Lord Newby (LD)
My Lords, according to the Prime Minister, the package of proposals in this Statement represents
“a project of our era equivalent to the creation of the NHS and the welfare state.”
How, then, do the proposals measure up to this challenging claim?
Taking the spending side first, the Statement covers three separate but related areas. First, there is the implementation, at last, of something like the Dilnot proposals for placing a cap on the contribution that individuals need to make towards their social care. This principle was legislated for by the coalition in 2014 and its implementation is long overdue. Secondly, the Government are making a major investment of about £10 billion per annum for the next three years in the NHS to deal with the backlog of elective procedures. Undoubtedly this is necessary, but not necessarily sufficient. Yesterday, the Prime Minister failed to give any assurances about the rate at which the backlog of procedures would be reduced. Can the Minister today give any further indication of timescale on this?
Thirdly, the Government claim to be making more resources available to state-funded social care beyond Dilnot. This is arguably the most pressing problem of all, with 112,000 vacancies, massive staff turnover rates and providers teetering on the edge of financial viability. Sadly, the Statement was almost silent on the substance. Instead, all details about the future of social care are yet again pushed back into the long-promised White Paper, for which no publication date has been set, as the noble Baroness pointed out. Can the Minister confirm that there will be no immediate increase at all in funds available for social care, not a penny? If so, how does she expect care homes and domiciliary care providers to survive over the coming months? Over the whole three-year period covered by the Statement, exactly how much additional central government funding will flow into adult social care provision unrelated to the Dilnot reforms, bearing in mind that the current annual cash shortfall is somewhere in the range of £6 billion to £14 billion?
After the first three years, the proceeds of the levy are supposed to go increasingly towards social care. However, given that, on the basis of previous experience, overall NHS spending in future is likely to be greater than that currently budgeted for, there will undoubtedly be pressure for this additional level of NHS funding to continue, even after the pandemic catch-up is more or less complete. What assurance can the Government give that over the medium term, the bulk of the revenue raised by the levy will go to social care, as promised? When later this year does the Minister expect the White Paper to be produced? We have heard so many assurances that it is almost here, nearly here or will soon be here. We are a bit sceptical.
The Government document states that they want to
“make care work a more rewarding vocation”.
How will these announcements allow care providers and local authorities to increase the wages of the many thousands of care workers stuck on zero-hours contracts and the minimum wage? Do the Government really believe that offering a few training courses will solve the recruitment and retention problem in this sector? The Government say that they will
“ensure that the 5.4 million unpaid carers have the support and respite that they need”.
How much additional funding over the next three years will now be available to fulfil this promise?
The Government say that they will move towards equalising the amount paid by self-funders and those funded by local authorities. Do they plan to do this by reducing the amount paid by self-funders or by increasing the amount paid by local authorities? If it is the latter, where will the money come from?
I turn to the new hypothecated health and social care levy. Many people are indignant that a major manifesto promise has been broken, but why are they surprised? For this Prime Minister, a promise is not a binding commitment; it is simply a holding position, until it becomes easier to do something else. More surprising than a broken promise is that the Treasury has agreed to introduce a hypothecated tax—something that it normally never countenances, because of all the inflexibilities that it brings. Why has a new, unprecedented, hypothecated tax been introduced here? The obvious reason is that the Government know that they will have ever-growing demands for future spending in health and social care, for which tax rises will be required, and they see this tax as a vehicle for doing that in future. Can the noble Baroness confirm that, for this Parliament at least, there will be no more increases in the levy?
All in all, does this Statement amount—as the Prime Minister claims—to the equivalent for our age as the creation of the NHS and the welfare state? For those trying to run a care home, act as an unpaid carer or subsist on a minimum income, such a boast will ring hollow. Beveridge, Attlee and Bevan must be turning in their graves.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
I thank the noble Lord and the noble Baroness for their comments, but I am slightly surprised that they have not welcomed our announcement of a new £36 billion package to help tackle NHS backlogs, reform adult social care and bring the health and social care system together on a long-term, sustainable footing. That is a hugely significant amount of money to help our precious NHS and to solve a problem that all across this House have acknowledged for many years.
We have indeed held many discussions throughout the year with leading members of the sector, specifically on reform, and will of course continue to do so. We have committed to spending an additional £5.6 billion on social care in England, across the next three years. As the noble Baroness rightly says, the deferred payments agreement remains in existence to enable people to use the value of their home, if they need to, without selling it. Both the noble Baroness and the noble Lord asked why this involves national insurance. To raise the sums needed for this significant investment in the NHS and to reform social care, only a broad-based tax, such as VAT, income tax or NICs, is able to do so. NICs already ring-fences funds for the NHS and successive Governments have increased it, so there is precedent for our belief that this is the best and fairest way.
