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Before Clause 115, insert the following new clause:

Residential care: needs of spouse where occupational pension paid

(" .—(1) In section 22(4) of the National Assistance Act 1948 (assessment by local authority of resident's personal requirements) after "appropriate" there shall be inserted "and in particular, where

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the person is in receipt of benefits from an occupational pension scheme a local authority shall have regard in calculating his personal requirements to the needs of his spouse living other than in accommodation provided under this Part and to the usual standard of living of that spouse".
(2) The Secretary of State shall, with the approval of the Treasury, make grants out of money provided by Parliament to pay any expenses of local authorities incurred because a local authority calculates the personal requirements of a person in receipt of benefits from an occupational pension scheme to take account of the needs of his spouse.").

The noble Baroness said: My Lords, I make no apology for returning to the issue of residential care for the third time. Among elderly people the two greatest fears are crime, on the one hand, and, on the other, their health so deteriorating that they need residential care but cannot afford the cost. Ten thousand men and 5,000 women with occupational pensions are in residential care. At the moment if a man—and it is usually a man—has been nursed at home but develops Alzheimer's disease he will need residential care. If he has an occupational pension then it is likely that the whole of it will be taken in fees for his care. His wife, left behind at home, becomes dependent on a state category B pension of just £35 a week. She has nursed him lovingly, she has now lost him to a savage illness. She has probably lost her own health through nursing him and she now loses virtually her entire income. She would be better off if she were widowed. She would keep half of her husband's occupational pension. As regards his state pension, she would be better off if she were divorced. She would then be entitled to the full state pension of £57 a week; that is £20 more.

However, because she has kept him going, she is not widowed and has stayed loyal to him and not walked away, she has received blow upon blow. After all, the occupational pension belongs to her husband, officially and technically, but we recognise that the couple built it up together. In every moral sense short of the legal and technical sense, the pension belongs to them both. But through necessity he has had to take it all, leaving her with nothing.

At the Report stage we on these Benches pressed amendments that would allow the trustees to split the occupational pension in such a situation. Then the wife left at home would also be entitled to have the single person's state pension. We were narrowly defeated; in part because Members from all sides of your Lordships' House who care about disability were attending the All-Party Disablement Group meeting. The monitors did not alert them to the Division and it is not clear whether those monitors were working. The Members therefore missed the Division.

Those Members of your Lordships' House would not have heard the Minister repeat his essentially sole argument against the amendment. It was that local authorities had the discretion to remit part of the fees and that they should use that discretion. I do not wish to put it too harshly, but he said that it was their problem and not the Government's.

The Minister is a conscientious man. I wish that he had talked to his right honourable friends not just in the Department of Health—as I believe he has done because I am sure that he is concerned about the problem—but

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also in the Department of the Environment. Had he done so, he would have found that the Department of Health empowers local authorities to remit fees. He might also have found that the Department of the Environment punishes them if they do so.

It is true that under the 1948 legislation local authorities have the power to remit but in practice, within the framework of the DoE, they cannot use that power. Why? First, because of the financial situation of local authorities. They are right up against the cap imposed by the DoE. Half a dozen local authorities are already going through that cap. The Minister says that it is an "I told you so" situation. What does he expect when, in order to stand still to meet inflation, local authorities would have needed an increase in the revenue support grant of over 2 per cent? They actually received an increase of ½ per cent. That means a cut in real terms of 1½ per cent. without a single elderly person being cared for—and our population is ageing.

In consequence, the weekend survey of the Association of Directors of Social Services, with which I am sure the Minister is familiar, reports that over 80 per cent. of local authorities are making cuts in social services budgets of up to 10 per cent. And how are they to do so? First, they will restrict eligibility for some social services; secondly, they will have to reduce investment in home and domiciliary care, thus subverting care in the community; thirdly—and this is particularly germane to this amendment—they will have to increase charges above inflation to compensate for a grant that did not match inflation; and, fourthly, they will have to limit the amount of care that each client is entitled to and allowed to receive, however needy that client may be.

Every one of those cuts that the ADSS has identified and local authorities will have to make hits the group of people to which this amendment refers. Cuts in services at home add to the pressure on the wife who is the carer. Increased charges—including, for example, in Norfolk, £8 an hour for home help services—or full residential costs will directly affect those going into residential care. In Gloucester, elderly people have announced that they are taking the county council to court in order to seek the restoration of services that have been cut in the context of the present financial stringency. In this context, local authorities are increasing charges, cutting services and reducing the amount available for each individual. How on earth does the Minister expect local authorities to remit, by discretion, part of their fees?

That is bad enough. But the situation is worse still. Local authorities' standard spending assessments have been adjusted to reflect what the DoE thinks ought to be included for additional income from charges such as these. If local authorities therefore do not increase charges, and indeed, as the Minister suggests they should, actually remit charges, they will then be punished by the DoE with a local SSA settlement.

I therefore hope that today the Minister will not repeat the sole argument that he adduced in Committee and on Report that local authorities have the discretion to remit charges, unless he tells us what advice he will give to them in this situation. What statutory service should they cut to make possible a discretionary remission in

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fees? And will the Minister then protect them from the punitive effects of the standard spending settlement, which assumes an increase in the very charges that the Minister says they should remit? I hope that the Minister addresses this issue rather than yet again uttering platitudes about discretion.

Hence I have tabled this amendment. Its wording is drawn from Section 50(ME) of the 1990 community care Act. It requires all local authorities to exercise discretion so that the spouse at home would receive an adequate income. As that will lead to a fall in income from charges, the standard spending adjustment—as the additional grants are referred to in the words of the community care Act—should be adjusted accordingly. This amendment would therefore do precisely what the Minister has been calling on local authorities to do; namely, to remit charges on the basis of need, and a local authority would not be punished in consequence. I beg to move.

6.15 p.m.

Baroness Seear: My Lords, I support this amendment. It has been moved with such ability and in great detail by the noble Baroness, Lady Hollis, and I do not intend to repeat the arguments that she put forward so clearly. I wish to say this to the Minister. If he finds it difficult to accept the proposals put forward by the noble Baroness, Lady Hollis, I believe he will accept that this is a problem of great severity.

We must all know from our own personal experience—and the Minister is an understanding man; he realises what these problems entail—that this is a very real problem for a great many people. As one of the older Members of this House, I recognise that a great many of us are living too long. There is not much that we are prepared to do about that, but many of us who live too long get odder and odder, more and more difficult and more in need of care. To be serious, we all know that there are hideous cases of women —it is mainly women—who go on struggling with people who have diseases such as Alzheimer's which get worse and worse, and then have to resort to residential care. It cannot be right that, having had to move their husband into a residential institution, they are then left in abject poverty.

If the proposals put forward by the noble Baroness are not such as the Minister can accept—I hope that he will, but experience suggests that he may not be able to—I beg him, before the Bill goes to another place, to treat this as a very serious problem and try to think of other ways, in consultation with other departments, in which this serious problem can be dealt with. Whenever I hear that three government departments are involved in a problem my heart sinks. One is bad enough; two is dreadful; and three is quite unthinkable. I recognise that that is the Minister's problem as well as ours. But it is also his problem to try to overcome difficulties of this

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kind. I am certain that he will not deny the seriousness of the problem. If he cannot accept our solution, will he tell us what is his solution?

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