HL Deb 03 July 1975 vol 362 cc443-56

8.52 p.m.


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.)

House in Committee accordingly.

[The VISCOUNT HOOD in the Chair.]

Clauses 1 and 2 agreed to.

Clause 3 [Married women and widows]:

On Question, Whether Clause 3 shall stand part of the Bill?


I think I ought to say a word on Clause 3 and ask the noble Lord one question. This clause concerns the married women's and widows' option. We have discussed this matter on many previous occasions and the views of the Conservative Party are well known. Moreover, it has been fully debated in another place and therefore I do not wish, at this hour and with this restricted number of your Lordships here, to go into any great detail. But I think it is right to put on record that we deplore the loss of this option, which will place a very heavy extra financial burden on many working mothers and widows, particularly if they are self-employed.

I acknowledge, of course, that there is a trend for married women and widows to spend more of their lives at work. But there still remain a large proportion who work only at times of particular need, and who spend most of their lives running their homes. For them the option was of great value, and three out of four accepted it. We seek to achieve, as I said on Second Reading, an agreed Bill and therefore I realise that to make any attempt to put the option back into the Bill at this stage would strike at the whole basis of it. So although we remain of the view that the option to married women and widows is very valuable, we shall not put down any Amendment to the Bill.

However, I should like to ask the noble Lord whether he can give details of the arrangements to be made for those people who are at presented opted out, and of the interim proposals which are foreshadowed in subsections (2), (3) and (4), under which regulations will be made to take care of this point. I know that consultations have been in progress, but I think we ought to know the Government's decisions, certainly before the Bill leaves this Chamber, even if not this evening. The Secretary of State gave a pledge in another place on 15th April last, that she would announce her considered decisions on the transitional period at the Report stage in another place. So far as I am aware, that pledge was not fulfilled, and therefore I hope that the noble Lord will either be able to give us some information tonight or, at least, undertake that before the Bill leaves this Chamber we shall know what decisions have been taken in this matter.


I am much obliged to the noble Lord. Before attempting to reply to him, I wonder whether I might say for the benefit of your Lordships that we had hoped to start on this Bill much earlier than this, and that we might have finished Parts I and II before rising tonight. This seems to be quite impossible now and, subject to your Lordships' consent, I suggest that we take the Committee stage as far as we can up to about half-past nine, and then continue our work on Monday as arranged, and again on Tuesday of next week.

I do not know whether I can help the noble Lord a great deal. He knows as well as anyone in your Lordships' House why the Government are phasing out the married women's option, and why we feel, for a whole variety of reasons—all of which the noble Lord knows—that this is the right thing to do. My right honourable friend the Secretary of State is giving urgent consideration to the comments made by interested organisations on the Memorandum, in which she outlined the arrangements under which the present option might be phased out. However, I have to confess that it is not possible at this stage to say when the outcome will be known. But in view of what the noble Lord has said, I will make a point of conveying his observations to the Secretary of State in the hope that I may be able to say something to your Lordships at a very early date.

While the contribution option may well be protected, in the sense that those who have opted out will be able to continue to do so, I can only say—and this is by no means authoritative—that it may well be that if a person who has decided to opt out remains out of work for, say, a period of one year, when she returns it will then, perhaps, be required that she enters the scheme as a full contributor. If this were to be done, it would mean that it would come at a time when the person was in a better position financially to meet the cost. Having heard the observations of the noble Lord I will undertake to convey them, in the hope that I shall be able to give a more satisfactory answer at a later stage.


I am very grateful to the noble Lord, but I wonder whether he would go a little further and say that before the Bill leaves this Chamber we shall be told what the decisions are. His right honourable friend the Secretary of State undertook, during the Committee stage in another place, that these matters would be made known before it left the other place. I think we have gone a long way in avoiding any further opposition to the abolition of this option, and I think it is right that we should be quite sure that those women and widows who have already exercised the option will be fairly treated, but we cannot be sure of that unless we know how the Government will act.


I accept what the noble Lord has said. I cannot go beyond giving him the undertaking that I have given him: that I will convey this point to my right honourable friend and express the urgency which has been indicated to your Lordships tonight. I am sure that if my right honourable friend had been able to give her decisions to another place sooner, she would have done so. But it is important if we are to effect this change that it should be effected only after careful consideration with all the interests involved. I will convey the noble Lord's view.

Clause 3 agreed to.

Clauses 4 to 13 agreed to.

Clause 14 [Rate of invalidity pension for persons under pensionable age]:

9.1 p.m.

