Health and Social Care - Statement

– in the House of Lords at 11:39 am on 9th September 2021.

Alert me about debates like this

The following Statement was made in the House of Commons on Tuesday 7 September.

“Mr Speaker, with permission I will make a Statement on the Government’s plans for health and social care. Our National Health Service is the pride of our whole United Kingdom, and all the more so after it has been there for us during the worst pandemic in a century, treating almost half a million patients, administering more than 88 million vaccines and saving countless lives. The inevitable consequence of this necessary and extraordinary action is that Covid has placed massive pressures on our NHS. As we stayed at home to protect the NHS, thousands of people did not come forward for the treatment they needed. Like those who suffered from Covid, these are all people we know: your aunt who needs a new hip, your neighbour who has problems with their heart and needs a pacemaker, or your friend at work who thinks that they should get that lump or cough checked out. So we must now help the NHS to recover, to be able to provide this much needed care to our constituents and the people we love, and we must provide the funding to do so now.

We not only have to pay for the operations and treatments that people decided not to have during the pandemic; we need to pay good wages for the 50,000 nurses who will enable that treatment and who can help us to tackle waiting lists that could otherwise expand to 13 million over the next few years. We now need to go beyond the record funding we have already provided, and we need to go further than the 48 hospitals and 50 million more GP appointments that are already in our plan. So today we are beginning the biggest catch-up programme in NHS history, tackling the Covid backlogs by increasing hospital capacity to 110% and enabling 9 million more appointments, scans and operations. As a result, while waiting lists will get worse before they get better, the NHS will aim to be treating around 30% more elective patients by 2024-25 than it was before Covid.

We will also fix the long-term problems of health and social care that have been so cruelly exposed by Covid. The Labour Party certainly failed to tackle them. But having spent £407 billion or more to support lives and livelihoods throughout the pandemic—from furlough to vaccines—it would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it. It would be irresponsible to meet the costs of this permanent additional investment in health and social care from higher borrowing and higher debt.

So from next April we will create a new UK-wide 1.25% health and social care levy on earned income, hypothecated in law to health and social care, with dividends rates increasing by the same amount. This will raise almost £36 billion over the next three years, with money from the levy going directly to health and social care across the whole of our United Kingdom. This will not pay for pay awards for middle management; it will go straight to the front line at a time when we need to get more out of our health and social care system than ever before. It will enable radical innovation to improve the speed and quality of care, including better screening equipment to diagnose serious diseases such as cancer more quickly; designated surgical facilities so that non-urgent patients are no longer competing with A&E; faster GP access to specialists, so people do not have to wait months to see someone in hospital to find out whether something is wrong; and new digital technology so that doctors can monitor patients remotely in their homes.

We will do all this in a way that is right, reasonable and fair. Some will ask why we do not increase income tax or capital gains tax instead, but income tax is not paid by businesses, so the whole burden would fall on individuals, roughly doubling the amount that a basic rate taxpayer could expect to pay, and the total revenue from capital gains tax amounts to less than £9 billion this year. Instead, our new levy will share the cost between individuals and businesses, and everyone will contribute according to their means, including those above state pension age. So those who earn more will pay more, and because we are also increasing dividends tax rates, we will be asking better-off business owners and investors to make a fair contribution too. In fact, the highest-earning 14% will pay around half the revenues. No one earning less than £9,568 will pay a penny, and the majority of small businesses will be protected, with 40% of all businesses paying nothing at all.

Although Scotland, Wales and Northern Ireland have their own systems, we will direct money raised through the levy to their health and social care services. In total, Scotland, Wales and Northern Ireland will benefit from an extra £2.2 billion a year and, as this is about 15% more than they will contribute through the levy, it will create a union dividend worth £300 million.

However, we cannot just put more money in; we need reform and change. We need to build back better from Covid. When the Covid storm broke last year, 30,000 hospital beds in England were occupied by people who could have been better cared for elsewhere and who wanted to be better cared for elsewhere. That is 30,000 out of 100,000 hospital beds in our NHS, costing billions. Those beds cannot be used by people needing cancer care or hip operations, making it harder than ever to deal with the growing backlog in our NHS.

