SOCIAL SECURITY (No. 2) BILL

HL Deb 16 July 1980 vol 411 cc1780-96

3.2 p.m.

Lord CULLEN of ASHBOURNE

My Lords, on behalf of my friend Lady Young, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read 3^a.—(Lord Claw of Ashbourne.)

Lord WELLS-PESTELL

My Lords, we on this side of your Lordships' Chamber have made no secret of the tact that in our view this Bill is a thoroughly bad Bill, and one which we believe will bring lasting discredit to the Conservative Party. It is a Bill devoid of feeling, understanding and sympathy, and it is one about which I am sure many Government supporters feel unhappy. But, unfortunately, only a few (if I may be permitted to say so) have had the courage and the will to oppose the Government at certain stages. We on this side have not put down any amendments for today's stage of the Bill, as in our view it would be a complete waste of time. During the passage of the Bill we put down 36 amendments, and it was very clear early in the proceedings, as it was in the case of the first Social Security Bill, when we put down 58 amendments, that the Government had made up their mind that both Bills should be returned to the other place without any amendment at all.

Perhaps unfortunately for the Government, my Lords, the No. 2 Bill will not go back unaltered, because the noble Baroness, Lady Masham, with a good deel of help from noble Lords opposite, succeeded in winning her amendment to the effect that wives of doctors should be paid if they are acting as their husbands' secretaries. Perhaps it is not without—

Lord DENHAM

My Lords, I am sorry to interrupt, but I only want to put the noble Lord right. It was not the Social Security Bill to which that amendment was carried; it was the Health Services Bill.

Lord WELLS-PESTELL

My Lords, the noble Lord is perfectly right. I should have said the Health Services Bill, which had its Committee stage last Thursday, and I am most grateful to the noble Lord for pointing that out. But perhaps it is not without significance that noble Lords opposite are prepared to cut the meagre benefits of the unemployed and the sick, and those in receipt of invalidity and other benefits, while supporting the claim of a group who no doubt they know and represent, as distinct from a section of the community whose problems they do not know and, if I may say so, never will know.

The first Social Security Bill, which is now an Act of Parliament, and the Bill now before us, the Social Security (No. 2) Bill, shortly to become an Act, are in our opinion a disgrace, and I would say to noble Lords who have not read the Bills from cover to cover that they will not come to any other conclusion if they do. They are swift-moving vehicles used by the Government to make savage cuts in the social security provision, including benefits which people contribute for when at work. I have in mind retirement, unemployment and widowhood. As a result of Government policy, it is estimated that an extra 110,000 people will need to claim means-tested supplementary benefits by 1982. Already we have about 5 million people, including dependants, relying on supplementary benefit, and this number is going to be added to as a result of the Social Security (No. 2) Bill. The cuts made under this Bill will affect more than 1.8 million claimants who will lose benefit under the proposals, of whom 310,000 will lose more than £1 a week and 19,000 will lose more than £3 a week.

The worst features of this No. 2 Bill are the de-indexation of short-term national insurance benefits, and, in the case of the unemployed, the first reduction in benefit for 50 years. This, my Lords, will be the unkindest cut of all. No person who really understands what unemployment means could do this, but noble Lords opposite have done it, and I think that their action in doing it speaks more eloquently than anything I could say. It means a loss of £1.50 per week for a married couple, and £1.85 per week for a married couple dependent on invalidity benefit; and, with prices as they are—going up—this will mean a tremendous amount to them. I will resist the temptation to spell out what the Government's actions mean to the already badly off. It is a saga of callous indifference or of complete ignorance as to what is happening at present. Meanwhile, for those at work, 22 million of them will go on paying earnings-related contributions that will not be entitled to earnings-related supplements.

