Lords Sitting of 17 June 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 Chester.

THE BELFAST WELFARE RIGHTS PROJECT REPORT
Lord HYLTON: 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 is their reaction to the report of the Belfast Welfare Rights Project, published in March 1980; whether they will make a statement on its implications (a) for social policy generally, and (b) for statutory and voluntary social workers; and when they expect to bring forward proposals in the light of the report.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Elton): My Lords, the Government have welcomed this report, which provides a great deal of valuable information about the take-up of means-tested benefits in selected areas of Belfast and points out the many social problems facing, especially, those living in the inner city. The main implication of the report for social policy is to underline the importance of concentrating resources on the Belfast areas of special social need, and this continues to be the Government's policy. My honourable friend, the Minister with responsibility for the environment in Northern Ireland, is chairing a committee representative of all the public agencies involved, with a view to co-ordinating their programmes and ameliorating social conditions in these areas.
The report underlines the need for the training of social workers in welfare rights work and the Government are
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examining the extent to which such training is already included on recognised social work courses or as a part of in-service training. It may be necessary to discuss this recommendation with the Central Council for Education and Training in Social Work.
The project will end next month but the Government are currently considering how the flow of information to the public about social security and other benefits can best be improved. The noble Lord will appreciate that the report contains a number of other recommendations which will need to be examined and these will be followed up as appropriate in the light of available financial resources.
Lord HYLTON: My Lords, I am grateful to my noble friend for his detailed reply and also for the Government's welcome to the report. In view, however, of the fact that Northern Ireland has a much colder and wetter climate than most of Britain, and that there is higher unemployment and worse conditions of housing by and large, would the Government consider a more generous scale of welfare benefits for that part of the United Kingdom?
Lord ELTON: My Lords, I do not think there is a great prospect of having a separate scale or administration for the Province; but the noble Lord began by talking about assistance in respect of the climate, which led me to suppose he was interested in assistance with fuel costs, on which the report made a recommendation. I have to tell the noble Lord that, in our view, the report is quite wrong in representing that the measures to help poor consumers in Northern Ireland with their fuel bills last winter were a withdrawal of assistance from the elderly. In fact, largely the same range of people were eligible for assistance and almost twice as much was spent on last winter's package of measures as on the previous discount schemes. The Government are aware of the particular problem posed by high fuel costs in Northern Ireland, and consideration is at present being given to what extra assistance can be provided next winter for poor consumers in addition to the national measures announced recently by the Secretary of State for Social Services.
Lord BLEASE: My Lords, is the Minister aware that there is a considerable amount of discussion and talk around this report? Is there not a possibility that this penetrating and useful social survey may be relegated to nothing more than talk and, indeed, a depressing statistical exercise? May I ask the Minister: is there not a tendency to over-concentrate on the relief of poverty and unemployment rather than to take suitable action to prevent these social evils and problems? While I wholeheartedly welcome the Government's support for the general publication of the report, may I ask the Minister whether he would not agree that there is a need for some form of concerted action generated by the Government in order to tackle the proposals arising out of this report?
Lord ELTON: My Lords, in response to the first part of the noble Lord's question, the answer is "No", the report will not be relegated to some dusty in-tray or pending-tray. Secondly, my honourable friend the Minister with responsibility for the environment is already chairing a committee embracing all the interests concerned on the very question of co-ordinating relief, to which the noble Lord refers. Thirdly, I as well as the Government entirely agree with him that the basic problem is not to cure the symptoms but to cure the disease itself. That is what our economic policy is about. The noble Lord and his friends may not agree with us in the way we tackle it, but we are in fact dedicated to curing the economic crisis; and that is the only way to remove poverty.
Lord TAYLOR of BLACKBURN: My Lords, may I ask the Minister: does not the same code of practice prevail in Northern Ireland as prevails in the rest of the United Kingdom?
Lord ELTON: My Lords, I thought I had already said so.
Lord HYLTON: My Lords, can my noble friend comment on the recommendation in the report for a single integrated housing benefit to be applicable to Northern Ireland? If that could be experimented with there, would it not also be of great benefit to the rest of the United Kingdom?
Lord ELTON: My Lords, the notion of a simple, single, housing benefit is not entirely new and there would appear to be certain advantages in it. It is clearly a recommendation that requires further consideration, and it will receive it.

DROUGHT PREVENTION
2.42 p.m.
Lord DE CLIFFORD: 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, in view of the early spring drought, which has seriously affected agriculture and the environment, they are satisfied that water authorities and other bodies have adequate plans to prevent the effects of a drought like that of 1976; and what steps they are taking to ensure minimum inconvenience to the public, horticulture and agriculture.
Lord MOWBRAY and STOURTON: My Lords, the dry weather in April and May has led to water supply problems in some parts of the country, because of the unusual demand on distribution systems. However, there is no general shortage of water. Impounded stocks are higher in most areas than in 1976 and ground water levels are above average for the time of year. In some areas increased demand has resulted in temporary restrictions on the use of hose-pipes, and in a relatively few areas a deficiency of resources has led to the water authorities concerned taking action under the Drought Act 1976 to seek orders to enable them to conserve supplies in order to minimise inconvenience to consumers.
Lord DE CLIFFORD: My Lords, I thank the noble Lord for his reply, and appreciate that we have been having rather peculiar weather lately. But is he aware that in the border counties of Wales and England the water has just managed to get down to the potato level? Is he also aware that if we get a shortage in the future there may be great difficulties in these areas?
Lord MOWBRAY and STOURTON: My Lords, I am upset about the level of water not reaching the potatoes. But, quite honestly, the water supply to farmers has been arriving from the water authorities. If the water supplies of his higher lordship God are not reaching the noble Lord's potatoes, that is something which this Government cannot help.

CONTACT LENSES: PRESCRIPTIONS FOR CHILDREN
2.44 p.m.
Lord SEGAL: 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 in how many cases have contact lenses been prescribed on the National Health Service for children of school age within the Greater London Area during the last five years.
Lord CULLEN of ASHBOURNE: My Lords, I regret that statistics are not collected centrally in the form requested, and could be obtained only at disproportionate cost. However, I can say that some 15,000 pairs of contact lenses were prescribed in England in 1978, only a small proportion of which are likely to have been for children. The statistics do not break down the lenses prescribed by age groups.
Lord SEGAL: My Lords, I should like to thank the noble Lord for that reply. Is he aware that he is quite right in assuming that only a very small proportion of the figure he has given can refer to children of school age? Also, would he not agree that the prescribing of contact lenses ought to be extended to cover psychological needs, where the wearing of conventional spectacles can adversely affect the whole of a child's future, as in the cases of, for example, sensitive, introspective children or pupils at a ballet or drama school? Why cannot a recognised ophthalmic specialist at a large London hospital be allowed a much wider latitude to prescribe these contact lenses in all cases where he thinks that their use is advisable?
Lord CULLEN of ASHBOURNE: My Lords, as I am sure the noble Lord knows, contact lenses can be prescribed under the National Health Service only when, in the opinion of a hospital consultant ophthalmologist, they are clinically essential. NHS contact lenses are not available through the general ophthalmic services. I fully understand the noble Lord's point, about sensitive children not wishing to wear glasses and look different from other children, but certainly at this stage there is no way in which the consultant is able to prescribe contact lenses on other than clinical grounds.
Lord SEGAL: My Lords, is it not totally wrong that a recognised ophthalmic surgeon has to refer a child for a psychiatrist's report before a child can be given these contact lenses?
Lord CULLEN of ASHBOURNE: My Lords, I do not really believe that that is true, although I feel very wary about saying that to the noble Lord, who has so much more knowledge and experience on this subject than I have. But I have asked the department about this, and I understand that a psychiatrist is brought in only if the child concerned has a psychiatric history.
Lord SEGAL: My Lords, does the noble Lord not agree that the cost of these contact lenses is comparable to the cost of ordinary conventional spectacles, with the added advantage that there is no requirement for the notoriously expensive spectacle frames?
Lord CULLEN of ASHBOURNE: Yes, my Lords. I know that in the private sector contact lenses cost from about £25 up to £100 or more, and this, I agree, is an appalling cost. Frequently contact lenses are desirable on account of cosmetic rather than ocular reasons.
Lord SEGAL: My Lords, the cost to a National Health Service patient of contact lenses is only £6·25.

AL FATAH CONGRESS AND EUROPEAN COUNCIL POLICY
2.48 p.m.
Lord JANNER: 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 steps were taken at the EEC summit in Venice on 12th and 13th June in respect of the manifesto of the Congress of A1 Fatah (the largest terrorist group affiliated to the PLO, headed by Mr. Arafat), which calls for the elimination of Israel and the escalation of violence against that state.
Lord TREFGARNE: My Lords, we took full note of the results of the recent A1 Fatah Congress in considering our policy at the European Council. Any policy not involving recognition of Israel's right to live in peace is unacceptable to us. There is no question of encouraging the Palestine Liberation Organisation in such a policy.
Lord JANNER: My Lords, is the noble Lord aware that many people are very disturbed about the Government's attitude in respect of the PLO, which they regard as encouraging the PLO to believe that, even though they are determined—as they have recently stated again in the document to which I have referred—to destroy Israel, we are proposing to have dealings with them? Secondly, will the noble Lord let the House know whether that document has been presented to NATO, and whether it has been considered by the defence officers in this House, in view of the potential danger of such an entity, which is governed by the PLO, upon our defence and armament position?
Lord TREFGARNE: My Lords, the noble Lord expressed his views very forcefully yesterday, when my noble friend the Foreign Secretary made his original Statement. But the fact of the matter is that prospects of achieving a settlement in the Middle East are not realistic without taking into account the positition of the Palestinian people and the PLO.
The Earl of LAUDERDALE: My Lords, can my noble friend tell us whether there is any evidence yet that the notorious stand of the PLO has been modified or is in the process of being modified to conform with the purposes and spirit of the Council's resolution?
Lord TREFGARNE: My Lords, we sometimes receive a number of conflicting reports on the views of the PLO and their associates, and the document referred to in the Question was one of them.
Lord BLYTON: My Lords, is the Minister aware that it was the Conservative Party, in their Balfour Declaration, who created the State of Israel? Why, therefore, do they take a jump now to support the Palestinians in the Arab world, who are out to destroy the State of Irsael which Balfour created?
Lord TREFGARNE: My Lords, the Balfour Declaration was before my time.
Lord JANNER: My Lords, is the noble Lord suggesting that Balfour, Lloyd George, Churchill and the other people who were instrumental in producing the Balfour Declaration had no idea what was happening? Does not the noble Lord realise that they considered the position very carefully and came to the conclusion that one democratic state in the Middle East would be very valuable, and that in view of what had happened the Jewish people were entitled to have some place from which they could protect themselves?
Lord TREFGARNE: My Lords, of course we agree with the position of the State of Israel which was carefully described in the declaration which came from Venice the other day, but to bring Lloyd George into it is, I think, a bit much.
Several noble Lords: Why?
Lord DERWENT: My Lords, reference has been made to the defence officer of this House. Is that Black Rod or the Government Chief Whip?
Lord ELWYN-JONES: My Lords, the noble Lord disowns responsibility in this matter because all these things happened before his time, but in fact the State of Israel politically came into existence in 1948, which I think is just about within his time.
Lord TREFGARNE: Yes, my Lords, of course that is right, but I was asked about the views of Mr. Balfour and of Mr. Lloyd George.
Noble Lords: The noble Lord should know about that.
Lord TREFGARNE: I should have said the late Lord Lloyd-George. This is history, and of course that is fine. But the position of the State of Israel is not in question, and we have supported the declaration in that context.
Lord BROCKWAY: My Lords, is the Minister aware that, despite what was said in the other place yesterday and what has been said in this House today, many of us welcome the European statement about the Middle East, with its acceptance of the double principle of the security of Israel and the right of the Palestinian people to self-determination?
Lord TREFGARNE: My Lords, I am grateful to the noble Lord.

BUSINESS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 this afternoon, my noble friend Lord Strathcona and Mount Royal will repeat a Statement being made in another place on cruise missile bases.
My noble friend Lord Trefgarne will then repeat a Statement on Hong Kong to London air services.
It may also be for the convenience of your Lordships if I announce that dinner will be available this evening at the usual time. The Committee stage of the Social Security (No. 2) Bill will be adjourned at about seven o'clock for approximately an hour, and the debate on the 42nd Report of the European Community's Committee on powered industrial trucks will be taken during this period.

SOCIAL SECURITY (No. 2) BILL
2.54 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.—(Baroness Young.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of LISTOWEL in the Chair.]
Clause 4 [Reduction and abolition of earnings-related supplement and addition]:
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 25:
Page 4, line 24, leave out subsection (1).
The noble Lord said: We come to Clause 4 of the Bill, which is responsible for the reduction and abolition of the earnings-related supplement and addition. The amendment which I now beg to move, and the one that follows it, seek to eliminate Clause 4 from the Bill. I have decided to do it in two parts. Nevertheless, with your Lordships' permission, I wish to speak to both parts but to move the amendments separately.
If I may refresh your Lordships' memories as to what the earnings-related supplement and addition are, the present position is that under Sections 14(7), 22(4), and 24(3) of the Social Security Act 1975, and Schedule 6, people receiving unemployment benefit, sickness benefit, maternity allowance and widow's allowance are entitled after two weeks on benefit to an earnings-related benefit which can be paid for a maximum period of six months. The Government are proposing to reduce the amount payable by way of the earnings-related supplement. The amendment now before your Lordships will prevent the Government from reducing the 15 per cent. rate of earnings-related supplement payable on earnings of over £30 a week to 10 per cent. from January 1981.
If I have understood the Government's attitude to the earnings-related scheme it is this: that because the average value of its benefits has diminished it might be just as well to abolish it. During the Commons Committee stage, the Secretary of State conceded that the reason for delaying the abolition of the earnings-related supplement until January 1982 was that people have already paid their

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national insurance contributions for the tax year 1979–80 in the belief that they would be entitled to an earnings-related supplement based on those contributions, in 1981. But the Secretary of State argued that the proposed reduction of the 15 per cent. rate to 10 per cent. in 1981 was such a modest change that it was not felt there was the same binding nexus between contributions and benefits. He referred to the Cabinet's sense of propriety, convincing them that if the benefits were abolished in 1981 people might have a legitimate criticism.
The Cabinet's sense of propriety, however, clearly has to be kept within bounds. Although precisely the same point of principle applies to the reduction of a benefit based on contributions that had already been paid, they were apparently prepared to swallow that. I do not want to go all over that again because I have already raised the question of the morality of taking contributions for a specific purpose and then reducing them, as has been done in the case of certain benefits that are not going up by 16½ per cent. but only by 11½ per cent.
In fact, this cut is not so modest as the Secretary of State's words might have implied. For somebody getting earnings-related supplement at the maximum rate on weekly earnings of £135 in 1981, it represents a reduction from £19·25 to £14 a week which, over the six-month period for which the earnings-related supplement runs, would mean a loss of £136·50. At a lower level of earnings—say, £80 a week—the loss would be about £2·50 a week, or £65 for the six-month period.
In the Budget speech the Chancellor of the Exchequer said:
"The earnings-related supplement scheme itself has been diminishing in worth and effectiveness over recent years. Redundancy payments are now more generous, and the development of the employers' sick pay scheme means that earnings-related supplement is much less needed than formerly. Of the unemployed, only about 10 pet cent. to 15 per cent. are in receipt of earnings-related supplement at any one time. All in all, the Government would find it difficult to justify its retention".—[Official Report, Commons; 26/3/80, col. 1461.]
But that is not the point. The point is that these people have paid national insurance contributions which we, on this side of the Committee, say have taken into
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account benefits to which they are entitled, including the earnings-related supplement. The main reason why earnings-related supplement has diminished in worth is because the £30 dividing point between the two rates on which it is calculated has not been raised, with the result that the one-third rate applies to a diminishing band of earnings.
The position at the present moment is that the percentage payable is one-third of earnings between £17·50 a week, which is the lower earnings limit, and £30 a week, and 15 per cent. of earnings between £30 a week and the upper earnings limit which is, I think, £135. But the lower earnings limit of £17·50 is now very much lower in relation to earnings than the lower limit of £9 when the scheme commenced in 1966. For low paid workers therefore the scheme is more effective than it was originally. For the average earner, too, it is still a very useful addition to his benefit. For instance, a man with earnings of £100 a week in 1981 would get earnings-related supplement in 1982 of about £13 a week. And this is not a gift; it is part of the money that he has paid in for and there are no grounds for saying that the statutory redundancy payments are now more generous. As the reply to a Member in the other place on the 17th April at column 670 showed, the average redundancy payment is worth little more in real terms than it was in 1965–66, and such increase as there has been took place almost entirely between 1965 and 1968. The relative value of redundancy payments compared with flat rate unemployment benefit was hardly changed at all.
The growth of the employers' sick pay schemes does not justify abolishing the earnings-related supplement for the unemployed, expectant mothers and widows. Anyway, many people, especially manual workers, are not covered by employers' sick pay, and the Government's proposals for compulsory sick pay would apply only to the first eight weeks of sickness, during which the amount payable would be only £30 a week. Even that would be subject to tax, reducing its value for most people down to something like £21 a week, because most people would have income for the whole year above the tax threshold.
To say that only 10 to 15 per cent. of the unemployed are getting earnings-

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related supplement is quite meaningless. The vast majority of unemployed people who remain out of work for more than two weeks (other than school-leavers) do qualify for an earnings-related supplement. Of those not currently receiving it, a large proportion have either been unemployed for less than two weeks or for more than 28 weeks, and if the Government are concerned about the latter group, as I and my noble friends think they ought to be, they should be thinking about extending earnings-related supplement beyond the six months or paying a higher flat rate benefit to those whose entitlement to earnings-related supplement has expired. Instead of which they are proposing to reduce the real value of the flat rate benefit and ultimately to abolish the earnings-related supplement.
The only other thing I want to say is in relation to subsection (2), the deletion of which I shall be moving subsequently. This amendment would prevent the abolition of the earnings-related supplement, and if earnings-related supplement were neither reduced nor abolished the rates payable in 1982 would be one-third of earnings between £23 and £30 a week, which would be £2·35, plus 15 per cent. of earnings for those earnings between £30 a week and £165. For a man who earns £100 a week in 1980–81 (roughly the national average) the earnings-related supplement in 1982 would be about £12.85 per week. If he continued to draw it for 26 weeks its total value would be in the region of £334. That is the amount that the Government are proposing to take—and I use the kindest possible word I can find when I say "take". I could use many others with every justification. But that is what they are proposing to take from the sick, the unemployed and widows in order to leave more money in the pockets of those fortunate enough to be in work. In the last analysis we must look at the position of those who are unemployed through no fault of their own, many of them who, once they become unemployed, stand very little chance of getting another job. I beg to move.
3.7 p.m.
Lord BANKS: I should like to support the two amendments to which the noble Lord, Lord Wells-Pestell, has spoken. I suppose the situation is the same in
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regard to these amendments as it has been in regard to previous amendments: that the Government are not against the earnings-related supplement, that they would not reduce or abolish the earnings-related supplement in the ordinary course of events and that they are only doing so in order to make a saving—because this Bill is about saving. I think they would argue that the people who are in receipt of earnings-related supplement are the least vulnerable; but it is true, of course, that this clause, although one of the shortest in the Bill, produces the biggest saving. It produces a gross saving of £360 million, but that is reduced to £285 million once one takes into account the extra amount which will have to be spent on supplementary benefit, because this clause will put more people on to supplementary benefit at a time when we should be trying to reduce the very large numbers who are dependent upon that benefit. It means that a total of £285 million is being saved on this clause out of £460 million saved by the Bill as a whole.
I should like to ask: Do the Government envisage the earnings-related supplement being restored when the Conservative millenium arrives and inflation is down to a nil rate of growth as a result of these draconian measures that they are introducing in the meantime? There is no indication that the earnings-related supplement is unbalancing the national insurance fund as a result of having to include earnings-related supplement in the benefits it provides. The fund is meeting its obligations and the one feature that has led to a small increase in the contributions recently is the increase in unemployment. It is anticipated that that will go further, and, if it does, that will be a result of Government policy. But there is no indication that there is going to be a problem in having to find the money for the earnings-related supplement. The fund is paying out some £10,000 million a year and we are talking about a saving of £285 million.
Presumably there will be no reduction in contributions. That would enable the Government, I suppose, to save the 18 per cent. of the total cost which they provide, but I suppose it would be more advantageous for the Government's purposes if the money were accumulated in the National Insurance Fund, because if it is accumulated there it reduces the public

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sector borrowing requirement. I think that is really the reason why this is being done—not because there is any objection on the part of the Government to the earnings-related supplement, not because they hope to reduce contributions, but because they hope to reduce the public sector borrowing requirement by accumulating money in the National Insurance Fund. The question I would ask is, for how long we are to accumulate money in the National Insurance Fund, at the expense of benefits which it is generally agreed are desirable, in order to hold down the public sector borrowing requirement?
Lord MILVERTON: I would like to support Lord Wells-Pestell, which may surprise some of my noble friends on this side. On reading a different matter on this subject, I can only say that there is a sense in which in spirit I have felt a little disturbed and unhappy. I think my noble friends here and the noble Baroness, Lady Young, know that as far as possible I do my best to support Her Majesty's Government, but on this occasion I have an uneasy conscience and I do not think I really can. I have to be truthful and say that if I had been able to be here yesterday I most probably would have found myself supporting noble Lords opposite on most of the amendments.
Lord SANDYS: I think I should start by advising my noble friend Lord Milverton, if he would be good enough, to follow my remarks. I cannot possibly claim to give him satisfaction in this regard, but the history of this matter is an extremely long one. I begin by saying that the noble Lord, Lord Wells-Pestell, referred to Clause 4 of the Bill in his speech on Second Reading, at column 1124 on 2nd June. I remind your Lordships of his remarks:
"What the Government are proposing to do may be quite legal, but in my view it is open to serious question".
Then he went on to say:
"I recognise what the Government want to do in this matter, but people have paid national insurance contributions over a long period of time, and I would find it very difficult to believe that in assessing the amount of their weekly national insurance some consideration has not been given to the amount which is likely to be paid out by way of an earnings-related supplement".
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Before we embark on a detailed study of the very complex formula, I would like to go into the history of this, because I think it will interest your Lordships, and as some noble Lords made very interesting speeches on this subject I think it would give a good opportunity to do so
This is an important issue of entitlements under a national insurance scheme. I hope I shall not weary your Lordships in making some excursions into the past in order to help to show how we have arrived at the present position. My noble friend Lady Young explained the provisions of the clause on Second Reading at column 1115. She said:
"It is significant that under successive Governments the real value of the earnings-related supplement has been allowed to decline since 1971. Maximum earnings-related supplement is now worth half what it was".
To reach the nub of the issue it is necessary to look at the national insurance scheme and how it was funded. As my noble friend put it very clearly at column 1116:
"The original proposals put forward by Beveridge were for a strict insurance scheme. The contributions each individual would pay over his lifetime would be related to the average benefits he could expect to receive over his lifetime. An inevitable consequence of this was that it would be many years before full retirement pensions could be paid out: Beveridge suggested 20 years. The Government of the day in fact introduced full pensions from the outset, and it followed that the scheme as originally designed was not financially viable".
The outset of the scheme was a particularly interesting one, and I propose to quote from the debates that took place in 1946 because I believe they are relevant to this, and also to the fact that a very important maiden speech was made on that Bill by the noble Lord, Lord Wallace of Coslany, which I have enjoyed reading this morning. I think I should refer to what the Minister said on 6th February 1946. He was of course, the right honourable Member for Llanelli, Mr. James Griffiths. At column 1738, he said:
"The next point of general importance to which I would refer is the scope of the scheme. I believe that Clause 1 of the Bill is an epoch-making document, and I hope that Members will read it".
I am sure they did, and this is what it said:
"Every person who on or after the appointed day being over school-leaving age and under

