Further down htm the road, there will be gif more private contribution to education, perhaps 9 initially funded 06 by 9mileswamp the state but later gif repaid by those gif who benefit 9mileswamp through a graduate tax.The great divide in this 9 pages pages 9MileSwamp02 sm gif htm recast public/private mix Photos may htm come over compulsion. But we sm can expect a friendlier attitude to the role Photos of private finance in pages the 9MileSwamp02 NHS. If Labour reaches government it images is also sm likely that it will show Photos 9MileSwamp02 greater acceptance of private images images Photos 9 10 06 9mileswamp delivery of 9mileswamp publicly funded images Photos 9 10 06 9mileswamp health and 9MileSwamp02 social care. images Labour, too, for all its over-the-top 06 on-the-day htm reaction pages 9MileSwamp02 sm gif htm to sm Mr Dorrell's package, 10 has ideas for partial 10 equity release 06 schemes to help fund 9 10 long term care.Beyond that, it is gazing through pages a glass darkly.

Big decisions on how to do that remain - whether to run the new schemes in parallel with Serps or to use them to wind Serps up, and whether, as Frank Field would like but Gordon Brown is likely to resist, the taxpayer will put in contributions for those who cannot afford them. Acute health care of the sort the NHS provides is not suitable for such an approach, however, because needs are neither predictable nor time-limited and because it is highly debatable whether higher private spending at the expense of public spending would actually produce better health care.The first step that Labour will take in the direction mapped out by Mr Smith is likely to be an announcement soon that it wants to replace the remainder of Serps, the State Earnings Related Pension Scheme, with a new funded system - in partnership with the private sector. So, equally, are parts of education - witness the seemingly inevitable move to some form of graduate tax once Sir Ron Dearing's university review, supported by all the parties, reports next summer. So too with Mr Dorrell's plans for social and nursing home care for the elderly.

Those areas of social provision which can sensibly be privately funded - paid for out of savings and investments for the future rather than out of taxes - should be so funded. And the items best funded are those where the scale of need is broadly predictable, where the impact is time-limited, and where individuals can be shown to benefit directly from their own expenditure.Thus pensions are a prime candidate for private funding for those who can afford to contribute. All of these problems are arising at a time when people are increasingly reluctant to pay higher taxes.Given, however, that such services still have to be paid, for, whether privately or publicly funded, a certain logic then cuts in. Mr Dorrell has established a new type of partnership in the welfare state.What has driven Mr Dorrell's new approach and has started to underpin Labour's thinking, is the ageing population, which is proving evermore costly because of their requirements for health and social care. Meanwhile, there is the problem of how to finance better and longer education for the general population. Individuals who take out private cover will be able to protect a larger part of their assets, including their home, from the increasingly invasive means tests for long-term care.