Health and Social Care Levy

Dehenna Davison Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Jake Berry (Rossendale and Darwen) (Con)]

Let me start by congratulating the Government on grappling with what I think is a very difficult issue—actually, it is probably “the” issue for our generation to deal with—of how we ensure that older people have dignity in their old age, and how we deal with an ageing population. However, I do not believe that the way in which we are proposing to do it, through national insurance contributions, is the correct way.

There are three reasons why I think this will be particularly damaging to areas such as the one that I represent. First, ours is an area with low incomes. The lower a person’s income, the more that person pays, as a proportion of that income, in national insurance contributions. The national insurance rate on incomes above £50,000—before these changes—is just 2%. So those on the lowest incomes pay the most proportionately in national insurance contributions.

Secondly, ours is an area with low property values. An £86,000 cap on contributions, or even a £100,000 asset floor, may be right for other parts of the country, but in my constituency, where the average property price is £170,000 or £180,000, by the time people hit that damping floor of £100,000, they would have had to pay the equivalent of 50% of their property value in care home fees.

[Dehenna Davison (Bishop Auckland) (Con)]

I thank my right hon. Friend for raising an important issue, with which I too have been grappling since yesterday’s announcement. Does he agree that it would be wonderful to hear from the Government that they may consider looking at regional disparities in house prices when setting the floor?

[Jake Berry]

What a brilliant suggestion—one that I was about to make myself. I think that the Government should think about both the £86,000 contribution and regional house prices when considering that damping floor.

Thirdly, ours is an area with historically high unemployment. National insurance, as we have all called it during election campaigns, is in fact a jobs tax. It is a disincentive to the creation of new jobs, and those already in work will see, for instance, pay rises suspended as the wage bill goes up for employers just for employing people in their businesses. That is why I think that national insurance is the wrong tax to use for the people in my constituency. They are hit just as hard by this appalling social care issue as people anywhere else, but, for us, I would have much preferred it if the Government had looked at income tax, which, as we heard from the Chair of the Treasury Select Committee himself—my right hon. Friend the Member for Central Devon (Mel Stride)— would be much less regressive.

--- Later in debate ---

[Dehenna Davison (Bishop Auckland) (Con)]

I know there have been partisan words flying across the Chamber today, but one thing that unites everyone across the House is a commitment to try to tackle the issue of social care so that our children are still not having to deal with it in generations to come. I would like to start by thanking all our NHS workers who have been a part of tackling the really difficult challenge over the past 18 months. Their dedication to fighting covid, keeping us safe and keeping the NHS working at this difficult time must be commended by us all. I also want to thank our care workers. I have to mention my cousin Natalie and my great aunt Elaine, who have been fantastic, working throughout the pandemic. I have said it now. They will be watching at home.

I am really proud that, after years of it being kicked down the road, it is the Conservative party that is finally grasping this issue and saying that we are going to tackle social care. To some extent it has been disappointing to hear Labour criticise with no viable alternative. I want to try to be more constructive. One of my concerns is about the speed at which these proposals have been presented to us. We know that urgency is needed to tackle this issue. In a sense, it is fantastic that the Government want to act swiftly, but having seen these proposals only yesterday, we have had limited time to scrutinise them effectively and to consult our constituents and find out what their concerns are about these proposals, and to feed that into Government. I really hope that Government will engage with us as this passes through to the next legislative stages.

The speech that really struck me today was from my right hon. Friend the Member for Rossendale and Darwen (Jake Berry). I kind of wish I could copy and paste his speech and turn it into my own, because it really did address many of the points that I wanted to make. The first one I want to touch on is the relativity of house prices and how the maximum floor for care will have an impact. My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) made a decent point about needing a simple system, but unfortunately, when looking at that limit and relative house prices in areas such as my Bishop Auckland constituency, where the average house price is about £120,000, seeing constituents potentially lose a huge percentage of their only asset—an asset that they have worked their entire lives for to pass on to their children—is something that I am finding incredibly hard to justify, when people in other areas of the country who have worked equally hard would lose a much smaller percentage of that asset.

It is good, however, to see the floor lifted from £23,000 to £100,000. That is to be commended, but still, there is an issue about the ultra-wealthy who will also have the cost of their care capped, and who can afford to pay more than the £86,000. I hope that that will be addressed. I also have concerns about national insurance being used as the tool for this, like many other colleagues who have spoken today.

My main concern is the fact that we have not had a great deal of time to consider these proposals and to consider alternatives, as my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) said. The article by Peter Lilley proposing a state-backed optional insurance system not only is a free market approach to tackling this, backed up by the state, which is well needed, but goes to the Conservative principle of personal responsibility that I think every Government Member supports.

A quote by Mike DeWine, the former Governor of Ohio and a US Senator, struck me:

“Governing is about making tough decisions, but it’s also about figuring out a better way to do things.”

I am so proud that the Government are making this tough decision. I hope that by working together, we can find that better way of delivering on our social care pledge, but unfortunately, for the reasons I have highlighted today, I will be abstaining on this today. However, I will work alongside colleagues to try to make it the best it can be for all our constituents, for the country and to ensure that our economy can bounce back in the best possible way.

--- Later in debate ---

[Ben Everitt]

No—not cocktails!

We have to recognise that the simple option is not always the right one, and I look forward to the debates that will follow as this policy evolves.

As for the quantum and the period over which the revenue is spent, I must ask whether it is enough to fix the care sector. The hon. Member for Sheffield South East (Mr Betts), the Chairman of the Housing, Communities and Local Government Committee, referred to the previous report of the Health and Social Care Committee, which required an additional £3.6 billion for the sector. Are we going to get that, and is it going to go through at the right time? We need to solve the broken economics of running a care home, which mean that providers must fund the services off the back of private clients to subsidise the clients who are referred by local authorities. I think we need a big conversation about that as well.

Let us turn to how the money is spent. The additional funding must be supported by meaningful reform. We must address the issue of funding allocation, and the allocation of responsibility within the sector. Currently, the system is set up to incentivise referrals. The system is split between local authorities, care providers and the NHS.

[Dehenna Davison]

Does my hon. Friend agree that we need a wide spread of provision to ensure that we have the best possible outcomes for social care patients?

[Ben Everitt]

Absolutely. We need more providers in the market, but the market needs to be functioning for that to take place.

My hon. Friend made a very good point earlier about another aspect of how the money is spent. The £86,000 cap needs to be met and tweaked with a regional house price element to recognise the fact that houses are worth more in some areas than in others.

In conclusion, I will vote for this. Our job in this place is to make good laws, and we need to do that at every stage. This is a tricky problem. The Government are right to grasp the nettle and reform social care. The fundamental problem that we face is that the assumptions that we are basing our entire welfare system on were made in the 1940s when people went into work in their teens, retired when they were 60 and lived until they were about 65. Now, they are living much longer lives and retiring earlier. That is the funding issue that we face.