My Lords, I am pleased to open the debate on this Bill. The health and social care levy was announced only last September and then made its way through Parliament to become the Health and Social Care Levy Act 2021. This Bill, if passed, repeals this legislation. I intend to set out the background to this, the consequences of this Bill and to provide some reassurance on its impact.
First, I shall make a few comments about the events which have taken place over this weekend and this morning, which provide a backdrop to this legislation. The Government, as we are aware, have a new Chancellor who, with the backing of the PM, has continued to emphasise the importance of achieving economic growth, not for its own sake but because of the benefits it will bring to communities across the country: higher wages, better public services and greater opportunities for all.
As the Chancellor has set out this morning, there can be no economic growth without fiscal credibility. That is why the Government are acting decisively today to get the public finances under control. As well as confirming that we will not proceed with the planned reduction of corporation tax from 25% to 19%, the Chancellor has set out further steps this morning to support confidence and, vitally, stability. The Chancellor is setting out further details in the other place shortly and a Statement will follow here, in discussions with the usual channels.
It is in the whole country’s best interests for the Government to act decisively, at scale, to regain the confidence and trust of financial markets. On 31 October, the Government will publish a credible plan to get debt falling as a share of the economy over the medium term, backed by the judgment of the independent Office for Budget Responsibility. For that plan to be credible, there will be more difficult decisions to come across tax and spending. The Chancellor has made a promise that, in doing so, we will always act in line with our values, seeking to protect vulnerable families and back businesses at the same time. The repeal of the health and social care levy should be viewed, therefore, in the context of this continued commitment to support families and businesses.
The levy was originally introduced to help put the NHS and adult social care on a sustainable footing. However, given the financial pressure on households, it is right now to reverse the levy. There is a reasonable question to be asked about the long-term impact on health and social care. Overall funding for health and social care services will be maintained at the same level as if the levy were in place.
The Deputy Prime Minister and Secretary of State for Health and Social Care recently set out details of her priorities for the health and social care sectors in the booklet Our Plan for Patients. The Government will seek to expand on this in due course. The Deputy Prime Minister’s plan includes a £500 million adult social care discharge fund that will help people out of hospitals and into social care support, while providing support to the social care workforce.
If I may finish my remarks, as they are nearly finished, that would be very helpful. I encourage the noble Lord to ask some questions during the debate.
Crucially, as I said earlier, reversing the levy has no bearing on the funding of health and social care services, because the Government will maintain funding at the same level as if the levy were remaining in place.
To conclude my opening remarks, the Government’s reversal of both the levy and the temporary NICs rise will make a significant difference to the lives of millions across the country. It will also have no impact on the provision of health and social care services. The Chancellor has promised that we will continue to support families and back businesses; we will keep those promises. I beg to move.
My Lords, I declare an interest as a vice-president of the Local Government Association. I am opening from the Lib Dem Benches today to focus on the health and care sectors, their need for core funding and the current crises they are facing—not least, as we need to remember, that people are dying waiting for ambulances or in ambulances outside A&E, and that those fit to leave hospital cannot do so because the care they need is not available, whether in a care home or through domiciliary care, where staff deliver care to people in their own homes. My noble friend Lady Kramer will focus on the Treasury mechanisms when she speaks later.
The journey of the Conservative Government since 2015 is from being a party that used to pride itself on being economically responsible to one now deemed by the public to be unfair and irresponsible, with crises happening so fast it is hard to keep up. Indeed, Wikipedia has recently had to put up a notice on the page called “2022 United Kingdom government crisis”. Underneath, it says:
“This article is about the mass resignation of ministers from the Johnson government in July 2022. For the Truss government crisis resulting from the September 2022 mini-budget, see ‘September 2022 United Kingdom mini-budget’.”
