Health and Social Care in England

Baroness Hollis of Heigham Excerpts

Thursday 11th July 2013 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, as we know, social care, health and social security expenditure is being driven by the growing number of the elderly. It accounts for two-thirds—£110 billion—of our welfare budget. As local authorities face 50% cuts, we are none the less going to need 65% more hours of care from the same number of working-age people in the next 15 years.

People talk airily about the extra life expectancy since Beveridge’s time—it was then five years after retirement; it is more than 20 years now. They argue that there should be a fixed proportion of adult life for retirement—let us say 30%—and that the pension age should rise accordingly, saving some £15 billion a year. However, the health and social care statistics should give us pause for thought. Those extra years are not enjoyed as years of good health but are years of chronic disability. At 65, we may enjoy a decade of good health, followed by a decade of growing but chronic disability, such as arthritis and diabetes, impairing our ability to walk, to reach, to see and to hear. Finally, there are perhaps two to five years—this has not changed much—of conditions involving heavy dependency, including Alzheimer’s, with substantial personal care needs.

The years of extra life, therefore, are largely extra years of chronic disability, but it is heavily class-specific. The better-off will live longer in good health—and they include those commentators who seek to encourage the raising of the state pension age—but for everyone else, those extra years of life will be added to the years of chronic disability. In my city, in two wards that are one mile apart, there is 11 years’ difference in life expectancy and 15 years’ difference in healthy-life expectancy. The gap is widening. It is deeply unfair to raise the state pension age and reduce the good years of retirement for most of the population.

I doubt that we can significantly extend the decade of healthy-life retirement for most people, but we can make the next decade, of disability, qualitatively better. What must we do? Measures include adapted housing and equity release—only £0.5 billion of the £2 trillion locked away in property of the over-55s is being released each year. Decent state pensions under the new Pensions Bill will provide funding for heating, food and mobility. We also need to fund social care adequately and intervene early.

Can we afford it? We spend £62 billion a year on the state pension and more than £40 billion on pensions tax relief—a shadow welfare state for the well-to-do. It is outrageous really. We have three ages of man—work, early good-health retirement and later disabled retirement. We need to smooth income not just from work to retirement, as we do, but between early retirement and later retirement as well, which we do not do.

Standard tax rate relief on pensions and/or treating pensions like ISAs would release £7 billion or £8 billion a year. If that money was then ring-fenced for later-life social care, redistributing it not only from work to retirement but from younger, healthier, wealthier pensioners to the older and frailer among us, I think that it would command support. Raising the cap on employees’ national insurance, now frozen at the higher rate, would raise a further £11 billion.

There is money; it is about our political choices and our priorities. With a sufficient state pension which is coming, with the redistribution of money from pensions into social care, with the adaption of our homes for safer living, partly funded from equity release, and with a more courageous attitude to integrating hospital, primary and social care, we can cope. Half of the growth of the older old is indeed due to increased longevity, but half is due to the post-war baby boom. In a decade or so we shall be through that baby boom and in a better worker-pensioner support ratio than almost all other European countries—until the next baby boom, that is, which has just begun, but that is a problem for the 2070s and our great-grandchildren.