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pensionable age … shall become insured under this Act and thereafter continue throughout his life to be so insured".
Lord DAVIES of LEEK: May I ask the noble Lord a question? He is not quoting dear old James Griffiths in support of this Bill, in the name of God, is he?—because he would be rolling in his grave if he knew.
Lord SANDYS: I am attempting to explain, and I thought I was embarking on a very useful explanation of how we have reached this point. I hope the noble Lord will listen and will contain himself. I have further to come on to the right honourable Member's next speech on this subject, on review, a matter of eight years later. I hope the noble Lord will allow me to do so and that I may be permitted to continue.
Lord DAVIES of LEEK: I apologise to the noble Lord.
Lord SANDYS: If I am allowed to continue in this vein, we reach a very important debate on 9th December 1954, when the Conservative Party were in Government. A review had been taking place and the Phillips Committee had reported. The same right honourable Member, Mr. James Griffiths, from Llanelli, at column 1216 said this:
"As one who eight years ago, just before this time of the year, completed several months of very hard work drafting the 1946 National Insurance Bill, and who piloted it through the House and began to bring it into operation … It was a new venture. My job was to translate the Beveridge Report into legislation".
Further down he said:
"It was inevitable that in the light of experience we should find a lot wrong with the Act".
The problem was a problem of funding so clearly identified by my noble friend Lady Young. Another former colleague of the noble Lord, Lord Davies of Leek, made a very significant contribution to that same debate on 9th December 1954. I am referring to Mr. Aneurin Bevan who had some very interesting comments to make. Of course, as he was not a Minister the Committee will not permit me to quote him verbatim. However, at columns 1149 and 1150 of the Official Report for that date he said that there was a danger that the House believed that it
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was dealing with insurance but, in fact, in his view, to talk about it as insurance was bunkum. He then cited the situation as follows. He believed that the contractual relationship which exists in insurance in its normal context was totally different when the state enters as a third partner. He believed that once the state became a third partner to the arrangement, the ordinary concept of insurance was immediately modified. He went on to point out that the state, as a sovereign body, can change the terms of an insurance contract and. therefore, to relate everything concerned with national insurance to the normal concept of insurance as we know it, is, in his submission, nonsense. I believe that the late Mr. Aneurin Bevan, a much revered figure by both the nation and the Labour Party, had hit upon a very important point.
Insurance is an extremely complicated issue and I believe that what he said identifies the problem which has so worried the noble Lord, Lords Wells-Pestell. He and his honourable and right honourable friends in another place believe that a contractual matter has been violated. Do I understand the noble Lord correctly? The noble Lord does not wish to reply, but it was clear from his remarks that he believed that to be so. It is our submission that that is not correct, because national insurance is in a rather different context.
I should like to refer to how the scheme went after the first review. It will be remembered, of course, that the change took place—and it was a very radical change—when funding was altered in 1959, and the system has been run on a "pay-as-you-go" basis ever since. Speaking on this very subject in connection with the earnings-related supplement, my right honourable friend Mr. Patrick Jenkin, the Secretary of State, said, in Standing Committee, at column 833:
"The essence of the working of a 'pay-as-you-go' scheme is that contributions paid this year finance the benefits paid this year. Benefits for the succeeding years will be financed by the contributions paid in those years".
That is an important matter to bear in mind.
I listened with interest to what the noble Lord, Lord Wells-Pestell, quoted from Standing Committee "B" and I must say that I was somewhat mystified

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because he referred to column 670 and I could see no reference in that column to the matter. I wonder whether, in his subsequent remarks, he might wish to explain which column it was—to correct or confirm it. I believe that the remarks made by my right honourable friend in this context in Standing Committee "B" are the ones which give the best advice. I think that I can advise the noble Lord that it is our belief that the amendment as a whole should be rejected.
The noble Lord, Lord Wells-Pestell, has made it clear that the intention of this amendment is to preserve the existing formula—and it is a very complicated formula—for the rates of earnings-related supplement and earnings-related addition payable with the short-term incapacity, unemployment and widowhood benefits. Subsection (1) of Clause 4 gives effect to the Government's intention to reduce the rate of earnings-related supplement and addition in 1981, prior to abolition in 1982. This, as I have said, is a complex subject and it may be helpful if I explain the effect of the subsection in some detail.
Under the existing provisions, the amount of supplement or addition payable during 1980 is calculated in the majority of cases by reference to earnings in the 1978–79 tax year; the formula is one-third of weekly earnings between the amounts £17·50 and £30, and 15 per cent. of earnings between £30 and £120. The lower and upper earnings limits are raised year by year, as they are linked to the lower and upper earnings limits for contributions in the relevant tax year; the £30 cross-over point between "bands" remains constant, however, so that the one-third rate is gradually paid on a smaller and smaller earnings band. Subsection (1) has the effect of reducing the 15 per cent. rate to 10 per cent. with effect from January 1981. This means that in 1981 beneficiaries will receive one-third of weekly earnings in the tax year 1979–80 between the new lower limit of £19·50 and £30 and 10 per cent. of weekly earnings between £30 and the new upper limit of £135. I apologise that the explanation is lengthy, but I think that it will probably be very much easier to understand when read in Hansard than when spoken.
The automatic change in the earnings range coupled with the effect of the
978
change in the rate under Clause 4, while the cross-over point remains constant, means that a man entitled to the maximum level in 1980 (based on earnings in the 1978–79 tax year) would receive £17·67 per week, while someone entitled to the maximum rate in 1981 (based on earnings in the 1979–80 tax year) would receive £14·00.
Subsection (1) is intended to take effect from 4th January 1981, which is the start of the 1981 benefit year. The new arrangements would, however, apply only to claimants whose period of interruption of employment—through unemployment or incapacity—begins during that benefit year or, in the case of the widow's earnings-related addition, whose husband dies during that year. For these beneficiaries, entitlement to benefit will be governed by reckonable earnings in the 1979–80 tax year. We intend to make transitional arrangements under regulations which will allow a beneficiary whose period of interruption of employment commenced before 4th January 1981, or whose husband died before that date, to be entitled to benefit at the rates now in operation until entitlement is exhausted or the period of interruption of employment ends. This would be subject to a final cut-off date in June 1982. These will be people whose entitlement to benefit depends on reckonable earnings in the 1978–79 tax year or, in the case of linking claims, an even earlier tax year. This is to ensure that rates of benefit are not reduced during the middle of an existing claim and are not reduced where a current spell of incapacity or unemployment links with an earlier spell to form part of the same period of interruption.
I am coming to the end of my speech, as the noble Lord, Lord Wells-Pestell, will be pleased to hear. I have explained the operation of the subsection at some length. The Government decided to make this reduction in the earnings-related supplement to achieve substantial savings in 1981. I apologise to the noble Lord, Lord Wallace of Coslany, remembering his remarks in this regard last night, but I can assure him of the pleasure I had when I read his maiden speech in another place on 7th February 1946.
These savings amount to £65 million, partly offset by supplementary benefit expenditure of £5 million at current

979
benefit rates in the calendar year 1981. We must achieve savings in the social security programme, and this subsection makes an important contribution to overall savings. Earnings-related supplement and addition are paid for a limited period only to a limited number of beneficiaries, and are paid on top of the basic benefit. We could not accept an amendment which would reduce the total savings and force us to find savings elsewhere, which would be more painful. I must, therefore, ask for your Lordships' support in resisting this amendment.
Baroness WOOTTON of ABINGER: The noble Lord, Lord Sandys, has given us a very stimulating intellectual discourse which contained two points on which I should like to comment. The first was his elaborate explanation that there is no real actuarial basis for the benefits that people now receive under the National Insurance Act. Whatever else may be said from this side I should like to say that I am entirely in agreement with the noble Lord, and this has been true for a long time. The argument that what people are paid governs what they receive is, with great respect to my noble friend Lord Wells-Pestell, now out of date because that relationship has long since been destroyed. That is a simple matter which we can appreciate. People now receive what Parliament decides they shall receive.
The other point on which I should like to comment is the incredible complexity of the regulations. I doubt whether many of your Lordships who listened to the admirable explanation of the noble Lord, Lord Sandys, could repeat any part of it correctly. I should like to emphasise that if these are the regulations by which people who have had fewer educational advantages than many of your Lordships will find their incomes governed, then the regulations are completely disastrous. The great point is that we should get something simple. However, at the end of his remarks the noble Lord, Lord Sandys, said something which we can all understand and which I can understand—that those who would have received 15 per cent. of something will now receive 10 per cent. of something, and that is the "guts" of the amendment. For that reason, I hope that my noble friends will sustain the amendment.
Lord WELLS-PESTELL: I find myself in complete agreement with my noble friend Lady Wootton of Abinger. Anyone who knows the noble Lord, Lord Sandys, as I and many people have come to know him over the years, will realise that if he takes on something, he is extremely thorough. I say that because it is absolutely true. I have been against him for something like five years and I know that to be so. With the greatest possible respect, I want to say that this has nothing whatever to do with what is before your Lordships' Committee. We are not concerned with the philosophy of Beveridge; we are not concerned with the opinions of Nye Bevan; we are not concerned with what people thought in 1940. We are concerned with Sections 14(7), 22(4) and 24(3) of the Social Security Act 1975, which laid down what people receiving unemployment benefit, sickness benefit, maternity allowance and widow's allowance are entitled to. That is all we are concerned with.
Our welfare state was based upon concept, and my noble friend Lady Wootton is perfectly right when she said that our insurance scheme and our national insurance has no bearing whatever on the thinking of that time; for the simple reason that Governments have found that, whatever a political philosophy may be, it must be interpreted in political terms and ultimately in an Act of Parliament which goes on the statute book, giving people certain rights. There are noble Lords sitting opposite me who have seen more Acts of Parliament put on the statute book than I shall ever see, and who have participated in their formulation. The Social Security Act 1975 was another Act which laid down people's entitlement. The only way in which to do things in our society today is for Governments to look at something, come to a decision and put it on the statute book.
On this side of the Committee our quarrel concerns the fact that people are entitled to an earnings-related supplement. The noble Lord is quite right when he said, I think, that I said I did not question the legality of it. I do not question the legality of it because a Government can change an Act of Parliament, which is precisely what the present Government are proposing. On behalf of my noble friends, I am saying that it is thoroughy immoral to do so. People have been

981
promised an earnings-related supplement at a certain level, for which they have paid national insurance contributions. I say it is thoroughly disgraceful and immoral that the Government should come along when it suits them and say, "All right. Instead of giving you 15 per cent., we shall give you only 10 per cent." That is the nub or crux of the argument.
Lord SANDYS: It may well be that the noble Lord, Lord Wells-Pestell, feels that the Government are being immoral. But I have attempted to show that that is not the case. I would further point out the remarks of his noble friend Lady Wootton of Abinger, which related to the extreme complication of the situation as it is. What better way to relieve the noble Baroness of her anxieties—and, indeed, the anxieties of a very large number of people—in computing this scheme than to ensure its abolition at the cut-off date of June 1982, the date to which I have referred?
Lord ROSS of MARNOCK: When this scheme was introduced, can the noble Lord tell us what changes were made in respect of payments made by those who were insured? It is all very well for him to give us a long lecture starting in 1945, and jumping to 1954, and then 1959. It is a great pity that the Minister of Pensions and National Insurance at that time is not with us—he was the noble Lord, Lord Boyd-Carpenter.
I can remember all the arguments in respect of the notional fund relating to insurance. I can remember all the arguments about the projections that were made, as to whether this fund would be viable in 10, 15 or 20 years' time. The argument advanced was that pensions should be paid out of finance annually. But in 1959, or just before, another scheme was introduced by the noble Lord, Lord Boyd-Carpenter. It was supposed to be based actuarially, and there are certain aspects of our present national insurance which are still said to be based actuarially. There is no doubt that it is a bit of a mess. But it is not right to say that we should get rid of this by abolishing entitlements. On the basis of his last argument, we shall abolish unemployment benefit altogether. I think that the noble Lord, Lord Hill of Luton,
982
will remember the introduction of a free National Health Service in, I think, 1956. Then 10d. was added to the cost of the insurance stamp, but that had nothing to do with insurance; it was to do with payment for the National Health Service.
I can assure the noble Lord that his arguments have not satisfied me. In the subsection he is actually making a transitional reduction prior to wiping out an entitlement which people presently have and for which they have paid for some considerable time. If he had also said—if the noble Baroness wishes to interrupt me I will gladly sit down. I shall then be able to answer her in this speech rather than later on.
Baroness YOUNG: I was not intending to comment on what the noble Lord, Lord Ross, is saying, but there are two Statements to be made, and when he has completed his remarks I think we ought to resume the House to hear the Statements.
Lord ROSS of MARNOCK: We are in Committee, and it is very easy for me to sit down and resume my remarks later.
Baroness YOUNG: I beg to move that the House do now resume.
Lord WELLS-PESTELL: We have come to the end of this discussion, and we wish to divide the Committee. Surely we can do this before we hear the Statements. Having reached the point where we wish to divide, surely this is the right time to do it.
Baroness YOUNG: When the noble Lord, Lord Wells-Pestell, was speaking before, I thought that we were going to conclude the business and divide the Committee. Then the noble Lord, Lord Ross, started to speak and I thought that noble Lords wished to continue with the debate. We are in Committee, and we could conclude discussion on the amendment at any time. But certainly we will divide the Committee at this stage if that is the wish of the noble Lord.
Lord HAWKE: I was thinking of saying a few words, but I will postpone them until after the Statements.
Baroness YOUNG: As the noble Lord, Lord Ross, also wished to say something further—
Lord ROSS of MARNOCK: May I say that I have quite finished now? I can say anything more that I want to say on the next amendment.
Baroness YOUNG: I think we are in a difficulty. We are in Committee. We can go on with this debate, and of course we can divide the Committee at any stage the noble Lord, Lord Wells-Pestell, or his colleagues wish. But I think we should now resume the House in order to take the Statements.
Several noble Lords: No, divide!
Lord TREFGARNE: I am sorry to intervene once more, but if there are noble Lords who still wish to speak I think we must resume the House.
Lord PEART: Looking around, I think the consensus is that we should divide the Committee. We have two very important Statements to come, and there is a long way to go on this Bill. I think we ought to divide now.
Lord TREFGARNE: I am sorry to intervene once more, but my advice is that it is not proper to deny a noble Lord the right to speak. In that case, I beg to move that the House do now resume.
Moved, That the House do now resume—(Lord Trefgarne.)
Lord DAVIES of LEEK: We are in a proper mess now.
Baroness LLEWELYN-DAVIES of HASTOE: As neither the Chief Whip nor I was here at the beginning of this discussion, may I say that as we understand it nobody on our side of the Committee wished to say anything further on that particular amendment and that therefore it was proper to take the Division. What we did not think was proper was to resume the House.
Baroness YOUNG: May I just explain the position? The noble Lord, Lord Wells-Pestell, made a speech. I thought he was concluding the debate on the amendment. When he sat down, the noble Lord, Lord Ross, rose to speak. At that stage we
984
had the information that we could take the Statements. I then made a move to get up, and I said to the noble Lord, Lord Ross, who gave way, that I did not wish to interrupt his remarks but that when he sat down I should like your Lordships to take the two Statements. At that stage the noble Lord, Lord Wells-Pestell, said that he wished to divide the Committee. I was agreeable to that, but one of my noble friends wished to speak. We are in Committee. It is right that anyone who wishes to speak should be able to do so. We are perfectly willing to divide the Committee at any stage, although of course it is principally for the noble Lord, Lord Wells-Pestell, or for any member of the Committee to say when they wish to divide. It seemed to me correct that at this stage we should resume the House to take the Statements.
Baroness LLEWELYN-DAVIES of HASTOE: If we are still in the middle of a discussion on an amendment, of course we should continue with it. I am sure the noble Lord the Chief Whip will agree with me that we take Statements at a time agreed between the two Front Benches. That time was not agreed.
Lord DENHAM: I understand that my noble friend Lord Hawke wishes to keep the Committee for only one minute on this particular amendment. The difficulty is that, after the noble Lord, Lord Wells-Pestell, had concluded, had the Committee divided, then, of course, it would have been rather difficult for my noble friend to get up and speak. But there has been another speech. Perhaps we could hear what my noble friend Lord Hawke has to say.
Lord BYERS: With all respect to the Chief Whip, we are in the middle of a vote. We are in the middle of a Motion. It has been put once by the Chair, and surely we must dispose of that before we proceed to the next business.
Lord DENHAM: I absolutely agree, and it was this Motion that I was speaking to. May I suggest that it be put to the Committee? After it is put to the Committee, perhaps my noble friend Lord Hawke may say what he wishes to say and then we can conclude this amendment before we have the Statements.
The DEPUTY CHAIRMAN of COMMITTEES (The Earl of Listowel): Perhaps I should remind the Committee that the Motion is that the House do now resume.
On Question, Motion disagreed to.
Lord HAWKE: I do not think I have ever spoken in such baffling circumstances. I wanted to say one or two words about the background to the detail that has been dealt with so ably by my noble friend Lord Sandys. For a number of years I have viewed with concern and interest the tussle going on in this country between the producers and the non-producers, the producers being those in work, and the non-producers being the people at school, the old age pensioners and so on, whose numbers, if anything, have been increasing.
Successive Governments have handed out to the non-producers increasing amounts of money the whole time, perhaps not in real terms, but in money terms. That money has to come from
somewhere else, and it can come only from the producers. Time and time again the producers have rebelled when asked to pay higher and higher taxes and increased (what we call) national insurance contributions but which are in effect taxes. They have nearly gone on strike for more pay to meet those increases. The result is that an inflationary process has been set in train. In our economy, 1 reckon that the mainspring of inflation is the price of oil and coal; but the element which has kept it going more than anything else is the increasing cost of social security payments. This clause is just one small item in the attempt to keep those things down.
3.47 p.m.
On Question, Whether the said amendment (No. 25) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 105.
Baroness YOUNG: I beg to move that the House do now resume.
House resumed.

SOCIAL SECURITY (No. 2) BILL
4.43 p.m.
House again in Committee.
[Amendment No. 26 not moved.]
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 27:
Page 4, line 33, leave out from ("allowance") to ("shall") in line 34.
The noble Lord said: This can be taken fairly quickly. I hope, having regard to the substance of it, that the noble Baroness the Minister will be able to accept it. This amendment would prevent the abolition of the earnings-related addition to a widow's allowance. The case for preserving this allowance I think is particularly strong for a number of reasons. First, of all the groups of people who might be asked to share in the sacrifices resulting from the Government's policies, women who have recently suffered the tragedy of the death of their husband are surely among the least appropriate victims.
In addition to the emotional stress resulting from widowhood, it has always been
1008
recognised that this is a time when they particularly need financial support to help them to adjust to the new situation. Secondly, the argument about incentives and the relationship between benefit and earnings which underlie the Government's hostility to the earnings-related supplements to unemployed and sickness benefit, has no relevance whatsoever to the situation of widows. Thirdly, the earnings-related addition to the widow's allowance must be seen in the context of the long-term provision for widows in the national insurance scheme. Widow's allowance is payable for the first six months of widowhood after which it is replaced by a widowed mother's allowance if there are dependent children, or by a widow's pension if there are no children but the widow is aged 40 or over.
Under the Social Security Pensions Act 1975 those benefits are increased by the earnings-related pension which the husband had earned by his contributions from 1978. But the additional earnings-related pension is not paid for the first six months of widowhood precisely because during that period the widow is entitled to a short-term earnings-related addition. If the earnings-related addition payable under the earnings-related scheme is to be abolished, the earnings-related pension payable under the 1975 Act clearly ought to commence immediately on the husband's death. Since the Government do not propose to extend, as I understand the situation, the 1975 Act pension in that way, it would be wrong to abolish the existing earnings-related addition for the first six months of widowhood.
I would say to the noble Baroness that it is really a special case. I am not unmindful that there is a lot to be said against special pleading. If one does it for one, why does one not to it for another? I accept all that; but there is a strong case to be made out here. I hope that the noble Baroness, unless she is quite adamant that this cannot be done or the Government will not do it, will take this amendment back and have a look at it. I beg to move.
Baroness MACLEOD of BORVE: I am grateful to the noble Lord for what he has said about widows being a special case. When widows are mentioned, having been twice widowed, I am apt to plead

