Lords Sitting of 1 July 1980

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of London.

MRS. HETTIE CRYSTAL
Lord SUDELEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the police are continuing their investigation into the possible assisted suicide of Mrs. Hettie Crystal of Vaughan Avenue, Hendon, on 4th December 1979, despite the open verdict recorded by the coroners.
The PARLIAMENTARY UNDER-SECRETARY, HOME OFFICE (Lord Belstead): My Lords, I understand from the Commissioner of Police of the Metropolis that, following an investigation by his officers, a man has been charged with aiding and counselling the suicide of Mrs. Crystal. The matter is now sub judice, and it would not, therefore, be appropriate for me to comment any further at this stage.
Lord SUDELEY: My Lords, while thanking the Minister for that Answer, may I seek the assurance of the Government that they do not intend to introduce any legislation enabling assisted suicide?—because that would lay open the door to the activities of unscrupulous persons.
Lord ELWYN-JONES: My Lords, a ruling having been given that this matter is sub judice, it really is not proper to press the matter in a supplementary question.
Lord BELSTEAD: My Lords, having regard to the advice that has been given by the noble and learned Lord from the Opposition Front Bench, I think that the less said, the better.

SHEEPMEAT: PRICE GUARANTEE SYSTEM
2.37 p m.
Baroness ELLIOT of HARWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what date they expect the new agricultural price guarantee for sheep to operate; and what will be the position of any subsidy where lamb carcasses are for export.
Lord SANDYS: My Lords, the community sheepmeat régime, which was agreed by the Council of Agricultural Ministers, is expected to come into force when the voluntary agreements have been concluded with third country suppliers of sheepmeat. The proposed régime allows a member state to operate a variable premium system as an alternative to intervention. Where this system applies, an amount equivalent to the variable premium will be recovered on exports.
Baroness ELLIOT of HARWOOD: My Lords, I thank the noble Lord very much for that Answer. May I ask the Government whether they realise that these delays, hesitations, and failures to make decisions cause particular difficulties in the world of agriculture, since the growth of animals is a matter that does not stand still? If one does not make a decision when the animal is a lamb, it very soon becomes a young hogg or ewe and the period for sale is completely ruined. If they possibly can, I urge the Government to ensure that decisions are taken under the EEC agricultural policy. It is really vital that a decision be taken in this matter, and I ask the Government to bear this in mind.
Lord SANDYS: My Lords, I fully recognise the very practical problems to which the noble Baroness refers—she has such a close personal association with the producers' industry—but I cannot give a firm date for the implementation of the régime. All parties to the voluntary restraint agreement negotiations recognise the need to avoid delay.
Lord HENLEY: My Lords, is the Minister aware that the slaughtering industry is very worried that, if there is a delay between the date of the beginning of the new price guarantee scheme and its actual implementation, it might cause severe disruption to the amount of lamb being sent for slaughter?
Lord SANDYS: Yes, my Lords; but I would draw the attention of my noble friend to the Statement and press release issued on 30th May by my right honourable friend the Minister of Agriculture. He referred to the effect on third countries, especially New Zealand. He said:
"The whole régime will come into effect only if, and when, New Zealand agrees on the volume of her imports into the Community in exchange for tariff reduction".
Baroness ELLIOT of HARWOOD: My Lords, if that is the position, can the noble Lord say what will happen if New Zealand does not agree?—because the entire sheep industry of England, Scotland and Wales would therefore be in jeopardy.
Lord SANDYS: My Lords, that is a hypothetical question, and I regret that I cannot answer it.

GREEK STUDENTS' FEES
2.40 p.m.
Lord GLADWYN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper, and in so doing I would venture, if I may, to draw the attention of the House to the fact that, no doubt owing to my atrocious handwriting, the Question has not been reproduced altogether as intended. The words towards the end of the Question should not be,
"is a fair way to Greek membership of the Community",
but should be,
"is to give a fair wind to Greek membership of the Community".
I trust that the noble Baroness will not be misled in her reply by this hiccough.
The Question was as follows:
To ask Her Majesty's Government whether they would agree that charging Greek students very heavy "full cost" fees for 1980 when from 1st January
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1981 such students along with students from other EEC countries, will only pay fees chargeable to home students is a fair way to Greek membership of the Community.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, the intention is that Greek students should be treated as EEC students and thus qualify for the home rate of fee with effect from 1st September 1981. I think it is fair and reasonable that the concession should apply in the first full academic year after Greece becomes a member of the European Community.
Lord GLADWYN: My Lords, I thank the noble Baroness for that reply. However, does she not in her heart of hearts agree that this cheeseparing, unimaginative and unwelcoming attitude is typical of the Government's whole approach to the difficult problems presented by overseas students in this country?
Baroness YOUNG: My Lords, I am very well aware of the view of the House on the matter of overseas students' fees and the difficulties that have arisen from it. Like other Members of the Government, I wish that it was not necessary to embark on these kinds of economy, but the fact is that it is. We have taken this decision, which we believe to be a fair one, because it will mean a saving of about £l·5 million.
Lord HARMAR-NICHOLLS: My Lords, is my noble friend aware that the EEC itself may not appreciate a Member Parliament anticipating what is not yet a fact? Does my noble friend agree that in strict terms of adhering to the letter of a contract—which is the only way to make it really effective and worthwhile—preferences should not be given until entitlement applies through the contract having been fulfilled? We ought not to anticipate something that will not be a fact until the date on which the preferences will come into force.
Baroness YOUNG: My Lords, I should like to thank my noble friend for that intervention, because, of course, once Greece becomes a full member of the EEC, then the home rate of fees will apply.
Lord MAYBRAY-KING: My Lords, since Greece will become a full member in January 1981, could not the Government be generous and include the academic year 1980–81, instead of starting at the academic year 1981–82?
Baroness YOUNG: My Lords, the fact is that tuition fees are normally fixed in advance for a full academic year. That is why the concession to Greek students will be given in the first full academic year after the accession of Greece to the EEC.
Lord CARADON: In this connection, my Lords, can the noble Baroness tell us whether any decision has been taken following the very urgent representations made to the Lord Privy Seal when he was recently in Cyprus on behalf of the Cypriot students?
Baroness YOUNG: My Lords, I think that is another question, and if the noble Lord would put down a Question on that point I should he happy to answer it.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, if I may return to the previous answer given by the noble Baroness, she said that "normally" fees had to be paid for a whole year. I remember the last time this matter arose. Is the noble Baroness aware that on that occasion many noble Lords in all parts of the House asked whether this could not be varied, and that if the Government could not go the whole way perhaps students could he required to pay the full rate for the first three months but have their fees varied from the moment when Greece was in the EEC? I am sure there is support for that in all parts of the House.
Baroness YOUNG: My Lords, it is true that this precise point was raised when this matter was discussed on an earlier occasion, and I accept that some tuition fees are sometimes collected in termly instalments. However, there is an increasing tendency to collect them in advance for the very practical reason that sometimes there is the non-payment of fees by some students and it is extremely difficult to collect them later on.
Lord MONSON: My Lords, is the noble Baroness aware that the majority
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of taxpayers in this country see no reason why they should subsidise students from any EEC country, and take the view that if there are to be any subsidies they should go to the poorest students from the poorest countries?
Baroness YOUNG: My Lords, this is an agreement that we have reached in regard to students coming from the EEC, and of course it would be quite wrong in those circumstances to discriminate against Greek students in respect of arrangements that have been made for students from other members of the EEC.

JOB OPPORTUNITIES FOR SCHOOL-LEAVERS
2.45 p.m.
Lord ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further proposals they have for creating job opportunities for school-leavers.
Lord LYELL: My Lords, the job prospects for school-leavers, as for all other age groups, depend on the success of the Government's policies designed to reduce inflation and create a climate for investment and enterprise, which in turn will lead to increased economic activity and lower unemployment. The Government do not themselves create job opportunities, but the Manpower Services Commission's youth opportunities programme provides work preparation and training schemes for the young unemployed, which have proved successful in helping young people into regular employment. This programme has been expanded to provide about 25 per cent. more places in the year 1980–81, and this will enable the commission to continue to operate its undertakings to unemployed school-leavers and to young people who have been unemployed for 12 months or more. Also, the temporary short-time working compensation scheme and the job release scheme will contribute towards reducing unemployment and helping hard-hit groups, such as school-leavers.
Lord ORR-EWING: My Lords, I thank my noble friend for that helpful and constructive reply. Would he bear in mind, and perhaps reconsider in this very difficult matter, whether we ought not to introduce some sort of civic service as a contribution to the benefit of young people and the benefit of the nation, giving young people options to serve either in the environmental services or in the social services, at one end of the spectrum, and perhaps in the police as a reserve, receiving a bit of training there, or even in the military services, at the other end of the spectrum? Is this not a contribution which they could usefully make and be the better for it, the nation being also the gainer?
Lord LYELL: My Lords, that is a very interesting suggestion. It is one of many that is being considered by the Government; but I cannot stress too strongly that the Government cannot by themselves create the sound economic growth which is going to bring about more real jobs as opposed to more merely temporary jobs.
Baroness GAITSKELL: My Lords, may I ask the Government whether it would not be more accurate, in dealing with this matter, to delete one word from the Question—the word "further" in the phrase "further proposals" when asking the Government's intentions in this matter?
Lord LYELL: My Lords, I hope the noble Baroness will not think that the Government are responsible for my noble friend's handwriting, but the Answer I have given is as far as the Government would want to go, and I believe the proposals are very firm and constructive.
Lord CLEDWYN of PENRHOS: My Lords, would not the most effective contribution to the community in the form of civic service, and to industry as well, be to extend apprenticeship schemes in essential industry? Could the noble Lord say what plans the Government have to this end, and how much the Government are now spending through the MSC on the granting of apprenticeships to young people?
Lord LYELL: My Lords, of course the Government will do everything they can to assist apprenticeship schemes and other
224
methods of encouraging young people to gain proper and lasting work. The noble Lord was wondering what was being done. The youth opportunities programme is to be expanded by 25 per cent.in the year 1980–81, and as part of the Manpower Services Commission's overall budget the expenditure on the youth opportunities programme for the year 1980–81 is £183 million, compared with expenditure of £124 million in the year 1979–80. So I think the noble Lord will see the order of increase.
Lord SHINWELL: My Lords, is it not unrealistic to ask the Government to provide job opportunities when the Government freely admit—and there are valid reasons for their attitude—that their policy is directed to creating unemployment and that it cannot be avoided? Although the situation is deplorable, why do we not face the facts and be realistic about this? Something has happened which is unfortunate and a large number of young people have to suffer. It cannot be helped.
Lord LYELL: My Lords, the noble Lord, Lord Shinwell, made most of my answer for me. He says that it is unfortunate. I believe that the noble Lord, Lord Shinwell, is with us in that. The Government are facing the truth. I have already said that it is not for the Government to create jobs, but to seek, as they are seeking, to create a climate where lasting and beneficial jobs may be created and may thrive.
Lord HUNT: My Lords, while appreciating the objective of the Government in creating a situation in which there will be employment, I should like to ask the noble Lord whether the Government are aware of the seriousness and—and I use the words advisedly—the potentially explosive nature of the situation as regards unemployment among young school-leavers, and particularly among young black school-leavers? If the noble Lord is not fully aware, may I ask whether he will cross the river and pay a visit to the borough of Lambeth and talk to some of the young black school-leavers in that borough?
Lord LYELL: My Lords, the Government do care about young people all over Britain who are unemployed. I am aware

225
—and I have certain evidence at least of two visits, not necessarily to the particular area described by the noble Lord—that my noble friend Lord Gowrie has paid visits to London and to the North, among other places, to just such areas of particular need among young people; and we are keeping this in mind all the time.
Lord GISBOROUGH: My Lords, will the noble Lord agree that where manpower reductions have had to be made in public services, it is extremely unfortunate that the distress has fallen upon the young entry rather than upon those workers in the public services whose excessive wage claims have been the cause of the whole problem '?
Lord LYELL: My Lords, I think that that is a little wide of the Question. The Government are taking action under the job release scheme and under the temporary short-time working compensation scheme, both of which schemes are applicable to the situation.
Lord ROSS of MARNOCK: My Lords, is the noble Lord aware that the figures for unemployment announced a short time ago show that in Scotland the figures are higher than they have been since the 1930s, that at the end of last week thousands more young people left school and that they will have little confidence in the kind of statement that is being made by the noble Lord today? Is it any wonder that the Tory candidate lost his deposit and could get only 700 votes in a seat in the centre of Glasgow?
Lord LYELL: My Lords, those of us who read the Scottish papers understand that the Labour Party did not have much to crow about at the Central Glasgow election. The noble Lord is correct. Unemployment is at a very grave level in Scotland. This is one of the reasons why the Government are increasing their expenditure on the youth opportunities programme just for the school-leavers that the noble Lord mentioned. The Government are doing everything they can to assist in this grave situation. We realise it and we are taking action.
Baroness MASHAM of ILTON: My Lords, may I ask the noble Lord whether he will consider the plight of the severely
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disabled school-leavers? Would he consider—and I notice that the noble Baroness, Lady Young, has fled—that the severely disabled people might extend their school period as they do in many EEC countries?
Lord LYELL: My Lords, that is an interesting suggestion. I think it is a little wide of the Question, but I am delighted to take on board the comments made by the noble Baroness and I will pass them on to my noble friend Lady Young.
Lord BRUCE of DONINGTON: My Lords, is the noble Lord aware of the repeated utterances of his right honourable friend the Secretary of State for Industry that unemployment is a self-inflicted injury? Will he explain how school-leavers can inflict unemployment upon themselves? Will he give some indication as to when this Government, in whom public confidence is rapidly diminishing, intend to take up their responsibility to school-leavers who, through no fault of their own, are unemployed?
Lord DERWENT: My Lords, is this really the time for a debate?
Lord LYELL: My Lords, if I may reply to the noble Lord, Lord Bruce—and I am grateful for the support from my noble friend—I have said three times that the Government do not create employment. I think that the noble Lord, Lord Bruce, certainly understood that and he realises that. I am sure that the noble Lord will appreciate that the matters he attributed to my right honourable friend the Secretary of State may be relevant; but I would remind the noble Lord that these matters of young people entering jobs and of their respective wage rates are very largely a matter for collective bargaining. Certainly, the wages of both young people and other people in employment are very carefully considered by the employers and the unions, with particular relevance to the possibility of giving young people opportunities to enter industry.
Lord ORR-EWING: My Lords, while congratulating the Government on extending by £50 million the expenditure available to help get jobs for young people, would they consider as a matter of urgency convening a conference with

227
Church leaders and youth leaders from all parts of the country—
A noble Lord: Oh!
Lord ORR-EWING: My Lords, and why not?—a conference to see what can be done? Let the Government come forward with constructive suggestions as to what can be done to provide useful employment for these young people who otherwise, as was rightly said by noble Lords opposite, could be frustrated and become a great cause of anxiety for the nation in future!
Lord LYELL: My Lords, that is an interesting suggestion. I shall pass it on to my noble friend the Minister, but I would stress that we believe the youth opportunities programme is the best and most relevant source of aid in this continuing problem of young people's unemployment.

BUSINESS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Trefgarne will repeat a Statement being made in another place on Ferranti.
It may be for the convenience of your Lordships if I announce that dinners will be available at the usual time this evening.
The Report stage of the Social Security (No. 2) Bill will be adjourned at approximately 7 o'clock for about an hour and the Welfare of Livestock (Deer) Regulations and the Veterinary Surgeons Order will be taken during that adjournment.

SOUTHERN WATER AUTHORITY BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

LIMITATION BILL [H.L.]
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I rise to move that this Bill now be
228
read a second time. The law of limitation was last consolidated in 1939. Since then there have been four important amending statutes as well as various amendments in other Acts. Amendments to facilitate a consolidation were made in the Limitation Amendment Act 1980 and this Bill, which is a pure consolidation, marks the end of a review of the law which has lasted nearly a decade. If given a Second Reading by your Lordships, this Bill will be referred, as usual, to the Joint Committee on Consolidation Bills. I beg to move.
Moved, That the Bill be now read 2a—(The Lord Chancellor.)
Lord ELWYN-JONES: My Lords, I am sure that the House will welcome this piece of consolidation in a very difficult field. It is yet another indication of the urgency with which the process of consolidation is being tackled.
The LORD CHANCELLOR: My Lords, I am much obliged to the noble and learned Lord.
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

SOCIAL WELFARE (LOCAL SERVICES) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I rise to move that this Bill be now read a second time. As noble Lords will see from the Table of Derivations at the back of this Bill, its provisions derive from no less than 30 Acts of Parliament. It is accordingly, I hope, a most useful piece of consolidation which will, I believe, be greatly welcomed by local authorities, who are charged with the duty of carrying out these services. There are no changes in the law made by the Bill: it is therefore pure consolidation. If read a second time by your Lordships, this Bill will also be referred in the usual way to the Joint Committee. My Lords, I beg to move.
Moved. That the Bill be now read 2a—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

SOLICITORS (SCOTLAND) BILL [H.L.]
The LORD ADVOCATE (Lord Mackay of Clashfern): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Recommitment be discharged.
Moved, That the Order of Recommitment be discharged.—.(Lord Mackay of Clash fern.)
On Question, Motion agreed to.

CORONERS BILL
Read 3a, and passed.

LABORATORY ANIMALS PROTECTION BILL [H.L.]
3.2 p.m.
The Earl of HALSBURY: My Lords, I beg to move the motion standing in my name on the Order Paper. Last Thursday, when the Bill received its Third Reading, I omitted to move the usual privilege amendment before it was sent to the Commons. Such an amendment is necessary because of the financial provision in paragraph 5 of Schedule 1.The purpose of this motion is to enable the error to be corrected by giving the Bill another Third Reading and including the privilege amendment before the Bill is finally sent to the Commons. I beg to move.
Moved, That the proceedings of Thursday last with respect to the Bill be vacated. —(The Earl of Halsbury.)
On Question, Motion agreed to.
Read 3a, an amendment (privilege) made; Bill passed, and sent to the Commons.

SOCIAL SECURITY (No. 2) BILL
3.5 p.m.
Report received.
Clause 1 [Reduction of compulsory up-rating of certain benefits]:
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 1:
Page 1, line 10, after first ("sum") insert ("and that sum is not chargeable to income tax").
The noble Lord said: My Lords, my noble friend Lord Wells-Pestell has been detained for a short while and therefore I am taking over this particular amendment. This amendment would ensure that the 5 per cent. cuts in future years are not applied to benefits which have been brought into the tax net. It is apparently the Government's intention to tax unemployment benefit at least from April 1982. Yet Clause 1(4) gives power to make 5 per cent. cuts in November 1982, even though the benefit would already be taxed by then. The purpose of this amendment is to prevent this. I beg to move.
Baroness YOUNG: My Lords, as the noble Lord, Lord Wallace of Coslany, has explained, this amendment would ensure that no further abatements could be applied to a benefit once it is brought into taxation. In discussing this matter, we are going over fairly well-trodden ground. I hesitate to say to the noble Lord, Lord Wallace, who was so concerned at the Committee stage that we constantly referred to the need to make reductions in public expenditure, that that is the reason for the first five clauses of this Bill. They are reductions which we believe are an essential part of the Government's economic strategy.
In order to achieve these reductions, we have to make savings in the social security budget which presently costs some £20 billion each year and is equal to about one quarter of all public expenditure. As I have explained, the provisions in Clauses 1 to 5 of the Bill are being introduced to enable us to obtain these vital savings. All the other factors are secondary to this particular end. They indicate where savings can best be made, they are not reasons in themselves for the introduction of a particular proposal.
This is as true for Clause 1 of the Bill as it is for all the other clauses, with the exception of course of Clause 6. The primary reason for the abatement proposal in Clause 1 is the contribution it will

231
make to savings in social security expenditure which we estimate to be about £130 million net in a full year. The fact that the benefits affected are not taxable was an important factor in deciding that these savings should be made in this way, but it was not the reason for proposing the abatement. It seems right to us, that, when savings in social security expenditure have to be made, part of those savings should fall on those benefits which ought to be taxable but are not.
My Lords, the clause will allow us to make further abatements in 1981 and 1982 but, as I have said before—and I reemphasise on this occasion—no decisions have been taken about this. We have at present no intention of abating any of the benefits once they are brought into taxation. But we must not lose sight of the fact that what we are concerned about in this Bill is the need to make savings in public expenditure, not the arrangements for taxing benefits. If the amendment were accepted, it would mean that, no matter what the economic circumstances, further abatements could not be made once the benefits had become taxable. In view of all that I have said, I do not believe that your Lordships would expect me to say other than that the Government cannot accept this particular amendment.
I should like to make one final point. That is to stress that Clause 1 does not give the Government the power automatically to repeat the abatement proposals. It gives them the power, in subsection (4), to put such proposals to Parliament through an Affirmative Resolution. I have said that we have no intention of continuing the abatement once the benefits are brought into taxation. So we would only consider laying an
order under subsection (4) in the most critical economic situation. Such an order would have to be approved by both Houses, and your Lordships would therefore have an opportunity to decide whether the economic circumstances justified the order. We believe therefore that the Bill already contains adequate safeguards. I hope that, in view of the explanations I have given of the Government's policy in this matter, the noble Lord will feel able to withdraw this amendment.
Lord WALLACE of COSLANY: My Lords, I should thank the noble Baroness for that detailed explanation, which is all right as far as it goes. The point here is—and this is the point of dispute between us—that we object to the present 5 per cent. abatement and the Government can rive no guarantee whatever that there will not be further abatements. We feel this is quite unjust and that to continue abatements in this field is not acceptable and therefore should not be continued.
The Government give no guarantee. They say the economic circumstances "may not permit", which shows a rather grim outlook as far as Government policy is concerned. If they are so confident about the effect of their economic policy they should not be afraid to say: "No further abatements": but they have no confidence in their own policy and we are faced with further abatements. We cannot accept the explanation and I will ask the House to divide.
3.11 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 99.

CONTENTS

Airedale, L.

Bruce of Donington, L.

Elwyn-Jones, L.

Amherst, E.

Burton of Coventry, B.

Evans of Claughton, L

Amulree, L.

Byers, L.

Fisher of Rednal, B.

Aylestone, L.

Caradon, L.

Fulton, L.

Bacon, B.

Chitnis, L.

Gaitskell, B.

Balogh, L.

Cledwyn of Penrhos, L.

Gladwyn, L.

Banks, L.

Collison, L.

Gordon-Walker, L.

Beswick, L.

Crook, L.

Goronwy-Roberts, L.

Birk, B.

Crowther-Hunt, L.

Henderson, L.

Blease, L.[Teller.]

Darling of Hillsborough, L.

Hunt, L.

Blyton, L.

Davies of Leek, L.

Janner, L.

Boston of Faversham, L.

Davies of Penrhys, L.

Kaldor, L.

Bowden, L.

Diamond, L.

Kilmamock, L.

Brockway, L.

Donaldson of Kingsbridge, L.

Leatherland, L.

Lee of Newton, L.

Peart, L.

Stone, L.

Leonard, L.

Phillip, B.

Strabolgi, L.

Listowel, E.

Pitt of Hampstead, L.

Taylor of Gryfe, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Plant, L.

Taylor of Mansfield, L.

Rhodes, L.

Underhill, L.

Lloyd of Hampstead, L.

Ritchie-Calder, L.

Wallace of Coslany, L.

Lovell-Davis, L.

Ross of Marnock, L.

Walston, L.

MacLeod of Fuinary, L.

Sainsbury, L.

Wedderburn of Charlton, L

McNair, L.

Seear, B.

Wells-Pestell, L.

Maelor, L.

Shinwell, L.

White, B.

Milford, L.

Simon, V.

Willis, L.

Milverton, L.

Stamp, L.

Wilson of Radcliffe, L.

Ogmore, L.

Stedman, B.

Winstanley, L.

Oram, L.

Stewart of Alvechurch, B.

Wootton of Abinger, B.

Parry, L.

Stewart of Fulham, L.

NOT-CONTENTS

Alexander of Tunis, E.

Fairfax of Cameron, L.

Murton of Lindisfarne, L.

Alport, L.

Faithfull, B.

Newall, L.

Ampthill, L.

Falkland, V.

Nugent of Guildford, L.

Auckland, L.

Fortescue, E.

O'Brien of Lothbury, L.

Avon, E.

Gage, V.

Orkney, E.

Barnby, L.

Gainford, L.

Orr-Ewing, L.

Bell win, L.

Gisborough, L.

Porritt, L.

Belstead, L.

Glenkinglas, L.

Reigate, L.

Berkeley, B.

Gridley, L.

Renton, L.

