New Clause A

HC Deb 12 March 1975 vol 888 cc621-49

RATES OF REDUCTION OF PENSION IN RESPECT OF EARNINGS OF INVALIDITY OR NON-CONTRIBUTORY INVALIDITY PENSIONERS

Lords amendment: No. 2, in page 2,

line 26, at end insert new Clause" "—

"A.—(1) Where the earnings of a person entitled to an invalidity pension or to a non-contributory invalidity pension, being a person who has not reached pensionable age, have exceeded £13.00 for the week ending last before any week for which he is entitled to an invalidity pension or a non-contributory invalidity pension, the weekly rate of pension for the last mentioned week shall be reduced—

(a) where the excess is less than £4, by 5 pence for each complete 10 pence of the excess, and

(b) where the excess is not less than £4, by 5 pence for each complete 10 pence of the excess up to £4 and by 5 pence for each complete 5 pence of any further excess.

(2) In this section "week", where used in the expression "week for which he is entitled ", means such period of 7 days as may be prescribed by regulations made for the purposes of this section."

Mr. Deputy Speaker

I call the hon. Member for Exeter (Mr. Hannam) to move his amendment to the Lords amendment, with which it will be convenient to discuss the two amendments in the name of the hon. Member for Radcliffe (Mr. Clarke)—

In line 1, leave out ' an invalidity pension or to '.

In line 5. leave out ' an invalidity pension or '.

I also call attention to the fact that privilege is involved in this amendment.

Mr. John Hannam (Exeter)

I beg to move, as an amendment to the Lords amendment, in line 1, leave out from beginning to ' have ' in line 3 and insert: A.— (I) This section shall apply to a person entitled to an invalidity pension of a noncontributory invalidity pension who, while continuing to be incapacitated for normal full-time work, becomes capable of undertaking light work in circumstances which satisfy prescribed conditions. (2) A person to whom this section applies shall continue to be entitled to benefit for so long as the prescribed conditions are satisfied but where his earnings '.

Mr. Hannam

The amendment seeks to improve the new clause which has been added by the other place so that it can become acceptable to the Government.

We are dealing with the earnings position of invalidity pensioners, the disabled persons under retirement age, but so severely incapacitated that they qualify for the special invalidity payments to themselves and their families.

Unlike the retirement pensioner, who can earn up to £20 a week without affecting his pension and who will be able to earn by 1977 up to £50 a week, the invalidity pensioner can at present earn only £4.50 a week before he loses his entire pension. In other words, a severe and sudden wages stop takes place at £4.50 a week. This can sometimes result in the loss of four or five times that amount of earnings. I will give an example later.

This is totally unfair. in the most excellent debate which took place in the other place on 27th February, when Lord Crawshaw, who is himself disabled, moved the new clause, noble Lords from all political parties supported him in the Lobby and they secured this notable improvement for disabled people.

However, in view of the Government's reluctance to accept the clause as it stands, the Disablement Income Group, which is an all-party organisation and pressure group, has under the drafting inspiration once again of Mr. Peter Large, its parliamentary spokesman, produced a way in the amendment of overcoming the definition problem of entitlement to earnings relaxation.

The amendment which stands in my name and that of my hon. Friend the Member for Wallasey (Mrs. Chalker), who unfortunately has been struck down by the same influenza bug as is causing myself and other hon. Members some vocal problems, would add an extra sentence in subparagraph (1) defining eligibility for a person who while continuing to be incapacitated for normal full-time work, becomes capable of undertaking light work in circumstances which satisfy prescribed conditions. There are many hon. Members on both sides who have the interests of the disabled at heart. The all-party Disablement Group, of which I am secretary, seeks to lift disablement above party politics. Many important concessions have thereby been won from successive Governments. Last week, on the Report stage of the Finance Bill, the Government were nearly defeated on an amendment to relieve disabled people from the disgracefully low income surcharge level which is now to operate. If more hon. Members opposite had listened to the debate and heard the details of, for example, polio victims who are now being taxed on any income they receive over £1923 per week, many more than the eight or nine would have abstained.

The Minister of State, Treasury in that debate gave as his reason— it is linked with this debate— for not giving the concession, that the Department of Health and Social Security benefits were the right way of helping the disabled rather than Revenue concessions. This is why we have the amendment before us tonight. I hope that the Department of Health and Social Security Minister will accept his responsibility and accept the amendment.

The principle then, as now, is to help disabled people to earn their own way if they wish to and if they are able to and thereby reduce their dependence on State benefits. In case the Minister intends to deploy the argument that we are imposing an increase in Government expenditure, I wish to assure him that I believe that the result of the amendment would be the opposite.

We have at present what has been termed a "sick or fit situation. Either a person is considered sick or unemployable and receives State aid— invalidity pension, supplementary benefits and so on — or he does a little part-time work and earns more than £4.50 a week and thereby loses his invalidity pension completely.

The consequence is that many disabled people, who can easily be certified under the prescribed regulations we suggest in the amendment by a doctor or an occupational therapist as being fit for light work, are now staying at home doing nothing and, in their own definition, becoming State cabbages. The alternative is that they become a kind of slave labour, with employers who restrict their wages to the wage-stop limit of £4.50.

On top of that, there are all sorts of fiddles arranged whereby such people work in little joint businesses and arrange for all payments to go through their wives. Such things are inevitable when a wage stop operates at such a ridiculously low level. This wage stop constitutes an earnings stop and prevents many disabled people from doing useful work, it is a hindrance, and it does not encourage people to return to work.

With a sickness benefit it is different. After a spell away from work, the doctor prescribes an ability to return to work. For the disabled invalid there is a transitional rehabilitation period during which part-time work helps a person to get back to full-time employment, and, therefore, away from dependence on the State, which is surely what we all want to achieve if possible.

8.45 p.m.