The noble Lord is absolutely right: the levy will be ring-fenced for health and social care. HMRC will send funds to the health bodies in all four nations of the UK and, by 2023, to social care funding bodies, such as MHCLG, which will deliver it through local authorities. As I say, part of the reason for using NICs is that the more you earn, the more you pay. I am sure noble Lords are aware that a typical base-rate taxpayer, earning £24,100, will contribute roughly £180 a year, whereas a typical higher-rate taxpayer, earning £67,100, will contribute £715 a year. The highest-earning 14% of people will pay around half the revenues. The 6.2 million lowest earners will be kept out of the levy. The use of NICs also means that the cost of the levy will be shared between individuals and businesses; however, 40% of all businesses will pay nothing extra.
The noble Lord asked about tackling the backlog in the NHS. We will spend £2 billion this year, which is double our previous commitment to tackle the backlog. In addition, we plan to spend more than £8 billion in the following three years, from 2022-23 to 2024-25. On the waiting list, we do not know how many people who did not come forward for help from the NHS during the pandemic will now seek treatment, so plucking numbers out of the air about the size of the waiting list is not helpful. But I can certainly assure both the noble Lord and the noble Baroness that the funding announced will deliver 9 million more checks, scans and procedures until 2024-25. This is a significant investment and, over the next three years, will be the biggest catch-up programme in NHS history.
The noble Baroness asked about local government. She is aware that, in 2021-22, we have provided councils with access to over £1 billion of additional funding for social care, on top of the significant funding provided to help the sector. In the spending review, we are also committed to ensuring that local authorities have access to sustainable funding for core budgets. This announcement includes funding to enable local authorities to move towards paying providers a fair rate for care, which should drive up the quality of adult social care services, improve workforce conditions and increase investment. The funding package covers the costs to local government of implementing the charging reforms, including the cap, the increased capital limit moving towards paying a fair rate for care, which I just mentioned, and associated implementation costs.
The noble Lord asked about self-funders. As he knows, under the current system, individuals who fund their care often pay more than individuals who are funded through their local authority for equivalent care. Under this new system, self-funders will have a choice to ask their local authority to commission their care on their behalf, which means that individuals fully funding their own care could choose to benefit from the market power of local authorities. We will be publishing a consultation document on the details of these proposals next month.
On other issues, we are investing more in supported housing and exploring other innovative housing solutions to support more people to live independently, as the noble Baroness said. As part of the additional £5.4 billion of investment announced, we will fund an extension to the established disabled facilities grant to enable more people to live independently in their own homes.
On the integration work, the House will be looking at the Health and Care Bill shortly, before Christmas, when it begins its passage through this House. That is laying the groundwork for reform, and we will see an improved oversight of how social care is commissioned and delivered. It will facilitate a greater integration between health and care services, on which these reforms build. As we have said, we will work further with the sector and more broadly to coproduce a comprehensive national plan for supporting and enabling integration between health and social care, but I am afraid that I cannot go any further than saying that the White Paper will be published later this year.
Finally, the social care workforce has worked incredibly during this pandemic. Our investment of £500 million across three years will deliver new qualifications, progression pathways and well-being and mental health support, which is critical. We will continue to support the fantastic 5.4 million carers to have the support, advice and respite they need.
Lord Ashton of Hyde (Con)
I remind noble Lords that there will no doubt be lots of questions for the Leader, but the Companion is clear that they should be brief. This should not be the occasion for a separate debate, which I am sure will come later.
Baroness Brinton (LD) [V]
I declare my interest as a vice-president of the Local Government Association. My noble friend Lord Newby asked, but the noble Baroness did not answer, so I ask again whether she will give an undertaking from the Dispatch Box to guarantee that social care will receive the bulk of the revenue raised by the levy, in the medium term, regardless of whether the NHS has completed the backlog of waiting lists. Otherwise, this is no reform to social care at all, however delayed.
These proposals do nothing to help the current problems in the social care sector. The noble Baroness referred to the extra £1 billion to local government, but all the experts say a minimum of £4 billion a year is needed to help solve them. Can the Minister confirm that, given the current severe crisis in staffing and funding in our care homes, there will be funding on top of that £1 billion at least to start to remedy the problems in social care?
