NOW MAKE THE CARE WORTH THE COST , BORIS
THE GOOD NEWS: After years of neglect, a plan at last for UK’s social care crisis THE BAD NEWS: Tax burden will be highest in history – and as help for families won’t start for TWO YEARS, the Mail’s demand...
BORIS Johnson unveiled historic plans to reform social care last night as he hailed the Daily Mail for pushing the crisis to the top of the agenda.
With a high-stakes political gamble that broke manifesto pledges on tax and pensions, he announced a new levy to tackle the NHS backlog and fix social care.
A £86,000 cap on lifetime care costs will be introduced in 2023 to reduce the pressure on pensioners to sell their homes to pay their bills.
But the extra 1.25 per cent levy on national insurance and dividends will leave Britain with the highest sustained tax burden in history.
Mr Johnson insisted the pandemic and the social care crisis meant he had to break his election promises on taxation. He said the money raised would clear the NHS backlog and finally address the social care crisis – a problem he said governments had ‘ducked’ for decades.
In an article for the Mail, the Prime Minister said this paper’s landmark campaign to secure for dignity for the elderly had played a critical role in persuading him to ‘grasp the nettle’ of social care reform. ‘In truth, it is in
large part the Mail’s campaign which drove this issue to the top of the agenda,’ he said. ‘The nation owes you a debt of gratitude for continuing to fight for this.’
MPs will vote this evening on the £36billion plan set out by the PM yesterday.
The package – a double tax rise totalling £12billion a year involves a national insurance increase of 1.25 percentage points from next April affecting 25million workers.
The tax will be rebranded as a dedicated ‘health and social care levy’ the following year. Ministers have also agreed the same rise on dividends, hitting savers.
Under the new levy a typical basic rate taxpayer earning £24,100 will pay £180 more a year, while a higher rate taxpayer on £67,100 would pay £715. Anyone on £30,000 a year will pay £255 extra tax, or roughly £5 a week.
The tax bombshell shatters the PM’s solemn manifesto promise at the 2019 election that he would not raise national insurance. But it will provide billions for the NHS to clear a waiting list forecast to hit 13million by the end of this year.
Mr Johnson admitted waiting lists would ‘get worse before they get better’ but insisted the new tax was ‘fundamental to putting the NHS back on its feet’.
In October 2023 the levy will fund the introduction of an £86,000 cap on lifetime care costs.
As the Prime Minister refused to rule out further tax rises this parliament:
■ Work and pensions secretary Therese Coffey confirmed that the pensions ‘triple lock’ will be suspended next year, breaking another Tory manifesto pledge;
■ The Prime Minister refused to rule out a snap reshuffle as early as tomorrow;
■ Tory opposition to the plan melted away, with only a handful of MPs publicly criticising the decision to break the manifesto tax pledge;
■ Business leaders savaged the national insurance increase, describing it as ‘a drag anchor on jobs growth at an absolutely crucial time’;
■ The PM said the NHS would be asked to run at 110 per cent of capacity, with an additional nine million procedures over the next three years;
■ Chancellor Rishi Sunak hinted at his unease over the rise, saying he could ‘certainly sympathise with and understand’ concerns over increasing taxes;
■ Mr Johnson confirmed that, unlike normal national insurance, the new levy will be paid by working pensioners from April 2023;
■ Self-funding care residents will be able to ask their local council to arrange their care;
■ Labour was agonising over whether to oppose the tax rise.
The new package was broadly welcomed by Tory MPs, with former health secretary Jeremy Hunt praising Mr Johnson for ‘biting the bullet on this intractable issue’.
But it also raised a series of concerns, including how the Government will guarantee that the proceeds of the tax rise will not be swallowed up by the NHS.
In the first three years of the plan, social care will receive just £5.4billion of the £36billion raised, with the NHS taking the rest.
Downing Street said the care sector would get ‘more’ after this, with the NHS expected to have cleared the waiting list backlog. No figure was given.
Damian Green, who served as deputy to Theresa May as prime minister, yesterday warned the care sector could remain underfunded.
He said: ‘My fear is that, once you start spending on perfectly proper things like the NHS backlog, there will never come a point where there is enough money in the new fund to transfer to social care, which needs it now. You cannot spend the same pound twice.’