I take no comfort from the fact that the Government's policy is beginning to hit hard the very people they are pledged to assist and to whom they have referred from time to time. I am thinking of the small businessman. Company liquidations have reached a post-war record for the first part of this year, resulting in 1,500 compulsory liquidations; and bankruptcies are on the increase. In our view, the Government's monetarist policy is deliberately throwing hundreds of thousands of people out of work, and their legislation is depressing the standard of living of those who are affected by their policies. So far as this Bill is concerned, we on this side of the House think that the Government have a lot to answer for. One of these days—sooner, I hope, rather than later—the depth of feeling against it will be made manifest.

Earl GREY

My Lords, like the Labour Party, we on these Benches are opposed to most of the clauses in this Bill. It is difficult to amend since on almost each clause it was a matter of for or against. Nevertheless, we regret that our Liberal amendments designed to protect the position of the disabled were not accepted. The Bill, as the Government have conceded, is simply a measure to save £500 million in pursuit of their economic policy. We regret that, if it was necessary to save such a sum, it was decided to save it at the expense of social security.

3.11 p.m.

Lord UNDERHILL

My Lords, is it not ironic that we are discussing the Third Reading of this Bill today after having considered the expenditure yesterday of £5 billion on weapons of destruction? I am one of those who, with other noble Lords, sat throughout all stages of this Bill. Despite the amiability and the pleasant way in which the noble Baroness introduced the Bill, the fact cannot be obscured that it is a harsh and mean Bill. There are one or two points which struck me as the stages went on. First, the Government were not prepared to move at all despite all the pleas for the disabled. They were not even prepared to write into the Bill the assurance that we were told has been given by the Secretary of State to put back the position of the disabled on a level with the retirement pensioners when the benefit comes into taxation. There is no reason why that should not have been written into the Bill to give an assurance to the disabled, but the Government would not move. The whole of this Bill means that we are putting some of the economic responsibilities on to the weakest section of the community. That is the thing which came out clearly during all stages of the Bill.

Despite the Conservative manifesto promise to abolish the earnings rule with regard to retirement pensions, no move is made on that and even the question of abatement of the rule was not considered. Despite pleas from various sides of the House regarding the earnings-related supplement, the Government would not move on that. The fact that the insurance principle was no longer at stake was put forward, but the position was dismissed that there is some moral responsibility here. People believed they were entitled to earnings-related supplement. They believed it was a right. One cannot dismiss it by saying that the insurance principle no longer applies.

The other point made—and I made it in at least one debate—was that the Government dismissed the question of the opposition that some of us made to the reduction of unemployment benefit for those in receipt of occupational benefits of £35 or more a week. We put the case that some people found it necessary to retire long before they came to retirement age. Since the last debate on this, one point has come to my knowledge which I had not realised before; that is, the position of the police about whom noble Lords rightly paid a number of tributes. The police, I am sure, do not want special treatment, but they statutorily, compulsorily, must retire on or before they are 60 years of age. Many of them go into other employment. That sort of employment is now becoming less easy as public expenditure cuts go on, so that we find that the position of our own police now will be affected by this Bill. They will not be able to have unemployment benefit when they find there are no longer jobs for them when they must compulsorily retire before they are entitled to receive the normal retirement pension. In this Bill there are six clauses of harshness and meanness. These cannot be obscured by all the silky words and nice manner in which they were presented. As my noble friend said, the Government will regret that they have brought in a Bill of which they should be grossly ashamed.

Baroness PHILLIPS

My Lords, I should not like the Bill to pass without making a comment. It has been described as mean and as bad. I would prefer to call it a sad Bill. I have been active in the field of social security and pensions for a very large part of my life in voluntary organisations, when I had the privilege of serving in Government and when sitting on the Front Bench of the Opposition. With my noble friends, I think that this must be the first time that a Bill described as a social security Bill contained only clauses to abolish or reduce social security. The whole concept of social security, if we go back to the original Beveridge Plan, was that it would bolster up during the bad times those who were unfortunate enough to need to draw from it. We all pay into the pool in the hope that we shall not need to draw from this particular pool but that if we do so it would be there to support us.

