Will the baby boomers win again?

 

           The Report published yestersay into care for the elderly posed the question what is fair between the generations?

           Should the elderly person pay for their care in a Care home, if they have capital available to do so? Or should the rest of society pay for that elderly person’s care, so they can pass on their accumulated wealth to their children? Or should the children of elderly parents in need of care help pay, if they are to inherit the assets that are saved?

            There are several possible answers to this question.

            The answer that successive governments have accepted up to today rests on the proposition that any elderly person who can afford to pay for their care home should do so. Those who cannot afford it will be paid for by the state. If an elderly person no longer can live in their own home, that home is sold so the proceeds can pay the bills for rent and service at the Care home. If the elderly person has no means of their own then the state will provide, just as the state provides benefit and pension assistance for them to live in their own home when still capable.

           Some want to go to a new model, where the provision of accommodation and hotel services is regarded as part of the elderly person’s care package. All the bills would then be paid by taxpayers, leaving the family of the elderly person free to inherit the full value of the elderly person’s former home, and any other assets acquired over their lfietime.

            The Report proposes a mixed answer. The first £35,000 of  residential care costs would be paid for by the elderly person, and any balance paid for by taxpayers. It invites a debate over what sum between £25,000 and £50,000 would be an appropriate level of  commitment from the elderly person.

               The baby boomer generation is sometimes  said to have been the lucky generation. No overseas wars were fought requiring compulsory call up. House prices over most of the baby boomer’s lifetimes boomed. It was the first generation where a majority owned their own home, and where they made good money as a result. It is, of course true that some baby boomers were not so rich or lucky. It is also true that if you need to live in your own home its value does not add to your income or your spending power.

               To many baby boomers it would seem natural and be popular for the state to pick up more of the costs of care  for frail and elderly parents no longer able to look after themselves. The children would then inherit more, which they in turn could pass on to their own children. In their turn baby boomers would benefit from taxpayer assistance if they need nursing home care.

              It is likely to prove a popualr policy. It also poses the question of how should it be paid for? Labour’s so called death tax did not seem a popular way. There will doubtless be other suggestions of which tax or taxes could be raised to pay the bills. What is clear is that someone has to pay for it. The children who inherit may inherit more if we go for the Report’s conclusions, but they will in turn have to pay more tax to meet the state’s bills for this provision.  The popularity of the measure with the potential heirs will be tempered if the tax to pay for it is not popular.

           Mr Dilnot has suggested a National Insurance levy on retired people. That will be unpopular, as it means those who have saved and been prudent will pay yet more tax in retirement than those who have not. The underlying truth is this. The nation cannot get something for nothing. The money has run out and there are limits to how much can be borrowed.

              I would be interested to hear your thoughts on whether this is a good scheme or not.

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101 Comments

  1. Stuart Fairney
    Posted July 5, 2011 at 6:49 am | Permalink

    As, if and when my elderly mother requires residential care, then it is up to me, my siblings and indeed my mother to fund it. If this means we end up receiving nothing as the proceeds of the sale of her house are used to fund the care ~ so be it. Of course, medical needs notwithstanding, she could come and live with one of us.

    The idea the state (ie everyone else) should be on the hook for the costs is anathema ~ just as it is anathema that when two people randomly create a life neither can fund, the state is on the hook for that.

    So whilst I don’t agree with the idea of state funding for elderly care except in extremis, you can see why some people are angry ~ they are raped by the tax authorities to fund others but have the state care concept inconsistently applied leading to their own impoverishment.

    • TimC
      Posted July 5, 2011 at 11:56 am | Permalink

      Indeed. Why on earth should the home not be sold to pay care costs. My mother no longer needed a house to live in so it contributed to her care. I see no reason why a third party should have been taxed to support her.

    • Pete Chown
      Posted July 5, 2011 at 12:04 pm | Permalink

      I agree. Dilnot has come up with a proposal that involves spending other people’s money, which is easy but not exactly fair. This proposal is especially bad for two reasons, though:

      – Welfare spending is supposed to provide a safety net for the poor. This proposal will send money in the opposite direction, from the poor to the middle class.

      – When we are trying to eliminate the deficit, the last thing we need is a new and long term spending commitment.

      Like you, I would probably benefit from this policy if it was implemented, but I still don’t want it. I’m financially secure so it would be silly to pay me welfare.

  2. R Jellicoe
    Posted July 5, 2011 at 7:00 am | Permalink

    This is Darwinism in reverse.

    • lifelogic
      Posted July 5, 2011 at 11:48 am | Permalink

      That is what socialism so often becomes, regardless of whether it comes from the Cameron, Labour, Liberals or the EU. Transfers of wealth from the responsible to the feckless & irresponsible. Thus encouraging the former and discouraging the later. Slowly killing responsible behaviour and wealth creation and teaching people the only way to get on under socialism.

      Having said that, Darwinian evolution is hardly without its cuckoos, parasites, free riders and predators indeed you could say nearly all are that. It is just that they do not usually have a government tax and benefit system to encourage such behaviour.

      • uanime5
        Posted July 5, 2011 at 7:55 pm | Permalink

        Care to explain why this hasn’t happened in every socialist country in the EU? Also if capitalism is so good why is the USA so bad?

      • Bazman
        Posted July 5, 2011 at 8:14 pm | Permalink

        Darwinism and inheritance are at great play in this debate as its interesting to note how anyone of average income will be able to afford a house without any inherited wealth? Darwin’s rules will also be in effect for stupidity and will also be selecting the best risk takers and balance skills when desperate for subsistence. I do see your point of transfer of the wealth from the responsible to the feckless and irresponsible in regard to your criticism of the working height regulations as what you mean is that employees should risk their necks on ladders and companies should not have to pay for scaffolding Thus encouraging the former and discouraging the later. Slowly killing responsible behaviour and wealth creation and teaching people the only way to get on under socialism. (For the rich/fittest survive) In this race to the bottom a number of workers will find themselves at the bottom faster and harder than they thought possible joining the feckless and irresponsible, but with greater injury and risk of death.

        • lifelogic
          Posted July 10, 2011 at 7:56 pm | Permalink

          Which is more dangerous one man up a ladder or several men driving and delivering and erecting and removing scaffolding poles and one man up it.

          Probably the latter as fewer man hours involved in the former and accidents are always possible at any time driving erecting dismantling . Also the later cost more and so the former leaves less money available for other safety measures or other good uses. The richer people are the fewer risk they need to take as history shows clearly.

          • rose
            Posted July 11, 2011 at 12:20 am | Permalink

            A good example of this, Lifelogic, is the electric light arrangement under the EU tyranny over bathrooms: however big the room, and however high the ceiling, you may no longer have an ordinary light fitting hanging down whose one bulb you can easily change. You must have something heavy, screwed tightly to the ceiling. So the suppliers tell you: get someone in to change the light bulbs when they go. I’m not going to do that because they would obviously need scaffolding erected. So I do it myself, and very dangerous it is, balancing on the top of the ladder trying to unscrew a heavy glass and metal fitting from the ceiling without dropping it all on my head or falling off the ladder. Then I have to go down the ladder to put the fitting on the floor. Then back up again to to fit the 3 bulbs, one by one. 3, not 1, because the EU’s Elves say they must be of a very low wattage, and of course the long lasting ones don’t fit. Then I have to go down the ladder again to pick up the heavy fitting, and then back up the ladder, to screw it back on to the high ceiling, again without dropping it all on my head or falling off. This is so I don’t lie in the bath over in one corner of the big high ceilinged room and switch on the light in the other corner at the same time. That might of course be what a German woman would do in a tiny modern flat in Dusseldorf with a very low ceiling, and the bath facing the other way, but I’m not physically capable of that here. My arms are just too short.

