One of the characteristics of life is that we all want to live as long as possible and to a ripe old age. However, I wonder whether everybody looks forward to his old age with the same equanimity. Some people, as they get older, are less able to look after themselves and finish up in what is called, in shorthand, part III accommodation. This is often regarded as accommodation where once people have gone in they never come out on their own two feet. Happily, today more and more people are able to live longer and sustain themselves in a much more healthy state than in the past. Consequently, not only are people in part III accommodation in there merely because they are seeing out their last days, but they can and should be able to enjoy themselves in their twilight years, although they are old, ill and frail.
My Adjournment debate was prompted when I had the privilege of visiting some part III accommodation in my constituency last November, on the occasion of the 100th birthday of one of the residents who, I am pleased to say, still enjoys a long daily walk and is still able to have a good and lucid conversation with all people who visit that establishment. I was delighted to see so many males in that accommodation. I am accustomed to finding the ladies outnumbering us by about 10:1.
This gentleman assailed me on one particular point, which I felt bound then, and I am delighted for the further opportunity now, to bring to general attention. It is that people in part III accommodation are forced into a form of pocket money penury because of the rules that dictate how much they are allowed to spend while resident in the accommodation. The amount of money is so small that it is not sufficient to allow the ambulant but old people in part III accommodation to go out, as they have done throughout their lives, at night, round to their local pub and sit there and enjoy a pint, and smoke their pipe and perhaps tell a few tales of what it was like when they were young.
It is odd that the total amount of money that the people who are resident in part III accommodation are allowed is £7·75 a week, unless they have worked hard all their lives and have an occupational pension to supplement it. They may have a war pension or an occupational injuries pension. If they have a pension that they have earned while they have been working, all of it except for £4 is taken from them, and they are allowed to supplement their £7·75 with the £4. If they have not earned that sort of pension, they are stuck on the £7·75 limit.
When the Minister replies, I should like her to support me in saying that that amount of their own money, which they have saved and worked for all their lives, should not be confiscated in that manner and that people in part III accommodation should be allowed sufficient to meet simple needs. I doubt whether, if they were given total licence, they would want to drink three, four or five pints of beer, to smoke two pipes at once or that the ladies would want to put on new make-up six or seven times a day. However, that is the limit that they are now allowed to spend.
I repeat that those old ladies and gentlemen are not prisoners. They have not been sent to part III accommodation because they have committed a crime, unless becoming old is regarded as a crime in itself. They are there because they need to be looked after. It is not unusual to find, among partners, who have lived together for many years and shared the household duties and chores that, when one passes on, the other one is incapable, of sustaining himself or herself properly when alone. Quite rightly, they are admitted to part III accommodation. However, when they are there they must not, and should not, feel that they have been sent there as if to serve out a sentence. They should not have their money reduced to the extent that they do not have sufficient for a modest extra standard of living in their latter days.
It would not seem unreasonable for the Government to review the amount of clawback so that the residual moneys that are left to the old people will enable them, if they wish, to buy a drink for someone else in the pub at night when they go out, or to buy another person a cup of tea at the café round the corner when they go out for a walk during the day. It does not seem unreasonable that that should be reviewed.
I put that point to the Ministry after my visit to the old people's home last November. I received a reply in February. I do not know whether it was hoped that my 100-year-old would have passed on by then, but I assure everybody that he is still hale and hearty and going out for a walk every day. I do not need to remind my colleagues and others who have followed these matters that one of my constituents will be going to New York, via Concorde, in August for her 110th birthday.
If people can live that long and enjoy life, why, just because they have had to go in to part III accommodation, should they be regarded as second class and inferior? The pocket-money syndrome is distasteful and a further aspect of this issue which requires urgent consideration and action. Not only are those people penalised because they have worked and earned their own pension, or served in the forces and earned their own war pension, but if they have owned their own home and followed the Conservative party philosophy of thrift they are penalised over and again.
If such people have assets of £1,200 or more, which include their house which may still be unsold, they are penalised by having a notional return on their capital calculated at the rate of 25p per £50 per week. That works out at 26 per cent. Any usurer who charged 26 per cent. on capital would quickly find himself in hot water with the press and with public opinion. Yet that is what we charge people who have worked, saved and bought their home when they go into part III accommodation.
The residual assets may be a modest £15,000. We are talking not about a grand house but the sort of house that many of my constituents live in. In practice, a house valued at £15,000 would be reduced in the first year by £3,600, in the second year by £2,600, in the third year by £2,000 and so on until no value remains. What is the point of encouraging people to become home owners, to live a family life and have something to pass on, if all their savings are likely to be swallowed up in their latter years simply because they become old and frail?
Every Government since part III accommodation was introduced have known about this position and every Government have tut-tutted and said, "We should do something about it, but, oh dear, what?" When the disregard figure is £1 from an occupational pension and everything else goes towards the cost of being kept, the position requires review. The majority who have done nothing for themselves and, equally, find themselves in part III accommodation are sustained in full by the state. The number of those who are penalised in this way is small. They are a minority who seldom grumble or have their legitimate grievances aired sufficiently or brought to light.