1009
their case. Widows are frequently in financial trouble, sometimes because of the overlapping benefit rule, which is very strict. At the same time it would not be fair—as I said in Second Reading—to exclude them from the Government's reductions. However, I feel that there is a special case for them. The new widows have been greatly helped by the Chancellor, who agreed that they can keep the tax allowance for the first year, which is £770. But if the ERS is taken away, it would in most cases mean giving with one hand and taking away with the other.
The ERS has been paid for, after all, by paying Class 1 National Insurance contributions, and the abolition of the ERS on widow's allowance will of course affect only women. But if the ERS is abolished, those paying Class 1 National Insurance contributions will once again be paying and receiving no benefit. I know the Committee has heard reference to this today. Perhaps one should not expect to get out what one has put in. Some people seem to think that one should; and some people seem to think that one should not.
As understand it, the ERS was created in 1966 in order to cushion those in difficulties and lift those people up above the poverty line for this crucial short period of six months. It affects the widows over 60 if their husbands were under 65 and working at the time of death. It will be obvious to your Lordships that I am trying to find my way through this maze of difficulties. I have been given a few particulars by my widows, and perhaps I may ask my noble friend whether he can make an exception in these particularly difficult circumstances.
Lord SANDYS: I fully recognise the concern that has been expressed about this problem by both the noble Lord, Lord Wells-Pestell, and by my noble friend Lady Macleod. I think there is a considerable case for special pleading in this regard, but I am unhappy to say that it will be difficult for me to add very much to what has already been said in another place.
I fully understand why this amendment seeks to exempt widows from the provisions of Clause 4(2), but I am unable to accept the amendment. Subsection 4(2) abolishes, with effect from January 1982, the earnings-related supplement payable
1010
with short-term incapacity and unemployment benefits, and the earnings-related addition payable with widows' allowance during the first 26 weeks of widowhood. Under this amendment, widow's earnings-related addition would be exempt from this abolition, and would continue to be paid, though at the reduced rate introduced under Clause 4(1).
We have had to make difficult decisions on this Bill. We have had to find savings in the social security programme and it has not been an easy task. This subsection achieves substantial savings in 1982/83 and makes a major contribution to the total package. Earnings-related supplement was introduced in 1966, primarily in respect of unemployment benefit; but because of the close relationship between unemployment benefit and the other short-term benefits it was paid with these from the outset. It would be illogical to exempt any of these benefits from the effect of Clause 4(2) and it would also be costly. We would lose savings of around £12 million in a full year if this amendment were accepted, and we cannot accept reductions in the total package of this order.
However, I would refer to what the noble Baroness said in regard to the Chancellor's arrangements under his tax concession. I think she will be reassured to hear that from 5th April 1980 a widow has been able to qualify for a widow's bereavement allowance of £770 in the year of her husband's death, irrespective of when in that year her husband died. The concession will still be of benefit to a great many widows, whether or not the earnings-related addition is abolished, as it will reduce their tax liability during the year in which their husband dies or take them out of tax altogether. It is true that some widows will lose the benefit of the earnings-related addition when it is abolished from 1982, but only some 60 per cent. of widows are at present entitled to this addition and in many cases the amount of the addition they would have received during the tax year would be less than the amount gained owing to the tax concession. There are advantages and disadvantages but, on balance, I think the noble Baroness will agree that it is an advantage.
I have said that I understand the difficulties faced by widows. But I think

1011
we must recognise that the basic widows' allowance is paid at a much higher rate than the other short-term benefits (post November 1980 the proposed rate for widows' allowance is £38·00, compared with £20·65 for the single person's unemployment or sickness benefit) and the allowance is paid to younger widows, who may in fact be working before and after their bereavement. Widows have the unique advantage among short-term beneficiaries of receiving full benefit on top of full earnings. This and their high basic rate of benefit explain why comparatively very few widows are expected to have to claim supplementary benefit when the earnings-related addition stops. In making savings, we have, in Clauses 2, 4 and 5, concentrated on those areas where payments are received in addition to the basic benefits. Finding comparable savings elsewhere would involve still more difficult choices. In conclusion, I should perhaps remind your Lordships that the benefits of most value to most widows are the widows' pension and the retirement pension. These are not affected in any way by the Bill and are fully price protected.
Lord DRUMALBYN: If I understood him aright, my noble friend said that supplement would be abolished as from January 1982. Is that actually in the Bill or is it just the intention of the Government that that should be so? I cannot find it in the Bill.
Lord SANDYS: I think I said on the amendment we dealt with just before the Statements that the cut-off point is June 1982. I think the cut-off final date for ERS is June 1982.
Lord DRUMALBYN: But is it in the Bill? It seems to me that it is governed by Clause 8(2) and it is not yet actually in the Bill: it is an intention. Is that so?
Baroness YOUNG: As I understand it, it will be governed by regulations.
Lord WELLS-PESTELL: The noble Lord staggers me somewhat. He said, "Only 60 per cent." of widows will benefit. I should have thought that that was an enormous number. It is nearly two-thirds, and to argue that they would not derive much more benefit than they
1012
have already derived as a result of the changed tax structure means that if they had this earnings related supplement, however small, they would be that much better off. This is the 27th amendment. Are the Government saying that no matter what the merit of the case is and no matter how important the amendment is, in no circumstances are they going to consider the merit, even if the sum is small? I suggest that the amount of money which will be saved here is £12 million. It is an infinitesimal sum, and I really feel that if the attitude of the Government is: "All right: we are not going to give an inch; we are not going to budge; we are not going to consider the merits of the case put to us", why not say so? We could shorten these proceedings very considerably.
Baroness YOUNG: We on this side, of course, have a great deal of sympathy with what the noble Lord, Lord Wells-Pestell, and my noble friend have been saying, particularly because my noble friend speaks with a wealth of experience and represents an organisation of widows, and, therefore, has a great deal of knowledge of these matters. The fact is that we are not in a position to be able to accept this amendment, but I will, of course, draw the attention of my right honourable friend the Secretary of State to the remarks that have been made in the course of this discussion. But it would be quite wrong of me to pretend to your Lordships that we are in a position to take this back and look at it again, when I know in fact what the answer to that particular question is.
My noble friend Lord Sandys has explained very clearly that the Government's overall policies have, in some respects, meant an improvement for widows. Although we accept that by the abolition of earnings-related supplement some will be worse off, the fact is that we have introduced a great many other benefits which will be of benefit to widows. So I hope that my noble friend and her colleagues in her organisation will recognise those benefits, when they consider this matter which is before the Committee today.
5 p.m.
On Question, Whether the said amendment (No. 27) shall be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 108.

CONTENTS

Alport, L.

Gaitskell, B.

Plant, L.

Amherst, E.

Gladwyn, L.

Ponsonby of Shulbrede, L. [Teller.]

Amulree, L.

Gordon-Walker, L.

Ardwick, L.

Goronwy-Roberts, L.

Robson of Kiddington, B.

Bacon, B.

Gosford, E.

Rochester, L.

Balogh, L.

Grey, E.

Ross of Marnock, L.

Banks, L.

Hale, L.

Sainsbury, L.

Barrington, V.

Hall, V.

Seear, B.

Beaumont of Whitley, L.

Hatch of Lusby, L.

Segal, L.

Beswick, L.

Henderson, L.

Simon, V.

Birk, B.

Hood, V.

Stewart of Alvechurch, B.

Blease, L.

Irving of Dartford, L.

Stewart of Fulham, L.

Blyton, L.

Jacques, L.

Stone, L.

Boston of Faversham, L.

Janner, L.

Strabolgi, L.

Bowden, L.

Kilbracken, L.

Strauss, L.

Brimelow, L.

Leatherland, L.

Tanlaw, L.

Brockway, L.

Lee of Newton, L.

Taylor of Blackburn, L.

Bruce of Donington, L.

Leonard, L.

Taylor of Mansfield, L.

Burton of Coventry, B.

Listowel, E.

Underhill, L.

Byers, L.

Llewelyn-Davies of Hastoe, B.

Wall, L.

Chitnis, L.

McNair, L.

Wallace of Coslany, L. [Teller.]

Crook, L.

Maelor, L.

Wells-Pestell, L.

Cudlipp, L.

Maybray-King, L.

Whaddon, L.

Darling of Hillsborough, L.

Milverton, L.

Wigoder, L.

David, B.

Mishcon, L.

Wilson of Radcliffe, L.

Davies of Leek, L.

Ogmore, L.

Winterbottom, L.

Donaldson of Kingsbridge, L.

Pargiter, L.

Wootton of Abinger, B.

Elwyn-Jones, L.

Peart, L.

Wynne-Jones, L.

Fisher of Rednal, B,

Phillips, B.

NOT-CONTENTS

Airey of Abingdon, B.

Bolton, L.

Cottesloe, L.

Alexander of Tunis, E.

Brooke of Cumnor, L.

Craigavon, V.

Allerton, L.

Brooke of Ystradfellte, B.

Crathorne, L.

Amory, V.

Campbell of Croy, L.

Cromartie, E.

Ampthill, L.

Clancarty, E.

Cullen of Ashbourne, L.

Bellwin, L.

Clitheroe, L.

Davidson, V.

Belstead, L.

Clwyd, L.

de Clifford, L.

Berkeley, B.

Cockfield, L.I

De La Warr, E.

Denham, L. [Teller.]

Hillingdon, L.

Rawlinson of Ewell, L.

Derwent, L.

Hives, L.

Redmayne, L.

Drumalbyn, L.

Holderness, L.

Reigate, L.

Dundee, E.

Home of the Hirsel, L.

Renton, L.

Eccles, V.

Hylton-Foster, B.

Roberthall, L.

Effingham, E.

Ilchester, E.

Rochdale, V.

Ellenborough, L.

Inglewood, L.

Rugby, L.

Elliot of Harwood, B.

Kinloss, Ly.

Saltoun, Ly.

Elton, L.

Kinnaird, L.

Sandford, L.

Emmet of Amberley, B.

Lauderdale, E.

Sandys, L. [Teller.]

Exeter, M.

Long, V.

Selborne, E.

Falkland, V.

Lovat, L.

Soames, L. (L. President.)

Ferrers, E.

Luke, L.

Somers, L.

Fraser of Kilmorack, L.

Lyell, L.

Spens, L.

Gage, V.

McFarlane of Llandaff, B.

Strathclyde, L.

Geddes, L.

Mackay of Clashfern, L.

Strathcona and Mount Royal, L.

Geoffrey-Lloyd, L.

Macleod of Borve, B.

Strathspey, L.

Gibson-Watt, L.

Mancroft, L.

Tranmire, L.

Glenkinglas, L.

Mansfield, E.

Trefgarne, L.

Godber of Willington, L.

Marley, L.

Trenchard, V.

Gowrie, E.

Martonmere, L.

Ullswater, V.

Gridley, L.

Mowbray and Stourton, L.

Vickers, B.

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

Netherthorpe, L.

Vivian, L.

Newall, L.

Wakefield, of Kendal, L.

Hatherton, L.

Northchurch, B.

Ward of Witley, V.

Hawke, L.

Nugent of Guildford, L.

Young, B.

Hill of Luton, L.

Nunburnholme, L.

Hill-Norton, L.

O'Neill of the Maine, L.

Moved accordingly, and, on Question, Motion agreed to.

CONTENTS

Amulree, L.

Grey, E.

Pitt of Hampstead, L.

Ardwick, L.

Hale, L.

Plant, L.

Avebury, L.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L. [Teller.]

Aylestone, L.

Henderson, L.

Bacon, B.

Hood, V.

Ritchie-Calder, L.

Balogh, L.

Houghton of Sowerby, L.

Robson of Kiddington, B.

Banks, L.

Howie of Troon, L.

Rochester, L.

Beaumont of Whitley, L.

Hutchinson of Lullington, L.

Ross of Marnock, L.

Beswiek, L.

Irving of Dartford, L.

Sainsbury, L.

Birk, B.

Jacques, L.

Seear, B.

Blease, L.

Janner, L.

Segal, L.

Blyton, L.

Kilbracken, L.

Simon, V.

Boston of Faversham, L.

Leatherland, L.

Stewart of Alvechurch, B.

Bowden, L.

Lee of Newton, L.

Stewart of Fulham, L.

Brimelow, L.

Leonard, L.

Stone, L.

Brockway, L.

Listowel, E.

Strabolgi, L.

Bruce of Donington, L.

Llewelyn-Davies, L.

Strauss, L.

Burton of Coventry, B.

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

Tanlaw, L.

Byers, L.

Taylor of Gryfe, L.

Crook, L.

Longford, E.

Taylor of Mansfield, L.

David, B.

Lovell-Davis, L.

Underhill, L.

Davies of Leek, L.

McNair, L.

Wall, L.

Donaldson of Kingsbridge, L.

Maelor, L.

Wallace of Coslany, L.

Elwyn-Jones, L.

Melchett, L.

Wedderburn of Charlton, L.

Evans of Claughton, L.

Meston, L.

Wells-Pestell, L.

Fisher of Rednal, B.

Milverton, L.

Whaddon, L.

Gaitskell, B.

Mishcon, L.

Wigoder, L.

Gifford, L.

Noel-Baker, L.

Wilson of Radcliffe, L.

Glenamara, L.

Ogmore, L.

Winterbottom, L.

Gordon-Walker, L.

Pargiter, L.

Wootton of Abinger, B.

Goronwy-Roberts, L.

Peart, L.

Gosford, E.

Phillips, B.

NOT-CONTENTS

Airey of Abingdon, B.

Falkland, V.

Newall, L.

Alexander of Tunis, E.

Ferrers, E.

Norfolk, D.

Allerton, L.

Fraser of Kilmorack, L.

Northchurch, B.

Amory, V.

Gage, V.

Nugent of Guildford, L.

Ampthill, L.

Gainford, L.

Nunburnholme, L.

Balerno, L.

Geddes, L.

O'Neill of the Maine, L.

Bellwin, L.

Geoffrey-Lloyd, L.

Orkney, E.

Belstead, L.

Glenkinglas, L.

Porritt, L.

Berkeley, B.

Godber of Willington, L.

Rawlinson of Ewell, L.

Bessborough, E.

Gowrie, E.

Redmayne, L.

Bolton, L.

Grantchester, L.

Reigate, L.

Brooke of Cumnor, L.

Gridley, L.

Renton, L.

Brooke of Ystradfellte, B.

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

Rochdale, V.

Cairns, E.

Rugby, L.

Camoys, L.

Halsbury, E.

Saint Oswald, L.

Campbell of Croy, L.

Hanworth, V.

Saltoun, Ly.

Clifford of Chudleigh, L.

Hatherton, L.

Sandford, L.

Clitheroe, L.

Hawke, L.

Sandys, L. [Teller.]

Clwyd, L.

Hertford, M.

Selkirk, E.

Craigavon, V.

Hill of Luton, L.

Soames, L. (L. President.)

Crathorne, L.

Hillingdon, L.

Somers, L.

Croft, L.

Hives, L.

Spens, L.

Cullen of Ashbourne, L.

Holderness, L.

Stamp, L.

Davidson, V.

Home of the Hirsel, L.

Strathclyde, L.

de Clifford, L.

Hood, V.

Strathcona and Mount Royal, L.

De La Warr, E.

Hylton-Foster, B.

Strathspey, L.

Denham, L. [Teller.]

Lauderdale, E.

Tranmire, L.

Drumalbyn, L.

Long, V.

Trefgarne, L.

Dundee, E.

Lucas of Chilworth, L.

Trenchard, V.

Eccles, V.

Lyell, L.

Ullswater, V.

Ellenborough, L.

Mackay of Clashfern, L.

Vaizey, L.

Elliot of Harwood, B.

Mais, L.

Vickers, B.

Elton, L.

Mansfield, E.

Vivian, L.

Emmet of Amberley, B.

Marley, L.

Wakefield of Kendal, L.

Energlyn, L.

Merrivale, L.

Ward of Witley, V.

Evans of Hungershall, L.

Mowbray and Stourton, L.

Young, B.

Exeter, M.

Murton of Lindisfarne, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.8 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 28:
Page 4, line 36, at end insert ("unless it is a period in respect of which the weekly rate of earnings-related supplement or earnings-related addition is to be ascertained by reference to the claimant's reckonable earnings for a tax year not later than 1980–1981.")
The noble Lord said: This amendment would ensure that the earnings-related supplement continues to be payable for spells commencing up to January 1983, instead of only up to 1982 as the Government propose. The contribution rates for 1980–81 were fixed last November, as your Lordships know, long before there was any question of the earnings-related supplement being abolished. It is true that national insurance operates on a "pay as you go" basis, but from the point of view of the individual contributor there is a clear connection between what he pays in this year and what he draws out in future years.
The connection is particularly clear where, as with the earnings-related supplement, the amount of benefit is directly related to the amount of the contributions paid in a particular year. To fix the contribution rate and then announce that one of the principal benefits based on the contributions paid in that year is to be abolished may be defensible—I say that it may be defensible—in terms of "pay as you go" financing, but most contributors will look upon it with very grave suspicion. I shall not put a word to it, but I do not think "robbery" would be out of place.
The whole contributory basis of the national insurance scheme rests—and I think this is where the Government slip up very badly, indeed—on the confidence of the working population that the benefits for which they are contributing will be paid. If they only knew the working population a little better, and realised how important some things are to them, the Government would not get themselves into this difficulty. What I am trying to do is to be very generous and get them out of it, but over the months the Government have made it abundantly clear that they do not need my help and that they will not touch it with, if I may say so, the proverbial barge-pole.
Let me end by saying that the whole of the Bill, especially Clause 4, threatens to undermine the confidence of ordinary working people. There are millions of them and they ought not to have a view about any Government that will lead them to believe that they are being taken for a ride. It is on that basis that I move the amendment.
5.11 p.m.
Lord SANDYS: I have listened with interest to the arguments of the noble Lord, Lord Wells-Pestell. I think I can say that we on this side of the Committee always listen to his arguments with the closest care and, indeed, read them afterwards. But the problem is that it is impossible for the Government—indeed, for any Government—to say that the situation as regards national insurance is frozen in time. In the past, much has had to be superseded by changes in benefit, and this Bill makes further changes.
Clause 4 aroused a very great deal of criticism, both during the Second Reading and again in Committee. Clause 4(2) provides for the abolition of the earnings-related supplement and the earnings-related addition. It is intended to abolish the benefit from 3rd January 1982, the start of the 1982 benefit year. Claimants whose period of interruption of employment through unemployment or incapacity begins before 3rd January 1982, or whose husband dies before that date, will retain their entitlement to the supplement, or addition, until the entitlement is exhausted or the period of interruption of employment ends, subject to a final cut-off at the end of June 1982. These will be people whose entitlement to benefit depends on reckonable earnings in the 1979–80 tax year or, in the case of linking claims, an even earlier year.
The abolition of the earnings-related supplement and the earnings-related addition from January 1982 is a crucial part of our overall strategy to achieve savings in public expenditure. If abolition were delayed, we should have to find savings elsewhere in the social security programme which would be extremely difficult to achieve without causing a great deal of hardship.
It has been suggested that the abolition of the earnings-related supplement and the earnings-related addition is a breach

1017
of contract. The noble Lord has referred to this many times, both on Second Reading and on earlier amendments. The argument put forward is that the supplement paid out during 1982 will be paid for by contributions which people are paying at the moment and that they will therefore lose a benefit which they have already paid for. My noble friend Lady Young gave a detailed explanation of this point during Second Reading and I quoted her this afternoon, but it may be helpful if I go through the important points once again.
It is true that the entitlement to the supplement during the benefit year 1982 will be based on earnings upon which contributions have been paid in the current tax year 1980–81. Entitlement during 1982 is based on earnings in 1980–81, for the practical reason that we have to obtain information about earnings for 1980–81 from employers and it has to reach the Newcastle computer before the benefit rates can be calculated. But the 1980–81 earnings do not pay for the 1982 benefits.
The national insurance scheme is not a funded scheme, which I referred to earlier, but is run on a pay-as-you-go basis. Contributions are set each year taking account of likely expenditure on the benefit in that year. Earnings-related supplement will not be abolished until the latter part of the 1981–82 tax year, and the abolition will he one of the factors taken into account when the contribution rates for the year are fixed.
This is a complex issue and I hope that I have been able to explain what the real position is. We could not accept an amendment which would reduce total savings by some £275 million in 1982–83, and I must therefore ask your Lordships to resist this amendment.
Lord BANKS: Before we finally leave this subject of the earnings-related supplement, I should like to return to the argument which the noble Lord, Lord Sandys, has pursued in the course of his remarks about entitlement to benefit. We all know that it was originally envisaged, as the noble Lord explained to us on an earlier amendment, that national insurance should be fully funded. Also, we all know that in the event it was not fully
1018
funded and that eventually, because of that, it was transferred entirely on to a pay-as-you-go basis. But that does not alter the fact that people have an entitlement to national insurance benefits in relation to the contributions which they have paid. The fact that it is pay-as-you-go instead of on an insurance basis does not make any difference to that. When it comes to the question of benefit that people are going to get, this will depend upon the contributions which they have made. That will be the source of their entitlement.
We know that the Government have the right to alter the level of benefits, and we know that the Government have the right to alter the nature of benefits. But surely any Government ought to hesitate about abolishing benefits to which contributors believe they are entitled, especially when this is done to accumulate money in a national insurance fund at a time when contributions are proving to be quite adequate. It is not done because the fund is in difficulties; it is done for quite other reasons—for economic reasons, for reasons to do with the Government's handling of the economy. As the noble Lord, Lord Wells-Pestell, said, if this were done on any scale, confidence in the national insurance scheme would surely vanish completely.
5.19 p.m.
Baroness PHILLIPS: Before the noble Lord the Minister replies, may I draw attention to the fact that the Government are yet again perpetuating the rather curious idea that some benefits will be either better or worse according to the year in which a particular Act comes into force. To take, for example, the widow's allowance, it appears from what the Minister has said that a woman who becomes a widow in one year will be better off than a woman who becomes a widow in another year. That is something you do not determine, nor indeed desire.
We had an earlier discourse from the Minister on the original Beveridge plan, which of course was based on a totally different concept from the one described by the Minister. It was based on the concept that, while one was young and fit and working, one paid into a fund from which one drew if one was unfortunate enough to be handicapped,

1019
widowed, elderly, unemployed or in any other such circumstance. But since we have moved away from that principle, I would still suggest that it is very curious to say that certain benefits will come to you if the situation arises before a certain date whereas those who are unlucky enough to have the same circumstance occurring after that date will not have the earnings-related benefit. There is something curiously unjust and curiously difficult in that, and if we once institute this into Acts of Parliament we shall have ladies arranging to make sure that their husbands die at the right moment so that they get the earnings-related benefit.
I have seen this so many times in Acts of Parliament over the years, when advising people on the question of pensions and benefits, and I know that it involves something which is quite fallacious. We already have enough of these anomalies on the statute book and I should have thought that the Government would hesitate to add some more, even to save money, although of course a national insurance fund is basically not designed to subsidise the state; it is put there for those who have to draw from it if it is necessary.
Lord DRUMALBYN: I should like to raise a small point about the cut-off date. If I understood my noble friend aright, he said that the earnings-related supplement would end on 3rd January 1982 but that those who already had an entitlement still running would be allowed to continue until a cut-off date, which I think he said was towards the end of June. It looks as though that is all right for the sickness benefit because that is 168 days and that would be just about running out by that time. In other words, the benefit and the earnings-related supplement would end at about the same time. But when we come to unemployment benefit, that runs for 312 days and the cut-off date would cut off the supplement in the middle of the period of benefit. I wonder whether he could give consideration to that.
5.23 p.m.
Lord ROSS of MARNOCK: I wonder whether the noble Lord would now proceed to answer the question which I asked him. When earnings-related benefits
1020
were introduced, am I right in thinking that earnings-related contributions also were introduced, and those contributions were related to what supposed benefits were going to come from these six-month benefits? It is wrong to say that actuarial calculations do not enter into it. It means this. There are millions of people who have paid these contributions but who, because of the Government's decision to end this particular benefit, are not going to draw a penny out of it and they will have a feeling that they have been "done". There is no saying what is going to happen after 1982, as to whether some of these people will be sick or rendered unemployed, and what they have paid for will not be available to them.
Are the Government going to make any change in the earnings contribution? Are they going to reduce it? I fancy not, otherwise the whole purpose of the Government would be spoiled. All they want to do is to save money, but they are doing it by cutting off the rights of people while at the same time they are continuing to charge the same. This is a very important point. It has nothing to do with insurance at all; it has nothing to do with unemployment benefit, sickness benefit and the rest of it. It is purely to do with the Treasury and the decisions which the Government have taken in respect of public sector spending. The department which the noble Baroness represents has been told, "You must save so much: go ahead and do it". They have been driven to these quite unethical procedures of ending benefits but not ending the contributions to which those additional benefits were related.
What we are asking for here is only an additional one year and they should at least give us that and show that they are tender in their thoughts about what they are doing. It is all very well for the noble Lord to stand up and say, "What we are doing is legal; there is nothing unethical about it". But I wonder when last we did anything like this. I wonder when last we ended a benefit without making a similar balancing reduction in contributions. I cannot remember it and I was concerned with national insurance matters for many years. This is not something which any Government would enter into lightly, and it does not stem from the Department of Health and Social Security but comes really from the Treasury.