  3. Oldrightie
    Posted July 5, 2011 at 7:03 am | Permalink

    What is forgotten is that what little wealth is left to this Nation, much of it was carved from the wreckage of two world wars. The “baby boomers” created wealth and successive governments, mainly Labour but also Conservative, have squandered it. A perfect example of this profligacy is the destruction of private pensions which at one time were sufficient to fund the dotage of millions but no longer. In the meantime we quibble about the new proposals having a price tag of circa 1.5 billion. Stack that against the cost of Iraq, Afghanistan and now Libya and weep.
    Care for the elderly should rest with relatives and families with state incentive to bring this about. Where a legacy might be available then those likely to benefit should be prepared to contribute, at some point. As for the feckless, those who have contributed little to their future and many with dubious entitlement to State benefits should expect a less than comfortable reality, in their old age. Harsh yes, reality, yes.

  4. Sue
    Posted July 5, 2011 at 7:14 am | Permalink

    The baby boomers were also the first generation that “worked, paid taxes and NI” all their lives. A lifetime of paying into an “insurance scheme” which was supposed to pay for their health services and pensions. Many also paid into private schemes. Both these “pots” have been plundered by subsequent governments and now they don’t want to pay up!

    That’s hardly fair, but from my point of view….. traditionally, children take on the care of their parents. This still happens in many European countries.

    I think that if the “inheritors” of the family estates are willing to take on the care and/or cost of their “parents”, they should inherit the estate. If they are willing to stick their parents into a state funded euthanasing, concentration death-camp, they should forfeit that right.

    • APL
      Posted July 5, 2011 at 9:48 am | Permalink

      JR: “Or should the rest of society pay for that elderly person’s care, ”

      Oh silly me, I thought it was all to be paid for out of the National Insurance fund.

      Remind us all, how much is actually in the National Insurance fund?

      Off topic but very topical:

      Nothing to say about the job losses at the British engineering firm Bombardier so that Germans can keep their jobs?

      Could you at the very least explain how it is value for money if British tax receipts are used to support German tax revenues?

  5. Mike Stallard
    Posted July 5, 2011 at 7:21 am | Permalink

    Today is my 72nd birthday. So I am in the firing line.

    My dear little country is broke.
    B – R – O – K – E.

    If I cannot afford to look after myself when I finally become even more decrepit, then I deserve to shuffle off this mortal coil ASAP.

    Noses out of trough please: it is empty.

    • backofanenvelope
      Posted July 5, 2011 at 9:19 am | Permalink

      As usual Mr Stallard, I agree with you. I have just reached free TV Licence age. There are a couple of useful suggestions in the Telegraph today – bin free travel, TV licence and Winter Fuel Allowance. Best of all – take the money out of the international aid budget.

    • Electro-Kevin
      Posted July 5, 2011 at 12:04 pm | Permalink

      Happy Birthday, Mike.

      One of the most endearing posts I’ve read in a long while.

      Kevin

    • Robert K
      Posted July 5, 2011 at 1:55 pm | Permalink

      Best wishes for a happy birthday! No sign of decrepitude in your post 🙂

    • sm
      Posted July 5, 2011 at 11:28 pm | Permalink

      Happy Birthday, Please continue to contribute.

  6. Peter Richmond
    Posted July 5, 2011 at 7:22 am | Permalink

    It does seem odd when we are seeking to reduce taxation, reduce the size of the state and more importantly encourage people to be more self reliant, that we are considering proposals that will lead to higher taxes and a greater dependence on the state. Perhaps there is a fair reason to support some ‘older’ people who have lived through a different age but surely we should be moving to a position where the majority are not dependent on state support in this way. The government ought to look in more detail at the nature of available care and its affordability, encouraging innovation within what seems to be a rather inadequate industry whether it be in the public or private sector. This rather than a rush to tax us all even more would be a better way forward.

  7. Techno
    Posted July 5, 2011 at 7:30 am | Permalink

    I will never own my own home due to being permanently priced out of the housing market.

    But I will be have to pay more tax in order to pay for older people who won’t sell their home to pay for their own care.

    This country is a joke now. I am disgusted.

  8. Bryan
    Posted July 5, 2011 at 7:48 am | Permalink

    The scheme has merits and I hope the Treasury does not ‘squash’ it on the grounds of cost.

    Scotland treats its elderly much better as I know from personal family experience.

    We continue to throw overseas aid at despots and countries which do not need it – presumably because it makes our (some) politicians look and/or feel good. We continued to bail out failing countries because of our membership of the European Project. We continue to fight unwinnable wars because there is no exit strategy. All paid for by borrowing – loading up the future for our children.

    It surely is now time to spend the maximum possible + to look after out own?

    Nobody else will!

    • Winston Smith
      Posted July 5, 2011 at 10:41 am | Permalink

      Scotland provides State care paid for by English taxpayers. Yet another example where we (the English) are shafted.

    • Stephen Gash
      Posted July 5, 2011 at 12:40 pm | Permalink

      Really? There is a report in Today’s Scotsman that free care for the elderly may be stopped.

      It could well be there may be many salutatory returns from cloud MacCuckoo land over the next few months.

      • Stephen Gash
        Posted July 5, 2011 at 12:42 pm | Permalink

        Salutary I meant.

  9. Electro-Kevin
    Posted July 5, 2011 at 7:52 am | Permalink

    The unfairness on those who provide for themselves being forced to shell out when the person in the bed next to them has blown it all or not worked at all. Care home fees are so expensive because residents have to subsidise those less well off than themselves.

    This is recurrent through British society. It starts at school when my boys kept asking me why it was the bad kids who got all the treats.

    We cannot keep going by supporting losers and penalising winners.

    The Big Society should encompass children doing the right thing by their elderly parents. We also need to evaluate the value of keeping people alive for the sake of it just because the medicine can.

    • Bob
      Posted July 5, 2011 at 9:06 am | Permalink

      Hear hear!

      • Electro-Kevin
        Posted July 5, 2011 at 12:11 pm | Permalink

        I intend to treat my daughter in-laws well. One day they could be wiping my arse.

        Truthfully. Who wants to get to that state ? Shuffling around a miserable ‘care’ home bewildered and dribbling, in soiled pants, whilst your equally decrepit mate tries to bang out Human League hits on a knackered old piano.

        :((

        • alan jutson
          Posted July 6, 2011 at 8:32 am | Permalink

          Elecro-Kevin

          Yes, one day they may get to pick your nursing home as well.

    • Andy
      Posted July 5, 2011 at 1:40 pm | Permalink

      This.

  10. Martyn
    Posted July 5, 2011 at 8:00 am | Permalink

    From each according to their means, to each according to their needs, surely?

    • Simon
      Posted July 5, 2011 at 8:58 am | Permalink

      Martyn ,

      For that to work would surely require the state to take according to people means throughout their lifetime rather than waiting till they are nearing the end .

      Compulsion to save is a better idea than what we’ve got at the moment but how on earth would we get to that situation from where we are now ?

      (with almost everything having become overpriced leaving people with no discretionary income . Especially houses prices )

      We need some sort of compulsion to save otherwise even those who could save will just go and blow it all and throw themselves at the mercy of the state .

      • Mick Anderson
        Posted July 5, 2011 at 9:49 am | Permalink

        Simon,

        Surely the payment of NI is effectively the compulsion to save for medical and old age care.

        The fact that Government just slings the money into the same pot as everything else is the (standard) betrayal from which all these problems arise. If NI contributions were ring-fenced to pay for their original targeted intention, this debate would not be taking place.

        As a result, I have to pay NI, then save as well to allow for the fact that the Government has effectively misappropriated the money it demands from me. Why should I pay twice for the same thing?

      • Cliff. Wokingham.
        Posted July 5, 2011 at 10:13 am | Permalink

        There is already a compulsion to save; it is called National Insurance. This wizzard wheeze was sold to the country as an insurance payment that would provide us all with care and a pension in our old age sadly, the system is a giant ponzi scheme which would be illegal for a private company to provide based on the business model HMG uses.

        Whether it is right or wrong to force people to pay extra for something they thought they had already paid in for all their lives or to make people work longer and for less pension is a debate that sadly is needed due to feckless successive governments, but it is not the people’s fault, we have all acted in good faith, it is the governments of all political colours that have let us down and because of Labour’s raid on private pension funds, many that thought they had done the “right thing” and tried to take care of themselves now find they have a massive shortfall in their expected retirement income.

