The Elderly: Long-term Care

HL Deb 06 December 1995 vol 567 cc972-1013

3.7 p.m.

Lord Dean of Harptree rose to call attention to policies for the long-term care of the elderly; and to move for Papers.

The noble Lord said: My Lords, I notice that the noble Earl, Lord Longford, is to follow me in this debate. I feel sure that the whole House will wish to offer him warm congratulations on his 90th birthday yesterday.

I begin by declaring two interests. First, I fall into the category concerned in the debate. In fact, according to my grandchildren, I am positively ancient. I call it maturity, to which they reply, "Does that mean that we are immature?" My reply to that is, "No, it means that you are just maturing". Such good humoured banter can readily take place within families. My second interest to declare is that I am fortunate enough to be in receipt of a national insurance pension and also a war pension. I am particularly grateful for the war pension because the Inland Revenue is not allowed to get at it.

This debate on the long-term care of the elderly covers a vast subject. I am very glad that it has attracted the attention of noble Lords who have vast experience and great knowledge of the subject. As your Lordships o well know, the background to the debate is that the number of elderly people as a proportion of the population has increased and will continue to increase. In our population, the over-65s now number one in six. It is calculated that by the middle of the next century, they will number one in four. Of that group, the most rapidly growing in number are the over-85s. There are now about a million in the country and it is expected that that number will treble to about 3 million by the middle of the next century. Clearly, that has obvious implications for financial and budgetary policy, as indeed the French are finding to their discomfiture at the present moment.

I propose to deal first with cash benefits, particularly pensions, and then to say a few words about the boundaries between health and other care services. With regard to cash services, as your Lordships know, 50 years ago the Beveridge Report established the concept of universality. Virtually everyone pays a contribution, as do employers, and in return qualifies for benefit in the main exigencies of life—birth, death, sickness, injury, unemployment and retirement. That concept of universality has been modified over the years for some benefits, but not for pensions, which is by far the biggest item. Although the scheme is called "nationl insurance" it is not insurance in the accepted sense of the word. It is a pay-as-you-go scheme; it is a transfer of resources between generations.

Another factor to be considered is that for many years governments of all political colours have felt it right to uprate the benefit each year to compensate for rises in the cost of living. Inevitably, as a result of those factors, the cost of pensions rises year by year.

When the Beveridge concept was first introduced there were few occupational pension schemes outside the public service. Indeed, most people, on retiring, had limited savings and there was much less home ownership than exists today. A great deal has changed over the past 50 years. A growing number of people now retire with an occupational or personal pension and there is a far higher level of saving and home ownership. Many retired people are now in receipt of three incomes and their liabilities are reduced. Their children are normally grown up and off their hands and they have probably paid off their mortgages. Admittedly, they may have new liabilities for long-term care, but many of their earlier obligations have been removed.

In the light of those changes the Government, to their credit, introduced a series of reforms designed to concentrate resources on those in real need and to make savings where justified. As a result, the projected rate of growth in social security expenditure has been modified for the years ahead, though it is still very large. Following the uprating statement made the other day, the cost of social security benefits in 1996 will be no less than £90 billion. That is an average of £15 per working day for every working person in the land. Again, by far the biggest item is pensions and income support for the elderly.

Against that background I ask whether the government reforms have gone far enough. I doubt it. Are we still placing too big a burden on future generations? I believe we are. Is universality in pensions still justified, 50 years after Beveridge? I question that. Clearly any reform must be carried out on a long-term basis. The state entered into a contract with pensioners and that must be honoured. Understandably, pensioners have an expectation that pensions will be paid. Any changes therefore must be worked out and introduced on a long-term basis.

I believe that the time has come when we must consider some form of voluntary contracting-out of state contributions and pensions for those who make adequate private provision for themselves. I do not anticipate a great pronouncement from the Minister today on this point. However, I hope that the matter will be discussed inside and outside Parliament, and it would be helpful if agreement could be reached on an acceptable way forward.

I turn now to the care services. As there are more elderly people and they are living longer, the need for medical treatment in hospital and care in the community is bound to grow. Fifty years ago "geriatrics" was very much a Cinderella, and elderly people who could not look after themselves either lived with younger relatives or ended their days in long-stay geriatric wards in our hospitals. Since then there have been enormous advances in medical techniques—organ replacement is an obvious example. The emphasis now is on rehabilitation and helping the elderly to keep active. The phenomenon of the healthy elderly is well known. In fact, there are many good examples of that in your Lordships' House.

Inevitably the cost of services is bound to grow. The Government have responded to the demand. Since 1979 expenditure on the National Health Service has increased in real terms by more than 70 per cent. and an additional £1 billion will be available for next year. There has also been a big increase in expenditure on community services. Around 42 per cent. of total hospital and community care expenditure is for people who are over 65, though they only number 16 per cent. of the population. That illustrates the high priority being given to services for the elderly.

We must not exaggerate the problems. Only around 2 per cent. of over-65s are likely to be in hospital at any one time. The vast majority live in the community in their own homes either without help or with some assistance, such as Meals on Wheels, home helps and professionals keeping a friendly eye on them. Others will need more expensive care in sheltered accommodation, residential homes or nursing homes.

A variety of help is available. But that raises the question of who does what and who pays. A lot of work has been done in recent years on the right boundaries between health and social care. There is still a need to clarify those boundaries and obtain greater consistency across the country. The BMA is understandably anxious that the National Health Service should accept full responsibility for medical care. Organisations like the Alzheimer's Disease Society and others involved in long-term care are increasingly worried about reductions in National Health Service provision.

Time does not allow me to develop that important point. But whoever provides the service, somebody must pay, whether it is the National Health Service where treatment and accommodation are free; or whether it is the local authority or a private institution where services are usually provided on a means test basis. The key question is: what is the right balance between state and private finance? Your Lordships will be well aware of the anxiety among elderly people and their families about paying for long-term care in residential accommodation and nursing homes. We are all familiar with the anxious questions: Will I need it? If I do need it, can I afford it? What will happen if money runs out? What about the nest egg that I am hoping to hand on to the children? It is no use modifying inheritance tax if there is nothing to inherit.

I warmly welcome the proposals in the Budget which tackle these anxieties. First, capital limits are to be increased so that elderly people in residential accommodation can keep more of their money before having to pay. The lower threshold is to be raised from £3,000 to £10,000 and the upper threshold is to go up from £8,000 to £16,000. That is a great improvement but there is a snag, as there always is with thresholds; namely, some people will be just on the wrong side of the threshold. They will naturally resent their position.

Secondly, I am very glad to see that the Government have announced that benefits from a range of insurance policies which provide long-term care are to be exempt from tax. That should encourage people to insure and, above all, to start insuring in good time during their working lives.

The third point in the Budget which I warmly welcome is the consultation which will take place about the possibility of occupational pension schemes enabling pensioners to defer some income early in retirement so as to have more income later to help with the cost of long-term care. That greater flexibility is highly desirable although, as I am sure your Lordships recognise, it can create problems for occupational pension schemes.

Finally, the Government have announced that there will be consultation on a range of proposals to encourage private provision. They intend—I am very glad to see it—to develop the concept of partnership schemes which combine state provision with rewards for those who are thrifty and make their own provision.

These are all steps in the right direction but, inevitably, many of them will take time to mature. In the meantime, I hope that the Government will give careful consideration to the possibility of helping with nursing costs for those who are in nursing homes by putting them more on a parallel with the free treatment which is available in the National Health Service. I recognise that this is asking for an increase in expenditure, but I understand that if such provision did exist, at the present moment the cost would be about £150 million a year.

It may be said by some, "Why bother with long-term insurance since only a minority are likely to need it?". But that is to misunderstand the nature of insurance. We take out life assurance but we hope that we will not die yet. We insure our houses but we hope that they will not burn down. We insure our cars but we hope that there will not be an accident. I hope that we shall reach the stage, with government encouragement, when it will be regarded as important to take out long-term care insurance as to join occupational pension schemes or take out a personal pension.

I am sorry that I have detained your Lordships for rather a long time. I look forward to the wealth of knowledge and experience which is clearly going to follow in this debate. My Lords, I beg to move for Papers.

3.24 p.m.

The Earl of Longford

My Lords, I am sure that all Members of the House, particularly older Members, will be grateful to the noble Lord for raising these far-reaching issues. I hope he will forgive me if I do not take up with him the all-important financial aspects of these matters, which I studied many years ago when I was a personal assistant for three years to Sir William Beveridge and he was drawing up the plans for the welfare state. Luckily, I am able to leave all such crucial matters to my noble friend and acting Leader Lady Jay, who is about half my age and twice as well informed on all such issues.

The noble Lord was kind enough to refer to the fact that I have become 90. There are certain advantages and certain disadvantages to being 90. You get a lot of friendly comment. The late Kingsley Martin, editor of the New Statesman, said, "What's gone wrong? No one is being nasty to me any more. Aren't they frightened any longer?" So that is one danger as you get older. In fact, it is rather like winning a lottery. It is no virtue of yours that you have achieved this so-called feat. On the other hand, you do not get any money out of it. Equally, no one imagines that you are better off as a result. If you won the lottery people would come begging at your door and overwhelm you. But no one thinks of a nonagenarian as having anything to spare. So there are benefits and disadvantages.

I shall speak from what one might call a broadly human point of view about these matters. I speak as by no means the oldest Member of the House. Our senior prefect is the noble Lord, Lord Houghton. I gather that the news from the hospital is rather better. I should like to feel that we can send a message of goodwill to the noble Lord, Lord Houghton, who is aged 97. When I last asked him, "What's it like, Douglas? How do you do it? How are you so vigorous at 97?", speaking as one who is in training for the top office, he said, "I have two rules. Live every day as if it were your last and never accept a post-dated cheque". There are other noble Lords: the noble Lord, Lord Soper, preaching away in the open air without a microphone. He is 92 or 93. There is the noble Lord, Lord Gladwyn, aged 95, the noble Lord, Lord Sainsbury, and other noble Lords may come to mind. So I am by no means the senior. However, I speak as one of the "oldies". I might at least call myself that.

The oldies have certain physical and medical needs. However, on the psychological side, it is worth asking ourselves what old people do need. To start with, they need company. Some of us are very lucky in that when we are old we have a loving wife and so we are well looked after. Others are not so fortunate, or they may have lost their loving partner quite recently. One's heart goes out to them.

What can be done? The carers must try to provide something that they have lost. Activity and occupation are very much harder to provide for people as their disabilities grow but an effort must be made. However, the particular point I want to speak about is the need to give them what I call respectful help. As one gets older one's physical disabilities increase, although one likes to think that one's knowledge becomes greater and greater and that one becomes wiser and wiser. One may be mistaken in that but there is no mistake in that one's physical disabilities increase.

The problem about old people is that they become very sensitive. It is difficult to know quite when to offer them help. I was brought up to offer my seat to a lady on the tube or anywhere else. Nowadays, if a lady offers her seat to me on the tube, I am in two minds about it, because I may be going only from Westminster to Sloane Square. In that case I would probably not accept it unless I was very tired. However, if I am going to Ealing or somewhere similarly far away, I gracefully accept it. That is one problem with the elderly: how to give them help? When you drop something on the floor people rush to pick it up. I fell down in the tube the other day and I think eight people tried to pull me to my feet. I could have got on very much better without them, but the intention was good.

It is a question of how one provides tactful help. I merely mention these aspects about the caring professions. As regards care, respectful help and company, one can find one place in the world where everything possible is done; namely, in this beloved Chamber in which we sit. There is no doubt that for old people this is the ideal haven; a sort of Valhalla. That is partly due to the wonderful behaviour of noble Lords and Baronesses, but it is also due to the staff. Everyone who comes to this House must know, and old people in particular, that we owe an immense debt to its unique staff.

