Health and Social Care Levy Bill

Debate between Gary Sambrook and Abena Oppong-Asare

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to respond to this Second Reading debate on behalf of the official Opposition. I thank all hon. Members for their contributions. As several have said, it is good that we are now debating these issues, even though the Government have provided a short time today.

We have heard some excellent contributions, including from my right hon. Friend the Member for Barking (Dame Margaret Hodge), who spoke about how unfair the new tax is on working families. She also made it clear how many alternatives there are to this tax. My hon. Friend the Member for Birkenhead (Mick Whitley) talked about how the combined impact of this tax and the universal credit cut will push more families in his constituency into poverty. My hon. Friends the Members for Dulwich and West Norwood (Helen Hayes) and for Putney (Fleur Anderson) spoke powerfully on behalf of hard-working and underpaid social care staff, pointing out that the Government are increasing their tax through this Bill. As my hon. Friend the Member for York Central (Rachael Maskell) said, there is nothing in the Prime Minister’s announcement for unpaid carers. My hon. Friends the Members for Swansea West (Geraint Davies), Liverpool, Riverside (Kim Johnson) and for Hornsey and Wood Green (Catherine West) talked about the unfairness in this Bill.

The hon. Member for Rushcliffe (Ruth Edwards) made a powerful speech about her family’s experience with dementia and reminded us about the people at the heart of this debate. Several Conservative Members also called on the Government to think again about this tax rise, including the right hon. Member for Wokingham (John Redwood) and the hon. Member for Basildon and Billericay (Mr Baron). I hope they will join us in the Lobby tonight.

As the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), set out last week, and as my hon. Friend the Member for Ealing North (James Murray) said earlier, Labour has two tests for the Government’s proposals: first, do they fix the health and care crisis; and secondly, are they funded in a fair way? The answer to both is a resounding no.

[Gary Sambrook]

We have had three hours of this Second Reading debate, and as far as I am concerned, not a single Opposition Member has actually said how they are going to fund their plan and how it is going to be fair, so will the hon. Lady take this opportunity now to tell the House what individual tax Labour would put up to fund it?

[Abena Oppong-Asare]

I am a bit concerned that the hon. Member has not been listening to the debate carefully. We have made it very clear: if a tax has to be raised, it should be fair across income groups and generations. The national insurance rise fails to pass these tests, and the Chancellor wants us to believe that there is no way to do so. That is not the case. I want to hear from the hon. Member what he is going to tell his constituents about breaking his manifesto promise, and why he has done so. What will he say to the low-paid hospital cleaners who will have to pay this tax when some of the wealthiest people in his constituency will not?

It has become increasingly clear that this Government do not have a plan to fix the social care crisis or to tackle spiralling NHS waiting lists. It is certainly not in this Bill, which only says that the Chancellor will decide how to distribute the revenues between health and care. Even if we look at the broader proposals, it is clear that there is still no plan for social care. Indeed, the Chair of the Health Committee made this point earlier. A promise of a White Paper is simply not good enough. Despite the Government repeatedly stating that they have finally grasped the social care nettle, the small print reveals that only a fraction of this spending will go to social care over the next three years—and even that is not guaranteed.

Of course our NHS needs more funding, not least because the Tories have underfunded it for a decade, but funding without a plan is not an answer. On social care, the Institute for Fiscal Studies has said that

“the extra funding will not be sufficient to reverse the cuts in the numbers receiving care”

since 2010. Under the Tories, billions have been cut from social care despite growing demand, vacancies have soared, and waiting lists have grown ever longer. This sector is in crisis and it needs help now. Instead, the Government are making it wait. The hard-working and underpaid staff in the care sector deserve better than that. As my hon. Friend the Member for York Central said, even with the new cap, hundreds of people will be left with high care costs, with many costs associated with being in a care home excluded completely from the cap. The cap does not even kick in until 2023. For those paying for social care, or those who need it but cannot afford it, this is no help at all. Even when it does start, too many will begin to face charges of hundreds of pounds a week even after they hit the cap.

The Government cannot even guarantee that this new system will prevent people from being forced to sell their home to pay for care. For those who live in the north, where house prices are generally lower, that is even more likely—£86,000 is a big proportion of house values in the north and the midlands. The plan fails on its own terms, and it is not only Labour saying that. Last week, the Conservative chair of the Local Government Association said that the Government’s announcement would make the situation worse because private care providers would face increased tax bills. Let that sink in: the leading Tory voice for local government is not only saying that the proposals will not help, but that they will make things worse, and it is not just him. The hon. Member for Stevenage (Stephen McPartland)—also a Conservative, last time I checked—said:

“The new health and social care levy provides no new money to fund social care for three years. No money for living costs, only personal care costs. Selling your home is just deferred. It is a tax on jobs.”

The Government have no plan for social care and no plan to bring down NHS waiting lists. Instead, all we are left with in this Bill is a manifesto-breaking tax rise on working people and the businesses who employ them—a tax rise that will cost a typical employee an extra £261. I say that again to the hon. Member for Birmingham, Northfield (Gary Sambrook): this tax rise will cost a typical employee an extra £261. It is a tax rise that leaves many graduates with a marginal tax rate of nearly 50% and that comes after this Government are already hitting working families with higher taxes and a freeze in the income tax personal allowance.

That is a triple whammy of taxes on working people, yet the Government have chosen not to extend the health and care levy to rental income, even though 67% of people who own buy-to-let properties are in the top fifth of income distribution. Nor have the Government looked properly at financial assets, stocks and shares, or income from other forms of wealth. The proposed dividend tax rise will raise only £600 million, compared with the £11.4 billion coming from workers and businesses, and it is not even in the Bill. Just £1 in every £20 is coming from dividends, rather than people’s wages, and the Government will not even rule out further tax rises on working people during the rest of this Parliament.

The tax rises could not come at a worse time. A fragile recovery is being put at risk at precisely the time we need businesses to create jobs. Family incomes are being hit by the universal credit cut and rising household bills. In fact, when combined with the universal credit cut, a care worker will be over £1,000 worse off a year. Let me repeat that: £1,000 worse off over a year. The Government’s own tax impact assessment, which my hon. Friend the Member for Ealing North referenced earlier, states:

“There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

That just sums up how this Government are treating workers and families.

The impact assessment also states that the new tax will affect business decisions about hiring new workers and putting up wages. It is a tax on jobs, a tax on workers, a tax rise with unfairness at its heart, and a tax rise without a plan. Politics is about choices—Labour would not have made these choices. We cannot support this Bill, and I urge Government Members to remember their manifesto commitments that they each made, to think of the lowest paid in their constituencies and those in desperate need of care today and to do the right thing and vote against the Bill on Second Reading.