Before today’s debate, we had to wait until 11 am this morning to hear whether the Health and Social Care Levy (Repeal) Bill would indeed be debated today in your Lordships’ House. I do not think it is surprising that we are debating it, but we were all told that we had to wait to hear what the new Chancellor had to say. The former Chancellor, the IEA, the TaxPayers’ Alliance and even the Prime Minister now seem to be pushed sideways by the appointment of Jeremy Hunt. As we start this debate, the PM should be in the Commons responding to an Urgent Question—but she is not.
The Minister referred to the context for the original Bill. All stakeholders in the NHS and social care recognised that our social care system was fundamentally broken and had been for some decades, not least because of the very poor levels of funding for state-funded social care. The result of this was the escalating care fees for self-payers but continued very low pay for front-line staff—whether nurses, care assistants, supervisors or allied healthcare professionals—because of the public funding provided for them.
My Lords, I speak with some trepidation, as I am not sure whether the Bill is still government policy; it may well have changed since this morning. I gather that Jeremy Hunt has already won the Chancellor of the week competition so he may well be moving on.
When the Health and Social Care Levy Bill had its Second Reading in this House on 11 October 2021, the then Minister said that the levy was part of the plan to tackle “the NHS backlog”. Since then, as the noble Baroness, Lady Brinton, mentioned, the NHS England waiting list has grown to 7 million people. Of course, that Minister, the noble Lord, Lord Agnew, became so disenchanted with the Government’s policies and practices that he resigned, so we do not know whether the Government stick to any of these promises; certainly, the NHS queue has increased. I hope that the Minister can answer a number of questions.
It was claimed that the £12 billion originally associated with this levy would be used to fund social care and the National Health Service. Can the Minister confirm that that £12 billion will still be provided in real, not just cash, terms? On 7 September, the Health Secretary said:
“Instead of having, in effect, a ring-fenced levy, we will be funding”
health and social care changes
“out of general taxation, so the investment going to health and social care will stay exactly the same.”
That is a highly ambiguous statement. It does not say whether that investment or funding will be the same in real terms or just nominal terms.
Of course, the NHS needs proper funding. Can the Minister explain when the queue of 7 million people will be reduced? In each of the 12 years that the Government have been in office, that queue has increased. It is part of the austerity measures that the Government have introduced. Between 2012 and 2019, 334,000 people died because of austerity. There is no record of any previous Government killing so many of their own people at the altar of economic ideology. Will the Minister tell us now that there will be no more austerity measures for the National Health Service and that this Government will not kill their own citizens any more? That is unacceptable.
My Lords, I welcome the Minister’s opening remarks on the Government’s economic policy. The Chancellor should be congratulated for restoring a more sensible fiscal policy and a modicum of calm to the gilts market, and for listening to his Treasury officials.
Returning to the Bill before us, the health and social care levy has few friends, so I will probably make myself unpopular by speaking in its defence—a defence less of its detail, which I will come to, and more of the principle behind such a levy. On a day when the Chancellor has rightly unpicked much of his predecessor’s mini-Budget Statement, he may have missed a trick in not keeping this levy in place. It is worth revisiting why it was introduced.
There are massive spending pressures on the National Health Service and the social care system. Those have not suddenly gone away over the last few weeks. Indeed, judging by the length of waiting times, they have got worse. We are still dealing with the aftershock of coronavirus, which exposed the weakness of the social care sector. The fact is that this country delivers social care on the cheap. We rely on underpaid workers and a thinly capitalised private sector. It is no wonder that its shortcomings have been exposed. It is also unrealistic to expect doctors, nurses and care workers to accept cuts in their real wages year after year. Above all, the much-awaited demographic timebomb is already upon us. The old-age dependency ratio is set to rise inexorably in the decades ahead.
I sometimes wonder whether the Government read the Office for Budgetary Responsibility’s Fiscal Risks and Sustainability report. It was published as recently as July. If Mr Kwarteng had read it, perhaps he would still be in post. It shows health and social care projections rising from 9.7% of national income in 2026 to 10.2% in 2031, to 11.9% in 2041 and to 13.7% in 2051. That is an increase of 4% of GDP, which is the equivalent to £100 billion a year in current prices.
