Social Care Funding

Debate between Vince Cable and Bill Esterson

Tuesday 1st October 2019 Westminster Hall

[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 That was withdrawn when he went into a care home, because the burden fell back on social care.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.

Apprenticeships

Debate between Vince Cable and Bill Esterson

Wednesday 4th February 2015 Commons Chamber

[Vince Cable]

I am not disowning the report; it clearly exists. [Interruption.] Perhaps the Opposition could be a little less silly and just try to follow the argument. The key is in the word “formal”. Many people do good apprenticeships in business that involve informal work in the workplace, and many people define good training in that way. The survey that we conducted, which the hon. Gentleman is having a little giggle about, tells us very clearly that 90% of those trainees are satisfied with their apprenticeships, while 72% are very satisfied. Ninety-seven per cent. said that they had been trained—sometimes informally, sometimes formally—and 90% got a job. Perhaps most crucially, there is a very high earnings premium. I have quoted the figure for level 2, and for level 3 it is significantly higher—about 16% three to five years after graduation. The proof of the pudding in is in the eating: these apprenticeships do provide satisfaction, jobs and higher salaries for the people who do them.

Let me address the minimum wage. The survey shows that 15% of people are not being paid the minimum wage. That figure is clearly too high, and unacceptable. The motion says that it is “one in five”. I am not sure who did the maths on this, but one in five is not 15%. Perhaps we need compulsory maths for Opposition Front Benchers as well as apprentices. The key point is that 15% is way down on the 30% figure that we inherited. As the hon. Gentleman knows, because he has been part of these debates during the past year, we have significantly improved enforcement measures. We have increased penalties from £5,000 per firm to £20,000 per person, we have introduced naming and shaming, and we have increased the enforcement budget by 30%. We do take the minimum wage seriously. We believe that it must be enforced and that it should apply to apprentices as it should to anyone else.

The hon. Gentleman is right that procurement is a lever for the public sector to employ. We already have many examples of good practice in public sector procurement. Crossrail is a company that has really committed itself to high levels of apprenticeships. There are a couple of practical problems, as I hope he recognises; I think he hinted at one of them. First, for small and medium-sized enterprises and social enterprises, where we are trying to increase the share of public procurement, there is a conflict of objectives. Do we regard getting SMEs into procurement as more important than increasing their number of apprenticeships? There is no clear answer to that. Secondly, companies that are required to introduce apprenticeships would simply add that to the cost and it would be passed on to the public sector, so instead of a direct subsidy through our 50:50 payment system we would be providing indirect subsidies. These are not crippling objections. We need to reflect on how we can better use public procurement, but crude legislation and compulsion is probably not the best way. I accept that public procurement is a good vehicle, and we have to work on this.

[Bill Esterson]

I agree that it is a real challenge, given the current situation, to enable more SMEs, particularly the smallest businesses, to take on apprentices. Does the Secretary of State agree that countries such as Germany have cracked this problem over many years, and that there are things we can apply from Germany and elsewhere to achieve the goal of getting more small businesses to take on apprentices?

[Vince Cable]

The hon. Gentleman is right. There is a German model that seems to work for that country, and Austria is another example. Their approach is different from ours, but it has given them consistently high levels of skills in manufacturing industries, in particular. We should learn from that. There is an element of compulsion and levying that we have moved away from in the UK. However, I am certainly happy to learn from Germany on this and other things.

Oral Answers to Questions

Debate between Vince Cable and Bill Esterson

Thursday 20th November 2014 Commons Chamber

[Vince Cable]

I do not believe in quotas for ethnic minorities, women or any other group. I have never ever said anything about 20%. If he reads the correspondence from Trevor Phillips, he will acknowledge that I never endorsed that view. However, there is a problem, which I hope the hon. Gentleman acknowledges, that more than half of the boardrooms in the UK have no non-white representation whatever. Only one in 16 senior managers comes from our very talented ethnic minority groups, and they should be better represented.

