The first detailed study of new plans for “Fair Pay Agreements”- published by Policy Exchange today – finds that the policy could cost taxpayers £4.2bn per year in social care alone, £21bn over a parliament, while failing to improve many beneficiaries’ living standards. 

The plans, part of Labour’s New Deal for Working People, have been little noticed so far but are potentially among the New Deal’s most far-reaching elements.

Policy Exchange reveals that in social care, the first sector to be covered, the cost could be £9.9bn per year. £4.2bn of this would fall on taxpayers, equivalent to an extra £225 per year – 10.9 per cent – on average Band D council tax.