Don’t nationalise care for the elderly

Labour want to nationalise care for the elderly. They think it would be their latest big idea, another large spending pledge which they hope will win them votes. Even they have recognised that in this climate people will ask “How is it going to be paid for?” That led them into the trap of the unpopular death tax, a tax on the estates of those who die leaving money to others. As a result last night they started to peddle back from it, and will instead go into the election offering a review of how to pay for this latest expensive nationalisation.

Let me explain the reality of the situation. Against the current bleak background for public spending there is no money to do as Labour wishes.

What is the alleged problem with current policy? The issue is that prudent pensioners who need to move into a care home for their final months have to use up their savings or sell their home to pay the bills of the care home. Their children often complain, believing that it should be part of the NHS service to provide the care home place free. They would like the money and the property to survive in the pensioner’s ownership, so it can be passed on to the children on death. For many years I have had to explain politely but firmly to constituents under Labour and Conservative governments that is not our system.

Our system does provide free care home provision for any pensioner who needs a place and has no savings or property of their own. It provides a free care home place for an elderly person with a home, if their husband or wife is also still alive and needs their own home to live in. The only elderly person that has to sell their former home is the one who was living on their own and has moved into the care home.

Our system also provides free health care for all who need it, including residents of care homes. The issue is who pays for the meals and the accommodaiton. Anyone continuing to live in their own home, whatever their age, has to pay for their meals and housing. The same regime applies to those living in care homes, if they have some money.

When the country is nearly bankrupt it is foolish to suggest that taxpayers need to take responsibility for paying for all care home bills, however much money the elderly person in the care home may have. The person in the care home does not need their former house, as they now live in the care home.

Children of elderly parents who have money themselves can always pay the bills for their elderly relative in order to inherit the property, if they do not wish it to be sold prior to the relative’s death. It is possible to take out insurance against the need to be in a care home. The good news is most people do not need to end their life in such a home, so insurance is affordable.

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41 Comments

  1. no one
    Posted March 30, 2010 at 9:39 am | Permalink

    Re "It provides a free care home place for an elderly person with a home, if their husband or wife is also still alive and needs their own home to live in." you sure? dont think thats the way its working in practise in many parts of the country

  2. Nick
    Posted March 30, 2010 at 9:43 am | Permalink

    For many years I have had to explain politely but firmly to constituents under Labour and Conservative governments that is not our system.

    No. The system is that you pay the insurance fee (National Insurance) and when it comes to making a claim, the government reneges on the deal.

    If a private insurer did that the government would shut it down.

    The reason why the government is in this position is that you've spent the money. All of it. Instead of investing the required proportion of NI in a fund to provide for care home bills you spent it.

    Ponzi scheme anyone?

    • StevenL
      Posted March 30, 2010 at 6:40 pm | Permalink

      "If a private insurer did that the government would shut it down."

      Your faith in financial regulators is quite touching.

      • Nick
        Posted March 30, 2010 at 8:59 pm | Permalink

        In part I agree.

        However, lets take one regulatory disaster – Equitable Life. People have lost what was promised, but they still have something.

        However, when it comes to the government, there are no assets.

        Which would you rather have? Nothing or something

        Nick

  3. Nick
    Posted March 30, 2010 at 9:44 am | Permalink

    The good news is most people do not need to end their life in such a home, so insurance is affordable.

    You're having a laugh.

    1. The government can't afford it.
    2. People can afford it.

    All said without a trace of irony.

    People can't afford it because they are being taxed to the hilt.

    Nick

  4. alan jutson
    Posted March 30, 2010 at 9:47 am | Permalink

    John

    If only your argument were that simple.

    If only residential accomodation and meals only costs were the reality of the real charges in a Care Home for those who need them.

    If only the total care package which you presently get at home and is paid for under the various Home Care schemes, was at the same rate, in the same situation, for the same condition, in a Care Home.

    If only Social Services/NHS treated those in a Care Home, with the same criteria as those living at home and paid for that treatment.

    The reality is very, very different from what you outline, the added complication is Council run and funded Care Homes against Private ones.

    Different Primary Health care areas with different criteria/rules.
    Different Councils with different policies.
    Different standards of care.
    Different standards of accomodation.

    You over simplify your argument, the system simply does not work as you state.

    Speaking from someone who had a family member in a Care Home (a very good one) for over 4 years, and who had to contest 4 medical assessments before getting the correct treatment and care.

  5. wonderfulforhisage
    Posted March 30, 2010 at 10:29 am | Permalink

    Meanwhile, north of the border…………

    I'm with you on this one Mr R. but can't agree with one law for the Scots and another for the English taxpayers who fund the Scotish care system.

