The commitment to carry out the legislation will be a part of the Tory election manifesto strategy aimed at winning back the support of the middle- class family voters and the elderly. The manifesto will also encourage more people to take out private pension schemes as part of a drive to encourage self-provision.
The Secretary of State for Health, Stephen Dorrell, will publish a draft Bill in the next three weeks offering inducements to people to take out private insurance for long-term care. The state could help with insurance costs to avoid them having to sell their homes if they suffered long illnesses in their old age.
"It's all part of a general strategy for self-provision which will be a key part of our social agenda," a Tory party source said.
John Major promised action after the party was inundated with protests from families forced to sell homes to pay for long-term care. Mr Dorrell was forced to delay the legislation last year when he ran into trouble with the insurance industry, but ministerial sources confirmed last night that a scheme had been agreed.
"The real problem was that it appeared to penalise people who were thrifty and had saved. We have to reward them for their thrift," the source said.
The average home is worth pounds 60,000 and local authorities disregard up to pounds 16,000 before demanding the sale of assets. The Tory election manifesto will promise that in future they will be able to insure part or whole of the additional value of their home at a reasonable cost.
The Liberal Democrats, meanwhile, will today target their appeal at young people with a youth newsletter promising loans to cover rent deposits, and safe accommodation for those under 16 who have left home or care. Paddy Ashdown, the Liberal Democrat leader, said yesterday that he was in favour of reducing the voting age from 18 to 16.
But Tory strategists believe the Liberal Democrats are mistaken in their target. The Tory manifesto will seek to mobilise the grey vote which swung behind Mr Major to win the 1992 election.
Speculation on an early election was resurrected yesterday when Mr Major denied reports - from Cabinet colleagues - that he was determined to hold off until 1 May, barring Commons defeat on a vote of confidence.
The Prime Minister's repudiation, a hint that he might yet go to the country in March or April, coincided with renewed Westminster talk that the Ulster Unionists would be prepared to vote the Government down.
The accelerated pace of preparation for the election was shown yesterday in a run of Commons questions put by Liberal Democrat Treasury spokesman Malcolm Bruce on the costing of various options - including a pounds 1bn switch of tax revenue from the rich to the lowest taxpaying income groups.
Mr Bruce was told by the Treasury that the Liberal Democrats' policy of imposing a 50p tax band on the 140,000 people with taxable income of more than pounds 100,000 a year would raise pounds 1.4bn - while 470,000 taxpayers with taxable income of less than pounds 6,000 would benefit from a pounds 1.2bn increaser in personal allowances of pounds 200.
Those who would benefit from such a policy include married couples with two children, and one earner on pounds 100 a week, who currently pay income tax of 36p a week.Reuse content