Social Care

Lord Lipsey Excerpts

Thursday 30th March 2023 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, social care is the Passchendaele of the welfare state. It is now 25 years since I sat on the royal commission on this subject. Since then, there has been a veritable snowstorm of excellent reports—including the two in front of us today—with, often, government promises and, sometimes, government policy statements. However, all have melted the moment they touched the ground.

I cannot hope to cover the whole subject in the time available to me so I will concentrate on one issue that is very close to my heart. After that royal commission, my noble friend Lord Boateng called me into his office; he was in charge of funding long-term care. He asked me a very good question: “If you had a bit of money to spend in the social care field, where would you spend it?” I replied, unhesitatingly, “On increasing the pay of social care workers.” Then, I said by £1 an hour; now, it would be more like £2. It is a scandal what goes on now for both the workers involved and the people for whom they care.

In January this year, Skills for Care reported that 10.9% of posts—around 170,000 of them—were vacant, meaning people will not be properly cared for. According to the latest figures, a care worker in the independent sector earns £9.66 an hour; in local authorities, it is £11.03. Care workers’ pay has dropped behind that in other sectors. In 2012-13, retail assistants earned 16p an hour less than care workers; today, they get 21p an hour more. One care manager is quoted by the Commons Health and Social Care Committee as saying:

“I dread hearing Aldi opening up nearby, as I know I will lose staff.”


Being a social care worker does not just involve hard skills, though there are those. It also involves soft skills in getting on with people. Do we really want those soft skills transferred to behind cashier points in supermarkets?

There are also problems of low promotion. People love the job but cannot see the way forward. There is also the problem of local authority finance. Councils are trying to push care home fees down. Homes make it work because they charge the councils the marginal cost of putting up with someone and get the rest of the money back off the private payers. The Government said that they would tackle this. Can the Minister kindly tell us where they have got to? I would be most grateful.

This problem is going to get worse and worse, for the simple reason of demographics—an increasing elderly population with increasing care needs. The overall population in England grew by 7% in the 10 years between 2011 and 2021. The number of people aged 85 or over rose by 16%, so nearly three times as fast. Many of those people will need care. By 2038, 57% more adults in the population will be 65 or over, compared with today. How are we going to care for them?

I make this final point. There is a crude choice in social care. You can spend the money that you have available on helping people to pay their care home fees, which helps the top half of the population, or you can spend it on providing better care. The Government plan to prioritise a cap. Fortunately, the proposal for that has now been ditched, or postponed indefinitely. However, they should have prioritised the first, with better care for all, starting with better care for those who give their lives to these difficult but rewarding tasks.

Health and Care Bill

Lord Lipsey Excerpts

Lords Hansard - Part 1 & Report stage
Monday 7th March 2022 Lords Chamber

[Lord Warner (CB)]

My Lords, I rise to speak to Amendments 141, 143 and 144A—to all of which I have added my name. In the unavoidable absence of the noble Lord, Lord Lansley, through Covid, I shall be moving Amendment 144A with his agreement. I also declare my interest as one of the three members of the Dilnot commission and, unsurprisingly, I shall be supporting the findings of the commission’s report in speaking to these amendments.

The coalition Government passed the Care Act 2014 to enable the Dilnot cap to be implemented but, since then, there has been no action to do this until now, with Clause 155 of this Bill. Unfortunately, that clause has major unfairnesses and shortcomings, as has been pointed out by all three speakers—the noble Baronesses, Lady Wheeler, Lady Brinton and Lady Campbell—so I am not going to repeat what they have said. This is a deficient clause, and no reasonable person would see it as a fair and reasonable implementation of the Dilnot proposals on the cap. As far as I am concerned, Clause 155 is an unsatisfactory attempt at implementing that commission’s report and should be deleted from the Bill.

