‘Unfair’ social care tax to affect Haringey’s worst-off, warn leaders

MPs David Lammy and Catherine West

By Luchia Robinson

Tottenham MP David Lammy has labelled the government ’s health and social care tax increase “unfair,” “regressive” and “wrong”, stating it will make the “worst off pay for the better off.”

The statement followed the government’s announcement of a new health and social care tax to pay for reforms.

Last month, Prime Minster Boris Johnson outlined the plan to increase tax by 1.25% to raise £36billion (£12bn a year, over three years), ring-fenced to support the NHS and social health sector.

Anyone earning £20,000–£100,000 will be expected to pay the levy which contributes to covering state care costs for people with assets below £20,000.

Johnson said raising the tax, instead of borrowing funds, would enable “radical innovation to improve the speed and quality of care,” insisting the government was taking “reasonable, fair and responsible steps to put the NHS back on its feet”.

The UK-wide tax levy will begin in April 2022 as a 1.25% rise in National Insurance (NI), paid by workers and employers. It will then become a separate tax on earned income from 2023, paid by all working adults.

In a series of tweets, Lammy referred to Johnson’s social care plan as “smoke and mirrors” stating that the “unfair” tax hike “breaks the promise [Johnson] made in his manifesto,” (not to raise the rate of NI, VAT or income tax).

Referring to the Conservative Party as “the party of levelling down,” Lammy went on to say: “[The] so-called social care plan is to impose an unfair tax on nurses, shop staff and other working people. It is just plain regressive and wrong. The wealthiest should have to shoulder their share of the burden.”

The density of jobs in Haringey is low, and wages are lower than the London average. Of all the London boroughs, Haringey has the second largest proportion of residents earning below the London Living Wage, meaning in-work poverty is a significant issue for many.

The number of Universal Credit claimants in Haringey increased by 192% from February 2020 to March 2021 as a result of the Covid-19 pandemic.

However, as of this month (after 6th October), standard allowances of the benefit will be reduced, as the ‘temporary’ £20 weekly uplift put in place to support people through the pandemic comes to an end.

According to the government the highest-earning 14% will contribute around half of the NI tax revenue, and at least £5.4bn of the £36bn will go to adult social care, with local authorities receiving more money to ensure this.

Haringey cabinet member for health, social care and wellbeing, Lucia das Neves said: “It is difficult to know exactly how the increased funding will be used and how this will help Haringey residents – the government has been light on the details.

“It is not clear how the government plans to help residents in Haringey get better access to GP care or wait less time for hospital appointments, waiting times were at an all-time high even before the pandemic.

“Families are anxious about how they will pay for social care now, people with disabilities want adequate support now, yet we are told we must wait until 2025/26 to have an answer to adult social care funding.”

UK councils are facing a social care funding shortfall of £2.2bn, following increased demand and government funding cuts, but Cllr das Neves insists that increasing NI to fund social care is “regressive and unfair.”

Cllr das Neves said: “The NI rise will hit workers and businesses hard, just as we are looking to recover from the economic impacts of the pandemic. The burden of funding our NHS and social care system is now falling to those that are least able to bear it, while many of the wealthiest are completely exempt from National Insurance payments.

“In Haringey we are doing all we can to support care workers – including paying the London Living Wage.

“But this tax increase means that those who support our most vulnerable residents will end up taking home less money.

“What we do know now is that this plan will mean the vast majority of hardworking Haringey residents will be worse off, while those who are able to shoulder the burden will remain financially untouched.”

Data from Haringey Council shows that the considerable variation in income between the Tottenham constituency in the east of the borough (median hourly pay of residents is in London’s bottom quartile), and Hornsey and Wood Green in the west (median hourly pay is in line with the London top quartile) is getting worse.

Of all the Inner London boroughs, Haringey has experienced the second largest increase of residents earning below the London Living Wage, having increased by 47% since 2013.

Labour MP for Hornsey and Wood Green, Catherine West said: “The Covid pandemic has demonstrated what many of us already knew – we need a comprehensive plan for health and social care. The government’s plan does not fit the bill, and is no more than a tax hike for many of my constituents in Hornsey and Wood Green”.