3.30 p.m.

The Lord Bishop of Worcester

My Lords, may I first add my congratulations to the noble Earl, Lord Longford, on his 90th birthday and say how grateful I am for what he said. I feel a certain honour speaking in the same debate. I thank him for those words. I am also grateful to the noble Lord, Lord Dean of Harptree, for initiating this debate.

Obviously, long-term care of the elderly is going to be one of the large social problems in the next century. Noble Lords will know that by the year 2020, for example, the percentage of people aged 65 years and over will have doubled from the 16 per cent. it is today. Furthermore, there will be fewer adult children about to support them. The proportion of funding spent on them is already 42 per cent. of the available healthcare funds, and that will have grown proportionately.

I hope that the House will forgive me if I speak out of my own experience as one now ordained for 42 years. First, the care of the elderly during that time has vastly improved. I found as a curate that old people's homes were by no means pleasant to visit. There was the smell of over-cooked vegetables coming from the kitchen. We may speak of the setting-up of homes for the elderly as a growth industry, but things are much better regulated. Such homes have to be registered and inspected. The improvement is obvious. At the same time, we should remember that about 96 per cent. of those over the age of 65 actually live in the community and that is good. Since 1978 the number of consultant geriatricians has increased by 81 per cent.

Secondly, my observation of the elderly leads me to the conviction that some of the problems of old age begin in youth and middle age. Giving in to hypochondria; becoming too reliant on the other partner in a marriage; unwise eating and drinking; and the failure to take exercise, to keep the mind active and to maintain a general interest in the world and its activities will almost certainly make people prematurely aged. That is why "ageism" is so false. It is possible to be young at 85 years of age or even at 90 and beyond; it is possible to be aged at 65. Sometimes wisdom is to be found in the jingles of birthday cards, such as, "Roses are red, violets are blue; it is alright to be 60 if you feel 22".

Thirdly, it is almost too obvious to remark that as people grow older they want to retain autonomy, independence and dignity. Perhaps I may be personal here. My mother was fully switched on at 95 years of age and did not need to have things explained to her by her grandchildren. It always saddened me when people started calling her "dearie". Elderly people want to retain their dignity and privacy and, if possible, their mobility. The quality of life depends on the availability of people like ourselves who are prepared to see that these things are safeguarded and provided for.

People who move into a residential establishment should do so by positive choice. It is all too easy in your Lordships' House to think of the world as being like ours, but I have to tell noble Lords that on housing estates and in the inner cities there is not the provision that we would expect to find in our own homes. There is not the space for older people to live under the same roof with comfort. I repeat: people who move into a residential establishment should, if possible, do so by positive choice.

A distinction should be made between the need for medical care and the need for services. No one should be required to change permanent accommodation in order to receive services which could be made available to them in their own homes. Living in a residential establishment should be a positive experience ensuring a better quality of life than the resident could enjoy in any other setting at that age. There is a need for local authorities to make special provision for ethnic minorities who may have slightly different needs and expectations. All those in residential accommodation should have access to relatives and friends.

Local churches have a great responsibility and opportunity to be the suppliers of those who visit the lonely, the elderly and the housebound. Without complacency, I dare to say that this is happening in scores of communities, often rural communities, and does not even need organising. It happens in the interests of an unspoken neighbourliness. Throughout the Church of England—I can only speak for my own Church—I am happy to vouch for the fact that local lay people, carefully selected and trained, are being formed into teams of visitors.

There must always be a readiness to listen. The visiting of those who are disadvantaged must never be a form of ego trip for the visitor. I also dare to think that a lively faith in the goodness and mercy of the Creator can help to make the elderly philosophical, able to live one day at a time, able to see that life is all about a progress and able to listen to and support those who are in the thick of their own careers and bringing up their own families. Vanity is not acceptable at any stage of our lives and an old person's vanity is to be avoided, if at all possible. I can see how easy it is for it to develop in myself.

I conclude with something which is possibly controversial. I have spent my life as a parson. I have noticed a growing and well nigh incomprehensible complexity in the funding of care for the elderly. Such funding is extremely and increasingly expensive. It is for that reason that I deplore the fact that political parties on either side of your Lordships' House refuse to go to the electorate with proposals for taxation which would provide core funding for both medical and social care. If they did so, that would be a signal that, as a nation corporately, we are prepared to provide long-term care for the elderly.

Since my time as a curate, the standard of living has risen immensely. The United Kingdom now has far more millionaires than was the case 40 years ago. The money is there. It is my firm conviction that we need a re-writing and updating of the Beveridge Report. Mixed funding is too catch-as-catch-can. General practitioners are both providers and purchasers. In my diocese it has been necessary to establish a forum so that people can be sure who wants to purchase and who will be the provider. It is all so complex. Surely the time for integration has come, as the noble Lord, Lord Dean, implied. The purchaser/provider situation creates confusion and uncertainty.

Today we are considering one of the potentially most serious social problems of our time. Can we not all commit ourselves to its proper funding? After all, self-interest so often dictates that which justice demands.

3.42 p.m.

Baroness Elles

My Lords, I too thank my noble friend Lord Dean of Harptree for having launched the debate in such an open spirit and for raising such a wide range of issues upon which I am sure that we shall all touch during the afternoon. Perhaps I may join in wishing my noble friend Lord Longford—I hope I may call him that on this occasion—a happy birthday. I am sure that we all recognise that it was a great privilege to hear him make such a moving speech on a subject which touches us all now and which will certainly touch most of us later. I must also apologise for being unable to stay until the end of the debate because I have a long-standing appointment at 4.30 p.m.

I urge the Government to consider having a principle upon which their attitude towards the care of the elderly may be based so as to direct the policies and strategies which will enable them to deal with the problems. I listened with the greatest of respect to the right reverend Prelate, but I do not believe that the basic problem about the care of the elderly is funding. The problem is people's attitudes, and in particular the attitude of the young towards looking after the elderly.

I have a small house on the Continent. One of the two neighbouring families had the mother-in-law living with them until she died at the age of 95. In the house next door the elderly grandfather lived with his family until the age of 96. Both of those individuals were cared for and loved by their families. In former times we would have said that the families were hard working agricultural "peasants" who worked their own land. It would have been considered a great insult to suggest to those families that those two elderly people should be sent to a home. Great care and loving attention were given to those elderly individuals who I happened to get to know well over the years. Unfortunately, we do not see that attitude very often in this country. Many excuses are given, such as funding, the size of the home, the distance involved or the fact that the children are busy.

I should like the Government to consider the idea that the principle behind the funding and running of policies towards the elderly should be based, wherever possible, on keeping people in their own homes. On that basis, I think that we can then deal with many other aspects of the problem, upon which noble Lords have already touched. I am not talking now about people who are severely disabled or ill and who need constant nursing. I am talking about the vast majority of elderly people, such as those many of us know. I am not talking only about our friends in this Chamber but about those who are happy to be living with their cracked teapot and little battery clock. Those people are just as happy living with their own things in their own homes as those who have Crown Derby and a Tompion clock. We should recognise that most old people do not want to be moved from their own home. Unfortunately, very often old people do not last all that long when they go into a residential home. I wonder how many of us have seen that happen to people who are put into a residential home because they cannot be looked after in their own home.

The right reverend Prelate said that old people should enter residential care only if they want to, but too often in this country they go into care because there is no alternative. At the moment about 264,000 elderly people who are not disabled are living in residential homes. I consider that a blight on our society and a condemnation of the way in which families treat the elderly without respect and without dignity.

Perhaps I may put three practical points to my noble friend the Minister. They relate to financial and other arrangements and could, I think, contribute to making it more possible for the elderly to live in their own homes.

I refer first to inheritance tax. I was grateful to the Chancellor of the Exchequer for increasing the threshold to £200,000 in the Budget. That sounds a lot of money to many people and it was said that only 22,000 people actually pay inheritance tax. However, the fact is that there are 750,000 houses in this country in the G and H council tax bands, which means that they are worth well over £200,000. That means that the owner will be faced with having to sell the property either to pay for future care or to avoid the children being left with severe death duties. We have already seen quite a strong reaction to the threshold being raised. Many people will have to pay about £18,000 if the testator dies before next April. That is just one example relating to the many people who will have to pay death duty on a home. Therefore, I urge that consideration should be given either to abolishing inheritance tax altogether or to raising the threshold so that it covers the vast majority of homes.

A third alternative would be to treat the home of an individual who dies in exactly the same way as property is treated for capital gains tax purposes. Tax should not be paid on a home which is left to a beneficiary who is a child of the family. That would follow many continental tax provisions. In both France and Italy, for instance, the children of the testator—or, indeed, of the intestate—pay little or no inheritance tax precisely so that the family home can continue to be used down the generations. Surely that contributes to the stability of the family. I am not talking only about money, but about the family itself. Whether it is a large or a small house, the family should be able to inherit it and to carry on living in it in the same way as the parents who worked so hard to build and maintain it. That would make a major contribution to the question of the care of the elderly.

There is another aspect. If the basis of the policy is that we should keep elderly people in their own homes, we have to be able to provide that they will be looked after. I should like to refer to a recently introduced French policy which is seen to be working extremely well. Local authorities find people to do domestic work or nursing in the home of an elderly person and, although the elderly pay for it, what they pay is 50 per cent. tax deductible. Many people could pay a small amount for a few hours of individual help a week. That would cost far less than going into a residential home but would enable them to live in their own homes.

That tax deduction system has apparently been working extremely well. It now appears—this was reported by the INSPE, which is the official institute working in conjunction with the Minister of Employment in Paris, and so as far as I know these figures are official—that over 50 per cent. of all old aged pensioners who stay at home can now employ home helps or extra nursing care. That enables them to stay in their own homes. Furthermore, it has created 150,000 to 200,000 new jobs. Of course much of this work was done not exactly on the black market, but it was not declared for social security. The workers have now been identified and several thousand people now have proper jobs and can do this kind of work.

That is something that should be looked at. I do not say that we should follow the same method. The supplying of home care does not necessarily mean dishing out dependency allowances and so forth. Many people would be prepared to pay an amount if they knew that it could be deducted from income tax. We know that a vast number of people in this country pay some form of income tax.

The third point to which I should like to draw the attention of my noble friend the Minister arose out of a case reported in The Times in June of this year. A granny flat which was annexed to a family home was found to be liable for council tax. That provision in the Local Government (Finance) Act surely needs revision, but the interpretation was rightly made by the judge. The family had in good faith built the annexe for the grandmother. It was then found that it was not considered to be part of the same dwelling as the family home but a separate dwelling. That is just another element in the accumulation of elements. If those points could be looked at they would contribute towards enabling the elderly to stay in their own homes.

I hope that the Government will consider these aspects seriously. An enormous amount can be done, not just through funding, as has understandably been mentioned, but through encouraging young people to recognise that they have a responsibility for the elderly. That is something that will be more and more necessary in the future.

I should like to conclude on a point which was raised by the right reverend Prelate. I have often met young people who have derived immense personal satisfaction—that might be considered a sin by some, but I find it gratifying—and enjoy calling on elderly people in their own homes. The elderly too receive immense pleasure and joy from visits by the young. In that way we might see a more cohesive social fabric in our society, where it is not just the family involved but there is a linking of the old with the young and the young with the old. I hope that my noble friend the Minister will take those thoughts on board.

3.54 p.m.

Lord Butterfield

My Lords, I am honoured to be speaking in this debate. I should like to thank the noble Lord, Lord Dean of Harptree, for introducing this important topic, and I should like to add my congratulations to the noble Earl, Lord Longford, on that famous 90. We are now looking for the century, please.

