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Don't get me wrong, I find the idea that the elderly are forced to sell their homes sad, tragic – even, a great shame, and rather insulting as those that have contributed nothing or wasted their assets receive the same care free of charge. There's a certain moral hazard in this situation: don't save, enjoy your money, and you'll still get the same care as your hard working, heavy saving neighbour. It's no wonder Saga is as successful as it is!
So I'm not one of the inter-generational warriors: the fact that of the nation's total wealth 52% belongs to those aged between 45 and 65 – the baby boomers – doesn't surprise me, let alone annoy me, given that this age group has had three decades or more of adult life in which to save, invest, and pay down mortgages. Quite frankly, there'd be a problem if this age group didn't have such an asset base – either that or the younger Generation X and Y were prodigious over-achievers that skewed the ratios! I have little time for the bizarre Intergenerational Foundation, which seems intent on nothing short of civil war, and question stances and arguments of David Willetts's The Pinch as well.
Yet though I have no problem with the age distribution of wealth in the country – in fact, the "baby boomer" generation should have been encouraged to accumulate more, consuming less, and thereby being financially prepared for lengthy retirements – I do have a problem with liabilities burdened upon the taxpayer, liabilities that are getting progressively heavier and a taxpayer demographic increasingly narrow. Under current projections, the number of retirees will increase from 11.5 million today to 13.5 million by 2020 and hit 17 million by 2035, by which point there will be just 1.9 individuals in employment per retiree. The tax burden to withstand this (which according to ONS data amounts to a £4.7 trillion unfunded pension liability, excluding added health and social care costs) will be both punitive and economically crippling.
Into which tax tsunami steps the Dilnot Commission, the proposals of which we are told the Government intends to adopt in their entirety, capping the cost to the individual of social care at £35,000 from 2017, taxpayers being told that the £1.7 Billion annual cost is being "funded through rationing elsewhere in government spending, rather than increased borrowing or taxation". All of which raises several questions.
First, If finding £1.7Bln is that easy, why hasn't this been done already to reduce the deficit or refund taxpayers? Second, if it is being done at the expense of other services then which services and how can we justify rationing those services to fund this scheme? And third – and perhaps most importantly – how can we be sure that the cost will not increase greatly?
When Scotland introduced free care the result was an avalanche of families incarcerating their elderly relatives to sell their homes, and that was without the higher property values of England: with care fees capped, the state assumes the duty of care, and the taxpayer foots the bill. Individuals will be able to place an elderly relative in a care home, selling their assets and avoiding Inheritance Tax (which needs abolishing, but I digress) for just £35,000 plus the modest "hotel fees", at taxpayer expense. With an aging nation, the future liability is astronomical.
Of course this doesn't mean there should be no change, there is a serious issue, but as Conservatives consideration shouldn't be given to what is effectively a major expansion of the welfare state that truly makes it "cradle to grave". Rather, as conservatives, the notion of individual responsibility and self-reliance must be central, with insurance being a suitable solution that gives choice to individuals rather than places burden upon as yet unborn taxpayers. Anything else is simply the creation of an unsustainable scheme that will be funded by taxpayers who themselves will not receive such welfare.