        There is more to life than working until you drop, especially if you’re in a less than attractive job and most people that have lives have had more than enough of “the world of work” once they’re in their sixties.

        We have all paid in for care and pensions in good faith and expect the government to honour their commitments; I am really angry at the way the government have used clever media stories to attack pensioners and disabled people just to convince the unsophisticated and generally uneducated British public that pensioners and disabled people are being subsidised by Daily Mail readers; we have all paid in over a lifetime, enduring pretty hard conditions much of the time and in my experience, many of these people that are “keeping me” don’t know they’re born. The government are dividing the nation by setting one group against the other because a divided nation is easier to bully.

        It has been said that a nation can be judged by how well it takes care of its elderly and disabled citizens well, using that criteria, it sounds as if we are going down hill.

        When the economy takes off again, if it ever does, the government of the day MUST start to build up a fund from surpluses that will enable the government of the day to fully fund pensions and care for the elderly and infirm and it must be protected so that a future PM cannot sell of that reserve to fund political projects.

        John, just out of interest, would the money we pay to the EUSSR, foreign aid and silly wars fully fund our nation’s pensions and care bills? If so, don’t you think that the British government need to get their priorities straight and remember who they are supposed to be working for?

        Reply: Yes, the sums you identify if saved in their entirety would buy a lot of social care, though they would not cover all pension costs as well I fear.

        • Cliff. Wokingham.
          Posted July 5, 2011 at 10:18 am | Permalink

          Sorry John….Almost forgot;
          A couple of weeks or so ago, a contributor raised a question regarding EUSSR pensions for former “servants” of the institution that were bound, on pain of loosing the said pension, if they act in a way to the detriment of the EUSSR by say criticising the project in a negative way or voting against any provision that may help or give more power to the EUSSR…..How is you investigation going; have you an update for us?

          Reply: I can’t stand up that claim

          • BobE
            Posted July 5, 2011 at 4:27 pm | Permalink

            John, do you mean that it isn’t true? Their pensions do not depend on supporting the EUSSR project? Your answer is not clear to me.

            Reply: I mean what I say – I have no proof it is true, nor can I deny it.

          • sm
            Posted July 5, 2011 at 11:47 pm | Permalink

            Keep digging please! Sunlight is the best disinfectant.

      • Martyn
        Posted July 5, 2011 at 4:53 pm | Permalink

        I put it clumsily; what I meant was that when the point is reached at which one has to move into sheltered housing or nursing home, those with means should expect to pay for their care, those without means to be supported.
        But Heaven help us all is the government decides to take more money away from us on the basis that we might need to go into care 10, 20 or 30 years in the future. Like NIC and income tax, monies taken will never be seen again or be used for the purposes it was taken from us.

        • BobE
          Posted July 5, 2011 at 8:04 pm | Permalink

          “when the point is reached at which one has to move into sheltered housing or nursing home, those with means should expect to pay for their care, those without means to be supported.”

          So Martyn the best course of action is to ensure that you do not have the means to pay. Then it is provided for you!!.
          Do you know how insane that idea is?.
          So everybody will start moving there assets to relatives before they are 70. There is a 7 year rule. So assume do-lali at 80plus should garantee that you’ll be clear of any ability to pay.

    • lifelogic
      Posted July 5, 2011 at 10:13 am | Permalink

      Yes but that just encourages everyone to spend everything before they get to need help. You need to encourage prudent behaviour by people (in some civilised but firm way) to encourage that they to provide for themselves where ever possible. The current system of tax and benefits does the complete opposite, in so very many ways through all the stages of life, and people respond exactly as you would expect them to.

  11. lifelogic
    Posted July 5, 2011 at 8:12 am | Permalink

    Just halve the size of the state sector, taxes and daft regulations and people will have more than enough left to pay for themselves – though perhaps something needs to force them to do it in some way so the state is not left with all the bills.

    The burden however falls very unevenly – some dying in their own beds will no care ever needed other couples needing 20 years of care between them at a cost of perhaps up to £1M. Some system where the government or insurance or pensions systems could even out the costs would be beneficial. Perhaps offering people a way of paying up front an average cost rather than having all the uncertainty. Also people should be able to pay their Inheritance TAX up front in such a way too – this would raise taxes early and give people peace of mind knowing the liability had been fully dealt will.

    Not that there should be any need of IHT in a well run country with a proper Tory government anyway – it is counter productive and should go with the 50% tax rate and all the rest of the state oppression.

    • uanime5
      Posted July 5, 2011 at 8:04 pm | Permalink

      This idea didn’t work in the USA and it won’t work here. The fairest way is for the state to deal with everyone, not having the state abandon the elderly and require them to purchase care from a private sector company.

      • alan jutson
        Posted July 6, 2011 at 9:43 am | Permalink

        uanimes5

        Have you visited any nursing homes ?.

        They vary very considerably in suitability and cost, not always the most expensive being the best.

        From experience of visiting many nursing homes in the Wokingham area, before having to choose one for my Mother, it opened my eyes to this care industry.

        The better homes tend (not surprisingly) to have the longer waiting lists, bit like schools.

        Eventually found an excellent home, where initial gut feelings proved absolutely correct, and where my Mother received excellent care for the last 4 years of her life.

        The sad fact is that whilst I visited my Mother at least 3-4 days a week, some residents had no visitors throughout the entire year.

  12. A David H
    Posted July 5, 2011 at 8:31 am | Permalink

    Leaving aside the known unknowns and the unknown unknowns, this would appear to be :
    1. An excellent scheme for those of little income or savings/assets.
    2. Largely irrelevant for those of massive income and savings/assets
    3. Maybe a good scheme for those of modest income and assets or maybe another thing to worry about.

    Is the first £35k to be set in stone or CPI or RPI linked or even to be varied at some minister’s whim to £50k, £100k or £150k, when the scheme is found not to cost in? Then we learn that pensioners will be expected to pay NI contributions. How convenient, that will make lumping NI contributions into the income tax bands simpler. Don’t forget NI for the unearned income from residential lettings though.

    Although I feel guilty at being a (so far) fortunate baby boomer, it seems that the present government is so eager to keep spending money it hasn’t got on people it is not paid to represent, it might just as well spend some more on those it is paid to represent.

    Too soon to say whether this is a good scheme or not but don’t forget that there are a lot of grey voters out here.

  13. John carpenter
    Posted July 5, 2011 at 9:07 am | Permalink

    I am a pensioner and therefore have a vested interest in the issue, however I feel that the baby boomers may be the last generation to be more affluent than the previous. I do not believe it fair to bequeath my generations care costs to the next because in thirty/ forty years time the system will probably become unaffordable and collapse. A bit like the free university education my generation had!

    The solution should probably be achieved through some form of compulsory insurance for those able to afford it. The remainder of the cost could probably be raised from the group receiving the benefit by removing the anomaly of exempting pensions from national insurance which is no more than a form of income tax and would rebalance the taxation burden from the working population. It would also overcome the main obstacle to abolition of national insurance and associated administrative savings.

    • Mark
      Posted July 5, 2011 at 12:26 pm | Permalink

      Your generation’s university education was not free. Did you not notice the 50%+ income tax rates levied on much lower levels in real terms than today’s?

  14. Kay Tie
    Posted July 5, 2011 at 9:10 am | Permalink

    “leaving the family of the elderly person free to inherit the full value of the elderly person’s former home,”

    Full value less the half that the state confiscates first.

  15. alan jutson
    Posted July 5, 2011 at 9:11 am | Permalink

    John

    Appreciate that this is not an easy problem to resolve, but perhaps just a few pointers.

    The advance of medical science, drugs and simple age longevity has first of all extended peoples lives in more recent times, beyond what was accepted as perhaps the norm, of many years ago.

    Nursing home care is a fairly recently established business as a solution for the masses. In good Nursing homes, the residents are well looked after, and lives perhaps extended by the sympathetic and proffessional care given, it is of course in the nursing homes interest to look after its residents, as to put it crudely, whilst alive they continue to pay the ongoing rate, when passed, they are not of any further financial value, and in business terms, are a customer lost forever.

