Yesterday was an unusual day in UK politics. What the Tories recognised, albeit deeply reluctantly, was that the boundary between the state needed to be extended. Given changes in need, demographics and costs the direction in which they have been driving the economy for the last decade has been proven too be wrong. The ever shrinking state is not possible. They had to concede that their decade of cuts in social care had to be reversed. And that, in a very inadequate, unjust and partial way, is what they have begun to do.
I stress the point about the reversal of cuts. The additional spending announced yesterday does no more than restore some of the cuts in social care imposed during the last decade.
The spending on the NHS is recognition that the formulas used to claim that it has been ringfenced are wrong because healthcare inflation has been higher than general inflation rates due to the increasing complexity of care.
In that case this is not a generous settlement. It is instead a reversal of a trend in government spending that is long overdue.
That reversal reflects something I have suggested for some time, which is that when the private sector is both failing to innovate and is therefore finding it hard to stimulate demand from consumers for products that many do not really want the real capacity for new activity in the economy is in the state sector. Few doubt that people do want more healthcare, social care, education, justice, housing end environmental reform. The very tentative step towards rebalancing made yesterday is recognition of that.
That was the best thing I can find to say about yesterday's announcement. That the Tories have been forced to recognise that the state not just has a role, but that it might need to be a bigger one is the good news.
The bad news is that they are still hopelessly unable to comprehend what that means in terms of funding and policy delivery.
I will discuss funding in another post. On policy delivery what was very apparent yesterday was that what was being delivered on social care was a tax increase on low paid workers so that the wealthy could retain more of the value of their properties to pass on to their children. That was the driving force behind this change. Everything else is a footnote to that goal. As policy priorities go few are as perverted in the face of need as that.
When it comes to practical delivery the statements made were even worse. Social care is largely delivered by local authorities. There was no indication of additional support being supplied to them. Nor was there any indication of how the social care sector might attract the staff needed to supply the services that are now so essential, including by providing funding for better pay. Nor was there a hint as to how the staffing crisis caused by Brexit is to be solved.
As bad is the detail of the proposal for individuals with care needs. The £86,000 cap on care costs is just for care. But when a person goes into care, which is when these costs usually accumulate, there are also accommodation and food costs to pay. They are not covered by the cap. The government thinks they come to no more than £10,000 a year - which is a little more than what they think a student in a hall of residence can live on a year. Those costs will not be capped. The chance that these costs are already higher, and will rise as pressure on costs in care homes increases, is significant. In that case the cap is not a cap at all. Sometime the backlash to that will kick in. As usual the Tories have sold a con-trick. Their MPs would be wise to note this today.
In summary then, this deal does not do what it says it will, and does nothing to solve the actual problem of care provision because the intention is that much of the value of the spend will be captured for private gain by those with wealth. There is a need for better funding for the NHS and social care. That is beyond dispute. But even before the flaws in the tax choices made are considered this plan is not the way to deliver that change, largely because that is not its real intention. The consequence is that on the ground nothing of consequence will change. And that is what really matters. Redrawing the boundary between the state and private sectors to increase private wealth is not a policy at all, built is instead another raid by the well off on the public purse. And it is those that have to end.
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Mmmmmm – very interesting post.
So, what we could have been seeing yesterday then is simple: Panic!
Mixed with incompetence of course. If I get my meagre pay rise this year, it will be wiped out by the NIC rise. And like many in the public sector, I’ve lost a quarter of my pay since 2010.
CH4 News interviewed some pensioners yesterday in Blackpool of all places. The ones they spoke to loved it. One old lady thought the young were all on high wages and could afford it! Ha!
I don’t see a backlash yet or in the future – simply because the Labour party is incapable of capitalising on it by providing an alternative. Mannish boy Ashcroft was talking about his alternatives on CH4 and it was all market orientated orthodoxy to me. The blindness to other ways and means is staggering.
The Labour party I think needs to be mindful of the fact that in a country where people admire the rich and want to be rich, putting forward the idea that the rich should pay more might not be a good idea. That’s what happens in a so-called ‘aspirational society’.
I think Boris has bought him and his party some time. Time to polish a turd I’d say, and him and his crew are past masters at that if nothing else. All the signs tell me he’ll get away with it because the headline is that there is now going to be some money as you say that appears to help, and this society of ours – so beaten down by this bunch of most nasty Tories – is breathing for now at least a sigh of relief.
The NI increase is nothing to do with social care. Look through what they tell us.
Its is everything to do with the fact businesses are struggling to hire staff, since Brexit means less foreign workers. This shortage of workers is threatening to drive up wages, as employers compete to get what remaining workers are available.
The government (who look after the rich’s wealth’) need to step in, in order to dampen this potential surge in workers pay, by increasing the pool of those seeking work.
How do they do this?
