Social Care Funding

Andy Burnham Excerpts

Monday 11th February 2013 Commons Chamber

[Andy Burnham (Leigh) (Lab)]

I thank the Secretary of State for his statement, and for early sight of it. I agree with him that our current social care system in England is the worst of all possible worlds: a cruel lottery whereby people go into later life with everything for which they have worked on the roulette table, and the most vulnerable are always the biggest losers. That needs to change.

The Secretary of State has tabled a modest plan that will make the system fairer than it is today, and we congratulate him on that. We welcome elements of what he has announced today. A cap of £75,000 will protect people from the catastrophic costs of care, and raising the means-test threshold will help more people on lower incomes to obtain some help with care charges. This is a step forward, but it is a faltering one. The House has been presented with a flawed prospectus today. Vulnerable people will still face rising care charges and homes will still be lost, notwithstanding valiant attempts to put the best possible spin on things in the weekend media. Yesterday the Deputy Prime Minister made the big claim that the Government were going to “crack” the care “conundrum”. Today, when we are faced with this meek package, that sounds suspiciously like overselling. Stephen Burke, the director of United for All Ages, has described the cap as

“the dampest of damp squibs”.

Yesterday, on The Andrew Marr Show, the Secretary of State said:

“I've been hauled before the Speaker before and I wouldn’t want that to happen again and so I don’t want to go into the details.”

Now that we have heard the details, perhaps the Secretary of State could explain on which part of his statement the media had not been pre-briefed. It is disappointing that the media rather than the House were briefed first on a statement that was of such importance to so many people. It is also disappointing that the Government have abandoned any effort to build a cross-party consensus before rushing to announce its proposals, and that they have chosen to rewrite the Dilnot report with figures of its own, breaking its careful logic.

More specifically, there are four problems with what has been announced today, and I will address each in turn. First, it fails the fairness test. We will only have a durable solution if it can answer this question: will it help every person and every couple to protect what they have worked for, whatever their wealth and savings? I am afraid that the answer is no. According to Demos, a £35,000 cap would benefit about 3.2 million pensioners. A per-person cap of £75,000 will benefit just 1.4 million. For the average couple, the cap is £150,000. That might be enough to protect detached houses, but it will not protect the average semi-detached home in large parts of England.

As Andrew Dilnot said today, the cap

“is higher than we would have wanted —£11,000 higher than the top end of our range—and I regret that”.

Will the Secretary of State confirm that people with modest to average homes and savings are not protected under his plan? Is this not a plan for the few and not the many, and further proof that we are not all in it together?

The Secretary of State claims that insurance companies will step in with new products to help more people to protect their assets, but in evidence to the Health Committee, the Association of British Insurers said that it did not believe that the capped cost model would result in a market for pre-funded care insurance. So what further confidence can the Secretary of State give the House today that such a market will in fact emerge?

Secondly, the plan is at best a partial solution. With this decision, the Government have prioritised the funding of a cap on care costs with new money, over and above addressing the crisis in council care budgets. Will the Secretary of State confirm that this was against the advice of Andrew Dilnot to the cross-party talks? In practice, it will mean that vulnerable people will continue to face rising charges, as councils put up fees to cope with the growing shortfall in their budgets, making it more likely that those people will, in time, have to pay right up to the new £75,000 cap. To many people, that will not feel like progress.

More than £1.3 billion has been cut from local council budgets for older people’s care since the coalition came to power. Care charges are rising above inflation, and councils are warning that, by 2024, they will be overwhelmed by the costs of care. Does the Secretary of State accept that forecast, and if he does, how will the plans he has announced today help to address it? If he fails to face up to the current crisis in council funding, is it not the case that, with care charges rising, today’s announcement will feel like a con? It is true that the Government have raised the capital threshold, and I have said that we welcome that, but can the Secretary of State give the House any confidence that the extra support that people receive through a more generous means test will not be more than offset by increasing care charges caused by collapsing council budgets?

What people might not know is that the cap reflects not what people actually pay for care but a local authority average, and that it does not include accommodation costs. That was not mentioned in the Secretary of State’s statement. Will not people feel conned if the Government do not make that clearer?

The third problem is that this package disguises yet another coalition U-turn, this time on inheritance tax—[Interruption.] It is ironic, I must say. In 2007, a flagship pledge was made to increase the inheritance tax threshold to £1 million. Just eight weeks ago, the Chancellor said that he would increase the threshold in two years’ time. What has happened in the past two months to make him change his mind? Is not this the quickest coalition U-turn yet? The irony will not be lost on people that the Government are now increasing death taxes to pay for their plan. The Secretary of State has also said the rest will be made up from national insurance. Does he think it is fair to ask the working age population to pay for something else, rather than older people?