I should like to make it clear that I strongly support what was said by the noble Baroness, Lady Elles, about weaving elderly people into the community. I want to make it clear also that I am not a tax pundit. I am here because many people have made it plain to me that they believe the new problem of the elderly can be laid at the feet of my profession—the doctors. "Before you medical people got into top gear, we had less of this problem than we have now". I want to speak to that point and to draw some conclusions from it.

In my family we had the granddaughter of one of the Mayo brothers who started the famous Mayo Clinic in America. At a family party to honour her 90th birthday she made a remark which is stamped indelibly on all our hearts, as Calais might have been. She announced to us all—great grandchildren and the rest—"My dears, do remember that old age is not for cissies". She was of course referring to the many things with which people of advancing years have to deal.

The noble Earl, Lord Longford, made some lovely points about people offering him seats on the tube, picking him up, and picking up anything he dropped. There are many other things that elderly people have to put up with, so that we should see in them the great veterans of living. That is why I was so touched by the points made by the noble Baroness, Lady Elles, about integrating the old and the young. I do not feel that enough young people—I suppose it is my age that makes me feel this—are aware that they can talk to the veterans of wars and many historic events, which they may be happy to be able to report down the line to their children and grandchildren.

In the medical profession I have been very much involved with the need for gerontological research. It was almost absent. There were three or four Cinderellas in the medical profession. One was geriatrics, and, funnily enough, another was psychiatry. I can remember a secretary of the MRC saying to me when I went in to talk about a new project for which I wanted money, "I do hope you are not going to produce a psychiatric project for me, Butterfield". That was because psychiatry was not then thought to be scientific.

There are other topics. One which worries me is the way health promotion seems to have been relegated by so many people in my profession as an inconsequential game which one plays if one has any time left in one's diary. Good health promotion can make a great deal of difference to the burden that elderly people will place upon the social and health services.

I shall not repeat an exercise I urged upon noble Lords, which involved flexing the knees to strengthen the quadriceps muscle so that they could get up easily when they were sitting down. If I am called upon to do so, I will perhaps repeat it in the Dining Room.

Since I became a young medical student, the advances in high technological medicine and the development of medical care have revolutionised all our lives. I suppose 100 years ago there was the feeling in the minds of many people that if they had pains in their old age they were probably due to sins they had committed in their youth. I find now that hardly a patient will put up with a fig of pain. They all want a pill which will remove not just the pain but preferably the condition.

I was entertained to hear on my way from Cambridge that Papandreou is going to have a tracheotomy. He is on a ventilator because, of course, he has pneumonia; and he is on a kidney machine because he has renal failure. I am afraid that 50 years ago the Greeks would be having to look for a new prime minister. Now, his ex-air hostess wife can announce to the media men entering his sick room, "Don't you suggest that he is not up to running the country. He certainly is". That is a great credit to his doctors and all the research into the antibiotics that have helped his pneumonia go, the machinery that keeps him breathing satisfactorily, and the artificial kidney machine.

However, I wish to make the point that in a Utopia it would be possible for everyone to come through life and have an equal chance in the final stakes. But biology is not like that. Some conditions remain the centre of interest for the likes of me. They are conditions which will probably get one into health service care. Ever since Harvey took an interest in the circulation, which he discovered, this country has always had plenty of doctors who are interested in people who have difficulties with this little pump working away in the chest. If coronary bypass surgery is required we can do it; if the pulse becomes seriously irregular we can fit a pacemaker. Your Lordships are looking at a bionic man; I have had both those operations.

I also wish to point out to your Lordships that if one has the misfortune to have senile dementia or pre-senile dementia, into which we have not undertaken so much research, it is almost certain that it will be very difficult to find doctors who will give a great deal of time to that condition—at any rate, at this stage.

Your Lordships will sense my hope that you will push for more investigation, research and interest in the extraordinary conditions which make the brain fail. It is brain failure. We know that small clots are created in the circulation and that they can plug up the circulation to the brain so that people become demented. Perhaps I may say for the record that Alzheimer recorded the cases of four people who had dementia in early middle age—in their forties—which was most interesting. Those people were unusually young to have dementia. We talk about a generation of people over 85 all with Alzheimer's disease but they do not have what Alzheimer originally described. A purest such as me would say, "No, they have dementia". That does not attract quite so much attention because I think it is easier to spell dementia than it is to spell Alzheimer.

I believe that I will be making one of my points rather subtly if I point out that the present problem of providing money for the care of the elderly stems in part from the fact that people with dementia need long-term care. However, for people who have problems with their lungs, kidneys or heart there are short-term solutions which get them out of the hospital, leaving the warm bed for the next person who needs it.

It is also most important that we pursue a clearer understanding of the cause of many of the conditions that arise and bother elderly people. We know about tobacco and the connection with lung disease, but we are becoming fascinated with the wide prevalence of cancer of the prostate. We do not know why that epidemic is occurring but cancer of the prostate is fast becoming a major problem for the medical profession.

It is important that your Lordships appreciate my point that at present the service one ends up with is a lottery. We cannot make it an even chance that someone will end up in a hospital or a mental hospital. Until we can it will be for those who are able to design policies, financial ' arrangements and decisions about tax to solve the interim problem. Ultimately, we may be able to produce a steady kind of life which does not require long-term care. Of course, we must recognise that mobility in the joints and a weakening of the muscles are important factors which contribute to infirmity in old age.

My final remark must relate to my admiration for the elderly who have prevailed through life and who are victorious veterans. I was most interested in a demonstration that I saw in Hungary many years ago. A doctor there showed me a treatment which produced wonderfully fit elderly people. Eventually I discovered that one could not get into those homes unless one was 85. If one got to 85 and was admissible one was pretty fit. I was looking at the people who I should like to join and I shall bat as best as I can to get into one of those homes later.

4.5 p.m.

Lord Jenkin of Roding

My Lords, I too congratulate the noble Earl, Lord Longford, whom I have known for many years. Indeed, I was once in love with one of his daughters, but as she was only 13 it did not get very far. The noble Earl's remark reminded me of something that was said to me when I arrived in your Lordships' House. "Welcome", said the late Lord Bruce-Gardyne, "to the best appointed geriatric day centre in town". I very much endorse what the noble Earl said about the way we are looked after.

I also congratulate my noble friend Lord Dean of Harptree, not least upon his timing. He has chosen to debate the subject of long-term care only a few days after the Budget which has perhaps drawn more attention to the issues surrounding long-term care and the prospect of further measures to deal with some of the costs. That shows that he has the foresight of a Hebrew prophet. We admire him for it and thank him for allowing us to debate the subject today.

In line with the Griffiths Report and the resolution of the House, I must declare my interests. I am chairman of a life insurance company and of a National Health Service trust. I must also apologise to my noble friend because, for reasons which I have explained to him, I may not be able to stay until the end of the debate.

Last month I was privileged to chair at Ditchley a splendid weekend conference which discussed ageing populations in developed societies. Perhaps I may share some of the conclusions on which we were remarkably unanimous. Those attending the conference came from a range of different countries, professions and occupations and, I dare say, of different political complexions. Some of the conclusions are obvious. As has been said, we are living longer and as more of us become dependent there will be fewer people of working age to support us. That is the so-called dependency ratio. Interestingly, those at Ditchley did not regard the dependency ratio as in any way a demographic time bomb, as has sometimes been said.

We also recognised that the state never can, never has and probably never will meet all the needs from the cradle to the grave. There was a general assumption that we must learn to set aside more money if we are to avoid poverty in old age. But we must also recognise that being old is not being poor. On the contrary, a large number of elderly people are better off than were their age group a generation or more ago. Of course, there are many poor elderly people, but never let it be forgotten that, if they do not have assets or capital, the care that we are talking about, whether it be in the health service or provided by local authorities, is for them free. We need to bear that in mind and I endorse the comment of the right reverend Prelate that the standard of care now available in residential homes is very much higher.

The group at Ditchley also looked at the more positive things that are happening and which we need to recognise and respond to. One does not regard retirement as an event after which one goes down hill. It is not. Retirement is a process. As was said to me the other day, retirement is an attitude of mind, and some of the remarks made today bear that out.

Older people must be valued for their experience and wisdom. It is quite wrong that they should be marginalised. They must be encouraged to go on being economically active. I believe that a trend has set in of always retiring older people prematurely because somehow it is thought that that is giving jobs to the young. There is no truth in the lump of labour theory that old people keep young people out of jobs. On the contrary, older people have a great deal of experience and wisdom which needs to be used.

Most older people wish to continue to be useful to society. They do not wish to be considered a burden on it. That theme recurred powerfully throughout our discussions. Society needs to accelerate and reinforce the trend in perceptions—not least because the perceptions of old people themselves—away from the notion that the years after customary retirement age are a time of decline and likely dependency. That notion diverges from the increasing reality as lifespans and health during them improves.

The relevance of all that to a debate in which we are looking at the problems of long-term care is very great. There is a great deal of evidence to suggest that at whatever age one dies, whether it be 55 or 95, one's period of dependence is concentrated into the last three or four years of life. Therefore, the vast majority of elderly people live in the community with their families and neighbours for support and in many cases they are able to make a real contribution.

Age Concern has estimated that only 5 per cent. of the over–65s need long-term care other than in their own homes. The Alzheimer's Disease Society estimates that only 5 per cent. of dementia cases need NHS care. And yet the issue of long-term care has assumed, as has been said in the debate, considerable political importance in recent years.

There are a number of reasons for that. First, in absolute numbers there are many more cases of families who are affected. There are few people today who are untouched by any experience or anxiety on behalf of a frail elderly person who needs care. Secondly, it has been made clear yet again that the NHS is, as the noble Lord, Lord Butterfield, said, concerned with medical care, but it is not part of its function to provide just social care. Thirdly, it is true and sad to say that relatively few people have been able to save enough to pay for long-term care for themselves without eating into their savings and, if necessary, selling their house, which causes much distress. Fourthly, while the NHS will pay for nursing care in hospital, in residential homes and for a patient in his own home, for some strange reason, it will not pay for nursing care when the client receives it in a nursing home. That is a point made very forcefully by the Royal College of Nursing.

My noble friend Lord Dean of Harptree suggested that it may cost as much as £150 million to extend that. But perhaps the Minister can tell the House the cost of removing what seems to be an absurd anomaly, that one is entitled to nursing care—which after all, is a form of medical care—everywhere except in a nursing home.

The consequence of that is that more and more families find themselves having to pay for long-term care when they had assumed—and that is the basis of the anxiety—unwisely but understandably, that somehow the National Health Service would provide. They are somewhat shocked when they find that it does not.

What shall we do about it? I should like to take up a point made by the noble Lord, Lord Butterfield. It was a straight finding that we came to at Ditchley. There is a growing need to distinguish more clearly between the medicine of old age and that of acute healthcare. I hope that the noble Lord will allow me to say that, on the whole, the medical profession has not been well structured in, for example, multi-disciplinary teams to reflect what is a very real distinction. Moreover, although geriatric care is now attracting a good research effort, there are still immense shortcomings in the distillation, co-ordination and dissemination of the fruits of that effort. We had a very distinguished geriatrician in the group who made that point with great eloquence. Structures of care are often over-rigid and are poorly matched to real need, to risk and opportunity, with the dependent elderly taking up acute care beds when their needs, including maximising the scope for rehabilitation, which is such an enormously important part of the process, could be served more economically and better by more extensive convalescent or nursing support provision.

That is a subject which the National Health Service must address. The Forest Healthcare Trust, which is an integrated trust, is trying to build improved bridges between acute treatment, rehabilitation, community support and primary healthcare. But I have no doubt whatever that there is a long way to go before we get it right.

