Care in a cold climate

27 Feb 13
David Lipsey

The government’s response to Dilnot’s care funding proposals might be modest but it is a brave move in the right direction, backed by public and politicians alike

The poor are hit by a veritable tsunami of benefit cuts. Middle-income earners will not get back to where they were in 2008 until 2023, according to a report from the Resolution Foundation. The worst hit of all – in percentage terms at least – are the rich, according to an article in Prospect magazine by Paul Johnson, director of the authoritative Institute for Fiscal Studies. He says the top tenth of the income distribution are losing 7% of their income.

Occupation of Parliament? General strike? Crime wave? A London spring? Not a bit of it. Moan and groan though the British might, the phlegmatic streak is to the fore: keep calm and carry on.

This extraordinary national mood was highlighted when the government announced its response to the Dilnot report on paying for the long-term care of the elderly. I have long-term care scars all over my body. I was publicly excoriated when I wrote the minority report to the 1999 Sutherland Royal Commission, dissenting from the view that social care should (like health care) be ‘free’ ie, taxpayer financed.

Those wounds reopened when, with my colleague Lord Warner, we blocked Gordon Brown’s free-care-at-home election bribe. And I was braced for a repeat performance for welcoming the government’s fairly modest package in response to Dilnot. This institutes a cap of £75,000 on what an individual must pay towards care costs (as against the £25,000–£50,000 recommended by Dilnot) and anyway won’t help anyone until 2020 or so.

I trembled unnecessarily. Andy Burnham, the Labour health spokesman, said it would ‘make the system fairer’ though rightly pointed out we were providing inadequate care services. Michelle Mitchell, the director of Age UK, a pressure group whose predecessors were prominent among the free care claque, called it ‘a brave step towards bringing older people and their families peace of mind’.

The Guardian, a newspaper occasionally inclined to think that the money to fund public spending grows on trees, produced a brilliant supportive leader. Attempts to brand the government’s measure a ‘death tax’ did not really get off the ground, partly because the actual measure – a freeze in inheritance tax thresholds – was so modest. I even began to think my public response to the announcement – ‘better half a loaf than no loaf at all’ – was too grudging.

It may have been a modest measure but for most of the 18 months since Dilnot reported, it seemed certain that his report would join the commodious wastepaper basket of discarded solutions to care. Much of the credit – and, as a Labour peer, it pains me to say this – belongs with the Liberal Democrats. When Nick Clegg lost Lords reform to Tory rebels, he determined to make progress on long-term care a substitute goal and appointed his best man, social care minister Norman Lamb, to deliver it.

It does not pain me to say that Labour’s Liz Kendall brought to the table intellectual mastery of the subject and diplomatic skills. Even George Osborne, the chancellor, who waxed hot and cold, in the end grasped that doing nothing was not an option.

But this is also a case where democratic discussion genuinely improved the outcome. Dilnot’s report was a triumph of evidence-based policy-making, and he worked tirelessly to propagate his recommendations. The great majority of informed opinion, from local councils to private insurers, rallied round his proposals creating an underlying consensus. And, yes, public opinion itself moved.

People may not easily articulate the need for austerity. Since the government has proved incapable of making a coherent case for it, that is not surprising. But they instinctively understand that there is no such thing as public spending, only spending financed by taxes. They came to realise that in today’s circumstances, you can’t have owt for nowt. In a cold climate, that popular maturity is a warming thought.

This article first appeared in the March issue of Public Finance

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