HL Deb 04 December 1997 vol 583 cc1502-9

4.41 p.m.

The Minister of State, Department of Health (Baroness Jay of Paddington)

My Lords, with the leave of the House, I should like to repeat a Statement made in another place by my right honourable friend the Secretary of State for Health. The Statement is as follows:

"As people approach old age, many become anxious about how they will be looked after, how much it will cost and who will pay. So, at the general election, we promised we would establish a Royal Commission to work out a fair system of funding long-term care for the elderly. Today, I can announce that the new Government are keeping another of their promises. The Queen has agreed to the setting up of the Royal Commission whose terms of reference will encompass the United Kingdom as a whole.

"It is to be chaired by Professor Sir Stewart Sutherland, Principal and Vice-Chancellor of Edinburgh University. I am confident he will bring to the commission the skills and experience necessary to ensure rapid and vigorous scrutiny of the issues involved and practical cost-effective proposals to deal with them. He will be joined by eleven other commissioners: Professor Dame June Clark, Professor of Community Nursing at the University of Swansea; Sir Nicholas Goodison, deputy chairman of the Lloyds TSB Group and former chairman of the Stock Exchange; Dr. Iona Heath, a GP in Kentish Town who represents the Royal College of General Practitioners on the British Geriatrics Society; Joel Joffe, a human rights lawyer, founder director and former deputy chairman of Allied Dunbar Assurance and former chairman of Oxfam; David Lipsey, political editor of the Economist and a public interest director on the Personal Investment Authority; Professor Mary Marshall, director of the dementia services centre at the University of Stirling; Claire Rayner, writer, broadcaster and president of the Patients' Association and a former nurse; Paula Ridley, the chair of the Liverpool Housing Action Trust; Professor Robert Stout, Professor of Geriatric Medicine at Queen's University, Belfast; Robin Wendt. the former secretary of the Association of County Councils and a former civil servant at the DHSS; and Len Woodley QC, a Recorder who chaired the Laudat Mental Health Act Inquiry.

"Briefly, the commission's terms of reference will be to examine the short and long-term options for a sustainable system of funding of long-term care for elderly people, both in their own homes and in other settings, and to recommend how, and in what circumstances, the cost of such care should be apportioned between public funds and individuals. I have placed the full terms of reference in the Library of the House.

"The commission will consider the implications of its recommendations for younger people who have long term care needs because of illness or disability and have regard to the Government's review of pensions. The Government want both sound and swift advice, so the commission has been asked to report within 12 months; it will therefore be different from previous Royal Commissions.

"This commission will be different from its predecessors in other ways, too. In the past, some Royal Commissions have included representatives of the pressure groups involved in the topics to be covered. This one does not. The commissioners are not supposed to be representatives. They are there to take a fresh look.

"However, pressure groups and representatives of users and carers should have their say. So the commission will establish a reference group of organisations to help gather views and receive advice. The chairman of the commission is today inviting a whole range of organisations to serve on this reference group. It will include charities and other groups involved in long-term care, the financial services sector, NHS, local government and other service providers together with representatives of the major religious faiths in the UK. By this means the commission will be able to draw on the most up-to-date experience of users and carers.

"The commissioners will also be making visits around the country to listen to other users and carers. They plan to be out and about so that they can really get the full flavour of the current concerns in different parts of the country.

"The task of this Royal Commission is neither simple nor easy but it is important. The present situation cannot go on much longer. People are entitled to security and dignity in their old age. So we must find a way to fund long-term care which is fair and affordable for both the individual and the taxpayer. With the independent advice of the Royal Commission, I hope we will be able to establish a consensus from which we can fashion a sustainable system of long-term care which will meet the needs of elderly people well into the new century.

My Lords, that concludes the Statement.

4.46 p.m.

Earl Howe

My Lords, I am most grateful to the Minister for repeating the Statement. The issue of long-term care and its funding is one which, for thousands of families up and down the country, has become an ever-present and personal reality. We on these Benches are in no doubt of its importance. If we look at the demographic position, older people represent the section of the community which is growing the fastest. The proportion of the population aged 85 and over has doubled in the past 25 years to 1.8 per cent. and it is expected to continue rising over the next 15 to 20 years. It is estimated that 5 per cent. of people between 75 and 85 years of age and over 20 per cent. of all those over 85 years of age will eventually require long-term residential care at a cost of £20,000 or even more, each year, for an average of three years.

For the state to fund that cost it is necessary for an individual to prove need on the basis of a means test, a principle which has applied ever since 1948. Many of us know the worry and sense of unfairness felt by elderly people who are sometimes obliged to sell their homes in order to pay for long-term care while those with no assets whatever and who have made no attempt to provide for their needs in retirement pay nothing and receive exactly the same care. We all understand those concerns. Before they were elected, the Government, I believe, criticised the means testing rules, but without a means test the cost to the public purse would be very considerable.