The scale of earnings rule proposed in the new clause is identical to that which was originally proposed by the Government for retirement pensioners. The House, however, subsequently decided to increase substantially the retirement amounts, but the Minister cannot object to the reasonable exemption figure of £13 a week which is proposed in this new clause. In these days of hyper-inflation £13 can represent one or two days' work. That is the sort of period which we are suggesting for part-time work for a disabled person. Above the £13 earnings level and up to £17 there would be a 50 per cent. deduction from the pension of the £1 to £4, and above the £17 level a further 100 per cent. deduction would be made. An invalid earning £5 a day for three days' light work would lose £1 from his pension, and a person earning £7 a day for three days a week would lose £5 from his invalidity pension.

Contrast that fair and reasonable graduated earnings rule proposed here with a case which came to my attention recently of a 32-year old former librarian who 10 months ago became disabled from multiple sclerosis. He has taken up research work at home and recently received £47 for work done over a six-week period— about £8 a week. The Department of Health and Social Security removed his entire invalidity pension for that period, amounting to £73, so he lost £26 for working those few hours a week.

There are many other cases which can be quoted of people who are doing a few hours' work a week and earning up to £10 and will lose their entire invalidity pension. I hope that the evidence which I have produced will convince the House that it is wrong and unfair to allow major relaxations in the earnings rule as applied to retirement pensioners who are still able to work, while on the other hand applying a vicious wage stop to the disabled. It must be wrong to create a situation in which it is better to be a pensioner than a disabled person, where it pays to pretend to be incapable of work in order to obain the invalidity benefits, and in which a person who is willing to make a comeback and work again is prevented from doing so by the wages stop. Those of us who are actively involved in work for the disabled share the feelings of disappointment and frustration that all disabled and handicapped organisations are experiencing.

Following the Social Security Act 1973, the Secretary of State was required to make a report by September of that year on the workings of the Chronically Sick and Disabled Persons Act. A House of Commons paper published in July 1974 promised to look into the whole question of the wages stop. Nine months later many of the disablement organisations are anxiously awaiting the results of that Department of Health and Social Security inquiry.

I should like to quote from paragraph 51 of that report : Such evidence as there is, here and abroad, points to the possible value of a separate standard benefit to be paid to severely disabled people who are working despite their disablement "— in other words, a wages supplement scheme, which disabled organisations are still anxiously awaiting. This proposed earnings rule is a step towards such a scheme, but without a massive charge on the Exchequer.

This fearful earnings disincentive— a disincentive psychologically and financially— must be removed, and I hope the Minister will not try to persuade us to accept some minor modification or slight uplift on the £4.50 wages stop. We want, and intend to have, at some stage for the disabled a graduated earnings rule, albeit at a much lower level than that applying to the retirement pensioner. The new clause which was accepted by the Lords introduces an earnings rule figure of £13 to £17 a week, which will allow a minimum period of rehabilitation. It will relieve the supplementary benefits system of many claims by disabled people, and it will also produce tax revenue for the hard-pressed Chancellor of the Exchequer. In addition, it will allow disabled people to regain their self-respect and independence.

Mr. Kenneth Clarke

The amendment standing in the names of my hon. Friends and myself has been grouped with that of my hon. Friend the Member for Exeter (Mr. Hannam), and both amendments are based on one carried in the House of Lords after having been moved by Lord Crawshaw, to whom the whole House is seriously indebted for having highlighted this problem. His interest in the disabled and his advocacy on their behalf is well known to us all. He succeeded in defeating the Government yet again. Once more we are debating a part of this Bill as a result of a Government defeat, and I calculate that there have been six such defeats on the Bill. That is no less than justice. There was, perhaps, room for a few more.

When the Secretary of State presented the Bill on Second Reading on 21st November last, on almost her last appearance in connection with it— I believe she has made one speech since— she described this in column 1558 as a "package of compassion ". She went away from our debates whilst the House opened that package to find just how little it contained. When we find that we have to amend the Bill in this way to eradicate its weaknesses we are convinced that the Labour Party, in government as in opposition, wears its heart on its sleeve in relation to this sort of subject. We see on closer examination, however, that the heart is not on quite straight.

The Government's genuine achievement so far in these matters is fairly limited, as, judging from the attendance in the Chamber, is their level of interest in it. I congratulate the two Labour back benchers who are in the House. It was significant that as soon as the debate about the disabled began there was no longer a solitary Labour back bencher in the House to participate. The only occupants of the Government benches were two Ministers, a Whip and a PPS. Perhaps that is a contrast with the professions of concern for the disabled by numerous Labour Members outside this House.

I come now to the amendment which deals with the non-contributory invalidity pension. This is an important new benefit which has been heralded for a long time but which was extremely disappointing when it finally appeared in the Bill. We believe the Government misled the disabled into expecting a great deal from this benefit, and then let them down. One of the difficulties we have argued about since the Bill was presented is the 100 per cent. earnings rule, which as my hon. Friend the Member for Exeter said, is probably better described as a wage stop.

How did the Government get themselves into the difficulty which led the other place to try to amend the Bill and improve it? The trouble stems from the fact that they have welded the noncontributory invalidity pension to the old invalidity pension and they therefore took the definition of "incapacity for work "as qualifying someone for the new benefit.

We spent a lot of time in the House arguing against this basis for the new benefit. We preferred that there should be an assessment of the degree of disability of individuals as the basis on which the non-contributory invalidity pension should be paid. However, the course adopted by the Government, which they say is administratively more convenient, means that the wage stop— or the 100 per cent. earnings rule— that applies to the contributory pension has been imported into the new benefit.

At present the only earnings allowed to the invalidity pensioner are the so-called therapeutic earnings of £4.50 a week, that figure having been maintained since 1972. It is available in extremely limited circumstances, which are set out in the regulations governing unemployment and sickness benefit. Therapeutic earnings are not normal earnings ; they are permitted only for limited categories of work. First, they are allowed if the work is undertaken under medical supervision as a part of treatment while the person concerned is a patient in or of the hospital institution, and if the earnings therefrom are less than the specified sum. Secondly, they are allowed for the work of a non-employed person where that work is not undertaken as a patient in hospital but is work which the person concerned has good cause for doing.

