Wednesday, 24 May 2017
Social care: the dementia tax
The conclusion of my previous post, written a week ago, that
. . . . Mrs May, far from being strong, consistent and a safe pair of hands, is a vacillating opportunist, quick to change her statements to the advantage of her party and herself. . . ., and skilful in the "dissembling and cloaking" against which she was warned in her Prayer Book upbringing
is amply borne out by her volte- face on payment for social care.
(For those unaware of the details, the Conservative Manifesto promised that people would have to pay in full, without limit, for any necessary social care, mainly in old age, until their assets were reduced to £100 000. This meant that property owners would, if necessary, have to to sell their houses, thus preventing their children or legatees inheriting what could be considerable sums. This produced outrage, mainly from the wealthy, and Mrs May decided that there would after all be a cap on the total to be paid for social care - and blustered this was not a change in policy, just a detail. A master-class in dissembling and cloaking.)
When the policy was published it was quickly dubbed the "Dementia Tax." Serve the Tories jolly-well right - when Labour introduced a similar (but better - more on that later) proposal just before the 2010 election,, the Tories were quick to label it the "Death Tax." Just another example of how childish our politics have become.
Happy this U-turn has put paid to the concept of Mrs May as a "strong and stable" pair of hand. "Weak and wobbly" has taken over and bears constant repetition.
Actually "Dementia Tax" is not a particularly accurate description as there are many reasons other than dementia for needing care in old age. For the moment my own potential problems appear to relate more to the bladder than the brain. And it's not just old age. As this article in today's Guardian points out, almost half of council's social care spending goes on adults below the age of 65.
I can't say that I'm particularly comfortable with the idea of the state shelling out squillions so that the already privileged offspring of owners of mini-mansions can inherit yet further advantages. It seems to me that there are two problems to be solved.
The first is paying for the care. If it is to be "free at the point of use" from the beginning or after a limited contribution from those able to pay, then this will require an increase in National Insurance Contributions (NICs) or general taxation. If health and social care services are to be merged, which seems a popular and sensible proposal, then increased NICs seem the logical choice. If the politicians are too frightened to attempt this, then Andy Burnham's proposal (the above-mentioned "Death Tax") of a levy on of some 15% on all estates, first put forward in a White Paper of 2010 seems to me to be perfectly acceptable. The important thing is to fund the service properly and ensure decent wages and conditions for those providing it. If the service were returned to public or "not for profit" hands then priority could be given to the quality of care rather than than profit-maximisation
The second problem is that of inheritance. The present threshold for liability to inheritance tax (formerly Death Duties) is £325 000, but rich people with assets well above this can afford clever accountants to find ways of avoiding paying. Given that inherited wealth is a major source of inequality I should like to see a revival of the good old Liberal proposal that the tax should not be on the estate but the recipients, and should be tax free provided the estate is bequeathed to different people in small dollops - say of £50 000 at today's values.
Just to show how even handed this blog is, I'll but on record that I welcome the Tory proposal to discontinue the Winter Fuel Allowance for comfortably-off pensioners (which I'd define as anyone still paying income tax, which incudes me) and would take much the same view of the free TV licence for the over75s (which also incudes me)