James Forsyth
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If the Tories do this, it will put Labour in a tricky position. How do they respond when a Tory government raises taxes to put more money into the NHS? They can argue that national insurance is more regressive than income tax, but they’ll have to say whether they support or oppose the move. The Tories will also be able to claim that any Labour promise to spend more on the NHS or social care will lead to this tax going up.
Johnson feels he needs a solution to social care, having promised to solve the issue when he became PM
But there is a political, as well as an economic, danger to the Tories in such an approach. Ahead of the announcement in the autumn, what remains of the low-tax Tory right will mobilise against the proposal. This bloc is not as formidable as it once was, yet it can still cause problems. Inevitably, more resources will start to be demanded to deal with the NHS backlog. Its next chief executive is unlikely to be as politically canny as Stevens, who was an expert at persuading the government that this was his last demand for more cash and then, when that was settled, asking for more, but it is not hard to work out how to play the game.
The irony of the policy is that the cap is not, in fact, the biggest problem with social care. The low regard in which the work is held — as evidenced by the poor pay and the emphasis on agency staff — is a more pressing problem. But the cap has taken on huge importance. The NHS might be the nearest thing the British have to a national religion, but for the property-owning classes, the belief you should be able to pass on that asset is a close second. The potency of the aspiration that wealth should cascade down generations means that any threat to it must be dealt with. Johnson’s calculation is that preventing any risk to this ranks higher than a commitment to low taxes in the hearts and minds of Tory voters.
The calculation is likely correct in southern seats with high property prices. The social-care cap will be the most middle-class part of the welfare state. It’s telling that national insurance, which pensioners do not pay, is the chosen vehicle. The tax exacerbates the issue of generational fairness. If this policy is pushed through and then the state pension increases significantly because of how the pandemic has led to earnings bouncing around (the triple lock requires the state pension to rise by whichever is highest: 2.5 per cent, inflation or earnings) then Britain would start looking like a gerontocracy. Basic fairness requires the increase in the state pension be linked simply to inflation this year.
Longer term, the bigger worry for the Tories should be how they stop the rise of an ever-bigger state. After all, it is hard to believe that this will be the last tax rise to cover the costs of social care and the ballooning NHS bill.
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