I turn to Amendment 144A in the name of the noble Lord, Lord Lansley. The purpose of this amendment is very simple: to require the Government to bring Sections 15 and 16 of the Care Act 2014 into force by April 2023. That is the time when one might expect the Government to bring the cap into force if Clause 155 remained in the Bill, so I do not think we are doing anything very adventurous by putting that date in the amendment. However, the removal of Clause 155 without any replacement would create uncertainty as to whether Sections 15 and 16 of the Care Act would be activated. If, as I and the noble Lord, Lord Lansley, hope, Clause 155 is deleted, Amendment 144A would ensure that the cap was brought into force by April 2023, but also on the basis that the cap was calculated to include the costs of all eligible needs met by the responsible local authority. In short, Amendment 144A would ensure a date for the Dilnot report on fairer care funding to finally start being implemented.

I acknowledge that if the noble Lord, Lord Lansley, were here to move this amendment, he might be more trusting than I am and willing to accept assurances from the Minister that Sections 15 and 16 would be activated by April 2023. I am afraid that someone who wrote and contributed to a report over a decade ago—which has been subject to prevarication ever since then—is rather less trusting, and I think it is absolutely essential, if we want to implement the Dilnot recommendations, that we should not offer that comfort of assurances to the Minister.

I turn briefly to Amendment 143, spoken to so well by the noble Baroness, Lady Campbell, in the absence of the noble Baroness, Lady Bull—another Covid casualty. The Government have made—if I may put it this way—a total hash of the Dilnot recommendations on page 24 of our report. These made it absolutely clear that anyone born with an eligible care need—or who developed an eligible care need before the age of 40—should have a zero cap. We set out the evidence and the arguments for this recommendation extremely clearly. The Government have chosen to ignore our clarity and have muddled up—for charging purposes—the income and capital circumstances of two very different groups of people: older adults and disabled working-age adults. As the noble Baroness, Lady Campbell, has shown, this is very unfair to working-age disabled people. I suggest to the Minister that the Government need to remember the title of our report was Fairer Care Funding—that is what it said on the tin, and that is what we expected to be implemented. The extra cost of sticking to our recommendations on working-age disabled people is—at the most—about the cost of 10,000 people by about 2030. That, if I may put it crudely, would be about the cost of a few rather dodgy PPE contracts.

These three amendments—141, 143 and 144A—work together well as a package. They remove dubious government amendments; they restore the Dilnot proposals for younger disabled people at a modest cost; and they start the implementation of the Dilnot cap in April 2023 on the basis that we recommended.

[Lord Lipsey (Lab)]

My Lords, it gives me great pleasure to follow the noble Lord who sat on the Dilnot committee. I think it was a first-class report, which, at the time, I was prepared to endorse as the least bad solution to the social care problem. But I have changed my mind since then. Why? Because the facts have changed. I set out some of those facts when I spoke in Committee, and they include the large rise in house prices that makes many people much more able to pay for care for themselves at the moment. The facts have changed again in the last couple of weeks because of this disgusting war that has broken out in Ukraine. As a consequence, we are going to have to spend more on defence, as the Germans have already recognised. Therefore, public budgets are going to have to be squeezed in other areas. I regret those squeezes, but it is President Putin’s fault, not ours.

Health and Care Bill

Lord Lipsey Excerpts

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.

[Lord Warner (CB)]

My Lords, a little belatedly, noble Lords might like to hear from one-third of the Dilnot Commission; I declare my interest as that third. I have to say that our ideas have been presented in a whole variety of ways over the last 10 years. This evening, they have been presented fairly accurately, which is refreshing.

Social Care

Lord Lipsey Excerpts

Thursday 28th October 2021 Grand Committee

Asked by

[Lord Lipsey]

To ask Her Majesty’s Government what assessment they have made of the possible role of the private sector in helping individuals pay for social care.

[Lord Lipsey (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as the unpaid president of SOLLA, the Society of Later Life Advisers.

I think these proceedings are a bit rum. A Conservative Government are proposing reforms to help people to pay for care: the cap and the revised means test. They say that these should be entirely funded by the state. And here is a Labour Peer saying, “No, you have got the emphasis wrong, and you should be looking at what the private sector can do to solve the problem without recourse to public funds.” Let me try to resolve that paradox.