Too often, people were in hospital beds because they or their relatives were worried about the cost of care in a residential home, and that same fear kept many others at home without any care at all. This anxiety affects millions of people up and down the country: the fear that a condition such as dementia, one of nature’s bolts from the blue, could lead to the total liquidation of their assets, their lifetime savings and their home—the loss of everything, however great or small, they might otherwise pass on to their children—while sufferers from other diseases, who have to be in hospital for the majority of their treatment, have their care paid for in full by the NHS.

Governments have ducked this problem for decades. Parliament even voted to fix it, yet that 30,000 figure is an indictment of the failure to do so. There can be no more dither and delay. We know we cannot rely solely on private insurance because demand would be too low for insurers to offer an affordable price, and a universal system of free care for all would be needlessly expensive when those who can afford to contribute to their care should do so.

Instead, the state should target its help at protecting people against the catastrophic fear of losing everything to pay for the cost of their care, and that is what this Government will do. We are setting a limit on what people can be asked to pay, and we will be working with the financial services industry to innovate and to help people insure themselves against expenditure up to that limit.

Wherever you live, whatever your age, your income or your condition, from October 2023 no one starting care will pay more than £86,000 over their lifetime, and no one with assets of less than £20,000 will have to make any contribution from their savings or housing wealth—up from £14,000 today. Meanwhile, anyone with assets between £20,000 and £100,000 will be eligible for some means-tested support. This new upper capital limit of £100,000 is more than four times the current limit, helping many more people with modest assets.

As we fix this long-term, long-standing problem in social care, we will also address the fears that many have about how their loved ones will be looked after by investing in the quality of care, in carers themselves, and by integrating health and care in England so that older people and disabled people are cared for better, with dignity and in the right setting. My right honourable friend the Secretary of State for Health and Social Care will be bringing forward a White Paper on integration later this year.

You can’t fix the Covid backlogs without giving the NHS the money it needs; you can’t fix the NHS without fixing social care; you can’t fix social care without removing the fear of losing everything to pay for social care; and you can’t fix health and social care without long-term reform. The plan that this Government are setting out today—the plan I am setting out today—will fix all of those problems together. Of course, no Conservative Government ever want to raise taxes, and I will be honest with the House: I accept that this breaks a manifesto commitment, which is not something I do lightly, but a global pandemic was in no one’s manifesto. I think that the people of this country understand that in their bones and can see the enormous steps this Government and the Treasury have taken.

After all the extraordinary actions that have been taken to protect lives and livelihoods over the last 18 months, this is the right, reasonable and fair approach, enabling our amazing NHS to come back strongly from the crisis; tackling the Covid backlogs; funding our nurses; making sure that people get the care and treatment they need, in the right place, at the right time; and ending a chronic and unfair anxiety for millions of people and their families up and down this country. I commend this Statement to the House.”

Photo of Baroness Smith of Basildon Baroness Smith of Basildon Shadow Leader of the House of Lords, Shadow Spokesperson (Northern Ireland), Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Cabinet Office, Constitutional and Devolved issues) 11:46 am, 9th September 2021

My Lords, yesterday we saw in the House of Commons quite an extraordinary sight. The very day after an outlined policy announcement on social care, the Government rushed through a vote for a 10% increase in national insurance contributions that will not even be used for that purpose until 2023.

There is a no doubt that addressing social care is a critical and complex issue, and one that is expensive to address. However, what we heard in the Prime Minister’s Statement was not the oven-ready plan he promised two years ago. The danger for the Prime Minister—and, unfortunately, for the country—is that this now feels like an impetuous decision made for political reasons when there are so many who are willing to work across parties, professions and interests to find a consensual way forward. Despite the usual hyperbole, we did not hear a plan for dealing with a system crumbling under strain; nor did we hear a guarantee that this money will go into social care.

Despite this measure being flagged as a social care policy, the Prime Minister announced that, for at least the next three years, the bulk of the money raised by the levy will be spent on the NHS to “clear the waiting list backlog”. Yet the Secretary of State for Health seemed very uncertain that this would work. Waiting lists were already at record highs even before the pandemic struck, and our health and social care services had been left weakened and exposed when the virus hit.

Where would that leave both the NHS and social care services? To me, this feels just a bit too close to the Prime Minister’s Brexit bus tactics. Remember: Brexit was going to deliver £350 million a week to the National Health Service. Already, care sector experts and leaders are critical of using the NHS as a political fig leaf to break a manifesto commitment and make the introduction of a deeply controversial tax palatable, as well as using it to cover up many mismanagements and misjudgments during the handling of the pandemic. If the Prime Minister’s tactic of a rushed vote was to avoid scrutiny, it has failed. On an issue of this magnitude, scrutiny is essential. It is not just about holding the Government to account; it is about trying to get the best policy outcomes.

