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.

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.