Health and Social Care Levy

Philippa Whitford Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Jesse Norman]

The overall fiscal approach is set out in detail in the document that has already been referenced by the hon. Member for Sheffield South East (Mr Betts). We will be presenting a Bill in due course, which will have further explanatory notes and a tax information and impact note associated with it, and of course we have a Budget in which the wider fiscal position will become clear, so the House is not going to be short of information about how this will land.

Finally, if I may, I will just remind the House why this levy is so important. As the Prime Minister and the Chancellor set out yesterday, the levy will enable the Government to tackle the backlog in the NHS. It will provide a new, permanent way to pay for the Government’s reforms to social care, and it will allow the Government to fund our vision for the future of health and social care in this country over the longer term.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I thank the Minister for giving way. I have two points. He talks about the Government’s vision for health and social care, but with their obsession with outsourcing, that does not match the Scottish vision for health and social care. This is a devolved area. Why is the Minister not using tax, which the Scottish Government control? We have already been slagged for three years in this place for putting a penny on income tax bands to fund health and social care in Scotland. Why is he hitting Scottish taxpayers again, and taking power away from the Scottish Government?

[Jesse Norman]

Nothing could be further from the truth. All parts of the UK need a long-term solution to fund this health and social care position sustainably, including Scotland and the Scottish Government. Scotland’s own Audit Scotland has said that more money is needed in the Scottish social care system, and an independent review of adult social care said that more money needs to be provided. Of course, there is a Union dividend from that policy, in that Scotland, Wales and Northern Ireland will benefit by an average of 15% more than is generated by their residents. That is £300 million a year on average.

The Government have acknowledged that this policy involves a breach of the manifesto. They have done so directly, they have done so plainly, and they have done so honestly. But I would put it to the House that, in a deeper sense, this measure serves to redeem a promise and discharge an obligation. It is a profoundly Conservative thing to do, to provide for future generations without increasing our borrowing, without increasing spending, and in way that is sustainable and grips a nettle that for too many years has been ignored by the Labour party. With that in mind, I commend the motion to the House.

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[Alison Thewliss]

I would be very curious to know why that is. I was going to read out that very quote, because even three former Conservative leaders, including a former Prime Minister and three more former Chancellors, have spoken out against this move. To complete the quote that my hon. and learned Friend mentioned, this person, an anonymous member of the Conservative party, said:

“Putting up National Insurance would be morally, economically and politically wrong.”

They went on to say:

“After all that’s happened in the last 18 months they can’t seriously be thinking about a tax raid on supermarket workers and nurses so the children of Surrey homeowners can receive bigger inheritances.”

Well, yes indeed they are.

[Dr Whitford]

Is it not the case that the talk is about making life better for social care staff, but actually, they are exactly the people who will lose £1,000 a year in the universal credit cut and will now face this extra cost?

[Alison Thewliss]

My hon. Friend is absolutely right. They are the people who can least afford it and who have worked the hardest through this pandemic, who this Government should be thanking, not taxing.

We are being asked to vote today on measures that the Institute for Fiscal Studies has described as “better than doing nothing”, which is about as charitable an analysis as is possible of this policy.

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[Alison Thewliss]

We already spend more per head on the NHS than is spent in England. We already have better services in Scotland than in England. This policy is an entirely regressive form of taxation that does nothing for the hon. Gentleman’s constituents and does nothing for mine.

[Dr Whitford]

Scotland already spends 43% more per head on social care, which allows us to be the only nation that delivers free personal care and has extended it to people under 65. That was why we raised the extra 1p on tax, for which Scots are already paying and from which they are already gaining. That should be controlled by the Scottish Parliament.

[Alison Thewliss]

My hon. Friend speaks the absolute truth. There is a huge contrast between what the Government propose and what is already being delivered in Scotland.

Some have said, “What’s your alternative?” Well, fixing England’s social care crisis is not for the SNP to decide, quite frankly. Having heard evidence when I sat on the Select Committee on Communities and Local Government some years ago, I know that successive UK Governments have failed to act and have ignored the evidence as difficulties mounted. Now the Prime Minister has come to this House in haste, shamelessly using covid as cover.

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[John Lamont]

These proposals will result in Scotland’s NHS and services that our constituents use getting a billion pounds extra each year to help deal with the backlog of treatment, the GP shortages and the whole catalogue of other issues that Scotland’s NHS is dealing with. It is nonsense to pretend that social care is not an issue in Scotland as much as it is in the rest of the United Kingdom. Indeed, the SNP Scottish Government in Edinburgh has called for action on social care in the past. They have said that they intended to increase investment in social care in Scotland, but they have also been clear that their plans required extra resources. Their planned reforms

“can only be delivered with increased investment.”

