Health and Social Care Levy

Andrew Murrison Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Dame Angela Eagle (Wallasey) (Lab)]

I look forward to seeing the right hon. Member for Rossendale and Darwen (Jake Berry) in the Division Lobby tonight. What we witnessed yesterday was a Budget in all but name. It was a Budget sprung on this House with minimal warning and leaked to friendly newspapers over the weekend, but with scant detail being made available to Members of this House in a statement full of the deliberate obfuscations that have come to define this most slippery and unreliable of Prime Ministers. And today the Government are attempting to bounce it through the House before their own Back Benchers rise up in revolt. Some things are abundantly clear, despite the Government’s attempted sleight of hand. This announcement cynically breaks a guarantee personally signed by the Prime Minister at the last election that he would not put national insurance contributions up. That was one of two solemn manifesto pledges that he tore up yesterday, which makes me ask why anyone should believe what any future Tory election pledge says, ever again.

While proclaiming that they are the party of low taxation, the Conservatives have ushered in the largest tax rise in generations and now preside over a country with the largest percentage tax take in peacetime, but it is not a fair tax system. It continues the shift in tax liabilities away from those who make their income from owning assets to those who work. It exacerbates the three-body problem with self-employment, encouraging evasion, and it leaves wealth largely unscathed. It will exacerbate the unfairness and inequality that scar our society and that have been highlighted by the covid pandemic’s unequal effect on the poor and vulnerable. This tax hike has been presented by the Government as an historic move to fix the social care system, but in reality it is nothing of the sort.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

If the hon. Lady is so against this increase in national insurance contributions, why did she vote for one in 2003? Can she say what happened to NHS productivity as a result in the decade that succeeded it? I can, and it wasn’t pretty.

[Dame Angela Eagle]

We had the Wanless report, rising real wages and a buoyant economy, and we did a lot of work with civil society and communities before we introduced the rise. We did not just pull it out of a hat like a rabbit. It led to a 6% increase per year in funding for the NHS, not the 3.5% that this measure will lead to.

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

When I first heard that the Prime Minister was going to come forward with a plan for social care, to tell the truth I am so desperate for any improvement in social care that I even considered voting for it. Even until yesterday I would have considered voting for it. As the details came out, however, I was not only disappointed but completely devastated, as will be many of my constituents. Not only does the plan fail to deal with any of the real issues in social care, which I will come on to in a second, but it is actually just a tax hike pretending to deal with health and social care. In reality, at the beginning it is not even linked to that, and later on there is some vague promise that it might trickle down to social care if we are lucky.

This is a tax rise that will hit the youngest, the poorest and the hardest working in our communities the hardest. It exacerbates the crisis in intergenerational justice that we have in our society at the moment. Far too many young people feel that the ladder is being whipped up behind them by an older political generation that is currently in power. I think that is sometimes unfair, because actually the issue is class-based and wealth-based, but this will exacerbate that feeling. A young graduate with student loans will be paying a marginal tax rate of almost 50%, which is more than many people on £90,000 and vastly more than someone whose earnings are from property, shares or other forms of wealth.

There are other options. The Government had other options. They could, of course, have lifted the lower rate of national insurance into the higher rate. Most people do not realise—most hard-working people, of course, do not earn £50,000 or more—that those earning more than £50,000 pay only 2% national insurance. That could easily have been made 12%, or now included the additional for everyone. That would have provided £14 billion in one stroke and not affected any hard-working person in our country. It would have already raised more than this non-existent plan. They could have looked at a wealth tax for people who have wealth higher than £5 million, an amendment that I and other colleagues tabled for today; capital gains reform to bring it in line with income tax, for example; or making inheritance tax fair so it is based on what you receive, not necessarily on what you give, so that those in large families can receive a fair amount while ensuring that everyone pays their contribution.

None of those options were considered. Why? Because this Conservative party is paid for by developers, landlords and the very people this tax will not touch. It is a party not of capitalism, but of extraction: extracting the wealth from hard-working people and small and medium-sized businesses, and redistributing it to landlords and capitalists who work in the stock market and in the City, not in the factories that run our country.

[Dr Andrew Murrison]

I always listen very carefully to what the hon. Gentleman has to say. Why, then, does he think that Gordon Brown did something remarkably similar to what my right hon. and hon. Friends are proposing—on that occasion, in 2003—for exactly the same reason: to raise the spend on our national health service and care services? Was he wrong?

[Lloyd Russell-Moyle]

Because then, wages were growing and the economy and working people were doing better, and now they are not. We are coming out of a pandemic. Everyone has suffered and suddenly putting a tax on small and medium-sized businesses and on working people is the very last thing we need to do.

