HC Deb 07 March 1972 vol 832 cc1406-16

11.57 p.m.

Mr. Michael Meacher (Oldham, West)

One of the major gaps in our services for the disabled, as I believe the evidence makes clear, is the lack of any adequate provision of capital grants for those handicapped persons who cannot obtain normal or sheltered employment.

From the Government's own survey, entitled, "The Handicapped and Impaired in Great Britain", there are known to be at least 1¼ million seriously handicapped persons in the country today of whom there are several thousands, particularly persons with professional or executive experience, who probably will never be able to get a regular job again and yet who have scarce skills which could be used to the community's gain and for their own self-respect and independence if only they could obtain initial capital.

Evidence of unmet need in this respect is derived from at least three sources. One is the disproportionate percentage of persons on the local authorities' disablement registers compared with the general population who have been subject to prolonged unemployment of a semi-permanent nature. Another indicator is the collection of cases on the files of various bodies, such as the Central Council for the Disabled, in which pleas for assistance of this kind have been made regularly in vain.

A third index of unmet need is the small, yet constant and gathering trickle of requests over the years to the Department of Health and Social Security asking for the commutation of pension rights into a capital lump sum. The size of this flow is indicated by the huge total of 45,000 applications for commutation received by the Department or its predecessors from disabled "other rank" pensioners over the 18-year period from 1921 to 1938 as revealed by the Parliamentary Under-Secretary in the Department in his most helpful letter to me of 31st August last year.

Although no doubt it would have been inappropriate to accede to a number of these requests, the figures suggest a large pool of genuine demand running into a few tens of thousands of cases today where the provision of capital facilities would fill an important, albeit a minority, gap in our present services for the disabled.

I am well aware that the State has to a degree sought to meet its responsibilities in this area through providing capital grants to severely disabled persons under Section 15 of the 1944 Disabled Persons Act to help them, and I quote "to undertake work on their own account". While I readily acknowledge that the spirit of the Act is right, it seems that in practice the Act has never attained more than a marginal significance.

According to the Department's own statistics in the Answer given to me yesterday, for which I am grateful, there has been an average of only six grants a year from 1951 to 1971. In some years the grants have been as few as only two or three. Moreover, the average size of grant has been extremely small, ranging from £123 to £250. Last year, for example, apparently six awards were granted with an average size of £215. It seems clear from this evidence that both the numerical coverage of this service and the minuteness of the grants were quite unsuited to the scale of need that remains to be met. Furthermore, there has been no development of the central and regional machinery which would be required to gain the necessary knowledge of the range of openings available, the necessary experience for the more confident assessment of the projects brought forward and the necessary expertness in the screening of applicants.

I appreciate that Government assistance in the past took another form which has now been rejected as unsatisfactory. This was the right to commutation between the two world wars whereby a war disabled pensioner was permitted to exchange his future rights for a pension based on his life expectancy in exchange for a capital sum to enable him to set up in business. This practice was discontinued in September 1939. not only on grounds of economy, but also, to quote the Minister …there was evidence that many pensioners had sustained serious loss particularly in connection with business ventures. Ironically enough, the evidence of the Minister in that same letter points to the opposite conclusion. According to that letter, of 48 business grants made in 1928–29 and analysed in 1935, after six years at the depth of the depression, there was still a going concern operating in more than half the cases.

Since the normal rate of retail business failures is such that between a third and a half of businesses are forced to close within two years of their start, I believe this evidence clearly suggests that the disabled, so far from lacking the necessary business expertise, have it in full measure provided they can obtain the initial capital and provided applicants are properly screened.

Since the 1944 Act has clearly never been used, and perhaps was never intended, to initiate grants for viable business enterprises as a whole, and since the Ministry refuses to consider reintroducing the right of commutation—where, I would agree, there are very real risks—I would nevertheless hope that the case for partial commutation, say 50 per cent., or selective commutation, in certain carefully approved cases, would not be automatically ruled out for further consideration at this stage.

I hasten to add that this is not my purpose tonight. What I now wish to propose is that a special fund should be set up to provide finance to establish businesseses for disabled persons who are very unlikely to find either normal or sheltered employment again and who have been carefully vetted on strict business lines. I emphasise that this is not intended to be a social welfare proposal. There are other ways of meeting that kind of need.

This is meant to be a proposal explicitly along commercial lines. I would suggest that the trustees of the fund might in the first year allot 50 grants of an average size of about £5,000, which would mean a total annual expenditure of £25,000. Since this would be essentially experimental and need not be developed if it was unsuccessful, this is an extremely small cost when set against the size of the Employment and Social Security budgets.

The trustees would explore the question of whether, given Government backing, which is crucial, finance houses like the banks, whilst not willing to initiate loans in the private market to disabled persons because of the degree of unsecured risk, might nevertheless be willing to top up the grant on the basis of some collateral. That would be an important extra way of supplementing the total resources that might be made available in these cases.

