Health and Social Care Levy Bill

Andrew Griffith Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[James Murray]

The right hon. Lady raises points about the backlog in the NHS. We have had 10 years of a Conservative Government, of whom she has been a key part. She is responsible for the backlog, along with all her colleagues on the Conservative Benches. They should take some responsibility for the mess they have caused.

We know that social care desperately needs more funding, but are the Government raising taxes for those with large portfolios of stocks and shares? No. Are they increasing taxes on landlords who rent out multiple properties? No. Are they going further to tackle large online multinationals that shift their profits overseas? No. The Government have gone for a tax rise on working people and businesses creating jobs.

Last week, the Government tried to soften the blow by claiming that their tax plans are fair because this tax rise on working people is accompanied by a tax rise on dividends. So where is the tax rise on dividends? The Government’s proposal documents last week admitted that that might be legislated for in the next Finance Bill, and indeed there is nothing on raising taxes on dividends in the Bill in front of us today. They are pulling out the stops to increase taxes on working people as quickly as possible, ramming this legislation through in one day, but when it comes to dividends and a tax that the Prime Minister acknowledged last week would affect

“better-off business owners and investors”—[Official Report, 7 September 2021; Vol. 700, c. 154.]

suddenly there is no rush. Let us not fall for the claim that the dividend tax rise will make the Government’s proposals fair. The dividend tax—if it ever happens; we have only the Prime Minister’s word for that, after all— would raise only 5% of the total revenue. Some 95% of the tax bill would land on employment.

If we want to understand the impact of this tax rise on people and their jobs, let us start by looking at the Government’s own view. Their own tax information and impact note on this tax rise was signed off personally by the Financial Secretary to the Treasury and published on 9 September—curiously, this was a couple of days after the Government’s proposals were announced. It says in no uncertain terms:

"There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

Five years ago, the Prime Minister’s predecessor began her time in office claiming to be an ally for people who are “just about managing”. Now we have the Government’s own report admitting that they are the ones who will suffer.

The report is blunt too about the impact of this tax rise on businesses. It makes it clear:

“Behavioural effects are likely to be large, and these will include...business decisions around wage bills and recruitment.”

It is there in the Government's own analysis: this will be a tax blow to jobs and wages. Others agree, with the chair of the Federation of Small Businesses saying last week:

“Breaking a manifesto promise by increasing National Insurance Contributions just at the moment when firms are struggling to get back on their feet would be devastating for small businesses and the local communities they serve...If this hike happens, fewer jobs will be created by the UK’s small business community over the crucial months ahead.”

The British Chambers of Commerce agrees, warning:

“A rise in National Insurance Contributions would represent a hammer blow to jobs growth at this crucial point in the UK's economic recovery.”

The CBI president said:

“National Insurance increase will directly hurt a business’s ability to hire staff, at a time when businesses have faced a torrid 18 months and are now fighting crippling labour shortages.”

Do the Financial Secretary and the Chief Secretary think the Federation of Small Businesses, the British Chambers of Commerce and the CBI are all wrong? Perhaps the Financial Secretary will get up to tell me the answer to that. [Interruption.] Sorry, I thought the Financial Secretary was keen to get to his feet to respond to my question. He does not want to, no. He does not want to answer whether he thinks the FSB, the BCC and the CBI are all wrong. Do other Members from his party think they are wrong?

[Andrew Griffith (Arundel and South Downs) (Con)]

rose—

[James Murray]

Perhaps the hon. Gentleman would like to intervene to answer that question.

[Andrew Griffith]

I am just wondering whether the hon. Gentleman’s tax primer in low corporate taxes has enlightened him with any ideas of his own as to how his party would propose to fund this. The proposal on the table is a broad-based tax. How would he fund this?