My Lords, I have some technical questions about the implications of repealing this levy, but they prompt more significant questions about the sustainability of health and social care funding, as other noble Lords have already suggested. The sustainability of health and social care is hugely important to me, not just as a former Government’s Chief Nursing Officer, but as a bishop. This is about funding a service well with a long-term view, so that those who work hard to care for us have the resources to do the job. This is about the fact that every person is of great value in God’s sight and should be treated with dignity and equity. This is about a thriving economy because, without a healthy population, we will not have an economy that grows.
When the levy was introduced, the then Financial Secretary wrote to the Treasury Select Committee to justify it, saying that
“it would not be possible to fund this from existing tax revenues, nor would it be responsible to fund it through borrowing.”
This uncertainty about the direction does not inspire confidence that the Government have a sustainable plan to fund health and social care. If repealing this levy will not affect health and social care funding, can the Minister guarantee that a detailed breakdown of how this tax cut will be funded will be set out clearly?
As we have already heard, departments have been asked to double their efforts to make savings on spending. Presumably, this will include the Department of Health and Social Care. In that context, how will spending on health and social care be maintained? The Secretary of State announced £500 million for the health plan for patients. Is this additional funding, or will it be absorbed into the cost of maintaining the level of spending in the department after cutting this levy?
My Lords, I do not know what set that phone off. There is no need to drown me out just because I am going to speak.
This has been an enjoyable debate for those of us who think that the scrapping of the levy is a disaster. I particularly enjoyed the speech of the noble Lord, Lord Macpherson, and all the wisdom he brings to these matters from his experience in the Treasury. I had a rather wicked thought that the Government could consider one more U-turn when they read his remarks: on the sacking of Sir Michael Scholar, the splendid Permanent Secretary at the Treasury, no doubt because he suggested that there were some things wrong with the Government’s proposals. If they had listened to Sir Michael they might not be in this complete and utter mess today.
Sorry; I know Michael better than Tom. I thank the noble Lord for that correction.
Let us be in no doubt: this Bill is another U-turn, not by the Truss Government—they have got in so many—but on this Conservative Administration’s policy. The levy was brought in by the Johnson Government as a way of funding the changes they wanted to make in health and social care, which I will speak more about later. The contributions will now be frozen under this legislation, if it goes through Parliament. That means that there will be more spend, less tax and another mighty addition to the fiscal deficit. I hope, for the Minister’s sake, that the markets are looking elsewhere today—they have plenty to look at.
The revenue to pay for the extra spending has been ditched, but I wonder what will happen to the Government’s policies that these contributions were supposed to fund. In particular, what will happen to the Government’s scheme to introduce a cap on what individuals have to pay for social care? Will this be another U-turn? Has the cap passed on? Is it no more? Has it ceased to be, expired and gone to meet its maker, as with Monty Python’s parrot?
In fact, I would be very pleased if the cap was a victim of the Government’s unwillingness to put up national insurance contributions. The cap has three enormous flaws in today’s circumstances. First, it adds hugely to the fiscal deficit—according to Library figures, £13 billion a year. That is not a small number. I know that we get used to billions these days, but £13 billion is a substantial sum of money to be added to the deficit as a result of giving up this increase. The more the fiscal deficit goes up and the more the markets are scared of it, the more we have a problem. We know what will happen, broadly: fuel prices will go down and interest rates will go up. Most mortgage holders will be struck with a further blow to their pockets when they are reeling from the cost of living crisis. You honestly could not make it up as a policy. That is one reason against the cap: it is jolly expensive.
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Noble Lords will forgive me if I briefly touch on how we got here. The health and social care levy was originally announced last September, as I mentioned earlier. The Health and Social Care Levy Act 2021 made its way through Parliament soon afterwards and received Royal Assent on 20 October. The levy had two key elements: first, a temporary increase in national insurance contribution rates of 1.25 percentage points for the 2022-23 tax year; then, from April 2023, a formal legal surcharge of 1.25%, which would also affect those working over the state pension age. As a result of this Bill, neither of those will now happen. To be clear, this Bill repeals that legislation, reversing the temporary NICs increase from 6 November 2022 and ensuring that no new levy comes into force in April 2023.
