Follow the money, Deep Throat’s advice to Bob Woodward during the Watergate scandal, applies just as much to politics as to journalism. The Dilnot commission on adult social care, which yesterday published its report, is at one level about where we will all live when we get old. It’s to do with treating the elderly with dignity and decency. It’s about dealing with an ageing population.
But it is also fundamentally about cash. For individuals, the issue is whether they can afford to pay for their own care in old age — or indeed, among the middle classes, whether they will have any money left to hand on to their children. The commission recommends that there should be a £35,000 cap on what anyone has to pay so that people do not have to sell their home. For politicians, the question is how they can possibly afford proposals that will initially cost £1.7 billion a year — rising to £2.8 billion by 2020 — at a time when public spending has already been squeezed until the pips squeak.
David Cameron, Nick Clegg and Ed Miliband are falling over each other to call for a “cross-party consensus” on long-term care for the elderly. In the middle of last week, the Prime Minister and the Deputy Prime Minister agreed to approach Labour about setting up joint discussions. At the weekend, Mr Miliband promised to put aside narrow party political interest for the sake of a “once-in-a-generation” reform.
By yesterday, the Labour leader was inviting Mr Cameron and Mr Clegg to sit down with him to discuss the issue. There’s safety in numbers for political leaders when it comes to potentially tricky decisions. Certainly, the public like a non-tribal approach — the “worm” graphic through which the broadcasters showed the studio audience reaction during the leaders’ television election debates last year shot up when Mr Clegg said he wanted all the parties working together to sort out social care.
If this were just about rhetoric, it would be easy to reach a deal. All the party leaders agree that Andrew Dilnot’s proposals are “sensible”. They all know there’s a problem, they all say they want to solve it. But nobody has yet worked out how to fund the reform. The Treasury has warm words about the commission’s report but one official warns: “It does come with a price tag and in these times that’s not easy.” A Downing Street aide emphasises: “It’s a lot of money and we can’t be irresponsible. We are still a way off sorting how it will all work.”
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Already, obvious possible funding streams, such as abolishing universal winter fuel payments, free buses and television licenses for pensioners (which together cost £4 billion), appear to have been ruled out by No 10 for political reasons, even though Mr Dilnot emphasised yesterday that the elderly should be expected to contribute to the cost of his plan.
On the Labour side (and among some Lib Dems) there is a concern that it’s wealthier families who will benefit most from any reform because the poorest already get state support. There’s also an institutional hostility to change in parts of Whitehall. As long ago as 1998, Frank Field, appointed by Tony Blair to think the unthinkable on welfare, came up with a plan that was remarkably similar to the one put forward by Mr Dilnot. It was vetoed instantly by the Treasury on the ground of cost. As one Lib Dem strategist puts it: “The history of social care is littered with the corpses of previous efforts.”
Crucially, the issue of money has now created an important fissure within the coalition over how to approach the cross-party talks. George Osborne is insisting that any deal between the Government and the Opposition must include a specific agreement on how a new social care system will be paid for. It was he who authorised the Tories’ sensationalist attack on Labour’s previous attempt to deal with the issue as a “death tax” — (illustrated by a red rose lying on a gravestone carved with the letters RIP Off) — and he is terrified that Labour will run a similarly brutal campaign against the Conservatives at the next general election. For the Chancellor, this is as much about politics as it is about economics and he is determined not to hand any ammunition to Ed Balls, his Shadow.
“We want to achieve consensus both on reform and how it’s paid for,” says one senior Treasury source. “The Government won’t push through how to pay for it against Labour objections.”
By contrast, Mr Clegg and Danny Alexander, the Lib Dem Chief Secretary to the Treasury, say the priority is to reach agreement on the principles of a new system so that legislation can be passed before the next election. For them, the precise mechanism to fund a reform that will not be introduced for several years is a secondary question that need not be included in any cross-party deal. More important is proving that coalition governments can take difficult decisions.
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“Yes to fiscal responsibility, no to a specific agreement on a specific way of raising money,” says one senior Lib Dem. “You agree this has to be done. To try to identify the revenue stream from which you will fund it this many years out would strike me as a wrecking tactic.”
Certainly it is true that the terms of the cross-party talks will determine whether or not they succeed or fail. Similar discussions about party funding foundered over the nature of large donations. If it all depends on Mr Osborne and Mr Balls reaching a financial deal — two men who loathe each other — it’s hard to see consensus being reached any time soon.
Follow the money in Whitehall and you get to the Treasury. The Chancellor is as much political tactician as economic brains. Like his predecessor Gordon Brown, he enjoys nothing more than wrongfooting his opponents. It is no secret that he is “sceptical”, as one colleague puts it, about the Dilnot plan. “George is the ultimate strategist,” says a Cabinet minister. “He won’t want to get trapped. It’s like the Highway Code rule that you must not enter the yellow box at a junction unless you can see your way out.”
This is, though, a moment to rise above politics. In his youth, the Chancellor used to play poker. “He was very solid but played a very ABC game with not much bluffing or flair,” says a friend who played with him. “He didn’t take many risks and you always knew he had some sort of hand.” On social care, Mr Osborne needs to put an issue of national concern about narrow party interest, even if that means taking a gamble.