The figure is miserly. The definition of the kind of work that can be undertaken is extremely limited. To call them therapeutic earnings is something of an understatement. To many people who are disabled the earnings are therapeutic in more than a limited medical sense. Disabled people who are lucky enough to have some small occupation have a valuable way of keeping contact with the outside world and the world of work. It gives them some contact and activity outside the immediate range of what is necessarily a limited family and social life.

The injustice of the rule as it stands, as my hon. Friend the Member for Exeter has already well explained, is that it catches the very occasional and very light job. A disabled woman who does some envelope-writing for an organisation may easily find that she is earning more than £4.50 per week. It is not even like the retirement pensioner who loses some of his earnings. If more than £4.50 is earned there is a complete stop and the person concerned no longer qualifies for any benefit for the period that he or she is receiving a modest sum by way of wages.

By bringing that definition into their new benefit the Government have landed themselves with the problem which my noble Friend Lord Crawshaw has attempted to put right and which my hon. Friend the Member for Exeter is attempting to rephrase to deal with some of the practical difficulties.

One matter that needs to be highlighted, and to which we must return as we develop further the area of new benefits which is just being opened up, is the problem of the complete exclusion of the disabled who are in any kind of real work which provides an income, however modest.

I know that there are not many people who come into that category. That makes the public expenditure less if we try to do something to assist the disabled who are fortunate enough to have any kind of real sustained employment. It seems that there will have to be a new benefit in the form of some kind of wage supplement for those disabled who work. They tend to find that their earnings are lower than those with full physical and mental capacity. Their expenses are higher and their cost of living is higher, because of the extra expenses to which they are subjected because of their disability.

Given that we have embarked on the road of the non-contributory invalidity pension as it stands in the Bill, it seems that the disabled who work will have to wait for a new benefit and for new policies to be developed by the Government. We shall press the Government to develop such policies as soon as possible.

In the meanwhile, what are we to do with what we have already? We must try to avoid the full implications of the therapeutic earnings rule being applied to the non-contributory invalidity pension.

On looking at the amendment that was carried in another place, we share the Government's concern about the throwing over of the old rules for the contributory invalidity pension. It is the fact that the £4.50 that has remained for so long has always been accepted as being based on incapacity for work. It is applicable to those who receive sickness benefit for the specified time so that they move on to contributory invalidity pension. It is received so long as a person is out of work. It is not intended to be paid as any kind of wage supplement once the person concerned resumes employment. It has been accepted as a benefit based on incapacity for work, but it does not exclude capacity for some very limited work. That is why we have had the therapeutic earnings rule.

I can see difficulties for some one who has been a wage earner or salary earner who begins to receive sickness benefit and who is away from work because of an accident for long enough for him to receive an invalidity pension. The difficulty under the Lords amendment will arise if he finds that he can continue receiving his invalidity pension and at the same time have a steady little job on the side. A person may be capable of doing some gardening or some other jobs for his neighbours. The benefit would run until such time as the tribunal decided that he was capable of full-time work. This could be an encouragement to some not to go back to full-time work, and it could lead to some anomalies.

As that rule has stood for so long we are a little reluctant to throw it over, which is the effect of the Lords amendment and the amendment of my hon. Friend. We wish to explore the question whether different rules may be applied to non-contributory invalidity pensioners. They are the people who have never worked for long enough to acquire a contribution record. Can it be said that the same strict rules should apply to those who are disabled in childhood by accident, or are congenitally disabled, or are struck by a serious disease and have never been in employment? Can it be said that it would be wrong or anomalous if those people received slightly more than the therapeutic earnings rule allows for contributory invalidity pensioners who come out of employment?

My noble Friend hit upon the figure of £13. It is difficult to see why that should not be allowed when one considers the sort of people who receive the non-contributory invalidity pension. The idea needs to be explored. It is an unfortunate consequence of the Government's proposals that those people are caught by a wage stop. Our amendment seeks to remove from the Lords amendment the changes in respect of the contributory invalidity pension but to retain the Lords amendment for the non-contributory invalidity pension.

I look forward to hearing what the Minister has to say about this possible way of meeting the genuine hardship that the present arrangements will cause to some seriously disabled people.

9.0 p.m.

Sir George Young (Ealing, Acton)

I support the amendment moved by my hon. Friend the Member for Exeter (Mr. Hannam), which follows logically from our recent debate when we relaxed the earnings rule for pensioners. Many hon. Members believe that the relaxation of the earnings rule for invalidity pensioners should have even higher priority than the relaxation of the rule for retirement pensioners.

The argument put forward in another place for resisting the amendment was that the invalidity pension is payable to people who are incapable of work and that there is no case for continuing to pay it when they stop work. That principle does not hold up because it has been conceded by allowing them to earn £4.50. The real argument is what should be the level of the disregard rather than whether the principle should be vigorously defended.

It was clear from the debate in another place that fixing the level at £4.50 acted as a deterrent to many people to continue to do work which might be valuable for the community. An analogy was made with unemployment benefit, and the argument advanced was that those in work do not claim unemployment benefit. Therefore, invalidity pensioners earning more than £4.50 should not claim the invalidity pension.

That is not a fair analogy. There is a clear distinction between those in work and those not in work. There is not such a clear distinction between those who are eligible for an invalidity pension and those who are incapable of earning more than £4.50. It is perfectly possible for a person to be in both categories.

One argument which is put forward for resisting amendments such as these is that of cost. At no time in the other place was the cost of the amendment declared. A reference was made to the cost being a deterrent, but I should like to know what is the cost of the amendment which was carried in another place.

Will the Minister clarify what happens when an invalidity pensioner reaches the age of 65? Is the earnings rule lifted from £4.50 to the normal disregard for pensioners, which is £20? If so, as they grow older they will be able to earn more. An anomaly would be created if invalidity pensioners were treated differently from retirement pensioners as they approached retirement age.

In another place the amendment was carried by 72 votes to 36. I hope that my hon. Friend's amendment, which clarifies the position and makes the case much more justifiable, will be carried by an even larger majority.

