Can social care be fixed?

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0:30School ready at Whole Foods Market. Odoo, providing tools for businesses across industries into one fully integrated platform. Whatever your business needs, Odoo is committed to providing it. Learn more at odoo.com. Wake Up To Money from BBC Five Live. Hello, welcome to Wake Up To Money. How should the nation pay for its social care? Who should deliver it? Should it be privately run or not? Should there be a new tax, a change to inheritance taxes, a different way of finding the cash? Andy Burnham is today calling for a consensus across parties to fix the crisis. So it's up for debate once again.

1:13We'll have it on Wake Up To Money. We'll hear what's going on. We'd like to hear from you as well. Wildfires continue across Europe. We'll learn what businesses might expect from their insurers in terms of compensation. and FIFA's plan to sell a stake in its competition has been strongly criticised by our own Prime Minister, amongst others. We'll hear what it could mean for the beautiful game. Wake Up To Money with Sean Farrington. Good morning to you. Wake Up To Money on BBC Five Live, Wednesday morning, the 29th of July. It is just after five o 'clock. And after yesterday's discussions about the next ideas from Andy Burnham and what should happen in the school process to get people into work.

1:57Today, the conversation turns to what should happen with social care across the country, particularly Andy Burnham, of course, will be talking about what should happen in England, where he has the powers as the Prime Minister of the United Kingdom to change some of the rules there. But right across the UK, it's a devolved power in many, many scenarios. But what is working where you are? What needs to change where you might be? Because the conversation is going to get a little bit bigger once again. Social care often seems to be high up the agenda whenever there's been a new prime minister, doesn't there?

2:32But we haven't yet seen any drastic changes over recent years into how it's provided, where the money might come from, what the services should be as well, who should pay, all of that and more. It's a crucial issue for the nation. I've got Rachel Ketterwell with me this morning, founder of Fern and Rosie Jam in Yorkshire. Rachel, very good morning to you. Good morning, Sean. Lovely to speak to you. How are you? I'm okay, thank you, Rachel. We're rattling through new policies every day or new suggestions of what policies might be with Andy Burnham now as Prime Minister. And social care, Rachel, one of those topics that households around the country can't avoid, but yet it has felt like politicians over the years, is it fair to say that they have avoided so far making the big changes that many people would like to see?

3:27i think it's not an area that i've got huge amounts of experience with um but i think what's challenging when you're looking at anything on this kind of scale is as you were talking about where where the money is going to come from to kind of put the services in place to support like the more vulnerable in our society and i think it's similar well i always used to think it was the same with school breakfast clubs that school breakfast clubs. I was a primary school teacher and I used to think it was such a challenging thing for people to tackle because they knew it was going to be such an expensive problem to solve.

4:01And I wonder if that's similar with social care and the reason that perhaps we're not seeing the actions that we would like is because we know it's actually going to be really challenging to fix these things. We've got Olivia Micklem with us as well this morning, who's the US Equities Fund Manager at Artemis. So very much involved in looking at what's going on in the US economy, at those companies that we often talk about every day on Wake Up To Money. They have such an influence in our lives, some of the bigger ones as well. Olivia, very good morning to you. Good morning. Thanks for having me.

4:32Thanks for being with us, Olivia. This sort of wider concept of who pays for our care in the future, I'm guessing this isn't just one that the UK will be battling with. Absolutely. I mean, government's trying to work out how to sort of balance their budgets and fund new policies and evolving policies is obviously a complex path to tread. So, yeah, it's no more complex for Burnham than it is for any other politician at this point in time. And it's interesting to look through the papers today. So the overall story for the government today is that they want some cross-party collaboration. They reckon that's essential to addressing the social care crisis.

5:12But you have a look in some of the papers this morning, the Daily Telegraph front page, workers face new tax to fund social care. So health officials drawing up plans for a 1.8 % levy on earnings to pay for Andy Burnham's reforms. Now, this is civil servants been working on proposals, so we're still a bit of a way from any of this being what Andy Burnham and his team are putting to the country as a way for social care in England to be paid for. But an idea that there would be a levy, 1.8 % of earnings above just over£6 ,000 paid by workers over the age of 34. Unlike national insurance and those contributions, the part of people's pay slips that funds current government spending, it just goes effectively straight into the pot.

