Health and Social Care Levy Bill

Dan Poulter Excerpts

Committee stage & 3rd reading
Tuesday 14th September 2021 Commons Chamber

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I am someone who has believed in getting cross-party consensus on the future of social care funding, and who has been calling for a health and social care levy since 2016. Does the hon. Member recognise that there has actually been cross-party consensus on this issue, and that the shadow Care Minister, the hon. Member for Leicester West (Liz Kendall), called for a health and care levy in 2018? How does he reconcile that with his comments just now?

[James Murray]

Let us be really clear about what the shadow Care Minister, my hon. Friend the Member for Leicester West (Liz Kendall), proposed, because it was entirely different from what is being discussed now. She proposed that the tax should be raised from unearned income, and that it should be progressive and fair between generations, which fundamentally differentiates it from what we are discussing today. If the Government had truly sought to build cross-party consensus, does the hon. Gentleman not think that they would have done better to take some time over the Bill, rather than rushing it through within a week of the proposals first being announced, with limited ability for scrutiny and without any discussion of cross-party consensus about how to proceed?

[Dr Poulter]

Will the hon. Member give way?

[James Murray]

I am going to make some progress now; I have given way to the hon. Gentleman already.

As I said, although new clause 8 has not been selected today, I hope that Government Back Benchers have seen it on the amendment paper and will perhaps raise the matter with their colleagues on the Front Bench.

I hope, however, that there will be a vote this evening on new clause 5, and I urge Government Members to join us in voting for this crucial review of how the Bill will make inequality worse. We know how widespread and deep rooted inequality has become in our country. The latest bulletin from the Office for National Statistics on household income inequality in the UK for the financial year ending 2020 confirms what we all know: the income gap between the richest in society and the rest of the population has widened over the last decade. A tax rise that singles out income from employment can only make this inequality worse, and new clause 5 seeks to expose this.

Not only does inequality manifest between people who may live in the same area, it also creates divides between different nations of a country and the regions within them. In areas where average wages are lower and fewer people get income from other assets, the impact of the national insurance rise and the levy will be more acutely felt. Recent analysis in the New Statesman suggested that within the regions of England, it is people in the north-west and the west midlands who will take the greatest hit to their disposable income as a result of the Bill.

Data from the Office for National Statistics’ wealth and assets survey shows that the south-east is home to well over 3 million adults living in families with net wealth per adult of more than £250,000. That is roughly six times the number in the north-east. A tax increase that ignores income from renting out properties and selling financial assets, and that seeks to fund a plan that ignores differences in house prices and care costs between different regions, is destined to make inequality worse.

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[Mr Fysh]

My intention with amendment 7, which I have tabled with esteemed colleagues, was to try to get the Government to focus on a way of looking at the future costs of social care and how to finance them more creatively. I have to ask: if not now, when?

We know that the most powerful way to address costs in the future is to provide for them in the present and to have the power of compounding investment returns over a period of years to meet the liabilities that people have. I am passionate about encouraging the Government to look at ways to encourage people across the board, with progressive incentives in different ways, to make provision for themselves with support from the state.

People think that they pay a contribution into national insurance that rolls up over time and gives them an entitlement to a pot of money—I have heard constituent after constituent talk about that—when we in this place know that that is not in fact the case. In fact, my right hon. Friend the Minister confirmed that that is not the Treasury’s view and that national insurance is a tax collected in-year that must be spent in-year.

There is a big opportunity for reform and innovation that could be useful and get very much back to the ethos behind the Beveridge report and the origins that I spoke to in the Second Reading debate. There was a radical movement trying to help individuals and groups provide for each other. Lloyd George and the Liberal Government’s 1911 Act was about getting national aid into the system in a creative way. I think there is an opportunity for us to talk as one whole House about innovating for the modern world in that way. What was wrong with some of those older schemes and co-operatives, friendly societies and such things in the old days was that sometimes people ran off with the money. That was one reason why there was a need to put more of a national embrace around it and administer it that way. In the modern world, we can do it differently.

All I was trying to do with the amendment was give scope for the Government to think about applying some of the funds from an element of national insurance or something related to it—that is, the levy, which clause 2 sets out—to help incentivise such pooled saving schemes. That is not necessarily insurance or private insurance with a middleman; it could be national schemes or community schemes that are properly co-operative and very low-cost. There are many modern approaches to that in the digital world, such as digital autonomous organisations, where there are no middlemen at all and people do not have to rely on a contract.

That was the pure intent of my amendment, so I am a little disappointed that the Government do not seem to want to engage with it. I urge my right hon. Friend and those on the Treasury Bench to think about ways we might do that in the future, because I can see it as a useful evolution of the policy that might bring people from all parts of the House together in the way I have been describing.

[Dr Poulter]

I am sympathetic to the point that my hon. Friend is making. In principle it is a very good point, but the practicalities are that the moment we move towards the system that he is advocating, we have to clearly define what is health and what is social care, and that makes the integration of the two systems much more challenging. In the context of better integrating health and social care, has he considered that practical element in putting forward this proposal?

