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.