Mr. David Penhaligon (Truro)

I shall not delay the House for long. We must remember the arguments on these amendment against the background that by 1977 a pensioner will be allowed to earn £50 per week before pension is reduced. In the present Bill there is a proposal to remove the situation which now exists by which the invalidity pensioner earning £4.50 a week suffers not some reduction of pension but a total removal of pension. It is an absolute pension stop. This is unfair and will encourage people to evade the rule. This is a section of our community which should not be subjected to such emotional presures. Furthermore, I believe that the £4.50 stop creates enforced idleness. The really serious aspect is that it will create a situation in which many of our older citizens are bored to tears.

Great emphasis has been laid on the question of costs, but as the situation stands the provisions are so unfair that it is difficult to justify the continuance of the present system on the basis of cost alone. There is little doubt that in regard to the cases which would benefit from a change the savings would pay for a large proportion of the proposals.

I should like to hear how much the amendments would cost to implement. It has been said that the figure of £4.50 was fixed in 1972. I do not know what wage inflation has been since that time, but it certainly has been substantial. Therefore, the value of the £4.50 has been substantially reduced. The Liberals will vote on this amendment with the rest of the Opposition.

The Under-Secretary of State for Health and Social Security (Mr. Alec Jones)

I intend to oppose both amendments, and I shall be inviting the House to reject them. At the same time, at a later stage, I shall be asking the House to disagree with the Lords in their amendment.

I am sure the hon. Member for Rushcliffe (Mr. Clarke) would think it remiss of me if I did not respond in some slight way to his purely political points. He suggested that the Bill was a small package. It is a little surprising that he should take that view when we see that the increased benefits provided in the Bill amount to more than £1,100 million. By no stretch of the imagination could that be regarded as a "small package ".

The hon. Gentleman chided the Government for the absence of Labour Members. That shows a slight lack of gratitude since the hon. Gentleman was able to carry his amendment on an earlier occasion with the support of Labour back benchers.

The hon. Gentleman mentioned the £4.50 therapeutic earnings limit and said that the sum had been unchanged since 1972. The Conservatives were in power in 1972–73 and we heard no suggestion then that they would seek to increase those earnings.

Having had my little bit of fun, I turn to deal with the amendments. The new clause and the amendments will change the very nature of our existing invalidity pension and non-contributory invalidity pension. There is no dispute about the need or desire to aid the disabled. It is reasonable to say that since the Bill introduces two new benefits with regard to non-contributory invalidity pension and invalid care allowance—as well as increasing existing benefits for the disabled the measure is a true indication of the fact that we accept the need and are doing something about it.

The new clause seeks to introduce into the arrangements for existing contributory invalidity pension, and for the proposed new non-contributory invalidity pension, an earnings rule similar to that which currently applies to retirement pensioners.

The existing contributory invalidity pension is payable to those who are, and have for some time been, totally incapable of doing any work for which an employer would pay them. The non- contributory invalidity pension proposed in this Bill is no more than the same benefit without the contribution conditions. Both depend on incapacity for work. The very great majority of people who get, and who will get, this benefit earn nothing at all. A small minority—most of them mental patients who have been in hospital for a long time—earn a little by doing things which are therapy rather than work but which keep them from vegetating. Few of them have earnings of anything like £4.50 a week, which is—subject to various easements concerning working expenses—the amount of the current limit. But, overall, the general concept of total incapacity and the limited approach to therapeutic earnings is one of which we have experience on which we have built in establishing the invalidity pension and the NCIP.

Mr. Kenneth Clarke

The hon. Gentleman is describing his experience and that of his Department. I hope that it is not thought that that indicates that the effect of the rule is as limited as he suggests. Last week I visited the South Notts Centre for the Disabled. I heard many complaints there about the therapeutic earnings rule. It limits the availability of work to disabled people. They do not earn £4.50 because there is only limited work for them. The reason is that it is known by those responsible for the centre that they will not benefit if any paid work is found for them above that limit. Nevertheless, it has the effect of putting many people out of work altogether. The hon. Gentleman is quite wrong to describe the effect of the present rule as being quite so limited. What is more, my hon. Friend the Member for Exeter (Mr. Hannam) described the extent to which the rule is "fiddled "at the moment because it is so penal.

Mr. Jones

If the hon. Gentleman will bear with me, I shall deal in a moment with the level of therapeutic earnings.

We are discussing not earnings as normal people would regard them but the earnings of people who, if they are to qualify for the invalidity pension or the NCIP, must show their incapacity for work. If anyone is doing a substantial amount of work, he is not entitled to invalidity pension—and this is true even if he is earning nothing at all. With the Bill as it stands amended in another place, the ordinary person who had to do quite a number of hours' work during a week —whether full-time or part-time—to earn even £13 would not be eligible for invalidity pension. He would be ruled out because he was working, and, as such, could not be held to be incapable of work. On the other hand, a highly-paid professional man, for example, who could get a substantial income for a minimal amount of work might be eligible for benefit. This does not seem to me a very fair result.

Quite apart from the arguments of principle which tell against the clause, the House must realise that the cost might be substantial. The hon. Member for Rushcliffe asked specifically about the cost. No one can estimate what the likely cost is. People who are at present in employment might possibly move into the invalidity benefit stakes if therapeutic earnings were increased to a level which made it more beneficial for them to do so.

Hon. Members have spoken about the need to encourage rehabilitation. The effect of replacing the therapeutic earnings limit by a full-blown earnings rule would not only be inconsistent with the fundamental basis of invalidity benefit ; its effect in terms of encouraging rehabilitation might well be exactly the opposite to what I am sure was intended by the hon. Gentleman and by the sponsors of the clause in the other place. It would mean that invalidity benefit, which is tax-free, plus earnings would amount to substantially more than earnings for disabled people in sheltered employment and substantially more than the training or rehabilitation allowances that disabled people can get while being prepared for open employment. The higher the earnings limit, the greater the likelihood that benefit plus earnings would exceed earnings in open employment.

9.15 p.m.

Mr. Hannam

Is it not clear from the amendment which I have tabled to the Lords amendment that we are describing clearly the undertaking of light work in circumstances carefully prescribed by regulations laid down? We have broken away from the original Lords amendment in the amendment. My amendment defines clearly the degree of light work for people who are not capable of normal full-time work. This is an important point.

