About half of people die with an estate worth £100,000 or less. The poorer half. You’d think you could fairly describe as progressive a policy that relieved them – but not the richer half – from all burden of paying for their social care.
In weighing up the attractiveness of the policy you’d add a few other elements to the scales. The changing demographics of our population – more and more will need social care and someone will have to pay: so who? The fact that older people are richer: of the different types of household by wealth mapped by the ONS the second wealthiest was couples both of whom were over 65 with no children. The wealthiest? Couples one of whom was over 65 with no children. The fact the burden would ultimately be born not by people who had worked for that money but by their inheritors who had not. The policy would level out inter-generational inequities.
No, the policy wasn’t perfect. Yes, there will be market failures in products that release equity. Yes, it is odd that the some risks are wholly born by the State and other similar risks it shares with individuals. But no policy is perfect. And, for me at least, these criticisms are relatively minor.
So what does the u-turn – recognising that as yet there’s very little detail over its shape – really signal about our next Government?
That’s what interests me.
The rhetoric of the Conservative Manifesto is, with exceptions, Milibandist. It proceeds from a premise I share – that the present shape of capitalism does not suit society at large or even (over time) capitalism.
Of course, its exceptions are quite something. Its stance on immigration is economically insensible and culturally anathema to me. And to place at the forefront of your campaign a policy you know you will not deliver is hugely damaging to our democracy. The Manifesto stance on Brexit is, of course, a major problem for those who believe that the economic and cultural life of the nation is better served by our continued membership of the EU. And its absence of detail – striking compared with its 2015 predecessor – is consistent with Theresa May’s inclination to coalesce power around her personally rather than to share it with others. As someone who believes strongly in good governance this makes me deeply uncomfortable.
But then (at least if you believe the rhetoric of the Manifesto) the shape of Brexit under Theresa May may not differ so profoundly from that under Jeremy Corbyn. And perhaps we live in a time where only those with autocratic tendencies can get stuff done?
And here we get to the core of the issue.
Can you trust the rhetoric? How do you, as Andrew Rawnsley yesterday asked, respond to a political party that asks the country to trust it with the future by disowning its own past?
And this, for me, is the importance of the u-turn on social care.
Here was a policy that began to address some of the issues around inter-generational fairness, that was progressive, that placed the burden of funding social care on those who would inherit money rather than (as with Labour’s offer) those who strive (in highly paid jobs) and earn.
And yet, faced with pressure from Tebbit and Redwood’s Bow Group, and aided by McDonnell’s unattractive opportunism, Theresa May crumbled. And what, ultimately, the u-turn signals is this.
She may have diagnosed the disease. But she lacks the strength to deliver the medicine to cure it.
It is not progressive to break the social contract’s underlying assumption that there are certain basics of life (health, education, social security) that are not dependent on income, but whose burden is shared. What was perverse about the policy was not its fake progressive aura (the ‘rich’ will pay for the services) but the perverse logic that social security is not anymore a right, but a pay-as-you-go gimmick. How long before the logic would have worked its magic backwards, and the government would have argued that it is ‘unfair’ that cancer patients get their care for free, and dementia patients do not? Is there anybody in Britain left who believes this is not the strategy? This was not a step in the right direction, but a dangerous step towards the abyss.
And we all know the rich can already mitigate against this in a million ways.
The analysis, though, doesn’t take into account the fact that for many people whose only real wealth is in their houses made financial planning decisions over the last 3-4 decades based on the assumption that “at least the kids can sell the house when we’re gone”.
The arrogance of May’s government in giving people a break on IHT thresholds while saying to others “100K is enough for you little people to leave to your children” is quite staggering.
Care for people with long term debilitating illness is certainly difficult and people need to rethink the pooled care bill. But what we ought not do is trump up a half-cooked uncosted policy based on lack of understanding (not yours, theirs) on multiple levels and vote on that as a manifesto promise.
If you favour funding social care in the way proposed in the Conservative manifesto, shouldn’t you also favour funding medical treatment in a similar way ? In both cases, there are huge variations in the lifetime needs of individuals, yet in the case of the NHS we seem happy to pay out of taxation, while in the case of social care we seem to be going to great lengths to avoid that.
“The policy would level out inter-generational inequities”
It would mitigate them a bit but it would hardly level them out.
The only way to properly address inter-generational inequities is to recognise that inheritance law, as it currently operates, is blatantly incompatible with uncontroversial principles, such as equality of opportunity, and needs to be radically reformed.