In a nutshell, the problem is that roughly half of those needing care have to pay for some or all of it themselves. When it is just a few months or years for people with some wealth, that does not provide much of a problem. But a minority of the half—one in 10 perhaps—go on living for many years in a care home. That means that they exhaust all but £20,000 or so of their resources. Their children may be deprived of their inheritance. As Andrew Dilnot argued in his excellent 2011 report, these people need some form of insurance. The private sector will not provide that insurance. There has never been and never will be any insurance policy you can buy in advance to pay for your care. Tory voters will be terribly affected by this—those we used to call middle England and in the south of England—so of course the Government want to help out.

There are two central flaws in the Government’s approach. First, the insurance that will be provided by the government cap is not at all adequate. I will not repeat what I said in the care debate the other day, but it will be seven years at least before anyone benefits from it and I think it will only pay one-third or one-quarter of costs at the most. We can debate that another time. Secondly, and more importantly to me, such little support as the cap provides will not go to those most in need. It will go to the better off. They are the ones with lots of assets and therefore debarred from means-tested help, and they will tend to live longer since being wealthy is a key to a long life. The Government’s policy, I am afraid, represents a levelling down: taking from less well-off national insurance payers and giving the proceeds to the better off and their children.

Worse still, by spending money on helping the rich in this way, the Government give away money that could be deployed on a more important task: improving our wholly inadequate care services. As the population ages, adding to demand, supply has got worse and worse as local authorities are cut back. The quality of care is not by any means always adequate. If the Minister will forgive me in his presence, I speak the language of Nye Bevan:

“The language of priorities is the religion of Socialism”.


For me, providing more care takes greater priority than paying for care for the rich.

Can the private sector step in? It is true that the financial services sector has been chary of this space. I mentioned already that it does not provide long-term care insurance. Its excuse for this is risk: what if people live much longer than expected and therefore it has to pay out more? If you think about it for a minute, this is palpable nonsense, because these same insurance companies are going around the place desperately trying to sell life insurance policies, which are subject to precisely the same risks as apply to long-term care policies. Having been around these people for a long time, I am afraid that the real reason is a simple one: it is very hard to sell long-term care policies. Most people out there are pitifully ignorant about care. They may know about pensions, but they do not know about care. About a third of the population still think that the state will pay for it in full. Even those who understand see it as a problem that is far in the future, to be dealt with when the time comes. Persuading them to cough up now for a need that they may well never have is hard work, even for the most seductive of financial services salespeople.

However—a big however—there are a number of purely private financial products which financial services companies offer that can help, and there could be more. A major one is equity release. With house prices having soared, many people have a large chunk of money which they can access through an equity release to pay for their care. They do not have to spend that money on it. They can take out a point-of-use care product when their need arises. Then there is the immediate care cost annuity: you take it out when you go into a home and your costs escalate, and it will pay out for as long as you live. If you live for 10 years, it will pay out for 10 years. If you live for less time, you will not do so well. There are subtle variants on this—for example, policies which refund your premium if you die within a few months of taking the policy out, because some people are frightened that they might be paying something for nothing. For many, the future may lie with a cheaper and more attractive policy: a deferred annuity policy. When you first go into care you pay for yourself, but as you are in care for a longer period—a specified number of years—the policy will step in to pay for the rest of it. That provides insurance as a sort of privately funded cap. These are not the only possibilities. An ingenious correspondent suggested to me that there could be a product whereby you temporarily give your home to a housing association. It will then pay your care fees out of the rent.

These products are making progress but from a very low base. For example, equity release sales have nearly doubled since 2016. The number of firms offering care annuities has gone from two to four. It is growing, but slowly. How do we encourage it to grow? I am SOLLA president because people do not know much about care. When they do find out, they are disinclined to do much about it. There is a role here for more publicity, but the most important requirement is for better advice for more people. I do not just mean publicly provided advice. There is no substitute for an independent financial services adviser—dare I say it, a SOLLA-accredited one. It is very important that we increase the availability of that advice and do not just leave people to go to the citizens advice bureaux. Great organisation though it is, Citizens Advice is not necessarily capable of dealing with these very complicated issues.

