SOCIAL SECURITY BENEFITS BILL

HL Deb 27 February 1975 vol 357 cc996-1050

3.33 p.m.

Lord WELLS-PESTELL

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Wells-Pestell.)

On Question, Motion agreed to. House in Committee accordingly.

[The Earl of LISTOWEL in the Chair.]

Clause 1 [Rates of basic scheme benefits]:

Lord WELLS-PESTELL moved Amendment No. 1:

Page 2, line 17, leave out from ("substituted") to ("paragraphs") in line 23 and insert (" "£20" and at the end there shall be inserted—

"With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, this subsection shall have effect with the substitution for "£20" of the amount specified in relation to that year in the second column below—

1976	"£35"
1977	"£50""

(4) In ").

The noble Lord said: My Lords, when the Bill was before your Lordships' House on Second Reading I drew attention to the fact that subsection (3) of Clause 1 might not technically achieve the result which its sponsors in another place intended, and I assured the noble Lord, Lord Aberdare, that I would inform your Lordships about the difficulties and let you knew how best they could be overcome. The Amendment which I now move, with the related ones to come later on the Marshalled List, are the result. If your Lordships will allow me, I will speak to Amendments Nos. 1 and No. 3 and draw your Lordships' attention to the fact that the second part of Amendment No. 10 and Amendment No. 13 are also in some respects related.

The technicality to which I referred at Second Reading was in relation to what was to happen after 1977. As the clause came from the other place, it would have meant that the earnings rule would have finished completely at that period. The ambiguity was that the wording went something like this: that it should start the year after the coming in of the 1973 Act. If one refers to the debate in another place, one sees that there was more than one view as to when that would happen, whether it would be 1975 or 1976. In that sense there was an ambiguity. I think the whole matter could have been resolved successfully if the word "thereafter" had been inserted. But neither of these matters was cleared up and so we have this Amendment before the Committee. The effect of the Amendment is to put in to clear and unequivocal form the relaxation of the earnings rule which was agreed upon in another place.

The Government made no secret of their reluctance to commit themselves at this stage, to the substantial additional expenditure involved in such a relaxation, but I want to make it perfectly clear, particularly as the noble Lord, Lord Reigate, is here, that this Amendment is not designed in any way to reverse or to modify the clear intention of those who supported the relaxation. I should like to explain to your Lordships the detailed reasons for the Amendment. First, as Clause 1(3) left the other place the amendment it made to Sections 26(1) and to 35(2) of the Social Security Act 1973, was such as to render the text of those sections virtually unintelligible. I am sure that noble Lords who have tried to effect the substitution for which the Bill at present provides, as I have done, will readily agree with me that it is not easy to understand. The second reason for the Amendment which stands in my name is more practical and less aesthetic. The dates from which the various relaxations included in the Bill are to come into force are not as clear as they should be. Clause 1(3) of the Bill as it stands brings the £20 earnings limit into operation (I have already said this but perhaps I may be permitted to repeat it) and I quote: In the year following the coming into force of the said Act of 1973 that is the Social Security Act of 1973. But there is in fact no single date on which the Act comes into force. Although important provisions of the Act relating to contributions are to come into force from April of this year, there are other provisions which have already come into force on various dates from 1973. The Amendment I am moving removes any doubt by setting out in terms the operative dates for the staged relaxation of the earnings rule and these dates, I am confident, are those envisaged by the originators of the present provision and will, I hope, meet the approval of noble Lords opposite.

There is one other point which I must mention. As drafted, the Bill provides for no earnings limit once the £50 limit has been in operation for a year. The sponsors of the Amendment to the original Bill clearly did not intend the earnings rule to disappear in 1978; if they had so intended, there would have been little point in their voting for the subsequent Amendment to abolish the earnings rule by 1980 or in their resisting the later Government Amendment at Report stage in another place to delete this provision from the Bill. Nevertheless, the Bill as it stands would mean that once the £50 had applied for a year there would be no figure by reference to which the earnings rule could operate. This would not only produce a result not intended when the provision was passed in another place, but would also have a very odd effect on the retirement condition.

I am sorry to be so long about this, but it is really important. At present there is a provision which allows a person to be treated as retired if his or her earnings can be expected not to exceed, or only occasionally to exceed, the amount which at the time constitutes the earnings limit for purposes of the earnings rule; namely, £13. If there were no earnings limit this provision would be rendered ineffective, so that, at the very time when—and, I believe, quite unintentionally—the earnings rule was being withdrawn, the retirement condition would become more difficult to satisfy. This is because an intention to continue in paid work might, however small the earnings, be adjudged inconsistent with retirement. So while the earnings of people who had retired would not affect their pensions, quite small earnings could in some cases debar a person from being treated as retired for the purpose of receiving pension. This would be most inequitable. One could have a situation of a man doing full-time work on a very small income and this would debar him from his retirement pension. This, surely, was never intended.

The effect of the Amendment I am moving will be to continue the £50 earnings limit from April 1977 until amended by regulations under existing powers. I want to make it clear that there is no intention on the part of the Government, nor is it the purpose of the Amendment, to upset what has taken place in another place, except to make the position rather more clear.

I hope I have convinced your Lordships of the case for the Amendment which the Government propose to Clause 1. I trust that you will bear with me a little longer while I explain the consequential Amendments. I shall be moving an Amendment to Clause 2 which is intended to extend to the wives of unemployability supplement beneficiaries under the industrial injuries scheme the same relaxed earnings rule which will apply to the wives of retirement pensioners and invalidity pensioners. Clause 1(3) as it stands fails to make this extension. Your Lordships will know that unemployability supplement is an increase in industrial injuries disablement pension payable to persons who are likely to be permanently unable to work or unable to earn more than a limited amount in a year. I am sure noble Lords will agree that the earnings of the wives of such persons should continue to receive the more favourable treatment given to the earnings of wives of retirement and invalidity pensioners.

In dealing with the difficulties involved in the relaxation of the earnings rule I come now to a final and, in itself, a relatively minor aspect, but one which could have unfortunate implications administratively and could prove confusing for the beneficiaries concerned. I am deeply conscious of the pleas made during the Second Reading debate in your Lordships' House by, I think, my noble friend Lord Brace of Donington and the noble Lord, Lord Reigate, for simplicity in our dealings with members of the public. I could not agree more. I find it extraordinarily difficult to understand the language not only of our Bills but also of the advice that we give.

A problem arises from the fact that the pension for any particular week is affected by earnings in the previous week. Therefore, the change proposed in the Bill as it stands, which relates to earnings from 6th April—the "year" being the financial year for the purposes of the 1973 Act—would not affect pensions until the week beginning 14th April 1975. Pensioners will, however, naturally expect the relaxed rule to begin to operate this year in the week beginning 7th April and not 14th April when the increased rates of pension provided for under the Bill will themselves be payable. The Amendment which I am moving will enable that to happen this year. The reason why we seek a power to prescribe the precise day from which the second and the third phases of relaxation will be introduced is technical. Retirement pensions, invalidity pensions and industrial injury disablement pensions are payable on different days of the week. The power to prescribe days will be used to ensure that different dates are appointed for the different benefits so that the change can be applied to all beneficiaries in the same week. The "week containing 6th April", which is the phrase used in the Amendment, is of course the week in which the financial year begins.

Later, when we are dealing with Clause 8, I shall be moving Amendments designed to remove the need for the National Insurance Advisory Committee and the Industrial Injuries Advisory Council to have to consider regulations which simply appoint the precise days in the weeks already prescribed in relation to the operation of the earnings rule for 1976 and 1977. The present Amendment, together with those I shall be moving formally to accompany it, will tidy up Clause 1 (3) and make its provisions watertight. I am sure noble Lords will accept that the Government have no intention of tinkering with the spirit behind the subsection, but are merely amending its wording so as to ensure that it goes on to the Statute Book in a proper form without the serious defects which it now contains. I apologise for speaking for so long on a single Amendment, but it was necessary. I beg to move.

3.48 p.m.

Lord ABERDARE

We are grateful to the noble Lord, Lord Wells-Pestell. He said on Second Reading that certain difficulties would result from the Amendment which was made in another place and he has now explained what this new Amendment does. I am quite prepared to take his word that it does no more than put into the correct form the intentions of those who inserted the Amendment in another place. On the other hand, I must say that I believe there will be many people in this House and in another place who would have been only too delighted had the earnings rule ended after 1977, so I am rather sorry that the noble Lord has managed to avoid that trap. As the noble Lord said there was another Amendment to bring the earnings rule to an end in 1980, and the fact is that in the present inflationary conditions even this increase to £50 a year will not represent any particularly great relaxation by 1977. I am sure that, unfortunately, we have not heard the last of the earnings rule.

Lord REIGATE

The noble Lord, Lord Wells-Pestell, kindly referred to me in his remarks and I wish to echo what was said by my noble friend Lord Aberdare about our great appreciation for the trouble he is taking over this appallingly complex Amendment. I cannot say that I understood the noble Lord's explanation, but I feel that when we have had time to study his remarks inHansard we shall be made somewhat wiser. Nevertheless, I am certainly grateful to him for the spirit in which he has accepted the changes in the Bill, which I know were not welcomed by the Government. I feel that the mild protest of the noble Lord, Lord Bruce of Donington, and myself may have some effect in the Department and I am sure that, in their case, the spirit is willing even if in some respects the language is appallingly obscure. I thought that the high peak of complexity in the wording of Amendments was reached by Amendment No. 3 in which we read that at the end of page 2, line 30 we have to insert—using words in the way one would have to dictate them—" open brackets, quote, open brackets, close brackets," there being nothing between the brackets. On the same score, Amendment No. 1 ends with the figure 4 in brackets and then has the following: In, quotes, close brackets. No wonder the layman is a little confused by some of our machinations.

I agree entirely with what my noble friend Lord Aberdare said, that we must face the fact that it is not the final end of the earnings rule. On the last occasion we discussed the matter, I said that I looked forward to seeing a finalTe Deum, but I was a little premature in my wishes. I hope the fact that we have Social Security Bills at the rate of roughly two a year, including a Consolidation Bill which is already out of date although it is only about six weeks old, will result in the Government giving full consideration to the best way of removing the earnings rule altogether. Nevertheless, I must state my regret that those who were opposed to the Government's policy—the policy of previous Governments—were unsuccessful in getting the Amendment finally abolished by 1980. Part of the confusion that has arisen has been due to that fact. At some time I feel that both Houses must give a firm instruction to the Government, at present in power and in future in power, that it is time to get rid of it altogether.

Baroness SEEAR

We should like to welcome this Amendment, but I feel that I must join with those who have said that we greatly regret that we are not seeing the back of the earnings rule, for it is time that the whole thing was packed up once and for all.

Lord BRUCE of DONINGTON

I wish to add my voice to that of noble Lords and the noble Baroness who said that it is time that the Government decided definitely to put into effect the Amendments that were inserted in another place. I do not know whether my noble friend has had an opportunity to look further into the extent to which finance would be required to produce the money to enable this to be carried into effect. Several estimates have been given. In another place, in Standing Committee B, an estimate was given for 1975–76 of some £80 million. In a Memorandum to the Bill the amount was given as some £60 million. I wonder whether my noble friend has had an opportunity to look into it even further. I must of course point out that after tax considerations have been taken into account, the total charge during the next fiscal year will be of the order of £43 million. If one looks at the report of the actuaries which was made to the Secretary of State in another place, one finds that the excess of income over expenditure in the Fund during the fiscal year would be about £268 million. I wonder, therefore, if my noble friend can say whether it will be possible for this charge to be borne out of that excess. I say that because in another place my right honourable friend the Chancellor of the Exchequer appeared to indicate that the charge might have to fall on even heavier taxation during the next fiscal year. It might be for the convenience of the Committee if my noble friend could clarify this point, and in the meantime I earnestly thank him for the effort he has made in bringing forward this Amendment.

