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The Green Paper contains three options that we have all been asked to consider and debate. I have my own preference, but we will have to have the debate. I hope that people will not have to choose between their homes and care in the future, but that has been the choice for many years for many people, usually those in social care places. I would not want to make that choice. Personally, I have never wanted to inherit anything from my parents: I have wanted them to have the best care. However, I have heard from relatives of Alzheimer's sufferers that it is very distressing to know that they are unaware that
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the home that they have always treasured has had to be sold. So I understand the point that the hon. Gentleman was making.

In a roundabout way, that has brought me to the point that I was going to make about funding in general. When people are feeling vulnerable-and it is that vulnerability that I wanted the House to consider-they do not know where to go or to whom to turn. That is where the notion of advocacy comes in. In cases that I have looked at, the system has not always worked out as people expect. They have gone to people and asked for help, but they have been a little let down-

Mr. Deputy Speaker: Order. The House has been listening to the hon. Lady with great respect, but in fairness to other hon. Members we have to move on.

5.47 pm

Mr. Stephen Dorrell (Charnwood) (Con): I wish to follow the hon. Member for Colne Valley (Kali Mountford) in adopting a relatively non-adversarial tone, but nevertheless addressing some of the core issues that are at the heart of the debate that the Government seek on this sensitive issue.

The truest words spoken in the House this afternoon have been by the former Minister for Pensions, the right hon. Member for Croydon, North (Malcolm Wicks), who acknowledged that this subject has been avoided by Governments for the previous 25 years. It is therefore true, as my hon. Friend the Member for Eastbourne (Mr. Waterson) said from the Front Bench, that it is disappointing that a Government who came in pledged to action on the subject, which was certainly unfinished business when I left office as Secretary of State 12 years ago, are only now introducing a Green Paper and seeking a national debate. I am happy to enter into that debate, because it is a hugely important issue.

The central problem, of course, and the reason why Governments have consistently failed to address the issue, is not that it is difficult to express the aspiration-the Green Paper expressed many of the aspirations accurately, and I could have used much of the same language myself. The key issue is how we produce the resources necessary to deliver the services that we all aspire to provide for our elderly citizens.

I agree with the Green Paper's emphasis on the importance of carers. As one of my hon. Friends said earlier, elderly people can be carers not only for their elderly relatives-often their spouses or partners-but important sources of care for other members of the wider family community. Engaging in a proper discussion about how to use the voluntary support available from a wider understanding of family connections is an important part of this discussion. That is my first point.

My second point relates to my intervention on the Minister on the subject of direct payments and to the rather larger subject of personalised care, about which the hon. Member for Colne Valley was talking. We must all have experience from our personal lives and in constituency surgeries of money being wasted because it has not been accurately used in a way that reflects the individual preferences-I use that phrase as distinct from a need calculated from a dispassionate point of view-of the service user. The importance of personalised care and, in particular, of the direct payment principle
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is that it focuses resources on the delivery of service chosen and fashioned by the service user. In my view, that is the best way of securing care that meets the service user's needs.

The third issue that I want to touch on briefly before I come on to what I have described as the core issue of resources is what has been called "a National Care Service". The Government are extremely unclear in the Green Paper about what that phrase means. What, for example, is the role of the local authority in delivering a national care service? Is it to be a service provider? Is it to have local discretion on commissioning? The Green Paper refers to the oft-used "postcode lottery", which is exactly the same concept as local discretion. Do the Government think that all exercise of local discretion is merely a manifestation of the postcode lottery? If so, do they aspire to a single, uniform national service or are they willing to defend local differences of service and not dismiss every local difference as merely a manifestation of the postcode lottery?

I would suggest to Ministers that the phrase "national entitlement" is extremely dangerous, as we have seen not just from court cases in the social care field but from the broader debate about what the national health service should be providing as a national minimum entitlement. The moment we get into a discussion about the concept of a national entitlement, it becomes extremely difficult to produce services in a local area that reflect accurately the needs of people in that area and represent an efficient use of the resources available. Those resources will be different in different parts of the country for a variety of difficult historical reasons and the needs that arise will be different because of the nature of different local communities.

The concept of a "National Care Service"-the balance between the national definition and local delivery and between national priorities and local priorities-is not made any easier by the introduction of initial capital letters. With respect to Ministers, all the difficult questions attached to that phrase are left unanswered by this Green Paper.

I now come to the fundamental issue of resources. In 2006, Wanless analysed the resource implications of moving from social care provision, which we acknowledge does not deliver what we would want it to deliver to elderly people, to either what he called scenario 1, which was the current basic level projected forward for another 15 years, or scenario 2, which met the current aspiration projected forward for another 15 years. One can follow the arithmetic with decimal points, but in back-of-the-envelope numbers Wanless identified a funding gap of £20 billion emerging over 15 years. That funding gap of £20 billion is the elephant in the drawing room. It is the reason why, 12 years on, we have a call from Ministers for a national debate. It is the reason why we have not had the action promised by Tony Blair at the Labour party conference of 1997.