My noble friend Lord Dean referred to the financial dichotomy between the NHS, which is free, and social care, which is means-tested. I believe that it is unrealistic to think that that will change in the short term. Therefore, solutions must be found to make it easier for more families to be able to pay for social care without feeling that they are eating into their inheritance.

That is why I warmly welcome the higher disregard limits in the Budget, which my noble friend listed at the beginning of the debate, and also the exemption from tax for certain insurance policy proceeds. I have no doubt that that will encourage more permanent health insurance and perhaps, in time, more long-stay insurance. But I am inclined to agree with the chairman of the Continuing Care Conference, Mr. Paul Seymour, who was quoted the other day as saying that those changes by themselves will not solve the problem. Like him, I am looking forward to the process of consultation which my right honourable friend the Chancellor has promised. Mr. Seymour was quoted in The Times last Saturday as saying: The major benefit is the consultation coming up … It's about making improvements for the future, not just for today. The Chancellor was perfectly right not to come up with an immediate answer".

There must be wide consultation with all the interests involved including, of course, the voluntary sector, the charitable sector as well as the commercial and public sectors.

Perhaps I may offer a few thoughts about what I should like to see. It is not realistic to expect millions of young people, perhaps just when their children are off their hands, to start taking out substantial insurance for their own long-term care. There is something psychologically very difficult about that. Although there have been products on the market, very few have been sold so far, despite considerable efforts by the companies and by the Association of British Insurers to promote the concept.

Not only is it psychologically difficult, but the fact is that there is still a huge shortfall in the provision which people should be making for their own retirement. It is that which perhaps needs to be addressed primarily rather than trying to dream up new products for that long-term care process.

I am delighted that my right honourable friend the Chancellor has made this point. There must be more flexibility in pension schemes; not only in occupational pension schemes but also in personal pension plans. The House may not be aware that two years ago one insurance company, Lincoln National, announced a scheme whereby when the pension became payable, the beneficiary could take 90 per cent. of the pension as a pension and pay the 10 per cent. balance as a premium for long-term care. That was disallowed by the Inland Revenue because it broke the rules. That seemed to me to be absolutely absurd. If that is what the Inland Revenue rules say, then they need to be changed. That is only one example of what I believe should be done. In my view, such a scheme has real merits. I hope that that will be included in the consultations.

Another idea would be to allow pensioners to take a lower pension when they first retire. After all, many pensioners are happy to go on doing some part-time work and earning some money so as to maintain their standard of living. They may not need their full pension for, perhaps, 10 years or so after retirement. If they could, as it were, set aside or postpone a slice of their pension so that when they become wholly dependent a higher pension would be payable, I believe that that would go some way towards solving the problem.

There are also what have been called partnership schemes whereby if a policy-holder makes some provision for his own long-term care, that is matched ' either by higher disregards or by some other form of provision from the state. Indeed, there is a whole range of possibilities which now need to be examined objectively and sympathetically because we are facing a very real social problem. Whatever avenue is explored, it is now clear that, in one way or another, our people need to save more if they are to provide adequately not only for ordinary retirement but also for the final years of dependence. There needs to be much more public debate and understanding in that respect. My noble friend Lord Dean can properly claim credit for having focused our attention on the matter today.

4.21 p.m.

Lord Glenarthur

My Lords, my noble friend Lord Dean of Harptree has certainly raised an exceedingly important topical but, as I think one can gather from all that has been said so far, somewhat intractable matter in today's debate. I join others in thanking my noble friend for bringing it forward. I should like to tackle the debate primarily from a fairly narrow perspective: from the point of view of one involved in the acute hospital sector as chairman of St. Mary's NHS Trust in central London. In that respect, I declare an interest.

There is no doubt whatever that the whole issue of long-term or continuing care generates major social, financial and political implications for this country. My noble friend Lord Dean mentioned the numbers that we were likely to have to cope with in old age in the years to come. But, in financial terms alone, the figures are really staggering. One recent article in the British Medical Journal (which, I believe, appeared on 9th September) predicted that as much as 10 per cent. of GNP may be required to meet the needs of domiciliary and institutional long-term care by the year 2030. That is really a frightening prospect for any country to face.

Unsurprisingly, the medical and surgical needs of an elderly patient can exceed the level that can be met in the community, even by the extensive support services that are now available. Where that is the case, a complex decision-making process is necessary to determine the best form of long-term placement. The choice is principally between a residential home, a nursing home or, as we have heard, a continuing care ward. Those alternatives have many implications both for individual patients and the providers of care—implications such as management, quality control, comparative cost and the source of funding.

There are clearly a number of difficult issues surrounding the area of quality control which will need to be addressed in any setting. However, there are no obvious fundamental barriers to the process of setting, monitoring and enforcing quality standards in any type of placement. The financial implications are—and are likely to remain—a major source of contention, but they cannot be brushed aside: they must be tackled. The selection of different placement options will determine the cost of long-term care, the source of funding (whether it is to be from the National Health Service or the local authority) and whether or not individual patients will need to be means-tested, or whatever, to determine their ability to pay for care themselves.

It is certainly very easy to understand why some patients—perhaps even their families—are, I have to say, to a greater or lesser extent in favour of staying in hospital in a continuing care ward as a means of preserving their ability to pass on an inheritance. As other speakers have said, that issue was at least partly addressed in the recent Budget in a way that I, too, warmly welcome. However, as my noble friend Lady Elles, pointed out, there are many further steps which need to be taken to sort out that particular issue.

The local levels of National Health Service continuing care provision are fixed within the purchaser-provider contracts to which the right reverend Prelate the Bishop of Worcester so clearly referred. The relevant local authorities can, therefore, be left in a situation where they may be asked to fund an inherently unpredictable number of residential and nursing home placements. If, as I fear is often the case, there are local deficiencies in either the availability or funding of those different forms of long-term care, patients waiting for appropriate placement often accumulate in hospital acute and rehabilitation wards. If they do—and I am not for one moment suggesting that they do not need that sort of care—they can seriously compromise and undermine the other functions of those services, sometimes leading to the cancellation of surgery where beds for those cases are required. That is often compounded (and we certainly see evidence of this daily in St. Mary's at present) by a constant stream of seriously-ill admissions to the hospital and to those beds through accident and emergency.

I believe that I should mention at this point that, in carrying out our major role at St. Mary's as an acute hospital—and not have beds blocked by those who, perhaps, should be elsewhere leading to our consequent inability to provide planned surgery when it was intended—problems can arise due to the difficulty for community nursing services, social services and others to effect provision for suitably recovered elderly patients who could leave their hospital beds evenly over the week and go home, or wherever. I ascribe no particular blame—planned discharges of patients should not normally take place at the weekend—but the pressure is such that some means of helping alleviate the strain would be helpful. For example, I understand that there is a 48-hour standard wait from the time a decision is made to send a patient home to the provision of an ambulance if one is required. Therefore, a decision for a discharge to take effect on a Monday must be taken by the previous Thursday, because the weekend must be taken into account. That may not be a universal problem, but it certainly exists in some places and generates difficulties for all concerned, not least for the elderly who are in those beds.

I believe that there is an urgent and growing need to draw up guidelines of some sort for the process whereby different forms of long-term care are selected for a given patient. Those guidelines need to define, first, who is involved in the decision-making progress and, secondly—or, perhaps, in parallel—the criteria upon which those decisions are to be made or based. They can then be applied nationally, with the aim of facilitating the local assessment of both the quantity and cost of the long-term care that is required.

Such guidelines might also help eradicate the current practice whereby decisions with far-reaching financial and social consequences may at times be taken in a potentially arbitrary fashion by well-meaning, but not always so well informed, professional groups or individuals. That is by no means always the case, but good practice is not matched universally.

There are, inevitably, a number of thorny issues to be tackled in drawing up such guidelines. Some of them have been touched upon. There are the rights of individual patients and their relatives to determine the form of placement and thes roles of both hospital-based medical staff and primary care physicians, and others—as my noble friend Lord Jenkin of Roding described just now—in the supervision of continuing care. As I said earlier, there are the personal and political consequences of policies that may have a major impact on the principle of inheritance.

I have not mentioned continuing care in the community for those who could be treated at home, or elsewhere, in that regard, but this policy certainly ought to be included in any discussion on how to develop and refine the overall policies for the people we are addressing today. Community care is often seen as a viable alternative to institutional care. As my noble friend Lady Elles said, it has many advantages. However, it is a fact that experience has shown that comprehensive packages of home care which are likely to be necessary in some of these cases may be considerably more expensive than placement in a residential home, as some local authorities have already found. Like it or not, whatever the advantages or disadvantages of any particular course of action to suit people's needs, this is a problem from which we cannot easily hide.

I am aware that what I have said probably poses more questions than it attempts to answer. My noble friend Lord Jenkin suggested a number of other solutions, particularly as regards insurance. This aspect of care for the elderly is a fundamental and alarming issue which must be faced fairly and squarely. It has to be addressed and resolved by informed discussion between all the professional groups involved. Failure to face up to it and conduct a constructive debate can only lead to greater uncertainty for individuals, local authorities and those involved in the professional care of individuals. It can indeed have somewhat of a debilitating effect upon the acute hospital sector.

4.32 p.m.

Baroness Seccombe

My Lords, I add my thanks to my noble friend Lord Dean of Harptree for initiating this important and timely debate. I also add my congratulations to the noble Earl, Lord Longford, on his 90th birthday. I hope that he will continue to have many years of good health to enable him to continue making such valuable contributions in this House.

I well remember my 30th birthday. At the time I had two small children, and a lovely Norwegian girl lived with us. She was just 18 and spent the whole day telling me how awful it was that I was so old. I also remember my mother who at the age of 92 talked of her elderly friends of whom there were still a few left. Whatever her age was, her elderly friends were always just a few years older. I have come to the conclusion—I believe that my noble friend Lord Jenkin of Roding mentioned this—that old age is a state of mind. Whether one is 30 or 92 what really matters is how fit one is both mentally and physically.

However, a statistic stays in my mind which is vitally important as we face the future. In 1951 there were in England 1.2 million people over 75. By the year 2000 it is estimated that there will be almost 4 million such people. We have to ensure that measures continue to be taken to maintain care and support for those who are unable to cope by themselves. It is not unusual for someone who is reaching retirement age today to have one or even two parents still living. Only a few years ago that was practically unheard of.

I understand and applaud the Government's determination to maintain the value of the state pension which is after all the foundation of pensioners' income on retirement. It has been raised each year in line with prices, and other measures taken by successive Chancellors have kept pensioners' incomes ahead of the cost of living. That is a far cry from those dreadful days of the Labour government of the mid–1970s when, with inflation touching 27 per cent., the weak and the vulnerable, and particularly the old on fixed incomes, suffered. Many had retired believing that, with their savings, they could manage. What happened was that the evil of inflation overtook them and their living standards dropped like a stone. The present Government pledged that it should not happen again and until this day they continue to fight against inflation in the system.

Some say that inflation does not matter. They are often employees in work whose incomes rise as inflation rises or people on index-linked pensions. However, the reality is that jobs are priced out of the market, goods are too expensive, unemployment rises and those on fixed incomes carry the burden. The Government have encouraged people to make provision for retirement to support themselves, and it is heartening to know that 75 per cent. of pensioners have extra income from investments and two-thirds from occupational pensions. This has resulted in the incomes of average pensioners rising dramatically by over 50 per cent. after inflation.

However, as people become sick or frail, the time may come when some form of help is essential. I believe everyone wants to stay in their own home for as long as possible. For that reason I am a devotee of community care. The help required may be only minimal but it can make all the difference to someone living alone. I pay special tribute to charities such as Crossroads which do such sterling work in this area. Local authorities, through social services, are the main providers of assistance with dressing, providing meals on wheels, and generally keeping an eye on things. However, as time goes by, more help is often needed and the awful decision has to be made as to how long everyone can cope. I can speak from personal experience of going through the maze of options and weighing up the pros and cons of someone remaining at home or selling the home and moving to residential care. The effect on elderly people can be traumatic as they see life crumbling around them. I was therefore heartened when the Government in this current year gave generous funding of an additional £1.8 billion for community care responsibilities and up to a total of £3 billion by the year 1996–97. By that action the Government have fulfilled their commitment to the new policy.

