Health and Social Care Levy

Alison Thewliss Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

I would like to start by giving the UK Government some credit: they are absolute masters of illusion and deflection. Trying to get them to simply answer a question is like pinning jelly to a wall. Their Ministers are astonishingly unperturbed by going out to argue for policies that entirely contradict the cast-iron promises they made when they stood for election. We on the Scottish National party Benches are clear that raising national insurance is a blunt tool to fund social care, likely to disproportionately hit young people and lower earners. Our SNP amendment (a) would have forced the UK Tory Government to come clean on the distributional impact of this policy.

We would love to be able to amend the motion more broadly, but as the hon. Member for Rhondda (Chris Bryant) pointed out, we have limitations on our ability to do so this afternoon, which is hugely frustrating. Our amendment therefore covers the impact by age, because we know that young people will be affected worst; by income, because we know that national insurance is regressive and will hammer lower earners; by wealth, because those with unearned incomes stand to be the big winners and the key political motive here appears to be for the Tories to bail out their well-heeled voters against losing their inheritance; and by place of residence, because this is a UK tax for an English policy crisis and, within England, the Resolution Foundation is clear that this policy will benefit the south-east the most. It is of no surprise to me that the UK Tory Government’s national insurance hike and the “back of a fag packet” plan announced yesterday are already drawing criticism from all sides—from The Daily Telegraph, the Daily Mirror, the Cabinet and Back Benchers.

[Joanna Cherry (Edinburgh South West) (SNP)]

My hon. Friend is making a number of very important points. An anonymous member of the Cabinet is quoted in The Daily Telegraph as being very critical of this policy:

“If you get all your income from investments and property you don’t pay a penny but if you work your guts out for minimum wage you get clobbered.”

Can my hon. Friend hazard a guess as to what the Tories have against taxing unearned income?

[Alison Thewliss]

I would be very curious to know why that is. I was going to read out that very quote, because even three former Conservative leaders, including a former Prime Minister and three more former Chancellors, have spoken out against this move. To complete the quote that my hon. and learned Friend mentioned, this person, an anonymous member of the Conservative party, said:

“Putting up National Insurance would be morally, economically and politically wrong.”

They went on to say:

“After all that’s happened in the last 18 months they can’t seriously be thinking about a tax raid on supermarket workers and nurses so the children of Surrey homeowners can receive bigger inheritances.”

Well, yes indeed they are.

[Dr Whitford]

Is it not the case that the talk is about making life better for social care staff, but actually, they are exactly the people who will lose £1,000 a year in the universal credit cut and will now face this extra cost?

[Alison Thewliss]

My hon. Friend is absolutely right. They are the people who can least afford it and who have worked the hardest through this pandemic, who this Government should be thanking, not taxing.

We are being asked to vote today on measures that the Institute for Fiscal Studies has described as “better than doing nothing”, which is about as charitable an analysis as is possible of this policy.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Will the hon. Lady give way?

[Alison Thewliss]

In a second. Very few people would dispute the need for action on health and social care in England. However, an increase to national insurance contributions is not the fairest way to go about it. I would be interested to know why the hon. Gentleman thinks it is fair for his constituents.

[John Lamont]

The hon. Lady made reference to the IFS. She will know that the IFS has noted that over the past 10 years the health spend in Scotland has grown by 1.2%, whereas in England it has grown by 3.6% on a like-for-like basis. Surely it is astonishing that she would vote against £1 billion of extra investment for Scotland’s NHS.

[Alison Thewliss]

What the hon. Gentleman fails to understand is that we are starting from very different points. He does not acknowledge that, and he does not understand it.

The response from equality and anti-poverty groups has been absolutely damning. The Women’s Budget Group has said:

“We believe there is a fairer way to fund social care. This is because, as they currently stand NICs are more regressive than income tax—with a lower threshold at which payments start, and a higher rate threshold beyond which employees pay a lower rate.”