Baroness Evans of Bowes Park (Con)
As I said in my opening remarks, we are committed to spending an additional £5.4 billion across the next three years. This will end the risk of unpredictable care costs and include at least £500 million to support the social care workforce.
Lord Hunt of Kings Heath (Lab)
My Lords, can I ask the noble Baroness about the people currently paying their way in care homes? Are they to get no credit whatsoever for the fees they pay up to October 2023? Is it not grossly unfair if the clock starts only when we reach that point?
Baroness Evans of Bowes Park (Con)
This has been an intractable issue. If all parties had managed to deal with it better, people in the situation the noble Lord mentioned—for whom we have a lot of sympathy—would have been helped. Unfortunately, that is not the case. We have announced a package that will begin with the new cap in October 2023.
Lord Lansley (Con)
My Lords, I very much welcome the additional resources for the NHS and social care, but will the Government increase and accelerate the resources for social care? Everyone in the NHS knows that only by increasing the capacity in local authority-funded social care can they relieve the pressures on the NHS. The House will recall that we legislated in the Care Act 2014 for a Dilnot-style plan. It is now more than 10 years since he submitted that plan to me as Secretary of State. We should bring it into force, and we can and should do so by April 2022.
Baroness Evans of Bowes Park (Con)
I am afraid I have already set out the timescale on which we are doing this. This is a complex area and, as I said, the new cap will come in in October 2023. As I said, the funding in this package covers the cost to local government of implementing the charging reforms, including the cap, the increased capital limit moving towards paying a fair rate for care and the associated implementation costs. We will be working closely with local authorities to make sure that we can implement this to the benefit of all our citizens.
Baroness Walmsley (LD)
My Lords, can the noble Baroness say how much additional employers’ NICs will be paid by struggling care home providers in respect of their staff? Could that not be sufficient to make them go under?
Baroness Evans of Bowes Park (Con)
I do not believe so, no. As we have said, the levy will be shared between individuals and business. The largest 1% of firms will pay around 70% of the total business contributions, with the smallest 40% paying nothing extra.
Baroness Ritchie of Downpatrick (Non-Afl)
My Lords, in Northern Ireland the money given directly through Barnett consequentials normally goes into the central pot in the Department of Finance. There is money with this new health and social care tax because it is a UK-wide tax, so what guarantees can the Minister give your Lordships’ House that the money allocated to Northern Ireland will go directly to the health and social care budget?
Baroness Evans of Bowes Park (Con)
That is exactly what we intend to happen. In fact, Scotland, Wales and Northern Ireland will benefit from around 15% more than is generated for their residents, which will be equivalent to around £300 million every year on average. As a total, Scotland, Wales and Northern Ireland will benefit from an additional £2.2 billion each year on average. We intend to put the money directly into the health services across the nations, as the noble Baroness said.
Lord Lipsey (Lab)
My Lords, as I think I was the first person to propose a cap on care costs in the minority report to the royal commission in 1999, it would be churlish of me not to welcome the fact we are now getting one, albeit a mere 22 years after I first proposed it. It is disappointing that the Government have concentrated their sole attention, practically, on government, state-funded—which means national insurance-funded—care and have apparently paid no attention whatever to the great role that the private sector can play in helping richer people to afford their care in later years.
Baroness Evans of Bowes Park (Con)
The noble Lord will be well aware that historically there has been very low demand for social care insurance products and insurers have actually withdrawn products from the market. We believe that there will now be certainty about costs faced by individuals. We hope that more financial products will come on to the market to enable individuals to plan for their future care needs. We intend to work with the financial services industry to innovate and help people insure themselves against expenditure up to the limits.
Lord Forsyth of Drumlean (Con)
My Lords, of course everyone welcomes the extra money for the health service. The last big additional sum given to the health service was some £20 billion, which is more than the entire spending on social care. Social care is in immediate crisis; it needs the money now. There are 1.5 million people not getting the care they need and care has been rationed by local authorities that have not got the costs. How will the Government cope with this? The importance of having a settlement for local government to deal with that is there. How do the Government expect this money to get to social care in three years’ time, given what we know will be the pressures on the National Health Service? How will that money be ring-fenced? If it is not, the most vulnerable people in our country—that includes half the budget going to people of working age—will suffer.
Baroness Evans of Bowes Park (Con)
I can certainly reassure my noble friend that the levy will be specifically ring-fenced for health and social care. As I said, HMRC will send funds to the health bodies in all four nations of the UK and by 2023 to social care funding bodies such as MHCLG, which will deliver through local authorities. In the up-and-coming three years, £5.4 billion will be provided to support social care.
