Lamb and Williams warn on care cap delay

As Care Minister, Norman Lamb (and his Liberal Democrat predecessor) were pivotal in ensuring that the cap for care costs was introduced. The Conservatives have now delayed its implementation by 4 long years. Norman described this as an “outrageous betrayal of people at their most weak and most frail. He said:

This an extraordinary and devastating u-turn from the Tories and an outrageous betrayal of people at their most weak and most frail with conditions like dementia.

Crippling care costs need addressing urgently. In coalition we designed a solution that would help and was affordable. Local authorities have spent millions already preparing for the introduction of the cap, yet we now hear the Tories are turning their back on it. This delay is a total waste of public money.

The distress and heartbreak that people feel when a loved one is in care, is being exacerbated by the fear of how to pay for it. We must not allow this to continue.

Be in no doubt, this is not a delay. The Tories are abandoning the cap. George Osborne never supported this, and Labour were only half hearted in support. The cap was only secured because Liberal Democrats negotiated it in coalition.

There’s no possibility that the finances of social care will be any easier in 2020. They have broken a clear promise in their manifesto within weeks of grabbing power on their own and decided to prioritise tax cuts for the wealthy.

Welsh Liberal Democrat leader warned of the “dire consequences” of the delay:

I am appalled that, the moment the Liberal Democrats leave government, the Tories have kicked our plans to cap lifetime care costs into the long grass.

Liberal Democrats in government fought to reform the way social care is funded, to help ease the burden of long term care costs on the elderly, their families and carers.

With an ageing population in Wales, the need to secure a sustainable system for paying for care has never been more urgent. Yet the Welsh Labour Government has said it will sit back and wait for the reforms to first happen in England. This means that we will see no long term reform until post 2020, which will have dire consequences for many elderly people in Wales and their families.

The care cap was to be met largely by freezing the inheritance tax threshold at £325,000, which George Osborne has now announced he will raise to £500,000. It is no wonder that the care cap cannot be funded when the Tories are giving the wealthy a windfall tax break which the Lib Dems blocked in government.

We need a fair and sustainable system where people no longer live in fear of losing nearly everything they own to pay for care and it is time for the Welsh Labour Government to lay out a plan for Wales. Using the excuse of a lack of money doesn’t wash when the Welsh Government can still find millions of pounds to buy an airport on a whim.

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11 Comments

  • David Evershed 26th Jul '15 - 3:43pm

    In the arguments about this issue we should distinguish between the cost of care and the cost of accommodation and food. We would all like our accommodation and food to be paid for by someone else. However, it is not fair that people who own expensive (empty) houses should have their living expenses in care homes paid for by poorer tax payers.

    There is no reason those who own houses should expect to hold onto this wealth and not use it to pay for their accommodation and food (but not medical treatment) when they live in a care home. They can remortgage the house to release the cash to pay for their new residence.

    To argue that the older people’s wealth tied up in houses should be protected is the same (wrong) logic used by the Chancellor to introduce a new tax law to protect the wealth invested in houses from inheritance tax.

  • David,

    Would you advocate 100% inheritance tax on everyone then? That would level the playing field!

    It is unfair that the accident of needing care at the end of your life takes away the opportunity to pass money or a house on, when those lucky enough not to need care can now pass on £500k without any tax. However the desire to pass on some money to your descendants is strong and understandable, so combining this threshold with a decent levy of inheritance tax is a good policy. The many loopholes in inheritance tax also need closing however..

  • FUNDING & THE DEMISE OF LOCAL GOVERNMENT..

    Norman Lamb is correct to condemn the postponement of the Care Cap by Osborne. It is a further example of how local government has been pressured by a combination of added responsibilities combined with cut after cut in funding over the last five years – and for which, sadly, our party bears some responsibility.

    Government funding of local councils to run local services has been cut by 40 per cent up to May 2015 – and many Tory Councils were given more favourable treatment . LGA modelling, which factors in reduced funding and rising demand for adult social care, shows money available to provide popular services like running gyms, parks, libraries and youth centres is likely to shrink by at least 66 per cent by the end of the decade. (source, Local Government Association).

    Government funding for councils to run local services has been cut by 40 per cent by in the five years to May 2015. LGA modelling, which factors in reduced funding and rising demand for adult social care, shows that money available to provide popular services like running gyms, parks, libraries and youth centres is likely to shrink by 66 per cent by the end of the decade.

    Almost half of local councils are now having to dip into contingency reserves to meet their commitments to adult social care – and there is an almost intolerable pressure to reduce the hourly rate paid to outsourced care companies to provide care in the home. Outcome : a lousy rushed service on the cheap and wages cut to the bone for those employed to provide care for older people.

    Tim knows the situation in rural Cumbria. I hope one of his early actions will be to set up a research team to establish a compassionate caring Liberal Democrat policy to enable as many folk as possible to stay in their own homes with adequate care. If the choice is Trident or the needs of an incontinent bed-bound 90 year oldI know which I will choose.

