Dilnot survives the Russian front. . . for now

Social care is a minefield for politicians - and the Dilnot report offers no easy option for the gov

"One of the three Russian fronts of Whitehall". That's how a very senior Whitehall mandarin described social care to me over a decade ago. Alongside housing benefit and local government finance, social care has long been seen as one of Westminster's most difficult policy challenges. This particular Whitehall official had "lost many of my best people on that treacherous terrain". The warnings were well-deserved, even if the language was a little hyperbolic. After countless reviews, consultations and reports, little lasting change was secured on social care in the Labour years.

So it's to Andrew Dilnot's credit that he's come up with a package that provides the best opportunity for a generation to create a new and lasting settlement on elderly care. The basic shape of his proposals has been heavily trailed - a cap of £35k on personal liability for the costs of care with encouragement of private insurance to meet these costs; a less punitive means test for state support (lifted from £23k to £100k); and the creation of national standards for assessing care needs to remove worst aspects of the post-code lottery. These proposals fall short of what some campaigners have called for, but they are broadly sensible.

They do, however, pose some major questions. Most obviously: how will the cost of the Dilnot package be funded? That's not a question today's report seeks to answer. We also need to ask if it's realistic to expect a private insurance market to develop (there is scant international evidence of this happening). Then there's the hope that the current generation of working adults - so many of whom are already failing to save anything for their pensions - will be encouraged to put aside some extra cash in their pension pots to cover future care liabilities below the level of the cap. Really?

The "death tax" assault

Doubts on these issues were exactly the reasons that the previous Labour government wanted some sort of compulsion in the system, forcing people to save or contribute from their assets. But following the Conservative's "death tax" assault in the last election, that plan became politically impossible -so it's hardly surprising that it hasn't been proposed.

Given this context, how are the politics likely to play out over the coming months? There are high stakes both between the parties and within Whitehall. As my former mandarin colleague would have said: never underestimate the forces of inertia when it comes to funding social care. The treasury will be pivotal. Even though the total cost of Dilnot is tiny compared to overall public expenditure, George Osborne will dig in hard against absorbing any new costs. The treasury will insist on any new sources of revenue to be agreed upfront.

Harder still is the fact that the £2bn price tag associated with the Dilnot report understates the problem. For instance, the report does not include the cost of preventing the existing system from collapsing prior to the new proposals coming into effect - the King's Fund estimate that the shortfall will be well over £1bn by 2014. It is hard to see how the government can commit to fixing the system without filling this gap. Doubts on funding mean there will be a very real temptation to try and find a way to play Dilnot long, by kicking the tough questions on funding into a second term when (so the argument goes) revenue will be flowing more freely into the Treasury.

Number 10, meanwhile, will be anxious on many fronts. It will be highly concerned about a popular backlash against some of the likely ways of raising the necessary resources to pay for Dilnot (such as means-testing of disability benefits or increasing National Insurance contributions of the over 60s). And, following the recent NHS debacle, it will be intensely worried about rushing down a reforming path with great fanfare only to carry out a humiliating U-turn. It is also nervous about tying itself to proposals which offer significant benefit to middle and high income groups whilst doing comparatively less for the poorest, leaving the coalition potentially exposed to a Labour ambush. Overall, the mood-music coming out of government is worrying: the fact that even Lib-Dem ministers are using dread phrases like an "important milestone" to describe Dilnot speaks volumes.

Inertia or inaction?

Weighed against the forces of inertia are the escalating political costs of inaction. If the coalition ducks this opportunity then any claims to be willing to make the long-term reforms the country needs will be seen as risible. This is as clear a test of the coalition's reforming resolve as it is going to get. And the notion that it will be politically more tenable to deal with this issue in a second term should be dismissed out of hand - it won't be, and the leading lights of No 10 will know this. Those Conservatives still hoping that Tories can be the true radicals on welfare and public services understand that Dilnot presents them with a way of demonstrating the coalition's vitality. It is a policy area where Labour failed to lead and so is wide-open for the coalition to make its own. What's more, it provides a beguiling opportunity to protect the property interests of the Conservative's core electoral group (middle income baby boomers) in the name of securing a new pillar of the 21st century welfare state. That is surely a heady mix.

We can also be confident that there will be a rash of stories between now and the next election about shocking conditions in care homes. This will happen whether or not the government embraces Dilnot. The key difference is that acting on Dilnot will help insulate ministers from the fallout of these scandals and provide them with a clear argument to make whenever they arise. If the public judge the coalition to be foot-dragging, ministers will be in the firing line every time Panorama does an exposé. And let's not forget that the mainstream media is now sensitised to the politics of ageing in a way that simply wasn't the case 10 years ago, so these stories will run and run.

Labour's problem

And what about Labour? First and foremost it must appear relevant to the debate - as the party sometimes struggled to recently on the NHS. For that reason, Ed Miliband, who has always been keenly interested in this issue, was rightly quick out of the blocks yesterday seeking to insert Labour in the middle of the story on possible cross-party talks. The Labour leadership's strategy is to be seen to be statesman like and to occupy the high-ground. The hope is that this creates a 'win-win' scenario. If the talks deliver a consensus Labour can claim to have played a key role in securing reform for the good of the country. If the Conservative's crash the discussions (and let's not forget what happened just over a year ago during the last talks on this issue) Labour will be in a position to condemn them for being partisan and untrustworthy on this vital issue, at the same time as they seek common cause with the Lib Dems, who should surely want to be seen to be taking a lead.

That said, the risks for Labour are very real. The leadership will not want to get tied to unpopular ways of funding the proposals; and there are many within the Labour movement who are still smarting from the "death-tax" campaign who would like nothing more than the opportunity to use Dilnot to inflict political pain on the coalition come the next election. There is scope for division.

All sides have a lot to lose. Make no mistake: there is a long way to go before we see the new system of care this country so badly needs. Dilnot has done well to bring care in from the cold - and to have survived the Russian front. Whether his proposals will do so by 2015 remains to be seen.

Gavin Kelly is chief executive of the Resolution Foundation 

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.