Lord Shipley (LD)
My Lords, I remind the House of my registered interests. In 2016, the Government introduced the social care precept and council tax payers have had to pay up to 15% more over the past five years than they otherwise would have done. Council tax is a regressive tax, so would the Minister please confirm that this practice of increasing council tax bills will now stop as a result of this new funding proposal?
Baroness Evans of Bowes Park (Con)
I can certainly say to the noble Lord, as I again said in my opening remarks, that we are committed to ensuring that local authorities have access to sustainable funding for core budgets and we will do so in the spending review.
Lord Walney (Non-Afl)
My Lords, how are the Government factoring into the calculations the urgent need for an increase in the basic pay of care workers to increase the quality and availability of care?
Baroness Evans of Bowes Park (Con)
Obviously the noble Lord will know that the vast majority of the workforce is employed privately. Local authorities, as part of the fair rate for social care, will be working with that sector to help improve conditions and pay rates as part of the overall involvement further in the system.
Baroness Manzoor (Con)
My Lords, I very much welcome this announcement. It is a very pragmatic way forward in the circumstances we find ourselves in, particularly when one looks at the past 18 months. Health inequalities have increased significantly and this will go some way to addressing that. However, it is imperative that one looks at the relationship between acute care and social care. Could my noble friend assure me that this will be looked at immediately, with a view to these budget allocations being ring-fenced accordingly?
Baroness Evans of Bowes Park (Con)
I thank my noble friend. As she will well know, the Health and Care Bill, which will come to your Lordships’ House shortly, lays the groundwork for that. We are certainly doing much more work on integration. As I said, a White Paper will be published this year. We will be looking at creating the right incentives for integration and prevention, as well as working with the NHS—both hospitals and primary care—social care providers and other partners to ensure that they are working to deliver effective care in people’s homes and communities.
Lord Scriven (LD)
My Lords, the plan for health and social care says that a
“workforce that is rewarded and feels valued is essential for high quality care”.
The Care Workers Charity, which provides cash support for care workers in desperate financial need, paid out more than £2.2 million last year. How will the Government’s plan deal with this pay crisis in social care within the next three years?
Baroness Evans of Bowes Park (Con)
As I mentioned to a noble Lord earlier, the vast majority of care workers are employed by private sector providers, which ultimately set their pay, but local authorities are going to work with them to determine a fair rate of pay based on local market conditions. This investment of £500 million across three years will deliver new qualifications, progression pathways, and new well-being and mental health support. We are going to provide support to professionalise and develop the workforce by providing hundreds of thousands of training places and certifications for care workers, so we are putting in a lot of investment. We understand the importance of the social care workforce and the fantastic job it has done, particularly in the incredibly difficult times of the pandemic.
Baroness Blake of Leeds (Lab)
My Lords, I declare my interests as set out in the register. As the leader of the second-largest metropolitan local authority in the country until earlier this year, I ask the Leader of the House what direct conversations she has had with leaders in the sector, particularly from a local government perspective. If she is not able to tell me directly who she has spoken to, I offer my services to arrange for her to come and visit the leaders in the sector, so that she can fully understand the pressures they have been under over the last several years—before Covid—and what they have gone through during the pandemic to protect the most vulnerable in our society. I concur that without the necessary investment in local government, the National Health Service will fall over; it will be on its knees. It is just not good enough to ignore the needs of local government to provide the services that the most vulnerable people deserve. It is not just older people but all age groups.
Baroness Evans of Bowes Park (Con)
I completely recognise the passion the noble Baroness has spoken with, and I thank her for all her work. I would absolutely be happy to take her up on her offer and listen and talk to people. The most useful person for people to talk to is probably the Secretary of State for Housing, Communities and Local Government. He will have had a huge number of conversations about this, and they will be ongoing. I thank the noble Baroness for her offer and look forward to taking it up.
Baroness Altmann (Con)
My Lords, I am sorry to say that I cannot see how this solves the social care crisis. Can my noble friend explain how this extra money will actually address the discrimination that there is against those who have dementia, relative to those who have cancer, how it will improve staffing levels or the level of pay, and how the Government have decided that nothing needs to be contributed out of pensions income or buy-to-let income to something that is clearly a social insurance need across the economy?
Baroness Evans of Bowes Park (Con)
What will help the people my noble friend has talked about is the fact that, under these plans, we will now cover all care costs for anyone with assets under £20,000, which is up from the current level of £14,000. Importantly, she will know that, currently, anyone with assets over £23,350 faces paying their care costs in full. The new £100,000 limit is four times higher than that, which means that many thousands of people will now be eligible for further state support under our plans.