Lord PARGITER

It should be borne in mind, in defence of the earnings rule, which has been so strongly attacked— and I speak as one who was present when the measure was originally passed—that it was an integral part of the system of benefits; in other words, related to earnings actuarially ascertained, and the earnings rule had some bearing on the level of benefits provided. I am aware that since that time many changes have taken place and that it may be appropriate to abolish the earnings rule, but it should be remembered that it represented an integral part of the scheme, so that higher rates were thereby payable at the beginning of the scheme.

Lord WELLS-PESTELL

I am grateful to noble Lords who have given their approval to this Amendment. I am particularly grateful to the noble Lord, Lord Reigate, who has been most consistent about this and I hope that he will change the writing on his heart in case anything happens in the next three years, before the earnings rule ultimately disappears. In reply to my noble friend Lord Bruce of Donington, I did give the figures so far as I understood them on Second Reading, when I said: If an allowance were made for tax at current tax rates, I am informed that the cost in 1975–76 would be reduced by £15 million to £45 million … £15 million of the £60 million would be tax. In 1976–77 the cost would be reduced by £25 million, namely from £110 million to £85 million. In 1977–78 the cost would be reduced by approximately £35 million to £110 million."—[Official Report, 18/2/1975, col. 208.] When one adds those three figures together, one sees that they are quite substantial, so the question that arises is whether, in our present situation, we can afford to take this step. It is often desirable that things should be done, even in our private lives, but one must face the facts and perhaps have to wait until one can afford to do them. The running of a country is not so different in principle from running a family, and this is a problem we have to face. I am not able to make a statement in advance of the Budget, but I rather imagine that any indication of the intentions of the Government as to how any relaxation of the earnings rule is to be financed would be mentioned then by my right honourable friend the Chancellor of the Exchequer and I do not think I should go beyond that at this stage.

Lord ABERDARE

May I ask the noble Lord to confirm that any extra money that has to be found will come from the National Insurance Fund and not from the Exchequer?

Lord WELLS-PESTELL

Obviously, I cannot do that. If I were Chancellor of the Exchequer I might be able to make some pronouncement on this, but I just do not know at this stage. Furthermore, I doubt whether anybody else knows where this money will come from.

Lord ABERDARE

But this is part of the moneys which come out of the National Insurance Fund.

Lord WELLS-PESTELL

Yes, I appreciate that, but I do not think I am in a position to give any undertaking.

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

4.1 p.m.

Lord CRAWSHAW moved Amendment No. 2:

After Clause 1 insert the following new clause:

Rates of reduction of pension in respect of earnings of invalidity or non-contributory in validity pensioners

.—(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—

1. (a) where the excess is less than £4, by 5 pence for each complete 10 pence of the excess, and
2. (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.

The noble Lord said: When I spoke in the debate on the Second Reading of this Bill, I said that I would be putting down some Amendments to deal with the earnings position of the invalidity pensioner. Since then, I have managed to collect some formidable support, and I am delighted to be assisted this afternoon by for one, the noble Earl, Lord Longford, whose powers of persuasion and light touch are well known to your Lordships. I should also be assisted by my noble friend who sits on my left, and I believe that I have a fairly strong case to put to your Lordships.

I hope that many of your Lordships from other parts of the Committee will speak, one way or the other, about the Amendment. I do not want to cross swords with the noble Lord, Lord Wells-Pestell, and I promise that whatever the result of our deliberations we will keep the party clean and respect the feelings of the Committee. My attitude as to how far to press this matter will depend on the amount of support that appears to be available. I am particularly glad that this discussion should follow so closely on the debate on the earnings rule for the retirement pensioners, because it was the relaxation and, as I thought at the time, the ultimate abolition of the earnings rule in their case—which was recently decided in the other place—that led me to put down this Amendment.

As your Lordships have just heard, the noble Lord, Lord Wells-Pestell, has proposed that the retirement pensioner should in 1977 be able to earn £50 a week without its affecting his pension. In contrast, the invalidity pensioner who is a person not of retiring age but who receives a pension because of incapacity, in one form or another, can, as things stand earn only £4.50 a week before he loses his entitlement to his entire pension. Is this fair? Many people are quite capable of earning their living well beyond the age of 65. I do not want to be personal but I know that the noble Earl, Lord Longford, will not mind my quoting him as a perfectly good example—

The Earl of LONGFORD

How does the noble Lord know I am over 65?

Lord CRAWSHAW

My Lords, the noble Earl told me yesterday. There is also the example of the noble Lord, Lord Shinwell, who I think is 65 years, plus about 25. All these people are, in my view, perfectly capable of earning and competing in the world at large—and of competing on extremely favourable terms. All are extremely articulate and, as I see it, have no great problem. On the other hand, many younger people, affected perhaps by heart trouble, multiple sclerosis and illnesses of that sort, find it quite a problem to hold down a full-time job in the outside world. I believe that the age qualification of 65 for men and 60 for women is a crude yardstick. In the same breath, I would be the first to agree that the proposal in this Amendment, to raise the earnings figure of £4.50 to £13 a week before affecting a pension, is also fairly arbitrary. It is certainly not a sacrosanct figure by any means, but it is a considerable improvement on the present position; although, as I say, it is comparatively modest compared with the £50 a week figure just mentioned by the noble Lord, Lord Wells-Pestell.

We put down the figure of £13, because it was the figure which the present Government thought ought to be applied in the case of the retirement pensioners, and the other place thought otherwise; but that was the original figure in the Bill. Depending on how matters go today, we could easily alter this present proposal of £13. It may be argued that the figure of £4.50 a week is adequate and should be regarded as therapeutic earnings. I gather from the noble Lord, Lord Wells-Pestell, that in the past he has tried his hand at weaving and I, myself, some years ago, tried my skill at basket-making, tapestry and things of that sort, but neither of us would be capable of earning much more than £4.50 a week in these trades. I hope that that is no aspersion on the dexterity of the noble Lord, Lord Wells-Pestell, but it is true in my case.

Unfortunately, this therapeutic principle, as I call it, is extended beyond the time that a person is in hospital and is trying to establish himself outside. I should like to give the Committee an example of what I have in mind. Recently I heard of a man aged 32 who was a chartered librarian and until 10 months ago he earned £2,000 a year. He now suffers from multiple sclerosis and has taken up some research work at home. He has recently received £47 for work done over a six weeks' period: in other words, about £8 a week. The Department of Health and Social Security promptly removed his entire invalidity pension for that period amounting to about £73.

I also heard of a man in my part of the world—Melton Mowbray—who is 54 and was formerly employed in the hospital service. He now suffers from a heart condition and has had to go on to an invalidity pension. He now feels able to do work for two or three days a week, and was offered a job at £5 a day He tells me that his employer made out a pay slip for £5 for his first day's work, but he had to be told that £4 50 was the maximum he could accept. These are just two examples. I know of many more, and I think that my noble friends will possibly cite others, but I think these examples illustrate the frustration which people feel. By this system of enforced idleness—and it is nothing else—we are, I trust unwittingly, creating publicly-funded cabbages. I do not want your Lordships to be confused by this doctrine of therapeutic earnings when applied to people after discharge from hospital.

In my experience, you do not really know what you can do until you try, but under the present system there is precious little incentive to try. It may also be argued this afternoon that there is no need to make a fuss about the earnings rule or indeed the rates of invalidity pension, because if people cannot manage their incomes will be made up by supplementary benefits. This is not the answer, because, first, people do not want to be publicly-funded cabbages, and, secondly, they resent the rigorous inquisition into their personal circumstances that this system entails. This may be necessary in the case of professional shirkers in society, but 99 per cent. of the people I am talking about resent this system, and the system itself is devised as a temporary safety net and is not intended as a long-term answer.

My noble friends and I moved a similar Amendment to this one to the Social Security Bill in 1973. A great many of the other proposals put forward on that occasion—for instance, the invalidity care allowance, the non-contributory invalidity pensions, and help for disabled housewives—have now been adopted by successive Governments. But this matter—and I am afraid this is rather a reflection on my advocacy as it was the matter which I took up on that occasion—has got stuck. To take account of inflation alone this figure of £4.50 really must be raised. We are not asking for the moon, and I respect the views of the Labour Government and of noble Lords who feel it imperative at this moment to curtail our demands on the Exchequer. But I do not believe that there will be a great increase in public spending; in fact there may well be a saving because, instead of drawing supplementary benefit, people will be earning something.

By accepting this Amendment we shall be moving away from a situation where people have to be written off as totally unemployable before they get some help from the State. I hope, as I say, that many noble Lords will air their views on this matter. I should particularly like to hear what my noble friend Lord Aberdare has to say. I know that on a previous occasion when it came to a relaxation of the earnings rule he felt that the invalidity pensioners should have priority over the retirement pensioners. Now that the other place has helped retirement pensioners to the extent that we have heard, and because this Amendment was not considered either in Standing Committee B of another place or in the light of their help to retirement pensioners. I ask particularly that your Lord-ships should give this Amendment favourable consideration. On matters of this sort we probably have more first-hand experience in this House than exists in the other place. I believe also that since this matter has not been properly considered in the other place your Lordships have a constitutional obligation to look at it very closely. I beg to move.

4.13 p.m.

Baroness DARCY de KNAYTH

I should like to support this Amendment which was so ably moved by my noble friend. As he has already said, in the summer of 1973 during the Committee and Report stages of the Social Security Bill, a similar Amendment was moved but we withdrew it because the Minister, who was then the noble Lord, Lord Aberdare said that we should wait for the review which was being undertaken by the Government, and the report of the Secretary of State, which was the review, promised to go further into the problems of disabled people in employment. We are still trying to remove the earnings stop, which is a very real and positive deterrent to a disabled person to enter or re-enter employment. We seem to be going round in circles and do not seem to have made any real progress.