Lord MELCHETT moved Amendment No. 1: Page 7, line 28, after (" shall ") insert (" for any period of interruption of employment ").

The noble Lord said: On behalf of my noble friend Lord Wells-Pestell, I should like to move Amendment No. 1 and, if I may, speak to Amendment No. 2. These two Amendments are technical and are intended to make clear how invalidity pension is to be calculated. The invalidity pension paid for a spell of incapacity, resulting in a period of interruption of employment, will be based on the contribution record in the tax years up to and including the tax year preceding that in which entitlement to invalidity pension arises for the first time in that period of interruption of employment. As noble Lords will know, days of incapacity for work occurring within 13 weeks of each other are linked to form part of the same period of interruption of employment.

This was the intention of the present wording of the clause, but we are now advised that the words "became payable" in the clause are not suitable in this context, because they are open to a number of interpretations. Invalidity pension is payable in respect of days of incapacity for work. In any case, strictly speaking, the pension cannot be said to be payable until the relevant award is made—which means, for example, that in a case of continuing incapacity based on medical certification of 13 weeks' duration it can become payable four times a year. The wording of the Amendments is therefore designed to achieve unambiguously what was always intended. I beg to move.


I beg to move Amendment No. 2.

Amendment moved— Page 7, line 32, leave out from (" year ") to end of line and insert (" which includes or included the first day of entitlement to the pension in that period ").—(Lord Melchett.)

Lord CRAWSHAW moved Amendment No. 3:

Page 7, line 32, at end insert— (" (2) Regulations may—

  1. (a) provide for an invalidity pension to be payable to a pensioner who, whilst continuing to be incapacitated for normal full-time work, becomes capable of undertaking light work in circumstances which satisfy prescribed conditions;
  2. (b) prescribe the amount such a pensioner may earn before his pension is affected in any way; and
  3. (c) prescribe the effect any earnings additional to the amount referred to in paragraph (b) above will have on a pensioner's entitlement to invalidity pension. ")

The noble Lord said: This Amendment is a sequel to several Amendments and debates in your Lordships' House over the vexed question of the earnings stop when applied to people receiving the invalidity pension. It incorporates the whole philosophy of the employment of the physically handicapped. At the risk of wearying your Lordships on a rather well-worn subject, and late at night, I feel I ought to give a little background information.

The present position is that a person not of retiring age but who is incapacitated in some way can receive an invalidity pension if he is judged incapable of work. Up to this April a man in this position with a wife and child would receive £26.55 a week, which includes an invalidity allowance of £2.40. There is no complaint about that; it is a very reasonable amount which is often increased at further expense to the State by supplementary benefits. As I have explained before, the trouble with this system is that it creates public-funded cabbages, because if a person makes any effort to get back to eventual full-time work by taking on part-time or light work he is allowed to earn only £7 a week—admittedly this was raised from £4.40 a week following a debate in your Lordships' House in February—before losing entitlement to his entire invalidity pension.

The crux of our plight is that this system is inconsistent with the facts of life. A combination of an Englishman's or a Briton's natural burning desire for independence and some very sophisticated modern equipment has meant that there are very few people indeed who are totally incapable of performing some work. I do not suppose that my noble friend Lady Darcy de Knayth and I are the only people in your Lordships' House who have found ourselves in this rather halfway position. Even if it may appear to the noble Lord, Lord Wells-Pestell, that being a thorn in his flesh has become now a full-time occupation, I think that rather proves my point. Instead of the system of the subsidised cabbage, garnished with small therapeutic earnings of £7 a week, we want to maximise everyone's potential and encourage them with a small invalidity pension which will decrease as earnings rise.

On the last occasion, to which I have already referred, we proposed a substantial increase—up to £13, in fact—in earnings before entitlement to the entire invalidity pension is reduced on a sliding scale. Your Lordships agreed to this by a majority of two to one, but unfortunately the other place rejected the Lords Amendments on grounds of financial privilege although they did not produce any supporting figures. Nor were they able to answer my contention that Exchequer money would not be saved, because people would be earning something instead of drawing supplementary benefits and automatically receiving the top rate of pension. Anyway, we let it pass.

