Mis-step on Maycare?

In Britain now, about 10 million people are aged over 65, traditionally time to retire from paid work. In 2017 these ranks are swelled by those born in 1952 - men and women who turned eleven in 1963, the year the Beatles began their string of chart-topping hits. 

Welcome, generation Please Please Me, first fruits of the post-war welfare state. It is a good time to join us!

Since 2008, the real household incomes of over-65s have risen by around 10%, while the rest have mostly flat-lined. One reason is a transfer from workers to pensioners through a political promise called the ‘triple lock,’ implemented by the 2010-15 Coalition government: this guarantees an annual increase in the state pension by the greatest of price or wage inflation or 2.5%. 

Politicians long ago worked out that the way to win elections was to please the older people who are much more likely to vote than younger generations.

In 2015, for the first time in 23 years, and somewhat against expectations, the Conservative party won an election outright. One momentous outcome was the referendum leading to Brexit, hence the fall of David Cameron as Prime Minister, his replacement by Theresa May, and the ‘Brexit election’ called for June 8^th, 2017. The original scale of expectations for this poll can be measured by the fact that the Opposition leader’s principal backer, head of Britain’s largest trade union, told a reporter that for Labour to win 200 seats in Parliament would be satisfactory: a result which would be the  worst for Labour since 1935, leaving May with a mandate as big as was enjoyed by Tony Blair.

On May 18^th, May presented her manifesto, and Conservative expectations took a dip. After much speculation about the ‘triple lock,’ the decision to replace it with a ‘double lock’ from 2020 was no big surprise. This still guarantees a state pension rise of the greater of either price or wage inflation, which (with real incomes now falling again) could well mean a continuing transfer from workers to retirees. The ‘winter fuel allowance’ would henceforth be ‘means tested’ – this tax-free bonus (usually £200) is paid to all pensioners, supposedly to counter extra heating costs met by older people, even the ones who pass their winters on the shores of the Mediterranean. Again, no huge shock. 

The surprise, landing May in the most serious political trouble she has yet faced as Prime Minister, was to reverse the Cameron government’s policy on funding care for elderly people. Opponents dubbed her proposal a ‘dementia tax’; she countered that a review was needed because of the growing elderly population. Neither of these is, I suggest, a particularly illuminating analysis.  

What are we dealing with here? According to figures from Age Concern, about 400,000 people over 65 live in residential care homes, and another 372,000 get substantial amounts of care at home – so little more that 7% of the age group rely on such care (even among over-85s, only one in six lives in a care home). This all costs about £22bn a year, of which about £8bn is paid by the state. This is ‘social care’ and unlike health care (a fine and contested line) it is means-tested. The great majority of pensioners are debt-free home-owners, so have average household wealth around £200,000, the product of rising house values. If they go into residential care, the value of their home is used to fund their stay, down to a ‘savings floor’ which is usually £23,250. If they stay in their own home, its value is not considered part of their wealth. In twenty years’ time, forecasts are for a 40% growth in the numbers of over-65s including a doubling in over-85s. How many of these will need social care is a matter more of guesswork than informed judgment. But we do know that most will, as now, be debt-free home owners, with wealth enough to cover the need (the implications for the Health Service are another matter).

The problem is not so much the numbers as the politics. Old people want to pass their homes to their families, and the random way in which a disabling condition can wipe out this value is experienced as deeply unfair. The Coalition government passed the problem to an Oxford economist, Andrew Dilnot. His committee proposed that the savings floor be increased to £100,000, and that users be expected to pay for their care only up to the value of a cap, suggested as £35,000 for total costs over a lifetime. This, he thought, would add £2bn to public costs annually – a significant increase in the cost of social care, but a trifle against the cost of the National Health Service (NHS), which takes between four and five days to burn its way through £2bn.

The 2015 Conservative manifesto promised to implement Dilnot but with a higher cap - about £70,000 – and with the existing, rather than a raised, savings floor. Payment could be deferred until death so that ‘no one has to sell their own home’ and all would be ‘protected from unlimited costs.’ They also promised to introduce these changes in 2016. Having won the election, they deferred the changes to 2020. 

Quite unexpectedly, May chucked all this out in her manifesto for the Brexit election. The preceding proposals, it said, ‘benefited a small number of wealthier people.’ Instead, she offered the full Dilnot floor of £100,000 – but there would be no cap, and care at home would be subject to the same savings floor test as residential care, with the cost charged to the estate at death. Four days later, May announced that there would, after all, be a cap to be set after consultation, and there things rest for now.