Bessborough, E.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Robbins, L.

Bridgeman, V.

Rochdale, V.

Brookeborough, V.

Hankey, L.

St. Aldwyn, E.

Campbell of Croy, L.

Han worth, V.

Saint Oswald, L.

Chelwood, L.

Hayter, L.

Salisbury, M.

Clancarty, E.

Henley, L.

Sandys, L. [Teller.]

Clifford of Chudleigh, L.

Hillingdon, L.

Sharpies, B.

Clitheroe, L.

Home of the Hirsel, L.

Skelmersdale, L.

Clwyd, L.

Hood, V.

Soames, L. (L. President.)

Cottesloe, L.

Hylton-Foster, B.

Somers, L.

Craigavon, V.

Ilchester, E.

Spens, L.

Cullen of Ashbourne, L.

Kemsley, V.

Strathclyde, L.

Davidson V.

Kilmany, L.

Sudeley, L.

De Freyne, L.

Kimberley, E.

Swansea, L.

Denham, L. [Teller.]

Kinloss, Ly.

Swinton, E.

Derwent, L.

Lindsey and Abingdon, E.

Trefgarne, L.

Drumalbyn, L.

Long, V.

Trenchard, V.

Dundee, E.

Loudoun, C.

Vaizey, L.

Effingham, E.

Lyell, L.

Vaux of Harrowden, L.

Ellenborough, L.

Macleod of Borve, B.

Vickcrs, B.

Elliot of Harwood, B.

Mancroft, L.

Ward of Witley, V.

Ely, M.

Marley, L.

West bury, L.

Emmet of Amberley, B.

Merrivale, L.

Wise, L.

Energlyn, L.

Mowbray and Stourton, L.

Young, B.

Exeter, M.

The Question is that Amendment No. 2 be agreed to.

Resolved in the negative and amendment disagreed to accordingly.
3.20 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 2:
Page 1, line 12, at end insert ("and such further increase as may be necessary in order to make good a shortfall in the previous up-rating").
The noble Lord said: My Lords, this amendment, which I beg to move, would require the Secretary of State, before making a 5 per cent. cut, to make good any shortfall in the previous year's up-rating. I do not want to rehearse everything that we said on this side of your
234
Lordships' House during the Committee stage, but, as your Lordships will know, we do feel it is grossly unfair that some of the benefits, instead of going up in line with prices which for the coming November will be 16½ per cent., will in fact be reduced by 5 per cent. to 11½ per cent. As your Lordships know, they affect unemployment, sickness benefit, maternity allowance, invalidity pension and a whole host of other benefits. It is true that the Government have given an undertaking eventually to put the invalidity pension back to where it should be, but there is no undertaking as far as these other benefits are concerned. As it is customary —and if I may say so, it is laid down in the

235
Social Security Act, 1975—for all benefits and pensions to be reviewed in time for a November up-rating, we are going to have a situation where there will be an eventual 5 per cent. cut in certain benefits.
However, what exercises our minds at the present moment is that the pensions, which are due to go up next November by 16½ per cent., will be going up at a time when there is every indication that the inflation rate will be anything but 16½ per cent. and is much more likely to be 20 per cent. or more. What we are saying is that, if the rate of inflation for the 12½ months up to this year's up-rating turns out to be more than 16½ per cent., the shortfall in the up-rating would have to be added on to next year's up-rating if the Government wanted to make another 5 per cent. cut. In other words, if the shortfall were 2 per cent.—and it will certainly, in our view, be as much as that—then the Government ought to make a cut in the following year of only 3 per cent. This seems to us to be very reasonable indeed.
These are benefits that are going to those members of the community who are more hard-pressed than anyone else. We have to bear in mind that the next up-rating on 24th November will be 12½ months since the last up-rating, and beneficiaries will lose two weeks of the up-rating which, in our view, should take place every 52 weeks. We do not feel it unreasonable to ask your Lordships to accept this amendment. That this shortfall should be made up is reasonable and if there is to be, as I said a moment or two ago, a shortfall of any degree, then it should be taken off the cut which is to be made in the following year in relation to certain benefits that will receive 5 per cent. less. I ask your Lordships to support this amendment which I think is reasonable. My Lords, I beg to move.
3.25 p.m.
Lord BANKS: My Lords, I should like very briefly to support this amendment. We have made it clear from these Benches on a number of occasions in the past that we think that a shortfall in the estimate of the increase in prices ought to be made good. If the Government's forecast is wrong, it does not seem to us
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that the recipients of these benefits should be the people to be penalised. As the noble Lord, Lord Wells-Pestell, has put it, it seems likely that this year the Government's forecast will be wrong and that inflation will be higher than 16½ per cent. so that, unless this amendment were passed, the loss to the recipient would in practice be much greater than 5 per cent.; it would be somewhere between 8 per cent. and 9 per cent. So for these reasons we agree with the noble Lord, Lord Wells-Pestell, that this amendment is reasonable.
Lord DAVIES of LEEK: My Lords, there is only one other way to give equity and justice to the people who are most likely to suffer from the kind of transition from which the whole of society all over the Western world is suffering at the moment. The Government should have the courage, as we did after the war, to get a restriction on the prices in our shops. Even in our London hotels, the prices are destroying our tourist industry. In other words, will the Government do one thing or the other? Will they either agree to this amendment or do something about the rapidly rising and "rip-off" prices that are new seen in all our cities in this country, as well as in parts of the Western World? We here could do something about it, if we tried.
Lord LEATHERLAND: My Lords, I should like to say a word or two about the economy that is proposed at the expense of the maternity benefit. At the age of 82, I have no personal interest to declare, but it is generally known that keeping a family in these days is expensive, and as each week goes by it will become more expensive still. There are many very heavy household expenses to be borne at the time when a new baby arrives, so everything that has to be purchased for that occasion is now more expensive than it used to be and becomes more expensive with every month that passes. This is rather a miserable economy, so could not the Government drop it and just make an exception to their economy drive in this respect?
Baroness PHILLIPS: My Lords, it is a little unfortunate that we again have this curious wording "compulsory up-rating". We then refer to a decrease in up-rating. It is to me rather like the

237
chairman who said "There has been a noticeable falling-off in the lack of apathy". In other words, we have this confusion of the double negative. If we had an honest statement in the Bill of what we are really doing, which is making it impossible for people who have benefits to keep up with the increase in the cost of living, we should know exactly what we were talking about. After all, the benefit is up-rated only in order to keep people in the same position; it is not meant to give them any more.
It seems extraordinarily unfortunate that of all the groups in the community this group—whether it be somebody who is handicapped, somebody who is receiving maternity benefit and so on—is the one selected for not being able to keep up with the cost of living. We appreciate that there are to be economies made by the Government, but this, of all, seems to be the one which will fall most heavily on those who are least able to bear it. I feel that the Government will regret the passing of a Bill of this kind. Many of their Acts of Parliament will bring real sorrow and discomfort, but this is a very vulnerable group in the community.
Baroness YOUNG: My Lords, perhaps I may begin by agreeing with the noble Baroness, Lady Phillips, that there is a great deal of difficulty in understanding the terminology of this Bill. I find it difficult myself. One can, indeed, describe the effects of Clause 1. One might say, of course, that everyone will get an increase although some people's increase will not be as large as others. That is perhaps not a way that the noble Baroness would agree with, but it is at least one way of describing it.
I am very glad that the noble Baroness said that she accepted that some economies have to be made. The fact is that the abatement of the up-rating next November for certain groups of people is for those groups of people who currently do not pay tax, unlike retirement pensioners, who do, and I think there is general agreement on both sides of the House that these groups ought to be brought into taxation. As I have already indicated, once that happens my right honourable friend the Secretary of State for Social Services has said that, given that the economic circumstances will
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allow, he will make good the shortfall on the invalidity benefits.
Baroness PHILLIPS: My Lords, I wonder if the noble Baroness will forgive me for intervening. As I read this, it includes maternity allowance. Surely that is taxed. It is taxed as part of the family income.
Baroness YOUNG: My Lords, my understanding is that this is a short-term benefit, and these are short-term benefits that are not taxed. If I am wrong about that, I will certainly let the noble Baroness know later on in the proceedings, but that is my understanding of the position.
The intention of the amendment moved by the noble Lord, Lord Wells-Pestell, is to introduce a requirement that any shortfall—that is, the difference resulting from an estimate of price movements between the up-ratings which turns out in the event to be too low—would have to be made good at the following up-rating. It does this by applying the 5 per cent. abatement to the amount produced by inflation-proofing and making good the shortfalls. It would therefore apply to those benefits which are to be abated as a consequence of this Bill. The term shortfall" is unknown to social security legislation, and is not defined anywhere in the Bill.
This amendment would not affect the forthcoming November 1980 up-rating at all, since in November 1979 all the benefits were increased by more than enough to maintain their value in relation to price movements over the period from November 1978. The amendment would be effective at future up-ratings only if a combination of hypothetical circumstances arose, that is, if the provisions of this Bill to abate benefits were used in subsequent years, which is possible under the provisions of Clause 1(4), and if at the same time there were a shortfall in the amount by which these benefits had been increased the previous year. It would be necessary to define the shortfall so that it did not include the effects of abatement. For example, next year this amendment would apply at the November 1981 up-rating only if the abatement provisions were used in 1981 and if at the same time there had been a shortfall in the November 1980 up-rating. If both these circumstances

239
should arise, the Government would be in the best position to decide what action to take, in the light of all the relevant factors, including the economic situation prevailing at the time. In making that decision the Government would have in mind retirement pension and other benefits, and not just the abated benefits.
The noble Lord, Lord Banks, and the noble Lord, Lord Wells-Pestell, both asked what would happen if there was to be a shortfall this November. I would simply like to say at this time that the Government will consider what action needs to be taken were that situation to arise. The answer to the noble Lord, Lord Davies of Leek, who is in favour of price controls and believes that the Government should either agree to the amendment or deal with higher prices by price control, is that price controls have not been successful in the past in keeping down the rate of inflation. And because various other methods, including price controls, have not been successful the Government have embarked on a different economic course which we hope will be successful. We hope very much that it will enable us, if we do get the economy right, to be able to be far more generous to all these groups of people affected by Clause l as well as in other parts of the Bill.
The noble Lord, Lord Leatherland, made a reference to maternity benefit, and I can confirm now to the noble Baroness, Lady Phillips, that I was right. Maternity allowances are not taxed. I am glad to confirm it also to the noble Lord, Lord Leatherland. The point about these particular benefits, applied to Clause 1, is that they are the group that are paid that are not taxed, whereas of course the other benefits that are outside it are taxed.
I realise the concern that has been expressed in all parts of the House over this clause. It is not a clause that I think any of us finds easy, and we would all prefer to do without it. We believe that it is only the very difficult economic circumstances in which we find ourselves that make it necessary. We have been living beyond our means, and as a Government we are taking steps to cut back on our expenditure. We believe as a matter of principle that it is better that the
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Government should decide to do that rather than that some outside organisation comes in and tells us, as had to be the case in 1976, that we have to economise. That is why we are taking a conscious decision over all these measures. I hope I have said enough to enable the noble Lord, Lord Wells-Pestell, to withdraw his amendment. The Government cannot accept it.
Lord BANKS: Before the noble Lord replies to what the noble Baroness has said, I should like to put a question to the noble Baroness. It is this. What is the argument in favour of not making good shortfalls? If one has made an estimate and it is one's intention to get the estimate correct and then to link the benefit to it, and that estimate proves to be wrong, what is the argument in favour of not making good the shortfall? Surely the only argument can be that the Government are saving money. But then one is bound to ask this. Is there anything which the Government would not do in order to make savings? That in itself, surely, is not a good enough argument. There must be another one.
Lord DRUMALBYN: May I point out to the noble Lord that this is the Report stage?
Lord BANKS: I apologise. I should have asked the permission of the House, and I apologise.
Lord UNDERHILL: I should like to comment on one or two things that the noble Baroness said. She made it clear that the reason for the 5 per cent. abatement is the question of the benefits not being taxed. There is no argument about that, at least as far as I am concerned. The noble Baroness will be pleased to know that I am not going to argue figures again. But once again we must face the fact that a very large proportion of these short benefit claimants either do not pay tax or will not pay anywhere near the 5 per cent. abatement. Therefore, that makes the position of the shortfall of even greater concern to those people. I hope that point is going to be considered when noble Lords vote upon this. The noble Baroness also commented about the Secretary of State's assurance. I may be wrong on this—if I am, no doubt the noble Baroness will correct

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me—but I believe the Secretary of State's assurance in another place was in respect of the invalidity benefits and not to all the short benefit claimants. If that is correct, I hope it will be kept in mind when noble Lords vote on this issue.
The LORD CHANCELLOR: My Lords, I understand the statement has been cleared in the Commons. Would it be the wish of the House that I should put the Question now or await the Statement now?
Lord ELWYN-JONES: My Lords, there is a notable absence from the Government Front Bench of the person responsible for dealing with it.
The LORD CHANCELLOR: I am sorry, my Lords. I thought my noble friend Lord Sandys was going to repeat the Statement. He had a document in his hand.
Lord WELLS-PESTELL: My Lords, from time to time the Government have relied upon this question of people not paying tax. The noble Baroness said only a few minutes ago, "like the pensioners do". I wonder whether the noble Baroness is in a position to say what percentage of pensioners in this country pay tax. My understanding of the situation is that a very small percentage of them pay tax. A good number of them, though not as many as should be, are in receipt of supplementary benefit. It seems to be only a question of finding the right kind of phraseology.
In recent weeks we have had many Bills from the Government that have been very complex and that in many respects have been drafted very well, so it cannot be beyond the competence of either the Government or draftsmen to draft a phrase which will establish beyond all reasonable doubt what we mean by "shortfall". After they have made an assessment of what they think the rise in prices will be by the following November, I think there is a moral obligation on the Government to make up the shortfall if their assessment was wrong. It seems to be a reasonable thing to expect them to do. I realise that so far as the short-term benefits are concerned, or any other
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benefit, they would not take effect from this November. They would take effect only from November twelve month. I do wish that the Government would look again at this matter because I believe it to be of vital importance to a large number of people.
Lord SOMERS: My Lords, the noble Lord said that very few pensioners pay tax, but I am wondering what is his definition of the word "pensioner". All of us who receive an old age pension are pensioners. Those who have retired from their job, whatever it may be, may receive a pension. They are also pensioners, and they all pay tax on their pension. I should have said that the majority of people pay tax on their pension.
Several noble Lords: Not all do.
Lord WELLS-PESTELL: My Lords, I can speak only by leave of the House. When I speak of pensioners I am thinking in terms of the 10 million people, or thereabouts, who are in receipt of state retirement pensions. That would include women over 60, either in their own right or as a result of their husband's contributions, and certainly men over 65. I do not think that we ought to assume that because there may be members of your Lordships' House who are in receipt of a state retirement pension and pay tax, this goes for a large number of the 10½ million.
3.43 p.m.
Baroness YOUNG: My Lords, by leave of the House, the noble Lord, Lord Banks, asked whether there were any lengths to which the Government would not go to save money. When we were looking for savings in Government expenditure, we had to look at all aspects of Government policy. As I indicated in my answer to the first amendment, the social security budget stands now at £20 billion annually. We believe that it was right that this should not be exempt but should be looked at. My right honourable friend the Secretary of State for Social Services has, in an area where there will always be difficulties, looked at those parts which he believes will cause the least harm.
Regarding the noble Lord's point about the shortfall, he asked whether it was

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wrong not to up-grade and make good the shortfall, should it occur from year to year. As the noble Lord will know, there is no legal obligation at all to make good the shortfall. Indeed, the last Labour Administration got into some difficulties over this. It is a matter for the Government, when the time comes, to consider the matter. Governments of both parties have recognised that this is a matter of choice rather than a matter of law. That is the legal position.
What we should like to do is to be sure that we can make good the shortfall, whenever it arises. Indeed, in November 1979 we made good the shortfall. Retirement pensions were put up slightly more than the rise in prices to make good the shortfall. I hope that the House will take this as an assurance that when it is possible to do so we shall make good the shortfall, wherever it may arise.
In answer to the noble Lord, Lord Underhill I hope that I made it quite clear, on the question of making good the shortfall and any loss, that this will apply to invalidity benefits in particular, once they are brought into taxation. I should like to make that clear. If, however, the economy improves we should want to look at all other matters.
The noble Lord, Lord Wells-Pestell, asked me how many retirement pensioners pay tax. I do not have the figures in front of me, but it is thought that perhaps half of the retirement pensioners pay tax. If this is not the correct figure I will write to the noble Lord. The point I was making is that retirement pensioners who are eligible for tax will pay tax. In the case of the other people in Clause I, no matter what their other income they
would get the benefit without having to pay tax.
We on this side of the House have admitted and agree that there is a measure of rough justice because some people will be affected. However, no matter what your income, if you are at present drawing an invalidity pension you will get the whole pension without having to pay tax upon it. That is the difference between that particular benefit and a retirement pension, and I think we are all agreed that that should be brought into taxation.
As I have already explained, it is entirely for technical and administrative reasons that invalidity pensions cannot be brought into taxation before 1982. I understand that it has to do with putting it all on a computer, and various other such administrative changes. This is being worked at now. It is a matter of regret that it cannot be done earlier. That is the best information I have and the reason why invalidity pensions cannot immediately be brought into tax.
I hope that I have said enough, overall, again to show the Government's good faith in the matter and to show that we have gone into it with very considerable care. We believe that it is right that this very large proportion of Government expenditure should not be shielded from all cut-backs but should take a share of them, of which Clause I is a part.
3.48 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 107.

CONTENTS

Amherst, E.

Burton of Coventry, B.

Gladwyn, L.

Amulree, L.

Caradon, L.

Gordon-Walker, L.

Ardwick, L.

Chitnis, L.

Goronwy-Roberts, L

Aylestone, L.

Cledwyn of Penrhos, L.

Hale, L.

Bacon, B.

Crowther-Hunt, L.

Halsbury, E.

Balogh, L.

Darling of Hillsborough, L.

Henderson, L.

Banks, L.

Davies of Leek, L.

Hunt, L.

Barrington, V.

Davies of Penrhys, L.

Ilchester, E.

Beswick, L.

Diamond, L.

Janner, L.

Birk,B.

Donaldson of Kingsbridge, L.

Kaldor, L.

Blease, L. [Teller.]

Elwyn-Jones, L.

Kilmarnock, L.

Blyton, L.

Evans of Claughton, L.

Leatherland, L.

Boston of Faversham, L.

Fisher of Rednal, B.

Lee of Newton, L.

Bovvden, L.

Fulton, L.

Leonard, L.

Brockway, L.

Gaitskell, B.

Listowel, E.

Bruce of Donington, L.

Gardiner, L.

Llewelyn-Davies of Hastoe, B

Lloyd of Hampstead, L.

Ponsonby of Shulbrede, L. [Teller.]

Strabolgi, L.

Lovell-Davis, L.

Strauss, L.

McNair, L.

Rhodes, L.

Taylor of Gryfe, L.

Maeloi-, L.

Ritchie-Calder, L.

Taylor of Mansfield, L.

Milford, L.

Ross of Marnock, L.

Underhill, L.

Milverton, L.

Sainsbury, L.

Wallace of Coslany, L.

Ogmore, L.

Seear, B.

Walston, L.

Oram, L.

Segal, L.

Wedderburn of Charlton, L

Parry, L.

Shinwell, L.

Wells-Pestell, L.

Peart, L.

Simon, V.

Willis, L.

Phillips, B.

Stamp, L.

Wilson of Radcliffe, L.

Pitt of Hampstead, L.

Stedman, B.

Winstanley, L.

Stone, L.

Wynne-Jones, L.

NOT-CONTENTS

Adeane, L.

Exeter, M.

Mowbray and Stourton, L.

Airey of Abingdon, B.

Fairfax of Cameron, L.

Murton of Lindisfarne, L.

Alexander of Tunis, E.

Faithfull, B.

Newall, L.

Alport, L.

Falkland, V.

Nugent of Guildford, L.

Amory, V.

Fortescue, E.

O'Brien of Lothbury, L.

Ampthill, L.

Gage, V.

Orkney, E.

Auckland, L.

Gainford, L.

Orr-Ewing, L.

Avon, E.

Geoffrey-Lloyd, L.

Porritt, L.

Barnby, L.

Gisborough, L.

Redmayne, L.

Bellwin, L.

Glenkinglas, L.

Reigate, L.

Belstead, L.

Gridley, L.

Renton, L.

Berkeley, B.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Robbins, L.

Bessborough, E.

Roberthall, L.

Bridgeman, V.

Hankey, L.

Rochdale, V.

Brookeborough, V.

Hanworth, V.

St. Aldwyn, E.

Campbell of Croy, L.

Hawke, L.

Saint Oswald, L.

Cathcart, E.

Hayter, L.

Salisbury, M.

Chelwood, L.

Henley, L.

Sandford, L.

Clancarty, E.

Hillingdon, L.

Sandys, L. [Teller.]

Clitheroe, L.

Home of the Hirsel, L.

Selborne, E.

Clwyd, L.

Hood, V.

Sharples, B.

Cork and Orrery, E.

Hylton-Foster, B.

Skelmersdale, L.

Craigavon, V.

Kemsley, V.

Soames, L. (L. President.)

Cullen of Ashbourne, L.

Kilmany, L.

Spens, L.

Davidson, V.

Kinloss, Ly.

Strathcarron, L.

de Clifford, L.

Lindsey and Abingdon, E.

Strathclyde, L.

De Freyne, L.

Long, V.

Sudeley, L.

Denham, L. [Teller.]

Loudoun, C.

Swansea, L.

Derwent, L.

Lyell, L.

Swinton, E.

Drumalbyn, L.

McAlpine of Moffat, L.

Trefgarne, L.

Dundee, E.

Macleod of Borve, B.

Tryon, L.

Effingham, E.

Mancroft, L.

Vaux of Harrowden, L.

Ellenborough, L.

Marley, L.

Vickers, B.

Elliot of Harwood, B.

Merrivale, L.

Ward of Witley, V.

Ely, M.

Mills, V.

Westbury, L.

Emmet of Amberley, B.