    • david b
      Posted March 30, 2010 at 10:48 pm | Permalink

      That is a cheap jibe. There is a settled method of funding the Scottish parliament. They get a block grant. They can spend it in any way they see fit. They choose to spend it in different ways to the way the state spends money in England. If you do not agree with how money is spent in England vote in people who want to spend it how you would wish.

      As to the "subsidy" from English taxpayers to Scotland, there is much evidence that this has no basis in fact. All three of the parties standing in England who will take perhaps 2/3 of the votes soon in England between them are unionist. They support the present constitutional arrangement. Many people in Scotland – alas not a majority yet – would happily let English taxpayers keep their money, and all the other illusory benefits perceived to go with the union.

    • Lithgae Dave
      Posted March 31, 2010 at 10:35 am | Permalink

      This is wrong. The free personal care in Scotland covers help with dressing, washing, food preparation etc. Accommodation costs of care homes have to be paid for by the residents themselves if there savings are greater than around £23,000 – the same as in England. And yes, people in Scotland have to sell there homes to pay for it as well. It's hard to get accurate figures but between 4,000 and 8,000 Scots have to sell there homes a year. I agree with JR though, this cost should not be paid for by the state.

  6. former tory
    Posted March 30, 2010 at 10:37 am | Permalink

    Well said again, John. Why should a single pensioner moving into a care home, NOT sell their house to finance the move? It is not the role of the state to provide inheritance to the younger generation.

    • Yudansha
      Posted March 30, 2010 at 3:25 pm | Permalink

      Nor is it the role of pensioner, who has worked hard all his life, to carry the welfare dependant in the bed next to him.

      (I have no inheritance coming my way for your information)

      • Henry
        Posted March 30, 2010 at 9:36 pm | Permalink

        My brother-in-law is in a home for demetia patients. It costs just over £708 per week (about £36,800 per year). Fortunately, he worked for the same firm for 50 years (including National Service), from tea-boy to director. His company pension and state pension, after tax, almost covers the overall costs. My sister has to provide the rest from their capital. In the next room, there is a person of similar state of mind, who is there on the behest of the local council. Their cost is under £400 per week. Same meals, treatment, staff, amenities, etc. Fair? I don't think so!

  7. Antisthenes
    Posted March 30, 2010 at 10:49 am | Permalink

    Most people do not want to that which is fair and reasonable they want that which satisfies their greed. The country is now geared to the needs of the greedy it should be geared to the opposite encouraging responsibility and self reliance.

    Your point about insurance is of course valid not just for care homes but equally for Health, education , pensions etc. Once the state started taking responsibility for these things then the greedy were encouraged and they multiplied and responsibility and self reliance became in short supply the inevitable result of course is economic and social ruin.

    Conservative values as I understand them to mean is to promote responsibility and self reliance. If the Conservatives win the election they need to make the promotion of responsibility and self reliance the bed rock of all their policies.

  8. Stewart Knight
    Posted March 30, 2010 at 10:59 am | Permalink

    You and Labour are wrong, and woefully so.

    They are now planning on introducing a new tax to replace the old one, but without getting rid of the old one; NI.

  9. Man in a Shed
    Posted March 30, 2010 at 10:59 am | Permalink

    Of course what is also missing from Labour's argument is how this will increase demand as people who care for their own relatives descide to abandon them to the state.

    I suspect also that this proposal will be disproportionately unfair to our Asian communities who look after their own families so well, and shouldn't be asked to pay for everyone.else also.

  10. Kevin Peat
    Posted March 30, 2010 at 11:35 am | Permalink

    'Our system does provide free care home provision for any pensioner who needs a place and has no savings or property of their own.'

    My experience is that work doesn't pay. In covering my bills I've had to make do with 'staycations' and Saturday nights in with a video. But I may as well pee it up the wall.

    This is why I've no fear of redundancy.

    This is why you're going to have trouble with unionised Conservative voters. (BA Stewardesses kicking up ???)

  11. J Mitchell
    Posted March 30, 2010 at 12:01 pm | Permalink

    You save for a rainy day. When does it begin to rain? Why should the hospital porter and dustman and nurse pay tax so that I can inherit my parents' home?

    • Kevin Peat
      Posted March 30, 2010 at 3:20 pm | Permalink

      But hospital porter, dustman and nurse ought not to expect householders to subsidise their care from the sale of their homes.

      It seems that one of the reasons for the high costs is that Government caps what it is prepared to pay and the care home makes up the shortfall from private residents.