6:02The idea with this that civil servants have been working on is that the money would be invested on behalf of working-age people to use for care when their cohort reaches old age and it would be supplemented by wealthier elderly people who, on top of paying this levy, would pay up to 45 % of their own costs as well, depending on what they have. That would be an alternative to that 10 % tax on estates, says the Telegraph. It has been called a death tax nickname from some of his opponents. That's the Telegraph coverage there. Rachel, do you think it makes much of a difference whether there are cuts in spending made in one place to pay for this if people are engaged.

6:48We've had this conversation before under some of those recent Conservative Prime Ministers about the possibility for a new line on the payslip that you would be obviously paying out more in tax but very aware of where that's going to. Inheritance taxes, do you think there's a particular way to settle this? I think globally and then if you look at the UK, I think there is a problem with the amount of money that we have and the services that we want to provide for people. So we have to look at where that money is going to come from and what's the fairest thing. I think there isn't a perfect answer.

7:27I think that's one of the reasons that makes it so complicated for everybody. Well, it has been complicated for many, Prime Minister. Andy Burnham not the first to draw attention to the critical state of the social care system in England. Change absolutely must tackle the long-standing and damaging divide between health and social care. We are offering a long-term solution for the sustainability of social care. We will fix the crisis in social care once and for all. The challenge is absolutely right. We have to fix social care. Olivia, to hear David Cameron, Theresa May, Boris Johnson, Keir Starmer there.

8:05And now we've got Andy Burnham saying something similar about the urgency of this. What does it tell you about the issues with the problem that so many have wanted to let the country know that it is at the front of their thoughts, but yet haven't been able to get solutions over the line? Well, I suppose there's two sides of it. on the one hand, you have, you know, the issue within the political party of being able to come to some sort of agreement on how that should look and, you know, what the policy should actually end up looking like. But the other side is really how you fund it. And, you know, particularly for Burnham at this point in time, you're in a situation where inflation continues to be challenged.

8:47You know, you see what's happening in Iran and what that's done to energy prices globally, and particularly in the UK, with inflation potentially getting back out of control. That leaves central banks with less flexibility on what they can do. And that has a knock-on effect to the cost of funding. If they can't lean on taxes, will they have to lean on the debt markets? And can they afford to do that? So there's a lot of moving parts. And I think, you know, the fact that so many different prime ministers have tried the same approach and not yet managed to achieve what they'd hoped just tells you just how complex it has to be.

9:18We're going to be speaking to a company a bit later that runs a social care business, the St. Celius Care Group that owns and operates five care homes in North Yorkshire a little bit later in the show. Let's first hear what exactly the problem is. What is the state of the care sector right now? What options are available to the government? Wake Up to Money's Chief in Newer and spoke to Sarah Woolner, who is Chief Executive of King's Fund, the healthcare think tank, about the state of the sector. Yeah. Baroness Casey has been asked to lead a commission to examine different options for reforming our social care system, both shorter term actions and then a longer term vision and roadmap to fundamental reform of social care.

10:02As part of that commission, Baroness Casey is leading a conversation, a public engagement exercise to be clear what are different options and what are some of the trade-offs. So for example, you could have a more generous offer from the state, but But obviously, that's likely to come with a higher price tag. Baroness Casey will report to the government and then the government will use that both to make a recommendation to the public and drive reform forward, but also hopefully to create more political consensus on options for reform. What could reforms a social care system look like? What are the potential options and how could they be funded?

10:37There's almost a scale from where we are now to a system that's more akin to the NHS, so a universal free at the point of use. On the way to that, we could do things like offer free personal care. Scotland has this system in place. That's where everybody would be eligible for some help. For example, if they needed it at home with eating and dressing and washing, or you could move to a system where you cap care costs. So nobody would be eligible for costs over a certain amount, for example,£100 ,000. Or you could move to a more universal system like the NHS, where everyone was eligible to social care free at the point of use.

