Winchester & Chandler's Ford MP, Steve Brine, supported proposals that will bring an additional £36m into the NHS and create a new Plan for Health & Social Care in England.
After much rumour in recent days, the Prime Minister outlined his intentions in a Statement to Parliament on its return from Summer recess.
Please find below Steve's detailed "vote explainer" on what's being proposed and why he voted in favour this evening. It covers NHS covid catch, social care and changes announced this week to the way pensions are calculated.
Vote explainer on NHS catch-up, social care levy and pensions
The Prime Minister announced (on Tuesday) an additional £36 billion for the NHS and the outline of a new Plan for Health & Social Care in England.
As I said in Parliament on Monday, we’re not in Government to manage decline - to duck the big issues - to do nothing for fear of offending anyone. We were elected, with a big majority, to lead.
So, I support the initiatives launched this week and voted for such in the House of Commons this evening. Here’s why ...
Over the past eighteen months, this country has faced a national emergency because of the Covid-19 pandemic.
In order to protect the NHS and save people’s jobs and livelihoods, the Government has spent £407 billion worth of taxpayers’ (ie; your) money. In Winchester & Chandler’s Ford millions were spent and thousands of jobs were saved through the furlough scheme alone.
As a result of Covid-19, our country now has a national debt of over £2.5 trillion. This is money that will have to be paid back and, as a Conservative, I don’t believe you do that by just passing the buck to our children and grandchildren.
For this reason, the Government has had to make some very difficult decisions.
These are not ones taken to win easy popularity and quick votes but to ensure lasting economic and health security for our country. No Government, no political party and no manifesto could ever have predicted that we would enter a worldwide pandemic.
As to the breaking of manifesto commitments, no party ever wishes to do that, but listening to some this week it is as if the global pandemic never occurred, as if the economy never shrank by the greatest level since 1709, as if millions of jobs were never at risk, and as if this Government never had to step in fiscally in a way that no Government outside wartime has ever had to do.
I care passionately about the NHS, I have made it my number one priority since the day I was elected and have been privileged to serve as a Health Minister in Government.
Of course I welcome the extra £36 billion for the NHS - and am bemused by the Labour and Liberal parties voting against it - but I don’t do so with my eyes closed and I don’t plan to stand idly by just hoping the NHS uses it well.
The coronavirus pandemic has led to a huge backlog in appointments with the risk, on NHS England’s own figures, of some 13 million patients being left stranded on NHS waiting lists.
Many of my constituents will be waiting for GP surgery appointments, missed operations and treatments. My great fear is a tsunami of missed illness yet to come forward and our NHS has to be ready - with a plan - to stand with those for whom that’s a reality.
Further to this, our social care system is not fit for purpose. The system does not adequately support those on low incomes or those who will have to sell their home to get the right care they need. Currently, over one in seven people end up spending more than £100,000 on their social care. This is not sustainable.
It seems to me that social care is one of those issues that parties of both colours have grappled with for many years, yet now we are at last at the point where a Government (our Government) has the courage and are sensible enough to actually come forward with some realistic proposals.
I have represented our area for more than eleven years and I am constantly asked when we’re going to “fix social care”. I’ll be honest, it’s taken too long but credit to the current Prime Minister for facing it down at long last as he promised he would.
I’ll also be 100% upfront and say this is not yet a fully formed plan. We have an outline - and crucially a funding commitment to deliver it - and a full White Paper will be published later this year upon which we will consult widely.
I want to involve my constituents in that as much as possible so look out for more details on how you can be involved in due course.
To deal with these problems and ensure that we fund the NHS properly, the Prime Minister has announced the new NHS and Social Care Levy.
This levy will raise an extra £36 billion for the NHS and social care over the next three years, on top of the extra £34 billion promised in the 2019 election for the NHS. To be clear, the health service has NEVER been better funded and now, because of this levy, those who have written to me over many years to say they’d “happily pay more to properly fund our NHS” have their chance.
The money will be ring-fenced and guaranteed for the NHS frontline. These funds will help clear the NHS backlog and support patient care and I have already discussed with Sajid Javid (our Health Secretary) the clear plan he has agreed with the NHS to do that.
I have urged him to publish that so parliamentarians can judge it for ourselves and, crucially, NHS leaders (locally and nationally) can held to account for THEIR delivery.
I am meeting very soon with our own trust, Hampshire Hospitals, to understand exactly how the waiting list is made up in this area and how they fit into the national plan to tackle it.
As I said on the media this week, let’s be honest about the options that were available to the Treasury in raising the new money. How could we have squared the circle and funded £10 billion-plus a year?
The first thing that the Treasury could have done is to seek to cut expenditure in other areas. And it’s true we could have cut welfare, education or even local government budgets but MPs mailbags are not exactly bulging with suggestions on budgets we can reduce.
And we have to understand that on current projections, there are many unfunded commitments made, including, for example, keeping our railways running, going for net zero, additional funding that will be needed for school catch-up and others.
The second option was to rely on growth, to assume that we could grow our way out of this problem and the money would “trickle down” where needed.