Morris, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

FERRANTI: NEB SHAREHOLDING
3.55 p.m.
Lord TREFGARNE: My Lords, with your Lordships' permission I will repeat the Statement being made in the other place by my right honourable friend the Secretary of State for Industry. The Statement is as follows:
"With permission, Mr Speaker, I will make a statement about the disposal of the NEB's shareholding
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in Ferranti. I undertook in our recent debate to study what was said and to report to the House.
"The overwhelming view of the House was that if the NEB's shares were to be sold, they should he sold in such a way as to safeguard, at least temporarily, Ferranti's independence.
"I had told the House that a placing of shares to achieve such a purpose would tend to be below market price, so that the taxpayer would probably get less than he would if bids for the company were considered. Moreover, to place the shares without conditions

247
might not meet the purpose, since it might be possible for an over-bid at an attractive price to succeed. In that case the taxpayer would not have the benefit from the higher price, and the independence of the company, which would have been the purpose of the exercise, would not have been preserved.
"I pointed out that conditions could be imposed, but that they would further lower the price. I explained that a placing of shares, with conditions, with a group of institutions, would not provide a guarantee of independence.
" The board of the NEB told me that in all the circumstances, as a matter of commercial judgment, they considered the right course was to place the shares with institutions. But they thought that to impose conditions on the disposal was not a normal commercial action and accordingly they asked me to give them a direction. This I have done. Under powers in the Industry Act 1975 I directed the NEB yesterday to sell their shares on terms under which each purchaser agrees not to dispose of any interest in them for two years without the consent of the NEB. I have also directed the NEB to retain 4 per cent. of their holding for Ferranti's employees under an appropriate scheme. A copy of this direction has been laid before Parliament.
"The NEB hopes to place the shares at £5.30 each. This compares with £5.97, the price immediately prior to the suspension of the shares yesterday morning—a discount of about 11 per cent.
"The cost to the taxpayer of this arrangement, as distinct from selling the shares to the highest bidder, cannot be known. It must be recognised, however, that a successful bid might —I repeat, might—have been referred to the Monopolies and Mergers Commission, and some months would have passed before the outcome was known. Had the decision gone against the bidder the taxpayers' interest would have suffered, and even a favourable decision would have deferred the sale receipts for some time. I believe, therefore, that the balance of advantage lies with a placing, subject to conditions, despite a small net loss to the taxpayer.
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"I believe that the whole House will wish the company well".
My Lords, that is the end of the Statement.
Lord PONSONBY of SHULBREDE: My Lords, I thank the noble Lord for repeating the Statement being made by the Secretary of State in another place. The Statement largely repeats what many of your Lordships may have read in the daily press today. Although in fact the daily press conjecture that the loss to the taxpayer might be something in the order of £7 million, I see that that figure was not actually included in the Statement. However, if any of your Lordships had not read the daily press you would have greeted this Statement with some element of incredulity, in view of the Prime Minister's Statement in another place three weeks ago that the NEB must be allowed to dispose of the shares in Ferranti at the best possible price.
I am sure that all of us welcome this change of heart and the knowledge that Ferranti is to be protected from possible foreign control and is not to be absorbed into another British conglomerate. One also welcomes the fact that one effect of this decision will be that jobs will be saved in Scotland. Also, I am bound to comment that one is pleased to know that the Government are sometimes capable of being flexible. But one must continue to question the wisdom of selling off the Government holding in a company whose business is largely of a defence nature. This is an area of business where market forces do not play a significant part.
I am sure that we on this side of the House regret that this step has had to be taken at all, but we welcome the way in which it is now being taken and I am sure we would also like to join the noble Lord in wishing the company well in the future.
4.2 p.m.
Viscount SIMON: My Lords, may I, on behalf of my noble friends, also thank the noble Lord for repeating this Statement. I think certainly it would be very rash of me, with my small knowledge of these matters, to comment on the terms which the Government outline in this Statement, but I feel that it is of the utmost

249
importance that the independence of Ferranti should be maintained. If, as I assume, it has been ascertained that at this price the institutions will be prepared to take up the shares, then I would accept that the cost to the community is worth paying for securing the independence of Ferranti.
I should like to ask the noble Lord one question about the retention of some shares for the benefit of employees under an appropriate scheme. I am wondering whether the noble Lord can tell us anything about the appropriate scheme, how it is going to work, and in particular whether the employees' shares issued under the scheme will also be subject to being held for a period before they can be disposed of?
Lord TREFGARNE: My Lords, I am grateful to both noble Lords for, as I think I can call it, their welcome of the Statement, although I accept the reservations expressed by the noble Lord, Lord Ponsonby. The noble Lord referred to the preferability, as he saw it, of the company remaining in Government ownership having regard in particular to its role in defence products. I remember discussing that point with the noble Lord when we dealt with the Aerospace Bill some months ago, and I am afraid my view remains that there is no particular reason for a company to remain in Government ownership just because it deals with the Government as an important customer.
As for the details of the employee shareholding scheme about which the noble Viscount, Lord Simon, asked, he will appreciate that the direction to the NEB was issued only yesterday. I am not yet in a position to give any details of the scheme which will be devised.
Lord LEE of NEWTON: My Lords, is the noble Lord aware that this is a case of a firm which was rescued from bankruptcy by public control, and that now, whether we agree with the method by which it is to be disposed of or not, the taxpayer has certainly made a terrifically good deal by it having been in the custody of the NEB? Is the noble Lord aware that as recently as the period when the Industry Bill was before the House it
250
was emphasised from the Government Front Bench that firms which have a scientific product such as Ferranti should not be disposed of, that the Government were keen that the NEB should retain control of firms of that nature? Why is it that this change of heart has now taken place? Is the noble Lord aware that, as they are going to dispose of it, for my part I would agree with my noble friend Lord Ponsonby that this is the best way to do it? I should have thought that this is the best way to ensure that the ownership remains in British hands, but the fate of the employees of a number of Ferranti firms may well depend upon the sale in the manner the Government have now agreed upon. From that point of view I would agree that it is right to do it that way.
Lord TREFGARNE: My Lords, I do not think it right to say that the Government have said that high techonlogy firms should remain in public ownership. Certainly we have said that one of the remaining functions of the NEB should be to catalyse and promote in the highest realms of technology enterprise which might not otherwise be launched. But certainly it is no part of our policy that companies so launched should remain in public ownership indefinitely. In any event, I think Ferranti is a special case in this context. It was virtually a going concern when the Government took an interest in it, and we think the time has now come for the disposal in the terms I have described.
Lord RENTON: My Lords, is my noble friend aware that there is no company in this country which has done more to keep this country in the forefront of technological progress in the sciences of peace and war than the Ferranti company, but that in order to achieve their successes they have in the past mostly done best when they were independent? Therefore, one welcomes the difficult decision which the Government have had to make, which underlines the need for independence.
Lord TREFGARNE: My Lords, I am sure my noble friend is right. I think the Ferranti company for all its great achievements to date will now go from strength to strength under its new ownership.
Lord SHINWELL: My Lords, I do not propose to repeat references to the general principle involved, which is the disposal of the Ferranti firm. We have to recognise that this is part of the Government's policy and we have to accept it, whether we like it or not, until there is a change of Government or there is a U-turn, which has been referred to in the press and television and radio media. I do not propose to raise that at all. We have to accept the facts; the Government are in control.
What I am concerned about is this. The Ferranti firm has made a very valuable contribution to defence in electronics and in a variety of products to which I need not refer. I think it is generally known that Ferranti has made such a contribution. Can we have an assurance that this contribution will be controlled in the interests of our security, that there will be no private enterprise intervention in a matter of this sort? I want an assurance on that to begin with.
I should like also some assurance about the possibility of developments in technological advance in which the Ferranti firm has been involved. Are we to lose control of that? The shares will pass to certain contributors, the people who buy the shares. What assurance have we got that we can control them, and that the conditions that prevail under the new dispensation will be of a character consistent with our security?
Lord TREFGARNE: My Lords, I am not quite sure what assurance the noble Lord is asking for, but I can say, of course, that Ferranti will continue—exactly as it was doing so successfully before it came into public ownership—to be in the forefront of technological advance; I believe it will continue to be so.
Lord RHODES: My Lords, we ought not to allow this to pass without drawing attention to the fact that this is a classic instance of the necessity for Government intervention in certain circumstances at the right time. I should like to ask the Minister a question. Does he think that two years to move in dealing with these shares is enough?—because I do not.
Lord TREFGARNE: My Lords, as regards the first point raised by the noble Lord, I do not want to enlarge upon the
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circumstances that applied when Ferranti was taken into public ownership some years ago. However, as regards the second point raised by the noble Lord, Yes, I do think that two years is enough. There are arguments both ways, of course, and we have to reach a balanced judgment on these factors and two years was considered the right period.
Lord GISBOROUGH: My Lords, in view of the huge capital investment involved in the R and D for the new generations of technology involved, is my noble friend satisfied that they will be able to carry on without further recourse to greater capital? Can they manage on their own in the future with the huge capital resources necessary? Secondly, my noble friend said something about the possible losses on the sale price. Will he say something about the overall profit or loss from the start, including the amount of money injected into the company?
Lord TREFGARNE: My Lords, Yes, indeed. I shall deal with the two points raised by my noble friend. The first point raised the question of the continuing, capital requirements of Ferranti. Your Lordships will know that Ferranti recently made a rights issue for that purpose which, I think, according to my information, is likely to go very well. However, as regards the other point raised by my noble friend, I can tell him that the original cost to the Government of the Ferranti rescue operation—as it was then described—was about £7 million and the receipts to the Government arising from this disposal are likely to be about £60 million: so the bargain is a good one.
Lord TAYLOR of GRYFE: My Lords, will the noble Lord accept that the reason Ferranti was taken into part public ownership was the fact that the company had gone bankrupt or had suffered very substantial losses and required a rescue operation? Is he satisfied that the management and structure of Ferranti, now privatised once more, will respond to the market in a way that will make it continually prosperous?
Lord TREFGARNE: Yes, my Lords, we were of course anxious to see that the situation was as_described by the noble

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Lord and we are certainly satisfied about the new arrangement.
Lord SANDYS: My Lords, if it is your Lordships' wish, I think that we might continue now with consideration of the Social Security (No. 2) Bill.

SOCIAL SECURITY No. (2) BILL
4.13 p.m.
Consideration on Report resumed.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 3:
age 2, line 20, at end insert—
(" ( ) In subsection (1) of this section "the increase required by that subsection in respect of the sum "means such increase as the Secretary of State, at the time of laying the draft uprating order before Parliament, thinks necessary to restore the value of the sum in question.").
The noble Lord said: I beg to move Amendment No. 3. The object of this amendment is to make it clear that, for the purpose of this year's up-rating of benefits, the Secretary of State must estimate the likely increase in prices at the time when he lays the up-rating order before Parliament. The estimate of 16.5 per cent. was made at the time of the Budget and the Government clearly intend, from all that we have heard from them, to stick to it however implausible it may seem by the time the up-rating order is made.
I wish to call your Lordships' attention to Section 125(3) of the Social Security Act 1975 which provides that if, on a review of the benefit rates, the Secretary of State concludes that they have not retained their value he shall:
"…prepare and lay before each House of Parliament the draft of an up-rating order increasing those sums at least to such extent as he thinks necessary to restore their value".
However, Clause 125(1) of the Social Security Act 1975 says:
"The Secretary of State shall in the tax year 1975–76 and each subsequent tax year review the sums specified in"—
and it then goes on to say which parts of the Act—
" for the purpose of determining whether those sums have retained their value in relation to the general level of earnings or prices obtaining in Great Britain".
It is not entirely clear whether that means to such extent as he thinks necessary at the time of the review, or to such extent
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as he thinks necessary at the time of laying the draft order. In most years it would have made, I confess, very little difference, if any. This year, however, it makes a tremendous difference because it is becoming increasingly clear that the advice that the Secretary of State received at the time of the review which was before the Budget, was wrong, and that the rate of inflation—as I have already said many times—for the 12½month period to 24th November next, will be considerably more than 16.5 per cent. It is important, therefore, that when he comes to lay the draft order he should then make a fresh estimate of the probable increase in prices up to November and that the up-rating should he based on that new estimate and not on the out-of-date estimate announced at the time of the Budget.
I am not unmindful that this is likely to cause administrative difficulties, but I suggest that if the will is there, those difficulties can be overcome even if it means paying arrears of benefits some time after the up-rating date. The alternative of leaving the up-rating percentage at 16·5 per cent. is plainly unjust, but I think that it is doubly so when the 16·5 per cent. is further reduced by 5 per cent. cuts in respect of certain benefits. I hope that the Government will feel that this amendment is reasonable. We think that it is reasonable and that it is necessary for this course of action to be taken. I beg to move.
Baroness YOUNG: My Lords, the Government believe that, in fact, this amendment is unnecessary. The noble Lord, Lord Wells-Pestell, referred to the provisions of Section 125(3) of the Social Security Act 1975 which mean that when my right honourable friend the Secretary of State for Social Services lays a draft up-rating order, following upon a review, setting out the new benefit rates for the approval of both Houses of Parliament, he has to satisfy himself that the order increases the existing rates at least to such an extent as is necessary to restore their value in relation to the general level of prices—subject, of course, to the abatement of up to 5 per cent. in the increase of certain benefits tinder the provisions of this Bill.
These provisions to which the noble Lord has drawn attention and which I have

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confirmed, apply to benefits generally, in all years, whereas this amendment would apply only to benefits which are to be abated under this Bill and would appy only this one year, and in any subsequent year in which the provisions of Clause 1 of the Bill were used again. It would therefore, it seems to the Government, be entirely inappropriate to add the partial provision in this amendment to the comprehensive provision that has already been made. I can understand that the noble Lord, Lord Wells-Pestell, and his colleagues wish to clarify the position and I hope that now that the position has been made clear, the noble Lord will feel able to withdraw his amendment.
The noble Lord asked specifically about the estimate of 16·5 per cent. for price increases from November 1979 to November 1980, on which are based the proposed rates of benefit from November 1980 which were announced last March. The fact is that the proposed increases in pensions and other social security benefits from November this year are based on an estimate of a likely rise in prices of 16·5 per cent. over the period between the November 1979 up-rating and November 1980. This remains our estimate. With that explanation, I hope that the noble Lord will feel able to withdraw his amendment.
Lord UNDERHILL: My Lords, the noble Baroness has given her explanation, but it still does not meet the point that there will be this shortfall. When the Government took their decisions there could be no argument that this proposal was an economic necessity—I am not talking now about the 5 per cent. abatement. Nor could it be said that it was done in order to keep down public borrowing requirements. The fact is that the words here are:
" to restore the value of the sum in question",
and despite all the arguments which the noble Baroness has put forward, the fact is that the value of the sum in question will not be restored in November. The point of the amendment is to endeavour to put that position right.
Baroness YOUNG: My Lords, by leave of the House, I think there is confusion here on the part of the noble Lord, Lord Underhill. There are two matters at
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hand and this particular amendment is not concerned with the shortfall. This is concerned with the order setting out the new benefit rates, which have to be approved by both Houses of Parliament, in which the Secretary of State has to take into account the movement of prices from year to year. Whatever that figure is— and the figure that has been determined for this year is 16·5 per cent., which has to be approved—this would be abated by the 5 per cent.
The question of a shortfall is a separate issue and the answer which I gave the noble Lord, Lord Banks, makes it perfectly clear that there is not, in fact, a legal obligation on that particular aspect of it, although, of course, there is a legal obligation on the aspect of the up-rating, which is the part of it which is concerned with keeping it in line with the movement of prices: it is the aspect which is written into the 1975 Act, to which the noble Lord, Lord Wells-Pestell, referred and which I have confirmed. It is because that part is written into the Act that we believe this amendment would be unnecessary, for it would apply only to Clause 1 of this Bill and not to benefits generally. I do not think that that can be the wish of noble Lords opposite, because it would be a narrowing of the interpretation rather than the much wider one which is in present legislation.
On Question, amendment negatived.
4.23 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 4:
age 2, line 41, leave out subsection (4).
The noble Lord said: My Lords, this amendment would prevent the Government from repeating the 5 per cent. cuts in 1981 and 1982. The same amendment was debated at Committee stage on 16th June at columns 907 to 910 of the Official Report, when the noble Baroness, Lady Young, was asked for an assurance that no further cuts would be made once the benefits had been brought into tax. She not only failed to give such an assurance, but she ignored the point entirely in her reply.
It will be recalled that my noble friend Lord Wells-Pestell withdrew his amendment at the Committee stage in order to study the reply of the noble Baroness.

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We are not satisfied with the statement that the whole question will be considered in the light of circumstances at the time, and to say that it is essential and imperative that the Government have powers to put through proposals for a future abatement should necessity arise, serves only to indicate that the Government have not ruled out further abatements. The noble Baroness has said that the proposed abatement of 5 per cent. on the disabled and others was rough justice, and she has repeated that today. It is downright injustice, and the purpose of this amendment is to prevent this regrettable situation from being continued.
There are rumours of further drastic measures being taken by the Government to make more severe cuts in expenditure. Whether or not that is true, in this amendment we want to ensure that no further burden is borne by those whose circumstances do not warrant even the present 5 per cent. cut; if burdens have to be carried, let those who are fit, able and financially capable take them, and not the sick and the disabled. I beg to move.
Baroness YOUNG: My Lords, I have listened with great care to what the noble Lord, Lord Wallace of Coslany, has said in moving this amendment, and I must apologise to the House if I did not answer the questions to his satisfaction on Committee. I must clearly try again this time round. As, indeed, has been explained, this same amendment was discussed in Committee. The 5 per cent. abatement in 1980 is an integral part of the Government's overall strategy to achieve savings in public expenditure. It is essential that the Government have the power to put to Parliament proposals for a future abatement should the necessity arise. But I should like to emphasise yet again that the Government have at present no intention of repeating the abatement in either 1981 or 1982.
The noble Lord, Lord Wells-Pestell, asked in the similar debate that we had during the Committee proceedings why the Government need power to abate the benefits in November 1982 when their intention, which we have repeated today, is to bring these benefits into taxation in April 1982. As noble Lords will know, the Government intend to make unemployment benefit and supplementary benefit for the unemployed taxable in April
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1982. The employer's statutory sick pay scheme would bring a large proportion of payments made during sickness into taxation at about the same time. We intend to bring other benefit payments into taxation as soon as possible thereafter. However, it may not be possible to do this by November 1982. Flexibility is therefore needed so that the Government can decide, in the light of the tax position and of the economic circumstances at that time, whether the abatement should be repeated in 1982. As I have already said, it is not our intention to make further abatement once the benefits become taxable, but we must retain the power to do so should the economic circumstances demand it.
The noble Lord, Lord Wallace, may find this a very unsatisfactory reply, but I think he would accept—as, indeed, any prudent Government would accept—that when putting legislation like this on to the statute book, they have to make provisions so that, should difficult circumstances arise, they could meet them. Of course, if they do not consider these circumstances in a statute at this point, if the difficult circumstances do arise they then have to move other legislation to meet them. This happened during the Government of the noble Lord, and indeed, it has happened in other Governments. In this particular case we believe that when we are having a debate upon this Bill it is right to include in it measures which we do not expect to have to use, but which at least would be there should the circumstances demand it.
I should like to repeat one further important point about subsection (4) which I made when we were discussing an earlier amendment, but which I think is worth emphasis again. It is that any order made under the subsection would be subject to Affirmative Resolution. Thus, if the Government decide that it is necessary to repeat the abatement, noble Lords will have an opportunity to debate the decision when the order is laid. I must emphasise this point because I believe that it is a most important safeguard. Further abatements cannot be made under this Bill without the prior approval of Parliament. Therefore, the position is that we do not expect to have to use this power. If we do have to use it, it would be contained in an order which would then have to be debated.

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We hope that, with those assurances, the noble Lord, Lord Wallace, will at any rate feel that I have given him an answer to his question. But it is an important point. It is one of the provisions in the Bill which we regard as a fall-back position should economic necessity make it necessary to use it. However, as I have indicated, it is not a provision which we expect to have to use at present.
Lord WELLS-PESTELL: My Lords, I hope that the noble Baroness the Minister will tomorrow read carefully what she has said. It is a pretty disgraceful statement to say that while it is not the Government's intention to make any further cuts in three years' time they must nevertheless have provision in the Social Security (No. 2) Bill to enable them to do so if they want to. Let me remind the Government what they are doing. They are cutting the benefits, as I have said time and time again, of people who can least afford such cuts. For the next two or three years they are not going to get whatever is the accepted increase in prices; they are going to get 5 per cent. a year less.
I do not think we can overstress the fact that what the Government are doing is seeking to reduce certain benefits by 15 per cent. without giving an assurance that they will make up these cuts in the future when they are able to do so. Certainly they ought to give an undertaking that they will make good these
cuts on the benefits becoming taxable. It really is deplorable that the Government should take the line they are taking. I would say myself that it is entirely contrary to Section 125(1) of the Social Security Act 1975 where it lays upon the Secretary of State the duty
"… of determining whether those sums have retained their value in relation to the general level of earnings or prices obtaining in Great Britain".
There is that duty imposed upon the Secretary of State. It is a duty that he is not carrying out. I question whether it is legal to do what he is doing. Perhaps one of these days we may be able to test that in another place.
Baroness YOUNG: My Lords, with the leave of the House, I should like to correct one point. We are not making cuts of 15 per cent. As I have indicated, but it is an important point and I should like to emphasise it again, under Clause 1 the up-rating is 5 per cent. less for those to whom Clause I applies. The abatement cannot be applied in 1981 or in 1982 without an order being laid. It is therefore not correct to say that the abatement is 15 per cent.; it is 5 per cent. That is an important matter of fact.
4.34 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents, 103.

CONTENTS

Airedale, L.

Davies of Penrhys, L.

Lloyd of Hampstead, L.

Ardwick, L.

Diamond, L.

Lloyd of Kilgerran, L.

Aylestone, L.

Elwyn-Jones, L.

Lockwood, B.

Bacon, B.

Evans of Claughton, L.

Lovell-Davis, L.

Balogh, L.

Fisher of Rednal, B.

McNair, L.

Banks, L.

Gaitskell, B.

Maelor, L.

Beswick, L.

Gardiner, L.

Masham of Ilton, B.

Birk, B.

Gladwyn, L.

Milford, L.

Blease, L.[Teller.]

Glenamara, L.

Ogmore, L.

Blyton, L.

Gordon-Walker, L.

Oram, L.

Boston of Faversham, L.

Goronwy-Roberts, L.

Parry, L.

Bowden, L.

Gregson, L.

Peart, L.

Brockway, L.

Hale, L.

Phillips, B.

Bruce of Donington, L.

Henderson, L.

Pitt of Hampstead, L.

Burton of Coventry, B.

Houghton of Sowerby, L.

Ponsonby of Shulbrede, L. [Teller.]

Caradon, L.

Janner, L.

Chitnis, L.

Kaldor, L.

Porritt, L.

Cledwyn of Penrhos, L.

Kilmarnock, L.

Rhodes, L.

Collison, L.

Leatherland, L.

Ritchie-Calder, L.

Crowther-Hunt, L.

Lee of Newton, L.

Ross of Marnock, L.

Darling of Hillsborough L.

Leonard, L.

Sainsbury, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Seear, B.

Segal, L.

Strauss, L.

Wells-Pestell, L.

Shinwell, L.

Taylor of Mansfield, L.

White, B.

Simon, V.

Underhill, L.

Willis, L.

Stamp, L.

Wallace of Coslany, L.

Wilson of Radcliffe, L.

Stedman, B.

Walston, L.

Winstanley, L.

Stone, L.

Wedderburn of Charlton, L.

Wynne-Jones, L.

Strabolgi, L.

NOT-CONTENTS

Airey of Abingdon, B.

Falkland, V.

Mowbray and Stourton, L.

Alexander of Tunis, E.

Fraser of Kilmorack, L.

Murton of Lindisfarne, L.

Alport, L.

Gage, V.

Nugent of Guildford, L.

Auckland, L.

Gainford, L.

Orkney, E.

Avon, E.

Geddes, L.

Orr-Ewing, L.

Bellwin, L.

Gisborough, L.

Redmayne, L.

Belstead, L.

Glenkinglas, L.

Reigate, L.

Berkeley, B.

Gridley, L.

Renton, L.

Bessborough, E.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Robbins, L.

Birdwood, L.

Roberthall, L.

Bridgeman, V.

Hankey, L.

Rochdale, V.

Broadbridge, L.

Hanworth, V.

Saint Oswald, L.

Campbell of Croy, L.

Hawke, L.

Salisbury, M.

Cathcart, E.

Henley, L.

Sandford, L.

Chelwood, L.

Hillingdon, L.

Sandys, L. [Teller.]

Chesham, L.

Holderness, L.

Sempill, Ly.

Clifford of Chudleigh, L.

Hood, V.

Sharpies, B.

Clitheroe, L.

Ilchester, E.

Skelmersdale, I

Cork and Orrery, E.

Ironside, L.

Soames, L.(L. President.)

Craigavon, V.

Kemsley, V.

Spens, L.

Croft, L.

Kilmany, L.

Strathcarron, L.

Cullen of Ashbourne, L.

Kinloss, Ly.

Strathclyde, L.

Davidson, V.

Lindsey and Abingdon, E.

Strathspey, L.

de Clifford, L.

Long, V.

Swansea, L.

De Freyne, L. [Teller.]

Loudoun, C.

Swinton, E.

Denham, L.

Lucas of Chilworth, L.

Teviot, L.

Derwent, L.

Luke, L.

Vaux of Harrowden, L.

Drumalbyn, L.

Lyell, L.

Vickers, B.

Dundee, E.

Mackay of Clashfern, L.

Vivian, L.

Effingham, E.

Macleod of Borve, B.

Ward of Witley, V.

Ellenborough, L.

Mancroft, L.

Westbury, L.

Elliot of Harwood, B.

Marley, L.

Yarborough, E.

Emmet of Amberley, B.

Merrivale, L.

Young, B.

Exeter, M.

Mills, V.

Young

Fairfax of Cameron, L.

