Making everyone pay one per cent of their earnings into insurance fund could solve social care crisis, says Yorkshire MP Kevin Hollinrake

Thirsk and Malton MP Kevin HollinrakeThirsk and Malton MP Kevin Hollinrake
Thirsk and Malton MP Kevin Hollinrake
The Government could help solve the adult social care funding crisis by introducing a mandatory system where everyone pays around one per cent of their earnings into a private insurance system, according to a Yorkshire MP.

Tory Kevin Hollinrake, representing Thirsk and Malton, told a Commons debate that a cross-party approach was needed to solve the long-standing problem of a lack of money to pay for social care.

His warning came as peers warned that adult social care funding must be boosted by £8bn immediately to end a national scandal, peers have warned, amid concerns over a system “riddled with unfairness”.

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And Mr Hollinrake told the Commons that the lack of funding for children's services and social care was among the greatest challenges faced by his local authority, North Yorkshire County Council.

The MP, a member of the Housing Communities and Local Government Select Committee urged the Government to adopt a system that emerged from a joint inquiry with the Health and Social Care committee.

He said the proposal was similar to the one adopted by the Germans in 1995 when they realised that their current funding formula was unsustainable.

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He said that in this system “everybody pays a small amount - just over one per cent of people’s earnings, and the employer also pays one per cent - into a private insurance system. The insurance companies are not for profit—nobody makes any money out of the system.

"The levies are settled nationally, and the system also covers people with learning difficulties and disabilities. The system is simple and sustainable. Everybody pays a small amount so that nobody has to pay everything. That is the fairest part.

"The system must be mandatory—that is the key—so that everybody puts some money aside even when times are tough. There is a threshold for people on low incomes, but the system means that people properly prepare for the future."

This week, Equalities Minister Penny Mordaunt conceded it was “fair criticism” to say the Government has kept the public waiting too long for a green paper setting out proposals on social care.