Don’t Get Old In The UK!

In the last few days, the British Government announced a supposedly ‘radical’ upheaval to the provision of social care in England. For ease, we can define social care as the delivery of residential care for the elderly when it becomes impossible or inadvisable for the individual to stay in their own home.

The UK has a twin peaks approach of state run homes and a private care home marketplace. As with all residential care solutions, it’s expensive and residents are often billed £500-1000 per week which in many cases means selling property to pay the bills. Only the least wealthy qualify for a state provided solution and the perceived perception of such facilities is poor to awful.   

Let’s take a moment to revisit the problem before we talk about the proposed solution. First and foremost, pretty much all developed nations globally have the same challenge on their hands; an ageing population living ever longer but often with a reduced quality of life leading to limited independence and a need for residential support.

If that wasn’t vexing enough, we then have a general attitude that the state should cover the costs of that care in tandem with providing health services free at the point of care. To add a bit of data here, within 25 years, there will be 300% more 80+ year olds in the UK than there are today. The statistics across the western world are pretty similar.

So now let’s unpack the UK’s response to this socio-demographic phenomenon & reach for some conclusions.

The British tax system has many archaic & misleading facets but none more so than a tithe called ‘national insurance’ It is in fact an income related tax upon employers, employees and the self-employed. But it’s not called income tax…which the British also charge to all the aforementioned groups. In fact the money raised goes into the same government bank account as all other taxes, there is no insurance element whatsoever.

Still following me? Good, I’ll continue. The % rate of national insurance is being raised proportionally by about 10% to enable more people in England to receive social care without immediately having to sell their homes to pay for it. Sound good to you? Sound sustainable to you? Comments below please…

For my part, I am intractably opposed to this sticking plaster on a bleeding (soon to be septic) wound. In fact, the solution creates unintended consequences the like of which will make the challenge a crisis within 3 years.

The impact on global government finances due to inept covid related lockdown decision making gave political leaders a heaven sent opportunity to properly create a two tier public/private health and social care solution. Blame it on a lack of money to pay, blame it on continued worries that the virus may return… whatever… but fundamentally grow a pair, talk to the population and explain that the current national health system is broken beyond repair.

Finding a bit more income down the ‘tax sofa’ won’t fix it (instead will make the issue worse). Moreover, show the population what ‘good’ looks like – many Brits have only experienced domestic healthcare and actually believe it is world leading.

As someone who has experienced other health services in Europe, Asia and North America, nothing could be further from the truth. What was invented in the UK in 1948, laudably, to provide a basic level of healthcare to all citizens is woefully out of date and has metamorphosed into a perceived entitlement for all ailments, diseases & conditions to be cured by the state through taxation.

Potentially, this could work if taxation kept rising year by year to cope with the ageing population but in fact for the last 35 years headline taxes have stayed broadly similar because politicians need votes and votes don’t come from increased taxation. You see the problem…

The middle classes around the world tend to opt out of state provided services as soon as they have the money to do so.

So confident are they in the UK that the privately provided alternative will be better that they are willing to pay twice i.e. they write a cheque for, say, private education or a private medical operation whilst still paying the same tax rate as those citizens who avail themselves only of public services (there is no concept of tax deductibility for opting out of the state in the UK as there is in the USA) Given this backdrop, there is a culture already that a material swathe of UK citizens will pay privately for a solution if the public alternative looks sketchy or unreliable.

So, Prime Minister Johnson, take advantage of this mindset to work with private insurers to design a monthly premium based product that covers health and social care & make it attractive for large numbers of people to join and gradually reduce the role of the state in providing second rate health & social care solutions as soon as possible.

Make the system a hybrid such that those who cannot afford private insurance premiums receive state assistance leaving the rest of us to choose to insure against future events. For those who make no provision at all and don’t qualify for state assistance then their assets must be drawn down to pay for the costs of social care in old age.

To wrap up, I mentioned there are some horrifying unintended consequences here… by increasing taxation proportionally by c10% an expectation is created that the problem will be resolved when in point of fact that money (£12bn) will barely cover the cost of paperclips & notepaper in the UK health service.

Playing with the well-being and emotional health of citizens that they will be cared for via this con trick is heinous. It gets worse, if you tax people more today, they have less money available to pay the inevitable top costs that are just around the corner when they are faced with the gaping funding hole resulting from today’s pathetic, cowardly solution.

When push comes to shove, health services designed over 70 years ago are wholly unable to provide modern care for a quickly ageing, growing population. Let’s accept the reality and bite the bullet – the British National Health Service must be disbanded and re-purposed… yesterday. Private insurance must be introduced immediately for the majority whilst the minority receive state provision. I for one, won’t be spending my ‘troisieme age’ in the UK.

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