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‘Not a penny less’ for the NHS despite reversal of tax hike, says minister

The NHS and social care will “not get a penny less” if the government scraps a multibillion-pound tax hike, according to a finance minister.

Chris Philp offered the guarantee as the House of Commons took steps to end the Social Security increase introduced by former Prime Minister Boris Johnson’s government.

Mr Philp said Chancellor Kwasi Kwarteng would give more details on October 31 on how they will fully fund his programme.

The levy was expected to raise around £13billion a year to fund welfare and tackle the NHS backlog that has built up due to the Covid pandemic.

But Mr Kwarteng confirmed last month that he would reverse the 1.25 percentage point hike, with the reversal taking effect from November 6th.

Noting that part of the levy was used to fund the NHS catch-up scheme, Conservative former Health Secretary Steve Brine asked: “Is that affected by my voting for this repeal today?”

Mr Philp replied: “I can categorically assure him that it is unaffected. The £8bn allocated during the spending review period to catch up the electoral backlog remains unchanged by this measure.

“Social Care funding, I think it was £5.4million over three years, is also unaffected and the rest of the money, as that’s not all, will continue to go to the DHSC (Department of Health and Social Care). available care) to the NHS and social care exactly as previously intended.

“As a result of this action, the repeal or repeal of the Health and Social Care Levy Act 2021, not a penny less will go to social care, to the NHS or particularly to the electoral program that it mentions.”

He added: “We did this so people can keep more of their own money and on November 6th we are urgent to help with the cost of living challenges at this time and cannot delay it any longer. It’s also important, I think, and the chancellor is considering increasing work incentives.”

Conservative former minister James Cartlidge put the revenue lost from the levy’s abolition at £17 billion.

Noting that businesses are concerned about the “lack of stability”, the MP for South Suffolk added: “I think he needs to explain this fundamental issue: £17billion in revenue for this levy to fund social care and the NHS – if this levy goes, does that mean borrowing will fill the gap, or some other tax change? Is it like that will be confirmed on (October 31st)?”

Mr Philp replied: “Yes it is. The esteemed colleague asks quite reasonable questions, but of course you have to consider that in the round, about the totality of public spending.

“And the Chancellor will explain that in detail to this House on October 31st, accompanied by the OBR rating.”

Mr Philp also told MPs: “We will publish this on the 31st. There are a number of things the Chancellor has in mind to ensure that this is fully funded over the medium term, and critically doing this and the other things in the growth plan… to ensure that we get debt over the medium term as part of GDP falls .”

For Labour, Shadow Finance Secretary James Murray welcomed the Conservatives’ rethinking of the levy.

Labor opposed the levy when it was introduced and Mr Murray told the House of Commons: “We applaud the Government finally admitting they were wrong to increase Social Security for workers and businesses amid a cost of living crisis.

“But their broader economic approach is one characterized by skyrocketing borrowing and a discredited trickle-down approach to economic growth.

“Our message to the Prime Minister and the Chancellor is to continue the turnaround. They need to reverse their whole disastrous approach to the economy that the Chancellor laid out just over two weeks ago.”

The bill was approved by the House of Commons on Tuesday night after a unanimous third reading and will face further consideration in the House of Lords at a later date.

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