Chris Chope Demands Pragmatic Reform to NHS, Social Care & Public Sector Funding
It is a pleasure to follow Richard Burgon. He talked about alternatives, and perhaps I can throw out a possible alternative that he might think reasonable. Why should the very rich have unrestricted access to a free NHS?
Whenever that is raised by Conservative Members, Opposition Members object to the idea and say that it would undermine the principles of the NHS. I do not expect him to answer that question, but I throw it out there because it is another alternative that could be considered.
It is useful that Members on both sides of the Committee are coming clean with all sorts of ideas. I would assert the principle of universalism—universalism of the welfare state and universalism of the NHS.
I thought that might be the hon. Gentleman’s response. Today we are talking about social care as well as healthcare, and the principle of universalism does not apply to social care because it is and will continue to be the subject of means-testing.
The Government talk the talk of integrating health and social care, and I had an exchange with my right hon. Friend the Minister on this subject. He justifies having a health and social care levy on the basis that they are interdependent. If they are interdependent and we are moving towards an integrated scheme, why do we not apply the same principles to both NHS healthcare and social care? We could have means-testing for healthcare, in the same way as we have for social care, or we could not have any means-testing for social care, in the same way as we do not have any means-testing for healthcare. If we are going to merge the two schemes, we need to resolve those anomalies. I am afraid that everything that has come out of this short debate shows that the Bill is a muddled fudge that perpetuates the distinction between health and social care but does not meet the challenge I put to the Minister: why not have a distinct social care levy?
Is it reasonable that we should have co-payment in the NHS? If so, it would generate an enormous amount of additional income. We essentially have co-payment on prescription charges, ophthalmology services, dentistry and, increasingly, audiology services. The idea that we should have co-payment more widely, so that people who can afford it contribute, say, half the cost of an orthopaedic operation, seems to be anathema to the Government. I do not understand why, if they want to get more money into the system.
Our system differs from most overseas systems. We are not spending more on healthcare in this country, but we are spending more on publicly funded healthcare and not enough on privately funded healthcare. I would like to see a Government strategy to encourage more investment by ordinary individuals in the healthcare system. I have a private Member’s Bill on co-payment coming up in the new year, but perhaps before that we might be able to get some movement from the Government on these principles. We have co-payment in the social care sector. If it is all right in the social care sector, why is it not all right in the healthcare sector? We are excluding hotel costs—the board and lodging costs—from the £86,000 social care threshold, but we do not charge any hotel costs to rich people who are in hospital. Why not? There does not seem to be any logic in that.
I am glad it looks like the Minister will have a long time to answer these points and the other important points raised by my hon. and right hon. Friends. If we are going to have a complete review and fundamental change of outlook on health and social care, we need to meet those challenges. What is the answer as to why we do not charge hotel costs for millionaires in hospital? That would introduce more income into the service and bring it into line with what happens with social care.
Those questions remain to be answered, but there are a whole lot more besides. I was looking at the Official Report of an exchange in the other place yesterday evening. The Parliamentary Under-Secretary of State for Health and Social Care, Lord Bethell, said that
“we recognise that family carers play a vital role. When we announced an additional £4.5 billion over three years for social care, it included a commitment to take steps to ensure unpaid carers have the support, advice and respite they need.”
We know that there are about 1.6 million unpaid carers, and that was leading them to believe that there was some sort of dividend around the corner for them. However, Lord Lilley picked up on that point and asked the Minister to
“confirm that…there would be only £1.5 billion a year going to social care from the large increase in national insurance”.
Obviously, that is correct. He then asked the Minister to
“confirm that nearly half of that will be absorbed by the need to pay for the extension of free social care to those with valuable homes…That means that nothing will be left to help domestic carers.”
That was a perfectly straightforward question, and as it was not answered in the other place last night, I hope that the Financial Secretary can answer it tonight. The answer that that Health Minister gave—perhaps the Treasury has a better view on this—was that
“the maths that my noble friend has done is a little bit premature.”
I did not think that maths could ever be premature. He continued:
“The White Paper will come out later this year;
it will spell out the precise financial arrangements, and I am looking forward to that.” —[Official Report, House of Lords, 13 September 2021; Vol. 814, c. 1130.]