Finally, the proposal fails to meet the scale of the challenge of the ageing society. It will not lead to more integration of care. Instead, it will entrench the separation between two separate systems: a free-at-the-point-of-use NHS and charged-for social care. Would it not have made more sense, rather than developing these piecemeal plans in isolation, to have set them out as part of a single vision for a sustainable health and care system in the 21st century? The Secretary of State has made progress, but he has missed an opportunity to produce a long-term plan that is fair to everyone and built on cross-party consensus. He has settled for a timid solution when what older people needed was a far bigger and bolder response.

[Mr Hunt]

Really! The right hon. Gentleman talked about a flawed prospectus, but what we had from the Labour Government during their 13 years in power was no prospectus whatever. This was in Labour’s manifesto in 1997, then the Government had a royal commission in 1999. There was a Green Paper in 2005, followed by the Wanless review in 2006. The problem was going to be solved in the comprehensive spending review of 2007, but then we had another Green Paper in 2009. Let us compare that with a coalition that commissioned a report the moment it came into office, said after a year that it accepted the principles of the report, and has now, just two years later, announced how it will implement it and pay for that implementation.

Let me go through some of the things that the shadow Secretary of State has said. He quoted one stakeholder, Stephen Burke, but let us look at what some of the others have been saying. The Joseph Rowntree Foundation has said that

“the cap and threshold are welcome measures, and a welcome sign that the government is taking responsibility for addressing care funding.”

Andrew Dilnot said today:

“I recognise the public finances are in a pretty tricky state and it doesn’t seem to me that”—

what the Government are proposing is—

“so different from what we wanted”.

Or we could talk about Age UK, which says it

“has always supported the principle of a cap”

and welcomes the fact that we are increasing what it describes as

“the current miserly upper means test threshold”.

A lot of stakeholders welcome today’s announcement, but recognise that we are in extremely difficult financial circumstances and that that is why we have to be responsible with public finances.

The right hon. Gentleman talked about the cap of £75,000, which is indeed higher than the upper limit proposed by Andrew Dilnot, but to describe this as only helping people on higher incomes is fundamentally to misunderstand how a cap works. First, potentially more than 70% of the £1 billion a year that this will cost the Government by the end of the next Parliament is going to socially disadvantaged families. This is a highly progressive measure, and as well as increasing the cap we are increasing the threshold above which people do not get any help, from £23,000 to £123,000—exactly the kind of thing that some of the most disadvantaged families on the lowest of incomes will benefit from most.

The right hon. Gentleman talks about the Association of British Insurers—he needs to get up to date. It describes this as

“potentially another positive step forward in tackling the challenges of an ageing society.”

[Interruption.] If he wants some more quotes, let us look at what financial services companies are saying. Aegon UK says it

“welcomes today’s announcement and the clarity it brings on state support.”

Legal & General says it is

“pleased the Government has decided to move forward with Andrew Dilnot’s proposals.”

As for local authority budgets—the shocking state of which, by the way, we inherited from the last Labour Government—the Government said in the spending review that the NHS health budget would give £7.2 billion of support for health-related needs to local authorities during the course of this Parliament.

On inheritance tax, what the right hon. Gentleman does not understand about today’s measures is that fundamentally, they are helping people to protect their inheritance from the lottery of social care costs. The randomness of someone not knowing whether they will be the one in 10 who suffers over £100,000 in care costs is eliminated by a proposal that allows everyone to plan and prepare for their own social care costs.

The right hon. Gentleman describes this as a modest plan and says we have neglected the scale of the problem. Of course, in dealing with an ageing population many other issues need to be dealt with. He talked about the problem of integration, which we are solving by devolving power to clinical commissioning groups on the front line, a reform that Labour opposed, and by integrating technology, a reform on which Labour failed. Also, Labour did nothing about dementia, leaving us with less than half the people with dementia being diagnosed. We are now tackling that problem. We saw last week the issues of treating older people with dignity and respect. We are tackling that problem—Labour left it for far too long.

The problem is not that our solution is too small, but that it was too big for Labour to solve when they were in office. When it comes to making Britain a better country to grow old in, this Government are taking action where the last Government failed.