Theresa May’s former deputy has called for the creation of a National Care Fund, funded in part from the equity in older people’s homes.
Proposals in the Conservative manifesto to fund social care from property assets were branded a “dementia tax” and were widely blamed – despite a swift U-turn by Mrs May – for the loss of the party’s majority in the 2017 election.
Damian Green said his plan would avoid a similar backlash by ensuring that home-owners were left with a “significant” part of the value of their property to pass on to their children.
The former first secretary of state, who quit the Government in December last year, said the scheme would effectively amount to a form of insurance against the possibility of care costs in old age.
Funding would come in part from increased taxation and National Insurance, he said.
But in order to ensure that the full burden of the scheme did not fall on the working-age population, it would also draw on the equity built up by over-65s in homes on which the mortgage has been paid off in full.
Mr Green told BBC Radio 4’s Today programme: “It’s a staggering amount of money. It is £1.7 trillion of equity owned by over-65s with no mortgage left on their homes.
“A very small amount of that could solve a lot of this crisis.
“We all agree we need more money in, and we all agree it is fair that everybody should contribute something.”
Mr Green said his scheme would avoid piling disproportionate costs on to people with long-lasting conditions such as dementia, because everyone would be expected to pay for insurance, in the same way they do for car insurance.
It would provide a way for “people who don’t have very much income but do have a huge amount of wealth” to contribute to the funding of social care.
“My suggestion would take a very small part of that wealth and leave them significant amounts of money to hand on to their children, because I absolutely accept that inheritance through the generations is important,” he said.