What does that mean for people around the country? All employees earning more than the annual equivalent of £12,570 and self-employed people earning more than £11,908 in 2022-23 or £12,570 in 2023-24 will benefit. The average saving is around £330 in 2023-24, with an additional average saving of around £135 over the remainder of this year. Some 60% of businesses, 920,000 of them, will see an average tax cut of £9,600 in 2023-24.
I note that businesses which benefit from the employment allowance already pay no national insurance contributions at all. The employment allowance was increased from £4,000 to £5,000 in April 2022, meaning that businesses and charities which had employer NICs bills of £100,000 or less in the previous tax year can claim up to £5,000 off their employer NICs bill. Thanks to the employment allowance, a further 20,000 businesses will be taken out of paying NICs altogether in 2023-24.
Taking into account the threshold changes made earlier this year, almost 30 million people will be better off by an average of over £500 in 2023-24. I realise that that is quite a lot of detail to digest, but the bottom line is this: reversing the levy delivers a tax cut for 28 million people worth, on average, £330 every year. It also delivers a tax cut for nearly a million businesses, in turn boosting economic growth, as I said at the beginning. Crucially—
Things are so bad now that a care worker with five years’ experience is paid 7p an hour more than care workers with less than one year’s experience. The average care worker is paid £1 per hour less than healthcare assistants doing a very similar role in the NHS. As a result, the NHS is now directly recruiting staff from our already depleted care sector, and staff turnover in the sector is 29%. Your Lordships’ House has often discussed the problems of the NHS workforce, but social care is even worse off.
All this is primarily because the Government’s historical allocation to local government to fund the fees for those who cannot pay for themselves has slipped very badly. It has got so bad that most domiciliary workers are not paid for driving between clients, which results in these dedicated staff receiving less than the living wage simply because of the time it takes to travel. Three years ago, the Government agreed that it was inappropriate to allocate care packages of 15 minutes because it is almost impossible for a carer to get a client up, wash them and prepare their breakfast in that time, but they persist because there is not even enough funding for these basics. Care assistants leaving the care sector are receiving even higher wages in hospitality and retail. As a statement on our priorities as a country, that is shocking.
When the levy was announced earlier this year to great fanfare, it was recognised that at last there would be a mechanism to start to remedy this. Whether that mechanism, through national insurance, is the right one is not for debate today, because the Government chose that route earlier this year. There was one caveat, which the then Secretary of State outlined. For the first three years, the NHS would receive the proceeds of the national insurance levy to help it catch up post-pandemic, and an interim grant would be paid to the care sector to help develop its workforce and start to address the funding gap, but most of that would not kick in until after this year.
Therefore, in the mini-Budget in September, the then Chancellor—they move so quickly these days; we are now on the fourth since July—said:
“I can confirm that the additional funding for the NHS and social care services will be maintained at the same level.”—[Official Report, 23/9/22; col. 938.]
However, a briefing from the NHS Confederation says:
“Details remain unclear, but the approximate £2 billion the Treasury had allocated for the NHS to pay for their own employer National Insurance contributions to the new levy, will be reallocated. Part of this money will go towards the new”
half a billion pound
“Adult Social Care Fund announced yesterday by the new health secretary Thérèse Coffey.”
But this is smoke and mirrors. The £500 million is also covering winter costs, which were inexplicably left out of the NHS budget in March for this financial year, whereas there has been winter pressures money for the preceding five years. That left an enormous hole at a time when the NHS has been facing pressures at the level of the usual winter season right throughout this summer. This is not new money. Had the announcement not been made by the Secretary of State for Health and Social Care, it would have been an unforgivable dereliction by the Government. Worse, Health Service Journal reported on 6 October—so, after the mini-Budget—that increases in inflation will force the NHS to drastically scale back services. It faces £20 billion in efficiency savings because of the cost of goods and services.
