Social Care Funding

Vince Cable Excerpts

Tuesday 1st October 2019 Westminster Hall

[Sir Charles Walker (in the Chair)]

Order. There are plenty of speakers, so we will have a time limit of four minutes, perhaps dropping to three as the debate develops.

[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.

[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.

[Mr Jim Cunningham (Coventry South) (Lab)]

Will the right hon. Gentleman give way?

[Sir Vince Cable]

If the hon. Gentleman lets me go through this, I will take an intervention.

The first point is the rapid growth of demand as a result of an ageing population. We all know that. As far as we can establish, because of ageing and the onset of dementia in particular, we have a growth in demand of about 3.5% a year. That is considerably in excess of the growth of the economy and the resources to fund it. That is the fundamental problem at the heart of all this. We have 800,000 people with dementia at the moment, which goes up to 1 million in 2025, rising to 2 million in 2030. At the moment, there is no clear picture of how this demand is to be met.

My second point, related to that, is that we have a large and growing hidden cost that is not quantified—unpaid caring. If we take dementia alone—just one dimension of adult social care—we have 350,000 carers at the moment, of whom 110,000 have had to give up their job, which is a cost to them, the Exchequer and their employers.

[Several hon. Members rose—]

[Sir Vince Cable]

I will take an intervention, but I will return to the theme in a moment.

[Mr Jim Cunningham]

I congratulate the right hon. Gentleman on securing this timely debate. He refers to costs. The costs to families and individuals hit with dementia are 15% higher than they are for any other illness. They are about £3.5 billion because people have had to give up their jobs for all sorts of reasons. I hope that further assists him and I hope he agrees that we have to think about it.

[Sir Vince Cable]

Yes, that is quite right. We tend to use dementia, particularly the work of the Alzheimer’s Society and others, to illustrate the problems here but they are not unique. Many people with arthritis, diabetes and serious stroke conditions face the same set of problems.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I am grateful to my right hon. Friend for giving way. He rightly points out the importance of unpaid carers. Any new consensus, which must come, should make clear provision to support those who do the caring— 12,000 unpaid carers in my constituency alone. If they were to cease caring—if we do not care for the carers—the social care burden on the taxpayer more generally becomes even more unmanageable.

[Sir Vince Cable]

Indeed. My hon. Friend is right, and he reinforces the central point I am making.

[Bill Esterson (Sefton Central) (Lab)]

A constituent of mine raised the case of her father who had been assessed by the health service as needing 24-hour, one-to-one support. That was withdrawn when he went into a care home, because the burden fell back on social care. There was then the problem of who was going to pay. He immediately had a series of falls and became more frail and more vulnerable, causing him and his family enormous stress. The right hon. Gentleman mentioned Labour’s proposal that we will support particularly those with dementia and their families in paying for social care costs. In the spirit of cross-party consensus, does he agree with that?

[Sir Vince Cable]

I will come to that point later and to the heart of what I understand to be the Labour proposal—on free personal care—in not too polemical a way. It presents opportunities but also serious problems.

We have the growth in demand, the hidden costs, and the burden on local authorities. It is easy to score political points, and I will put my hand up immediately: after the financial crisis I was part of the Government and we cut—in real terms—per capita spending in this area by about 11%. It did not start then. The number of people with so-called moderate needs who were excluded in the previous five years rose from 50% to 75%. It is an old problem as well as a new one, and we are all faced with the challenge of how to finance local authorities. If local authorities are underfunded, we all know the problem gets passed back to hospitals in delayed discharge.

There is the problem of the labour force. It is horrendous. Until I saw the figures, I had not realised just how bad it is. There is an annual turnover of 450,000 care workers for a mixture of reasons, a lot of it to do with pay and conditions. We currently have 100,000 vacancies, and there is the potential for stricter immigration controls, which would create even more vacancies and make them even more difficult to manage. The business model for the companies involved, partly in residential care but also in domiciliary care, is just not viable; as I understand it, four of the leading providers are now up for sale and one is in administration.

The problem, as we all recognise from our constituencies, is that there is a two-tier system: on the one hand, luxurious and comfortable homes for those who do not need to worry about money, but on the other crumbling homes with minimal standards, overseas workers on minimum pay, and a nasty smell of urine—we have all seen them. An intermediate level of care that is attractive and affordable is simply not available.

