Saturday, April 19, 2008

Cameron is Right on Care for the Elderly

The papers today all carry the story of David Cameron indicating that the next Tory manifesto will contain substantive proposals to provide an element of free personal care for the elderly. He has spoken of a desire to implement a system where you pay for the first year or two and then get it free. In Scotland, of course, it is completely free, courtesy no doubt of the munificence of the Barnett Formula.

The terrible thing about this whole subject is the means test for the elderly who go into homes and then face the terrible prospect of having to sell their own home to finance it. Care home fees are horrendous and there are few people who can afford them outright. Using strict free market economic logic I suppose it is possible to argue that people should either pay their own way or make insurance provision, but this issue goes beyond economic theory. There's a lot of emotion, feeling and heartache involved, which pure economic theory can never address.

My own view is that this could become a 'clear blue water' issue for the Conservatives. Cameron has been careful not to promise complete free personal care from day one because it would be unaffordable, but if the funding were available to introduce it after the first two years he would be seen to have introduced a system which is both compassionate and sensible. And if abolishing the Barnett Formula can help pay for it, that's an added Brucie Bonus.

28 comments:

Anonymous said...

Iain, stop spreading myths about free care for the elderly in Scotland and it coming from some magically subsidy in the Barnett formula.
Please do your homework on this subject before making sweeping judgements. The present situation in Scotland is not straightforward and its well publicised, so no excuses!

dougal said...

Actually, I'm one Tory that doesn't have a problem with selling the old homestead to fund moving to a Home. In fact, despite not being a member of the Filthy Rich, we are trying to persuade our mum to do just that.

She has no other funds, and we couldn't pay for her, being pensioners ourselves. Given her age and medical condition, she may last another 3-4 years, so selling her relatively low value home will fund that, and may leave a little over for legacies.

Should we be asking every tax payer to fund her care when she can do it herself?

Of course it leads to the next possibility, that people will spend everything they've got, so that the taxpayer will then subsidise them, and I don't have an answer to that. Or perhaps there should be some kind of generous tax incentive to those who can and do help themselves?

Anonymous said...

Put a sock in it Iain!

Scotland has provided a massive surplus to the UK treasury in the last 30 years and we are no where near cancelling that out.

In any case we Scots are entitled to do whatever the hell we like with the block grant. In Scotland we spend 16% LESS on law and order than in England and Wales because we choose different priorities like free personal care or university education.

Need I remind you that you live in the city which is the largest beneficiary of tax payers money. And while Scotland still has many areas of deep poverty that equal or are worse than areas of London Scotland does not have the City. We still have some oil and gas which only receives a fraction of the special consideration that the City receives to generate income.

As a Conservative member I am sick and tired of this Scotland bashing from what seems to be turning into an English only club. You lot are doing more to help the SNP break up the Union than to support the basic philosophy of the Conservatives as a Unionist party.

McDodge said...

Or he could have broken new ground with the number of young people who are growing more and more tired with how this generation of old people have managed to rob this country bare!

Chris Paul said...

"An element of free personal care" is being conflated here with free care home residence. You do realise that Iain? What are you trying to pull?

And people who don't have resources or having used them up get free residential care. Also free home helps, domiciliary carers etc on basis of need.

What is Cameron offering here? Please find out Iain and report back properly.

Gman said...

Its going to be Expensive, notice the capital E? Its also a form of expenditure that will continually require greater and greater costs. A substantial part of the increase in Council Tax over the last decade is used to try and keep up with social services care for the elderly.

Anonymous said...

Many elderly people are terribly worried about this issue and rightly so. Annual care fees are about £25,000+ and the average length of time people spend in care is six years, a bill of £150,000 which, where I live, is more than the value of many houses.

A great deal of noise is made about inheritance tax payable at 40% over the nil rate band (currently £312,000 per person) yet self-funding of care is, in effect, a 100% tax on assets over £21,500!

Nor does Age Concern help, despite being one, if not the leading charity for the elderly as it advises that little can be done. This is nonsense. One measure that can be taken is to re-draft your Will to include asset protection which will safeguard at least some of the property and liquid from the clutches of the local authorities. It is also possible to set up a Trust into which assets can be placed yet remain accessible to the settlor.

James Barlow said...

But the trouble is that it wouldn't really be "free" would it?

It all has to be paid for by the taxpayers, and putting the centralised state between purchasers of service and providers of services has not offered very good value to date. Examples? The NHS and British Education spring to mind.

Wallowing in the "emotion, feeling and heartache" will just lead to bad outcomes for everyone.

Anonymous said...

Labour is failing older people and, with an ageing population, an increasingly large number of voters.

My mother died at 82, but it was clear she would have run out of care money (a fortune) if she had carried on much longer.

