Mrs May’s death tax
Is Theresa May trying to lose the general election? Her proposal to require people to pay for the long-term domestic care they receive at home by asset-stripping their own house, with a floor of £100,000 below which its value would not fall, could do for the Conservative party what student loans did for the LibDems: turn thousands of hitherto loyal voters against it.
At present, people with property worth more than £23,250 are required to pay for long-term residential care. This causes widespread resentment, since people believe they are being forced to sacrifice the house they wish to pass onto their children as their legacy in order to meet the costs of the care towards which they have already paid through their taxes.
Mrs May now proposes to compound that resentment by making people pay in addition for long-term care in their own homes, although payment will be deferred until after they die. Not surprisingly, it is therefore being viewed as a death tax. She will also raise the benchmark for residential care contributions from its current level of £23,250 to £100,000.
Everyone knows that long-term social care is in crisis. Rising longevity and levels of frailty coupled with constraints on public spending have created a perfect storm of ever-widening and deepening unmet need amongst the most vulnerable elderly people.
The fairest and most appropriate response to this crisis, however, is to change the system altogether to the European model of social insurance (and the NHS should be replaced by this too). This means everyone pays into an insurance scheme delivering social care, with those who really can’t pay being subsidised by those who can. Unlike private insurance, it thus pools risk and combines taking personal responsibility for your own future care with social responsibility for those who are too poor to do so.
There are three key benefits of such social insurance schemes. The first is that they amass so much money that the standard of even basic care is higher than the state provides. Second, because the care is provided by independent institutions rather than the state it is protected from the capricious, ideological or otherwise dysfunctional whims of politicians.
Third and in my view most important of all, it gives the consumers of social care leverage over the provision. Because they can choose between different insurance providers, this competition levers up standards and frees consumers from dependency upon on a provider which gives them lousy care.
Anyone who, like me, has ever watched impotently as a frail and elderly loved one is neglected, ill-treated and ultimately abandoned by state-run social care will surely be dismayed that people are now to be made to raid even more of their hard-earned nest-egg to pay for the privilege of being so badly served.
If Mrs May really thinks she is promising to deliver “for mainstream Britain”, this is a pretty strange way of demonstrating that.