My noble friend has referred to people who retire at 60. I mentioned that during the passage of the Bill. Can I again return to it? It is a curious anomaly that men who are forced to retire at 60 cannot draw retirement pension until they are 65; but if they are wicked enough to need some extra maintenance, they must now go to the supplementary benefits commission—which brings us to the nonsense of trying to save money, which is what this Bill presumably is intended to do. Indeed, all the Bills presented to us in this House appear to have one idea in mind, and that is to save money. We, as those who introduce legislation, are responsible for seeing that we present services and other opportunities to the unfortunate. This particular group will have to have some maintenance so that no money will be saved. Indeed, if we have two services running, it will cost more in the end to be administered. We have the final nonsense of the 60-year-old who would previously have been able to obtain unemployment benefit because he genuinely wants to work but now cannot do so because he will have to go to the supplementary benefits commission. I deplore the fact that we have not been able to change a single line in a Bill of this kind. We are not dealing with the rich; we are not dealing with people who have more of this world's goods than they need; but with people who need our support and encouragement. I feel that it is a sad day when a Bill of this kind goes on to the statute book.

Lord PLANT

My Lords, at an earlier stage I made an attack on the Government policy in relation to Clause 5. This has already been mentioned, but I want to make the point again for this reason. I have seen a letter from the National Association of Pension Funds. They implied in the letter that the Opposition had not been vigorous in relation to defending the interests of the occupational pensioners. I want to make it clear that we have done everything we can to influence the Benches opposite—without success. The fact is that we are not concerned about preserving the interests of the people over 60 who are not genuinely seeking work. We are interested in the person who is genuinely seeking work, who, by Clause 5, will be denied unemployment assistance because his occupational pension happens to be more than a specified amount. The question, in my view, is whether the Government in search of economies is entitled to repudiate a long-term insurance contract entered into with their citizens. The complete volte-face executed by the Government is based on expediency and not on principle. I urge, even at this late stage, some reconsideration of Clause 5.

3.20 p.m.

Lord MILVERTON

My Lords, there are some of us on this side of the House who are not completely happy with this Bill. I believe that it was on the second day of the Committee stage that I said that I was not completely happy and I was sorry that I had not been able to be present on the first day of the Committee when I would not have been able to support the Government. There are those of us on this side who are not happy and I know that some on the other side are aware of that. It may need courage to stand up and say this, but I hope that there are some on this side who still, if necessary, can have the moral and spiritual courage so to do. If you hold dear to anything, and if you really are a friend of a friend, you are prepared sometimes to say that you do not quite agree. On the whole, I hold dear to my party—I have not always —and as its friend once again I am bound to say that I hope this time it will be able to show that it has other matters to think about besides just cuts, and that it is also dealing with people, human beings, a man, a woman and a child who have a soul and a spirit.

3.22 p.m.

Lord WALLACE of COSLANY

My Lords, I should like to say a few words as one of many who have been involved in the creation of the welfare state over many years; we fought for it and eventually saw its arrival after the Second World War. Make no mistake about it, my Lords, this Bill is a major erosion in the welfare state. The Government have set themselves up as a set of Robin Hoods, but robbing the poor to give the rich generous tax reliefs; and one of the penalties paid by the poor is this Bill.

On unemployment benefits, we have heard in the Bill of a number of cuts; but there are other worrying features coming forward. We are reading accounts of a Government idea to put the unemployed on social work schemes. Then we hear a noble Member of this House, Lord Gowrie, suggesting that there should be a cut in benefit for those not accepting. This is a further extension of the Government's attitude. Something I regret most of all in this Bill is that the amendments on invalidity benefits were not accepted. It is true that they were lost only by a narrow majority, one that would not have existed had it not been that many noble Lords and noble Baronesses who were outside the Committee probably came in and acted with party loyalty, forgetting the details of what we were discussing.

