Tag: Dementia Tax

Osborne criticises the government’s manifesto, while charities are silenced by ‘gagging act’

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George Osborne, the architect of many an omnishambolic budget, has called the Conservative manifesto “the most disastrous in recent history” in a suprisingly critical editorial

The London Evening Standard derided the Tories’ campaign attempt to launch a “personality cult” around the prime minister. Osborne attacked Theresa May’s handling of Brexit as marred by “high-handed British arrogance”.  He said the campaign had “meandered from an abortive attempt to launch a personality cult around May to the self-inflicted wound of the most disastrous manifesto in recent history”.

He has already mocked May’s net migration target as “economically illiterate” and branded Brexit a “historic mistake” since becoming the London paper’s editor.

The editorial then mockingly suggested the current conversation among Downing Street aides would likely be along the lines of: “Honey, I shrunk the poll lead.”

The Evening Standard has also criticised the government’s manifesto meltdown over the  highly unpopular “dementia tax”, saying: “Just four days after the Conservative manifesto proposals on social care were announced, Theresa May has performed an astonishing U-turn, and bowed in the face of a major Tory revolt over plans to increase the amount that elderly homeowners and savers will pay towards their care in old age. 

There will now be a cap on the total care costs that any one individual faces. The details are still sketchy but it is not encouraging that the original proposals were so badly thought through.” 

In another article titled U-turn on social care is neither strong nor stable”, it says: “Current Tory leaders should have been ready to defend their approach. Instead we had a weekend of wobbles that presumably prompted today’s U-turn. The Pensions Secretary Damian Green was unable to answer basic questions in a TV interview about who will lose their fuel payments, and how much extra money will go into social care.

“Either the Government is prepared to remove these payments from millions of pensioners who are not in poverty, and don’t receive pension credit, and spend their substantial savings on social care; or they chicken out, target the tiny percentage of pensioners who are on higher tax rates, save paltry sums and accept the whole manoeuvre is a gimmick. Certainly, if the savings are to pay for a new care cap, then many pensioners will lose their winter fuel payment. This isn’t for consultation after an election — it’s an issue of honesty before an election.”

With the Tories’ poll lead diminishing, Liberal Democrat leader Tim Farron has warned that the proposed “dementia tax” would become May’s version of the poll tax which led to Margaret Thatcher’s downfall.

Whilst Osborne is free to speak his mind, it’s an irony that many charities have complained they have been silenced from criticising the Conservative social care plans despite the fact they will be hugely damaging to elderly and disabled people across the country.

One chief executive of a major charity in the social care sector has told the Guardian that they felt “muzzled” by the Transparency of Lobbying, non-Party Campaigning, and Trade Union Administration Bill – a controversial legislation introduced in 2014  which heavily restricts organisations from intervening on policy during an election period.

The charity said May’s decision to means test winter fuel allowance would “inadvertently” result in some of the poorest pensioners in the country losing the support, adding that “will literally cost lives”.

The charity also claimed that the so-called “dementia tax” on social care in the home would stop people who need support from seeking it.

“We are ready to speak out at one minute past midnight on 9 June,” the charity leader added, but stressed they were too afraid to do so now.

Sir Stephen Bubb, who runs the Charity Futures thinktank but previously led Acevo, an umbrella organisation for voluntary organisations, said it was notable how quiet his sector had been about the policy.

He went on to say: “The social care proposals strike at the heart of what charities do but they should be up in arms about them but it hasn’t happened. It is two problems: there is the problem of the so-called “gagging act”, but also the general climate of hostility towards charities means there is a lot of self censorship.” 

“Charities that once would have spoken out are keeping quiet and doing a disservice to their beneficiaries. They need to get a bit of a grip.” 

He cited the example of the Prime Minister hitting out at the British Red Cross after its chief executive claimed his organisation was responding to a “humanitarian crisis” in hospitals and ambulance services.

May accused the organisation of making comments that were “irresponsible and overblown”.

It’s not the only time the Conservatives have tried to gag charities for highlighting the dire impacts of Tory policies. In 2014, MPs reported Oxfam to the Charity Watchdog for campaigning against poverty. I guess the Joseph Rowntree Foundation had better watch it, too. What next, will they be reporting the NSPCC for campaigning for children’s welfare?

'Lifting the lid on austerity Britain reveals a perfect storm - and it's forcing more and more people into poverty' tweeted Oxfam
Lifting the lid on austerity Britain reveals a perfect storm – and it’s forcing more and more people into poverty.

The Oxfam campaign that sent the Conservatives into an indignant rage and to the charity watchdog to complain was an appeal to ALL political parties to address growing poverty. Oxfam cited some of the causes of growing poverty in the UK, identified through research (above).

Tory MP Priti Patel must have felt that the Conservatives are exempt from this appeal, due to being the architects of the policies that have led to a growth in poverty and inequality, when she said: “With this Tweet they have shown their true colours and are now nothing more than a mouthpiece for left wing propaganda.”

I’m wondering when concern for poverty and the welfare of citizens become the sole concern of “the left wing”. That comment alone speaks volumes about the attitudes and prejudices of the Conservatives.

Bubb said: “That was a warning shot. So many charity leaders do feel that if they do speak out there will be some form of comeback on them. The Charity Commission has been notably absent in defending charity rights to campaign – the climate has been hostile to the charity voice.” 

