Department of Health and Social Care and Ministry of Housing, Communities and Local Government

Andrew Lewer Excerpts

Monday 2nd July 2018 Commons Chamber

[Andrew Lewer (Northampton South) (Con)]

I draw Members’ attention to my entry in the Register of Members’ Financial Interests; I am a vice-president of the Local Government Association. I am pleased to take this opportunity created by the estimates to discuss adult care funding, given that a large percentage of the funding that local government administers relates to it.

I have been part of the joint Select Committee inquiry on the future of adult care. Before that, I led a county council with responsibility for adult care that had an adult care budget alone of around a quarter of a billion pounds. I then arrived as an MP just in time for Northamptonshire County Council to fall over financially, due in no small measure to adult care costs; addressing local versus national responsibilities for that are perhaps for a different time.

Adult care funding is a very important issue, and the solution to it requires bold thinking. Although the better care fund and the general funding in the estimates are welcome, they do not represent a solution; rather, they represent a temporary patch. When I was deputy chairman of the LGA, we had a presentation from the King’s Fund in which it showed us reports that it had produced every year since 1999—this is very much a cross-party issue—saying, “This year must be the year that there is a solution to adult care funding.” That was in the last century. Integration is not the same as the NHS taking over. There will always be lines. With adult care, the next line would be housing, and I do not think anyone is suggesting that the NHS take over housing.

Colleagues have mentioned parity of esteem. Parity of esteem for employees is important institutionally. We speak a lot about the NHS. We are proud of it, and we are talking about its birthday, but often the NHS workers shade out the esteem that we need to give to social care workers and people who work in local authorities providing essential local services, particularly to the elderly.

[Mr Clive Betts (Sheffield South East) (Lab)]

I thank the hon. Gentleman for the part he played in the joint Select Committee report. He is absolutely right about that. Figures in the inquiry showed that for the same work, social care workers were paid about 29% less on average than workers in the NHS.

[Andrew Lewer]

I thank the hon. Gentleman for that comment. It is about pay, but it is also about conditions and remembering that the health economy is much more than the NHS.

I believe, however, that more tax is not the solution, even if hypothecated and ring-fenced as road fund licence and national insurance were in their time. It is not wholly in tune with Conservative philosophy to suggest that higher tax rates equal higher tax revenue, and there is economic theory to back that up. The Laffer curve, for which the British economy in the 1970s was in many respects the laboratory, indicates that when a certain tax rate is reached, revenue goes down, not up. We are high on the Laffer curve already: 41% of GDP is Government spending in the last recorded figures, compared with 38% in 1988-89 and 34.5% in 2000-01. This is not about whether we need more—we do—but how to get it.

In general economic terms, productivity gains, as my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) said, and GDP growth per head are key to more funding going into adult care. In specific terms, an insurance approach with some elements of the German model has a great deal to commend it. I was very pleased to see that option retained in the recommendations of the joint Select Committee report.