Social Care Funding

Kevin Hollinrake Excerpts

Tuesday 1st October 2019 Westminster Hall

[Sir Vince Cable (Twickenham) (LD)]

I beg to move,

That this House has considered social care funding.

I should like to introduce a discussion on the funding of social care and narrow that to adult social care and the specific areas covered in the admirable Library briefing around the Green Paper in its absence.

It is a relief to debate something that is not about Brexit, although there is probably some indirect connection. Attempts have been made to blame the delays on Brexit, but the Secretary of State was candid enough to acknowledge that deep-seated disagreements going back 20 years explain why we are at an impasse on the basic principles.

There are a couple of contradictions or paradoxes that we must try to unravel. We all say that the only way forward is to have an all-party consensus, but at the same time the issue is increasingly weaponised. We all say that this is an incredibly urgent problem, but it stays for longer and longer in the long grass. Until we get to the root of those problems, we are not going to make any headway.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will the right hon. Member give way?

[Sir Vince Cable]

Will the hon. Gentleman wait a moment? I will happily take interventions in a few minutes.

At the root of this—and trying to be generous to all parties—is a lot of public misunderstanding. This is a complex subject. To take just one point, half of the adult social care budget is not about old people; it is for younger adults. The public fundamentally misunderstand the nature of the means test—most people do not realise it exists until they encounter it. Consequently, people are frightened when they see proposals that are characterised on one side as a death tax and on the other as a dementia tax, apparently unaware that we have a death tax and a dementia tax now.

I cannot in my short contribution solve such a fundamentally difficult problem that has been going on so long, but we need to try to disentangle issues that are fundamentally different. My primary concern is social care—how we support people in the community so they can function with a proper life, preferably at home, outside of hospital.

A totally different set of problems—wealth, property and inheritance—leads to a lot of the emotional angst caused by what is sometimes called catastrophe risk: people landed with financial obligations as a result of having long-term personal care and the expense of £50,000 a year or whatever in a residential home. However, that is about wealth, distribution and assets. It has nothing to do with health and we have to try to separate the two.

--- Later in debate ---

[Kevin Hollinrake]

I am grateful to the right hon. Gentleman for giving way. I am also grateful for the opportunity to discuss this matter on a cross-party basis. He mentioned a cross-party consensus earlier. Is he aware of last year’s joint report by the Health and Social Care Committee and the Communities and Local Government Committee on the future funding of social care? That report came to a cross-party consensus on how we can move forward, and one of the solutions was a social care premium.

[Sir Vince Cable]

Yes, there is a lot of joint thinking. We have the joint House of Commons Committees, and my hon. Friend the Member for Totnes (Dr Wollaston), as Chair, was critically involved in that. There is also a very good piece of work by the House of Lords, and the considerable brains of Lord Lawson and Lord Darling contributed to a cross-party consensus. A lot of think-tanking is going on in the vacuum created by the Government’s non-publication. There is no shortage of ideas, but we need to be clear what the problem is—and it is a very serious one.

--- Later in debate ---

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I appreciate the opportunity to talk about something other than Brexit, and to talk constructively, to have a proper debate on the facts, to look at each other’s positions and, I hope, to try to find a middle way. I think it was Lord Tebbit who said that politics was about shooting the crocodile nearest the boat. This crocodile is about to swallow the whole boat. There are three big, ticking time- bombs, all connected to demographics: pensions, healthcare and social care. According to the Office for Budget Responsibility, our national debt is about 80% of GDP. By 2060, unless we look at this issue strategically and change our taxes dramatically, our debt-to-GDP ratio will be 280%. This is not something that we can just put a sticking plaster over and hope it will be okay.

I do not mean to be critical of the Opposition’s policies, but they are moving down the road of free personal care. The difficulty with that is the question of its affordability. We have to understand the sheer scale of the problem. Perhaps, once they do, they will still have the same perspective. Another point is that there is no such thing as “free”, of course. If something is free, it is funded by the taxpayer. Taxes would have to go up significantly to do what is being suggested. The right hon. Member for Twickenham (Sir Vince Cable) talked about putting a penny on income tax, which will raise about £5.5 billion, but he acknowledges that the gap will already be about £8 billion in three or four years’ time. The scale of the problem is huge, and it will simply grow, so we need to look at the facts behind it.