My noble friend has already spoken of the therapeutic earnings of £4.50 a week. The word "therapeutic" is defined as "tending to the cure of disease". How can this paternalistic palliative be described as therapeutic when it actually prevents the full rehabilitation and realistically debars the disabled person from work? Let me read part of a letter from the father of a young man, an industrial psychologist, disabled in an accident. This man is married with two children but is living at present with his parents because, as his father said, it seemed rather much to expect his wife to have the additional care of looking after him. He is still very interested in the work he did as an industrial psychologist, but they have been told he will not be able to return to the demands and intensity of his old job and will have to be content with a job of a quieter character. He has been offered a light clerical part-time job by a local firm which is keen to help. The letter said: It will be a simple job, though that is necessary after absence from work for over two years and we are hoping that he will be competent to do it and that it may lead to something better and full-time. He is still receiving invalidity benefit to the amount of £13.60 a week which, I understand, will be increased at the beginning of October, but immediately he begins work this will cease. We are grateful that this part-time job has been offered and I suppose it could be regarded as continuing our son's rehabilitation. For this work he will be paid £10 a week, out of which we expect the cost of his insurance stamp will be taken. The amount remaining will not be so much as the amount which our son has been sending weekly to his wife. Although the Local Employment Bureau officers are sympathetic in their view of the case, as also are the local officers of the Department of Health and Social Security, and would pay the difference between what our son will earn and what he would otherwise get for his invalidity benefit, the higher authorities rule that there is no precedent for such a step. In other words, our son is making an honest attempt to begin work; it is in the nature of rehabilitation and yet he will receive less than he would otherwise receive if he chose, as indeed he could justifiably choose, to continue to receive his invalidity benefit. One is well aware that rules and regulations do not cover every contingency, but there seems something deficient when a person, in his desire to start work again, is placed at a financial disadvantage. This letter illustrates several important points. First, one often cannot return immediately to a job that is as full-time or demanding as the one previously held. Secondly, a part-time job is an important part of rehabilitation, a stepping-stone to doing a worthwhile productive job. This, if you like, is therapy. Thirdly, this young man is taking a cut, because of the earnings stop, and if he did not have parents who were able and willing to look after him at home, and if his wife was totally dependent on him for support he would be condemned to a life of forced inactivity, questionably enlightened by the therapeutic earnings of £4.50 a week. As my noble friend has said, from the point of view of cost a good proportion of invalidity pensioners, over one-third, will also have to resort to supplementary benefit, and I feel that this Amendment would certainly reduce the number of people on supplementary benefit and reduce administrative costs.

Paragraph 51 of the Report of the Secretary of State mentions the problems of extra expense, low income and incentives for disabled workers being closely related and it states: 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. The Report says that this should not be confused with invalidity benefit, but it would give some recognition of what has been lost and of the wider implications of disablement. I feel very strongly that the Department of Health and the Department of Employment should get together and try to work out some form of wages supplement scheme. I hope that this proposed earnings rule may be a step towards the wages supplement scheme, so I wholeheartedly support my noble friend's Amendment.

4.19 p.m.

The Earl of LONGFORD

I should also like to support my noble friend's Amendment which he has moved so effectively. I sympathise with the noble Lord, Lord Wells-Pestell, because there is nobody here who would be more sympathetic than he to a plea of this kind. But he is a Minister, it is not his money, and he will therefore be uncertain whether he can meet us without taking the matter back. I hope that at the very least he will say that representations will be sympathetically considered, which will give us an opportunity for a vote—if not today, at a later stage—if he is not able to win over his colleagues. I also hope that he will not slap us down and say, "Nothing doing", because that would be very unlike him.

I think anybody listening to this debate today would feel thatprima facie the noble Lord, Lord Crawshaw, made out a powerful case. The simple fact is that the retirement pensioner can earn up to £50 before there is a deduction, and the disabled person can earn up to £4.50. Something has got out of phase there. That must strike anyone at first sight. If the noble Lord is going to resist us, even temporarily, he will no doubt try to explain that the two things are not comparable. We must spend a moment to ask ourselves whether that argument, that you cannot compare the two, is a valid one. I am afraid that I have not given the noble Lord, Lord Aberdare, notice of a quotation of what he said— although I am sure that he has nothing to be ashamed of in it—when he was in Government and was dealing with this issue. He was explaining the difference between the retirement pension and invalidity pension, and he pointed out that the underlying purpose of the invalidity and sickness benefit is that it is paid when some physical or mental condition renders an insured person incapable of working.

The noble Lord went on to say that the £4.50 was not intended to be an earnings rule in the ordinary sense. He used that phrase with reluctance, I gather —the therapeutic earnings which the noble Lord, Lord Crawshaw, touched on. At any rate it was argued by him—and I do not know whether it will be argued today, although I hope not, in the same sense; and it may be argued by the noble Lord, Lord Wells-Pestell—that you cannot make the comparison. We may hear from the noble Lord that the retirement pensioner has earned his benefit. We may be told—I hope not, but it seems to lie behind a great deal of the thinking here—that the invalidity pensioner has not earned his pension in the same way. I do not think that the noble Lord, Lord Aberdare, used those expressions on an earlier occasion; but that is the kind of defence which may be made for drawing such a tremendous distinction between the two categories— that one has earned it and must expect better treatment, while the other has not earned it. I hope that that will not be said. It would be a sad reflection on our state of mind if we drew a distinction in that kind of way, if we talk of the disabled person as not entitled to it and as drawing his pension out of the benevolence, the charity, of the State. I would say that none of us in our family life would adopt such a criterion if, say, some of our children earned some substantial sums and another child, it may be, was incapable of earning in the ordinary legal sense. We should still feel that the disabled one was as much entitled to whatever was available as was the other who worked hard because he was able to work hard. I hope that that distinction will not be drawn. It is important to attend to the theory here; for unless the theory is brought in on the side of the existing proposal by the Government, there is no reason whatever to draw this distinction.

There is one practical example which came to me in the last few days. Someone was brought to see me who is a very heavily-handicapped spastic. He is incapable of speech, apart from being incapable of any action with his arms and legs. He cannot speak at all. He communicates in conversation by pointing his nose at a small blackboard which he brings with him; and he has some kind friend, in this case a student, who interprets for the benefit of anybody such as myself what he proposes to say. In spite of that colossal handicap he has a 2¹, very nearly a first-class, degree at Reading University, an M.A. degree at Sussex and he hopes to get a still higher degree. So he is entitled to look to a career, possibly in publishing—and he came to see me in that connection. One is entitled to ask whether such a person is to be described as incapable of work. Obviously he is not incapable of work; he just has a 2¹ degree at University and is capable of some work. But the question become urgent of whether the Government are to discourage him from working by a ruling of this kind. So the crude distinction between those who earned the money and those incapable of working and therefore entitled to therapeutic earnings, must be washed out; it is primitive, crude and somewhat repulsive. I hope that we will go back to the facts as set out by the noble Lord, Lord Crawshaw, and I hope that that very sensitive man, the noble Lord, Lord Wells-Pestell, at the very least will tell us that the proposal will be sympathetically considered before the next stage.

Baroness SUMMERSKILL

I would add only a few words to what has been said. Listening to the noble Lord who opened the debate on the Amendment, I was much struck by the way he expressed himself and by his knowledge of the position. I want to put the medical aspect of this question. It is a curious fact that today the Government attach so much importance to occupational therapy that they are willing to subsidise the training of occupational therapists in every field in order to reduce not only the disabilities of those patients who will eventually recover but, particularly, the helplessness of those patients who are unfortunately incurable but who have the courage to face up to life and who are determined that they will so far as possible make themselves familiar with some of the various activities to which they are introduced during their recovery state.

Here I find a most curious contradiction. While, on the one hand, the Government are saying—all Governments, not only this one; and the medical profession prods the Government to subsidise the training of occupational therapists—that occupational therapy is very helpful, that it will give the patient a new confidence in himself and his powers, that money must be spent on it and excellent young men and women trained in this field, on the other hand we learn here that the individual who has the energy and courage to decide to learn some particular pastime or job of work will suffer a penalty. He is asking for the same treatment as a retirement pensioner; and this, I think, is not unjust. Which of us in our retirement would willingly change our lot with the patient who has suffered from some incurable complaint for the whole of his life and is destined to suffer from it until he dies? I should have thought that at this stage of his life, if not before, the Government would say, "This is the time when, for his sake, we should do everything to encourage him to take up some occupation." Therefore, not only for medical reasons but for humane reasons, I feel that now that the whole question of retirement pensions is being looked at again, we should adopt a more practical and humane approach to the individual who is suffering from some incurable disease and who is desperately anxious to help himself.

Lord SOMERS

I should like also to support this Amendment. In considering the case one must remember the situation of the disabled person. Let us take, as an instance, a young mother with two children whose husband was perhaps killed in a car accident some years ago. She develops multiple-sclerosis or some such disease. She has these two children who must be fed, clothed and educated, and she is the only person who can in some way provide the necessities for them to survive. One must remember that the disabled do not find it as easy as others do to obtain employment, simply because some people have an odd reluctance to employ them—foolishly, as I think, because although they may be physically disabled, mentally they are often a great deal clearer than those of us who are physically able. Therefore, they are going to find things financially very difficult.

It seems to me that a rule such as that which exists at present is absolutely crippling. The disabled may not be able to do full-time work and so earn enough to keep them going and to supply the needs of their children, but they may be able to do enough to balance their earnings with an invalidity pension: the two incomes combined may be just enough. To cut that out altogether seems to me absolutely unjust—and if there is one thing on which Governments of all political colours are united it is surely that justice must be done. I sincerely hope that the Committee will accept this Amendment.

The Lord Bishop of WAKEFIELD

I support the Amendment. Whatever the noble Lord, Lord Wells-Pestell, has to say in reply to the contributions to the debate, I know that he will be kind in his reactions. I share the views of the noble Earl, Lord Longford, that we are quite sure that the noble Lord's intentions will be to help the disabled in every way possible. In my experience as a clergyman, I owe a tremendous debt to disabled people. I have had a lot to do with them over the years and they have given me far more grounds for encouragement in my view of human nature than many people who are not disabled. It is because of the heroic way they deal with their disablement that I feel that we who do not share their condition ought to be ready to give them every encouragement we can.

To support this Amendment in the hope that it may be accepted would give them encouragement. The most important point—if I may pick out one sentence from the speech of the noble Lord, Lord Crawshaw—is that this Amendment would give the disabled the will to try. If we can do anything here that will encourage people to try to overcome the disappointment that must suddenly come to them in discovering that they are disabled for life, we should all try to do it. They have so much to give to the community as a whole, in many cases more than those who are not disabled. I therefore wish to support this Amendment so that the disabled might be encouraged by us and find an even greater incentive to try.

Lord HYLTON

I should like to support this Amendment moved with such compelling arguments from my noble friends on the mobile bench. It is a modest Amendment and, probably, the proposed new ceiling hardly allows for the effect of inflation on the existing maximum earnings. I believe that this is one of the few occasions when it is possible to do something positive to assert the human dignity of handicapped people at very slight, minimal, cost to the Exchequer. I hope that the Government will accept the Amendment.

Lord ABERDARE

As my name has been mentioned by various noble Lords, I think I should say a word. I was honoured that the noble Earl, Lord Longford, should quote from what I had said in the course of proceedings on the Social Security Bill 1973. I am not in the least ashamed of what I said at that time. In fact, I remember the words very well, and should not be suprised if the identical words appeared in the brief of the noble Lord, Lord Wells-Pestell. I also said at the time, as the noble Lord, Lord Crawshaw, reminded us, that I had rather greater sympathy with this proposal, in terms of priorities, than with relaxation of the earnings rule. My mind goes back to the Bill of 1973 and to the demands that were made on the then Government from all around the House to make relaxations of one kind or another, or to help one kind of person in need or another by giving an extra allowance, an extra pension or by relaxing this or that rule.

