Social care reform – and why we can’t simply tax our way to better public services

6 Sep

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.

Robert Halfon: The political parties are stuck in the Dark Ages

2 Dec

Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

If I were a chief executive or chair of a major political party in Britain, I would have this book, Footsoldiers: Political Party Membership in the 21st Century by Tim Bale, Monica Poletti and Paul Webb, pride of place on my desk – and I would also send a copy to every local constituency party association chair in the country.

This book tells you more about the demographics of party members, and the reasons why they join – and quit – than anything you will hear from the usual commentators. Each chapter not only goes through the qualitative information, but has reams of data and surveys to evidence the claims.

Footsoldiers confounds a few stereotypes, too. For example, the average age of a member of the Conservative Party is 57 (not in the late 60s as is often reported). Moreover, the Labour Party’s average membership age is 54 – just a few years away from that of the Tories – and yet, it is only the Conservatives that are always described as having an aged member base. Interestingly, we learn that 77 percent of Labour Party members are middle class – a fact that may surprise those who imagine the party as a mass, working class, political movement.

What Bale, Poletti and Webb also show, in a really thoughtful way, is why people join political parties. Motivations to join comprises purposive incentives, material incentives and solidarity incentives. As I understand it, a person may choose to join a political party for ideological reasons, for a sense of belonging and/or a belief that, either they will benefit from their membership, or from their chosen political party running the country.

The authors also go a long way to reason the recent revival of membership which had, until recently, gone through a significant decline. As Footsoldiers explains, this trend can be put down to members thinking that they would have greater democratic say over decision-making and over the leadership, by selecting a new leader, for instance.

I’ve always thought that the surviving political parties are stuck in the Dark Ages. They operate like enormous, 1970s’ main-frame computers, whilst most people have moved to the individuality of mobile phones and apps.

Although central to joining will be ideological reasons, too often parties let their members down by not providing value for money, in terms of their membership, and by a lack of opportunity to make real decisions, such as the selection of parliamentary candidates, in debates at party conferences or in voting for the party’s executive boards. Only two-fifths of members feel that their membership has lived up to their expectations and one-third would like more say over the democratic processes.

If parties are to be brought into the twenty-first century and retain their membership (and there is an important chapter on why members quit), not only should their supporters be involved at every level of decision-making, in every reach of the party, but so, too, should they receive beneficial services to ensure that their investment is worthwhile.

Political parties could be, in essence, like a modern trade union. So, if, for example, a person were to join the Conservative Party, first, they would have meaningful votes at Party Conference; second, they would have a say in the selection of senior representatives on the party board; but, third, like a trade union, they would receive significant returns and benefits.

Party membership could offer discounts on the cost of living. For example, members could be looked after with personal insurance schemes should they need them. Why not automatically give every new Conservative Party member a “fuel card” upon enrolment, to give them a helping hand with petrol prices? Or, how about granting every new young Conservative a free bus or train pass, entitling them to discounted travel for one year?

This is very different to offering someone a “Nandos”-type loyalty card which anyone can get for a variety of retail and food outlets. We need to take substantive action to ensure that people really feel they are making an ideological difference, that their opinions matter and help shape policy, whilst offering services that make a material difference to their lives.

Footsoldiers also touches on the issue as to why members leave. Often, the party’s administration is so poor that a significant amount of memberships (one in seven of leavers) simply lapse, as members forget to renew. An important point is made that this is entirely solvable, were political parties to spend as much money on the recruitment and retention of members, as they currently do on investment into the “air war” and research.

Herein lies the problem; in recent times, members are all too often seen as the icing on the cake, rather than the cake itself. If political parties are to survive and flourish, this outlook has to change; and a first step on that path would be to understand what is really going on with party membership, and to read this book.