There is some fear that charities face a permanent “chilling effect” after the Electoral Commission said they must declare any work that could be deemed political over the past 12 months to ensure they are not in breach of the Lobbying Act. 

Another senior figure also said charities were too afraid to speak out on the social care proposals. “We are all scared of the lobbying act and thus most of us are not saying much during the election. There was the same problem in the EU referendum – if you criticise the government then you are being “political”.

During the referendum a row broke out after the Charity Commission
issued guidelines that some charities interpreted as preventing them from making pro-EU arguments. 

Head of the organisation, William Shawcross, dismissed the charge by Margaret Hodge MP that his Euroscepticism was to blame for the issuing of the advice from the commission on when charities could intervene on the issue.

Steve Reed, shadow minister for civil society, said the Labour party would scrap the lobbying act because it had “effectively gagged” charities.

Raincoat. Age. Die. A guest post by Hubert Huzzah

Hubert

In 2008 there were 700,000 people with dementia in the UK. That number is rising rapidly and is projected to be over 1 million by 2025. One in three people over 65 will end their lives with a form of dementia. In 2008 there were 580,000 people with dementia needing Carers in England.

Not all Dementia Sufferers are home owners. For the age group most likely to suffer Dementia 71.6% (45-75+) of the population do own their own home. The average home is worth £215,847 at 2017 prices. So, of the one million people with dementia by 2025, 716,000 will be sitting on assets worth a total of £154Bn.

Imagine being able to take ownership of £154Bn of assets simply by waiting ten years. That is the Dementia Tax. By 2027 those who are currently suffering from even mild dementia symptoms will have to pay for care as the value of the Home will be taken into account when means testing financial support for social care.

Currently, Carers put £132Bn into the Economy purely through Caring Services. This is the amount of money after all benefits – not just Attendance Allowance or Carers Allowance – are paid out. Carers are, in general, the next generation for Dementia sufferers – the children and grandchildren. In total, the Dementia Tax will be taking £286Bn from people who already pay substantial amounts into the economy and have been doing so for two generations.

That means penalising people until 2050 and it does not even make financial sense.

A report from the London School of Economics and King’s College London commissioned by the Alzheimer’s Society estimated the financial cost of dementia at over £17 billion for the state and families in 2008. This cost grew significantly as the number of people with dementia rose. A King’s Fund study estimated that the cost of dementia in England would rise from £14.9 billion per year in 2007 to £24 billion (at 2007 prices) by 2026, making up 74% of mental health service costs. Using £154Bn of assets to pay for £24Bn of expenditure is not only poor economics it is an invitation to fraud on an industrial scale.

The less well understood outcome will be a house price collapse leaving first time buyers in negative equity for the first time since the 1980s. In efforts to reduce the amount paid for Care Services, it will become rational for Carers of Dementia Sufferers to undervalue the property to bring the total estate under £100,000 for the purposes of means testing. Undervaluation to receive benefits is, in Social Security Law, fraud. Which will result in a market in avoidance and evasion promoting corruption. The policy, itself, is about effective money laundering which is, always, corrupt.

This undervaluation of properties will, inevitably, signal to the markets that house prices are dropping and so provide pressure to further reduce house prices. This will leave existing first time buyers at risk of negative equity. When Dementia Sufferers within the Dementia Tax Regime begin to die, First Time Buyers will sell to escape negative equity. Resulting in an extreme boom and crash market that will last for decades. The initial boom will be hailed as an economic miracle until the initial crash reveals the depth of the problem. In 2007 the National Audit Office estimated that £102 million could be saved by reducing the time people Dementia Sufferers stay in hospital.

A Lincolnshire case study they found that people with dementia on orthopaedic wards were staying over 24 days on average compared to under 17 days for people without. That increased length of Hospital stay is increasingly expensive as Private Contractors provide the service. At the same time, the Private Contractors, driven by profit, have no incentive to move Dementia sufferers out of Hospitals. The overall outcome is that Hospitals will become bed blocked by Private Contractors and that will feed back to poorer Accident and Emergency Service, longer waiting times and increased ill health in the general population.

The Dementia Tax is a poorly thought out policy that has one objective: releasing £154Bn of assets into financial markets. With the net contribution of £29Bn to the UK economy from the Insurance Sector in 2015, the indication is that the £154Bn will be a five year soft landing for the Insurance Sector on exit from the EU. That soft landing will, inevitably, be a source of capital flight from the UK to other EU capitals such as Dublin, Paris and Berlin. Which leaves the policy cascading out from the Health and Social Care Sector to cascade destabilisation across the Economy.

There are 379 authorised Life Insurance Companies in the UK. 200 are UK authorised and 179 are headquartered in another European country and passport in under the EU Third Life Directive. With the unfolding of Exit from the European Union, the Dementia Tax creates a mechanism for capital flight from the UK via those 179 passported Life Insurance companies. If the UK wishes to retain a working financial services relationship after exit then those 47.2% of Life Insurance Companies passported into the UK market will become the potential source of almost £73Bn of capital flight.

It is a poorly thought out, uncosted, scheme that seeks to buy time for the Tories. Given the public availability of information that can be used to cost the scheme, and the pieces of past research that show how poor equity-release is for solving financial problems, where did the Dementia Tax actually come from?

 

Sources: National Audit Office, Alzheimers Society, Association Of British Insurers. Picture: Madeline Von Foerster. “The Promise II” (Death And The Maiden).

Written by Hubert Huzzah