October 24 2014 Latest news:
Monday, September 24, 2012
Health minister and Norfolk MP Norman Lamb has told the EDP that the country must accept taxes will be raised or more cuts made to cover the cost of caring for the elderly.
North Norfolk MP Mr Lamb said a “mature” debate was needed and that government should discuss raising money by, for example, abolishing capital gains tax (CGT) relief given to families selling assets of deceased relatives or limiting the pensioners who receive benefits currently given to all.
Speaking from the Liberal Democrat conference in Brighton he said: “You only have to think about how public money is raised; either through a range of different taxes or coming from cuts to spending that already takes place. We do need to have a mature, open debate about that in terms of how we are going to pay for care.
“We also have to make sure the burden falls fairly and that the wealthiest pay their fair share.”
Currently anyone with assets greater than £23,250 covers the cost of their own care. But, struggling to meet the bill, 40,000 people are forced to sell their homes every year. Meanwhile, the state foots a huge bill supporting those with few assets.
The Dilnot Commission, tasked to solve the problem, suggested anyone with assets exceeding £100,000 should meet the first £35,000 cost of their own care, after which the state would pick up the estimated £1.7bn bill.
Mr Lamb said: “So the question is where do we find a new funding stream? The Institute for Fiscal Studies (IFS) has come up with eight or ten options. We need to open a discussion and we need to involve the public in that.”
Highlighting one possibility which could raise £600m annually, Mr Lamb said: “At the moment capital gains tax is not paid when an asset is released after death. If you sell the asset two weeks before death you pay capital gains tax, but not after.
“The IFS suggests you could change that situation so that CGT was paid on an asset sold after death as well as during a person’s lifetime. I’m not advocating that, it’s an example of one [possibility].”
The IFS report also says limiting pensioners getting benefits like free TV licences and the Winter Fuel Allowance could save a further £1.4bn.
Mr Lamb said he would seek to set up a process that would see a decision on how to fund care taken by a set date.