John Oxley: In a bid to cut immigration the Government has not explained how it will pay for social care

John Oxley is a consultant, writer, and broadcaster. His SubStack is Joxley Writes.

The cynics’ standard response to a government announcement is “Cui bono?” – who does it benefit?

It’s a nod to the idea of ulterior motives and that some conspiracy or enrichment lies behind everything. In modern politics, however, a more apt question might be “who pays?”. After all, our governments seem keen to announce new spending commitments with little clarity about where the money should come from. More than that, they are unwilling to even get into the question at all.

This week’s announcements on immigration were a classic example of this.

Among them were pledges to reduce the number of health and social care workers from abroad, enabled by better conditions and pay for those in the sector. It is an admirable aim. The current system effectively relies on extracting workers who are essential in their own country and using them to supplant locals who have better options. The visa type has been the main reason for the post-Brexit surge in net migration, but fundamentally, that is because we haven’t found a politically acceptable way to pay for it.

At present, the government is undertaking the Casey Commission. It is tasked with finding a short-term proposal on social care by next year, and to report on a long-term one by 2028. That should sound promising, but in reality, it is a repetition of the same government inaction that has dogged the issue for decades. Casey’s is the third report in as many decades, each of which has failed to be implemented. It shows the problem isn’t knowing how to cut through the issue, but finding the political will to do so.

It does not take a major review to work out how to fund social care. You can do it in a paragraph.

At one end, the fully private option would be to see people pay for their own care in its entirety. At the other end sits the fully public option, paid for out of taxes, with no one contributing to their own needs. In the middle sit hybrid models: capping how much people are forced to pay, insurance-based models and means-testing. A capable policy-wonk could probably flesh these out in a couple of weeks. That’s not where the problem is. It is with the politicians.

The reason social care hasn’t been fixed is that our officials are too cowardly to pin the cost on anyone. A fully taxpayer-funded model will add to Britain’s fiscal woes. In the short term, it would mean tax rises. On a longer horizon, it repeats the problem with our other services, creating obligations that future receipts might not cover. It can also end up becoming a transfer from earners to those with big assets and low income, increasing generational inequality, and

Demanding people pay for their own care is politically fraught, too. Voters seem implacably opposed to using their own assets to provide for themselves in old age. It is the sort of thing we now expect the state to step in with. There are also issues of fairness. Care costs can be very expensive and can wipe out the assets of the moderately well off. The state has no choice but to cover those who have no money, but a few years of care can cost private payers tens or hundreds of thousands of pounds. Ruinous to the moderately off, bearable for the very rich.

Engaging with this isn’t very comforting for politicians. No one likes putting up taxes, but nor do they like telling people they might have to sell their home or grind through their savings in old age. Indeed, the one serious attempt to address the issue, in the 2017 Conservative manifesto, has become a byword for political self-immolation. Instead of making a decision, our leaders fall into the displacement activity of calling for another review.

These reviews and commissions make it look like you want to solve the problem, but they usually fail. Taking a hard look at the issue, they come back with thoughtful, workable proposals. Perhaps not perfect, but achievable improvements on the status quo. They then get shelved by politicians because the answers are uncomfortable. It is not a want of information that stops this problem from being solved, but a lack of courage.

For more than a generation now, we have been stuck with an unintentional halfway house. In the thirty years since Tony Blair first ordered a review and failed to implement the results, millions have gone through the social care system. Many have spent fortunes on care, while the public burden has driven councils, which currently cover the bill, to bankruptcy. At the same time, our immigration policy has been shaped by a need to keep costs down, bringing in new labour rather than letting wages rise.

Abolishing the social care visa will not solve this problem. Doing it before there is a proper plan for funding social care will mean the money has to come from somewhere. The government has been far from clear on this. They are sticking with their plans not to raise direct taxes, but paying care workers more will mean either raising more money, greater borrowing, or shifting funds from elsewhere. They have been coy on this, while there is also every chance that when the Casey Commission does report, the Treasury and Labour backbenchers will stamp on its recommendations.

Eventually, someone will have to make a decision on how we fund social care.

The political dimensions won’t get any easier, so someone might as well do it soon. We cannot carry on as a country with successive governments outsourcing thinking without taking responsibility for decision-making, or kicking things into the long grass, hoping the other team will take the popularity hit when they have power. It just becomes a way of perpetuating the permanent crisis, ignoring the rising costs of the status quo, and diminishing the impact when things are actually changed.

Labour is right to target social care visas as a way to reduce immigration. However, they also have to consider why this became such a major route into the country. It was driven by an awkward truth, that a failure to sort social care funding, and an unwillingness to take responsibility for paying for it, made keeping costs down a priority. As we look to pay care workers more, we also have to grasp the nettle of who should pay and how. We must also admit that the failure isn’t knowing what to do, but doing it.

Reviews will give politicians answers, but they need to find the guts to implement them themselves.