UNIONS have blasted a right-wing think tank’s “morally bankrupt” claims that Labour’s fair pay agreements for social care staff could cost taxpayers billions of pounds a year.

Carers and trade unions that represent them would negotiate a sector-wide agreement for pay, terms and conditions as part of the party’s new deal for working people.

The proposals were described as an “act of economic self-harm” by Policy Exchange, which argued in a report that raising the sector’s minimum wage to £15 an hour would leave the taxpayer forking out an extra £4.2bn a year via local authorities.

Labour dismissed the claim “fiction” that doesn’t reflect the party’s policy, which it believes would make a big difference to low-paid workers and tackle the recruitment and retention crisis in the care sector.

TUC general secretary Paul Nowak said: “We have an ageing population and an acute staffing crisis in social care, with over 150,000 vacancies.

“This is having a huge impact on the quality of care provided to service users and is reducing capacity in the NHS.

“The international evidence is clear. Collective bargaining creates the better jobs, pay and conditions that workers, public services and our economy needs.

“Wheeling out these lazy and discredited arguments will do nothing to fix our broken social care system.”

GMB national officer Natalie Grayson said: “Care workers are some of the hardest-working yet underpaid and undervalued members of society.

“It takes a special kind of twisted mind to claim giving them a pay rise will somehow damage the economy.

“Not only are these dodgy figures economically unsound, they are morally bankrupt.

“Fair pay agreements will give care workers a proper quality of life and force care companies to invest in workers, rather than siphoning off profits to tax havens.”