Mr. Jones

I will deal with light work. My difficulty now, as I am sure the hon. Gentleman understands, is to deal with the two amendments and the new clause in one general debate rather than having three separate debates. I will deal specifically with light work because most hon. Members have already had experience of the use of the phrase "light work" which is not so easy to define as the hon. Gentleman seems to suggest.

These are some of the reasons for the announcement in my right hon. Friend's report to Parliament on "Social Security Provision for Chronically Sick and Disabled Persons ", House of Commons Paper No. 276, to which the hon. Gentleman referred. which was published in September. In that report my right hon. Friend indicated that the Government will take a good look at the problems of the disabled earner. We are in the main talking about the disabled earner rather than the person who is incapable of work. Once the mobility allowance and the other new benefits are properly launched, we shall be conducting further studies and consultations to see what further advances can be made to secure improvements in the level of income for disabled earners.

I believe that it is right to look at disabled earners as being in a different category from those in receipt of invalidity pension or non-contributory invalidity pension because the circumstances are so different. One group must show its incapacity for work whereas the other group has, to a greater or lesser extent, some capacity for work.

I want to make it clear to the House that in the meantime the Government do not propose to nullify the initiative taken in another place and to leave a void. The Government propose to bring forward a change which would otherwise have been reserved for a future occasion and to make regulations which will raise the present £4.50 therapeutic earnings limit to £7 from April this year. I am sure that that at least will be of some help in view of the criticisms that have been made of the level of therapeutic earnings. This change will apply not only to contributory and non-contributory invalidity pensions, but to sickness benefit, injury benefit and unemployability supplement under the industrial injuries scheme. Separate but corresponding provision will be made by prerogative instruments for unemployability supplement under the war pensions scheme. I should add that this matter has traditionally been dealt with in regulations, that it is not really proper to principal legislation, and that the appropriate new regulations are already in course of preparation.

To sum up, the restoration of the value of the existing therapeutic earnings limit in no way creates any great problem, but the introduction of a far more radical change would lead us into considerable difficulties in this respect.

I turn now to the two amendments. Like the hon. Member for Exeter (Mr. Hannam). I am sorry that the hon. Member for Wallasey (Mrs. Chalker) is not here. I am sure that had she been here she would have contributed to the debate with her usual enthusiasm and would no doubt have quite properly attacked me for something that I might have said. Perhaps, therefore, I should say that I am glad the hon. Lady is not here, but I do not mean it in that way.

The effect would be to change the nature of the invalidity pension and the non-contributory invalidity pension. That may be the hon. Gentleman's intention, but it is not the foundation on which our present invalidity pensions are based. The amendment would make these benefits payable not only to those incapable of work, whom we have provided for in our invalidity pensions and NCIP, but would also make the benefits payable to those who are capable of doing light work. The hon. Gentleman says that we can define that expression in regulations, but a definition is much easier talked about than implemented.

In my constituency, miners who have worked underground for many years are returned to the surface for what is called "light work ". I am sure that that definition of "light work" could not be used for what the hon. Gentleman suggests. Medical checks on people receiving sickness benefit and invalidity benefit are frequently made by doctors attached to my Department, who often say that a person is not capable of doing his normal work but is capable of doing light work. Do we say to such people "The light work which we shall prescribe and which we believe you must do is a normal, everyday job "? I do not believe that it is possible to have one definition for the cases in which the hon. Gentleman is interested and another for the ordinary category of those on sickness or invalidity pensions. We should be in impossible situations if we tried to deal with the matter in that way.

There is a worthy motive behind the amendment, which seeks some benefit from the clause but I must reject it because the result would be inconsistent with what we regard as the purpose of the invalidity pension or the non-contributory invalidity pension.

The amendment of the hon. Member for Rushcliffe would embrace the new clause inserted in another place, except that the clause would be confined to the non-contributory version of the invalidity pension. The amendment aims to import a full-blown earnings rule into the arrangements for the non-contributory invalidity pension, while retaining the therapeutic earnings limit of £4.50—soon to be £7—for contributory invalidity pension. The therapeutic earnings limit would also remain for sickness benefit, injury benefit and unemployability supplement under the industrial injuries and war pensions schemes. There would then be one rule for one benefit payable for incapacity for work—the NCIP—and another for four other benefits payable for the same contingency ; namely, incapacity for work. That sort of anomaly is hardly likely to commend itself to the hon. Gentleman when he gives it further study.

Apart from creating that glaring anomaly, the amendment is open to all the serious objections which I have already spelt out. It is impossible to reconcile a benefit which, under subsection (1) of Clause 6, can be paid only if a person is totally incapable of work, with the amendment, which would allow someone to do substantial amounts of work, even full-time under certain circumstances, and yet remain an invalidity pensioner.

We should go as far as we can to ease the restrictions on the existing incapacity benefits and on the non-contributory pension, and tackle the disabled earner problem, which is related to it, separately, but as soon and as effectively as we can. There are here, as the Government have indicated in the House of Commons paper, very real and complex problems which cannot be solved at a stroke merely by seeking to manipulate the existing benefits upon which much of our work has depended in the past.

On this basis and on the basis of the important point that the appropriate place for the therapeutic earnings limit is in a regulation, as with the present £4.50, and not an Act, I ask the House to oppose the amendments and, later, to support the disagreement on the new clause. I am sure that this is the best course and that we should deal with those who are capable of work but who need wage supplementation in a different way from the way in which we deal with those who are, by definition, incapable of work and the non-contributory invalidity pensioner.

Mr. Kenneth Clarke

I am grateful to the Minister for addressing himself to our two amendments. I listened with care to what he said. I see some difficulties in the amendment carried in another place and the alternative version proposed by my hon. Friend the Member for Exeter (Mr. Hannam). If one has this definition of "incapable of work ", one must be clear that one is not paying the benefit to people who are in ordinary employment. However, I think; that the Minister slightly overstates his case when he talks of people working substantial hours and being in ordinary work when he is talking of £13 a week. I could not understand his reference to the possibility of highly paid professional people being able to receive this benefit, with a £13 limit having been imposed in the amendment.