It is essential that local authorities play their part and discharge their responsibilities wisely. They are free to decide their priorities. I feel that sometimes too much stress is placed on form filling and assessment and not on care itself, although proper assessment is of course vital. It is also vital that care is well managed. The individual's wishes should be of paramount importance.

Care should not be imposed against an individual's wishes. Flexibility is vital as families may be able to be, and may wish to be, the main carers provided they can have a break. However, in recent years there has been a feeling that one asks what the state will do and then the family top that up. I am sure it is not for lack of love that an attitude has developed that the state should provide. Of course, elderly people may live far from their children and there can be other reasons why relatives are not available on a daily basis. I recently visited Taiwan. I was most interested to learn that people in that country have the same responsibility for their parents as for their children. That is very different from the attitude of some people here.

Respite care is a provision for the stalwarts—usually family members—who are caring for others. I believe it is the least we can do. Although good practice among enlightened councils where respite care has always been available, such provision has been strengthened by the Carers (Recognition and Services) Act. The Act established that carers should be involved in the assessment process. Here I must pay tribute to Members of your Lordships' House who spoke so tenaciously and movingly for the measures in the Act.

As time progresses, people are living longer. We shall have a smaller workforce. The ratio of retired people to those working is changing dramatically. Fortunately in this country 15 million people are making provision for a pension to make their retirement more comfortable. In fact people are doing so to an extent greater not only than in any other European country but throughout the remainder of the European Union put together. Government encouragement is vital for people to make similar provision for long-term care. The Chancellor made significant changes in the Budget and no doubt the debate will continue long and hard.

We all have a responsibility to ensure that the latter years of elderly people are not spent in fear of financial problems. We all have a vested interest. The Government have brought the issue to the top of the agenda. I believe that they can be complimented and trusted on the action they have taken so that pensioners will not become an unbearable burden on future generations.

4.41 p.m.

Baroness Platt of Writtle

My Lords, I too am grateful to my noble friend Lord Dean of Harptree, with whom I share two interests, as a pensioner and upon having achieved three score years and ten. I should like to add my wishes for many happy returns of the day to the noble Earl, Lord Longford.

The words "long-term care of the elderly" are capable of a wide variety of interpretations. I hope that we shall not fall into the trap of thinking that anyone drawing a pension is necessarily elderly. In the early 1980s the director of social services in Essex showed a film of people who had entered our county council residential homes at 60 when they were still reasonably active. Having been there for some years, they became incapable of looking after themselves and would remain in a home for the rest of their lives. As vice-chairman of the county council and chairman of finance at the time, the film had a profound effect upon me.

As several noble Lords have stated, most elderly people wish to remain for as long as possible in their own homes within easy reach of their long-term friends and neighbours. They may need sheltered accommodation, help with shopping, lifts to social events or just plain neighbourly calls. A chat over a cup of tea can establish that they are all right and that they have not had a fall or face some other problem.

I believe deeply in national investment in home help schemes. Apart from anything else, such a scheme is cost effective in avoiding residential care for as long as possible. Much more importantly, home helps can provide the assistance that people really need—whether it be house cleaning, shopping, the preparation of meals to ensure that elderly people keep well nourished, or to make sure that they light the gas fire to keep warm. In other words, it is to keep an eye on them and to help them remain independent in their own homes for as long as possible.

I remember too our director of social services telling me how useful a well trained, observant home help was in reporting back to the area organiser when one of his or her clients was experiencing deterioration in health and perhaps needed physical aids—banisters on stairs, hand rails along corridors, sticks, zimmers, handles and other equipment near the bath and lavatory, and the 101 other simple and more complex appliances which are now available to support independence. I am very much in favour of home helps. At the same time I believe that there should be a sliding scale of fees so that people like ourselves pay the full cost while those on benefit probably pay nothing or very little. In that way, councils will be able to make more home helps available within their budgets—in my view a most important policy.

The Chancellor's Budget last week will help those who finally have to go into long term care. About a third of those living to be over 85 will probably have to face that eventuality. I, like my noble friend Lord Dean, am glad that the Chancellor has more than trebled the minimum capital sum that people can keep before contributing to that care and doubled the sum below which they can apply for financial assistance for care. I am glad too that the Chancellor intends to prepare a consultation paper on partnership schemes, like some of those available in America. The idea is that those who plan ahead to meet perhaps the first three years of nursing care—that may, after all, be all they need—can then rely on the government to look after them for the rest of their lives. Like other noble Lords, I so agree on the need for respect, dignity and privacy in those homes.

I believe again that the Chancellor's possible scheme is both compassionate and cost effective. With all of us looking forward to longer and longer life spans, it is no good placing all the burden of cost, perhaps through taxes or directly, on our children and grandchildren at a very expensive time in their lives. We must make proper provision as far as possible during our working lives. I hope that that consultation process results in a scheme acceptable to both sides.

My Victorian grandmother had a profound influence on me as a child. She always worked hard and fed her family well. We loved her cooking and warm hospitality at Christmas. However, she was not extravagant and would never buy anything until she had saved up for it. She also believed in putting money away for a rainy day. In those pre-war days there was almost no inflation, so, as elderly people today benefit from the Government's low inflation policies, her savings retained their real value. I benefited from that prudence, inheriting a small income when she died at a ripe old age. I have to say that it was taxed to the hilt as unearned income in those socialist days. I certainly had not earned it, but, my goodness, my grandmother had, with a lifetime of hard work. I am glad that that position no longer applies. I am glad that the Chancellor, through the Budget, has brought in further fiscal incentives for saving. Coupled with the present low inflation rate, I hope that they will encourage people to save. I can testify personally to the comfort that a nest egg brings when you reach three score years and ten.

I hope that we shall not forget the voluntary sector, to which my noble friend Lady Seccombe referred—Help the Aged, Age Concern, Crossroads, WRVS Meals on Wheels, Darby and Joan Clubs, the hospices for palliative terminal care, to name but a few organisations. So many people selflessly give of their time and kindly consideration in making elderly people's lives more enjoyable or supportable. I share the admiration of my noble friend Lady Seccombe for those organisations. Many volunteers are themselves over 60. It is important for those retired from worthwhile jobs to feel that their lifetime skills are still needed so that they continue to contribute to society, as my noble friend Lord Jenkin said. It is a tragedy to meet someone who, having held down a responsible job for years, feels totally unwanted on retirement and therefore deteriorates both mentally and physically as a result. Britain perhaps leads the world in the multiplicity of voluntary organisations which do such valuable work. The skills of the over-60s must be utilised to the full.

On a different point, maybe the lottery will help with larger capital sums but in many ways I believe that both central and local government can continue to encourage smaller voluntary organisations, both fiscally and through imaginatively placed grants.

In mentioning local voluntary associations, I must register particular gratitude to those who provide respite care, to the long and faithful, often unheralded carers in our society. Day after day, year after year, they look after their relatives. It can be a great burden. Day care in a county council occupational centre or short periods in residential care, either private or publicly provided, can give those carers a few hours or days. of precious freedom to live their own lives.

Mention has been made of Crossroads and the hospices. As unpaid patron, perhaps I should declare an interest. They provide the sort of respite care on a voluntary basis which is of great importance to carers in maintaining their own health and sanity and giving them some chance of independent enjoyment. Those organisations too deserve every support.

This is a very important subject. I am glad that the debate has produced so many practical and innovative ideas for future policy, both in the statutory and in the voluntary fields, in an expanding field of need. I hope that my noble friend on the Front Bench will ensure that the Government follow up the debate with action in future.

4.52 p.m.

Viscount Chelmsford

My Lords, another three months and I qualify as an old aged pensioner, so you may take it that I have a personal interest in long-term healthcare. Whether that affects the public perception of the way in which I carry out my parliamentary duties",

as set out in Clause 3 of the Registration of Interests, I leave to others wiser in these matters to decide. I wish today to talk only about the private sector; what happens now and what might happen in the future, given that the Government seem keen for the private sector to take on more of the burden of dealing with the cost of old age.

Before considering healthcare, let me start with pensions. In retrospect, how fortunate I was to have a high grade employer who required me, aged 21, to join the company pension scheme. I did my 40 years and so I receive a full pension, but there are many who do not. Some start late and cannot amass enough contributions to retire on the full two-thirds of salary. Increasingly, many are retiring early, for reasons that are anything but voluntary and they do not achieve full pension rights either. Those in old age with inadequate pensions will have even more concern about long-term hospitalisation costs than those like myself who have retired on two-thirds of salary.

Then there are the widows, struggling to exist alone on 50 per cent. of the pension which was available before the husband died. Of course, there is often some private capital, but equally there is a great reluctance to risk it disappearing in medical fees when it ought to go to the children. I note from reading the brief supplied by Age Concern that the person who goes through the seven-year transfer of capital and later has no capital if, or indeed when, long-term hospitalisation fees are incurred, has committed the sin of deliberate deprivation. The ethics of that may be debatable, but the act itself would be unnecessary if we had the right type of long-term funding in place. Currently, in my view, we do not.

I turn to today's employees. Mine may indeed be the last generation to have a career of 40 years' full-time employment. Our children do not live in that world. They live in a world of self-employment and of part-time jobs. I do not know how to prove this, but my instinct says that that part of today's workforce which is between 20 and 30 years old is much less well funded for eventual private sector pensions than was the case with the same age group 10 years ago in 1985. I believe that earnings are so competitive now that the young may not have the surplus, nor do they have the will power, to fund their pensions in the way that historically was done for earlier generations by employers.

If we look at long-term medical care as a possible add-on cost—that is, some of us die without any medical costs—an add-on which comes on top of the routine cost of living as a pensioner, then today's poorly funded pension arrangements will aggravate the need for medical funding in some 30 years' time.

I turn to existing private medical insurance. In my view, the standard policy fails to give the consumer any long-term security at all. That is because terms are fixed on an annual basis and it is not possible for the elderly to change insurer due to the requirement for an existing medical condition exclusion by any new insurer. So I suggest that the whole basis is flawed and what is needed is a fund that is built up over time, prior to the arrival of medical conditions, and which is available if and when needed, to respond to significant pensioner medical costs.

In any group of pensioners, some will incur no costs from long-term healthcare, others will have heavy costs over time. But as a generality, at the date that a person becomes a pensioner no one in advance knows what costs he or she will incur. Insurance is one answer, but it is not the only answer. The Chancellor's decision to allow tax-free benefits from long-term care insurance is obviously extremely helpful but hopefully it will apply not just to insurance but also to long-term healthcare funds, whether insured or held by trustees on a self-insured or mutual basis.

Finally, since the Government intend to consult, I should like to offer headline details of two possible schemes which have been devised by colleagues. I was myself an insurance broker up to the end of 1991. The schemes were devised to enhance private sector long-term healthcare provision. Inevitably there will be some overlapping on what has been said by my noble friend Lord Jenkin of Roding.

The first scheme recognises that there is not the money around to increase pension contributions in order to build up a healthcare fund. So it is suggested that the Inland Revenue should be asked to relax current requirements for approved occupational pension schemes and for individual personal pensions, so that on retirement individuals can select a lower immediate pension in return for a substantial supplementary increase in annual income in the event that they or their spouses need long-term care, either in nursing homes or in their own home. In addition, it might be possible to encourage individuals to make additional voluntary contributions towards such long-term healthcare, without further reduction of their retirement income. On this thought, pension funds or insurance companies that do not wish to provide this facility should be allowed to transfer funds to other approved providers.

