ALEX BRUMMER: The true cost of Rachel Reeves’ secret welfare raid

Last month my 96-year-old relative, an Auschwitz survivor, was finally discharged from Sussex County Hospital’s shiny new Louisa Martindale Building after a five-week stay.

As so often, her fighting spirit was stronger than a Covid infection, pneumonia and a sodium imbalance.

His hospital stay could have been several weeks shorter, freeing up a bed in a public health system under severe pressure, if doctors had been assured that a social care package involving two visits a day could be implemented.

This was necessary for discharge, even though she had a domestic worker living with her.

Labour talked non-stop about the pressure on the healthcare system in the run-up to the election, promising two million more appointments a year.

Keir Starmer also claimed his ban on smoking outside pubs and in public areas would ease pressure on the NHS.

What the Prime Minister did not say was that Chancellor Rachel Reeves, in her “Repairing the Foundations” audit of the public finances on 30 July, removed, without warning, the proposed changes to social care.

Amid the furor over the cancellation of winter fuel payments to the elderly, a serious effort to reform welfare has been abandoned.

The Conservatives had pledged to cap the cost of providing social care for the elderly and sick at £86,000.

As part of the agreement, it was planned to finance an improved route from the hospital to the social care facility by October 2025.

Reeves said the previous government had “not set aside money” for this. However, clearing hospitals of thousands of cured people, the elderly and people with dementia, who should be in the care system, could ease the burden on the entire NHS.

Successive governments have missed a golden opportunity to begin fixing the social assistance system by establishing a social market model.

Had governments acted in 2011, when the Dilnot Commission reported its findings on social assistance and proposed a cap, it is possible that a considerable amount of funding could have been raised to make important progress in reducing growing welfare obligations.

As with automatic enrollment for private pension savings, workers would be given the opportunity to “opt out,” but very few do so.

The first decade of automatic enrolment saw 11 million people join, with a total pension pot of £114bn.

If the 2011 workforce had been automatically enrolled in a welfare fund (again with the option to opt out) and paid even a fraction of the pension subscription, there would by now have been a generous amount of cash for those needing welfare at home or in nursing homes.

And if those funds had been invested in the stock market, as in Australia’s pension plan, they could have taken advantage of the sharp rise in global stock prices since the 2008 financial crisis.

People would have access to social assistance funds that would allow them to keep their family home intact and face the final years of their lives without fear of being excluded from the system.

Instead of a rational social market solution, or even a government-backed plan, Reeves has left families and elderly people in need of care without a parachute.

This should be a major issue for our politicians. The Liberal Democrats, led by Ed Davey, campaigned at the election on welfare, saying they would use bank taxes to pay for what is needed. Very little has been heard from them since.

Reeves’ embrace of fiscal orthodoxy is part of an effort to curry favor with bond markets, but imposing austerity at the expense of retirees, the elderly and the sick is not a good look.

After all, as Labour likes to remind us, it is the party that adopted William Beveridge’s wartime report promising care “from the cradle to the grave”.

The final part of that journey is now considerably more uncomfortable as a result of the Chancellor’s worrying decisions.