TAKING aside the politics of it - basically, a vote-hunting shift to "big ideas" - the Government's plan today for people to take out private insurance for long-term care in their old age is, like its scheme to "privatise" state pensions, a brave piece of nettle-grasping.

For, as with pensions, it is confronting the problem of the elderly population explosion and the prospect of there eventually being too few providers to state coffers to render sufficient funds for their needs.

And if, as is predicted, the old-age care insurance proposals announced by health minister Stephen Dorrell are a trailer for plans to privatise local authority old people's homes and, on the lines of the NHS reforms, switch social services departments from being care providers to purchasers, then, the Major government is indeed packing its election manifesto with rare radicalism.

For while the welfare state may be a cherished institution, these Tory reforms - employing sweeteners to revert people to self-help schemes to provide for their old age - are practical responses to the problem of the system becoming increasingly unable to fund itself.

Moreover, the insurance scheme, of which Mr Dorrell was revealing the final details today in a draft Bill, confronts a deep and already-existing concern among many elderly people and their families - that of the aged being forced to sell their homes to qualify for state aid if they go into long-term care. The major problem with the plan, however, may be the cost of private insurance cover. With residential care now costing around £1,000 a month, the premiums will not be cheap.

And to be successful the scheme will depend on sufficient potential purchasers of the cover having a sense of self-reliance and social duty to make the outlay rather than depend on the state.

It is evidently in regard to this aspect that there comes the sweetener - in the form of those taking out the insurance being allowed to protect £1.50-worth of their assets for every £1 bought by their policy in addition to the £16,000 limit the Government has already given on assets.

This would make the cover more attractive and affordable in that buyers would have to make less of a raid on their savings. Additionally, the worry about being forced to sell their home - frequently, the only real asset of the elderly - would be diminished.

But though it amounts to another erosion of the prized welfare state, this scheme boldly confronts the problem of coping with increasing strains it is under. And if it can be shown to be affordable and fair, it may prove one piece of dismantling that voters approve of.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.