The Resolution Foundation has described the policy as “generationally unfair”. Paul Johnson of the IFS has said:

“Remains the case pensioners will pay next to nothing for this social care package—overwhelmingly to be paid by working age employees”.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

There are many ways in which this policy could have been made progressive, one of which would have been to look at the upper threshold for national insurance, which has not been addressed. A young graduate will now have a marginal tax rate higher than a rich Conservative on the Government Benches.

[Alison Thewliss]

The hon. Gentleman makes an excellent point. For young people who have perhaps struggled through this year, who have graduated and who are going out into the world of work, it is a real hammer blow to their prospects.

Many families are already facing a historic £1,040 cut to their annual incomes and are staring down the barrel of impending cuts to universal credit and working tax credit. The Joseph Rowntree Foundation has described the new levy as adding “insult to injury”. The New Economics Foundation has calculated that 2.5 million working households will be affected by the £20 a week cut to universal credit and the increase in national insurance. On average, they will lose out by £1,290 in the next financial year. Working households are doing their very best to put food on the table and support their children, and this cruel UK Tory Government caw the legs from under them.

[Mr Steve Baker (Wycombe) (Con)]

rose—

[Alison Thewliss]

If the hon. Gentleman can explain why that is fair to the families who have been working so hard, I will be glad to give way.

[Mr Baker]

I wonder whether the hon. Lady has popped out to the Vote Office and picked up the distributional analysis that the Government have published, which shows the impact across the deciles of income in this country: it just does not bear out what she is saying. I encourage anybody out there to pick up that analysis and have a look.

[Alison Thewliss]

I have seen a different analysis from the New Economics Foundation; I urge the hon. Gentleman to look at it, because it gives a very different picture from the one that the Government are presenting today, which is why we need more analysis of the policy before the Government go forward with it.

The policy will also have an impact on our recovery from the pandemic. Businesses, which have weathered such a challenging year, have spoken out against it in the strongest terms. The Federation of Small Businesses has called the national insurance hike

“anti-job, anti-small business, anti-start up”,

pointing out that the increase to national insurance will

“stifle recruitment, investment and efforts to upskill and improve productivity in the years ahead.”

[Dame Angela Eagle]

Is the hon. Lady worried that the Government appear to be increasing taxes at a far earlier stage of the economic recovery from the pandemic than similar economies?

[Alison Thewliss]

The hon. Lady is absolutely correct. The Government have learned nothing from the austerity that caused so much damage with the last crash. They are about to repeat their mistakes, and those on the lowest incomes will be hammered most, again.

The Institute of Directors has called the hike “political opportunism” and has highlighted the tax on dividends, which will hit sole traders and small company directors, many of whom were completely and unjustifiably excluded from UK Government support during the pandemic. It really does rub salt in the wounds.

[Matt Rodda]

I am grateful to the hon. Lady for giving way on that excellent point. In my constituency in Reading, many of the same families will be affected; she is wise to point that out, and I reiterate that point. It appears that the same very hard-working groups of people, many of whom are key workers or are with small businesses, are being affected disproportionately by this unfair tax rise. At the same time, it is not solving the fundamental problems with social care.

[Alison Thewliss]

Absolutely. It does nothing to resolve either issue, and it makes it all the harder for people who have suffered so hard during the pandemic and been excluded from support to get back on their feet and bring money back into the economy. It makes no economic sense whatever.

Of course, the unjust effect of the national insurance hike will be compounded in Scotland because the Prime Minister is proposing that Scottish tax contributions be used to fund England-only policies. My constituents and people across Scotland are generous people, and I am sure that very few of them would begrudge the principle of funding the NHS and fixing social care after the pandemic, if indeed they had any faith that this Government were capable of fixing anything. But as things stand, the Scots, Welsh and Northern Irish stand to be taxed twice: first for the health and social care system that they actually receive from their own Government, and then for the NHS and social care in England, for services that they do not have access to, where money more often than not appears to be squandered on dodgy contracts and cronyism scandals.

