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Mr. Baldry: Again, I shall ensure that the hon. Gentleman gets a copy of the consultation paper. If his constituents who are concerned read the criteria in the consultation paper, they will get a clear indication. The consultation period is as short as we can humanly make it. It is 14 days, and I hope that the industry will respond during that time and that decisions can be made speedily afterwards. It is important to have a consultation period, not least because we have to persuade our Community partners and others that the exemptions should be allowed and should stick.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley): Does not the Minister realise that the farmers, certainly those to whom I have spoken in my constituency over the weekend, are criticising not the scheme but the failure of the Government to have in place anything to implement that scheme when it was supposed to start? That is typical of the lack of a coherent strategy from or any assessment of the implications by the Government, as we saw when the Secretary of State for Health made the original announcement and as we see in the negotiations in Brussels.
Has the Minister made any assessment of the implications of the scheme that he has announced on the displacement of cattle that might otherwise have been slaughtered in the slaughterhouses? Has he made any general assessment of whether the scheme will ensure that some of the people who have lost their jobs in the past six weeks will return to employment and receive an income, which they have not had for six weeks?
Mr. Baldry:
It is self-evident to all of us--every hon. Member who has a farming constituency is in touch with farmers--that farmers are concerned to know when their cattle can be taken and culled, not least--and quite reasonably--because they want their compensation cheques. The farmers, like everyone, have to recognise that there is a backlog of around 150,000 cattle and that not all of those can be culled tomorrow or this coming week. There will have to be some forbearance as renderers, slaughterhouses and livestock marts work together with the farmers to bring forward livestock on an orderly basis.
As the scheme moves forward, clearly the number of cull cows will be the same as always. They will be slaughtered and, instead of entering the human food chain, they will be disposed of otherwise. The amount of clean beef will not be significantly reduced, so the volume of work carried out by the slaughterhouses will not be different from that carried out previously. The work will just be done in different ways. I see no reason why, in some slaughterhouses, there will not be more jobs as a consequence. I suspect that we will also see renderers taking on extra employees. In Scotland, there is only one renderer and I am sure it will take on extra staff to cope with the extra demand from the industry.
4.8 pm
The Secretary of State for Health (Mr. Stephen Dorrell): With permission, Madam Speaker, I should like to make a statement about the consultation document, which I am publishing today, setting out the Government's proposals to improve our arrangements for care in old age.
Older people represent the fastest growing section of the community. The proportion of the population aged 75 and over has risen from 4.7 per cent. 25 years ago to7.1 per cent. today. The figures for those over 85 are even more dramatic: the proportion has doubled from 0.9 per cent. 25 years ago to 1.8 per cent. of the population today.
It is fashionable to regard those trends as a problem that requires a solution. The Government are more optimistic. We unreservedly welcome the fact that medical and social advance allows us to live longer and fitter lives. It requires a particularly perverse nature to regard the prospect of improved life expectancy and improved quality of life as anything other than good news.
But even good news has to be planned for. As life expectancy increases, it becomes progressively more important to ensure that sufficient provision is made to enable retired people to enjoy a comfortable and fulfilling retirement.
The Government believe that the principal responsibility for making that provision must rest with the individual citizen. That is why we have developed a wide range of incentives to encourage people to save for their needs in later life. New rights and flexibilities have been introduced into pension schemes. Savings products, such as tax-exempt special savings accounts and pensioner income bonds, have been developed or made more attractive to encourage people to save during their working lives and provide for their needs during retirement.
There is, however, one cost that can have a dramatic effect on the finances of elderly people, and for which they have often not made specific provision. It is estimated that roughly one in five people who reach retirement age will eventually need long-term residential care, which can cost up to £20,000 per annum or, in some cases, even more. Costs on that scale cause real concern to elderly people and to their families. Furthermore, that worry is compounded by uncertainty, as no individual can be certain either whether they will need residential care or for how long they will need it. The open-ended nature of the potential commitment is a particular source of concern.
Against that background, the Government believe that it is important to provide a framework of support to allow individual citizens to plan their affairs against a more stable background. That framework must balance two objectives.
First, it must continue to offer targeted support to those elderly people who are not able to meet the full cost of their care for themselves. Secondly, it must recognise the contribution of those who do make provision specifically to meet their own needs and ensure that those people secure proper reward for their thrift and responsibility.
The existing arrangements have made possible an unprecedented improvement in provision for the care of elderly people, but they are widely perceived to impose an unfairly onerous burden on those elderly people who do make a contribution to their own care costs.
The Government are determined to address that concern. Last month we changed the rules of the means test, which is used by local authorities to determine entitlement to assistance with residential care costs. We increased from £3,000 to £10,000 the amount of capital that is fully disregarded, and provided for half a resident's occupational pension to be disregarded when he or she has a spouse at home. But we want to do more. The consultation document that I am publishing today therefore offers three new elements in the framework of support.
My first proposal concerns those still in work. Almost 11 million people of working age are members of occupational pension schemes and about 10 million people belong to personal pension schemes. Funded pension provision in Britain is more advanced than in any other European Union country, and it is the financial strength of the United Kingdom pension sector that provides the best assurance to the working population that their financial needs in retirement will be met. The Government believe that there are some significant ways in which pension schemes can help individual citizens to meet their long-term care needs. The Government are therefore seeking views on the possibility that pension schemes could offer variable pensions that involve a smaller initial payment in return for a larger payment later on. We believe that that change would be of considerable benefit to elderly people using their pension funds to help with the cost of long-term care.
My second proposal involves those who are at the end of their working lives and are planning their financial arrangements during retirement. In making their plans they need to make provision for the possibility that they will need residential care, but they will be anxious to safeguard their savings, and often the value of their family home as well. The Government therefore believe that it makes sense both to the individual and to the taxpayer to offer those people a partnership. To the extent that the retired person insures the risk that they will need long-term care, the taxpayer will give extra protection to the assets of the retired person. The consultation document offers two alternative formulations, both of which would have the effect of protecting the assets of those in residential care by an amount related to the value of the insurance policy that they take out.
My third proposal concerns those who are at the point of entering long-term residential care, or are already receiving it. At that point in their lives, it is either certain or very likely that they will need long-term care, but a substantial question mark remains over how long they will need it for. Again, it makes sense to both the individual and the taxpayer to offer a partnership that protects the assets of retired people by an amount that is related to the value of an annuity that they purchase on entering care. The annuity offers the elderly person certainty by providing a commitment to pay a stated amount for as long as he or she needs to fund his or her own care. The consultation document invites views about the level of asset protection that should be available to holders of that type of immediate-needs annuity.
In considering both insurance and annuity products, the Government think it important for the value of the asset protection available to retired people to be related to the value of the policy that they buy. The consultation document sets out more than one option for establishing the relationship, but it does not suggest that purchase of a policy should exempt a retired person from the means test. The reason for that is important. Total exemption could be linked only to an insurance policy or annuity that passed a minimum threshold of value. The result would be to remove any incentive to provide for themselves from those who were not able to afford total exemption. The Government think it important to provide encouragement to save for old age right across the income scale; we are therefore not attracted to a scheme that we believe would discriminate against less-well-off people.
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