Last week we heard the news that the Government is planning to increase National Insurance to pay for adult social care. National Insurance is paid by those who earn, and you stop paying it when you reach State Pension age. The Government is reportedly planning on increasing NI by 1 – 2%.
I am very much in favour of increased funding for social care. I have long called for the Government to address the huge gaps in local authority finances and develop a system that ensures elderly and vulnerable citizens are cared for properly. The problem is, however, the Government has picked the wrong tax to increase.
By increasing National Insurance, the Government will be placing the bill for social care squarely at the feet of young people, renters and workers. Those who are exceptionally wealthy, or who no longer work, will not pay a penny towards it. Additionally, employers will also have to increase their national insurance contribution, and this risks further destabilising small businesses who have already faced an incredibly challenging year and a half. It’s not just me who thinks this, politicians of all stripes (including Government Ministers) have urged the Government to reconsider this unfair tax increase.
A better option, in my opinion, would be for the Government to increase capital gains tax (the tax you pay when you make a large profit from selling an asset). A recent report found that an increase in CGT could raise around £17billion pounds a year. Essentially, we could fund social care by asking those who have more wealth and assets to chip in.
The other issue with the Government’s plan is that it does not seem to appreciate the wide-scale reform needed to sort out adult social care. I’ve spoken a lot about the NHS and care integration in Tameside, and how it can serve as a blueprint for wider social care reform. Tameside and Glossop Integrated Care Trust, alongside Councillor Eleanor Wills and her team, have worked exceptionally hard to develop a system whereby care is given both in hospitals and across the local community. The trust works in conjunction with the NHS, Tameside Council and private care providers. It’s a radical and effective model, and I have yet to see any evidence that the Government is utilising this kind of pioneering thinking.
We must fund social care properly, but we must do so with a fair tax increase, and with the knowledge that funding alone doesn’t solve a crisis – we also need a plan.