1021
The noble Lord has a distasteful task. It is not one which any Minister would enjoy but he does not help it by embroidering it with all sorts of fanciful talk about notional funds which have long since gone. When a new benefit is introduced contributions are assessed in relation to actuarial considerations. The actual fact is that in the early years there is a very considerable profit from a Government point of view; it is only in the latter years that it falls off and here we are, having taken the profit, cutting off the benefit but continuing to take the earnings-related contributions.
Lord DAVIES of LEEK: Millions of people will be affected by this. I am sure that in the Conservative manifesto the public were not told that earnings-related supplements and unemployment benefits, sickness benefit, maternity allowances, and so on, would be cut down. I am sure that millions of people did not realise that. The sick and those who really are suffering thought that this Government which was coming in would give justice and it would be a brand new world. I find this a piece of unnecessary legislation to save a fiddling amount compared with the health and wealth of those who are sick and who need help.
Lord SANDYS: I think much of the last two speeches of the noble Lord, Lord Davies of Leek, and the noble Lord, Lord Ross of Marnock, was replied to very well by the noble Baroness, Lady Wootton of Abinger. T expect the noble Lord, Lord Ross, will remember what the noble Baroness said. She referred to the extreme complication of the whole of the social security budget. There comes a time when a great complication and great rigidity is built into a succession of statutes. I need not recite them all, but starting with the 1973 Act in current legislation—I will not go back further—one statute has built upon another, and the noble Lord will remember that in the last Social Security Bill we built into it a thing called a Keeling Schedule, which is a device to make the legislation a little easier to understand. This is in the nature of an experiment: I hope that it will work, I hope that it will prove to be a means of understanding legislation more satisfactorily.
In referring to what the noble Lord, Lord Drumalbyn, said in regard to the
1022
cut-off date, I would remind him that the second six months of unemployment benefit are at a flat rate; earnings-related is the same as for sickness benefit, and I think that answers his particular point.
I am sure that the Committee will have agreed with much of what the noble Baroness, Lady Phillips, said in regard to the unpredictability of the situation of widowhood. I am sure the very great sympathy of the whole Committee was attached to what she said. So many statutes promote a very difficult situation. There must always be marginal cases which fall one side of the line rather than the other. It is one of the tasks of Government to draw that particular line and to make rules and regulations—of which there are all too many—to attempt to alleviate their particular problem. The noble Baroness may feel that the Government have fallen on the wrong side of the line here, but she will recollect that my noble friend Lady Young has agreed to bring the matter of all the discussions on widows' benefit this afternoon to the attention of her right honourable friend the Secretary of State.
Lord WELLS-PESTELL: Let us get this quite clear. The Government cannot hide behind what really is not true. You cannot say—no one can say—that this is due to the rigidity of the statutes. We are not simple-minded people on this side of the Committee.
Lord SANDYS: I never said that the noble Lord was in any way simple-minded. I think it requires very great flexibility of mind to understand the statutes.
Lord WELLS-PESTELL: We really must not be treated as if we are simpleminded. To hide behind a phrase, that the real trouble is the rigidity of the statutes, has nothing to do with what we are talking about, and what we have talked about since 3 o'clock yesterday afternoon. The trouble is that it is the rigidity of the Government, who are going to save money by fair means or foul, whether legal or illegal, whether it means appropriating money which should go to one source—
Lord SANDYS: I think the noble Lord has agreed that there is nothing illegal in what the Government are seeking to do.
Lord WELLS-PESTELL: Well, my limited understanding of the situation may well be that it is not illegal. I hope that some group of people in the not too distant future will test this in the courts.
Lord DAVIES of LEEK: In a company we would call that a "bucket shop".
Lord WELLS-PESTELL: It is the rigidity of the Government. They are going to save money by fair means or foul. They have made that abundantly clear. Do not let us hide behind the statutes and say that it is the rigidity of the statutes. We know the statutes are numerous; there are too many of them. They need to be looked at, but it would not help us here. From beginning to end this is a Bill which has been designed, from the first clause to the sixth clause, to save money on a whole variety of things, whether the amounts are small or whether the amounts are large. I would have more sympathy with the Government if they were honest enough to say, "The purpose of this Bill is to save money; we have looked at every possible field where we can save money and this is what we are doing"—it has nothing to do with statutes.
Lord SANDYS: There are two points here. One is that it has been said by my right honourable friend the Secretary of State in another place in Standing Committee B that this is a Budget Bill. Because it is a Budget Bill your Lordships' House has a certain difficulty in handling it. Nevertheless, I think the second point is closely associated with it; that is, that it is a matter of much concern to your Lordships that so many detailed provisions concern the funding of particular parts of the Budget in respect of those cuts. We believe that the Government have been very honest in your Lordships' House in making constant declarations that it is our aim to save money. It is a matter of complaint by the noble Lord, Lord Wallace of Coslany, who said he would start screaming if we said so again Now his noble friend says we have not said it enough.
Lord WALLACE of COSLANY: I am on the point of doing so.
Lord WELLS-PESTELL: At the appropriate time, I think the Committee has to
1024
consider amending the Long Title to make it Social Security (No. 2) (Confidence Trick) Bill.
On Question, Amendment negatived.
Clause 4 agreed to.
Clause 5 [Abatement of unemployment benefit on account of payments of occupational pension]:
5.36 p.m.
Lord BYERS Lord BYERS moved Amendment No. 29:
Page 4, line 43, leave out ("£35") and insert ("£50").
The noble Lord said: Now that the minuet between the noble Lord, Lord Sandys, and the noble Lord, Lord Wells-Pestell, has finished, perhaps I might have leave to move the amendment which stands in my name on the Marshalled List, which is at page 4, line 43, leave out "£35" and insert "£50". Even if one reluctantly accepts the principle underlying Clause 5—and I am rather doubtful that I do—that unemployment benefit should be withheld from men between 60 and 65 who are drawing substantial occupational pensions, there is clearly no one obvious answer to the question of what constitutes a substantial pension. I believe the Government have admitted in another place that there is no particular magic in this figure of £35, and I in turn am not particularly wedded to the figure of £50 rather than, say, £49 or £51, or some other figure close to that.
I do not think that in the middle of 1980 £35 a week constitutes a substantial income. I say this for several reasons. First, it is less than half the national average earnings. Secondly, it is clearly essential that our system of social security benefits should be a coherent one, and any figure used in this clause should be—and I am not saying it should be identical—at least consistent with the qualifying figure for, say, family income supplement. At the moment, a married couple, even with only one child, is entitled to support from this part of the social security system if their income falls below £56, a figure much higher than the £35 in Clause 5 as it stands at the moment. Even if one deducts the amount attributable to the child under family income supplement, the figure must be much higher than £35. How,

1025
therefore, can such a gap between these two figures be justified? If a married man earning £56 a week is entitled to additional support from the social security system, we cannot sensibly say that if his income takes the form of an occupational pension and falls to £35 that that is adequate or substantial.
Thirdly, the figure of £35 contained in the Bill is even less than the basic state pension for a married couple, which is £37.30. In the majority of cases, a married couple, for whom that constituted their only source of income, would be entitled to a supplementary pension in addition. How, therefore, can a figure £2 lower than this, and paid by a former employer instead of the state, be labelled substantial? Fourthly, whether or not we care for the principle, I think we have to admit that the aim of this clause is to apply some sort of earnings rule to those claiming unemployment benefit, albeit that the income measured is in the form of an occupational pension rather than true earnings.
In the context of state pensions, of course we already have an earnings rule, and it bites on those with earnings above £52. There is a prima facie case for using the same figure here. However, while there could well be arguments about whether to use a figure approaching £56, to be consistent with the family income supplement figure, or a figure of £52 to be consistent with the earnings rule figure, it would, to my mind, be quite inconsistent and would create an unnecessary anomaly to set the figure in Clause 5 as it is, at only £35.
I am aware that the £35 is merely the starting point at which the means test begins to operate to reduce the unemployment benefit and that total income will be higher than that. Nevertheless, I believe that the starting point is too low against the background of modern living. My suggested alternative of £50 is, I think, a modest one and I hope that it will command your Lordships' support in all quarters of the Committee. I beg to move.
Lord WALLACE of COSLANY: I rise to support the amendment moved by the noble Lord, Lord Byers. The point to which the noble Lord, Lord Byers, has
1026
referred and which he has embodied in his amendment was raised by my noble friend Lord Underhill on Second Reading, and I consider that the Minister did not make a very satisfactory reply. The noble Baroness more or less implied that £35 was picked out of the air as an alleged substantial sum. I entirely agree with the noble Lord, Lord Byers, when he asks how £35 a week can be regarded as a substantial income. When one comes to think about the matter—and we have a certain interest here—if one is a London-based or a suburban-based Member of this House that amount is equal to two days' attendance allowance here; and that is not taking into account having to keep one's wife and family because, of course, one does not keep one's wife and family on the attendance allowance: one is supposed to have another income or another job, which may not be the case.
In her reply to my noble friend Lord Underhill the noble Baroness said that she was grateful to the noble Lord, Lord Boyd-Carpenter, for putting right what could be regarded as an abuse. However, we have had no substantial confirmation that abuses are taking place. Of course, in social security—whatever area one looks at—there is a small element of abuse. That is bound to arise.
The noble Baroness also alleged that employers are wary of employing people who are over 60. I am not so sure about that. Some employers I know do, if possible, take on people who are 60 or just over 60, rather than a younger person, because they regard them as more reliable and not so unreliable as the younger generation.
Another point that we must bear in mind is that there is an increasing appeal to people to retire early. Many unions have agreed to that—for example, the National Union of Mineworkers—and I was somewhat surprised when my daughter, who is a teacher, told me last night that her education authority has issued a circular urging women teachers to retire at 50. I thought that there was a teacher shortage. That is the type of background that we must think about, and I believe that the Government should reconsider the matter—not necessarily accepting the amendment now—and give an undertaking to have another look at it and to sum up the situation in a better way than

1027
was done on Second Reading and will possibly be done in reply to the amendment tonight.
5.44 p.m.
Lord DRUMALBYN: I am interested to note from the two speeches that have been made that there is no substantial opposition to the principle of this particular clause. Perhaps it is worth recalling that quite a long time ago—about 17 years ago—our colleague Lord Evans of Hunger-shall made a report on this matter. I remember it very well because at the time I happened to be at the Department of National Insurance. That report has been in cold storage for quite a long time, but at last it has come out. I cannot say that I remember the details. Indeed, I doubt whether I would find a copy of it in the Printed Paper Office, but no doubt it is in the Library. I do not know whether the figure of £35 was in some way related to the figure of "disregard", so to speak, that the noble Lord recommended at that time. Personally, I have always felt inclined to accept the recommendation of that committee, difficult as it was to get a majority for it, particularly in the House of Commons.
As regards the actual amount suggested, if my arithmetic is right the benefit would disappear when the occupational pension was £69.90. Is that right? I think that after that there would be no further disregard. It is quite a substantial sum of money if one works it out in terms of annual occupational pension. It seems to me that it is a sum which is by no means derisory, given the terms in which the present position rests—that is, that in order to qualify for unemployment benefit at present one must be genuinely seeking employment. I remember that it was said in the report that a considerable amount of evidence had been accumulated to the effect that a number of people were claiming who, on retirement from their work, went to live in a place where it was almost certain that they would not be able to find work in the range of employment they were in previously. It was deemed at the start that they were not genuinely seeking employment if they did so, but gradually there was a relaxation and it was found increasingly difficult to interpret and apply that rule. So, in
1028
saying now that unemployment benefit should cease in part to be paid if the occupational pension is £35 a week, and should disappear altogether when it conies to £70 a week, does not seem to me unreasonable in the present circumstances.
Lord DAVIES of LEEK: I find that there is more in this than meets the eye. I do not want to make a party point because it is a fact all over the world that, with technology, micro-technology and so on, we shall face an issue of unemployment. We are asking people—sometimes people who genuinely feel that they have done enough—at the age of 60 in certain occupations to retire. I think that this will have a deadening effect. It will affect younger people and young married people, at the beginning of their lives, slipping into a job at a very difficult time. Frankly, that is what I foresee. I am not sure whether these figures are the law of the Medes and the Persians. I agree with the noble Lord, Lord Byers: I think that our social system at present is not by any means one of the best in Europe. I think that that of Albania is almost as good.
We are undermining the entire purpose of the society that we hoped to build-up after we had fought the Second World War for democracy and decent living. That is what hurts me. That is what is undermining the situation. It will not encourage the retirement of people who are still healthy enough to enjoy life, because if their occupational pension—which may be very meagre—reaches such a point there will be nothing for them. Consequently, I sincerely believe that we are making a mistake.
Finally, is there any hope—when I was in the Ministry of Social Security we used the phrase—of dynamising these figures? Are they static or will they be changed because of the terrific inflation that we may have to meet, whichever Government are in office? Inflation is one of those things that no one as yet has found a perfect formula for. That is why I see greater depth in this matter and a greater effect than can be seen superficially from just reading the paragraph for the first time. I hope that we shall go into the Lobby with the noble Lord, Lord Byers, because to me this is a matter of great principle.
Lord SANDYS: I listened to the noble Lord, Lord Byers, with close attention because I think that there is much to be explained as regards this particular situation. My noble friend Lady Young explained the position at Second Reading and I think that very often it helps to have an example, which I shall now quote. As the noble Lord, Lord Davies of Leek said, there is more to this than meets the eye. How right he was, because in the basic situation we start off with an occupational pension of £35 for an unemployed man.
Let us take the case of a married man with an occupational pension paid at the weekly rate of £35. At the age of 60 he would have, in the first year—but for no longer than that—a flat rate of £20.65 unemployment benefit for himself and an addition for his wife of £12.75. That totals £68.40. I agree that once his occupational pension exceeded that amount he would no longer be entitled to receive any benefit; but if his pension was less than £68.40, he could receive the amount of benefit that would bring his income up to that level.
I believe, first, that in arguing his case most cogently the noble Lord, Lord Byers, may have overlooked what my noble friend Lord Boyd-Carpenter said on Second Reading at column 1159 of Hansard, on Monday, 2nd June. Of course, my noble friend is very experienced in this particular field and he turned part of his remarks especially to this particular situation. He said:
"I return quickly to the other parts of the Bill to which I should like to refer. I am delighted to see the provision in respect of the limitation of unemployment benefit for the occupational pensioner. There is no doubt that in certain parts of the country this had the elements of scandal about it. To register for unemployment benefit for a type of work which one knows is non-existent in the area where one has decided to settle was certainly perfectly legal. But I do not think that those concerned are entitled to any very great sympathy if their unemployment benefit is moderately restricted, as is proposed by the Bill. Here again, applying if you like the hard test of priority, is payment of unemployment benefit to such people necessarily of the highest priority? Personally, I do not think that it is".
There my noble friend was speaking at a time when he did not have the benefit of seeing the amendment of the noble Lord, Lord Byers, as set down. Nevertheless, that was what was in his mind at that time.
1030
I turn to the amendment as it stands. At a time of savings in the social security expenditure, I repeat once again that, the Government's aim is to reduce expenditure in areas in which it will cause least hardship. In the circumstances, the Government consider that it is reasonable to abate the amount of unemployment benefit payable to people aged 60 or over who have retired on a substantial occupational pension. Those below the age of 60 are not affected.
The figure chosen to define a substantial pension is, of course, to some extent arbitrary. A case can be made out for a higher figure based on precedents or on "feel". But £35 is certainly not wholly arbitrary. The results of a recent survey have shown that about half the unemployed claimants aged 60 to 64 who have retired on an occupational pension receive a weekly amount of less than £35 from that pension. Under this clause a person over 60 who receives an occupational pension of no more than £35 a week will not be affected by the new rules and will receive his or her unemployment benefit in full, to which I have referred in that example. Thus, half those who might be involved are, in fact, exempted.
By deciding that abatement of unemployment benefit shall not begin until a person is receiving an occupational pension of more than £35, the Government will also ensure that full abatement will not apply unless a reasonably high level of occupational pension is being paid. For example, standard flat rate unemployment benefit for a single person in 1981 will not be fully abated unless his or her pension amounts to at least £55·70 a week, while the equivalent amount for a married couple is £68·40 a week. That, of course, was the example which I quoted.
It will be noted that Clause 5 is so constructed that the Bill itself sets only a lower limit to the pension figure from which the new rules begin. The actual sum is to be prescribed by regulations, and it is, therefore, not necessary to amend the Bill in order to prescribe a higher figure.
I hope that I have not wearied the Committee with the examples and details, but, as I have already explained, the main purpose of the first five clauses of this Bill is to reduce public expenditure. This clause will produce savings of about £25

1031
million in a full year, while protecting those on lower occupational pensions. The effect of this amendment would be to reduce those savings by about £9 million. Alternative savings would have to be looked for elsewhere in the social security field. I do not think that it would be easy to justify transferring this burden to others simply to ensure that the money could continue to be paid to some of the better off occupational pensioners, including many who, having retired from work, neither need nor wish to take further employment. I hope that the Committee will reject the amendment.
5.56 p.m.
Baroness PHILLIPS: I shall not pursue my point about the general principle until we come to the clause stand part debate. But the noble Lord, Lord Drumalbyn, will not be surprised because I have pursued several Governments on this point, including Labour Governments.
The Minister has just given some figures which are extraordinarily interesting. There seems to be the underlying principle that there is something very wicked in a person of 60 years of age who actually wants to work. It is a good job that that was not applied to this gentleman, Mr. MacGregor, who is 67 years old. I was delighted to hear that he was going to take part in the activities of the Steel Corporation because it was striking a blow for the over-60s.
But at the moment men have to retire at 65 years of age. If they are wicked enough and foolish enough to wish to work and they receive a retirement pension, immediately the earnings rule comes into operation. As the noble Lord, Lord Sandys, knows, if they earn enough they will lose their pension—and who knows what is enough, because they have to shop in the same market as everybody else; their loaf of bread costs exactly the same as that of a man who is earning; they receive no special privileges there. So now we are back to the same principle. If a man retires at 60 or is declared unemployed at 60 under our system he cannot collect a retirement pension. He may have an occupational pension towards which, in most cases, I would remind the Minister, he has made a contribution, and he then may seek work. I think that it is quite unjust of the noble Lord, who is not in his
1032
place, to suggest that people deliberately collect money without seeking work. Most pensioners of 60 who I know, who, after all, are not senile—because if we assumed that everyone over the age of 60 was senile, that would rule out quite a number of the Members of this House—are quite capable of earning money, of working, and want to do so. We are talking about a generation which liked to work. Therefore, it is quite slanderous to suggest that they go somewhere to live in order to go to the employment exchange to collect this magnificent sum because they do not wish to work. I do not think that that is true.
But let us suppose that they go along with the intention of finding a job. They then collect this vast sum and then, because they have an occupational pension, they are to lose a certain proportion. There is something totally unjust about this. No section of the population pay back £1 for every £1 they earn. They are always allowed to retain something out of it—even people who enter the class of the late Charlie Clore; they still retain some of their money.
This provision is quite unjust and unfair. If the amendment of the noble Lord, Lord Byers, were approved at least it would be lifted a little, but it is wrong to say that a pension of £35 a week is substantial. I suppose we are now to assume that the retirement pension is substantial. Most people who know people of that age would admit that they find it very difficult actually to live on the retirement pension. If they wish to work, I cannot see why we should be the ones who, by any Act of Parliament, deprive them of this privilege. At least let us raise this amount; it is in any case paltry enough.
Lord BYERS: I do not conceal the fact that I do not like the principle which has been introduced of penalising the occupational pensioner, but nothing which has been said from the Front Bench opposite has persuaded me that this figure of £35 is adequate. It is a bad starting figure. What I dislike is the suggestion that this is really brought in because there is an abuse. It is going to hit the unemployed person who is genuinely wanting work, is living in the right place, but is not able to get work.

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In those circumstances—I take the point made by the noble Baroness, Lady Phillips—these pensions on the whole have been paid for. A contribution has been put there by the employer and by the employee in order to make the sort of provision that people want, and a lot of them, as I shall say on the next amendment that I propose to move, have planned their retirement taking into account the fact that, if they could not find a job, they would at least get unemployment benefit when they had come to early retirement. I feel very strongly about
this. We have got the wrong figure. It is an arbitrary figure. There is no guarantee that regulations will dynamise this and I can see it being a trap for those over 60 who genuinely want to get work but cannot find it. I beg to move.
6.2 p.m.
On Question, Whether the said amendment (No. 29) shall be agreed to?
Their Lordships divided: Contents, 90; Not-Contents, 99.

CONTENTS

Ardwick, L.

Goronwy-Roberts, L.

Phillips, B.

Avebury, L.

Gosford, E.

Pitt of Hampstead, L.

Bacon, B.

Grey, E.

Plant, L.

Balogh, L.

Hale, L,

Ponsonby of Shulbrede, L.

Banks, L.

Hampton, L. [Teller.]

Ritchie-Calder, L.

Barrington, V.

Harris of Greenwich, L.

Robson of Kiddington, B.

Beaumont of Whitley, L.

Hatch of Lusby, L.

Rochester, L.

Beswick, L.

Hood, V.

Ross of Marnock, L.

Birk, B.

Houghton of Sowerby, L.

Sainsbury, L.

Blease, L.

Howie of Troon, L.

Seear, B.

Blyton, L.

Irving of Dartford, L.

Segal, L.

Boston of Faversham, L.

Jacques, L.

Simon, V.

Bowden, L.

Janner, L.

Stamp, L.

Brockway, L.

Kilbracken, L.

Stewart of Alvechurch, B.

Brooks of Tremorfa, L.

Kilmarnock, L.

Stewart of Fulham, L.

