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Health and care levy won’t fix social care and is not funded fairly, says Labour’s Rachel Reeves – as it happened

Shadow chancellor says social care tax ‘is a broken promise, it is unfair, and it is a tax on jobs’. This live blog is closed – for coronavirus updates, please follow our Covid live blog

Dehenna Davison says she will be abstaining over issues with the “ultra-wealthy having the cost of their social care capped” and concerns with raising NI

She said MPs have not had enough time to consider the proposals or consult constituents

There are other forms of income, through stocks and shares and properties. If you take, for example, somebody has got a portfolio of buy-to-let properties, under what the government announced yesterday and what we’re voting on this evening, they won’t pay a penny more in tax. And yet their tenants who go out and earn a wage will be paying more. That’s not right.

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In his speech at the start of the Commons debate Jesse Norman, the Treasury minister, cited a Resolution Foundation report (pdf) as evidence that the care plans would help people living in the north. He quoted it as saying: “The increased generosity of the means-test that will have relatively more impact in lower wealth regions.” (See 2.04pm.)

Here is another passage from the report explaining this point.

Only 29 per cent of individuals aged 70 and above living in the north-east have sufficient eligible assets that they might receive no state support with their social care costs, compared to almost half (46 per cent) in the south west.

The cap [the £86,000 maximum any one person will supposedly have to spend on social care] will offer most protection to those living in high-wealth parts of England. This is not just because of the obvious reason that a cap set in cash terms offers far more protection to those with higher-value assets to lose. The way in which care costs are likely to be calculated will also mean that those in more expensive areas will hit the cap more often (and therefore benefit more from the policy existing versus the status quo of no cap). Whether or not you have reached the cap will be calculated based on the normal spend required to receive the care you are assessed as needing in your local authority, not what you actually spend (another risk to the policy living up to its billing). But the costs of delivering care are significantly higher in some areas than others, as Figure 7 [see below] shows. The result is that those in the south are not only likely to have more assets that will be protected by the cap, but they are much more likely to hit it too, than those in the north or Midlands (assuming an equal distribution of the chance of needing care).

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Read the original article at The Guardian

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