Health and Care Bill

Debate between Baroness Greengross and Lord Lipsey

Lords Hansard - Part 2 & Committee stage
Monday 31st January 2022 Lords Chamber

[Baroness Greengross (CB)]

My Lords, I rise to speak to Amendment 235 in my name, which seeks to implement the social care contribution cap recommended in the 2011 Dilnot report. He recommended that a cap be set at £35,000. Care cost inflation runs at 1.5% above the consumer price index, so to replicate the 2011 recommendation, adjusting for this cap would now be set at £50,000, and that is what this amendment seeks to achieve. The amendment would also adjust the cap with care cost inflation each year.

I first want to acknowledge that the Government’s proposed cap in this Bill of £86,000 is a significant improvement, as it introduces a cap and puts some limit on what people pay in care costs. There are some who still do not believe that there should be a cap and feel that this will just be a means of helping wealthy homeowners, but not all homeowners are automatically wealthy or sitting on some high-value property portfolio. For many people, as we know, their only real asset is a modest family home, which, in certain parts of the country, may have increased in value over time but even so not enough to make them wealthy.

There is an equity issue in that, if someone is diagnosed with cancer, the NHS will cover the full treatment cost, whereas if someone is diagnosed with dementia, they may require many years of care, which will cost families thousands of pounds as this is not covered. My Amendment 291, which will be debated in a later group, addresses the issue of dementia care plans and specifically talks about the different types of dementia and how each requires a different type of care and support. If someone is unlucky enough to be diagnosed with a certain type of vascular dementia, Lewy body dementia, or Parkinson’s-related dementia, these conditions often require many years of care—up to a decade or more in some cases.

I am not suggesting that there should be a different cap for people who have been diagnosed with long-lasting forms of dementia, but we must understand that people with these types of dementia will be the most impacted by this provision. The proposed cap of £50,000 in this amendment, the equivalent to that recommended in the Dilnot report nearly 11 years ago, is a much better one. According to the ONS, the average yearly earnings for people in the UK is £31,000. The cap of £50,000 is roughly just under two years’ average earnings, whereas £86,000 is nearly three years’ average earnings.

I anticipate that, when the Minister responds, the main objection to this amendment will be the cost to the Government, and I have no doubt that the Treasury will have concerns if the cap is lowered. In response to this, I refer the House to the debate in this Chamber on 16 September 2021 on the Intergenerational Fairness Forum report, Grasping the Nettle. As chair of the Intergenerational Fairness Forum, I introduced this debate, outlining that the report recommended that the Government introduce a social care levy at a rate of 1%, which could be raised to 2% for those aged 50 and over if there were a need for extra revenue. The levy would apply only to adults over the age of 40, placing the heaviest burden on those best placed to contribute to the cost of this bill. I mention the recommendation from this report to highlight that there are still other options to fund social care, and it would mean that the Government could lower the cap.

Some will feel that it is better at this time to focus on implementing the current cap and then, over time, press for a lower cap. Certainly, history shows that when other social security measures, such as the pension, were first introduced, they started at quite a small amount of money but then became more generous over time. I accept the logic of this, but still feel that the case must be made for a lower cap and that this should be considered and debated in Committee.

[Lord Lipsey (Lab)]

My Lords, this is a rather strange grouping. In the earlier debates we were dancing at times on the heads of pins, and now we have the noble Baroness, Lady Greengross, with her proposals for a lower cap, and the noble Baroness, Lady Bull—with whom I agree—largely exempting people of working age with a disability, and it is difficult to cover the whole field. However, I will attempt to give a small synopsis leading up to my own amendment, which is about the taper.

I first declare an interest as an unremunerated president of SOLLA, the Society of Later Life Advisers—the people who really know a lot about this stuff. I should also apologise for not having participated in the Second Reading debate but, like the noble Baroness, Lady Bull, I was in a crucial meeting of our House’s Communications Committee, which made doing so impossible.

