June’s election result cheered all of us who want to see a Labour government sooner rather than later. But the backlash to May’s dementia tax proposal should cause us all concern since it was primarily a response to cost.
May’s plan was of course half-baked, and wasn’t promoted with even a vague degree of confidence. But it was actually not a million miles away from Andy Burnham’s proposal, dubbed by critics as the death tax, in the latter days of the last Labour government.
Burnham proposed an additional 10 per cent estate levy, effectively a boosted inheritance tax. May’s proposal was to guarantee an inheritance of an unclear amount, whilst the rest could be spent on whatever care a person might need. Her plan only seemed to impact those who would need it, hence the dementia tax label, whereas Burnham’s proposed levy would have been universal.
Burnham’s original tax idea, along with May’s more recent attempt seem to be off the table now – but the need for more money won’t go away so easily. To transform the care system, even with its low wages and abuses of staff, to one that can cope with the present demographic demands on it cannot be done without a surge in budgets, and thus a potential media and public backlash.
Given that our population is ageing, and the pressures on care will only increase, the need to change things before the system completely collapses is acute. Now of course, upping funding for care doesn’t need to come from inheritance taxes, and this is perhaps the key lesson to be learnt from past failures.
Britons seem to have an odd fetishisation of inheritance as well as property ownership the fact that both May’s and Burnham’s pilloried policies both involved care requirements being paid for through property-based taxation, and around the same time as when the care is required, might help explain why they were badly received. Attaching a definable cost to anything makes it easier to attack – another reason for arguing that social care would be best funded from general taxation. Burnham has spoken about moving towards a NHS-style system for care, where it is integrated into the health service. And this is something he will have the opportunity to trial in his tenure as Greater Manchester metro mayor. If it proves successful, it could become the template for the rest of the country – and show how Labour values can be transformed into successful policy.
Integrating social care with the NHS is a financially sensible measure, as well as being more just. The disconnect in planning between two fundamentally interconnected services leaves us with absurdities for patients and unnecessary costs. Take, for example, the patient ‘bed-blocking’ in hospital because there are insufficient nursing care spaces, or the older person who opts out of low-level care because they haven’t been assessed for enough help and in any case would have to pay for it themselves, leaving them more likely to fall. In both cases, the lack of social care means additional NHS costs and extended hospital stays for people who don’t need them. Were our health service to charge for GP visits, for instance, you would get far more people putting off going to the doctor for routine illnesses. An infection could get worse, to the point of needing antibiotics intravenously and with a hospital stay. Yet this is precisely the short-sighted situation we have with social care. The system might have been fit for purpose several decades ago, but it isn’t now – and it isn’t going to get any better.
While this integration will make some savings for the NHS, it is likely to be expensive. So we need to recognise that we cannot have well-funded public services without higher taxation. We shouldn’t shy away from this but we need to take the public with us.
Labour has altered the public’s perceptions of what the norms of state provision should look like – and the taxation burdens involved – before. We did so most notably immediately after the second world war when we created the NHS. Its existence, and the fact we all pay for it, have become so accepted despite how radical they appeared at the time. We don’t need another global catastrophe to bring a similar shift in public opinion on paying for social care, but it might be hard to do without the wriggle room that a parliamentary landslide provides. We’ve got work to do to get to that position: recent polls are consistently showing us only a shade ahead of the shambolic Tories. But a consistent and honest offer to tackle the social care crisis might just be the vote-winner the welfare state and the NHS were.