Andy Burnham’s plan to seize your savings is shocking, says Jonathan Walker.
Andy Burnham has been planning a care levy for years (Image: Getty)
Andy Burnham has wanted to impose a new social care tax since at least 2009. And it could have a devastating impact on your chances of enjoying a comfortable retirement. At one point, before he became Prime Minister, Mr Burnham admitted he wanted to seize 10% of everything you own.
He reiterated plans to create a National Care Service in a BBC interview over the weekend. The idea would be to offer care to people who need it, for free, just as the NHS provides free healthcare. It would end the current lottery in which some people see their entire savings eaten up in care bills, while others are able to pass on an inheritance to their children. But of course, nothing is really free.
The NHS is funded through general taxation. Mr Burnham doesn’t believe this will work for a care service, partly because younger people will object to paying extra taxes to care for the elderly. So we can expect to see a new, dedicated social care levy. Officially, Mr Burnham has asked Baroness Casey, who was already leading a review into social care, to consider the options. The Prime Minister told the BBC he would “lay out a broad direction” in his speech to Labour’s conference, and then Baroness Casey “is going to help me work up the details”. But he also said it would be a scheme where “everyone contributes”.
We’ve been here before. Mr Burnham was Health Secretary in 2009 when Labour drew up plans for a scheme where everyone over retirement age would pay into a social care fund. Some of us would then get care, for free, while if you were lucky enough to stay healthy in old age, or unlikely enough to die before you got very old, your contribution helped others.
Labour lost the 2010 General Election. But Mr Burnham never abandoned his plan for an NHS-style National Care Service.
When he stood for the Labour leadership in 2015, he said: “I am committed to extending the NHS principle to social care – where everybody is asked to make a contribution according to their means”. And this wouldn’t involve putting up existing taxes. Instead, he spoke about “a care levy”.
So how much would you pay? Well, Mr Burnham avoided giving a number and instead promised a review to look into it.
But that changed when he spoke at the Labour conference in 2021. Mr Burnham was Greater Manchester Mayor, an important job, but nothing to do with transforming the UK’s care system. It meant his comments didn’t get much publicity at the time.
However, the Disability News Service, a website reporting on disability issues, was there. It reported that Mr Burnham called for a care levy of 10% on “everyone’s assets, savings and homes”, with a payment plan possibly to be agreed when someone reaches the age of 65. Other comments from Mr Burnham make it clear that this could replace inheritance tax.
He said in 2021: “I don’t think you can say we are going to have a new system of social care without the older generation making a contribution to that.
“Because it’s a care levy and not an inheritance tax, it is linked to what you are getting… even if you don’t need care in your lifetime … you’re getting peace of mind, the peace of mind the NHS provides for you.”
And he’s spoken on a number of occasions about replacing inheritance tax, including in 2024 when he said: “I would be prepared to accept the abolition of Inheritance Tax on condition that we tax the wealthy properly while they are alive.”
That may sound rather good, as inheritance tax is extremely unpopular. However, it’s unpopular partly because people overestimate how much they (or their heirs) will have to pay. You can pass on £325,000, or £500,000 if your estate includes the family home, without anyone paying a penny. Only one in 20 estates is liable, whereas people with even modest wealth will have to pay Mr Burnham’s care levy.
The scheme Baroness Casey recommends may not be entirely the same as Mr Burnham’s 2021 plan. But the principle is clear. Mr Burnham wants us all to pay a special care levy, linked to our wealth and separate from income tax.
We’ll get something in return, to be fair.
But it’s going to be hugely controversial – and expensive for many families. No wonder he’s keeping the details vague for now.