Health and Social Care Levy

Debate between Rachel Reeves and Laura Trott

1st reading
Wednesday 8th September 2021 Commons Chamber

[Rachel Reeves]

My hon. Friend speaks well of what our constituents in Leeds North West and Leeds West will be facing with that double whammy of universal credit and the national insurance increase, in addition to the other tax increases from this Government. I will take a final intervention and then I will start to wind up.

[Laura Trott (Sevenoaks) (Con)]

I thank the hon. Lady for giving way. There is an obvious precedent for this national insurance rise to raise money for the national health service, which is from 2003. Were Labour wrong to raise national insurance for the national health service in 2003?

[Rachel Reeves]

We had a clear plan to bring down waiting lists, a plan that this Government are sorely lacking. The economic circumstances are different, too. The Government’s tax on jobs comes at the worst possible time. Businesses create jobs and will drive our recovery. Labour is a party that is pro-worker and proudly pro-business, too. I am proud of the decisions that the former Prime Minister and the former Chancellor made that brought down waiting lists to their lowest ever level—targets that have never been met under 11 years of Tory Government. We want business to succeed, to invest more, to employ more, to pay more and to create more wealth.

These are still precarious times, with many businesses in all our constituencies not yet back to full capacity and others considering how they are going to repay the loans taken on during the pandemic. What do the Chancellor and the Minister think the effect of this tax rise on jobs will be? That has not been set out. It could mean an attempted squeeze on wages and conditions, even higher prices for customers, or the scaling back of recruitment and growth plans. It will affect people and it will affect the Exchequer, too. It is a false economy. The Chancellor and the Minister do not need to take my word for it. The British Chambers of Commerce described it as:

“a drag anchor on jobs growth”

and believes it will

“dampen the entrepreneurial spirit needed to drive the recovery”.

Make UK says it is

“ill-timed as well as illogical”.

The CBI says that it

“will directly hurt a business’s ability to hire staff at a time when businesses have faced a torrid 18 months.”

The Federation of Small Businesses says that

“this increase will stifle recruitment, investment and efforts to upskill”.

They are joined by the trade unions. The TUC says it is wrong to hit young people and low-paid workers

“while leaving the wealthy untouched.”

We agree with businesses and we agree with our trades unions, too. They are right. This is a tax on jobs. It is a tax on the economic recovery and we will not support it.

Let us go back to the key questions that need answering. Will this plan deliver what is promised for our health and social care sectors? No. Will it clear the NHS backlog by the end of this Parliament? No—and the Health Secretary says no. Will it give social care the resources it needs for the next three years? [Hon. Members: “No.”] Is there a plan to reform social care? [Hon. Members: “No.”] Will it create more and better paid jobs in the economy? [Hon. Members: “No.”] Is it fair across the regions? [Hon. Members: “No.”] Will people be prevented from selling their homes to fund their care? [Hon. Members: “No.”] Will this tax bombshell help our economic recovery? No. Is it the last tax increase in this Parliament? No. This whole thing is unravelling. No wonder that Ministers are in a desperate rush to get it through. The Chancellor is absent today. Perhaps he has gone for a swim.

Covid has tested the people of our country like nothing else in any of our lifetimes. After the last year and a half the country deserves a much better future, a recovery that enhances and enriches all our lives and in all parts of the country. Social care is a huge challenge and there are other challenges coming too. We need to do things differently. Labour’s test is simple: does it fix the problem and does it do it in a fair way? The answer to both of those questions is no. That is why Labour will vote against this unfair, job-taxing, manifesto-shredding tax bombshell this evening.