On Mondays, Wednesdays and Fridays I am a strong supporter of the cap as recommended by Andrew Dilnot, for the obvious reason that it ends an unfairness to people who happen to live for a long time and therefore lose their assets. Unfortunately, in 54 minutes’ time I shall go back to the way I am on Tuesdays, Thursdays and Saturdays, which is to be broadly opposed to a cap of the kind that has been proposed. That is for two reasons. First, all parties should take into account that it is wildly expensive—some £3 billion, which will rise as the number of old people rises. I would much rather that that money was spent on better care for those who need it than on paying for the rich. Do not be in any doubt: whatever gloss is put on it, half the people in care are paid for by the state now, so all the expenditure on the Dilnot cap will go on the other half. A lot of them are not rich people—some of them are quite modestly wealthy—but it is the richer half of the population that this cap supports. As a socialist, that is why I cannot go along with it—at least on Tuesdays, Thursdays and Saturdays. It is not too long until next Sunday, when the good Lord will advise me on what final position to take.

Starting from that scepticism about the concept of a cap, I will say one thing about Dilnot’s proposals. Whatever you think, whether you are for it or against it, the case for the cap is much less strong than it was when Andrew Dilnot proposed it in his brilliant report, and for three reasons. First, no one now has to sell their house to pay for care. They did then but they do not now: they can borrow the money from the local authority and pay it back afterwards. Secondly, house prices have risen by 30%, so many people have more assets they could spend on their own care without leaving themselves with no assets to leave to their children. Thirdly—an important point which has been wholly missed so far in the debate—the private sector, belatedly but slowly, has started to get its act together about this. There are two relevant products: equity release, which enables somebody to get some money out of their house to pay for their care without selling the house, leaving plenty for the children; and, more importantly, annuities and deferred annuities, which are paid from the point of care in the case of an annuity, or after you have been in care for two years or so in the case of a deferred annuity. I was amazed to read through the impact assessment, which went through every possible argument on caps and alternatives to them, and not see a single reference to deferred annuities. They are part of a holistic solution.

I ask the Minister in all sincerity—I know he is very open to suggestions—that, before this Bill completes its passage and, preferably, before we have decided whether to leave Clause 140 as part of the Bill, we look at the role that the private sector can play in supplementing a cap, for example in allowing people to pay for better care for themselves, or indeed possibly replacing it with a less regressive way of paying for care. It should be looked at; it has been ignored since Dilnot, and the case that Dilnot then made against it is not quite the same today, so it really deserves to be looked at.

Finally, on my own amendment on the taper, I am very distribution-minded about this cap. What motivates me is that I hate taking scarce state money, which is needed to provide decent services for people who cannot provide decent services for themselves, and spending it on a subsidy for “Disgusted of Tunbridge Wells”. This seems wrong to me. I would love to see the welfare state expand. I am rather shocked to find a Conservative Government seeking to expand it in order to help the better-off at the cost of much more public spending. The better-off should be able to look after themselves.

If we are to have a cap, we should make it as good in terms of redistribution as we can, with less favouring of the rich than is the case with the present cap. That is why I brought in another thing that has not been mentioned in the debate: the taper. At the moment, the taper does not matter much; it applies in only a very narrow band of incomes. However, under this system, the taper will apply to assets of between £20,000 and £100,000. For every £250 you have in the bank, you lose £1 a week in benefits. That will hit the people who have between £20,000 and £100,000 in assets. They are not rich; they are the kind of people I want to help, but they are being struck by this taper.

Of course, addressing this will cost money, and I am reluctant about that. For every £50 you put on the £250 for the taper, it would be about £200 million a year; it is not nothing, but it is less than the £1 billion or so that would be lost if Clause 140 does not stand part of the Bill. If the Government want to show that they are interested in redistribution, as well as pleasing their richer supporters, I ask them to look at the taper as an alternative. I saw the vote in the Commons: Clause 140 is down the pan. It is not going to win. If he takes it back to the other place, he will be voted down, so it is not going to happen. Therefore, we all, particularly in your Lordships’ House, need to use our imagination to find alternatives to the proposal that the Government have put forward. That proposal will not pass this Parliament in its present form and in its entirety. Working with the Minister, we need to find a better proposal that meets the various considerations I have put forward and, in particular, uses the private sector and does not protect the assets of just the rich.

Care Bill [HL]

Debate between Baroness Greengross and Lord Lipsey

Tuesday 16th July 2013 Lords Chamber

[Baroness Greengross]

My Lords, I support the noble Lord, Lord Sharkey. A similar amendment in my name is not as strong as his amendment. I think that his would do the job that needs to be done remarkably well and I hope that it will be agreed by the Minister.

