Health and Social Care Levy Bill

Andrew Murrison Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[James Murray]

My hon. Friend makes us think about what we have read recently about what the hon. Member for Yeovil (Mr Fysh) has been saying about a rebate from this tax for those who take out private insurance. Make no mistake, that is a slippery slope towards a two-tier healthcare system.

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

The hon. Gentleman has been speaking for some time, but he has not said what taxes he would raise. Why was it okay for Labour to raise national insurance to pay for healthcare in 2003, when there was not a pandemic and we did not have the scale of social care need that we have today? If it was right then, why is it not right now?

[James Murray]

The right hon. Gentleman speaks about a tax rise 20 years ago, following a decade of wage growth, and it came with a plan for how the money would be invested. In stark contrast, this Government’s tax rise hits working people after a decade of stagnating wages, after we have been hit by a global pandemic and after years during which where people get their money from has changed. Above all, the Conservatives’ tax rise comes with no promise that it will clear the NHS waiting list backlog in this Parliament and no promise that any money will be seen by the social care sector.

Despite all that has been said, there is no guarantee in the Bill that social care will benefit from the Government’s tax rise. In fact, the Bill explicitly rules out any money going towards social care in the first year, and there is nothing to guarantee that a single penny of this new levy will ever go into the social care sector.

The Association of Directors of Adult Social Services realises this, and it said on Monday that

“it is not clear that there is any new money for adult social care to help improve care and support from April 1st next year… It will not add a single minute of extra care and support, or improve the quality of life for older people, disabled people and unpaid carers.”

As the association rightly points out, this could leave councils with no option other than to raise council tax. Indeed, the Government have admitted that they expect councils to cover increasing need and rising costs. Despite £8 billion having been cut from local council care budgets by a decade of Conservative Government, there is no money for councils that need it now.

In truth, this levy does not set out to fix the crisis in social care. It seeks only to be a political fix for the Prime Minister. I suspect Conservative Members know that, and I suspect the Prime Minister is noticing that his attempt at a political fix is quickly becoming a political headache.

Although some Conservative Members may be worried about how to explain to their constituents that they have broken their manifesto promise and still failed to fix social care, others have a different agenda. The hon. Member for Yeovil, as I mentioned earlier, has been reported as saying that he wants people with private social care insurance to get a rebate from the new tax. As my right hon. Friend the Member for Leicester South (Jonathan Ashworth), the shadow Health Secretary has said, this looks very much like a “slippery slope” towards a two-tier healthcare system and privatisation.

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[Tim Farron (Westmorland and Lonsdale) (LD)]

I probably agreed with at least three quarters of what the hon. Member for Basildon and Billericay (Mr Baron) just said. One thing I did not agree with him on was his belief that the Government have grasped the nettle. I believe they have walked past the nettle, barely nodding at it, and the people who will be stung are the people still in social care, the people working in social care, and the people who will disproportionately pay for what the Government are proposing.

Conservative MPs and the Conservative press are concerned about the Prime Minister breaking his promise on taxation, but the promise he has most definitely broken is the one he made during the leadership contest in 2019, when he said he would

“fix the crisis in social care once and for all”.

He has done no such thing; that proposal is not before the House today. There was a promise not to raise taxes. If the Government chose to break that promise, I would be happy to provide them with cover for that. Labour may have dodged the issue, but I am clear that we should raise income tax so that this is paid for by people who have the wealth and ability to pay for it—not by national insurance, which often will disproportionately fall on younger working-age people. What do those people tend to have in common? They cannot afford a home, or at least a house that they own. What will we be asking them to do? To fund those who have a home to have the right to leave it to those who come after them.

Nobody should be forced to sell their home to pay for care. Just a few weeks ago, I was talking to a friend of mine who sadly has cancer. This was a terrible thing to say, but he said, “I feared cancer and I feared dementia, but I’ve got the least bad of the two.” He is living with cancer now. The reality is that, for many reasons, his care is paid for, but for those like my father-in-law, my grandfather and others who suffer from dementia, that care is not provided for. So it is right to have radical reform of social care, but this is not it. It is right that all the parties should get together to ensure we have a common approach to this, but this proposal has been dreamt up and issued as a press release—it is not the reform of social care we need.