The invalidity benefits decision is hitting one of the worse off sections of the community two-fold, as I have stated time and time again. We have not only the cuts in benefit in this Bill, but throughout the country there are reductions in the social services by local authorities forced to cut their social services against their better judgment. Finally, there can be no pride for the Government in their calculated measures to hit the worse off sections of the community. It is the operation of an iron will without heart or understanding.

3.24 p.m.

Lord CULLEN of ASHBOURNE

My Lords, I should like first of all to say that I am sorry that my noble friend Lady Young cannot be here to listen to the interesting debate that we have had. She has asked me to convey her apologies to your Lordships. As my noble friend said when she moved the Second Reading of the Bill on 2nd June, and as noble Lords are well aware from discussion on the clauses, although it is a social security Bill, its purpose is primarily financial. Leaving aside Clauses 7 and 8, which are broadly technical, Clauses 1 to 5 are entirely concerned with achieving savings in public expenditure. Limited savings will also accrue from Clause 6, although its prime purpose is the implementation of the Government's general election pledge to deal with the payment of supplementary benefit to strikers' families. The Bill can be properly considered only in the context of our present economic difficulties and of the Government's determination to tackle them.

Noble Lords opposite do not appear to have any sympathy with our wish to reduce public expenditure. I should like to remind them that the policy that we are carrying out, which is to reduce public expenditure as much as we can, is the same policy that the IMF imposed on the last Labour Government. Whether we are doing it in the same way as the Labour Government have done is another matter, but we have to make economies.

Noble Lords opposite have also expressed their weariness with our reiteration of the public expenditure arguments. I understand their feelings, but it is no use ducking the facts; and I must state again the importance we attach to reducing public expenditure. The Government are committed to this: it is a vital part of our strategy to set the economy on the right course, and to get inflation under control. In the White Paper published in March we stated that we intend to reduce public expenditure by 4 per cent. in real terms over the period to 1983–84. All public expenditure programmes were scrutinised, and the social security programme could not be exempt. That programme now costs some £20 billion a year—around a quarter of all public expenditure—and is by far the largest single programme.

We have had to make reductions in other programmes; and, as noble Lords are well aware, those were by no means easy ones: the reductions in the housing programmes, for example, were far bigger. We cannot exempt a programme that accounts for a quarter of the total. My right honourable friend the Secretary of State gave details of the measures needed in his Statement on the up-rating made in another place on 27th March, expanding on the Chancellor's Budget Statement. This Bill is designed to put our intentions into effect. Nothing that can be said in support of any of the individual measures makes the changes as a whole easy or attractive. But, as my right honourable friend the Chancellor of the Exchequer said in another place last Thursday, we are laying the foundations for economic and industrial recovery. This requires restraint in overall public spending.

My Lords, that is what lies behind the introduction of this Bill. We have said this in earlier debates in this House. There are signs that inflation is indeed coming under control, as we intended that it should. This indicates that we are moving in the right direction. Unpalatable though the measures in this Bill are, we believe they are essential if we are to achieve what the Government are committed to do in the interests of everyone.

The savings should be seen in proper perspective. Up to 1983–84 our plans still allow for real growth of nearly 4 per cent. The Bill will save a comparatively modest 1 or 2 per cent. of the social security budget. Hyperbole may have its place, but statements that the Bill signifies the demise of the welfare state are wildly extravagant. Moreover, such charges overlook the steps the Government have taken in the current difficult times to price protect retirement pensions, attendance allowance and war and industrial disablement pensions; and, by no means least important, the safety net provided by supplementary allowance. The benefits of supplementary pensioners and others on the long-term rate of supplementary benefit are being aligned with the contributory retirement pension rates. In addition, needy families with children will be given extra help through family income supplement and the child benefit addition for lone parents. Mobility allowance for severely disabled people unable to walk has had a special increase. The November up-rating will cost more than £3 billion in a full year.