Although the awards would not, I would envisage, be loans, there should also be arrangements whereby if the profits exceeded a certain level some repayment of the original grant, either in whole or in part, might be expected in normal circumstances, but obviously this would have to be more carefully regulated than I can spell out at this stage. Repayment would both provide confirmation for the disabled person that he had finally achieved total independence and restore capital to the fund.

The persons who might be expected to gain most from these proposals would, I believe, be the younger disabled persons, who, despite their handicaps, do not want a life of dependence and are desperately looking for a real challenge within their powers. The excellent Government survey which I have already quoted has indicated that there are some 19,000 severely handicapped persons aged between 16 and 30, and suitable applicants from among this group might be expected initially to receive very careful consideration.

At the same time, the most handicapped men of the last war, who are now in their fifties, should not be overlooked. The Minister in his letter to me of August last argued that it was perhaps too late for men of that age to embark on new ventures. A disabled constituent of mine, who I am delighted to say is present tonight in the Strangers' Gallery, commented significantly in a letter to me: Did the men, or should I say boys, in 1939 think of risks? Not likely. They did a duty all over the world. Because we reach 50, do you honestly think we are finished and not worth a small risk from our Government? How little you know us. This illustrates far better than all my calculated arguments the spirit and determination of the disabled to overcome their handicaps and face the challenge that confronts us all. It demonstrates the desperate desire of the disabled to become producers rather than consumers; to become taxpayers rather than tax-users.

I earnestly hope that the Government will give this plea the most serious con- sideration, even if not immediately and not in full. I sincerely hope that the Government will find it possible to reveal a definite and practicable intention to implement this proposal, at least in some measure in the spirit in which it is made.

12.11 a.m.

The Under-Secretary of State for Employment (Mr. Dudley Smith)

I wish at the outset to tell the hon. Member for Oldham, West (Mr. Meacher) that there may be some merit in his argument that my Department's scheme of capital grants to help severely disabled people set up their own small businesses might be somewhat expanded.

Before returning to this point, I will make some general background observations which are relevant to the discussion and which may help to put it into perspective.

My Department's power to make grants to, or even in respect of, disabled people is restricted under present legislation to those who, though capable of gainful] employment, are so severely disabled that without financial help of one kind or another they could not be expected to obtain or retain employment or work on their own account, either for ever or for a very long time. This is a problem of considerable social and humanitarian seriousness, as the hon. Gentleman obviously recognises.

Although the debate tonight has focused on a particular aspect of the help my Department gives to such people, it may help if I were to spend a few moments on a more general appraisal of the help we can give under Section 15 of the Disabled Persons (Employment) Act, 1944.

I would not wish the House to gain the impression that my Department is at all niggardly in its provisions under this head. On the contrary. For example, our current annual expenditure on the severely disabled is about £9 million. This is mainly taken up by the cost of providing sheltered employment, whether by Remploy nationally, through Government partnership with local authorities in particular areas, or with voluntary bodies in respect of special classes of severely disabled people.

In this sphere, our announced policy is one of expansion. Remploy, for example, has been asked to increase its present labour force of 7,600 severely disabled employees—itself a record figure—to as high a figure as 8,000 to 8,500 by 1975, giving the usual priority to areas of high unemployment. We pay £55,000 a year for the maintenance of the Duchess of Gloucester House, which is a home for men and women who, though suffering from paraplegia, are able to hold down jobs in ordinary industry.

We spend a further £29,000 on alleviating hardship among people whose severe disability puts them to special expense in the cost of daily travel to and from work. For example, those unable to drive themselves or to make proper use of public transport. Cases like this come before Ministers of my Department every day, often having been put forward by hon. Members.

We spend £10,000 annually on the supply of special aids to employment for severely disabled people. One example is braille micrometers which enable the disabled to take their place alongside perfectly fit people.

We try to interpret all these provisions flexibly, sympathetically and indeed generously, bearing in mind the special circumstances under which these grants are made.

I quite understand that in contrast to those large sums, our annual expenditure on capital grants to set people up in small businesses of their own does not seem to be on the same scale, running, as it is, at a more restricted rate of only about £1,000 a year, with an average cost of £200 per case in the last two years.

Perhaps I can explain the reasons for this apparently rather disappointing record. In the first place, the dividing line between this scheme and other arrangements sometimes fluctuates—after all, we are concerned with helping people rather than operating water-tight schemes in separate compartments.

The fact is that some of the help we give under our schemes for providing special employment aids is tantamount to setting people up in business on their own account, for example by the conversion of a telephone switchboard for the use of a blind operator, the provision of an electronic typewriter, or the installation of a special telephone to enable a housebound person to undertake gainful employment, which would not be possible at all without this special aid. So, when we consider our scheme for setting people up in business on their own account, we are really looking at only one aspect of a rather larger question.

