Dorrell steps in the right direction: Leading article

Share
Related Topics
As if death itself weren't leveller enough. When chronic illness strikes in old age, bills for long-term care can leave the prudent and the well-off in the same financial boat at the ends of their lives as the spendthrifts and the poor. Middle England is displeased - and it is grumbling to its politicians.

The Health Secretary, Stephen Dorrell, could offer little yesterday to protect his party from the damaging political fallout of all the disappointed expectations raining down on the property-owning masses. But his proposals were nevertheless a promising first step towards tackling an issue that will bedevil politicians for a decade or more.

Long-term social care has always been means tested. But as the NHS withdraws from geriatric care, and as the number of home-owners grows, more and more pensioners are having to sell their houses to pay for care. Inheritances are being devoured by the wage bills of care homes. Disappointed inheritees may squeal but someone has to foot the bill. As a nation we have not saved enough in the past to enjoy today cascades of wealth across the generations, as well as low taxes. The current working population will have to pay for its elders' care somehow, whether through forfeiting inheritances or paying more tax. Unless younger generations start making additional provision their children will have to do the same in their turn.

Mr Dorrell hopes that individuals will bear more of the burden themselves, through higher savings and taking out insurance earlier in their lives. For the current generation of elderly the government is suggesting a new partnership to pay the bill for care. (It sounds very like the kind of scheme new Labour should have come up with but hasn't.)

The state won't pick up the entire tab; that could cost us two pence on income tax each year. But nor will every individual with assets worth more than pounds 16,000 be expected to fork out for the entire cost either - as most have to do at the moment, usually by selling their house. Under Mr Dorrell's plan, at retirement age, people would be able to buy insurance to cover a specified level of care. If you were to purchase insurance cover worth pounds 60,000 but your eventual bill overran, the state would still means test your ability to pay for the additional care. However, it would exclude pounds 60,000 worth of your assets from the assessment. By buying your insurance you pay for your long-term care and protect at least a chunk of the inheritance hoped for by younger generations in your family.

The details may vary in practice but the principle is right. There is at least one catch. For a start, the insurance market would need to become much more sophisticated. Senior citizens are asset rich and income poor. They would need to draw on the money tied up in their houses through equity- release schemes to pay the insurance premium. At the moment these equity- release schemes are completely inadequate. More important, the insurance premiums would be substantial - especially for couples. Many people would not be able to afford them. The Government could end up spending taxpayers' money protecting the assets and inheritances of the wealthy, leaving the lower-middle classes behind.

Still, at least the Government is moving in the right direction. Unlike the Labour Party. The shadow health secretary, Harriet Harman, was quick to denounce the Government's proposals as a "betrayal" of elderly people who expected the state to provide for them. Yet delivering the state-funded care that senior citizens expect would cost a bomb - something that sits uneasily with new Labour's fiscal prudence, and runs against Chris Smith's avowed aim of encouraging people to provide for themselves.

Massaging expectations downwards is an extremely difficult task - especially for a government that is already unpopular. Yet that is the task that will face this government and Labour if it takes power. Rather than opportunistically carping about the Government's attempts to find an innovative solution to a pressing problem, Labour should itself be searching for an alternative: if not a public-private partnership, then a new social insurance scheme. Labour's trouble is that it still wants the luxury of behaving like an opposition without responsibility when it needs to start behaving like a government.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

SEN Teacher

£100 - £120 per day: Randstad Education Chelmsford: Are you that teacher who c...

SEN Teacher

£100 - £120 per day: Randstad Education Chelmsford: Are you that teacher who c...

IT Auditor

competitive: Progressive Recruitment: IT Auditor , Information Governance, NHS...

Process Improvement Analyst (Testing)

£40000 - £45000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Day In a Page

Read Next
 

The daily catch-up: heatwave update; duck tape and market socialism

John Rentoul
David Cameron's 'compassionate conservatism' is now lying on its back  

The grand plan of Tory modernisation has failed under an increasingly right-wing David Cameron

Michael Dugher
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform