Andy Burnham Proposes National Care Service and Funding Reforms

Prime Minister Andy Burnham is proposing the creation of a national care service designed to improve social care workforce capabilities and align standards with the National Health Service. Burnham has not ruled out new taxes to fund these reforms, leading to warnings from the Tax Reform Council. Brian Monteith stated that placing the funding burden on income tax could increase the basic rate from 20% to 23%, costing an average earner of £39,000 approximately £715 annually.

To provide an alternative revenue stream, Lord Kinnock and Carsten Jung of the Institute for Public Policy Research have urged Burnham and Chancellor John Healey to equalize capital gains tax with income tax rates. They propose replacing the existing two-band system with a three-band structure of 20%, 40%, and 45%. Lord Kinnock claims this shift would generate approximately £12 billion per year, which he suggests should be used specifically to fund the development of the national social care service.

The proposal to reform capital gains tax is reportedly backed by Louise Haigh, an ally of the Prime Minister. Meanwhile, the Institute for Government noted that the politicization of social care reform may force Burnham to make brutal political choices to address low pay and unmet needs within the sector.