Health and Social Care Levy Bill

Lord Whitty Excerpts

2nd reading & Order of Commitment discharged & 3rd reading
Monday 11th October 2021 Lords Chamber

[Lord Whitty (Lab)]

My Lords, it is of course a pleasure to follow the noble Lord, Lord Bethell, but also to underline that what he has bequeathed to his successor is no answer to this problem, and he is now asking the Minister to provide at the end of this debate an answer which he and his many predecessors failed to provide.

I am totally convinced that the social care system has been chronically underfunded for decades and that the NHS itself requires very substantial increases, not just because of coronavirus but because of earlier underfunding and mis-funding. I am therefore at one with the noble Lord, Lord Macpherson, that we do need a significant tax rise, but I strongly object to this Bill. I object to its ill-thought-out basis; its misuse and possible distortion of the national insurance system; its regressive burden and unfairness, in terms of its impact on low-paid workers, jobs and the young; its jobs-threatening impositions on employers; and its ambivalence on whether this is a temporary or permanent structure for our taxation system, with its half-baked and probably temporary hypothecation.

I also object, and here I follow my noble friend Lord Lipsey, to the way in which this House has been asked to consider the Bill. This has been designated a money Bill, but behind it is an enormous political and policy issue: it is not just about our resources; it is about what we are going to do with those resources. The House of Commons was asked in a day to pass the Bill, in both senses, and we are not really allowed to vote on it. This is treating Parliament with contempt. It is also treating the public with contempt, as well as those of us who are supposed to benefit from this increase in resources, and those who are expected to pay for it. I do not think we should be party to that. Unfortunately, given its designation, we have no means of not being party to it.

I take one phrase from the noble Lord, Lord Forsyth, much of whose speech I totally agree with—I also agree with, rather more than I expected, the speech of the noble Lord, Lord Lansley, and with the masterly speech by my noble friend Lord Eatwell—that we cannot agree wholeheartedly to a Bill before we have seen the menu. That is what we are being asked to do today.

Behind all this is the fact that social care has been underfunded, staff are underpaid and service quality is rarely checked. Residential care is paid for in a variety of different—mainly unjust—ways, principally by individuals and their families through self-funding and unpaid care, but also by local government and the NHS regarding the nursing component. It is a mess. Care workers attending the clients’ own homes are subject to intolerable time regimes, their pay is awful, their management is awful and the visit diaries mean that those who really need sustained care rarely get it. The Covid epidemic has made this much worse.

Similarly, the NHS has been subject to severe cuts and constant reorganisations, but it has always been financed by general taxation. The tax proposed in this Bill is termed a “levy”. Normally the term “levy” suggests that we are addressing a temporary problem—it may be a big one such as a war, but nevertheless a temporary problem—but this must be resolved on a long-term basis. The genesis of this proposition is interesting. Originally the proposition was to raise money for social care but somehow it has been hijacked by the absolute necessity to find very substantial sums of money for the NHS. The bulk of the money is, rather peculiarly, to be raised on the basis of national insurance not general taxation, but the proceeds will go into the general fund.

As the noble Lord, Lord Macpherson, said, hypothecation is usually a dirty word in the Treasury, yet the mandarins have somehow been convinced that it is sensible to apply it to this. I am not against that in principle, but I wonder how a complete shift in Treasury ideology, a muddled basis of taxation and a lack of clarity as to how long this will persist give us a proper way of forward planning. I have a theory about why this was done. My noble friend Lord Lipsey pointed out that the Royal Commission on which he notably sat and many think tanks, commissions and inquiries since then, including Andrew Dilnot’s, have looked at this in detail. Some of those proposals have been half-baked, some pretty good, some partly good. Some have raised the issue of basing social care on a national social insurance basis. This is leverage. This is an old idea rethought. My feeling is that part of what the Prime Minister so wildly committed to, in resolving social care once and for all, was some of these ideas, which were floating around in circles in which he moved but were in reports he hardly read, which included a social insurance principle. This was regurgitated, therefore, in this form in this Bill when the Chancellor and the Secretary of State for Health realised that they need an answer to some of these issues. However, instead of it going into social care and making social care part of social security, it was hijacked and used for the very pressing and important needs of the national health service.

This is not a way to operate. The committee of the noble Lord, Lord Forsyth, provided a much sounder basis for proceeding in relation to social care. The issue of the integration of social care and the health service has been with us for a long time. Like the noble Lord, Lord Lansley, I mean integration not necessarily of institutions but of policy. This does not resolve the issue at all; it simply doles out the bulk of the money to one part and a little bit left over to the other.

The Bill is not about a sensible plan for bringing NHS and care services together, nor about putting both on a social insurance basis. It is about avoiding putting up income tax or profits tax contrary to the Conservative Party manifesto. It is about not depriving wealthier families of the inheritance of their parents’ homes to pay for when they have to go into a care home. Frankly, it is about putting the burden on lower-paid workers and small employers, who will disproportionately be paying the cost.

What started out as a vaguely half-decent strategic idea for social care has ended up in a bodge, and one that I think will boomerang on this Government. I plead with the Government that there is time to think again—not much time, but time to devise both a financially viable long-term social care system, which may or may not be based to some degree on social insurance, and to find the undoubtedly much-needed money for the NHS, but in a much less regressive manner. We need a long-term plan for health and social security, not a thin White Paper that just tells us how much it will cost us when we do not know what it is. We need a strategy whose cost is based on everyone contributing according to their means. We can thereby ensure that people get the benefit according to their needs.