Their independent review of adult social care said

“more money will need to be spent on adult social care over the long term.”

Further to that, Audit Scotland recognised that “more investment is needed”. The Scottish Government admitted in their August 2021 consultation that the proposals for a new national care service were not yet funded.

[Dr Whitford]

In Scotland, as I said earlier, we already spend 43% per head more on social care. If the hon. Gentleman is moaning about Scotland, he can perhaps imagine the problem here. Scotland has a plan: the Feeley review, the national care service, a human rights approach and extending free personal care and free provision to all home care. What we are not happy about is the idea that suddenly the Prime Minister will meddle in a completely devolved area of health and social care, and we will have the same outsourcing and fragmentation that England has struggled with since 2012.

[John Lamont]

Nothing in this plan undermines the devolution settlement. This plan provides our constituents with more investment for NHS services across Scotland. What the hon. Lady seems most upset about is this United Kingdom Government delivering that resource for something that the Scottish Government had previously asked for, and she admits that, which is frankly astonishing. It is beyond belief that the SNP opposes these proposals, which would raise much-needed extra resources for the NHS and the social care sector in Scotland. Scotland, Wales and Northern Ireland will benefit by an additional £2.2 billion a year as a result of the levy and an equivalent increase to dividend tax rates.

There is a clear Union dividend from this policy. Scotland, Wales and Northern Ireland, taken together, will benefit around 15% more than is generated from their residents, equivalent to around £300 million a year. The hon. Ladies and Gentlemen on the SNP Benches shake their heads. How on earth can they justify opposing this extra money coming into Scotland? Scotland will receive £1.1 billion in extra funding over the coming year.

We must ask why the SNP is so opposed to this extra money coming to Scotland and our NHS. That is certainly what my constituents in the Scottish borders are asking. They have witnessed the remarkable job that our NHS heroes have been doing during the covid-19 pandemic, but they also recognise the massive challenges now facing Scotland’s NHS: delayed operations, GPs under pressure, rural health services being withdrawn and waiting lists growing and growing. Yet, when offered extra funding from the UK Government to help address that and to tackle the social care crisis, the SNP says no. The SNP says no to extra funding for Scotland’s NHS.

[Dr Whitford]

Rubbish.

[John Lamont]

The hon. Lady says “rubbish”. Should I say “rubbish” to my constituents who have had their operations delayed time and again and those who cannot get access to a GP in their surgery because of decisions made by the Scottish Government, who blame a lack of resource and repeatedly blame the UK Government for not funding them enough? Here we have it: £1 billion more coming to Scotland and the SNP says no. It is typical SNP grievance politics. It is not about solutions or making the lives of our constituents better; it is about grievance, grievance and more grievance. The NHS in all four parts of the UK needs significant investment to tackle the lasting effects that covid-19 has had on services and we must work as one United Kingdom to tackle the collective challenge.

It is also true that the SNP Scottish Government have not prioritised investment in the NHS during their time in office. As I referenced earlier, the IFS has noted that, in the last 10 years, spend on health in Scotland has increased by just 1.2% as a proportion of total expenditure compared with 3.6% in England on a like-for-like basis. Therefore, despite all the spin we hear from SNP Members, Scotland’s NHS needs this extra investment.

Some in the SNP have been complaining that the policy is some sort of attack on the devolution settlement. That is utter, utter nonsense. It is true that devolved Administrations will be required by law to spend their share of the revenue raised by the levy on health services in 2022-23 and, from April 2023, on health and social care services. It is also true that some elements of the new revenue will be spent directly by the UK Government for the benefit of all four nations, including on purchasing vaccines to help defeat the virus. However, there is no requirement for the Scottish Government to implement the same policies as the UK Government. The devolution settlement is protected. So the SNP is really going to oppose this extra funding coming to Scotland’s NHS and social care services.

I very much welcome the announcement. It has been a tough decision for the Prime Minister and the Government, but it is the right decision. More funding for our NHS and social care services should be welcomed by everyone in the House. It baffles me completely why the SNP so strongly opposes it.

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[Jane Hunt (Loughborough) (Con)]

The question of how to deal with the worsening social care problem has been put off for too long. Indeed, the Labour party shunned its responsibility when in government and refused to make the difficult decisions to put social care on a sustainable footing.

Peter from Loughborough said in an email to me that it is

“long overdue to try and fix the social care problem. Governments of both parties have pushed this into the long grass time after time and it cannot be put off forever.”

