Dividing Lines: Getting old

The graph of doom.

In local government they call it “the graph of doom”. It is the chart with one steep downhill line showing budget resources and, soaring above it, another line showing the demand for services to look after an ageing population.

According to the latest census, one in six Britons is past retirement age. The number of pensioners will rise from roughly 12 million now to 16 million in 2050. The number of people aged over 100 (now around 12,000) will double over the next decade. As local authorities are responsible for adult social care, they won’t be doing anything else in the future unless the system changes.

What about the National Health Service?
It isn’t designed to provide long-term care for the elderly. Many people discover that only when they or their parents need urgent help. By some estimates, a third of all hospital beds are occupied by elderly patients. Long-term social care, arranged by councils, isn’t free for all. There’s a means test.

That’s the bit where I sell my house, right?
Under current rules, if you are worth more than £23,250 you pay. How much depends on the kind of care you need and where you live but the exposure is potentially unlimited. That often means cashing in equity.

Politicians should do something.
They are. The government is proposing a cap of £75,000 on the amount any one person would have to spend, starting in 2017. There will be a new, tapered means test starting at £123,000 – and so someone worth £50,000 still has to pay something, but less than someone worth £100,000. No one should pay a penny beyond the £75,000 cap.

Really?
No. In the small print, you are still liable for some “hotel costs” – the bed and board element of residential social care, the logic being that you’d still be paying for that sort of thing at home. But the state will now ease the burden for tens of thousands more pensioners.

If all these people are being let off the hook, where does the money come from?
The Treasury will need to find about £1bn extra per year. Some of this will be coming from additional employer National Insurance contributions. Most will be raised by freezing inheritance-tax thresholds, skimming more revenue over time from legacies of the dead.

Death taxes! Yuck!
Funny you should say that. It’s the very line that the Tories used in the 2010 general election campaign when attacking a Labour plan for universal social care, funded in part from inheritance taxes.

Oh, the irony.
That’s one word for it. That campaign poisoned relations between the Labour and Tory health teams, which made cross-party agreement impossible even though everyone agrees this is one of those big, long-term issues that demands collaboration. After the election, the coalition commissioned Andrew Dilnot, an eminent statistician, to come up with a plan. His report, published in July 2011, forms the basis of the coalition’s proposal. The government’s cap is a bit less generous than Dilnot recommended.

It took them 18 months to make that tweak?
It took them the best part of 18 months to summon up the courage to do much at all. There was a social care white paper last year that avoided the Dilnot route, which sounded a bit difficult and expensive to implement. Then the coalition parties realised that they needed some policy for the second half of the parliament. That became more urgent the clearer it got that fixing the national finances – formally declared Tough Issue Number One and the coalition’s stated raison d’être – wasn’t being tackled to anyone’s satisfaction. So Dilnot’s plan was fetched into Downing Street from the long grass.

And how’s that cross-party consensus coming along?
Labour has responded cautiously to the new coalition plan, with variations on the classic “too little, too late” holding rebuttal. Separately, Andy Burnham, the shadow health secretary, has devised a grand plan to integrate social care with the NHS. The idea, under the rubric of “whole-person care”, is to find ways to maximise the value that society gets from the huge health budget with a more strategic focus on promoting healthy, happy living – supporting the elderly to stay in their homes, for example. That, in theory, works better and costs less than the present inefficient process, which intervenes too late and ends up throwing money at random at the consequences of unhealthy lifestyles and poorly managed chronic conditions.

What does that mean in practice?
There’s a review to work out the details.

What about the money?
The right kind of interventions at the right time save money in the long term, as health and social care spending would go much further if the system wasn’t forced into making so many costly last-minute emergency interventions. Hospitals wouldn’t be turned into vast geriatric warehouses.

Long-term savings appear only in the long term. You’d need money upfront to fix social care, even just to match what the government is doing.
Yes, you would. And when Labour finally decides what its spending priorities are, there is a strong chance this will turn out to be one of them.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 25 February 2013 issue of the New Statesman, The cheap food delusion

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.