    In decades past when families lived closer together, and in some cases mothers did not go out to work, older people were supported in their own, or their childrens homes, as a matter of course by the family.
    Both myself and my wife as children, remember our grandmothers moving into our respective family homes for the last few years of their lives, until they became so ill that family could no longer help, and they were then moved to a local cottage hospital, until they passed away. Indeed my Mother looked after my very ill father at home for many years until she eventually had a breakdown herself and could cope no further. He was then under Doctors orders (to save my Mothers health) admitted at first to the local cottage hospital, until we could get him into a local convent nursing home for ex servicemen, where he passed a few weeks later.

    Whilst I have no figures, it is my guess that in decades past the decline from not being able to look after relatives in house (so called) to their passing, was reasonably short. This clearly is not the case now, when people can survive for decades, when in a very, very poor state of health.

    Years ago it was deemed the natural (and expected) thing to do, to look after family members within the family circle and within the family home where at all possible. This is perhaps not the situation now, due to extended distances between family members (so sharing the burden is not as easy) the neccessity for both husband and wife to have to go to work to pay the bills, and perhaps even the size of the family home not being large enough (more appartments now/houses with smaller rooms, than in decades past).

    Whilst I understand the governments problem on cost, they need to surely be careful that once again, that they do not send out the wrong message, and allow the taxpayer who has done “the right thing”, to fund the feckless who have simply blown any money they had, and not bothered to try and provide.

    The message which certainly does not need to go out, if you have nothing we will look after you for nothing, and your family does not need to bother either.

    I do not pretend to have a solution, indeed I wonder if there is a workable fair financial solution at all, is this is the price we seem to have to pay for the ways of modern living, and family breakdown, or should there be some form of social consience and commitment to look after parents who can no longer look after themselves ?

    Perhaps to encourage home family self help we could have a commitment from the government.
    For every year a person is looked after by the family at home, the government will match that length of time, with care free of charge in a nursing home.

    • uanime5
      Posted July 5, 2011 at 8:18 pm | Permalink

      I agree with most of what you said.

      While there are some people who blow their money there are many who through no fault of their own are poor or have been unemployed for long periods of time. They should not be penalised for their own misfortunes.

      Another factor preventing people looking after their elderly relatives is that the elderly relatives may have a wide social network but live far away from their children. Therefore if the family want to look after an elderly relative then either the relative or their family will have to move, which will be detrimental to them. This is why the elderly prefer care in their own home rather than living with relatives.

      • alan jutson
        Posted July 6, 2011 at 9:51 am | Permalink

        uanime5

        Agree care at home is certainly best, if it can be arranged, a Nursing Home should really be a last resort.

        With regard to your point about removing people from their social life to move in with family, perhaps many miles away. This is true, but I wonder how much social life a person has when they cannot live independently, even with help.

  16. John Bucknall
    Posted July 5, 2011 at 9:26 am | Permalink

    This pure socialism – where the state picks up the tab for feckless lives.

    It corrupts the people. There is NO motivation NO pride in saving for your old age.

    It will end in tears.

    PS – I was very amused to read the Adam Smith institute analysis of the need for a National Food Service to replace the greedy capitalist grocers currently doing this job.

    • uanime5
      Posted July 5, 2011 at 8:20 pm | Permalink

      Given that those who did save had all the money taken by the Government and private companies it seems that saving for your old age was the wrong choice.

      At least with socialism you’re guaranteed a decent standard of care.

  17. Bob
    Posted July 5, 2011 at 9:29 am | Permalink

    “The underlying truth is this. The nation cannot get something for nothing. The money has run out and there are limits to how much can be borrowed.”

    Get something for nothing? are you joking?
    Some of us are paying well in excess of half of their income in various taxes and getting very little in return.
    It’s not the revenue side of the budget you need to keep squeezing – you need to pay more attention to the expense side, and that includes foreign aid and EU costs which prop up inefficient food production, unnecessary bureaucracy and corruption.
    I also suggest you take a look at the sections of society who pay little or nothing into the system while at the same time are a huge burden on the state (the Basildon travellers site being just one example).
    The taxPAYERS have had enough. The squandering must stop!

  18. Richard Marriott
    Posted July 5, 2011 at 9:41 am | Permalink

    A very clear analysis by Mr Redwood – somebody has to pay, so who should pay?

    My own view is veyr clear on this. People make choices in life and the choice for the children of elderly, infirm parents have choices about how best to care for them. If they wish to protect their inheritance, as well as showing love and devotion, then they should arrange to care for their aged parent(s) themselves. If they are too selfish or the pressures of daily life are too great, then their aged parent(s) can fund their own care out any assets they may possess, until they are used up.

    To be honest, I fail to see what is wrong in the above.

    • Conrad Jones (Cheam)
      Posted July 5, 2011 at 8:23 pm | Permalink

      The problem with what you have suggested above is that people who suffer from dementia – despite earlier characteristics of devotion and consideration for their family members; changes completely. They become totally selfish and require immense patience that requires a professional detachment.

      Seeing a family member – who was once a figure of authority and respect; dgenerate into an incontinent vegetable is highly distressing and beyond the capacity of most family members. It may be easier if one care’s less about them. Having the 24 hour a day burden of looking after someone who was once admired and having to tireless repeat answers to questions that are endlessly asked, is a form of torture.

      A Nursing home provides professional staff who know that their shift will end and they can recvoer by going home. When someone is looked after at home, the carers cannot leave at the end of their shift, they are already home. Your comments show a complete lack of understanding and ignorance of what looking after someone with Dementia or Alzheimer’s is actually like.

      Once that person dies, returing to one’s carreer would also be a struggle because who is going to employ someone who’s skills are now hopelessly out of date. That person will then be dependent upon the state for social security payments.

      What is wrong “with the above” in your comments, is that people are punished for being prudent and rewarded for being profligate.

      • alan jutson
        Posted July 6, 2011 at 9:53 am | Permalink

        Conrad

        Agree with your comments.

  19. Caterpillar
    Posted July 5, 2011 at 9:47 am | Permalink

    The initial reports of the scheme appear to have some merit and therefore should be carefully considered. Nevertheless I would not go on along with the, so called, laeder of the opposition’s call for him, the PM and DPM to be involved. This would give me little confidence. I would prefer the repsonsible ministers, shadows and civil servants to undertake the consideration.

    Secondly the responses here to the report raise two larger issue, that the UK (or England?) need to finally get a grip on:

    (i) Do we want a ‘Scandanavian’ model, in which case we need higher taxation BUT this has to come with reliable, high quality provision, less politicking and more trust, or
    (ii) A more self-reliant system (?? the new Canada??) . This would of course come with smaller government, encouragement to save (as we know all MPs along with the BoE/MPC appear to delight in taking from savers) and a clarity on what a net below which people will not fall should realistically be. Rewarding on the basis of need, obviously encourages thouse that are not unfortunate to become so.

    The middle way that the UK has chosen for so long seens to be a minimum and not maximum between the two others. In the two poles above there is no advantage to demonstrate need – either everyone gets everthing or only a safety net is provided. We really need to stop pretending that we don’t have to make this choice.

    • uanime5
      Posted July 5, 2011 at 8:23 pm | Permalink

      Given how bad various Government are when it comes to saving, which is why we have this current problem, high taxes are more viable.

  20. MickC
    Posted July 5, 2011 at 9:55 am | Permalink

    The problem-some people do not have enough money to look after themselves

    The answer-take more money from them.

    This answer was produced by “a respected economist”! At our expense of course-wonder how much he got paid for this.

    It surely is no surprise that this country is totally finished. The Mad Hatters Tea Party would make more sense-and be a hell of a lot more fun.