Those are the problems, as I think we all recognise, but the question is: what can be done? As has been mentioned, a wide variety of brains in and outside this place have been contributing and thinking about it; one of the unintended benefits of the Government’s delay has been that others have filled the vacuum with ideas. The most useful ideas that I encountered seemed to be from organisations such as the Health Foundation and the King’s Fund, which have no political axe to grind that I am aware of. They suggest that rather than trying to deal with all these complicated problems together, we should deal with them in sequence, starting with those that are more manageable. Essentially, they suggest that there are four stages to dealing with them, which I will briefly canter through.

First, we should identify what we need to do simply to stabilise the present position, unsatisfactory though it is, because there is a real danger of going even further backwards as a result of lack of resource. The King’s Fund identifies a need for an extra £1.5 billion by 2021 and £6 billion by 2030 simply to keep the system at its present level, unsatisfactory though it is. I hope we can all agree that that is the absolute minimum that we should aim for.

The second level up is improvement. As the King’s Fund identifies it, that means going back to the standards that prevailed in 2009-10, although they were unsatisfactory even then, and filling in some of the holes in availability of social care. It costs that at approximately £8 billion a year, rising to £10 billion after five years—a significant sum. My party, including colleagues present, has come with up with one suggestion: creating a ring-fenced fund based on a penny in every pound of income tax. That would raise £6.5 billion, which would get us most of the way there. I do not want to be doctrinaire about the best way of doing this, but I hope that there can be some understanding that that contribution, which is very limited in terms of public funding, could get us back to a more acceptable standard. People have different views about which taxes we should use and how we should ring-fence the money, but that seems to me to be the minimum level of ambition—and it could happen without legislation if the parties agreed that we should proceed in that way.

We then get on to the more difficult level, which relates to charging. One thing that has come through to me from reading the various think-tank reports is the growing interest in the idea of free personal care in the Scottish model. I confess that I have always been sceptical about it—I have the traditional economist’s scepticism of free things—but its proponents note two practical attractions that have nothing to do with ideology or party thinking: it aligns social care and healthcare, if we are going to integrate the two systems, and it brings in a lot of people who are currently excluded from social care provision, so that they are more likely to stay at home rather than going into hospital. It has potential benefits as well as costs.

[Karen Lee (Lincoln) (Lab)]

I am an ex-nurse. Does the right hon. Gentleman agree that it is right to offset the costs of social care against what we would save the NHS? I regularly had eight patients, and probably three of them would be medically fit for discharge and did not want to sit in a bed, although they had to do so. When we consider the cost, we must also balance that issue.

--- Later in debate ---

[Sir Vince Cable]

That is the case, and I hope that when the Green Paper appears there will be a proper, objective look at free personal care. In the past this has been an ideological issue, but there is no reason why it should be. It is a practical proposition. As I understand it, the Scottish model has pluses and minuses—it is certainly very popular with the people who benefit from it, but there are much stricter tests for eligibility in terms of physical functioning—but at least let us consider it objectively. It is costly, however—about £8 billion a year over and above the other items I have mentioned.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

This was a flagship policy of the coalition Government in which I served in the Scottish Parliament, and I am proud of that. One problem that we never got around—I think this also applies to rural English constituencies and Welsh constituencies—is the issue of sparsity and distance. How do we deliver this service when there are vast distances between the various old people involved? When there is a low population base, how do we find the number of carers that we desperately need to tend to those elderly people, who deserve dignity at that stage of their life? It grieves me to say this, but in north-west Sutherland in my constituency we have a distinct problem with finding those carers. People have come to see me in the last few weeks who have not had a carer for three, four or five days, which is terrible.

[Sir Vince Cable]

My hon. Friend is right to point out the practicalities of this issue. That links to one of the current difficulties with domiciliary care, which is that providers are often not compensated for travel. I imagine that in a remote constituency that would be accentuated many times.

[Dr Sarah Wollaston (Totnes) (LD)]

Does my right hon. Friend accept that this could be done in a step- wise fashion? We could probably start immediately by introducing free personal social care for people at the end of their life, and we could then move forward to try to bring more people within that sphere. There is certainly a strong economic and moral case for introducing such care at the end of life.

