Old age should not have to cost a lifetime of savings

Every MP is aware of the deep unfairness inherent in this country’s health and social care provision. Those with cancer, for example, are well looked after by the National Health Service. Medical care, from GP appointments to the operating theatre, is free at the point of use and usually of a high standard. Constituents with more long-term conditions, however, are not so fortunate. An elderly person with dementia, for instance, who requires long-term complex social care, may have to pay hundreds of thousands of pounds, from their own capital and retirement income, until they are down to their last £23,250. The fruits of a lifetime of hard work and careful saving can be wiped out. The powerful bequest motive that guides behaviour among all conservative-minded people is effectively demolished.

No matter how good the subsequent level of care, the financial impact on a person and their family can be devastating. It can involve the forced sale of the family home. The effects can be even more severe when a much younger person requires long-term care and finds the welfare state has turned its back.

Politically, it is by no means easy to fix this problem. We saw this in the 2017 general election, when an untested and frankly disastrous policy was launched in the Conservative manifesto – the so-called “dementia tax”. It protected some assets, admittedly, but it highlighted and confirmed the huge sums people might be forced to spend on social care. There was no sense of pooled risk, and a lottery remained for people requiring care, which depended entirely on the sort of illness or condition they faced. The public was not impressed. Worryingly, it seemed as if social care had become a “third rail” in British politics: too dangerous to touch, which perhaps explains why the Government’s long-awaited green paper on the subject has yet to surface.

So I am pleased that the think tank Policy Exchange is exploring such a vital policy area in its paper 21st Century Social Care. This is clearly one area where the state has a significant role to play. It is far better to pool risk and for the taxpayer, where appropriate, to step in and help those who would face ruinous costs on their own, making social care largely free at the point of use. This is something we can afford as a nation, if we can only get our priorities right.

Nonetheless, as a Conservative, I also applaud the idea of an affordably small co-payment, of the order of £5,000 per year, for those who need social care, so that they are treated more like consumers of a service and less like those who can only take what they are given by some beneficent state provider. It is also right that it is charged on income, not savings, and is only paid by those who can afford it – not, for instance, those whose retirement income is the state pension alone or not much more.

There are some who have argued for a new tax, used solely for the funding of social care – a hypothecated social care tax. This would be pure sophistry and should be avoided. In cyclical downturns in the economy, the amount raised by such a tax would fall. In that scenario, would it be right to slash social care provision? Of course not. Likewise, in periods of boom, there might be higher-than-expected revenues – and earmarked money might be wasted. Partial hypothecation, where the Government can top up the tax revenue or take some of it for other uses, is even more fraudulent: a lie told by those who believe the taxpayer is gullible. Far better to pay for social care out of general taxation like any other area of public expenditure.

The Conservative Party has a better record in the area of social care than recent history might suggest. It was the Tories who introduced the Attendance Allowance in 1971, which is not means-tested and helps over a million people pay for personal care. But there is much more to do.

It is time for Conservative leaders to think differently, and radically. In another age, the original One Nation Tory, Benjamin Disraeli, sought to improve the “condition of the people”. In our own time, we should recognise that social care reform is one of the great challenges, where the people need to see new political leadership.

Jacob Rees-Mogg is the MP for North East Somerset