Andy Burnham has rightly made fixing social care a top priority and seems, on the face of it, to be genuinely interested in reaching a cross party consensus. Social care has been a priority for Liberal Democrats for a long time as well – I shed more than one or two tears when I first saw some of our election broadcasts from Ed Davey talking about his experiences.
The good news is that we don’t need to wait for the Casey Review to conclude in several years – the answers are already out there. In 2019, the House of Lords Economic Affairs Committee published a landmark report calling for £8bn investment in social care, followed by the introduction of free personal care in England. The committee at the time was chaired by the very right-wing Lord Forsyth – this is not a lefty fringe idea, but one that makes practical sense.
It was wisely adopted as our party’s policy in 2023 and a major plank of our manifesto in 2024.
Of course, post-Covid and an ever aging population would mean you need more than £8bn today – some estimates as much as £18bn for transformative social care by 2036.
Frankly, Liberal Democrats need to be a bit less squeamish about asking people to pay more tax. Real substantial taxes rather than fiddling with the Digital Services Tax which is paying for seemingly everything (incidentally widening its base to cover more products like user data sales and streaming services as France and Denmark do or expanding it to AI companies would generate substantially more revenue than upping the headline rate).
The main beneficiaries of making personal care free are people like my family – a fair amount of wealth and assets (a 3 bed detached house in Berkshire and investments) but not necessarily cash rich. The fairest solution is to look at taxing wealth more, rather than working people during a cost of living crisis, so the main beneficiaries are the main contributors. Equalising Capital Gains Tax with Income Tax, and removing some of the egregious loopholes would raise upwards of £11.3bn a year as well as removing distortions which would promote economic growth. It is also backed by the IFS.
We could also look at Corporate Tax reform. The introduction of Public Country by Country Reporting, a tool designed to tackle aggressive profit shifting by the largest multinational companies, is estimated by the Tax Justice Network to raise £5bn by the end of this parliament and is already on the statute books, it’s just never been implemented.
This does leave us £2bn short, but as was noted in our manifesto substantial savings will be made to the NHS if we fix social care and are able to get patients out of high cost hospitals and into lower cost proper social care.
You generally only use social care twice in your life – once when your parents get old and need it, then again when you yourself get old and need it. Incremental improvements won’t be felt in a way they will with the NHS or other public services that we use on a regular basis.
Burnham, and the Lib Dems, could choose the path of least resistance – Dilnot style caps, a few extra care packages, more funding etc. No one will notice and no one will feel like anything has improved. No one will feel reassured if they only have to pay £70,000 for social care rather than £150,000. This was Starmer’s downfall – incrementalism just won’t cut the mustard in our populist age.
So let’s grasp the bull by the horns and push for the radical change we promised in 2024 – free personal care and sustained investment, funded through progressive and substantial tax reforms on wealth and the biggest multinationals.
Reform, the Tories and some of the right-wing press will stamp their feet – but let’s stand up for something that the country can rally behind.
* Joe Wright is a member in Lambeth and who worked at Lib Dem HQ from 2021 to 2025 developing the party's long-term policies.
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6 Comments
Frankly, Liberal Democrats need to be a bit less squeamish about asking people to pay more tax“
There are also probably more urgent demands on the public purse than social care, being national security, covering military spending, energy security/net zero (two sides of the same coin) and food security.
I am being told that Lib Dem plans for social care can be paid for by reductions in costs elsewhere- one hopes by reductions in demands on the NHS by provisions of social care instead. People feel over taxed, higher personal taxes mean people have less to spend in the middle of a costs of living crisis and we have seen the damage that Labour’s national insurance increases have done to employment – we can’t tax our way to prosperity. We have to be realistic about this.
Thank you for raising the matter of care for our people!
However, taxes do not pay for government spending.
Having a sovereign currency, H. M. G. creates money by having an appropriate person use a computer keyboard and then taxes (some of) it back through taxation.
The actual purposes of taxation are to be found in this article:
https://www.taxresearch.org.uk/Blog/2026/03/02/tax-does-not-fund-spending/#gsc.tab=0
The “National Debt” is not a real problem because “governments borrowing in their own sovereign currency face virtually zero risk of involuntary default as liquidity can be backed by their central bank.” [AI Overview}
Alas, stated and unstated Neoliberalism [diliberately] confuses real resources, which include people, with a medium for exchange which includes money.
Money is not a resource because it has no direct utility and no intrinsic production value. [From AI Overview]
“A well cared-for-populace is a vital national resource that drives economic growth, social stability, and innovation through improved health, higher productivity and strong education.” [From AI Overview]
“Money is not a resource because it has no direct utility and no intrinsic production value.”
I think this means that I am better off being paid in kind rather than by a fiat currency because a fiat currency has no direct utility and intrinsic production value. In the real world I am dependant on everyone else accepting the fiat currency on the basis it has a practical value as a means of exchange despite the risk of that value being eroded by inflation.
We all know of course that relying on governments to control inflation by keeping their hands off the printing presses has historically not been especially successful. To do that again when illiberal politicians are looking to exploit popular discontent looks like a high risk strategy.
@Steve,
The argument that “taxes do not pay for government spending” has to be considered alongside the MMT view that taxes give the currency a value.
Therefore No Taxation = Worthless Currency = No meaningful Govt Spending.
As you sort-of imply, the limiting factor is the amount of spare resources in the economy. If we have lots then, sure, we can reflate the economy in the way you suggest. But have we?
Many MMTers don’t quite get it and end up giving the wrong impression. MMT is perfectly sensible if it’s understood correctly.
I wouldn’t quote Richard Murphy though. Some of what he says is OK but a lot isn’t
“Prioritizing inflation control primarily causes high interest rates, slower economic growth and increased financial burdens on regular households.” (Ffom AI Overview)
“For a sovereign currency issuing government, taxing does not directly fund or pay for government spending; spending comes first, and taxes come second. As noted by Tax Research, spending comes first, and then tax comes second. The government creates money, and then taxes people to modify the impact of that money.” (From Ai Overview)
@ Steve,
AI opinions need to be taken with a pinch of salt. 🙂
“Prioritizing inflation control primarily causes high interest rates”
It doesn’t cause them . Raising interest rates is a choice. It’s justified to some extent if we want savers to be given some protection against inflation but monetarism shouldn’t be the prime tool against inflation. Especially if the central bank is lumbered with the entire responsibility of hitting an inflation target. Govts should take more responsibility with fiscal measures too . This is probably a Post Keynesian view. MMTers take a harder line and advocate for a permanent Zero Interest Rate Policy. (ZIRP)
“As noted by Tax Research, spending comes first……”
No it doesn’t. If we are talking about starting a new fiat currency from scratch, the demands for the payment of taxes in the currency of issue have to come first. Otherwise the currency won’t have any value and no govt spending is possible.