Prime Minister Andy Burnham has outlined plans for a potential 1.8 per cent levy on workers to fund his ambitious social care reforms, a move that would hit typical full-time employees earning around £39,000 with an extra £590 annually. The proposal, reported by the Telegraph, targets workers aged over 34 and applies to income above £6,240, significantly lower than the current £12,570 tax-free personal allowance.
Levy Details and Impact on Workers
Under the emerging plan, contributions would be mandatory for those over 34, with the levy calculated on earnings above the threshold. For a worker on the Office for National Statistics average salary of £39,039, the additional tax burden amounts to £590.38 per year—approximately £49.20 each month. The levy is designed to generate billions to support a social care system that Mr Burnham describes as underfunded and in need of a preventative front-end service.
The Prime Minister, who previously served as Mayor of Greater Manchester, acknowledged the need for difficult decisions, stating that while he believes more can be achieved within existing resources, some reforms will require new funding. He emphasised that the government must first address systemic inefficiencies before turning to tax increases.
Burnham's Vision for Social Care Funding
Speaking on Wednesday, Mr Burnham fleshed out his social care plan, highlighting the estimated £2.5 billion annual cost to the NHS from preventable hospital admissions linked to inadequate care. He noted: "If you add all of it up, you are talking several billion pounds a year is lost from the lack of a preventative front-end social care service that's well supported."
The Makerfield MP stressed that tackling these inefficiencies should come before any tax rises. He told reporters: "I think it is possible from existing budgets to do much more. I mentioned that whole thing of people coming into hospital unnecessarily from social care settings, then having a long stay in hospital as a result of that unnecessary admission, and then a long period where they're medically fit to leave, but can't, because the care is not available."
Manifesto Commitments and Future Tax Decisions
Mr Burnham did not rule out future tax rises but insisted that the government would honour its manifesto pledge not to increase income tax, national insurance, or VAT. He said: "I think Louise [Casey] indicated some of what we would want to in the fullest sense will require difficult decisions. But we will be honest with people about those. We will put them before the country at the right time, and we will hopefully proceed with people's consent."
The proposed 1.8 per cent levy would fall outside those manifesto commitments, as it is a new ring-fenced contribution rather than a rise in existing taxes. Critics warn that the lower earnings threshold will disproportionately affect lower-paid workers, while supporters argue it is essential to stabilise the social care system.
The Telegraph report late Tuesday night indicated that the levy is one of several options being considered, with the final decision expected in the autumn Budget. Mr Burnham's government faces pressure to deliver on promises to fix the social care crisis, which has been a long-standing political challenge.