At that time, your Lordships will recollect, I accepted an Amendment—I believe an Amendment of the noble Baroness, Lady Seear—requiring a review to be made by October last year. The present Government accepted that obligation and produced their review; and it is, as I understand it, as a result of that review that we now have this Bill in which there are two new benefits: the non-contributory invalidity pension and the invalid care allowance. Both benefits are enormously welcome and both a real step forward in providing for the needs of the disabled. Since then, as a result of what happened in another place, the Government have, against their will, been made to relax the earnings rule and also to include the disabled housewife within the provisions of the non-contributory invalidity pension. I honestly feel that it is difficult for this Committee now to ask for any more.

I do not know what the noble Lord, Lord Wells-Pestell, will say to this Amendment, but I feel that in this Bill the Government have already gone a long way. They have been made to go even further, and I feel that I could not myself responsibly push them to go yet further —much as I support the feeling and the arguments behind this Amendment. It was extraordinarily well moved by the noble Lord, Lord Crawshaw, and very well supported by other noble Lords. I hope that he will not put it to a vote, for the very reason I have tried to express: that I feel we are trying to get too much too quickly in this Bill. I am sure we are going to receive a sympathetic response from the noble Lord, Lord Wells-Pestell, who himself understands well the needs of the disabled. I hope that his answer will prove sufficiently satisfactory to the noble Lord, Lord Crawshaw, for him not to put this matter to a vote. If he did, I myself should feel bound to advise those who care to follow me to abstain.

4.40 p.m.

Lord WELLS-PESTELL

I am glad that we have had what amounts to a fairly long debate on this Amendment. I know there is a great deal of sympathy, understanding and even support in your Lordships' Committee for the Amendment which stands in the name of the noble Lord, Lord Crawshaw. I do not have, and the Government do not have, any difference of opinion regarding what the noble Lord, Lord Crawshaw, has said. However, we must get this matter into its right channel—not into its right perspective but into its right channel. This country has a vast area of social services. It has a vast number of different allowances for different kinds of disability. I say this kindly, but not a bit of what has been said is relevant.

The invalidity pension to which the noble Lord, Lord Crawshaw, referred—I want to say this for the benefit of certain noble Lords whose heads were nodding in agreement with the noble Lord—can be given only if the person who receives it is incapable of work. May I compare it with the position of a person who is unemployed. One cannot obtain unemployment benefit if one is employed. It may well be that there ought to be another category. If, however, the person to whom the noble Baroness referred is capable of earning £10 a week, which I agree is not a princely amount, he is not incapable of work; therefore, he is not entitled to this invalidity pension. It is given simply and solely for being incapable of work.

The Earl of LONGFORD

If I may interrupt the noble Lord, I think he will not disagree with the language used by the noble Lord, Lord Aberdare, who may have received a little of the same expert advice as the noble Lord has himself received. In 1973 the noble Lord, Lord Aberdare, said: It has always been recognised that there can be circumstances in which a person may be accepted as incapable of work and yet be capable of doing some work". That is what the noble Lord, Lord Aberdare, said: that a person could be incapable of work but not incapable of doing some work—hence the £4.50.

Lord WELLS-PESTELL

There is nothing between the noble Lord, Lord Aberdare, and myself and the Government on this matter, because we realised when this benefit was introduced that it was possible and, what is more, desirable to encourage people who had a very serious disability to do some kind of work, if they can. The term "therapeutic value" has been used. This is very important to people who have limitations of one kind or another. Therefore they are encouraged to work, and they can keep anything which they earn, up to £4.50 a week. It is not taken into account when assessing what they need over and above that amount in order to live. However, that does not alter the fact that this benefit is given simply and solely on medical proof that a person is incapable of work. The noble Lord, Lord Aberdare, was right about that. Therefore, I must resist this Amendment. If a person can work—an example was given to your Lordships—and can earn £10 a week, one cannot argue that that person is incapable of work. We must keep within the terms of the various benefits.

It may well be that at some later stage we ought to do more, whether by way of a contributory pension or by way of a non-contributory pension. However, at the present moment we are in the situation where we must apply the conditions for a benefit. There is not a single noble Lord in this House who would approve of a person working and drawing unemployment benefit. Nor is there a single Member of your Lordships' House who would approve of people drawing benefits to which they were not entitled. If a person is incapable of work, he is entitled to the invalidity pension. As I have said, from advice which we have received over the years from the medical profession and others, one wants to encourage people who are in that position to do something for themselves. That is highly desirable, and I speak with a great deal of experience. It is highly desirable that one should encourage people to do something for themselves, in order to "get them out of themselves". If they can do a certain amount of work, we are saying that that is all right; we will ignore the first £4.50. Over and above that, however, so far as the invalidity pension is concerned, they will have to suffer some loss. I could go on, but I hope that your Lordships will feel that I have said sufficient. It is not that the Government are unsympathetic towards this Amendment; that must be clearly understood. It is a question that—

Lord HYLTON

I am grateful to the noble Lord for giving way. Before he leaves that point, is he asserting that it is possible to draw a rigid, cast iron line between those who can work and those who are incapable of work? Surely there must be many borderline cases. When doctors are assessing the ability of a person to work, surely they must tend to err on the generous side; namely, to give their patient the benefit of the doubt and to say that he cannot work when perhaps he could work. There are so many complicating factors. In this interim situation where there is doubt and where there are borderline cases, before we have some kind of tapering-off system, is it not reasonable to increase the ceiling in the way that is proposed in the Amendment?

Lord WELLS-PESTELL

I am grateful to the noble Lord, because he has helped me to make my point. Of course it is difficult to establish in every case that the person concerned is incapable of work. I am sure, and I hope that this will always be so, that a medical practitioner who makes the judgment will err on the side of the disabled person. We acknowledge that. That is why we say that in the case of those who can do some work we will ignore the first £4.50. However, it does not alter the basic fact, which is that this is an invalidity pension for those who are incapable of work. We can talk all the afternoon about this, but we cannot escape that fact. In the end, this is a requirement.

Baroness SEEAR

Surely the point that the Minister is making now he is making against himself. He keeps on telling us, rightly, that the Government are ignoring the first £4.50. Surely the issue is a much narrower one; namely, what is the level of the disregard to be? If one can ignore £4.50, logically one can ignore £5, £6 or an even higher figure. We are talking about how high should be the disregard. The noble Lord admitted the principle of a disregard. Now he is talking about the extent of the disregard. Surely that is the issue.

Lord WELLS-PESTELL

It may be the issue for the noble Baroness, but certainly it is not the issue so far as the Government are concerned. If the noble Baroness wants me to reply, I will reply quite bluntly and say that we cannot afford it. But that is not what is at stake at the present moment. What is at stake at the present moment is the idea that a person who is supposed to be incapable of work should be able to earn as much as he possibly can. What I am saying is that the two things are inconsistent. Therefore I must say, and I hope that the Committee will follow me on this, that while the Government have a great deal of sympathy with what the noble Lord has said, the crucial test in this particular matter is whether or not a person is incapable of work. If people are incapable of work they get the invalidity pension.

There is one other thing which has not been brought out that I should mention. It is that regardless of their age, if the wives of men who draw the invalidity pension go out to work, the first £13 that they earn is disregarded. I am the first to admit that not every man who has an invalidity pension is married, and if he is married his wife may not be able to go out to work. However, the fact remains that if she is able to go out to work, regardless of her age—the position is very different when one is dealing with retirement pensions—the first £13 of her income is disregarded.

I wish quite sincerely that we could do something to meet this situation. As the noble Lord, Lord Aberdare, has said, we have decided to introduce a number of fresh benefits in the Social Security Benefits Bill because we felt that there was a vast army of people who needed help, who had not been helped and had not been reached, and it may well be that at some later stage we shall be able to do something about this. However, bearing in mind the basic requirement I am afraid at this stage we cannot accept the Amendment.

Baroness DARCY DE KNAYTH

The noble Lord keeps saying that the Government cannot afford to help us, but would not he agree that if they encourage the disabled into full-time work by abolishing the earnings stop the Government would get them off supplementary benefit and would in fact save money?

Lord WELLS-PESTELL

I find it difficult to believe that people who are disabled will decline to do anything to help themselves financially simply because if they earn more than £450 it will be clawed back in some way.

Lord PLATT

With respect, I do not think the noble Lord, Lord Wells-Pestell, has at all answered the logical argument of the noble Baroness, Lady Seear, and others. If the argument is that at the moment the country cannot afford this, then we should be bound to listen to that argument: if the argument is that we cannot do this because it is only for people who are totally unemployed except that they can earn £4.50 a week, then surely with the same logic we could say that this is for unemployed people but they can now earn £5 or £650 a week, or anything else. Logically it is the same thing. The argument falls down completely as soon as one mentions the £4.50.

Lord O'HAGAN

I hope the Committee will press the Government In some way or other on this point. We all respect the noble Lord, Lord Wells-Pestell, but when he was trying to convince this Committee I had the impression that he was trying to convince himself, and perhaps not succeeding entirely. He did not mention any frightening figures that the acceptance of this Amendment would add to the burden on the Exchequer; he merely raised the bogey of unemployed people working and claiming unemployment benefit at the same time, when in fact that is not at all comparable.

Since another place has shown considerable humanity at great expense to the Exchequer in reducing the earnings rule for old age pensioners, surely we here can help the same course forward by exerting similar pressure on the Government in this much more limited and much less expensive sphere. I wish good luck to the movers of the Amendment.

Lord ABERDARE

This is a complicated matter but we seem to be getting into a terrible muddle. The noble Baroness, Lady Seear, and the noble Lord, Lord Platt, are talking about something quite different from what we are discussing; they are talking about raising the cut-off point at which a person loses the invalidity pension. That is not the Amendment. The Amendment is that the cut-off point should remain the same and that a graduated earnings rule should be introduced on the pension itself. I think we should stick to the Amendment under discussion. But having said that, I wonder whether the noble Lord, Lord Wells-Pestell, could perhaps go a little further to help the noble Lord and the Committee, and say that certainly when he is next looking at any further up-rating this particular matter will have very high priority?

Lord WELLS-PESTELL

I do not want to introduce a political element into this discussion but I think it must be patently clear that ever since this Government have been in Office they have looked carefully at the various forms and rates of benefit. They have unrated them and have undertaken to do so twice this year in line with wages, as distinct from prices; although the Government have reserved the right to switch over to prices if that is more beneficial to the recipients. We are constantly looking at these things. The added benefits that we are shortly giving will amount to about £1,100 million a year. Of course we look at these things, and we shall look at this one.

It would be wrong of me to say that we are going to do something about it immediately. Obviously, we must spread what money we have over the widest possible field and draw in the largest number of people who need help. Of course we are not unsympathetic, and I am sure that if my right honourable friend the Secretary of State can do something, she will. If I may say so with great respect, during the last year she has done a great deal for disabled people

(as I tried to explain during the debate that we had on the three-wheelers) bringing in 100,000 people who at present are not catered for at all. These things we have done; we are on the side of the disabled and their interests—there can be no question at all about that. Of course we shall look at this matter continuously, along with all the other benefits that we are able to provide for those who are unfortunate enough to be disabled.

Lord CRAWSHAW

May I thank noble Lords in all parts of the Committee for the great interest they have shown in this Amendment. I should like to take up one or two points. I do not agree with my noble friend Lord Aberdare that we want to raise the cut-off point from £4.50 to £13. But behind all the thinking on this question is an effort to establish some sort of wages supplement which will make up the income of somebody who is partially incapacitated. I realise that this Amendment is possibly not a perfect way of doing that, but it is one way of doing it and until somebody can produce a better way I am inclined to stick to my opinion.

