle says the prime minister, when he signed the guarantee on the tax lock in the general election campaign of 2019, also told the country he had an "oven-ready plan" for reforming social care prior to the pandemic.

"So he can't have signed the tax lock can he as well as having a plan for social care if one of those things wasn't exactly true."

Shadow chancellor Rachel Reeves responds for Labour and attacks the government for breaking its manifesto promise not to raise tax.

She tells MPs that the country is "littered with broken Tory promises" and says "guarantees from the prime minister count for absolutely nothing".

She argues that under the Conservatives' plan many people will still have to sell their home to pay for their care.

The debate is opened by Jesse Norman, financial secretary to the treasury.

He says: "Supporting health and social care in the aftermath of a pandemic and amid the worst health crisis for 100 years, laying the long-term basis for social care for generations to come, there are few if any greater peace time challenges for any government."

MPs are preparing to debate a plan to bring in a new 1.25% tax to pay for health and social care through National Insurance.

Before they do - here's a recap on what we know about the idea so far.

• The new levy would begin next April and aims to raise almost £36bn over three years benefiting all nations of the UK
• Most of this will go on helping the NHS deal with the backlog caused by the pandemic
• PM Boris Johnson says it will help deal with "catastrophic" care costs
• He accepted the tax broke a Tory manifesto pledge, but says the "global pandemic was in no-one's manifesto".
• But Labour's Sir Keir Starmer says it imposes an unfair tax on working people

• MPs will vote at 19:00 BST on whether to introduce the tax

The debate on whether to approve a new 1.25% tax to fund health and social care is about to begin, stay with us for updates.