New deal will fund care of elderly

Major pledges state cash to ease hardship

John Major is ready to launch a scheme to prevent elderly people in nursing homes having to use virtually all of their life savings to pay for their care before they qualify for state help.

In a pre-election initiative, the Government is planning a "pound-for- pound" deal with the private sector to promote the widespread use of individual insurance for long term care. The Prime Minister is expected today to give the strongest public indication yet that he favours the policy under which the state would match long-term provision provided by insurance companies to prevent the elderly in care from losing their assets.

In his keynote speech to the Conservative Central Council in Harrogate, Mr Major is likely to confirm that the Government will produce a consultation paper after Easter laying out options for what all parties acknowledge is the serious problem of the spiralling costs of the elderly in residential care.

At present the state only meets the full costs of nursing- home care if the individual's assets are worth less than pounds 10,000. This means that the family home frequently has to be sold, and life savings massively depleted, to ensure state provision.

Ministers have already decided in principle in favour of a scheme which would allow the elderly to keep their assets to the value of private insurance cover which they had secured.

So, if a person gets pounds 60,000 in insurance provision for residential nursery home care over three years, the Government would allow them to keep pounds 60,000 - instead of the present pounds 10,000 - of their assets or savings, even though the state pays for the rest of their provision.

At present the insurance industry calculates that such a level of provision could be provided with a lump-sum premium, paid on retirement, of around pounds 9,000.

Mr Major is preparing to treat the commitment to tackling the issue as a key section of the party's goal of making Britain a "Nation of Opportunity and Ownership", one of five themes the party will continue to emphasise between now and the general election.

Late drafts of Mr Major's speech, which will be finalised this morning as he returns from the opening of the Inter- Governmental Conference in Turin, include a pointed reference to long- term care which will underline the Government's commitment to tackling the issue. Although the final details could await the manifesto, the Government may produce them well before then.

The issue is highlighted in Our Nation's Future, the document published this week on the findings of the most comprehensive consultation exercise carried out among the party's rank-and-file membership - and describing provision of long- term care as a "matter of major concern to Conservatives".

Mr Major's emphasis on long-term care will come in a wide-ranging speech setting out an electoral platform which will emphasise his determination to encourage an increase in selective schools.

Basing his speech on the five electoral themes - Opportunity and Ownership, Law and Order, Enterprise and Prosperity, Sovereign Nation, and First Class Public Services - Mr Major will also go out of his way to draw a line between Labour's view of Europe and support for devolution, and the Tory view of Britain as a distinct and united nation state.

Yesterday the Cabinet's big guns, Kenneth Clarke and Michael Heseltine, were wheeled out at the Central Council to emphasise the Tories' unifying concept of Britain as the "Enterprise Centre of Europe".

Harrogate reports, page 2