Milverton, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.42 p.m.
Lord BANKS Lord BANKS moved Amendment No. 5:
After Clause I, insert the following new clause:
"Increases in invalidity payments
( .Where in consequence of a review under section 125 of the principal Act in the tax year in which invalidity pension, invalidity allowance and unemployability supplement of disablement benefit are made taxable the Secretary of State is required by subsection (3) of the principal Act to prepare and lay before Parliament the draft of an order increasing the weekly rate of any one of these benefits, the increase provided by the draft in respect of the benefit shall be greater than the increase required by that subsection in respect of the benefit by an amount that is not less than the amount the specified benefit has been abated in consequenec of section 1 of this Act.")
The noble Lord said: My Lords, in Committee I moved an amendment de-
262
signed to ensure that when the benefits affected by Clause 1 are brought into tax, the abatement suffered in the interim period as a result of Clause I should be restored. I pointed out that if that were not done, the abatement would be perpetuated and compounded. The noble and learned Lord, Lord Mackay of Clashfern, said that in the Government's view it would be most unwise at this stage to enter into such a general commitment so far ahead. I drew attention to the fact that if the Government could have brought these benefits into tax overnight, they would have done so, and that they would then have been committed to precisely the same commitment as the amendment sought.
It seemed to me, and still does, a nonsense to refuse to accept that commitment because of the interim period during which abatement instead of taxation will

263
operate. However, the noble and learned Lord, Lord Mackay of Clashfern, did not want to go beyond the undertaking given by the Secretary of State that, subject to the availability of resources, the abatement in respect of invalidity pension, invalidity allowance and the unemployability supplement in respect of disablement benefit would be restored in value when brought into tax.
This amendment is more narrowly drawn, therefore, than the one the noble and learned Lord turned down in Committee and it would give effect only to the Secretary of State's assurance. The Secretary of State's assurance was subject to the availability of resources. The passage of this amendment would necessitate primary legislation if the Government felt that resources were not available. The question of the availability of resources would then be debated. The amendment would therefore ensure that what the Government have agreed as reasonable and desirable should now happen, unless the Government convinces Parliament that resources are not in fact available. I beg to move.
Lord UNDERHILL: My Lords, I support the amendment, and I wish to emphasise that we are not arguing about the taxation of benefits in relation to the amendment, nor are we arguing about the general question of abatement; we are discussing solely the position of invalidity payments and their restoration, when they come into taxation, to the position as of now. I would remind the House that this is the first time that invalidity benefits will be out of step with retirement pensions. As I said previously, on the figures, which we accept, of the 650,000 invalidity claimants, some 250,000 either will not pay tax or will be paying less tax than the abatement, and we have the assurance of the Secretary of State, which we accept, but which has the qualification, as the noble Lord, Lord Banks, emphasised, that it is subject to the availability of resources.
This is not a party political issue; it is a question of the proper treatment of those unfortunate people in our society who are on invalidity payments. I would also remind noble Lords opposite that this is not in the Conservative Party manifesto, a copy of which I have with me. It also involved bringing unemployment and
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short-term sickness benefit within the tax system, it said, but it referred to short-term sickness benefit, not invalidity payments. In fact, there is a separate paragraph in it dealing with the position of invalidity payments, which the Conservative Party said it hoped to improve.
The noble Lord, Lord Banks, and those who support the amendment are trying to ensure that it will be restored, and that that should not depend on the economic circumstances of the time. After all, if the nation has reached the position when these benefits come into taxation that we can solve Britain's economic problems only by continuing what I regard as the unjust treatment of those on invalidity payments, then, frankly, we shall be in a very desperate state indeed. I am certain that at that time, even if the economic circumstances are still difficult, it will not be beyond the wit of any Government so to adjust things that proper treatment is accorded to those persons who, but for the present position of abatement, would be on the same level as those on retirement pensions, but they are being brought below that situation. I therefore hope noble Lords will support the amendment.
Baroness MASHAM of ILTON: My Lords, I too support the amendment, and I will be brief because your Lordships know only too well that the disabled have been hit very badly by inflation. Everybody concerned with disabled people and the disabled themselves are extremely worried at this time. If the Government could accept the amendment, which seems sensible, they would be taking a wise course. I therefore hope that if there is a Division your Lordships will support the amendment.
4.49 p.m.
Baroness YOUNG: My Lords, as the noble Lord, Lord Banks, said, this amendment is similar to amendments proposed by the noble Lords, Lord Wells-Pestell and Lord Banks, in Committee. I accept that it differs from earlier amendments in important respects. In Committee we were discussing an amendment intended to ensure that the value of all the benefits affected by Clause 1 of the Bill would be restored when they were brought into taxation. This amendment seeks to restore the value of only

265
the invalidity benefit and unemployability supplement, and to do so with effect from the November up-rating following the extension of tax to those benefits.
As my noble and learned friend confirmed during Committee, the Government share the view that invalidity benefit and unemployability supplement are essentially long-term benefits, even though invalidity benefit can be, and is, paid for very short spells of incapacity. It was because of this that my right honourable friend the Secretary of State was able to give the special assurance, which has been quoted several times already this afternoon, about restoring their value when they are brought into taxation. The details of this assurance have already been given to your Lordships, but I shall repeat them. The Secretary of State has given an undertaking that, subject to the availability of resources, invalidity benefit and unemployability supplement will be fully restored when they are brought into taxation; that is, they will be realigned to the basic rate of retirement pension.
The intention of the amendment is to incorporate that undertaking into the Bill, excluding of course—and this is the key point, which I am sure the noble Lord, Lord Banks, will appreciate—the phrase
"subject to the availability of resources".
In Committee the noble Lord, Lord Banks, implied that these benefits should be restored whether or not resources were to be available. He said,
"But it is only if resources are available that this is to he done and … that phrase is at best an aspiration, and at worst an escape hatch" —[Official Report, 16/6/80; col. 877.]
Of course we can do this only if resources are available.
I listened very carefully to what the noble Baroness, Lady Masham of Ilton, said about this matter. I should like to give her an assurance. I should like not to have to move Clause 1 at all, or even the Bill, but to be able to say, "Of course, we will put everything right". But that would be an irresponsible thing to do because none of us can give a guarantee that resources will be available. Noble Lords opposite, including the noble Lord, Lord Wallace of Coslany, cannot be
266
certain. I believe that in public life it is always wrong to make a promise, let alone write something into a Bill, if one cannot be absolutely certain about delivering it. It would mean holding out false hopes—
Lord WALLACE of COSLANY: My Lords, the noble Baroness has brought me into the picture. My argument is that we should not even be considering this amendment. The Government should not have done what they now propose. Another point I should like to make to the noble Baroness is that this section of the Community is already being hit by local government cuts involving the personal social services. They are being doubly hit, and it is grossly unfair to them. I am a pensioner who pays income tax, and I should not in the least mind paying additional tax if this particular misbegotten idea were got rid of. Many people, upon realising the facts, would feel most apprehensive, but the general public do not know the situation. What the Government are proposing should not have been done.
Baroness YOUNG: My Lords, I recognise the very strong feeling of the House on these questions. This is not an easy matter for any of us, and we have previously been over the ground in regard to the Government's reasons for introducing this legislation at all. I also take the other point of the noble Lord about difficulties that arise in local authority social services departments, but in this connection I should point out that invalidity benefit was, after all, introduced by a Conservative Government in 1971. We also introduced the attendance allowance, which was increased by nearly 20 per cent. last year, and will be raised again this year in line with the expected increase in prices. Supplementary benefits and the noncontributory invalidity pension have similarly been protected against inflation, while the mobility allowance was raised from £10 to £12 last November, and this November will go up to £14.50 a week. Fifteen thousand disabled people aged between 63 and 64 were phased into the mobility allowance last November, sooner than the Labour Government had intended, and from November 1980 the disabled will be able to claim the longer-term rate of supplementary benefit after one year instead of two years.

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I make those points in order to indicate that we are considering what improvements we can make within the limitations at our disposal. We should like to do more, and I hope that the noble Baroness, Lady Masham of Ilton, will accept that this is the kind of amendment to which we should like to agree, if we could. We all agree with the principle of it; nobody would argue against that. But we must be in a position so as to be able to take account of any unforeseen developments, and Clause 1 is primarily about saving money. Anticipation of tax liability is a very important aspect of Clause 1, but it is not the primary purpose of the clause. The fact is that we must live with the implications of our present economic difficulties.
We could argue about whether or not we should write this proposal into the Bill, but I have always taken the view that in public life I would not make promises that I could not be certain of delivering. I should have thought that all of us in this country have gone through enough of the vicissitudes of international affairs —including the increased price of oil, which we cannot control and which affects our lives and the rate of inflation—to realise that it would be most imprudent to write into a Bill a provision which we might later have to repeal, thus causing great disappointment.
I hope that invalidity pensioners will accept the assurances that have been given in both Houses: that if resources allow, we shall make good the shortfalls and the deficiencies once the pension is brought into tax. Our past record on these matters is good. We introduced a number of new benefits when we had the money to do so, and I believe that once again, as the economy improves—as I confidently expect it will—we shall be able to make good the deficiencies. We have given undertakings to look at the matter. I am quite sure that my right honourable friend the Secretary of State for Social Services would not have given those undertakings if he did not intend to stand by them.
Lord WELLS-PESTELL: My Lords, I do not think that it would be a very profitable exercise for either side to engage in setting out all the benefits which various Governments have introduced. I shall not burden your Lordships by mentioning
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the number of benefits introduced by the party of which I am a member when we were in Government. I mention only one: the mobility allowance. To enumerate the benefits does not serve a useful purpose.
However, what is important is to look at the position before us today. We are dealing with a group of people who are deprived. I do not wish to use the word "deprived and do so only because I cannot think of a better one. These people are deprived of most of those things which normal people experience, and they therefore require special attention. Invalids, particularly those who cannot get about under their own steam, often appear to he amongst the most cheerful people whom one could ever hope to meet. Nevertheless, a cloud of limitation and misery is perpetually hanging over them, and if there is anything that we can do to help them, we ought to do it.
I accept what the noble Baroness the Minister says about it being the intention of the Government to do something when resources are available, but so often these points are included in order to provide a get-out. If the will is there—and I wonder whether it really is—there is no reason why the amendment should not be accepted.
The noble Baroness the Minister said, or at least implied, that there was nothing between the Government and the noble Lord, Lord Banks. I go so far as to say that the noble Lord has presented an amendment which will assist the Government in their intention. If the Government were to accept the amendment, there would be no doubt in people's minds about their paying lip-service to the idea. Rather it would be seen as a real determination on the Government's part to take action along the lines that we have been discussing.
Viscount SIMON: My Lords, I wonder whether the noble Baroness can help me about one thing. She spoke of her unwillingness—and I understand this—to commit the Government to expenditure when they do not know whether they will be able to afford it when the time comes. But is there not a great mass of expenditure already provided under social security on exactly those terms? They are committed to that. This is a very small

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addition, is it not? I cannot see that there is any real difficulty in principle in committing the Government to this small addition to expenditure to which they are already committed. If the noble Baroness is saying that no Government in present circumstances—and we know they are difficult enough—can commit themselves to anything, then we shall have to repeal a great deal of the present arrangements because in fact there are commitments for next year and the years to come in relation to the levels of pension, are there not?
5.1 p.m.
Baroness YOUNG: My Lords, with the leave of the House, perhaps I may answer that point from the noble Viscount, Lord Simon. It is perfectly true that we have already debated issues in which there are statutory obligations—for example, looking at the whole question of the movement of prices in relation to retirement pensions. These matters already appear in legislation. But, of course, the difficulties that we have got ourselves into, and one of the reasons why we have to have this Bill, is that these matters are in legislation and they are now having to be repealed, and we have written Clause I into this Bill. It surely would not he wise, therefore, to accept a situation in which we would be writing into this Bill something which was a commitment for the future which we could not fulfil.
Whatever may have been done in the past, in better times, in the expectation of fulfilment—and I have not the slightest doubt that when these undertakings were agreed to there was a categorical assurance of this—we now find ourselves, when times are difficult, having to produce a Bill such as the one which is before the House today. It therefore seems to me that it would not be wise, in this Bill, which meets an emergency situation, to introduce something which we might not be able to fulfil in the future. That is one of the lessons that I think we have learned over this matter, and one which I think we have to be careful about. It is for that reason that we cannot accept the amendment as it stands, though I agree that there is no disagreement between us at all on the principle.
Lord BANKS: My Lords, I agree very strongly with the view of the noble Lord, Lord Underhill, that this is not a party political point. I think this is a matter which concerns people in all parts of the House, because, as the noble Baroness, Lady Masham, said, they appreciate that inflation has hit the disabled particularly hard, with the extra expenses that disablement brings. The noble Baroness, Lady Young, has made a great point about the resources being available, but, although she put forward her argument extremely lucidly, I do not think really she succeeded in dealing with the point which was raised by my noble friend Lord Simon. After all, the whole Bill saves only £500 million, and the noble Baroness herself has told us that £20,000 million is what is spent altogether on social security. To suggest that it is necessary to leave out of legislation this particular commitment in order to meet an emergency situation or a potential emergency situation seems to me to be exaggerating beyond reason the point which she is making.
As my noble friend Lord Simon has said, we do in fact write into legislation specific commitments which can be reversed by Parliament if it should prove necessary. One of those at the moment is that the benefits referred to in Clause I are to be increased in line with prices. There is to be a short interim period during which there will be abatement; but that is only an interim measure because at the moment these are not taxed, and once they are taxed, as I understand the position, there is a commitment, confirmed in this Bill, to continue to increase the benefits in line with prices.
Again, in addition to that there is the point which I made earlier, and which I do not think has been answered, that this abatement is only an interim measure because the Government cannot immediately bring these benefits into taxation. If they could bring them into taxation, I am sure they would do it immediately. If they did that, they would then be committed under the legislation to increase in line with prices. So they would quite happily accept the very commitment, since this would produce exactly the same level of benefits at the time when they are, under present circumstances, going to be brought into taxation. They would be quite happy to accept the commitment

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in those circumstances, but not in the circumstances of the Bill, which seems to me to be a nonsense, as I said earlier.
All that the amendment seeks to do is to put into the Bill the assurance which the Secretary of State has given, knowing that if at that time there should be such a crisis that the comparatively small amount of money needed to meet this particular commitment is not available, then it will be possible to come to Parliament and seek legislative power in order
to remove the commitment at that stage. But that will be a very unlikely happening, in my view; and by accepting this amendment we shall give a degree of certainty to this assurance which will bring a great deal of relief and satisfaction to those directly involved.
5.7 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 91; Not-Contents, 98.

CONTENTS

Ardwick, L.

Glenamara, L.

Peart, L.

Aylestone, L.

Gordon-Walker, L.

Phillips, B.

Bacon, B.

Goronwy-Roberts, L.

Pitt of Hampstead, L.

Balogh, L.

Granville of Eye, L.

Ponsonby of Shulbrede, L

Banks, L.

Hale, L.

Rhodes, L.

Barrington, V.

Hanworth, V.

Ritchie-Calder, L.

Bernstein, L.

Henderson, L.

Ross of Marnock, L.

Birk, B.

Houghton of Sowerby, L.

Sainsbury, L.

Blease, L.

Janner, L.

Seear, B.

Blyton, L.

Kaldor, L.

Segal, L.

Boston of Faversham, L.

Kilmarnock, L.

Shinwell, L.

Bowden, L.

Kinloss, Ly.

Simon, V. [Teller.]

Brockway, L.

Leatherland, L.

Stamp, L.

Bruce of Donington, L.

Lee of Newton, L.

Stedman, B.

Burton of Coventry, B.

Leonard, L.

Stone, L.

Caradon, L.

Llewelyn-Davies of Hastoe, B.

Strabolgi, L.

Chitnis, L.

Lloyd of Hampstead, L.

Strauss, L.

Cledwyn of Penrhos, L.

Lockwood, B.

Swinton, E.

Clifford of Chudleigh, L.

Longford, E.

Taylor of Mansfield, L.

Collison, L.

Loudoun, C.

Underhill, L.

Craigavon, V.

Lovell-Davis, L.

Wallace of Coslany, L.

Crowther-Hunt, L.

McNair, L. [Teller.]

Walston, L.

Darling of Hillsborough, L.

Maelor, L.

Wedderburn of Charlton, L.

Davies of Leek, L.

Masham of Ilton, B.

Wells-Pestell, L.

Davies of Penrhys, L.

Meston, L.

White, B.

Diamond, L.

Milverton, L.

Willis, L.

Elwyn-Jones, L.

Mishcon, L.

Wilson of Radcliffe, L.

Evans of Claughton, L.

Ogmore, L.

Winstanley, L.

Fisher of Rednal, B.

Oram, L.

Wootton of Abinger, B.

Gaitskell, B.

Parry, L.

Wynne-Jones, L.

Gardiner, L.

NOT-CONTENTS

Adeane, L.

Cork and Orrery, E.

Ferrier, L.

Ailesbury, M.

Croft, L.

Fraser of Kilmorack, L.

Airey of Abingdon, B.

Cullen of Ashbourne, L.

Gainford, L.

Alexander of Tunis, E.

Davidson, V.

Gibson-Watt, L.

Alport, L.

de Clifford, L.

Gisborough, L.

Atholl, D.

De Freyne, L.

Glenkinglas, L.

Auckland, L.

De L'Isle, V.

Greenway, L.

Avon, E.

Denham, L.

Gridley, L.

Bellwin, L.

Derwent, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Belstead, L.

Drumalbyn, L.

Berkeley, B.

Duncan-Sandys, L.

Hawke, L.

Bessborough, E.

Dundee, E.

Henley, L.

Bridgeman, V.

Ebbisham, L.

Hillingdon, L.

Broadbridge, L.

Ellenborough, L.

Holderness, L.

Brookeborough, V.

Elliot of Harwood, B.

Ironside, L.

Campbell of Croy, L.

Emmet of Amberley, B.

Kemsley, V.

Cathcart, E.

Exeter, M.

Kilmany, L.

Chesham, L.

Fairfax of Cameron, L.

Kimberley, E.

Clitheroe, L.

Falkland, V.

Lindsey and Abingdon, E.

Long, V.

Redmayne, L.

Strathcarron, L.

Lucas of Chilworth, L.

Reigate, L.

Strathclyde, L.

Lyell, L.

Ronton, L.

Strathspey, L.

Mackay of Clashfern, L.

Robbins, L.

Sudeley, L.

Macleod of Borve, B.

Rochdale, V.

Swansea, L.

Mancroft, L.

Saint Oswald, L.

Teviot, L.

Marley, L.

Salisbury, M.

Trefgarne, L.

Merrivale, L.

Sandford, L.

Vaux of Harrowden, L.

Mills, V.

Sandys, L. [Teller.]

Vickers, B.

Mowbray and Stourton, L. [Teller.]

Sempill, Ly.

Vivian, L.

Sharpies, B.

Ward of Witley, V.

Murton of Lindisfarne, L.

Skelmersdale, L.

Westbury, L.

Nugent of Guildford, L.

Soames, L. (L. President.)

Yarborough, E.

Orkney, E.

Somers, L.

Young, B.

Orr-Ewing, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 2 [Abolition of compulsory up-rating of amount certain pensioners may earn without abating pensions]:
5.15 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 6:
Page 3, line 21, leave out ("be omitted") and insert ("not have effect in any year in which the increase which the Secretary of State considers necessary to restore the value of the sums specified in that paragraph is less than 10 per cent. of those sums.")
The noble Lord said: My Lords, the effect of this amendment would be that from 1981 onwards the pensioner's earnings limit would have to he up-rated in any year when the expected rate of increase in earnings was 10 per cent. or more. This is a compromise proposal intended to ensure that the earnings limit is not so badly eroded by inflation that the cost of abolishing the earnings rule becomes inordinately high.
As noble Lords will remember, the earnings rule was debated in the Committee stage on amendments moved by the noble Lord, Lord Reigate, and my noble friend Lord Wells-Pestell. Both noble Lords referred to the Conservative manifesto commitment to abolish the earnings rule during the lifetime of this Parliament. In his reply to my noble friend the noble Lord, Lord Cullen, said that the present economic situation was very had and that was why the Government were having to eat their words on the manifesto commitment. We want to be extremely helpful. This amendment, as a compromise, is designed to ease and facilititate the Government's digestive processes. It is hoped that such a friendly gesture will prove acceptable to the Government.
Lord CULLEN of ASHBOURNE: My Lords, we have found it necessary to freeze the earnings limit for retirement pensioners at its present level of £52 per week, and to lift the statutory requirement to increase it in future years because of the need—which we keep having to repeat—to hold back public expenditure. We recognise that this is not a popular measure, but we believe it to be necessary in the present economic circumstances.
We very much hope that we will be in a position to increase the earnings limit next year. But we cannot at this stage say whether this will be possible. For this reason it is not desirable for a longterm limitation on our ability to freeze the limit to be written into the Bill. It makes for complication in something which needs to be simple and straight-forward: it expects to be long-lasting something which we envisage as temporary. If a long-term provision were wanted, we should not in any event want one, as in this amendment, which ignored the cumulative effect of successive increases which were less than 10 per cent. As your Lordships know, our standing aim is to do away with the earnings rule for retirement pensioners, not just to increase the weekly amount of earnings every year, and we are committed to doing this as soon as circumstances permit.
Baroness PHILLIPS: My Lords, the noble Lord is always so charming that it is difficult to have to follow him and to contradict him. He said that this was not a popular measure. He can repeat that. It goes further; it is an unjust measure. I am doubtful about the amount of money—and I have said this many times—that would be saved, because no Government can know how many retirement pensioners are going to work and therefore can be caught by this; and since

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if they do work and receive money it immediately becomes taxable, the state receives its just due, if that is how they put it. We feel those who earn should not be penalised in this way. I can give a classic case not a hundred miles away, within the Palace of Westminster itself, of people who have worked long hours at the request of their employers and who have thereby put their earnings into such a category as to cause them to lose their retirement pension under the earnings rule.
This cannot be fair. It cannot be just. I feel that this amendment is an opportunity for the Government to defer this action. This is not merely an unpopular action, it is an unfair action, particularly as it was in the Conservative manifesto. I believe I have said to the House before that I read the Conservative manifesto and I was delighted to read that, having petitioned several Governments, both Labour and Conservative, for several years over the earnings rule, at last this rule was going to be abolished. Now we find that possibly it is going to be abolished in the future. But this situation is imminent. Surely this is an opportunity for the Government at least to carry out this part of their promise.
Lord BANKS: My Lords, it has been pointed out that this Bill results in an increased severity so far as the earnings rule is concerned, and in that sense it moves in the opposite direction from the Government's originally stated purpose of phasing out the earnings rule during the lifetime of this Parliament. I was very interested indeed to hear the noble Lord say that the Government hoped to increase the earnings limit next year. Does the noble Lord mean that they hope next year to begin the phasing out, or does he merely mean that over the next year they will, as they are not doing this year, maintain the real value of the limit as it now stands after the effect of this Bill?
Lord CULLEN of ASH BOURNE: My Lords, with the leave of the House, I would say to the noble Baroness that we have taken the view that at a time when we are having to make economies, those who are able, fit and strong enough to work are not the most deprived people in the country: therefore we felt that this was not an unreasonable economy to make. This comes hard for the Conserva-
276
tive Party; and from a personal point of view I have argued as strongly as I can in favour of the abolition of the earnings rule. I take the point made by the noble Lord, Lord Banks, that what we are doing now is not only not proceeding with the abolition, as I would have hoped we would have done by now, if we could, but we are actually stopping the earnings rule at its present level. There is no question about what we on this side of the House should like to be doing, and there is very considerable regret that we cannot do it.
I do not think that I should be drawn by the noble Lord, Lord Banks, as to what it is that we might he doing next year—whether we would be increasing the earnings rule or phasing it out. If it is possible for us to start phasing it out next year, we will do so. If it is not possible, we hope that we will be able to increase the earnings limit.
Lord WALLACE of COSLANY: My Lords, may I ask the noble Lord how the Government arrive at the figure of £52 which they are freezing? Do they take into account the falling purchasing power of money in this country? We all know that this year we can buy less as against last year simply because of rising prices and the drop in the purchasing value of the pound. This is a factor that ought to be taken into account. It affects these people. With increases in costs, and so on, this £52 is going to be further reduced by the time next year is reached. The noble Lord sees what I am getting at?
Lord CULLEN of ASHBOURNE: My Lords, with the leave of the House, we are simply leaving the money frozen at this point. We realise that it will be of some hardship to some people. But this is one of the unhappy economies that we are making. I doubt whether I can add anything to that.
On Question, amendment negatived.
Clause 3 [Alteration of period of interruption of employment and of periods relating to invalidity allowance and unemployability supplement]:
5.25 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 7:
Page 3, line 43, leave out ("8") and insert ("10")
The noble Lord said: My Lords, in moving Amendment No. 7 I should also like to speak to Amendment No. 8. At the Committee stage my noble friend Lord Banks moved an amendment (No. 22) which dealt with the period of incapacity for work of 13 weeks. I had hoped that the Government during the interim period would have read what was said because it seemed to me that the noble Lord put forward then an unanswerable case for doing something rather different from what the Government intend to do. Your Lordships will know that the Government's original proposal was to reduce the linking period from 13 weeks to six weeks, and that they accepted an amendment in another place to substitute eight weeks for six.
At the Committee stage, the noble and learned Lord, Lord Mackay of Clashfern, said that the extension to eight weeks should go a long way to satisfy those who would prefer a longer period. If f may say so, it goes a very short way indeed, and certainly does not satisfy the voluntary bodies concerned with the disabled who are in a position to make a judgment on this issue.
It seems to me and my friends on this side of the House that the people who really have had the experience in this area have not been consulted. In fact the noble Lord, Lord Mackay of Clashfern, also stressed that the effect of any new rule would be monitored to see whether any further changes were needed. I suggest to your Lordships that it is a very clear indication that the Government in this matter are legislating in the dark. It is hit-and-miss. They wanted six weeks; they were pressured into having eight. It is true that I am now trying to pressurise them into having 10; but the 10 weeks is based on the judgments of people who are dealing with the disabled and have had a great deal of experience with them.
There is no real evidence as to what the effects are likely to be to the chronically sick and disabled people by keeping it at eight weeks. In this situation, if the Government are determined to change the existing rule I would, with respect, suggest that it would be far better to make as small a change as possible initially, thus minimising tle risk of hardship and injustice. There will be sonic, of course; it may well
278
he that whatever figure we choose will produce hardship and injustice.
The 13 weeks has worked extraordinarily well and I think the Government are just acting without any real knowledge as to whether this is going to be helpful or unhelpful. From the information that we have been able to obtain from disabled people we propose in this amendment that the linking period should be reduced to 10 weeks. Your Lordships will see that in Amendment No. 8 again, on page 4 at line 19, it would be necessary to leave out the figure "8" and insert "10" if Amendment No. 7 was accepted. I beg to move.
5.30 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I think that on this matter Government spokesmen have been consistent—perhaps too consistent for the wishes of noble Lords opposite—in declaring and maintaining that the primary object of this Bill, in its first five clauses, is to make much needed economies in public expenditure. The need to exercise some constraint over the continuing growth in the social security budget is inescapable; and unless measures are taken the growth would outstrip the country's capacity to pay for it.
The clause was designed to save some £20 million by ceasing to pay benefit for very short periods of incapcity of three days or less, and by shortening the linking period from 13 weeks to six weeks which, as the noble Lord has just told the House, has since been amended to eight weeks. Your Lordships will know that one effect of spells linking is that waiting days do not have to be served again in the second spell. A further effect is that days of incapacity in the two spells are added together for the purpose of determining title to invalidity benefit which comes into operation when sickness benefit has been paid for 168 days. In that case, the linking is advantageous as it gives earlier title to the long-term benefit which can then he drawn without any limit in time. But aggregation of the days of unemployment in the two spells can be disadvantageous because the 312 days' maximum benefit can he exhausted earlier than would otherwise be the case. In deciding what the appropriate linking period should be, account has to he taken of these complex interacting factors.

