Labour needs to fight for a National Care Service funded by a Wealth Tax – Richard Burgon exclusive

“That is why we need to push for a National Care Service based on the principles of our NHS. It would be free at the point of use, provided by the public sector & paid for through progressive taxation.”

Richard Burgon MP

The first week back in Parliament saw yet another huge Tory attack on the living standards of working people with new regressive tax hikes.  

This is a part of a double whammy – millions of working people are being hit by National Insurance hikes at the same time as Universal Credit is being cut by over £1,000 per yearse

There is a relentless Tory attempt to make working people pay for the Covid crisis and the attacks are going to keep coming. So the key question facing Labour is what do we do about it? 

Of course, we need to oppose the Tory policies – but that is not enough. Unless Labour offers its own solutions then, however unpopular certain Tory policies are, we can’t expect the public to see us as the alternative. 

The Tories have justified their tax hikes by labelling it a “Health and Social Care Levy” that they claim will address the long-standing failings in social care as well as boosting health budgets hit hard by Covid. 

It will do no such thing.  So this was a clear opportunity for the Labour leadership to map out a progressive alternative and shape the national debate: a National Care Service, free at the point of use, and funded through a Wealth tax on the super-rich.  Regrettably, it failed to seize the moment. 

Social care is in a deep crisis – one made much worse by a decade of Tory austerity, greater outsourcing and a dangerous race to the bottom that sees so many of its staff struggling on poverty pay and insecure contracts.

There have been £8 billion of social care cuts since 2010. Yet the new Tory funding falls well short of what is needed. Of the £12bn raised annually over the next three years through the National Insurance hikes, just £1.8bn per year will go into social care. That doesn’t even address the budget cuts since 2010 never mind meeting the demands of 1.5 million older people and many disabled people who don’t get the care they need.

There has rightly been anger from the social care sector over this woeful proposal. The Tories imply that more money from the new taxes will go into social care in three years time but Sajid Javid refused to say how much and, anyway, that would come by giving less to our NHS. 

The issue of social care is not however simply about its underfunding – it’s also about the broken care model. Following widespread privatisations since the late 1980s, 95% of elderly care home beds are now provided by private firms. While seven in 10 social care staff earn less than £10 an hour and a quarter are on zero-hours contracts. That’s why the social care sector has over 120,000 vacancies. 

We don’t want to be simply pouring public money into failing private companies. We need to rebuild care as a public service.  And we need to ensure that extra funds go into guaranteeing care staff a proper living wage and ensuring they have enough time to give people the quality of care they deserve. 

That is why we need to push for a National Care Service based on the principles of our NHS. It would be free at the point of use, provided by the public sector and paid for through progressive taxation.

Huge work was done on Labour’s vision for a National Care Service ahead of the 2019 election. That initial vision included free personal care, support to local authorities to directly provide care rather than outsource it and proper pay and training for the workforce. 

This is a vision that we can be confident would resonate with the public.  The party needs to champion it. It was wrong that our party failed to do so this week and it must start doing so ahead of the Tories’ new Social Care White Paper this autumn. 

A National Care Service would be a progressive alternative to the disgraceful Tory plan that leaves people having to pay £86,000 toward their personal care costs – and even more to cover food and accommodation costs of those who need to go into a home. We don’t accept this for someone who is in hospital with long term complications and no one on the left should regard it as acceptable for someone in a care home, for example, as a result of dementia. 

The Tory tax hike this week was simple class warfare – hitting millions of working people in the pocket and letting the wealthy off the hook. Labour needs to stand for progressive alternatives to raise much-needed funds to transform public services including social care. 

One progressive alternative to the Tory tax hikes would be to tax income derived from wealth at the same rates as income from work. It is profoundly unjust that, for example, someone living off income from shares pays lower taxes than someone who earns the same amount of money by going out to work.  

The TUC has been rightly demanding that Capital Gains Tax – paid on the profits of selling assets like shares or a second home – should be aligned to income tax rates. That could generate £90 billion for the Treasury over five years, substantially more than raised this week by tax hikes on working people. The Labour leadership must back this demand. 

In addition, I have been campaigning for a Wealth Tax. There are many ways a Wealth Tax could work. One form could be a one-off 10% tax on the wealth of those with over £100m, which would raise £69 billion or a 10% tax on those with assets of over £5m which would bring in £86bn. While an annual wealth tax of 1.5% on the wealthiest 1% of people would raise £14.4bn per year according to the UK Wealth Tax Commission, the same as this week’s tax hikes. 

The key thing for the Left,  given that the richest 1% have almost a quarter of UK wealth, is to raise and organise around the demand for a Wealth Tax so that it becomes core to the public debate. 

Last year Chancellor Rishi Sunak stated that he does “not believe that now is the time, or ever would be the time, for a wealth tax’. This week showed why. He wants working people to pay for this crisis. It is essential that Labour immediately maps out a progressive alternative.

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