The Government's policy has been to look for the necessary economies where there is some appreciable degree of justification. Three main areas have been chosen; firstly, among those benefits which ought to be taxed and are not; secondly, those benefits which are paid to people higher up the income scale; and, thirdly, those areas where existing rules for the receipt of benefit arguably require tightening. I trust your Lordships will bear with me as I bring out the main features of Clauses 1 to 6. We have traversed the ground fairly thoroughly and I shall be as brief as I can.

The case for the taxation of short-term benefits and invalidity benefit is widely accepted, since the consequence of non-taxation is that income obtained from benefit and earnings is worth more than an income of the same amount derived entirely from earnings. The Government have announced their intention to bring these benefits into tax in April 1982 or as soon as possible thereafter. In the meantime, as an interim step, Clause 1 provides for these benefits to be up-rated by five percentage points less than the prices forecast. The clause applies to the 1980 up-rating. Fresh parliamentary approval would be needed to extend it to the 1981 or 1982 up-ratings.

The first full year's savings will be about £130 million net. This represents only about one-third of the revenue that would be received if benefits were taxed. The Government recognise that the clause does not cater for individual financial circumstances in the way that the tax system does. They also acknowledge that, as long-term benefits, invalidity benefit and its industrial injuries equivalent, unemployability supplement, differ significantly from the other benefits affected by this clause, which are for short-term contingencies. My right honourable friend the Secretary of State for Social Services has therefore given an undertaking that, subject to the availability of resources, the rate of invalidity benefit will be restored to the same level as retirement pension once it is brought into taxation. The earnings-related addition to invalidity pension—

Baroness LLEWELYN-DAVIES of HASTOE

My Lords, will the noble Lord give way for just a moment? Perhaps I may intervene. He made a reference to hyperbole. I hope he will acquit anybody on this side or even on his own side of the House of hyperbole. We have been as moderate as we possibly could. In reference to the last points he was making, can he really say that nobody is going to suffer financially because of this Bill? I think it is very unlikely that anybody on any side of this House could really accept that point. It is a mean and a despicable Bill—we feel it so—and if he could show us that nobody will suffer financially we should be very grateful to him.

Lord CULLEN of ASHBOURNE

My Lords, I do not quite understand the noble Baroness. I do not think I have said that nobody would suffer as a result of this Bill. I suggest that the noble Baroness reads in Hansard tomorrow what I have said, because I am certainly not aware of having suggested at all that nobody would suffer from this Bill. Clearly, if benefits are only partially up-rated—up-rated less than the expected increase in prices—there must be some suffering; there is no question about that. I would not suggest that hyperbole has taken place in this House, but certainly it did in another place.

Baroness LLEWELYN-DAMES of HASTOE

My Lords, I thank the noble Lord for giving me time again. Whatever they said in another place, the feelings in this House are just the same, and we do not express them in hyperbolic terms. What we feel, and what everybody knows, is that the people who are going to suffer are the people who are least able to bear it. That underruns the entire Bill. That is what it is based on, and this is why we say it is a mean and a despicable Bill. If the noble Lord has any answer to that, again we shall be glad to hear it.

Lord CULLEN of ASHBOURNE

My Lords, I am afraid the answer is the same as the answers we have been giving throughout this Bill. It is no pleasure, I may say to the noble Baroness, for either my noble friend Baroness Young, my noble friend Lord Sandys or me to stand here and to discuss these measures, which we have already said are thoroughly unpalatable. It is a very uncomfortable operation to do this. I am not suggesting in any way that anyone in this House has said anything which should not have been said. If I did suggest that, I most certainly apologise to the noble Baroness.

I was saying that the earnings-related addition to invalidity pension under the new pension scheme is unaffected by the Bill, and, like earnings-related retirement pension, will continue to grow as the new scheme matures. As regards the short-term benefits, their level will be reconsidered when they are brought into tax, in the light of all the relevant factors, including the economic circumstances.

