Labour is open to the idea of taxing wealth to help pay for social care, shadow cabinet minister Lisa Nandy has said.
Her comments came as the TUC called for an increase in capital gains tax to raise £17bn a year to fill the massive gap in funding for elderly care and introduce a £10-an-hour minimum wage for care staff.
Boris Johnson is facing a revolt from his own MPs over his plan, expected to be unveiled in the coming week, to raise £10bn for the care system by putting an extra 1 per cent on National Insurance contributions (NICs) paid by workers earning as little as £9,500.
Vaccines minister Nadhim Zahawi did not deny that ministers were considering raising tax in order to fund social care.
Asked if people should be paying more tax to get better social care, Mr Zahawi told BBC1’s Andrew Marr Show only the government is “committed to reforming” the adult social care system. He declined to confirm expectations that the proposals will be unveiled this week, saying only that they will come “by the end of the year.”
Ms Nandy told Sky News’s Trevor Phillips on Sunday that a NIC hike – which would breach a Tory manifesto promise – was “a really difficult ask” for low-paid workers like supermarket staff and delivery drivers, saying: “We need to think much more creatively about this and make sure that we don’t load an unsustainable burden onto people who can’t bear it.”
The shadow foreign secretary said the “broad principle (that) those with the broader shoulders should take some of the burden” espoused by the TUC was “absolutely right”.
And she made clear that this could involve a tax on assets, such as property, shares or savings.
“Most people in this country- every family, including my own – is touched by the social care crisis. It is breaking families up and down this country,” said Ms Nandy. “And collectively, we’ve got to find a way to deal with it.
“If that means that those who make their money out of something other than income – out of assets – pay a bit more, if it means that people pay a bit more on their income, if it means that we find some kind of compromise that is sustainable so that people who can pay a bit more do in various different ways, I think that’s the right approach to take.”
A report published by the TUC today argues that raising Capital Gains Tax – paid at 20-28 per cent on profits from shares, business assets and second homes – is a fairer way to fund social care than hiking workers’ and businesses’ NICs.
TUC general secretary Frances O’Grady said it was “plain wrong” that under current tax arrangements a low-paid social care worker can pay a larger share of their income to fund the social care system than a private equity magnate who profits from asset-stripping care homes to sell on.
Ms O’Grady said: “Our dedicated care workers have risked their lives to care for our loved ones during the pandemic. Now it is time we cared for them.
“Every care worker in Britain should be paid a wage they can live on. And that means at least £10 per hour.
“Any plan to fix social care funding must also fix pay for workers in the sector.
“And working people shouldn’t bear the burden of funding social care alone. The prime minister should be asking those who make a fortune from their property and assets to pay a fairer share of tax.
“It is plain wrong that the government’s social care plans will see a low-paid social care worker paying extra to fund the social care system while the private equity magnate who profits from asset-stripping care homes to sell on sees no change.
“It’s time to raise taxes on wealth to fund social care properly, and guarantee decent pay for all social care workers.”