Lord Grocott (Lab)
What significance should the House attach to promises made by the Prime Minister?
Baroness Evans of Bowes Park (Con)
I am sure the noble Lord will make his own judgment on that. I repeat that the Prime Minister was perfectly honest about it in his Statement. He said that
“no Conservative government ever want to raise taxes”,—[Official Report, Commons, 7/9/21; col. 155.]
which is absolutely true, but he wanted to be honest and accept that this will break a manifesto commitment. I am sure that even the noble Lord would agree that, having provided more than £400 billion of support for jobs and livelihoods, businesses and public services at the start of the pandemic, we have particular challenges around our public finances. And that was not in our manifesto.
Lord Cormack (Con)
My Lords, do not the questions asked in the last 20 minutes or so illustrate the need for a thorough debate in your Lordships’ House? I say with great respect to my noble friend that the point raised by my noble friend Lord Forsyth needs addressing in detail. Can she give the House an assurance that, when we come back in October, an early, full-day debate will be devoted to these issues?
Baroness Evans of Bowes Park (Con)
I can say to my noble friend that the Health and Care Bill will come to this House when we come back, which will allow a lot of debate on this subject matter. He will be pleased to know that, now we have returned, we have many more opportunities for Back-Benchers to put down the titles of debates they would like to bring before the House. I am sure he will take advantage of that.
Baroness Barker (LD)
My Lords, can the Leader of the House explain why employers in freeports are exempt from paying the levy for some employees?
Baroness Evans of Bowes Park (Con)
I am afraid I will have to get back to the noble Baroness on that.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, under cover of this announcement, the Government broke another manifesto promise by abandoning the triple lock on pensions. With the costs of energy and food projected to rise substantially, how are pensioners who depend on the basic pension going to survive?
Baroness Evans of Bowes Park (Con)
I am sure the noble Lord will understand that, given the statistical anomaly that has led to average wage growth being 8%, it is just not fair to raise pensions by this figure. For one year only we are moving to a double lock and increasing pensions by the higher of inflation or 2.5%. We will then return to the triple lock. Since the triple lock was put in place in 2011, the state pension has increased by 3% a year; it is now at its highest level relative to earnings for 34 years. The number of pensioners in absolute poverty has fallen by more than 200,000 in the last decade. I do not dispute that this will impact some people, but I think that, for one year, in the light of everything the country has gone through, it is fair and people will agree with it.
Lord Brownlow of Shurlock Row (Con)
My Lords, clearly many people welcome the hypothecated levy and the intended ring-fencing of those resources, but can my noble friend the Leader assure me that these resources will not end up being more waste in the NHS and social care, of which there clearly is too much today?
Baroness Evans of Bowes Park (Con)
My noble friend is certainly right; this is a huge amount of investment going to where it is greatly needed. But he is absolutely right that, seeing as taxpayers—all of us—are being asked to contribute more, it is also reasonable to expect health and social care providers to ensure the money is well spent. We will work with them to ensure that happens.
Lord Campbell of Pittenweem (LD)
My Lords, I wonder whether the Leader of the House can help me with some puzzlement. As I understand it, the Government have produced what they regard as a solution to the problem of social care, but later this year the Government will produce a White Paper on the topic of social care. Can she tell us of any previous occasion when any Government have produced the solution before they have produced the White Paper? These are the politics of Lewis Carroll.
Baroness Evans of Bowes Park (Con)
As I have said, there will be consultation on the detail of the local authority elements and further White Papers on integration. This is a long-running and complex programme, and we will continue to talk to people and consult as we continue developing it.
Baroness Wheatcroft (CB)
My Lords, the noble Baroness, Lady Altmann, asked why income from pensions and buy-to-let property was not covered by these proposals. I wonder whether the Leader can answer that.
Baroness Evans of Bowes Park (Con)
I said at the outset that only a broad-based tax such as VAT, income tax or NICs could raise the sums needed for this kind of investment, and we believe that NICs is the fairest way to do that.
Baroness McIntosh of Pickering (Con)
My Lords, historically, no Government have imposed a percentage increase on national insurance contributions because it hits the very people—the NHS and local government—who are delivering health and social care. For what reason have the Government changed the position on this?
Baroness Evans of Bowes Park (Con)
As I have said, the reason we went to NICs is that we believe that is the fairest, as the higher your earnings, the more you contribute; I gave some figures to show that. As I said, the highest-earning 14% of people will pay around half of revenues, and 6.2 million of the lowest earners will be kept out of the levy.