I noted two specific points in the letter of reply from my hon. Friend the Minister in February. First, the Government have set up a joint working party. As we all know, that is shorthand for saying, "This is a hell of a problem, so we have kicked it into touch and, having done so, we hope to God that no one will ask us to find the ball." The answer I am given is that the Government hope to have some sort of answer to harmonise fiscal support and people in all sorts of residential care in the spring of 1987.
The working party first met in March 1986. I cannot understand how grown men and women, presumably with some intelligence because they have been put on the working party, must take so long to reach a simple conclusion about whether £1 is a reasonable figure in this day and age. I do not know of any law which forbids an interim report or prevents the Government from introducing the recommendations of an interim report. But I know that this matter leaves a sour taste in my mouth. Some of these elderly people, for no reason, are finding that all they have lived and worked for is being eroded, while those who have not bothered to look after themselves, to save, to enter into a pension scheme or take out some personal pension plan and who share the same accommodation are in a different position.
It is equally difficult to understand why the Government have different figures for people in part III accommodation provided by local authorities and for those who live in private residential homes in the private sector. Why should somebody in the private sector be allowed more pocket money than somebody who is not? If they go out together and have a drink, the landlord does not say, "I will charge you more and you less." He charges the same amount of money.
Secondly, I was rather disturbed—indeed, offended—by one aspect of the communication that I received, which says:
But even if the discretion is not exercised"—
that is a discretion for the local authority to supplement the personal allowance out of the rates—
there is nothing to prevent residents from supplementing their allowance from any capital they may possess.
I read that as meaning that if I am old the Government are saying that I may spend my money if I so wish. I hope to goodness that I am entitled to spend my own money. I should like to think that everybody is entitled to spend his own money if he so wishes. None of us should be hidebound by what was introduced in 1948. That was something to be euphoric about in the welfare days of 40 years ago, but it is time now for a review. It is not a time for the Government to hide behind working parties. It is time to recognise that the cost of living has risen considerably over 40 years. To suggest that we still do not make any special recognition of those who enjoy war
pensions—in which I must declare an interest—is an insult to those who have obtained a war pension as a consequence of their service to their country.
The eyes in the House tonight may not be many, but the ears of the world will be listening for the Government to say that they have taken on board this anomaly; that they recognise the injustice and unfairness of the present situation; that to grow old is not a crime and to save money to spend in old age should not be something for which we should be penalised; that in the end there will be equal treatment of all people, and if one has saved money one will not suffer consequently.
Information that I have received suggests that the major weakness in the existing scheme is that the person who is in the know can divest himself of the greater part of his fortune, and will hence be obliged to pay only the minimum. That is not the proper way of going about things. I shall listen with interest to hear how the Government will tackle this problem.
I should like to congratulate my hon. Friend the Member for Langbaurgh (Mr. Holt) on his success in the ballot. I know how much he cares for the welfare of his constituents, as has been shown by his efforts in the debate.
As my hon. Friend rightly says, he wrote to us on 12 November. I am delighted to hear that his constituent is still in good health. Indeed, his constituent will have benefited from today's Budget, with the increase in tax allowances for the over-80s, and the excise duty on his favourite tipple remaining unchanged. Indeed, one suspects that my hon. Friend's constituents' children will have benefited from the increase in tax allowances for the over-80s as well. We are glad about that.
The overall aim of our community care policy is to enable elderly people to remain in the community, preferably in their own homes, for as long as possible. That is what they want and what those who are responsible for their care think is best for them. However, there will always be some people who are unable to live independently, even with help, and for them residential care in an elderly persons' home may be the only alternative.
Local authorities are responsible for providing residential care for any elderly person who, because of age, frailty or any other circumstance, is assessed as being in need of such care. The financial circumstances of the individual therefore do not come into it.
The number of homes and places provided by an authority is a matter for the authority. The number of people now resident in homes for the elderly who are aged 65 years or over has been rising quite dramatically. The provisional figures for 1986 suggest that the total has topped 200,000 for the first time, about 101,000 being in local authority part III homes, about 25,000 in voluntary homes and about 75,000 in private homes.
The provision of residential accommodation by local authorities was never intended to relieve people of responsibility for meeting the costs of their accommodation and upkeep, which they would have to bear if they were living in their own homes. It seems only reasonable that anyone who is able to make a substantial contribution towards the cost of his upkeep should do so. Successive Governments have supported this arrangement, which I am sure is right. Whether current arrangements for calculating how much someone should pay are fair is another matter. It is a number of years now since the details of the scheme were revised.
Local authorities are required to determine a "standard charge" for their accommodation, which should represent the full economic cost. The average cost of a part III place in England is about £120 per week, compared with the current board-and-lodging limit in private homes of £125 per week. If a resident is unable to pay the standard charge, the authority is obliged to assess the amount that he is able to pay and to charge at such lower rate accordingly subject to a prescribed minimum, which is currently £30·95 per week and which is to be increased to £31·60 from 6 April. The resident retains a prescribed minimum allowance for personal expenses, which is currently £7·75 and which will be increased to £7·90 from 6 April.