  12. Acorn
    Posted March 30, 2010 at 1:03 pm | Permalink

    Keep in mind that there is a difference between a "care home" and a "nursing home", as far as the state is concerned. There is a limit to what the state will pay. It is different for both homes; is invariably less than the gross fees charged by a home, even if you use the "deferred payment scheme" (charge against property on its eventual sale on death). Hence the "third party top-up" requirement.

    Having gone through the whole gamut of this system, with both my late parents for six years (slow deaths from Alzheimer's and cancer); the system is not quite as simple and straightforward as JR suggests.

  13. Neil Craig
    Posted March 30, 2010 at 1:33 pm | Permalink

    I suspect that automation can & indeed must, develop a much greater role in both care of the elderly & nursery care. Certainly experience in Japan, which has an age problem that makes ours look minor, supports that.

    Not only does state control already make both lots of care considerably more expensive (usually hidden by the state sector being more subsidised) but even more importantly for the long term the resistance to change that is inherent in state centralised control would prevent automation or any other reforms.

    My answer to most problems is improved technology. Labour's is government control. Labour's has repeatedly failed. It would be nice if we were to have a government willing to try mine.

  14. Lindsay McDougall
    Posted March 30, 2010 at 2:45 pm | Permalink

    If you really want to save public expenditure on the retired elderly, how about raising the retirement age for men by one year in each parliament until it reaches 70? That would be a 25 year phasing in period, which ought to be more than enough.

    The retirement age for women? I would favour 65, maintaining the current gap, so the increases in the retirement age for women would match those for the men.

    The age gap between couples will probably persist (we all know the formula – older man with resources plus younger woman with fertility results in children that will survive).

    If any of you think that this is harsh, consider this. Since WW2 life expectancy has increased by at least 7 years for both sexes but the retirement age has not changed. Are the extra years good quality life (raise retirement age) or poor quality life (get the medical profession under control)? We can't have it both ways.

    Talking of life expectancy, I once read that medical advances are so rapid that a female chile born in 2000 can expect to live to age 100. Can anybody coroborate this? And what would be the quality of life?

    I refer here to state provision. For arrangements in the private sector, there should be complete freedom.

    • The college tutor
      Posted March 31, 2010 at 9:39 am | Permalink

      Changes in life expectancy are substantially affected by child mortality, which is the main reason life expectancy has increased over the last century. The other major factors have been the declines in death rates from infectious diseases such as TB, and more recently the decline of smoking. Life expectancy varies significantly with income, and rising prosperity accounts for much of the increase. Medical advances such as new cancer drugs have had a much smaller influence.

      It is hard to see life expectancy at birth exceeding 85 years.

      I agree with Mr Redwood, I would much rather make my own allowance and savings for my old age. There needs to be a very basic safety net, but also a reward for financial prudence. I intend to be healthy in my old age, but would much prefer to make my own arrangements.

      I write as a doctor with an interest in public health planning.

      • Lindsay McDougall
        Posted April 1, 2010 at 3:20 am | Permalink

        I too agree with Mr Redwood but I am looking for additional economies. The cash flow situation of this country is absolutely horrendous. It is no time to be investing more in yesterday.

        Infant mortality in 1945 was 40 deaths per 1000 births, now it is 5 deaths per 1000 births. So the post war increase in life expectancy due to the reduction in infant mortality is about 70 x 0.995 / 0.96 years, two and a half years. The rest, as you say, is down to increased prosperity and other factors. I think you implying that the increased life expectancy conditional on reaching 65 for man and 60 for women is good quality life. Excellent, people can work longer.

  15. Kevin Peat
    Posted March 30, 2010 at 3:07 pm | Permalink

    This is what I've read elsewhere:

    Care homes are obliged to take in those without assets by the Government. The Government then puts a cap on the fees which can be charged.

    The care home is then forced to make up the shortfall by charging extra from those with the means to pay. Those – like me – who struggle and go without to remain independent all their lives.

    If you assist me with emigration I'll promise to stop pestering you on your blog !

  16. John Bowman
    Posted March 30, 2010 at 4:04 pm | Permalink

    Old Labour's aim was to nationalise industry: New Labour's aim, it is now evident, is to nationalise society and indeed life itself.

    Mrs Thatcher undid the first Old Labour mess… who will undo the current New Labour mess? Nobody comes to mind, which is why the polls are favouring a hung Parliament.

    • james harries
      Posted March 31, 2010 at 12:35 am | Permalink

      Oh death, where is thy sting?
      A: "In the small print."

  17. Phil C
    Posted March 30, 2010 at 4:13 pm | Permalink

    You can't blame the populace for thinking they can have their cake and eat it, John. They have been brought up on a cradle to grave welfare state where the government takes taxes and National Insurance and provides lifelong healthcare, education of children and social care of the elderly and dependent adults. An unaffordable promise to which successive Chancellors have responded with miscellaneous charges for drugs, accommodation and means-testing. And quite in denial of where it will lead in the long term by making savings, and provision for the future and for family dependants, an act of folly.

