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Tories must call off their new death tax on pensioner homes


Published May 22, 2017

PatrickOflynn.pngUKIP economic spokesman Patrick O'Flynn today called on the Conservatives to scrap their plans to take huge sums out of the estates of elderly people who have received social care.

He said: "This Tory death tax could involve taking tens of thousands or even hundreds of thousands of pounds out of someone’s estate if they have been unlucky enough to suffer an extended debilitating condition late in life.

"This is a Russian roulette approach to paying for social care for the elderly and the abrogation of government responsibility. It makes a mockery of the claims of Mrs May and her key advisers to be running a communitarian Conservative administration.

"The Prime Minister seems to wish to avoid scrutiny on heavyweight political programmes in this election. She went on the One Show recently. If she sticks to this policy her next appearance should be on Total Wipeout because that is pretty much what she has in mind for the estates of many elderly people."

Mr O'Flynn predicted the Tory plan to raid assets would lead some frail elderly people to regret still being alive and cause others to try and muddle through without necessary social care, leading to more falls and other domestic accidents that would in turn put more pressure on hospitals and lead to premature deaths.

He called on the Conservatives to at least give people the option of paying into a social care insurance scheme from age 50 that would guarantee their care would be funded if they needed it in later life.

Read the full speech below:

The Conservative plan to confiscate assets pound for pound from elderly people to pay for their social care costs is the worst and the stupidest public policy proposal of recent years. And the nastiest too in effect if not intention.

It cannot be allowed to be implemented. And today I am going to explain why that is the case.

The Prime Minister is effectively proposing a 100 per cent inheritance tax on assets over £100,000 for those unlucky enough to develop a debilitating long-term condition that requires domiciliary care, such as dementia or acute arthritis.

Every pound spent on social care for these unfortunate people will be claimed back from them either at the time they receive it or from their estate when they die.

Now most policies that intrude on personal finances concern tens of pounds – such as insurance tax rises – or hundreds of pounds at the most – such as UKIP’s own excellent proposals to cut the cost of living, saving households £400 a year each by taking taxes off domestic energy and other measures.

But this Tory death tax is in an altogether different league. It could involve taking tens of thousands or even hundreds of thousands of pounds out of someone’s estate if they have been unlucky enough to suffer an extended debilitating condition late in life.

Damian Green seems to feel he is qualified to tell people how much is reasonable for them to pass on to their children, but the financial exposure the Tories are leaving millions of elderly people facing is not reasonable at all.

In fact this is a Russian roulette approach to paying for social care for the elderly and the abrogation of government responsibility. It makes a mockery of the claims of Mrs May and her key advisers to be running a communitarian Conservative administration.

Just consider for a moment typical house prices in many parts of the country – particularly but not exclusively in southern England. In Dagenham, for example, average house prices are £295,000, in Thurrock they are £338,000, in Epping more than £500,000 and in Ramsgate £210,000.

Homeowners requiring domiciliary social care are typically people who have paid off their mortgages and therefore own all or nearly all the value of their home. So in these ordinary English towns that I have listed anything from £110,000 to £400,000 will be exposed to the death tax.

The Prime Minister seems to wish to avoid scrutiny on heavyweight political programmes in this election. She went on the One Show recently. If she sticks to this policy her next appearance should be on Total Wipeout because that is pretty much what she has in mind for the estates of many elderly people.

The Conservatives have created a cult of the leader under Mrs May, but if they persist with this policy they will soon find out that this isn’t North Korea. The British public are free thinkers who do not take kindly to being treated like fools. Older voters in particular are not going to be brainwashed into voting for Kim Jung Theresa and against their own financial interests on such a huge scale.

It is often said that when there is a weak opposition the danger of bad government escalates and that is what we are seeing with the Tory death tax. Mrs May’s Tories think they can do what they like.

This policy is not just a dementia tax, it is a tax on all forms of debilitating disease and infirmity that lead to an elderly person needing social care. Every extra week that they live will lead to a further loss of equity and of what they can hand on to their children.

That fact will undoubtedly lead to an extra psychological toll on patients already struggling with disease. At the extreme end of the spectrum, it is likely even to make some elderly people feel regretful still to be alive.

The Tory policy will also cause some specific anomalies and perverse consequences that I want to set out and then hear answered by its advocates – if any can be found to field questions by the end of the day.

What happens, for instance, if a grown-up child is sharing the house of but working full time too? Does the house get sold immediately on the death of the elderly person? If so then that will render someone homeless just as they have lost a parent. Or, if not, won’t that lead to huge anomalies and scope for fee avoidance?