Critics also raised concerns that the cap will not be introduced until 2023, more than four years after the PM first said he had a plan to tackle the crisis.
The Department of Health last night clarified that the new plan could benefit people already in the care system. But only costs incurred from October 2023 will count towards the cap and it does not cover accommodation costs in care homes. Officials were unable to say whether there will be a cap on these.
Mr Johnson hailed the introduction of an £100,000 ‘asset floor’, a level of wealth below which people will get some help from the state. At present, anyone worth £23,250 or more has to fund all their costs.
However, the state will step in to fund the total bill only once someone’s assets have dwindled to £20,000.
Social care providers warned the package was ‘nowhere near enough’ to tackle the crisis in the sector.
Other groups welcomed the announcement, acknowledging that it represented a significant step forward and an opportunity for long-awaited change.
Professor Martin Green, chief executive of Care England, said the cap was ‘more generous’ than expected. He added: ‘We’ve got to find a way in which this process is speeded up, because the crisis in social care is happening now.’
Mr Sunak wanted to cap the increase at 1 percentage point and proposed cheaper alternatives but was overruled by the PM
However the Chancellor won the battle over the level of the care costs cap, which the PM had originally wanted to set at £50,000, helping more families.
‘Biting the bullet on this issue’
BORIS JOHNSON’S manifesto-busting tax rise has been billed as the long-term ‘fix’ to social care the country has been waiting for. But take a glance at the small print. Over the next three years, all the money raised through the new Health and Social Care Levy — some £36billion — is heading to the NHS. That’s in addition to a £5.4 billion NHS handout announced only a couple of days ago.
Another £41billion for the NHS, just like that: roughly equivalent to an entire new Ministry of Defence.
The key question is: will we see the results of this huge cash injection? I have my doubts that we will.
The backlogs caused by Covid-19 are a convenient excuse for soaring waiting lists, which now stand at 5.5 million and are projected to rise to an eyewatering 13 million.
But the truth is, even before Covid-19, waiting times for treatment in Britain were woeful. In January 2020, before the pandemic struck, more than one in six patients were waiting over 18 weeks for routine treatment.
Yet politicians and campaigners continue to insist that we have ‘the best healthcare system in the world’. We the public, who pay for it all, are expected to embrace the NHS and keep throwing billions at its creaky infrastructure.
The former Chancellor Nigel Lawson was spot on when he famously claimed ‘the NHS is the closest thing the English people have to a religion’.
Indeed: the deification of the NHS was rubber-stamped by the Queen herself earlier this summer when she awarded the NHS the George Cross. In a heartfelt note, she praised its staff for their ‘courage, compassion and dedication’.
Courage
It’s hard to argue with Her Majesty’s sentiment, given the valour shown by exhausted doctors, nurses and all health and care workers who endured long hours in inadequate PPE.
Many deserve awards for their courage, tenacity, compassion and professionalism. But to give an award to the bloated, bureaucratic behemoth that is the NHS is to me a parody of the very thing the George Cross — a testament to ‘acts of the greatest heroism’ — stands for.
The value of healthcare ‘free at the point of use’ is seen as part of Britain’s identity. But the sense that the NHS is something we must applaud and worship, rather than critique like any other official body, does not serve us well.
The feature so often proclaimed as unique — universal coverage, free at the point of need — is in fact the norm across the developed world.
Access to healthcare stands at 100 per cent in many countries and 99.9 per cent in several others.
To be clear, the American system, which defenders of the NHS portray as the only alternative, is an outlier. Many Americans go bankrupt every day for want of being able to afford swingeing bills.
Very few NHS critics suggest Britain follow that example.
If we look at Germany and New Zealand, however, we see social health insurance systems that distribute costs fairly through means-testing and community rating. This can be more progressive, ensuring poorer people don’t receive substandard care — and can often lead to a lower bill for the country at large.
In contrast, thanks to the enduring notion that the NHS is somehow special and ‘free’ — although it is of course funded to the tune of many and ever more billions by us taxpayers — too many of us are pathetically grateful for any care we do get.
We talk about the NHS having ‘saved our lives’ as if this were a privilege of being British, rather than something health services everywhere are supposed to do.