However, for those who, for whatever reason, cannot turn part of a pension payment into medical provision, we have a different plan. We envisage an insurance policy taken out at retirement and paying up to a fixed limit in respect of defined long-term healthcare costs during the policyholder's lifetime. Monthly premiums would be fixed at the inception and they would be payable until healthcare costs are incurred. In the event that the policy paid sufficient claims to exhaust the limit, then we propose that the following government relief to the policy holder should be offered. Instead of having to fund further care until his or her capital had reduced to the £16,000 newly allowed by the Chancellor, exemptions would start at £16,000 plus the policy limit now exhausted. Thus, if I can afford to pay private medical premiums sufficient to buy a £15,000 policy and I later become so incapacitated that all the £15,000 is spent on authorised costs, then the point at which the Government would start supporting me with further costs is reached when my free available capital has been reduced to the £16,000 plus the £15,000 from the policy, or £31,000. In this way we will be encouraging people to take out insurances and will be reducing the burden of elderly healthcare costs to the Government. We believe that many people, particularly those anxious to pass on capital to relatives after death, would find that idea motivating.

I suggest that both proposals meet the Government's objective of encouraging the private sector to carry more of the burden of old age at a time when there are only 25 per cent. of people in work to support the needs of the other 75 per cent.

5 p.m.

Baroness Robson of Kiddington

My Lords, I, too, thank the noble Lord, Lord Dean of Harptree, for introducing this debate. As the noble Lord said in his introduction, this subject is vast. It covers almost every area of our daily lives. The contributions today covered various aspects of the problem. The majority dealt with pensions; therefore I do not intend to refer to them. I want to comment briefly on the kind of services that exist for the elderly in our society and on where I feel improvements could be made.

As the noble Baroness, Lady Elles, stated, we can be absolutely certain that most elderly people would like to remain in their own home for as long as it is physically possible. It is interesting to note the fourth point in the Summary of Conclusions and Recommendations of the first report of the Health Committee; namely, the Department of Health and local authorities are urged to, ensure that preventative services remain a core responsibility of both health authorities and social services departments".

It is generally agreed that in all areas to do with health, prevention is better than cure. Much can be done to prevent an elderly person becoming dependent.

It is worth while looking at the submission to the Health Committee of the British Geriatrics Society. It suggests that savings of up £10 million in respect of each average group of 1,000 elderly people could be made if improved pre-admission assessment and more effective use of rehabilitation procedures were introduced. The society is of course supportive of the objectives of the 1990 community care legislation. It feels, however, that there have been inherent faults in the application of the Act; and also that, coupled with the NHS reforms, it has led to a reduction of available resources for rehabilitation within the NHS.

There is an urgent need to increase the effectiveness of pre-admission assessments, including specialist medical input. It is important to increase the facilities and the number of hospital beds for more specialist rehabilitation. In addition, it is important to increase the involvement of general practitioners and primary care teams in multi-disciplinary assessment.

Nurses and physiotherapists have a great part to play in enabling the elderly to remain in their own home—if their services are called upon in time, before deterioration has set in. Improvements along these lines would save money; but far more important, they would create a happier old age for a large number in our population whose one desire, as was agreed by all who spoke today, is to stay in their own home if they can.

Informal carers are another group who should be involved in the assessment procedure. Many speakers referred to them. Without their co-operation, often at great personal sacrifice, the cost of care for the elderly would increase by an enormous sum of money. It is estimated that they save the health service and social services something like £32 billion a year. If we compare that with the fact that we spend only £9.1 billion on formal care in our society, it is impossible to underestimate the service that informal carers give to society.

The noble Baroness, Lady Seccombe, spoke about carers. It is obvious that in modern society the extent to which we can continue to rely on informal carers will inevitably diminish. That is not because they do not wish to be helpful any longer but because life has changed so enormously. Most women nowadays—women are usually the carers—work full-time and find it difficult to care for an ageing relative. Very often, those women are the main wage-earner in their family. It therefore becomes even more difficult for them to take on extra responsibility.

In addition, families have become much more segregated and split up. In the past people tended to live in the same community as the rest of the family. That is no longer the case. Children live on the other side of Britain, in Scotland or perhaps even abroad somewhere. Therefore there will not in future be the same number of people to provide the service that informal carers have given in the past. It is therefore of even greater importance that we concentrate on preventive care, thereby reducing the number of people in need of permanent support in old age.

In February 1995, the Department of Health issued guidelines on long-term care funding by the National Health Service. The guidelines had many good elements. For instance, health authorities were told to re-invest in long-term care services where they had withdrawn too far and reduced services below the danger level. Also individuals were given the right to appeal if they felt they had been unfairly denied access to the NHS. Those are very good points.

However, I also have regrets about omissions from the guidelines. Health authorities are still left to decide locally on the standard of care to which an individual is entitled under NHS funding. That creates a great lottery as to what sort of care a person may receive. It means a lack of continuity across the nation. Certain authorities will set far lower standards than others, and the chances of having care funded will be less. Where someone lives could make an enormous difference. I believe that entitlement should be based on national standards.

The department tells me that there cannot be national standards as such because every case is different. Nevertheless, there could be a set of standards against which each case could be considered. Decisions will have to be taken locally, but we should have a national set of standards.

Secondly, like many other noble Lords, I regret that there has been no proposal for separating the cost of nursing care from the cost of accommodation in nursing homes. The noble Lord, Lord Jenkin, raised that point. When free care is provided in both hospital and the community, it seems to me very unfair to charge for nursing care in a nursing home. After all, the National Health Service Act said that nursing care should be free at the time of need. So we regret that that has not happened.

Many noble Lords also raised the subject of the help given in the Budget to elderly people and pensioners. Of course, we are delighted that the threshold on the assets that a person can hold has been raised from £8,000 to £16,000.

I believe, as did the noble Lord, Lord Jenkin, that tax relief on insurance will not help those people who desperately need it. To start with, a large number of them will have insufficient income to be able to benefit from the tax relief. I am also nervous about the large number of women who will be disadvantaged. They cannot take advantage of tax reliefs, because, first, they live longer and, secondly, they have had a broken working career and thus often have lower earnings. So the tax relief will not be so relevant to them. Those are the kind of issues on which the Government should concentrate.

The right reverend Prelate was upset that the political parties would not look at proposals for taxation to help ease the problem. I hope that he will exclude from that members of my party who voted against the 1p reduction in income tax—the only party to do so yesterday in the other place.

5.12 p.m.

Baroness Jay of Paddington

My Lords, I too thank the noble Lord, Lord Dean of Harptree, for introducing the debate on this important subject this afternoon and particularly for choosing a subject which attracted the wise words of my noble friend Lord Longford.

I take this opportunity of wishing my noble friend a very happy 90th birthday—which he celebrated yesterday. I also thank him for the continuing support and help that he gives to younger and more inexperienced colleagues in this House. I have to say that sometimes he undermines the confidence of those younger and more inexperienced colleagues. He undermined mine this afternoon when he said that, as a mere assistant to William Beveridge, he would leave to me the consideration of the financial issues of long-term care. I am not sure that I accept that challenge. But I accept that this debate is very timely and enables us to look at both the new financial arrangements in the Budget which have been proposed for residential care and, in my view, the rather more significant report on long-term care from the Health Committee in another place, which was published in November, about three weeks ago.

That report raised broad questions about the boundaries between health and social care, to which several noble Lords referred this afternoon and which are at the heart of this policy debate. It has some precise and far-reaching recommendations for government action. I am a little surprised that it received so little attention in the debate this afternoon. I think I am right in saying that only the noble Baroness, Lady Robson, who has just spoken, looked at that report in any detail. I am sure that many noble Lords have read the report, and when I said "looked", I meant addressed in the course of this debate.

I should like to look first at the Budget proposals, which have received considerable attention this afternoon. It is perhaps worth emphasising, although the point has been made, that the proposals on care apply only to the minority of old people who need to be looked after in residential institutions. Let me quote from the Health Committee report and repeat the sentiments which have been widely expressed this afternoon: the emphasis should be on providing high quality services for people in their own homes, with institutional care—to quote the report—being "a last resort". Nevertheless, it would be churlish not to welcome the announcement that people who provide their own long-term care will be able to keep more of their savings. It is not surprising that the changes have been most welcomed by organisations such as the Alzheimer's Disease Society, which works energetically for a group of people who will probably have no alternative but to accept some kind of residential care as their condition deteriorates.

But even though the level of assets below which people are eligible for assistance with care costs has been doubled to £16,000, that still does not seem to me to be a very generous figure when seen in the context of the value of a house, which usually constitutes the main bulk of a pensioner's savings. As noble Lords will know, the average house is now worth £67,000 and annual average care costs can total £15,000. The voluntary agencies calculate that about 40,000 homes are being sold annually to pay for care costs. I am afraid it seems likely that the tragic accounts that Age Concern, Help the Aged and many others have given of elderly husbands or wives becoming homeless after selling the family home to help pay for a partner's care will continue.

Those are not usually rich or privileged people. Indeed, several local authorities have pointed out that some were the proud purchasers of their council houses a decade ago. I am bound to say that the cynics have now sometimes said that the slogan should have been, "Buy your council house now and pay for your care later".

The cost to local authorities must also be properly calculated before we become too enthusiastic about the impact of the rise in individual capital thresholds. The Department of Health has announced that it will give a £60 million special grant to local authorities to help them meet those costs. That is for the United Kingdom as a whole. But the local authority associations have already done their sums and calculated that the costs to the English local authorities alone, let alone those in the other parts of the United Kingdom, could be in the order of £70 million or £90 million in the financial year 1996–97.

That gap will have to be made up somehow. A letter in last Thursday's Financial Times from two authoritative actuaries pointed out that the change in asset limits may well add up to 14 per cent. to local authority costs and could lead eventually to higher council taxes. In the short term, it seems likely that local authorities will juggle their budgets, probably at the expense of the community care budgets—the budgets for domiciliary and daycare services—precisely undermining the policy objective (which was reinforced by all those who have spoken this afternoon and is supported by all those with professional responsibility in the field) of enabling people to stay in their own homes whenever that is possible.

If elderly people are to be enabled to be cared for in their own homes, the central issue, as the noble Lord, Lord Dean of Harptree, said when he opened the debate, becomes: who pays for what and who does what? The boundary between healthcare—healthcare being free at the point of need—and means-tested social care has become hopelessly blurred. Several noble Lords have given illustrations of that confusion. Local agencies have been allowed to "cost-shunt", so that many old people feel betrayed by a system which promised them free care from the cradle to the grave.

We are unlikely to unravel the complex issues involved in that question in this short debate. That has been reflected in many noble Lords' contributions. But there are some relevant facts of which we need to take account. As I said at the beginning, the Health Committee has made recommendations on which it would be helpful to hear the Minister's response this afternoon.

First, there is the perennial issue of NHS continuing care beds. In the past four years the number of such beds has dropped dramatically from 73,000 to 59,000. In theory, that should be a good sign, if there were appropriate care in the community. But the lack of domiciliary support and the fear of being means-tested for what people regard in common sense terms as health services provided in the community means many old people resist being discharged from hospital. There is also widespread evidence that their doctors are reluctant to discharge them, although they are not in need of acute medical attention. For example, today I was told that at the Lewisham Hospital in South London between 40 and 60 beds out of a total of 480 are what is described as "blocked" by patients awaiting discharge but for whom no alternative NHS care is available. The noble Lord, Lord Glenarthur, this afternoon drew attention to the specific problems at St. Mary's in West London. Almost exactly a year ago we discussed in this House the whole question of financing long-term care in a debate introduced on that occasion by my noble friend Lord Ashley. In that debate we on these Benches urged the Government to circulate clear instructions to all local health service purchasers and providers in regard to their responsibilities to provide continuing care. At that time a Department of Health draft circular was being reconsidered. It gave rise to fierce criticism when it was first issued and reappeared, as the noble Baroness, Lady Robson, told your Lordships, as a final, much-improved document, in February. But it still does not lay down national eligibility criteria for NHS care—a point emphasised by the noble Baroness, Lady Robson.

