Tory plans have a habit of unwinding. Think of the budgets that have failed on things like pasties, caravans and broken promises on national insurance changes. In themselves each seemed a minor issue. What they collectively did was remind people that far from being infallible, strong and stable, Tory government's and chancellors in question were the purveyors of fragile thinking from which they were willing to retreat at the first sign of dissent.
Of course I am speculating, but Theresa May's decisions not to continue a Tory commitment to cap social care costs, and to change winter fuel allowance payments to pay for social care, have the feeling of being in the same camp. In themselves the policies can be defended. But the reality is that they alienate key elements in the Tory electoral base.
The cap on social care costs will hit all those of around my age with parents needing care who feel it is their absolute right to inherit the family home for which they have waited a lifetime. This absurd and wholly unjustified sense of entitlement is deeply embedded amongst many and any interference with it, whether from inheritance tax or to fund social care, is considered utterly unacceptable. May has trampled on angry toes there.
The winter fuel allowance is another shibboleth. Of course many recipients do not need it. But take it away and they will feel that they have had a very specific tax increase. For many involved they might be able to afford that. This is not the point. Few doubted most could afford the pasty tax but it upset a great many people.
So I wonder whether Theresa May has made two pretty fundamental mistakes that knock the sheen off her image with a great many people and tarnish the last weeks of her election campaign? Something had to go wrong. Most election mistakes are self inflicted. Are these amongst them?
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If the polls were closer, I suspect she wouldn’t be potentially alienating what has been the core vote but as she holds all the cards she is buying herself flexibility for future tax rises. There’s a good Behr article in the guardian this morning about ‘outriders’ – miliband/corbyn being hers. Daily Mail are currently falling into line behind her on this but is that going to hold post election? I suspect not and that point we’ll see how long the S&S schtick lasts.
I thought exactly that when I first read about them. they’re really going to start alienating their core vote with this. Well, at least I hope they will
I don’t think these changes will make much difference at this stage of the game. If the two parties were closer together in the polls and the LP was in a lot better shape, then strategic errors on this relatively low scale would be more significant.
The Tory election machine is in full attack-mode against a weak opposition that seems to have rather poor media relations. It’s not a Poll or Bedroom Tax moment. ‘Brexit’ is the ace in the pack because it overrides traditional party lines, attracting some Labourites to vote Tory and garnering most of the UKIP votes.
Theresa May is being advised by possibly the leading political tacticians in the world. There may be the odd minor slip but I can’t see it making any measurable dent in her inexplicable popularity – as comedian Tom Walker, aka Jonathan Pie, points out in his inimitably subtle style (warning: bad language) – https://www.youtube.com/watch?v=0M91g4OlGEY
However, double-guessing the electorate is a dodgy business and you may be right.
I think she feels able to do it knowing that the media and press will cover for her and continue to tout her as the only sensible option the electorate have. They will soft talk the bad points and big up where she is seen as stronger.
A random question which indirectly relates – why did Labour MPs vote overwhelmingly in favour of the snap GE? It doesn’t seem to make any sense. Surely it must have known May had figured out the tactical advantage gained by going to the country early? Even Caroline Lucas voted in favour (while the Scottish Greens were against it). Just asking. Any insights welcomed. Thanks.
John D. “Why did Labour also vote for a snap election”. Because if they didn’t the Tories’ could just repeal the 5yr Act and the PM just call an election anyway.
I have no other insight into the machinations of either the Tories warped reasoning or that of Labour. However, I suspect that JC may have been trying to win back dissaffected Labour voters who had moved to ukip due to unemployment & the constant media narrative of it being the EU, and conversely migrants fault that they have no work/low paid work.
There is also another thought that, with a virtual army of supporters at his disposal he might win the electorate round after 7 years of austerity with a stonking alternative to the austerity agenda. Whereas, to do nothing would show him up as being weak/indecisive/not on their side. He was caught in a catch 22 situation, damned if he did and damned if he didn’t. He may well have been right since the latest polling has shown Labour’s is up again at 13% behind Tories approximately.
That’s all I can come up with off the top of my head. Unless you want to include the emerging story of the funders of leave by shady think tanks who have manipulated the populace through media & social media coverage etc. Perhaps he could see what is slowly happening in the EU. George Monbiot’s article below is a good read. As is a whole series of article in the Guardian, by Carole Cadwalladr et al, on the subject of dark money. Apart from that, it’s the best I can come up with.
http://www.truth-out.org/opinion/item/39374-how-corporate-dark-money-is-taking-power-on-both-sides-of-the-atlantic
I am staggered by the cruelty of heaping social care costs onto individuals.
If you are unlucky and need care then the government kicks you and your family in the head and takes your savings away as well.
Should be just like the NHS, free at the point of use and paid for from the spend and tax circuit. The tax system is the insurance that allows to life live to the full knowing that we are covered if things go wrong. No need to hoard your money in case something goes wrong. It’s covered. How we tax is another question but at least start from the principle that a civilised society can protect those unwell and vulnerable.