We are in a crisis on care, and we are heading towards disaster. We have one group of older people who cannot get care of adequate quality, and their families are up in arms at this total failure of the Government. We have another group—smaller but much more used to getting their way—who want their inheritances protected for their children, who will discover, I am afraid, that Johnson’s cap is not an answer. They are likely to lose the greater part of their assets paying for care and will not be able to fulfil their last remaining ambition, which is to see their children right when they die.

The private sector cannot do everything to put this right. I am not saying that it can but, properly promoted and properly advised, private financial products can do much to take the sting out of the care cost fiasco. I hope that today the Minister will show some sign that he and his colleagues are beginning to wake up to the serious problem that was left after their proposals came out.

Social Care in England

Lord Lipsey Excerpts

Thursday 14th October 2021 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, I declare an interest as unpaid president of the Society of Later Life Advisers.

Today I will concentrate on the cap. It was first proposed in my minority report to the 1999 commission on long-term care and carried forward in the Dilnot report a decade later. Noble Lords might be expecting me to be dancing in the aisles because this long-awaited proposal is now being bought in. Well, dancing I ain’t, and nor should older people who have been deluded into thinking that their care costs and worries are over. Bluntly, this cap is a fraud perpetrated against the elderly and against their children, and one which will not deliver but will come back to haunt its progenitors.

Many elderly people will not benefit from the cap at all. Nearly half get their care for free under the means test. Of the rest, many will not qualify because they do not meet tough requirements for proving that they need care, under which substantial disability must be shown. Even if you jump those hurdles, will you get that help? Will you get back the £86,000 you have coughed up for care? No, because the £86,000 is a purely notional figure which, when analysed, turns out to be nothing like the truth. You can claim only as much as a local authority would pay if it were booking a care home place itself, so for a nursing home, the limit would be £779 per week. Yet self-funders pay much more than local authorities that place people—£1,139 per week according to the true expert, Graham Duffy, from Just. There is a gap of £360, which you will have to fill yourself since the cap does not help you. From what you can get help with, you must then deduct what are rather insultingly called hotel costs—that is, accommodation—of perhaps £200 per week. You may well get a nursing care allowance of £187 per week. That great deduction comes off what you will get back.

You are spending roughly £1,100 per week on your care, but only about £400 of that can count towards the cap. When will you start getting some cash? On my calculation, it will take about five years at £400 a week to get you above £86,000. However, the clock does not even start to tick until October 2023. Anything you pay out before then must come out of your own pocket. Therefore, in practice it will be at least seven years before anyone benefits by a penny from this cap—two years until the scheme is launched, and then five years to reach the £86,000. Here is the rub: the average person in residential care lives only for about another five years. There is a tail of robust and fortunate people who go on for a very long time. They might get some help from the cap, but if as many as one in 10 care home residents benefits from this cap, I will be extremely surprised. Also, as I said earlier, even those who benefit will not get back the money they have paid out. Under the cap, they will get back about a third of it.

Putting my cards on the table, I do not object to the few people benefiting greatly from the cap. After all, the beneficiaries are generally the better-off, who do not have to sell their homes to pay for care because they can borrow from the local authority, and the true beneficiaries are not the old people themselves but their kids, who presently get large and largely unearned windfalls. It is not the lack of generosity of the Government’s scheme that appals me but its opacity—not understandable even by those with great knowledge in this field who have studied it for hours.

I am sorry to blow my own trumpet, but my minority report proposed a very much simpler scheme whereby you must pay for five years of your own care and then you get it all free. That way, you do not have to keep tabs all along on how much somebody is spending. It has the advantage of being purely a chronological qualification. Instead, we have this monstrously complex scheme that is designed for one purpose only: to con the public that the care costs problem has been fixed. It is a cap, yes, but a cap that simple is not worth the palaver.

