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Five reasons why the ‘dementia tax’ U-turn was inevitable

‘The Tory “dementia tax” could backfire for Theresa May’ was the Coffee House take last Thursday, perhaps the first mention of that phrase in the media last week.

It took a few days for the announcement to sink in, and for the ‘dementia tax’ tag to stick. But it most certainly has backfired now. Jeremy Hunt tells the Evening Standard that the government wants to ‘make sure that people who have worked hard and saved up all their lifetimes do not have to worry about losing all their assets’. It seems there will, after all, be a cap on what an individual has to spend on care. Theresa May has separately promised a consultation that will at least look at a cap.

This is the second major U-turn from the government in a matter of months – after the scrapped rise in national insurance for self-employed people after the budget. It doesn’t exactly look ‘strong and stable’, does it?

But here are five reasons why it had to happen:

1. The ‘dementia tax’ was bombing on the doorstep

The BBC aired some remarkable footage last night, showing the Prime Minister being confronted – albeit very politely – by a middle-aged female voter who said she was concerned by the Tory policy on old people. Almost certainly, this was a reference to social care.


Others reported similar conversations on the doorstep. Westbourne Communications’ CEO was canvassing in East Anglia over the weekend and says ‘the ‘dementia tax” was raised incessantly by elderly voters:

The ‘Dementia Tax’ was raised incessantly by elderly voters – and there are lots of those in Norfolk and Suffolk. This policy is brave, but it’s bombed big time. From voter responses, there’s a lot of confusion and concern which, however misplaced, is bad news for Mrs May. Maybe it will all blow over? Maybe campaigns don’t matter and voting numbers end up where the polling began at the beginning of the election? But based on the feedback on the doorstep, this will cost a few seats and quite a lot of political capital.

This is a policy that was cutting through with the electorate – and not in a good way.

2. It was a last-minute idea

The FT reports this morning that it was inserted at the last minute into the manifesto by Theresa May’s chief of staff, Nick Timothy. This kind of briefing – clearly by senior Tories – just a couple of weeks before a general election is extraordinary. No 10 likes to keep tight control over policy. The manifesto wasn’t leaked, unlike Labour’s, because only about three or four people had read the thing. This is the problem with that approach.

3. … and a bad one

There have been spirited attempts to defend this policy, notably from Fraser Nelson in our Coffee House Shots podcast (see below), from Merryn Somerset Webb in the FT (in which I think she calls me a smarty-pants), and Libby Purves in the Times today.


Fraser Nelson, Will Heaven and Lara Prendergast discuss the ‘dementia tax’

But ultimately this policy seems more unfair than what the Conservatives had been proposing until Thursday: pooled risk, and a cap on what each of us would have to pay, rather than individual risk and almost unlimited costs. The reaction to the policy proves, I would argue, that people in this country – partly due to the NHS’s successes – prefer everyone to pay a little towards health and social care rather than for most to pay nothing and for a few to shoulder massive burdens. Britons are, it turns out, comfortable with collectivism.

It was notable on the Sunday morning TV shows that even Tories were struggling to back it. Boris Johnson appeared almost to pre-announce Theresa May’s consultation in an interview with Robert Peston and only praised the ‘broad thrust’ of the policy. Even the uber-loyal Sir Nicholas Soames said the detail needed looking at.

4. It was costing her media support

One thing that was remarkable about last week was how papers like the Daily Mail welcomed this policy, even though it could be seen as a direct attack on their readers. By the time the Mail on Sunday went to press, however, the narrative was beginning to change. The ‘dementia tax’ tag had stuck.


5. It might not have worked in practice

More prosaically, the social care policy might have been very tricky to implement. The Times reported today:

Theresa May’s plans to overhaul social care could be wrecked by poorly performing local authorities… Research suggested that people in some areas were struggling to exercise their legal right to defer residential care payments until after their death, with some authorities making it difficult or impossible to strike a deal.

This followed a Sunday Times story that ‘couples could be penalised if one needs to move into care but the other partner is able to stay in the family home’.

Fundamentally, it appears this pledge was simply not thought through. Today Theresa May is paying the heavy price for that.


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