We must fix social care but the PM’s plan isn’t the answer
Daily Telegraph 25/07/26
Few things matter more to people than their home and their savings. So millions of people will be in for a shock this week, as our new Prime Minister sets out his plan to raid what they’ve built up to “fund” his plans for social care.
No one doubts the importance of social care reform. I certainly don’t. I’ve seen in my own family the toll that our broken social care system is taking on families. I know many Telegraph readers will have painful experiences too.
We haven’t seen any sign of a plan to fix it from Mr Burnham, but in the past he’s supported a flat 10 per cent tax on everyone’s inheritance. In other words, a universal death tax. There would be no exemptions, no thresholds, just a catch-all raid.
Inheritance tax is already one of the most hated taxes – even by the vast majority who do not expect to pay it. That’s why, in the past, parties like the Tories have promised to abolish it, only to let people down when in government.
Today, inheritance tax affects 4 to 5 per cent of households or 30,000 of the 680,000 deaths a year, as most estates sit below the threshold. But Mr Burnham’s death tax threatens to bring everyone into the net. So every family, however modest their own nest egg, would have to pay. HMRC’s figures suggest it would catch an extra 650,000 families a year.
Say you’re a widow, living in a typical £250,000 bungalow with a bit of savings in the bank. Currently you could leave that to your children untouched by the taxman. Rightly so, as you’ve scrimped and saved for that property – and don’t forget already paid taxes on it – your entire life. Mr Burnham’s death tax would upend that precious inheritance.
And what’s worse? Mr Burnham’s £18bn tax raid is unlikely to fix the problem. A national care service will almost certainly cost far, far more than Mr Burnham naively anticipates. For its many flaws, the present system of council and private funding keeps a lid on costs. NHS management – by contrast – is appallingly bad at managing costs, and a national care service is bound to be wasteful, with costs quickly soaring.
The already overbearing state will inevitably grow yet again, and incompetent ministers and Whitehall bureaucrats on fat salaries will fail to manage budgets. Labour has spent two years trying and failing to abolish the NHS England quango, so you can imagine how hard it would be to control. A 10 per cent death tax would just be the starting point, mark my words.
Will the wonderful people who work in care be better paid, or the quality of care improved? It’s hard to say. There’s no evidence that they would.
This tax is personal for Andy Burnham. He tried to implement it as health secretary (a role in which he did not excel) and as shadow health secretary to Ed Miliband (where it contributed to Labour’s defeat in 2015).
But he has no mandate whatsoever for this radical tax grab. Whenever the public have been asked before, they’ve said a loud “no thank you” to precisely this policy. They rightly want meaningful efficiency savings, not another tax assault.
So my challenge to Mr Burnham? If you think this is the right approach, call a general election and win a mandate for it. Reform will see you at the ballot box as we defend the interests of millions of workers and savers that deserve better.
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