After clashing with Boris Johnson over the issue at Prime Minister’s Questions on Wednesday, Sir Keir told the Local Democracy Reporting Service (LDRS) that the proposals currently progressing through Parliament were at odds with the Conservative Party’s 2019 election manifesto commitment that nobody in need of care would have to sell their property to pay for it.
The Prime Minister had responded to that accusation in the Commons by declaring that the government was “taking away the anxiety from millions of people up and down the land about their homes” with its plan to impose an £86,000 cap on the amount someone will have to contribute towards personal care costs over their lifetime.
However, Labour later published an analysis claiming that homeowners whose dwellings are worth less than £186,000 would be worse off as a result of an amendment to the proposals as they were originally set out in September.
The change – which was voted through by MPs earlier this week on a reduced government majority – means that any financial support provided by local authorities will not count towards the cap on an individual’s care costs, only the amount that the person pays themselves.
Opponents of the move say that it will result in poorer people making the same contribution to their care as the better off.
Labour cited separate House of Commons Library analysis showing that someone with assets – in savings or house value – of £100,000 would contribute 80 percent of their wealth to care costs under the revised plan, compared to 75 percent under the original proposal. The difference is more stark for those with assets worth less – an individual with £75,000 in assets would use up 73 percent of their wealth compared to 55 percent as the policy was originally conceived.
Speaking to the LDRS, Sir Keir said: “If you’re in [say] Burnley and you read the Conservative Party manifesto, you think: ‘Ah, right, I won’t now have to sell my house in order [to pay] for social care, because that’s what I’ve been promised.
“I would have thought that there are very many people in Burnley who simply wouldn’t be in a position to raise £80,000 plus unless they either sold their house or treated it as a form of inheritance tax.
“The identifiable promise that’s been broken is the promise to people in Lancashire that they wouldn’t have to sell their house, when I think it’s pretty clear that very many families will end up having to do so,” Sir Keir said.
According to the latest data from the website Right Move – based on figures from HM Land Registry – the average house price in Lancashire is currently £195,072, just above the £186,000 level at which Labour claims homeowners will be worse off because of the changes to the reform plans.
However, there is huge variation in property prices in the county depending on house type and area. The price of the average terrace house in Lancashire is £124,252, the typical semi-detached property stands at £180,568 and for a detached dwelling the average cost is £326,423. Meanwhile, Preston has an average house price of £178,146, compared to £141,285 in Blackpool.
The government has said that nobody will have to sell their home during their lifetime to cover the cost of care.
Pressed on whether Labour would guarantee that properties would not have to be sold before or after death to pay for care, Sir Keir said that Labour would take a “completely different” approach to funding social care – and criticised the 1.25 percent rise in national insurance that the government has announced will be used, in part, to cover the cost of the new £86,000 cap.
“We’ve said you’ll have to have a tax which is fair across those that have the broadest shoulders – and that it’s wrong in principle not to tax those that make their money from stocks and shares [and] dividends. The government has…focused on working people, working families – and we say it’s those with the broadest shoulders who ought to pay,” said Sir Keir.
A motion at the Labour Party conference in September, which was passed by delegates, called for an end to the need for people to sell their homes to pay for care, according to the LabourList website. However, it is the party’s national policy forum ahead of a general election that determines what goes in the Labour manifesto, which in 2019 committed to free personal care for the over-65s.
During Prime Minister’s Questions, Boris Johnson accused Labour of never having fixed the issue of social care costs “in all their years in office”.
He added: “We are saying to the people of this country that we will disregard your home as part of your assets if you and your spouse are living in it – and…you can have a deferred payments agreement if you move out of it and you are living in residential care.
“But most important of all, by putting the huge investment that we are making now in health and social care we are allowing, for the first time, the people of this country to insure themselves against the potentially otherwise catastrophic costs of dementia or Alzheimer’s – and even if you are not one of those people who suffer from those afflictions, we are taking away the anxiety from millions of people up and down the land about their homes,” Mr. Johnson said.
Responding to a follow-up question from the opposition leader, Mr. Johnson said of the Labour Party: “Only a few weeks ago, they failed to support the £36bn that will enable us to fix this and to help people up and down the country, not just to fix the social care problem, but to pay for people to live in their own homes and receive the care they need in their homes – that’s what this one-nation Conservative government is doing.”
In response to Sir Keir Starmer’s comments to the LDRS, a spokesperson for the Department of Health and Social Care said: “For the first time in history, we are stopping people having to pay unlimited amounts for their care.
“The new £86,000 cap will end the pain of unpredictable care costs so that more people can preserve their savings and assets and pass something on to their loved ones.
“As is current policy – if someone or their spouse lives in their home, they will not be forced to sell it to pay for care.”
Under the government’s reforms, individuals will continue to be able to take out a deferred payment agreement so that payments for care costs can be deducted from their estate after they have passed away.
The government expects that the certainty of the £86,000 costs cap – which excludes “daily living” costs such as food and accommodation – will create more of a market in financial products that enable individuals to plan for their future care needs.
Currently, an individual is not eligible for support with care costs until their assets fall below £23,250. As part of the reforms, that figure will rise to £100,000.
Under the new policy, anybody with assets of between £20,000 and £100,000 will have to pay £1 per week for every £250 they have between those two thresholds. People with less than £20,000 in assets will not have to use them to pay towards eligible care costs.
The Health and Care Bill, which contains the provisions for the social care reforms, will now be considered in the House of Lords, where it has been predicted that attempts will be made to amend it.