[James Murray]

We have been absolutely clear that when it comes to funding the NHS and social care, those with the broadest shoulders should pay the most. The idea that this is a “broad-based” tax rise is completely wrong. The hon. Gentleman knows that, we know that and the British public know that. I note that when he got to his feet, he did not answer the question as to whether he thought the FSB, the BCC and the CBI are all wrong. Next time another Conservative Member gets to their feet, I would like to hear their answer to that. I would also like to know whether they think TUC general secretary Frances O’Grady was wrong when she said last week:

“We know social care needs extra funding. But the prime minister is raiding the pockets of low-paid workers, while leaving the wealthy barely touched.”

That is the fundamental unfairness at the heart of this Government’s tax rise.

The Prime Minister and Chancellor are desperate to pretend this is the only way to raise the money, but that simply is not true. A fairer approach would see funding for the NHS, social care and all our public services borne by those with the broadest shoulders—this would include those with incomes from large financial assets, multiple rental properties, and other income from wealth contributing more. But they have not been considered by this Government, who would prefer to hit workers instead.

This Government are landing a tax rise, which they claim will go toward social care, on low-paid social care workers themselves. The truth is that this is a tax on working people and their jobs. This tax rise tells us nothing about how the Government plan to fix social care, but it tells us everything we need to know about the instincts of the Tories when they are in power. That is why it is wrong. That is why we will be voting against this Bill. And that is why Conservative MPs would do well to join us tonight if, come the next election, they want to be able to look their constituents in the eye.

--- Later in debate ---

[Andrew Griffith (Arundel and South Downs) (Con)]

I pay tribute to my hon. Friend the Member for Rushcliffe (Ruth Edwards) for her remarks.

My constituency has a disproportionately older demographic—those who live there are 50% more likely to be over 65 than the national average—but I want to lay to rest the misperception on both sides of the House that social care is simply about the older generation. More than one in three people in the system is under the age of 65, and because younger adults are in the system for longer, spend on them is proportionately greater, so this is not just about a battle of the generations.

I pay tribute to the millions of unpaid carers in society who for years have been papering over the cracks in the system and the capricious nature of continuing healthcare assessments. I have personal experience of some of that as for many years my father was my mother’s unpaid carer and had to deal with that at the sharp end. For that reason, I celebrate the fact that this is a nettle grasped. It is not necessarily the whole solution but it is the start of a package of measures that moves forward a debate that has been stalled for too long. That is one reason why we should all come to the House and use our voice and platform on the hard issues that we face in society.

I applaud the Government on their selection of national insurance, which is the tax with the broadest reach. It is progressive, and that is why so many of our European neighbours have chosen to fund their social systems through similar measures. It is a chimera to think that there is another way—perhaps Opposition Members have been taking medicinal hallucinogenics—because the national insurance take is more than 10 times that of capital gains tax and inheritance tax combined. No mythical tax on wealth will give us anything like what we need to take this issue seriously—and we should take it seriously.

[Anthony Browne (South Cambridgeshire) (Con)]

Does my hon. Friend agree that it is the height of political cynicism for Opposition parties to campaign repeatedly to increase taxes to spend money on health and social care and then, when the Government introduce such measures, oppose them? Does he think that they should commit themselves to scrapping the health and social care levy once it is introduced?

[Andrew Griffith]

My hon. Friend, as ever, makes an important point. We should be on a quest for consensus, and it would be useful to hear more from Opposition Members in the wind-ups.

I pay tribute to the many dedicated workers in care homes across my constituency as well as their residents—from Barlavington Manor in the north to Valerie Manor in the south and from Villa Adastra in the east to Westergate House in the west. They are just four of the 28 care homes in my constituency providing fantastic quality care. It would be lovely to see more resources pumped into them as well as their staff.

Let me conclude broadly where I started. This is a down payment on a process of reform in our healthcare systems, building on the innovation that we have seen. However, a health and social care system cannot be managed permanently on an exceptions basis. We need reorganisation, better data and better decision making to build the high-quality health and social care system that both sides of the House want to see.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Before we move on, I remind colleagues—I am sure they know—that it is very courteous to listen to a lot of the debate before intervening, because many colleagues have sat here from the beginning and are waiting to speak.