Andy Burnham has suggested a new tax on workers could fund a significant overhaul of adult social care in the UK. He advocates for a system based on collective contribution, similar to the NHS principle, acknowledging that "difficult decisions" will be necessary.
The proposed tax on workers and potential wealth-based contributions signal a significant shift in how social care might be funded in the UK, potentially impacting millions of individuals and the broader economy. The debate highlights the substantial financial challenges facing the social care system and the political difficulty in finding sustainable solutions.
Andy Burnham, Mayor of Greater Manchester, has indicated that new taxes may be necessary to fund a comprehensive overhaul of adult social care. Speaking at a press conference, Burnham advocated for a system funded on the "NHS principle" of collective contribution, suggesting it could be more equitable than the current model and contrasting it with the US healthcare system. He acknowledged that "difficult decisions" would be required to implement such reforms.
Burnham and Baroness Louise Casey, who is leading a review into social care, urged against premature judgment of proposals. Potential tax increases or spending reallocations are likely to be considered after Casey's review is published, possibly influencing next year's Budget. However, the Prime Minister has stated he will adhere to the Labour manifesto from 2024 and ruled out raising income taxes, VAT, or national insurance.
Burnham previously endorsed an insurance scheme based on estates, emphasizing the "NHS principle" where a small contribution from everyone could protect most of what individuals have worked for. He admitted that going too close to a general election had not allowed sufficient time for public discussion on such issues.
Reports suggest that health department officials had considered a new levy of 1.8% on earnings above £6,240 for workers over the age of 34. This plan, broadly based on a think tank report, would differ from a 10% "death tax" on estates. Wealthier elderly individuals would potentially pay more based on their wealth.
The Prime Minister has invited Kemi Badenoch and Sir Ed Davey to cross-party talks on social care. Badenoch has expressed opposition to tax increases, and Conservative Party chairman Kevin Hollinrake criticized the potential for "huge new costs" for taxpayers. Casey, whose review is expected later this year, highlighted the need to ask "difficult questions" about who should receive support and how, emphasizing the struggles of families with significant disabilities.