During the last Parliament the means test thresholds were changed substantially. The amount of an elderly person's capital assets, protected under the rules of means testing, was tripled. That was a positive step. But the sense of unfairness felt by many people did not go away. In May last year the previous government published a White Paper called A New Partnership for Care in Old Age which in essence proposed a partnership between government and the individual to encourage people to take out indemnity insurance or annuities to cover the possibility of their needing long-term care in old age, offering them in the process the incentive of having more of their assets protected in any means testing procedure. The proposal that we put forward represented an addition to the programme of care in the community, not a slice out of those programmes.

We felt that the benefit of this approach was that it would enable any amount of protection to be secured—any sum of cover, large or small—and could even be of benefit to those whose need of long-term care might, as it were, be just over the horizon and would not simply be applicable to those of younger years. The Community Care (Residential Charges) Bill, prepared by the last government, would have achieved those objectives.

One of my worries about a Royal Commission is that it will take a good many months to reach its conclusions. The Government will then need to take their time to consider those conclusions. The whole matter is one which in any case requires fairly extended lead times to achieve change on any appreciable scale. I hope that the Minister will be able to reassure us that the Royal Commission will be operating strictly to the 12-month timetable that she mentioned.

In the meantime, over and above that, will the Government consider the possibility of bringing back the Bill drafted by the previous government as a government Bill? The Minister may say that she does not wish to pre-empt the Royal Commission's findings. If she does, I would respectfully say that I do not see that as being a satisfactory answer to the many thousands of people who cannot wait for the Royal Commission to report, and for the Government to cogitate, produce a White Paper, and, in due course, publish a Bill.

The issues are clear and salient. The risk of an individual needing long-term care at some point in his or her lifetime is plainly an insurable risk. Do the Government accept that part of the solution, at least, must lie in private provision, perhaps through annuities or as a standard element in pension schemes? Do the Government agree that saving for long-term care is feasible for most people to undertake during a working lifetime? If the Government do agree, what is to stop them pursuing those ideas sooner rather than later, whatever the Royal Commission's conclusions turn out to be? This does not seem to be a matter of mutual exclusivity.

I wish to make a comment or two upon the Royal Commission itself. While, for the reasons I have explained, we on this side doubt whether a Royal Commission is the most appropriate route to take in the current circumstances, nevertheless we join the Government in warmly welcoming Professor Sir Stewart Sutherland to his new post as chairman. We have every confidence in his ability to look at these important matters thoroughly and dispassionately. He is well suited to the appointment. We wish him and his fellow commissioners well in the task ahead of them.

Will the Minister assure the House that Sir Stewart and his commission will examine all the options for schemes which might enable more people to bear the costs of their own care while, at the same time, protecting their assets from the means test along the lines that I have described? Will they look also at the comparative merits of private care and local authority-funded care and the need for a level playing field between the two when a local authority takes responsibility for funding a residential care place?

I repeat my good wishes to the commission. We await its report with considerable interest and anticipation.

Lord Taverne

My Lords, it is hard to find anything in the announcement to criticise. The commission has a wide remit. It has good names. It includes studying the question of long-term care for young people. It is to co-operate with other inquiries. I have just one question for the Minister. Will she assure us that it is not just the funding of long-term care at which the Royal Commission will look, but how that care is to be provided and the kind of care that will be most effective?

Baroness Jay of Paddington

My Lords, I am grateful to the noble Earl and the noble Lord for their welcome for the Royal Commission, and, in particular. the chairmanship and membership. I shall respond briefly to the noble Earl on how this matter is to be looked at in the context of earlier proposals, specifically the partnership proposals of the previous government. We made clear early on that we did not intend to go ahead with that scheme: in our view, it was a partial solution designed to help relatively few people. I have no doubt that that might be one of the elements thought to be worth considering by Sir Stewart and his colleagues. I imagine that it will come on to their agenda.

On the more general point as to whether the Royal Commission is, in a sense, kicking into touch some of the earlier proposals and acting merely as a delaying exercise to make it possible to postpone some of the choices and decisions between previous and current suggestions about social insurance and other possible ways of funding long-term care, I reinforce the point that the Royal Commission does not have the luxury of a leisurely timetable. It has a clear and practical remit and the requirement to report in about a year.

The Government have already said that they will respond quickly to the commission's findings and take its recommendations seriously. A prompt report from the commission will allow legislation within the lifetime of this Parliament should that be considered necessary. In response to both the noble Earl and the noble Lord, I reinforce that all is on the table. Various schemes have been proposed in the past by the previous government and other distinguished experts. Part of the remit involved in having these individual contributors to the discussion take a fresh look is to assess those proposals further, both in the context of the demographic needs to which the noble Earl referred and the Government's comprehensive spending review and pension review.

The point made by the noble Lord about the type of care as well as the financing of the care is important. It is a valuable point to re-emphasise. The commission will look at types of residential care, types of care through which people are supported in their own homes, and the kind of care that can be provided by a mixture of funding and within the context of individual contributions and state contributions. There is no pre-assumption about the nature of the care which will be provided. As I said when repeating the Statement, our primary concern is to ensure that people can expect both dignity and security as they get older.

4.56 p.m.

