PRESS RELEASE -Wednesday 8th September 2021
Help comes too little and too late for many struggling families
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Make the rich pay, not low paid workers!
Of all the options available to pay for social care, national insurance is easily the worst
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Care sector is overstretched, understaffed, underpaid and fragmented. Government offers no solution!
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Privatisation means too much public money going to profits for shareholders
“Boris, this won’t “fix” Social Care!” says Martin Mayer, Secretary of Sheffield TUC. “Yesterday the Government announced £36B over 3 years for the NHS and Social Care – with most of it going to an overstretched and underfunded NHS in crisis. Compare that to the £37B splashed out to SERCO for a Track and Trace system that never worked! More money could have – and should have- been found for Social Care and we should have solutions now – not wait till 2023!”
Yesterday’s announcement won’t bring back publicly funded social care for all at the time of need. This was scrapped by Margaret Thatcher’s Conservative Government which has left us with today’s crisis where poor families have to sell their home to pay for care for their elderly relatives. Even when Boris’ plan is fully up and running most of us will still have to find £86,000 to pay for our elderly parents to get the care they need.
“Nothing was said yesterday about urgently needed reform of the Care Sector itself which is overstretched, understaffed and unsustainable,” said Martin Mayer. “The sector depends on a heavily exploited mainly female workforce on the lowest pay, with many Care workers earning barely above the National Minimum Wage. Much of our Care Service has been privatised and out of our direct control with lucrative profits hived off to private shareholders instead of going to those who need it. These problems need to be fixed if we are to get the high-quality Social Care service we desperately need” he said.
“The biggest insult of all is making low paid workers pay for this, whilst letting the wealthy off the hook again,” said Martin Mayer. “Britain is the 5th wealthiest nation in the world yet has one of the biggest wealth gaps between rich and poor. Low paid workers pay disproportionately higher taxes (direct and indirect) than the wealthy, and yet again the Conservative Government has let the rich off the hook!”
Look what tax specialist Richard Murphy has to say about using a 1.25% hike in national Insurance:
“National insurance is a deeply regressive, and very unfair tax. It starts being paid when a person earns just over £9,500 a year (worked out weekly). Income tax is not paid until a person earns the equivalent of £12,570 a year. That’s the first unfairness.
Then national insurance is charged at 12% on the employee and 13.8% on the employer (which is a cost that economists agree effectively comes out of wages, so it’s really paid by the employee). That’s a combined tax of near enough 25.8%, higher than basic rate income tax.
Add on to that the fact that national insurance largely stops, by falling to 2%, when wages reach £50,268 a year (current rates), and the tax suddenly looks very far from progressive.
In other words, what the government is going to do is ask those on the lowest pay to suffer a tax increase to pay for social care. It will, in real terms, charge those on higher pay less as a proportion of their total discretionary income.
It will ask vulnerable employers to pay more. That threatens smaller business in particular. It also encourages more tax evasion.”
“The trade Union movement is very clear; we need more money to “fix” Social Care,” said Martin Mayer. “We need a root and branch reform of the sector with a proper boost to Care Workers’ earnings and we need to fund this by taxing wealth properly, not loading the tax burden on ordinary workers who are struggling already”
TUC General Secretary Frances O’Grady said:
“We need a social care system that delivers high-quality care and high-quality employment.
“New funding for social care is long overdue. But today’s announcement will have been deeply disappointing both to those who use care, and to those who provide it.
“The Prime Minister promised us a real plan for social care services, but what we got was vague promises of money tomorrow.
“Care workers need to see more pay in their pockets now. Nothing today delivered that. Instead, the only difference it will make to low-paid care staff is to push up their taxes.
“This is so disappointing after the dedication care workers have shown during this pandemic keeping services running and looking after our loved ones.
“Proposals to tax dividends should have been just once piece in a plan to tax wealth, not an afterthought to a plan to tax the low-paid workers who’ve got us through the pandemic.
“We know social care needs extra funding. But the prime minister is raiding the pockets of low-paid workers, while leaving the wealthy barely touched.
“We need a genuine plan that will urgently tackle the endemic low pay and job insecurity that blights the social care sector – and is causing huge staff shortages and undermining the quality of care people receive.”
The TUC published proposals on Sunday to fund social care and a pay rise for the workforce by increasing Capital Gains Tax.
The union body says increasing tax on dividends is a welcome first step to reforming the way we tax wealth, but that it won’t generate the revenue needed to deliver a social care system this country deserves.
Instead, by taxing wealth and assets at the same level as income tax, the government could raise up to £17bn a year to invest in services and give all care staff a minimum wage of £10 an hour.
TUC analysis shows that seven in 10 social care workers earn less than £10 an hour and one in four are on zero-hours contracts.
Polling published on Sunday by the TUC showed that eight in 10 working adults – including seven in 10 Conservative voters – support a £10 minimum wage for care workers.”
The Daily Mirror has this to say about the announcement
“Of all the options available to Rishi Sunak this one is easily the worst, and amounts to class warfare. National Insurance is already an unfair tax. It is only charged on working people. It’s paid at the rate of 12 percent on earnings between £797 and £4,189 a month and on incomes higher than that at a rate of just 2 percent. That means it is always charged at higher overall percentage rates on those with lower earnings than it is on big earners.”
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Note to editors:
For comment please contact Martin Mayer on 0776 107 8482