11:18But you would still get into a discussion about how generous that offer was. What are the parameters of that versus what are you asking people to contribute or perhaps asking families to step in and deliver? Can you explain how the social care system works in England? Who provides it and who pays for it? Yeah, so at the moment, there are lots of different providers of social care, actually about 19 ,000 different providers. And that's from people coming into someone's home to help them, for example, get dressed and eat and retain some independence at home to care home providers. in terms of the funding of social care.

11:54Well, the government steps in and helps you and provide social care services only if you have very limited means. So savings and assets less than£23 ,250. And it will only provide state support if you have very high needs. Local authorities assess your needs and make a decision about whether state support is available to you. And so people usually apply for help through their local authority, but there are lots of different providers. The voluntary sector also provides some support. Why do you think that previous approaches to this haven't worked? I think we have got very tied up in just talking about the cost of social care when there is low public awareness of the current costs and how the system works.

12:39And we haven't made the positive case for reform. And that is that actually social care hugely enhances people's lives. And therefore, the debate is often simply focused on what's this going to cost us? And is it going to be too expensive? I think the other thing I would say is that social care proposals don't come cheap, but equally, we spend a lot on other public services. So if we were to offer free personal care, as for example, they do in Scotland, well, the devil's in the detail, but estimates are around an additional six to seven billion pounds a year. If we were to be more generous and offer a more universal system or a much broader system akin to some kind of NHS system, estimates suggest around 18 billion extra per year.

13:25We spend 200 billion pounds on the NHS each year. So in the scale of what we spend on some other public services, it's not sort of out of proportion in terms of what people would get but we do have to have an honest conversation how are we going to pay for it and what's the balance of the state paying versus individuals and families making a contribution so that's sarah walno there the chief executive of the king's fund healthcare think thing laying out the scale of the cost the ways around some of this where the issues have come from speaking to our very own Stephen Nervan there. More on that later in the show when we'll speak to that social care provider in Yorkshire.

14:07We've already had plenty of your messages coming in. Benjamin on Teesside says it'd be considerably cheaper to nationalise social care or make it a local not-for-profit to dramatically reduce the costs. Currently every care agency is for profit. Remove that and the costs go down in a single step. Well Benjamin the front page of the Times this morning. Shake-up of social care to lock out private firms. So the Times saying that privately run nursing home chains face being cut out of this radical shake-up of social care in England to prevent taxpayers' money being used to subsidise the profits of private equity.

14:44The Times understands the Prime Minister is reluctant to allow a new service to be operated by large private sector providers on a for-profit basis and wants to base the model around community led services run by charities, local authorities and not for profit companies. Your thoughts on that? Another's been in touch saying, let's be honest, people think when you can't look after yourself, you're a burden. Children no longer believe they need to help their parents. And on the issues of where the money comes from from this, you need less lines on pay slips, not more. Scrap national insurance and capital gains tax.

15:18Have one overall income tax tax, all on income evenly. 85058. Do let us know. your thoughts, join in the conversation. We're going to be speaking to somebody who runs that group of care homes a little later in the show to hear what it's like on the front line running one of those businesses, what some of those proposals might mean for the way all of this works. Keep your thoughts coming, please. We've got Rachel Kettlewell with us, boss of Fern and Rosie Jam, based in Yorkshire. Rachel, the weather, does it filter through yet? What conversations are you having with suppliers and the like about how this run of heat across the country is impacting those fruit growers?

16:03Yeah, 100%. I mean, even last year, but every year we're looking at crop prices and seeing increases across supply chain. I think particularly with berries, which obviously our jams are 70 % fruit, we see quite a lot of variance in the prices that we're paying. And I think that's driven by kind of a global market for fruit. In the UK currently, we grow around 93 ,000 tonnes, but we're actually consuming around 168 ,000 tonnes. So it's not just what's happening in the UK, it's the European markets and the global markets as well that are having an impact on price. And so at what point, you know, people see the weather in the last few months, at what point does that actually start to feed through into?