In fact this scheme, if implemented, will create a whole new tax avoidance industry with elderly people piling into equity release schemes and being given incentives to go on spending sprees to get the remaining value of their assets down under £100,000. The message from government would be: don’t be successful and don’t be financially responsible either.

Another even more serious perverse outcome could be that people who need social care refuse to accept it and try and muddle through in order to preserve their estate. With the inevitable result that they suffer far more falls and other accidents around the home which then necessitate long and expensive hospital stays or even bring about their premature death.

This is a devastating death tax dreamt up on the back of an envelope and apparently winging its way into the Tory manifesto without consultation with expert opinion, the Cabinet or even the ministers in charge of the policy area in government.

It doesn’t have to be this way were governments to make different and better choices on public spending priorities. What is needed first is an immediate and substantial injection of money into the social care system. Because UKIP is prepared to cut unjustified spending on the Barnett Formula, HS2 and Foreign Aid, we are able to offer just such a financial boost – and will do so when we set out our manifesto on Wednesday.

But longer term, we also need an agreed way forward for social care to ensure that risk is fairly pooled and bills are fairly paid. Possible solutions range from a National Care Service – as set out by Andy Burnham some years ago – to insurance products that people could be encouraged to invest in.

The Burnham route might have something to commend it if the public could be assured the resources of a National Care Service, funded out of tax revenue, could be protected against freeloading by new arrivals from other countries. But I am afraid that hurdle would not be cleared if Labour were in government because that party has a reputation for being generous to a fault with other people’s money.

Were I in the shoes of the Tories today, the first thing I would do would be to recognise that Denis Healey’s Law of Holes is now in play – for the uninitiated I should explain that this law is very concise and simply states in regard to a hole: when you are in one, stop digging. Declaring financial war on millions of retired people who spent a working life being responsible and building up assets does not amount to compassionate Conservatism. It amounts to betrayal.

So I offer this advice to Team Theresa: Why don’t you at least offer people a meaningful choice? That is, after all, what Conservatism used to be about. So why not give people an option of chipping in to a voluntary social care costs insurance system run by government, from say the age of 50? If people pay in and then need care, they are covered and should not be charged a penny. If, however, they have chosen not to pay in then at least you will have a semblance of an argument for reclaiming the costs from estates after death. If you did this then you could even claim to be adding to your manifesto proposal rather than abandoning it altogether, thereby sparing the blushes of whichever young Tarquin or Jocasta snuck it in without proper stress-testing or scrutiny.

I think one could tell from the demeanour of Tory ministers sent out to bat for this policy on the political programmes yesterday that they were knew they were on a loser. So far the Conservative newspapers have not really got stuck into the policy with full vigour. The ones that care about their readers will do so this week because it is an unforgivable attack on responsible and hardworking people.

And my message to all those who may be hit by the Tory policy but who would never vote Labour is simple too: Ask yourself what is the best way to influence the Conservative Party’s behaviour and policies and the answer is obvious – by voting UKIP or at least threatening to vote UKIP. Look how it worked on Brexit, look how it worked on grammar schools.

So tell Tory campaigners on the doorstep that you are going to vote UKIP for a common sense and fair approach and there is a very strong possibility this policy will be ditched altogether or at least greatly modified by the end of the week.

Now I want to turn briefly to the second leg of the Tory attack on the elderly and that is on the issue of the winter fuel allowance.

The Conservatives tell us they will means-test it, but will not say what income level people will lose it. Pensioners can be forgiven for suspecting the vast majority of them will no longer be eligible. The Tories are claimed to be making a principled case against universalism in this area and replacing it with an assessment of need.

So how come the very next day after unveiling the plan, the Prime Minister was helping Ruth Davidson launch a Scottish Tory manifesto that pledged to keep the allowance for all pensioners north of the border?

This is yet another example of the English – and indeed the Welsh – being treated as second class citizens within the UK. There is simply no good reason why a millionaire pensioner in Edinburgh should receive an allowance of up to £300 to pay for winter fuel, while pensioners on modest incomes in Essex or Easington get nothing.

It is the Barnett Formula – which leads to public spending in Scotland being £1,700 per capita higher than it is in England – that is behind this. And so it is another vindication of UKIP’s policy of dumping that Formula and replacing it with a needs-based funding system instead.

So Mrs May’s social care plan is not Conservative and her winter fuel plan is not Unionist. Apart from that everything is going fine on the Conservative & Unionist campaign.

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