Iain Duncan Smith is a former Secretary of State for Work and Pensions, founded the Centre for Social Justice, and is MP for Chingford and Woodford Green.
Over the weekend, the polls seem to have shown what commentators said was a sudden shortening of the poll lead, based, they maintained, on the issues surrounding the Conservative manifesto. There has been a reaction to part of the manifesto concerning the funding of social care, which I will deal with later. But first these poll moves should be put in context.
A careful look back over the last week shows that the polls started shortening before the Conservative manifesto was published. There are two reasons for this.
The first is Labour’s vicious ‘cuts’ campaign on education and health. This consists of websites, which parents and others are urged to believe are independent – though they are nothing of the kind, being set up by Corbyn supporters and trade unions. By using utterly bogus methodologies, they assert that school and health budgets are being slashed. In a number of places this process has been aggressively promoted by some public sector workers such as teachers, using their position to ensure parents are fed these false figures. In reality, the pledge for increased funding means that these budgets will rise in real terms for the next five years. But, as the maxim says, if you repeat a lie long enough, it can travel half way round the world while the truth is putting on its shoes.
The second is the Labour manifesto. I know the chatter amongst politicians and the media was about the chaos of their double launch. However, the public already recognises that the Corbyn regime is chaotic, so that didn’t alter their opinion of him, and his poll ratings remain disastrous. The Labour manifesto – a long, socialist shopping list where the state would re-nationalise privatised industry and run them as they did in the 1970s – represents a threat for most.
However, for some of those under 50, who pay little heed to politics in general and have grown up with privately owned utilities and railways, there is no memory of how hopeless the state was at running services before. This Labour magic wand of instantaneous improvement doesn’t hold quite the fears it would have had for older generations. Whilst most people of sense know that the figures don’t add up, for some there is a wistful sense that they wish they would. As one commentator said, the Labour manifesto is like chocolate cake. If you ask the public if they like chocolate cake, they will say yes, but if you ask them if they want to eat it all the time every day then they know it will eventually make them sick. The nausea has yet to grip them in the form of the bill we will all pay. As it becomes clearer just how much this will cost, who pays and how many jobs will be lost as businesses move away, their common sense will begin to narrow their focus.
This is why the Conservative manifesto was, I believe, right to recognise the sense people have that the market doesn’t solve all our problems and that there is a temporary role for the state when the system doesn’t function as it should. The energy market is one such example. Adam Smith recognised this in his Wealth of Nations, where he saw the problems of cartels and uncompetitive pricing which don’t give consumers the true power of a free market. This is what Janet Daley referred to as the ‘Common Sense’ proposal, as opposed to the ideological offer. There is clear conservative philosophy throughout the manifesto, but it ensures that those who might not think Conservatives are on their side have the opportunity to see that Theresa May’s desire to help those on the margins can be made to work.
When it comes to the social care proposals, I recognise that that these seem to have caused difficulty for those who have saved and have used property as part of their savings plan. Yet different governments have tried to resolve this vital issue staring us in the face. We have a real crisis in social care, which will only get worse, as there will be two million more people over 75 years old in Britain over the next decade. Unusually during such a campaign, the manifesto has been honest about this and set out general proposals as to how we could get the financing right and stabilise an often dysfunctional system, which costs the NHS billions in late discharges and blocked beds.
At the heart of this lies the issue of who pays. I have found we need to be straight with people. Care and support services in England have never been free. Most people have to pay something towards their own care and some will already have to pay for all of the costs, leaving them with only some £23,000 of their savings left.
Whilst local authorities may cover some or all of the cost of care in some circumstances, such help is means-tested.
Worse, the present system is a lottery, with some local authorities demanding the payment up-front, resulting in people having to sell their homes.This causes real anxiety and worry to those who are in need of the care when the system should be supportive. These proposals will bring this practice to an end.
Property has always been calculated in a personal care package, as is evidenced by the existence of the “12-week disregard”, which gives people time to consider whether they wish to stay in care before having to decide on how to fund it. People save first and foremost so that they are not a burden on their children. Whatever is left over of their savings and capital, of course, should go to their closest relatives if they choose. Yet not being a burden is the prime reason we save, so that we can all have a better than basic retirement without the need for our children to have to finance our support.
The issue of fairness is often raised. The answer is that we save and are responsible because we care about planning for the future which gives us greater opportunity and independence. This was why we have introduced automatic enrolment, to encourage everyone to save in the future. Yet there will always be those who haven’t managed to do so. Whilst that is unfair, what makes us decent is that we accept we aren’t made better by abandoning those others who have failed.
Our welfare reforms, getting more people into work and capable of saving, are how we make sure there are fewer people in future who fall into that category. Yet surely the greatest unfairness is if we dump the costs of social care onto our children. Despite all the scare mongering from Labour, that is what their proposals will do. Their fantasy manifesto, with its tens of billions of pounds worth of uncosted pledges, will result in enormous tax increases. First on their list will be inheritance tax, and Corbyn even said he would increase the basic rate of income tax for millions of people from 20 to 25 per cent to fund social care. So Labour will hit those families at the very point they expect to receive the money from their parents.
One of the problems in explaining this policy has been the absence of an upper limit from the manifesto’s outline proposals for the future green paper. The Prime Minister’s statement that there will be an upper limit should help those concerned about the scale of this financial contribution recognise it will have limits, ensuring they don’t necessarily fall back on the minimum saving of £100,000.
May has shown determination and boldness in tackling this issue head-on. I believe she is right to do so, and the alternative is a Corbyn-led government which will tax us so much that any thought of passing on savings to one’s children becomes a folk memory.