Health and Social Care Levy Bill

Catherine West Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Steve Barclay]

I will make a little progress. I have taken a number of interventions, including one from my right hon. Friend.

Existing NICs reliefs and allowances will also apply to the levy. That will mean that 40% of all businesses will not be affected owing to the employment allowance. When it comes to individuals, those earning more will pay more. Indeed, the top 14 per cent. of taxpayers will pay about half the revenues. Conversely, at least 6.2 million people earning less than the NICs primary threshold will not pay the levy at all.

[Catherine West (Hornsey and Wood Green) (Lab)]

rose—

[Steve Barclay]

I am sure that the hon. Lady rises to welcome the progressive nature of that measure.

[Catherine West]

Does the Secretary of State accept that, if 40% of businesses or employers are not affected, the other 60% therefore will be? What assessment has the Treasury made of the number of jobs that employers will not create because of, apart from anything else, the introduction of this measure at a time when the recovery from covid is fragile?

[Steve Barclay]

It is not just that the first 40% will not pay anything, as my right hon. Friend the Chancellor mentioned. The next 40% will pay less than 1% of their wage bill, and indeed 70% of the employer contribution comes from just 1% of business. To some extent, the hon. Lady’s point was also picked up by the Monetary Policy Committee in its evidence to the Treasury Committee, when it said, “You should not ignore one half of the policy announcement.” Of course, one needs to look at the spending implications of the measures, not just—

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[James Murray (Ealing North) (Lab/Co-op)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House declines to give a Second Reading to the Health and Social Care Levy Bill because, notwithstanding the need to increase funding for health and social care, the Bill raises money for an approach announced by the Government that fails to set out a plan to fix the crisis in social care, improve pay and conditions for social care workers, or clear the NHS waiting list backlog by the end of this Parliament, while breaking the Prime Minister’s promise that no one will have to sell their home to pay for care; because it lacks a guarantee that Parliament will vote on a social care plan before spending the money it raises; and because it breaks the Government’s promise not to increase National Insurance, raising taxes on employment that will disproportionately hit working families, young people, those on low and middle incomes and businesses trying to create more jobs in the wider economy, whilst leaving income from other sources untouched.”

Today, the Government are pushing through a new tax on working people and their jobs. All scrutiny by the House of Commons of the Government’s manifesto-breaking plans has been squeezed into a single day. As Conservative Members have said, we have just a few hours of scrutiny on this entire Bill, just one week after the Government first revealed their intentions. Why the sudden rush? The truth is that the Prime Minister and the Chancellor are desperate to avoid giving their own side enough time to push back. They want to make sure that, by the time it sinks in with their own MPs what a mistake this tax rise is, it will be too late for their Back Benchers to mount any opposition.

Perhaps it is also sinking in with Conservative Back Benchers that the Prime Minister and the Chancellor are pushing through these plans for a tax rise without having a plan for social care. If we are to believe the Prime Minister, and there is absolutely no reason why we should, he had a plan for social care two years ago. We are still waiting to see it. All we have today is a tax rise for working people and for businesses that are creating jobs.

[Catherine West]

Does my hon. Friend agree that these problems began in 2010? The NHS’s satisfaction rate in 2009 was 80%, and now it is way lower. In fact, they might have got rid of all the satisfaction surveys so that we do not know what people really think.

[James Murray]

My hon. Friend makes an important point about the Conservative Government’s impact on the national health service over the last decade, running it into the ground and leaving it in such a state when the covid pandemic hit.

As my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chancellor, said last week:

“There are two tests for the package announced yesterday. First, does it fix social care? Secondly, is it funded fairly?”—[Official Report, 8 September 2021; Vol. 700, c. 327.]

Looking at the Bill, it is clearer than ever that the answer to both those questions remains a resounding no.

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[Catherine West (Hornsey and Wood Green) (Lab)]

I must agree with the hon. Member for South Dorset (Richard Drax) in one regard: we are talking today about not a small tax rise but a whopper. This levy takes us back to 1950s levels of taxation.

The post-pandemic recovery is currently particularly fragile. Usefully, the House of Commons Library sent me the statistics on the jobless figures today—I am sure many other Members have theirs—and in Hornsey and Wood Green there are 6,430 jobless people. That is 4,000 more than pre-pandemic, so the idea that the recovery is secure is for the birds. There is a real question mark in my constituency over job retention following the end of furlough, because the recovery in the service-based economy is yet to take off securely.

What is on the minds of my constituents in Hornsey and Wood Green? First, the likely cut of £20 per week for those on universal credit, which will affect 12,970 households in Hornsey and Wood Green.

Secondly, the two-child limit. If people in Hornsey and Wood Green have large families and rely on the benefit system for some assistance, only the first two children get any help. I am a third child. I do not know how many Members are third, fourth or fifth children, but they should think about their parents cursing them because they were born third, fourth or fifth.