At the election, the Government promised to ensure that no one needing care would have to sell their home to pay for it. Can the Minister repeat that commitment today? The cap benefits those who live in the most expensive parts of the country or have the most expensive houses, but someone who has a house worth £100,000, for example, will still have to pay £86,000 for their care, even with the cap. That cap does not include the associated care home living costs, which are not covered by the cap and often far exceed the personal care costs of residential care.

The Chancellor’s explanation yesterday, which I hope that Minister will not attempt today, was that people needing to raise money for care need not sell their homes while they are still alive because they can get a loan that is then repaid when their estate is sold after their death. That is nothing new. Deferred payments were already available. Did anyone really think that this was what the Government’s promise of not selling homes meant?

I think that most people understand that good services cost money, but it is the unfairness of these tax rises that is wrong, especially with the lack of a proper plan or guarantees. Two and a half million working families face a double whammy: a national insurance tax rise and a £1,000 per year universal credit cut which even the Government’s own analysis has said will have a catastrophic impact. So many of those who kept us going through the pandemic—the medical teams, the care workers, the shop workers, the cleaners, some of the lowest paid workers—will be paying more, but they are the ones who will benefit the least.

The Government have not listened to warnings or proposed alternatives for supporting social care, nor have they addressed the rising demand. Conservative Governments in the years prior to the pandemic have cut the social care budget by £8 billion. At present nearly 300,000 people are on local authority waiting lists for adult social care services in England because of the funding pressures and delays in assessments for social workers. Yet we heard absolutely nothing yesterday about the role of local government. It would be helpful if the Minister could say how much funding will be provided to support local government in delivering social care. She must understand that despite being on the front line, it is concerned that the NHS will absorb the extra money and that the social care allocation will be swallowed up by the cap costs.

The Association of Directors of Adult Social Services has said that a chronic shortage of care workers means that more than one in 10 people assessed as needing care in their own homes were instead offered care in residential facilities, often against their own wishes. This is a stark reminder of why we need the investment now. A well-thought-out plan would, as we have repeatedly said, involve a real reform of services that allows people who wish to do so to stay in their homes for longer. There is nothing in the Prime Minister’s Statement about how we use technology, how we improve home adaptations, how we build and adapt more lifetime homes and how we support care workers. Can the Minister tell us whether there has been any engagement with charities and campaigners who deal with these issues every day of their lives, with the national forum, with policy makers, with service users or with carers?

It is a huge frustration that the long-promised White Paper on reforming social care and integrating it with healthcare has again been kicked into the long grass. All Ministers have said is that it will be published later this year. Would it not have been logical—a response to this would be appreciated—to publish the White Paper, set a timetable to consult and then discuss and engage in order to provide a transformative plan that includes how we support an army of unpaid family carers, how we ensure that working-age adults with disabilities have more control over their lives and how we tackle the workforce crisis and support care workers? Instead, we have an unfair funding plan, no reforms and no guarantees.

None of us underestimates the scale of the challenge this issue presents in funding and providing the proper services the country needs. Unfortunately, the fear now is that in the Government’s rush, they have missed that opportunity to seize the real prize for the British people. There is a better way to do this.

Photo of Lord Newby Lord Newby Liberal Democrat Leader in the House of Lords

My Lords, according to the Prime Minister, the package of proposals in this Statement represents

“a project of our era equivalent to the creation of the NHS and the welfare state.”

How, then, do the proposals measure up to this challenging claim?

Taking the spending side first, the Statement covers three separate but related areas. First, there is the implementation, at last, of something like the Dilnot proposals for placing a cap on the contribution that individuals need to make towards their social care. This principle was legislated for by the coalition in 2014 and its implementation is long overdue. Secondly, the Government are making a major investment of about £10 billion per annum for the next three years in the NHS to deal with the backlog of elective procedures. Undoubtedly this is necessary, but not necessarily sufficient. Yesterday, the Prime Minister failed to give any assurances about the rate at which the backlog of procedures would be reduced. Can the Minister today give any further indication of timescale on this?

