Tag: tax

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Sunak vows 20% cut to income tax  

Sunak said the plan would mark the biggest income tax cut since the time of Margaret Thatcher…reports Asian Lite News

Rishi Sunak, trailing in the race to become Britain’s next prime minister, has vowed to slash the basic rate of income tax by 20 per cent by 2029 in a potentially make-or-break throw of the dice by the former finance minister.

Sunak, once seen as the favourite to replace Boris Johnson when he helped to steer the economy through the ravages of the Covid-19 pandemic, has struggled against his rival, Foreign Secretary Liz Truss, who has pledged immediate tax cuts.

The bruising race between Sunak and Truss to become Britain’s next prime minister stepped up a gear on Monday (Aug 1) with the mailing out of ballots to Conservative party members.

Sunak said he remained focused on tackling inflation but once that was achieved he would follow through on an already-announced plan to take 1 pence (S$16.90) off income tax in 2024, and then take a further 3 pence off by the end of the next parliament, likely around 2029.

The two pledges would take income tax from 20p to 16p.

Sunak said the plan would mark the biggest income tax cut since the time of Margaret Thatcher.

“It is a radical vision but it is also a realistic one,” he said in a statement on Sunday (July 31).

Britain’s hunt for a new prime minister was triggered on July 7 when Johnson was forced to announce his resignation following months of scandal. Conservative lawmakers have whittled a field of candidates down to Truss and Sunak, with an announcement of the decision by party members due on Sept. 5.

With inflation surging to a 40-year high of 9.4 per cent and growth stalling, the economy dominated early stages of the contest.

Sunak, who steered the UK economy through the pandemic, said Truss’ plans were “fantasy economics” that would fuel inflation and heap further strain on public finances struggling to recover from the pandemic.

Sunak said each penny cut from the rate of income tax would cost around 6 billion pounds (S$10.1 billion) a year, a figure that he said would still allow Britain’s debt-to-GDP ratio to fall, if the economy grows in line with official forecasts.

Truss has argued that tax cuts are needed now to give the economy a shot in the arm. A recent poll by YouGov showed Truss held a 24-point lead over Sunak among Conservative Party members.

Trailing in polls with the all-important party members, Sunak last week performed a significant U-turn by announcing a plan to scrap VAT on energy bills.

He also promised grassroot Tories over the weekend that he would stop “woke nonsense” and “end the brainwashing” if he becomes prime minister, although added he has “zero interest in fighting a so-called culture war”.

The 42-year-old also unveiled plans to revive the country’s ailing town centres.

“I want to slash the number of empty shops by 2025 and make sure that they are turned into thriving local assets,” he said.

“I will also crack down on anti-social behaviour, graffiti and littering – through extended police powers and increased fines.”

ALSO READ-Sunak pledges major crackdown on sex offenders

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-Top News Sri Lanka

Low tax regime another curse to Lankan economy

Sri Lanka’s economic outlook remains vulnerable to unprecedented inflationary pressures as massive debt overhangs have significant adverse spillover effects on the economy…reports Asian Lite News

Due to the introduction of a low tax regime in 2019 followed by the impact of COVID-19 on the country’s revenue, Sri Lanka’s economic outlook continues to be in a vulnerable state as the Island nation is facing the worst economic meltdown in its history.

Sri Lanka introduced a low tax regime in late 2019 and the reforms included the reduction of tax rates of Value Added Tax (VAT), Personal Income Tax (PIT), and Corporate Income Tax (CIT), and narrowing tax bases of VAT and PIT, while introducing a plethora of tax incentives, such as tax exemptions for agriculture and Information Technology (IT) and enabled services, tax deductions and tax holidays resulting in an annual loss of around LKR 600 billion – 800 billion in tax revenue to state coffers, stated the Press Release.

The low tax regime, the impact of the COVID-19 pandemic on revenue mobilization, together with the pandemic relief measures, widened the budget deficit significantly to 11.1 per cent of GDP in 2020 and 12.2 per cent of GDP in 2021 from 9.6 per cent of GDP in 2019 and led to an increase in the government debt to GDP ratio to 100.6 per cent in 2020 and 104.6 per cent in 2021 from 86.9 per cent in 2019.

Therefore, these reforms are now being looked at as policies that led to a significant loss of government revenue, partly due to the spread of the COVID-19 pandemic in 2020/2021 and related developments, which affected the revenue generation process, ultimately resulting in the lowest revenue to GDP ratio in the region.