Thirdly, energy bills are about to go up. I am sure the Minister has done his own analysis of the fact that we did not have a windy summer, which meant that the renewables did not do as much as we had hoped. We will be reliant on gas and even coal, which we should not be given all our commitments in respect of COP26. For those reasons, we will see increases in our energy bills this winter.

Fourthly, the potential for higher food costs is on my constituents’ minds—that is, if they can find the food that they like in the supermarkets after the effects of Brexit and covid.

[Matt Rodda (Reading East) (Lab)]

I am grateful to my hon. Friend for giving way on that very good point. Does she agree that it is fundamentally unfair for hard-working younger people, who face dramatically increased costs of living and high rental costs, to have to pay more than their landlords, who will not be taxed under the Government’s proposal?

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[Catherine West]

My hon. Friend, who always talks about the impact of measures of this sort on those who rent, makes an excellent point. This levy is going to be very difficult for them, yet it will probably not be nearly as hard for their landlords.

Fifthly, the likelihood of a council tax increase is on my constituents’ minds. Why does council tax shoot up under Tory Governments? Because if local government is starved, council tax has to increase to cover local issues. In the case of this measure, the lowest paid will not only be paying for a whopper of a tax increase—the biggest since the 1950s—but will be faced with rising council tax bills and the precept for social care, because this measure will not adequately look after the local government aspect of social care. I declare an interest as a vice-chair of the Local Government Association and a former council leader.

I wish to make two further brief points—

[Alexander Stafford (Rother Valley) (Con)]

I am listening carefully to the hon. Lady’s interesting speech and her list of what her constituents speak to her about. One of the top issues that my constituents speak to me about is the need to deal with social care and to make sure that older people and people who need social care have adequate facilities and funding, yet I have not heard about Labour’s plan to deal with this important issue.

[Catherine West]

I am sure that when the shadow Minister, my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare), responds to the debate she will give the full detail of Labour’s proposals.

Let me return to my point about the important elements of reform that we need in local government. First, we need all care workers to be paid the living wage. By that I mean not Mr Osborne’s fake national living wage, which was the national minimum wage, but the real living wage, which in London is now more than £10 an hour but still languishes under £9 in other parts of the country. That must be addressed urgently. We need to look at those wages not least because of the important point that, as my hon. Friend the Member for Liverpool, Riverside (Kim Johnson) said, we are losing so many carers from the care sector. In addition, the Government are mandating vaccinations, and there is a big question mark over whether that is the correct strategy for those workers. Perhaps that is just another policy area where the Government are like a shopping trolley. Perhaps they will do another U-turn tomorrow and we will see that gone, we just do not know.

The other important element is training. Many experts have told me about the importance of training in the care sector, in the NHS, and especially in those dispersed jobs where people are actually working in the homes of those for whom they care and in our care homes. There is a desperate need for training and a proper career path in order to encourage people into the sector. Even the promise on the apprenticeship opportunities for young people to enter the care sector has been deeply disappointing in terms of the figures involved. Very few from the kickstart programme have ended up in the care sector, which desperately needs young people or people who are re-entering the workforce, but they need to be on a proper training path and in a proper career so that we have high quality care.

I hope that Members will search their consciences and think about how those leaflets will look at the next general election. We will be brutal about this, because the measure is attacking those who are least able to afford it.

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[Jesse Norman]

There have been 27 speeches, so, if I may, I will continue for a while. I may take an intervention later if we have made a bit more progress.

I feel particularly badly for the hon. Member for Erith and Thamesmead because, when the hon. Member for Hornsey and Wood Green (Catherine West) was asked what Labour’s plan was, she said that her Front-Bench colleagues would address that in their remarks. We waited with bated breath for the moment when they would address the question of what the plan was or what taxes would fund it. I can tell you, Mr Deputy Speaker, that it will need a lot more than £12 billion of health and social care funding to repair the damage from that hospital pass from the hon. Member for Hornsey and Wood Green.

[Catherine West]

I am grateful to the Minister for giving way, as he mentioned me. The UK economy has seen enormous asset price bubbles, yet not much appears to be getting back from those who have made quite a lot of money over the years through real estate. Why is he taking more money from working people instead of those who have gained enormous amounts—millions—from the asset bubble?

[Jesse Norman]

I am desperately sad, because I thought the hon. Lady was going to answer my questions about Labour’s plan or the taxation for it. Of course, we would expect people earning that income to pay property and income taxes in the proper way, and, if they are receiving dividends, their tax will go up as a result of the changes that we have made. [Interruption.] I am asked on what basis I say that. It is on the basis of a distribution analysis of the overall package of measures published by the Treasury in the last week, which is available for all Members to read and consult. If they do, they will see that this is a very redistributive package, with the highest-income 20% of households contributing 40 times that of the poorest 20% of households. It is a genuinely progressive policy, and the distribution analysis makes that clear.