279
The Government's view is that a linking period of 13 weeks is unnecessarily long and the clause provides for it to be reduced to eight weeks. The Government's original view was that a period of six weeks should generally be adequate to ensure continuity of benefit if a person falls sick again after a short period back at work. Where a person goes back to work too soon after a long illness he will usually be aware of it very quickly. In fact, of the 32 per cent. of spells which link with earlier incapacity, most have a gap of less than six weeks. However, for most periods of incapacity—actually 64 per cent.—there is no link at all with any previous spell. The remaining 4 per cent. link with spells of unemployment.
For incapacity benefits, a linking period that was too long would not accord with the concept of a special benefit for the long-term sick. The longer the linking period, the greater the extent to which invalidity benefit is made available to people whose pattern of incapacities does not match up to the invalidity concept for which the benefit was originally designed.
It is nevertheless accepted that there will be a minority of beneficiaries for whom the length of the linking period will he particularly important. Those who have recovered from a long illness sufficiently to try work again would feel safer if they could he assured of a fairly long trial period. And there will be those whose disease allows them to do some work during short periods of remission; they would like to be sure of regaining title to invalidity benefit when the time came for them to reclaim benefit. The Government have much sympathy for the groups concerned and have accepted that, on balance, a linking period of eight weeks will be preferable to one of six weeks: but to move further than this would reduce the total savings by several million pounds. I cannot be more precise regarding that figure.
1 am afraid that in view of the amendment already made the Government cannot accept any further lengthening of the linking period at this stage; to do so would he to frustrate the whole intention of the clause.
Lord BANKS: My Lords, I should like briefly to support the amendment. The
280
noble Lord, Lord Wells-Pestell, referred to the fact that at the Committee stage I put the case against the 8-week period being substituted for the 13-week period of interruption and referred to the disincentive for people to go back to work, those who had been seriously ill, and quoted a considerable amount of medical evidence to that effect—the greater difficulty of qualifying for invalidity pension, the greater liklihood of losing invalidity pension and the considerable income lost that would be involved if that should happen.
The only argument, it seems to me, in favour of the eight weeks as against the 10 weeks is this question again of saving money; but we are talking here about national insurance benefits, and there is no indcation that the National Insurance Fund is in any difficulties and is not able to meet its obligations. The Revenue provides only 18 per cent. of the cost and the rest is provided by contributions; and the contribution income, except in so far as the increase in unemployment has had some effect, has not required to be increased to meet national insurance benefits.
Therefore I am not inclined to believe that it is essential for the health of the economy that we should have to stick to the 8-week period, and I ask the Government to think very carefully about the possibility of accepting this amendment, which after all does not go as far as we should have liked to raise this matter in Committee, but would mean some concession, which I do not think would destroy the economy, on the part of the Government.
Lord BOYD-CARPENTER: My Lords, I should like to protest against the suggestion made by the noble Lord who has just resumed his seat that because expenditure falls on the National Insurance Fund rather than, apart from 18 per cent. of it, directly on the Exchequer, it is not for practical purposes public expenditure. With great respect, that is a fallacious argument; and expenditure from the National Insurance Fund has always been treated as a matter of financial policy, under all Governments, as public expenditure, particularly from the point of view of its economic effects.

281
I should like to ask the noble Lord, if he would, to consider further where his argument leads him. If his argument has any validity in the comparatively restricted scope of this amendment, then it is presumably valid right across the field. You could argue—and perhaps the noble Lord would—that national insurance benefits could be increased very substantially indeed all round without having any effect on the national economy. With enormous deference to the noble Lord, that is nonsense and it is, if I may say so, rather dangerous nonsense, because it could have an appeal to people who naturally feel, as the noble Lord does, a desire to help the beneficiaries of our national insurance system within the limits of financial responsibility. It is really because of the noble Lord putting forward this insidious, attractive but really rather dangerous doctrine that I thought I should enter a protest, particularly because, as I think the noble Lord will know, for some 6½ years I was the custodian of the National Insurance Fund.
Could I, while on my feet, also ask my noble friend how much money is involved in the change effected by this clause? He told us a few moments ago that the difference between six and eight weeks was several millions. But what is, in fact, the total saving which the Government expect to make for the National Insurance Fund by the reduction from 13 weeks?
5.40 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I should first like to thank my noble friend for his support on the rather complicated point made by the noble Lord, Lord Banks. The saving under this clause, reducing the linking from 13 to eight weeks, would be £20 million. Unfortunately, what I cannot tell the House is what would be the difference if it were 10 weeks rather than eight. But I understand that it would be several million pounds.
The question of whether we should have 10 weeks rather than eight has now been raised by both the noble Lord, Lord Wells-Pestell, and the noble Lord, Lord Banks, and I appreciate that there are some people, who know what they are talking about, who would favour a longer period than eight weeks. The noble Lord
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did not quote specific support from any particular area for 10 weeks rather than some other figure, but I think it is a fact that no period has a firm scientific basis or a firm basis in experience.
Our judgment is that eight weeks will strike a sensible balance between conflicting considerations, although I confess that we would not have made this change had it not been for the need for economies. I realise that there is some considerable doubt as to whether eight weeks will prove the most sensible figure. It is for that reason that we have agreed to monitor what happens, and will then make changes later on, if required. But at this stage, I am afraid that I must advise the House not to accept the amendment.
Lord WELLS-PESTELL: My Lords, I am glad that the Minister is back in her seat. We really have reached an extraordinary situation. I think that on every amendment put up at Committee stage, and on every amendment put up today, we on this side of the House have been confronted with the sentence: "We cannot accept the amendment because of the economies, and so on" I hardly describe this as an intellectual exercise, but it is nothing more than an exercise—a colossal waste of parliamentary time and people's time.
We had the same situation on the first Social Security Bill. It did not matter what the argument was. It did not matter what the merit of the argument was. The amendments could not be accepted because the Government are pledged to save money. That has been the cry all through the Social Security (No. 2) Bill, and it is quite deplorable that a number of Members of your Lordships' House spend hour upon hour reading Bills, considering their implications, putting down amendments and considering the implications of those amendments when we know, having done all that, that it is a complete waste of time.
I hope that the end of this Bill will see the final situation of this kind, because I really feel that a Government ought not to say to the House—not in as many words, but by their actions—" You can go on talking, you can go on putting down amendments and we will have discussions about them, but because we are going to save money "—in one case, only £1

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million—"whatever you say cannot be accepted by the Government". There may not be any substance in what I have said, but in all the years that I have been a Member of your Lordships' House I have never met this situation before, which we have had on two Bills in succession, and which I do not think does credit to Parliament.
Baroness PHILLIPS: My Lords, I should like to pick up one point. I feel that some one should reply to the noble Lord, Lord Boyd-Carpenter, who appeared to reprimand the noble Lord, Lord Banks, for daring to suggest that the National Insurance Fund should not be interfered with. I think he said that it was not sacrosanct—
Lord BOYD-CARPENTER: My Lords, would the noble Baroness allow me to intervene? I am most grateful to her. I am sure that she does not want to misrepresent me. The point of the noble Lord, Lord Banks, that I took up was his suggestion that expenditure from the National Insurance Fund was not public expenditure and did not have the economic significance of public expenditure—no more and no less.
Baroness PHILLIPS: Yes, my Lords, I take the noble Lord's point. I do not think I am misrepresenting him. I think he will find that he said that the National Insurance Fund was not sancrosant. But I think he also said that the noble Lord, Lord Banks, made an insidious suggestion. I am sure he used that phrase—
Lord BOYD-CARPENTER: Indeed.
Baroness PHILLIPS: My Lords, I would only ask, if the National Insurance Fund is not, and indeed has not been regarded for many years as, something a little different from money taken from the national Exchequer, why does every Bill contain a special reference to the fact that there is an increase or that there is money taken from it? If it is not a special fund, and is not something different, then there is no necessity at all to mention it in any Bills. It will simply be part of the general Exchequer. It will simply be part of what is taken from taxes.
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I assure the noble Lord that when the insurance is paid by the workers they take a different view of it, and have the feeling that they are contributing to pensions and things of that kind. It would be most unfortunate if the idea got abroad that any Government can tamper with this fund at any time and take out whatever they feel is desirable. Therefore, I feel that the noble Lord, Lord Banks, had a point.
On Question, amendment negatived.
[Amendment No. 8 not moved.]
5.48 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 9:
Page 4, line 23, at end insert—
(" (5) Not later than 31st December 1982 the Secretary of State shall make a report to both Houses of Parliament on the effects of the provisions of this section.").
The noble Lord said: My Lords, we have had some rather stern words from my noble friend Lord Wells-Pestell and my heart bleeds for him, as it does for myself, as it is a most frustrating experience to deal with the brick wall opposite. But the Uriah Heeps on the Front Bench opposite have an opportunity to accept this amendment.
The Government have said that they intend to monitor the effects of the new linking rule. It seems right that the results of this monitoring process should be fully reported to Parliament and this amendment would provide the means of doing just that. I welcome the fact that the Government have said that they will monitor the effects of the clause, for the very simple reason that there is real concern in many quarters about the effects of the clause, particularly on the disabled. Many of us in both Houses feel that the attempt to effect the saving in benefits of just over £2 million a year may give rise to anomalies that will impose hardship. If the Government are in earnest in their monitoring effort, then the results should be made available to Parliament for examination and debate.
There is nothing whatever for the Government to fear in this. It is admittedly a matter of public interest and concern. It is admittedly a matter that should be reported to both Houses of Parliament. There is no reason whatever

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why it should not be done. The Government may say, "Ah, we intend to do this, anyway", which is their get-out. But we want to make sure. To be quite honest, and not being too personal, we do not quite trust them, and if they would put it in the Bill we would say, "Well, they're very good people. They have put it in the Bill and they can't get out of it". This is what I am putting to the Government. We do not distrust their principles; it is their actions which give us cause for great concern. Therefore, I hope the Government will accept this amendment. It is quite harmless, it is most acceptable— and I shall be very surprised indeed if they do accept it.
Lord UNDERHILL: My Lords, I should like to support my noble friend in moving this amendment and to draw attention to the fact that the report he has asked for is on both the provisions in this clause, that is, the change in waiting days for sickness benefit and also the reduction of the period for interruption of unemployment and sickness. The reason why I think the House should agree to this report is that these provisions—the whole of this Bill—are put forward on the grounds of economy. We are not arguing whether or not that is justified. What we need to ascertain is what will be the effects of the provisions in this clause.
If my memory serves me aright, when we had the previous discussion I emphasised that the voluntary organisations were extremely concerned about this reduction of the period from 13 weeks to eight weeks and the effect it may have on the disabled who endeavour to get to work. Those people are really seriously ill at intervals, and it may be a deterrent to their getting back to work. The obvious consequence of that would be an additional fall upon benefits that will have to be drawn. Therefore, we need to have this report in order to assess the effect on such individuals of the changes proposed in this clause. We will need to have a report on the effect on employment, from the employers' angle, of persons who have not felt it advisable for their own sake to get back to work. In addition, I think we need to have a report, a review, from the Government departments affected. We need to have a review from the medical profession, from the voluntary organisations and the trade unions, be-
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cause these measures have not been put forward on medical or any other evidence. They have been put forward solely on the grounds of economy, and therefore this review is vitally necessary.
One point that was made on the Committee stage was that the change in the waiting period for sickness benefit would be an administrative saving. It would save 500,000 claims a year and would also save the time of doctors in issuing statements on which persons could claim benefit. My noble friend Lord Wells-Pestell made the point quite strongly that we are not in the business merely of saving administrative time. We are in the business of looking after the sick and the unemployed. What we must ensure is that these changes do not have an adverse effect on the individual's employment and other matters, and that is why I think this report is so essential.
Lord CULLEN of ASHBOURNE: My Lords, the change being made in the linking rule by this clause is the first change since the rule was introduced in 1948, when the figure of 13 weeks was picked upon. It is apparent that there has been no occasion to examine the practical effect of this rule in any depth before now. This is the reason why the Government did not have available the range of statistics that would have been desirable. Action to obtain these statistics is already in hand and the Government intend to see that they will continue to be available for the future. These figures will enable the department to gauge the effect of the change in the linking period.
I am afraid, however, that statistics of this nature cannot be made available on demand. They have to be planned for, collected and analysed. Incapacity statistics are collected annually, in June of each year, but because the exercise has to be spread over the year for reasons of administrative economy the results do not become available until the following year. The first year for which the change in the linking rule will have been fully in effect will be 1981–82; the full statistics for that year will not become available until the middle of 1983.
It is necessary to explain these statistical arrangements in order to make it clear that it would not be practicable to provide in legislation for the Government to be

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bound to report formally by the end of 1982, as the amendment proposes. But the Government will, of course, be obtaining information from various sources, including, I am sure, those groups representing the disabled, who will be wanting to ensure that the matter is kept very much in view. Individual case histories produced by groups will, if problems do arise in practice, be particularly valuable. Information will also be coming in from the department's own case work experience. At the same time, Members of Parliament, noble Lords and the pressure groups will be seeking answers, and whatever can be said at interim stages will be said.
I ask the House not to attempt to bind the Government in the way proposed in the amendment. The Government will be watching very carefully what happens after the change comes into effect and will be ready to make information available as it emerges. We shall take note of the comments made today by noble Lords. I am sorry to disappoint the noble Lord, but I cannot ask the House to accept his amendment.
Lord WALLACE of COSLANY: My Lords, the noble Lord has not disappointed me. I am getting absolutely punch drunk with the repeated statements of the Government. This is the sort of thing we expect. This is a simple amendment which, if the Government showed any willingness at all, they could accept or else say, "Look, lads, why not make it 1983?". But they just blunder on. This is an important matter. I do not think we should part with it readily. I do not intend to divide the House on it because it is not a matter on which there would be division, but I think there should be consideration. We have still the Third Reading to come; we look forward to it with some apprehension.
Shall we put it this way? Will the Government think about it and see what they can do to meet the ideas behind it? In other words, what we want is not only that the Government should gather statistics. I should have thought that with the marvellous computers we are buying these days they could probably have done it a bit more quickly, but perhaps they are cutting down on them; we do not know. However, I put it to the Government that they should think about it until the Third
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Reading and see if they cannot bring forward some proposal. They should put it in a Bill; it is only right that it should be in a Bill. There should be a report to Parliament. We are talking about a very important matter. If the Government will do that, okay. I think it would be most acceptable. We are after the principle of reporting to Parliament and getting the effects, and I think that would be very helpful to us.
Baroness YOUNG: My Lords, I think if the noble Lord, Lord Wallace, reads very carefully what my noble friend Lord Cullen has said—I am sure he will read it tomorrow in Hansard—he will see that in fact we have gone a very long way to meeting the spirit of what he is asking for. We are obviously going to monitor the effects of this, and, as my noble friend has already indicated, we shall be consulting the groups of interested people, including of course organisations representing the disabled, to see how it goes. We intend to monitor the effects.
The noble Lord will also realise that it is not just a question of collecting information and statistics but of analysing those statistics. Inevitably, this takes some time. Having got them, it is not a simple head count and then you put in a figure; you have to indicate what the figures show, what they mean and how they should be presented. It is for that reason that it is very difficult to tie down the Government to giving a specific date as to when they might he produced.
That said, I am sure the noble Lord feels that even though we cannot accept the amendment, we have taken note of the point he is making.
On Question, amendment negatived.
Clause 4 [Reduction and abolition of earnings-related supplement and addition]:
6.1 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 10:
Page 4, line 32, leave out ("unemployment benefit").
The noble Lord said: I think I ought to begin by saying that the noble Lord, Lord Cullen of Ashbourne, has certainly proved me wrong because we have just dealt with an amendment in which no

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mention at all was made of money. I beg to move the amendment standing in my name. We are now dealing with the reduction and abolition of the earnings-related supplement and addition—Clause 4 on page 4 of the Bill. I want to deal with subsection (2) of Clause 4, in the sense that I wish to remove the two words "unemployment benefit" in line 32. The subsection reads:
"Except as provided in pursuance of Section 7(2) of this Act, no earnings-related supplement of unemployment benefit, sickness benefit or a maternity allowance and no earnings-related addition to a widow's allowance shall be payable under the principal Act in respect of any period which is after the coming into force of this subsection".
I want to concern myself with the unemployment benefit and to draw your Lordships' attention to the problem of unemployment which is facing the country. Like many of your Lordships, I have been politically interested and involved for a good number of years. We all know that in the course of the week that means reading many, many newspapers and many, many periodicals. I do not remember a newspaper of quality spending five pages on dealing with the problem of the unemployed as did the Sunday Times last Sunday, from which I quote: Five pages is a great deal of space to devote to a single subject. But unemployment in Britain is now on such a scale that it demands a change in the attention to it; hundreds and hundreds of thousands of families are affected; there is the prospect of the 'eighties bequeathing a legacy as bitter and divisive as the 'thirties. That is from the Sunday Times.
I am not going to discuss the political implications, nor am I going to try at this stage to apportion blame or even to suggest who is responsible for it. But in this newspaper, right from May of last year, month by month, right up to the current month, they have set out, almost day by day, the exact number of people who have lost their employment. It is some of the worst reading that I have had. Last week we were told that there were 1,659,676 unemployed. Since last week that figure has risen by several thousand.
What I am so afraid of—and I really mean this—is that unless we are very careful we shall sec the word "unemployed" as a statistic and not in terms of flesh and blood. What we mean by an unemployed person is a person like
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ourselves but who has no job and probably no prospect, if he is 45 or 50, of ever working again.
It may be the good fortune of a large number of your Lordships who live in the country to see very little of the unemployed and perhaps to know very little about their lives or how they live. In fact, I would go so far as to say that it is beyond the imagination of many people, if they have not experienced it or seen it, to realise what unemployment means and the degradation, the disappointment and the psychological impact that it has not only on a man hut on his wife and family.
I can quite understand that noble Lords may well be asking themselves what all this has got to do with Amendment No. 10. The amendment deals with the abolition of the earnings-related supplement for the unemployed. In the case of sickness benefit, the Government can at least argue that there has been a considerable growth in the number of employers' sick pay schemes, though that growth has been very uneven, manual workers being much less adequately provided for by employers than white collar employees. But in the case of unemployment benefit there is not even that particular excuse.
Ministers have used the growth of redundancy agreements as a justification for abolishing the earnings-related supplement but they have been unable to produce any figures to substantiate this. While there has certainly been some growth, it is probably still true that most workers who lose their jobs today get no real redundancy payments. In the case of those who do—and they are the ones we hear of who get £3,000, £4,000, £5,000 and even more—they usually take a lump sum which, because of the prospect of a very lengthy period of unemployment, they will naturally want to put aside for major expenses in the future rather than fritter it away on current living expenses. Redundancy payments have never been regarded as a substitute for adequate unemployment benefits and I do not think they ever can.
The earnings-related supplement was originally regarded as primarily a benefit for the unemployed, providing them with some protection from the financial effects of economic circumstances, of which they

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are in most cases innocent victims. With the present level of unemployment in this country, I suggest that they need it more now than ever before.
I do not want to take up the time of your Lordships because we went into this very fully at the Committee stage. I contend that the earnings-related supplement is something for which men and women paid in their national insurance contributions every week, on the promise that when they retired they would get an earnings-related supplement to their basic pensions, and also on the understanding that if they were sick or unemployed or suffered some other adversity they would get an earnings-related supplement. Now here the Government are laying down that no earnings-related supplement to unemployment benefit, sickness benefit or maternity allowance
"and no earnings-related addition to a widow's allowance shall be payable under the principal Act".
I am concerned in this amendment with the unemployed. Do your Lordships really think that this is right? I do not just mean legally right, because I am quite certain in my own mind that it is legally wrong, but is this the sort of way that your Lordships would feel was right if you had been treated like it? Would you feel it right if you had taken up—or thought you had taken up—some kind of insurance and then your insurance company ratted on you? There may be noble Lords who will say that this is not analogous but I think it is, and what I want to do is to ask your Lordships to accept this amendment. I shall divide the House on this. I should like to feel that there are noble Lords opposite who would have the courage to say that this action which the Government are contemplating in this Bill is wrong—wrong from every angle. The unfortunate thing is that a large number—and I agree that they will sit on both sides —will vote without hearing the argument. That is regrettable but it is always part of it.
I do not think that anyone can really support this. Sickness is had enough but one hopes that it will not last long. The maternity allowance is just what it says it is; but here are hundreds of thousands of men who are going to have their earnings-related supplement stopped. The
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earnings-related supplement will eventually be abolished. That cannot possibly be right and I ask your Lordships when we divide, to indicate—it is not that I want to defeat the Government; of course one would like to win occasionally but I think this is a matter of principle—
Lord PEA RT: Of humanity.
Lord WELLS-PESTELL: Yes, my Lords, as my noble friend reminds me, it is a matter of humanity, which is a far better way of expressing it. It is on that basis that I ask your Lordships to support this amendment because I think it is the right thing to do. I beg to move.
Lord BOYD-CARPENTER: My Lords, I would not for a moment quarrel with the strong feelings expressed by the noble Lord, Lord Wells-Pestell, about unemployment. Indeed. I share them and I agree with him very much that the worst aspect of it is the sense of futility and frustration of the man or the woman who wakes up in the morning and finds there is no job to do, who has to hang about feeling unwanted. Unemployment is a horrible thing and I do not think there need be any difference between either side of the House about it.
Very properly and rightly on this amendment the noble Lord did not attempt to attribute blame for what we all regard to be a singularly unhappy situation. In this respect I will follow his good example and equally not attribute blame. If I were to do so, it might be in a rather different direction from that in which he would have put it.
Perhaps I may apply my mind to the question of earnings-related unemployment benefit from a rather different angle. I must confess to the House that I was never in favour of it when it was introduced. In a sense, of course, there is a contradiction in terms between "earnings-related" and "unemployment benefit" because ex hypothcsi unemployment benefit is only payable after earnings have ceased. I would not rest so strongly on that if it were not reinforced by the social argument. When someone becomes unemployed, generally speaking the man who has been on the higher earnings during his working life has more resources and reserves to meet it than the man who has

