LEADING ARTICLE: Asset-stripping the elderly

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The Independent Online
Once upon a time, Conservatives won elections by telling us we'd never had it so good. Now they seem to want to win by telling us that at present we're having it far too good and that greater sacrifices are demanded.

John MacGregor, the former Cabinet minister, has followed this trend by announcing that there is a "retirement time-bomb" ticking away - one that will see more retired people supported by fewer workers next century. "Immediate" action is needed, Mr MacGregor says, outlining a 10-point plan of tax breaks and other solutions to encourage private provision for retirement.

In practice, however, Mr MacGregor's problem is not so much the future costs of retirement, large though these loom. The acute issue, and the one that is alarming John Major, the No 10 policy unit and a growing body of Conservative MPs and voters, is how long-term care is to be funded.

The increasing means-testing not only of nursing and residential home places but also of care in people's own homes is cutting across the long- standing Tory promise that wealth will "cascade down the generations". More and more people are finding that not just their savings but also their homes can be swallow ed by the cost of such care.

As a World in Action programme on Monday will demonstrate, this is leading some of the better-off retirees to blow their assets on grand holidays, fast cars and yachts. That way, at least they'll enjoy the cash before the state takes it off them to pay for their care.

Mr MacGregor's solutions include exempting the family home from the asset calculations used to decide contributions to care, and raising the pounds 8,000 savings threshold above which people have to start contributing.

Such solutions, however, imply more public spending, not less. And they suggest that the state would raise taxes from the less well-off in order to protect the legacies of those who are better off.

This can be viewed two ways. It can be seen as a form of collective provision which to a degree would preserve people's financial achievements in life. The measure would reduce the lottery whereby children inherit provided their parents die cleanly and fast, while leaving little for those whose parents need long-term care. Sceptics, however, may think that in reality this is a proposal from a Conservative politician to protect the assets of an essentially Conservative constituency.

Labour's views on which it is are not known. To date "new Labour's" only pronouncement on the issue is that if it wins power it will set up a Royal Commission to debate the problem and chart a way forward. A clearer pronouncement is needed of the principles which Labour believes should underlie new policy approaches in this area.

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