The Minister was implying that he did not really have a clue as to what was going to be in it when it came out. That is an example of the muddled thinking, the failure of the Government to answer precise questions and the very dangerous policy of raising expectations among our constituents that somehow they are all going to be able to relax and spend all their hard-earned savings and use their houses for themselves without having to contribute much towards the long-term costs of social care.
May I throw out a suggestion arising from that exchange in the other place last night? If we have 1.6 million people providing free care for their loved ones, why are we choosing to impose upon them an extra levy, an extra tax? Surely it would be reasonable—clause 4 enables this to be done by subsidiary legislation—to exclude those who are looking after their loved ones, doing the right thing and saving the state a lot of money. We could say, “In return for doing that, you will be exempt from the 1.5% levy.”
I am delighted to see that my right hon. Friend thinks that is a good idea. I hope we will get some nodding soon from those on the Front Bench, but I have looked there in vain so far.
Anybody who speaks in a debate such as this is open to the challenge as to how they would pay for this. That challenge was put across the Dispatch Box today by Conservative Members to Opposition Members, and answer came there none. I have an anecdote to share with the House. Probably around a fortnight ago I was talking to a former very senior aide at No. 10. He said that one great thing that has come out of the covid-19 emergency is the sure knowledge that we can manage with 25% fewer civil servants in government without any detriment to the quality of government. That came from a senior adviser at No. 10. How many fewer civil servants does my right hon. Friend the Minister think we can have without any detriment to the public service?
My hon. Friend is making an interesting speech. Does he think that as a lot of civil servants now find they can work pretty well from home, we do not need all these expensive offices and perhaps ought to be surrendering leases?
That is another excellent idea. I am grateful to my right hon. Friend for the suggestion, but I fear that the Government are so focused on spending money that they have lost any incentive to try to control expenditure, which I thought was the Treasury’s job. It takes me back to Geoffrey Howe’s first Budget. The Conservatives had become a national Government on the back of very high socialist spending and a popular rebellion against socialist waste and high taxation. In his first Budget, Geoffrey Howe emphasised: “Finance must determine expenditure”. That message has now been lost by the Government, who are saying that expenditure must determine finance. Our Government—I say “our Government” advisedly—have reverted to the old socialist tax and spend philosophy in which expenditure determines finance. I hope that my right hon. Friend on the Front Bench will explain why he thinks that to change our philosophy fundamentally is consistent with Conservative values.
My final point is about the Barnett formula. The Bill recites a restatement of the fact that the Barnett formula is there and says, “Isn’t it fair?” My constituents are incensed at the unfairness of the Barnett formula, which results in their paying higher taxes so that the people of Scotland can receive higher public services, with much more spent on those services in Scotland than is spent in England, financed by our constituents in England. Why, when we should be looking at issues that relate to expenditure, are we just saying that the Barnett formula is going to apply? Will my right hon. Friend the Minister say what will happen when the Barnett formula is reviewed or abolished, as surely it must be because it has outlived its usefulness? The House of Lords did a comprehensive demolition job on the Barnett formula, which was brought in years ago as a stopgap—a plastering over of some cracks—and has now almost reached the status of some religious doctrine.
My right hon. Friend the Minister will not be able to persuade me to do other than vote against this Bill’s Third Reading, because introducing it is a chronic mistake by the Government, and it is even worse that we should be imposing taxes without explaining how we are to spend them. But let me leave that on one side. I hope that my right hon. Friend, wearing his Treasury hat, will be able to explain exactly what the Government are doing to help to constrain and reduce waste in public expenditure, whether it be by getting rid of leases on surplus buildings; by sacking staff who are not productive; by introducing the long-promised cap on exit payments; by stopping the obscene salaries that are paid in much of the public service; or by addressing the problem of all these bureaucrats in the health service who seem to squeeze out productive activity, for whom we are having to pay dearly and are going to have to pay the highest taxes in our lifetimes. Those are the challenges that the Government must face up to if they are to be able to recover not just my support, but the support of so many Conservative activists up and down the country.
I thank colleagues for their contributions to the debate. It has been very wide ranging—especially the last speech—occasionally touching on the subject of the Bill and the clauses and amendments in it.
Let me start with James Murray who speaks for the Opposition. He asked why the dividend tax has not been brought in. The answer to that question is that it does not fall under a national insurance contributions Bill. Dividends are subject to a separate dividend tax regime. That is a tax that is already in existence and it will be handled, as the Government have already made clear, in the course of the forthcoming Finance Bill.