We know from the United Kingdom Internal Market Act 2020 and other Tory Brexit legislation that we cannot trust Government Members to respect our hard-won devolution. I am not reassured in the slightest by all the talk yesterday from the Prime Minister about directing money raised from the new levy into health and social care services in Scotland.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

The hon. Lady is making a very important point. Is she aware of any discussions having been held between Treasury Ministers and SNP Scottish Ministers or Labour Ministers in the Welsh Government? It seems to me that the British Government are using a UK-wide tax to fund English priorities.

[Alison Thewliss]

The hon. Gentleman is absolutely correct on that front. These are not our priorities; we already have these services in our own nations.

[Several hon. Members rose—]

[Alison Thewliss]

If Conservative Members will just calm down for a little minute, I will try to bring them in at some point. I want others to get in to make their speeches—gie’s peace.

It is not for the Prime Minister or anybody else in the UK Government to direct how devolved budgets are spent. The Ways and Means resolution ties the money to NHS Scotland, not to our democratically elected Scottish Parliament and Government—a further undermining of decision making, showing a lack of understanding of how services are provided in Scotland. We have had no assurance from the UK Tory Government about the extent of the Barnett consequentials that will be generated from the spending. I seek clarity on that today.

SNP Members cannot support measures that are so manifestly unfair to our constituents and whose financial consequences amount to a pig in a poke. The Resolution Foundation has pointed out that while health spending may go up, spending on other areas such as local government has gone down compared with pre-pandemic plans. [Interruption.] Local government, of course, provides a significant proportion of the social care that Tory Members, who would do better to wheesht and listen than to chat away in the corner, claim to care about.

[Mr Richard Holden (North West Durham) (Con)]

rose—

[Alison Thewliss]

The hon. Gentleman has done more talking than listening in this place. It would be useful if he sat down.

The spending cuts will have an impact on Barnett consequentials. It would be just like this UK Tory Government to appear to give with one hand while picking Scotland’s pockets with the other. A new Tory poll tax that punishes those on the lowest incomes is being forced upon Scotland by a Government we did not vote for.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

rose—

[Alison Thewliss]

If the hon. Gentleman wants to explain that to his constituents, I would be very glad to hear it.

[Andrew Bowie]

The hon. Lady is making a serious speech with lots of very pertinent points, many of which I disagree with, but the fact is that we have come to the crux. This action by the Government will actually deliver more than £1 billion of extra funding to Scotland’s national health service. The real reason SNP Members oppose the motion is that they would rather Scotland’s NHS were poorer than that Scotland benefited from being a part of this United Kingdom. That is the fact.

--- Later in debate ---

[Alison Thewliss]

We already spend more per head on the NHS than is spent in England. We already have better services in Scotland than in England. This policy is an entirely regressive form of taxation that does nothing for the hon. Gentleman’s constituents and does nothing for mine.

[Dr Whitford]

Scotland already spends 43% more per head on social care, which allows us to be the only nation that delivers free personal care and has extended it to people under 65. That was why we raised the extra 1p on tax, for which Scots are already paying and from which they are already gaining. That should be controlled by the Scottish Parliament.

[Alison Thewliss]

My hon. Friend speaks the absolute truth. There is a huge contrast between what the Government propose and what is already being delivered in Scotland.

Some have said, “What’s your alternative?” Well, fixing England’s social care crisis is not for the SNP to decide, quite frankly. Having heard evidence when I sat on the Select Committee on Communities and Local Government some years ago, I know that successive UK Governments have failed to act and have ignored the evidence as difficulties mounted. Now the Prime Minister has come to this House in haste, shamelessly using covid as cover.

[Kevin Hollinrake]

Will the hon. Lady give way?

[Alison Thewliss]

I will, because we served on the Communities and Local Government Committee together.

[Kevin Hollinrake]

I am very grateful. In respect of the sufficiency of Scottish social care budgets, there is now an 11-week wait in parts of Scotland for discharge from hospital into a care home. Is the hon. Lady honestly saying that she does not need extra resources for Scottish health and social care?

[Alison Thewliss]

The hon. Gentleman should look at the comparative figures in his own constituency. I am not saying for one second, and I would never say, that everything in Scotland is perfect, but we are making good progress on that, and we intend to make more progress.