    Local government is on the brink. If local democracy is to mean anything it should be properly funded to provide the services increasing numbers of our older people need. We need a renaissance of democratic responsive local government rather than the nonsense of a so called ‘Northern Powerhouse’. It’s time to revise the 60’s Liberal slogan – ‘People Count’

    As for Police Commissioners – what a folly of vanity and wasted time and money !!

  • PS Sorry – ignore repetition in third para above.

  • Ruth Bright 26th Jul '15 - 5:51pm

    Norman Lamb is quite right to criticise the uncertainty the government has imposed on people with dementia and their carers. However, surely David has a point about the substance of the matter. My parents bought a house for just under £3000 when I was eighteenth months old. Had they held onto that house it would now be worth in the region of three quarters of a million pounds. Would it really have been right for them to expect to leave that house to me and other less fortunate people’s taxes pay for their care and accommodation?

  • John Tilley 26th Jul '15 - 6:23pm

    “….I am appalled that, the moment the Liberal Democrats leave government, the Tories have kicked our plans to cap lifetime care costs into the long grass.”

    Appalled, yes. Surprised? No!

    The Tories detoxified their image between 2010 and 2015. People like Nick Clegg and Danny Alexander went round during the general election repeatedly saying how “proud” they were to have spent five years in a Conservative Cabinet and making it clear that their preference was a continuation of that Cabinet.
    Meanwhile Cameron and other leading Conservatives went round the seats which had Liberal Democrat MPs saying how terrible life would be without a Conservative majority and concentrating huge resources on defeating Liberal Democrats. This appealed to Conservative voters and also to those waverers who had been persuaded by Clegg that the Conservatives were not so bad really.

    Yet now we get exclamations of surprise that the Tories are just as Toxic as ever.

    Is it any wonder that only 8% of voters found the Liberal Democrat position attractive?

  • Steve Comer 27th Jul '15 - 1:15am

    The Tories are showing where their priorities lie. They’ve raised the inheritance tax threshold to £500,000 and cut corporation tax to benefit large companies. (They’ve argued that the latter will create jobs, but it won’t, it’ll just lead to more ‘brass plates’ in the City of London as companies move their holding companies here).

    So lets take a case of three families with an elderly relative who gets dementia and needs residential care, and lives in a home for 7 years at an average cost of £40,000 per annum .
    In the case of family A the parent owns a large detached property in Surrey worth over £1million. That has to be sold, so when the elderly parent dies their offspring inherit over £700,000 of which £500,000 is tax free.
    In the case of family B the property is a modest semi in the midlands worth around £200,000, that has to be sold to fund the care, this uses up all the towards the end of life the local authority picks up the care bill, but there is almost nothing for the offsring to inherit.
    Family C live in rented accomodation, but have worked hard and saved around £50,000 which they hoped to pass on to their children and granchildren. Care costs eat up most of that, but the local authority covers most of the costs for 5 years.

    The effect of Osborne’s 2nd 2015 budget and the ‘delay’ to the care cap implementation is that the wealthiest family are better off than they would have been before the changes, the family that struggled to pay a mortgae for years still leave nothing to their offspring, and the family in rented accomodation were total mugs for saving £50,000. They’d have been better spending that money going down the pub more often, and having an expensive holiday every year! (the local authority would have picked up all the care costs if they’d had no savings).

  • Ruth Bright 27th Jul '15 - 8:43am

    Just as a point of information if close relatives live in the property as their principal home the local authority can place a charge on the property but it cannot sell it.

  • Sir Norfolk Passmore 27th Jul '15 - 1:03pm

    In response to David Evershed’s first point (and also to Ruth Bright), Norman and Paul’s original proposed care cap does indeed have a carve-out for food, rent and fuel of a fairly hefty £230 per week. So the proposal made exactly the distinction David argues for.

    This statement from Norman and Shirley is about the postponement, necessitated by the inheritance tax threshold rise – i.e. in this Parliament, those elderly people unfortunate enough to need chronic care will subsidise those who do not.

  • As John Tilley says (in his inimitable style]:
    ‘Conservatives went round the seats which had Liberal Democrat MPs saying how terrible life would be without a Conservative majority and concentrating huge resources on defeating Liberal Democrats.’

    So now we know how Tories really behave, as they lie and hide their greed in coalition, we must beat them and bring back the shared society we believe in – and they don’t. Keep showing the voters the difference, not just during elections. ‘Sharing resources good, pocketing resources bad’

  • Ruth,

    No, it is not fair! But we do have a principle (or did) of a National Health Service where it does not matter how ill you become, the rest of us pay for it. If you need care in your old age you are ill, so by forcing people to pay for their own care we have already broken that principle.

    Raising the inheritance tax threshold for a couple from £650k to £1million is a windfall of £140,000. Compare that with raising the income tax threshold by £1000, worth £200 per year, and you see what a gigantic tax cut the Tories have made for the favoured few who can pass on more than £650k in wealth to their offspring. Yet it seems to have gone by with hardly any comment… I would have a unified care cost and inheritance tax system with the threshold for inheritance tax significantly less than £325k, possibly with graduated bands like income tax, but with care costs paid out of future inheritance tax

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