Justin Welby is a wholly admirable man and a good Archbishop. But I believe he and his Commission on social care are just wrong when they say that the only moral way to improve our social care system is to raise taxes to pay for it. Of course we need more money in the system. But raising it through general taxation would be unfair, and I would argue actively immoral.
Earlier this week, the Archbishops’ Commission on Reimagining Care issued its final report. The commission was established to ‘develop a radical and inspiring long-term vision for care and support in England so that everyone can flourish’. And its prescription was that social care should become a universal service like the NHS – funded through an increase in general taxation.
The Archbishop and his colleagues are right to say that how Britain funds social care is ‘one of the most fundamental questions affecting our country, morally and ethically’. Whether it’s social care, healthcare, or pensions, we have an ageing population with growing costs and a dwindling working age population paying taxes to fund them. The number of over-75s in the UK is set to double by the 2040s.
However, where the Archbishop and I disagree, is on how to fund the additional services often required by older people. The commission argues that we as citizens should be ‘willing to contribute funding through taxation’ in order to provide the level of care we need. We need to think a little harder than that.
My generation, the much-reviled Boomers, benefited enormously from the economic growth of the 1980s and 90s – wages were growing, housing was still affordable, and mortgage rates were manageable. Many of us have ended up with a level of housing wealth that is unprecedented in our country’s history.
Today’s younger people, including those who are probably just entering middle-age but are still young enough to be in denial about it, have had no such luck. The tax burden is at its highest for 70 years. Economic downturns, two years of lockdowns, not to mention the undeniable and intractable housing crisis. mean that their capital comes nowhere near to the level of their parents at the same age.
Everyone recognises the importance of protecting the elderly, and I agree with the Archbishops’ report that social care is ‘everybody’s business’. However, asking younger generations to pay even more tax in order to protect the asset-rich may be equal, but it is not equitable – and it is certainly not moral.
In 2019 I published ‘Fixing the Care Crisis’ with the Centre for Policy Studies, a report in which we put forward a bold and comprehensive set of proposals to fix the social care system in a way that was financially and politically sustainable. In the opening pages I spelt out the critical point: that ‘any reform must ensure that older people can obtain the care they need. But we must also avoid burdening working-age people with simultaneously having to pay both for their own future care and the care of previous generations.’
In short, we argued that the care system should adopt the model of the state pension – the state would provide a base level of decent standard care for everybody while encouraging and incentivising people to top up that care via their savings or housing wealth. The additional top up, which we termed the Care Supplement, could be paid for in three ways: from people saving small amounts across their working life; through the payment of a lump sum upon retirement, either from savings or existing pension pots; or via equity withdrawal from people’s homes, which could potentially be realised through downsizing or a deferred payment when the property is sold. The first method ensures today’s younger people are thinking ahead and saving for their own future care needs while the other two mean older working age people and those who already need social care and have savings and assets are encouraged to support themselves. Most importantly for the general public, it does not require anyone to sell their homes during their lifetime.
This model protects councils from the soaring cost of care and encourages them to invest in greater provision of social care beds and retirement housing and, unlike the Archbishops’ plan, won’t add an unnecessary financial burden to working age people who are already shouldering enough.
This way of finding more money for social care would mean we not only had a care system we could be proud of but would avoid adding another burden to the hard-pressed young people who are struggling to build their own lives. I would gently suggest to the Archbishop that this is a project with a genuine moral purpose.
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