19th July

The Treasury fears a nationwide cap on care costs could still lead to regional inequality and force homeowners in the North to sell up, amid suggestions the Government’s plans could be delayed again.

With Boris Johnson pushing to finalise plans to fix Britain’s broken social care system, Number 11 is said to be hesitant about adopting a blanket limit on the amount that people should have to contribute towards their care.

A £50,000 cap, first put forward by Sir Andrew Dilnot, is understood to be favoured by the Prime Minister, who has vowed that people will not be forced to sell their homes to pay for care.

But Rishi Sunak, the Chancellor, is reportedly concerned about “regional imbalances” as a £50,000 cap would largely benefit people in the South, where average house prices are significantly higher than in the North and the Midlands.

The difference of opinion in Downing Street comes several weeks after The Telegraph disclosed that senior Conservative MPs and Treasury officials had voiced similar alarm that a cap failing to adjust for regional house price variations could still force some people in “Red Wall” seats to sell their homes.

Damian Green, the former deputy prime minister, has separately called on Mr Johnson to adopt an alternative plan that would limit personal contributions towards care to 30 per cent of a person’s assets.

On Sunday, Mr Green told Sky News that £50,000 is still a “significant chunk of your estate” in some parts of the country and “geographically unfair”, whereas a percentage cap would ensure “you won’t have to sell your home”.

Mr Green also believes the alternative plan would trim the cost of the policy from £10 billion to £2 billion, potentially averting the need for a new “health tax” to fund the reforms.

Mr Johnson and Mr Sunak are said to be at loggerheads over plans for the tax, with the Mail on Sunday reporting claims that Sajid Javid’s support for the new levy was a “condition” of his appointment as Health Secretary.

Mr Sunak is said to be opposed on the basis it would be equivalent to 2p on income tax and would be likely to require breaching the Conservatives’ manifesto pledge not to raise income tax, national insurance or VAT.

“When the PM brought in Sajid, he told him that he had to back him against the Treasury on this, so Rishi is being ganged up on,” a source told the Mail on Sunday. “We promised in the manifesto not to raise income tax, national insurance or VAT.”

There is now growing pessimism that the long-awaited plans, first promised by Mr Johnson on entering Number 10 two years ago, may not be ready before MPs leave for their summer holidays.

The Telegraph has been told by Cabinet sources and Whitehall insiders that at the end of last week Number 10 was still hoping to carve out time for a ministerial statement before Parliament rises on Thursday, although Downing Street is disputing that.

Robert Jenrick, the Housing Secretary, helped fuel speculation of a breakthrough on Sunday, stating: “We’ve said in the past that we would be bringing forward the proposals before the end of this calendar year, but I believe we will be in a position to set out proposals much sooner than that.”

However, the decision by Mr Johnson and Mr Sunak to self-isolate after being identified as close contacts of Mr Javid after he tested positive for Covid is feared to have killed off the prospects of a deal being reached.

https://www.telegraph.co.uk/politics/2021/07/19/national-cap-care-costs-could-force-homeowners-north-sell-treasury/