MPs have backed the health and social care levy, which will see National Insurance contributions rise by 1.25 percentage points to fund the NHS and changes to the social care system, by 319 votes to 248 this evening.
Labour voted against the government resolution tonight. Rachel Reeves set out why her party was opposed earlier this afternoon, describing the measure as a “job taxing, manifesto-shredding, tax bombshell”.
“There are two tests for the package announced yesterday. The first: does it fix social care? The second: is it funded fairly? The answer to both is no. It is a broken promise, it is unfair and it is a tax on jobs,” the Shadow Chancellor said.
A Labour amendment, which would have required the government to conduct an impact assessment of the levy on jobs and businesses, plus an assessment of the impact on different income groups and regions, was voted down by 335 to 243 votes.
Under Boris Johnson’s new care plan, those with assets amounting to below £20,000 will pay nothing for their care, while those with between £20,000 and £100,0000 will be eligible for means-tested support.
There will also be an £86,000 lifetime cap on the amount anyone will pay for care (not including care home food and accommodation costs). The new 1.25% levy, which goes against the 2019 Conservative manifesto, is supposed to help fund the reforms.
The Shadow Chancellor highlighted that “there is no plan for care workers who have been underpaid and undervalued”. She cited the 100,000 vacancies in the sector before the pandemic and the 170,000 predicted by GMB by the end of this year.
“The TUC say that it is wrong to hit young and low-paid workers ‘while leaving the wealthy untouched’. And they are right, too. This is a tax on jobs, it is a tax on the economic recovery, and we will not support it,” Reeves told MPs.
“Labour’s test is simple: does it fix the problem? And does it do so in a fair way? The answer to both those questions in relation to these proposals is no. That is why Labour will vote against this unfair, job taxing, manifesto-shredding, tax bombshell.”
She reminded MPs that the Chancellor has already frozen the wages of most public sector workers this year, is pressing ahead with a cut to Universal Credit next month and has forced an effectively mandatory council tax rise.
Reeves said her party would build a “strong and skilled social care workforce, with a new deal for care workers to create a well-motivated, skilled and properly rewarded workforce, with higher wages and more support for unpaid carers”.
Closing the debate for Labour this evening, Bridget Phillipson said: “Tonight, we are not voting for a plan to fix social care. There isn’t one. We are voting on the third Tory tax rise on working people and we will oppose it.”
An amendment to force Rishi Sunak to explore introducing a wealth tax on those with assets over £5m instead, put forward by left MPs led by Socialist Campaign Group (SCG) secretary Richard Burgon, was not voted on tonight.
“In the course of the pandemic, the UK has amassed a record number of billionaires. 171. Their wealth has rocketed by more than a £106bn. In total, it now stands just shy of £600bn, up nearly 25% since May 2020,” the Labour left’s Zarah Sultana said.
“You might think that instead of hitting the living standards of our heroic key workers, it would be this super-rich class who’d be asked to pay more when the NHS and social care system is in desperate need of funding, but that’s not how it is under a Tory government. This National Insurance hike will hit low-paid and young workers the hardest while doing absolutely nothing to tax the wealth of the super rich.”
Ministers cancelled an opposition day debate scheduled for today, in which Labour had been planning to force a vote on the upcoming Universal Credit cut, in favour of debating and voting on the health and social care levy this evening.
The levy was implemented via a ways and means resolution. These are used to give consent to parts of a bill that will involve taxes or other charges to be made on the public and they are usually approved without debate.
Boris Johnson defended his social care plan earlier today. Challenged by Keir Starmer as to whether he stood by his promise that nobody would have to sell their homes to pay for care under the proposals, Johnson refused to answer.
Addressing the Commons during Prime Minister’s Questions, Johnson suggested only that a private insurance market would be created to enable people to guarantee themselves against the costs of their care.
Reeves told MPs today that many people will “still face the threat of selling their homes”, adding: “Someone with a house worth £186,000 would still have to pay £86,000 even with this cap – and that’s before living costs of going into a care home. How does the Chancellor suggest they pay those fees without selling their home?”
The government has said the cash raised by the levy will provide £12bn a year to tackle the healthcare backlog caused by the coronavirus pandemic over the past 18 months, before the rest is directed towards the social care sector.
Ministers, and Johnson during Prime Minister’s Questions this afternoon, have been unable to say how long it will take the health service to get through the Covid backlog in care but it is expected to take several years.