Having said that, the points that the Minister made, which we would certainly wish to contemplate, were about the possibility of people drifting in from low-paid ordinary work into even lower-paid work and receiving benefit, and the possibility of someone who has been in work getting the benefit and then facing a considerable disincentive when he contemplated trying to get back into full-time work rather than relying on the benefit that he had been getting plus a small sum within the £13 proposed.

There are these difficulties. It seems to me, however, that they do not apply quite so strongly in the case of the non,contributory invalidity pensioner. There is no question there of someone who has been in work drifting into the benefit. If he has been in work, he has a contribution record and cannot qualify for the new benefit. Similarly, again, the disincentive against drifting out is not quite the same, because the born disabled person is only too anxious to get into full-time work, if the opportunity ever presents itself.

In trying to reply, the Minister has underlined the difficulty that he has made for himself—the difficulty of using incapacity for work as the basis. There is considerable logic in what he says about the difficulties that flow if one uses incapacity for work as the basis for this new benefit as the Government have chosen to do.

The Minister said two things which are reassuring. First, as I have implied previously, the logical step from where the Government have chosen to start is to look separately at the problems of the disabled earner. These require careful study. It would be unfair to expect the Government to put forward detailed provisions now, because this is a separate problem. As the Minister has mentioned that he is commencing such study, however, which is encouraging, we shall press him for progress reports and, we trust, rapid progress. On the subject of the way in which the disabled earner can best be helped, we trust that this commitment will not be allowed to hang about for years before something is done.

I give the Minister some credit for one thing, because at least the efforts of my noble Friend in the other place have produced another look at the therapeutic earnings rule. The Minister has produced a commitment to raise it to £7. We welcome that. We congratulate him on having extracted it from his friends in the Treasury, who are more responsible, I suspect, than he is for the difficulties into which he gets on Bills of this kind, in both Houses of Parliament. As he has managed to extract some money from that source, even though the £7 will not do much more than keep in line with inflation we accept that he has done something, and that the thought that has gone into the earnings rule has had some effect.

The Opposition will return to the problem of the disabled earner whenever possible, to press the Government. We shall return to it on future uprating Bills, on the question of the level of the therapeutic earnings rule and, still, the question—which we should like to consider further—whether something may be done in relation to recipients of NCIP which would give them a slightly advantageous position, for reasons which we believe are defensible, vis-à-vis other benefits.

However, as the Minister has been able to bring some good news on this occasion, I beg to ask leave to withdraw the amendment.

Mr. Speaker

Now there is a slight confusion, because I do not think the hon. Member has actually moved this amendment.

Mr. Kenneth Clarke

In that event I am relieved of the obligation of withdrawing it.

Mr. Hannam

I should like to reply to the point made by the Minister in answer to my amendment.

Mr. Speaker

Order. This is by leave of the House?

Mr. Hannam

By leave of the House.

The problem of definition is one which we always seem to come up against. We had exactly the same situation in the debates on disabled housewives, when we sought to define household work. The point has been made again and again by the disabled organisations that if the experts from the Disablement Income Group or other organisations were given the task of defining light work, such as the work which lift attendants do, they would have no difficulty in prescribing those regulations within one week. The Minister has moved only a small way towards helping those disabled people who want to rehabilitate themselves in normal employment. The £2.50 increase barely keeps pace with inflation and does nothing to help the cases I quoted, such as that of the ex-librarian on £8 a week.

I am afraid that I have to ask hon. Members to support my amendment.

Question put. That the amendment be made :—

The House divided : Ayes, 54, Noes 109.