This is the third time in the last two years that I have spoken to an Amendment of this sort and I feel that this discussion has gone on long enough. Also, I am anxious for the matter to be raised again in the other place. Therefore, with no feeling of animosity towards the Government or the Opposition, or anybody else, I would ask your Lordships for your opinion.

5 p.m.

On Question, Whether the said Amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 72; Not-Contents, 36.

CONTENTS
Amherst, E.	Dundonald, E.	Hylton, L.
Amherst of Hackney, L.	Ebbisham, L.	Hylton-Foster, B.
Balfour of Inchrye, L.	Elles, B.	Kilmarnock, L.
Banks, L.	Emmet of Amberley, B.	Kindersley, L.
Barrington, V.	Foot, L.	Lauderdale, E.
Beaumont of Whitley, L.	Gladwyn, L.	Lloyd of Kilgerran, L.
Boothby, L.	Goschen, V.	London, Bp.
Byers, L.	Greenway, L.	Longford, E.
Clancarty, E.	Grimston of Westbury, L.	Loudoun, C.
Crawshaw, L.	Guildford, E.	Lytton, E.
Darcy (de Knayth), B.	Hanworth, V.	Mackie of Benshie, L.
Darwen, L.	Harding of Petherton, L.	Masham of Ilton, B.
Daventry, V.	Henley, L.	Milverton, L.
Deramore, L.	Hunt, L.	Moyne, L.
Dudley, E.	Hunt of Fawley, L.	Newall, L.
Norwich, V.	Selsdon, L.	Teviot, L.
Ogmore, L.	Sempill, Ly.	Thomas, L.
O'Hagan, L. [Teller.]	Somers, L.	Thurlow, L.
Phillips, B.	Stamp, L.	Tranmire, L.
Platt, L.	Strathcarron, L.	Vivian, L.
Rochester, L.	Strathspey, L.	Wade, L.
Ruthven of Freeland, Ly.	Swansea, L.	Wakefield, Bp.
St. Davids, V.	Swinton, E.	Wardington, L.
St. Helens, L.	Tanlaw, L.	Wigoder, L.
Seear, B. [Teller.]
NOT-CONTENTS
Abinger, L.	Fletcher, L.	Plurenden, L.
Ardwick, L.	Gaitskell, B.	Shackleton, L.
Brockway, L.	Gordon-Walker, L.	Shepherd, L.(L. Privy Seal.)
Bruce of Donnington, L.	Greenwood of Rossendale, L.	Shinwell, L.
Caccia, L.	Henderson, L.	Stedman, B.
Camoys, L.	Houghton of Sowerby, L.	Stewart of Alvechurch, L.
Castle, L.	Jacques, L.	Stow Hill, L.
Davies of Leek, L.	Janner, L.	Strabolgi, L. [Teller.]
Douglas of Barloch, L.	Llewelyn-Davies of Hastoe, B.	Wells-Pestell, L.
Elwyn-Jones, L.(L. Chancellor.)	Lucas of Chilworth, L.	White, B.
Faringdon, L.	Mais, L.	Wigg, L.
Fisher of Camden, L.	Pannell, L.	Winterbottom, L. [Teller.]

On Question, Amendment agreed to.

Resolved in the affirmative and Amendment agreed to accordingly.

Clause 2 [Rates of benefit in respect of industrial injuries and diseases]:

5.7 p.m.

Lord WELLS-PESTELL moved Amendment No. 3: Page 2, line 30, at end insert— ("( ) In section 18(3A) of the said Act of 1965 (reduction of increase of disablement pension where beneficiary is residing with his wife and her earnings for the preceding week exceeded £13) for "£13" there shall be substituted "£20" and at the end there shall be inserted— With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, this subsection shall have effect with the substitution for "£20" of the amount specified in relation to that year in the second column below—

1976	"£35"
1977	"£50"")

The noble Lord said: When I moved the first Amendment I spoke to Amendments Nos. 1 and 3. This is the third Amendment to which I made reference. This Amendment extends to the wives of those industrial injuries disablement pensioners who are entitled to unemployability supplement the relaxed earnings rule which Clause 1(3) provides for the wives of retirement and invalidity pensioners. Noble Lords will recall that in the last Amendment I drew attention to that fact. Unemployability supplement is akin to invalidity pension, and the earnings

rule for the two benefits have always been the same. It is therefore desirable that they should continue to be the same. The Bill as amended in another place fails to extend the relaxed earnings rule to the unemployability supplement, but I am sure your Lordships will want to see the omission corrected. I beg to move.

Clause 2, as amended, agreed to.

Clause 3 agreed to.

Clause 4 [Duty to increase rates of certain benefits]:

Lord WELLS-PESTELL moved Amendment No. 4: Page 4, line 9, after second (" 1 ") insert ("(a)").

The noble Lord said: This is a wholly beneficial Amendment which corrects an oversight in the drafting of the Bill. The Amendment ensures that where unemployment or sickness benefit is payable to persons over pension age any increases in respect of dependent wives, adults or children will be included in the group of long-term benefits which are to be up-rated in line with the general movement in earnings or prices, whichever is more advantageous for the persons concerned. Unemployment or sickness benefit is paid to a person over pension age at the rate of personal basic retirement pension to which he would be entitled. Dependency increases of these benefits are therefore paid at the rates appropriate to pensions and other long-term benefits. It was the Government's intention to provide for all long-term benefits to be increased in line with prices or earnings whichever would be more beneficial on a particular occasion. It would clearly be illogical for a long-term dependency increase to be included with the short-term benefits (which are increased in line with the movement in prices only). The Amendment, therefore, corrects this anomaly. I beg to move.

Clause 4, as amended, agreed to. Clause 5 agreed to.

Clause 6 [Non-contributory invalidity pension]:

5.12 p.m.

Lord CRAWSHAW moved Amendment No. 5:

Page 6, line 43, at end insert— ("(10) For the purposes of section 11(5) of the Social Security Act 1973 entitlement to an invalidity pension shall be deemed to include entitlement to a non-contributory invalidity pension to allow payment of an invalidity allowance to a non-contributory invalidity pensioner out of the National Insurance Fund and regulations shall prescribe the basis on which the qualifying date shall be determined in such a case.")

The noble Lord said: This Amendment deals with the question of the invalidity allowance, which was a scheme devised to help the people who are incapacitated early in life. The logic behind this is that later on, or when one is fairly established in work, one has at least had some chance of building up a certain amount of income or capital and becoming established in a particular job or profession. The invalidity allowance was a welcome introduction to help those incapacitated at an early age, and most non-contributory invalidity pensioners will be those who became disabled early in life. I think that is a natural sequence of events. Their disability has probably prevented them from working at all. It seems something of an anomaly to us that the invalidity allowance under the Bill is available to the contributory pensioners but not to the non-contributory pensioners. It was with that in mind that we put down this Amendment. I beg to move.

Lord WELLS-PESTELL

The aim of this Amendment, as I understand it, is to pay an invalidity allowance on top of a non-contributory invalidity pension where the beneficiary satisfies the qualifying condition as to his age at the date of the onset of his incapacity. I am afraid there would be serious practical difficulties in trying to establish the age at onset of incapacity in many of the non-contributory invalidity pension cases. It is unlikely in such cases that there would be records still available anywhere so many years after the event, and people's memories of dates when ill-nesses began, some almost imperceptibly, are notoriously hazy.

The noble Lord, Lord Crawshaw, has argued that they have recognised the difficulties; hence the power in the Amendment to make regulations prescribing the basis on which the qualifying date is to be determined. I do not think that with all the power in the world to prescribe dates of onset one can overcome the facts that the age at onset cannot be properly determined in many cases and that an artificial solution imposed by regulations is unlikely to be a fair one between one invalidity pensioner and another.

Your Lordships will realise that there is more than this to the practical difficulties. I must again return to the question of cost. The non-contributory invalidity pension by itself as proposed in the Bill will cost an estimated £25 million net in a full year. Invalidity allowance would add another £7½ million net in a full year when the non-contributory invalidity pension is fully operative. In present economic circumstances, the Government cannot see their way clear to adding a further sum of this order to the cost, already massive, of the improvements and new benefits which this Bill and the Royal Warrants to increase war pensions will bring. We must also bear in mind that this is not the end of the story. Further measures to help sick and disabled people, the new mobility allowance and earnings related invalidity pensions, are on the way. These will add substantially to the cost of benefits, costs which, of course, have to be met in the end by the contributor and the taxpayer. It is for those reasons that at this stage we find ourselves unable to accept the Amendment.

Baroness

DARCY DE KNAYTH: In supporting my noble friend's Amendment, may I ask whether we can really discriminate against those people who have not paid contributions, when it is their disability which has been the cause of their not working? The noble Lord mentioned cost again. Perhaps I may return to this aspect. Because of the difference in benefits for contributors and non-contributors, the non-contributors' income has to be topped up from supplementary benefits, and when non-contributors receive the invalidity allowance probably two-thirds of them will still need supplementary benefits. During the Committee stage of this Bill in another place a reply by Mr. O'Malley referred to the fact that people on supplementary benefits had to be dealt with individually by an officer, and by hand. The massive dependence on supplementary benefit was said to be one of the principle problems facing any Government. The only way to minimise the problem would be to reduce the number of those in receipt of national insurance benefits who also had to depend on supplementary benefits. As the numbers on supplementary benefit was reduced the problem would progressively become easier.

This individual assessment is very expensive, and so these Amendments would help the Government in that they would be very much cheaper in operation. I therefore urge the Government to reconsider and support my noble friend's Amendment, since they would be helping themselves as well as removing an illogical penalty from those who, by reason of their disability, have never been lucky enough to be able to work.

Baroness PHILLIPS

I should like to support the Amendment. For too long have Governments fallen back on this argument about the contributor and non-contributor. If we look at another aspect of the payment of insurance, the widow under 40 whose husband may well have contributed (Joes not draw by reason of the fact that she is not the right age. If the Government can adjust on one occasion, it seems totally illogical that they cannot adjust the other way in the case of these people who need the money and, as my noble friend has said, must have the money. It will merely come from the State in another form.

I believe that these arguments were advanced when there was pressure for the over 80s, and eventually the Government of the day gave way. I would implore my noble friend to look at this again. I do not think that the question of cost can be determined. We know this all too well, just as we always had these strange figures about an earnings rule. I have always wondered whether a Chancellor sat down and actually assumed that a certain number of people would not draw their pension when he proposed his figures. I cannot believe that this is true. I feel that these figures are flexible, and probably would not stand up to close scrutiny. Would my noble friend look at this question? The amount concerned is not great. Surely our great scheme of welfare is not designed merely for those who can pay, but for those who need it. This was the basis of the Beveridge scheme.

5.24 p.m.

Lord ABERDARE

I do not want always to appear to be supporting the Government in this matter, because again I have great sympathy with the disabled. However, on this occasion I think that the noble Lord, Lord Wells-Pestell, has made two important points. The first is the matter of cost. As I understand it, extra money towards an invalidity allowance for the non-contributory pension would come out of Exchequer funds, and therefore your Lordships are asking the Government to find more money out of the Exchequer, which is a sensitive area for us to ask about. Secondly, he has pointed out the very real administrative difficulty in being able to put it into effect.