No one in the opposition spotted Brown's false giveaway in the last budget - the increase in the heating allowance. In fact, the allowance is per household. If you are at the same address as another pensioner, your allowance is now HALVED. Labour expect pensioners to huddle over a communal gas meter presumably.

The 2.5% inflation rate - Labour's biggest lie since WMDs - has also hit pensions hardest, since they are fixed to a rate some 15% below the real cost of living. The previous pension increase of 75p or something was worth half a packet of frozen peas.

Gordon's 100 billion to rescue banks is not going to feed through - or even warm up - the elderly, even if it reaches any other parts of the economy, which knowing bankers I strongly doubt.

Anonymous said...

What hypocrisy! It was the Tories who abolished long stay geriatric care in the NHS. It was the Tories that included homes into the assets that had to be sold to pay for private care, until savings were down to £8,000 pounds the present government raised it to £16,000.

Not all care homes are appalling, my mother spent the last eight years in an excellent one. Paid for by selling off her property.

If you honestly think that with people living well into their 90's the state would be able to pay for geriatric care without a massive rise in taxation, then your a f***ing moron.

Cameron would be lying in his teeth if he says anything different.

Hitchy said...

Iain, can you please stop repeating the myth that Scottish pensioners get free care.

The free personal care paid for by the state in Scotland amounts to a few pounds per week to get someone to come in and help you into the bath once a week. This is funded by, amongst other things, the less money Scotland spends on law and order than the English.

Residential care is just as expensive as it is in England (£20k+ per year) and pensioners are just as liable for their own bill.

Anonymous said...

Iain

To be honest, it is a voluntary tax entirely avoidable if you plan early.

I know of someone who lives in a Labour local authority and he was very rich indeed. What he did was put all his assets in Trust for his kids and made sure he did it 7 years before he planned to go into sheltered accomodation. By the time he had gone in to sheltered accomodation (partly paid for by the local authority) he had no significant assets.

When he became too ill to live in sheltered accomodation he had no more than £20k of assets and then he just went free straight into a care home.

He planned ahead, worked the system and took the money off a Labour local authority that he felt he had paid plenty of tax to during his working life.

He did nothing illegal - he was just savvy about it and made plans early. It beggars belief how old people just drift into retirement and seniliity without any clue as to how they will be looked after.

Anonymous said...

I am surprised at those who find fault with Iain's argument and suggest that old people are getting 'something for nothing'.

You pay taxes all your working life for a pension. Then your pension is taxable. Being old is not a free lunch by any means.

And is the NHS an 'insurance contribution' or what? I have been to the doctor twice in 40 years. Of course people only need healthcare when they are older. Not to get kicked into the gutter by Labour, because all their contributions have been misappropriated by The Treasury on everything from wars to quangos and Egodomes.

It also astonishes me that people here think that Labour is left wing or socialist. People like Blair and Chris Paul are the most neo con people we have seen in British politics. Cremate everyone at 60. Wipe out the single mums and the disabled first. Thank god Hain was binned. But not soon enough to save the Remploy factories from one of his property side deals.

Blinkered Brown doesn't realise that old people still pay the outrageous energy price hikes, still contribute to Tesco's and Sainsbury's (Nu Lab faves) outrageous profits and every other stealth and council tax going.

Give 'em a break? Well, if Cameron does, he'll get their vote tomorrow in the millions. To repeat, Britain has an ageing population.

Mike Smithson has written more about this at Political Betting. Sorry, Chris Paul, older people count.

judith said...

And of course, what won't help in the future is the current building of a plethora of flats, which in London at least are being downsized by fiat of Mayor Leavingsoon - so any chance of an elderly relative coming to live with their family will be beyond consideration.

I suggest that society stops making gooey feel-good noises about keeping the elderly and incapacitated alive, and starts urgently considering how to fund their care. Anyone see the 81yr old mum still giving 24hr care to her 51yr old son, a Thalidomide victim, with no apparent help?

Anonymous said...

This year celebrates the centenary of the introduction of the state pension. In 1908 that equated to 25% of the average national wage, Today it is about 14%. Perhaps if the state pension was raised to a more realistic level it would go some way to fund care.

Anonymous said...

I was grateful that my mother, who had no savings and owned no property, received free care at the end of her life. But I always felt it was unfair that many people had to sell their homes for the same treatment.
I may well have to sell my house in a few years, which will be a blow to my son. I can't see him ever affording a property

Roger Thornhill said...

What James Barlow said.

Adrian Yalland said...

No such thing as free I am afraid!

Scrap the Barnet Formula, and use the money saved to provide some form of voucher scheme, which will subsidize or even provide free (at the point of delivery) care for the elderly.

However, I don't think it's unfair that, in principle, people should contribute towards the cost of their care in retirement. But neither is it fair that it should swallow up all their life savings so they have nothing to leave behind.