Division No. 145.	AYES	9.32 p.m.
Arnold, Tom	Hamilton, Michael (Salisbury)	Newton, Tony
Bain, Mrs Margaret	Henderson, Douglas	Page, Rt Hon R. Graham (Crosby)
Body, Richard	Hicks, Robert	Paisley, Rev. Ian
Brittan, Leon	Howells, Geratnt (Cardigan)	Penhaligon, David
Brotherton, Michael	KIKedder, James	Powell, Rt Hon J. Enoch
Budgen, Nick	Knox, David	Reid, George
Clark, Alan (Plymouth, Sutton)	Lane, David	Renton, Tim (Mid-Sussex)
Cope, John	Lawrence, Ivan	Ross, Stephen (Isle of Wight)
Crowder, F. P.	Macmillan, Rt Hon M. (Farnham)	Ross, William (Londonderry)
Douglas-Hamilton, Lord James	Mates, Michael	Shepherd, Colin
Dunlop, John	Mayhew, Patrick	Sims, Roger
Evans, Gwynfor (Carmarthen)	Miller, Hal (Bromsgrove)	Thomas, Rt Hon P. (Hendon S)
Ewlng, Mrs Winifred (Moray)	Mlecampbell, Norman	Vlggers, Peter
Fisher, Sir Nigel	Moate, Roger	Wainwright, Richard (Colne V)
Fletcher-Cooke, Charles	Molyreaux, James	Welsh, Andrew
Fookes, Miss Janet	Montgomery, Fergus	Winterton, Nicholas
Gllmour, Rt Hon Ian (Chesham)	Morris, Charles R. (Openshsw)	TELLERS FOR THE AYES
Gray, Hamish	Nelson, Anthony	Mr. John Hannam and
Grylls, Michael	Neubert, Michael	Sir George Young.
NOES
Allaun, Frank	Deakins, Eric	Grant, George (Morpeth)
Anderson, Donald	Dempsey, James	Grocott, Bruce
Armstrong, Ernest	Dolg, Peter	Hamilton, James (Bothwell)
Atkinson, Norman	Dormand, J. D.	Hamilton, W. W. (Central Fife)
Bates, Alt	Duffy, A. E. P.	Harper, Joseph
Bean, R. E.	Dunn, James A.	Harrison, Walter (Wakefield)
Bishop, E. S.	Eadle, Alex	Hunter, Adam
Blenklnsop, Arthur	Ellis, John (Brlgg & Scun)	Jackson, Miss Margaret (Lincoln)
Boardman, H.	Evans, loan (Aberdare)	Janner, Greville
Boothroyd, Miss Betty	Evans, John (Newton)	Jay, Rt Hon Douglas
Brown, Hugh D. (Provan)	Ewlng, Harry (Stirling)	Jones, Alec (Rhondda)
Brown, Robert C. (Newcastle W)	Faulds, Andrew	Kerr, Russell
Callaghan, Jim (Middleton & P)	Fernyhough, Rt Hon E.	Lamond. James
Campbell, Ian	Fitch, Alan (Wlgan)	Leadbitter, Ted
Canavan, Dennis	George, Bruce	Loyden, Eddie
Clemitson, Ivor	Gould, Bryan	Lyons, Edward (Bradford W)
Cocks, Michael (Bristol S)	Gourlay, Harry	McElhone, Frank
Dalyell, Tarn	Graham, Ted	Mackenzie, Gregor
McMillan, Tom (Glasgow C)	Ovenden, John	Taylor, Mrs Ann (Bolton W)
McNamara, Kevin	Palmer, Arthur	Thomas, Ron (Bristol NW)
Madden, Max	Pavitt, Laurie	Thorne, Stan (Preston South)
Magee. Bryan	Phipps, Dr Colin	Tinn, James
Maguire, Frank (Fermanagh)	Prescott, John	Urwin, T. W.
Mahon, Simon	Roderick, Caerwyn	Walnwright, Edwin (Dearne V)
Marks, Kenneth	Rodgers, George (Chorley)	Walker, Terry (Kingswood)
Marshall, Dr Edmund (Goole)	Rooker, J. W.	Weetch, Ken
Millan, Bruce	Roper, John	Weitzman, David
Miller, Mrs Millie (Ilford N)	Rose, Paul B.	White, Frank R. (Bury)
Mitchell, R. C. (Soton, Itchen)	Sheldon, Robert (Ashton-u-Lyne)	White, James (Pollok)
Morris, Alfred (Wythenshawe)	Silverman, Julius	Wilson, Alexander (Hamilton)
Morris, Charles R. (Openshaw)	Skinner, Dennis	Wise, Mrs Audrey
Moyle, Roland	Small, William	Woodall, Alec
Murray, Rt Hon Ronald King	Smith, John (N Lanarkshire)	Young, David (Bolton E)
Newens, Stanley	Snape, Peter
Noble, Mike	Spriggs, Leslie	TELLERS FOR THE NOES
O'Halloran, Michael	Stewart, Rt Hon M. (Fulham)	Mr. Donald Coleman and Mr. Tom Pendry
O'Malley, Rt Hon Brian	Stoddart, David
Orme, Rt Hon Stanley	Swain, Thomas

Question accordingly negatived.

Mr. O'Malley

I beg to move, That this House doth disagree with the Lords in the said amendment.

Question put and agreed to.

Lords amendment disagreed to.

Subsequent Lords amendments agreed to.

Clause 7

INVALID CARE ALLOWANCE

Lords Amendment : No. 5, in page 7, line 6, leave out from "employed ;" to end of line 9.

The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris)

I beg to move, That this House doth disagree with the Lords in the said amendment.

Mr. Speaker

With this it will be convenient to discuss Lords Amendment No. 6, in page 8, leave out lines 15 to 17.

I draw the attention of the House to the fact that Privilege is involved.

Mr. Morris

The Government's purpose in asking the House to disagree with these amendments is so that they may restore Clause 7, which provides for the invalid care allowance, to the form in which it was originally introduced. This would enable the Government to pay the allowance to relatives of severely disabled persons receiving attendance allowance, as a first step. Later, when we had "run in" the administrative machine which will have to be created for the allowance, we would hope to extend it to the equally deserving case of non-relatives.

The amendments which have been made in another place are, in substance, the same as those moved and defeated in this House on Report.

9.45 p.m.

I must make it patently clear again that the reason why right hon. and hon. Members on the Government side of the House voted against the amendments was not that they disagreed with the principle of giving non-relatives the invalid care allowance. Quite the contrary : we are just as keen as anyone anywhere—and that includes another place—to see the ICA extended in this way. What my right hon. and hon. Friends were and are saying is that the Government are justified in treading warily and that the success of the introduction of ICA in particular, and of the Government's unfolding programme in general, must not be jeopardised.

The Government's opposition to the amendments made in another place is based on the fact that in proposing an ICA at all we are moving into unknown territory. Until my right hon. Friend's report to Parliament on "Social Security Provision for Chronically Sick and Disabled People" was published on 13th September 1974, successive Governments over many years had said consistently that those who are to be helped by the invalid care allowance could be dealt with only through supplementary benefit.

We have now undertaken to help such people without means-testing, and we are incorporating credits with the benefit. This is an enormous step forward, and I suspect that some of those who have long pleaded for an invalid care allowance have been surprised that it is now being legislated for.

We have acted, and we are providing a new benefit where other Governments offered only sympathy. We have said that at least 11,500 people might benefit. Yet such is the dearth of statistics that we should not be very surprised if a substantially greater number did so. Add to that the fact that ICA is an entirely new concept and the case for proceeding cautiously is compelling.

As the Bill stood when it left this House, we would have had the power to bring in the deserving cases of nonrelatives—I make no apology for emphasising yet again that the Government are as much concerned about these cases as any right hon. or hon. Member on either side of the House—in a progressive and systematic way, once we had got over the initial and major hurdle of paying the benefit to relatives. This still seems to the Government to be the right approach, leaving aside the question of the cost, which might be considerable. For every 2,500 additional beneficiaries, the cost would go up by an extra £1 million.

There is, however, another question to which I beg the House to give the most serious consideration. Neither the extension of ICA to non-relatives, nor even the ICA itself, can be looked at in isolation. ICA is part of a structure of benefits that are related one to the other but are at the same time separate, in the sense that they deal with different contingencies affecting disabled people. It is one of a series of improvements in social security benefits, which the Government are anxious to introduce, and which can be introduced only on the basis of a carefully phased programme for which the necessary resources in terms of money, skilled manpower— both medical and lay —and office buildings will have to be found.