    You are of course right that nationalising elderly social care is a big error of judgement, as was Bevan's decision to nationalise the health service against Beveridge's recommendations. But he was in a tight spot at the end of the war, and it seemed like a good idea at the time. It is clearly not a good idea to repeat the mistake.

    Instead, there should be compulsory self insurance, its terms properly regulated to prevent insurers cherry picking or levying charges or premiums which end up at pay-as-you-go levels. (Obama has got the right idea). With tax allowances to make it affordable and portable Treasury contributions, together with protection from tax grabs by unscrupulous Chancellors, this would lead to services at competitive prices, efficiently and responsively delivered, with low taxation. A much better idea than a tax funded NES.

  18. Ian Jones
    Posted March 30, 2010 at 4:21 pm | Permalink

    So your recommendation is to sell your house at the age of 60, spend all your cash on lavish holidays then let the state pick up the bill?

    How about bringing in individual NI funds so the money I pay goes towards what I use rather than funding layabouts.

  19. gac
    Posted March 30, 2010 at 5:32 pm | Permalink

    The system in Scotland is much more elderly friendly than here in England. The support my Mother got in her 80's and 90's was brilliant!

    But then again here in England (is it still racist to refer to oneself as English?) when Labour is in power we are ruled by the Scottish Mafia aided and abetted by the free thinkers at the BBC.

    I do not think that ConCenOffice and the focus groups have worked this out yet!

    The members of the shadow front bench are still being put up like lambs for slaughter to Paxman et al; Tories are badgered to explain where the cash will come from whilst Labour are give an easy ride; the explanations as to where the money will come from are treated with loud derision yet Labour's 'it will all be in the Autumn statement/comprehensive review' is given a free passage. This what is registering with the 'common folk'.

    And the central office focus group has yet to work out why the gap is not massive in the polls – it would be funny if it were not so serious for the UK's future!

  20. Pauper
    Posted March 30, 2010 at 5:51 pm | Permalink

    Looks like another policy for rewarding the feckless and shafting the prudent. Whatever happened to Moral Hazard? Gone the same way as Moral Compass, I suppose.

    My mother is a senile dement in a care home. She hardly knows her own name any more. But when I told her she had to pay for herself (£2500 a month) and sell her home to do it, she said, "That's fine. I've never been a sponger."

    There's the wartime generation for you.

  21. StevenL
    Posted March 30, 2010 at 6:50 pm | Permalink

    "Children of elderly parents who have money themselves can always pay the bills for their elderly relative in order to inherit the property" (JR)

    Or here's a novel suggestion – they move their elderley parent in with them and look after them.

    This is the fundamental issue and it is one of culture, not money.

    • Ian
      Posted April 7, 2010 at 6:07 pm | Permalink

      Well said. What kind of a society are we living in when children seem to think nothing of packing their parents off to die in some care home and then complain that their parents are having to pay for the cost of it? Surely children should look after their own parents wherever possible, funding it from their parents's assets if necessary, and regard sending them off to a care home at the expense of the state as a wretched fate to be avoided at all costs. And for those with no children, so what if they have to sell their house to pay for their care?

  22. JimF
    Posted March 30, 2010 at 8:21 pm | Permalink

    We make things much more difficult than they should be. We have legions of 18+ young adults with no job and no money. We have legions of 75+ adults with money but no care.
    It's not rocket science is it?

  23. Stewart Knight
    Posted March 30, 2010 at 8:23 pm | Permalink

    What is all this puerile nonsense, used by politicians and now spouted by the public like here in these comments, about culture and why should people pay for others to inherit etc. etc. etc.

    Nobody has to pay for others care, and when someone is not dependant on the state they should not have to pay above and beyond for their care, and for the simple fact that, wait for it and take a deep breath, THEY HAVE ALREADY PAID.

    People who have worked during their lifetime and accumulated some wealth, and property, did that mainly while paying tax and NATIONAL INSURANCE. That NI has accumulated to pay their care when elderly and this crass, divisive and vindictive rubbish about charging again for that care is purely because the politicians have wasted and spent the money that should have accumulated.

    For those who don't know what NI actually is, and there seems to be many, this is what Wiki says it is:

    National Insurance (NI) in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits.[1] It was first introduced by the National Insurance Act 1911

    So all those pensioners that this and any other Government want to levy a charge on for their elderly care, and you John by the sound of it, are actually paying through their lives and now again. Labour has raised the NI threshold so the care provided should be even better shouldn't it?