Labour’s manifesto – presumably written on the assumption that the Cameron plans would go ahead in 2020 - suggests no early changes to the payment system. It wants to add £3bn to care budgets, mainly to pay for better terms for staff and meet less acute needs. For the long term it talks about a ‘National Care Service’ integrated with the NHS, with funding to be a matter for consultation.

Theresa May’s surprising pledge seems to reveal significant instincts in the team of close advisers said to have thought it up. The idea that a pensioner with housing equity above £100,000 is ‘relatively wealthy’ challenges the compact with the middle class that has underpinned democratic politics since 1945. Under ‘Maycare’ a modest level of protection is to be assured – this is the good the state can do – at the expense of more lavish protection shared by the middling majority. Putting such detail into a manifesto can only have been done with the intention of securing this principle against all comers in government: in conceding a possible cap, May has insisted that the ‘principle’ is what stands. If so, what next for health, education, and the rest run on the opposite principle – that the modern, democratic state is a vehicle for all citizens to share the costs of services that meet the aspirations of the ‘relatively wealthy’ majority?

So what is the answer? The central principle here is that of ‘social insurance.’ A proportion of us will face huge costs of care in the closing years of life. We do not know how many will be impacted or at what cost, making the risk uninsurable in the private market unless politicians do something to contain the long-term risk. There is an upside to this, at any rate for the next forty years or so – most of those facing the risk have, or will have, substantial equity in residential property. So what makes sense? If we do not want to share the risk, so be it – leave us with a smallish cushion and let the losers take the hit. If we do want to share the risk, then we can pay more tax. The obvious source is inheritance tax (IHT). The most recent annual figures show that, of 267,000 estates valued for IHT, 248,000 paid no tax at all. On a total worth of £80bn, the government collected little more than £4bn in tax. Housing equity amounted to £40bn, but no tax was paid on housing assets of £33bn. For me, an IHT levy to build a dedicated fund to compensate for exceptional care costs in later life is the logical way to meet the challenge. But of course, I am not the first to suggest this – when the politician Andy Burnham floated the idea, he was accused of charging a ‘death tax’ and no party has dared put it forward since. 

But what, exactly, is wrong with a death tax? As someone once said, let the dead bury the dead. 

The Icing on the Gay Cake: what's the Appeal?

The McArthurs ...

The case of Ashers bakery and the ‘Gay Cake’ has prompted an outcry not just in Christian circles, but also from liberal sources, including the Guardian and Independent newspapers, as well as Peter Tatchell. 

Many find confirmation here of anti-Christian bias in equality law – a finding I dispute in The Jesus Candidate. 

The Ashers appeal ruling came too recently to have been examined in the book. So what is to be learnt? Does it change anything as far as the arguments go in The Jesus Candidate?

... and the icing 

The facts are straightforward. Same-sex marriage was recognised in most of the United Kingdom in March 2014. On 29^th April 2014, the Northern Ireland Assembly voted, for the third time, against allowing same-sex marriage in the Province. 

... on the cake

A few days later, Gareth Lee placed an order for a cake. It was to be eaten on Friday, 17^th May, at an event planned “to mark the end of the Northern Ireland anti-homophobia week and to mark the political momentum towards legislation for same-sex marriage.” The cake would be iced according to Mr Lee’s design, with the slogan “Support Gay Marriage” and the logo of the “QueerSpace” group to which he belonged. He placed the order with Ashers Bakery, a limited company with nine shops around the Belfast area, and a net worth of about £1.4million. Its directors are Mr and Mrs McArthur. The firm is equipped to scan an image and reproduce it on the icing of a cake. 

After accepting the order, the bakers received the design. They then refused the order, and refunded the deposit, because, as Christians, they were not prepared to place the particular message on the cake. Mr Lee was able to get the order fulfilled elsewhere, in time for his event. The Northern Ireland Equalities Commission decided to support Mr Lee in seeking redress for discrimination on grounds of sexual orientation. The Christian Institute supported the bakers’ defence. The case came before District Judge Brownlie in the County Court. She delivered judgment on 19^th May, 2015, in favour of the claim, and awarded damages of £500. The defendants appealed. The Northern Ireland Appeal Court upheld Judge Brownlie’s ruling, in its findings published on 24^th October 2016.

The question is whether the refusal to bake the cake amounted to unlawful discrimination. The courts looked at three issues.

