Sajid Javid has already planted a tree at Dorneywood—a tradition among former chancellors who have used the grace and favour country house. In normal circumstances, it might be seen as a demotion for somebody who has already held two “great offices of state” (at the Home Office as well as the Treasury) to be appointed as health secretary. But during a pandemic there is almost no more important job. Javid is clearly delighted to be back in the Cabinet, 16 months after he resigned following a clash with Dominic Cummings, who tweeted this weekend that he had “tricked PM into firing Saj.”
The new health secretary stressed on his first day in the job that his “absolute priority” was to get life back to normal as quickly as possible. “I want to see those restrictions lifted as soon as we can,” he said. Javid has always been more sceptical about the coronavirus lockdown than his predecessor Matt Hancock. He brings a former chancellor’s eye to the relative importance of economic and public health consequences of each decision, which will shift the balance of power between “hawks” and “doves” in the government. As Salma Shah, a former special adviser to Javid, said at the weekend: “the immediate thing you’re going to see is a change in complexion around the Cabinet table.”
Javid’s Treasury experience also makes him ideally placed to try to square the circle of social care reform. This is a policy that needs money as a matter of urgency, as well as a way of raising resources to make the system sustainable over time.
It is almost two years since Boris Johnson promised to “fix the crisis in social care once and for all.” The “clear plan” he claimed to have in place then has still not materialised. The coronavirus pandemic has only further exposed the flaws in the system. More than 40,000 care home residents have died of Covid-19, partly because of the lack of proper integration between the NHS and social care.
Meanwhile, according to Age UK, 1.5m older people are not getting the support at home that they need. In some parts of the country, the social care system is close to collapse because some councils pay as little as £2.75 an hour for care and a third of providers are making a loss. Martin Green, head of Care England, the charity that represents care providers, has warned that “the sector is extremely fragile.”
With one in five people in the UK predicted to be 65 or over by 2030, this crisis will only deepen. But the issue is stuck in Whitehall gridlock, caught between a prime minister who only wants to spend and a chancellor, Rishi Sunak, who is determined to save. A week ago, a meeting between the two men that had been set up to try and thrash out a deal was cancelled at the last minute after journalists caught wind of it.
As a former chancellor now in charge of a major spending department, Javid is almost uniquely positioned to see both sides of the coin. He can make the argument to Sunak that the Treasury should agree to release the resources while also persuading Johnson that he needs to make it clear how the government will pay for the plan. Reports that the health secretary believes it was the wrong time to launch a major social care reform are, I am told, wide of the mark.
The outlines of a deal are already obvious. Ministers accept that it is time to “act on” the decade-old recommendation from Andrew Dilnot for a cap on care costs which would mean that no-one has to contribute more than around £48,000 towards their own care. With the state effectively underwriting the system, the costs would be spread between the population. No one would end up with “catastrophic” costs or be forced to sell their own home.
Introducing such a cap would cost an estimated £3bn a year. Dilnot himself has stressed that more money must also be put into the general system to pay staff properly and put care providers on a stable footing. The total cost to the Treasury would be around £10bn to fix a system that “we should all be ashamed of,” he said recently.
Sunak is reluctant to cough up this amount without a clear way of paying for it, while Johnson is refusing to agree to the tax rises or spending cuts that will be required. Javid is perhaps the only person who can persuade both that they need to compromise.
The chancellor should loosen the purse strings for this critical national priority, and the prime minister must accept that tax rises will be necessary. Scrapping the pension “triple lock” would save £4bn a year—enough to fund the cap on care costs.
The government could also cut the lifetime allowance that people can pay into a pension pot and introduce National Insurance on the earnings of those over pension age. The department of health has also been looking in recent months at a ring-fenced increase in National Insurance, possibly weighted towards older workers, to fund improvements in social care.
Social care policy has been politically toxic for successive leaders and political parties. In the run up to the 2010 election Gordon Brown was accused of planning a “death tax,” while Theresa May’s 2017 proposals were branded a “dementia tax.”
Any radical reform that costs billions of pounds will be controversial, but Covid-19 and an ageing population has now made it impossible to avoid.
Johnson has promised to build a “cross-party consensus” but he has not even reached out to the opposition parties. He will not be able to win the support of Labour and the Liberal Democrats without significant increases to funding.
A growing number of senior Tories now know that fundamental reform is required. “This is a once in a generation thing, it can’t be done in a black box with the opposition parties shut out,” one says. If the prime minister wants to secure a legacy after the pandemic, it is time to move beyond ideology on social care and rise above the traditional clash between the Treasury and Number 10. Javid may be the only person who can bring that about.