The Government say that it is impossible for tax funding to fill that gap-in their phrase, that is "ruled out"-and I agree with them. I suspect that the Liberal Democrats still believe that it is possible-through a penny on income tax, no doubt.


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Dr. Ladyman: I am following the right hon. Gentleman's argument with care. He is absolutely right: that is the elephant in the room. That gap can be funded only from public spending or from people's savings-largely, the money they have locked away in their property. Although he may be justified in criticising the Government for not facing the elephant in the room, are not his hon. Friends, who started this debate by implying that, somehow, people would never have to tap into their savings, equally open to that criticism?

Mr. Dorrell: I agree with the hon. Gentleman to the extent that the funding gap has to involve more private resources-I totally agree with that. However, although it may be the policy prescription that he espouses, I do not think that it is necessarily true that those resources have to come out of the savings of retired people in retirement. It is, to my mind, one of the unattractive policy options canvassed by the Government that we should have a compulsory system that pays for provision exclusively through what is, in effect, a tax on elderly people. I think that we should be encouraging people to look forward to their likely evolving need during their working lives, and the secret to doing that lies in the insurance system.

The Government identify what they describe as partnership funding. As I said in an intervention on the Liberal Democrat spokesman, the hon. Member for Leeds, North-West (Greg Mulholland), the Government's definition of partnership funding is different in an important respect from Wanless's definition of partnership funding. As it happens, I am more on the side of the Government than I am of Wanless in that debate. However, the Government identify partnership funding as one option and then imply that insurance is a different option. I think that they are wrong to imply that they are different; in fact, they are one and the same option.

In my view, the Government's refashioning of the resource that is currently provided from the Exchequer-using Government money more effectively-in partnership with private resources will, if the Government develop a proper policy, automatically lead to an insurance market that allows resources to be mobilised in a way that is significantly fairer than trying to pay for the provision from a tax on pensioners, which is what I understand the Government's so-called comprehensive option to be. The core challenge, which the Government acknowledge but do not face head-on, is to use existing public resources more effectively and in a way that enlists private resources in order to fill the Wanless funding gap.

The Minister of State, Department of Health (Phil Hope): I am loth to intervene, but the right hon. Gentleman seems to be arguing for option 2, which is the insurance model-partnership with a voluntary option. What does he see as the strengths and weaknesses of that option in the longer term?

Mr. Dorrell: The key strength of a link between partnership and insurance is that more private resources are unlocked for an area where I see no alternative source of funding available to meet the requirement, and those resources are levied in a way that is fairer than the other options offered by the Government, because the insurance system allows people to contribute during their working lives. That is why my hon. Friends
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and I have repeatedly tabled different versions of insurance-based schemes that work in partnership with the public sector. That is where the answer to the conundrum lies. What is disappointing is that, 12 years on, we are still taking about the concepts, rather than the detail of the legislation. As the Minister knows, a version of that legislation was left in the desk of the incoming Secretary of State in 1997. I no longer sign up to every detail of that legislation, but it was a long way on then from where we are now.

6 pm

Dr. Stephen Ladyman (South Thanet) (Lab): I sometimes think that I am a little bit too naive for this job. When I saw on the Order Paper the subject that the Opposition had chosen for debate, I thought, "Ah, they realise that the Green Paper is coming out, and they want to make a contribution on it in a debate." It was only when I got to the Chamber that I realised that the debate was intended to be a statement to the people of the by-election constituency, Norwich, North.

Before I try to follow the right hon. Member for Charnwood (Mr. Dorrell), and comment on his constructive comments and on the very thoughtful and impressive comments of my hon. Friend the Member for Colne Valley (Kali Mountford), let me say a little bit in response to the way in which the debate opened.

If people in Norwich, North are listening to this debate to help make up their mind how to vote, let me remind them that it was the Conservatives who broke the link with pensions. They then attacked the Government's tax changes, and the impact that those changes had on definable benefit pension schemes, but they never point out that it was their Government who gave employers payment holidays, which accounted for a large part of the black hole in pension pots. Of course, the Conservatives never explicitly say that they will change those tax arrangements to refill the pot, because they are not going to do that. They do not mention that it was they who opposed the introduction of pension credits.

The Conservatives raise issues such as Equitable Life and try to give the impression that if they were in power, they would find £5 billion with which to compensate all Equitable Life pensioners. I have some Equitable Life pensioners in my constituency, and I hope that we will treat them generously, but the Conservative party really should not try to give the impression that it will give a blank cheque to those pension holders when clearly it will not. The Conservatives keep telling us that they want honesty about public spending in the debate, yet today they have tried to imply that every pensioner will be better off. They have even tried to fudge the difference between means-tested benefits and universal benefits. They tried to give the impression to people who currently do not get means-tested benefits that the Conservatives will move to universal benefits, and that everybody will get something, without being honest to the people on means-tested benefits about the fact that if one does that, the pot of money has to be distributed more thinly, and the poorest in society will get less. The people of Norwich, North would be well advised to take what has been said today by Conservative Members with a substantial pinch of salt. That also applies to the Liberal Democrats-


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Paul Holmes (Chesterfield) (LD): Will the hon. Gentleman give way?

