Cognitive dissonance, holding entirely contradictory views at once, looks set to be happening a lot more in the coming months as the next tsunami of spending cuts comes thundering in. David Cameron complaining about painful cuts to his own council was a fine example. But watch out for many more rightwingers, anti-tax payers and austerians protesting against the inevitable effects of policies they champion.
This week it’s the care sector that is in trouble, most of it privately owned by people who tend to vote for austerity. The great groundswell of alarm in social care reached a climax this morning with yet another set of reports warning that care homes are closing as the fees paid by cash-strapped councils shrink. More old people need care, and hospital beds are blocked by those for whom there is no care home place.
The Resolution Foundation today reports that just to cover the new minimum wage, the government needs to find £1.4bn – and ensure it goes to the care workers: one in nine are cheated out of the current minimum wage. But that’s just stand-still money to keep up with higher pay. Despite a sharp rise in the number of those aged over 80, the private care home sector lost 1,500 beds in the year to September due to closures, reports LaingBuisson, which analyses the healthcare sector, and warns of a “wave of closures” to come. Some 90% are private, with nearly half their beds largely paid for by the state: private payers are profitable, state-paid residents are loss-makers. ResPublica’s report this week estimates 37,000 more beds will go by 2020/21 without more funding.
Now add in falling quality: this week’s series of Care Quality Commission inspections on 54 homes across the north found that 28 “require improvement” or are “inadequate”, and none “outstanding”. There’s no wriggle room, no productivity gain to be made where the already low-paid work hardest. Most voters may not notice squalid deterioration in care or no care at all for an extra 150,000 this year who need it yet remain in their own homes – but closures make headlines only when old people are tipped out of their nursing homes.
Step forward Guy Hands of the private-equity company Terra Firma, owner of the troubled Four Seasons, which runs 450 care homes. In a funding crisis, it’s selling off 53 homes due to sharp cuts in what councils pay. This week Hands wrote a strong piece for the Guardian, calling on the chancellor to plug the funding gap – £100 a week for residential and £150 for nursing home beds. This is not special pleading: no one denies the crisis, and Hands’s plea was emotive: “The debate over the future of care for the elderly in Britain is a subject about which I feel passionately. It is not just an economic issue but also an issue as to where the UK wants to go with regard to providing care for some of the most vulnerable people in society.”
Well said. Except you could hardly find a better case of cognitive dissonance than this. Where does he think the money comes from? Thin air? It needs to come from all our taxes, including his. But in one of the most bizarre and, you would think, personally dysfunctional acts, he moved to Guernsey in 2009 in a noisy protest against the 50% tax rate for high earners. He has never been back and said in 2010 that he never visited his elderly parents in their home, but his wife and children living in Kent fly to visit him, and his company team flies out to Guernsey every Monday morning for a meeting. He and his wife are reportedly worth £93m, but this arrangement has been, he told a New York court, “a burdensome option for me and my family”.
That’s just an extreme example, but as a country we suffer Guy Hands disease: we want the services but won’t stomach paying for them. No chancellor has raised income tax for 25 years (except that 50p top rate in Labour’s very last-gasp month). Ken Clarke laid it out starkly at a Resolution Foundation seminar this week: tax rises are “regarded as a political no-no nowadays”. He cut income tax every single year in his budgets to loud applause. Warning the public that they had no idea what constraints the NHS faced, he slipped out opposition to Osborne shrinking the state to 35% of GDP. He told me 40% was all that was achievable or desirable.
Meanwhile, HM Revenue and Customs is still cutting back staff, and with it the ability to collect tax: today it’s reported another 170 tax offices are to close, losing many more staff (whose numbers have already been cut by half). Just 300 are left chasing £70bn of high-value tax evasion.
Good for the little town of Crickhowell, whose traders are exposing tax avoiders such as Amazon, Google and Starbucks by setting up offshore accounts to cut their tax for a BBC series.
People are indignant at the great tax avoiders. But preventing the super-rich and company tax avoiders from doing so still won’t provide all we need, if we expect average EU levels of public service. So who will stand up and say that we all need to pay for the services we want? It needs the likes of Guy Hands to start connecting the two sides of their brains: private business in the end depends on a flourishing state and a civilised society.