  21. Richard
    Posted July 5, 2011 at 10:07 am | Permalink

    There is also an increasing effort by the NHS to discharge elderly patients out of a Hospital into the custody of relatives when years ago the patient’s need for 24 hour professional care would have kept them in a geriatric hospital ward.
    Private care of this nature is difficult to find and very expensive and you can be left as the only available carer, as my Aunt was with her mother who was in her 90’s and suffering from dementia.
    None of us know if we will need care when we are older, nor do we know for how long and at what level we we may require it.
    This is why the State should be there to provide this care but we should all be given incentives to take out private insurance to cover this possibility and incentives should also be given to families who are prepared to take on the responsibility.
    Old people who have paid their taxes throughout their lives should be cared for in their time of greatest need by the state.
    We can afford to do this as a nation but we have our priorities all wrong.

  22. Geoff not Hoon
    Posted July 5, 2011 at 10:08 am | Permalink

    Mr.Redwood, Would the proposals as presented thus far mean a couple staying together into care would be charged £70,000 as you see it?
    We look down on Greece and a few others over debt etc. but we could and should have learned a lesson from them many many years ago on how to deal wirh the elderly. Families stay much closer together in their chosen community and father will work over a period to extend his home to accommodate the first daughter to marry. When father (and mother) are no longer able to cope the ‘help’ is there on hand. As a society we seem to think the nanny state will do everything for us. If it does it does it very badly and we have to begin again to take care of ourselves IMHO.

  23. Steve Cox
    Posted July 5, 2011 at 10:18 am | Permalink

    Surely the welfare state is a form of social insurance where the costs are divided across the whole population via taxation according to their ability to pay. Now additional taxes are being proposed which will only apply to this one specific group of people. That strikes me as extremely unfair, and that it is likely to be the thin end of the wedge. If people believe that this proposal is fair, then surely we should reintroduce the Community Charge, based on the number of people living in a household. Why should the hard pressed public have to pay the excessive costs of people who decide, as a personal lifestyle choice, to have a lot of children? The same can be argued of free education and access to the NHS, if we are going to bash the elderly with extra taxes out of the blue, let’s start means testing access to every public service. Is that fair?

    Look, it’s simple. The baby boomers, for all their supposed luck and good fortune, have paid all the taxes and impositions that governments and councils since the war have demanded of them (often accompanied by some rather nasty threats). Since demography is one of the most easily predictable sciences, there is no surprise in the number of people retiring now, we have known about this for decades and the various governments, while spending all our taxes, should have planned for it. They clearly neglected to do so, and have compounded the problem massively by virtually bankrupting the country. It’s all the fault of venal and myopic politicians over the last 30 years, not of the baby boomers. The governments of both parties have caused this problem as they are driven purely by the 5 year electoral timeframe and so did not have the backbone or morality to sort out the problem while there was still time and money in the kitty to do so. On the one hand this Coalition is robbing many of us blind via low interest rates and high inflation, and now they want to steal what little is left via extra taxes. Thanks, but no thanks, John. This stinks to high Heaven.

  24. Percy
    Posted July 5, 2011 at 10:25 am | Permalink

    The baby boomers are the Conservatives very own version of Labour’s feckless benefit scroungers, a nice little client state you can depend on come election time; the only trouble is the rest of us who have to pay the bills have quite frankly had enough.

  25. Roger Thornhill
    Posted July 5, 2011 at 10:36 am | Permalink

    There seems to be a false dichotomy at work here.

    “State pays all or those with assets pay up to a certain amount”.

    At no stage is anyone daring to suggest that if someone pays for care, that the standard of care is any different to someone who has hardly paid in to NI[1] or now does not pay anything.

    There is no pot of gold at the end of the Fabian Rainbow. It was, is and is still set to be all a massive deception. Society has been paying on the never-never and is living in never-never land as a result.

    Elderly care needs to be considered more in terms of defined contribution, not defined benefits[2].

    To switch to a form of voucher might be the way to segue from the unethical treatment of those who contribute. That voucher could also have differing values depending on one’s NI contributions record [3] and a market in care will enable people to trade off as they see fit.

    The argument needs to face up to the outrageous moral hazards currently in the system and in all major “alternatives” that I have seen.

    The quicker people are responsible for themselves, their own or for their causes, the better. The Left scream about socialising bankers debt, but we have had massive socialising of welfare liabilities to an astronomical scale.

    It will take 100 temple treasure hoards to pay that off.

    The Boomer generation exposes the flaw in “democracy”, in which people can vote in largesse for themselves or their pet concepts and “get away with it”. Politicians are as much, if not more, to blame, for they are in a position to explain the realities and stand up for what is right.

    But no, generation after generation have either been ignorant, naïve, cynical or just plain dishonest.

    [1] In this we must recognise the situation of a married partner of someone who did.
    [2] Defined benefit – as with pensions – is a conceit, a fraud, a thef, even.
    [3] All these problems may have been manageable had we had a proper, defined contribution National Insurance scheme, not a National Ponzi Scheme.

  26. Elliot Kane
    Posted July 5, 2011 at 10:45 am | Permalink

    It’s far fairer than the current scheme, which rewards profligacy and steals from thrift. It’s also easy enough to pay for: leaving the EU should very easily cover the costs, and then some.

  27. Simon
    Posted July 5, 2011 at 11:05 am | Permalink

    Key to success is striking a fair balance i.e. encourage folk to save / invest throughout their working lives (thereby helping the economy to prosper), but support the most needy at a very challenging time towards the end of their lives. Is it fair to expect someone who has saved for their retirement to have all their assets seized when they need care, and at the same time allow someone who has spent (and presumably enjoyed) all their cash throughout their lives to receive a free hand out?

  28. Michael Read
    Posted July 5, 2011 at 11:33 am | Permalink

    There’s an assumption here that a care home is a desirable solution.

    My experience of managing my mother’s career through this particular rites de passage fills me with horror.

    Vascular dementia rendered living at home impossible. But I wasn’t prepared for care which had a working assumption that dosing her with the anti-psychotic Respiradone – the so-called liquid cosh – contributed to the quality of her life, rather than the convenience of the care home. I wasn’t prepared too to witness that lack of liquids and eventual dehydration leading to coma and death was regarded as an acceptable care strategy.

    When it’s my turn, I hope I’m compus mentus enough to opt for a Roman departure. Yes, I’d die happy knowing that all my estate went to my kids leaving Southern Cross with a Churchillian salute.

  29. John Bracewell
    Posted July 5, 2011 at 12:18 pm | Permalink

    What happened to the idea of an Insurance policy that was put forward before the 2010 election. I think it was set at an estimated £8000 and provided for those who needed care at a later date. It was said was to be 20 pc of the elderly, so effectively provided £40000 + interest for each person needing care. That seemed a good idea to me and ties in with the National Insurance for the elderly idea in the Dilnot report. How about paying NI for the elderly until £8000 has been put aside per person, then care costs for those who need it can be provided out of that fund. Payment could be per month (£66) over, say, 10 years or as a lump sum (£8000 less a discount) equivalent. This could then create an insurance market for those in work who could build up the £8000 required whilst still working thus easing the burden when retired. To those who say it is too expensive, someone has to pay for the care for the elderly, and to put the burden on the individual rather than the general taxpayer seems equitable to me. Why should dependents inherit money that could have gone to pay for the individual elderly person’s care? There could be a tapered entry system to allow people who are aged 56 years or younger now to make provision for their own care later whilst the current batch of elderly get a reduced rate since the idea has been sprung on them at a late date. This assumes of course that these people did not expect to grow old! and therefore have not made any provision for that eventuality, a symptom of the belief that the ‘state will always take care of us’, which should be challenged. Since these people are the ‘baby boomers’ and I count myself in that band, they have had lots of other advantages as explained by Mr Redwood so this elderly care package should not be too much of an imposition.

  30. rose
    Posted July 5, 2011 at 12:19 pm | Permalink

    Where the baby boomers went wrong was in thinking they hadn’t just abolished poverty and war, but also class, and on the back of that, domestic service, replacing them with feminism, international socialism, and mod cons. Now they find in old age that the chickens have come home to roost. Family and domestic service are still necessary after all, but the liberated women out to work are over-pressed. So the baby boomers’ answer is to nationalise domestic service and call it “Social Care”, to be paid for by the tax payer. (As they wanted with “Childcare”.) It is still badly paid drudgery done by working class women or immigrants, but now it isn’t supervised in situ, and can be a bit of a lottery – like marriage, the family, and the rest of the oppression they tried to abolish. When it comes to nursing homes and hospital wards, it is still a lottery, supervised or not. Some have an angelic ethos, some not, regardless of who is paying.