The hon. Gentleman asked questions about levelling up and multinationals’ tax avoidance. I think he is aware that the Government’s approach to levelling up is extremely manifest, most recently in the work that we have done with the UK Infrastructure Bank, which is specifically dedicated to net zero and levelling up and which has just recruited a world-class new chief executive. On the case of multinationals, he has obviously forgotten that the Government have been in the vanguard of the G20 and the G7 in arranging and leading on a new settlement on Pillar One and Pillar Two multinationals’ tax avoidance.
The hon. Gentleman repeated his untrue claim from the earlier debate that these measures contain no new funding for social care. In fact, as the Chief Secretary to the Treasury said a few minutes before he first said that, the measures contain £5.4 billion to support social care, which is in the plan. In case he missed it, it is in paragraph 36 of the plan. It is no wonder that those on the Labour Front Bench do not think that we have a plan if they cannot be bothered to read the plan that we have actually published.
To be absolutely clear, the question that I was putting to the Minister was: where in the Bill is there a guarantee that a single penny of this new levy will go to social care?
The Bill is designed to fund the plan and the plan has been published. The plan is perfectly explicit as to where the money is going with regard to social care and how much is going to social care. It is in paragraph 36. The hon. Gentleman only needs to look at the plan to see it.
My hon. Friend Mr Fysh tabled a probing amendment and explained the background to his own amendment 7, and I thank him for that. I mean him no disrespect when I say that the Government have taken the amendment on board, and will take it on board, but I still ask him to withdraw his amendment.
Stephen Flynn talked airily about unfunded social care plans controlled, as it were, by England over Scotland. Nothing could be further from the truth. The truth is that Scotland has social care plans that are underfunded. Audit Scotland said that more money was needed. The Independent Review of Adult Social Care in Scotland said that more money will need to be spent over the longer term. Unfortunately, he also ignores what has been accurately described by the Prime Minister as the Union dividend from which all the devolved Administrations will benefit.
My hon. Friend Nigel Mills asked the important question of why a new tax. It is important to focus on this. The reason there is a new tax is that this is a fundamental change in how we have been thinking about social care. Andrew Dilnot himself has said that he does not think it inappropriate to have a new tax funded to support this.
My right hon. Friend John Redwood talked about Treasury concern with hypothecation, which remains intact. There is already an existing level of hypothecation within the national insurance contributions system and this plays off that. Nadia Whittome went into a long diatribe, in which she accused the Government of seeking to protect the richest people in society, to which the only simple answer is that that is absolute nonsense. I think she missed the debate on Second Reading, but if she read the distributional analysis, she would see that this package means that the 20% of highest income households will contribute 40 times the amount contributed by the least well off 20% of households. It is also worth pointing out that the highest earning 14% will pay roughly half of all revenues. Even the Wealth Tax Commission, which is independent of Government and dedicated to the idea of arguing for a wealth tax, acknowledged that the UK is on par with G7 countries as regards a wealth tax. Under a more inclusive definition—one that includes, for example, stamp duty land tax—the UK is near the top of the G7 countries in terms of a wealth tax.
My right hon. Friend the Member for Wokingham talked about hypothecation; I perfectly understand that. He also mentioned gross net revenues. These are net revenues—revenues that have been calculated net of the effects. The detail is set out in the technical annex to the published plan.
My hon. Friend Sir Christopher Chope went on a glorious canter, or possibly a ramble, around various public spending concerns. I fully appreciate his concerns. Very little of what he said actually bears direct relation to the levy, but let me address the parts that do. He asked why there is no distinct social care levy. Of course, it is possible to claim, as I did, that there is a need for greater integration between healthcare and social care, without suggesting that the funding for those things needs to be handled in exactly the same way across both. This provision blends the funding in a way that is felicitous for both elements.
My hon. Friend argued vigorously for co-payment. I take his arguments as I am sure he means them and look forward to seeing his Bill. He also mentioned millionaires in hospitals. He is right that maths is eternal; our noble Friend Lord Bethell may have been referring to the fact that calculations are not eternal, but may be in time and premature.
In the Conservative party manifesto almost two years ago, we promised that we would reform social care at the same time as promising that we would not increase VAT, national insurance or any other taxes. If it had not been for the pandemic, how would we have dealt with the challenge of reforming social care without raising taxes? Surely one way of doing it would have been to reduce public expenditure elsewhere.
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