16:57Is it this year's produce, this winter, next summer? What might be the longer term consequences of this? I mean, the information that I have currently, it's still quite early to kind of predict crop prices for the year for next year and because we've not finished the season um but you can kind of get early indicators coming in from around March time but I think if you looked at actually the crop from 2025 I think that was more it looks like that was more severely impacted because of um some challenging climate across across Europe and I think that one of the pieces of information I was looking at was like um a report from PROFIL which is like the European Association for fruit and vegetable processes and they were talking about just a steady decline in fruit across Europe driven by a few things like less acres and so actually the fact that the land isn't the land that we're growing fruit on isn't in the best place and that's changing.

18:01Also the impact of climate change and how much that's driven actually the change in the soils that we're using but also the fact that there's less farmers and that's because obviously it's becoming more and more complicated to make money from fruit farming. And actually, again, also like the lack of workers that are coming out to do the picking. And again, because that's quite low pay. And all of those things kind of make the sourcing of our fruits quite complex. And when you're looking at kind of negotiations, you're looking kind of, you know, three years into the future of what crop prices could look like.

18:36So might you change the, I don't know, the type of fruit you use in your jams? I mean, that feels like that'd be quite a big move. I think that's something that, yes, I would say that I think our business and I'm sure other businesses are looking at because I think having stability of crops is really important. So which fruit has the biggest, sorry to interrupt you, Rachel, which fruit has the biggest pressures and which ones sort of, when you look at others, are like most appealing? I'm guessing there's a spectrum of this stuff. So what are we talking about here? I feel like in my experience, what we always see as a challenge is raspberries.

19:14And I never know like how much that is just because quite, you know, there's all the complexities around it. But I always don't know if that's just because really simply like picking a raspberry is more complicated than picking a different fruit. And actually, when you then scale that across supply chain, you know, raspberries go moldy quicker. There's so much waste with a raspberry. So all those kind of things make raspberries more difficult to source. so I think raspberries are really challenging and then I guess we don't use this product but I guess like apples are a product that's more readily available and easier to grow I think That's very interesting Keep an eye on our shelves in the years to come You heard it here first The poor old raspberry is not necessarily the easiest fruit to pick We learn something new on Wake Up To Money every morning Plenty more to come from Rachel.

20:09Got Olivia Micklem with us as well this morning, who is the US equities fund manager at Artemis. Olivia, if we turn our attentions to some of those biggest companies in the world, at the minute we often talk about the big tech companies. Apple has become the second company in history to touch that valuation and market capitalisation, as we call it, of$5 trillion yesterday when the share price bounces around. So NVIDIA was the first here. Have there been changes in recent weeks, Olivia, in which tech companies are in favour at the moment? Well, there's an awful lot going on in what people think and are willing to pay for different tech companies at the moment in the US.

20:58And it's all being driven by the market's view of whether this huge cycle of spending to build out these AI data centers across the US, the view of how sustainable that spend really is and what the market is willing to pay for the companies that are either spending that money or benefiting from that spend. What we've seen with Apple is it's actually not really that involved in any of that debate. And that's part of the reason why recently the stock has performed so well. So for most of this year, the market has been willing to buy and boost the prices of everything in that capex supply chain. So memory companies and the spenders of what we would call the hyperscalers, companies like Google and Meta.

21:40But Apple isn't spending. In many ways, it was perceived to be a bit of an AI sort of loser or laggard, certainly. But now that the market has become a lot more cynical and a lot more worried about how this spending is actually going to play out over the next few years, by not being involved, Apple is actually getting the benefit of the doubt. And because it's not involved, it's not spending all its cash. So it's got a huge amount of cash flow being generated. And certainly in the last sort of six weeks or so, the market has seen that as a real positive. And as a result, that stock has moved really nicely upwards, while other parts of the tech complex have been really underperforming.