Your separation of tax and care is key
I am opposed to the idea that inheritance is right without obligation to the state
I think social care is also a right
Reconciling this is the obvious need
This means a wealth based tax is entirely appropriate – and will hit those who are older, pretty much by definition. But the randomness of what the Tories are proposing will appal many, and rightly so
I agree with a wealth tax (or LVT) is much fairer as the funding is shared rather than falling only on the unfortunate.
It cannot be right that someone that gets dementia is hit twice, first with the disease and second with an extra bill.
I feel an article coming on here
You or me?
The economist Andrew Dilmot said it on Today, the policy is :
“like saying to somebody: you can’t insure your house against burning down, if it does burn down then you’re completely on your own, you have to pay for all of it until you’re down to the last £100,000 of all your assets and income.”
This is really bad and not what you would expect of the conservative party!
In contrast, Labour’s death tax was based on shared risk and therefore fair and sensible.
In practice there are problems in implementing a wealth tax given when wealth is not well defined – why are we still using ancient house price valuations for council tax?
I think you can only really tax money, assets, when they change hands so I would tax inheritance as an income to the beneficiary and remove all loopholes to do with trusts, etc. but I know this would be a hard sell to the electorate, because people think they have already paid their tax and any land value appreciation is theirs too.
I think the only way is to start teaching people the Henry George theorem that nearly all money creation (certainly more than half) ends up in the value of land so the beneficiaries should give a little back or else the system collapses.
Charles
See what I’ve just done
I wrote it before reading this comment
The solution is consistent
Richard
‘In themselves the policies can be defended’
‘The Conservatives will attempt to soften the blow by promising that pensioners will not have to sell their homes to pay for their care costs while they or a surviving partner are alive. Instead, products will be available allowing the elderly to pay by extracting equity from their homes, which will be recovered at a later date when they die or sell their residence.'(Grauniad).
Oh, so they have ‘financial products’ to siphon the cr*p out of you in your later years. £100, in assets is diddley squat these days as even relatively poor people have that when average house prices are about 230 grand!
Don’t know how you can see further housing equity extraction as defensible, Richard. It strikes me as downright evil that will strengthen the housing as piggy-bank mentality at a time when that has been show to be destroying communities and depriving the young of hope in the future.
Those’financial products’ will have nice fees and ahem…’administration costs’ that the vampires will extract.
I’m not sure I’m happy about mu mum’s flat ( it might just be worth £100,000).
Of course the present system leaves you with next to nothing as you have to sell your property to get residential care ( you might be left with 20,000?) but this is another free lunch for financial services.
I was arguing about the principle that person with assets should be required to pay
The involvement of the financial services sector is toxic
Ironically, it might well help in my individual case as the present value of my Mum’s flat is slightly under £100,000 ( I’ve just checked!) but for others , jsut by didnt of living in a certain area a person and their offspring could be in relative poverty and mired in debt and then having to pay for their parent’s care by selling the house and coughing up interest as well after the parent’s death.
Surely this will exacerbate the household debt bubble?
Of course it will
That is the aim!
If you think £100,000 is “diddly squat”, can I send you my details? I’d be very happy to receive diddly squat. I’m “relatively poor” and won’t ever inherit £100,000 nor will I ever have £100,000 to leave my children.
PS. Any sub-diddly squat donations also accepted!
A tax payable only after death sounds like the best kind of tax to me!
You missed the point Sue -what I was saying is that there are many relatively poor people who happen to have a house worth more than 100,000; not because they are wealthy but because a familly home bought 40 years ago for, say, 20,000 could easily be worth much more than 100,000 now.
Given that the children of these sorts of house owners are likely to be in debt and struggling themselves to oblige them to then re mortgage an ill parent’s house for socila care when you are effectively skint means they can never pay off their own debts so the debt bubble continues.
becaue of the housing bubble, effectively ‘poor’ people are now being seen as asset rich.
In another context, I would agree, 100,000 grand is a decent wad. But not in the above one.
Because of these policy flip flops from Tories I will be voting Labour for first time in 40 years
“The cap on social care costs will hit all those of around my age with parents needing care who feel it is their absolute right to inherit the family home for which they have waited a lifetime”
I had to laugh at this.
Richard, it is my belief that many people far younger than you and I, as I write, also feel this way.
Infact I believe they incorporate this expected inheritance in their financial planning
How could it be otherwise?
Real wages have declined over the last 20 years and artificially low interest rates have made borrowing money so cheap. So quite logically, people lucky enough to have rich parents or “propertied” parents, in the absence of wage increases have been borrowing safe in the knowledge that their inheritence will pay off the capital borrowed.
Accepted
They’re just not so close to it as yet
If Tory voters understood the policy change, May would lose the election. I have tried to explain to some of them why it is unfair one child inherits wealth and another nothing. The answer is “but they’ve worked hard and saved all their life”. These people are incapable of understanding property gains are unearned income and that, anyway, the child is not the parent. If they understood that these same property owners must pay for their NHS care (it SHOULD be NHS) down to their last £100k, there would be pitchforks and torches in Downing St.
For a wealth rax to be fair it must encompass all wealth.
It must therefore include the present value (using actuarial discounted cashflow techniques) of pension entitlements