Wednesday 31 March 2010

Death, Taxes & Deceits

There is nothing more exciting than an exhumation in a crime investigation. The dawning realisation that there is not just a real crisis in prospect in relation to the care of the aged but it is here already and has been up and running for several years now.

In some places it has been going on for rather longer. The manner in which some Labour councils handled their care for the old was both a disgrace and a crime in several respects. The way Government has gone about it since 1997 follows their example.

Strangely, it is Andy Burnham whose localities are amongst those who have behaved badly who is responsible for summoning the ghost of Lord William Beveridge, latter day Civil Servant, Master of University College, Oxford, and between 1919 and 1937 the Director of the London School of Economics where he tried to create in the Fabian Society mould an institution of study that now sends 30% of its graduates into financial and management services.

Originally, a lawyer and writer for the Morning Post, he was involved in social policy before 1914. He became a Civil Servant during WW1 dealing with manpower matters. The family heritage was that of the British Indian Civil Service at the height of The Raj and his father is said to be one of the Orientalist school, although this is the later version rather than the one of the late 18th and early 19th Centuries.

The 1942 Beveridge Report “Social Insurance and Allied Services” produced after some convoluted politics amongst the Labour leaders involved in the WW2 Coalition Government has long been regarded as almost a sacred text of social policy and Beveridge regarded as one of the saints of the socialist pantheon.

It had a key impact on the 1945 election and if anything could be regarded as a major piece of wartime propaganda. The creation of hope and a better life to stir people into making huge sacrifices and accepting the demands of the war was important at a time when it was going badly and it was clear it would be years before it ended. There was a hunger for certainty and security and for putting the problems of the past behind.

Moreover Beveridge was a firm believer in The State, in centralised direction and control and that power, decision, delivery and management should all be in the hands of those in Whitehall and their subordinates in local authorities. Given that the population were being told that vast State powers were a necessity in winning the war, the built in message was that it would be The State that would win the peace and only The State could deliver what people wanted. It was assumed that The State would educate and tell people what they wanted.

Is all this beginning to seem familiar? So here we are in the 21st Century in a world that has changed a great deal, yet what Labour and Burnham offer us is the vision of an early 20th Century Statist politician cum academic with a liking for eugenics and brought up in the traditions of the British Raj of the late 19th Century.

Meanwhile, here in the UK the old and vulnerable are faced with an expensive, unreliable, predatory system that delivers little care less certainty and a lot of insecurity. Sell a boy a gold fish and you have the forces of hell unleashed on you. But anyone who smashes their way into your house, reduces you to a physical wreck and a takes you for everything you have will get community service at worst or if it is done within Labour’s laws and Cronygarchy either honours or bail outs or both.

There are too many ways in which the implementation of Beveridge’s ideas were either compromised or botched or taken beyond reasonable conclusions to go into here. The recent story of how a single parent family can cost the taxpayer over £5 million over a lifetime is instructive enough.

What matters in relation to the old is that these days old age is a reality for many and almost taken for granted. In 1942 old age was an aspiration few would achieve and of those who did few would enjoy for long. The Grim Reaper used to get up a lot earlier those days.

Going back a hundred years or more, even amongst those who survived very few would be “pensioners”. The Census Returns commonly have a job listed for the old men and for the women they are usually in a situation where they would be doing a great deal either round the house or in other contexts.

The idea that people of greater age might do little or nothing or only things that amused them was alien. That there might be large numbers of such people who contributed little or nothing to their families and community and depended on a State service for their functioning would have seemed utterly crazy, if only because it would have been obvious that the costs would be beyond bearing.

Which brings us to the basic problem. The numbers involved in relation to the working population and its taxable capacity given other obligations are simply too great for the State to cope with financially and they are rising as the fiscal gap widens year by year.

I may scream about paying National Insurance all those many years, but this always worked on the running bathtub principle, that the tap of National Insurance payments would keep the water level high enough despite the loss through the pensions plughole. Only instead of the five inches or less decreed by the State for baths for the few that had them, as in the 1940’s, the water level needs to be much higher, because the plughole of liabilities has become much bigger.

The difficulty is that the tax element called “National Insurance” is not “insurance” at all. It is a tax, which amongst others, is a form of revenue for government spending, a great deal of it on health, social services and pensions. The political problem is that since the age of Beveridge the great majority of politicians have been untruthful and evasive about this and its implications.

The basic situation has worsened appreciably since the 1940’s. The increasing rates of divorce and this has become more common amongst older people allied to smaller families together with the rate of break up amongst families generally means there are far fewer people to give family support.

Moreover, the modern culture of individuality as opposed to a basis of either family or community means reduced willingness to give lives or even time to supporting and caring for their aged. Add to that at the extremes of age many of the family are pensioners themselves, especially with the numbers either taking early retirement or dumped out of jobs at or after 50 and increasingly 40.

Since 1997 the options for the old have been more and more restricted. Many of the former types of care home, residential quasi hotels specialising in pensioners, the convalescent homes are such have radically reduced in numbers. There is severe pressure on nursing home places. Care in the Community is for decreasing proportions of the elderly and largely means younger women buzzing quickly spending an hour or two here or there on basic duties.

Nutrition, hydration, medication, physical assistance, personal monitoring are all out of the question not only in their own homes but often in hospitals as well. What was the malnutrition figure for the NHS, 53,000? So where is the rest of it going to come from and how will it be paid for when there are so many other pressing needs?

One thing that is very different now from 1942 is that large numbers of the elderly own their own homes as opposed to renting or living in lodgings. Given the inflation in property prices many are asset rich and income poor. Much of this rise in theoretical wealth can be attributed directly to the boosting of the property market by the government and other forms of inflationary easing.

The Lord gave, and The Lord Hath taken away. What was it I said on Thursday 24th September 2009 “Property Tax – The Price Of Folly”? The past is coming back to haunt us and the bill is in the post.


  1. Additional bit about NI. It is not ring fenced for the NHS as many think it is. It just goes into the general pot just like the road tax.

  2. There is of course a moral to this story. When you unleash a juggernaut as the 1945 Labour government did with the launch of the welfare state then only a massive obstacle can arrest it's progress that obstacle that is fast approaching is a precipice. When it eventually falls to it's destruction then all else will go with it having been swept before it in it's relentless progress. The good news is of course for those who survive they will find a world as it should be the bad news it will not at first be to their liking.

  3. The problem is Antisthenes, that when it all gets blown away, those of us who have paid for everybody elses comfort to the detriment of ourselves through high taxes and restrictions on private saving and pillaged pensions will be left with nothing.

    The world will not have returned to where it should be, it will have a gaping hole in the middle where the highest contributers to the system will be left high and dry with no time left to undo the damage that has been forced upon them against their will.

  4. Tony E, my very point is that is what the juggernaut is doing, eating your taxes and savings and when there is nothing left it will fall over the precipice. After which there will be no more welfare state and everyone will survive or otherwise by their own efforts not from someone elses. So the the world that emerges is going to be stark one for everybody and only those that can will survive and those than can't will not.