The noble Lord, Lord Wells-Pestell, also informed me in writing that he felt this was a matter which should be dealt with by regulations. On this occasion, we have leaned over backwards to meet these objections. As we have mentioned in the Amendment, we propose that the matter should be dealt with by regulations. We have used the word "may" in order to keep the position flexible—at any rate, for the time being. In this way the Minister can ensure that the so-called "incapable of work" who are at present out of work are not deterred by the present system from trying to return to work. At the same time, he would not be obliged to pay a pension to those lucky people who are working full-time in places such as Remploy, although I feel it should be our ultimate aim to try to reward them for their spirit in refusing to become publicly funded. I am told that the number of people employed in Remploy is being reduced, because they obviously earn less than the normal wage. What one might call the attraction of a fairly high rate of invalidity pension is discouraging them from remaining in work.

May I also remind the noble Lord, if he does not know it already, that there is a social security system in force whereby car workers in the Jaguar factory can work four days a week and claim unemployment benefit for the fifth. What we are saying is rather a parallel to this, but it is being applied to a more deserving case. We have purposely not mentioned any figures in the Amendment, so we cannot upset the Commons Money Resolution or their financial privilege.

As I see it, it has yet to be proved that anything in this Amendment increases the charge on the Exchequer. In comparison with the "earnings stop" of £7, which I said applied to the invalidity pensioner, the retirement pensioner, due to the recent relaxation of the earnings rule, can now earn £20 a week, increasing to £50 over the years, before his pension is affected. When one thinks of that, I believe that the invalidity pensioner is still being treated unfavourably. I beg to move.

9.13 p.m.

Baroness DARCY de KNAYTH

I should wholeheartedly like to support my noble friend's Amendment. He has raised a very important point about unemployment benefit being paid to car workers on a four-day week. At our last, and fleetingly successful, attempt to introduce this Amendment in a different form during the Committee stage of the Social Security Benefits Bill in February of this year, the noble Lord, Lord Wells-Pestell, explained—as he has done on several other occasions—that the invalidity pension can be given only if the person who receives it is incapable of work. He added: May I compare it with the position of a person who is unemployed? One cannot obtain unemployment benefit if one is employed ". However, Questions in another place, on 28th April and 9th May this year, have highlighted the fact that certain workers have been paid unemployment benefit when working a four-day week. They drew unemployment benefit while they were, in fact, employed. There seems to be a double standard here. There seems to be one rule for the able-bodied worker and another for the handicapped, would-be worker. But as my noble friend has already stressed, the real point is that the overall concept is so wrong. During the Second Reading of this Bill last week, the noble Lord, Lord Wells-Pestell, said: People who are in receipt of an invalidity allowance or pension—call it whatever you like—get it because they have been certified by a doctor as being incapable of work ". What a terrifying verdict! Surely the idea of condemning someone as incapable of work is as dead as the Dodo, in the light of current ideas on rehabilitation.

After my noble friend had successfully moved his Amendment to introduce an earnings rule during the Committee stage of the Social Security Benefits Bill earlier this year, I received a letter from a remedial teacher. He said: I am what Lord Crawshaw would no doubt classify as an intellectual, publicly-supported cabbage as I am confined to a wheelchair at a comparatively early age (28) but I have had my specialist's approval to do some work for an afternoon a day from my wheelchair. (I am a qualified remedial teacher). The only snag is that I have to be employed at a union rate of about £2.50 an hour; this means that, with the old £4.50 a week ruling, I can only work for about 1½ hours a week. This is no good whatsoever to me or my pupil. This proposed ruling "— namely, the Amendment which my noble friend introduced— would at least enable me to work for about five hours a week—a step in the right direction ". Before I could even reply to his letter, the Amendment had been removed in another place and I had to tell him that all he could look forward to was the earnings stop being raised to £7.

His comment, in a letter to a colleague concerned with the disabled, was as follows: If one takes the earnings stop to have been £4.50 in 1972, this increase does not even keep pace with inflation. It will allow me to work the grand total of 3 hours a week which is doing neither me nor the kid I take any good whatsoever. I will agree that it is three-quarters of an hour more than I could do formerly, but it is nowhere near enough. The old old-person's earnings rule that was proposed (for a very short period of time) was much more satisfactory as, if you are engaged in my sort of work, it is often better, if you have the kid's interest, to go on for a few minutes rather than to stop at say, 15.00 hours dead. But in this case not only is the disabled person himself being prevented from operating at his full potential, but the person he is trying to help is also being penalised by the earnings stop.