I’ve been arguing for several years that the roots of current inheritance law go back to the time when landownership was part of the machinery of government – the power local rulers had to nominate a successor was essentially one of the administrative responsibilties that came with land ‘ownership’. To my mind, the first step towards eradicating inter-generational inequities would be to re-establish the principle that the primary purpose of inheritance law is transmission of responsibility, rather than wealth, and that testators bequeathing land and other forms of productive assets are acting as agents for the public at large. Unfortunately, not many people seem willing to look at the problem at that sort of level.
Trying to generalise it doesn’t seem to work either: I’ve been suggesting for years that the courts should be able to make declarations of incompatibility whenever they encounter laws which violate generally-accepted, uncontroversial principles (which would at least force the issue onto the agenda). However, Parliament certainly wouldn’t bring that in without considerable public pressure and the idea seems to be too abstract for most people. And, so far, my argument that the courts could do it unilaterally hasn’t aroused any interest.
Whilst everyone discusses the issue of whether one’s house should be taken into consideration for social care costs, nobody seems to be looking at the situation of the surviving spouse. I speak from the heart as a carer of 16 years. If a charge is put on our house to fund my husband’s care costs, where does that leave me – not now, but when the council has sold off the debt to some third party? How will I be protected? Will I be put under pressure to downsize (no more visits from grandchildren – and smaller homes are not necessarily much cheaper)? Or go into a home myself before I am ready, bearing in mind that I haven’t reached pension age yet?
I have already foregone a decade of lost earnings, have no pension and am one of the WASPI generation of women. I have funded two children through uni as I cared for my spouse and both my and his ailing parents.
As Chris Giles has argued in the FT, there is horizontal inequality and vertical inequality. This policy promotes horizontal inequality. Intergenerational equality should be handled through inheritance tax.
Your argument is entirely sound if we start from the assumption that social care should primarily be paid for by individuals, and the state should only intervene for those individuals who cannot afford to pay.
However, you could make exactly the same arguments about medical care. Following the logic of your argument, then if an elderly person needs a hip replacement rather than social care, she ought to pay for it out of the value of her assets rather than rely on the NHS.
Do you think that elderly people should also have to pay for their own medical care if they have the means to do so? And if not, what do you see as the difference between medical care and social care that it’s right for the state to pay for one but not for the other?
If the NHS then why not social care? If social care for the old then why not child care for the young? If social care for the young and old why not housing? If housing, why not food?
I can’t agree with you about social care as far as I’m concerned it replaces the Social Contract. takes out insurance pooling and will eventually run out of other peoples assets.
i have other ideas on what should be done, if I may. https://bill40.wordpress.com/2017/05/22/social-care-costs-sieze-the-day-2
Please let me lmow if you don’t want links in comments.
Not quite sure what your point is, Jolyon. Don’t we provide nursery care for the young and free education? And we still have social housing for some who need it and provide benefits for the low paid so they can eat.
Yep. The state pays for some stuff, but on the basis of need. That’s what this measure does for social care.
Does it make sense for such a radical distinction to be drawn between a person who requires a high level of care due to a medical condition causing dementia, and a person who requires a high level of care due to a medical condition causing cancer? Why is one person’s need borne largely by the afflicted person, and the other’s largely by the state?
We already had a tax that deals with inheritances. Rather than introducing a nasty quasi-tax charge on the basis of a health lottery, we could reduce the nil rate band to say £100,000.
In a similar manner, we already have a tax on the increased income enjoyed (in the main. on average) by those who benefit from university education. We don’t need an additional graduate tax uplift, particularly one dressed up as an overweening student debt.
Jolyon, cards on table: I do not share yur view about the impact of markets in the world (you say capitalism) or the social and political effects of globalisation. Other than that there is very little in your analysis with which I cold take issue. The policy was, would have been and perhaps still will be good, fair and effective. The politics were awfull, I would have introduced as a sweetener a new savings account, the use of which would have been limited to social care and legacies, exempt from inclusion in the IHT calculation.
What strikes me though is the reaction. Not so much that most correspondents here equate social and health care and call for both to be fully funded by taxes; I expected that. No, the truly astonishing thing about this election is the number of correspondents passionately arguing for social care to be funded by taxes, even for the wealthy, whilst their party speaks of those wealthy as ‘vulnerable’ and promises them the right to leave that inheritance and promises them their triple lock. Between the Tories conversion to social justice and John McDonell’s strident defence of the castle that is and Englishman’s home this truly is an election to be viewed though the looking Glass.
You haven’t explained why you think the NHS should be funded differently from social care.To turn your question around, if social care, why not the NHS ?
I have, in the comments. And it is, this debate is only about the extent to which it should be.
As someone who has Type 1 diabetes (other chronic conditions as well) I fond this policy to be a complete withdrawing of the idea of social pooling over health issues. Caring for someone who is healthy is a completely different thing from someone who has a chronic condition such as Alzheimers/Dementia which is disastrous for both the sufferer and their partner who is normally the main carer. If you don’t have someone close to you this can leave them completely at the mercy of the state. I agree that lines have to be drawn somewhere but this seems a step to far for me.