This reform of social care does nothing to tackle the 120,000 care assistant vacancies in our country, or to give social care staff the pay and esteem they deserve. One reason there is a crisis is that wonderful people can earn more money stacking shelves than they can caring for our loved ones, of whatever age. This plan will do nothing to give local authorities the money they need to backfill the terrible backlog and black holes that the Government have left them. Again, they are taking unpaid carers for granted and—the hon. Member for Arundel and South Downs (Andrew Griffith) rightly mentioned this earlier—not addressing the needs of those in care who are not of retirement age but significantly younger. This is a massive missed opportunity that will be paid for by people who have the least.

In my community in Cumbria, we are about 10 years above the national average age. We have a smaller working-age population and a disproportionately large population in need of care. We have colossal staffing shortages as things are. This measure does nothing to meet the needs of the people in my community, because it does nothing to invest in the quality and standard of the care that they will receive.

[Dr Murrison]

I am loth to give the hon. Gentleman an extra minute, but I must ask him how much he would put on income tax. I know that his party was famously keen on putting a penny on income tax, but he has just made a whole load of spending commitments—particularly raising incomes for care staff. I assume he has costed that. If so, will he say how many pennies on income tax he proposes to burden our constituents with?

[Tim Farron]

We would need to raise income tax to do what the hon. Gentleman’s Government say they need to do in the short term to get through, and then we would have a ring-fenced, bespoke tax that would deal with social care. If people had lived to the age they do now when Lord Beveridge, the fine Liberal who came up with the welfare state and the NHS in the first place, wrote his plan, there is no doubt that social care would have been part of that package, and we would be paying more tax now as a consequence. I say we should be doing what we were doing around Dilnot a few years ago, when we were moving in the right direction, sworking often across the House, and coming up with a package that we would pay for. In the short term, though, we would immediately raise a tax that is affordable and fair and does not just clobber those people on low wages and people of working age. That is the right thing to do.

That is why this measure is not just the wrong way of going about this but a colossal missed opportunity. We were promised something like the Beveridge report, and we ended up with something written on the back of a fag packet. We need something that means people will look back on this generation the way people still do on the generation of politicians post war who built the welfare state in the first place.

[Craig Mackinlay (South Thanet) (Con)]

In common with my hon. Friend the Member for Basildon and Billericay (Mr Baron), I am wondering—I think many of us are—why we are here today. We have a fiscal event, the autumn Budget, in just six weeks’ time, which would seem to be the right forum to discuss these matters. One cannot help but wonder: why the haste.

We had the Dilnot commission report in July 2011, 10 years ago. Arguably, even then, that was 10 years too late. It was intended to solve the inherent unfairness between two people who were on similar incomes throughout their lives, one who rented and one who bought their home, whereby one lost everything and one got everything for free. That is at the heart of these issues and of affordability in the longer term. I get that, and the Government have to be applauded for finally thinking about these things, but haste is not due at this time.

I am sad that we are just reaching for the tax lever. That is not what Conservatives do. We are going to end up with a tax take at the highest level of GDP for 70 years. Since we are raising NICs—particularly employer’s NICs—it stands to reason that any employer with a pot that they were thinking about using to increase general salaries across their workforce will reduce that pot by 1.25%.

Let us concentrate on NICs. On our first day back at school last Monday, we debated the National Insurance Contributions Bill, which exempts from NICs veterans and potentially new freeport businesses. We have employer’s NIC relief for the under-21s and for those under 25 on apprenticeships. We have an employment allowance to exempt employers from national insurance. That was at £3,000 for all small employers, and it has now increased to £4,000, because exempting employers from national insurance is deemed to be a good thing.

I say to those on the Treasury Bench: please help me. We tend to tax things that are deemed to be bad. We tax things such as alcohol, cigarettes and fuel because we want lower use of them. They are deemed to be bad. Increasing a tax on jobs, something we want a lot of, seems rather bizarre.