According to the official report, the fiscal imbalance has significant adverse spillover effects on the economy. Sri Lanka’s economic outlook remains vulnerable to unprecedented inflationary pressures as massive debt overhangs have significant adverse spillover effects on the economy.

The loss of access to international markets and the relatively low amount of other foreign exchange inflows to the government have created substantial issues in financing the government budget deficit.

In 2020 and 2021, the entire budget deficit was financed through domestic sources as there were net repayments to the foreign sources. Of the domestic sources to finance the budget deficit, the majority was obtained from the banking sources, particularly from the Central Bank of Sri Lanka. A continuous significant amount of Central Bank monetary financing has adversely affected the economy, particularly with the significant pressure on the inflation and the exchange rate.

At present, the situation has aggravated to a very critical level where the General Treasury has to increasingly obtain Central Bank financing to make the government expenditures, including a substantial part of interest, salaries and wages, pensions and Samurdhi payments etc. This is clearly unsustainable and hence the implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as expenditure rationalization measures in 2022 and beyond to ensure macroeconomic stability to support the medium to long-term economic growth objectives of the country, the press release said. (ANI)

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-Top News UK News

Taxing times for Sunak

In a letter to PM Boris Johnson published, Sunak said he wants a probe by the government’s adviser on ministerial standards to help ensure the public “retain confidence in the answers they are given.”

Rishi Sunak asked for a formal review into whether he properly declared his financial interests, as the UK Chancellor of the Exchequer tries to defuse a row over his tax affairs that threatens to derail his career.

In a letter to Prime Minister Boris Johnson published late Sunday, Sunak said he wants a probe by the government’s adviser on ministerial standards to help ensure the public “retain confidence in the answers they are given.”

The move comes as he faces intense pressure to lay out the details of his and his family’s financial arrangements. It emerged last week his millionaire wife, Akshata Murthy, holds non-domicile status and was not paying UK taxes on her overseas income and the chancellor held a US green card — proof of permanent residency — which he only gave up more than a year and a half into his current role.

The opposition Labour Party said it wrote to Johnson and the standards adviser earlier Sunday demanding a probe into whether ministerial rules had been broken. “A fish rots from the head, Labour’s deputy leader Angela Rayner said in an emailed statement. “It is the prime minister’s responsibility to bring this debacle to a close by ensuring that standards are upheld across his cabinet.”

The furore compounds the problems facing Sunak, whose popularity has slumped since he was accused of not doing enough to help Britons facing a record slump in living standards. In a mini-budget last month, he went ahead with a levy increase to fund health care and rejected calls to boost welfare payments.

The country’s tax burden now at its highest level since the 1950s, so the backlash when it was revealed Murthy holds so-called non-domicile status — allowing her to not pay British tax on overseas income — was inevitable.

Though she said late Friday she would no longer take advantage of that rule and would now pay UK taxes on her foreign earnings, it is unlikely the scrutiny will fade. Together with the revelation about Sunak’s green card, the reports have fueled the perception the family is not committed to Britain.

By requesting an inquiry, Sunak wants the findings to help draw a line under the issue. But it also carries the risk of keeping the focus on his financial arrangements. Labour is asking if the chancellor has taken advantage of tax havens and demanding “full transparency” on where the family pays taxes.

“I have always followed the rules and I hope such a review will provide further clarity,” Sunak said on Twitter where he posted the letter to Johnson.

Outstanding job

PM Johnson has so far defended Sunak, telling reporters on Friday the chancellor is doing an “outstanding job” — though he also said he had not been aware of Murthy’s tax status.

The fallout illustrates the dramatic turnaround in their fortunes. Just weeks ago Johnson was clinging to power, with members of his Conservative Party threatening to oust him over allegations of rule-breaking parties during the pandemic. At the time, Mr Sunak was seen as Johnson’s most likely successor.

Boris Johnson hosts the Prime Ministers Business Council alongside the Rishi Sunak, Chancellor of the Exchequer and leading business figures in 10 Downing Street. Picture by Simon Dawson / No 10 Downing Street

That was before Russia’s invasion of Ukraine. Since then, Johnson’s personal approval ratings have recovered and several Tory MPs have said an international crisis is not the time for a leadership change.

Now the question is whether PM Johnson keeps Sunak in the role, as some Tories speculate about a change in chancellor during a ministerial shuffle in the coming months.

Different views

The country’s two most powerful politicians have very different economic approaches, with Johnson more inclined toward spending on big infrastructure projects and the chancellor — the tax rises on his watch not withstanding — styling himself as a low-tax, fiscal conservative.