I would appeal to those noble Lords who are supporting this Amendment to consider carefully whether it is really right to send back to the other place another Amendment which involves further expenditure of public money, and, as I understand it, in this instance Exchequer money, when they have already won a considerable victory on the: last Amendment. We all need to have our priorities. The Government have had their priorities, and have put them in the Bill. Those who have put their names to this Amendment should have their priorities, and they have already got one Amendment. I should think that they ought. to be content with that.

Lord WELLS-PESTELL

I do not think that I can add much more, if anything, to what I have already said, or anything that would in any way improve upon what the noble Lord, Lord Aberdare, has said. My noble friend Lady Phillips said that it was unlikely that this would cost any more, but this is a very difficult area. My advice is that it will cost considerably more, notwithstanding the fact that, in the last analysis, 1 suppose that all money comes from the same source. But there is the difficulty of fixing a date, and this is going to be quite a costly operation. If money has to come out of the Treasury, this is certainly not the most propitious time to ask for it.

As we are always looking at these matters and keeping them under constant review, I should have thought that the Government's record over the last year is such that if those who represent, quite rightly, the needs of the disabled, would only look back over that period and see what has been done, and at what is going to be done in the forthcoming twelve months, they would realise that things have to be done by stages, and we cannot change all that needs changing in one, or perhaps two, years.

Lord CRAWSHAW

On this occasion I accept the advice of my noble friend Lord Aberdare and the noble Lord, Lord Wells-Pestell. As they have said, this whole concept of the non-contributory invalidity pension is new. There is an area here where we do not know what is going to happen. We shall probably return to this question because it concerns the congenitally disabled—those who have perhaps been disabled from birth, or at any rate from an early age— and we do not want to penalise them for it. I appreciate that we do not exactly know how the non-contributory scheme is going to work. For that reason, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.27 p.m.

Lord CRAWSHAW moved Amendment No. 6:

Page 6, line 43, at end insert— ("(11) A person who becomes entitled to a non-contributory invalidity pension and who satisfies prescribed conditions relating to his previous dependence on a contribution to the National Insurance Scheme shall be entitled to an invalidity supplement, payable out of the National Insurance Fund, at a rate equal to the difference between the rates of invalidity pension and non-contributory invalidity pension specified in Part 1 of Schedule 4 of the Social Security Act 1973.")

The noble Lord said: Here again we are dealing with the non-contributory invalidity pension. We are once more dealing with possibly the worst off people in society as a whole. This Amendment is based on the view that an entitlement to invalidity pension should not depend on a contribution record because, as has been pointed out on the last Amendment, there are certain people who are not in a position at any stage in their lives to pay a contribution, and we do not feel that they should be penalised for this situation.

Again we come into this exploratory area of non-contributory pension. I recognise what the Government have done in introducing it at all. However, I think that this is an important principle. The question of ethics is involved here, and 1 should have liked the opinion of a right reverend Prelate, but unfortunately one is not present. This is an ethical question, and for that reason I beg to move.

Lord WELLS-PESTELL

Here again, I am in some difficulty because I cannot, on behalf of the Government, accept the Amendment. The aim of this Amendment, as we understand it, is to pay an invalidity supplement of £4. 70 to some non-contributory invalidity pensioners, thus giving them, in effect, non-contributory invalidity pensions at the full contributory rate of £11.60 instead of the proposed non-contributory rate of £690. In fixing this rate at about 60 per cent, of the contributory rate the Government are following precedent, and this has often been the precedent.

As noble Lords will know, in the discussion which we had on the subject of the selfemployed weekly payment it was said that they did not pay the full amount and, as a result, they were deprived of certain benefits. The Government justified the non-contributory rate for the new non-contributory invalidity pension in paragraph 56 of the Report to Parliament on Social Security Provision for Chronically Sick and Disabled People, which they stated in the following terms. Perhaps your Lordships will permit me to quote the relevant section, which reads: …it would be inconsistent with the maintenance of the contributory basis of (the insurance) scheme and inequitable in comparison with the treatment of those already over pension age—particularly those who have no or reduced pensions and are just as disabled as those under pension age—to pay non-contributory invalidity pension at the full contributory rates to people under pension age". Paragraph 56 went on to cite the precedent of the non-contributory pension provided for people aged 80 or over.

I am sure your Lordships will appreciate that if one gives full-rate contributory benefits to those who have paid no contributions, one departs very radically from the sort of National Insurance scheme which we have had in this country since 1943; and, indeed, before then. I think that one of these days it could well be argued that we ought to depart from that course. What I am saying is that in the financial climate in which we exist today it is just not possible. It has been argued in some quarters that full-rate pensions for disabled people who had never been able to work would be accepted by contributors as being fair. But would this be accepted as fair by, for example, the disabled worker, who having struggled to work for most of his life, had a deficient contribution record and so received a retirement pension at a reduced rate?

In short, the borderline between potential non-contributory invalidity pension beneficiaries and others is by no means sharply defined. It is one thing to modify the advantage gained by having been a contributor; it is a rather different matter to make having been a contributor a positive disadvantage. I know that your Lordships will forgive me if I dwell on this aspect, but it is a key point. Both the congenitally handicapped and those in the wider group of potential non-contributory invalidity pension beneficiaries include people over pension age. Once the case for full-rate benefit below pension age is established, it becomes much harder to deny full-rate retirement pensions to those over pension age who are, in all other respects, identical.

One of the effects of trying to introduce provision on a residence-only basis at the full-rate as part of a system which otherwise pays full-rate benefits only in return for satisfaction of prescribed contribution conditions, would be to give the full benefit to a person who has just squeezed in through the residence gate-way, has not worked and has made no effort to work, but who at the age of 64 can be accepted as incapable of work; while paying a reduced rate of pension after pension age to somebody who has lived in this country all his life, and, given the disadvantages imposed by disablement in terms of job opportunities, education and so on, has not, despite his best endeavours, been able to piece together the necessary full contribution record. The cost of paying national non-contributory invalidity pension at the rate of £11.60 per week would be about £48 million net, compared with £25 million net at the £6.90 per week rate. This does not take account of the cost of any possible repercussions on the rest of the contributory scheme, including, for example, the cost of full-rate pensions for the over 80s, for non-pensioners, and for those with reduced rate pensions, which might well be enormous. This is a problem which no doubt, in better times, we might be able to do something about.

As we seem to be so very, and rightly, serious about the last two or three Amendments, I wonder whether the noble Lord, Lord Crawshaw, would object if I quoted something he said on 12th June 1973 at column 598 ofHansard of that day? He was, able to call in aid he said, the facts that the sun had been shining, England had won a good victory in the Test and we were in the middle of an economic boom. The sun may have been shining recently, though I have not seen much of it, but in other conditions we are far from satisfied in the current difficulties of the economic circumstances. Bearing that position in mind, reluctantly we cannot accept the Amendment.

Lord BANKS

May I ask the noble Lord, Lord Wells-Pestell, whether he is able to answer this point? Is it a fact that the Government intend to introduce an earnings-related invalidity pension for contributors? If this were so, would it not maintain a differential between what contributors and non-contributors get? If this Amendment were passed, and subsequently the Government introduced the earnings-related invalidity benefit, there would still be a distinction between the two. But at least, in the meantime, something would have been done to bring the non-contributory and the invalidity pensioner nearer to the subsistence level.

Lord WELLS-PESTELL

That is the Government's thinking and at this stage I cannot go beyond that.

Baroness PHILLIPS

I am sure my noble friend will take the point made by the noble Lord, Lord Aberdare, but to put it more colloquially, perhaps the Opposition should not "push their luck" having been successful in one context. I know my noble friend is no grinder of the faces of the poor, but I think it is always a pity to rest an argument on precedent. After all, precedent sometimes mean that one has done the wrong thing for 20 years, and it is a pity that it cannot be changed. I think it is also a pity to base an argument on cost. Has there ever been a right time when one can spend money on the social services? I have lived long enough to have been through booms and slumps, and I have never known a period when any Government have stood up and said, "We are delighted to spend money on either social services or education".

Such progressive points have been won from Governments by people pressing them, either in this House or in the other place. So while I am sure that the noble Lord is sympathetic, it is not the best argument to suggest that precedent determines it, nor indeed that cost determines it; because, after all, those of us who are fit and lucky enough to work and to pay into the insurance fund do it for the very reason that those who are not so fortunate may have to draw out. This is the whole basis of our great Welfare State. Every time we produce this dreadful argument that only if you pay in can you draw out, we are ourselves denying a marvellous concept.

Lord CRAWSHAW

I should like to thank those noble Lords who have taken interest in these last two Amendments. I am glad that the whole question of the non-contributory principle has been so well-aired. I took up one of the sentences of the noble Lord, Lord Wells-Pestell, when he said that one of these days we ought to depart from our present system. I think that is right. I do not believe that these people we set out to help by this Amendment are being fairly treated by the community at large. However, I certainly do not want to appear greedy on this occasion and my noble friends and I were very grateful for the support which your Lordships gave to the first Amendment which we moved. I therefore beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 6 shall stand part of the Bill?

Lord ABERDARE

I should like to ask one quick question relating to Clause 6. During the Second Reading debate, I tried to stress the urgency of bringing in the provision for severely disabled housewives at an earlier date than the noble Lord himself contemplates, which is, I think, 1977. The noble Lord rightly stressed the very difficult task that faced the Department in bringing in a completely new provision of this sort, and of wording a new definition of "incapable of performing normal household duties". I fully appreciate that difficulty. However, I wonder whether the noble Lord would consider the case of a married woman in receipt of attendance allowance where, clearly, that person is incapable of performing normal household duties. Could the noble Lord introduce this new allowance more swiftly in the case of those who qualify for attendance allowance, because these are people who very much need the extra help and who, almost by definition, come within the category of those incapable of performing normal household duties?

Lord WELLS-PESTELL

I am most grateful to the noble Lord, Lord Aberdare, because we were mindful of what he said on Second Reading and we noted that, as he has just said, he appreciated that there would be considerable difficulties. He is quite right and those difficulties are very real. I am grateful to the noble Lord for the understanding which he has shown and for his suggestion that we might use the receipt of attendance allowance as a factor in identifying housewives for the purpose of paying non-contributory invalidity pensions immediately.

We have looked into this point very carefully and we have had some discussion upon it, and I am grateful to the noble Lord, as I so often am, for giving me advance notice, and sometimes, a reminder, of points that he wants to raise. We find at the moment that it would not be feasible for us to do this. The first reason—and it is a fundamental one —is that the conditions for the two benefits are not the same. For non-contributory invalidity pension, we shall require; a housewife to be both incapable of work and incapable of performing her normal household duties. The requirement for attendance allowance, however, is quite different. It is that the severely disabled person needs a lot of help from another person in connection with his bodily functions. For attendance allowance there is no requirement that the claimant should be incapable of housework and no inquiries are made about that.

However, it is known that some people receiving attendance allowance go out to work. For example, I have heard of a man who is a spastic and who is confined to a wheelchair. With commendable courage, he took a degree and is now working full time as a Principal in Whitehall. He is entitled to the attendance allowance. I could cite other cases. For example, there is the person who undergoes treatment on a kidney machine several nights a week, but who, nevertheless, works during the day. As regards the ability to do housework, there is no inquiry of this nature which is carried out in connection with claims for attendance allowance, so that, as I hope noble Lords will appreciate, a title to attendance allowance does not mean that the inability to perform normal household duties is a condition for the automatic receipt of the non-contributory invalidity pension.