Social Care Funding: Intergenerational Impact

Lord Lipsey Excerpts

Thursday 16th September 2021 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, the noble Baroness, Lady Greengross, rightly highlights one of the central features of the Government’s proposals—namely, the generational redistribution between poorer workers, who pay for the cap, and the older people who benefit from it. Actually, so far as I can see, in all the commentary the main redistribution that is going on here has not been noticed at all. It is not about generational redistribution; it is redistribution within the generations from the poor to the rich.

I shall try to explain this briefly. Half the recipients of care do not pay for it anyway; they have insufficient assets or income so are not affected by this measure either way. Of the remainder, half will be paying for care in a way that counts towards the cap. However, only costs that are strictly categorised as care count towards the cap—what are called hotel costs they will have to pay themselves—so it will take quite a while to reach that £86,000 cap; three years would probably be a generous estimate. On average, people are in care homes for less than three years, so most older people are not going to benefit from the cap at all. Of the rest, most will not benefit from it for long. Some people live in a care home for 10 years and good luck to them, but that is very unusual; sadly, most people will pass on soon after they reach the £86,000 threshold.

Let us think what this means. It is not these older people, for whom we probably have great deal of sympathy, who will benefit from this. There will not be a rash of cruises around the world or teas at the Ritz that they are going to enjoy: where the money actually ends up is in the pockets of their children, to whom they will bequeath it. The poor have to pay for their own homes; the better-off, because of this cap, will find it much easier to buy bigger, better homes, because they are being saved the cost of Mummy’s care by the Government with this measure. It is redistribution, yes, but it is from the poor to the better-off among the younger generations.

The Tories once described Labour’s plans to pay for care as a “death tax”. Now we have the Tory equivalent: an inheritance subsidy. That is why the case for paying for the cap through a tax on wealth—inheritance tax, capital gains tax, annual wealth tax—rather than through national insurance is so compelling.

Social Care Funding (EAC Report)

Lord Lipsey Excerpts

Thursday 28th January 2021 Grand Committee

[Lord Lipsey (Lab)]

My Lords, this is a fine report. I hope the noble Lord, Lord Forsyth, will forgive me if I concentrate my remarks on the recommendation with which I profoundly disagree, which is that of free personal care introduced over the next five years, so that it is universally available by 2025-26. I can at least claim to be consistent on this, because I signed a minority to the report to the royal commission saying so.

Why? It is bloody expensive—£7 billion. That is the same amount as is said to be needed to be put into the present system to make it workable. I would prefer to see this money devoted to better care for the less well-off. It would inflate demand. In Scotland, the demand for care in people’s homes doubled when free personal care was introduced. Speaking now as a socialist—if that is allowed—56% of people in need of care, more than half, are paid for by the state already. The £7 billion I have talked about would all go to the remaining 44%, most of them not rich people, but comfortably off. It seems an extraordinary proposition that the state should pick the pockets of the less well-off to subsidise the better off.

The weepy old argument drummed up to whip up support for free care is that people are forced to sell their homes to pay for it. This is simply not the case. First, if you are getting care at home or go into a care home leaving a dependant in your house, the value of the house is excluded from the means test, so you are not forced to sell because you need the money.

Secondly, anyone who does not want to sell can go to the local authority and borrow the money, which is repaid after their death. They do not have to sell their home during their lifetime.

Thirdly—this has been referred to—there is an alternative route for most homeowners that does not involve the state at all. You take out an equity mortgage on your house and use the proceeds to buy an immediate-needs insurance policy, which will go on paying your care home fees for as long as you live—problem solved. L&G, which is the most progressive company, recently went into this market offering increasingly innovative policies. They solve most of the problems that we are worried about with older people having to pay for care.

Finally, and more consensually, I strongly endorse the committee’s emphasis on the need for consensus. It has been tried before, as the noble Lord, Lord Lansley, was saying. First, the Tories branded Labour’s proposals a “death tax”. Secondly, Labour branded the Tories’ proposals a “dementia tax”. This is no way to do business.

