Rattled UK PM May forced into 'dementia tax' U-turn after poll lead halves

LONDON (Reuters) - British Prime Minister Theresa May was forced to backtrack on one of her most striking election pledges on Monday to force elderly people to pay more for their social care after her party's opinion poll lead halved in just a few days.

In her biggest misstep of the campaign so far, May set out plans on Thursday to make some elderly people pay a greater share of their care costs, before hastily announcing on Monday there would be a limit. Questioned at an election event, she grew irritated at suggestions she was backing down.

Six opinion polls published in the past three days have all shown the Conservative Party's lead over the opposition Labour Party narrow by between 2 and 9 percentage points, though all project May will win the election.

May said Labour leader Jeremy Corbyn and other opponents had tried to scare the elderly by spreading "fake claims" about her plan to transfer more of the cost from taxpayers to recipients who can afford to fund care themselves.

Dubbed the 'dementia tax' by opponents, the proposal had raised concerns that some seniors might see their houses sold off to pay for care, rather than passed on to their descendants.

"We will make sure nobody has to sell their family home to pay for care," May said in the Welsh city of Wrexham. "We will make sure there's an absolute limit on what people need to pay."

She later denied playing politics, telling the BBC she had addressed concerns about her plans.

May called the election to strengthen her hand in negotiations on Britain's exit from the European Union and to win more time to deal with the impact of the divorce.

But if she does not handsomely beat the 12-seat majority her predecessor David Cameron won in 2015, her electoral gamble will have failed.

May said the proposed changes to elderly care were part of an attempt to reform the care system for an ageing society.

But she appeared flustered taking questions about her announcement of a cap from journalists, including one whom suggested she was "weak and wobbly" in contrast to her election promise to be a "strong and stable" leader.

"Nothing has changed, nothing has changed, we are offering a long-term solution for the sustainability of social care for the future," she said, shaking her head and raising her voice as it was described as a U-turn by journalists. "Nothing has changed."

Sterling fell below $1.30 on Monday after polls showed her lead had fallen but then made back some of its gains after May announced the cap.

London's Evening Standard newspaper, edited by former finance minister George Osborne, led with the headline "Strong and stable?" Osborne, sacked by May after the EU referendum, was first to break the story of May's reversal on the policy.

"SHAMBOLIC DISPLAY"

Liberal Democrat leader Tim Farron described it as a "frankly shambolic display", while the main opposition Labour Party's election coordinator Andrew Gwynne said May had thrown her election campaign into "chaos and confusion".

The Financial Times reported on Monday that May had not consulted some of her most senior colleagues on the plans announced last week, and that the head of her policy unit had advised against it.

When May called a snap election for June 8, surveys indicated she would win a landslide comparable with Margaret Thatcher's 1983 majority of 144 seats in the 650-seat parliament.

That picture appeared to change after both the Conservatives and Labour set out their election pitches to voters last week, with a Survation poll published on Monday showing May's lead over Labour had halved to 9 percentage points.

With polls showing the Conservatives' lead over Labour down from 20 points or more earlier in the campaign, May is projected to win a smaller majority of around 40 seats.

An ICM poll published on Monday showed the lead of May's party's had contracted to 14 percentage points from 20 points a week ago.

"After the delivery of the party manifestos, polling over the weekend has indicated a resurgent, if still rather distant Labour Party," ICM director Martin Boon said.

But many are skeptical of the headline poll numbers after surveys failed to correctly predict Britain's last national election in 2015, as well as the 2016 EU referendum and Donald Trump's U.S. election victory.

Pollsters have said their 2015 findings significantly overestimated support for Labour. While they have since adjusted their methodology to seek to address this, it will not be known until June 9 whether they have now gone too far the other way.