[Sir Vince Cable]

That is a helpful and humane suggestion, and if we approach this whole question in terms of its practicality, rather than with abstract ideology, we might make some headway. What my hon. Friend suggests seems an eminently sensible way to start that process.

The last and most difficult issue is the one in which successive Governments have got hopelessly bogged down: the so-called catastrophe risk for the small number of people who are caught with prolonged expenses as a result of residential care. When I was in government the Dilnot report attempted to address that issue, but I think we have moved beyond that now. This is a classic problem of insurance, and it is now recognised in a way that it was not before—I think the current Prime Minister said this publicly—that the private insurance market cannot, and will not, deal with this problem. If there is to be insurance it must be social insurance, and large numbers of people will have to make a contribution to prevent the burden falling on a small number of unfortunates who contract long-term conditions, with all the costs involved.

That could be done in a variety of ways. One idea is a supplement to national insurance. Another idea from 10 years ago, which I had no problem with, is that if we are to solve the problem of people losing their inheritance, everyone who pays inheritance tax should pay a small supplement. That struck me as a good social insurance principle. Whether or not that formula was right, we have now got to a point of accepting that this is a social insurance problem, and there are different mechanisms for dealing with it. If we are reasonably grown up politically, we should find a way of closing that gap.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

The right hon. Gentleman is making a fantastic speech on what we will all agree—Brexit aside—is the issue of the day. I visited Parkinson’s UK in East Kilbride, and Parkinson’s sufferers are particularly affected by social care catastrophe burdens because theirs is a degenerative condition that can start in their 50s, or even earlier, and go on for the rest of their lifespan. Does the right hon. Gentleman think the Government should look at conditions that particularly affect people and start by focusing on those as a priority, as the hon. Member for Totnes (Dr Wollaston), the Chair of the Health and Social Care Committee, said?

[Sir Vince Cable]

The hon. Lady is quite right. We are talking about a variety of conditions. I listed some, and Parkinson’s is clearly one. With Parkinson’s, it is difficult to separate the health and the social element, which is one of the problems with a lot of these conditions and why the current distinction is so arbitrary and unsatisfactory.

Perhaps I could finish with a quotation from Her Majesty the Queen, although it does not relate to her need for social care. Two and a half years ago she made a speech in which she said:

“My Ministers will work to improve social care and will bring forward proposals for consultation.”—[Official Report, House of Lords, 21 June 2017; Vol. 783, c. 6.]

That was two and a half years ago, and the basic question is: where are they?

[Several hon. Members rose—]

--- Later in debate ---

[Sir Vince Cable]

Sir Charles, thank you for safeguarding the last 10 minutes. I tried to approach this whole subject in a non-tribal way. I thank all the Members, including the Minister, who participated in that spirit. The debate was enriched by people drawing on professional experience, such as the hon. Member for Lincoln (Karen Lee), and those drawing powerfully on personal case experience, such as the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), the hon. Member for York Central (Rachael Maskell), the hon. Member for Eastbourne (Stephen Lloyd), the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) and others.

The title of this debate included the ugly word, “funding”. However good our intentions, we do have to pay for this, and I commend the hon. Member for Thirsk and Malton (Kevin Hollinrake) for setting out clearly and succinctly the financial constraints and a good solution through social insurance for many of these problems. I also commend the hon. Member for Sefton Central (Bill Esterson) and the hon. Member for Newton Abbot (Anne Marie Morris) for pointing out that we are trying to reconcile two fundamentally different systems of funding and organisation. As we integrate the system, bringing them together is not an easy task.

Perhaps I tried too hard to be non-tribal. I thought we were trying to get a bit of respite from Brexit. However, as my hon. Friend the Member for Totnes, the hon. Member for Linlithgow and East Falkirk (Martyn Day), and others pointed out, unfortunately we cannot get away from it. It has a major impact on resource availability and the labour market.

In conclusion, I wish to thank the Minister for her reply. She pointed out—and I should have acknowledged this at the beginning—that the Government have put in a little bit more in resource. However, that is growing at 2.5% while the demand is growing at 4% and the cruelty of compound interest is, I am afraid, rather powerful and painful over time.

[Sir Charles Walker (in the Chair)]

Colleagues, thank you for sharing out the time so well.

Question put and agreed to.

Resolved,

That this House has considered social care funding.