My hon. Friend has referred to the working party, and we are trying to devise a new charging and assessment system for part III accommodation that might take account of some of the difficulties that he has mentioned. A consultative document was issued early in 1984, and the response to its proposals could not be regarded as enthusiastic. Further action was deferred pending consideration of the use of public funds to support people in all types of residential care. That is what is currently in the hands of the joint central Government and local government working party, which is chaired by our official, Mrs. Joan Firth, and which is due to report shortly. It is not known how many residents pay at the prescribed minimum rate for their accommodation but we estimate that about 70 per cent. do so. About 20 per cent. pay a rate between the prescribed minimum and the standard charge and 5 per cent. pay the full charge.
My hon. Friend referred to disregards and picked up some of them, as I would expect, with his normal accuracy. A local authority's assessment involves a calculation of income and capital resources based on the method used until 1980 for assessing eligibility for supplementary benefit. The method is set out in part III of schedule 1 to the Supplementary Benefits Act 1976. Certain limited forms of income—for example, payments to holders of the Victoria Cross or George Cross—are disregarded in full, as well as, at the authority's discretion, other forms of income such as gallantry and service awards.
In addition, charitable and voluntary sums for a specific purpose, such as payments for holidays, can be disregarded. Other forms of income, such as war disablement pensions, are disregarded up to an aggregate limit of £4. This rule is in line with current supplementary benefit provision. Under the income support scheme, most forms of income will be taken into account in full. Additionally, there is a £4 disregard from any weekly earnings, but the number of residents affected by this is likely to be exceedingly small.
My hon. Friend is right to say that occupational pensions are now taken fully into account. They are no different from other basic forms of income, such as the state retirement pension, which has always been taken fully into account. For part III assessment purposes, the £1 disregard which was set in 1966 is still allowed.
When dealing with capital, my hon. Friend was right to say that the first £1,200 of a resident's capital is disregarded. The tariff income is assessed at 25p per week for each complete £50 of capital above that level. That means that the assessed ability to pay rises gradually and does not reach payment of the full cost of a place in a home until a substantial amount of capital—about £25,000 depending on other resources—is held.
It is recognised that residents will gradually use up their capital above £1,200 to pay towards their accommodation. Of all the concerns expressed about the part III charging arrangements, the treatment of capital has attracted the most criticism. That is principally because of the higher capital disregard—£3,000—that applies to supplementary benefit claimants. This has been represented to us as anomalous and unfair and it is one of the key issues that is being addressed by the working party to which I have referred.
The personal allowance is intended to enable residents to buy personal items such as toiletries, stationery, newspapers and other personal items. The prescribed minimum rate that has been set by successive Governments is about one fifth of the standard rate of retirement pension.
The hospital downrating of national insurance benefits reflects the fact that for long-term patients in hospital their board and lodging is provided free and their needs will normally be limited to the personal items such as I have mentioned. People in part III accommodation are essentially in no different position in that their accommodation and upkeep—if they were at home they would have to pay for themselves—is provided by the local authority. In the case of people in hospital and part III accommodation, it is not expected that the allowance should be spent on expensive items such as clothing and footwear, as those should be provided by the local authority or hospital. Of course, residents are free to choose to spend their allowance in this way if they wish.
The average age of permanent admission residents to part III accommodation is about 82 years. Many residents are unable to make much use of their personal allowance.
In many cases, that allowance simply accrues and eventually forms part of the resident's estate. One must consider whether an increase across the board would produce any major increase or improvement in welfare.
We accept that part III residents may occasionally find it difficult to meet the cost of outside social activities. That could be equally applied to anyone remaining in their home in the community on a low income. The personal allowance of people in private residential care—my hon. Friend drew attention to this — and who may be supported by supplementary benefit is £9·05. That is intended to cover any item of personal expenditure, but it includes clothing. That is the reason for the difference.
With regard to the particular interest of my hon. Friend's constituent, I checked up in the 1985 family expenditure survey and I discovered that in households with a couple or one pensioner living alone, the average expenditure on alcohol and tobacco was 5 per cent. of income—£5·80. That suggests that the £11·75 that my hon. Friend's constituent has been able to enjoy should cover at least the expenditure that one might expect if he were living at home. It is to be hoped that the gentleman's generosity and sociability is also recognised by those he meets and that they are able to buy him a round in return for those he buys.
My hon. Friend spoke movingly about the problems that can arise. I wonder how much resentment might be generated should any Government decide to ignore large amounts of capital income and whether those without such benefit, savings and foresight — and perhaps, without such fortune—might regard that as fair. The home costs the same to run whether the residents are wealthy or have nothing. Admission to part III homes is based on the need of that person for physical help and not his financial circumstances.
I hope that I have been able to answer a number of the queries raised by my hon. Friend. Many representations have been made to us on those matters. They are under consideration and we hope that we may see some improvement soon.