New Clause 5 - Review of equality impact of Act

Health and Social Care Levy Bill – in the House of Commons at 7:15 pm on 14 September 2021.

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Votes in this debate

  • Division number 72
    A majority of MPs voted not to require reports on the equality impact of a new tax to fund health and social care.
  • Division number 73
    A majority of MPs voted for a new 1.25% tax on individuals' earnings or profits to be spent on health and social care.

“(1) The Chancellor of the Exchequer must review the equality impact of this Act and lay a report before the House of Commons within six months of the passing of this Act and every 12 months thereafter.

(2) A review under this section must provide a separate analysis of the equality impact of this Act on—

(a) income inequality,

(b) wealth inequality,

(c) geographical inequality,

(d) inequality between people with protected characteristics (within the meaning of the Equality Act 2010), and

(e) socio-economic status.”—(James Murray.)

This new clause would require the Chancellor to report to the House on the equality impact of the Act.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Division number 72 Health and Social Care Levy Bill — New Clause 5 — Review of Equality Impact of Act

A majority of MPs voted not to require reports on the equality impact of a new tax to fund health and social care.

Aye: 240 MPs

No: 320 MPs

Aye: A-Z by last name


No: A-Z by last name


Absent: 86 MPs

Absent: A-Z by last name

The Committee divided: Ayes 240, Noes 320.

Question accordingly negatived.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 8:06, 14 September 2021

I beg to move, That the Bill be now read the Third time.

I am grateful to all right hon. and hon. Members who have participated in the passage of this landmark legislation. I would like to remind the House, if I may, of the Bill’s provisions and its overarching goals. We may talk loosely of it as being based on national insurance contributions, or indeed as being a national insurance contributions Bill, but it is of course a separate Bill to introduce a 1.25% health and social care levy based on national insurance contributions.

The levy will be introduced in 2022. In 2022-23, it will be delivered through a temporary increase in NICs rates of 1.25% for one year only, with all revenues generated being ring-fenced and paid to NHS England, NHS Scotland, NHS Wales and the equivalent in Northern Ireland. Then, from April 2023, a formal legal surcharge of 1.25% will replace the temporary increase in NICs rates, with revenue ring-fenced for health and social care only. The levy will also then apply to those working who are over the state pension age.

The levy will enable the Government to tackle the backlog in the NHS. It will provide a new, permanent way to pay for the Government’s reforms to social care and will allow the Government to fund our vision for the future of health and social care in this country over the longer term.

I reiterate my sincere thanks to all Members who have engaged in our series of stimulating debates on the measure. I commend the Bill to the House.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury) 8:07, 14 September 2021

I thank the Clerks for their excellent and particularly rapid help with amendments to the Bill.

Today, the Government have been determined to push through their tax rise on working people and their jobs as quickly as they possibly can. The Bill contains nothing at all—not even a reference or mention—about a plan to fix social care, and it fails to guarantee that a single penny of the new levy will ever go towards the social care sector.

On Second Reading, the Opposition attempted to push for a guarantee that Parliament would vote on a social care plan before spending the money that the Bill raises. The Government rejected our attempt, and I am sure there are many Conservative Members who feel deeply uncomfortable about the position in which they find themselves.

While the Bill lacks a plan for social care or any commitment that a plan will ever be in place, or even that any of the money that the levy raises will ever go to social care, it does include a tax rise—a tax rise that hits working people and businesses creating jobs. We know what that will mean for people across the country: combined with the cut to universal credit and the freeze in personal allowances, hospitality workers, teaching assistants, supermarket workers and social care workers stand to lose more than £1,000 next year.

Members do not have to take my word for it. The Financial Secretary admitted the impact that this tax rise will have in his own tax information and impact note, which set out in no uncertain terms that people who are just about managing financially will see their disposable incomes fall. The Conservative party has united the Federation of Small Businesses, the British Chambers of Commerce and the CBI against its plans. They all agree that this represents a blow to jobs growth at a crucial point in the UK’s economic recovery. Last night, the Financial Times published its view that the “Tories must regain trust as the party of business”—which seems to be an understatement, to say the least.

The Government’s approach will hit businesses creating jobs, and it will disproportionately hit working families and young people. It will hit those on low and middle incomes. It will hit people in some parts of the country more than others. But when we tried to push Ministers in Committee to come clean about the unequal impact of their tax rise on different people and across the country, or to be transparent about how it would hit social care workers themselves, they refused. The Prime Minister, the Chancellor and the Conservative party simply have their fingers in their ears.

Finally, the Government have refused to accept throughout today’s debates, and indeed throughout the last week, that there is any alternative to their tax rise. The Prime Minister and the Chancellor are desperate to pretend that this is the only way to raise the money, and that simply is not true. A fairer approach to funding the NHS, social care and all our public services would see those with the broadest shoulders—including those with incomes from large financial assets and multiple rental properties, and other income from wealth—contributing more. The Government have refused to consider those options, and would prefer to hit workers instead.

The simple truth is that there is no plan to fix the crisis in social care. There is no plan to improve the pay and conditions of care workers, no guarantee that any of the money will go toward social care, no guarantee that people will not have to sell their homes for care, and no plan to clear the NHS waiting list backlog during the present Parliament. All that we have is a tax on working people and their jobs. It tells us everything we need to know about the instincts of the Tories when they are in power, and that is why we will be voting against this Bill.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury) 8:12, 14 September 2021

Let me first take the opportunity to thank the Clerks, who give us so much support in putting together amendments to the Bill, which arrived at such short notice. I thank Scott Taylor and Salma Saade in our research units, who also helped, and my hon. Friend Stephen Flynn, who did so much in Committee.

This is a Bill and a tax without a mandate, in Scotland or even in England, since it is a breach of a Tory manifesto pledge—a pledge reiterated by the Chancellor at the time of the Budget. The Health Secretary has said that it is for the Scottish Government ultimately to decide how money is spent, but the Prime Minister said that the UK would direct money raised by this levy to the devolved institutions, and the Chancellor is on record as saying that the UK Government have the right to do this. The truth—the legal truth, because it is in the Bill—is that the Treasury may determine how this money is spent in Scotland. That is a fundamental undermining of the devolution that we fought so hard to get. Within the Bill, Ministers can even change what they like in regulations later, so even what we agree today may not be the principles that the Government will go by later on.

This is a tax on the people of Scotland to pay for England’s social care crisis. It is a tax on young people and lower earners to pay for the wealthy. It is a tax on jobs, undermining recovery at a time when we need to be thinking about getting people into work, not making it harder for businesses to employ them. It is also a tax on the many who have been completely excluded from UK Government support throughout the pandemic and who are now going to be hit by this increase. It is also a power grab. It is another Tory power grab on devolution. This is not a Union dividend; it is a Union dead end, and we on the SNP Benches will not support this new Tory poll tax.

Question put, That the Bill be now read the Third time.

Division number 73 Health and Social Care Levy Bill — Third Reading

A majority of MPs voted for a new 1.25% tax on individuals' earnings or profits to be spent on health and social care.

Aye: 306 MPs

No: 250 MPs

Aye: A-Z by last name


No: A-Z by last name


Absent: 90 MPs

Absent: A-Z by last name

The House divided: Ayes 307, Noes 251.

Question accordingly agreed to.

Bill read the Third time and passed.