Jacob-Rees Mogg is MP for North East Somerset.
A proposal to solve the social care issue was one of the reasons for the Conservatives’ dismal performance at the last election. There has long been a need to develop a system – but that it had such stark electoral consequences is a reminder of the sensitivity of any policy solutions, though bringing it forward it showed how serious the issue is.
The current system does not work. It is arbitrary. Families argue with the authorities as to what part of care is medical and what is social and diseases of old age, especially dementia, seem to be excluded, at least in part. This leaves some families with bills of tens of thousands of pounds each year, potentially for many years, while those with heart disease or cancer will see all the costs fall on the state. This principle of health provision free at the point of use is one of the main stays of the British welfare state. It provides security for all of us if certain types of illness hit, but leaves the failure to provide social care, that has crossed a narrow boundary from medical care, appear all the more unfair.
Not only is there an arbitrariness in the definition but the rules of who pays what are complex and problematic. Council budgets take the strain for social care but the NHS for medical, which leads to people spending too long in hospital. All the while, budgets are argued over and higher-cost hospital beds remain occupied by people who ought to be elsewhere – possibly, with a little support, even back in their own homes.
Once the bureaucracy has determined the fall of costs, the ways that these fall on individuals are equally complex. Quite rightly, an individual who shares a home will not normally be expected to see the value of the property taken into account. Yet, the frail, elderly parent who has been looked after by a child for ten years who then spends the last year of their life in a home could see the family property taken, whereas if the child had moved in it would not be. Complex charging rules inevitably lead to the system falling harshly on some and not on others, contributing to changes in behaviour.
It is, perhaps, easy to set out the problem but less so the solution. An ageing population and the growing complexities of care make the costs high and move from self-paying to government-paying increases demand. This is an iron law of economics – there is more demand for something that is free. So why is Warwick Lightfoot of Policy Exchange right to say that the state must take on this burden?
It is the role of the state to save and shelter us from the overwhelming problem. The cost of long-term social care is more than all but the super-rich can easily afford, and the risk of it falls indiscriminately. The majority of families will not be hit in this way, but some will be hit completely.
It is also a continuation of the NHS principle of care free at the point of use: any constituency MP will have helped constituents argue what proportion of care is NHS and free and what is social, so paid.
Additionally, the cost, though high, is affordable if it is a priority. Lightfoot’s paper suggests £11 billion, but there would be some savings from the NHS budget as beds are freed up, reducing the misallocation of resources. The ONS has recently revised up the nation’s GDP to £2.2 trillion so this is 0.5 per cent of national income, a significant but not disproportionate amount to provide for the needs of the most vulnerable elderly.
To prevent a spiralling of costs, it is important to keep an affordable element of co-payment: £5000 per year seems to strike the right balance. Families would still have an incentive to keep their elderly relations at home, avoiding the probably vast cost of all this care falling on the state. However, once this amount had been spent, the rest of the base cost would fall on taxpayers, although families would be free to buy extra services and the supply would continue to be from private operators as no one wants to go back to council-run nursing homes.
There are some things that ought to fall on central taxation, and it is anomalous that social care does not, especially when the individual cost is potentially ruinous. It has become a near 100 per cent wealth or inheritance tax that falls randomly on an unlucky few. It is, therefore, a risk that it makes sense to pool but, with no insurance available, it is an area where it is right and fair for the state to step in.