Lord Clark of Kempston

My Lords, I welcome the setting up of the Royal Commission, providing that it reports within 12 months, and the fact that the Minister said that long-term savings must be given every encouragement. Will she explain the logic behind raiding pension funds for the elderly by £5 billion a year, cancelling health care insurance for the elderly, and, finally, yesterday making TESSAs and PEPs less attractive than they were under the previous government?

Baroness Jay of Paddington

My Lords, I say, as the noble Lord would expect, that we have taken the position that those provisions which we have introduced are in the interests of the many and not the few. The ISA scheme which the Government have now proposed is designed to extend the ability to save to those people who we feel will be most vulnerable and in most need of protection as they get older.

Baroness Pitkeathley

My Lords, I too welcome the Statement. There are two main reasons. First, payment for long-term care, as everyone in your Lordships' House will be aware, is currently a mess. Secondly, it affects every man, woman, and indeed, child in this country. I welcome also the establishment of a reference group, particularly with its emphasis on consulting users and carers. Does my noble friend agree that it is vital that any proposal made for changes to funding for long-term care must command the support of the whole nation, as did the original proposals in the 1940s? I welcome the news that the commission will be out and about. Will my noble friend give an assurance that the commission's decisions and recommendations will also be put out to the widest possible consultation before final decisions are implemented?

Baroness Jay of Paddington

My Lords, I am grateful to my noble friend, especially because I know that the organisation which she leads (the Carers' National Association) has been approached to be part of the reference group, and, I believe, has accepted. That is a useful beginning towards establishing an authoritative group of people on the reference group. Of course the point she makes about the need to establish a consensus around whatever proposals are made is well taken.

My honourable friend, Mr. Boateng, the Minister with direct policy responsibility for this area in the Department of Health, has talked elegantly about the need to achieve consensus across the generations before any proposed plans are accepted. On the point of consultation, once the Royal Commission has reported, I am sure that there will be a period for consultation, but I am mindful of the points made by noble Lords about not building in enormous delay. There is, as always, a tension between consultation and action, but I am sure that that will be resolved.

Baroness Thomas of Walliswood

My Lords, obviously I have not had time to read the full document in the Library, so may I ask whether the terms of reference will enable the Royal Commission to look at the interface in terms of care between social services and the health service and, in particular, services such as physiotherapy which are available only to the health service and which can help to extend elderly people's physical ability to move? Will the Government also bear in mind the importance of preventive care, which has a wider role to play? Finally, will the wider target group include people from the Councils for Voluntary Service which have long experience of co-ordinating various agencies in order to solve problems?

Baroness Jay of Paddington

My Lords, I have the exact terms of reference in front of me. I realise that the noble Baroness has not had the opportunity to read them in the Library. The specific point about physiotherapy is not made, but I would feel that it is encompassed in the term which refers to looking at the strengths and weaknesses of the current arrangements. The one thing that is clear about the delivery of care in the community is the so-called "Berlin Wall" between health and social services. That could be demonstrated to be a weakness of the current arrangements to which I am sure attention will be drawn. With regard to the specific membership of the reference group, the organisation to which the noble Baroness referred does not appear in the list that I have before me, but that does not necessarily mean that it is not included. I believe that the list simply records those who have already been approached.

Lord Borrie

My Lords, when repeating the Statement, I noted the phrase—I believe that I quote it correctly—that the Royal Commission will "have regard to the Government's review of pensions". Does that mean that if the pensions review results in a compulsory element of contribution for the second pension, it will not be appropriate for people to be compulsorily required to contribute towards their possible need for long-term care in old age? If I may phrase the question slightly differently: do Her Majesty's Government agree that there are fewer arguments for compulsion for long-term care contributions because the risk of need for care is less obvious than the risk of need for a pension from the age of 60?

Baroness Jay of Paddington

My Lords, I suspect that my noble friend is asking me to pre-judge some of the intellectual discussions which will undoubtedly form the meat of Sir Stewart's inquiry. My noble friend has put his finger on an important point. At the moment all I can say is that we clearly understand the direct relationship between the Royal Commission and the pensions review. There are obvious links to ensure coherence between the different aspects of the reviews of government policy in terms of the pensions review, a wider look at the welfare state as a whole, and the Royal Commission. As a government we need to ensure that those different groups, all of which are considering the same problem but from slightly different angles, produce a coherent policy in the end.

Lord Swinfen

My Lords, will the Royal Commission consider the position of the dependants of the person who needs long-term care? So often, the cost of such care is so great that it puts the dependants into a serious and difficult financial position which can at times have detrimental effects on those dependants' health and, as a result, can cost the National Health Service a considerable amount of money.

Baroness Jay of Paddington

My Lords, that point is covered in the provisions which specifically relate to the interests of both carers and users. It is reflected in the inclusion of my noble friend Lady Pitkeathley in the reference group as a representative of the Carers' National Association. As the noble Lord rightly points out, those who are looking after the frail and elderly should be an important consideration. That point was reflected also in the comments of the noble Earl who referred to those people who have been compelled to sell their marital home when one partner enters long-term care. I am sure that that problem will be addressed and that the general issue which the noble Lord raises will be covered by the broad umbrella remit to look at the concerns of the carers as well as of the users of services.