SOCIAL CARE FUNDING : USE MY HOUSE !

With the next Budget due very soon, there have been the usual speculations about what steps Chancellor Hammond might take in order to boost the popularity of the Conservative government. As usual, most of the speculation is likely to be nothing but the imaginings of the fevered minds in the media, but some suggestions may be closer to the mark.

One of the ideas suggested has been that the Chancellor may look for ways to transfer resources from the elderly to the younger generation who are currently less than enthusiastic about the Conservative Party. It's been suggested that there could be some form of tax increases that would only affect the elderly though how realistic, and politically acceptable, any such move would be is questionable.

One of the main reasons for the failure of the Conservative election campaign was their suggestion of using the resources tied up in property to pay for social care in old age; the idea, as presented, proved electorally disastrous. For some reason that I can't really understand, it has become an accepted fact that 'the family home' is somehow sacrosanct and can't be touched. Government has even added weight to this notion by providing some inheritance tax exemptions for family homes, quite illogically in my view.

People who were able to save during their lifetimes traditionally did so for the purpose of being able to live a reasonably comfortable old age. Savings may have been as money in the bank, investments or even insurance policies, though for most, by far the most significant saving was their family home. Paid for out of their income over many years, their home was their principal asset and, as such, was realisable in the event of financial need. No more, it seems. The home is now protected to be passed on to subsequent generations who have done nothing to earn their good fortune.

If Chancellor Hammond really wants to transfer resources from the elderly to the young, he needs look no further than to a reversion of this crazy approach. My home belongs to me and I can see no logical reason for it's value not being used to fund any social care needs that I may have in old age. I see no logical reason why my home should be passed on, tax free, to the next generation when it is that generation that is then expected to pay for my social care costs - it's nonsensical.

Assets that are accumulated during a lifetime are not for the purpose of passing on but as a hedge against old age and infirmity. The Chancellor should remove the inheritance tax exemptions that currently apply and make it clear that social care costs are the responsibility of individuals, with appropriate safeguards and limits in place. Taxes could then be reduced, largely benefitting the young, one of those taxes quite possibly being inheritance tax itself which is currently levied at a penal rate of 40%, and this on assets which have been accumulated out of already taxed income, too.

That our tax and benefits system is a mess is something that everyone knows. If Chancellor Hammond wants to make a name for himself, he should do something about it, and tackling the stupidity that surrounds houses and the funding of social care would be a good place to start. The policy proposed in the Conservative election manifesto was right all along.