On Second Reading, I think the noble Lord, Lord Wells-Pestell, thought I was being highly critical of the mobility allowance, but I am in fact on record, as is in fact the Joint Committee on Mobility for the Disabled, as welcoming the scheme most warmly. This does not mean that we should not scrutinise the whole mobility allowance carefully and suggest improvements, and I feel that the Amendment proposed by my noble friend would effect one of these improvements. As my noble friend has said, this Amendment is now in a form which offers the Government the maximum possible flexibility and ample time for all concerned to consider the best arrangement for overcoming this out-moded "sick or fit" Social Security system. I very much hope that the Government will be able to accept it, and I can really see no reason why in its present form they cannot do so.


I wonder whether I may make a very brief comment on this Amendment. Having listened to discussions on this point in your Lordships' House before, I have no doubt that when the noble Lord, Lord Wells-Pestell, replies he will tell us that it is a contradiction in terms to speak about an earnings rule for people who are not entitled to any kind of pension unless they are in fact unable to work. It always seems to me that the fallacy of that argument is the fact that you have the rule—now £7 allowed—so it is agreed that a certain amount may be earned and it is useful that to that extent at any rate the person who has an invalidity pension should be encouraged to work.

It seems to me that all the sponsors of this Amendment are saying is that with regard to that definition of invalidity, which at the moment is limited to the ability to earn £7, they want to alter not the principle but the degree, and to raise the limit from £7 and put it on to a sliding scale. It does not seem to me that that is an alteration in principle; it is merely a question of degree. The noble Lord, Lord Wells-Pestell, may well say that there are difficulties about finding the money, but I think we ought to dispose of the argument once and for all that any suggestion that it should be increased above the figure of £7 is contravening some obvious piece of logic, because I do not believe that that is the case at all.

Baroness SEEAR

I know that the noble Lord, Lord Wells-Pestell, is most sympathetic towards arguments of this kind and understands how extremely important it is that people who are incapacitated should lead as normal lives as possible, of which working and earning some money is at the very heart of being normal. The fact that you can earn something yourself makes an enormous difference in a situation of this kind.

I follow the argument that has been put forward, although I should have thought on the point made by my noble friend Lord Banks, that if you allow the principle to be breached to the tune of £7, you have admitted that it can be breached. I am trying to help the noble Lord to find a way out of this, because I am sure he wants to find a way out. Surely for once the inflationary spiral can come to our aid and at least the limit could be raised just above the £7, which at least would take us some way towards what we are after; that is, finding a way by which people who can earn only very little, can be encouraged to work because it is beneficial for them.


We have been over this ground a great many times and I do not believe there is anybody in this Committee, few as we are, who is not really enormously sympathetic to the case that has been made once again by the noble Lord, Lord Crawshaw, and the noble Baroness, Lady D'Arcy de Knayth. We all feel the same; we are all completely convinced that it is far better that people should be able to earn money. However, I also recognise the difficulties that the noble Lord, Lord Wells-Pestell, is going to recite to us again about using this particular invalidity benefit in this way.

We have always hoped to work towards a scheme of different, varied payments to those who are disabled, according to the degree of their disablement—something on the lines of the present Industrial Injuries Scheme, but this, of course, is a major undertaking, an expensive project, and one that would have administrative difficulties because of the medical certification required. Obviously it is something we would have to think of in the future, and which would not lend itself to being brought in by regulation. It would require legislation. So I am afraid I am left in the same position in which I have been before, of having the greatest sympathy, and, like the noble Baroness, Lady Seear, hoping always that the limit can be raised from £7. But in these hard times, I doubt whether even that is possible. I am really hoping that eventually we can work towards some more satisfactory general scheme of payment according to the degree of disability.

9.21 p.m.


I hope I can say something that will be helpful. I find it extremely difficult because we are dealing with a situation in which a person has been medically certified as being totally incapable of work, and therefore, there can be no question at all of earnings. The Amendment seeks to extend the provision to such an extent that we have a very different kind of benefit from that which we have at the present moment.

While I find myself in a great deal of sympathy—I think I have to say this—the £7 which can be disregarded can be disregarded only if a doctor certifies that, from a therapeutic point of view, it is desirable for the person to undertake some kind of activity. That is the situation. If I may use the term in the widest possible way, that is the law. This is what we have to apply. The noble Lord, Lord Crawshaw, and the noble Baroness, Lady D'Arcy of Knayth, are not thorns in my flesh. If they were, I could not imagine two nicer thorns. But we have this difficulty of dealing with a situation under the existing regulations in the way they want it dealt with. It has nothing to do with unemployment. If society cannot offer a person full-time employment, so that he can work only for three or four days, because of society's inability to employ him fully in the course of the week, he is permitted to go along to get unemployment benefit for two days. The two things are not comparable, and cannot really be considered in the same breath.

