Prime Minister Andy Burnham has unveiled plans to reform social care that could see workers lose £6,330 of their tax-free allowance. The new Labour leader, who succeeded Sir Keir Starmer last week, is pushing for a national care service modelled on the NHS, with community-led services run by charities, local authorities and not-for-profit companies.
Proposed Income Levy
According to reports in The Times and The Telegraph, a key element under consideration is a new tax on income to fund the reforms. The levy would be set at 1.8% of earnings above £6,240, paid by individuals over the age of 34. This would effectively reduce the current personal tax-free allowance of £12,570 by £6,330, bringing the threshold down to £6,240.
The move is intended to create a mandatory fund that workers contribute to throughout their careers, which would then pay for their care needs in later life. Burnham has vowed to give "everything I've got" to reforming social care in England, describing it as a top priority for his government.
Political Reaction
Conservative MP Stuart Andrew responded by stating that any changes proposed "must be fully funded." He added: "Andy Burnham and Labour cannot rely on vague promises of reform without a clear plan for implementation and detail on what will happen when. The Conservatives are ready to work with Labour on measures that improve social care provided they are not reliant on yet more tax rises and borrowing."
A Conservative source was more sceptical, saying: "If Burnham was serious about working cross-party he would have given us more than 18 hours notice for a 30 minute meeting during recess and the invitation wouldn't have been immediately press released. It's almost like it's only being done for show."
Background and Implications
Burnham, the new Makerfield MP and former Mayor of Greater Manchester, has long championed social care reform. His plan to create a national care service aims to address the chronic underfunding and fragmentation of the current system. The potential tax changes would affect millions of workers, reducing the amount they can earn before paying income tax. Critics argue that the levy amounts to a tax rise on working-age people, while supporters say it is necessary to secure sustainable funding for an ageing population.
The government has not yet confirmed the details, with reports indicating that the plans are still being drawn up for the Prime Minister to consider. Any final proposal would require parliamentary approval and could face significant debate.