The House as a whole will readily appreciate that a formidable array of tasks faces the Department over the next few years. Known commitments alone entail increases in pensions and other benefits for about 11½ million beneficiaries at each uprating. The Bill deals with only the first of this year's upratings, and there will be another of these massive operations for the staff to cope with before the year is out. There are also the increases in family allowances for about 4½ million families and the revision of supplementary benefit disregards affecting some 800,000 people.

Next month sees the introduction of the new earnings-related contribution, with consequential effects on contributory benefits. We have ahead of us also, as a result of the provisions of the Bill, the introduction of the non-contributory invalidity pension for chronically sick and disabled people. There will be a total of well over 250,000 people involved, including patients in mental hospitals and disabled housewives. In due course there will be the new mobility allowance, which will eventually reach up to 100,000 beneficiaries.

Is it really to be wondered that the Government want to proceed carefully with the invalid care allowance? Is it too much to ask that we should allow a little while longer for the staff, who have to bear the brunt of the work involved in all the demands that we make on them, to get the ICA on to a working basis?

The invalid care allowance has been designed primarily to meet the case of the single daughter who would be a breadwinner in paid employment but for the need to stay at home to look after a severely disabled parent or parents. The Government do not, however, intend to confine ICA to the daughter-parent relationship. The nub of the Government's case is that the power will be exercised and that the deserving cases of non-relatives will be brought into the ICA arrangements, once we have got over the initial and major hurdle of paying the allowance to the relatives. It would be deeply unfortunate if anyone thought that we do not intend to bring caring non-relatives into the scheme as soon as we can.

There are some very good arguments for introducing overnight all the new benefits which assist chronically sick and disabled people and their families—not only the ICA, but also the noncontributory invalidity pension, the housewives' invalidity pension and the mobility allowance, as well as all our other improvements in which disabled people will share. However, it would not be in the interests of either the people for whom the benefits are intended or of those with the job of administering them to try to do the impossible. The Government have put forward an unprecedented number of proposals in a very short space of time and it is inevitable that it will take time to implement them. That is why the Government are seeking to stick to the phased timetable for ICA, to allow us to take one step at a time. There is very little difference between us, and I hope that the House as a whole will join me in disagreeing with the Lords amendment.

Mr. Robert Boscawen (Wells)

This is the third of the major groups of amendments that have been carried by Parliament against the Government's advice and have greatly improved what we believed was a very inadequate Bill when it was brought before the House last October.

The first of the amendments was the phasing out of the earnings rule. The second was the extension of the noncontributory invalidity pension to cover the disabled housewife who cannot perform normal household duties. That was a very necessary measure which the House carried a few weeks ago. We are delighted that the Government have been sufficiently wise as to keep that in the Bill.

The third group of amendments concerned the extension of the new invalidity care allowance to groups of people who are not relations. I am glad that the hon. Gentleman gave an undertaking tonight that it is the Government's absolute intention to introduce this allowance as soon as possible for those who are not blood relations. We believe that it is vitally necessary that they do so, became the Government are creating, by seeking to overthrow the Lords amendment, a host of cruel anomalies which will be a stick for beating their own backs.

I assure the Government that it is always the cruellest anomalies that come back on the unfortunate Government of the day who introduce a new benefit. The Conservative Government found that when we introduced the invalidity pension and other benefits. It is the small anomalies that harm the major provisions of a new benefit so much.

The Under-Secretary referred to the desirability of proceeding carefully. They are already proceeding carefully. It is not proposed to introduce this new benefit until 1976–77, so there is plenty of time in which to get the Department organised, to get the plans laid and to get ready to introduce this new benefit

Mr. Alfred Morris

The hon. Gentleman will recall that I said that the invalidity care allowance is one of a series of new benefits which we are phasing in. It is the totality of what we are seeking to carry through which makes it essential that we should introduce each step of a new benefit in an orderly manner.

Mr. Boscawen

I have not argued against introducing it in 1976–77, but I suggest that when it is introduced in 1976–77 it is introduced in the way proposed in the Lords amendment. One reason is that by excluding those who are non-blood relatives the Government are making their task harder because they will have to identify relatives. This surely means another process. By making this allowance available to anyone, whether he is a relative or a non-relative, looking after either a friend or a relative who is seriously ill, we are not creating any further work for the Department. We are creating less work because it will not be necessary to identify relations. The assumption will be that anyone can benefit from the Bill provided he complies with the necessary qualifications. That is the first point I make against the argument that more time is required in order to proceed more carefully.

My second point deals with the necessity to help as soon as possible those persons who look after a friend. At present anyone who gives up work in order to help a seriously disabled or chronically sick person who is not a relative is not entitled to draw supplementary benefit. That has been an age-old regulation of the Supplementary Benefits Commission. I think the Under-Secretary of State will agree that that is so.

There are not many of these people. but their position is the more difficult because they are left with the dilemma of deciding whether or not they should give up work in order to help a friend. I was given an example of a person with whom another lady had been living for many years. She had to decide whether she should give up work in order to attend her friend who had developed serious mental illness over a period of time, and who finally became a severe schizophrenic. Should she give up work and receive no supplementary benefit, or should she continue in work and allow her friend to go into a home or a place of residential care? That is the dilemma which faces some people. We on this side of the House want, by means of this measure, to overcome that sort of difficulty as soon as possible. We accept the invalid care allowance, and we congratulated the Government when the Bill was introduced on having presented the idea. We understand why it will not be possible to introduce it before 1976–77.

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,

That, at this day's sitting, the consideration of Lords Amendments to the Social Security Benefits Bill and the Export Guarantees Amendment Bill may be proceeded with, though opposed, until any hour, and that the Motion relating to the European Monetary Cooperation Fund may be proceeded with, though opposed, until half-past Eleven o'clock or one and a half hours after it has been entered upon, whichever is the later.—[Mr. Dormand.]