Bruce of Donington, L.

Kings Norton, L.

Stone, L.

Burton of Coventry, B.

Leatherland, L.

Strabolgi, L.

Byers, L.

Lee of Newton, L.

Strauss, L.

Chitnis, L.

Leonard, L.

Tanlaw, L.

Crook, L.

Llewelyn-Davies, L.

Taylor of Mansfield, L.

Crowther-Hunt, L.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Cudlipp, L.

Lovell-Davis, L.

Wallace of Coslany, L. [Teller.]

Darling of Hillsborough, L.

McNair, L.

David, B.

Maelor, L.

Wedderburn of Charlton, L.

Davies of Leek, L.

Melchett, L.

Wells-Pestell, L.

Elwyn-Jones, L.

Milner of Leeds, L.

Whaddon, L.

Evans of Claughton, L.

Noel-Baker, L.

Wilson of Radcliffe, L.

Fisher of Rednal, B.

Northfield, L.

Wootton of Abinger, B.

Gaitskell, B.

Ogmore, L.

Wynne-Jones, L.

Gifford, L.

Pargiter, L.

Glenamara, L.

Peart, L.

NOT-CONTENTS

Adeane, L.

Crathorne, L.

Fortescue, E.

Airey of Abingdon, B.

Croft, L.

Gainford, L.

Allerton, L.

Cromartie, E.

Glenarthur, L.

Amory, V.

Cullen of Ashbourne, L.

Glenkinglas, L.

Ampthill, L.

Davidson, V.

Godber of Willington, L.

Balerno, L.

de Clifford, L.

Gowrie, E.

Bellwin, L.

De Freyne, L.

Gridley, L.

Belstead, L.

De La Warr, E.

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

Bessborough, E.

Denham. L. [Teller.]

Bolton, L.

Drumalbyn, L.

Hanworth, V.

Brooke of Cumnor, L.

Dundee, E.

Hatherton, L.

Brooke of Ystradfellte, B.

Eccles, V.

Hawke, L.

Brougham and Vaux, L.

Ellenborough, L.

Henley, L.

Cairns, E.

Elliot of Harwood, B.

Hertford, M.

Campbell of Croy, L.

Elton, L.

Hill of Luton, L.

Clifford of Chudleigh, L.

Emmet of Amberley, B.

Hives, L.

Clitheroe, L.

Exeter, M.

Hornsby-Smith, B.

Colwyn, L.

Faithfull, B.

Hylton-Foster, B.

Craigavon, V.

Falkland, V.

Kimberley, E.

Kinnoull, E.

Murton of Lindisfarne, L.

Spens, L.

Lauderdale, E.

Newall, L

Strathclyde, L.

Long, V.

Norfolk, D.

Strathcona and Mount Royal, L.

Lyell, L.

Northchurch, B.

Strathspey, L.

Mackay of Clashfern, L.

Nugent of Guildford, L.

Tranmire, L.

Macleod of Borve, B.

Orkney, E.

Trefgarne, L.

Mansfield, E.

Redmayne, L.

Trenchard, V.

Marley, L.

Renton, L.

Ullswater, V.

Massereene and Ferrard, V.

Rochdale, V.

Vaizey, L.

Merrivale, L.

Saint Oswald, L.

Vickers, B.

Milverton, L.

Sandford, L.

Vivian, L.

Monson, L.

Sandys, L. [Teller.]

Wakefield of Kendal, L.

Morris, L.

Selkirk, E.

Ward of Witley, V.

Mottistone, L.

Soames, L. (L. President.)

Young, B.

Mowbray and Stourton, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.10 p.m.
Lord BYERS Lord BYERS moved Amendment No. 30:
Page 4, line 44, at end insert—
("This section shall not apply in respect of payments by way of occupational pension which commenced before 26th March 1980").
The noble Lord said: I am concerned over the timing of this measure. It is desirable, even essential, that people should plan their financial provision for retirement in advance. Indeed, it is a sad fact of life that all too many people grossly underestimate the length of time they are likely to spend in retirement and hence the amount of income they are likely to need. Fortunately, there are some people who make proper provision in advance; but whether or not they have made proper provision, if they have already made a decision and entered upon retirement, or indeed if retirement has already been forced upon them by way of redundancy, they are surely entitled to be protected from legislation which cuts out part of the income they are currently receiving.
It is that protection that my amendment seeks to provide. Without it, the Bill, as it stands, is in danger of undermining the basis of the calculations which many people now retired have already made. Such calculations will have led many people to decide that they can afford to retire, or others to decide that they can afford a certain lifestyle in retirement. Having made such decisions, they surely are entitled to protection from a measure that would now withdraw part of the income which they had planned upon having.
There is a strong case for making this provision effective from a date in the future so that this measure can be taken into account by anyone who is considering whether or not he can afford to retire, or, if the retirement is an enforced one, whether a certain standard of living can be maintained. On the other hand, the Government could argue—and indeed I expect them to argue—that the choice of an effective date in the future would give people the opportunity to frustrate the intention behind this clause by retiring immediately, or at least before the critical date arrives. With some reluctance, therefore, I have incorporated in my amendment an effective date based on the timing of the announcement of this measure in the Budget proceedings in another place.
The effect of this amendment, therefore, would be to exempt from the provisions of Clause 5 only those whose occupational pension had commenced before the day of the Budget. That means that there can be no possibility of anyone timing his retirement in order to frustrate the intentions of the Government, whatever we may feel about those intentions.
All in all, this amendment is a modest one, but one that in my opinion we owe in all fairness to those whose occupational pensions have already begun. Of course, if we were designing a social security system from the drawing board where none already existed, we would probably not make provision for unemployment benefit to be payable to certain occupational pensioners. But we are not faced with a blank sheet of paper; we are faced with a system already working and, whatever its defects, those who have taken the working of that system into account in making fundamental personal decisions were fully entitled to do so. It would be

1037
thoroughly objectionable if, at this late stage, we were to penalise them for doing so, and that is the principal at the heart of my amendment. I hope that it commends itself to your Lordships. I beg to move.
Lord WALLACE of COSLANY: I rise briefly to support the noble Lord, Lord Byers. He has outlined and made a cast iron-case. The amendment would avoid an obvious injustice. I think that this is a situation where the Government can come forward and meet this side of the Committee in an attempt at last to reach a stage where an amendment will he accepted, which would of course be revolutionary. But please do not mention anything more about financial savings.
6.15 p.m.
Lord SANDYS: I think the noble Lord will agree that in discussing Clause 5 it has been argued that many of those who have retired on an occupational pension have done so in the expectation that they will be able to claim unemployment benefit if they are unable to find work. In this context, it is interesting to note that the recent Cohort Study of a sample of unemployed men—which no doubt the noble Lord, Lord Wells-Pestell, has read or has had the opportunity of looking at—which was run for the Department of Health and Social Services, reported that 56 per cent. of those on occupational pensions, the subject with which we are concerned in this amendment, had applied for unemployment benefit but were not available for work.
It has been emphasised both in this House and in another place that in many cases they have paid national insurance contributions all their working lives in the expectation of drawing unemployment benefit when they retire. The facts are, first, that many people who retire from work with a substantial pension are, quite understandably, not really keen to obtain further work. This is, I think, disputed by the noble Baroness, Lady Phillips.
Baroness PHILLIPS: Will the Minister forgive me for intervening before he leaves this point? He said something that I have not heard before; that is, that the survey showed that these people were receiving unemployment benefit but were not available for work. How could you
1038
determine that? Surely, the mere fact that you go to the manpower services, I believe it is called now, or the manpower centre, means that you are seeking work.
Lord SANDYS: At this stage, without the survey in front of me, I can only say that this was embodied in the survey carried out by the DHSS. I shall be happy to answer the question, but I have not had the opportunity of looking at chapter and verse in the few moments since the noble Baroness has spoken.
Baroness PHILLIPS: Perhaps the Minister will let me know, because I do not see how he can reach that figure.
LORD DRUMALBYN: I think the Minister said that the numbers were of those who had applied for unemployment benefit. Perhaps he could verify whether they had actually received unemployment benefit.
Lord SANDYS: Once again, I would hesitate for several long minutes before replying to my noble friend Lord Drumalbyn on this point. As I have now been given a note on this, perhaps I could reply at short length. The recent survey known as the Cohort Study found that over half, that is to say, 56 per cent., of the unemployed men with occupational pensions of a size to be affected by this proposal admitted—and that is the crucial word—that they were not looking for work. I do not know whether that satisfies either the noble Lord, Lord Drumalbyn, or the noble Baroness.
Baroness PHILLIPS: No, it does not satisfy me.
Lord SANDYS: May I now resume my argument on this amendment. The facts are that this was borne out by the results of the survey referred to earlier—over half of the unemployed men over 60 with a pension large enough to be affected by this proposal admitted that they were not looking for work. Secondly, quite apart from the issue of whether or not a pensioner is looking for work, it must be remembered that unemployment benefit is extended as a short-term earnings-replacement benefit for people experiencing unforeseen periods of unemployment until they can find fresh work. Retirement

1039
from work can hardly be regarded as unforeseen. Moreover, if on retirement a person is awarded a substantial occupational pension, he will be receiving a form of earnings-replacement, and payment of unemployment benefit in addition is double provision for the same contingency. In the present economic circumstances it is difficult to justify spending £25 million to provide duplicate earnings replacement of this kind.
I readily accept that this amendment would not cost as much as some which have been proposed. Many people who retired before 26th March 1980 and who had then claimed unemployment benefit would have exhausted their entitlement before the start of the new provisions in April 1981, and to that extent the cost of the amendment would be reduced. But if those concerned obtained further work for at least 13 weeks or if, having worked for a time after retiring from their normal occupations, they then became unemployed, they could claim unemployment benefit at any time until they retired after reaching the state pension age of 65. Distinguishing the entitlement of these occupational pensioners from those who had retired after March 1980 would involve administrative complications, and would most certainly lead to a sense of unfairness as between those pensioners who received full unemployment benefit and others with similar occupational pensions who had had their benefit reduced or extinguished altogether. For those reasons the Government cannot accept the amendment.
Lord MOTTISTONE: When I retired from the Navy at the age of 47 I was unemployed for six weeks and drew unemployment benefit, primarily to find out what it was like to do so, and I discovered that they paid it from a different office from social security benefits, and that of course was a valuable thing to have learned. Do I understand that under the Bill I would not now be able to do that and gain the valuable experience that I did on that occasion?
Lord SANDYS: I do not think the provisions of this clause would apply. I am not fully conversant with my noble friend's situation and I would hesitate to confirm or otherwise the situation in such a particular case.
Lord BYERS: I was very disappointed indeed at the attitude of the noble Lord, Lord Sandys, and I was worried by a statement he made, and I am not sure whether he realises exactly what he said. As I understood him, he said retirement from work could not be entirely unforeseen. That is what is happening today; people are not able to get jobs and are forced to retire. That is not something they have foreseen. I am worried that we are being bedevilled by this 56 per cent. of people who say they do not really want work. It means that 44 per cent. of people are genuinely seeking work. If there are people taking unemployment benefit who do not wish to work, that should be treated as the abuse which it is and should not affect those who are genuinely seeking work and whom this will catch in a very bad way. As the noble Lord, Lord Wallace of Coslany, said, here was an opportunity for the Government at least to be sympathetic towards this idea and perhaps to have said they would have another look at it. I regard this as a potential injustice to a large number of people, and if the Government are not prepared to have another look at it, the Committee should press it to a Division.
Lord WELLS-PESTELL: I do not think we can leave the matter of the 56 per cent. there. I do not suggest we pursue it tonight, but my understanding of the regulations of the Department of Employment is that a person has to register or sign on once a week to get his money. If that is what he does, then he signs on once a week to get work and, if there is no work, he gets his money. The implication of what the noble Lord said—and I realise he was relying on a report—suggests that money is paid out without that requirement being exacted because, as I understand the situation, they must register for work once a week. The very fact that they sign on means that they sign on saying they want work. Perhaps the noble Lord could at an early stage pursue the matter. Many of us would like to know how this percentage of people interviewed admitted what the noble Lord described. We should like to know, of course, what conditions they had to fulfil.
Lord SANDYS: I will certainly look into this matter, and perhaps the noble

1041
Lord, Lord Wells-Pestell, would either like me to write to him about it or—if he thinks a larger number of people would benefit from such a course—if he would set down a Question for Written or Oral Answer in your Lordships' House, I should be only too happy to make what arrangements we can on behalf of the Government.
Lord BYERS: I do not think that would be satisfactory either to the noble Lord, Lord Wells-Pestell, or to those on these Benches. If the noble Lord will say he will have another look at this and come back with something positive on Report, I should be willing to withdraw the amendment. If not, I should like to press it to a Division.
6.26 p.m.
Baroness PHILLIPS: As the one who originally raised this point, I should like to pursue it because the reply given by the noble Lord, Lord Sandys, appeared to refer to a report. Was that report prepared by the department? From what he said, it seemed to be an outside report. We all know about market research; you can get any answer you like if you ask the right question. The report in question seems to have originated in this way, that people leaving the manpower services centres were stopped and asked, "Did you want work, or were you just coming here for a walk"? and they gave an answer.
It seems dreadful that we should he dealing with a prospective Act of Parliament on the basis of a piece of market research about which we have had no information. It is a slur on people I know, through Age Concern, who genuinely want work. The idea that more than half of them go along gaily to collect this vast sum of money in order to live, presumably in a nice place like Devon or Cornwall, is a total nonsense. In view of the sort of report this appears to be, we need the source, the kind of questions that were asked and all the facts that went with it; that is, if it is to be quoted as a reason for a provision in a Bill.
Baroness YOUNG: Perhaps we could take ourselves away from that point. It would be a great mistake if the Committee believed that Clause 5 had been inserted to cater for something that might be
1042
regarded as an abuse. On Second Reading, a few noble Lords raised the whole question whether the Bill was aimed at dealing with abuse, and I made it clear in my winding-up speech that it was not. It has nothing to do with that at all. In fact, that is a quite subsidiary point, which arose over the clause when it was said it was possible for somebody to draw unemployment benefit although he had an occupational pension and was not available for work. On the point that has been raised about the survey, to satisfy the Committee my noble friends and I would be very happy to write to anybody giving the full details of the survey to indicate where the information can be found, so that any of your Lordships who care to look at it can do so; but I would not want the Committee to think that the case rests on that.
Lord WALLACE of COSLANY: The noble Baroness, Lady Young, said this was not a Bill designed to deal with abuse. Why, then, did she say on Second Reading:
"I was very pleased to have the support of my noble friend Lord Boyd-Carpenter for putting right what could be regarded as an abuse"?
Baroness YOUNG: The way in which I couched my remarks on that occasion indicates that I do not regard that as a principal reason for the Bill. The noble Lord, Lord Wallace of Coslany, has said often enough that he is bored hearing us say it is a Bill to save money, but I indicated in my opening remarks that that was indeed the purpose of the Bill. In fact, the principal purpose of this clause—and we have not pretended about this fact—is another way of saving money. We have said that this is a group of people who have retired and who have an occupational pension, and we have chosen the figure of £35 as a cut-off point for those who would not be eligible for this unemployment benefit.
Lord BYERS: That was in regard to the previous amendment. What is the cost of this amendment? Will it really be very much?
Baroness YOUNG: I beg the Committee's pardon. I accept that the cost of this amendment is not as great as the cost of other amendments. The point that my noble friend Lord Sandys made was that it would distinguish between those who

1043
retired before the date in March 1980 when my right honourable friend the Chancellor of the Exchequer made his statement about the matter and those who have retired subsequently. To distinguish between the two would be a very complicated matter and would, I believe, create a sense of unfairness between two groups of occupational pensioners.
Lord WALLACE of COSLANY: Will the noble Baroness agree that the figure would probably be about £25 million per annum?
Baroness YOUNG: I can certainly give the noble Lord the precise figure.
Lord WALLACE of COSLANY: The figure I mentioned actually appeared in an early day Motion in another place.
Viscount MASSEREENE and FERRARD: I wish to make a quick observation. With regard to the 44 per cent. who want work—
Several noble Lords: It is 56 per cent.
Viscount MASSEREENE and FERRARD: No, it is 44 per cent., not 56 per cent. Some of these people are very choosey about the kind of work that they want.
Several noble Lords: Oh!
Viscount MASSEREENE and FERRARD: I just wanted to make that point because I have had experience of this matter.
Baroness PHILLIPS: We cannot let it go on the record that we started this business, because it was the Minister, the noble Lord, Lord Sandys, who said that his noble friend the noble Lord, Lord Boyd-Carpenter, had made the remark that we we have been discussing. That is why we followed up the point; we on this side of the Committee did not raise it. We have simply tried to answer the accusation and to point out that these people are not layabouts. May I say to the noble Viscount that, if he went to a labour exchange or a manpower centre, he would not think it unreasonable to expect the type of job to which he was accustomed, rather than one to which he was not accustomed.
Viscount MASSEREENE and FERRARD: I was not accusing people of being choosey about work; I was just making the point.
6.32 p.m.
On Question, Whether the said amendment (No. 30) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 97.

CONTENTS

Ampthill, L.

Gosford, E.

Ogmore, L.

Ardwick, L.

Greenwood of Rossendale, L.

Pargiter, L.

Bacon, B.

Grey, E.

Peart, L.

Balogh, L.

Hale, L.

Phillips, B.

Banks, L. [Teller.]

Halsbury, E.

Pitt of Hampstead, L.

Barrington, V.

Hampton, L. [Teller.]

Plant, L.

Beaumont of Whitley, L.

Hanworth, V.

Ponsonby of Shulbrede, L.

Beswick, L.

Hatch of Lusby, L.

Ritchie-Calder, L.

Blease, L.

Hood, V.

Robson of Kiddington, B.

Blyton, L.

Houghton of Sowerby, L.

Rochester, L.

Boston of Faversham, L.

Howie of Troon, L.

Ross of Marnock, L.

Bowden, L.

Irving of Dartford, L.

Sainsbury, L.

Brockway, L.

Jacques, L.

Seear, B.

Brooks of Tremorfa, L.

Janner, L.

Shannon, E.

Bruce of Donington, L.

Kilbracken, L.

Simon, V.

Burton of Coventry, B.

Kilmarnock, L.

Stamp, L.

Byers, L.

Leatherland, L.

Stone, L.

Collison, L.

Lee of Newton, L.

Strauss, L.

Crowther-Hunt, L.

Leonard, L.

Taylor of Mansfield, L.

Cudlipp, L.

Llewelyn-Davies, L.

Underhill, L.

David, B.

Llewelyn-Davies of Hastoe, B.

Wallace of Coslany, L.

Davies of Leek, L.

Lovell-Davis, L.

Wedderburn of Charlton, L.

Elwyn-Jones, L.

McNair, L.

Wells-Pestell, L.

Evans of Claughton, L.

Maelor, L.

Whaddon, L.

Fisher of Rednal, B.

Melchett, L.

Wilson of Radcliffe, L.

Gaitskell, B.

Milner of Leeds, L.

Wootton of Abinger, B.

Glenamara, L.

Milverton, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

Northfield, L.

NOT-CONTENTS

Adeane, L.

Emmet of Amberley, B.

Morris, L.

Airey of Abingdon, B.

Exeter, M.

Mottistone, L.

Allerton, L.

Faithfull, B.

Mowbray and Stourton, L.

Amory, V.

Falkland, V.

Murton of Lindisfarne, L.

Balerno, L.

Fortescue, E.

Newall, L.

Bellwin, L.

Gainford, L.

Norfolk, D.

Belstead, L.

Glenarthur, L.

Northchurch, B.

Bessborough, E.

Glenkinglas, L.

Nugent of Guildford, L.

Bolton, L.

Godber of Willington, L.

Orkney, E.

Brooke of Cumnor, L.

Gowrie, E.

Redmayne, L.

Brooke of Ystradfellte, B.

Grantchester, L.

Renton, L.

Brougham and Vaux, L.

Gridley, L.

Rochdale, V.

Cairns, E.

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

Saint Oswald, L.

Campbell of Croy, L.

Sandford, L.

Clifford of Chudleigh, L.

Hatherton, L.

Sandys, L. [Teller.]

Clitheroe, L.

Hawke, L.

Selkirk, E.

Cockfield, L.

Henley, L.

Soames, L. (L. President.)

Colwyn, L.

Hives, L.

Spens, L.

Cranbrooke, E.

Hornsby-Smith, B.

Strathclyde, L.

Crathorne, L.

Hylton-Foster, B.

Strathcona and Mount Royal, L.

Croft, L.

Kimberley, E.

Strathspey, L.

Cromartie, E.

Kinnoull, E.

Tranmire, L.

Cullen of Ashbourne, L.

Lauderdale, E.

Trefgarne L.

Davidson, V.

Long, V.

Trenchard, V.

de Clifford, L.

Lyell, L.

Tweeddale, M.

De La Warr, E.

Mackay of Clashfern, L.

Ullswater, V.

Denham, L. [Teller.]

Macleod of Borve, B.

Vickers, B.

Drumalbyn, L.

Mansfield, E.

Vivian, L.

Dundee, E.

Marley, L.

Wakefield of Kendal, L.

Eccles, V.

Massereene and Ferrard, V.

Ward of Witley, V.

Ellenborough, L.

Merrivale, L.

Westbury, L.

Elliot of Harwood, B.

Mills, V.

Young, B.

Elton, L.

