Rt Hon John Healey, Shadow Health Secretary
Speech to IPPR – 22 June 2011
Thank you Nick. May I say an institutional ‘thank you” to the ippr for hosting us today, and a personal ‘thank you’ for the work you did in Government and have continued to do at ippr to develop our Labour plans for a new and fairer deal for old age.
Can I also thank the number of you here from care organisations who have worked with Emily Thornberry and I in the 9 months we’ve been doing our jobs in Labour’s shadow health and care team.
I used to think those in the housing field are highly committed to their cause. But the passion shared by people involved in care, whether as campaigners, professionals, users or researchers is truly striking. I have been struck by your anger and concern at the cuts care services face as a result of the Government’s choices in cutting public spending as it hits families and the most vulnerable people hard, costs jobs and makes the national deficit harder to pay down.
But I have also been struck by your optimism in the midst of austerity, and by the faith that you show – despite all that is happening to welfare and care services – that we can forge a new deal for the future of care in our country.
I want to talk today about what a fair new deal for care should look like, particularly for older people. But I want to put that in the context of where Labour is now, just over a year since the election.
In truth, during this first year following the Election, we’ve been learning opposition fast. I see the imperatives of effective opposition as the four ‘A’s.
Attack and challenge to try to stop the worst of what the Government is doing is clearly our first task. Indeed, it is our duty as the only, as well as the Official, Opposition Party.
This is necessary but not sufficient, and Labour must also both build Alliances and make Arguments that others come to accept and see as right.
We’ve done all three in leading opposition to the government’s NHS reorganisation and legislation, though some of this is in public and some behind the scenes.
But whilst we challenge the Government – and stiffen the resolve of others to do the same – the fourth imperative of Opposition is to show people the Alternative – a different vision and future for the country.
This is very much the mission that Ed Miliband has set himself as Labour leader. He talks with passion about the “Promise of Britain” to young people that opportunities for them will be better than for their parents.
Challenges of care for ageing society
I want to extend that today and talk about the promise of Britain for the next and future generations of older people. And I want to do so based on Labour’s basic values of opportunity, security, fairness and dignity for all – which I believe are consistent also with the priorities of older people.
Last decade, Britain was the first country in Europe where the number of over-60s overtook the number of under-16s.
We have already reached the point where, according to Carers UK, the cost to society of caring has overtaken the cost of the NHS
And in the next Parliament we will reach the point where the need for informal care outstrips the availability of working age family members to provide that care.
So one of the big challenges for Britain is how to provide secure and sustainable care in old age. This challenge is compounded by increasing working age disability, but today I want to focus on the ageing challenge.
I believe this to be a moral, social and economic challenge.
A Moral challenge – because of our duty as a society to our vulnerable people.
A Social challenge – because a fair and sustainable care system is central to well-functioning family and community life
An Economic challenge – because unmet care need is an economic burden that holds back employment, productivity and growth.
I describe this as a “challenge”. And some say with pessimism that this is impossible in light of the present fiscal pressures.
But we need to offer an optimistic vision in hard times, as Attlee offered in the 1940s.
Amidst massive opposition from the Conservative Party, Labour had the vision to create a National Health Service, free at the point of need and use to everybody regardless of their ability to pay. Labour’s courage then has helped millions of people since to live happily and healthily well into older age – a dream their grandparents could barely imagine.
I think our political debate lacks a breadth and vision. While our policy language of ‘burdens’, ‘challenges’ and ‘time bombs’ we allow ourselves to be constrained by narrow horizons and a cautious, conservative mindset.
This language and thinking is past its sell-by date.
Instead we require a clear take on how the world is changing.
Our lives are very different from our parents lives – and our children’s lives will be just as different from ours.
For our grandparents, retirement was often just a few years after they stopped work. Today, those of us who reach 65 can expect to live another 20 years, mostly in good health. One in five of us alive in Britain will reach 100 .... I won’t be one of them ... but our children have the prospect of living one third of their lives in retirement.