The social care funding announced by the Government may in the end amount to as little as 20% raised by this tax hike, and not even for a few years. The British Association of Social Workers has said that this raises more questions than answers, and that it needs the funding for services right now, not at some point in the future. The early analysis across the board today demonstrates that the sheen is already coming off this policy. In contrast, the SNP has used its time in government to introduce health and social care integration, self-directed support and the Carers (Scotland) Act 2016. We have health and social care partnerships on the ground working away to deliver more integrated services to our constituents. Free personal care has been available in Scotland for adults aged 65 or over since 2002, extended in 2019—as was pointed out by my hon. Friend the Member for Central Ayrshire (Dr Whitford)—to people of all ages who require it. Yesterday the Scottish Government’s programme for government set out the timetable for establishing our national care service, the most significant public service reform since the creation of the NHS.

This is a Westminster power grab on devolved healthcare and the democratic institutions of Scotland, Wales and Northern Ireland. The Government are taxing our people to pay for their chaotic mishandling of health and social care in England. They are undermining our recovery by putting a tax in employers. They are punishing working people on low pay by cutting their universal credit and hiking taxes on their meagre wages. This is no Union dividend, as the Prime Minister likes to claim; it is a Union dead end, and the people of Scotland must have the choice to take the fastest road out of here to independence.

--- Later in debate ---

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

I very much welcome the fact that the Government are taking action to properly fund social care and the NHS in this country. As my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) said, previous Governments and previous Prime Ministers have recognised the challenge of funding social care and the NHS, but it is this Prime Minister and this Government who are taking the brave step of bringing forward concrete proposals to address it.

We have heard much over the past few days and the past few hours from those on the Scottish National party Benches about how horrified they are by these proposals to increase funding for Scotland’s NHS. Astonishingly, they seem to oppose the billion pounds of extra funding that Scotland’s NHS will benefit from this year. It is astonishing. I just do not understand how they can possibly explain that to their constituents and justify such an irrational decision.

[Alison Thewliss]

Will the hon. Gentleman give way?

[John Lamont]

I am happy to hear from the hon. Member why she has made that choice.

[Alison Thewliss]

As the hon. Gentleman well knows and as has been made clear to him in the remarks I made, funding for the NHS is not the issue here; the issue is raising taxes disproportionately on the backs of his and my poorest constituents. I would be interested to hear what he will tell his constituents when they come to his surgery about it.

--- Later in debate ---

[Steve Barclay]

I listened very closely to the hon. Gentleman’s speech, because he is a very informed and knowledgeable commentator on these issues. He rightly pointed to paragraph 36, where we are being very clear about the role in terms of demographic and unit pressure. As he well knows, part of the discussion at a spending review is to look at local government pressures in the round. That is in the context that local authorities are getting an additional £2.2 billion of funding. I remind the House, in terms of the adult social care flexibility that was allowed for councils this year, that out of the 152 local authorities, less than two thirds actually used that flexibility. That is part of looking at these issues in context.

Let me come to the central point put forward by the Scottish National party, which was very well demolished by my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont). All parts of the United Kingdom need a long-term solution to fund health and social care. The Scottish Government’s independent review of adult social care recently noted—[Interruption.] I am quoting from their own review. I thought they would want to hear that. It stated that

“Scotland’s ageing demography means that more money will need to be spent on adult social care over the long term”—

and its recommendations to the Scottish Government are that this would

“require a long-term and substantial uplift in adult social care funding.”

In fact, in 2002, John Swinney said that a 1% increase was

“progressive taxation…required to invest in the health service in Scotland”.—[Scottish Parliament Official Report, 18 April 2002; c. 8005.]

[Alison Thewliss]

Does the right hon. Gentleman accept that that was 18 years ago and that things have changed? Since that time, national insurance has not been reformed in any way to protect the poorest, as income tax has been.