Monson, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.40 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 31:
Page 6, line 28, leave out from ("subsection") to ("as") in line 30.
The noble Lord said: This is a very brief amendment. It is one which the Government will have no difficulty in accepting, and I know will be pleased to accept. It certainly has no money implications at all, and therefore they cannot offer that as a reason for not accepting it. The amendment relates to subsection (5) of Clause 5, which deals with the function of the Social Security Advisory Committee, which will have the responsibility of making proposals and examining regulations once they have come into being. But subsection (5) says in line 28:
"such regulations as are mentioned in the preceding subsection, other than regulations which are made during the period of 6 months beginning with the date of the passing of this Act …".
I think it is understood that once the Act comes into being it will take a little time to set up the Social Security Advisory Committee. This I accept. It is not
1046
something which ought to be done in a hurry; it has to be done with very great care. That means that in the early stages regulations will have to be drawn up, they will come before Parliament and Parliament will make a decision on them; and there may well be other proposals put forward by the Secretary of State. We are not objecting to that. What we are saying is that, although this is a necessary procedure, once the Social Security Advisory Committee is in being, then no matter how many regulations have been passed and proposals adopted during the first six months, they should nevertheless go to the Social Security Advisory Committee so that they can look at them. It may well be that they will approve of all of them; but I think those of your Lordships who have followed the function of the National Insurance Advisory Committee (known as NIAC) will realise and will know that there have been times when they have seen things in regulations and proposals which have escaped the notice of everybody else, and that they have been able to make some valid and well worthwhile criticism and comment.
This is a very simple thing, and I do not honestly think there can be any rooted objection to it. I hope nobody

1047
will say that, of course, they will have so much work on their hands, because we do not know how much work they will have on their hands. At this stage, we do not know how often they will meet—whether it will be once, twice or three times a week, though it will be probably not as much as that. I see no reason for resisting this request because the regulations made in the first six months are really going to be of supreme importance. I know the answer is that they must come before Parliament, but Parliament has not a complete monopoly of wisdom, as we know from time to time. If they had, we should not have to amend so many Acts. Therefore, I ask the noble Baroness, or whoever is replying from the Government Front Bench, to say that this is a reasonable request, and that they will accept it. I beg to move.
Lord SANDYS: The noble Lord, Lord Wells-Pestell, will recollect that we had discussions on the first Social Security Bill a matter of a month ago on the subject of the Social Security Advisory Committee and its administration. Under this clause, proposals to make regulations under subsection (2), which would allow the introduction of certain detailed operating rules or the making of regulations to extend the definition of payments by way of occupational pension, must be submitted to the Social Security Advisory Committee unless they are made within six months of the Royal Assent to this Bill. This amendment would remove the proviso, so that any regulatory proposals made within six months of Royal Assent would also have to be submitted first to the Social Security Advisory Committee.
I hope that the noble Lord has a copy of the Notes on Clauses, because if he has looked at page 7 he will have seen that Ministers are minded not to use the regulation-making powers to counter arrangements which deal with lump sum payments and other payment practices, which could be used to avoid abatement of unemployment benefit, until experience of the new provisions has established the need and pointed to the best approach. This would mean that these particular proposals would not be made within six months of Royal Assent, and therefore would be submitted to the Social Security Advisory Committee before being made.
1048
As regards the regulations which are to be made within six months of Royal Assent the majority of these will be of a procedural or non-contentious nature; for example, for the conversion of monthly payments of occupational pension to weekly payments for calculation purposes and for ensuring that no adjustment of unemployment benefit is made for days before the occupational pension becomes payable. Opportunities for discussion of the general principles on which these regulations will be based have been provided during the passage of the Bill through Parliament, and the regulations will of course be subject to annulment in the usual way.
This apart, it is important that these regulations should be made some months before the proposed commencement of the new arrangements in April 1981, to allow time for the necessary local office instructions to be prepared and for staff to be properly trained. In this context, of course, the noble Lord, Lord Wells-Pestell, will recollect that we had certain discussions on the No. 1 Bill in regard to this highly important matter. It is unlikely that the new committee, which will be set up only in November of this year, would have adequate time to consider the regulations. On these grounds, I ask the Committee not to support this amendment.
Lord WELLS-PESTELL: I feel that that reply is a very unsatisfactory one. No case has been made out at all as to why the matters affecting the working of the Act should not be referred to them. The noble Lord says that there are a number of matters which will be non-controversial. They may well be non-controversial from the Government's point of view, no doubt, but I am not sure they are going to be non-controversial to people outside the Government or to Members on this side of the Committee. Furthermore, though the regulations will be dealt with by going through the Affirmative Resolution process, it does not necessarily follow that we shall not miss something.
I feel that it would be a simple matter to refer these things. Even if they come into being or have to be considered before the Social Security Advisory Committee comes into existence, there is no reason why, after that committee has been set up, it should not be asked to examine

1049
the regulations and the other things which have been decided upon. I should have thought it was a very good longstop and a very good safeguard.
On Question, amendment negatived.
Clause 5 agreed to.
Clause 6 [Supplementary benefit in cases affected by trade disputes]:
6.50 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 32:
Page 6, line 42, leave out paragraph (a).
The noble Lord said: I beg to move this amendment standing in my name. As noble Lords will realise, we are now moving into a very difficult and controversial area. The first amendment, on page 6, line 42, is to leave out paragraph (a). Paragraph (a) of Clause 6(1) provides that PAYE refunds to a person involved in a trade dispute and other relevant payments which, for practical purposes, I shall call "strike pay", are to be taken into account in full for supplementary benefits purposes, except to the extent that regulations provide otherwise. The intention is that PAYE refunds should be taken into account without any disregard while up to £12 of strike pay will be disregarded. The £12 disregard of strike pay could be provided for by regulations modifying Clause 6(1)(b). The effect of deleting Clause 6(1)(a), as the amendment I am moving proposes, would be to retain the existing £4 disregard of PAYE refunds.
The normal way of treating PAYE refunds for supplementary benefit purposes is to regard them as capital. Since a claimant can have as much as £1,200 of capital without any reduction of benefit, the result in most cases is that the tax refund is disregarded. Until 1971, the same rule applied to tax refunds received by strikers. In that year, as one of a number of measures to tighten up the supplementary benefits rules for strikers, it was decided that their PAYE refund should be treated as income, subject to the normal disregards. That remained unchanged under the Labour Government. Athough it constitutes a form of discrimination against strikers, most people would probably regard it as a reasonable compromise. To abolish the £4 disre-
1050
gard, as Clause 6(1)(a) proposes, is simply—and I do not think that I am using too strong a word here—vindictive; and I believe it will cause justifiable resentment.
After all, a tax refund is a man's own money which he has earned in an earlier part of the tax year. That is what we are dealing with. Whether he gets a refund at all depends upon whether the strike takes place early or late in the tax year. It hardly seems equitable that a man who strikes in April should receive substantially more supplementary benefit than a man who strikes in February or March. A £4 disregard to some extent mitigates this in equity. There may be a case for increasing it to take account of inflation; but I submit that there is no case for abolishing it. I move this amendment rather briefly, because what is in our minds is I think quite clear, and I do not think that any useful purpose will be served by prolonging it at this stage.
The LORD ADVOCATE (Lord Mackay of Clashfern): As the noble Lord, Lord Wells-Pestell, has said, this amendment would leave out Clause 6(1)(a) which is in two parts. Part (i) proposes, in effect, the removal of the £4 disregard on strike pay and it is the Government's intention to substitute a disregard of £12 a week on strike pay which will be brought in by regulations. This Government were elected on a promise to ensure that trade unions paid a fair share of the cost of supporting their members and families when they were on strike, and the proposed £12 a week disregard of strike pay would give unions every incentive to be responsible in this particular way. This amendment would provide for only a £4 disregard on strike pay, so there would be no incentive to unions to pay more than £4 a week in dispute pay to their members.
Part (ii) of Clause 6(1)(a) abolishes the present £4 disregard on income tax refunds. The striker gets a refund of tax only because he is on strike and has no earnings, and in most strikes it is part of his regular weekly income. We do not think it is right to continue with this £4 disregard which, in effect, provides an unwarranted bonus by increasing the entitlement to supplementary benefit for the striker who receives a tax refund.

1051
The noble Lord in moving his amendment pointed out that whether or not a person received a repayment of tax would depend upon the situation at the time. He suggested that it was unfair that a person who had a refund should have it brought into account; whereas if he did not have a refund, it would not be. This ignores the fact that supplementary benefit is supposed to deal with need. We see the income tax refund that he receives as something which ought to be taken into account in assessing his need. I invite your Lordships not to agree to this amendment.
Lord WELLS-PESTELL: I tried to point out that the refund of PAYE is money which a man has earned and which he has paid by way of taxation and, therefore, if he finds himself in the position of being locked out or on strike and gets that money back, it is iniquitous that anybody should seek to take into account part of that money. I do not know whether there is any point in raising the general principle behind this. The Government originally intended to deem that a man on strike would be receiving £12 a week from his union. But they discovered, of course, that union funds, generally speaking, would not permit payments of that kind; so that, at least, the word "deem" seemed to have died a natural death and we have not heard about it. But in its place we have legislation which is going to recover that amount of money, as I understand the situation, by reducing the supplementary benefit by that amount.
I know that noble Lords opposite have strong feelings about people being on strike. I do not know how many noble Lords opposite have ever in their lives accepted the fact that men sometimes have a justifiable reason for coming out on strike; but, as far as I can see in the Bill, there is no yardstick by which that is going to be measured. It is going to be a matter of whether people are out on strike. It also means, as a result of some people being out on strike, that others can be laid off or locked out.
It is difficult for noble Lords opposite because many of them are in the capacity of employers. If the employers of this country understood a little more about their employees, there would not be nearly
1052
so much trouble. I do not think that anybody on the Government side would deny that a good deal of the trouble that we have experienced in the industrial field has been due to bad management. I am not going to say that it is all due to bad management.
A noble Lord: Thank God!
Lord WELLS-PESTELL: We need not thank God for it. I am a fairly reasonable person. I do not think that right is always on one side, but I think that right can be on both sides. I invite noble Lords opposite to recognise that there is often right on the side of the workers.
What the Government are saying is that whether they have a good reason or not the married man, his family, will suffer to the extent of a £12 a week reduction in Social Security. For the very first time that I can remember we are now going by law to penalise the family. Just think of it—£12 a week! Not much to some noble Lords opposite, but £12 a week to a family is very considerable.
I am saying that we are enunciating a new principle; that it is going to be a kind of crime to strike. One of the great bastions of democracy which we have had longer than anybody else is the fact we have recognised the right of a man to withdraw his labour or, if it is more acceptable, to go on strike whether he was right or wrong in doing it, because he always thinks that he is right. The employer invariably thinks that he is wrong. But this is the way the things goes.
I have always been proud when I have been abroad and people talk about our democracy that we have permitted men to do this, but we have not permitted their families to suffer. I want to raise this as a general principle because I want to ask noble Lords opposite to have this at the back of their minds. I believe the Minister has received a letter from the Assistant Masters and Mistresses Association. They have sent me a copy of it and perhaps it is appropriate for me to read it, if the noble Baroness does not mind. It says:
"My Association is most concerned about Clause 6 of the Social Security (No. 2) Bill which is now under consideration by the House of Lords. The advice that the Association has received is that as Clause 6 of the Bill is at present

1053
drafted, and in the light of the comments that Mr. Jenkin made in the debate in the House of Commons, the Department of Health and Social Security will have no discretion to pay supplementary benefit if our members were prevented from working as a result of industrial action by some other group of employees in the education service. In these circumstances, we take the view that the Social Security (No. 2) Bill should be amended to ensure that the employees who are locked out by their employers, as a result of industrial action being taken by some other group of employees, will not have the deduction of £12 a week made from the supplementary benefit which is paid in respect of dependents".
I hope that somebody on the Government Front Bench is in a position to reply to that. If that is true, there is a very serious omission in the Bill.
I will not take up more time. I hope that nobody will go back on a long established principle which has been a pillar of our democracy: that we have permitted men to do this but we have not imposed some kind of sanction or penalty on their families. In the 1980s it is a retrograde step to take.
Lord MOTTISTONE: Before the noble Lord sits down, could he tell us why, in view of the letter he read out at the end of his speech, he did not put an amendment down to give effect to that letter instead of the amendment he has put down?
Lord WELLS-PESTELL: I have several amendments down—as many as I thought were necessary in the Committee stage proceedings. There is a limit imposed as to how many days we can have in Committee. We have two Committee days and we shall take them up because we shall not finish, so far as I can see, much before half past nine or ten o'clock tonight. Therefore it is always necessary to consider the period between the Committee stage and the Report stage for putting down other amendments.
Lord MOTTISTONE: That is not a very good explanation. It would have been better to concentrate on an amendment for which the noble Lord had a definite statement rather than making a general one and taking a particular issue. To take the noble Lord very quickly up on this point about the right to strike, of course it is entirely agreed from this side of the Committee that there must be a right to strike. Of course at the time the strike occurs the people who are striking believe in their cause; but it seems surely
1054
reasonable that there should be some means of making sure that trade unions that call strikes make a proper contribution from their funds towards the cost of supporting the strike.
As I see this particular clause in the Bill, it is attempting in a rather small way to bring an encouragement to the trade unions that are supporting strikes to do their share, as they used to in days gone by, in assisting strikes which they think are worth supporting. Is it not also reasonable that there should be some discouragement for the type of unofficial strikes of which we used to have a rash at one stage—particularly during the period of office of noble Lords opposite—and that those strikes need to be discouraged? This clause will serve to assist in that purpose. To try and draw a shadow across the whole debate to imply that noble Lords on this side do not know the facts of life is not only unreasonable but unworthy of the noble Lord who has just spoken.
Lord WELLS-PESTELL: I am grateful to the noble Lord for giving me an opportunity of adding to what I have said. One has to bear in mind that if one is going to impose a regulation of this kind upon the unions, one has to be satisfied that every union will be able to comply with it. Probably the noble Lord would be prepared to take it from me when I say that the funds in a large number of unions are such that they would not be able to do it. We have the "Big Four" or the "Big Five", like the high street banks, but there is an enormous number of unions that could not do it. Also, it would necessitate a very careful inquiry into their means. While that would not be difficult, in the last analysis, it would not be possible for the majority of them to do it. When it comes to imposing some stricture, some penalty, it is the wrong way of going about industrial relations. This is the mistake.
I do not pretend to be more informed on this—I am perhaps less informed—than some noble Lords opposite. I have not had the experience. I know that Mr. Heath came a "cropper". Mr. Prior, with his reasonableness—and I am no being sarcastic; he has more reasonableness than many people—is running into very serious difficulties. One cannot

1055
legislate for relations and relationships. All one does is to aggravate the situation. One has to start from a different angle. Therefore any imposition of penalty is going to exacerbate rather than help the situation.
Lord MACKAY of CLASHFERN: May I just say that a great deal of what has been said recently has nothing at all to do with the amendment. So far as this amendment is concerned, I cannot accept for a moment that there is anything iniquitous about taking account of an income tax refund as a resource when it is a question of need that is being assessed. So far as the £12 point is concerned, in this clause all that has been said is that if a union pays
strike money up to £12 it will be disregarded from the point of view of supplementary benefit and therefore, from that point of view, this clause is of considerable advantage to the striker. This particular part of the clause, of course, is not alone, but that is the way this part of its stands.
Lord WELLS-PESTELL: Yes. May I say that if I have gone into other fields it is because I allowed noble Lords opposite to seduce me!
7.11 p.m.
On Question, Whether the said amendment (No. 32) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 89.

CONTENTS

Ardwick, L.

Hampton, L.

Ponsonby of Shulbrede, L. [Teller.]

Banks, L.

Hatch of Lusby, L.

Beswick, L.

Houghton of Sowerby, L.

Ritchie-Calder, L.

Blease, L.

Jacques, L.

Rochester, L.

Blyton, L.

Janner, L.

Ross of Marnock, L.

Boston of Faversham, L.

Kilmarnock, L.

Seear, B.

Bowden, L.

Leonard, L.

Simon, V.

Brockway, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B.

Burton of Coventry, B.

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

Stewart of Fulham, L.

Collison, L.

Stone, L.

Crowther-Hunt, L.

Lovell-Davis, L.

Strauss, L.

Cudlipp, L.

McNair, L.

Taylor of Mansfield, L.

David, B.

Maelor, L.

Underhill, L.

Davies of Leek, L.

Milner of Leeds, L.

Wallace of Coslany, L.

Evans of Claughton, L.

Mishcon, L.

Wells-Pestell, L.

Gaitskell, B.

Northfield, L.

Whaddon, L.

George-Brown, L.

Pargiter, L.

White, B.

Gosford, E.

Phillips, B.

Wilson of Radcliffe, L.

Gregson, L.

Pitt of Hampstead, L.

Wootton of Abinger, B.

Hale, L.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Ellenborough, L.

Lyell, L.

Allerton, L.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Amory, V.

Elton, L.

Macleod of Borve, B.

Ampthill, L.

Falkland, V.

Mansfield, E.

Balerno, L.

Forester, L.

Marley, L.

Bellwin, L.

Fortescue, E.

Massereene and Ferrard, V.

Belstead, L.

Gainford, L.

Merrivale, L.

Bessborough, E.

Glenarthur, L.

Mills, V.

Bolton, L.

Glenkinglas, L.

Milverton, L.

Brooke of Cumnor, L.

Godber of Willington, L.

Monson, L.

Brooke of Ystradfellte, B.

Gowrie, E.

Morris, L.

Brougham and Vaux, L.

Gridley, L.

Mottistone, L.

Cairns, E.

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

Mowbray and Stourton, L.

Campbell of Croy, L.

Murton of Lindisfarne, L.

Clifford of Chudleigh, L.

Halsbury, E.

Norfolk, D.

Colwyn, L.

Hanworth, V.

Northchurch, B.

Crathorne, L.

Hatherton, L.

Nugent of Guildford, L.

Cromartie, E.

Hives, L.

Redmayne, L.

Cullen of Ashbourne, L.

Hylton-Foster, B.

Renton, L.

Davidson, V.

Killearn, L.

Rochdale, V.

de Clifford, L.

Kimberley, E.

Saint Oswald, L.

De La Warr, E.

Kinnoull, E.

Sandys, L. [Teller.]

Denham, L. [Teller.]

Lauderdale, E.

Shannon, E.

Drumalbyn, L.

Long, V.

Soames, L. (L. President.)

Eccles, V.

Lucas of Chilworth, L.

Spens, L.

Stamp, L.

Trefgarne, L.

Vivian, L.

Strathclyde, L.

Trenchard, V.

Wakefield of Kendal, L.

Strathcona and Mount Royal, L.

Tweeddale, M.

Ward of Witley, V.

Strathspey, L.

Ullswater, V.

Westbury, L.

Tranmire, L.

Vickers, B.

Young, B.

On Question, Motion agreed to.

Lord TREFGARNE: I beg to move that the House be now resumed.
House resumed.

CRUISE MISSILE BASES
3.55 p.m.
The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal): My Lords, with the permission of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Defence about ground launched cruise missiles. The Statement is as follows:
"I announced on 13th December last year the NATO Foreign and Defence Ministers' decision to modernise the Alliance's long range theatre nuclear forces; I am now able to advise the House where the 160 ground launched cruise missiles to be deployed in the United Kingdom will be stationed.
"The missiles will be stationed at two existing military establishments, the United States Air Force standby
988
base at RAF Greenham Common in Berkshire, and RAF Molesworth, a disused airfield in Cambridgeshire, currently used by the United States Air Force for storage purposes. Greenham Common will be the main operating base for the cruise missile units in the United Kingdom and will house six flights of cruise missiles. Molesworth will house four flights. It is planned that the first units will deploy at Greenham Common by about the end of 1983.
"The factors affecting the decision stemmed from the prime operational need to bring the first missiles into service as soon as possible. The choice had therefore to concentrate on establishments already in defence occupation which had sufficient space available and as many as possible of the basic facilities, in particular adequate accommodation, road communications, and access to training areas and suitable dispersal areas during operations.
"Many different locations for stationing have been very carefully studied, but the two bases chosen proved to be the most suitable in the light of the considerations to which I have just referred.
"The deployment of the ground launched cruise missile force will generate very little aircraft movement at either of the bases, probably no more

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than a few a month. As to ground movements, it will be necessary from time to time to practice the deployment of the launcher and its support vehicles to dispersed sites away from the base. These exercises will be along pre-planned routes and will take place after consultation with the local authorities concerned. No live missiles or warheads will be carried on exercises at any time and no missile test-flying will take place in this country. The missiles will be stored in purpose-built shelters in conditions that fully meet the United Kingdom's very stringent safety standards—standards that have proved themselves effective since the inception of a nuclear capability in Britain. As part of the security arrangements, we shall be contributing 220 British personnel towards the guard forces for the bases and dispersal deployments.
"I am having an information folder prepared, covering all aspects of the basing of cruise missiles in the United Kingdom. Copies will be placed in the Library and will also be sent to the local authorities in the areas concerned. The information folder will also be available to those members of the public living in the areas of these sites who wish to know more about the reasons underlying these decisions.
"I am notifying the local authorities concerned about the deployment, and their views on the environmental and social aspects of the arrival of the cruise missile units will be taken into account to the fullest possible extent. They will of course be consulted in due course on the detailed building plans.
"The total cost to the United Kingdom of the whole modernisation programme throughout the Alliance will be of the order of £16 million.
"As I made clear in the House on 13th December, the 160 cruise missiles to be based in the United Kingdom are an integral part of a programme to deploy 572 United States missiles in a number of European countries. The Alliance-wide support for the new system and its widely spread deployment throughout Europe is a clear expression of the determination of NATO as a
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whole to preserve its security. The Soviet Union has developed a large and expanding capability in long-range theatre nuclear forces which directly threatens the whole of Western Europe. In view of the markedly increasing threat we face, the Alliance has decided that it is essential to modernise its own theatre nuclear forces, which are ageing and becoming increasingly vulnerable.
"At the same time, the Government, and the Alliance, remain fully committed to the parallel arms control approach which was agreed in December as part of the modernisation decision. As the House will be aware, the Soviet Union has rejected repeated offers by the United States to negotiate, and has maintained its obviously unacceptable demand that NATO should abandon its modernisation programme as a precondition for negotiation. However, we shall continue to try and persuade the Russians to come to the table and play their part in a genuine negotiation.
"The instability in the world today and the growing military strength of the Warsaw Pact countries require us to be exceptionally vigilant. NATO's unanimous decision on theatre nuclear modernisation was taken for the continuing security of the whole Alliance, and the United Kingdom is determined to play her full part."
That concludes the Statement.
4.2 p.m.
Lord PEART: My Lords, I am grateful to the noble Lord, Lord Strathcona and Mount Royal, for repeating that Statement which is, in my view, a Statement of tremendous importance. I know that the House—and, I understand, another place—is divided on this matter, but the decision has been made that this will strengthen NATO, and the Minister gave the details. Has there been any opposition from local authorities on this matter? Local authorities and areas have been named, but I should like to know whether there has been any opposition from them. Further, has there been any opposition from the public? I have seen reports in the press that the majority of people in the areas concerned have supported the idea, although they may change their