1. The McArthurs said that they did not discriminate against Mr Lee, since his own sexuality was not relevant and they objected only to a message. So was this discrimination lawful? The court said it was not, on the grounds of “associative direct discrimination.”  It did not matter whether Mr Lee himself was gay or not. The McArthurs refused to fulfil the order because of its association with gay people generally. As the appeal court put it:

The benefit from the message or slogan on the cake could only accrue to gay or bisexual people. .. The reason that the order was cancelled was that the appellants would not provide a cake with a message supporting a right to marry for those of a particular sexual orientation … There was an exact correspondence between those of the particular sexual orientation and those in respect of whom the message supported the right to marry. This was a case of association with the gay and bisexual community and the protected personal characteristic was the sexual orientation of that community. Accordingly this was direct discrimination.

2.     The bakers objected to the message because it was against their deeply held religious convictions – don’t they have a right in law to uphold these?  The courts found this question raises matters already resolved in previous cases, especially the Chymorvah Hotel’s famous refusal to offer a night in a double bed to two men. The right to freedom of religion is to be balanced with others’ rights. The Chymorvah hoteliers’ religious beliefs did not entitle them to confine their offer of a shared bed to heterosexual married couples, and ignore the rights given in law to their gay customers. Likewise the McArthurs’ undoubtedly genuine faith did not entitle them to refuse a service if this overrode the rights of gay people to equal treatment.

3.     By being required to ice the cake, the bakers were forced to support a view with which they did not agree – was this ‘compulsory speech’ violating their rights to free expression?  The courts did not think that, by icing a cake with a message specified by a customer, they would be indicating personal support - real or apparent - for the message. The county court said that “what the Defendants were asked to do did not require them to support, promote or endorse any viewpoint.” Evidence showed that the bakery often iced messages which the McArthurs did not personally support.

The Northern Ireland Attorney General has sought leave to appeal on constitutional grounds. Will John Larkin QC try to persuade the Supreme Court of the merits of the same argument that failed to convince the Northern Ireland Appeal Court? There he submitted that, under devolution legislation, the Northern Ireland Assembly cannot make laws that discriminate on religious grounds; that, by being required to fulfil Mr Lee’s order, the bakers were penalised for their religious views; and therefore that the (Northern Irish) legislation applied in the case cannot be valid. This sounds like the same argument previously heard, and rejected, by the courts. Religious freedom does not – the courts have conclusively found – imply a right for employees and businesses to pick and choose the tasks they do or the customers they serve.

But I don’t think the matter should end there. As the courts clearly understood, the bakers were asked to ice a slogan for use in a political campaign against a decision of the Northern Ireland Assembly. The McArthurs agreed with their legislature’s decision, and did not want their work used in a campaign against it.  Their view would be, I guess, that reserving marriage, as a legal concept, as a monogamous relationship between two people of opposite genders is to the ‘benefit’ of all, regardless of individual variations in sexuality or sexual preference. The courts thought that overturning the decision of the legislature would be to ‘benefit’ gay people and so refusing services with the effect of supporting such opposition is unlawful discrimination. 

This sounds like judicial review by proxy. If Ashers bakery is guilty of unlawful discrimination, then the real issue – surely - is the Assembly’s decision, and this should have been the matter before the courts.

There are, it seems to me, risks in the way the Ashers ruling deploys ‘associative discrimination’ in the context of a political campaign. Under the Equality Act 2010, it is unlawful to discriminate because of “religion or belief.” This Act does not extend to Northern Ireland, where an added complication is that it is unlawful to discriminate on grounds on “political opinion” – a minefield the courts avoided when they based their judgment on the issue of sexual orientation. But mainland courts have already had to consider if, and when, a political viewpoint amounts to a protected “belief.” Sooner or later, it seems to me, someone will refuse services for a political campaign - and then face threatened action for ‘associative discrimination’ against adherents of the beliefs advocated by the campaign.

The case is not credibly, at any rate in my view, an instance of religious discrimination or denial of free speech. No one could sensibly consider the McArthurs authors or editors of text processed through their scanning and icing machines. 

Nonetheless it will be disappointing if the Supreme Court does not take a look at the matter. The judge-made doctrine of ‘associative discrimination’ is clearly useful in dealing with someone denied, say, a job or a home due to prejudice aroused by family or social connections. 

But can it really bear the load added by the Ashers ruling - an obligation to enter into a business relationship with a political campaign against a decision made by an elected parliament?