Those are the main objections in the way of the noble Lord's suggestion, but there is also an administrative difficulty. Housewives receiving attendance allowance could not be readily identified from our records. In any case, even if they could, much of the information may already be out of date in those cases where the allowance was first claimed several years ago. Having said that, I can only assure the noble Lord that the Department will be tackling the problem of housewives' non-contributory invalidity with some sympathy, and I hope, with some vigour.

Lord BANKS

May I ask the noble Lord a further question relating to Clause 6? Would I be right in thinking that, whereas a contributory invalidity pensioner qualifies on retirement for the normal retirement pension, a non-contributory invalidity pensioner will, having received the £6.90 as of right up to retirement age, then be thrown entirely on to supplementary benefit until such time as he reaches the age of 80, when he will qualify for the reduced retirement pension as of right? If I have understood the matter correctly, there would appear to be a gap during which, the pensioner will receive no pension other than supplementary benefit, which of course would be subject to means test. If that is right, is that what the Government intend?

Lord WELLS-PESTELL

I think I can say that the noble Lord's conclusion is not right. This is not so. I will look into the point and will write to the noble Lord, but I am absolutely certain that what he has said is not the case.

Lord ABERDARE

Does not sub-section (4) make it quite clear that the noble Lord is not right? If one has a pension before one retires, that pension goes on after one's retirement. Subsection (4) says: A person who has attained pensionable age shall not be entitled to a pension …unless he was entitled … to such a pension immediately before attaining that age".

Clause 6 agreed to.

Clause 7 [Invalid care allowance]:

5.58 p.m.

Baroness SEEAR moved Amendment No. 7: Page 7, line 6, leave out from (" employed;") to end of line 9.

The noble Baroness said: I think I should declare an interest as the Chairman of the National Council for the Single Woman and her Dependants because it is particularly in the interests of members of that Society and people who are similarly situated that I am moving the Amendment. It may not be abundantly clear at first sight that the purpose of the Amendment to remove paragraph (c) is to make the invalid care allowance available to persons other than relatives who are in attendance on severely disabled persons, provided that they fulfil the requirements of paragraphs (a) and (b). The point of the Amendment is that, whereas I suppose the provision to be aimed primarily at a daughter who gives up work to look after a severely disabled parent, there are quite a number of cases in which, for instance, two single women have been living together and one becomes very severely disabled and the other attempts to go on working, because if she did not she would lose all source of income and, incidentally, some part of her own subsequent pension rights. The idea of the Amendment is that such a person should be able, just as a relative is, to qualify for the invalid care allowance.

The noble Lord, Lord Wells-Pestell, has spoken—and I have great sympathy with this—about the cost of the additional benefits which are being proposed. I make the point in relation to my proposal, however, that this is cost-saving rather than a cost-incurring benefit. In the case of severely disabled people, if there is no person who is prepared to be in the house for the long periods required to qualify for the benefits, those people will have to go into institutions. It will cost vastly more to keep them in institutions than to pay the invalid care allowance to a person who is not a relative, but who would, no doubt, in many cases greatly like to be able to stay at home to look after the friend with whom he or she has lived for many years.

It is even arguable, and sensible in some cases, that even where there is a relative it is more appropriate, for a variety of reasons, that that relative should continue in employment and that somebody else, not a relative but fulfilling the requirements of this provision, should do the caring. It is for these reasons that I move the Amendment.

Lord ABERDARE

As I raised this matter on Second Reading, perhaps I should say at this point that while I have considerable sympathy with the noble Baroness I did appreciate what the noble Lord said on Second Reading about feeling his way in a new field.

Lord WELLS-PESTELL

I am inclined to say that I am obliged to the noble Baroness for raising this matter because we have a great deal of sympathy with the point she has raised. I tried to deal with it on Second Reading and she might care to read my remarks on that occasion as reported in column 209 ofHansard for 18th February last. I do not think that I can say a great deal more than I said on that occasion, when I referred to the plight of the single woman devoting her life to caring for a severely disabled parent and that the invalid care allowance was of supreme importance. Nevertheless, the Government—I think it opportune that I should repeat what I said on that occasion— do not intend to restrict the invalid care allowance to this one situation and relationship. The intention is to prescribe a wide range of relatives, including ascendants and descendants in a direct line, nieces, nephews, uncles and aunts, who will qualify for the allowance right from the beginning.

I know that the noble Lady is concerned about non-relatives and I must say frankly that they will not be included at the beginning. However, I hope that the three words "at the beginning" will satisfy her in the sense that I made it clear, in replying to a plea made by the noble Lord, Lord Aberdare, for the inclusion of equally deserving cases where the person doing the caring is a friend or neighbour, that this does not mean that non-relatives are necessarily excluded from this for all time. The Government are proposing to proceed step by step and the reason for this is simple. It is that this is an entirely new field. It is a radically new departure which I am sure will appeal to the noble Baroness. It is not modelled on any existing benefit and we are therefore going into rather uncharted seas. Nobody knows what the initial load of work will be or how many additional people would be brought in if we accepted her Amendment. I hope, having said that non-relatives will not be excluded but that they will not be included at the beginning for the reason I have given, the noble Baroness will feel that I have met her needs.

Lord BYERS

Is this the right sort of thinking? Are we not going to penalise the person who just cannot find a relative but who has the same need as someone who has a relative who is prepared to do this work of caring for the disabled person? I suggest that the use of the words "at the beginning" is not the right or logical way of dealing with this matter. As my noble friend Lady Seear said, there must be a cost saving here. We all know that in the event of its being impossible to find someone to care for a disabled person, the only solution often available is to put that person into an institution. This is much more expensive than providing something like an invalid care allowance on a non-relative basis. I do not believe that there are a great many people who are not able to find a relative to do this work. Nevertheless, I do not believe that what the noble Lord has suggested is the right way to tackle the matter, nor do I understand why those who cannot find, for example, the fifth son of a second cousin should be debarred from having this help.

Lord WELLS-PESTELL

If the noble Lord, Lord Byers, wants a frank answer as to whether this is the right thinking, then, with respect, I must tell him that in my view it is. We know, as does the noble Baroness, Lady Seear, who moves in these circles, that the vast majority of people in this category are being looked after by a daughter or niece or some other relative. For this reason we want to start at this point, and that is why we have laid down the degree of relationship—because they are the people who are doing it now. What we are saying is, "For goodness sake! let us see what this involves in terms of money before we extend it to non-relatives." The principle of extending it to non-relatives is there and we are prepared to do it. We are simply asking for permission to put it a little further down the pipeline.

Baroness SEEAR

I cannot accept the noble Lord's argument. It seems extraordinary

that the Government should be indulging in all manner of expensive projects but should suddenly stick at providing an invalid care allowance for a very small number of single women who do not happen to be the relatives of severely disabled people. We hear about the Government pouring £700 million plus into food subsidies. Why should they refuse this allowance to a few poor old ladies who want to stay at home to look after someone who does not happen to be a relative? After all, people will not queue up to look after severely disabled people simply to conform with the requirements and get this allowance. This is not the sort of job which will attract all the idlers in the country, though it will save the nation a great deal of money. The noble Lord knows what it costs to keep a person at any level in any institution. We are not contemplating paying anything like such sums to these people and I should have thought that the Government would have been glad of an opportunity to get more people to look after the disabled in their own homes. Apart from these considerations, noble Lords know only too well how desperately many of these people want to stay in their own homes, and for this, if for no other reason, I cannot accept the noble Lord's argument. I propose to divide the Committee on this issue.

5.58 p.m.

On Question, Whether the said Amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 89: Not-Contents, 28.

CONTENTS
Aberdare, L.	Drumalbyn, L.	Hylton-Foster, B.
Abinger, L.	Dundonald. E.	Inglewood, L.
Alexander of Tunis, E.	Ebbisham, L.	Killearn, L.
Amherst of Hackney, L.	Ellenborough, L.	Kilmarnock, L.
Auckland, L.	Elliot of Harwood, B.	Lauderdale, E.
Banks, L.	Elton, L.	Lindsey and Abingdon, E.
Beaumont of Whitley, L	Falmouth, V.	Lloyd of Kilgerran, L. [Teller.]
Byers, L.	Ferrers, E.	Long, V.
Campbell of Croy, L.	Foot, L.	Longford, E.
Cathcart, E.	Geoffrey-Lloyd, L.	Loudoun, C.
Coleraine, L.	Gladwyn, L.	Lyell, L.
Colville of Culross, V.	Glasgow, E.	Lytton, E.
Colwyn, L.	Glenkinglas, L.	Mackie of Benshie, L.
Cowley, E.	Goschen, V.	Macleod of Borve, B.
Crawshaw, L.	Grey of Naunton, L.	Malmesbury, E.
Cullen of Ashbourne, L.	Haig, E.	Mancroft, L.
Darcy (de Knayth), B.	Hanworth, V.	Masham of Ilton, B.
Daventry, V.	Harmar-Nicholls, L.	Massereene and Ferrard, V.
Denham, L.	Henley, L.	Newall, L.
Deramore, L.	Hunt of Fawley, L.	Northchurch, B.
Norwich, V.	Sandford, L.	Swinton, E.
Ogmore, L.	Sandys, L.	Thorneycroft, L.
O'Hagan, L.	Seear. B. [Teller.]	Tranmire, L.
Onslow, E.	Sempill, Ly.	Tweedsmuir, L.
Phillips, B.	Sharpies, B.	Vivian, L.
Rankeillour, L.	Somers, L.	Vickers, B.
Redesdale, L.	Strathcarron, L.	Warrington, L.
Rochester, L.	Strathcona and Mount Royal, L.	Wigoder. L.
St. Davids, V.	Strathspey, L.	Young, B.
St. Helens, L.	Swansea, L.
NOT-CONTENTS
Ardwick, L.	Henderson, L.	Shinwell, L.
Brockway, L.	Jacques, L.	Snow, L.
Bruce of Donnington, L.	Janner, L.	Stedman, B.
Castle, L.	Llewelyn-Davies of Hastoe, B.	Stow Hill, L.
Davies of Leek, L.	Lovell-Davis, L. [Teller.]	Strabolgi, L.
Douglas of Barloch, I,.	Mais, L.	Wells-Pestell, L.
Elwyn-Jones, L.(L. Chancellor.)	Pannell, L.	White, B.
Gaitskell, B.	Shackleton, L.	Winterbottom, L. [Teller.]
Gordon-Walker, L.	Shepherd, L. (L. Privy Seal)	Wynne-Jones, L.
Greenwood of Rossendale, L.

On Question, Amendment agreed to.

Resolved in the affirmative and Amendment agreed to accordingly.

6.6 p.m.