But I should like to emphasise particularly, at this point, that we are dealing always with a closely defined group of people, namely those unemployed registered severely disabled people who are suitable and available for gainful employment, but who, as the hon. Member of all people will recognise, battle manfully against considerable odds with distinctive courage in so many circumstances.

That total number is currently about 12,000 throughout the country, all of whom are known individually to my Department through our various disablement officers. A fair proportion are young people with many years of life still ahead of them.

We next have to consider, of that number, those who are capable not merely of sheltered employment, but of running their own businesses. Then one has to consider the chances of success of a particular business in a given area under certain economic circumstances and competitive markets. All these factors have to be considered.

It is, I should have thought, clear that the numbers of such people who can sensibly be helped under a scheme of capital grants is unlikely ever to be high. The hon. Member knows from my answer to his recent Question, to which he referred, that only about eight people a year are helped in this way. That represents about one third of all applicants; and of the limited number of people helped, only about a half make a success of their venture.

In the circumstances, it is perhaps not surprising that we do not pay many capital grants to individuals for this purpose from public funds. Neither it is surprising that the sums granted are normally small.

For those modest enterprises that we are asked to support, a small grant is all that is usually necessary, and usually all that is requested. As the hon. Gentleman said, it is vitually important in the interests of the person just as much as in the interests of safeguarding public funds that those concerned should be properly and adequately screened.

Mr. Neil Marten (Banbury)

What is the average type of job that these people do when they get this money?

Mr. Smith

It varies considerably over a wide range, going back over the years. Generally speaking, it would be what my hon. Friend would regard as reasonably modest. I have in mind sub-postmaster-ships, small shops, and very small manufacturing concerns, which an individual can cope with by himself or perhaps in co-operation with someone else. I know of my hon. Friend's interest in this matter and, if he cares to have it, I shall send him a comprehensive list of cases.

There is the point that the hon. Member for Oldham, West raised about the possibility of more publicity about the scheme. He implied that it should be better known. I can see that there may be arguments for and against. But we have some years' experience of the way that the scheme has worked in practice under successive Governments, and certainly our conclusion has been that indiscriminate publicity would be unwise, not because we are reluctant to make grants but because we know that many applicants will have to be rejected and that many of these businesses set up are likely to fail in practice. In effect, people sometimes have to be saved from themselves.

I am told that this is also the experience of the Department of Health and Social Security in connection with the previous arrangements where by war pensioners could commute their pensions in certain circumstances, although I understand that the hon. Gentleman disputes this. However, I gather that these arrangements are now changed and that this has been the subject of correspondence between the hon. Gentleman and that Department. The hon. Gentleman knows that I am not in a position to comment on that because it does not come into the remit of Ministers in my Department.

Given the general experience that many businesses assisted by us fail, often through no fault of the person concerned, naturally we are all the more reluctant to arouse false hopes and consequent distress, bearing in mind that we are dealing always in this context with severely handicapped people who need their morale boosting rather than depressing.

In practice, we find that our disablement resettlement officers at employment exchanges know all those who might be eligible, and our staff is instructed about the scheme and advises severely disabled people accordingly.

Having said all that, I should add that I have no wish to seem negative or indifferent about a subject which is agreed betwen the two sides of the House as being so important. I cannot but agree, as I said at the outset, that the case for some expansion has been put forward by the hon. Gentleman with cogency and conviction. As it happens, I am especially susceptible to many of his points since, recently in the Department, we ourselves have been looking, as part of a more general review, at this aspect of the Department's work. I expect that a report on the matter will be available shortly to my right hon. Friend the Secretary of State.

I agree that this method of resettlement, where practicable, is in many ways excellent, not least for the morale and well being of the severly handicapped persons concerned. On the basis of the report which we expect to receive shortly, and bearing very much in mind the hon. Gentleman's points, I will consider whether it might not be practicable and desirable to expand our present scheme further for the benefit of the people concerned and of the community as a whole. I am glad that the hon. Gentleman has been able to raise the subject tonight. It has given me an opportunity to ventilate it further from the Treasury Bench.

I conclude, however, by emphasising that, given the limitations within which the scheme operates and bearing in mind what I have said, any expansion is bound to be relatively modest. I am sure that the hon. Gentleman will accept that I cannot discuss figures tonight, although he advanced some interesting figures which I promise to study. The whole matter is worthy of careful consideration, and that is what we shall give to it.

I think that both sides of the House are united in trying all the time to find more ways in which those courageous people who struggle on in employment under the most tremendous handicaps should be assisted to every possible degree by the Government of the day. Certainly, while I have any connection with the Department of Employment, these people will always have the utmost priority over things which we are able to do.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes past Twelve o'clock.