Government in ‘utter retreat’ over social care plans, say Tories

Andrew Lansley, the shadow health secretary, says white paper being published today will be ‘a train crash’ because ministers have changed tack

The Conservatives today claimed that the government was in “utter retreat” after it emerged that ministers have ruled out introducing a death tax in the next parliament to pay for social care for the elderly.

Andrew Lansley, the shadow health secretary, said that a white paper being published by the government later this morning would be “a train crash” because ministers have changed tack.
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But Andy Burnham, the health secretary, claimed that the government had never actually proposed a death tax. Burnham said the Tories launched a poster campaign against the idea on the basis of a “speculative” press story.

Today’s white paper will set out “the route to a national care service”. It will propose new laws to cap the cost of residential costs after two years in a home.

The cap will be funded by freezing inheritance tax thresholds for the lifetime of the parliament, increasing the statutory retirement age of 65 and by greater efficiencies in the care system. The white paper will also set in place the building blocks for a national care service, including its minimum national standards and entitlements.

Launching the white paper, Burnham will set out his preferred plans on how to fund the final stage of a national care service, but legislation to introduce the changes will not be proposed until the next parliament, in a bid to take of the sting out of the issue ahead of the election.

Alistair Darling confirmed during the Channel 4 TV debate last night that the death tax was being deferred, prompting the Tories to claim that the government’s plans were mired in confusion.

Burnham in an article in the Guardian suggests that his preferred option remains a compulsory levy of some form, but says further work is needed to create a political consensus, something he will argue can be reached by creating an independent commission.

The health secretary will set out concessions on Gordon Brown’s proposals to introduce free care at home for the 280,000 most seriously ill and disabled people. In a cross-party revolt, peers a fortnight ago imposed a new timetable for the introduction of the measure in the personal care at home bill. The peers postponed the start date for the scheme from this October to April 2011.

Ministers are expected to propose a compromise on this timetable as long as the basic principle of free care at home for those who are most disabled is accepted by peers before parliament is dissolved ahead of the election.

The proposal that the elderly will pay only the first two years’ cost of residential care is seen as addressing the most damaging aspects of the current system, which often leaves elderly people forced to sell their homes to meet the cost.

Freezing inheritance tax thresholds for the lifetime of the parliament is expected to raise between £400m and £500m by 2014-15, with all the money earmarked for social care. Raising the age at which employers can require someone to retire from 65 to 70, or scrapping it altogether, will raise a further £100m to £200m, on the basis that the longer someone is in work, the greater the income tax they provide.

It is not clear how much the NHS care efficiency improvements, due to be announced today will raise, but they will focus on fresh measures to encourage the elderly to stay in their home. Legislation for the framework national care service, and the funding of the two-year cap on residential care, would be passed by Labour in the next parliament.

Writing in the Guardian ahead of a long awaited white paper, Burnham says: “If we fail to reform the system now, unfairness will only intensify in the years to come.”

He says his proposals for future funding of social care will require “big choices for the country”. But he insists the electorate wants a clash of ideas at the election and inter-party divisions over how to fund social care in the future represent that clash.

He also sticks to the principle of a long-term compulsory additional contribution, saying: “To make the national care service work, everyone will have to make a contribution. Because of this, the costs of covering everyone’s care needs will be reduced.

“This means people of all incomes will get peace of mind in old age and be able to protect everything they have worked for. Like the NHS before it, it will end catastrophic care costs.”

He accepts there are risks in Labour proposing a comprehensive approach, but says now is the time for strong hearts. Burnham’s officials said he would set out choices for how the electorate personally fund their social care, suggesting they would not impose a uniform system. One option is “soft compulsion” where people would be enrolled into a state-run scheme, but retain the right to opt out or top up.

Some in the cabinet also argued that it would be political madness for the government to put forward complex ideas on the future funding of social care only weeks ahead of the election.

But Burnham insists the current system is not sustainable: “We currently have a random dementia tax – where people can see tens or hundreds of thousands of pounds wiped out by the costs of care, the loss of their homes, their savings and every ounce of their financial security.”

Today, in an interview on the Today programme, Lansley said the government was in “utter retreat” over the death tax. “They have ended up not with a white paper but with a train crash,” Lansley said.

Responding to Burnham’s call for a consensus on long-term care, Lansley said: “A consensus requires people to recognise where policy is wrong and more toward something that is sustainable in the long run.”

Lansley said a compulsory system was “unfair” on people who paid for their own care. The Conservatives have proposed allowing people to insure themselves against the possibility of needing to go into a care home by paying an £8,000 voluntary levy.