[Steve Barclay]

Obviously, what SNP Members regard as progressive has changed. The point is that if they disagree with this, they can adjust their Barnett consequentials, spend that and reprioritise their spending accordingly. Indeed, likewise, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards)—I hold him in great affection and he speaks very powerfully in the Chamber—said that these are “English priorities”. Clearing the covid backlog and addressing the challenges of social care are not English priorities. They are United Kingdom priorities, they are this Government’s priorities, and they are the people’s priorities.

This levy will enable the biggest catch-up initiative in the history of the NHS, a comprehensive long-term solution to the social care challenge and a significant long-term investment that will directly improve people’s lives.

Those are things that I think my hon. Friend the Member for Wellingborough (Mr Bone) values, and I hope he will support them.

The Prime Minister said yesterday:

“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 social care”.—[Official Report, 7 September 2021; Vol. 700, c. 155.]

This plan addresses those problems. I commend it to the House.

Health and Social Care Levy Bill

Alison Thewliss Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

To start where the right hon. Member for South West Surrey (Jeremy Hunt) left off, in the Bill before us this afternoon we have the lack of a proper plan. We have a means of raising taxes, but absolutely no detail whatsoever on how the money is to be spent.

Let me start with a useful note sent round by the Hansard Society, which says:

“Parliament’s scrutiny of financial matters is generally poor, and the treatment of the new Health and Social Care Levy demonstrates many of the worst aspects of both the financial and legislative scrutiny processes: acting at speed with insufficient policy detail available for MPs to consider; important constitutional questions brushed aside; and broad powers delegated to Ministers with a lack of clarity about how they are to be used in future.”

I agree with every single word of that.

Scrutiny and accountability are absolutely key to this issue, because we have been presented with a huge additional spending commitment but no detail whatsoever as to how it will actually be spent on the other side. I know that there are Conservative Members who are extremely nervous about this levy; far be it from me to agree with them, but I am right to agree with them on that, because we do not know how this money is going to be spent. People are incredibly nervous that health and social care will be at the back of the queue when the money is to be spent.

As the hon. Member for Basildon and Billericay (Mr Baron) pointed out earlier, we are considering this Bill in unseemly haste. Is this to do with the election cycle, testing the loyalty of Government Back Benchers or making sure that people are loyal in the run-up to any reshuffle? We cannot see the real reason for this haste. If we could wait, we could see a little more detail as to exactly why we have to proceed in this way. There is also a difficulty in scrutinising the spending of the levy because it is outwith the usual estimates process and the usual Budget process. We cannot have any real clarity in that respect.

Most worryingly of all, the Government have—as they have done in so many different ways—taken back control only to give all the power back to themselves and their cronies. A lot of the work in respect of the Bill will be done through regulations. Clause 4 gives the Government very wide scope to make regulations on this matter later, which means we will lose all sense of scrutiny from this place. It will all go to civil servants rather than to Parliament. That is entirely undemocratic and wrong. Yet again, there is a wide-ranging power grab from this place and in respect of our job as Members of Parliament here. I cannot see the justification for that in the Bill; it would be interesting to hear why Ministers intend to do that.

We on the SNP Benches demand urgent clarity about every penny of Barnett consequentials that will be given to the devolved Administrations. In line with our manifesto, any additional money that Scotland gets will be spent on health and social care, but there must be no attempt by the UK Government to sell Scotland short by clawing back our share through cuts in other devolved policy areas. It would be just like Government colleagues to give money with one hand while pinching money out of our back pocket with the other. The UK Government must give urgent assurances that we will get every penny we are due—as should Wales and Northern Ireland.

Last week, the Secretary of State for Health and Social Care told “Good Morning Scotland” that, ultimately, it will be for the Scottish Government to decide how the money raised is spent, but that is not what the Prime Minister said. In his statement last week, he said:

“Although Scotland, Wales and Northern Ireland have their own systems, we will direct money raised through the levy to their health and social care services.”—[Official Report, 7 September 2021; Vol. 700, c. 154.]

To direct money would be to override the devolved settlement. It would override our Scottish Parliament and our Scottish Government. It is also unclear where it is intended that that money should go. Will it go to NHS Scotland or to the health boards, the integration joint boards or the health and social care partnerships that sit underneath? Will the formula by which funding is distributed in Scotland be disrupted?