    Feminism and Socialism didn’t abolish human nature – or human needs, and in the end wasn’t it better to be looked after at home by your own family and servants – as is still done all over the world?

  31. Demetrius
    Posted July 5, 2011 at 12:21 pm | Permalink

    This is yet another one that has been “coming” for some time and entirely forseeable. Again, the essential issues should have been first tackled years ago and measures put in place before a crisis occurs. There is now a crisis in train and a very expensive one. The essential reason for saving during a working life is to provide for ageing in one form of investment or another. Property is but one form of such saving. If property cannot be touched then why should any other form of saving be liable? The reality is that the extent of the general problems are so costly that they cannot sensibly be borne out of taxes and borrowing by the State would be idiocy. This is a relatively new situation, less than a century ago and before then it was common to find the elderly living with other family. It was quite rare, indeed for them to be alone as we assume today they should be. Lastly, it is right that the monied do not pay, shift the bills onto other and then their families or inheritors are given a free ride? Incidentally, I can remember the beginning of World War 2 and own my own home.

  32. Mark
    Posted July 5, 2011 at 12:22 pm | Permalink

    John, please don’t perpetuate the myth that Baby Boomers are the winners in retirement. They aren’t. The first Baby Boomers are just reaching retirement age to find their pensions plundered, deferred and under-indexed, with the prospect bleak for the future: the last Baby Boomers born in 1970 won’t reach retirement until 2040. Rather, it is the pre-war generation who have been rewarded with golden full index linked final salary schemes.

    Meantime, let’s remember that failure to abolish IHT is giving the government over £3bn per year to pay for the care of the elderly. Not taking the money off them while they are alive would further increase the yield when they die.

    Perhaps government could usefully examine all the unfriendly legislation that discourages families from looking after their own parents and grandparents. There are strong disincentives in the tax system, and the courts discourage grandparents retaining contact with children in divorce cases, and so forth. Sort out these anti-family policies, and the care bill will reduce.

  33. Denis Cooper
    Posted July 5, 2011 at 1:03 pm | Permalink

    I haven’t read the whole Report and nor do I intend to, but from the summary I’d say that this is the crucial sentence in JR’s article:

    “The children who inherit may inherit more if we go for the Report’s conclusions, but they will in turn have to pay more tax to meet the state’s bills for this provision.”

    The proposals would limit the extent to which the elderly person’s assets could be depleted by the costs of care, so it should no longer happen that their estate could be virtually wiped out and there would be very little or nothing left for the children to inherit.

    It seems obvious to me that ideally the extra tax required to protect certain estates in this way, effectively insuring them against excessive losses due to the unpredictable costs of care, should not come from tax levied on the population as a whole, or just on the sub-set of the population who are pensioners, but instead on the sub-set of the population who are the beneficiaries of the protected estates.

    The remit of the Commission did not extend to reform of the present system of inheritance tax, which is in fact still estate duty by another name, but clearly the two sets of reforms should be linked.

    If we moved from the taxation of estates before distribution to taxation of the cumulative legacies received by individual inheritors, a true inheritance or legacy tax, then it would be much easier to claw back the required extra tax in a way which was reasonably fair to everybody.

    Under that system each person would have a basic lifetime allowance for tax-free legacies, with unused allowance increased in line with inflation each year, and potentially with various special allowances such as an extra allowance if they were disabled, to be set against whatever legacies they actually received, and then the legacy tax paid by each inheritor would be calculated on the excess of their cumulative legacies over their unused allowances.

    Those who had inherited nothing so far and who stood to inherit nothing from the elderly person on their decease would of course pay no tax; those who had already inherited much and stood to inherit a great deal more would pay more tax; while there would be a wide intermediate band where the inheritors would in effect be insuring each other against excessive attrition of their legacies through the unpredictable costs of care.

  34. Conrad Jones (Cheam)
    Posted July 5, 2011 at 1:45 pm | Permalink

    Yes – this scheme would help preserve some savings by the elderly so would be a good thing in our current fianancial system.

    Many people would be more capable of looking after themselves – after a lifetime of saving money; if money did not lose 5-10% purchasing power every year.

    The fact that the Government allows inflationary practices to satisfy their Keynesian Ideology (both Conservatives and Labour) means that more and more people are becoming more and more dependent on the State.

    House prices going up in value is NOT a good thing as it attacks the Family and prevents them from saving adequately for their retirement and or Nursing/ Care Home needs.

    You say we do not have the money but the Bank of England were able to conjure £200 billion out of thin air and buy Banker assets with it.

    What you mean to say is that we do not have the money for certain things.

    We have plenty of money to bail out Banks, launch into a third Middle East War, make contributions to the IMF and give Foreign Aid to India; but tax payer money – used for Public services and looking after Dementia and Alzheimer patients; must be cut back.

    Admit that the core problem is the fianancial system otherwise putting bits of sticking plaster on a gaping wound isn’t going to work for the public at large.

    The NHS Assessment for providng fianancial help to Alzheimer Patients is geared towards not donating a penny unless the person has several life threatening conditions – ignoring the fact that they have severe mental incapacity.

    Demetia and Alzheimers are NOT regarded as deserving any assistence from the Government so forcing vulnerable people into using their own life savings to pay for something that should be paid for by the NHS through adequate Government funding. The fact that it isn’t clearly states that the Government has not realised the trauma that Dementia and Alzheimers can cause a family looking after an elderly victim of this disease.

    Perhaps more tax payer money could also be used to fund stem cell research?
    I believe more people would rather work longer than suffer from dementia.

  35. Conrad Jones (Cheam)
    Posted July 5, 2011 at 1:50 pm | Permalink

    In addition to my comments above, it seems evident that the Government wish to deter any savings or capital buildup by the general public and the current system of forcing the elderly to pay for Nursing Home Care costs while allowing people who spent everything they ever earned – get a free ride. Charles Bean even admitted that the low interest rates were partly to encourge people to spend and not save.

  36. Neil Craig
    Posted July 5, 2011 at 1:51 pm | Permalink

    I think that improvements in robotics and automation will help reduce the costs of care – this is already happening in Japan whose problem exceeds ours. I also think that more research on reducing the effects of aging (perhaps we should spend as much as we do on AIDS since everybody is affected by aging) would allow a raising of the retirement age.

    I think it likely that within decades we will have learned how to turn off, or even reverse that aging process at which point retirement funds will be a moot point.

    Consider this an instance of my belief that the answer to most provlems is technological not fiscal.

  37. Mr Leslie Smith
    Posted July 5, 2011 at 1:54 pm | Permalink

    Finally, the cynical politicians are seeing that my Generation, the “Bay Boomers” have an ever increasing number of votes. We can now unsettle many MPs in Westminster, if they continue to ignore us. We still control over 80% of the Lands Wealth and will have our say. The Marketeers and Consumer Lobbies forget us at their peril, as we in the end, will vote to decide who has power in Britain.

    • Ian Heath
      Posted July 5, 2011 at 3:49 pm | Permalink

      Now who’s being cynical? I find this call to wield grey power entirely on the grounds of self-interest, contemptible. I can hardly believe that anyone would blatantly advocate such a misuse of democracy. Speaking as a fellow “Baby Boomer”, you are not speaking for me sir.

  38. Robert K
    Posted July 5, 2011 at 2:13 pm | Permalink

    The starting point, surely, is that the individual and their families should make provision for their own old age. If that means foregoing an inheritance, so be it. The tough bit comes when there is no more capital left and the family are unable, or unwilling, to afford care for their impoverished elderly relatives. The state should not be expected to pick up that cost because in effect it means the prudent, saving, taxpayer is paying two sets of bills: their own and those of others. The correct description of the provision of elderly care is charity, another word for which is “love”. Maybe that is where the revolution needs to come from – an acceptance that the care of the elderly is a loving and charitable gift. This gift can be given in the form of time and care, or in the form of cash given voluntarily. It’s hard to see how tax money excised by the state can be described in those terms.