Thirdly, the Government claim to be making more resources available to state-funded social care beyond Dilnot. This is arguably the most pressing problem of all, with 112,000 vacancies, massive staff turnover rates and providers teetering on the edge of financial viability. Sadly, the Statement was almost silent on the substance. Instead, all details about the future of social care are yet again pushed back into the long-promised White Paper, for which no publication date has been set, as the noble Baroness pointed out. Can the Minister confirm that there will be no immediate increase at all in funds available for social care, not a penny? If so, how does she expect care homes and domiciliary care providers to survive over the coming months? Over the whole three-year period covered by the Statement, exactly how much additional central government funding will flow into adult social care provision unrelated to the Dilnot reforms, bearing in mind that the current annual cash shortfall is somewhere in the range of £6 billion to £14 billion?

After the first three years, the proceeds of the levy are supposed to go increasingly towards social care. However, given that, on the basis of previous experience, overall NHS spending in future is likely to be greater than that currently budgeted for, there will undoubtedly be pressure for this additional level of NHS funding to continue, even after the pandemic catch-up is more or less complete. What assurance can the Government give that over the medium term, the bulk of the revenue raised by the levy will go to social care, as promised? When later this year does the Minister expect the White Paper to be produced? We have heard so many assurances that it is almost here, nearly here or will soon be here. We are a bit sceptical.

The Government document states that they want to

“make care work a more rewarding vocation”.

How will these announcements allow care providers and local authorities to increase the wages of the many thousands of care workers stuck on zero-hours contracts and the minimum wage? Do the Government really believe that offering a few training courses will solve the recruitment and retention problem in this sector? The Government say that they will

“ensure that the 5.4 million unpaid carers have the support and respite that they need”.

How much additional funding over the next three years will now be available to fulfil this promise?

The Government say that they will move towards equalising the amount paid by self-funders and those funded by local authorities. Do they plan to do this by reducing the amount paid by self-funders or by increasing the amount paid by local authorities? If it is the latter, where will the money come from?

I turn to the new hypothecated health and social care levy. Many people are indignant that a major manifesto promise has been broken, but why are they surprised? For this Prime Minister, a promise is not a binding commitment; it is simply a holding position, until it becomes easier to do something else. More surprising than a broken promise is that the Treasury has agreed to introduce a hypothecated tax—something that it normally never countenances, because of all the inflexibilities that it brings. Why has a new, unprecedented, hypothecated tax been introduced here? The obvious reason is that the Government know that they will have ever-growing demands for future spending in health and social care, for which tax rises will be required, and they see this tax as a vehicle for doing that in future. Can the noble Baroness confirm that, for this Parliament at least, there will be no more increases in the levy?

All in all, does this Statement amount—as the Prime Minister claims—to the equivalent for our age as the creation of the NHS and the welfare state? For those trying to run a care home, act as an unpaid carer or subsist on a minimum income, such a boast will ring hollow. Beveridge, Attlee and Bevan must be turning in their graves.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I thank the noble Lord and the noble Baroness for their comments, but I am slightly surprised that they have not welcomed our announcement of a new £36 billion package to help tackle NHS backlogs, reform adult social care and bring the health and social care system together on a long-term, sustainable footing. That is a hugely significant amount of money to help our precious NHS and to solve a problem that all across this House have acknowledged for many years.

We have indeed held many discussions throughout the year with leading members of the sector, specifically on reform, and will of course continue to do so. We have committed to spending an additional £5.6 billion on social care in England, across the next three years. As the noble Baroness rightly says, the deferred payments agreement remains in existence to enable people to use the value of their home, if they need to, without selling it. Both the noble Baroness and the noble Lord asked why this involves national insurance. To raise the sums needed for this significant investment in the NHS and to reform social care, only a broad-based tax, such as VAT, income tax or NICs, is able to do so. NICs already ring-fences funds for the NHS and successive Governments have increased it, so there is precedent for our belief that this is the best and fairest way.

The noble Lord is absolutely right: the levy will be ring-fenced for health and social care. HMRC will send funds to the health bodies in all four nations of the UK and, by 2023, to social care funding bodies, such as MHCLG, which will deliver it through local authorities. As I say, part of the reason for using NICs is that the more you earn, the more you pay. I am sure noble Lords are aware that a typical base-rate taxpayer, earning £24,100, will contribute roughly £180 a year, whereas a typical higher-rate taxpayer, earning £67,100, will contribute £715 a year. The highest-earning 14% of people will pay around half the revenues. The 6.2 million lowest earners will be kept out of the levy. The use of NICs also means that the cost of the levy will be shared between individuals and businesses; however, 40% of all businesses will pay nothing extra.