[Bill Esterson (Sefton Central) (Lab)]

The Secretary of State mentioned earlier the importance of regional networks. I wonder whether he thinks the same when it comes to banks? Regional banks have the advantage of understanding their local community and economy and their customers. When banks are not lending to small businesses in my constituency and others around the country, are not regional banks the answer to the problem of getting the growth and support that small business needs?

[Vince Cable]

We warmly welcome challenger banks offering a service to small business. If they can be organised on a local and regional basis, so much the better. There is an organisation called Cambridge and Counties, which is performing this role in the east of England, and I know that Airdrie bank does so in Scotland. We would like to see many more. The liberalised process of licensing means that these things can come on stream rapidly when they are put forward.

Royal Mail

Debate between Vince Cable and Bill Esterson

Tuesday 1st April 2014 Commons Chamber

[Vince Cable]

Actually, I made the argument for bringing private capital into Royal Mail about 10 years ago.

[Bill Esterson (Sefton Central) (Lab)]

The Secretary of State was warned beforehand that he had undervalued the sell-off. He did not achieve value for money, and priority investors stand accused of profiteering. The public feel ripped off and will wonder why he is still in his job. How can this possibly be a success?

[Vince Cable]

The hon. Gentleman is just inviting me to repeat the statement that Mr Speaker has already told me was too long, but, yes, it was a success.

Oral Answers to Questions

Debate between Vince Cable and Bill Esterson

Thursday 5th December 2013 Commons Chamber

[Vince Cable]

The hon. Gentleman is adding his name to the roll call. Perhaps we could simplify this process, whereby if everybody in the House who does not support small business Saturday puts up their hands.

[Bill Esterson (Sefton Central) (Lab)]

I shall enjoy supporting small business Saturday, too. Many young people take their first job in retail and gain vital experience and training that stands them in good stead for the rest of their working lives. Given the problems that retail faces, what steps will the Government take to support retail, especially to deal with the scourge of youth unemployment?

Oral Answers to Questions

Debate between Vince Cable and Bill Esterson

Thursday 24th October 2013 Commons Chamber

[Vince Cable]

A great deal has been done at central Government level to ensure that we reach our target of 25% of Government contracts going to small and medium-sized enterprises. Considerable progress has been made in reducing the bureaucracy of pre-qualification questionnaires. The problem remains at the decentralised level—local government, hospitals and so on. Efforts will be made through legislation to simplify that process.

[Bill Esterson (Sefton Central) (Lab)]

The No. 1 issue for small businesses in my constituency is the high level of business rates. I urge the Secretary of State and his ministerial colleagues to support our proposal for a business rate cut, followed by a freeze.

[Vince Cable]

As I have said, there is an extensive programme of business rate relief, which extends to half a million companies. That is a very good programme, but there is an issue with how we will continue to pay for it, given the many other claims on Government spending.

Royal Mail

Debate between Vince Cable and Bill Esterson

Wednesday 10th July 2013 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

Does the Secretary of State not understand that postmasters, postmistresses and their customers all have grave concerns? They know that their branches are already in trouble and remember the botched privatisations of rail and the utilities during the 1980s and ’90s. They also recognise that the danger is that we will see the same problem—increased prices and reduced services.

[Vince Cable]

Post offices have had a remarkably good deal—I am repeating what I have said many times. We have put a line under the large-scale closures repeatedly experienced under the previous Government. Despite the pressures on public finance, we are investing £1.3 billion. Post offices have a 10-year agreement to provide stability in their link with Royal Mail. This very difficult business is being sustained in an exceptionally attractive environment.

Oral Answers to Questions

Debate between Vince Cable and Bill Esterson

Thursday 13th June 2013 Commons Chamber

[Vince Cable]

My hon. Friend analyses the problem correctly: we have to make a major effort in big emerging markets, which we have neglected in the past. We have identified 20. I have been to the majority of them, leading trade missions, as have my colleagues. With reference to raising awareness, for example, in May, a few weeks ago, we had 80 events across the country identifying 3,600 businesses with interests in emerging markets, and there is a greatly increased tempo of activity in the field through the establishment of chambers.

