Andy Burnham has long championed a dedicated social care tax, with plans that could see a 10% levy on everyone's assets, savings and homes. The Prime Minister reiterated his commitment to a National Care Service in a BBC interview over the weekend, promising free care for those who need it, akin to the NHS.
The proposal aims to end the current system where some people see their entire savings consumed by care bills, while others pass on inheritances. However, the funding mechanism remains a point of contention, with fears it could devastate retirement plans.
Long-standing plans for a care levy
Mr Burnham's ambition dates back to at least 2009, when he was Health Secretary. At that time, Labour drew up plans for a scheme where everyone over retirement age would pay into a social care fund. Some would receive free care, while contributions from those who stayed healthy or died early would help others.
Labour lost the 2010 General Election, but Mr Burnham never abandoned the idea. In 2015, during his Labour leadership bid, 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." He spoke of a "care levy" rather than raising existing taxes.
Details of the 10% levy
In 2021, speaking at the Labour conference as Greater Manchester Mayor, Mr Burnham called for a care levy of 10% on "everyone's assets, savings and homes", with a payment plan possibly agreed when someone reaches 65. The Disability News Service reported his comments at the time.
He argued: "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."
Impact on inheritance tax and families
Mr Burnham has also spoken about replacing inheritance tax. In 2024, 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."
While inheritance tax is unpopular, it only affects one in 20 estates, with people able to pass on £325,000, or £500,000 if the estate includes the family home, without paying. In contrast, even those with modest wealth would face Mr Burnham's care levy.
The Prime Minister has asked Baroness Casey, who is leading a review into social care, to consider options. He told the BBC he would "lay out a broad direction" in his speech to Labour's conference, with Baroness Casey helping to "work up the details". He also indicated it would be a scheme where "everyone contributes".
The final scheme may differ from the 2021 plan, but the principle is clear: a special care levy, linked to wealth and separate from income tax. It promises to be hugely controversial and expensive for many families, with details kept vague for now.