Ministers argue that individual needs must have pre-eminence over the attempt to draw up national standards. I am glad that the all-party Select Committee challenged that argument, noting in its report that the final Department of Health circular did call for consistency of local eligibility criteria. The committee went on to say, If it is not feasible to set national criteria because individual needs vary, then logically it cannot be feasible to set local criteria either, because individual needs will also vary in that locality".

I hope that the Minister will respond to that argument as set out in the debate in another place. The Select Committee went on to make positive recommendations in paragraph 11 of its final report where it said, on the grounds of equity, we believe that the nationally set framework should include the eligibility criteria for long-term care to define what the NHS, as a national"—

"national" is emphasized— service, will always provide and to set priorities for all other areas of long-term health care".

The committee went on to make another important recommendation at paragraph 14, where it stated, We also recommend that the DoH should introduce a national Long-Term Care Charter which specifies the minimum levels of provision that people can expect from health authorities, NHS trusts, GP fundholders and local authorities … In doing so we echo the call we made … for the development of a national Community Care Charter.

I hope that the Minister will be able to give us at least a preliminary response to those recommendations in his reply. Unless those recommendations are adopted, the overall picture of long-term care for the elderly in this country will continue to be patchy and will continue to be one of confusion and chance—a lottery in which what you receive depends on where you live and not on what you need.

In September this year Age Concern published a survey of the attitudes and anxieties of older people on long-term care. Frankly, it does not make comfortable reading. A large number of correspondents felt let down by the health services. One man sent a copy of a letter he had written to the Secretary of State for Health saying, you and your predecessors entered into a contract with me (and millions of others) 50 years ago to provide the necessary care and I have paid my full Natio,ial Insurance contribution since. Surely you cannot just opt out? Do you not have a legal as well as a moral obligation?

We all have a moral and a legal obligation. I urge the Government to try to allay the fears of elderly people by accepting and implementing the recommendations of the Health Select Committee in another place. Only if we are all confident that our access is based on our needs, not on where we live or on what we can afford, will we all, whatever age we may be today, have security of mind about long-term care.

5.25 p.m.

Lord Mackay of Ardbrecknish

My Lords, I am grateful to my noble friend Lord Dean of Harptree for raising this important subject and allowing us to debate it this afternoon. I am much more grateful that the debate this afternoon is not going on quite as long as last Wednesday afternoon's debate and the Statements managed to do—long after everybody had programmed their departure. Indeed, some noble Lords had to leave before the end simply because they had added five hours to three o'clock and logically reached eight o'clock, but had not allowed for two Statements. We have not had that problem this afternoon and I am grateful for that.

This has been a thoughtful debate. I am delighted to join my colleagues in congratulating the noble Earl, Lord Longford, on his 90th birthday. As I believe I said the last time he spoke in a debate in which I summed up, I find his speeches amazing to listen to, partly because of his remembrance of events in his long life and his ability to do it without reading copious notes, and partly because he makes his points both humorously and tellingly. Today was no exception. I hope to be here, preferably at this Dispatch Box, to congratulate him on his 100th birthday.

The Earl of Longford

My Lords, I am grateful to the Minister. But I must not take credit for something that is not a virtue. I am now partially sighted and I am a patron of the Partially Sighted Society, so I cannot use notes.

Lord Mackay of Ardbrecknish

My Lords, the noble Earl reminds me of something that perhaps I should not tell your Lordships. One of my colleagues, the Secretary of State for Foreign and Commonwealth Affairs, has never used notes in his speeches and became extremely upset when those interesting devices—teleprompters—came on the scene. His colleagues started to make speeches which appeared to be without notes when in fact they were using the teleprompter. He tried to find a way round that to ensure that his point was made, and the teleprompters are always removed when he speaks. I therefore appreciate the noble Earl's intervention.

One of the important points made by the noble Earl, which I wrote down and underlined, was "respectful help". He made it in his usual pleasant and jocular way, but it was a telling point. Bluntly put—he did not say. this—it is the difference between not helping at all and over-helping; that is, assuming that everybody over 65 is decrepit and needs all the help everybody else can give them. Although I have not reached the age of 65, I have friends who have and they do not seem to require or even wish my help, except in the case of two of them when it comes to netting the salmon that they have managed to catch (I want their help the other way round on the rare occasion that that happens).

The noble Earl made that point and it is well worth emphasising in my summing-up. The right reverend Prelate the Bishop of Worcester and my noble friend Lady Elles spoke of the need to make people feel that they belong and are part of the community; the need to talk with them and involve them in activities. That is vitally important, but it is not something which the Government can do. It is something we should all be doing and encouraging others to do.

My noble friend Lady Seccombe and others spoke of old age as being a state of mind and mentioned how her mother discussed her "elderly" friends. It is not long since my wife's aunt, who I believe is 92, baked scones and organised tea parties for the "old folk", as she called them. The fact was that all the "old folk" were younger than she. I suspect that that attitude is part of the reason she is still with us at 92.

Either the noble Lord, Lord Butterfield, or the right reverend Prelate the Bishop of Worcester said that we should practise for old age when we are younger by sensible dieting, taking exercise and taking part in activities. No one mentioned this, but it is sad when someone retires and finds that he has no other interests outside the job which he has left. That is perhaps where practice for retirement can help.

My noble friend Lord Jenkin of Roding and my noble friend Lord Chelmsford underlined the need for good pension provision. Not much was said in our debate about pensions and that is perhaps because—I see the noble Baroness, Lady Hollis, in her place—we exhausted that subject last Session when we dealt with the Pensions Bill. However, I very much hope that the Pensions Act will help to underline the need for good pension provision. I say to my noble friends that we are undertaking a large campaign of information to the world at large and targeting it at younger people on the back of the Pensions Act to bring to their attention the possibilities that are there and the importance of starting to make pension provision at a young age.

The main part of this debate is perhaps about the boundary between healthcare and social and residential care. It may help if I say a few words about the history of these events. Ever since the creation of the welfare state in 1948 there has been a division in responsibility between the National Health Service on the one hand and local authority central services on the other for meeting the needs of people who require long-term support. Some people need the medical and nursing expertise and the specialist care that only the National Health Service can provide; others need support and help with everyday activities, which, depending on the extent of the person's incapacity, can be provided either in a residential setting or in the person's own home.

This distinction, ever since 1948, has marked the division between care which is free at the point of delivery under the NHS, and social services care, for which local authorities may, and regularly do, seek contributions towards the cost from people who can afford it. It is hardly surprising that people are sensitive about this boundary between "health" and "social" care; but it should, I think, be appreciated that it is not anything new and is a recognised feature of our system. While it is sometimes difficult to define, it has been recognised by those who are responsible for planning, purchasing and delivering care. It has been recognised by governments of both parties since 1948 and by other commentators, including, notably—if I may say this to the noble Baroness, Lady Jay of Paddington—last year, the Borrie Commission on Social Justice. It said: Although the dividing lines between treatment and care can be difficult to agree, the distinction offers the basis for a clearer approach to funding. Given the many demands on resources, however, it is not feasible to extend the founding principle of the NHS, that treatment should be free at the point of use, to the comprehensive provision of care and help with everyday activities".

We have had a reasonably non-party political debate so I do not want to ask the noble Baroness whether that remains the position of the party opposite and it has accepted what the Borne Commission has said or whether it is part of thinking the unthinkable on which Mr. Smith and his colleagues have set out. But that is what the Borrie Commission said. I believe that most, if not all, noble Lords will agree that there is a distinction and that it is a distinction which, whether we like it or not, we have to maintain.

The boundary is not a static feature but shifts over time, especially with the continual advances in medical science and social changes. In 1948, people were consigned to indefinite periods in hospital who would now receive rehabilitation and be discharged home to carry on with their lives, with perhaps some support from social services. My noble friend Lady Platt of Writtle underlined that point when she mentioned the film she had watched which illustrated the point that in years past people were taken into residential hospital care and were left there for many years. They then became so institutionalised that they could not possibly have lived on their own even when the geriatricians and others got round to thinking in a different frame of mind and tried to see whether they could rehabilitate them into the community. I am happy to say that those days are past and I am sure that we are all determined, whatever our party, that they should not return. It is a matter for celebration that the NHS can do a great deal more now than it used to be able to do to help people to remain in their own homes. I shall return to that issue in a moment because a number of speakers made some very interesting points about it.

There have been great improvements in treatments to remedy conditions which a few years ago would have been crippling and which meant that it would have been impossible for people to stay at home. Better anaesthetic techniques mean that operations can be carried out on people at quite advanced ages, as we all saw just a couple of weeks ago when the Queen Mother underwent her operation. We were all delighted to see her coming out of hospital and showing everyone else—all the. other old folk, just like my old aunt—that, if one has some spirit about, age can be put aside. That is a good example to everyone of what can be done. Indeed, I suspect that a few of your Lordships are going around with artificial hips and various other things. The noble Lord, Lord Butterfield, described to us how he has been helped by some of his medical colleagues with the little pump inside his chest.

So it is hardly surprising if, as a result of all these medical advances, people who would once have needed hospital-based care can now manage at home, perhaps with some support; or, if they are too frail for that to be a realistic option, can enter residential or nursing home care in a comfortable, homely environment. The 1980s have seen a great expansion in the independent residential and nursing home sector as the availability of social security money made it easier for frail elderly people to enter a residential or nursing home. Beds for people 65 and over in private nursing homes increased by more than 500 per cent. between 1983 and 1993.

As I said a moment ago, hospitals should not be, and should never have been, people's homes. Residential or nursing home care can provide a homely and comfortable environment superior to the standards obtaining in some of the old and totally unsuitable "geriatric wards" which the NHS had, especially during the 1980s.

The noble Lord, Lord Butterfield, and my noble friend Lord Jenkin underlined the need for research into matters which the noble Lord, Lord Butterfield, described so well for the non-scientists among us as brain failure. One speaker mentioned that the number of consultant geriatricians has increased by about 81 per cent. since 1979. On the subject of research, perhaps I may say to the noble Lord, Lord Butterfield, that the Department of Health is developing a mental health research strategy which will include research into dementia. Almost all the speakers in the debate talked about the need for good assessment and rehabilitation, the noble Baroness, Lady Robson of Kiddington, being one of the last ones to do so. I agree with her on that, as do the Government.

I turn to the community care reforms of April 1993. They continued and strengthened the drive away from institutional care and the development of community and domiciliary based services. We have provided generous funding for this work. Local authorities are responsible for assessing needs for residential and nursing home care and for providing the necessary financial assistance, with the resources we have allocated to match these new responsibilities. Over all, in 1995–96 local authorities received an extra £1.8 billion for community care. By the end of 1996–97 local authorities will have been given an additional £2.2 billion—a considerable injection of resources at a time of considerable budgetary restraint. We plan to inject a further £350 million in 1998–99, demonstrating our long-term commitment to the success of community care. By the end of that financial year more than £2.9 billion extra will have been put into community care.

Elderly and vulnerable people are now being offered more appropriate support to enable them to stay in their homes wherever possible, and are getting more choice, better support and services tailored to their individual needs. Domiciliary services are on the increase. During 1994 local authorities provided 24 per cent. more home help or home care contact hours than in 1993, and day centre places rose by 19 per cent.