Clause 2 removes the requirement to increase annually the amount that can be earned by a retirement pensioner without it affecting his retirement pension. The effect will be to freeze the amount at its current level of £52 instead of raising it in November. We do not consider it right to proceed with the existing automatic increase of the earnings limit in the present economic difficulties, since, by definition, this would favour those with significant earnings in addition to their pension. The savings are about £1 million for every 1 per cent. rise in earnings over the year. The Government hope, subject to prevailing economic circumstances, to raise the limit next year. But we do remain firmly committed to abolishing the rule as soon as possible, and further work on the costings shows the cost of abolition to be substantially lower than hitherto envisaged, though still substantial.

Clause 3, which overall is intended to save about £20 million in a full year, makes two changes. Both of these will take effect in September. The first change provides that spells of incapacity of less than four consecutive days will not attract benefit. This will produce very modest benefit savings in an area where the brevity of the contingency reduces the risk of hardship. The second change reduces the linking period applied to incapacity and unemployment claims from 13 to eight weeks. The shorter period will mean that fewer separate spells of incapacity or unemployment will link, and so more waiting days without benefit will have to be served. People with short, widely-spaced spells of minor illnesses will be less likely to qualify for invalidity benefit, a benefit which is intended for the chronically sick.

The Government consider that the eight-week period should be sufficient to safeguard the interests of chronically sick people while still excluding those for whom the benefit was never intended. However, the Government have already made it clear that they will he monitoring the workings of the new linking provisions. I can now respond to the case stated by the noble Lord, Lord Wallace of Coslany, and the noble Lord, Lord Underhill, at Report stage. I can give an undertaking that we shall report on monitoring of the change by the end of 1983. It is not possible to promise an earlier date for a more formal report, because it will naturally take some time for data on the post-change situation to accrue. The results of monitoring will be supplied as appropriate, and I have some new figures to supply now.

We have already explained that taking sickness and invalidity payment together, 64 per cent. of claims did not link at all with an earlier spell. In most of the minority of cases where Clause 3 will stop linking, the main effect will be that a further three waiting days have to be served, but most of those drawing invalidity benefit at a particular time are not affected by the linking rule because their incapacity is continuous. But looking at those cases where invalidity pen- sioners go back to work but then have a further linking spell, 80 per cent. would still link under the new linking rule. For the younger beneficiaries with the highest rate of invalidity allowance, the figure is 85 per cent.

Clause 4 provides for the reduction and eventual abolition of the earnings-related supplement which is payable on top of sickness, unemployment, maternity and widowhood benefits. The latest estimate of gross savings from abolition is £385 million in 1982–83. Where savings have to be found, it is better that they should fall on additional benefits for the higher paid rather than on basic benefits. Not only have successive Governments allowed the real value of the supplement to decline substantially, but its significance has been further reduced by the growth and improvement of occupational sick pay schemes, the introduction of maternity protection and the increased scope of redundancy payments.

Clause 5 provides for the abatement of unemployment benefit where a person aged 60 or over has an occupational pension in excess of £35 a week. In the present economic climate it is not sensible to pay full unemployment benefit to a group which includes a substantial number with little real interest in the job market and a retirement income that is not wholly consistent with their claim to be unemployed. Important details of these new arrangements will be considered by the new Social Security Advisory Committee when regulations are put to them after next November. We have been pressed to let them see as well those regulations which will have been made during the six months after passage of the Bill. There is scope for this retrospective reference, and I can respond to the noble Lord, Lord Wells-Pestell, who raised this point at Committee stage, by saying that we shall be considering seriously whether it might be better from the Committee's point of view to look at the overall regulations in this way, so that they can consider the new provisions in the round.

The main purpose of Clause 6 is not to secure public expenditure savings but to ensure that trade unions pay a reasonable proportion of the cost of the maintenance of their members who go on strike. We intend to achieve this by reducing the supplementary benefit otherwise payable for the striker's wife and other dependants by £12 a week. To complement this new rule we intend to provide in regulations for a special disregard of £12 a week strike pay paid by a trade union. Thus, if a union pays £12 a week strike pay, it will completely offset the £12 deduction. The burden on the tax payer will be correspondingly reduced, and a much fairer balance will be achieved in the responsibility for the support of the families of people on strike.