Sunak’s slumping popularity helps solidify Johnson’s position by removing an obvious challenger, but it also carries big risks. The reports about the chancellor’s wealth and his family’s tax affairs play into Labour’s regular attack on the Tories, that “it is one rule for them and another for the rest of us.”

Local elections in London and across much of the UK on May 5, therefore, loom large for PM Johnson, Sunak and the Tories — especially if the cost-of-living crisis hits support for the party.

“Today I have written to the Prime Minister asking him to refer my ministerial declarations to the Independent Advisor on Ministers’ Interests. I have always followed the rules and I hope such a review will provide further clarity,” he tweeted.

ALSO READ-Rishi Sunak demands probe over wife Akshata Murty’s tax leak

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UK News

One in five top bankers gained from ‘non-dom’ tax status

Pound (Wikipedia)

The top three nationalities for non-doms in 2018 were the United States, India and France, and 93% were born outside the United Kingdom…reports Asian Lite News

More than one in five bankers earning at least £125,000 pounds a year in Britain have benefited from non-domiciled tax status, as have many high-paid workers in other sectors, a study showed on Thursday.

Non-dom status – which exempts more than 75,000 mostly foreign nationals in Britain from tax on overseas income – has raised questions about the fairness of the tax system, as it overwhelmingly benefits the very rich.

The research from the University of Warwick and the London School of Economics showed that just 0.3% of British taxpayers earning under 100,000 pounds in 2018 had claimed non-dom status at some point in the past 20 years. By contrast, 27% of taxpayers earning 1-2 million pounds had done so.

Two in five top earners in the oil industry, one in four car industry executives and one in six top-earning sports and film stars also benefited from the status.

Non-dom status is only available to British residents who claim that their ‘domicile’ – the centre of their personal and financial interests – is outside the United Kingdom.

People walk on Westminster Bridge in the mist in London, Britian. (Photo by Stephen ChungXinhuaIANS)

The top three nationalities for non-doms in 2018 were the United States, India and France, and 93% were born outside the United Kingdom.

Non-doms were most likely to live in central London and around 80% of them reported their main source of income was from employment or a pension, while 20% lived off investment income or other overseas earnings.

“A significant minority of non-doms do appear to be the ‘rentier rich’,” the report said.

The research is based on anonymised individual tax data from 1997 to 2018 provided by Britain’s revenue office.

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-Top News London News UK News

Sunak resists rise in defence spending

Chancellor of the Exchequer Rishi Sunak on his way to brief members of the cabinet at the weekly Cabinet meeting inside No10 Downing Street, on the day the Chancellor delivers his summer statement to the House during the coronavirus. Picture by Andrew Parsons / No 10 Downing Street

The chancellor said he had already allocated a £24bn cash increase for military spending over four years, while allies said his spring statement was not a moment to announce more, reports Asian Lite News

Rishi Sunak is resisting pressure for a big increase in defence spending this week in the wake of Russia’s invasion of Ukraine, as he attempts to free up money for cuts in fuel duty and taxes to ease the crisis in the cost of living.

Sunak has told ministers he is turning off the spending taps and they will have to make do with the money they have got, ordering a search for £5.5bn of efficiency savings.

He has vowed to cut taxes but has warned that reductions must be funded by controlling public spending. Sunak’s allies believe the defence and health budgets are particularly badly managed.

The chancellor said on Sunday he had already allocated a £24bn cash increase for military spending over four years, while allies said his spring statement on Wednesday was not a moment to announce more.

“This is not a spending review,” said one ally of the chancellor. Sunak told the Mail on Sunday: “Let’s not be spending any more money — let’s make sure the money we’re spending is spent really well.”

Sunak argued that he increased the military budget before the Russian invasion of Ukraine, telling the BBC’s Sunday Morning programme that was “a good thing”.

He insisted the government’s integrated defence and foreign policy review last year recognised the Russian threat, although critics claim the document was overly preoccupied with a “tilt to the Asia-Pacific”.

With Sunak attempting to hold down public spending, he is expected to use his spring statement to start mitigating cost-of-living pressures, as households confront soaring energy prices and rising inflation.

The chancellor said he would help families struggling with the cost of living when he presents updated economic forecasts on Wednesday, saying: “Where we can make a difference, of course we will.”

Sunak admitted that energy prices were “the number one priority” for people at the moment and that, as MP for the rural Yorkshire constituency of Richmond, he knew fuel prices were “a big issue”.

“It’s something that’s challenging to families, I get that,” he said, hinting at fuel duty cuts. He said his policy was to take “targeted action where we think there is most acute pressure”.

