Boris Johnson pledged to ‘fix the crisis in social care’ over two years ago. Next week, the Prime Minister is set to announce his plan to do just that. In doing so, he is also expected to opt for a major break from his manifesto pledge not to raise key taxes. So what is Boris’s solution, and will it work?
The Prime Minister remains wedded to the 2011 Dilnot reforms to answer today’s problems. This includes bringing in a cap on the cost one would be required to pay for their social care. At least a 1p tax hike on National Insurance is also expected, to raise around £6bn. This pot of money will be used firstly to tackle the NHS’s ever-growing waiting list (over five million now, and counting) and then be diverted to cover social care costs.
As I say in this week’s magazine, it is not at all obvious that this tax hike is going to lead to fundamental reform of social care. Not a single bed is guaranteed to be added to a care home, and there is no reason to think the quality of care the elderly receive will in any way improve.
So Boris’s shake-up is probably better described as funding reform: the kind that will transfer the financial burden from the individual to the taxpayer. In many cases, this will mean poorer taxpayers protecting the assets of the wealthy. ‘Ultimately it’s a regressive policy,’ one government source tells me — taxpayers will protect the assets of many people who can afford their own care. ‘We’re changing who pays, but not much else.’
The Prime Minister wants to do what his Conservative predecessors could not, and deliver comprehensive and sustainable reform. His current plan fail on both accounts. Matthew Lynn details on Coffee House the many problems with using National Insurance to pay for social care, including the deep unfairness of hiking a tax that is only levied on the working age population under the state pension age.
But there’s a practical problem here too: the number of working-age people to those over 65 has been dwindling for decades. In 1971, there were 4.6 working-age people for every person over the age of 65. Last year, it was down to 3.3. The ratio is only expected to decline further. Not only are these reforms unlikely to improve care for the individual – they are going to become increasingly unsustainable to fund, too.
Conservative governments that promise not to raise taxes, and then do so anyway, often pay a steep price. If Boris’s social care pledge delivered fast and obvious improvements, he might just convince his base the tax hike was worth it. But nothing about the proposals, so far, suggests anyone will feel better served or protected by health or social care institutions. Johnson may soon find the public asking what higher taxes got them, and why the system still seems so badly broken.
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