The noble Lord asked about tackling the backlog in the NHS. We will spend £2 billion this year, which is double our previous commitment to tackle the backlog. In addition, we plan to spend more than £8 billion in the following three years, from 2022-23 to 2024-25. On the waiting list, we do not know how many people who did not come forward for help from the NHS during the pandemic will now seek treatment, so plucking numbers out of the air about the size of the waiting list is not helpful. But I can certainly assure both the noble Lord and the noble Baroness that the funding announced will deliver 9 million more checks, scans and procedures until 2024-25. This is a significant investment and, over the next three years, will be the biggest catch-up programme in NHS history.

The noble Baroness asked about local government. She is aware that, in 2021-22, we have provided councils with access to over £1 billion of additional funding for social care, on top of the significant funding provided to help the sector. In the spending review, we are also committed to ensuring that local authorities have access to sustainable funding for core budgets. This announcement includes funding to enable local authorities to move towards paying providers a fair rate for care, which should drive up the quality of adult social care services, improve workforce conditions and increase investment. The funding package covers the costs to local government of implementing the charging reforms, including the cap, the increased capital limit moving towards paying a fair rate for care, which I just mentioned, and associated implementation costs.

The noble Lord asked about self-funders. As he knows, under the current system, individuals who fund their care often pay more than individuals who are funded through their local authority for equivalent care. Under this new system, self-funders will have a choice to ask their local authority to commission their care on their behalf, which means that individuals fully funding their own care could choose to benefit from the market power of local authorities. We will be publishing a consultation document on the details of these proposals next month.

On other issues, we are investing more in supported housing and exploring other innovative housing solutions to support more people to live independently, as the noble Baroness said. As part of the additional £5.4 billion of investment announced, we will fund an extension to the established disabled facilities grant to enable more people to live independently in their own homes.

On the integration work, the House will be looking at the Health and Care Bill shortly, before Christmas, when it begins its passage through this House. That is laying the groundwork for reform, and we will see an improved oversight of how social care is commissioned and delivered. It will facilitate a greater integration between health and care services, on which these reforms build. As we have said, we will work further with the sector and more broadly to coproduce a comprehensive national plan for supporting and enabling integration between health and social care, but I am afraid that I cannot go any further than saying that the White Paper will be published later this year.

Finally, the social care workforce has worked incredibly during this pandemic. Our investment of £500 million across three years will deliver new qualifications, progression pathways and well-being and mental health support, which is critical. We will continue to support the fantastic 5.4 million carers to have the support, advice and respite they need.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Captain of the Honourable Corps of Gentlemen-at-Arms (HM Household) (Chief Whip, House of Lords), Deputy Chairman of Committees

I remind noble Lords that there will no doubt be lots of questions for the Leader, but the Companion is clear that they should be brief. This should not be the occasion for a separate debate, which I am sure will come later.

Photo of Lord Brougham and Vaux Lord Brougham and Vaux Deputy Chairman of Committees, Deputy Speaker (Lords)

The noble Baroness, Lady Brinton, is taking part remotely and I invite her to speak.

Photo of Baroness Brinton Baroness Brinton Liberal Democrat Lords Spokesperson (Health)

I declare my interest as a vice-president of the Local Government Association. My noble friend Lord Newby asked, but the noble Baroness did not answer, so I ask again whether she will give an undertaking from the Dispatch Box to guarantee that social care will receive the bulk of the revenue raised by the levy, in the medium term, regardless of whether the NHS has completed the backlog of waiting lists. Otherwise, this is no reform to social care at all, however delayed.

These proposals do nothing to help the current problems in the social care sector. The noble Baroness referred to the extra £1 billion to local government, but all the experts say a minimum of £4 billion a year is needed to help solve them. Can the Minister confirm that, given the current severe crisis in staffing and funding in our care homes, there will be funding on top of that £1 billion at least to start to remedy the problems in social care?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I said in my opening remarks, we are committed to spending an additional £5.4 billion across the next three years. This will end the risk of unpredictable care costs and include at least £500 million to support the social care workforce.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, can I ask the noble Baroness about the people currently paying their way in care homes? Are they to get no credit whatsoever for the fees they pay up to October 2023? Is it not grossly unfair if the clock starts only when we reach that point?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

This has been an intractable issue. If all parties had managed to deal with it better, people in the situation the noble Lord mentioned—for whom we have a lot of sympathy—would have been helped. Unfortunately, that is not the case. We have announced a package that will begin with the new cap in October 2023.