This is unprecedented historically, and is a great cause for celebration, giving us many exciting new opportunities. But it also challenges many of our assumptions – about the family, the workplace, and our lifelong pattern of saving.
Today, as we contemplate retirement, we are more likely to think of global travel, gap years and grandparenting than see it as a period of rest and inactivity.
But for many of us, expectations are running well ahead of reality.
To make retirement a time of opportunity, people need the freedom to choose for themselves. Retirement should not be ‘one size fits all’. We have led different lives, have different interests and commitments and want different things from retirement.
In the last decade, in so many areas of society, we have torn down barriers which separate people. Civil rights, gender equality and gay rights. But we are called again now to do the same and transform the way we think about older age and older people.
We understand aspiration, ambition, independence, belonging and hope in our own lives.
We rarely recognise it but this is exactly what older people want for themselves.
This is not a new challenge, nor need we see this as a year zero.
Labour made progress in government – for current pensioners and for those of us from the post-war baby boom period who don’t think of ourselves as ‘old’ but rather facing or contemplating new stages in our lives of retirement, bereavement or becoming a grandparent. Although in the policy and political world we are more accustomed to discussing the stages of life in earlier years – of childhood, teens, starting work and becoming a parent – rather than later years.
For the first time, current pensioners are now no more likely to be living in poverty than people still in work, they have legal protection against age discrimination and more support from a greatly improved health service.
For those of us in work or looking ahead to retirement, the opportunity and choice on how and when to do so, has been significantly widened by Labour ending the work-retirement cliff-edge with a flexible retirement age and scope to draw a pension while still working of lump sum payment if retirement is deferred.
It remained incomplete and not yet fully comprehensive but with Labour in government, we also led a revolution in the philosophy of care, from the ethic of aid to ethic of independence and of rights.
We created personal budgets and direct payments, aiming to give adults choice, control and independence over the care they receive. We promoted greater health and social care integration through Care Trusts and proposed new statutory duties for integration. We created and set up thousands of dignity champions to promote respect and dignity in the treatment and care of older people in the community, hospitals and residential care. And we asked the Law Commission to review social care law and propose ways of rationalising the current complex systems.
So there’s a good deal during our period of Labour government we can reflect on. But we also fell short in some areas.
In place of fear
For too long, we believed because we were tackling the fear of elderly poverty, and because we were radically improving the services offered by the NHS, we were dealing with the main concerns of existing and future pensioners.
But fear of old age has not gone away. Fear we’ll need care which won’t be good enough; fear our savings will be wiped out; fear we can’t insulate ourselves or our families from such risk; fear of losing our homes, of being a burden on our families or being left in isolation or neglect.
A society with such endemic fear of becoming elderly is not a society of which any of us can be proud.
We must aim to see the next and future generations free from the fears of growing old, able instead to look forward to a fulfilling later life.
In the later years of our time in Government we led a major review in the Big Care Debate and groundbreaking Green Paper, then White Paper and I pay tribute Ivan Lewis, Phil Hope and Andy Burnham as ministers – and to Nick himself working behind the scenes – for their passion and hard work on this.
They developed options, for the first time, for a new funding settlement for care.
They brought together and worked with many of you as sector organisations, providers, users, insurers, carers.
They brought together the Political parties to try to forge an historic consensus solution.
And they oversaw much of the internal Government work on which Dilnot and the Coalition can now draw.
Dilnot and beyond
Our imperative in government then was to collaborate. It remains our instinct now in Opposition.
We know that any new system of care must give all of us the long-term confidence to know what will be on offer for us and our family, and that this will not change as we contemplate and prepare for older age.
We know this requires a stable, sustainable system supported by all political parties.
Ed has given his word that we will not play politics with this issue. This is bold and unusual from an Opposition leader.
I and my Labour colleagues regard the Tories’ decision to pull out of the consensus discussions and put up their “death tax” campaign posters before the last elections as one of the lowest moments in recent political history.