Even worse, the day before, 5 October, Health Service Journal reported that the Government’s own new ground-breaking integrated care systems, which took over from clinical commissioning groups on 1 July, are already in deficit. Two out of three ICS funding plans are already in deficit because of the impact of inflation, Covid costs—which were not funded in the Budget for this year, despite numbers rocketing up to 200,000 new cases a day last week—and the increased spend on agency staff because of the continued struggle to retain and recruit staff across the NHS.
The funding from this levy was intended to help reduce the backlog of cases initially. When identified in the spring, the formal backlog was just over 5 million patients, including those with suspected cancers and other time-critical illnesses. Because of the pressures this summer in the NHS, not least due to the wave of Covid we had, last week it was announced that the waiting lists are now at 7 million. We should forget any idea that funding is available to reduce this significantly; it is not going to happen.
Today, the new Chancellor said that savings would be required from every department on top of the positions that they find themselves in now. For the NHS and Social Care sector, this is in direct contradiction to what his predecessor said a bare three weeks ago—and, frankly, a bit of digging showed that it was not quite the promise that Mr Kwarteng had made. Indeed, the Minister made that promise at the Dispatch Box just now.
The Minister and the Treasury try to reassure us that the consequences of this Bill are neutral. That is not the case. In the words of the letters that banks used to send out to clients about cheques, “The words and the figures do not agree”. Those fighting on the front line of our NHS and social care sector know this, and so do the public. The question is, does the Treasury understand the pressures that the NHS and the social care sector will face, not just because of, but partly because of, the repeal of this levy?
At the end of 2021, the EU divorce bill stood at £36.7 billion. That was after paying £10 billion in 2020. Of course, we all remember Ministers telling us at the time of the Brexit referendum that vast amounts would be saved by coming out of the EU and that this would boost the NHS. Does the Minister agree that that was a complete lie and misinformation, because the Government have not properly funded the NHS? Hopefully the Minister can tell us how much has been saved by coming out of the EU and how much of that has gone to the National Health Service and social care.
The Government’s spin machine is promoting the view that the repeal of this levy will somehow promote growth, although no evidence has been provided to support that. Contrary to the numbers cited by the Minister earlier, let me cite for him an alternative analysis of the benefits of this levy repeal. The poorest tenth of the population will gain just £7.66 a year. The second-poorest tenth will gain £37.36. Then, it is £73.33, £143.52, £247.59, £375.89 and so on. The richest tenth will gain £1,802 a year from the repeal of this levy. That is wrong. Some 21 million adults will gain absolutely zero from this repeal because they are surviving, not living, on an income of less than £12,570 a year.
The gains to the poorest have already been wiped out by government-engineered inflation, wage freezes, higher energy, food and water bills, and higher mortgage charges and rental costs—and let us not forget the stealth taxes that the Government have imposed by freezing personal allowances and income tax thresholds. As usual, they are looking after the rich and nobody else. They could have reduced the rate of VAT to help the poorest, but they have chosen not to. They could have calibrated the repeal of the health and social care levy in such a way that the poorest received the most benefit, but the poorest are just ignored; they simply do not really count.
The Government should have taken the opportunity to reform national insurance contributions, a highly regressive tax, but again they have chosen not to. After this Bill is enacted, most employees on incomes of between £12,571 and £50,270 will pay 12% of it in national insurance. Incomes above that will incur a charge of only 2%. This is highly regressive and ensures that low and middle-income workers pay a disproportionately high percentage of their income in national insurance, compared to people with vastly higher incomes.
I am sure the Minister will defend the Government continuing to shower gifts upon the richest, but I remind him that in open letters and seminars in this building, patriotic millionaires have urged the Government to tax them more. Therefore, why will the Government not tax the rich more? Why will they not increase their national insurance contributions and help the people at the bottom? The recipients of dividends and capital gains, generally the richest in the country, use the National Health Service and social care but will pay zero national insurance.