  39. Damien
    Posted July 5, 2011 at 2:17 pm | Permalink

    I think its only fair that an individual with substantial resources should pay towards their care. That said far too little is done to assist the elderly or frail to live independently in their own homes through adaptations, and home care arrangements. Perhaps the large contribution and risk of losing the home will help us all focus on our future arrangements and the families who stand to lose some of their inheritance.

    Slightly off-topic but politicians should be mindful of the attractiveness of free accommodation in a Care Home for anyone without assets. It is all very well 2.5 million immigrants from the EU coming to work but remember they will also be entitled to bring their elderly parents also to be cared for by the state in the UK, many who will have no assets nor have contributed through taxes to the exchequer.

    • rose
      Posted July 5, 2011 at 4:20 pm | Permalink

      Quite a few Indians go back home at the moment, now that the future is bright there, leaving their parents to be looked after here. And why not, if it is all laid on?

      • lifelogic
        Posted July 5, 2011 at 8:42 pm | Permalink

        Indeed the system says do just that so they do.

  40. Ian Heath
    Posted July 5, 2011 at 2:59 pm | Permalink

    As a better-off 67 year old, the proposed cap on care costs will likely benefit my heirs, yet I feel distinctly uncomfortable about it – much as I consider it my duty to give them a leg up when I shuffle this mortal coil. Until now I have been planning to minimise my care costs and to maximise their inheritance. However, under the proposal there would seem little incentive to do so (assuming, as seems likely, the costs would exceed the cap). Instead the present generation of workers would have to foot the bill on top of all the other “deserving” cases they are forced to support. There are numerous ways in which care costs can be minimised by the responsible infirm. For a start, they should be incentivised to avoid going into care and remain self-reliant for as long as possible (what most would want to do anyway). They could use their financial assets to pay for care in their own home, such as their own private cleaners, shoppers, house-keepers, bathers and nursing care. My wife and I are contemplating having a live-in help when we are no longer capable. This would provide employment and accommodation for the live-in help and would not cost the taxpayer a penny. Finally, arrangements could be made for the off-spring to provide some care themselves (possibly by moving to live with them, or they with you), in return their inheritance would not be heavily eroded. This minimisation of care costs already happens in many cases. It would be a travesty if the introduction of a cap removed the financial incentive for self-help. This strikes me as another case where state-benefits remove incentives for responsible planning and self-reliance.

  41. forthurst
    Posted July 5, 2011 at 3:41 pm | Permalink

    I would have thought the Southern Cross Healthcare, Blackstone Private Equity saga would have raised more fundamental questions concerning not only what individuals and taxpayers should pay, but who should collect their money.

    Sadly now, care for the elderly resides on a fault line between entrepreneurialism and predation. People are attracted to this sector who have no more to offer than their own pathological greed. An elderly relative of mine was admitted to a care home owned by one of the usual suspects and experienced two serious falls with the first three weeks; there were serious concerns over the availability of qualified staff, particulary overnight; she was hurriedly transferred to a properly run institution with more or less the same rates.

    I understand that the Dilnot paper concerns the maximum obligation of an indiviual for his nursing care with the taxpayer picking up the rest; his ‘hotel’ costs would be paid by him, currently averaging £50k. This raises certain issues:
    when institutional care is involved, how, in practice, can ‘hotel’ and care costs be accurately separated, particularly as the proposal is to pay for them differently.
    Is not the £50k ‘hotel’ cost rather high considering that many of these institutions as hotels would not pick up many stars? What is the actual breakdown of the costs of the ‘hotel’ service in terms of salaries for staff, mortgage payments, profits for ‘investors’, mainenance and local taxes? Is it appropriate that residents should fund payments in respect of mortgage principal cost or is it reasonable that a care home should be run as a buy to let investment?

    I cannot help feeling, particularly as Cameron droned on about the ‘Big Society’, that the ‘entrepreneurial’ model of ‘care’ should be deprecated in favour of one based on the Charitable model. Of course, some minorities are enabled to apply this model for their own exclusive use; something, the English are not privileged to do. Furthermore, when an ancestor of mine subscribed to fund the building of a Grammar school (subsequently nationalised), the middle classes were allowed rather more discretion on how their income was distributed. Nevertheless, I cannot feeling that even with some national or local subventions to kick start such schemes, cutting out the element of profit and ensuring that the most disgusting predators are blocked out by design, would be beneficial.

  42. simple soul
    Posted July 5, 2011 at 3:59 pm | Permalink

    Mr Dilmot does his best to make a silk purse out of a sow’s ear, and his report is probably the best that could be produced in the current state of opinion. The difficulty is that we have to face two rather different questions: what to do about the urgent and humane issue of those already old or shortly to become so; and the separate long term issue of finding a system which will cover the vastly greater numbers of those who will be old in future generations when the working population will be relatively smaller. For the long term I would support some form of compulsory insurance because no-one can know in advance exactly who is going to need the care or for how long. In this it does not differ of course from the NHS and the Welfare State in general, or indeed road accidents. All of these liabilities are arbitrary and unforeseeable; and if they cannot be met from general taxation, then the insurance principle is a fair one, and less likely to lead to perpetual argument and electioneering than rules and regulations based on cut-off points, amounts of capital, means tests, etc. Whatever system you have, the feckless will always get whatever there is for nothing. In a civilized country I don’t know the answer to that one, unless we were to bring back the Work House.

    Before we spend these huge sums of money, we should, as always, ask if there is some alternative expenditure which would give better value for money. It is not as clear as it might be that this has been done. It is clear that expenditure on medical research into Alzheimer’s has been minute compared to Cancer and Heart, both of which killer diseases saved the tax payer a lot of money in practice, where Alzheimer’s does the very opposite. We should be slow to assume that Alzheimer’s is beyond the reach of medical science, or that its victims will be ever increasing in number. It could even pay to fund research into the various dementias almost on a money no object basis, as Nixon did for Cancer.

  43. Yudansha
    Posted July 5, 2011 at 4:03 pm | Permalink

    It seems that whenever the State gets involved with anything the price goes up.

    Lawyers ? More of them than coppers and yet they command average £100 per hour. Why ?

    Rental properties ? Bonkers prices in places where wages are below national average.

    Care homes ? £35k per year ??? That’s more per week than a PC earns ?

    Why ? Because the State boosts the market and it gets ripped off. It’s the same way in that insurance boosts vet bills.

    • Yudansha
      Posted July 5, 2011 at 4:07 pm | Permalink

      Cap legal aid fees. What’s the worst that can happen ? A brain drain of lawyers ?

      Win win.

      • lifelogic
        Posted July 5, 2011 at 8:44 pm | Permalink

        Indeed over paid and usually incubating discontent wherever they are active.

    • alan jutson
      Posted July 6, 2011 at 8:30 am | Permalink

      Yudansha

      Lawyers £100 per hour ?.

      When was the last time you contacted a lawyer, its now nearer £300 per hour in the home counties and if you want a senior partner more than that.

      In London you will have needed to have won the lottery.

  44. pipesmoker
    Posted July 5, 2011 at 4:14 pm | Permalink

    I consider ending up in a care home with none of my toys and comforts worse than a dignified death.

    If it comes to that I just hope I am able to do myself a mischief and failing that I intend to refuse food and water which would mean a horrible end but I would remain in control.

  45. Harfield
    Posted July 5, 2011 at 4:38 pm | Permalink

    I find it interesting that we get drawn into the detailed arguments as to how much we “baby boomers” should pay.
    The real issue is inefficient public services. Lower their costs and you have much more of the present cake to share on care for the elderly. We need less tax not more.

    • uanime5
      Posted July 5, 2011 at 8:28 pm | Permalink

      How is less tax, resulting in less money for public services, going to make them better?