The Conservative manifesto pledged to build cross-party consensus on an answer to solve the problem. Clearly, this has not been possible. It has therefore been left to this Government to make the tough decisions, which I know the Prime Minister has not made lightly as the Conservatives are the party of low tax.

[Dr Whitford]

I welcome the hon. Lady’s reference to the aim to create cross-party consensus. We have heard that said repeatedly. I am the health and social care spokesperson for the SNP, and the Labour spokesperson and I did not receive so much as an email. To say that consensus could not have been built is wrong. It could have been built, and we could have had discussions before yesterday.

[Jane Hunt]

That is not my understanding. Maybe it is the case, I am not sure. [Interruption.] Forgive me if it is the case.

The Government have made proposals to raise much-needed funds to deliver on important commitments such as upskilling the social care workforce, strengthening the adult social care system, tackling the elective backlog in the NHS as it recovers from covid-19, funding a 3% pay rise for our fantastic nurses and implementing a cap on adult social care costs. These aims all have widespread support across the country.

I could mention many cases that have been referred to me over the years of elderly people who are afraid to come out of hospital because they know they are not well enough to live independently but are afraid to move into the care system because of the cost.

In yesterday’s speech on social care costs, the Prime Minister said:

“from October 2023 no one starting care will pay more than £86,000 over their lifetime, and no one with assets of less than £20,000 will have to make any contribution from their savings or housing wealth—up from £14,000 today.”—[Official Report, 7 September 2021; Vol. 700, c. 155.]

The Office for National Statistics states that between 2014 and 2016, the most up-to-date figures I can find, the average inheritance was £11,000 per person, which fits in well with what we are trying to develop so that people are enabled to leave something for their family.

Finally, alongside this additional funding, we need to look at the overall finances and management of the NHS to identify where savings can be made, so that money is put where it is needed most—frontline services. That is particularly true in respect of waste generally. For example, GP statistics show that 173,165 people did not attend their appointment last year, costing £5.1 billion. Those are some of the things we need to look at. However, I will support this measure tonight, for the reasons I have set out.

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[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I am pleased to follow the hon. Member for Dartford (Gareth Johnson), because I do welcome the fact that this debate is happening and that there is an attempt to find a solution to something that absolutely has been kicked down the road. However, I am very disappointed that despite the rhetoric there was no attempt at cross-party contact or to achieve consensus and agree a long-term solution.

I also feel that this proposal is regressive. It will hit lower-paid people, including the key workers we were clapping for just 18 months ago. It will hit the younger generation, who have been hit from multiple directions and will not have the benefits that we have been lucky enough to have in our lifetimes. It will stifle recovery because it is simply a tax on jobs. Like previous social security cuts driven by Tory austerity, it will take money out of local economies and remove spending power. That means increasing poverty—the single biggest driver of ill-health.

In Scotland, that will impact on our aim to have a wellbeing recovery from covid. That is why we object to this measure and why we object to the Prime Minister saying that he will direct how the spending is used. Income tax would have been a fairer method. It is paid by wealthy pensioners, as I will probably be in a few years’ time. It is paid more by people who earn more. It does not hit wealth, but there other taxes that could have been used to do that. The Scottish Government already took action in 2018 by adding a penny to all our tax bands so that we had more money for health and social care. We do not just provide free prescriptions; we are the only UK nation that provides free personal care, and in 2019, that was extended to those in need below the age of 65. That is something to which other nations within the UK should be aspiring. It allows people to stay at home and to have greater independence, and that is how we should be looking on it. The Feeley review, which the Scottish Government commissioned, asks us to turn it around, to stop seeing social care as a burden and instead to see it as a way of allowing the people affected, whether due to disability or age, to still be part of our society.

We object to the undermining of devolution, because it is the Scottish Parliament that has responsibility for the strategy of health and social care. Our health and social care landscape is quite different. Not only do we have free personal care; we also still have a unified, public NHS. We have been integrating with social care since 2013, so to say that suddenly we will hand that control over to the Prime Minister—I am sorry, but that will not wash. The national care service proposal from the Feeley review recognises that we already pay the living wage and we pay for overnight sleepovers. What we actually need for social care in all four nations is to develop social care as a career, so that people stay there and commit to it. It is not just a job that someone does until they can get on the checkout at Tesco. It is a simple fact that above all other careers, care is delivered by people, for people. That is where any plan should start. If there is focus on the workforce, we may end up with a care service that we can be proud of and that will deliver for all constituents.