I serve on the Public Accounts Committee, and just last week we did an investigation into the Department for Work and Pensions. Last year alone, there was £8.3 billion of fraud and error in its payments out. Obviously, the pandemic had something to do with that, but there is an in-built annual loss of £5.5 billion through fraud and error. That is something approaching half of what we are looking for here to solve these problems.

As Conservatives, we grasp difficult problems. We grasp and understand the problem of an ageing demographic in our populations. On pensions, we did something novel. We could have just reached for the tax lever, but we did not. We introduced auto enrolment pensions, where the employer and the employee contribute and every employee in the land earning above a certain amount has a pot that they can call their own, with the flexibility that that has. To me, that is the type of thinking we should be doing now. I am very concerned that we will just sink another load of tax into the Department of Health and Social Care and hope for a different outcome, when we have been throwing money into these Departments for many years, yet our waiting lists are at the highest ever.

Her Majesty’s loyal Opposition have been howling, “Let’s have wealth taxes.” Well, I am very pleased to tell them that, yes, we have a very substantial wealth tax in play and it is called inheritance tax. It has doubled since 2011, from £2.7 billion to £5.4 billion today, and that will be going in one direction, given asset value inflations and the fiscal drag within the IHT system.

[Dr Murrison]

Of course, we have also had a wealth tax in the form of the removal of indexation allowance on capital gains tax for some years now, which is very substantial over time.

[Craig Mackinlay]

I am very grateful to my right hon. Friend for highlighting some of the fiscal drags that have been beneficial to the Treasury. In terms of asset price inflation, which has nothing to do with the activities of the taxpayer, other factors of low interest rates are involved. There are big windfalls coming towards the Treasury, in terms of IHT and capital taxes, which were never really forecast and are now bearing some substantial fruit. So I would have hoped that the Treasury Bench might have thought, “Where are those taxes going? Where are the other losses within the system across different Departments? Are there procurement gains? Are we really saying that the way the NHS is run today is the best way of running it?” I would have hoped that that could have formed the new pot to solve our social care problem.

I am very concerned that this is going to be wasted cash. I am very unimpressed and I will not be supporting the Government tonight.

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

I will certainly be supporting the Government in the Lobby this evening, and the reason is this: in 1948, we instituted a system of socialised medicine, which has the support of all major political parties in this country, for all medical conditions save just a few. They tend to be things such as dementia, the general frailty of old age and associated conditions such as Parkinson’s. Nobody in this place has any cause to hector or lecture on these subjects unless they have had personal caring experience for somebody with that spectrum of conditions, because I can tell them that it alters your perspective dramatically on what is needed to improve services for an increasing proportion of our population. It is no good Opposition Members professing their support for our model of socialised medicine while excepting the growing burden of ill health that tends to attend advanced years. That is chiefly what lies at the heart of this measure today.

If we are all agreed that it is invidious to except dementia and the frailty of old age from the provision that we have celebrated since 1948, we have to find an equitable way of paying for it, and that implies the use of a broad tax base. It is not clear to me from anything that has been said this afternoon that anyone other than those on the Government Front Bench has a clue as to how that alternative balance sheet would stack up. Despite interventions that I have made, I am none the wiser about what their alternative would be. Nobody enjoys taxation. As a Conservative, I loathe putting my hand in other people’s pockets, but there is a general expectation, after the pandemic, that money will have to be raised from somewhere. The only question that I would concede is when should we do that?

I would like to put one or two points to the Minister, having given him my support. We are fundamentally changing the health and social care system by providing this increase in funds and an alternative way of paying for health and social care through a hypothecated levy. It is likely that the social care industry will respond, as all businesses will. I am ever so slightly worried that things like hotel costs will be ramped up, as they are not covered by this, to the disadvantage of our constituents, and that costs will be frontloaded to about, say, £86,000.

I hope that Ministers, in their White Paper and subsequently, will insist on some way of limiting and moderating such frontloading; otherwise I fear that many of the advantages we want for our constituents and their families in this situation will be eroded. We need an indicative sum on, for example, hotel costs. Please do not assume that all within this sector are acting for pure and altruistic reasons. They are businesses and will respond as all businesses do.

I support the levy, as it is the right thing to do. No alternative has been put forward that is remotely credible, and I will strongly support the Government this evening.