I would like to make a positive proposal for how to stop it. You need not exactly a chairman but an appointed neutral mediator, who tries to find common ground between the parties. The great advantage of that, and I have had personal experience of this, is that, if one party or the other tries to get off the agenda and seize party-political advantage by sabotaging the talks, the mediator can call out the offender. I am hopeful that, if you had talks with such a mediator, you could produce a system that, more or less, satisfies everyone.

Health Protection (Coronavirus, Restrictions) (No. 2) (England) (Amendment) (No. 4) Regulations 2020

Lord Lipsey Excerpts

Tuesday 6th October 2020 Lords Chamber

[Lord Lipsey (Lab)]

Balderdash. Twaddle. Gobbledegook. Piffle. Oops, I am sorry, my Lords, I misspoke. I do not want to talk about the content of this order but about its communication, or rather non-communication, led by the Prime Minister.

Every time I speak to friends, I ask them this question: we all know that we are allowed to see only six people indoors at once, but can they be different people, or does it always have to be the same six? Of those who claim to know, a majority think that it is okay to host two guests or family members one night, and two different guests or family members another. But if we are to believe the noble Lord, Lord Bethell— I always believe him—they are wrong, as he said this afternoon and in a Written Answer to me on 10 September:

“Support bubbles should be exclusive. This means people should not … make connections with multiple households.”


I accept that communicating these rules is hard, especially since the utterly meaningless “Stay alert” was substituted in England for the clear, if unpalatable, “Stay at home”. It is particularly hard if, like me, you live in both Wales and England, or if you live in one of the local areas subject to stricter restrictions. It has been made immeasurably harder still when Ministers, from the Prime Minister down, are quite unable to spell out from day to day, even if they know, what the regulations they have flashed through Parliament with minimal scrutiny mean.

Queen’s Speech

Lord Lipsey Excerpts

Thursday 9th January 2020 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, I entirely agree with the noble Lord, Lord Forsyth—it is not very often that I say that—on the importance of social care and many of the points he made on the subject. It is one of the two great issues facing us, the other being climate change. The advantage of social care is that it is entirely within our control. It does not have to depend on what other countries do; we can do it ourselves.

I was genuinely pleased when Boris Johnson said very soon after the election that he had a fully prepared plan for social care. We have been looking forward to that after five promised Green Papers down the pan. In fact, I have been looking forward to it since I sat on a royal commission 20 years ago. Now, apparently, we have it.

Unfortunately, when the Queen’s Speech came along, it did not look quite so good. The first element referred to was an extra £1 billion for social care now. That is rather like sticking your little finger in a water cannon—it will go nowhere. The second element was ensuring that nobody had to sell their house to pay for care. But nobody has to now. We passed in the last Parliament the deferred payment scheme so that nobody has to sell their house in their lifetime to pay for care. If they cannot pay for care, they can borrow from the local authority, and that is paid after they die. No individual ever has to pay for their own care by selling their house.

The third element was more attractive but slightly mysterious: he was going to seek a consensus on social care. I am in two minds about that. It is highly desirable that we get a consensus on social care, because then there will be a greater chance that people can plan on the basis of policy that they know will go forward for years to come, no matter what Government are in power, and that is a very good thing. However, there was a little suspicious bell that went off in my head that said, “Achieving consensus—what an opportunity for endless further delay.” If the Government were serious in proposing it, it could be happening now. Labour published its plan for social care in its manifesto; I happen to think it is not a very good one in many respects, but it is a plan that is there and ready to debate. Although we have not seen the detail of it, we have the word of the Prime Minister—nothing could trump that, surely—that the Government have a prepared plan. This month, this week, this afternoon, the two sides could be sitting down together and hammering out a compromise consensus on the way forward for social care.

Two attempts have been made at achieving consensus on social care before, and two blew up. One blew up when the Tories suddenly decided halfway through the talks to call Labour’s plans a “death tax”. Labour got its revenge halfway through the next set of talks by declaring that the Government’s plans were a “dementia tax”. If we play politics with this thing, we will get nowhere with it. It is beyond and more serious than politics, but it requires a certain amount of political skill to solve.

