Social Care Strategy

Lord Lilley Excerpts

Thursday 10th October 2024 Lords Chamber

[Lord Lilley (Con)]

My Lords, it is a privilege to follow such a witty, wise and moving speech from the noble Baroness, Lady Donaghy. I congratulate the noble Baroness, Lady Tyler, and agree with her that the most serious problem in social care is financing care for people who cannot pay for themselves; it is not the potent political issue that often eclipses it: the fear of home owners and, let us be honest, their heirs that catastrophic care costs will consume the value of the parental home.

Most proposals to deal with this involve the taxpayer meeting anyone’s social care costs above, say, £100,000. That was what Dilnot proposed, and both parties have flirted with it. I congratulate the Government if they are distancing themselves from it now. Extending free social care to some, let alone all home owners would pre-empt public funds desperately needed for councils’ social care budgets. If there is a way to protect people’s homes from bearing the catastrophic cost of social care in old age, it is insurance.

Andrew Dilnot noted that elderly social care looks like an eminently insurable risk. We know the average proportion of elderly people who need social care, the average length of stay and the average annual cost of that care, so it is simple to calculate the necessary premium to insure against having to sell your home. But the private insurance industry was adamant that it would not provide such policies, mainly because of the incalculable and therefore uninsurable risk that future medical advances may prolong the period during which people need such care. Dilnot therefore abandoned the idea of insurance, but there is an alternative to private insurance, which was rejected by my own party for ideological reasons. I hope the same ideological reasons will make it appeal to the Government.

The alternative to private insurance is for the state to offer or underwrite such insurance. My Conservative friends were appalled that I, who had drafted the Thatcher privatisation programme, should propose nationalising an element of insurance. What apostasy! But if a state body provides or underwrites insurance against the current known risks of long-term elderly care, the only costs which would fall on the taxpayer would be those added if advances in medical care prolong the duration that people need social care. The reality is that the state already bears that risk. If we set a cap on care costs, the taxpayer will find themselves also paying billions to protect home owners from the costs of known risks of long-term care, which could be met by insurance.

The second reason why private insurers will not provide such policies is that they believe people will not pay contributions during their working lives, on top of saving for their pensions and repaying their mortgages. The alternative to trying to persuade people to contribute during their working lives is to enable them to take out such insurance after they retire by taking a modest charge on their homes, which would be realised only when they die or sell their homes. I set out the details for this in a pamphlet called Solving the Social Care Dilemma?: a Responsible Solution. I hope that the Minister and her apparently open-minded Secretary of State will give this proposal serious consideration. If not, they will find the pressures to divert money to enable home owners to bequeath to their undeserving heirs almost irresistible.