We have just had a huge contraction of the economy. We are not yet back up to the pre-pandemic level, although the Bank of England thinks that we may arrive at that point some time towards the end of this year, and we have many headwinds to growth ahead of us, not least the bottlenecks in supply chains and the many labour shortages causing real issues for our economy.
The third thing that the Treasury could have done is to borrow even more money. Despite the fact that the Bank of England now seems to feel that there is more money - I suspect that the Office for Budget Responsibility will confirm that around the time of the Budget in October - because the economy is doing a bit better than we expected, probably to the tune of about £25 billion, it would be a very brave Chancellor who started to borrow yet more and more, knowing that one day it is possible that the markets might turn around and look at the United Kingdom and decide that they no longer have confidence to lend to us. That would be a very dark and dangerous day.
That is the sword of Damocles that hangs regularly over the head of Rishi Sunak, so that leads us to taxation.
If we look at taxation and the amounts involved here, there are only three taxes that we could consider. About two-thirds of all tax is raised through income tax, national insurance and VAT.
The criteria we should ask to decide which one is does it look after the least advantaged in our society - the lowest-paid - and the second is does it look after those who are the youngest, who have borne the greatest brunt of the economic consequences of the pandemic?
We are looking to the younger generations, to some significant degree, to fund predominantly the needs of elderly people and social care. If we look at those taxes, income tax rises would have been very progressive - we would have had to have about twice the level of increase that we are looking at with national insurance to have raised the same amount of money.
If we put up VAT, that would be hugely regressive and retail / hospitality would have despaired at such a move after the 18-months they’ve.
That would therefore have been wrong and we are also up at 20%, near the upper limit of where VAT should be in my opinion.
That inevitably leads us to national insurance, just as it did the Labour Government in 2003.
A straight NIC’s rise - as floated in last weekend’s press I noted - would have failed both fairness tests and been highly regressive. It would have hit the poorest hardest, but what is right about the Chancellor’s approach is that he has extended it to those beyond the state retirement age and those receiving income by way of dividends. That critical double move makes this, in my opinion, the right approach and one I can support.
As well as supporting the NHS, this money will mean that residents from low incomes will be able to be given proper social care in their old age. The levy will be used to upskill the social care workforce, strengthen the adult social care system and cap adult social care costs.
In the House of Commons on Tuesday, I urged the Prime Minister to consider those stuck in the spiral of rising care costs NOW as their resources fade away. Of course every tax change has to have a start point - and people will fall the wrong side of that - but I am concerned we risk a group who will hear the Government has come up with a social care fix and assume help is on its way retrospectively.
I am making this point to the Secretary of State and the Chancellor (pictured) and have spoken to both already this week.
I am also keen to support those on lower incomes in our area and have asked what mitigating factors can be put in place to lift the burden of the new NHS levy.
The Prime Minister confirmed that those who are earning less than £9,500 per year will not contribute. He also noted that the Government will be lifting the minimum assets for which people can be liable for social care costs from £14,000 to £20,000.
However, the crucial point is that the NHS Social Care Levy will be predominantly on the highest earners rather than on those on low incomes. Those earning more will be paying more. The wealthiest 14% will pay more than 50% of this levy. Moreover, many small businesses will be protected.
The Prime Minister has stressed that 70 percent of the money raised from businesses will come from the largest one percent of businesses, while 40 per cent of all businesses will pay nothing extra.
And, as said already, to ensure that everyone pays their fair share, financial dividend tax rates will be increased by 1.25 percent. The respected and independent Institute for Fiscal Studies has described this policy as both “progressive” and “broad-based”.
It is worth noting that the lower paid are also being protected through other measures such as the increase in the national living wage to £8.91, cuts to the National Insurance threshold, the raising of the tax threshold for lower earners and the ten-year fuel duty freeze, which has saved the average worker £10 every time they fill up. A lower earner paying the basic rate of tax, now pays £1,200 less per year than they would have done otherwise.
Finally, a word on pensions ...
The Government has also this week confirmed that the state pension will increase by at least 2.5 percent next year.
As described above, the precarious financial situation faced by our country has forced tough decisions upon the Government. These are extraordinary times.
The “triple lock” guarantee introduced in 2011, has led to the state pension increasing by an average of 3 per cent annually. Since 2011, the basic state pension has increased by 35 percent or £2,050. It is now worth £137.60 per week, relative to earnings, the highest it has been in 34 years. The Government is taking the decision to temporarily move to a double lock this year.
This means the state pension will rise next year by the higher of inflation or 2.5 percent. This will ensure pensioners are protected against the rising cost of living.
The triple lock is being removed for the time being because it would increase pensions by 8% meaning an extra £746.20 would need to be given per pensioner each year costing taxpayers many billions of pounds. There is a commitment to return to the triple lock after one year.
In conclusion ...
These are very hard policy decisions but I think it is better to do what’s right and protect our NHS, safeguard the livelihoods of those who are less well-off and get our economy back on track.
If we sort these problems out now, we will be able to not just protect the NHS, and spend more on education, the police and the transition to net zero but also cut the cost of taxes and living for hard-working residents in the future.