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minds. This is an important aspect and I should like to know the position.
Is the Minister in a position to give any information about whether there was any discussion with our American allies on the question of offset? I will not go into the details of offset, which is an important matter and, after all, these cruise missiles are being built and we are paying for them. I see no reason why the British should be handicapped in any way; this is a sensible method of approach which helps the parent Government financially to a considerable extent.
I was glad to hear the Minister stress the fact that we shall continue to try to get a deal with the Soviet Union. I have argued time and again in defence debates—I argued this only recently—how important it is for the SALT talks to be got going again, otherwise we shall just have an arms race which will get out of hand. I therefore hope we can be assured that the Government really will try to keep the temperature down, especially in relation to matters like the Olympic Games. There has been too much talk of war and aggression, and I believe that we are now coming into another period when we can play an important part. I therefore hope we can be given full assurances on this matter.
4.5 p.m.
Lord GLADWYN: My Lords, I too thank the Minister for repeating that most important Statement. As noble Lords will be aware, we on these Benches are in favour of the stationing of these missiles on British territory as part of the NATO reply to the threat, constituted by the Soviet SS 20s, which is already upsetting the whole balance of power on which peace in the long run depends. We also share the view of the noble Lord, Lord Peart, that the decision, acceptable though it is, should involve increasing pressure—even greater pressure than that suggested in the Statement—by Her Majesty's Government on the Soviet Government to agree to negotiate on the whole matter of tactical nuclear weapons, long-range or otherwise. This means in practice getting on with SALT 3, and I have never been able to see why SALT 3 should necessarily have to depend on the ratification of SALT 2.
For the rest, I assume—although this does not appear in the Statement—that the
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missiles when installed will be under joint United Kingdom—United States control; in other words, that they will be launched only with our express consent. I also assume that they will primarily be designed to deter the use by the Russians of the SS 20s; in other words, that they are not designed to be used on a first strike. But I should be grateful if the Minister will confirm that both those assumptions are correct.
4.7 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am grateful to both noble Lords, and I am particularly grateful for the attention they direct to the question of peace negotiations because that is fundamental to our position in this decision. We have said on many occasions that the Alliance offer to negotiate is serious and remains open, and it is up to the Soviet Union to respond. These missiles will not be deployed until 1983 and we believe that this, if anything, will increase the possibility and will increase the pressure on the other side to enter into meaningful negotiations.
So far as offset is concerned, the question asked by the noble Lord, Lord Peart, I do not think that really arises. The cost to the United Kingdom is minimal. The cost to the United States is very much greater. We believe that in terms of the enhancement of NATO capability, this represents an exceedingly good bargain. On the question of control, raised by the noble Lord, Lord Gladwyn, these missiles will be under single key, but the arrangements which have obtained for many years will continue and the matter will be subject to a joint decision between the United States and the United Kingdom. On the question of local opposition, the position as I understand it is that no specific local opposition has arisen—because it has not been known exactly where the deployments were going to occur—but such indicators as there have been of local opinion have, on the whole, been quite favourable to the concept of stationing these missiles.
Lord BROCKWAY: My Lords, does the Minister appreciate that many of us feel that this is the most disastrous Statement that has been made while we have been Members of this House and even of another place? Does it not

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inevitably mean an intensification in the world of the confrontation of nuclear weapons which could destroy the whole of mankind? Does it not invite, in the case of war, the absolute annihilation of the whole population of this country? Instead of pursuing this disastrous course, will not Her Majesty's Government seek, by the negotiations which are now going on at the Geneva Committee for Disarmament, to secure world agreement on the ending of nuclear weapons and weapons of destruction altogether?
Lord STRATHCONA and MOUNT ROYAL: My Lords, the noble Lord and I have engaged in what I can only describe as a dialogue of the deaf on this issue. I do not wish to be discourteous to him, because he is always extraordinarily courteous to me, but the answer to his questions is: No, and I do not agree.
Lord DRUMALBYN: My Lords, does this mean an end in due course to the independent deterrent in this country?
Lord STRATHCONA and MOUNT ROYAL: My Lords, this is quite distinct from the decision on the Polaris replacement.
Lord TAYLOR of GRYFE: My Lords, the Minister said that 572 cruise missiles would be made available to the NATO Alliance; that 160 of these would he stationed in this country. Can he tell us whether all of the countries of the NATO Alliance have agreed to have these cruise missiles stationed in their territories, and if that is not the case, which countries have refused?
Lord STRATHCONA and MOUNT ROYAL: My Lords, the position is that the decision to station the 572 missiles was a unanimous decision of NATO as a whole, but certain countries have not yet agreed to the details of the stationing within their territories. Denmark and Belgium are the most notable examples in this respect.
Lord MILVERTON: My Lords, no matter how distasteful it may be, I believe it is necessary that we and our friends be prepared to defend ourselves, and in my view the first prupose of the present Government and of previous
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Governments, of whatever shade, has been merely to defend ourselves; and we must be able to defend ourselves. I ask the Minister whether he agrees that that is what the Statement is about. Is it not purely a matter of our wanting to be able to defend ourselves? Will the Minister agree that the Statement does not reflect a tendency towards being aggressive?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am grateful to my noble friend. The intent is not an aggressive one. We believe that the NATO Alliance as a whole had fallen seriously behind in regard to theatre nuclear weapons. We believe that this decision to modernise these theatre nuclear weapons, however regrettable it may be, is necessary in order to redress the balance and to reduce the risk. It in no way prejudicies our abiding wish to continue towards the ultimate goal of peace negotiations.
Lord HILL-NORTON: My Lords, does the noble Lord agree that a very large number of people in this country regard this Statement as the best news for our country and for NATO that we have had for a very long time? Does he further agree that the stationing of these weapons in this country will, contrary to what is put about on various sides, in no way increase the risk of nuclear attack on this country, which is already very high indeed?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am very grateful to the noble and gallant Lord. That question, coming from so authoritative a source, certainly reinforces the Government's view, and I agree in particular with the last part of what the noble and gallant Lord said. We believe that, if anything, the enhancement of the theatre nuclear weapon capability of NATO as a whole, and of this country in particular, diminishes the chance of a nuclear attack upon this country.
Lord HANKEY: My Lords, will the Government agree that if the Russians were allowed to go on increasing their strength without the strength of the West keeping pace with it, there would be much less likelihood of our being able to have a useful dialogue with them with a view to reaching the kind of agreement on arms

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limitation which the noble Lord, Lord Brockway, and many others among us are so anxious to see? Will the Government also agree that if a decision about the cruise missile had not been reached, the likelihood of a dialogue with the Russians would have been greatly diminished?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am most grateful to the noble Lord. What he has said exactly reflects the view of the Government that when it comes to a question of negotiating with the Russians, it is a regrettable fact that it is impossible to negotiate if one is in a position of weakness. We believe that the best chance we have of bringing off successful negotiations—which continues to be our primary aim—is through demonstrating that we are willing to maintain our credibility, if that is what it costs us to do so.
Lord STEWART of FULHAM: My Lords, I do not think that the noble Minister answered the question of the noble Lord, Lord Gladwyn, as to whether these weapons would ever be used in a first-strike capacity. But whatever the answer to that question may be, is the noble Minister aware that a number of us here believe this measure to be essential to the credibility of NATO, and hold also that the evidence of the last 30 years is that the credibility of NATO is our strongest guarantee of peace?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am very grateful to the noble Lord for the robust words at the end of his remarks. I did attempt to answer the noble Lord, Lord Gladwyn. It is difficult to postulate exactly the situation under which any nuclear missiles would be used, but of course we—and the Americans, too—have always said that it is not our intention to indulge in a first strike.
Lord PEART: My Lords, can the noble Lord say when SALT talks will take place? Has he any information about this? I think that the vast majority of noble Lords would wish to know whether SALT talks were going on.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I wonder whether the noble Lord was referring to SALT 3
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or to the resumption of the SALT 2 negotiations. I do not think that I have any further information. We are awaiting an indication of interest in resumption, and in fact we are not ourselves actively engaged in these negotiations. It is a matter between the Americans and the Russians.
Lord LEATHERLAND: My Lords, as one who believes that we have to defend ourselves in this way, may I ask the noble Lord whether he can tell us how many miles each of these two sites will be from the nearest well-populated town?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I cannot exactly tell the noble Lord that because, apart from anything else, I am not wholly certain as to what he means by his question. One of the sites is near Newbury. The other site is near Huntingdon, in Cambridge. I suppose that the noble Lord would regard those as well-populated towns. I think that the sites are in the order of about 10 miles distant from the respective towns mentioned. Perhaps it would be opportune for me to say that the intention would be in moments of crisis to deploy the missiles out from these bases, for quite a considerable distance—of the order of 50 miles, rather than one or two miles.
Lord HATCH of LUSBY: My Lords, the noble Lord the Minister has partially answered a number of questions about the defensive qualities of the cruise missile. He has not yet answered the question asked by the noble Lord, Lord Gladwyn: Is the cruise missile anything more than a first-strike weapon? Can it in any circumstances be used as a defensive weapon, or is it to be held by the NATO countries simply as a bargaining tactic? Above all, will the noble Lord please answer directly the question of whether the cruise missile is capable of being used in any capacity other than as a first-strike weapon
Lord STRATHCONA and MOUNT ROYAL: Yes, indeed, my Lords. It is described as a theatre nuclear weapon, which means to say that it is being used in a battlefield sense. That postulates that some kind of hostilities have surely started already. I do not know whether

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I should expand upon that for the noble Lord. It certainly is not primarily a first-strike weapon.
Lord GORE-BOOTH: My Lords, I am somewhat shy about asking a question at all on this subject, which is not one in which I am expert, and in any case I believe that all of us feel very strongly that this is the most important, yet also the most dislikeable, matter that we have to talk about, given the basic issues that are presented to us. So I attach an importance to intervening, albeit unskilfully, though none the less expressing agreement with what the Government have decided. I do so because I feel that these matters have now reached a stage where, if one does not take up what is at least by implication an offensive challenge or an offensive threat, then by implication one is beginning to give up the main struggle altogether, and none of us would wish to do that. My other point—
Several noble Lords: Question!
Lord GORE-BOOTH: I am sorry, my Lords. May I ask the Minister whether he also agrees that when mention is made of too many threats of war, surely there is a very easy answer to the point; namely, for the Russians to move out of Afghanistan?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I think the last part of the noble Lord's question is somewhat removed from the Statement, but I would not dissent from what he has said. As far as the ground launched cruise missiles themselves are concerned, they are intended to be in response to an enhanced threat from the other side. We believe that it would he unwise and, indeed, dangerous not to counter an enhancement of the threat from the other side, and this is the intention in the stationing of the ground launched cruise missiles.
Earl DE LA WARR: My Lords, before I ask my brief question perhaps I may say how much I welcome what my noble friend Lord Hill-Norton has said, that this is indeed the best news for NATO for many years. Having said that, may I ask my noble friend whether he could be a little more specific about his description of the control of this weapon as being single key and under
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joint control. Specifically, does this mean that the warheads are physically under British control; and, more generally, does it mean that in the final analysis it would be possible for the British Government to take a unilateral decision to use them?
Lord STRATHCONA and MOUNT ROYAL: My Lords, as far as the last part of that question is concerned there is no question of the British being in a position to take a unilateral decision to fire the weapons, if that is what I understood my noble friend to ask me. This arrangement has obtained ever since 1952, at the time of the Government under Mr. Attlee; and the arrangement has not been altered although the weapons themselves have been altered. The actual firing of the missiles could not take place without the necessary political authority under the same arrangement as has obtained ever since 1952. As I have said before, the question of the use of these bases is a matter of joint decision between the United States and the United Kingdom authorities.

HONG KONG-LONDON AIR SERVICES
4.22 p.m.
Lord TREFGARNE: My Lords, with your Lordships' permission, I will repeat a Statement being made by my right honourable friend Mr. Nott on Hong Kong to London air services. The Statement is as follows:
"With permission, Mr Speaker, in view of the widespread interest in the matter, I would like to make an oral statement about the decision I have taken concerning air services between London and Hong Kong.
"Last year three airlines, British Caledonian, Laker and Cathay Pacific, a Hong Kong based airline, applied to the Hong Kong Air Transport Licensing Authority and the Civil Aviation Authority for licences to operate on the London-Hong Kong route in addition to British Airways. At present British Airways provide the only direct service, although there are of course already a large number of

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services between Hong Kong and other European cities.
"Both authorities heard evidence separately on these applications. In December the Hong Kong Authority licensed British Caledonian and Cathay Pacific, but restricted their frequency of service to four and three flights a week respectively. In March this year, the Civil Aviation Authority announced its decision to license only British Caledonian.
"The two applicants who were unsuccessful before the Civil Aviation Authority submitted appeals to me under the provisions of Regulation 16 of the Civil Aviation Authority Regulations 1972. I also received a number of representations, including one from the Government of Hong Kong, that, under the powers conferred on me by Section 4(3) of the Civil Aviation Act 1971, I should direct the authority to license Cathay Pacific in the interests of the United Kingdom's relations with Hong Kong.
"I have given this matter the most careful consideration, in particular against the criteria set out in Section 3 of the Act, and I found myself in disagreement with the Civil Aviation Authority in a number of ways: in particular I was convinced by Sir Freddie Laker's contention that there is a large untapped market for this route if fares are pitched at the right level.
"In his evidence he described this market as consisting of 'the forgotten men and women at the bottom end of the market'—who might wish to fly if they could afford to do so. I find myself in agreement with this dynamic approach to civil aviation and in my view it should he acknowledged.
"I also felt that the authority had placed too much emphasis on the economics of the proposed additional services in the short term, and too little on the benefits to the development of the United Kingdom civil aviation industry generally of choice of service and competition on a route such as this—in particular competition with other non-British airlines.
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"I felt that it was in the interests of airline passengers that they be offered a wider choice of service than exists at present, that it would be unreasonable to expect British airlines, within the meaning of Section 3(1) of the Act, to he granted exclusive rights when Cathay Pacific are based in Hong Kong, command much local loyalty, and can expect to draw traffic from their network of regional services.
"I concluded therefore that the substantial new traffic likely to be generated over a period by a wider variety of services would offer a reasonable prospect that four operators could, over a period, achieve an economic return on this route.
"I have accordingly upheld the Civil Aviation Authority's decision to license British Caledonian but in addition have directed it to reverse its decisions on the other two applications and issue licences in the same terms to Cathay Pacific and Laker, but without prejudice to the former's existing rights between Hong Kong and Bahrain. The authority and the other parties to the appeals are being informed of my decision today.
"As I have reached this decision by the normal appeal criteria, I do not intend to issue a political direction under Section 4—and I have informed the Hong Kong Government accordingly.
"I believe that my decision will be welcomed by airline passengers generally and in Hong Kong where freedom to compete is one of the cornerstones on which the economic success of Hong Kong has been built. I hope therefore that the Government of Hong Kong will lend support to the applications which Laker may now wish to renew to the Hong Kong Air Transport Licensing Authority and to any applications which British Caledonian and Cathay Pacific may wish to make to increase the frequency of their services, should they believe it is in their interests to do so."
My Lords, that concludes the Statement.
Lord BESWICK: My Lords, I am sure the House is grateful to the noble Lord for repeating this Statement, on what is really a controversial decision. May I ask him whether I am not right in saying that quite recently and emphatically Her Majesty's

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present Government have emphasised that they are going to give greater weight to the decisions of the Civil Aviation Authority, and that that course is in accordance with the non-interventionist policy of Her Majesty's Government? Does not this decision go quite contrary to the declared policy; and may I ask the noble Lord how he reconciles this overturning of a CAA decision with the declared policy of Her Majesty's Government?
Secondly, on what information have the Government based their view that four carriers can make a profit and give a service on this route? There was a case for maintaining the rights of British Airways, and there was a case for extending the operation to a second carrier, but I have not heard it seriously argued anywhere that four carriers could be justified on this one route. May I ask the noble Lord whether, if there is other information that was not available at the hearing by the CAA, he could make that information public, and would it not be better if the whole matter was referred back to the CAA so that they might consider this additional information?
Earl AMHERST: My Lords, I, too, should like to thank the Minister for repeating this Statement, which we on these Benches are not too happy about, in that it seems to challenge the whole basis of validity, value and protection of the CAA licence. Only three months ago, or thereabouts, the CAA, who were set up to issue such licences, which were formerly issued by the Board of Trade, issued a licence for Caledonian Airways to operate this route. At that time presumably it took into full consideration all the arguments that were used by Cathay Pacific, Laker and anybody else interested, balanced the thing up and made the decision to issue the licence. Now, an airline, having got a licence, assumes considerable financial liability in order to find staff and equipment to operate that licence. If, a short three months after that licence is issued, the Minister, apparently on his own account, decides not to cancel that licence but so to modify it as to let in other operators, which renders practically valueless the paper on which the licence is written, have British Caledonian Airways any recompense for the money they have expended on aircraft and additional staff?
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I would also ask this question of the noble Lord: in the airline business, is not the share equity of an airline based largely on its assets? The average airline's main asset is its licence to operate. Without that, its whole equipment is virtually valueless. Therefore, if at short notice this licence is going to be modified, altered or challenged, does that not seriously prejudice the equity of the airline in question? May I ask the Minister whether he could not review this situation and inform us of some means by which to establish the validity and protection of these licences?
4.31 p.m.
Lord TREFGARNE: My Lords, I am obliged to noble Lords for what they have said. I am sorry that they were not more receptive to this Statement. This case hinged on the judgment that my right honourable friend made upon the traffic available on this route. My right honourable friend came to the conclusion that the figures advanced by Laker in their original application were more likely to prove justified than the more pessimistic figures which the authority took into account when they made their original decision. I can tell the noble Lord, Lord Beswick, that my right honourable friend had no additional information before him when he considered this appeal. Under the procedure, he is not permitted to do that but only to have regard to the facts as they were put before the authority at the original application. But he is entitled to consider any further clarification of the facts that the original parties to the application put before the authority at that time.
The noble Earl, Lord Amherst, referred to what he thought was the dilution (if that is the correct word) of the effect of the licence originally granted to British Caledonian and asked whether they were to receive any compensation. The original licence was granted only two or three months ago, in March. There is no question of compensation. In any event, as I have said, we believe that there is sufficient business for all four carriers on this route.
Baroness BURTON of COVENTRY: My Lords, as the House knows, the Civil Aviation Bill has gone to ground in the Commons and we are awaiting its Second

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Reading here. As my noble friend Lord Beswick has said, this Bill gives much more power to the Civil Aviation Authority. I am in favour of more choice for air travellers. May I ask the Minister whether I am correct in understanding the background to this matter when I say that I understand that the service given by British Airways to Hong Kong was not deemed satisfactory and that someone suggested that British Caledonian should apply for a licence? Is the noble Lord aware—and I must put this in the form of a question—that I, personally, think that British Caledonian is a first-class airline and I have always admired its slogan, "We never forget that you have a choice"? It would be useful if more airlines felt the same. Is he also aware that Cathay Pacific is reckoned also to be one of the best airlines in the world? At the time that the decision was reached, I regretted that British Caledonian and Cathay Pacific were not included in the granting of a licence.
May I ask three specific questions? Does it not seem unfortunate that the Civil Aviation Authority and the Government did not get together a little earlier on this matter? I am not talking about the appeal but about the application. Did they, in fact, get together; and is this a change of heart? Secondly, under the new arrangement, is it suggested that British Airways should have the larger share of the operation? Thirdly, if, as I understand it, British Airways did not make full use of the quota that they were given for the service to Hong Kong, could we not have a more equitable arrangement in the future? If that could be done, would it not help British Caledonian to overcome the financial drawbacks that they now fear and which they had no reason to suspect would be theirs under the ruling given by the Civil Aviation Authority?
Lord TREFGARNE: My Lords, there is no question of the Government getting together with the CAA in the first instance when the authority are considering the initial application. That, I think, would be wrong. The Government have a role in this matter only when there is an appeal from the original decision of the authority; and that is what has happened in this case. As for British Airways' share of the
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market, to which the noble Baroness referred, the future share of the market will depend upon the success of the individual airlines in a very competitive situation.
Lord TAYLOR of GRYFE: My Lords does the noble Lord accept that this is an industry in which regulation is essential and that the Civil Aviation Authority is the appropriate authority to weigh up all aspects of applications for licences? Is there a precedent for the Secretary of State overturning a decision of the Civil Aviation Authority? Does it not undermine the authority of the CAA in viewing future licences or is it now Government policy that there has to be a "free for all" on many other routes? Is that the logic of the decision in this particular case?
Would the noble Lord accept, too, that British Caledonian have entered into substantial commitments in order to service the licence that they were given—including the setting up of a maintenance depot in Scotland in an area of very substantial unemployment in order to increase employment facilities in the maintenance of aeroplanes? In view of all these circumstances, does the noble Lord not accept the suggestion made by the noble Lord, Lord Beswick, that this might be reviewed with the Civil Aviation Authority?
Lord TREFGARNE: My Lords, I think that the commitment to which the noble Lord referred, the British Caledonian engineering base, was made long before this matter became an issue. It would not be fair to say that they entered into that commitment simply for the purpose of operating this route.
Lord MONSON: My Lords, may I congratulate the Government on living up to their free enterprise and free competition philosophy in this instance to the great benefit of the consumers? May I ask the Minister whether the Government will now consider abolishing, or at any rate limiting, the power of the CAA to impose monopoly or semi-monopoly conditions on other routes and allow much freer competition, subject only to safety considerations?
Lord TREFGARNE: No, my Lords; I am afraid that I cannot accept that

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suggestion. The authority will remain as the body primarily responsible for licensing matters. Only when they come to appeal, as in this case, does the Secretary of State have a role to play.
Lord BESWICK: My Lords, may I ask the noble Lord whether he will make clear the Government's policy in this? Do they intend to give the authority a deciding role in these spheres or not? That, we understood, was the position. May I thank the noble Lord for making it clear that there was no other information available to the Secretary of State when he came to this modification of the CAA's decision. If there was no other information, can he seriously say that the "men in Whitehall knew better than the experienced and professional judgment of the CAA?
The noble Lord in the Statement said that it was hoped that the Government of Hong Kong would lend support to the application which Laker may now wish to renew to the Hong Kong authorities. Have the United Kingdom Government any reason to believe that the Hong Kong authorities will look more favourably at the Laker application?
Lord TREFGARNE: My Lords, I can confirm that our general policy in this matter remains unchanged and that we seek to provide to the CAA the maximum degree of autonomy and authority in these matters and only in very rare and special cases such as this one would the matter come before the Government in the form of my right honourable friend the Secretary of State. The second point the noble Lord raised has escaped me for the moment.
Lord BESWICK: My Lords, I asked about the reference in the Statement to the hope of Her Majesty's Government that the Government of Hong Kong will lend support to the Laker application.
Lord TREFGARNE: My Lords, that is a matter for the Hong Kong licensing authority. We have expressed our view, which I repeated in the Statement. I cannot predict the outcome of any application to that authority.
Lord SEGAL: My Lords, can the noble Lord confirm that the original
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decision to exclude Cathay Pacific and Laker on this route gave rise to a great deal of indignation locally in Hong Kong? Is it not a well-established precedent that when a new route or an extension of a route is granted, a reciprocal arrangement is made at both ends providing that each should have a share in the new trade thus created? May I join with the noble Baroness, Lady Burton, in welcoming the Government's decision and expressing the hope that the increased traffic which will result from the Government's decision now will be to the advantage of British Airways, of British Caledonian, of Laker and of Cathay Pacific and to the enormously increased benefit of Britain and Hong Kong in the interests of cheaper fares? I believe that the Government decision is one warmly to be welcomed.
Lord TREFGARNE: My Lords, if I may respond to the first point, Hong Kong is a very special case, not only for the factors that I have mentioned, but also because it is considered as part of British territory for air services purposes. That is why the matter came before the Civil Aviation Authority and my right honourable friend.
Lord DRUMALBYN: My Lords, if licences are granted to the three companies that have applied for them, will the companies be free to choose their own routes? Will they be free to negotiate intermediate freedoms with other countries?
Lord TREFGARNE: My Lords, all the airlines are now authorised to operate on the route, as I understand it, except for Laker Airways which still have to make a successful application to the Hong Kong authorities. As for intermediate stops, my right honourable friend has not authorised any addition to the licences in that respect but has however taken note of the existing authority to Cathay Pacific to stop at Bahrain for traffic purposes.
Lord TANLAW: My Lords, did the noble Lord have any discussions with his right honourable friend the Minister of Energy about the implementation of this policy which does not seem consistent with that of the conservation of energy? Will he confirm that this means overloading a route with aircraft and more

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seats? Cannot better use be made of energy by minimising the number of aircraft and relating the number of seats to those presently available and not to those that are hoped to be available?
Lord TREFGARNE: My Lords, I can assure the noble Lord that with fuel at the price it is, none of the airlines will be operating except in an economic way.
Lord GEDDES: My Lords, may I ask my noble friend whether the Government are aware of the satisfaction that will be caused in Hong Kong as a result of this announcement—albeit somewhat diluted satisfaction? Is he also aware of the extreme importance to the people of Hong Kong of allowing Cathay Pacific on to this route; and, further, the importance of Anglo-Hong Kong relations and Anglo-Sino relations?
Lord TREFGARNE: Yes, no doubt, my Lords; but those were not of course the considerations in my right honourable friend's mind.