Photo of Lord Lansley Lord Lansley Conservative

My Lords, I very much welcome the additional resources for the NHS and social care, but will the Government increase and accelerate the resources for social care? Everyone in the NHS knows that only by increasing the capacity in local authority-funded social care can they relieve the pressures on the NHS. The House will recall that we legislated in the Care Act 2014 for a Dilnot-style plan. It is now more than 10 years since he submitted that plan to me as Secretary of State. We should bring it into force, and we can and should do so by April 2022.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I am afraid I have already set out the timescale on which we are doing this. This is a complex area and, as I said, the new cap will come in in October 2023. As I said, the funding in this package covers the cost to local government of implementing the charging reforms, including the cap, the increased capital limit moving towards paying a fair rate for care and the associated implementation costs. We will be working closely with local authorities to make sure that we can implement this to the benefit of all our citizens.

Photo of Baroness Walmsley Baroness Walmsley Co-Deputy Leader of the Liberal Democrat Peers

My Lords, can the noble Baroness say how much additional employers’ NICs will be paid by struggling care home providers in respect of their staff? Could that not be sufficient to make them go under?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I do not believe so, no. As we have said, the levy will be shared between individuals and business. The largest 1% of firms will pay around 70% of the total business contributions, with the smallest 40% paying nothing extra.

Photo of Baroness Ritchie of Downpatrick Baroness Ritchie of Downpatrick Non-affiliated

My Lords, in Northern Ireland the money given directly through Barnett consequentials normally goes into the central pot in the Department of Finance. There is money with this new health and social care tax because it is a UK-wide tax, so what guarantees can the Minister give your Lordships’ House that the money allocated to Northern Ireland will go directly to the health and social care budget?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

That is exactly what we intend to happen. In fact, Scotland, Wales and Northern Ireland will benefit from around 15% more than is generated for their residents, which will be equivalent to around £300 million every year on average. As a total, Scotland, Wales and Northern Ireland will benefit from an additional £2.2 billion each year on average. We intend to put the money directly into the health services across the nations, as the noble Baroness said.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, as I think I was the first person to propose a cap on care costs in the minority report to the royal commission in 1999, it would be churlish of me not to welcome the fact we are now getting one, albeit a mere 22 years after I first proposed it. It is disappointing that the Government have concentrated their sole attention, practically, on government, state-funded—which means national insurance-funded—care and have apparently paid no attention whatever to the great role that the private sector can play in helping richer people to afford their care in later years.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

The noble Lord will be well aware that historically there has been very low demand for social care insurance products and insurers have actually withdrawn products from the market. We believe that there will now be certainty about costs faced by individuals. We hope that more financial products will come on to the market to enable individuals to plan for their future care needs. We intend to work with the financial services industry to innovate and help people insure themselves against expenditure up to the limits.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Economic Affairs Committee

My Lords, of course everyone welcomes the extra money for the health service. The last big additional sum given to the health service was some £20 billion, which is more than the entire spending on social care. Social care is in immediate crisis; it needs the money now. There are 1.5 million people not getting the care they need and care has been rationed by local authorities that have not got the costs. How will the Government cope with this? The importance of having a settlement for local government to deal with that is there. How do the Government expect this money to get to social care in three years’ time, given what we know will be the pressures on the National Health Service? How will that money be ring-fenced? If it is not, the most vulnerable people in our country—that includes half the budget going to people of working age—will suffer.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I can certainly reassure my noble friend that the levy will be specifically ring-fenced for health and social care. As I said, HMRC will send funds to the health bodies in all four nations of the UK and by 2023 to social care funding bodies such as MHCLG, which will deliver through local authorities. In the up-and-coming three years, £5.4 billion will be provided to support social care.

