Create a Carer’s Minimum Wage: note

Central fiscal result

+£4.0bn - Net fiscal impact in 2028-29

Low case: +£2.0bn. High case: +£10.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models create a carer’s minimum wage by 2028-29.
• Baseline is current policy or published departmental plans.
• Central case uses published party or official anchors where available.
• Wider manifesto interactions are excluded unless stated.

Affected population

• Affected units are people, firms, households or providers depending on policy.
• Direct exposure follows the manifesto or government target group.
• Indirect exposure includes suppliers, workers, consumers and taxpayers.
• Weakest counts are widened in the low and high cases.

Gross impact

• Published anchor or scenario central is +£4.0bn in 2028-29.
• Gross costs or receipts are adjusted for behaviour and delivery risk.
• Tax, benefit or procurement offsets are separated in the fiscal build-up.
• The range is deliberately wider where implementation detail is thin.

Fiscal build-up, central case

• Gross programme or delivery cost: +£4.6bn
• Tax and receipt offsets: -£0.3bn
• Administration and evaluation: +£0.1bn
• Behavioural and pass-through effects: -£0.4bn

Central net impact: +£4.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes stronger delivery or receipts than central.
• Central case applies moderate behavioural leakage and pass-through.
• High case allows weaker delivery, larger take-up or higher costs.
• Output effects follow incidence, capacity and investment channels.
• Distributional gains do not automatically imply GDP gains.

Phasing

• 2026-27: +£0.4bn. Phased implementation and take-up.
• 2027-28: +£2.2bn. Phased implementation and take-up.
• 2028-29: +£4.0bn. Phased implementation and take-up.
• 2029-30: +£4.0bn. Phased implementation and take-up.

Main source groups

• Crawford, Stoye and Zaranko, "Long-term Care Spending and Hospital Use" (Journal of Health Economics, 2021): Long-term care spending can interact with hospital use among older people; relevant to care spending and NHS offsets.
• Gruber, "The Incidence of Payroll Taxation" (Journal of Public Economics, 1997): Employer payroll taxes are often shifted partly to workers through wages, but incidence depends on institutions and time; important for employer NIC and labour-cost policies.
• Liberal Democrats, "Funding a Fair Deal: Liberal Democrat Manifesto Costings" (2024): Party costings give 2028-29 spending, revenue and investment figures; used as starting anchors, not official costings.
• Skills for Care, "State of the adult social care sector and workforce in England 2025" (2025): The report gives workforce scale and pay context for adult social care; used for care workforce exposure.
• Liberal Democrats, "For a Fair Deal: Liberal Democrat Manifesto 2024" (2024): The manifesto gives announced policy detail across health, care, housing, taxes and climate; used to define the policy scenarios.