This is also about the lack of a plan for social care. There is no plan for social care. In fact, we have been asked for a begging bowl, but we have not really been told how the money is going to be spent. How are we going to recruit social care workers, who are currently paid miserable wages for 15-minute appointments and no travel time? How are we going to reform the sector so that is not fragmented between people? How is this going to improve someone’s grandmother’s care home or someone’s brother’s care worker? It is not, because this does not deal with that fragmentation, it does not integrate social care into the NHS, which we desperately need, and it does not relieve the burden on councils. At the moment, the truth is that council tax has to subsidise social care time and again. People complain about the roads, their parks or youth services being shut, but the reality is that it is because the Government have not dealt with funding social care properly. They have put the burden on councils and council tax, which was never designed for social care, and this does not deal with that fundamental problem. When people complain about their bins or potholes, I say to them, “It is not your council’s fault. It is the fault of this Government, failing to deal with that drain on your council.”

This levy will not aid us one bit to close the gap that has been growing. That gap will continue to grow under this Government. So holding my nose and desperately sad, I will unfortunately be voting against this, not because I think that we need no action, but because this action is the worst of all worlds.

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[Dr Andrew Murrison (South West Wiltshire) (Con)]

May I congratulate the Government on dealing with unfinished business? Since 1948, we have pooled our risk for the management of the consequences of poor health except for things such as dementia and the general frailty that for some of us attends old age. This could be a historic moment in which we sort that out, and I will most certainly be enthusiastically supporting the Government tonight. It is grossly unfair that certain conditions should be excluded from our provision, and I am so hopeful that this will finally, after 70 years, complete the job begun by our predecessors.

I am disappointed that Labour Members should have taken the line they have, because I recall their doing something really rather similar in 2003 with national insurance contributions, presumably because Gordon Brown and Tony Blair at that time decided this broad-based tax was the fairest and most equitable way of dealing with this and, crucially, of raising significant amounts of money. We can debate whether the money was then well spent, and the statistics and figures suggest that that was not the case at least for the rest of that decade, and productivity in the NHS only started picking up in the following decade. Nevertheless, in raising sufficient funds for spending on something we all agree is vital, Gordon Brown and Tony Blair made the right call in 2003, and I find it dispiriting, saddening and disheartening that Opposition Front Benchers should on this occasion decide, for their own purposes, not to support it.

[Jess Phillips (Birmingham, Yardley) (Lab)]

I notice from the right hon. Member’s entry in the Register of Members’ Financial Interests that he makes income via rentals, as many people in this House do. Does he think it is fair that, in what has been presented to us today, rental income for landlords is completely not within the remit of any take for this levy, so there will be care workers in South West Wiltshire who are paying this on the income they make being care workers while it will not be paid by landlords with rental income?

[Dr Murrison]

I am grateful for that intervention, because additional rate taxpayers, who I think make up about 2% of taxpayers in this country, will be paying a fifth of the whole receipts for this measure and 14% of taxpayers will be providing half of it. That is progressive, which is presumably why Gordon Brown and Tony Blair, all those years ago, decided to levy this on national insurance. I am extremely grateful to the hon. Member for raising and underscoring that point.

However, I do have some concerns, as Ministers would expect me to have. One of those concerns was expressed by our right hon. Friend the Member for Rossendale and Darwen (Jake Berry), which is that this is a one-way tax, because there is no way that in the future we are ever going to attack a tax hypothecated to health and social care. In some eyes it represents a flawed tax, since as Conservatives we of course always want to remove as little money as possible from the pockets of all of our constituents.

There is also a traditional disconnect in healthcare between money in and services out. We found that in 2003, and the challenge for the Government today, which I am fully confident they are up for, is to turn the money they have announced yesterday and today into the output we so badly need, and which indeed is vital if we are to turn this around in two years’ time and use this money for social care.

There is some concern about the extent to which the money that has been announced for this will distort the social care market, and I would be interested in Ministers’ views on that. Will the industry load hotel costs, and will it front-load charges up to the £86,000 cap? How will that incentivise the domiciliary care market, which could turn out to be extremely positive? How will it affect the current 40% cross-subsidy from fee payers to local government-funded customers? How can it grow a vibrant insurance product market that will cover the delta—the £20,000 to £100,000 difference—and what will be done with actuaries and underwriters to that end?

Can I finish by saying that all of this depends on improving productivity in the national health service? It is a challenge that has evaded many over seven decades, but one that must be grasped if we are to complete this and ensure that we do indeed set the foundations—and I am confident we will—for proper social care. We need, for example, to drive down sickness absence, which is very high in the national health service. We need more service work to be done by professions allied to medicine. We need more artificial intelligence, data analysis and robotics. We need to crack down on variations in healthcare and to have zero tolerance for practitioners who diverge from it. We need to cut treatments and procedures of marginal benefit. We need early switching to generics. We must stop the revolving door between social care and the acute sector—something I am afraid the industry exploits to its advantage. Over time we must revisit the disastrous doctors’ contracts that I am afraid have meant, over the past several years, that people like me at the peak of our powers are retiring early or going part time, grossly reducing productivity in our national health service.