Why are the recipients of capital gains and dividends let off making even one pennyworth of a contribution to national insurance? What is the case for that? It would be nice to hear from the Minister on that. Why are the Government giving them a free ride on contributions? By charging national insurance on dividends and capital gains, the Government could raise £15 billion. Why is that opportunity being shunned? I hope that the Minister will answer these questions.
Meanwhile, much of the tax base is eroding. We no longer have substantive oil revenues and tobacco duty revenues are rightly in decline. As the country moves from petrol-fuelled cars to electric vehicles, fuel duties are likely to decline. In the end, the best way of raising revenues is to rely on the big taxes: income tax, national insurance and VAT. We can all fantasise about getting more tax from the rich, and I certainly support having a go at that, but actually it needs to come from the taxes that everybody pays.
The health and social care levy is based on national insurance. It is therefore likely to be a buoyant tax. It also has the positive feature of linking the raising of revenue to increasing expenditure. Now is not the time to go into a long discourse on hypothecation. I am not in favour of hard hypothecation; that was tried with the road fund before the war and it did not work: it created rigidities in the public finances. But it is important that taxpayers understand why their taxes are rising. Linking increased tax to increased spending, as Gordon Brown did in his 2002 Budget and Mr Sunak did in 2021, ensures that higher spending is funded and sustainable, and a tax increase is more acceptable.
In my view, it is inevitable that the health and social care levy will be resuscitated at some point. When it is, I would recommend a different tax base. The problem with national insurance is that it is paid only on employment income. It is not payable on rents, dividends or pensions, however well off the pensioner is—and old people are exempt altogether. The big change in income distribution in my lifetime is that old people are less likely to be poor than younger people.
It is right that the tax burden should be shared across the generations. Mr Sunak tried to put right some of the anomalies in national insurance, but he did not put right all of them. I strongly recommend that any future levy is based on the income tax base and not the national insurance base. Indeed, the whole issue would be made much simpler if national insurance and income tax were fully integrated, although, having explored that for many Chancellors, I will not hold my breath.
Meanwhile, we are burying the levy. I recognise that I am one of the few mourners, but I am confident that, whatever the Government and Opposition are saying now, one day it shall rise from the dead.
If we are concerned about the sustainability of health and social care funding, we must be even more concerned about the sustainability of the workforce. They are the bedrock of this sector. The noble Baroness has already mentioned the social care workforce. There is a very serious issue, particularly around retention. The Nuffield Foundation’s recent research stated that 40,000 nurses have left the workforce this year. The Government responded to the BBC by saying that they were already half way to meeting the target of 50,000 additional nurses in the NHS. I am not sure that this is being felt in the NHS, nor that the loss is being kept up with. Almost as many nurses are leaving the sector as are joining, resulting in the loss of valuable expertise. This is an inefficient and expensive approach to staffing, and one that sees people as expendable.
We are in the midst of a cost of living crisis, of which the health and social care workforce are at the centre. They are not exempt because they look after us. In fact, they are feeling some of the worst effects. One in four hospitals has food banks set up for nurses. The NHS Providers report on the rising cost of living said:
“Increasing numbers of nurses and other staff, particularly in the lower pay bands, are finding they are unable to afford to work in the NHS.”
It cannot be overstated how difficult things have become. Can the Minister say what is being done to make sure that we have a sustainable workforce? Only with this will we find that health and social care funding is sustainable.
One of the most effective ways, perhaps, to ensure the sustainability of health and social care funding is to reduce the need for it. The Government have not confirmed whether they will publish the long-awaited and desperately required health disparities White Paper. There are rumours that they are stepping back from the tobacco control plan and obesity strategy. What are the Government doing to reduce health inequalities? Health and social care funding is only sustainable if the need for these services is reduced.
