Health and Social Care Levy

Jess Phillips Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Paul Bristow]

I have given way twice, and I would like to continue because I want to make another important point.

This tax, this levy, needs to be accompanied by reform. The Health and Care Bill is in Committee, and it is really important. The way incentives are geared within the system is one reason we can power through elective waiting lists. We pay for care through a system of tariffs. I urge Ministers and others to think carefully about how we pay for elective procedures in our NHS, because any system of tariffs needs to ensure that hospitals are paid properly for carrying out procedures. There need to be proper incentives for hospitals to carry out hip, knee, cataract and hernia operations, which are the majority of the backlog, as well as treating cancer, heart conditions and everything else. If we are not able to find the right levers within our NHS system to ensure that we power through those elective procedures, we will not be able to solve some of the more serious operations at the end.

Innovation tariffs, for example, would also help by encouraging new ways of doing things. We cannot have a system where, financially, trusts and our NHS are not incentivised to do the things they need to do to be more productive. They should not pursue short-term financial measures when we really need incentives to make sure that they do the right thing.

I will be marching through the lobby to support the Government today, because this is really important.

[Jess Phillips (Birmingham, Yardley) (Lab)]

Will the hon. Gentleman give way?

[Paul Bristow]

I have given way a few times.

We must grasp the nettle of NHS reform, backed with finance so that our NHS staff have the bandwidth to deal with the needed reform. That bandwidth is capacity and money. If that does not happen, we will borrow more and spend more in the long term and this ever-lasting round of more staff, more money and more plans will go on and on.

I urge hon. Members to support the Government’s motion today.

--- Later in debate ---

[Dr Andrew Murrison (South West Wiltshire) (Con)]

May I congratulate the Government on dealing with unfinished business? Since 1948, we have pooled our risk for the management of the consequences of poor health except for things such as dementia and the general frailty that for some of us attends old age. This could be a historic moment in which we sort that out, and I will most certainly be enthusiastically supporting the Government tonight. It is grossly unfair that certain conditions should be excluded from our provision, and I am so hopeful that this will finally, after 70 years, complete the job begun by our predecessors.

I am disappointed that Labour Members should have taken the line they have, because I recall their doing something really rather similar in 2003 with national insurance contributions, presumably because Gordon Brown and Tony Blair at that time decided this broad-based tax was the fairest and most equitable way of dealing with this and, crucially, of raising significant amounts of money. We can debate whether the money was then well spent, and the statistics and figures suggest that that was not the case at least for the rest of that decade, and productivity in the NHS only started picking up in the following decade. Nevertheless, in raising sufficient funds for spending on something we all agree is vital, Gordon Brown and Tony Blair made the right call in 2003, and I find it dispiriting, saddening and disheartening that Opposition Front Benchers should on this occasion decide, for their own purposes, not to support it.

[Jess Phillips (Birmingham, Yardley) (Lab)]

I notice from the right hon. Member’s entry in the Register of Members’ Financial Interests that he makes income via rentals, as many people in this House do. Does he think it is fair that, in what has been presented to us today, rental income for landlords is completely not within the remit of any take for this levy, so there will be care workers in South West Wiltshire who are paying this on the income they make being care workers while it will not be paid by landlords with rental income?

[Dr Murrison]

I am grateful for that intervention, because additional rate taxpayers, who I think make up about 2% of taxpayers in this country, will be paying a fifth of the whole receipts for this measure and 14% of taxpayers will be providing half of it. That is progressive, which is presumably why Gordon Brown and Tony Blair, all those years ago, decided to levy this on national insurance. I am extremely grateful to the hon. Member for raising and underscoring that point.

However, I do have some concerns, as Ministers would expect me to have. One of those concerns was expressed by our right hon. Friend the Member for Rossendale and Darwen (Jake Berry), which is that this is a one-way tax, because there is no way that in the future we are ever going to attack a tax hypothecated to health and social care. In some eyes it represents a flawed tax, since as Conservatives we of course always want to remove as little money as possible from the pockets of all of our constituents.

There is also a traditional disconnect in healthcare between money in and services out. We found that in 2003, and the challenge for the Government today, which I am fully confident they are up for, is to turn the money they have announced yesterday and today into the output we so badly need, and which indeed is vital if we are to turn this around in two years’ time and use this money for social care.

There is some concern about the extent to which the money that has been announced for this will distort the social care market, and I would be interested in Ministers’ views on that. Will the industry load hotel costs, and will it front-load charges up to the £86,000 cap? How will that incentivise the domiciliary care market, which could turn out to be extremely positive? How will it affect the current 40% cross-subsidy from fee payers to local government-funded customers? How can it grow a vibrant insurance product market that will cover the delta—the £20,000 to £100,000 difference—and what will be done with actuaries and underwriters to that end?

Can I finish by saying that all of this depends on improving productivity in the national health service? It is a challenge that has evaded many over seven decades, but one that must be grasped if we are to complete this and ensure that we do indeed set the foundations—and I am confident we will—for proper social care. We need, for example, to drive down sickness absence, which is very high in the national health service. We need more service work to be done by professions allied to medicine. We need more artificial intelligence, data analysis and robotics. We need to crack down on variations in healthcare and to have zero tolerance for practitioners who diverge from it. We need to cut treatments and procedures of marginal benefit. We need early switching to generics. We must stop the revolving door between social care and the acute sector—something I am afraid the industry exploits to its advantage. Over time we must revisit the disastrous doctors’ contracts that I am afraid have meant, over the past several years, that people like me at the peak of our powers are retiring early or going part time, grossly reducing productivity in our national health service.