Long-term care from Labour

A future Labour Government would make the provision of long-term care one of its first priorities, the party has confirmed.

Shadow health spokesman, Chris Smith, speaking at the annual dinner of the Society of Pensions Consultants in London last week, said he had ‘no pat answers’ to the question of who would pay for Britain’s growing retired population but that a Royal Commission was needed to build a cross-party consensus to tackle the problem.

He said: ‘The Government has proposed an insurance-based alternative whereby people invest in a policy on retirement so they don’t later have to sell their house to pay for long-term care. It’s neat, but doesn’t answer the real problem – how many pensioners have liquid cash of between u5,000-u10,000 to pay the premium. All that will happen is the wealthy will be able to afford it. If you wanted the greatest beneficial effect you wouldn’t choose the top of the income scale to achieve it.’

Smith, who lost the party’s pensions portfolio after his promotion to health earlier this year, said Labour also planned to change pensions regulation. Instead of rigorously overseeing the advice process, Smith said a new framework would regulate pensions providers and not the detail of advice-giving.

‘The Government seems to regulate everything now but this leads to increased fees and higher charges. It would be better to regulate the provider and so avoid the need for two hours of (compliance work) just to explain what a personal pension is.’

Smith said that Labour also planned to encourage wider take-up of occupational pension schemes, which, he claimed, were at risk of being dropped by companies.

One option would be a new private sector scheme involving employers’ federations, trade unions, insurance companies and trusts, Smith said.