It is commonplace to lament the failure to properly fund social care as a failure of political leadership. It’s a fair charge, but it’s worth tracing that failure back to its root: property wealth.
The current government has already proposed changing the cap on social care. It is also edging towards a limited and ill-targeted effort to drip a little more money into care, by way of additional National Insurance Contributions. Raising some more cash is welcome. Doing so by taxing earned income is not.
But today’s ministers, like any other politicians contemplating social care, do so in the shadow of not one but two political tombstones. The first stands over the grave of Andy Burnham’s 2009 attempt to fund care by way of a levy on the estates of the dead. That plan was killed by George Osborne and Tory posters damning Labour’s “death tax.”
The second marks the resting place of Theresa May’s 2017 proposal to use the value of person’s home to help fund their care in that home, as happens for people in residential care. That plan was quickly smothered by headlines about the Conservative Party’s “dementia tax.”
Those episodes have helped to entrench the notion in many political minds that the primary aim of social care is to preserve untouched the property assets of care recipients. The provision of high-quality, affordable care is effectively subordinated to this higher goal.
This is a category error, but one so familiar that it is barely noticed; some politicians even boast that their care policy will reduce or eliminate cases where people must use property wealth to fund care.
“No one earned the inflated addition to their property values; a lick of paint and a new conservatory are irrelevant in the economic context”
The politics of this are simple—the people who are most likely to vote are also the most likely to own property. According to the latest Wealth and Assets Survey (WAS) from the Office for National Statistics, the average household where the main earner is aged 55-64 has net property assets of £256,000. For people over 65, it’s £273,000. Pensioner households own around £2.2 trillion in housing equity.
In the years since Burnham’s doomed effort to make limited use of housing wealth to fund care, property values have grown steadily, helped by restrictive planning rules and cheap credit. The closer you are to that stage in life when you are likely to need care, the greater the benefit you’ve felt from this asset inflation.
The same survey shows that more than half of those households in the 55-64 age group have at least £500,000 in wealth. Almost a third—31 per cent—have wealth in excess of £1m. Among the late middle-aged, it’s mundane to be a millionaire.
No one earned the inflated addition to their property values; a lick of paint and a new conservatory are irrelevant in the context of quantitative easing and the global savings glut. And no one earns the value of the property they inherit. So such assets should be the first place to look for new cash for social care. But the fierce attachment of owners to the value of those assets successfully sends politicians looking elsewhere.
And once you have eliminated the obviously sensible, what remains, however unreasonable, must be social care policy. Hence the current moves to ask workers to cough up more from their wage packets to fund care, and spare the housing assets of those closer to needing that care.
It goes without saying that many of those younger workers will never themselves own such assets, except by means of inheritance. Talk of intergenerational tensions in the UK can be overdone. Bobby Duffy, of King’s College London, has recently argued convincingly that younger generations are not clamouring for boomers and their parents to be stripped of wealth and comfort: most young people want their grandparents’ generation to be properly looked after.
But I wonder if those tensions are partly lowered by limited understanding: how many of Generation Rent currently understand that their take-home pay is set to fall to preserve, untouched, the value of homes they can only dream of owning?
But then, the politics of social care are founded on a lack of understanding. Most people, to be frank, don’t realise how the current system of care works, and therefore don’t realise that the reforms they might instinctively see as awful would in fact be preferable to our current mess of inconsistency and unfairness. The people who do know are the ones now coping with the system, for whom any reform will almost certainly come too late.
Earlier this year, my friend Tim Bale of Queen Mary University wrote movingly about his experience of supporting both his parents in residential care, something that at one point was costing £17,000 a month. A significant number of people contacted him to tell him that he was mistaken or even lying: they simply couldn’t believe that such figures were possible. Things can’t be that bad, can they?
Even when the facts of care in its current dismal state are available, most people who aren’t in direct contact with the system don’t want to know. We all prefer the comfort of optimism bias, believing that it will never happen to us or those we love.
But it very likely will. The more people realise that what awaits them and their families is a broken care system, the more that apparently unthinkable options like taxing property wealth will come to be seen as the least bad choice.