22:15Well, and another part of that tech complex, we might not have been talking about or even been aware of this huge South Korean company, SK Hynex, a year ago. But in recent times, when everybody's so interested in the kit that goes into so much of these advancements in technology, the chips that are being made for all of this, what can you tell us about SK Hynex, how it's been performing? Why its share price seems to continue to have fallen in recent weeks after much excitement. What's the latest? Well, the way that the market looks at these sort of opportunities is, you know, trying to work out how sustainable this new source of demand is.

22:59So, coming into this year, certainly overall, any of these businesses like SK Hynix that are involved in the memory part of this whole supply chain got a huge boost. And we saw stocks like SK Hynix and plenty in the US perform extremely strongly. And indeed, many of them are still sort of up year to date. but the last six weeks you've seen a big reversal there and so you know all those memory stocks and others in the supply chain have really underperformed and then last night or sort of overnight we got the results from sk hynix now if you looked at those results kind of um you know on a standalone basis it's extremely strong you know incredibly strong growth that we're seeing incredibly strong margins and the company talking really really optimistically about how strong the demand is and how they expect that demand to exceed supply well out to 2030, which, you know, on paper sounds super attractive, but we're in an environment where expectations have become extremely high.

23:54That's what drove those stock prices higher for the first part of the year. And when expectations get really high, companies really, really need to outperform those kind of ever increasing expectations. So what we're seeing, you know, overnight is great numbers in many ways from SK Hynix, but they missed what people expected. And in an environment like this, where everybody's becoming increasingly nervous about how sustainable this spending cycle is going to be. We're seeing the stock down as a result. So we might be getting close to some of this sell-off across these memory names and other AI exposed names.

24:26We might be getting close to the sell-off coming to an end. But for the time being, this sort of disconnect between expectations and reality and what the market is willing to pay for has created an awful lot of volatility. Very interesting. So that's why some of those prices are bouncing around quite a lot if you're keeping a close eye, as many, many have been in recent times on these various tech companies and tech-linked companies in recent years. Huge increases in some share prices and huge falls. We spent so much time talking about SpaceX, didn't we? And that had a bit of a tumble once it launched and people got involved.

24:5985058, your thoughts on that one? Let's have an update on what's happening with the wildfires that have continued to cause major damage across parts of France and Spain. Another heatwave has arrived. Our correspondent James Waterhouse was in the Gironde region near Bordeaux yesterday where firefighters are battling the flames. Ten kilometres west of Bordeaux towards the fire where the smoke is starting to get thicker. You can feel it on your eyes. You can see teams pulling down trees in this dense woodland. This is a defensive measure. They are trying to prevent the fire from progressing here across this road towards this woodland.

25:41So the hope is in what is called a fire break, ripping down these trees, it limits the fire's ability to spread further. But the area we are talking about is vast. And as the temperatures start to rise and you can feel the heat, the concern is that there are going to be outbreaks once more. We're already starting to see that further towards the coast behind me. Well, we're going to have a little bit of a focus on Wake Up 20 today on the insurance aspect of so much of this. So, you know, whether you've experienced something across the UK because of the wildfires that we've seen here, whether you are involved with businesses that are based around Europe suffering some of this.

26:24And even, I think, so much of the conversations we've had in recent weeks around the consequences of this extreme heat and some of the wildfires, and it reminds me so much of the conversations we've had when there's been extreme flooding and other major weather events. You know, maybe there are things that you can share experiences from previous insurance claims or what has happened when you've been a victim of a major weather event like this. Now, a man who knows this region around Bordeaux very well is Valentin Proudhon, who's the president of UMIH, which is France's principal hospitality trade union.

27:01Valentin is also general manager of Logis Hotel and Restaurants Europa. Valentin, thank you for your time this morning. Good morning. Thank you. Can you just tell us what the situation is where you are right now? Yeah, of course. First of all, if you'd like, if I'd like to have some thought for the firefighters who lost their life because of the fire, of the wildfire in the region. So first of all, yeah, thought to them and their families, if you'll know me. Of course, of course. Yeah, the situation is kind of bad all around in Gironde, in the lands as well. So two departments that have been affected by the wildfire for six days now.