Sunak is under pressure to go further and cut taxes more generally, and said they would come down “over time”. He blamed the pandemic for the fact Britain has its highest overall tax burden since the 1950s.

But he refused to say whether he would cut income tax or change the threshold for the payment of national insurance in the spring statement, as many Tory MPs would like.

The chancellor said his priority was to cut taxes over the rest of the parliament, after analysis showed he had raised taxes more in two years than Gordon Brown, former Labour chancellor, did in a decade.

Sunak insisted that Brown had not had to contend with a pandemic, but his credibility with Conservative MPs now rests on his ability to control spending and push down taxes before the election.

The Labour party is calling for a reversal of the £12bn national insurance rise, which Sunak insisted would go ahead in April to help fund the NHS and deal with a treatment backlog. Labour also wants a windfall tax on North Sea oil companies.

Rachel Reeves, shadow chancellor, said it was about time Sunak lived up to his rhetoric about wanting to cut taxes and said Labour would not “stand in the way” if he decided to cut fuel duty by 5p a litre.

ALSO READ-Sunak calls on G7 to go faster in support of Ukraine

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-Top News Asia News

Pak farmers announce protest against agri taxes

The protest is being called ‘Speechless Animals and Helpless Farmers’ by the farmers association. The PKI has vowed to take the protest to other districts of the province and later move towards the federal capital….reports Asian Lite News

Farmers in Pakistan have announced to take to streets next week as the Imran Khan government imposed taxes on the agriculture sector, rising prices of fertilisers and other farm inputs, reported local media.

Pakistan Kissan Ittehad (PKI) activists, along with their children, livestock and poultry will protest on February 14 in Multan against the imposition of taxes on the agriculture sector, costlier fertiliser and other farm inputs, reported Dawn.

The protest is being called ‘Speechless Animals and Helpless Farmers’ by the farmers association. The PKI has vowed to take the protest to other districts of the province and later move towards the federal capital.

Pakistan Prime Minister Imran Khan (India Narrative_IANS)

PKI chief Khalid Mahmood Khokhar said that the farmer next week on Monday will be mourning to save the future of their children, coming generations and the economy of their beloved motherland.

Khokhar also said that the representatives of the farmers held a series of meetings with the government authorities to protest a 17 per cent general sales tax on farm produce.

They also opposed 3 per cent GST on seeds, high rates of electricity billing for tubewells, manifold increase in diesel and fertiliser prices in the wake of Supplementary Finance Bill 2021 but to no avail as they were told the steps were being taken on IMF directions.

Farmers argue that as they have never benefited from the loans and borrowings by the government from the IMF, why they are forced to pay high taxes on seeds, electricity and diesel as per demands of international money lenders, according to Dawn. (ANI)

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Business India News

No tax relief for middle-class, people disappointed

R.C. Joshi, a senior member of the family, says that he is a retired army officer and was expecting some exemption in the tax slab for senior citizens but this year’s Budget did not provide any tax exemption…reports Asian Lite News

A middle-class family living in east Delhi’s Laxmi Nagar says that there was nothing special in this year’s Union Budget failing to provide any tax relief for household kitchens, presented by Union Finance Minister Nirmala Sitharaman on Tuesday.

The middle class says that there was fear among the majority of the people that the Union government may increase direct taxes which ultimately did not happen.

The family says that Tuesday’s Budget was a “normal one” but said that a lot more could have been done by the Union government.

Saroj, a housewife, says that there is no reduction in cooking gas, oil and vegetables prices. The prices of pulses and foodgrains have not been reduced so being a housewife, she is not satisfied with this year’s budget.

R.C. Joshi, a senior member of the family, says that he is a retired army officer and was expecting some exemption in the tax slab for senior citizens but this year’s Budget did not provide any tax exemption.

He said, “The economy will be boosted from this year’s Budget, but how many more years will it take to create new jobs is difficult to comment at present. Nothing has been done for the limit on any one income tax slab. If the common man does not have enough savings, then how will he/she buy anything. The purchasing power of people will get automatically reduced. Emphasis has been laid on boosting infrastructure such as construction of 25,000-km road. I can’t comment how long will the common man avail its benefit. No concrete measures have been taken by the Union government for those people who have lost their jobs or whose salaries have been slashed during the Covid-19 infection.”

Radhika, another member of the same family, said that giving tax concession to an Anganwadi woman from a middle-class family will not yield any benefits. “There should be a reduction in the prices of ration and cooking gas in households, then only some respite will be available. Housewives had high expectations from the Modi government which seem to be unfulfilled by this budget.”