    Stop spouting rubbish about how the low paid are paying for the rich to be able to leave an inheritance because it is not the case; you should be castigating the spongers who have not paid NI all their lives and have nothing, not those who have paid and accumulated a little to leave after they've gone.

  24. Alan Wheatley
    Posted March 30, 2010 at 8:24 pm | Permalink

    Every one I know would like to live out their life in their own home and with sufficient good health to be reasonably independent. Debilitating illness can make this unachievable.

    It seems to me very negative to simply assume more and more people will require more and more help at the end of their lives, especially as this is not what they want.

    I think more research money should be spent on counteracting debilitating illness and proportionally less on those which kills us. Then the cost of care for the elderly by the state would be affordable. Else, taken to its logical extreme, we could end up with most of the population able to cheat death but unable to live a worthwhile life.

  25. Mark
    Posted March 30, 2010 at 8:35 pm | Permalink

    Surely there are two underlying and separate issues here. One is what care is needed and where/how is it best delivered taking account of cost and preferences of those cared for and their relatives, and the other issue is how should appropriate care be funded. If we don't have agreement on part one, it's hard to specify how to deal with part two.

  26. Martin S
    Posted March 30, 2010 at 10:25 pm | Permalink

    Off topic, but a couple of hours ago I had my first ever visit from Conservative canvassers: deeply unimpressive; I explained that since I first voted in 1979 I had always voted Conservative, but that this time I could raise absolutely no enthusiasm for a bunch of spoilt, morally and intellectually corrupt public schoolboys who shared the same basic philosophy as Labour and the LibDems: a technologically advanced hybrid of fascism and socialism which , at best, is indifferent to, and, at worst, hates England, the English people, English culture, English history, the English countryside.

    All they could do was talk about how bad Labour was, even after I explained that I loathed Gordon and the rest of them. Tossers.

  27. david b
    Posted March 30, 2010 at 11:01 pm | Permalink

    Really we need to stop tinkering with the piecemeal crappy system which has evolved here. We need to start again. If radical action was taken to redesign the system eventually it will work, but it is not going to work the way it is constructed now. Welfare Ponzi schemes are really what is bankrupting us.

    We should phase in a Singapore type system. We set up personal accounts into which we pay and perhaps our employers, building up a fund that is used to provide for welfare needs. We need to end NI eventually and replace it with privately administered systems. The Ponzi scheme dies with the last pensioner and the state is out of (mal)administering the welfare system.

    If you want to redistribute wealth then you can contribute to minima in "personal welfare accounts" by taxing the rest of the population, but the prudent people who save up over their lives will not be subsidising the feckless which is so clearly unfair.

  28. Monty
    Posted March 31, 2010 at 1:19 am | Permalink

    In regard to caring for my own elderly relatives, I was fortunate in that none of them suffered from the types of illnesses (eg paralysis and difficulty swallowing, or dementia) that would have required expert care, beyond my abilities.

    But I think this split between medical and personal care, is rather false. All patients, of any age, in our NHS hospitals receive both medical and personal care, free at the point of delivery. They are fed and accomodated, and provided with toilets, baths and showers which are cleaned by the staff. Clean bed linen is also provided, as is space heating, lighting, hot water. You don't get presented with an invoice for all this when you leave one of our hospitals.

    So why does an elderly patient in a nursing home have to pay extra for these services, and why are the charges so high? Is it because the service providers know they have a captive market, and many of their patients have assets ripe for the picking?

  29. Adrian Peirson
    Posted March 31, 2010 at 3:07 am | Permalink

    I disagree on this one, we either have an NHS or we don't, if we do and these elderly residents have paid into the system then they should get it free, if not, then why has Westminster been stealing their taxes all of their working lives.
    People should be free to pass on wealth to their children, the only reason the system is engineered so that this cannot happen is because Westminster is now run by Communists who do not believe in individual liberty.
    We give £20 Billion in aid each year, another £3 B for wars in the ME, at least £20 B to the EU and spend at least £100 Billion having people in Quangos shuffling bits of paper instead of doing something useful for society like building cars, or ships, or planting and harvesting crops.
    We have let these old people down, Westminster has stolen their wealth and now renaged on the agreement to look after them.
    Most of these costs for Private care homes are because the directors are driving around in Daimlers.

    How we abuse and let down our elderly is a disgrace.

  30. BillyB
    Posted March 31, 2010 at 12:57 pm | Permalink

    Perhaps politicians should come clean and admit that the original ideals of National Insurance have been defrauded by both main parties, and merge NI with income tax.

    There is no real insurance and there is no fund is there?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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