In the Labour leadership, we are determined to help create the opportunity for a high point in care politics, by offering – as both Ed and I have done – to work for a consensus to implement the recommendations of the Dilnot commission on funding of long term care and support.
We look forward to Andrew Dilnot’s report. We want to give Dilnot a fair wind, and look forward to his conclusions. But the real challenge and the real responsibility lies with David Cameron. His cheap-shot decision to pull the Conservatives out of constructive cross-party work before the last election saw him playing politics with care for our elderly people.
If the government demonstrates that they are determined to see a better long-term system of social care put in place for elderly people in our country then Labour are willing to talk and work with them and all other parties to do so. This is a big test for David Cameron.
If he fails to rise to this challenge he will let down older people now and in the generations to come.
The onus to act is obviously on Government.
For our part, we are conscious of the imperative to get such reform underway and the impatience in the care sector to begin work promptly.
Britain is an ageing society, and we need a better, fairer and lasting system of care for people as they grow older.
So let me set out what I see as the main objectives for a new system to follow Andrew Dilnot’s work. I do so based on what I regard as those core Labour values of fairness, security, opportunity and dignity for all. In doing so, however, I am conscious that the judgement that matters most is that of older people who will assess for themselves how much confidence they can place in the declarations of politicians to build a better and fairer system.
The new promise for old age must fulfil a commitment to fairness for all.
For many, the fear and unfairness of being hit by the catastrophic care costs for a condition like dementia is a major flaw in the present system.
For the last year in government, I argued in public and in cabinet, that Labour needed a broader view of fairness than being pro-poor. I believed we needed an appreciation of the pressures and a vision for the future that appeals to the 14 million people on either side of median income – the ‘just coping’ section of society who work hard but often feel they don’t get enough back from Labour governments. I set out in my advice to the next Labour leader last summer, before Ed was elected, in an open Memorandum published under the Next Left programme.
I think this helps frame an important objective for fairness in any new funding system for social care.
At present, the system works best for those able to use accountants and lawyers to switch the ownership of their assets and avoid means testing, or those with a big cushion of savings to fund their care. It also seems to many to reward those who make no provision for their own future and to penalise those who have put savings aside for their older age.
Instead, we need a long-term settlement that offers security and confidence to all; and that offers a fair protection to the ‘squeezed middle’ – people on modest earnings who strive hard throughout their working life to build up their own savings, and who are often unpaid carers as well.
Too many families and individuals make their contributions but get little or nothing back.
Means-tested out of care support when they need it themselves, they can find their modest equity or savings rapidly swallowed up by care bills.
Whilst the low-to-middle earners are 25 percent more likely to be unpaid carers, three-quarters will denied funding by the current means testing levels. Research by the Resolution Foundation found that low earners have a deep sense of unfairness about long-term care, believing the system punishes those who work and save to prepare for old age.
So a fair settlement for old age should therefore also recognise the time people put into caring for family members. Nobody should be expected to give up their own life to provide round the clock care with no recognition or support from the state. Informal carers are the backbone of our society and of our care system, so we need care, work and welfare policies should be developed to recognise this more fairly and more fully.
The second objective should be the security and the sustainability of a new care settlement.
This is the big challenge, and the big promise that Dilnot could set out to offer is a future free from fear of ageing.
This will require a partnership between the state, providing the ultimate stop-loss support or insurance, and the individual, making a fair contribution through their life, or from their accumulated assets.
I think we must recognise too that this will require us all to pay more, including Government.
But any insurance option must be available to all. Just as any equity or asset release option must be available to all, and not depend on the lottery of where we live or whether the local
authority run such a scheme.
There must be a long term plan for those who are some way from retirement, to enable them to make provision for their old age in advance.
And there must be a short term plan for those about to retire.
There is a growing expectation that the financial sector will play a role in helping people to make provision. I do not see a principled reason why this should not help.
But in practice insurance in long term care insurance tends to fail. The last UK provider of long term care insurance left the market in 2010. The US and France have tried to use this model, but have achieved only 10 to 15 percent population coverage.