[Lord Lipsey]

My Lords, I will speak to the amendments in this group standing in my name but, before I do so, I should like to offer the strongest possible support for the noble Lord, Lord Sharkey, and particularly for the words that he said at the beginning about the information task that we face here. This is not just a question of advising individuals when they go to their councils, although that is important and we have had a debate on that. It is a question of making the whole of our society aware of what is going on against a background of very great ignorance and misinformation. It is crucial that something is done on a real scale to turn that around and that the best communication skills are used in doing so. We have to move from the language that we use in this Chamber as aficionados or geeks studying the detail of the Bill to the general public out there, and that is a hell of a task.

As I said, I will speak to my Amendments 90D, 92ZZB, 92ZZC and 104ZC. Amendments 90D and 92ZZC relate to a topic that we touched on in the debate on the previous amendment—namely, the costs and administrative difficulties for local authorities of introducing the cap in the scheme. The Local Government Association has expanded on the numerics in the briefings for this debate, as has London Councils. I think that the local authorities have a slight tendency to underplay what is going on for fear that the Government will take the whole thing away from them, and they want to be shown as “can do” rather than “can’t do”. When you get into the detail, and look below the politicians in local government at the fine detail of those who have to implement it, you find that it is quite difficult.

The Government have in principle accepted the burdens doctrine, namely that if they make local government do something they will pay for it. They have provided around £335 million to pay for that. None of this extra money is coming now, by the way. The contributions will not start until 2016. Bad though the administrative mess may be, if local government does nothing to prepare for this scheme until 2016 it will certainly fail. Already it is doubtful whether the burdens scheme is really being met. Many of the costings put forward are fingers in the air stuff. The detail has yet to be grappled with. Details crucial to costing the implementation of the scheme, such as the eligibility requirements, are only emerging bit by bit. We do not even know what the government money is supposed to cover. Does it fund in full the cost of additional self-assessments, when the self-funders and people who will potentially benefit from Dilnot queue up for assessments? I really do not think that we know the detail of duties around advice and information, on which we spoke earlier, or on the funding for setting up new deferred payment schemes.

My change is designed to write into the Bill what is in effect the burdens doctrine. Whatever the cost, the Government must pick it up. It is not as if local authorities have got large chunks of money in their pocket at the moment to reach in and pay for all this stuff. They do not. They cannot afford basic care services at the moment, so this is a huge task. There is a huge task, too, in training the local authority workforce to do assessment and implementation on this scale, and indeed in creating the workforce.

These facts lead me to believe—and I am very glad that my noble friend Lord Warner, with whom I agree on nearly everything, agrees—that it was a terrible mistake to bring forward the start of the scheme from 2017 to 2016. We know why it happened, do we not? The Government found that they had a few spare quid in their pocket, and wanted to be able to tell the electorate that Dilnot was nigh, and so without proper consideration of any kind they brought the date forward. It was a U-turn, and my amendment U-turns on the U-turn to get back to the right place where they were to begin with, namely that the scheme will come in in 2017. This would give it a good chance to work.

I turn now to my other amendments in this group. I hope that we might finally get an actual concession from the Minister, instead of words of great sincerity and great sympathy and not much change. My other amendments in this group refer to the setting up of a ministerial advisory group on the cap and the means test. They insist that this group should be consulted in the planned five-year review of how all of this is working. This is not a criticism of the Department of Health. I have been impressed by how effective officials have been in grasping this scheme, particularly as for most of the time that Dilnot was under consideration they probably thought that it was never going to happen. They are a first-class team, but I do not think that they possess a monopoly on wisdom, and indeed they do not think so, either. The Minister just referred to the working parties with the financial services sectors that have been set up to give advice. I applaud that.

I think that there are complexities in all of this that even the most literate advisers have barely grasped. I will come to some of them, for example when we come to the detail of the proposals on the means test. It would be helpful if Ministers had to hand a helpful advisory group comprising academic experts, local authority representatives, representatives of the financial sector and someone from Dilnot. Maybe the noble Lord, Lord Warner, would like to volunteer. A group of that kind would not second-guess Ministers on every detail, but would offer its general advice on how things are progressing and how they may be set right if there are departures from the course on the way forward.