Baroness SEEAR moved Amendment No. 8: Page 8, leave out lines 11 to 17 and insert (" of whom there has been payable either an attendance allowance for an uninterrupted period of six months or for periods which together make a total of six months or such other payment out of public funds for a similar period or periods on account of his need for attendance as may be prescribed; ")

The noble Baroness said: The purpose of this Amendment is quite small and in a sense is technical. The invalid care allowance will, as I understand it, be available only to people in attendance on those severely disabled for a continuous six months' period, for which they qualify for the attendance allowance—but it has to be for a continuous period. We should like to suggest that it should not be a continuous period but a period in which the attendance adds up to six months. The period could have interruptions in it. At the early onset, or relatively early onset, of a very severe illness there could be a period when full-time attendance was required; there is then a break; and then the full-time attendance is resumed. What is suggested in the Amendment is that it should be possible to aggregate these periods of need for attendance, rather than to say that it must be a complete six months—one continuous period— before the invalid care allowance can be paid. I beg to move.

Lord WELLS-PESTELL

I wonder whether the noble Baroness will allow me to deal with both this Amendment and the next Amendment together, because it might save a little time, although I realise that she has spoken mainly to only one of them. These Amendments would alter one of the fundamental conditions for the award of the allowance. I should explain that Clause 7(8) of the Bill is drawn so as to enable the invalid care allowance to be paid where the severely disabled person who is being cared for is currently—and the operative word is "currently"—receiving an attendance allowance, or the equivalent allowance, under the War Pensions or Industrial Injuries scheme; for example, a constant attendance allowance at the full day rate or above. It follows that (other conditions being satisfied) the invalid care allowance can be put into payment from the first day for which an attendance allowance or an equivalent constant attendance allowance is payable.

The effect of the first Amendment and the first limb of the second Amendment would be to delay the payment of the invalid care allowance in such cases by up to about six months. That is how we understand it and I find it difficult to believe that this is the result which the noble Baroness really intended; but this is how I am advised by our legal experts. Be that as it may, it is without doubt a much more restrictive condition than that in the Bill. I am sure that if, on reflection, the noble Baroness feels that I am right she will not want to press her Amendment.

The second limb of the second Amendment would enable invalid care allowance to be paid on the strength of a medical certificate by a general practitioner. There is a deceptively simple ring about this suggestion, but its implications are not so simple. Again, as I understand the position and as I am advised, it would be possible for such a medical certificate to cover an absence from work lasting a very short period—for example, where a person needing care had an illness or a crisis in an illness lasting a mere two or three weeks. This would be contrary to the whole concept of the invalid care allowance as a long-term benefit for long-term cases because that is its intention. Invalid care allowance could be paid for a very long stretch of a claimant's life. In any event, it is important that the standards to be applied in judging whether a disabled person needs care should, in the very nature of things, be consistent. Bearing these considerations in mind, I am sure that your Lordships will agree that it would not be right to provide that this new long-term benefit should be governed, in effect, by general practitioners' certificates.

Furthermore, I said just now that the whole concept of the invalid care allowance was that it would be a long-term benefit for long-term cases. The Report to Parliament on theSocial Security Provision for Chronically Sick and Disabled People put the point in this way—per-haps I could read it: Caring situations are not, of course, limited to households with a severely disabled member —problems of a similar sort arise where there is a small child, a temporarily sick person, or an elderly person; but it is important to set limits to the scope of a new benefit, and to concentrate on the most severe contingency. Thus the receipt of attendance allowance would be used to determine the disabled person's need for care … It is a fundamental part of the Government's proposals for the invalid care allowance that there should be an attendance allowance, or an equivalent constant attendance allowance, in current payment. This links the invalid care allowance to the severe contingency for which it is intended. Furthermore, it avoids entirely the need for a claim for invalid care allowance to be supported by medical evidence, for the disabled person to be examined by a medical board in connection with a claim for invalid care allowance or for his need for care to be assessed for invalid care allowance purposes. In view of this I am wondering whether I could ask the noble Baroness, if she disagrees with our interpretation of the Amendment—and, as I say, I base my reply on the advice, particularly legal advice, that I have received— whether she herself would like to take it back and look at it in the light of what I have said.

Baroness SEEAR

I thank the noble Lord for his helpful comment on the Amendment. I must say that my advice about the interpretation of the first of these two Amendments was not the same as his, but I may well have been incorrectly advised. Of course it was not the intention at all that it would restrict or make more difficult the invalid care allowance by saying that the time could be aggregated. However, in both these cases I should like to take it back for consideration and bring it up at Report stage. I fully accept that at this stage probably it is necessary to tie it to the attendance allowance, although I hope that that will be only a first stage. It could well be that later, when we have gone into the working of this matter, the medical certificate would be an appropriate way of doing it. I would, with leave, like to withdraw the Amendments and to bring them up again at Report stage if, on further consideration, that is appropriate.

Lord WELLS-PESTELL

May I express my gratitude for that action, and if after the noble Baroness has taken advice on this matter any useful purpose can be served by our meeting, I hope she will realise that I am at her disposal.

Baroness SEEAR

I thank the noble Lord very much.

Amendment, by leave, withdrawn.

Clause 7, as amended, agreed to.

Clause 8 [Minor Amendments]:

Lord WELLS-PESTELL moved Amendment No. 10: Page 8. line 43, at end insert: (" ( ) In Part III of Schedule 7 to that Act (claims, reviews and appeals) in paragraph 15(a) after the word "sub-paragraph" there shall be inserted the words "or sub-paragraph (b) below". ( ) In Part III of Schedule 12 to that Act (regulations not requiring prior submission to the National Insurance Advisory Committee) after paragraph 12B there shall be inserted the following paragraph— 12C. Regulations made by virtue of section 26(1) or 35(2) of this Act for the purpose only of prescribing a day." ")

The noble Lord said: This is a technical Amendment designed to restore to the attendance allowance board a power to review which was inadvertently lost in translating powers of review from the National Insurance Act 1970 to the Social Security Act 1973. The relevant power of review is one that has been used by the Board in favour of applications for allowance. It is important to correct the error in the translation from the 1970 Act because one would not want the Board to lose power to review on any ground a decision given at an earlier review. This is purely a technical Amendment and I hope your Lordships will feel able to accept it. I beg to move.

Lord WELLS-PESTELL moved Amendment No. 11: Page 9, line 21, leave out from ("by") to second (" an ") in line 22 and insert (" , or in consequence of the passing of, an Act include references to an alteration by, or in consequence of the making of,").

The noble Lord said: With your Lordships' permission, I should like to take Amendments 11 and 12 together. Again both of these Amendments are of a technical nature. The first of them amends Clause 8(5) of the Bill. Clause 8(5) amends Part II of Schedule 6 to the National Insurance Act 1969 so that its provisions, which apply generally when the main rates of National Insurance, Industrial Injuries or Industrial Injuries "Old Cases" benefit are altered by an Act or, in the case of reduced rates of benefit, in consequence of the passing of an Act, will apply to alterations made by uprating orders under Clause 3 of the Bill. This Amendment ensures that the provisions of Part II of Schedule 6 to the 1969 Act will also apply to reduced rates of benefit altered in consequence of the making of such an Order.

The second Amendment has a similar effect on the corresponding Northern Ireland legislation (the National Insurance Etc. (No. 2) Act (Northern Ireland) 1969). The Amendment also provides that references in that legislation to the Act include an Act of the Parliament of the United Kingdom. This is consistent with the new situation in which social security legislation for Northern Ireland is no longer made by the Parliament of Northern Ireland or by the Northern Ireland Assembly but by the Westminster Parliament. This is purely technical and I commend it to your Lordships for approval. I beg to move.

Lord WELLS-PESTELL

I beg to move formally Amendment No. 12:

Amendment moved— Page 9, line 45, leave out from (" words") to second ("an") in line 1 on page 10 and insert (" and references to an Act include references to an Act of the Parliament of the United Kingdom and references to an alteration by, or in consequence of the passing of, an Act include references to an alteration by or in consequence of the making of").—(Lord Wells-Pestell.)

Lord WELLS-PESTELL moved Amendment No. 13:

Page 10, line 21, at end insert— (" ( ) In section 62(3) of the National Insurance (Industrial Injuries) Act 1965 (which makes provision as respects the submission of regulations to the Industrial Injuries Advisory Council) after paragraph (b) there shall be inserted the following paragraph— (c) regulations made by virtue of section 18(3A) of this Act for the purpose only of prescribing a day".").

The noble Lord said: This Amendment makes a provision in respect of unemployability supplement under the industrial injuries scheme parallel to that relating to National Insurance benefits in Amendment No. 10. It would similarly be inappropriate for regulations concerning the dates of the relaxation of the earnings rule relating to unemployability supplement to have to be considered by the Industrial Injuries Advisory Council. I beg to move.

Clause 8, as amended, agreed to.

Remaining clauses agreed to.

Schedule 1 [Provisions to be substituted in Schedule 4 to the Social Security Act 1973]:

6.22 p.m.

Lord CRAWSHAW moved Amendment No. 14: Page 13, line 38, column 3, leave out (" 4.30 ") and insert ("6.90").

The noble Lord said: When I first read this Schedule, I wondered whether there might be a misprint. No doubt the noble Lord, Lord Wells-Pestell, will clear that up; but I could not quite follow why it is currently proposed that a non-contributory invalidity pensioner shall receive £4.30 a week for an adult dependant (who in most cases would be his wife) and a contributory invalidity pensioner shall receive £6.90. As your Lordships can see, in the Schedule the children are treated the same in both cases. I should have thought it logical that if you need the same for children in both cases, then you need the same for adult dependants in both cases. This is a small point. Perhaps it can be cleared up quickly by the noble Lord. I beg to move.

Baroness DARCY de KNAYTH

I should like to support my noble friend's Amendment, for the reasons that he has given. The anomaly is so glaring that I have nothing to add to what he has said.

Lord WELLS-PESTELL

I fear I am not going to be able to satisfy the noble Lord who moved this Amendment. Perhaps for the Record, I ought to point out that the reference is to page 13, line 38 but, I think, to column 4 and not column 3.

This Amendment would raise the rate of a dependency increase for a wife or other adult dependant, where one is payable with a non-contributory invalidity pension, from the non-contributory level of £4.30 to the full contributory level of £6.90. It is, I assume, consequential upon the noble Lord's earlier Amendment to Clause 6 which, by the device of paying an invalidity supplement, would, in effect, have raised the personal rate of the non-contributory invalidity pension itself from the non-contributory level of £6.90 to the full contributory level of £11.60. All the arguments against that earlier Amendment apply here too. The £4.30 rate is set at roughly 60 per cent. of the contributory rate; it applies, as your Lordships will see from Schedule 1, to the non-contributory old person's pension (described as "category C or D retirement pension"). As I indicated when we were discussing the earlier Amendment, it really would not be right to pay non-contributory benefits at contributory levels.

This may be something where in the future we shall have to disregard the distinction, but a good many of our insurance benefits are based at the moment on that particular ratio. It may not be right, but at the present moment I do not feel that we can do much about this without having to look at a much wider field. I hope that the noble Lord will not press this Amendment because I have already given an assurance that this is a matter constantly before my noble friend, and in particular the Minister who deals with the disabled. As the noble Lord knows, there could not be, anyone more anxious to see that matters like this are put right I hope that he will feel able to leave it to see what can be done in the future.

Lord CRAWSHAW

I thank the noble Lord for his reply. I am still a little confused, I must admit, why children and dependent adults are treated differently. But I accept what the noble Lord says about the whole principle of the non-contributory system now being innovated. Having not pressed the two previous ones, I think it would be illogical to press this Amendment. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Remaining Schedules agreed to.

House resumed; Bill reported with the Amendments.