Many constituents have contacted me about the recent vote which was held in the Commons to increase National insurance payments, expressed as a 'Health and Social Care' levy. Some have been supportive of the decision and some unhappy. It was an issue that I thought long and hard about, and voting for it was not a decision that I took lightly as a Conservative Member of Parliament who believes in low taxes.
Indeed, not only do I believe in low taxes, but there comes a point when taxes reach a level where they no longer raise as much for the public purse as lower taxes do. Higher tax RATES do not always equal higher tax TAKES. This has been ably demonstrated by Corporation Tax rates not only in the UK but in other jurisdictions as well and has its overall basis in economics in the Laffer Curve. It is fair to note that there does come a point when a low tax rate DOES reduce tax take as well, but it is my view that the latest round of tax rate increases will only increase tax take for a temporary period, one that acknowledges the current severe situation in the NHS, rather than being a successful longer term measure. (I acknowledge that there have been some other tax changes around this issue, but the Health & Social Care Levy is the ‘headline’ one.)
As a result of the Covid pandemic, the NHS has been under immense pressure, more so than at any other time in its history. These are exceptional circumstances, unlike any of the traditional seasonal pressures the NHS face in the winter months. Elective surgeries, cancer treatment and access to GP appointments have all been sidelined in the NHS effort to combat Covid-19. This has created a tremendous backlog. In the Covid-19 debate last September, I raised this exact point with the Government and highlighted my concerns about the health care needs that have been overlooked or at least have been unable to be properly serviced and that would need to be provided for as the pandemic eased.
What I am clear about is that this increased taxation is not the solution for Adult Care, something I have been campaigning for across many years, both as a Councillor and Council Leader and more recently as an MP – indeed several of my Prime Minister’s Questions, to both Theresa May and to Boris Johnson have been about this very topic. I find the idea that there will be a tax to raise money for the NHS and that it will at a future date ever be diverted to other uses, even if related uses such as Adult Care, to be implausible.
I would therefore encourage the Government to use the maximum imagination it can, coupled with Conservative principles and that is why, alongside other concerned Conservative colleagues, I have secured a meeting with the Health Secretary and other Health Ministers, to discuss other options for Adult Social Care.
There is no need for a complete reinvention of the wheel here, or for this country to act in isolation. Instead, we should look to countries that have devised new ways of coping with Adult Care pressures. (Yes, this country is different and has the NHS etc., but that simply means that overseas models need adaption and not that they could not work.) Options that I wish to see considered are based on insurance model systems that have been successfully used in countries like Australia, Germany and Japan. These schemes enable people to choose many aspects of their Adult Social Care plan and would work via the private sector upon the same principle of car insurance and therefore reduces pressure on public finances. (As a motorist you can choose your car insurance, but you cannot choose whether to have car insurance or not.) I will be profoundly disappointed if the Government misses the opportunity to be innovative over a proper method of funding adult care and simply goes for permanently higher taxes. As I stated above, I think this could well lead to concomitantly permanently lower growth rates.
I reluctantly voted for the National Insurance increase as a short term solution and immediate injection of cash to help solve the NHS backlog crisis but I am not content for this to become the status quo. Plus there is much, much more to do in terms of health care reform and adult care funding solutions.
