Andy Burnham sets out options for elderly care funding

Andy Burnham, the health secretary, announced today he is considering three options to pay for a new “national care service” including a progressive estate levy.

But the first cross-party debate on the issue, where he had spoken, ended in acrimony with the Conservatives rejecting overtures from both Labour and the Liberal Democrats to resume consensus talks over how to provide for the aged.

In the conference organised by Age UK, Britain’s biggest charity for older people, Burnham revealed that a white paper on the subject would be published in the next few weeks and that he favoured a “comprehensive, compulsory” scheme to replace a system that forces many to sell their homes to fund nursing home bills.

A new social care system, he said, could be financed in one of three ways.

One, people could decide to defer retirement to 68 and use their pension contributions for three years to pay for a care fund. Two, people could pay in instalments in the run-up to retiring at 65. Three, an estate levy could be deducted from the property of older people when they die.

Health department officials said that they were looking at a levy rate of 10%. “This is not a flat fee and would enable people to protect 90% of their homes and savings,” Burnham told the conference. He said the levy would be “progressive” as the millionaire would pay more than the ordinary pensioner.

Speaking later Burnham said he wanted to offer a range of options. “Manual workers might be worn out and not want to work for three more years so the option of using pension contributions does not suit everybody.” He had also said that if re-elected he would want a cross-party commission to work out the details of a bill to put before parliament – a move that was welcomed by the Liberal Democrats.

However Tory health spokesman Andrew Lansley rejected this offer saying that there was now a clear dividing line between the parties in the election.

Labour, he said, wanted to force people to pay “death taxes” while the Conservatives would offer a voluntary insurance scheme with an £8,000 premium.

“We have had 13 years of a Labour government with absolutely no reform or help for elderly people.

“The time for talking is over. Each party should set out their policies and let the people decide in the general election which is the best approach.

“The choice is clear: five more years of Gordon Brown dithering over helping older people or real reform under the Conservatives.”

The issue has risen to the top of the political agenda – partly in recognition that the problem of providing care for the aged is growing urgent as more people live longer. By 2026 one in five will be 65 or over – and total spending on care services could top £25bn.

Andrew Harrop, policy director at Age UK, said there was “no such thing as a free lunch” and urged the main parties to set out their plans in full.

“The parties continue to be bitterly divided on whether there should be new compulsory payments to fund care in later life. in one way or another and politicians need to say where it will come from. In our view, none of the parties have yet set out credible proposals for comprehensive reform of the care system.”