Dr. Ladyman: In one moment. I was just about to be rude to the Liberal Democrats; let me do that first, and then I will certainly give way. The Liberal Democrats have at least changed their position now, but for a number of years they gave the worst of misdirections to the people of this country by implying that social care could be made free sustainably; they did so in the past couple of general elections, when clearly that was never an option. We should have been honest with people about that, and so should the Liberal Democrats.

Paul Holmes: I was going to agree with the hon. Gentleman absolutely until he made his last point. Everything that he says about Conservative policy, about the fact that the origins of the problems lie in what the Conservatives did in the 1980s, and about their lack of an answer now is true. However, is the hon. Gentleman-a former Minister-happy that after 12 years of a Labour Government we have the worst pensions in western Europe, 20 per cent. of pensioners in poverty, and still no answer on the question of care for the elderly? All we get, after 12 years, is another discussion paper that will come to nothing until after the next election.

Dr. Ladyman: I am not happy if one single pensioner is in poverty, but I know that, thanks to this Government, far fewer are living on low incomes than in 1997, because there is pension credit and winter fuel payments. I have not been to Norwich in the run-up to the by-election, but I have knocked on an awful lot of doors in the past few months, and poorer pensioners, to a man and woman, say to me that they are better off than they were. They recognise that the Government have targeted resources on them. Means-testing may be inefficient, and we might wish that we could do otherwise, but it has meant that we have been able to help the poorer people in society.

I turn now to the issues thrown up by yesterday's social care Green Paper.

Mr. Graham Stuart: The hon. Gentleman has said that pensioners are better off, but we have had 12 years of economic growth so of course they are-although still far too many are in poverty. Does he agree that social care received only a 1 per cent. increase in the Treasury's spending provisions, which in real terms was a cut? It was separated from NHS spending, but should not the two be joined together in future?

Dr. Ladyman: I certainly think that we need to bring funding for the NHS and for social care together in various ways. I was going to make the following point later anyway, but will make it now instead: we already have a model that could help us to do that. We do not need to reinvent the wheel, because we have done the same thing for children.

Children's trusts have been created to bring together all the resources-for education, social care and so on-that are focused on children. That is the responsibility of the directors of the children's trusts. We have also introduced the idea of care trusts. Local
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areas can voluntarily create care trusts, in which NHS resources and social care resources from the local council are pooled together. What we have not yet done, but ought to, is say that that approach should no longer be voluntary. We should say that adult care trusts must be created everywhere, with each one having a director of adult care services responsible for pulling together funding from the NHS and local councils and making sure that it is spent most effectively. That is a way in which we can reduce the cost of social care.

One thing was missing from yesterday's Green Paper. We have identified the options for funding social care and how we might move forward on them, and I applaud the Government for grasping that nettle and being prepared to open the debate, but the Green Paper did not really put forward ideas for minimising the growth in the costs of social care.

By the middle of the century, four times as many people will be needing care than now. The fastest growing demographic consists of people over the age of 100: if we are spending £12 billion to £15 billion a year now on social care, we will be spending £60 billion in today's terms by the middle of the century. That cannot be afforded, so as well as identifying ways to fill the social care spending gap identified by the right hon. Member for Charnwood, we have to look at how we can minimise that spending.

Basically, the models in yesterday's Green Paper suggest that people should put a certain amount of money into the pot and that the Government will meet the rest of the costs, but that does not include any incentive for people to organise their lives in a way that minimises their care costs. They can continue to live in the biggest houses in the remotest parts of our constituencies and expect care workers to travel out to deliver care. Effectively, that will be at great expense to the Government: the liability falling on individuals will be capped, with the result that the public sector will have to step in and meet the costs.

How are we to incentivise people to organise their lives more sensibly? One option that I am very keen to promote is extra care housing. First of all, it means that people remain independent, because they stay in their own homes and do not have to live in residential care homes. They can access care as and when they need it, but the system means that care-providing organisations can model the care around the fact that people who need it are all in a relatively small place.

The extra care housing environment is a very efficient way to deliver care, yet councils around the country are still allowing developers to build ordinary, warden-assisted housing everywhere. Ninety per cent. of all the accommodation for older people that is being built is still simple assisted-living accommodation, with no element of care service provision. Therefore, we should change the planning laws, so that local councils can say, "No, you can't build this accommodation as just warden-assisted accommodation. You have to have care services delivered there as a way to help with that aspect of reducing costs."


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