For once, it’s been a quiet summer. So the news in late August that the government was considering a ‘Care Isa’ was something of a lone sound punctuating the silence.
The idea may have been roundly dismissed (see page 13 for a taste), but that doesn’t mean it will automatically be mothballed. Just look at the Help to Buy initiative for evidence of a policy pursued in the face of near-universal criticism.
It’s worth emphasising the policy’s flaws. The most obvious concerns its principal attraction: the ability to avoid inheritance tax. While these receipts are rising steadily, the vast majority of people still aren’t captured by it.
A less significant point is that it would add to an already hugely cluttered Isa landscape. Trade bodies and MPs had begun calling for a reduction in the number of Isas available just weeks before this latest idea was floated.
It’s clear that the care crisis will not be easy to solve. The sheer cost of care homes, now running into thousands of pounds a week in many cases, ensures that.
Tax rises, insurance schemes, ‘care pensions’ have all been mooted, and it’s not obvious that any would be sufficient to resolve the issue satisfactorily. But even in this context, the Care Isa simply shows the paucity of government thinking. It’s not so much a sticking plaster as a piece of tissue paper, and doesn’t bode well for this autumn’s social care green paper.
This unwillingness to commit to something more consequential is partly due to the great unknown of 29 March 2019. But it’s also been reinforced by the events of the past few years.
A firm commitment to fiscal “consolidation”, a shaky leadership loath to rock the boat, and a series of embarrassing policy U-turns – the most high-profile of which itself involved later-life care – have boxed the government in.
Those in the pensions world may welcome the relative serenity that stems from this policymaking caution. But the care crisis is not a subject in need of a light touch. It requires a comprehensive rethinking of current attitudes.
The irony, if you can call it that, is that the government does have room to manoeuvre, even under its own self-constraining terms of reference. Its finances have been improving for some time now; use a crude income versus expenditure model, and the country is actually running a fiscal surplus at present.
That’s almost entirely due to the decline in expenditure seen over the past eight years. And yet our leaders remain terrified of spending in any shape or form.
So what’s next, should the green paper prove to be a non-event? The Budget, lest we forget, is now scheduled for the end of the year, in place of the old Autumn Statement. It’s likely to take place relatively soon after negotiations with Brussels are due to conclude.