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[Stephen Flynn (Aberdeen South) (SNP)]

It is a remarkable feat indeed that the Government have managed to unite the left-wing press, the right-wing press, the Unionist press, the nationalist press, pressure groups in favour of ending poverty and pressure groups who want to see businesses excel, all in condemnation of the Bill. Although I do not think anyone in the House doubts that it will once again sail through the voting Lobbies this evening, I would like to put in my two cents for what little it is worth. In that regard, I commend the amendments in my name and those of my learned colleagues.

As colleagues across the Chamber will recognise, new clause 1 seeks to get the Government to provide an equality impact assessment of the effect of this Bill, by age, on people’s wealth or income. The reason they will not accept that, despite the polite remarks of the Minister, as always, is that such an equality impact assessment would put in black and white what all the pressure groups are telling us. Indeed, much of what we have heard from Members across the Chamber throughout today and last week is that the Bill, in its entirety, will hammer the youngest and those who work the hardest in society, but not necessarily those in the south-east of England who have the most to give.

I heard a remark earlier that about 50% of the income that will be generated by this Bill will come from those under the age of 45. It will be coming primarily from younger people, who are the very people whose horizons have been shortened by Brexit, and whose job opportunities, career opportunities and educational opportunities have been hammered by the pandemic. What the Government are seeking to do is impose further challenges to their lives. It is an unforgivable act, but one that they are going to push through with no contrition whatsoever, as far as I can see, and in the knowledge that they also plan to cut universal credit in the coming weeks—a double whammy on those in society who can least afford to face the real challenges in front of them, and an abdication of responsibility of the highest order.

However, it is not just individuals, young people, working people or families who will be hammered by this tax; it is also businesses. That takes me nicely to our new clause 2, which involves trying to get the Government to do an economic impact assessment of these policies. However, they will not do that either, because they know what the outcome would be, as we see in the language being used by business groups. The Federation of Small Businesses has been absolutely clearcut about its expectation that the proposal will force 50,000 into unemployment. It is a disaster for business.

The Tory party was once, when I was growing up anyway, regarded as the party of business. What has happened? Why are we in a situation now in which not only have the Government forced through Brexit in the middle of a pandemic—and businesses are having to deal with the challenges of exporting goods and the shortages of supplies, to pay back bounce back loans before they have even had the opportunity to bounce back, and to deal with the fact that furlough is going to end despite the clear uncertainty facing them—but they are seeking to impose a jobs tax? Where is the justification for that? I encourage any Government Member to rise to their feet and disagree with anything I have said, but they will not because they know that we are right in this regard.

[Dr Poulter]

I declare an interest as a practising NHS doctor. Will the hon. Member reflect on the fact that the single biggest transformation delivered to health and care in the last 20 or 30 years was when Tony Blair increased national insurance to give a huge injection of funding to improve care for patients throughout the United Kingdom, including Scotland? In reflecting on that, can he see the benefits that will come from this levy for patients in his constituency and all our constituencies in the years to come, because it will make a difference? Will he reflect on the difference that it will make to real people’s lives—improving cancer care, reducing waiting times—and does he see that there is a benefit in that?

[Stephen Flynn]

I thank the hon. Gentleman for his intervention and for the tone in which it was made, and I shall reflect on two points in relation to what he said. He said that perhaps the biggest change to health and social care was the action of Tony Blair, but I happily disagree with that. In fact, it was in 2016 in Scotland, when we did something that I heard Members discussing earlier at length: we integrated health and social care in Scotland. That was on top of the fact that we provide free personal care for our elderly and so on, and that is in contrast to the situation in England, which has led to the crisis we see before us.

On the hon. Gentleman’s point about finance, which is the crux of this argument, do the ends justify the means? That is the purpose of this discussion. I believe in the ends. I believe our NHS and social care services deserve more money, but I do not believe that this is the right way to do it. That obviously leads to the next question, which is about how we should fund this. I heard Conservative Members—rightly—shouting at the Labour Benches, “What is your plan?”, but what is the cost of Trident? What is the cost of nuclear weapons? Over their lifespan I believe it is between £164 billion and £200 billion. Conservative Members will not say that those weapons should be scrapped, but I will. They should absolutely be scrapped, and we can use that money to fund our vital NHS services. The answer is staring them in the face, but they choose not to look at it because this is about priorities, and their politics and priorities differ massively from mine, and ultimately from those of the people of Scotland.

Finally, amendment 4 goes to the nub of where much of our frustration lies with the Bill, because if we shake it about a bit, this is ultimately another UK Government power grab. They are seeking to tell the Scottish Parliament how it should spend money in devolved areas. Whether they agree or disagree with the national insurance hike, all members of the Committee, certainly Unionist Members, should be concerned about the consequences of the UK Government seeking to impose themselves once again on devolution. I say that not as someone who seeks to defend the Union—by all means continue to do it—but because all the UK Government are doing is driving home the message in the minds of the people of Scotland that they do not respect the devolution settlement and they do not respect the Scottish Parliament.