Frankly, the NHS gets an awful lot of credit just for simply doing its job. In the same way, we tend to think that crises somehow happen
the NHS, not because of it. The reality is that it is not normal for a health service in a rich country to have a flu crisis every winter.
We expect to wait months for an operation and are pleasantly surprised if we wait less than several hours in A&E.
We are meant to be impressed by being able to see a GP today, even though we called yesterday. Services that would be substandard in many countries are regarded in Britain as normal, if not excellent.
The fact is that the NHS is a failing system. The UK has 2.5 hospital beds for every 1,000 people, close to half the EU average and less than a third of the number in Germany — or even Bulgaria.
Survival
We have 2.8 practising doctors for every thousand people, fewer than any EU country bar Poland and Cyprus and well below the EU average of 3.7 per 1,000.
The UK’s cancer survival rates lag behind Italy and France, and more of us die from cancer than do Belgians, the Dutch, Germans, the Japanese and New Zealanders — all countries with a social health insurance system.
Rates of ‘avoidable deaths’ are even worse.
In 2014, a league table by the Commonwealth Fund found that Britain performed well on ‘access’, ‘equity’ and ‘care process’ but came second-last for ‘health care outcomes’.
What does that mean? As the Left-wing Guardian newspaper put it, the ‘only serious black mark against the NHS was its poor record on keeping people alive’. Quite a mark! And certainly the ‘world’s best healthcare system’ has shocking disasters on its record, from the failures at the Shrewsbury and Telford Trust hospitals which led to hundreds of infant deaths to the high rate of children’s deaths after cardiac surgery at Bristol Royal Infirmary in the 1990s.
The Infected Blood Inquiry is looking into the deaths of thousands of haemophiliacs given blood products contaminated with hepatitis C and HIV during the late 1970s and early 1980s.
In fairness, the NHS can be superb in individual cases. Most of us have good stories to tell alongside the bad.
Blame
The service employs many talented and dedicated people who go the extra mile to save lives — working long hours, often for relatively low pay in a dysfunctional, antiquated and frustrating bureaucracy.
They do a tremendous job despite, not because of, the system — and they know it, for no one complains more about the inadequacies of the NHS than those who work in it.
Some like to blame budget cuts, but in 2019, the UK spent 10.3 per cent of GDP on healthcare — some £177 billion — and the same as Denmark. Only four of 27 EU countries — Germany, France, Sweden and Austria — spent more.
Despite ‘Tory austerity’ and Labour’s ‘24 hours to save the NHS’ warnings, the health budget has risen every single year in real terms in the last decade — all under Conservative prime ministers.
Where does all this money go? Scandalously, a great deal is spent on pumping up the pay cheques of the managers, management consultants and bureaucrats (many earning more than the prime minister) who make up a hefty slice of the 1.4 million people working within the NHS.
Then there’s the eyewatering waste. In 2013, MPs described an attempt to upgrade NHS computer systems in England as one of the ‘worst and most expensive contracting fiascos’ in publicsector history. It was abandoned at a cost of £11 billion.
The NHS’s accountancy books are littered with foolhardy spending: in 2016, it spent more than £70million giving expensively priced paracetamol to patients in England despite it being available over the counter at a fraction of the cost.
In short, the idea that its
shortcomings can be solved by throwing more money at it has been tested to destruction.
For all our banging of pans during the ‘Clap for Carers’, the NHS performed neither particularly well nor particularly badly compared to other countries during the pandemic. A study by Kristian Niemietz, my colleague at the Institute of Economic Affairs, convinced him there was ‘nothing special about the NHS’ and ‘no reason for us to feel particularly grateful that we have it’.
Naturally, he was vilified. As an American friend remarked to me, criticising the NHS in Britain is like criticising the military in the U.S. — you just don’t do it.
But just as it is possible for Americans to oppose their country’s foreign policy while supporting the troops, it should be possible for Britons to criticise the structure and management of the NHS while appreciating the work done by its staff.
If we want a truly ‘world-beating’ NHS, we need to abandon the delusion that it already is. When other countries are producing better health outcomes with fewer resources, we should put patriotism aside and learn from them.
CHRISTOPHER snowdon is head of Lifestyle economics at the institute
of economic Affairs.