Wales could be ‘guinea pig’ for social care income tax

Finance Secretary Mark Drakeford has revealed the UK government is interested in carrying out “experimental work” in Wales on using income tax to fund social care.

The Welsh cabinet secretary told BBC Wales Live he was in discussions with the Treasury over a compulsory insurance system.

Mr Drakeford said: “First of all I think people would need a cast iron guarantee that the money that was being paid in would stay in a fund for that purpose, that governments in future years couldn’t look at that fund and say ‘oh that would be handy, we’ll spend it on something else.

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“So if we were to persuade people they would really need to know that the contributions they would be making would be there for them when they needed them.

“Secondly I think there is work to be done in fleshing out the sort of purposes that that fund could be used for, and I don’t think it would be enough to say that all we would be doing would be to buy more of the sort of services that we have today.”

Economist Gerry Holtham is to submit a report to Welsh ministers next month on how the system could work.

Former Deputy Prime Minister Damian Green revealed last month that the UK Government was considering the introduction of a compulsory National Insurance Levy as part of proposals to be published in its Green Paper this summer (see Millions of workers facing potential ‘dementia tax).

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