Grantham: MP and businesses respond to National Insurance hike to fund social care

By The Editor

8th Sep 2021 | Local News

Vale of Belvoir MP Alicia Kearns has defended the rise in National Insurance announced by the Prime Minister to help solve problems in the social care sector.

The MP, who along with Boris Johnson was elected less than two years ago on a manifesto commitment not to impose tax rises of this kind, also blamed the impact of the pandemic for this.

Today, the government is to force MPs to vote on the move, barely a day after the measures were announced.

Last night, Mrs Kearns posted on social media: "The Government has today stepped forward to create a long term solution for funding health and social care.

"This is a challenge of many decades, there are no easy solutions, and after the pandemic we face enormous financial challenges whilst the pressures of social care become more significant and acute.

"I know the Prime Minister had hoped to look at a solution before entering pandemic but this was not possible. Today I lobbied him on ensuring Leicestershire and Rutland councils get the money they need.

"A UK-wide 1.25% Health and Social Care Levy will be introduced from April 2022, paid by individuals and businesses. The levy will create on average an additional £12bn annually for health and social care.

"The £12bn will help us tackle the backlog in the NHS, invest the largest amount of any Government ever to upskill the social care workforce, fund a nurses 3% pay rise and implement the Dilnot solution to cap social care costs.

"Too many of us are very worried about finding the compassionate care we want our loved ones to receive, and I think it's right that further borrowing and debt isn't how we go about funding social care."

Earlier yesterday, the MP quizzed the Prime Minister in the Commons, asking: "During the pandemic, the Government stepped in to save lives and jobs. In Rutland and Melton, 47% of jobs would have been lost without those efforts.

"Does the Prime Minister agree that it would be wrong to meet the cost with higher borrowing and debt, which would be carried by our children?

"Will he commit to look at those councils that are worse funded, specifically Leicestershire and Rutland, which need real help with social care above and beyond a generic formula across the country?"

Boris Johnson replied: "Yes, Mr Speaker. I thank my hon. Friend for what she says about Rutland and Melton, and we will certainly make sure the councils get the funding they need.

"She has hit on the fundamental point: borrowing more is no answer. We are borrowing a lot, and in the end borrowing is just future tax rises for younger people or even people unborn. That is not what this Government are going to do."

Today, Grantham-based Duncan & Toplis- one of the largest accounting and business advisers in the East Midlands- spoke of the burden the government's move will have on businesses.

Head of tax Nicholas Smith said: "My initial thoughts are that we are in danger of protecting the wealth of the elderly too much. One has to wonder why the wealth of older people shouldn't be used to fund long-term care, because this leaves some people to inherit substantially more than others who aren't so fortunate.

"As businesses are recovering from the pandemic, it's not a good time to increase the national insurance cost for businesses and it seems harsh on employees to bear so much of the burden.

"While it may seem controversial, a more general increase in income tax, in addition to the dividend tax increase would be a better alternative as it would spread the load across a greater base and because it includes all types of incomes such as pensions and property rental income."

He added: "It seems impossible to grasp, with difficulties in assessment and collection, but the government is shirking a closer look at a wealth tax, which, in theory at least, would seem to be the fairest way to pay for long term health care."

Lincolnshire-based Home from Home Care, which has 11 sites across the county, caring for those with special needs, feared the NHS would devour much of the extra revenue generated by the National Insurance.

Managing Director Paul de Savary said: "The good news is that after 20 years, the government has made a decision. However, the political expediency of packaging social care as part of an NHS focus means that the NHS will consume most of the funds, but at least it is the start of a process.

"The bad news is that it offers no immediate help for the critical staffing situation exacerbated by vaccine refusal and the serious image problem that's caused by underfunding.

"The despair amongst other providers is shocking with demoralised management who feel abandoned by government ministers' repeated failure to comprehend the magnitude of the "now" issues and act with agility. With no firm promise of new funding for social care, even years down the line, this does not bode well."

He added: "Although Home From Home Care is affected by tight staffing, we work hard to fight against the negative perceptions of care work by ensuring all our people are well paid, with great opportunities for progression and with a supportive system in place for employee wellbeing.

"However, that's only possible thanks to our unique, data-driven model of care which sets us apart from all other providers, so I worry about how organisations across our sector will manage without immediate government support and with only the vague prospect of additional funding in years to come."

     

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