Another family member, Pooja, says that there is some tax relief announced in the budget such as clothes becoming cheaper, prices of items like shoes coming down but the prices of vegetables, grocery etc used in daily life need to becomes cheaper, only then we would have appreciated the Budget.

Achin, a youth from the same family, says, “There is nothing much for the youth in the Budget by lowering mobile phone prices. I run a stationery shop where all items have become expensive. The tax levied on stationery items has increased a lot, they should have been reduced. The Union government should have announced some tax relief. The ability to avail loans will only increase for the lower-income families without much relief for the middle class.”

Diksha, a chartered accountant student, says that the budget is only aimed at economic and industrial growth. “Nothing happens for the middle class anyways. Nothing has become cheaper nor expensive either, this is the special takeaway of this budget. According to me, the taxes have not been hiked, though prices of items like clothes, slippers, shoes etc have become cheaper which bodes well for the country’s economy moving ahead. All these daily use commodities are extremely important for a family. This is an average budget and if implemented properly, this could lead to economic growth. This budget is good for the next 25 years.”

There have been no changes announced in the income tax slabs for the Budget 2022-23.

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-Top News UK News

UK shelves proposals to raise capital gains tax

In contrast, the government accepted five recommendations made by the OTS in its second report on CGT — which covered much more narrow, technical issues…reports Asian Lite News.

The government has shelved proposals to raise capital gains tax rates to align them with income tax and slash the levy’s annual allowance, moves that would have hit the wealthy.

In the past year, the Office of Tax Simplification (OTS), a statutory body, has published two reports into CGT at the behest of chancellor Rishi Sunak and concluded that the government should consider reforming it.

But on Tuesday, in a letter to the OTS, the Treasury passed over the suggestions made by the group in its first report on CGT, which included the proposal to consider raising the rates and lowering the allowance — signalling that the recommendations are unlikely to be implemented any time soon.

“These reforms would involve a number of wider policy trade-offs and so careful thought must be given to the impact that they would have on taxpayers, as well as any additional administrative burden on HMRC,” wrote Lucy Frazer, financial secretary to the Treasury, referring to the tax authority. “The government will continue to keep the tax system under constant review to ensure it is simple and efficient.”

The first £12,300 of capital gains each year is exempt from tax. CGT is charged at 10 per cent for basic rate taxpayers and 20 per cent for higher and additional rate taxpayers, or 18 per cent and 28 per cent respectively on residential property. In contrast, income tax is charged at a basic rate of 20 per cent, rising to 40 per cent and 45 per cent for higher and additional taxpayers, Financial Times reported.

In contrast, the government accepted five recommendations made by the OTS in its second report on CGT — which covered much more narrow, technical issues. These included an agreement to extend the time divorcing and separating couples have to transfer assets between them without paying the levy. Married couples and civil partners can transfer assets without any CGT being liable, but people getting divorced can only do so up until the end of the tax year in which they separated.

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-Top News Business UK News

UK Parliament backs Johnson’s tax hike plan

The vote win provides some respite for Johnson after his government came in for heavy criticism over its handling of Afghanistan, reports Asian Lite News

Lawmakers backed Prime Minister Boris Johnson’s plan to raise taxes in a parliamentary vote on Wednesday, clearing the way to direct more funds into the country’s creaking health and social care system.

Johnson had angered some members of his governing party by breaking election promises not to increase taxes, and only set out the full plan on Tuesday. Despite the backlash his party, with a working majority of 83, won the vote 319 to 248.

Under the proposal, the rate of National Insurance payroll taxes paid by both workers and employers will rise by 1.25 percentage points, with the same increase also applied to the tax on shareholder dividends.

It is expected to raise 12 billion pounds ($17 billion) a year.

The extra funds will go into Britain’s social care system, where costs are projected to double as the population ages over the next two decades.

They will also be used to tackle waiting lists within the state-run National Health Service after it directed its resources onto COVID-19 during the pandemic, leaving millions of people waiting months for treatment.

Politicians have tried for years to find a way to pay for social care, though successive Conservative and Labour prime ministers have ducked the issue because they feared it would anger voters and their parties.

For Johnson, tackling the problem offers a possible way to broaden his domestic legacy, although critics have said his plan does not go far enough. They say it will also unfairly increase the tax burden on working-age British people.

The vote win does, however, provide some respite for Johnson after his government came in for heavy criticism over its handling of Afghanistan. Five Conservative lawmakers voted against the plan while others abstained.