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been on the lowest scale of wages. That must be so.
Therefore, from a social point of view, a provision which makes better allowance for the man who has been on better earnings when he is unemployed than for the man who has been on lower earnings is a questionable one. It is one on which I have been wholly consistent during the many years in which I have been involved in the subject. I have always believed in earnings-related retirement pensions—indeed I had something to do with introducing them in the first place—but I have always felt that in respect of the short-term benefits, and in particular unemployment benefit, it was not a very sound provision.
But I must face the argument which, if he will allow me to say so, was extremely well put by the noble Lord, Lord Wells-Pestell, about the question of whether there is not some breach, as it were, of an insurance contract in altering these benefits at this stage. On the face of it. that sounds an impressive argument but of course if one thinks about it and carries it to its logical conclusion it means that no Government at any time, as I understand it, can alter the level of benefits in the whole of our complex national insurance scheme, because the argument used by the noble Lord a few moments ago about earnings-related unemployment benefit would apply equally to any other benefit. The person concerned has contributed in the expectation that he will get this particular predetermined benefit and then the Government of the day come along and deprive him of the whole or part of it.
If one were really to accept that argument—and I know that the noble Lord has practical experience in the administration of these schemes—I think it must be seen that it would make the scheme really unmanageable. If we are to manage this enormous scheme, one of the major directions of public expenditure, of really enormous importance to almost everybody in the country, the Government of the day must have the right and the facility for altering it—one hopes, as in years past, always in an upward direction but sometimes, in times of difficulty like the present, inevitably in some respects in a downward direction. Therefore, I think one must not put too much weight on the argument of a kind of insurance contract.
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The argument is of course weakened when one remembers that the same man who has contributed in the hope of getting earnings-related unemployment benefit will find that with the other improvements which go on being made in the scheme he will get very substantial increases on the other benefits to which so far he has not contributed. I think one must look at it in that light. Every contributor in normal circumstances benefits directly or potentially from the regular increases in the standard benefits which are made from time to time, and if the Government of the day are to be pinned down on one particular benefit by the thought that people who have contributed to it can never have it reduced, then inevitably I think that the Government of the day would say, "Then we are not under any obligation to increase the other benefits for which people have not contributed at the new rates that we are introducing". Therefore, I think the noble Lord, with respect, has a little overdone what is on the face of it a powerful argument.
So I come to the view that earnings-related unemployment benefit is a benefit which, at a time when it is, I think, generally accepted that reductions in public expenditure are inevitable, is one that naturally and properly would attract the attention of the Government of the day. I think the principle of it—this is idiosyncratic, my personal view, but it is one that is consistently held—is at least dubious. I will not press my personal view on that on the House. But I think the social argument that such resources as are available should go to the poorest of the unemployed, who are generally those who have been on the lowest earnings, is a powerful one, and that the House would put itself in rather a curious position if it insisted on additional benefits for that section of the unemployed who have enjoyed higher wages while not seeing to it that those who have suffered from lower wages share the same benefit. I hope, therefore, that my noble friend, despite the persuasive and attractive way the amendment was moved, will resist it.
Baroness GA ITSKELL: My Lords, I should like, as strongly as I possibly can, to support my noble friend on this amendment. Unemployment is the main instrument for economic recovery that is put forward every single day by this

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Government, by the American Government, the wonderful Mr. Ian MacGregor who is supposed to have solved their economic difficulties. I do not know whether noble Lords heard Alistair Cooke last Sunday, when he said quite plainly that America was in recession in spite of the great Mr. Ian MacGregor's ideas. He said it quite clearly. The noble Lord who has just spoken has utterly ignored the rising numbers of unemployed. What are we going, to do with them? We shall not only get into recession, we shall become bankrupt and we shall have all these millions of people unemployed. What else does he suggest we can do except to have remedial actions like the one my noble friend has put forward in his amendment, and to support such an amendment? I would like to know what other things we can do.
Lord BOYD-CARPENTER: My Lords, the noble Baroness tempts me. If she really wants me to tell the House and the Government what I think can he done to deal with the economic situation I shall he out of order.
Lord SANDYS: My Lords, with due respect to my noble friend, I think he must seek the leave of the House before speaking a second time.
Lord BOYD-CARPENTER: With great respect to my noble friend, I sought to intervene, with the noble Baroness's agreement, in the course of her speech. That is not, on my understanding of the rules, a second speech, for which of course the leave of the House is required. Courteous ladies like the noble Baroness can give way when they have asked a question. Indeed, having asked a question, it would he a very odd position if they did not give way.
6.25 p.m.
Lord UNDERHILL: My Lords, the noble Lord, Lord Boyd-Carpenter, endeavoured to appeal to our consciences on the grounds of the comparison between the better off unemployed, f you can use such an expression, and the worse off unemployed. I would like to know how the noble Lord reacted to the appeals we made on this side on the question of the disabled. One would imagine that we are talking about people who have got
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fantastic salaries. I understand the situation is that, based on the previous year, a person who was getting an average wage of £95 a week, which is a marvellous figure, would be getting earnings-related supplement of about £14·50. I dare say noble Lords opposite, as well as noble Lords on this side, know people who are earning £95 a week, a man and wife and possibly three children. We know when he is out of work what commitments he has got, and we know what bank balance he has got—usually nil.
When this scheme was introduced in 1966 I understood it was done in order to cushion the effects of unemployment. Unemployment now is affecting vast sections of the community, the better off persons as well as the worse off. It sounds very good to appeal to our social conscience, but many people earning £4,000 or £5,000 a year, with their commitments, would he driven to get supplementary assistance to see themselves through because of those commitments. Also I understand that the scheme was introduced in 1966 to try to assist mobility of labour. The noble Lord yesterday spent quite a lot of time talking to us on another issue about mobility of labour. This is still an issue before us now, and in fact we are being told more than ever before of the necessity to move because of unemployment in different regions. Therefore, I believe there is a lot of sense in this amendment.
Once again I say, as I have said on other issues: Tell me where this is in the Conservative manifesto? If many of the things on the social insurance side had been put in the Conservative manifesto, if people had been told what they were going to do to the disabled, if they had been told they were going to cut out earnings-related supplements, I wonder what the reaction would have been. Noble Lords opposite on many occasions say, "This is a manifesto commitment". This was not in the manifesto; it is something that has been brought in since without any justification, except the one issue, the economic necessity. I will come back to this time and time again, that some of these issues could have been dealt with in other ways; they could have been found from the income tax cuts of £4,500 million: it may be that a little hit could have been found from defence expenditure, in order to see that social

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benefits are made available to people who really deserve them.
Lord BANKS: My Lords, the noble Lord, Lord Boyd-Carpenter, speaking about earnings-related supplement, suggested—and one can see a good deal in this argument—that it was helping people rather better off than those who were suffering the most from unemployment. But I think he would agree that there is a top limit; it is not an earnings-related benefit which goes right up the scale. You do not have to be earning a princely income in order to get the full amount of the earnings-related supplement. It is designed to help with the sudden reduction in income, and the continuing commitments which can place some people —not necessarily those at the bottom of the income scale—in an extremely difficult position. One wonders, if we are going to remove earnings-related benefit, or indeed any benefits, or reduce them, whether there ought not also to be reductions in contributions. That I think would frustrate the Government's intention, because, as I understand it, the intention is to accumulate funds in the National Insurance Fund.
This brings me back to what I was saying about capacity to pay. Whether it is the earnings-related supplement that we are dealing with or the question of a 10-week interruption instead of eight weeks, I was maintaining that the money is there to pay, that it is there in the National Insurance Fund, and only 18 per cent. of that comes from the Exchequer; the capacity is there. I did not say, as I think the noble Lord, Lord Boyd-Carpenter, was suggesting, that what you spend on national insurance benefits has no effect on the economy.
I fully realise—we have had some interesting discussions about it in this House—that if you maintain contributions and reduce benefits you accumulate funds in the National Insurance Fund, and this has its impact on the public sector borrowing requirement; it reduces the public sector borrowing requirement. I can understand that one might want to do that. The Government want to do that as an instrument of economic policy, and an economic policy which they believe is necessary at the present time. But I do
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not accept that it is beyond our capacity to pay for earnings-related supplements or for a 10 week interruption instead of eight weeks, because I believe that the money is there in the fund and no reduction in contributions is proposed.
6.30 p.m.
Lord SANDYS: My Lords, we have had a lengthy and very useful debate on this amendment introduced by the noble Lord, Lord Wells-Pestell, in terms which I think were at times moving. But the arguments brought to bear from the full height of his experience by my noble friend Lord Boyd-Carpenter were particularly significant. He has advised your Lordships that he was guardian for six-and-a-half years of the National Insurance Fund as Minister of National Insurance. He was also a Cabinet Minister with experience at the Treasury, and I think he brings to bear on this subject a very great deal of expertise in a field in which many of us—and I speak for myself—have very much less experience than he does. We are grateful to him for the information which he has brought to bear about the insurance contract argument It is a fallacious argument.
I attempted in Committee to show that this argument was fallacious and I did it somewhat lengthily with quotations going back to 1946. My noble friend did it very much more succinctly and in a few sentences. Evidently the noble Lord, Lord Wells-Pestell, was unimpressed by my arguments, but I believe that at the heart of Opposition thinking lies the problem that they believe that an insurance contract has in some way been legally abrogated, and I think that that is also at the heart of Liberal thinking.
The noble Lord, Lord Banks, said that the money was there in the fund. In one sense it is there in the fund, but again I quoted my right honourable friend the Secretary of State in Standing Committee who said that we were in a pay-as-you-go scheme. There are many problems here which we have not resolved in Committee, and perhaps I may be allowed to go into the matter a little further.
In so far as the insurance contract argument is concerned, I think that the situation may be summarised as follows. People do not receive the benefits that they have paid for as the books are balanced

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in a given year and most people are not both contributors and beneficiaries in a given year. In fact, contributors pay for other people's benefits during part of their lives and when they come to receive the benefits it is other people who pay. The contributions being paid in the current tax year go to pay for the earnings-related supplement being paid out in the current tax year. The supplement to be paid out in 1982 would have been paid for by contributions in the next tax year and the tax year afterwards. When my right honourable friend comes to set the level of contributions for these tax years, the abolition of the supplement is one of the factors that he will take into account.
I turn to the amendment itself. As the noble Lord, Lord Wells-Pestell, has explained to the House, under this amendment the earnings-related supplement payable with unemployment benefit would be exempt from abolition and would continue to be paid—though at the reduced rate introduced by subsection (1).
I share the concern which the noble Lord has expressed about the high level of unemployment and accept that there are arguments for the retention of the supplement for those who are unemployed. The noble Lord referred to the article which I am sure many of your Lordships, including myself, have read in the Sunday Times, and will keep and re-read because this is a subject of great importance. I did not notice a specific reference in the article—and I must give the subject further attention—to the noble Lord's amendment to the Bill. I shall certainly examine the article.
Nevertheless, it is vital to our economic strategy that public expenditure is reduced as part of the general effort to make the country more prosperous. In looking for savings we turned to the benefits which are payable above the basic level. In the case of the earnings-related supplement we also took into account the fact that the supplement has lost some of its original purpose and significance since it was first introduced in 1966. Further, we are maintaining the supplementary benefit net to ensure that the poorest are protected.
At this juncture I should like to refer to what my right honourable friend the
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Secretary of State for Social Services said on this subject. I have not previously quoted this particular extract from what he said in Standing Committee B on Thursday, 8th May, at column 905. He said:
"I shall not weary the Committee by going into the arguments about the Chancellor's economic strategy. So much has been said about the alleged motives for ending earnings-related supplement, about the 'Why work?' syndrome and about tax rebates. We had a long piece from the hon. Member for Wood Green (Mr. Race) about tax rebates. But, with the greatest respect to Labour Members, none of those is at the heart of the reason for the clause. The reason is overwhelmingly that it is necessary to reduce the burden of public expenditure to what the nation can afford".
My right honourable friend went on—and I shall not quote him, because I think that I quoted him in Committee—to deal with our election pledges, our price protection of the retirement pension and also of the supplementary benefits scheme. I believe that in retaining these highly important aspects of the social security budget my right honourable friend has placed the emphasis in the right area.
I was interested in what some of your Lordships said as regards unemployment in other countries. The noble Baroness, Lady Gaitskell, referred to unemployment in America. I understand that in that country there has been a 30 per cent. increase in the three months up till May, whereas in France there has been an increase of 8 per cent. and in Germany 11 per cent. in that same short period of three months. I thought it unfair of the noble Baroness to suggest on the very first day that Mr. MacGregor, as the new chairman of the British Steel Corporation, was not perhaps the person to be placed in that office. That is irrelevant to this debate and I think that the noble Baroness may wish to withdraw the remark. The noble Baroness shakes her head.
Baroness GAISTKELL: My Lords, I am afraid I have been misunderstood. I was saying things about him which I had read only quite recently; namely, that there was a recession in America; that there was higher and higher unemployment and so on. I queried the fact that he may not be quite the right person. But he is there and we have to accept him.
Lord SANDYS: My Lords, the whole reason for the appointment was to bring

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employment back into a stable situation within the British Steel Corporation. The Government whole-heartedly support his appointment and we look forward to a period in which gradually the situation will both stabilise itself and improve.
We believe that the amendment being put forward by the noble Lord, Lord Wells-Pestell—which in some respects is similar to Amendment No. 26 which he brought before your Lordships in Committee—is not perhaps the best way of achieving what he intends to achieve. I believe that it is important to remember that the earnings-related supplement plays only a modest role in provision for people who are unemployed. Those with short spells of unemployment get little or no supplement and the long-term unemployed get no supplements because it stops after six months. The supplement is not insignificant, but it would be wrong as well as easy to overstate its importance.
The cost to the National Insurance Fund of preserving earnings-related supplement with unemployment benefit, allowing for the reduction, would be around £90 million in a full year, though supplementary benefit expenditure would be less. We should have to find comparable savings elsewhere and this would involve still more difficult choices. I must, therefore, ask your Lordships to resist this amendment.
Lord DAVIES of LEEK: My Lords, before the noble Lord sits down, I apologise for not having been present at the beginning of the debate on this amendment and for not having heard the noble Lord, Lord Boyd-Carpenter, who is an expert on this Ministry. Can the noble Lord, Lord Sandys, tell the House what is happening to the Industrial Injuries Fund?—which in my day was a very rich fund indeed. I believe that an intelligent use of that fund may have been a means of solving and modifying this problem. I should like an answer to that, and if one is not ready, I should like a note about it.
Baroness YOUNG: My Lords, I think that this is outside the terms of this Bill, but, if I can, I shall get an answer to the noble Lord and let him know.
Lord DAVIES of LEEK: My Lords, thank you.
Lord WELLS-PESTELL: My Lords, I do not have very much to say. I simply want to clear up one or two points. I think that the noble Lord, Lord Sandys, referred to Amendment No. 26, which, if he looks at Hansard, he will find I did not move. I did not understand the noble Lord's comment about my amendment and the article published in the Sunday Times. I thought that I made it perfectly clear that I wanted to use some things that were reported in the Sunday Times article in order to draw attention to the problem of the unemployed. My amendment had no connection with it, any more than the article in the Sunday Times had any connection with the amendment itself.
There is only one other point I want to make. It may well be true that the earnings-related supplement is very small in a large number of cases. I do not know what the noble Lord means by "very small", but if one is unemployed and one has a wife and a family, 50p can be a great deal and £l or £2 can be a great deal more.
The noble Lord said, as he was entitled to say, that the Government had every justification for doing this, and he also said that I spent some time talking about insurance. This was an analogy that I was trying to draw. The noble Lord is saying that a Government are entitled to do anything they like if they can get it through Parliament, and with that I should not disagree. I am saying that there are some things that are sacred. There are millions of people today going to work, paying national insurance contributions because they know that when they become 65 years of age, and if their wives happen to be more than 60 at the time they become 65, both will he able—if they want to—to retire on a pension. The noble Lord is saying that a Government can still go on collecting the national insurance contributions every week and then suddenly decide, "All right, you will not be paid your retirement pension until you are 70 and your wife is 65". There is nothing to stop a Government from doing that. However, I am saying that it would he wholly disgraceful and immoral.
6.44 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 61; Not-contents, 92.

CONTENTS

Ardwick, L.

Gaitskell, B.

Ponsonby of Shulbrede, L. [Teller.]

Avebury, L.

Gardiner, L.

Bacon, B.

Glenamara, L.

Rhodes, L.

Balogh, L.

Goronwy-Roberts, L.

Ritchie-Calder, L.

Banks, L.

Gregson, L.

Ross of Marnock, L.

Bernstein, L.

Hale, L.

Sainsbury, L.

Beswick, L.

Jeger, B.

Seear, B.

Blease, L.[Teller.]

Kaldor, L.

Simon, V.

Blyton, L.

Kilmarnock, L.

Stewart of Alvechurch, B.

Boston of Faversham, L.

Lee of Newton, L.

Stewart of Fulham, L.

Bowden, L.

Leonard, L.

Stone, L.

Brockway, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

Burton of Coventry, B.

Lovell-Davis, L.

Thomson of Monifieth, L.

Byers, L.

McGregor of Durris, L.

Underhill, L.

Chitnis, L.

McNair, L.

Wallace of Coslany, L.

Cledwyn of Penrhos, L.

Maelor, L.

Wells-Pestell, L.

Collison, L.

Milner of Leeds, L.

White, B.

Davies of Leek, L.

Milverton, L.

Wigoder, L.

Davies of Penrhys, L.

Oram, L.

Wilson of Radcliffe, L.

Diamond, L.

Peart, L.

Wynne-Jones, L.

Evans of Claughton, L.

Phillips, B.

NOT-CONTENTS

Airey of Abingdon, B.

Ebbisham, L.

Mowbray and Stourton, L.

Alexander of Tunis, E.

Elliot of Harwood, B.

Murton of Lindisfarne, L.

Ampthill, L.

Exeter, M.

Nugent of Guildford, L.

Atholl, D.

Fairfax of Cameron, L.

Orkney, E.

Auckland, L.

Faithfull, B,

Pender, L.

Avon, E.

Ferrier, L.

Redmayne, L.

Bellwin, L.

Fortescue, E.

Reigate, L.

Belstead, L.

Fraser of Kilmorack, L.

Renton, L.

Bessborough, E.

Gisborough, L.

Rochdale, V.

Boyd-Carpenter, L.

Glendevon, L.

St. Aldwyn, E.

Bradford, E.

Glenkinglas, L.

Sandys, L.[Teller.]

Bridgeman, V.

Greenway, L.

Sempill, Ly.

Brookeborough, V.

Gridley, L.

Sharples, B.

Brougham and Vaux, L.

Hankey, L.

Soames, L. (L. President.)

Carrington, L. (A Principal Secretary of State.)

Hawke, L.

Strathclyde, L.

Henley, L.

Strathcona and Mount Royal, L.

Cathcart, E.

Holderness, L.

Strathspey, L.

Clifford of Chudleigh. L.

Kemsley, V.

Sudeley, L.

Clitheroe, L.

Kilmany, L.

Swansea, L.

Cockfield, L.

Kimberley, E.

Swinfen, L.

Cork and Orrery, E.

Kinloss, Ly.

Swinton, E.

Craigavon, V.

Lindsey and Abingdon, E.

Trefgarne, L.

Craigmyle, L.

Long, V.

Trenchard, V.

Cranbrook, E.

Lonsdale, E.

Tryon, L.

Croft, L.

Lyell, L.

Vaux of Harrowden, L.

Cullen of Ashbourne, L.

Mackay of Clashfern, L.

Vickcrs, B.

Davidson, V.

Macleod of Borve, B.

Vivian, L.

de Clifford, L.

Mansfield, E.

Ward of Witley, V.

Denham, L.[Teller.]

Marley, L.

Westbury, L.

Drumalbyn, L.

Morris, L.

Yarborough, E.

Dundee, E.

Mottistone, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 6 [Supplementary benefit in cases affected by trade disputes]:
6.52 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 11:
Page 7, line 8, leave out ("pension or").
The noble Lord said: My Lords, I think we can take this quite briefly. The effect of this amendment would be that the proposed £12 deduction from a striker's supplementary benefit would not apply if the striker is over pension age. After all, pensioners are not expected to go on working, but many of them do because they have to. If they do so and, as a result, become involved in a trade

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dispute, we feel that it is plainly wrong that they should be penalised in the way suggested in the Bill.
The £12 deduction would normally apply only to a married pensioner. If he is a single striker, he will not be entitled, as your Lordships know, to any benefit at all. The effect will be that instead of getting the normal long-term weekly rate of benefit for a married couple, which is £43.45, he will first have this reduced to £21.70, because he would not be entitled to anything for himself as a result of his own requirements being excluded from the assessment. That figure will then be further reduced by the £12 deduction, which means that he will be left with only £9.70 per week to meet those of his own needs as well as those of his wife.
In most cases, I think she too would be over pension age. He may, or may not, get strike pay to replace all, or part, of the £12 deduction. That would depend not only on what the union can afford but on whether of course the strike is recognised or not. In view of the time, I do not think that I shall add anything more, but I should like to hear the Government's view on this.
Baroness YOUNG: My Lords, the effect of this amendment would be to exclude strikers over pensionable age—that is 65 for men or 60 for women—from the £12 reduction in supplementary benefit. The effect of it would be to put these strikers in a special privileged category and to ensure that they received £12 a week more supplementary benefit than their fellow strikers who had not yet reached the ages of 65 or of 60.
The Government believe that the decision to strike must be a personal decision for the individual worker. It would be unfair if certain workers doing identical jobs under identical conditions received a higher rate of supplementary benefit while on strike simply because they had reached a certain age. The number of people over pensionable age who are involved in a trade dispute is, of course, likely to be very small, but we see no reason for excluding them from this part of the clause.
This is a matter that we discussed at considerable length in the earlier stages
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of the Bill. As my noble friends and I made clear, the main purpose of Clause 6 is to carry out our manifesto pledge to make sure that trade unions pay their fair share of the cost of supporting their members who are on strike. There is no case for relieving them of this responsibility for those members over 65 for men or 60 for women and placing it back on the taxpayer. I hope that with this explanation your Lordships will recognise that we cannot accept this amendment, and that the noble Lord, Lord Wells-Pestell, will withdraw it.
Lord WELLS-PESTELL: My Lords, I am obliged to the Minister for the comments and observations. It is not entirely a surprise as to the line she has taken in this matter. It is not at all unexpected. I shall certainly look at what the noble Baroness has said, because I feel that there is a case here that merits special consideration, and I shall wait until I see Hansard tomorrow.
Amendment, by leave, withdrawn.
Baroness YOUNG: My Lords, I think that this might be a convenient moment to break for dinner. I beg to move that further consideration on Report be now adjourned until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

WELFARE OF LIVESTOCK (DEER) REGULATIONS 1980
6.58 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield): My Lords, I beg to move that the draft Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order 1980 and the draft Welfare of Livestock (Deer) Regulations 1980, copies of which were laid before the House on 21st May, be approved. If I am not entitled to move two Motions at once, I shall move one and then the other later. These statutory instruments are two in a series of four instruments which if approved will implement the Government's decision to ban the harvesting of antlers in velvet from live farmed deer, with exceptions for veterinary treatment and for first-aid in an emergency. Before I outline the effect of the two draft