Photo of Lord Shipley Lord Shipley Chair, Youth Unemployment Committee, Chair, Youth Unemployment Committee

My Lords, I remind the House of my registered interests. In 2016, the Government introduced the social care precept and council tax payers have had to pay up to 15% more over the past five years than they otherwise would have done. Council tax is a regressive tax, so would the Minister please confirm that this practice of increasing council tax bills will now stop as a result of this new funding proposal?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I can certainly say to the noble Lord, as I again said in my opening remarks, that we are committed to ensuring that local authorities have access to sustainable funding for core budgets and we will do so in the spending review.

Photo of Lord Walney Lord Walney Non-affiliated

My Lords, how are the Government factoring into the calculations the urgent need for an increase in the basic pay of care workers to increase the quality and availability of care?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

Obviously the noble Lord will know that the vast majority of the workforce is employed privately. Local authorities, as part of the fair rate for social care, will be working with that sector to help improve conditions and pay rates as part of the overall involvement further in the system.

Photo of Baroness Manzoor Baroness Manzoor Conservative

My Lords, I very much welcome this announcement. It is a very pragmatic way forward in the circumstances we find ourselves in, particularly when one looks at the past 18 months. Health inequalities have increased significantly and this will go some way to addressing that. However, it is imperative that one looks at the relationship between acute care and social care. Could my noble friend assure me that this will be looked at immediately, with a view to these budget allocations being ring-fenced accordingly?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I thank my noble friend. As she will well know, the Health and Care Bill, which will come to your Lordships’ House shortly, lays the groundwork for that. We are certainly doing much more work on integration. As I said, a White Paper will be published this year. We will be looking at creating the right incentives for integration and prevention, as well as working with the NHS—both hospitals and primary care—social care providers and other partners to ensure that they are working to deliver effective care in people’s homes and communities.

Photo of Lord Scriven Lord Scriven Liberal Democrat

My Lords, the plan for health and social care says that a

“workforce that is rewarded and feels valued is essential for high quality care”.

The Care Workers Charity, which provides cash support for care workers in desperate financial need, paid out more than £2.2 million last year. How will the Government’s plan deal with this pay crisis in social care within the next three years?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I mentioned to a noble Lord earlier, the vast majority of care workers are employed by private sector providers, which ultimately set their pay, but local authorities are going to work with them to determine a fair rate of pay based on local market conditions. This investment of £500 million across three years will deliver new qualifications, progression pathways, and new well-being and mental health support. We are going to provide support to professionalise and develop the workforce by providing hundreds of thousands of training places and certifications for care workers, so we are putting in a lot of investment. We understand the importance of the social care workforce and the fantastic job it has done, particularly in the incredibly difficult times of the pandemic.

Photo of Baroness Blake of Leeds Baroness Blake of Leeds Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Opposition Whip (Lords)

My Lords, I declare my interests as set out in the register. As the leader of the second-largest metropolitan local authority in the country until earlier this year, I ask the Leader of the House what direct conversations she has had with leaders in the sector, particularly from a local government perspective. If she is not able to tell me directly who she has spoken to, I offer my services to arrange for her to come and visit the leaders in the sector, so that she can fully understand the pressures they have been under over the last several years—before Covid—and what they have gone through during the pandemic to protect the most vulnerable in our society. I concur that without the necessary investment in local government, the National Health Service will fall over; it will be on its knees. It is just not good enough to ignore the needs of local government to provide the services that the most vulnerable people deserve. It is not just older people but all age groups.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I completely recognise the passion the noble Baroness has spoken with, and I thank her for all her work. I would absolutely be happy to take her up on her offer and listen and talk to people. The most useful person for people to talk to is probably the Secretary of State for Housing, Communities and Local Government. He will have had a huge number of conversations about this, and they will be ongoing. I thank the noble Baroness for her offer and look forward to taking it up.

Photo of Baroness Altmann Baroness Altmann Conservative

My Lords, I am sorry to say that I cannot see how this solves the social care crisis. Can my noble friend explain how this extra money will actually address the discrimination that there is against those who have dementia, relative to those who have cancer, how it will improve staffing levels or the level of pay, and how the Government have decided that nothing needs to be contributed out of pensions income or buy-to-let income to something that is clearly a social insurance need across the economy?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

What will help the people my noble friend has talked about is the fact that, under these plans, we will now cover all care costs for anyone with assets under £20,000, which is up from the current level of £14,000. Importantly, she will know that, currently, anyone with assets over £23,350 faces paying their care costs in full. The new £100,000 limit is four times higher than that, which means that many thousands of people will now be eligible for further state support under our plans.