Perhaps I may turn to the guidance on NHS responsibility for meeting continuing care needs, mentioned by a number of speakers. The noble Baroness, Lady Jay, certainly mentioned it, as did the noble Baroness, Lady Robson. The community care reforms have proved very successful in promoting and emphasising non-institutional forms of care. However, it is true that the role of the NHS in providing continuing care for those with greater dependency does require clarification. In February of this year the Department of Health issued some very important guidance to the NHS and to local authorities on the responsibilities of the NHS for meeting continuing healthcare needs. I hope that what I am going to say on this subject will go some way towards answering the questions posed by my noble friend Lord Dean of Harptree and the BMA Alzheimer's Disease Society in its submissions to him.

First, this guidance confirms and clarifies the responsibilities of the NHS for meeting a range of continuing healthcare needs, including the capacity to secure continuing in-patient care, whether in an NHS hospital or funded by the NHS in an independent sector facility. Secondly, it requires authorities to take action to fill any significant gaps in their current services, in their area of course. It aims to achieve greater consistency across the country in the provision of continuing health care by a national framework, which sets out what the NHS should be doing to meet continuing healthcare needs. This is probably as much as has ever been said in one place about the scope of the NHS responsibilities in this area.

The framework gives a strong steer on when people should receive NHS continuing in-patient care; for example, if the level or nature of their condition requires on-going and regular supervision from specialist doctors or nurses, or if their condition is very unpredictable. While individual health authorities, doctors and nurses need some freedom to interpret this framework in the light of local circumstances, we are expecting all health authorities to reflect these core conditions in their eligibility criteria.

The guidance also focuses on the need to improve arrangements for hospital discharge of people who have continuing health or social care needs. I believe that that was a point made by my noble friend Lord Glenarthur. It ensures also that there will be a greater openness about continuing healthcare services. Health authorities' policies and criteria must be open for consultation locally with all groups with an interest, including in particular local authorities with whom the policies and criteria should be agreed, and with patients' representatives. The final policies and criteria are to be published in community care plans.

My noble friend Lord Jenkin of Roding and the noble Lord, Lord Butterfield, talked about the range of services provided by the NHS. I believe that my noble friend described it as from the medicine of old age to the medicine of health care; the one being more appropriate to care outside hospital and the other in hospital. A very important feature of the work we are doing on continuing healthcare is looking at the range of services which we wish to see developed. While in-patient beds are a key part of an authority's pattern of service, we are stressing that they must make plans for rehabilitation, recovery after illness, respite care, palliative care for people who are terminally ill and specialist services to people in residential or nursing homes, community health services and specialist transport. Hospital discharge arrangements are to be given high priority to ensure that all the necessary services are in place. Overall, the focus is on getting people back into the community wherever possible and on making placements based on proper assessment, and consultation with the patient and his or her family. We do not want to see a return to the old and outdated models of care such as the old-style geriatric wards.

One of the real problems faced by many parts of the health service has been called, when I was the Health Minister in Scotland, "blocked beds". My noble friend who succeeded me as Health Minister mentioned this problem, which is nationwide. We very much hope that these kinds of ideas and guidance will help reduce, if not eliminate, that problem.

The noble Baroness, Lady Robson, and, I believe, the noble Baroness, Lady Jay, suggested to me that we should have used the opportunity presented by the issue of this guidance to impose national criteria for continuing healthcare services. I hope I have outlined that we are aiming for broad consistency. I believe that it would not be either feasible or desirable to require authorities to provide precisely the same patterns of continuing care services. Existing services vary considerably depending on the facilities which are available locally. In some areas services have been centred around old long-stay hospitals, while in others such a facility has never existed. In some areas the independent sector is well developed and in others it is less strong.

Finally, health authorities and local authorities need to have the flexibility to agree locally the precise boundary between their respective responsibilities, so that they can work together to meet the needs in as seamless a manner as possible. Detailed national prescriptions of exactly what should be provided by whom may sound attractive, but we believe that it would be unlikely to be helpful in reality. We are committed to making sure—

Baroness Jay of Paddington

My Lords, I thank the Minister for giving way. Does what he has just said, in response to my remarks and those of the noble Baroness, Lady Robson, indicate that the Government will reject the recommendation of the Select Committee on Health of another place which called for that?

Lord Mackay of Ardbrecknish

My Lords, I believe that the noble Baroness knows that we do not normally say how we are going to respond to the select committee before we have done so. I am not going to be drawn down that road. I am trying to outline, in as fairly an open and straightforward way as I normally try to do, my response to the points made by the two noble Baronesses. I hope that she will not ask me to go too much further. That is our thinking at the moment, but we have to look at the whole report from the select committee before we give our considered view.

We are committed to making sure that this guidance is put into practice. I believe that that is demonstrated by the fact that implementation is one of the six key priorities for the NHS in 1996–97. The NHS Executive is making sure that the requirements of the guidance are fully met, and will be carrying out further monitoring from April next year as eligibility criteria for continuing healthcare services are put into operation.

The work the Department of Health is doing to implement the guidance on continuing health care is one strand of our action to deal with the problems associated with long-term care, which were raised by every noble Lord and all the noble Baronesses who have spoken in this debate.

I turn now to the position of people who need long-term care in a residential setting, but who do not need the specialist care the NHS provides. There have been concerns expressed by and on behalf of individuals who felt that the rules on charging for such care have operated unfairly. The Government have listened sympathetically to those views. One such concern was expressed by many of your Lordships during the passage of the Pensions Bill. That was that local authorities were not using their discretionary powers to ensure that spouses of people who entered residential care could receive part of an occupational pension paid to the resident. As a result, earlier this year we announced that from April 1996 local authorities will be able to take into account only one-half of a married resident's occupational pension, so that the remainder may be used to support a spouse still living at home. That, I believe, overcomes the fears put to me rather graphically in your Lordships' House—I believe by the noble Baroness, Lady Hollis of Heigham, with a turn of phrase for which she is noted—that for a spouse left at home it would be better if the husband had died leaving her with her' 50 per cent. widow's pension rather than go into a home and have it all taken away. I hope that we have responded positively to that.

As your Lordships know, we have now decided to increase the current lower and upper capital limits in the local authority charging system for residential care and nursing homes and for income support payable to people in homes. Currently, as your Lordships know, the lower limit is £3,000 and any capital up to that level is ignored. The current upper limit is £8,000 and anyone in residential care who has capital above that level will not receive any help with costs. Between £3,000 and £8,000 there is a sliding scale of tariff income taken into account.

My right honourable friend the Chancellor said in his Budget speech that the current limits are far too low and that we want to help people who have saved and worked all their lives. The lower limit will be more than trebled from £3,000 to £10,000 and the upper limit doubled from £8,000 to £16,000. These changes will take place by next April. I am pleased that we have been able to provide this extra help for people in residential care and nursing homes. It is a much more generous treatment of capital than other aspects of the income support system and is good news for the elderly and other vulnerable people who have had to make significant contributions out of very limited capital for care home charges. I do not want to go into the arguments in favour of having these distinctions and some degree of charging. I believe that, as I said at the beginning of my speech, governments since 1948 have accepted this dividing line. Indeed, the Borrie Report, commissioned by the party opposite, accepted it, which suggests that it is something which has fairly wide acceptance.

This is a difficult issue, but I do not think that people who are reasonably well off can look to other people who are not well off to help them, through their taxes, to pay for residential care simply in order to protect their money and to allow them to pass it on. That is not an easy thing to say, but it is one of the hard issues that those of us who have to make difficult political decisions simply have to face. We decided to make those changes and the changes announced earlier this year to the treatment of occupational pensions after listening to the real concerns of elderly people. I very much hope that what we have done will be as widely welcomed outside the House as it has been welcomed in the House this afternoon.

We hear a lot about the potential impact—some would say the "threat", although I do not agree with that—of the increasing number of older people in our society. As my noble friend Lord Dean said when introducing the debate, it is true that over the next 20 years there is projected to be a 20 per cent. increase in the number of people aged 75 and over, and a 44 per cent. increase in the number over 85. That is where we find the big recruitment group for residential care. However, we should be careful not to assume that older age necessarily brings dependency and disability. Many people remain fit and active into their eighties and nineties or even beyond and this trend seems likely to continue in the light of progress in medical and pharmaceutical science, preventive measures and health education. The Department of Health is looking carefully at the results of research into healthy active life expectancy—the extent to which extra years of life are, or can be, free of disability. An expert group has been set up to consider this important question.

The Government are doing everything possible to promote good health. I refer, for example, to the Health of the Nation. We are trying to find ways to persuade people to change their lifestyles in order to reduce the incidence of strokes, heart disease, cancers, mental illness and accidents, all of which are relevant to the good health of older people. However, as the noble Lord, Lord Butterfield, said, the biology of the human being is such that disabling conditions increase with age. Despite all the cleverness of medical science, long-term care will be needed for the foreseeable future for a significant number of elderly people.

I have mentioned the imminent changes to the rules for treatment of income from occupational pensions and the substantial increases to the capital limits for people who enter residential care. That is aimed at the short term, but we need to go beyond and look at the long-term position. I have already spoken about the challenge of demographic changes.

I should like to round off my contribution—

Noble Lords

Hear, hear!

Lord Mackay of Ardbrecknish

Thank you very much—by looking into the future a little. The Chancellor announced in another place a range of proposals to encourage people to make provision for long-term care. The first is to exempt from tax the benefits from a range of insurance policies which provide for long-term care. This is, of course, on top of the recent decision to exempt from VAT certain forms of care provided in someone's own home. I was delighted with the welcome that those moves received from those of your Lordships who mentioned them today.

Secondly, in consultation with the financial services industry, we will be studying the experience of partnership schemes in the United States. My honourable friend, Oliver Heald, the Parliamentary Under-Secretary, recently returned from a fact finding mission to look at schemes in New York and Connecticut. The essence of the schemes is that individuals who plan ahead to meet a proportion of long-term care costs themselves are able to retain some of their assets above the £16,000 capital threshold. My noble friend Lord Chelmsford suggested such a scheme, without mentioning Connecticut.

Thirdly, in consultation with pensions representative bodies we shall be looking at the possibility of changing the tax rules to extend to members of occupational pension schemes the option to take a variable pension. That could provide a larger pension in later years when people are more likely to need long-term care in exchange for a smaller pension earlier on. My noble friends Lord Chelmsford and Lord Jenkin of Roding mentioned that and pointed out that the Inland Revenue rules may require to be changed.

I hope that I have not gone on for too long, but I believe that we have had an important debate and that it was worth saying a few things which needed to be said to illustrate the Government's position. I am sure that many of our proposals are accepted by all noble Lords, but I know that there is some concern about certain areas in which the Government have had to take serious decisions about the way in which we should move in the future. I believe that we have made our position clear and that, for a variety of reasons which are both medical and social, we are now giving our old folk a very much better standard of living and way of life than was ever the case in the past. I very much hope that we can continue to do that. I am grateful to my noble friend Lord Dean, and to all noble Lords who have spoken, for giving us the opportunity to have this important discussion today.

5.55 p.m.

Lord Dean of Harptree

My Lords, I should like to thank all noble Lords who have taken part in this interesting and constructive debate. It has been greatly enriched by the deep knowledge and experience of all those who have spoken. My only regret is that we have had very few contributions from the Back Benches of the official Opposition where I am sure that there is great knowledge and interest in the subject.

I am particularly grateful to my noble friend Lord Mackay of Ardbrecknish for listening to all the speeches throughout the debate and for his usual courtesy in answering all the points that have been made with considerable thoroughness, laced with his special brand of Scottish humour. I am sure that your Lordships will want to return to this important subject at a later stage, but in the meantime I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.