Keir Starmer has criticised the government for “hammering working people” with its plan to raise National Insurance contributions, while setting out the “principles” underpinning Labour’s plan for social care.
In a Sky News interview today, the Labour leader described the plan unveiled by Boris Johnson last week, which will see NICs increase by 1.25 percentage points, combined with the withdrawal of the Universal Credit uplift, as a “double whammy”.
The government increased the rate of Universal Credit when faced with large numbers of people struggling early in the pandemic. Ministers have insisted that the increase was temporary and confirmed it will be cut from October.
“I’ve been talking to people who are going to be hit by effectively a double whammy because, on the one hand, they’re going to get a tax rise of several hundred pounds,” Starmer told viewers, referring to increasing NICs.
“At the same time, the government wants to take away the £1,000 in Universal Credit uplift that we’ve seen. So some of these families – 2.5 million families – are going to face the double whammy of losing £1,100-£1,200 a year. That’s a huge amount of money.”
He highlighted a conversation he had with a care worker last week who will pay more in NICs and lose £87 per month as a result of the cut to Universal Credit.
Starmer stressed his preference for funds for social care to be raised through income from assets, saying that Labour would raise the cash in a “broader way where those with the broadest shoulders pay their fair share”.
“The government is saying, if you’re working we’re going to tax you, and I say people who earn their income from other ways – whether it’s property, landlords, stocks, shares dividends – those people should be paying their fair way,” he said.
Johnson has argued that trying to raise the additional funding needed through measures such as increasing capital gains tax or profits on assets would not be sufficient. Starmer said today: “I don’t agree with the Prime Minister on that.
“Our analysis is that you could raise this money in other ways, whether that’s capital gains tax, whether that’s on property, stocks and shares and dividends. He’s not even trying. He’s gone straight for hammering working people.”
Asked what Labour’s plan for care would be, Starmer said: “Firstly, we must make sure that care is provided at home. The vast majority of people want their care provided at home. So the question of going into a care home is secondary. The first question is provide it at home.
“The second principle under our plan is that this should be preventative. There are many bits of social care, which aren’t provided at the moment. If they were, it would actually prevent people going into care homes in the long run.
“And the third issue that’s really important to our plan, our principles, is that you’ve got to pay the workforce properly. Care workers are underpaid and undervalued and we want to see that change and change materially by them being paid more, on more secure contracts and recognised for the hard work that they’ve put in.”
He said he agreed with the principle that nobody should have to sell their home to pay for care, but insisted that this problem should not be solved in the “unfair way” that the government has put forward.
Starmer criticised the plan put forward by Johnson for not addressing issues of care worker pay or providing care to people in their homes, and highlighted that it is not known when the funding will be directed towards social care.
Ministers have said the cash will go first towards clearing the NHS Covid backlog and then it will be used for social care. Johnson has refused to say when that will be or committing to clearing the Covid backlog by the end of this parliament.
Starmer added: “[The plan] only addresses one small part of the problem, which is whether people have to sell their homes – many people with moderate homes will still have to sell their homes.”
Since the rise in NICs was announced, Labour has taken a poll lead over the Conservatives for the first time since January, according to YouGov, with the Tories seeing a five-point drop in support to 33% and Labour up one point to 35%.
Jonathan Ashworth said last week that Labour would fund social care via a community-first savings plan. The Shadow Health Secretary said the party would “expand eligibility with a national framework”, with more people accessing care in their homes, raise standards for care workers, provide “proper respite support” for carers and develop a “plan for adults with disabilities”.
Asked whether Labour would keep the Universal Credit uplift, the Labour leader said today: “We’ve been fighting the government on this uplift, month in month out. It is wrong to remove that £1,000 uplift. It will impact millions of families who will be poorer because of it.
“In the long run, we would reform and change Universal Credit because it doesn’t work well – particularly when people start to want to earn a little bit more money, they get trapped in the system. So we would reform it in the long run but absolutely keep this uplift at the moment. It’s a lifeline for millions of families.”
Jonathan Reynolds last month outlined the Labour proposal to replace Universal Credit with a fairer welfare system allowing low-paid people to keep more of the money they earn as part of a wider plan to tackle in-work poverty.
The Shadow Work and Pensions Secretary announced that a future Labour government would reduce the taper rate – the rate at which the entitlement is withdrawn as a person earns more – when it replaces the benefit.