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instruments now before the House, it might be helpful to your Lordships if I were to explain something of the background and of the reasons why the Government consider it necessary to introduce this ban.
In recent years, the farming of deer has become more popular in this country because of the better prices obtainable for venison. In some other countries, however, deer are farmed for another crop which, unlike venison, can be taken annually; this crop is the antler when it is in velvet. A deer's antlers are shed and re-grown each year. While growing, they are soft, sensitive to pain and covered with a velvet-like skin. In Far Eastern countries these growing antlers have long been a component of traditional medicine. Suitably processed, they are used as tonics, often for children and for nursing mothers. I understand that it is also claimed that they act as an aphrodisiac, but I must tell your Lordships that I do not know whether this claim is justified or not. As standards of living in these Far Eastern countries have improved, the demand for this product has increased and this has pushed up the price it can fetch. The result has been that the price obtained for antlers in velvet soon became higher than that for venison, and this encouraged the production of antlers in velvet in countries outside the traditional producing countries, particularly in New Zealand.
There is no evidence that antlers in velvet have been harvested from live deer in the United Kingdom. However, in view of the considerable publicity given in this country to the commercial benefit of producing antlers in velvet, and as little was known of the effect of harvesting velvet on the welfare of the deer, the Agriculture Ministers invited the Farm Animal Welfare Council, which is an independent advisory body, to examine and report on this aspect.
The council took written and oral evidence from a wide range of organisations and individuals. After weighing this evidence, the council's main conclusion was that there was no overriding need on medical, veterinary or husbandry grounds for the practice of harvesting antlers in velvet, and that the commercial benefits of the practice should not out-
308
weigh those other considerations. It therefore recommended to Ministers that the harvesting of antlers in velvet from live deer should be banned in Great Britain. The council's report was published and was placed in the Library of the House, and some of your Lordships may already have studied it. I would like to take this opportunity of thanking the council for producing such a comprehensive and well-researched report so speedily.
As your Lordships will no doubt be aware, public opinion in this country attaches great weight to the humane treatment of animals, and this attitude is reflected in our wide range of legislation which aims to ensure that the animals which we use for food and other produce are not caused unnecessary pain or distress or unnecessary mutiliation. The evidence presented to the council showed that antlers in velvet were sensitive to pain and it did not show any valid husbandry reasons for removing them. After studying the evidence and the council's report, we concluded that the correct course was to ban the harvesting of antlers in velvet from live farmed deer, except in certain closely defined circumstances to which I shall come, and to implement this ban as quickly as possible before the practice became a feature of deer farming in this country.
In order to put this decision into effect, four statutory instruments were necessary, two of which have already come into operation. First, we introduced the Welfare of Livestock (Deer) Order 1980, which brought deer kept for their antlers in velvet within the definition of "livestock" contained in the Agriculture (Miscellaneous Provisions) Act 1968. That order came into operation on 20th May. The second order that we have already made is the Removal of Antlers in Velvet (Anaesthetics) Order 1980, which came into effect on 11th June. This prohibits the operation of removing any part of a deer's antlers while they are in velvet without an anaesthetic being given, except to save life or relieve pain in an emergency.
I come to the two draft Instruments which are before the House this evening. The first of these, the Welfare of Livestock (Deer) Regulations, applies to deer being commercially farmed on agricultural land in Great Britain; they prohibit the removal of any part of the antlers of the

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deer while those antlers are in velvet, with two exceptions which allow a deer's antlers in velvet to be removed by a veterinary surgeon where in his opinion this is the proper treatment of the deer for a disease or injury, and which allows anyone to remove antlers in velvet in an emergency to save life or relieve pain. I would emphasise, however, that these exceptions in respect of first-aid and veterinary treatment do not impair the effectiveness of the ban on the harvesting of antlers in velvet; on the contrary, they are abolutely necessary in the interests of the deer themselves.
The last piece in this legal jigsaw is the Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order. The Veterinary Surgeons Act 1966 imposes restrictions throughout the United Kingdom on the practice of veterinary surgery by unqualified persons. Part I of Schedule 3 to that Act provides exceptions which allow the owner of an animal and certain other unqualified persons to carry out treatment and specified operations which could otherwise be carried out only by a veterinary surgeon. The proposed order, if approved, will have the effect of excluding from these exemptions the removal of any part of the antlers of a deer while those antlers are in velvet, except in an emergency for the purpose of saving life or relieving pain. The order will therefore bring the law regulating the practice of veterinary surgery into line with the provisions of the Welfare of Livestock (Deer) Regulations 1980.
In accordance with our statutory obligation, we have consulted interested bodies on the making of the two statutory instruments. These consultations have resulted in useful comments; in particular, we have defined antlers in velvet in these two instruments in such a way that deer farmers will still be able to remove antlers when these have ossified and become insensible to pain, a practice which may be necessary under some husbandry systems since antlers harden in time for the mating season, when stags are naturally aggressive and can inflict severe injury on each other or on those who look after them.
I hope that what I have said will have made clear to your Lordships the reasons for our proposal to ban the harvesting
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of antlers in velvet from live farmed deer. The measures before your Lordships this evening will provide a valuable protection to farmed deer; they reflect the genuine concern felt by Parliament and by the people of this country for the welfare of all farm animals, and I commend them to the House. I beg to move.
Moved, That the draft regulations laid before the House on 21st May be approved. —(The Earl of Mansfield.)
7.7 p.m.
Lord WYNNE-JONES: My Lords, it has been a pleasure to listen to the noble Earl on this matter. He explained it extremely clearly and told us exactly why the order is necessary. From these Benches we would not wish to oppose the order, but on the contrary welcome it. The noble Earl made certain references to the potency of the velvet, of which, frankly, I was not aware. I am always interested when matters like this come before your Lordships' House because so much information is put at our disposal, and we go away very much better educated than when we came in. I remember that when we were discussing the Endangered Species Act we learnt that the whiskers of tigers were considered to be of importance in parts of the world with regard to potency, and I have no doubt there are many other things, such as the horns of rhinoceros, which are considered important.
Those matters, which are either trivial or mythological, should not be allowed to interfere with what the noble Earl rightly described as being the wish of people of this country to ensure that livestock of all types are properly and humanely treated, and this order—so carefully considered by the Government, and I congratulate them on that—will clearly lead to a better state with regard to the care of deer in the country, and we therefore heartily support it.
Lord LLOYD of KILGERRAN: My Lords, I apologise to the noble Earl, Lord Mansfield, for being a little late in coming in. I therefore missed the initial part of his speech. However, any order which has the support of the noble Lord, Lord Wynne-Jones, has my support, particularly in these matters. I must,

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however, declare an interest in that I have to look after in the Lake District about 250 acres associated with the home of John Ruskin, and deer is very much associated with that area.
I have only one question to ask the Minister, and I shall understand if he cannot answer it now. What has been the attitude of the Forestry Commission to the order? The noble Earl may have mentioned this point before I came in, in which case I apologise. This is obviously a matter which closely concerns the Forestry Commission, and if he could help me in relation to the attitude of the Forestry Commission, particularly from the point of view of the Lake District, the area about which I have declared an interest, I should be much obliged.
7.10 p.m.
Lord TRYON: My Lords, I, too, welcome this order and the most expeditious way in which the Government have moved to meet an abuse that might have arisen and offended a great many people in the near future, apart from causing great suffering to deer. However, for those interested in the welfare of deer this is really not even half a loaf; it is a mere crumb of what we need, at any rate South of the Scottish Border. Discussion of a much needed comprehensive deer Bill has been an almost annual feature of Parliament for some years now. The noble Earl and I well remember several previous Sessions concerned with this matter, and there is at present a Bill before a Select Committee of the other place.
We have tonight saved deer from having their antlers cut off while in velvet, but we are really no nearer to preventing other, arguably worse, abuses whereby they are almost daily being killed, particularly by poachers employing the most inhumane methods. We have heard from all noble Lords who have spoken of the great wish of the British public to see farm animals, and to that one can add wild animals, properly and humanely treated; but surely it is time that we again gave some really serious consideration to the other problems affecting deer at the moment.
Time is running out for the present Deer Bill in this Session. We may or may not see it, but the chances of it
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reaching the statute book must not be good. Therefore may I urge the Government themselves to promote a proper deer Bill as a matter of urgency, and may I ask the Minister whether there are any plans for this.
The Earl of CRANBROOK: My Lords, I join other noble Lords who have spoken in congratulating the Minister upon his very clear exposition. I also welcome the intention of the Government in inserting these two extra pieces in what, by some curious coincidence, both my noble friend the Minister and the Parliamentary Secretary to the Minister of Agriculture, Fisheries and Food in another place, have termed a "legal jigsaw".
I should like to ask whether the picture is now complete. It seems clear that other pieces are needed before this jigsaw does the job that is required. May I ask my noble friend, with reference to Regulation No. 2, to explain exactly what in the circumstances is agricultural land. If a deer from a deer farm is temporarily removed so that "for the time being" it is situated on what one could term nonagricultural land—which in my opinion might very well be the deer farmer's garden, or a patch of wood adjoining his farm—is the deer no longer protected by these regulations?
It has been said, again in another place, that there are 20 deer parks in this country. I have a feeling that there may be many more than 20 parks in which there are deer. Are these, or are they not, also agricultural land for the purpose of the regulations before us? Is a zoo in any way agricultural land? Is a menagerie in any way agricultural land for the purposes of the regulations?
It is also clear, I believe, that wild deer remain unprotected, and it seems likely that rather few domesticated or farmed deer will actually be protected. My noble friend has told us that as far as we know there is not yet any velvet culling (if that is the right word) being practised in the country. He has asserted that valuable protection is being given to farmed deer. However, I should be grateful if my noble friend can give an approximate estimate of how many deer are actually protected, and how many more deer remain unprotected.

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There is a final question which ought also to be asked. Two of the four orders that make up the jigsaw apply to the whole of the United Kingdom. May I ask the Minister whether we can hope that all four orders in the present jigsaw will ultimately cover the whole United Kingdom?
Lord de CLIFFORD: My Lords, I join with other noble Lords in thanking the Minister for these two orders. May I also join with other noble Lords in saying that while these are very good orders, they form only part of what is required for the protection of deer in this country. It would also be most interesting to many people who are interested in deer to know exactly where the Forestry Commission stand in regard to this matter. The commission has many hundreds of deer on its property. Can the commission's activities be considered as farming. It would be most interesting to know. I wish to ask the Government most earnestly whether they cannot within the next few Sessions produce a really comprehensive deer Bill which would absorb all the orders that are now being brought into operation.
7.16 p.m.
The Earl of MANSFIELD: My Lords, first, may I thank noble Lords who, generally speaking, welcomed this proposed legislation. I think that there are a number of misconceptions as to the extent and scope of the legislation. I shall try to disabuse noble Lords (if that is not being offensive) of what may be misconceptions.
In the first place these measures are not designed to afford protection in general to deer, similar to that which might be afforded by a deer Bill if, and when, it comes along, or by general legislation on the treatment of animals, wild, domestic, or farmed. The measures are designed to deal with the case of farmed deer where the farmer (if I may so call him) might be tempted to remove the antlers in velvet for purposes that I have related to the House.
I think that the noble Lord, Lord Lloyd of Kilgerran, will see that in fact the Forestry Commission really has nothing to do with this situation. It did not give evidence on this matter to the Farm Animals Welfare Council. The Forestry
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Commission is not in the business of farming deer. If one finds a deer in one's woodland, be it big or small, and one says, "Ah, I'll have that", meaning its antlers in velvet, for the purpose of enriching oneself, or for any other purpose for that matter, that is not the same thing as what we are talking about here, which relates to the farming of deer. Therefore I hope that that disposes of that point—
Lord LLOYD of KILGERRAN: I am sorry to interrupt the noble Earl. Is he saying that the Forestry Commission is not at all concerned with these orders?
The Earl of MANSFIELD: Yes, my Lords, because the Forestry Commission does not farm deer. If the commission farmed deer, it would be just as concerned as anyone else. The keeper of a forest, such as the Forestry Commission, or anyone in the private sector for that matter, is not concerned with these orders because such a keeper is not a deer farmer.
The noble Lord, Lord Tryon, described the measure as but a crumb. I quite agree; if one takes the subject within the totality of the welfare of deer, both farmed and in their wild state, it is but a crumb. But we think that it is an important crumb. We wanted not only to nip the practice in the bud, but in fact to stop it before it started. No evidence has come to the agricultural departments in Scotland or in England that these practices have started. Nevertheless we wanted to ensure that they do not start.
There is a Deer Bill. At the moment it is going through the Commons. If I may say so, I think it is wrong to say that it is before a Select Committee. It has left the Standing Committee and it is due to be considered by the other place on Report on, I think, this coming Friday—at any rate, within a matter of days. In a debate such as this, I think it would be wrong of me to forecast what is to be the fate of Mr. Farr's Bill, still less to surmise what would happen to it if it were passed by the other place and sent to your Lordships. There are obviously time contraints, and it is not for me to say what attitude this House would take to that Bill. But I would be being hypocritical, in view of the many times that I have addressed your Lordships in

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possibly a more private capacity in the past on earlier Deer Bills, not to say that it contains elements which I am sure would be very welcome to anybody who has the welfare of wild deer, particularly, at heart.
I come finally to my noble friend Lord Cranbrook, who, if I may say so, as usual put his finger on the pressure point (if that is right) of this particular legislation. The answer, in a sentence, is: No, my Lords, the picture is not complete. This measure deals with one aspect of keeping deer on a farm, which I have already told the House is limited in scope. But now we come to deer in parks—not on farms, but in parks. There, the situation is that the individual is not allowed to remove antlers in velvet unless it is in an emergency; to save pain, for instance, or the animal's life. In those circumstances a registered veterinary surgeon is allowed to remove antlers in velvet by means of a proper medical operation (if I may so term it); and, therefore, to be frank with my noble friend, it is possible, if the owner (if I may so call him) of deer in a park persuaded a veterinary surgeon to remove antlers in those circumstances, that would not be against the law as it stands. But I do not think that is something which really we need concern ourselves about very much, because there is no evidence that the owners of deer in parks would want to assign that fate to them. If it was necessary to legislate in that way, then it could be done.
Now we come to the situation of wild deer. There, again, there is legislation. It is an offence to take a deer in the close season, and I am advised that to capture a wild deer temporarily, as it were, when it is in velvet, and to cut off its antlers, would be taking for the purposes of the legislation, and would be an offence. The only time when it would not be an offence to take a wild deer is in the season, so to speak; and, as my noble friend will know just as well as me, the period of time when a deer is in season and in velvet would be, if at all, an extremely short one.
The Earl of CRANBROOK: My Lords, my I ask my noble friend whether the regulations he has just outlined are applicable to England and Wales only, to Great Britain or to the entire United Kingdom?
The Earl of MANSFIELD: My Lords, agricultural land (which is one of the questions I was asked) is defined in both countries. In Scotland it is in the Agriculture (Scotland) Act, Section 86(1) and (3), and there is a similar provision for England, although I do not have it to hand. The measures which I have outlined to the House this evening apply to both countries. In fact, everything which I have said applies, although with different legislation, to both countries.
There was another question I was asked by my noble friend. If a farm deer escaped into a garden, that would be agricultural land within the meaning of the section, and therefore the deer would be protected. He asked me how many deer are unprotected, which really is a "Catch 22" question, because I suppose any deer is unprotected by the legislation which your Lordships are considering this evening if it is not on a farm, which is the vast majority. I certainly have not got figures which would enable me to tell my noble friend how many deer are in parks, still less how many deer are wild in the United Kingdom. I could make a guess, but I really do not think it would be very helpful. The Welfare of Livestock (Deer) Regulations are on a Great Britain basis; the regulations concerning veterinary surgeons are on a United Kingdom basis. I think that, one way or another, I have answered all the questions which have been put to me. I shall look at the Official Report tomorrow, and if I have not answered any questions I shall, if I may, write to the noble Lords concerned.
On Question, Motion agreed to.

VETERINARY SURGEONS ACT 1966 (SCHEDULE 3 AMENDMENT) ORDER 1980
7.25 p.m.
The Earl of MANSFIELD The Earl of MANSFIELD rose to move, That the draft order laid before the House on 21st May be approved.
The noble Earl said: My Lords, I have already spoken to this order. I beg to move.
Moved, That the draft order laid before the House on 21st May be approved.—(The Earl of Mansfield.)
Lord WYNNE-JONES: My Lords, as this order is entirely consequent on the other one, we on this side of the House would agree with it entirely.
On Question, Motion agreed to.
Lord TREFGARNE: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.27 to 8 p.m.]

SOCIAL SECURITY (No. 2) BILL
Further consideration on Report, on Clause 6.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 12:
Page 7, line 13, leave out from ("is") to ("and") in line 15 and insert ("50 pence or less").
The noble Lord said: My Lords, the intention of this amendment is to modify paragraph (b) which provides for the £12 deduction in trade dispute cases. An amendment to delete that paragraph was debated and negatived at the Committee stage on 17th June (cols. 1070 to 1084). On that occasion, the noble Baroness, Lady Young, pointed out that some of the unions were increasing the amount of strike pay that they paid and she appeared to regard this as justifying the Government proposals. The amounts of strike pay that she quoted varied from £12 to £16.·50 per week, the latter figure to apply only from July 1981. The noble Baroness overlooked the fact that in a trade dispute the supplementary benefit assessment already omits the claimant's requirements, leaving the family £17·55 per week below the normal minimum level. Strike pay at the levels that she quoted does not even fill that gap. To suggest that it will make good the additional £12 deduction is quite wrong. Strikers' families will suffer whether the unions provide strike pay or not.
Of course, it is distinctly possible that there may be some noble Lords who want to ensure that strikers' families suffer. This is a barbaric and crude approach to an extremely sensitive area of industrial
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relations and it will provoke and will not solve industrial disputes. I am not for one moment suggesting that the Government are acting in such a crude fashion, but they are sailing very close to the wind. Therefore, I beg to move the amendment standing in my name.
Baroness YOUNG: My Lords, the effect of this amendment would be to remove the proposed deduction of £12 a week from the supplementary benefit now payable to a striker for his family and would substitute instead a new rule whereby benefit would be paid only if it exceeded 50p a week. There is no getting away from the fact that this is a wrecking amendment. I should like to make it clear at the outset that this clause, which is a commitment in our manifesto, is not aimed against trade unions at all. But one of its purposes is to ensure that trade unions contribute when their members are on strike. The whole purpose of this clause is to enable us to fulfil our election promise to ensure that the trade unions pay a fair share of the cost of supporting their members' families during a strike. We believe that for too long too much of the burden has fallen upon the taxpayer and we believe that this measure will do much to redress the balance.
As we have announced, it is our intention to bring in regulations under which up to £12 strike pay from a trade union will be ignored for supplementary benefit purposes; so that it is up to individual unions to make good this £12 reduction in the supplementary benefit paid to their members. The trade unionist who goes on unofficial strike and the non-unionist involved in a trade dispute must be expected to make some provision for themselves. It is unreasonable to expect the taxpayer to continue supporting them to the extent to which he does at present. Therefore, it will not be any surprise to the noble Lord, Lord Wallace of Coslany, to hear that the Government cannot accept this amendment which, as I have said, we believe to be a wrecking amendment because it would negate the whole purpose of Clause 6.
Lord WALLACE of COSLANY: My Lords, I am not surprised that the noble Baroness rejects this amendment. That was taken for granted before I got up to

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move it. The noble Baroness says that she is not against trade unions as such on this basis; but it would appear that the Government are against individual trade union members because this will certainly cause hardship. I know that this is an accepted policy on the part of the Conservative Party and is wrongly designed to reduce strikes. I do not think it will do so. In fact, I feel that when a showdown or a strike arises this particular move will cause such bitterness as to produce greater industrial disorganisation than would otherwise be the case. We shall see. But that is our considered view. I do not intend to press the amendment at this stage, with the House obviously more engaged in studying the weather forecasts and feeding themselves. There are not enough Members to have a representative vote. Therefore, I do not intend to press the amendment to a Division.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Nugent of Guildford): My Lords, I should explain that if Amendment No. 13 is agreed to, it will preempt Amendments Nos. 14 and 15 which cannot then be moved.
8.7 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 13:
Page 7, line 16, leave out paragraph (c) and insert—
(" (c) any payments in pursuance of section 4 of the said Act of 1976 (which relates to urgent cases) made, in respect of requirements relating to that period, to him or to any other person whose requirements are to be aggregated with his in pursuance of that Act shall be recoverable by the Secretary of State.").
The noble Lord said: My Lords, I beg to move the amendment standing in my name. The Government's intention appears to be that urgent need payments to strikers should be subject to more stringent rules than will apply to other claimants, and that initially, at least, there should be no provision at all for urgent need payments to single strikers. This, I think, is quite unnecessary because as far as single strikers are concerned the number of payments made under existing rules is, I believe, very small. Payments are made only when a striker is destitute and has no other source of help available. For those with families, whether involved
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in a strike dispute or not, urgent need payments will in future be limited to the types of case specified in the regulations. If I may say so, there is no good reason for making these regulations more restrictive for strikers than for other people.
The noble Baroness stated during the Committee stage debate on an amendment to delete paragraph (c) that it would result in urgent need payments being made to make good the £12 deduction. But it is perfectly clear from the list of urgent need cases that has been given both in the Notes on Clauses of the No.1 Bill and in the debates on this Bill that the regulations would not allow this. When we discussed this matter at the Committee stage on 17th June last, I was impressed by the contribution made by the noble Lord, Lord Drumalbyn. I should like to quote him—and he knows that I am proposing to do so—although I shall probably jump about as far as his speech is concerned. In column 1089, where I had raised the importance of this matter, the noble Lord said:
"Would it not suffice to allow payments to be made on the strict understanding that they should be repaid when the people are back at work?"
He went on to say:
"There is a feeling on the opposite side of the Committee—and I share this—that there must be some means, in any event, of meeting real need during the strike".
Towards the top of col. 1090 the noble Lord continued and said:
"The right course seems to be—it is not in the Bill and no doubt my noble friend will say that regulations will deal with it but it is important and it should be mentioned—that payments in cases of real need should be made on the understanding that they are repaid afterwards".
The noble Baroness, when she came to reply to the noble Lord, Lord Drumalbyn, and myself said at col. 1092:
"This is a matter which we have not considered in this connection. If I may, I will write to my noble friend on that point, but I think the answer will be that it would he very complicated to pay a benefit and then ask the person who had received it to repay it when he went back to work. I understand that this is something which is sometimes done in other connections in continental countries, but it would be a new departure in our country".
Towards the bottom of col. 1092 the noble Baroness went on to say:
"But it would be very difficult to introduce what would be an entirely new principle into our whole benefit payments, and it would therefore create a number of difficulties".
The fact that it is new, I venture to suggest, is not a reason for not considering it and for not including it in the Bill. It may well create difficulties but difficulties are made to be overcome if that can be done. I understand, and the noble Baroness said, it is done in other countries. Then presumably it does not present all those difficulties. So I ask myself whether there is really a willingness, really a desire, on the part of the Government to do this, or whether it is because they do not want to do it that they raise these objections, difficulties and problems.
The fact is that in future, under Section 4(2) of the Supplementary Benefits Act, as amended by the Social Security Act 1980, all urgent need payments will be recoverable except in cases excluded by regulations from the recovery provisions. There is no question of introducing an entirely new principle therefore. Recovery of urgent needs payments will be the normal procedure from this November onwards and Lord Drumalbyn's proposal, which is embodied in this amendment, is that this procedure should apply to those involved in trade disputes.
But in deference to the Government's view about strikers—which we do not share—that there should be no exceptions, we accept that all urgent need payments to strikers should be recoverable. That does not mean they would be automatically recovered. It would be for the Secretary of State to decide in what circumstances recovery should be waived, if at all.
However, it means that in making an urgent need payment benefit officers would not have to apply a separate set of rules to those involved in trade disputes. It would thus avoid an entirely unnecessary complication of the scheme and at the same time ensure that genuinely urgent needs are met. If this amendment was adopted and put in the Bill then urgent need cases of strikers could be met. They would have to be considered along with the normal conditions and regulations and they would be subject to being recovered, subject again to whatever the Secretary of State laid down. I beg to move.
8.15 p.m.
Baroness YOUNG: My Lords, this amendment would have the effect of mak-
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ing some strikers eligible for further supplementary benefit to offset the £l2 reduction proposed in Clause 6(1)(b). It is quite unacceptable to the Government as we believe that it would go a long way to nullify the purpose of our proposal to reduce strikers' supplementary benefit entitlement. It is our intention that the striker should look to his trade union for a reasonable part of his family's maintenance during a strike. If the Government were to provide in effect interest-free loans for strikers, as this amendment proposes, there would be no incentive for the trade unions to increase their payments, and the taxpayer would again be bearing a high proportion of the cost of financing the strike. Recovering the loans from the strikers once they had returned to work would often be a long-drawn-out process and would incur administrative costs for the Department.
We do not intend to exclude strikers and their families completely from the urgent need provisions of Section 4 and we shall make regulations to cover the really compassionate case without opening the door to all-corners. If experience shows that there are other rare circumstances for which provision is justified, I am glad to confirm what I said on Committee, that we shall be ready to make the necessary regulations.
The House will no doubt recall the list of circumstances that I gave during the Committee stage where we believe urgent need payments will be available: fire, flood or similar disaster; a very expensive diet prescribed for the striker himself; fares to visit seriously ill or dying relatives; essential fares for special transport to take a handicapped or disabled child to school; immediate necessities for a new-born baby in a long strike; and the repair or supply of essential household equipment if, for example, there is no working form of heating during the winter.
The fact is that there is a difference between what we are proposing in Clause 6 of this No. 2 Bill and the proposals under the No. 1 Bill. I accept that after November special needs payments will be able to be recovered if they take the form of a loan. But we believe that there is a difference in principle here. We feel that it would be wrong to weaken the principle which we regard as important in Clause 6 whereby trade unions would

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be responsible during a strike for part of the care of their members. For those reasons, and although I understand the reasons that have led the noble Lord, Lord Wells-Pestell, to put this amendment down, I regret this is not one that the Government can accept.
8.20 p.m.
Lord DRUMALBYN: My Lords, it is obviously not desirable that I should remain mute in these circumstances. My noble friend was good enough to write to me about this and I can tell the noble Lord, Lord Wells-Pestell, that she said almost the same in her letter as in her reply to him now. My noble friend said that this amendment would be quite unacceptable because, if I understood her correctly, part of the intention is to cause trade unionists to look more to their trade unions in case of a strike. Immediately the question arises: what happens if a person in distress is not a member of a trade union but is on strike because others who are members of trade unions are on strike and he fears the consequences—which can be pretty serious—if he does not also go on strike? I think that is a matter which has to be borne in mind. My noble friend says that establishing this "new principle", as she calls it, would give rise to a long-drawn-out process and would cause complications. When I spoke about this, I had in mind the old principle that applies in general to supplementary benefit; that if you are in dire distress there is somewhere you can go. I do not think any of us are wholly certain, after the No. 1 Bill, where discretion begins and ends; but it seems to me that in any situation like this you must have some discretion left to those who are making payments of this kind.
My noble friend quite rightly has picked out the sort of cases—and I gather these are only examples—in which payments would be made; but even there a discretion must exist. I do not believe it would be at all possible to make out a complete list of all the circumstances in which discretionary payments would be desirable. I should have thought that provided the regulations, or the guidelines if it comes to that, make sufficiently clear to those administering supplementary benefits what is required, then it would be quite right to leave the discretion, in
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this case as in others, to the people administering the supplementary benefit. I should not have thought it would be impossible to get sufficient indication in the guidelines to ensure that there was not any general recourse in a crisis situation to supplementary benefit applications. I am sorry that is rather a long phrase, but I think everyone would understand what was required. I personally do not see how this would cut across the intention, which I think we must all accept, in this clause to make the trade unions more responsible for their own people during a strike.
I share that view very strongly indeed, but I would be reluctant to feel that no loophole was left to deal with cases of real hardship. Therefore I hope that my noble friend will have another look at this just to see whether, even though the words may not be appropriate, some words can be found to ensure that a person who meets with some kind of serious hardship and is in real distress should not be denied help merely because he happens to be on strike at the time. This is what we are really talking about. Surely a person who is on strike when some disaster happens should be no less entitled to the kind of benefit he would get in other circumstances if he were not on strike. I cannot see how the difference can be made in that case. While I entirely accept that these cases should be drawn as narrowly as you like, nevertheless there must be occasions when discretionary payments should be made.
8.24 p.m.
Lord WELLS-PESTELL: My Lords, if the noble Lord, Lord Drumalbyn, cannot move the noble Baroness the Minister, then I think I have to admit that I am beaten before I start. However, I want to point out just one or two factors. It seems to me that the noble Baroness has overlooked one very important point, and those who support her must also have overlooked it. What is the position when a man goes on strike? We know—it is history and it is statistical—that very few of them ever apply for supplementary benefit for their wives and families. The bulk of them do not. It is a very small minority; but with those who do, what is the position then? The husband gets nothing at all—not a penny; only his wife and children.

