Andy Burnham's rumoured plans for a social care levy could result in an extra £715 tax bill for someone earning £39,000 a year, according to a former parliamentarian. The warning comes as the Labour government faces mounting pressure over how to fund a new national care service.
Tax rise could hit average earners
Brian Monteith, a former member of the Scottish and European Parliaments and senior adviser to the Tax Reform Council, has calculated the potential impact. Speaking to the Telegraph, he said: "If placed squarely on income tax, the cost would require an increase in the basic rate of almost 3p from 20pc to 23pc (that’s an increase in tax of £715 on an average salary of £39,000)."
The warning suggests that the government could end up shooting itself in the foot if it proceeds with the levy, as it may alienate middle-income voters. Mr Burnham, the Makerfield MP, has refused to rule out a tax raid to fund his social care changes, insisting that an "honest conversation" is needed about financing.
Burnham's vision for social care
Mr Burnham has outlined ambitious plans to improve the social care sector, saying he wants to "lift it closer to NHS standards ... and think about progression routes for young people coming into social care, so they can progress from social care into NHS positions as well."
He added: "We will not get the care service we all want until we improve the strength and the capability of care at the very front of the service, and that means lifting up the social care workforce as best we possibly can."
Cross-party consensus vs action
The Institute for Government has weighed in on the debate, acknowledging the challenges ahead. A spokesperson said: "Aiming for cross-party consensus at the start is a desirable approach. The policy area has become too politicised, with every party (including Labour) using previous reform attempts to land political blows. Burnham is right that this has stymied progress.
"But Burnham is likely to end up faced with a choice between cross-party consensus or taking action. Ultimately, there are going to be some brutal political choices to come."
The think tank highlighted two key areas Burnham wants to address: high levels of unmet need and low pay. "There are different ways to correct those problems, but all of them require more money," the spokesperson said. "The question then becomes who stumps up that money? And how does it flow into the sector?"
Funding dilemma ahead
As the government grapples with these questions, the prospect of a tax rise looms large. With an average salary of £39,000, the proposed levy could translate into a significant financial burden for many households. The debate over social care funding is set to intensify, with Mr Burnham at the centre of the discussion.
While no final decisions have been made, the warnings from experts like Mr Monteith highlight the political risks involved. The government must balance the need for additional revenue with the potential backlash from taxpayers, making the path forward far from straightforward.
