Congratulations to the Government. That’s a sentence written less on ConservativeHome than you might imagine – and, when it comes to public service reform, scarcely at all.
For while the last Conservative Manifesto promised more nurses, GP appointments and police, it provided little explanation, if any, of how these new nurses would provide better care, doctors’ appointments would become quicker to book and extra police would catch more criminals.
And now that Dominic Cummings has left Downing Street, no reforming “hard rain” will drive down on the civil service. Meanwhile, Tory backbenchers have left the government’s flagship housing plan holed below the waterline.
So it’s to Boris Johnson’s credit that he wants to overhaul social care, even if he hasn’t had a “prepared plan” for it since entering Downing Street, as he claimed at the time. However, we fear that this is almost as far as the good news goes – because, of all the services in need of change, social care is among the most difficult to tackle.
Here’s why. For a start, many voters don’t understand the difference between how healthcare and social care is provided in in England and Wales.
Health care is funded free at the point of use but social care usually isn’t. This confusion played a major part in the Conservative general election disaster of 2017. Many voters hadn’t grasped that the value of their homes is taken into account for residential but not domiciliary care, and revolted when the Tory manifesto proposed to level the playing field.
The source of the muddle is doubtless what Tim Bale, in an agonising blog about the fate of his parents, rightly categorised as optimism bias: namely, the belief that disability and dementia, say, “won’t happen to you – I mean, what are the chances?”
Next comes the question of which problem the Government is trying to solve. For not all social care goes on elderly people: half of the spending on it is consumed by working age adults. Demand is rising; more people want social care but fewer are receiving it; council budgets have fared less well than the NHS’s, and local government is responsible for delivery.
And “there is a basic concern among the public about quality,” according to the Kings’ Fund, perhaps especially in care homes. Then there’s the separate-though-related issue of selling one’s home to help meet the costs.
Penultimately in our list of problems, we turn to manifesto commitments. The Tory manifesto not only promised more spending for public services; it also ruled out raising certain taxes to pay for it. “We will not raise the rate of income tax, VAT or national insurance,” it said baldly. Finally, there is the matter of intergenerational justice.
Questionmarks over trust and fairness haunt the Government’s plan, which is concentrated on the final social care issue that we raise above – selling the family home to help meet costs. (There will also be a big rise in the means-testing threshold for care homes.)
That means a floor beneath and a ceiling above which no-one will pay. The higher the floor is, the more poorer people will be protected. The lower the ceiling is, the less richer ones will pay. So there is an obvious north/south trade-off, broadly speaking, between the interests of, say, Batley & Spen, and those of, for example, Chesham and Amersham over where the ceiling and floor are set.
The Government’s plans are still being finalised, but it seems to be planning to raise national insurance to fund its plan. Younger and poorer people would thus fork out to meet costs more often incurred by older and richer ones. This would be unfair – especially in a country in which the latter hold an effective monopoly on capital. Not to mention a breach of the manifesto.
How might Ministers respond to this formidable list of objections to their plan? They might say one shouldn’t make the best the enemy of the good, and that even if only one of the main social care problems can be solved, the effort will be worthwhile.
And add that, since their proposals are based on the Dilnot Report, they at least command a degree of consensus. They would doubtless say that older people tend to vote Conservative, and that it’s bad politics to alienate one’s base. If Johnson also announces that the triple lock will be abandoned this year, they will claim that he has presented a package that “strikes the right balance”.
The Government’s model is the then Labour Government’s tax rise of the early 2000s to fund higher NHS spending. Tony Blair got away with it, and the Prime Minister will hope that he does too.
Maybe Tory MPs will vote through a national insurance rise if Johnson, with his majority of 83, puts it to Parliament with the support of his Chancellor. Downing Street will hope that the prospect of a reshuffle will keep Ministers in order – and that Labour opposition to the NI rise will minimise the Tory revolt.
None the less, we warn the Government that the cat of Conservative tax rises has fewer than nine lives. Tory MPs won’t indefinitely nod hikes through.
Nor is the Blair precedent encouraging. His national insurance rise failed to deliver the improvements he wanted. Hence his later decision to support Alan Milburn as Health Secretary in delivering market-based reform. Above all, governments can’t expect to break manifesto promises made in one election, and have those it makes at the next taken seriously.
It may be that Johnson will dress up any national insurance rise to pay for social care as a special levy, thus enabling him to claim that he’s not in breach of the pledge he made two years ago – technically, anyway.
But doing so wouldn’t ease this site’s wider concern: that just as government can’t tax its way to a more prosperous economy, it can’t tax its way to better public services. And that once Ministers start reaching for tax increases to solve a problem, the reflex can become automatic.
At the heart of social care reform for any Conservative Government, two fundamentals conflict. The first is: there’s no such thing as a free lunch. The second is: wealth must cascade down the generations.
In other words, someone must pay for social care – be it the user, the taxpayer, or someone else. If so, wealth risks not so much cascading as trickling down, especially if the main form of saving, the family home, is sold off to meet social care bills. At the one of the policy spectrum, Policy Exchange proposes rolling social care into the NHS, which would certainly require new taxpayer funding.
At the other end are a long succession of Tory plans for insurance-based schemes. Peter Lilley’s set out a variant recently on this site, supporting a state-backed voluntary system.
There is no shortage of objections to such a plan – not least potential voter resistance to any Conservative health-related insurance scheme. But if the aim of government is to protect homeowners from Bale’s “Russian roulette”, this type of proposal has merit.
It would be consistent with the Conservative manifesto, avoid tax rises and a backbench revolt, be generationally fairer, and represent evolutionary rather than revolutionary change, since no-one would be forced to join the scheme. Instead, the Prime Minister is rushing in where angels, or at least politicians, have feared to tread.
He isn’t always associated with prizing courage over guile, or attempting today what can be put off until tomorrow. Not for the first time, we’re learning something about Johnson that we didn’t know before.