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If the Government succeed in doing what they want to do and take £12 from the benefit, what does that mean? It means that the husbsnd gets nothing, because he is not entitled to it, but the supplementary benefit for the wife and family is going to be reduced by £12 and so the wife and the children are being penalised. In point of fact, they are losing considerably more than £12, if one takes into account what the husband would get in the normal way.
I ask noble Lords opposite: do you not really think that it is an inhuman thing to do? You are not only saying to the man, "you are out on strike and therefore we will give you no supplementary benefit at all", but you are saying to the wife and children, "Because your husband and your father is on strike we are going to cut £12 from your entitlement." This cannot be defended; it cannot possibly be defended on any ground whatsoever.
The noble Baroness went on to say that the Government are considering what they are prepared to do for extreme cases, as I understand the situation, and they may provide in certain circumstances for strikers to apply for an urgent needs payment. May I ask the noble Baroness this? Are the Government just saying that, or are they in the process of considering who will he entitled to urgent needs payments? If so, will the regulations governing that section of the Bill be among the first batch of regulations that Parliament is asked to consider or will the whole section on extreme cases be left until some later date?
Lord MOTTISTONE: My Lords, is not the noble Lord, Lord Wells-Pestell, seeking to reinstate the Government in the foreground of industrial disputes from which, I would suggest to your Lordships, it is the purpose of this legislation and of other legislation to withdraw them? The Government surely should not be in the foreground. An industrial dispute is between a group of men and their employer, supported by their trade union. They are undertaking an enterprise, if you like to call it that, which they decide they need to do for a particular purpose, and they should support themselves in principle when they are doing that. When things go wrong and hard for individuals within this
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framework, then it is right that the Government should be there, as my noble friend Lord Drumalbyn was saying, to pick up the people who cannot cope in other ways.
But the important thing is that the Government should be in the background. This is not only because the Government are not in dispute, should not be in dispute and should not be seen by people to be in dispute. It is also because it creates a totally wrong impression in the body politic, if they think that the Government are going to come in and help out when anything is going wrong anywhere; however well organised people are, however well supported people are and however much money they have got, dear government will help them out. This is what we must draw back from. This is part of a legislative principle which is trying to withdraw the Government from the front line and put it behind, and not to have it as something that is automatically involved in all disputes that occur in the country.
I suggest to the noble Lord, Lord Wells-Pestell, that his argument was essentially trying to draw the Government back into the front line, and not really very much more than that. I also suggest to him that that is a wrong principle, which has misled hundreds and thousands of people during the course of the last five or six years, however long we have had the misfortune of having noble Lords opposite in power.
Lord WELLS-PESTELL: My Lords, with the leave of the House, the noble Lord has really asked me a question. I shall try not to abuse the consideration of the House by taking up too much time, but I would say this to the noble Lord. The Government are bringing the Government into the front line. It is not a question of taking an action to take them out of it. The very people whom we are talking about are taxpayers. They are entitled to all the facilities, amenities and benefits to which other people are entitled. If the Government are going to introduce a punitive measure—and this is a punitive measure, although the Government will not admit it—then, believe me, my Lords, far from removing them from the front line it is bringing the Government into the front line, and I only hope that none of us will live to regret it.
Lord MOTTISTONE: My Lords, I shall not waste your Lordships' time. It is a straight difference of opinion and I think that noble Lords opposite are wrong.
8.32 p.m.
Baroness YOUNG: My Lords, with the leave of the House, I was very glad that my noble friend Lord Drumalbyn agrees with us about the principle of this clause. I was also very pleased to hear what my noble friend Lord Mottistone said about it, because this has set out the Government's view very clearly. But I think it would be helpful to the House if I answered the various points which have arisen about it.
May I make it clear that it is intended that there will be regulations which will prescribe the circumstances in which urgent need payments will be available. As noble Lords who took part in the proceedings on the previous Social Security Bill will know, it is our intention that they will draw up the circumstances and, therefore, there will be, we hope, a very limited discretion indeed about when they should be used.
In this Bill, the list is very tightly drawn and there would be no discretion at this stage to add to, or extend, the list of circumstances which I gave a few moments ago. These cover our normal experience of the kind of cases which can arise, and it would be for my right honourable friend to make a further regulation if the Government wanted to cover additional cases. We believe that, if we were to allow a residual discretion at this stage, it would provide a loophole which we would not wish to see at this point in the Bill.
The point was made that very few strikers' families accept supplementary benefit. None the less, we believe that the steel strike cost the country £9 million in benefits and that there would have been a considerable reduction had this Bill been on the statute book. I was also asked about the case of someone who does not belong to a trade union, and what happens then. Clearly, if someone does not belong to a trade union he is in a difficult position, but the same principles would apply to him. Whether or not he required any of the hardship payments which I have enumerated would,
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of course, depend on the circumstances of his family, and they would apply to him, should he qualify for them.
We believe that this clause, which, as I have already indicated, is something which was in our Manifesto and which we indicated, during the general election campaign, we would bring in, is a fair provision in this difficult world of trade union relations. It is not in any way intended to be against trade unions, but we believe that it redresses the balance; and, as my noble friend Lord Mottistone made clear, it is a fair measure. I hope, furthermore, that I have said enough to reassure my noble friend Lord Drumalbyn. We are assuming in this clause that there is a strike, and that the striker's family will have had withdrawn from them the £12 that they might have had in supplementary benefit. We believe that that sum of money will be made up by the trade unions.
We have set out six areas where there might be hardships that would be met under regulations, and which would apply. Under our proposals in the first Bill, there will be a set of regulations and there will be very limited discretion, indeed, in the way in which they will be implemented. This was the whole essence of the Bill and of the proposals.
As I have said, it will be up to my right honourable friend the Secretary of State to consider, if experience proves it to be necessary, whether or not we should bring forward further amending regulations to cover additional circumstances. At the present time, we do not believe that this is the case and we think that we have covered the main areas which are likely to give rise to concern. At this stage, I am afraid, as I indicated, earlier, I am unable to accept this amendment.
Lord DRUMALBYN: My Lords, before my noble friend sits down, may I ask her one question? I hope that I know the answer to it. Am I right in thinking that the families of strikers will be treated as entitled to supplementary benefit, with the deduction of the £12, and entitled to all that goes with that? In particular, I was thinking of the free prescriptions, and that kind of thing, on the health side.
Baroness YOUNG: My Lords, my understanding of the position is that they would be entitled to all the supplementary benefits to which they would have been entitled, with the exception of the £12. That is what this clause sets out to do.
On Question, amendment negatived. 8.39 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 14:
Page 7, line 17, after ("made") insert ("after 31st December 1981").
The noble Lord said: My Lords, this amendment would, if accepted, defer the operation of paragraph (c) of subsection (1) until 1st January 1982. Paragraph (c) disentitles a person involved in a dispute, and members of any family unit of which that person is a member, from urgent needs payment under Section 4 of the Supplementary Benefits Act, in respect of requirements relating to the period during which Section 8 applies to that person. We are doing this to give the Government an opportunity of seeing how the new rules regarding urgent need payments coming into force this November are working in practice and whether it is really necessary to have different and more restrictive rules for those affected by trade disputes.
I said earlier that it is our view that this is not necessary. If, as we believe, the normal rules prove to be quite restrictive enough, there will be time to repeal paragraph (c) before the end of 1981. A Bill for that purpose could pass through both Houses, I would think, in a week without undue haste, given the Government's skill in drafting Long Titles. In view of the present situation, it seems that there is no great rush and I would ask the Minister to see whether paragraph (c) could not be postponed until 1st January 1980. My Lords, I beg to move.
Baroness YOUNG: My Lords, as the noble Lord, Lord Wells-Pestell, has said, the effect of this amendment would be to postpone the operation of this clause until 1st January 1982. As I have already indicated, the Government see Clause 6(1)(c) as an essential part of our proposals for strikers' entitlement to supplementary benefit. We do not believe there would be any point in reducing benefit by £12 a week if the striker can simply claim a £12 hardship payment under Section 4 of
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the Supplementary Benefits Act instead. This amendment would mean that general hardship payments would be available until 31st December 1981. We cannot accept that there is a case for this. We believe that Clause 6(1)(c) must go with our main proposal contained in Clause 6(1)(b). I would look on this amendment as one which effectively would prevent the introduction of this clause for 18 months from now. As this is a matter, as I have already indicated, on which we fought the general election and therefore one to which we are committed, we would not feel it right, when we have an opportunity of putting it on the statute book earlier on, to have this kind of delay. For that reason I cannot accept the amendment.
On Question, amendment negatived.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 15:
Page 7, line 20, at end insert ("except for the purpose of providing for or relieving hardship").
The noble Lord said: My Lords, this amendment would ensure that the ban on urgent need payments did not prevent benefit officers from making payments where it was clearly necessary to do so in order to prevent hardship. In particular, it would enable them to make payments to single strikers faced with total destitution. This amendment runs very close to the feelings of the noble Lord, Lord Drumalbyn. Whether he could support it is a different matter, but it runs very close to his thinking on this issue. The amendment would bring a streak of decency and humanity to a clause which many of us fear will bring into industrial relations bitterness and anger which the country can ill afford.
There is quite a lot of talk about strikers' moral responsibility to society. This amendment, not at all drastic in its effect, puts things in a modest, human way just a little on the other side by raising the question of the moral responsibility of society. Whether a striker be right or wrong, need we be harsh to the point of inhumanity? I know the Government have said tonight that they will be bringing in sonic regulations on this subject, and I would ask them why they would not accept this amendment to show good intentions in this field. I do not think the amendment is in any way too strong for the Government to accept. As the

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noble Lord, Lord Drumalbyn, and others have pointed out, there are cases where there is some need for a little general approach rather than a tight adherence to regulations. I move this amendment in the hope that the Government can come some way to meet us, in which case it will be almost revolutionary.
Lord DRUMALBYN: My Lords, I did not go over what I said before because, as the noble Lord said in introducing this amendment, it is intended to cover very much the same ground as we went over before. I could not have accepted the width of the amendment for leaving out paragraph (c). May I ask my noble friend this? Whatever the intentions are, it seems to me that this amendment really goes a good deal further than the noble Lord, Lord Coslany, thinks it does, because unless I am mistaken—I hope my noble friend will tell me if I am—" requirements "is a term of art, and if one uses that word one is opening the whole field of requirements. This is quite different from special cases, which is what are dealt with in the discretionary things. The requirements are a different matter. As I understand it, they are a matter for calculation and I think if this amendment were carried it would knock a hole in the policy that my noble friend is advocating.
The Lord Bishop of NORWICH: My Lords, I think it would be possible, with your Lordships' willingness, for me just to say that a very distinguished Member of this House is in fact called, as we have now said three times in three weeks, Lord Wallace of Coslany. Coslany is a very distinguished ward in the city whose name I have the privilege of holding. He is one of our most distinguished citizens but is still not yet called in Norwich Lord Coslany, though I am sure that slowly we are getting the message and will start doing it unless somebody stops it.
Lord DRUMALBYN: I beg the noble Lord's pardon.
Lord BANKS: My Lords, would it not be the case, following on from what the noble Lord, Lord Drumalbyn, has just been saying, that the clause would still refer to urgent cases? So it would not be taking it out of the sphere of urgent cases, if I have understood it correctly.
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Perhaps I have not correctly understood, but I think that is right. I must confess that I do not yet see why it is necessary to have these two different definitions of urgent cases that the Bill proposes—one under the first Bill and the other under the second Bill—for those who are on strike.
The noble Baroness says that if the regulations under the first Bill were to apply it would open the door to all-comers. But is that what she thinks is going to happen in any event, as far as non-strikers are concerned? I think she is concerned about the residual discretion, but she must be afraid that it is going to be exercised more liberally in the case of strikers than in the case of non-strikers, who would come under the first Bill in any event. I wonder why that should be so. Why should the discretion not be exercised in precisely the same way, whether people are strikers or non-strikers?
Baroness YOUNG: My Lords, I have already explained the importance of Clause 6(1)(c); that is to say, strikers are to be excluded from the normal arrangements for dealing with urgent need, as otherwise they would be in a position simply to claim for the £12 reduction in benefit which is proposed in Clause 6(1)(b). My noble friend Lord Drumalbyn is quite right in drawing our attention to the difference provided by this amendment. This is provided generally for relieving hardship.
In the reference here to Clause 6(1)(c) mention is made of the 1976 Act which deals with a different situation. The regulations about which I have been talking and which would apply under this clause of the Bill are designed to meet narrowly defined sets of circumstances in which urgent needs payments would be made. But if we widen that provision with discretion and make it as wide as it could be in other circumstances for people who are not out on strike, we should nullify the effect of this clause which is to reduce by £12 the supplementary benefit which would then simply be made up under the urgent needs payment. I do not therefore believe that we are talking about the same thing.
Lord BANKS: My Lords, I thank the noble Baroness for giving way. Is she

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saying that every striker's family will be an urgent need case in terms of the regulations under the first Bill?
Baroness YOUNG: No, my Lords, I am not saying that. I am saying that if this amendment were carried it could have the effect of widening the numbers of urgent need cases that could be applied. Under Clause 6, it is our intention that there will be a much more narrowly defined list of special hardship cases which will be prescribed in regulations which will be available. One has to remember that in Clause 6 we are not talking about people who are not out on strike; we are talking only about people who are out on strike. Otherwise, the clause does not apply.
It is our intention that further categories would be included in further regulations only if Ministers were satisfied that such payments were needed to relieve dire hardship. We believe that it is essential that these categories are kept to a minimum in order to prevent a general circumvention of the £12 deduction made in Clause 6(1)(b). We are therefore talking in each case about different groups of people—in one case about people who are not out on strike, and in the other about people who are out on strike.
I hope I have made the position quite clear. It might be helpful if I said that the regulations on strikers' urgent needs will not be in the first batch of regulations but that they will be laid before November. However, on this occasion I cannot give the precise date.
Lord WALLACE of COSLANY: My Lords, first may I thank the right reverend Prelate, the good Bishop of Norwich and a staunch supporter of the Canaries for putting my title right, although it is apt that there should be a reference to me as "Lord Coslany", for a very simple reason. "Coslany", an ancient ward of the City, has been renowned for its dissenters, both religious and political, since the 17th century, and I seem to be in a state of perpetual dissent with the opposite side, night after night!
I think that we have got something here. There is something between the noble Lord, Lord Drumalbyn, and I in a general sense. In the circumstances, it
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might be worth reconsidering the matter and returning to it again at Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Supplemental]:
8.54 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 16:
Page 10, line 6, leave out ("the Schedule") and insert ("Schedule 1").
The noble Lord said: My Lords, I beg to move Amendment No. 16, and with the permission of your Lordships I should also like to speak to Amendments Nos. 18, 19 and 21. With your Lordships' further permission, I should also like to talk about Amendment No. 22 because all the preceding amendments to which I have referred are paving the way for Amendment No. 22.
Your Lordships will recall that at the Committee stage we had a fairly good debate on the position of widows in respect to the earnings-related addition, and that I tried to make out a case for preserving this allowance. We feel it is a very strong case. I mentioned that of all the groups of people who might be asked to share in the sacrifices resulting from Government policies, women who have recently suffered the tragedy of losing their husbands are surely among the least appropriate victims.
The purpose of this amendment is to safeguard the widow's allowance. If it becomes an Act, the Bill as drafted will eventually abolish the earnings-related supplement to unemployment benefit, sickness benefit and maternity allowance, and the comparable earnings-related addition to widow's allowance. This means that when the clause takes full effect the widow's allowance will have no earnings-related top layer, whereas the benefits which succeed the widow's allowance; namely, the widowed mother's allowance or the widow's benefit, have added to them any additional component which has accrued to the late husband under the Social Security Pensions Act 1975. It seems quite unfair that the widow's allowance should be deprived of that.
This amendment seeks to ensure that the earnings-related addition goes to the widow's allowance so that it follows the same pattern as the widowed mother's allowance and the widow's benefit. The position is that immediately after a woman's husband dies she receives a widow's allowance for 26 weeks. The amount is £32·60. I am talking about the present allowance, not about the one in October. The earnings-related supplement is received during this time. It is not a fixed amount; it will depend on just how much a widow is entitled to as a result of her husband's previous yearly earnings. But she does get an earnings-related supplement.
After this time, a widow over 50, without children, or a widow with children under the age of 19, at home and dependent, receives £23·30, but she receives allowances for each dependant child. This is a widowed mother's allowance. If the widow is between 40 and 50, she receives a proportion of the basic pension and the earnings-related supplement which is known as an age-related pension.
We are concerned that when the widow's allowance stops at the end of 26 weeks and she ceases to get the £32·60 a week, it then becoming a widow's allowance or a widowed mother's allowance, she ought to be entitled to the earnings-related supplement which the others already get. If this amendment were accepted, it would mean that we should insert in the Bill:
" In Section 13 of the Social Security Pensions Act 1975, in subsections (1) and (2) before the words widowed mother's allowance ' there shall be inserted the words 'widow's allowance'".
This means that she would then be treated in precisely the same way. I beg to move.
Lord SANDYS: My Lords, in moving Amendment No. 16 the noble Lord, Lord Wells-Pestell, has sought leave of the House to address himself to the succession of amendments that he mentioned to your Lordships; that is, Amendments Nos. 19, 21 and 22. The intention of these amendments, as the noble Lord said, is to replace an earnings-related addition to widow's allowance from the date of its abolition under the Bill by an earnings-related additional component calculated in the same way as that currently payable with
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widowed mother's allowance and widow's pension.
The widow's earnings-related addition was introduced originally to bring, widow's allowance, which of course is only payable for six months, as the noble Lord said, into line with other short-term benefits like unemployment and sickness benefit. Now that it has been decided that, as part of the Government's economic strategy, it is necessary to abolish the earnings-related supplements generally, it would be quite inappropriate to replace the widow's earnings-related addition with another earnings-related payment. From next November widow's allowance will be calculated at £38 a week compared with the present one, to which the noble Lord referred, of £32.60. A further comparison is with £20·65 for unemployment and sickness benefit and there really is no justification for placing widows receiving widow's allowance in an even more favourable position compared with other short-term beneficiaries.
The noble Lord, Lord Wells-Pestell, referred to the position both of a childless widow and a widow with dependent children and I might remind the House that in the case of each dependent child there is the sum of £7.50 in addition to the sum of £4.75 in regard to child benefit. Of course, each case will vary, but from November the situation will be quite substantially better than it is at present.
However, not only are widows receiving widow's allowance already receiving a much higher rate of benefit than other short-term beneficiaries, they are also receiving a much higher rate than widows receiving one of the long-term widow's benefits, that is widowed mother's allowance or widow's pension, which from November will be £27·15 a week and only just over £30 a week even with the current maximum additional component under the new pension scheme.
One of the basic concepts of the new pension scheme, which began in 1978, is that a person should be able to receive on top of his basic pension an addition related to his earnings, or, in the case of a widow pensioner, her late husband's earnings. But this was intended to make provision for long-term needs and it would be inappropriate in the context of the new scheme to pay the additional component

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on top of a short-term benefit like widow's allowance—and most inappropriate of all, of course, in those cases where a young childless widow does not qualify for a succeeding benefit to follow widow's allowance. In any event, the new scheme is still in its early stages and, quite apart from any other considerations, such as the reduction in savings under Clause 4, to pay an additional component with widow's allowance would involve administrative expense and complications at a time when we are doing all we can to simplify the social security scheme.
Lord WELLS-PESTELL: My Lords, I should like to get this quite clear. Is the Minister really saying that a widow receiving a widow's allowance is, at the end of 26 weeks, going to be deprived of the earnings-related supplement to which she is entitled as a result of her late husband's contributions, while it is going to be added to the widowed mother's allowance and the widow's pension?
Lord SANDYS: The answer to that is yes, my Lords. One has to appreciate that the whole situation changes in November, as I have described.
On Question, amendment negatived.
[Amendment No. 17 not moved.]
Clause 8 [Citation, commencement and extent]:
[Amendments Nos. 18 and 19 not moved.]
9.7 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 20:
Page 10, line 22, after first ("Act") insert ("and section 3 of that Act shall come into force on such day as the Secretary of State may appoint by order made by statutory instrument, not being earlier than 1st October 1981.").
The noble Lord said: My Lords, this amendment, which I can take briefly, is to ensure that the clause does not come into effect for over one year. We submit that if implementation of the clause were delayed for one year it would provide a positive time period in which the effect of the linking rule could he studied and monitored. We think it desirable that there should be this period, hence this amendment which I beg to move.
Baroness YOUNG: My Lords, Clause 8(2) of the Bill provides that Clauses 3 to 6 and 7(7) of this Bill shall come into effect on a day appointed by the Secretary of State. As I informed your Lordships at Second Reading, the Government's intention is that Clause 3 shall come into effect from September 1980. The effect of these amendments would be to defer the implementation of that clause by over a year, until October 1981 at the earliest.
Throughout the passage of this Bill my noble friends and I have stressed that the measures it contains are unwelcome. We recognise this. Nobody wishes them to come in, but they are something which we believe are justified by the vital contribution to public savings that they will achieve. Given the urgent need for economies, there is absolutely no point in postponing the introduction of these measures a moment longer than is necessary. For these reasons it is our intention that Section 3 shall come into effect on the day appointed, which will be September 1980.
On Question, amendment negatived.
[Amendments Nos. 21 and 22 not moved.]

CLIFTON SUSPENSION BRIDGE BILL
Returned from the Commons with the amendments agreed to.
GREATER MANCHESTER PASSENGER TRANSPORT BILL [H.L.]
Returned from the Commons agreed to.