Scott Gallacher, a chartered financial planner at UK-based IFA firm Rowley Turton, told International Adviser, that May’s decision to include taxpayers’ homes for the first time when calculating the cost of elderly social care may be a key reason why the Conservatives failed to secure the 326 seats necessary to form a majority government.
“The dementia tax, whilst a brave policy decision, was undoubtedly one of the many missteps that Theresa May made.
“I believe this alienated a large element of the Conservatives core support and whilst they might not have been willing to vote against the Tories I know some traditional Conservative voters who couldn’t bring themselves to vote for anyone,” he said.
Speaking to IA, Mark Hassall, director of UK-based IFA firm Moneyology, described the Conservative pledge where people with more than £100,000 in assets would have to pay for their own elderly care out of the value of their homes, as “May’s moment of madness”.
Voters seemed to agree as, come Friday morning, Britain woke up to a hung parliament as no party won enough seats to secure a majority in the House of Commons, as voters delivered 318 seats for the Conservatives, against 261 seats for Labour, led by Jeremy Corbyn.
May has reportedly struck a deal with North Ireland’s Democratic Unionist Party to form a “confidence and supply” informal agreement and will seek approval from the Queen at 12:30pm on Friday.
‘Target on her back’
Rachael Griffin, financial planning expert at Old Mutual Wealth, believes even if the Conservatives form a new government, the ‘dementia tax’ is unlikely to be introduced.
“May painted a target on her back when she announced her controversial social care plans as she faced negative public sentiment towards her proposals and seemed unable to answer crucial questions. She is now unlikely to be able to get such a controversial policy through parliament,” she said.
Frank Nash, tax partner at UK accountancy firm Blick Rothenberg, told IA: “One thing that parties can take away from this result is the need to consult with voters and taxpayers more seriously before drawing up manifestos and taxation policies.”
However, George Bull, senior tax partner at RSM, an international tax, audit and consultancy firm, said he didn’t believe the ‘dementia tax’ cost Theresa May a majority in the UK election but her subsequent U-turn on a social care cap could have hurt her chances.
“At a time when the electorate want clear leadership, to publish proposals which ignored expert advice and then to backtrack so quickly certainly didn’t help,” he told IA.
