ALEX BRUMMER: New betrayal for social care
When it comes to social care, successive governments never miss an opportunity to miss an opportunity.
Labour’s foolish decision to set up a social care taskforce led by Baroness Casey, which will not report until 2028, is kicking a perennial problem into the long grass.
Some fourteen years have passed since the publication of Andrew Dilnot’s in-depth report on paying for social care. In 2019, Boris Johnson stood on the steps of Downing Street and promised to make social care reform a priority.
His government planned to pay for a new service through a 1.25 percent levy on ‘health and social care’, with the money raised set aside. Instead, revenues fell into the black hole of public finances after the Covid-19 pandemic.
In the meantime, the road from the hospital to social care remains blocked.
An older cousin spent five unnecessary weeks in the Royal Sussex County Hospital in Brighton last summer waiting for a social care package.
Lessons to learn: Keir Starmer should learn from the post-war Attlee Labor government, which did not hesitate and quickly legislated for a ‘cradle to grave’ welfare system
There are countless similar stories. The answer to the financing problem is obvious. In the years since the introduction of opt-out private pensions, as created by Adair Turner’s committee, some £30 billion has been accumulated in the National Employment Savings Trust and countless billions more in defined contribution pension schemes. Very few people opt for a plan where money is collected at source from pay packets.
Imagine how much money would have been raised for social care, both at home and in care, if a similar opt-out scheme had been set up in Dilnot’s day with low contributions.
It is recognized that there will be objections. Some on the left argue that young people should not be required to contribute to a fund for wealthy retirees. The answer is that young people can opt out. But by doing this, they will not be eligible for assistance if setbacks occur during their working lives or during retirement.
Health Minister Wes Streeting could learn from other G7 countries. In Germany, long-term care is levied on the income of working people and retirees, at a rate of 3.05 percent for those with children and 3.3 percent for those without children. In Japan, with its rapidly aging and long-lived population, everyone over the age of 40 must contribute to the long-term care fund. Only people over 65 can use the system.
The UK government’s idea of a new National Care Service is a great PR slogan. Starmer should learn from the post-war Attlee Labor government, which did not hesitate and quickly legislated for a ‘cradle to grave’ healthcare system.
Steel decision
Labour’s economic thinking was closely aligned with that of Joe Biden until the election of Donald Trump. Ministers would do well to see how the Committee on Foreign Investment in the US (CIFUS) and the soon-to-be-vacated Biden White House deal with Japan’s Nippon Steel’s £11.4 billion bid for the Pittsburgh-based established US Steel.
Despite a strong lobbying campaign from both Nippon and US Steel to seek approval of the deal, the outgoing president blocked the transaction on national security grounds. Steel is seen as a strategic industry. Importantly, the CIFUS report raised concerns that if Nippon’s global business interests required it, promises to the US government to keep the furnaces burning and save jobs would be dumped.
Business Secretary Jonathan Reynolds, the unions and other stakeholders would do well to keep this in mind, given the simple faith placed in the promises of Czech sphinx Daniel Kretinsky to secure control of the Royal Mail. He has pledged to keep the jobs, pay rises and universal service at the Royal Mail for five years. Such commitments have rarely proven enforceable. Should there be a global recession or interest rates rise, the economics of Kretinsky’s £3.6 billion offer will change.
Postal workers and consumers could pay a high price.
Tilting against windmills
Donald Trump’s plea to ‘open up’ the North Sea and get rid of wind farms will be seen as very unwelcome by Energy Minister Ed Miliband. It shows the scale of the problems facing the British ambassador to Washington, Lord Mandelson, in renewing the special relationship with the US. Energy security, employment and tax revenues should not be sacrificed at the altar of climate change.
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