I started by speaking about values. I am grateful that the Minister mentioned some of the values behind the Government’s objective for this Bill, including the flourishing of the economy not for its own sake but for the most vulnerable. Forgive me: I am concerned that, without a long-term plan for sustainable funding for health and social care and plans that ensure effective public health to reduce health inequalities, it will in fact be the most vulnerable who will suffer.
We need a sustainably funded health and social care system that has the resources to invest in good and equitable health and social care, but also in public health. Surely this is the bedrock of a flourishing community and economic growth.
[Interruption.]
The second reason is more obscure: the scheme that the Government have come up with is unworkable. They are going to trial it in one or two areas. Local authorities, quite rightly and quite reasonably, are screaming at the cost and unviability of it. The Government might have to drop it simply because it does not work. Funnily enough, that might suit them rather well: they do not want to ditch it and admit to yet another U-turn; if it has to go for administrative reasons, that is a better excuse than the fact that they have an unworkable scheme to get out of—it is also now unaffordable.
Thirdly—my noble friend Lord Sikka and others have referred to this—what gets me about the cap is this: it is exactly the same as the income tax changes made in the mini-Budget. It is a simple way of taking money from the poor and giving it to the rich. Only half of those needing care have to pay for it themselves; the rest are funded one way or another by the Government or local government. It follows that only the better-off half of the population will benefit from this cap, but it gets worse. Take just the richer half—nobody who is not in the richer half gets anything. The poorer half of that group will do much less well than the richer half of the group. That is especially so because—noble Lords will remember the row we had about it in this House and in the other place—the Government are insisting that any money local authorities have paid towards people’s care should be knocked off the cap. So here we have small amounts of money going to the poorer, but what a bonanza for the rich. Be you a millionaire, a multi-millionaire or billionaire, the maximum you have to pay for your care is capped at £86,000—and you can keep the rest. If you get better, you can go out on your yacht again, and even if you do not get better, when you die you will have all the more money to leave to your kids.
This is not a sensible priority because there is an enormous problem with social care at the moment. It is not so much a problem of who pays for it as who gets it. Noble Lords will have seen the utterly terrifying report last week from Skills for Care. It is an official government policy. It shows the deepening shortage of care workers and the grotesque underpaying of social care workers—they are hopping off from their care shifts, doing some of the most intimate and desirable things a human being can do, to go to the tills in the supermarket. Those are real problems and they are leading to real suffering for real individuals who need care. To prioritise over that necessity giving more money to the poor old rich so they do not have to fork out for their own care makes no sense. It is genuinely immoral.
I will summarise my argument so far:
“returning contributions to their previous level is regressive … It benefits higher earners more, both in cash terms and proportionally, than lower earners. It benefits the poorest not at all.”
That is the admirable Paul Johnson from the Institute for Fiscal Studies, who knows of what he speaks.
For all those reasons I hope that, when the Minister rises tonight, he will announce that the cap is dead and gone. I noticed he did not refer to the cap once in his speech. He said that funding would be maintained, which is a very different thing. If he meant that funding on care would be maintained rather than funding on this blessed cap, I would be very pleased, although I expect that when he replies—the Minister is a most able master of this House—he will say that the Government have no plans to get rid of the cap. It is a useful Civil Service phrase that has no content whatever because if the Government do not have plans now they can develop them tomorrow if they need them. I expect the Minister to say that the Government have no plans to abolish the cap. That does not stop them later on taking measures to abolish the cap. This is at a time when we are going through huge public expenditure cuts. This is a huge addition to public expenditure that has to be met and which makes cuts in other things more strict.
However, it is perfectly possible that the markets will deal with this when they see how the Government are squandering money on this handout to the rich. The markets, although populated by rich people, know the political disadvantages of assisting them, and may well smell a rat here. Alternatively, the Government could go ahead with this ill-designed cap, which would show what the mini-Budget has already demonstrated: that this Government are concerned only with how much money they can stuff into the pockets of the rich.