The one concrete suggestion I would make is that, if we are to have such talks, there be a completely neutral chairman or mediator whose job is to try to bring the two sides together. Incidentally, I have some experience in this, although in a quite different context. The bookmakers and greyhound racing had been at complete loggerheads for 10 years about increasing the bookmakers’ contributions. I, as a greyhound man, was asked by Tracey Crouch to see whether we could reach a solution. It was possible to do so because both sides knew that if they were the ones who messed things up, I would go public and say, “This is the bookmakers’ fault” or “This is the greyhound industry being too greedy.” You need a referee of that kind, of independent force and influence, so that the talks do not collapse into political chaos but result in the lasting solution which older people and their relatives so richly deserve.

Older Persons: Human Rights and Care

Lord Lipsey Excerpts

Thursday 16th November 2017 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, by far the worst abuse of older people is poverty. This welcome debate covers many other forms of abuse—ageism, elder abuse, inadequate care—and they are all very important. However, it behoves us to remember that, according to official figures, some 1.9 million older people live in poverty, which means that their income is below 60% of median earnings in this country. That is one pensioner in six.

Half a century ago, we were all very conscious of pensioner poverty. For one reason or another—perhaps because of better pensions and the rise in home ownership—that recognition has declined. Now, instead, people are talking about intergenerational fairness, which means giving older people less and younger people more. The research, including the excellent book by the noble Lord, Lord Willetts, has emphasised that the older generation has done increasingly well while the younger generation—generation rent—struggles. There is something in this, but it is a gross and important oversimplification. Rather than thinking of the elderly as one generation, we should think of two groups of elderly people. One group—I hope noble Lords will forgive me—is people like us, who are doing quite well. We enjoy wealth in the form of owning valuable homes that can be easily turned into cash through equity release. That wealth will be tax-privileged when we die, and on top of that we have had the chance to build pensions through our lifetimes: employer schemes, personal pensions and self-enrolment, which is now adding to our numbers. Meanwhile, the state has gone out of its way to hand us more dosh.

The noble Lord, Lord Foulkes, referred approvingly to the triple lock. The triple lock is an absolute disaster, making us richer at the expense of much poorer working people—free bus passes; at 75, free TV licences. Last night I got home to find a large tax bill and with it, guess what? A piece of paper awarding me my winter fuel payment of £100—tax free, naturally. I have dispatched it to charity.

However, another group, the 1.9 million I referred to earlier, is materially seriously deprived. They do not own, they usually rent. They may not have adequate state pensions because they have not had the earnings record to get one, so they are forced back on to means-tested help. If they need care outside their own homes, they will be forced back on to the care that the local authority can provide. Local authorities now provide care only to people in gross need—care that is so cheap that it struggles to be inadequate. Those people cannot even look forward to leaving their struggling kids an inheritance.

These problems stem, in part, from deep social inequalities affecting all generations at all ages. However, in the case of the elderly there is one other factor that we should not ignore. It is a combination of the bad effects of two aspects of our politics. From the right has stemmed extreme restraint over public expenditure—austerity, if you like. That lies, for example, at the heart of the care crisis. At the end of the day, when all is said and done, the answer to the care crisis is more money. But I fear that we on the left have also made a big mistake through our belief that all state benefits must be universal. There has been a liberal wing drifting out from academia, and it still permeates large sections of the left. So we all get these universal handouts, I get my fuel allowance, and the result is that the money is not available to target the true causes of poverty in old age.

Yesterday I and many other Members of this House attended the memorial service of the great Lord Joffe. He was my ally in this matter. When we sat on the Commission on Long-Term Care in 1999, the majority wanted care to be a universal benefit, free to all who need it, paid for in full to the rich. Joel and I argued instead that the top priority for scarce public money was to spend it on better care services for the poor, not on these huge handouts to subsidise the rich and, more particularly, their children, who would inherit the money from them. Life is about hard choices. We can have universal benefits for the elderly, or we can target the poverty among the elderly that is making the lives of so many a misery. Alas, we cannot spend the same money on both, but I know which I would put first.