Part of Elderly Social Care (Insurance) Bill [HL] - Third Reading – in the House of Lords at 10:05 am on 4 March 2022.

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Photo of Lord Kamall Lord Kamall The Parliamentary Under-Secretary for Health and Social Care 10:05, 4 March 2022

My Lords, I begin by thanking the noble Baroness, and the Lord Speaker for allowing us time for this debate. I congratulate my noble friend Lord Lilley on securing the time for Third Reading of the Bill, which proposes a state-backed insurance company for social care. I am sure noble Lords across the House will wish my noble friend a speedy recovery. I thank him for his thoughtful proposal to address the long-standing issue of unpredictable social care costs. As many noble Lords will recognise, there have been many reports over the last few decades and they have just sat there gathering dust on shelves: to date, we still do not have a proper system. The Government wholeheartedly agree with much of the analysis underpinning the Bill and I shall mention but a few of the ideas that stood out for us.

First, we are well aware of the challenges around the private market delivering insurance for social care costs, so we recognise the benefits of delivering insurance through a public not-for-profit company owned and guaranteed by government. I also particularly admired how the proposal addresses affordability by allowing people to pay for the insurance premium through equity on their home. Lastly—this is probably the Bill’s strongest selling point—it would be cost-neutral to the Exchequer. I recognise the opportunity this presents for the savings to be invested in financial support for those not able to access the insurance offer—for example, people who do not own a home.

I reassure my noble friend that his proposal has been carefully considered in the lead up to the announcement of our reform package from October 2023, but I point out that one of the key benefits of the cap and extended means test is that it is a universal offer—universal for everyone, irrespective of age or home ownership. We believe that a universal cap means people can plan ahead for their care from the outset. Knowing that the cap is there will benefit everyone, not just those who own a home. The home ownership landscape is changing over time, and within that context the Government have developed a package of reforms which is future-proof and gives support and certainty to the current generation, as well as future generations.

In addition to the cap, from October 2023, anyone with assets of less than £20,000 will not have to make any contribution for their care from their savings or the value of their home, ensuring that those with the least are protected. Anyone with assets below £100,000 will be eligible for some means-tested support, helping people without substantial assets and ensuring that many more people benefit from funded support earlier in their care journey. We believe that our reforms significantly improve the current system. In developing the reforms, we had to make tough choices, balancing the generosity of the reforms with how much extra we ask taxpayers to contribute and pay for them. My noble friend may disagree with our current formulation of the cap, but we believe the plan is credible, deliverable and affordable. Therefore, while the Government are not convinced that the Bill is the right course of action, we agree with his intelligent analysis that underpins it and, as the noble Baroness, Lady Merron, said, we will debate this further.

I again thank my noble friend Lord Lilley for putting forward this proposed Bill, and for his engagement in discussing our reforms after this debate.