[Bill Esterson (Sefton Central) (Lab)]

What has the Secretary of State learnt from the experience in Germany, where the state-backed investment bank makes export finance one of its priorities and one of its objectives? Does he think there are lessons there for this country that could improve access to export finance to address the problem that he has just set out?

[Vince Cable]

The Germans do indeed have a very good system of export support and trade finance. They do many of these things well. Partly in response to that, in the earlier period of this Government I introduced a new range of short-term trade finance products that we had not had before. They are now picking up a substantial amount of interest, and in the Budget the Chancellor announced £1.5 billion for medium-term—three to five-year—export credit guarantees, which are now being implemented.

Oral Answers to Questions

Debate between Vince Cable and Bill Esterson

Thursday 20th December 2012 Commons Chamber

[Vince Cable]

The general principle of account portability and its being voluntary is absolutely right. I am aware that some banks are currently discharging their customers against their will, which is bad business practice but not something we can stop. I am not sure what particular objection the hon. Gentleman has to the Co-op. It is one of the new challenger banks that we welcome.

[Bill Esterson (Sefton Central) (Lab)]

I send my sympathy to the Comet staff who have lost their jobs today, just five days before Christmas. When the Secretary of State carries out his review of what happened at Comet, will he look at how staff have lost bonuses and how staff who have served loyally for many years will not get their full redundancy packages, in spite of the fact that the Government are stepping in with £50 million?

[Vince Cable]

The inquiry that the Department is now carrying out will be into the conduct of the directors, and various consequences will flow from that. We cannot investigate the wider social consequences, but the hon. Gentleman is quite right that severe loss has been suffered, not just by the workers but by the Government, who are having to make up the redundancy pool.

Economic Growth and Employment

Debate between Vince Cable and Bill Esterson

Wednesday 23rd November 2011 Commons Chamber

[Vince Cable]

Obviously, I do not know the particular position in Deptford, but I am very happy to take up the specifics if that helps.

The particular question that the hon. Gentleman started with was fair: why did the economic slow-down occur? He quoted my colleague in the upper House and others of varying views about why we have lower growth than was predicted by independent forecasters 18 months ago.

[Bill Esterson]

Will the Secretary of State give way?

[Vince Cable]

Let me try to deal with this issue. We would all probably accept—I hope that the hon. Member for Streatham would accept—that the Governor of the Bank of England is an independent, non-partisan, non-political analyst of what has occurred. Let me read to him the Governor’s account given a week ago on why the slow-down in growth has occurred. He said:

“This reflects the impact on the United Kingdom of the deterioration in prospects internationally, working through weaker net trade, higher credit spreads and the likelihood”

of elevated uncertainty. He goes on to describe the impact of world energy and commodity prices, and the 35% increase in the sterling price of oil, none of which was mentioned in the hon. Gentleman’s speech.

[Bill Esterson]

Will the Secretary of State give way?

[Vince Cable]

Let me just finish this argument. Some of us have argued for a long time that the underlying problem is that, since the beginning of the crisis, the British economy has suffered—I use my own metaphor— the economic equivalent of a heart attack. There is a profound problem, and what lies behind it is the fact that, more than any other developed country, we have quite extraordinary levels of debt.

There are different kinds of debt. Household debt is 160% of gross domestic product and, after the boom that took place under the previous Government, it is higher than in other developed countries. Banks’ balance sheets are more than 400% of GDP, after they were allowed to run out of control. Government debt is 180% and rising as a result of the deficit financing we had to undertake. If we put those things together, as McKinsey has done, they show that the position we inherited is one where total debt in the UK is approaching 500% of our GDP. The only other country with a problem of that scale is Japan. That is the inheritance we are now seeking to manage.