Tuesday, November 30

PM warned his £12bn a year tax raid will fail to end social care crisis


Social care leaders are warning that Boris Johnson’s £12bn-a-year tax raid will fail to end the crisis that has left 1.6 million elderly and disabled people without help, after most of the cash was diverted to the NHS.

Even as the prime minister’s manifesto-busting plan appeared to win over Tory MPs who are expected to back it in a rushed vote on Wednesday it was met with an angry backlash from councils and charities.

They warned local authorities would continue to be starved of the billions needed to provide adequate care for people in their own homes, a verdict backed by the respected Institute for Fiscal Studies (IFS).

It is clear that the extra funding will not be sufficient to reverse the cuts in the numbers receiving care seen during the 2010s, the think-tank said. The package includes £500m over three years to boost recruitment and training of care workers but the GMB union warned of a shortage of 170,000 staff by the end of the year alone.

The warnings came as the scale of Mr Johnson’s gamble was laid bare, the IFS warning that with £25bn of tax hikes already in the pipeline the overall rise to come is the highest in peacetime. Strikingly, at a Downing Street news conference, the prime minister refused to rule out further tax rises before the next election, warning the impact of Covid meant the fiscal position has changed radically.

Nevertheless, a No 10 source said it is confident the Commons will back the new health and social care levy effectively a national insurance (NI) hike of 1.25 percentage points, from next April on Wednesday. A threatened Tory revolt appeared to have fizzled out as the vast majority of Conservative MPs spoke out in favour of what Jeremy Hunt, the former health secretary, called biting the bullet on social care.

The prime minister conceded his broken tax promise, telling MPs: I accept this breaks a manifesto commitment which is not something I do lightly. But a global pandemic was in no one’s manifesto. And, pointing to the dividend tax as proof of the plan’s fairness, he said: We will be asking better off business owners and investors to make a fair contribution too.

Stephen McPartland, the Conservative MP for Stevenage, said he would not back a plan that provided no new funding for social care for at least 3 years but there were few dissenting Tory voices. No money for living costs, only personal care costs. Selling your home is just deferred. It is a tax on jobs. I need much more detail to even consider supporting it, Mr McPartland tweeted.

Public opinion is split, a snap poll by YouGov suggested, with 44 per cent of people in favour of the tax rise and 43 per cent against. In what was widely seen as an historic moment after a decade of Tory inaction on social care Mr Johnson announced a package similar to that put forward by Sir Andrew Dilnot a decade ago, and then shelved.

Lifetime care payments will be capped at £86,000 from October 2023, to allow homeowners facing catastrophic care costs, for conditions such as dementia, to pass on their properties to their children. No one with assets below £20,000 will pay any social care costs but, although there is a “floor” of £100,000, people with assets between £20,000 and that amount will contribute on a sliding scale.

To counter the charge that the NI hike will punish the young and lower-paid, working pensioners will also pay what will become a new health and social care levy from April 2023 and listed separately on pay slips. And business owners and investors will also pay a new dividend tax of 1.25 per cent, after criticism that only workers and companies paying them are being hit.