I’m happy.to answer Tony Holmesfield directly.
First of all, Jolyon Maugham pointed directly to the progressive nature of the social care plan. All funding of all public/social programmes, all health provision,all defence, all tax-based is funded on the insurance basis of the well off picking up the costs for the less well off. This plan has that feature in spades. The principle doesn’t alter just because the wealth is measured in accumulated capital rather than income. Your distinction is arguably not worth even raising.
Health care, however, isn’t usually end-of-life. Those receiving the benefit often -usually -return to life, to work, to raising children or just being good friends to someone. a long term illness might already have a huge cost in terms of lost earning capacity. I myself am currently working with a member of m staff who is taking ill-health returment; it is awful. We do indeed fund the health service on the basis of wealth, just as this social care plan. We measure wealth, however, by income partly because of income’s temporary nature. After recovery a person is able to keep their home and resume earning. This social care plan can be funded using the über-capital measure of wealth because it is end-of-life; the charge on the property is claimed after the patient has died.
With respect Jolyon, you haven’t explained what you think the difference between the NHS and social care is in the comments.
What you have said is that the state pays for some things on the basis of need. But the state also pays for NHS care for people who could perfectly well afford it for themselves.
Do you think it’s wrong to do that? And if not, how is that different from social care?
“But the state also pays for NHS care for people who could perfectly well afford it for themselves.”
I’m sorry but that is incorrect. The State may be the provider or the agent, but the State does not pay for it; the taxpayer does. In the case of the social care plan the well-off home owner does. Those people who could well afford it for themselves are indeed paying for it themselves. And as our taxation system is highly progressive (oh yes it is) they are paying for other peoples’ as well.
I also said (in a different comment) that the State pays for some stuff and not others. My point was that the internal logic of what the State presently does and doesn’t pay for is not always clear, this makes it difficult sensibly to reason by analogy (as you do: if the State pays for x then it should also pay for y), but we have to have lines (the State can’t pay for everything) and the line we presently draw is between health care and social care.
I would agree with the comments above regarding the social contract, and in that sense this policy is dangerous. Furthermore while it is progressive, that is only true to an extent, as this analysis shows it would mainly hit the middle of society (as you have to analyse it alongside the changes to inheritance tax):
Fine, but if we accept that the state is not going to pay for all social care, and we want to place the burden on those who inherit money, why should the burden fall only on those whose parents have needed social care, and not also on the heirs of the “healthy wealthy” ?
It is patently unfair for two people in a similar position to be treated in a radically different manner.
Dementia is a health condition. Why should a person with dementia (or their heirs) contribute towards the care needs of the person with another sort of medical condition, when they get no support for their own care needs caused by their own medical condition? The losers in this lottery have to pay for themselves and for others too.
Are there examples of other countries which make this artificial distinction between state funded healthcare and privately funded social care?
I think I would take issue with the idea it being a ‘burden’ for my parents’ house to be used to pay for their care rather than being preserved for my inherited ce by the taxpayer agreeing to meet the costs.
If I inherit something then lucky me and I’m not impressed by those who begrudge me that luck; why would they exactly? I do not, however, consider myself in any way entitled to it until the moment my mother’s will is opened and I here my name as a beneficiary.
I do wonder if our brains are trained to see taxation – particularly taxation of income – as the only way to pay for this sort of provision. Health care could be means tested in the same way. In time people would start obtaining insurance to cover for that rainy day and a cap on costs borne by individuals would be brought in. Now I think taxation is a simpler, more efficient way of paying the health costs of our nation’s residents. It is not, however, the only way and it has no particular moral or social advantage over what is being proposed by this social care plan, the progressive nature of which was outlined by Jolyon Maugham in his original post.
“If I inherit something then lucky me and I’m not impressed by those who begrudge me that luck; why would they exactly?”
Is it luck that gives the Duke of Westminster an inheritance of x billion while huge numbers of people inherit nothing? Seems to me it’s the operation of law.
Don’t we have a responsibility, as a society, to ensure that our laws are soundly based and reflect the principles we claim to live by? Would you say that current inheritance law is fair and rests on solid foundations? Unless it does, it seems to me the measures being debated here are just tinkering.
I’m getting infuriated by people referring to the original proposal as a dementia ‘tax’. It is not a tax. The money from your estate goes towards the care for you – none of it goes into a pot for other people. Ok, inheritance tax, and stamp duty on the sale would go to the Exchequer for general spending on others, but the care cost is individual to the person being cared for.
Dementia ‘charge’ would be better.