First the good news - we live longer. The bad news concerns how to fund increased demand for adult social care. This requires sober debate and will increasingly dominate British politics.
The government has established an independent commission to devise a fair and lasting system to give people support to lead their lives with dignity.
This is close to my own heart as a former care worker. A decade back I worked with Claire Rayner, the respected agony aunt and advocate for elderly people in the Right to Care campaign.
Before the election, the Conservatives abandoned cross-party talks when Labour and the LibDems refused to drop a posthumous levy on people's estates to pay care bills. The Government has now included this as an option but I have doubts because it assumes that house prices will continue rising.
One difficulty is the mismatch between short-term electoral cycles of five years and longer socio-economic cycles. Instant action to win votes is no substitute for longer term planning and popular support.
The main problem with funding adult social care is due to our fantastic successes in helping people live longer and surviving diseases. Twice as many over 85s are alive compared to just 25 years ago.
The post-war baby boom generation - born after our soldiers returned from the front - is also reaching retirement age. A quarter of the population will be over 65 in 20 years and most will need some form of social care. There will also be fewer workers paying for more pensioners.
The Newcastle University Institute for Ageing and Health urges a radical reassessment of the position of older people with new attitudes to ageing. They rightly say that ageing is an economic good with older people buying and providing products and services and so boosting economic growth. But the question remains how to fund social care.
My strong preference has long been that general taxation should fund it. The basis of our welfare state is that we pay according to ability and see returns over our lifetimes. This is cheaper and fairer than millions making individual arrangements.
If this stance had been taken earlier it would now be more widely accepted. Last year, I pushed a Labour minister to fund social care this way but he flatly refused, although it is how we fund the NHS.
I then suggested a possible way forward - that a small portion of VAT fund social care. The Labour Government had then temporarily cut VAT 15% to encourage consumer spending. I asked whether just half of one percent, when VAT returned to its normal rate, might help plug the gap specifically on social care - a hypothetical hypothecated tax of nearly £2.5 billion.
Let me be crystal clear. It was a second best option. Indirect taxes indiscriminately charge poor and rich alike and hit poorer people more. But politicians have to work with what they've got.
As part of the Coalition's mantra that savage cuts are 'unavoidable,' VAT is soaring to 20%. This is the worst of all worlds especially because this government scrapped planned extra national insurance on employers but kept it on employees and failed to raise capital gains tax enough whilst promising to cut corporation tax. This is the wrong balance which doesn't outweigh the small gains of a slight increase in when people start paying tax. We should tap the banks for bigger contributions for both international and domestic needs.
The social care inquiry can only work if all options are considered and a long-term cross-party consensus constructed. It may mean a mixture of funding from taxes and our own resources - co-sharing in the jargon.
Elderly people should receive the best possible care. It is the very least that the very people who built our welfare state deserve. Being old and needing care should be treated no differently to being ill and needing care.
Newcastle Chronicle and Journal
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