Health and Social Care Levy

Bim Afolami Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Bim Afolami (Hitchin and Harpenden) (Con)]

It is a pleasure to follow the hon. Member for Nottingham East (Nadia Whittome), but I must disagree with her that the Government are kicking the can down the road. We are doing precisely the opposite by trying to tackle what is a very difficult problem, as everybody has already described. As many Members have said, politics is about choices. Ultimately, the choice is this: either we put more money into the social care system and borrow extra; or we decide not to tackle the problem, and allow it to continue and continue. I wholeheartedly support the Government in trying to tackle what has been a very difficult problem for a very long time.

I thought it would be useful to address in my remarks some of the criticisms of the plan that need pushing back on rather strongly. Many speakers have said that it would be better to use income tax, not national insurance. I disagree, because national insurance is paid by both individuals and employers; it is a broader-based tax, which raises more money. And guess what? By having a broader-based tax, everybody is going to benefit. It is not bad to have a more broadly-based system, where everybody in the country is going to benefit.

Certain Opposition Members have said that a wealth tax on the wealthy, in and of itself, will somehow fix all the problems. I am afraid that we are dealing with billions of pounds—£12 billion, £13 billion or £14 billion—and no wealth tax in the world has been designed to yield anything like that amount, so that would not deal with the problem.

Many Members have suggested that this levy does not deal with social care at all. The point is that it deals with both health and social care; they are linked. Therefore, by accelerating money in the next 18 months to two years to deal with the backlogs that have developed in the health system due to covid, we actually help to deal with the social care problem. Then, as is very clear in the documents, from October 2023 more money will flow more directly into the social care system, so the levy deals with both these things.

It is worth addressing the point made by many colleagues on the Government Benches—including my constituency neighbour, my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning), and others—that this is somehow unfair because certain parts of the country, such as my own, have higher house prices and others have lower house prices. That is an observable fact. However, there are many problems with doing something much more complicated. First, it would be difficult somehow to change a system on the basis of fluctuating house prices in every county, region or district council. It is also difficult to come up with those differences when, yes, certain areas have higher house prices, but then there are also higher costs for social care in different parts of the country. It is much better to have a broad-based system that is broadly the same across the country, although I am in agreement with certain hon. Friends that the Government should look at all possible options in detail as we look to implement the tax.

I turn to the idea about which I have heard so much from Opposition Members: that this tax is somehow not progressive, but regressive. They think that if they keep repeating that, it will make it true. I took a look at companies. Let us think about big companies versus small companies. The smallest 40% of companies will pay nothing extra as a result of this measure. The next 40% will pay, on average, about £400 more. The smallest businesses are really not going to be paying a lot of national insurance.

Let us turn to individuals and consider the richest individuals. Somebody who earns a very high amount—let us say £1 million a year—will, by my maths, be paying £12,500 extra as a result of this measure. A basic rate taxpayer pays something like £3.40 a week. I am afraid to say to the Opposition that this is a progressive, fair and broad-based way of dealing with the problem.

In addition, we need to think about outcomes. Members on both sides of the House have made the fair point that the money, in and of itself, does not deal with the problem. Yes, we need better pay for carers. Yes, the system needs to be better. Yes, we need to be sure about what we are getting with the money. Yes, there needs to be reform. We should study all that, and work with the Government over the next few weeks and months as the White Paper comes out. I will be supporting the Government in the Lobby this evening.