Photo of Lord Grocott Lord Grocott Labour

What significance should the House attach to promises made by the Prime Minister?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I am sure the noble Lord will make his own judgment on that. I repeat that the Prime Minister was perfectly honest about it in his Statement. He said that

“no Conservative government ever want to raise taxes”,—[Official Report, Commons, 7/9/21; col. 155.] which is absolutely true, but he wanted to be honest and accept that this will break a manifesto commitment. I am sure that even the noble Lord would agree that, having provided more than £400 billion of support for jobs and livelihoods, businesses and public services at the start of the pandemic, we have particular challenges around our public finances. And that was not in our manifesto.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, do not the questions asked in the last 20 minutes or so illustrate the need for a thorough debate in your Lordships’ House? I say with great respect to my noble friend that the point raised by my noble friend Lord Forsyth needs addressing in detail. Can she give the House an assurance that, when we come back in October, an early, full-day debate will be devoted to these issues?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I can say to my noble friend that the Health and Care Bill will come to this House when we come back, which will allow a lot of debate on this subject matter. He will be pleased to know that, now we have returned, we have many more opportunities for Back-Benchers to put down the titles of debates they would like to bring before the House. I am sure he will take advantage of that.

Photo of Baroness Barker Baroness Barker Liberal Democrat Lords Spokesperson (Voluntary Sector), Deputy Chairman of Committees

My Lords, can the Leader of the House explain why employers in freeports are exempt from paying the levy for some employees?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I am afraid I will have to get back to the noble Baroness on that.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, under cover of this announcement, the Government broke another manifesto promise by abandoning the triple lock on pensions. With the costs of energy and food projected to rise substantially, how are pensioners who depend on the basic pension going to survive?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I am sure the noble Lord will understand that, given the statistical anomaly that has led to average wage growth being 8%, it is just not fair to raise pensions by this figure. For one year only we are moving to a double lock and increasing pensions by the higher of inflation or 2.5%. We will then return to the triple lock. Since the triple lock was put in place in 2011, the state pension has increased by 3% a year; it is now at its highest level relative to earnings for 34 years. The number of pensioners in absolute poverty has fallen by more than 200,000 in the last decade. I do not dispute that this will impact some people, but I think that, for one year, in the light of everything the country has gone through, it is fair and people will agree with it.

Photo of Lord Brownlow of Shurlock Row Lord Brownlow of Shurlock Row Conservative

My Lords, clearly many people welcome the hypothecated levy and the intended ring-fencing of those resources, but can my noble friend the Leader assure me that these resources will not end up being more waste in the NHS and social care, of which there clearly is too much today?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

My noble friend is certainly right; this is a huge amount of investment going to where it is greatly needed. But he is absolutely right that, seeing as taxpayers—all of us—are being asked to contribute more, it is also reasonable to expect health and social care providers to ensure the money is well spent. We will work with them to ensure that happens.

Photo of Lord Campbell of Pittenweem Lord Campbell of Pittenweem Liberal Democrat Lords Spokesperson (Defence)

My Lords, I wonder whether the Leader of the House can help me with some puzzlement. As I understand it, the Government have produced what they regard as a solution to the problem of social care, but later this year the Government will produce a White Paper on the topic of social care. Can she tell us of any previous occasion when any Government have produced the solution before they have produced the White Paper? These are the politics of Lewis Carroll.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I have said, there will be consultation on the detail of the local authority elements and further White Papers on integration. This is a long-running and complex programme, and we will continue to talk to people and consult as we continue developing it.

Photo of Baroness Wheatcroft Baroness Wheatcroft Crossbench

My Lords, the noble Baroness, Lady Altmann, asked why income from pensions and buy-to-let property was not covered by these proposals. I wonder whether the Leader can answer that.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I said at the outset that only a broad-based tax such as VAT, income tax or NICs could raise the sums needed for this kind of investment, and we believe that NICs is the fairest way to do that.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

My Lords, historically, no Government have imposed a percentage increase on national insurance contributions because it hits the very people—the NHS and local government—who are delivering health and social care. For what reason have the Government changed the position on this?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I have said, the reason we went to NICs is that we believe that is the fairest, as the higher your earnings, the more you contribute; I gave some figures to show that. As I said, the highest-earning 14% of people will pay around half of revenues, and 6.2 million of the lowest earners will be kept out of the levy.