One of the reasons for this market failure is the potential for catastrophic costs to escalate, inflating the cost of insurance so that it is unaffordable for most people. Capping the liability could tackle this barrier. But the knowledge and behavioural barriers that have also prevented the success of long term care insurance in the past will also need to be overcome, as will the low-level of confidence we have in financial institutions – as the ABI report today, lack of trust is the biggest problem the industry face.
As we work to see sustainable provision for the future we need to be clear-sighted about these serious market failures and barriers to private care insurance. And whilst the choice of financing models will be an important decision for Dilnot we need also to be open to new partnerships and ways of shaping people’s choices – just as we’ve done with the new National Employment Savings Trust for pensions that combines state sponsorship with private administration.
Opportunity for all
Our third objective should be based on the principle of opportunity for all, with a consistent national and portable assessment system and the aim for a basic minimum entitlement at the start of care need. As with the NHS, the concept of a National Care Service captured an ideal that chimes with our national values, that everyone should share a responsibility to contribute and everyone should share a right to some support.
Universal rights create the ties that bind our national identity. They also give legitimacy to universal contributions and responsibilities.
Just as we established Sure Start as an expression of a national entitlement to a fair chance at the start of life, so too should we aspire for a fair chance in later life as we first need care in our own homes.
It makes sense for us all – even and including the Treasury. As the evidence from the Partnerships for Older People’s Pilots found, early intervention was effective at preventing expensive hospital care.
Evidence from the ippr itself, underlines this invest-to-save equation with support for working carers. Your work has shown whilst only 7 percent of carers who can stay in work are in relative poverty, while nearly one third of non-working carers are poor. You’ve concluded, in a memorable phrase “caring is written in invisible ink through all the major inequalities” in the labour market.
So there is a strong economic, as well as a moral and social case, for a minimum universal entitlement in care.
Our fourth objective – also based on the principles of opportunity for all, fairness and security and dignity – must be better provision, not just better funded provision. I don’t propose to develop this today because I could take another half hour to do so.
Care has too long been a second class service. Whilst Labour put in place important safety standards and quality regulation, it is clear from recent events that we need a new deal for care providers alongside a new financial settlement for a future care system.
Neither Southern Cross nor Winterbourne View was directly due to underfunding.
People receiving care, and people living in care homes, have the right to feel safe. These are their homes. It seems to me that there’s a case for regulation for financial stability as well as regulation for quality.
There is some very good care in all parts of the care sector. But we cannot expect residents to be treated with dignity and respect if the staff looking after them are not. So we must consider again the case for registering care staff as well as properly training them, and ensuring the existing regulations are sufficient and the official watchdog is adequately resourced and well managed.
I’m leading one of Labour’s long term policy reviews at present on older people and their expectations and needs for the future. We’re looking at some of these questions – and others, like:
Overcoming the daily reality of loneliness and isolation for many elderly people;
Making the Equality Act stick for older people;
More effectively integrating health and social care services;
Supporting families better and the potential for family based carers budgets.
I welcome your views and look forward to working with you and with the ippr.
Stopping the system sliding now, to build a better system for the future
These are some of the most important longer term aspirations and objectives.
But there is the immediate problem of funding now.
Last year, George Osborne promised extra resources for social care. But in the same budget, he slashed the grant to local authorities. This has hit the poorest hardest. And what the
Treasury failed to see was that many local authorities have been funding social care at levels over and above the component allocated as part of central government grant. So despite the attempts to protect council care budgets:
£1bn of the £3bn in local authority cuts was in social care.
Councils are planning to spend £991m less on adult social care.
The King’s Fund has said social care now has an estimated short fall of £1.2bn over the next four years.
So if the Government are serious about a better and fairer system for the future, they must be ready to act to stop the serious deterioration of current care. It’s a matter of credibility and confidence for people who are looking to the Government to accept the big care challenge that they, we and all of us together in Britain must face.