One way is to remove money from the pockets of Jo Public, who will spend less , which will result in some businesses (notably smaller businesses) going to the wall and making layoffs. The increase in people, now unemployed, will result in wage inflation kept low.
Will taxing the rich do this? No, of course not. They save most their money anyway, taxing them is not going to fix the worker shortage.
Will taxing the poor? Yes. Because much more of a poor persons money is used to buy things. An increase in National insurance is an ideal way of increasing the pool of poor destitute people needing to find work, and so throttling wage inflation.
How do you sell this to the public?
Tell them it’s for Social care. It’s not, but its much better than telling the plebs that some of them need to be plunged into poverty by being made redundant, in order that the rich business owners can continue to exploit workers, which is the real reason for this NI increase.
Increasing NI to pay for social care, Is bullshit. There will be no increase in social care. This is everything to do with protecting the wealth of the rich, by keeping inflation low, and facilitating the ongoing exploitation of the worker by multinational companies who do not want to compete for workers in the ‘free’ labour markets.
Am I correct in thinking that, before these changes, someone with liquid assets of, say £400,000 and perhaps a second home who is faced with a care bill of £400,000 would have to use all of his/her liquidity but that after the changes his/her outlay would be £86,000 – a saving of £314,000.
Yes
Ashcroft was appalling yesterday and showed yet again that Labour does not have an opinion on anything yet alone a policy. Babbling on about offers to “sit down with the government” blah blah blah is not what an opposition should be doing.
But this change does nothing to change the fact that people will still need to sell their homes for social care which is what the Tories are trumpeting will not happen. Where people have limited assets apart from that home then that home will need to be sold in order to release funds to pay for care. Now you can say well people should use up their assets to fund their care in later life but the Tories are pretending you won’t and grabbing votes if they can convince people what they are saying is true.
If someone has £200k equity in their home but only a modest pension then in order to fund care they will need to sell that property because there is no surplus income. They will also have to start paying rent for accommodation even though they have a home that they have paid for. For many older people such a prospect will be very scary. It is a lie to suggest that this policy solves the social care issue for those of moderate means. As you say what it does do is cap and secure the assets of the very wealthy that have other income generating assets to pay for initial care costs and accommodation charges.
It needs to be pointed out that for many homes will still need to be sold.
Boris thinks that in raising taxes he has “got Social Care done”.
The reality of social care is stressed out workers battling through traffic to deliver a 15 minute care slot to tick a box that says “meal served” or “put to bed”; staff churn (inevitable in such a job) means there is little relationship between carer and cared for. Or relatives trying to care for parents and hold down a job with an unsympathetic boss. The quality of life for all concerned is poor.
So far, I see nothing that even starts to tackle these issues.
I might break a “golden rule” (the first person to mention Hitler in a debate automatically loses)…. but to me, Boris is like Hitler in his bunker manoeuvring non existent divisions on the Eastern front while his generals look on nervously wondering who is going to break the truth to him.
I agree that there is a post-modern lack of reality in all he does, whilst in the actual world life is as you describe
As someone who has just been exposed to the UK ‘care’ system first hand, the carer spends more time form filling and box ticking than anything else when she visits. I timed it the other day and it was 8 minutes box ticking and 6 minutes emptying a bed pan, urine pots and checking on medicines. Then boom, gone! They want £40 for that in a few weeks time when the 6 free weeks runs out. I’ve decided I’m doing it all myself and the care of my only parent must be my job, I can’t leave it to someone on minimum wage who doesn’t even want to be there. Sod the career, sod everything, I need to care for my Dad myself.
Good luck
But imagine if we did do this properly?
My problem is that I don’t see anything that justifies the name “plan”. The problem that needs fixing is not the wish for compensation by those with the means to fund their own care, it is the fragmentation and lack of organisation of care provision which makes it so difficult to access for those in desparate situations – typically those needing a safe discharge from hospital.
And there is a lot of missing detail that is crucial. It was clarified this morning that what would be covered is just the care costs, not the associated “hotel costs”. That is reasonable if the hotel costs are the same as someone’s outgoings in their own home anyway, but it opens up the possibility of some arbitrary charging that ends up penalising users. There will need to be clear accountancy rules, do fixed building costs which are necessary for providing both residential care and the inextricably linked accommodation and meals get charged as one or the other? And how much care, expensive 1:1 or the much lower ratios in less luxurious care homes?
It is inevitable that someone who thinks about tax as much as you do (and your readers) will come up with much more creative ways of raising any necessary tax funding. Not surprisingly I agree with you. But we are both coloured by our underlying morality (basically, sense of fairness) and the Conservative Party has always been blinkered on that point.
Spot on
Labour needs to be talking rather more loudly about this Tory jobs tax, and the unfairness of the wealthiest paying no or almost no NICs on unearned income such as rental income and dividends, and low rates of tax on capital gains. And the need for real reform of social care, not this hot air.