It seems to me that the difficulties facing your Lordships on this question of the amount are really due to the fact that we are talking about a situation in which a person is held to be totally incapacitated, whereas my noble friends, if I may call them so, would like to think of this—and they may be quite right—as a long-term disablement benefit which, therefore, ought not to be subject to the same kind of limitation. That is not to say that the Government do not understand the motives behind the Amendment, or that they do not sympathise with the aims of the thinking which has produced this Amendment.

We have a great deal more sympathy than is perhaps realised by the noble Lord and the noble Baroness. But we are up against this regulation, dealing with total incapacity, that requires a competent medical person to sign that a person is incapable of work. The fact is that the Government have already acknowledged the existence of the problem; namely, the position of those disabled people who are able to work but whose working ability is limited, or whose work costs are high. We have given an undertaking, and have promised to carry on further work in this area.

On the 27th February last the noble Baroness referred to a Commons Paper, Social Security Provision for Chronically Sick and Disabled People. It said: The problems for the disabled worker of extra expense, of low income and of incentives are closely related. 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. This sort of benefit must not be confused with invalidity benefit, which provides for the maintenance of disabled people who are unable to work. The paragraph concluded: This is an area in which more informed discussion and more information are needed before the right answers can be found. The Government is anxious to draw on the practical experience of those who are professionally and personally involved, and will be making the necessary arrangements for consultation. In other words, we take the view that the basic condition for entitlement to sickness or invalidity benefit, that is, incapacity for work, which has to be satisfied on the 10 million or more claims a year, cannot be carelessly cast aside or in any way weakened without serious consequences. The cost, for example, could be substantial. I am a little tired —and I say that in the nicest possible way—of having to emphasise the whole question of expense. We have in this country 26 major benefits, and this year we shall be paying out £9,000 million. It is a lot of money, and it is all very well for people to say "It is only £5 million, £10 million, £20 million", but in the present situation we have to call a stop. As I said, the cost could be substantial, because it would enable people who are currently earning wages to claim an incapacity benefit in addition, and it could also result in numbers of people reducing their present activities and earnings in order to qualify for benefit. If total incapacity is no longer to be the yardstick, the issue is not simply one of people now on benefit being encouraged to earn.

It is true that there is already an earnings limit associated with the incapacity benefits, which, as I have said, is known as the Therapeutic Earnings Limit. Noble Lords will remember that, largely due to the noble Lord who has just spoken, and the noble Baroness, who twisted our arm, if I may say so, on a previous occasion, it was increased to £7. As things are at the moment, I would ask the noble Lord and the noble Baroness not to press the Amendment. I know one hears this so often on these occasions. I want to assure them both that we are not unmindful. We find it difficult to get away from this term "total incapacity". We are looking at the whole problem to see whether there is some way, maybe some kind of re-designation of the situation. I can only hope that if I say we are looking at it to see what can be done, they would feel able to leave it with us a little longer and not press the point at this stage.


I wonder whether I could ask the noble Lord if he could be more specific on these discussions and research taking place. Can he give any sort of timetable?


No, I cannot. I do not want to mislead the noble Lord or the Committee. Much of this has to be done internally. As the noble Lord knows, we are in touch with a vast number of organisations, probably all the organisations in the field, and their experience must have told them that we are not unsympathetic. It is a question of seeing just what can be done, because we realise there is a point here which we cannot meet in the present situation. But I cannot go further on the timetable.


I am grateful to the noble Lord for his answer. I still remain unhappy about the universal use of the criterion "incapable of work" because, as I tried to explain, I do not believe that that is a realistic appraisal in this day and age. I hope that we can get away from that before very long. I am still not convinced that the cost, in the words of the noble Lord, could be "substantial", because in the Amendment, which is purposely framed to be flexible, no figures are mentioned. The Minister would have a great deal of scope to adjust it to economic circumstances.

I do not accept that people already in work need automatically to be paid invalidity pension in addition. The Minister could phrase it so that it was paid to people at present out of work but to encourage them to come back into work. That was the reason for using the word "may" in the Amendment. I should like to look at his reply a little more carefully. I do not feel that this evening is a particularly appropriate moment to press this matter because there are not many present. Before the next stage I will discuss it with my noble friends and see what they think. For the moment, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 14, as amended, agreed to.

Clauses 15 and 16 agreed to.


I beg to move that the House do now resume.

House resumed.