We need certainty as to how the money will be spent, and the Bill currently does not give that. All the Bill says is that money will be paid

“in such shares as between health care and social care, and in such shares as between England, Wales, Scotland and Northern Ireland, as the Treasury may determine.”

That means more power for Treasury Ministers, which I am sure they will enjoy having, but less power for this Parliament and even less power for the devolved institutions. It is their right to know how that money is to come to them and how it is spent. We should not get one penny less than we were due.

Many analysts have pointed out that other parts of devolved spending have been cut because of, for example, the Barnett consequentials of the cuts to local government or to justice. Such cuts mean that we get less money coming through, even if the Government like to pretend, through things such as this levy, that there will be more. It is unclear in the documentation published by the Government exactly what the Barnett consequentials will look like. Their plan for social care says that the Barnett consequentials will be £2.1 billion in 2022-23, drop to £1.7 billion in 2023-24 and be £1.9 billion in 2024-25. If the money that comes is going to jump about by such significant amounts over those years, we will not know exactly how things are going to look, what the certainty is and how we can plan. The Scottish Government deserve certainty so that they can plan for services.

Let me highlight some of our other major issues with the proposals, which are a tax on the poorest working people in this country. They are completely unjustifiable on that basis. The levy is disproportionate and unfair. There is a bit of brass neck from Government Members: they howled when Scotland put money on income tax—a progressive system in which those at the wealthier end of things paid a little more into our system for our services in Scotland. They said it was terrible and awful, yet today there is not a peep out of them to complain about the lack of progressive taxation and the fact that Scotland will have to pay for England’s social care crisis, which is completely unjustifiable. This is also a tax on jobs and the recovery. Reflecting on the ONS figures that show that the recovery is now stalling, the Federation of Small Businesses says that this tax on jobs will mean 50,000 more people becoming unemployed. That is 50,000 people losing their jobs as a result of this Government’s incompetence in taxing jobs and the recovery. We really could not make this up. From every angle that we approach this tax, it makes absolutely no sense whatsoever.

I will talk in greater detail about our amendments when we come to the Committee stage, but my reflection for now is that we have Scottish taxpayers paying for England’s health and social care crisis, and an undermining of devolution in Scotland, Wales and Northern Ireland and of the services that our Parliaments are democratically elected to provide.

[Christine Jardine]

Can the hon. Lady explain how Scottish taxpayers, of which I am one, are paying for this levy? I am confused by the thinking. We either agree with the fairness of the levy or we do not. In Scotland, we would get more than we paid in, so I am confused by her thinking.

[Alison Thewliss]

The point is that we do not know what we will get out of this. We do not know because it is not clear in the documentation that has been provided. We also do not know what will happen on the other side of that equation—money in other devolved areas could be whipped away from us at our expense. Organisations such as the British Association of Social Workers have pointed out that cuts to local government will fundamentally undermine the social care provision in England. Authorities will not receive anything for three years, which will also have an impact on the money that we have to spend in Scotland.

These moves tax the poorest. They come at the same time as £20 a week is being removed from universal credit. Some 2.5 million people across the UK will be affected by both of those policies at a time when they can least afford it. The tax on jobs will stifle the recovery. Rather than being a Union dividend as Ministers like to try to claim, this is a Union dead end.

[Madam Deputy Speaker (Dame Rosie Winterton)]

In order to try to get everybody in, I will reduce the time limit to five minutes, and I have been able to warn the next speakers of that. If people do not get in, let me remind them that there is a Committee stage to follow and they might like to bear that in mind.

Health and Social Care Levy Bill

Alison Thewliss Excerpts

Committee stage & 3rd reading
Tuesday 14th September 2021 Commons Chamber

[Jesse Norman]

I do not know whether the hon. Lady heard, but I was talking about the NHS and that has been a founding principle of the NHS, one the Conservative party have always adhered to, and rightly so. What we are doing with the levy is funding an expansion and a development of an existing set of arrangements, and, as I have discussed in relation to the question from my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), the potential to expand that through the use of other mechanisms of support, now that these catastrophic risks have been removed, or will be removed, from people’s lives.