Lord ELWYN-JONES

My Lords, would the noble Lord allow me to intervene? I confess that for my part I do not quite follow what he is doing. He seems to be reading a lengthy account appropriate for the Second Reading of a Bill and nothing else. What, with respect, does the Minister think he is doing to assist the House at the Third Reading stage of this Bill?

Lord CULLEN of ASHBOURNE

My Lords, I am sorry if the noble and learned Lord does not think that what I am doing is suitable. I am simply making a closing speech at the end of the Third Reading, and the noble and learned Lord will no doubt be pleased to hear that I am just about to finish doing so.

There has been a great deal of criticism from noble Lords opposite that we have listened to none of their arguments and have made no amendments to the Bill. I fully understand their views. However, I would say that the House has considered the Bill very thoroughly. We have had 19 Divisions, we have had the benefit of the excellent contributions from the noble Lord, Lord Wells-Pestell, and also from the noble Lord, Lord Banks, and we have greatly profited by their expertise.

I should like to end by thanking all those noble Lords in all parts of the House who have taken part in the previous stages of this Bill, and particularly my noble friend Lord Sandys and my noble and learned friend Lord Mackay of Clashfern. I know that all noble Lords will regret the absence today of my noble friend Lady Young, who has played such a major role in piloting this Bill through your Lordships' House. The changes that we have proposed in this Bill have been made after a great deal of heart-searching but unless immediate steps are taken to prune expen- diture judiciously and modestly, as part of the general effort to restore the economy, it is precisely the sick, the disabled, the unemployed and the elderly who will suffer most in the long term. For these reasons I commend the Bill to the House and I beg to move.

On Question, Bill read 3^a.

3.47 p.m.

Lord CULLEN of ASHBOURNE

My Lords, I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(Lord Cullen of Ashbourne.)

Lord LEATHERLAND

My Lords, the noble Lord has told us that he had been indulging in a great deal of heart-searching. I wish he would search his heart a little more. I have been doing a little simple arithmetic, as distinct from making a long speech about the unimportant matters in the Bill, and the one very important matter. That very important matter is contained in page iii of the Explanatory and Financial Memorandum which is in the forefront of the Bill, and which says: 11. The effect of subsection (1) of clause 4, if implemented in January 1981, would be to reduce benefit expenditure from the National Insurance Fund on earnings related supplement and widows' earnings related addition by about £65m in the calendar year 1981. This saving would be offset by expenditure on supplementary benefits of some £5m. Abolition of earnings related supplement and addition, under subsection (2), if implemented in January 1982, will result in a total reduction in benefit expenditure from the National Insurance Fund of the order of £360m in the first full financial year. This will be partly offset by increased expenditure on supplementary benefit which will be of the order of £75m". If we condense that paragraph into a little sum and if we put cuts on the one side and offsets through supplementary benefits on the other, we get something like this: earnings related supplement and widows, a cut of £65 million; abolition of the earnings related supplement, £360 million: that makes £425 million of cuts. That is money which now goes into poor people's pockets but it will not go into their pockets in the future. These are offset by a total of £5 million and £75 million respectively under those two headings, making a total of £80 million. If you subtract from the £425 million of cuts the £80 million of offsets, you get cuts of £345 million. Then in a further clause of the Bill we get another cut in unemployment benefit of £25 million. The total cut in the amount going from State sources into the pockets of the poor and needy will be £370 million a year. I think the Government ought to be ashamed of themselves for doing such a thing as this at this moment in history.

Lord CULLEN of ASHBOURNE

My Lords, I think it is a pity if the noble Lord had these views that he did not let us have them at Committee stage, when we could have considered them.

Lord LEATHERLAND

My Lords, would the Government then have altered the figures?

On Question, Bill passed.