Thread by @Jeremy_Hunt

Lots of noise on social care and a possible new tax to pay for it...my thoughts in this thread.

It’s progress that the soc care debate has moved on from 'whether' to 'how.' This isn’t just because it wld breach the PM's words on the steps of Downing Street, but a growing realisation that with the Covid backlog we’ll never get the NHS back on its feet without soc care reform

Let's take as starting point the HSC report which said the sector needs min £7 bn annual raise in its budget over 4-5 years. This covers a cap, demographic changes and increases in the national living wage but not a big expansion of quality or eligibility committees.parliament.uk/work/136/socia…

As Chx, Philip Hammond managed to fund the £20 bn rise in the NHS annual budget, which I negotiated with him in 2018, without raising taxes. But given post-pandemic public finances £7+ bn is is likely to be too much for any Chancellor to find down the back of a Treasury sofa.

One option is uncapping the council tax social care precept. Currently capped at 2% annual rise, it’s been less unpopular than feared (I hardly recall any constituency letters & colleagues generally agree). But soaring council tax bills to pay for soc care would change that.

Another option is to remove exemption for pensioners to pay NI. Logical as they’re the biggest winners from more ££ - but only raises £0.5 bn a year, & also breaches a manifesto promise. After Philip Hammond's attempted changes to NI this would be 'brave', in Sir Humphrey’s words

Then there is a new levy, perhaps set at around 1% of income. This could raise £6 bn+ immediately, actually more than the social care system needs or could cope with right away. But there is somewhere that does need that funding right away...

The NHS Covid backlog is now the most serious for two decades. As @HSJEditor says we are seeing thousands of people waiting TWO YEARS for surgery for the first time in two decades. That is going to require a big short term increase in capacity:

https://twitter.com/hsjeditor/status/1416429557549240323?s=21

So the attraction of a Health and Social Care levy is it would fund the NHS backlog in the short term and desperately needed improvements in the social care system in the medium/longer term. It would also be transparent about the need for resources and capacity in both sectors.

Will this turn us into a high tax country? As a Conservative I believe a lightly-taxed economy is essential to our future. But look at this table from the IFS [ifs.org.uk/taxlab/key-que… ]. It shows the US takes 25% in tax v.s 33% in the UK (and higher in most of the rest of Europe]

But in the US you pay much more than 8% of income in health insurance. In the future we’re all going to pay more for health due to living longer & new treatments. In the US/Germany/Switzerland/Holland that’s through higher insurance premiums; in systems like ours it’s through tax

This does not make us 'higher taxed' except in the most literal sense - and ignores the fact that overall costs are often lower in tax based systems because of lower admin costs caused by not having to invoice every individual treatment.

So a Health & Care Premium is the most honest solution, with a sensible debate on whether we’ll fund the new dementia drugs on the way, make our cancer survival rates as good as Denmark/Australia - & proper social care - & how much that’s about funding v.s innnovation/efficiency.