And neither is it fair that those who don;t save for their retirement get the same standard of care as those who act responsibly. Where is the motivaton to save if you know you are simply going to lose it all, before being moved into some grotty care home surrounded by those who did nothing to contribute towards the care they now receive.

Yes it is emotive, but so is paying the mortgage, saving for your own pension and paying the gas bill as well as having to pay more taxes to keep the old folks in a degree of comfort.

A good compromise would be increasing the threshold at which you pay tax on properties you sell, so that this will encourage those selling houses to pass on something substantive to the kids (before they die), whilst still having enough to contribute towards (not pay for in full) their on-going care.

In short, the system needs to encourage saving, encourage giving to the kids, and be fair to those who have to pay for future care provision, whilst putting pressure on us all to start saving for our retirement now, rather than externalizing that cost to our kids!.

The other thing is to support and encourage those who decide to have mum or dad move in with them, and to recognise the value they provide in subsidising the state! Perhaps they should receive a lower tax code in recognition of the support they give in providing a roof over their parent's head.

That would be a progressive way to bind the family together!

Bill Quango MP said...

Annon said..In 1908 that equated to 25% of the average national wage, Today it is about 14%. Perhaps if the state pension was raised to a more realistic level it would go some way to fund care.

good point just missing the important bit...
A retirement age, originally of 70 but later reduced to 65, was introduced in Britain under the 1908 Pensions Act, when average life expectancy was around 50.

people didn't live to claim it.

Baldwin said...

I think Cameron's proposal is attractive and practical.

Firstly, only a minority end their days in care homes.

Secondly, average life expectancy in the most expensive sector, nursing homes, is around two years.

The present system is a mess and a major worry for the elderly and their families.

asquith said...

Speaking as a working-class Englishman, this Scottophobia is repulsive to me. I've got more in common with someone in a block of flats in Glasgow than I have with a stockbroker or a fat, mentally retarded Daily Mail "reader" in England. Maybe the Barnett formula itself should be altered, but only so as to put funding on a proper class basis. For example the pupil premium, funding schools in deprived areas.

And yes, I've been drinking so just watch out. May not be too serious.

Anonymous said...

"In Scotland we spend 16% LESS on law and order than in England and Wales "

Maybe that is why the violent crime rate in Glasgow is higher than in New York.

Anonymous said...

"The 2.5% inflation rate - Labour's biggest lie since WMDs - has also hit pensions hardest"

The 2.5% inflation figure is for CPI. The index used for pension increases is the RPI which is currently at 3.8%.

Anonymous said...

Er . . Iain? Weren't you a candidate at the last election?

This is exactly the same policy we were promoting last time. It was one of the best things in Michael Howard's manifesto and it's just as good now.

Congrats to David Willetts I say.

Terry Heath said...

It is not Scotophobia, or Scots bashing to complain about unjustifiable inequalities. Cameron should offer the English full equality with Scotland and Wales both constitutionally and financially.

Scotland received more money than EVERY SINGLE ENGLISH REGION in 2005/6 and will do for the projected 2007 figures* Scotland has received almost £60bn more than England since 1997. That’s a lot of money when spread between 50m people, it could have paid for the entire English schools and universities budget. Think how far this money goes in a country the tenth of its size!

If you want to split the UK just give three nations generous welfare provisions, get one nation to pay for it (and put up with a forth class health/education service) and give the other nations greater democratic powers to ensure these wrongs cannot be righted.

Those that deny equal treatment for England (including a Parliament) are threatening the Union. If that is their intent, they should admit it.

* http://www.hm-treasury.gov.uk/economic_data_and_tools/finance_spending_statistics/pes_publications/pespub_pesa07.cfm

asquith said...

Terry Heath, I agree with the implications of your post. Funding should be localised. It's just the unsavoury types who've discovered "England" as a cause that I don't like. Maybe you disown them, but they're still around.

Personally, I was never that much of a fan of Scottish and Welsh devolution, and it's a shame that they ever felt the need for it. I really do feel that the Scots, the Welsh (and the Irish) are my brethren.

Terry Heath said...

Asquith, we are supposed to be fellow British citizens. However, Scotland gets 25% more money than England, (for no good reason) but doesn't hae to pay a penny in extra taxes for it.

Scotland also has its own Parliament and has better representation at the UK one.

I'll vote for equality, nothing less will do.

By the way, can someone post a link for the original article? I can't find Cameron saying this anywhere except in Iain's blog.

Anonymous said...

Apart from selling off my Mother's very modest property her state pension and 2 small private pensions are taken to fund her Residential Care fees. She is handed back £20.00. for 'sundries'. How about constant underwear purchases due to constant washing probably a hygenic necessity. Slippers Shoes and Outerwear. £20. per week just doesn't cover their expenses.

Esmeralda