  46. stred
    Posted July 5, 2011 at 5:13 pm | Permalink

    to Electro K. Thanks for the desciption of the future. At the time, I hope to laugh myself to oblivion with similar thoughts, after a glass of saved up morphine. As my late father in law said the night before he slipped away’ Don’t forget. It’s all bollocks!.

  47. Douglas Orchard
    Posted July 5, 2011 at 5:42 pm | Permalink

    In the Daily Mail today the government intends to spend £12.6 billion of our money on foreign aid. The cost for looking after pensioners is shown as £1.7 billion according to the Dilnot report.

    Why do foreigners warrant such expenditure whilst pensioners have to sell up so that the government can find this money of ours for its pet projects.

    Charity begins at home. The government has a duty of care to the people of this country first!

    Reading some of the comments from your contributors it seems that most of them are from a comfortable middle class background. I fail to see why pensioners should have to sell all of their life time belogings and homes whilst the government is sending so much of tax payers money abroad. There is little to choose between the Coalition and the Brown Government. Same ivory tower syndrome. Look after everyone else and leave our people to struggle. Give all the jobs to foreigners and leave our lot on the dole. Think Bombardier. Sheffield Forgemasters.

    Parliament has become a disgrace, full of out of touch middle class people who have never had to soil their hands in honset toil! Ever!

    • uanime5
      Posted July 5, 2011 at 8:31 pm | Permalink

      The Government is hardly middle class as most of them are millionaires. The Government is made up of the rich who would rather pretend to be saving the world than fixing the real problems in this country.

      • alan jutson
        Posted July 6, 2011 at 9:59 am | Permalink

        uanimes5

        Agree with part of your comment, but Brown was the worst example of spending other peoples money, and he has made us all the poorer for it.

  48. Bazman
    Posted July 5, 2011 at 6:57 pm | Permalink

    The reality is that the ones who save or have their own home get stung and the ones that don’t, don’t. What if anything can be done about this situation? The same applies about all benefits. If you have five children, do not work and live in a council then you will be, at least financially, better off than someone who does with the bonus of spending time with the children even though this is often not what happens. Many people expect the feckless to have middle class ideals and methods which is fantasy and many people are in personal circumstances which are and have been beyond their control in the past. Some even just play the system and this is also a strategy. Low taxes and low benefits is a simple fantasy for simple middle class fantasists as many rely on benefits and not low taxes.

  49. Edward T
    Posted July 5, 2011 at 8:28 pm | Permalink

    There’s a big problem in making the elderly pay according to their means: payment can easily be avoiding by giving one’s wealth to one’s children. Thus individual payments into the government care scheme would quickly become like Inheritance Tax, a voluntary tax on those who do not trust their children.

    To me the only fair solution is a compulsion to purchase insurance while one is earning against the costs of care later in life. National Insurance is a failed model so the government should instead require the purchase of private insurance for those who are able, and to provide its own scheme or top-up for those who are not. This scheme would also lay the foundations in the political landscape for the shift to insurance-based healthcare that must eventually take place if the NHS is not to collapse and take the public finances down with it.

  50. StevenL
    Posted July 5, 2011 at 8:35 pm | Permalink

    Why can’t the income from the capital in the houses be used to pay for care. If you go into care you either pay for it or put your capital in a pot to pay investment income into a care fund. Your estate inherits the capital.

    Either renting the house out or selling and investing it in blue chips and bonds would produce an income to cover the cost of care homes when added to the individuals pension(s) income. Also, no care home funded by this mechanism should be on prime land where the land rents are sky high. Just build more care homes on green field sites.

    We really are getting our knickers in a twist about something that should be easy here. If you want to put your mother in law into a care home so you can live in her nice house mortgage free and then keep it when she kicks the bucket that is just not reasonable.

  51. Robin
    Posted July 5, 2011 at 10:31 pm | Permalink

    I fear that the proposals will do little more than add to the stultifying levels of bureaucracy and the persecution of responsible pensioners. The problem being addressed is far more fundamental than that offspring seeking to protect their inheritance.
    The enduring solution is for this country to stop persecuting the responsible citizens who play by the rules! But, of course, it has also to stop rewarding irresponsibility, fecklessness, criminality and immigration and we all know that will never happen!
    An aspect of self funding that I do not recall being mentioned, is that of the premiums paid by self funders. My mother pays roughly 50% more per week, for the same level of care, than will the Council. I believe this is general practise throughout the country. Thus, at almost 100 years old she continues subsidising irresponsibility through her taxes and care fees!
    Please be assured that your recent difficulties with the train are insignificant, yes insignificant, when compared with those endured by self funders and their carers.
    Socialism! Darwin must be turning in his grave.

  52. Mark M
    Posted July 6, 2011 at 12:00 am | Permalink

    Always an awkward subject, but I have to say that as long as the state is unwilling to look into legalisation of assisted dying, it will always have a responsibility to provide for the elderly.

    I don’t doubt that, when faced with a terminal illness, many parents would much rather their accumulated wealth went to their children and not to fund their care. A much better solution is to allow those who do not wish to place the financial burden of care on the shoulders of their children to choose when their final day shall be.

    Unfortunately, the world is not ready for such a subtle argument. We seem to have this idea that people should be kept alive no matter the cost. It’s time we started to realise there comes a time when the burden is unfair on all involved parties, and that to end it is the fairest thing.

  53. Jane
    Posted July 6, 2011 at 8:58 am | Permalink

    This is a difficult issue. As a so called baby boomer, I am aware of the likely high cost of Adult Care in the years to come. I am cross too that for many years government has been aware of the need to resolve the matter and have shelved the decision making for political reasons only as they fear upsetting us – we are the people more likely to vote!

    I am being selfish in stating that I have paid taxes (continue to do so) and National Insurance all of my life. I have never required hospital treatment nor any other costly state provision such as unemployment benefits etc etc. I do not have children either and have always been happy to pay for education costs even though outcomes have often been disappointing. My taxes have contributed to many issues that I have disagreed with such as long term benefit claimants who are fit for work and disability living allowance for substance misusers etc etc. Like others, I have direct experience of those of a similar age to myself who spent their income rather than prepare for retirement.

    It is therefore offensive to me to be a burden on the State. I have always done the right thing in working and paying taxes. I have no doubt as I become old (I do not consider myself old in my mid 60’s as I am still able to run 5 miles a day) then I will have to receive services from the NHS or Adult Care Services.

    How does the country pay for the aging population in the coming years? I feel unhappy that younger people believe that the elderly are all parasites. I could call them the same as I paid for their education and all other services they have received. People without children do pay into the pot and yet those who have benefitted overlook this fact. I am selfishly stating that I have paid into a system throughout my life believing that if I ever needed services these would be provided free of charge.

    It is time that the government looked at compulsory pension contributions to ensure that people retiring are not reliant on the State. I am also persuaded of an insurance policy to provide for Care Services too. I accept that over the past decade a culture has developed which leads people to believe that the State will provide. This has encouraged so many social problems. In my area it has encouraged a huge influx of migrant workers as local youth will no longer work in agriculture and prefer living on benefits. It has encouraged parents of teenagers to opt out of parental responsibility for their welfare in the high number of teenage pregnancies etc etc. I have paid for this culture which was permitted under the last government.

    No system of Adult Service Cost will suit me personally. That is because no system will ever be fair because people do not fit into boxes and government can only deal with the boxes. Wealthy people will get around costs by clever lawyers and poor people will be unconcerned as they know the State will provide. The burden will as usual fall on those who have worked hard, paid taxes and been prudent throughout their lives. It always does and of course we will follow whatever system is introduced.

  54. rose
    Posted July 6, 2011 at 10:45 am | Permalink

    The Baby Boomers got all those things you have listed, including the contraceptive pill and abortion on demand, as soon as they needed them. Now they need assisted death to be made legal. Will they get their way on that too?

    • John Bracewell
      Posted July 6, 2011 at 9:19 pm | Permalink

      I hope so. Having seen the undignified last 4 years of my father in care with dementia, I would like to be able to specify my end at a time of mychoosing.

  • 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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