Let me turn to the amendments tabled by the Scottish National party and Plaid Cymru which look to require a joint agreement between the Treasury and the Governments of Scotland, Wales and Northern Ireland as to how the levy proceeds are to be shared between the four parts of the UK, and between healthcare and social care. As for how the levy revenue will be split between the four parts of the UK, this legislation mirrors existing legislation on how NHS allocation is divided between England, Scotland, Wales and Northern Ireland. It is right and appropriate that we should follow that established precedent. The Government will work closely with the devolved Administrations on the implementation of the levy, including on the process for allocating revenues across the UK and on the split between health and social care from April 2023 onwards. It is also worth bearing in mind that the devolved Administrations’ overall funding will continue to be determined by the Barnett formula, so that this process will just determine the element provided by the levy. I hope that the Members concerned will not press their amendments, for the reasons I have outlined.

[Alison Thewliss]

I do not know whether the Minister has read the note from the Hansard Society on this, but it is concerned by some of the implications for the devolution settlement. It says:

“There is also no requirement in the Bill for the Treasury or the Health Secretary to consult the devolved administrations about any aspect of the process.”

Is that not a cause for concern?

[Jesse Norman]

The Treasury already consults the devolved Administrations very closely on many aspects of tax policy and there is no reason to think, and the Bill does not suggest, that there should be any other reason for handling this. On the contrary, following an existing hypothecation gives direct support to devolved Administrations that they will be able to receive the Union dividend, which is generated and delivered by this policy.

Clause 2 creates a legally binding obligation to use the funds raised by this levy for the purposes of health and social care, and sets out that HMRC will direct funds to the Secretary of State to be used for the cost of health and social care in England, Wales, Scotland and Northern Ireland. The funds from the levy will be shared between healthcare and social care, and will be shared between each nation in a proportion determined by the Treasury. The Treasury has used the long-standing Barnett formula to fund devolved Administrations and will continue to do so for the proceeds of this measure. Clause 2 goes further and ensures that any interest or penalties that can be attributed to the levy will also be used to fund health and social care. However, any expenses incurred by HMRC in collecting the levy will be deducted from the proceeds, which ensures that HMRC has the ability to collect and police this levy properly. I therefore ask Members to allow clause 2 to stand part of the Bill.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

Let me first take the opportunity to thank the Clerks, who give us so much support in putting together amendments to the Bill, which arrived at such short notice. I thank Scott Taylor and Salma Saade in our research units, who also helped, and my hon. Friend the Member for Aberdeen South (Stephen Flynn), who did so much in Committee.

This is a Bill and a tax without a mandate, in Scotland or even in England, since it is a breach of a Tory manifesto pledge—a pledge reiterated by the Chancellor at the time of the Budget. The Health Secretary has said that it is for the Scottish Government ultimately to decide how money is spent, but the Prime Minister said that the UK would direct money raised by this levy to the devolved institutions, and the Chancellor is on record as saying that the UK Government have the right to do this. The truth—the legal truth, because it is in the Bill—is that the Treasury may determine how this money is spent in Scotland. That is a fundamental undermining of the devolution that we fought so hard to get. Within the Bill, Ministers can even change what they like in regulations later, so even what we agree today may not be the principles that the Government will go by later on.

This is a tax on the people of Scotland to pay for England’s social care crisis. It is a tax on young people and lower earners to pay for the wealthy. It is a tax on jobs, undermining recovery at a time when we need to be thinking about getting people into work, not making it harder for businesses to employ them. It is also a tax on the many who have been completely excluded from UK Government support throughout the pandemic and who are now going to be hit by this increase. It is also a power grab. It is another Tory power grab on devolution. This is not a Union dividend; it is a Union dead end, and we on the SNP Benches will not support this new Tory poll tax.

Question put, That the Bill be now read the Third time.