Earlier, Johnson had said that his plan – which includes capping care costs in England at £86,000 – was broad-based and progressive according to the economic think tank the Institute for Fiscal Studies.

“The plan deals – after decades – with catastrophic costs faced by millions of people, the risks that they face, the threat they could face the loss of their homes, their possessions, their ability to pass on anything to their children,” he said.

He added it was the first time the state had stepped in to deal with the threat of such costs and meant insurance companies would now be able to help protect people against the costs of care.

The key proposals of the new plan are:

  • People will no longer pay more than £86,000 in care costs – not including food and accommodation – over their lifetime, from October 2023
  • Once people have reached this cap, ongoing costs for personal care will be paid for by local authorities
  • Those with between £20,000 and £100,000 in assets will get means-tested help towards costs from their local council
  • Those with less than £20,000 will not have to pay towards care costs from their assets at all, but might have to contribute from their income
  • The tax will be raised through a 1.25 percentage point rise in National Insurance – which working people and their employers pay to ensure benefits like the state pension – from next April
  • This will cost £255 a year for someone earning £30,000, and £505 a year for someone on £50,000, the government says.

ALSO READ-MPs to vote on Johnson’s manifesto-breaking tax rise

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-Top News UK News

MPs to vote on Johnson’s manifesto-breaking tax rise

Prime Minister Boris Johnson said it will raise £12bn a year which will be used to tackle the health backlog caused by the Covid pandemic and boost social care, reports Asian Lite Newsdesk

The House of Commons will vote later on whether to raise National Insurance to fund health and social care, a day after Prime Minister Boris Johnson unveiled the manifesto-breaking historic reform plans.

Johnson said it will raise £12bn a year which will be used to tackle the health backlog caused by the Covid pandemic and boost social care, the BBC reported.

He described the plan, which includes capping care costs in England at £86,000, as “reasonable and fair”.

From April 2022, the government will introduce a new, nation-wide 1.25 per cent Health and Social Care Levy, ringfenced for health and social care. This will be based on National Insurance contributions (NICs) and from 2023 will be legislatively separate, the government has announced.

To ensure everyone contributes fairly, all working adults, including those over the state pension age, will pay the levy and the rates of dividend tax will also increase by 1.25% to help fund this package.

Sir Keir Starmer

Labour leader Sir Keir Starmer described the plan is a “sticking plaster”, while leaders in social care have warned the plan will not address current problems, BBC reported.

The government is investing £36 billion will be invested in the health and care system over the next three years, to ensure the long term resource.

Speaking in the House, Prime Minister, Boris Johnson said: “You can’t fix the Covid backlogs without giving the NHS the money it needs. You can’t fix the NHS without fixing social care, you can’t fix social care without removing the fear of losing everything to pay for it, and you can’t fix health and social care without long-term reform. The plan I am setting out today will fix all of these problems together.”

The pandemic put unprecedented pressure on the NHS. The number of patients waiting for elective surgery and routine treatment in England is now at a record high of 5.5 million. According to the government, this could reach 13 million by the end of the year if left unchecked.

Before the pandemic, nine out of ten were waiting fewer than 25 weeks in England. This has now risen to 44 weeks, it said.

To fix this, the NHS needs to be able to offer more appointments, operations, and treatments. Rather than simply plugging the gaps, new, innovative practices must be pushed forward so patients continue to receive the best possible care, it added.

The new funding is expected to fund an extra 9 million checks, scans, and operations. The NHS long term plan committed to increasing activity year on year. In recognition of pressures from Covid, this will now increase to 110% of the planned activity levels by 2023/24.

“We’re tackling the NHS backlog and taking decisive action to fix our broken social care system,” Chancellor of the Exchequer Rishi Sunak said. “This significant £12bn-a-year long-term increase in public spending will improve people’s lives across the UK – but our health and social care systems cannot be rebuilt without difficult decisions.”

“The new Health and Social Care Levy is the necessary and responsible thing to do to protect the NHS, sharing the cost between businesses and individuals and ensuring those earning more pay more,” he added.

Meanwhile, Health and Social Care Secretary, Sajid Javid said: “Our nurses, doctors and care workers have worked tirelessly throughout the pandemic in our hour of need. But the pandemic has taken its toll – waiting times are longer than ever before and social care is under even greater pressure.”

He added: “This additional funding is a critical investment in our country’s future – it will give the NHS the extra capacity it needs to get back on its feet and is a vital first step in the reform of our broken care system.”

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