The Liberal Democrats are calling on Chancellor Jeremy Hunt to scrap planned tax cuts for banks to fund a pay rise for carers.

In a speech to the party’s spring conference in York, Treasury spokeswoman Sarah Olney will say ministers could “comfortably” afford a £2-an-hour pay rise for social care workers commissioned by local authorities if they took back money from the banks.

The party said an analysis of figures in the Office for Budget Responsibility’s latest forecasts showed dropping a cut in the bank surcharge – confirmed by Mr Hunt in the Budget on Wednesday – and reversing a previous Conservative reduction to the bank levy could bring in up to £3.8 billion a year.

This money would be far better spent funding a pay rise for carers and investing in our NHS

It said this would enable the Government to cover the cost of recruiting 150,000 additional care workers at the new higher rate of pay at a time when there are 165,000 vacancies in the sector.

Ms Olney said: “It’s baffling that this Conservative Government is pressing ahead with handing out billions in tax cuts for the big banks, while the NHS is crumbling and families struggle to pay the bills.

“It shows yet again that Rishi Sunak and Jeremy Hunt are staggeringly out of touch and have their priorities totally wrong.

“Fixing our broken social care system needs to be top of the agenda. The Chancellor needs to go back to the drawing board with these plans.

“This money would be far better spent funding a pay rise for carers and investing in our NHS.”