‘Death Tax’ resurrected: Labour’s looming spectre?

Some say there are only two things in life which are certain: death and taxes.

Back in July, it emerged that Shadow Secretary of State for Health, Andy Burnham, had plans to introduce a 15% levy on estates to pay for elderly social care – a move that was dubbed at the time as the return of the ‘Death Tax’.

In a leaked secret recording of Burnham speaking at the Fabian Summer Conference the month previously, the Shadow Secretary was quizzed on whether Labour was considering introducing a tax on estates to help fund social care.

“I put that forward before the last election to support a national care service… but there is a debate to be had on whether that is acceptable to the public. But I think it is,” he said, before continuing: “It’s only where you create a system where everyone is in and everyone is then covered, that I think you’ll be able to help people protect their own homes.”
At the time, a spokesperson for the Labour Party stressed that Mr Burnham’s comments were “not Labour policy” and that “we have made clear we want to improve social care and we are consulting on how that is best done”.

Given the ‘hoo-ha’ around this comment, it was not surprising that the ‘Death Tax’ didn’t feature in Mr Burnham’s conference speech. However, improving social care formed a key part, as he promised to end the “scandal” of how the British state treats its vulnerable and older citizens by integrating social care into the NHS for the first time. He added that “bringing social care in doesn’t add to the financial burden. It’s the key to unlocking the money”.

Hailed by many as a fundamental step in the right direction, Mr Burnham has also since faced criticism for the lack of clarity around his plans to fund whole-person care – two years after admitting he did not have “all the answers” to the same question in his 2012 conference speech. In a Labour conference peppered by new proposed tax, this glaring omission by the Shadow Health Secretary suggests that social care funding is proving to be a continued headache for Labour.

The ghoulish connotations associated with a ‘Death Tax’ have a tendency to provoke two reactions from the public: a collective shudder and a sense of outrage – which was once succinctly summed up by actress Whoopi Goldberg, who said: “I don’t want to get taxed just because I died”. The Conservatives have previously used this to their advantage and turned it into a campaign tool to attack Labour – particularly in the run-up to the 2010 General Election. This week, in response to Miliband’s proposed mansion tax, Conservative MP for Chelsea and Fulham Greg Hands called it “a new Death Tax”, and argued that the levy could be taken from estates of the deceased.

Despite the public’s aversion to the notion of a ‘Death Tax’, an estates levy – which the Tories say could mean a cost of £46,000 to the average Briton – would, in theory, alleviate the pressure on local authorities and independent providers, and help create a stable, sustainable financial model for funding social care going forward. There are those of the opinion that we should be funding our own social care – especially as we won’t be able to take our estates with us.

Mr Burnham’s perceived sympathy for a form of ‘death levy’ may not toe the official party line, but it is, at least, a potential solution. For Labour, and arguably all parties, the real challenge between now and the next election is to come up with a workable formula for funding social care in England that is both credible and which doesn’t alienate the electorate.

This article was first featured in the October print edition of Healthcare Business News.

Kelly Baker is an Account Executive at PLMR and provides public affairs and media relations support to several leading health and social care clients.

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