The Health and Social Care Committee and the Communities and Local Government Committee held a constructive inquiry into all those issues and came up with a German-style social insurance premium. I felt that was the most sustainable, simple and scalable option that tackled the future as well as the past.

Germany introduced the system in 1995 and has already revised the level of contributions once. Since 2005, it has increased the percentage of total take from the premium by 56%, at a time when our resources have been decreasing. That shows that this can work on a cross-party basis. It is a simple system based on a percentage of somebody’s income. It is not actually put on national insurance, which I would not advocate, because we would go back, in a future Budget, to arguing about who could put the most on national insurance and who could spend the most on it.

It is an independent system in which people are categorised according to need, so it is possible to calculate exactly how much needs to be raised. In future, we can come to a cross-party agreement about by how much we need to increase the premium, because we will have to increase it. Everybody pays a small amount from their income—not just their salary, so it is for retired people as well. It is also mandatory, which tackles the insurance problem, because the insurance market will not work unless there is universal cover, and it is handled by not-for-profit insurance companies.

The key element in the system is that, when someone is categorised as needing care, they can pay for provision, ask their local authority or provider to give them care, or draw down the money and pay it to a relative or neighbour, so they get care from the people who care for them most and understand them best. That also helps to tackle the staffing element. If we have a system where everybody pays something, nobody has to give everything.

[Several hon. Members rose—]

--- Later in debate ---

[Barbara Keeley]

My hon. Friend is absolutely right. For people with dementia and learning disabilities, seeing a familiar face every day can be crucial.

We cannot allow this crisis to continue. We must see action to ensure that everyone is able to access the care that they need to live with dignity. That is why Labour has announced that we would introduce free personal care for all older people who need it and expand such provision to working-age adults as soon as possible. That would end the scandal of people having to sell their home to pay for basic care. We will fund social care in the only fair, sustainable and understandable way—through general taxation. That is how we fund our NHS and our schools, and it is how Labour will fund our national care service.

Before we can build this new system, we must also repair the damage caused by years of budget cuts. We will invest £8 billion in more care packages, in improved training and in better community support. The apprenticeship levy is not enough for training; skills for care should be better funded.

[Kevin Hollinrake]

Will the hon. Lady give way?

[Barbara Keeley]

I do not have time.

A few months ago, we pledged £350 million a year for community resources, aimed specifically at helping to bring autistic people and those with learning disabilities out of in-patient units—over 2,000 of them—in which they are trapped. It is a scandal that we do not have the social care and community resources that are needed to prevent people being trapped in abusive care. Time and again, the reason given for people being in those units is that there is no resource in the community. My hon. Friend the Member for Plymouth, Sutton and Devonport has spoken about the burden that falls on social care authorities if they end up with a very expensive case. We have to get round that.

We can fix the crisis in social care only by properly funding the system, as the Labour plans will do. Two years after the Conservatives’ disastrous 2017 manifesto plans, which were later dropped, we are still waiting to hear what they will do. The Government’s promised Green Paper has been delayed and delayed, and now it looks to many—including many in this Chamber—as if it has been dropped altogether. The hon. Member for St Ives (Derek Thomas) mentioned how embarrassing that was. It is not just embarrassing; people lose hope waiting for the care they need.

A cap on care costs, which would stop people facing catastrophic costs, and for which we legislated, was ditched by the Government in December 2017. I am sorry to say that instead the Government have provided only small, one-off cash injections—sticking plasters—rather than the long-term funding settlement that social care needs. Will the Minister tell us where the Government’s proposals on social care are? If the Government want to resolve the crisis that their funding cuts have created, as I hope they do, why have they constantly kicked social care funding reform into the long grass? It is time for a solution to the crisis that this Government have created. Labour Members have pledged a way to solve the crisis, which in itself gives hope to many people who need social care.