ECC REPORT ON POWERED INDUSTRIAL TRUCKS
7.18 p.m.
Lord KINGS NORTON Lord KINGS NORTON rose to move, that this House takes note of the Report of the European Communities Committee on powered industrial trucks. The noble Lord said: My Lords, the report deals with the draft directive published last May, which is part of the Commission's programme under Article 100 of the EEC Treaty for the removal of technical barriers to trade in industrial products. Your Lordships will learn, if you have not already done so, that it singularly fails to achieve this objective.
The majority of the vehicles embraced by the title "powered industrial trucks" are what we call "fork lift trucks", which are widely used in industry, and it is essential that they are so designed as to minimise the possibility and ill consequence of accidents.
The directive particularly examined in the report before your Lordships is the first of a series arising from a draft framework directive, by which is meant a general directive, related to the harmonisation of the design of lifting and mechanical handling devices. Although published in 1975, those of your Lordships who are familiar with the speed at which decisions are reached in the Community will not be surprised to learn that the framework directive has not yet been adopted. It has been the subject of a reserve, or estoppel, by the French. None of the subsidiary directives can be adopted until this reserve is removed and, as our report says,
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"there is no indication when this is likely to be".
Even if that great event occurred tomorrow we should still be far from the end of the road, because there are serious objections to the particular directive we are considering, which your Select Committee urge the Government not to agree to in its present form. The report states that,
"Agreement on the technical content of the directive may be reached only with difficulty".
Your Lordships will see from a study of the report that Sub-Committee F of the Select Committee have gone deeply into the directive, examining witnesses from the Health and Safety Executive, the British Industrial Truck Association and the Committee on Economic and Monetary Affairs of the European Parliament. They consulted the Select Committee on European Legislation of another place, and received and considered submissions from the CBI, the Independent Engineering Insurers Committee and the Associated Offices Technical Committee.
As a result of this investigation, your Committee draw attention in emphatic terms to two issues of principle raised by the draft directive. The first, and more important, is the inclusion of two requirements which appear to be unnecessary and which raise a serious political question. The second concerns the degree of harmonisation required—total or optional.
On the first point of principle, your Lordships will be interested to remark that the preparation of the draft directive took several years. During 1979, however, France imposed new national manufacturing standards and certification procedures, with which manufacturers from other member states had to comply in order to sell their products in the French market. Following the last meeting of the Commission Working Group, when the draft directive was finalised, two clauses taken from the recent French regulations were added by the Commission, even though they had previously been rejected by the experts. The two clauses concerned called for automotive-type pedal arrangements on trucks and for removable fuel tanks. Their declared purpose is to achieve greater safety.
Evidence to Sub-Committee "F" emphasised that the clauses had no value in relation to safety and amounted to a technical barrier to trade. There has therefore been surprise and disappointment at the last minute inclusion of these two provisions by the Commission. In the explanatory memorandum which accompanies the directive, the Commistion said that they,
"did not wish to preclude from the outset the technical measures recently taken by a Member State",
and this certainly suggests that the Commission were not persuaded by the French arguments in favour of the clauses, but that they foresaw that the French would insist on retaining them. The inclusion of the clauses has provoked a considerable and adverse reaction in the United Kingdom. The CBI claim that they have jeopardised the acceptability of what is otherwise a highly desirable directive, that,
"the French action is a violation of the fundamental aims of creating a Common Market"
and that member states should firmly resist
"such an abuse of Community rules".
At the time of publication of the Report before your Lordships, neither the European Parliament nor the Economic and Social Committee of the EEC—called ECOSoc, for short—had expressed opinions on the directive, but it is clear from the information supplied to your committee by the rapporteur of the Economic and Monetary Committee of the European Parliament, that the ECOSoc section concerned had developed the view that the provisions on fuel tanks and controls are unacceptable, because they do nothing for the safety, health or comfort of the operators or users; they add to the great and increasing diversity of national regulations; they constitute a design restriction which will hamper development, and they damage the export capability of EEC manufacturers to the rest of the world. Furthermore, the Parliament's committee, to which I referred, believe that the matter raises a political issue requiring debate on the floor of the European Parliament.
That is where this piece of European history stood when your committee's report went to press. But since then
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things have got worse. The ECOSoc section, with the sound views that I mentioned, recommended to the ECOSoc plenary session on 26th March that the two French clauses were unacceptable. But, through French intervention, ECOSoc did not accept the recommendation, so the draft directive now goes forward to the EEC Council with the two offending clauses still included. From the points of view of all interested parties who are not French, it is essential that the Council do not accept the draft without deleting them. However, there is one item of news on the credit side. I have just heard that the European Parliament have decided to hold a debate on the matter on 26th June.
May I now tell your Lordships about the second issue of principle. First, you must understand the difference between "total" and "optional" harmonisation. Total harmonisation means that member states are obliged to prohibit the marketing of all products covered by a directive which are not in conformity with its provisions. Optional harmonisation, which your Lordships may be forgiven for thinking is unlikely to be harmonious, means that while products conforming to a directive may be marketed and used within the Community without restriction, products not conforming may still be marketed and used with in a member state if it so permits.
Although Government witnesses emphasised that they had not yet taken a decision on which form of harmonisation they would press for in negotiations, optional harmonisation would be the more usual form and has definite administrative advantages. Whereas optional harmonisation would require only the minimum amendment of United Kingdom law by regulations under the Health and Safety at Work Act 1974, total harmonisation would require detailed government implementation and the application of appropriate enforcement measures. There is the danger that under total harmonisation it may be more difficult to adjust or amend the standards to meet innovative developments as they arise. The framework directive makes provision for technical progress committees to achieve this end, but such a procedure would in practice, be easier to operate within an optional scheme.
But the United Kingdom manufacturers favour total harmonisation. While under an optional scheme they would be entitled to market their products in other member states, it might in practice prove difficult to do this if member states continue to allow the marketing and use of products which do not conform. Similarly, since current United Kingdom requirements for industrial trucks are not stringent, there would be little to stop the import into the United Kingdom of inferior products which do not conform to the requirements specified in the draft.
As between optional and total harmonisation in this particular case, your committee express no definite opinion. They appreciate the advantages which a total scheme may bring to United Kingdom manufacturers but, if this cannot be negotiated, then optional harmonisation would be better, they think, than none. The ECOSoc plenary session on 26th March, however, appears to have agreed on total harmonisation.
On the objectionable clauses so unconstitutionally included by the Commission, your committee expresses itself categorically. They see no justification for the inclusion of the two clauses on pedal arrangements and removable fuel tanks. They urge the United Kingdom not to agree to the adoption of the directive without their deletion, and I hope that the Minister who is to reply will be able to assure us that this will be done. Your committee remarks that there seems little point in conducting exhaustive and time-consuming preparatory discussions if, at the last moment, the Commission include requirements which were rejected by expert opinion and were designed primarily to meet the demands of one member state.
The Commission should, in the first instance, the committee considers, have sought to persuade France to do away with its unnecessary standards. If such persuasion had failed, the Commission should have proceeded on the basis of expert advice and published the directive without the offending clauses. It would then have been open to France to argue for their inclusion during negotiations but, as the position now stands, one member state has a quite unfair bargaining position.
If barriers to trade arising from mandatory Government regulations cannot be satisfactorily removed by Community
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legislation, then it is preferable, the report states, that the problems of standardisation should be left to the international standards bodies who will overcome them slowly but by consensus.
Indeed, it is inconceivable that the Commission should try to harmonise standards across the whole field of industrial appliances. The difficulties arc reflected by the fact that in the current draft directive there are 50 pages of technical detail—50 pages just for fork lift trucks—and five years have passed and there are years of argument still to come. We have yet to start on the rest of the series under the framework directive; we have yet to start on turbines, caravans, cooking stoves, railways, nutcrackers, mousetraps—and goodness knows what else. The path ahead, through an undergrowth of frustration, is lost in the mists of the 21st century. Expressing a personal opinion, for the Commission the task is an impossible one.
Another point, my Lords. The draft directive which is the subject of the report which I am presenting to your Lordships, in my view represents an attempt to standardise design. I doubt whether in principle we should ever try to do this. Again expressing a personal view, what is needed in some areas, powered industrial trucks among them, is a set of safety requirements similar in philosophy to those so well devised for aircraft, European agreement for which is achieved by sensible international action without any help from the EEC Commission. I think that the Commission might well be put into a position to decide in what areas such requirements are needed. Then it should, I suggest, call upon the standards institutions, the relevant regulatory bodies and the industries concerned to collaborate to produce them. This has worked splendidly in aviation, and in my opinion it could work equally expeditiously in other areas of technology. My Lords, I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on powered industrial trucks (42nd Report, H.L. 205).—(Lord Kings Norton.)
7.33 p.m.
Lord SHERFIELD: My Lords, I should like to express my thanks to the

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noble Lord, Lord Kings Norton, for the crisp and trenchant manner in which he has explained this draft directive and, in a few words, to give my support to the general line which he has taken. At first sight, it may appear strange that this House should be troubled with what on the face of it is a technical matter affecting a limited class of product, but it is a link in the chain of harmonisation measures being forged by the Community, and experience already shows that technical harmonisation proposals may cover matters of more general import.
For this draft directive does not stand alone. The House may remember that a few days ago a Starred Question was asked by the noble Lord, Lord Plowden, arising from another Select Committee Report on an EEC draft directive dealing with scissions—a word hard to enunciate even before dinner! This is a rather obscure corner of company law relating to the winding up of companies. At first sight, there would appear to be no connection between fork lift trucks and scissions but in fact they are almost exact analogues. Both are examples of technical harmonisation in their respective fields. Both have been tailored to suit the interest of one member only of the EEC—in fact the same member in both cases. And in the scissions case an attempt has been made to by-pass the European Parliament and the Economic and Social Committee altogether rather than, as the noble Lord, Lord Kings Norton, has explained, to bulldoze the proposal through the Economic and Social Committee. However, as the noble Lord has also said, the European Parliament has proved to be made of sterner stuff.
Different departments of Her Majesty's Government are responsible for dealing with these two directives which are, of course, two of many. I hope the Minister can confirm that somewhere in Whitehall there is a department which watches the whole field of the harmonisation policies of the EEC; brings all the disparate directives together; and co-ordinates the responses of the departments concerned to those recondite but potentially significant attempts at harmonisation. This is important because, as in those two cases which I have mentioned, they can either involve the interposition of additional non-tariff barriers to trade or give rise to
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a great waste of time and effort both internationally and, later, nationally if legislation is required, as it usually is.
I should now like to probe a little further into a matter mentioned by the noble Lord, Lord Kings Norton; namely, the relationship of the harmonisation policies of the European Economic Community and the work of the standardisation bodies. I do not know the reasons for which the Community embarked on harmonisation in the industrial field, which is really standardisation under another name. It is obviously a Herculean task, with huge staff requirements, to cover the whole field of industry, and it is difficult to see how overlapping and confusion can be avoided.
As a former President of the British Standards Institute, I know something of the complexities of the work in the national field as well as the dedicated efforts of thousands of individual members of technical committees. And of course it all becomes infinitely more complicated when the national effort has to be integrated into the work of the two European standards institutions and, at the highest level, with that of the two international organisations, the ISO and the IEC at Geneva.
Moreover, one of the sub-committees of the select committee which is preparing a report on yet another harmonisation proposal has discovered that the Economic Commission for Europe is also busy in some areas of the harmonisation process, and to this extent a third variable is added.
Standardisation work is extremely slow and cumbrous but, as the noble Lord, Lord Kings Norton, has pointed out, so are the harmonisation procedures of the European Economic Community. It would probably have been more satisfactory for all concerned if the Commission had kept out of industrial harmonisation and left it to the standards institutions, but we are presumably now stuck with a dual and, in some cases, a triple system and it would be interesting to know what, if any, attempts are made to harmonise in turn the work of the Community in this field with that of the standardisation bodies. Perhaps the Minister might be able to say something on this point.
This apparently unimportant directive is merely the ears of the rabbit, for under-

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neath lies the whole body of non-tariff barriers to trade. The manipulation of standards is one of the most effective ways of erecting these non-tariff barriers and, as the present report shows, harmonisation can also be manipulated for the same purpose. An earlier example was the notorious noise level requirement for lawn-mowers.
This harmonisation process takes place in a jungle where predators abound, and those who operate in it need to be constantly on the alert. I hope that the departments of Her Majesty's Government who have to negotiate on these matters are well prepared, well co-ordinnated and resolute. If this report helps to make them more so it will have been worth the effort.
7.40 p.m.
Lord DAVIES of LEEK: My Lords, I will not take up much of the time of the House. I have read the report and I have decided, as somebody who is not on any of the European Committees, that it was my duty to listen to this debate because I have given examples before, and so have other Members of this noble House, of pettifogging meddling about with standards. I remember even an effort to standardise mustard throughout the European system. Consequently, what I am afraid of is that we shall get something like Japanese resistance to pharmaceuticals and to engineering; unless the number of an engine is stamped in a certain place on the engine itself in a car it will not be accepted.
All I want to say is that common sense insists that there shall not be a great overlapping of different bodies dealing with standardisation. We have just heard an authoritative statement from somebody who knows what he is talking about on this, and I hope that the Common Market will take it a little more slowly rather than interfere in this realm, and will allow the appropriate bodies which have been in existence for generations to deal with those things which they can deal with better than a heterogenous group in the Common Market itself.
Originally I was against the Common Market, and although I still am against it I have to bow before the wave of the referendum. Nevertheless, it hurts me to see the sovereignty of this House—of
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Parliament itself—being lost to pettifogging ideas such as this. Consequently, I hope that the Government in their wisdom will try to do something to rectify this continuous—yes, it is continuous; it is not continual—this continuous interference with the legislation of various Governments that goes on inside the Common Market.
7.42 p.m.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, I have listened to the debate with great interest. The Government are grateful to your Lordships' Select Committee for their very thorough examination of the European Commistion's proposal for a directive on the approximation of laws relating to powered industrial trucks, and we are also grateful to the noble Lord, Lord Kings Norton, for initiating the debate about it tonight. As the noble Lord, Lord Sherfield, told us, although this draft may appear to be of a technical character—indeed to take up the phrase of the noble Lord, Lord Davies of Leek, to be also of a pettifogging character—it does raise some really grave political issues and the noble Lord, Lord Kings Norton, spelt these out clearly to us. It raises the question of how the institutions of the European Community should or could respond when one member state—in this case, and indeed in another case that was cited, France—introduces some new technically-seeming barrier to trade which it seeks to justify on health and safety grounds. It is because the Department of Employment (my Ministry) is the sponsoring Ministry of the Health and Safety Executive that I am in fact answering this Motion.
In my view, this kind of activity is extremely dangerous not only to the free trading system on which Western prosperity since World War Two has largely been based but also to the political survival of the European Community as a coherent and dynamic entity. On the one hand, people can be alienated from the kind of pettifogging restriction to which the noble Lord, Lord Davies of Leek, drew our attention and, on the other hand, they become sharply aware that this bureaucracy is simply the jungle within which real predators are lurking, as the noble Lord, Lord Sherfield, told us.

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Under the rules of the Community it is for the Commission to make proposals for removing such barriers between member states and they accordingly produced this proposal for a directive, which was delivered to the Council of Ministers on 11th May 1979 and in due course was also published in the official journal of the Community. It then went to the Economic and Social Committee, which after detailed consideration eventually delivered its opinion on 26th March of this year. Since then it has been going through the European Parliament whose opinion is now awaited and I was glad to hear that that will be coming fairly shortly. All this while the Commission have been working towards producing additional technical material which will be essential to make the proposal complete.
Meanwhile here in this country the Commission's proposal has been considered by a Select Committee of your Lordships' House and also by the Select Committee on European legislation in another place, which has published its own report. The two Select Committees took evidence from the responsible Government departments and agencies and, in particular, the Health and Safety Executive and also from the Confederation of British Industry, the British Industrial Trucks Association and other interested bodies. The responsible Government departments and agencies have been undertaking their own consultations with the CBI, the BITA and other bodies with a view to establishing our negotiating position—the Government's negotiating position—in good time for the Council of Ministers' stage, which I understand is not likely to come before the autumn and possibly later than that.
That is the process of consultation, which is not yet quite complete. We are preparing our armoury, so to speak. Before determining our negotiating position the Government will of course take into account the views expressed in the debate tonight as well as any further debate in another place and also the debate which the noble Lord has told us will shortly be coming in the European Parliament.
I should like now to comment briefly on what has been said by the noble Lord, Lord Kings Norton, in introducing
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tonight's debate. First, the draft framework directive on lifting and mechanical handling appliances, upon which this particular draft directive on powered industrial trucks depends (fork lift trucks for short) has indeed been with the Council of Ministers since 1975. It is virtually complete but the problem of how to deal with imports from outside the Community has not yet been fully resolved. I think perhaps the noble Lord, Lord Kings Norton, was a little unfair in blaming the Commission for this delay, for which member Governments should really take responsibility.
Lord KINGS NORTON: My Lords, if I may interrupt the noble Earl, I said "the Community".
The Earl of GOWRIE: My Lords, I beg the noble Lord's pardon. It is, as I said, the member Governments that have been a bit lax here.
Next the inclusion by the Commission in their draft directive and the endorsement by the Economic and Social Committee of the current French requirements that fuel tanks should be removable and that pedal controls should be of the automotive type and layout. I can confirm that the French authorities have not yet produced any accident information whatsoever which could justify these two requirements. Accident information from the Health and Safety Executive in this country does not indicate that removable fuel tanks would make any significant contribution to safety, and does not indicate, either, that automotive pedal controls are any safer than non-automotive. This is a try-on, my Lords, and we all know it. In support of British manufacturers we will argue strongly to resist the inclusion of these requirements in the directive.
I wish now to turn to the question of total or optional harmonisation, which the Select Committee and the noble Lord, as well as the noble Lord, Lord Sherfield, have already explained to the House. It is clear that British manufacturers want total harmonisation, as they feel this would effectively protect them from competition from sub-standard trucks. But we must not—if this is the right image in this contest—get hoist with our own petard. We also have to take into account the interests of purchasers and users. These have also been consulted,

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and while many prefer total harmonisation, as this ensures a standard product, some want to be able to retain the freedom to purchase any truck which they consider would meet their particular requirements.
The manufacturers allege that this freedom could be abused, in that cheaper and less safe trucks might be ordered, perhaps from overseas. But the Health and Safety Executive tell me that they already have adequate legal powers under Section 6 of the 1974 Act to stop this happening, and that total harmonisation would require the making, administration and indeed enforcement of detailed technical regulations, while optional harmonisation would in this country require little or no legislation. I am, therefore, not yet persuaded that there is need for total harmonisation solely on safety grounds, but we will be taking into account the views of the manufacturers as well as the users in establishing our final negotiating position.
Finally, let me turn to what the Select Committee and the noble Lord said about the European Communities' harmonisation programme as a whole. It certainly is a burdensome programme for the Commission and for member Governments. I wish it were true that we could leave all this work to the international standards bodies to achieve by consensus. To answer Lord Sherfield, the European Commission are encouraging the two Pan-European standards-making bodies, the CEN and the CENELEC, to organise their programmes so as to produce the harmonised standards the European Community requires. So they are trying to achieve what the noble Lord wants in that direction. But the trouble, of course, is that they cannot always achieve consensus; and even when they do, it is not necessarily binding on member Governments, some of which seem intent upon maintaining and even developing their own national requirements which have the effect, if not always the intention, of being technical barriers to trade. The Government therefore see no alternative in the present circumstances to persevering with the programme in so far as it is necessary in order to remove such barriers where they already exist, and prevent their erection elsewhere.
The noble Lord, Lord Sherfield, asked whether there is a central co-ordinating
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department looking at all EEC harmonisation directives. The Foreign and Commonwealth Office, and the Department of Trade play the central co-ordinating role here. I am, as I say, most interested in this debate. We are preparing our negotiating position on this and it will be a very strong one. Our case will be strengthened by the remarks made in your Lordships' House this evening.
Lord DAVIES of LEEK: My Lords, may I put to the noble Earl this presumption? When they think something needs the attention of the Government it is their duty to inform the Government of the position, and the Government make use of that information?
The Earl of GOWRIE: My Lords, they are the Government, so to speak, at present, and so that difficulty would not be there. But I might give further reassurance to the noble Lord, Lord Davies of Leek, and to the House by saying that Ministers are also discussing, inter-ministerially if you like, about the whole issue of non-tariff barriers which cause such a lot of concern.
Lord DAVIES of LEEK: I thank the noble Earl.
Lord KINGS NORTON: My Lords, I do not think I have anything more to say. I am very satisfied with the reply.
[The sitting was suspended from 7.54 to 8.15 p.m.]

SOCIAL SECURITY (No. 2) BILL
House again in Committee.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amend-No. 33:
Page 7, line 8, leave out paragraph (b).
The noble Lord said: I beg to move Amendment No. 33. It is rather regrettable that one has to deal with this part of the Bill—and it is nobody's fault—which is perhaps one of the most important, if not the most important, part of the Bill so far as some of us are concerned, with less than a dozen people in the Chamber.

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It means that when we come to a Division, people will troop into the Division Lobby without hearing either the Government's argument or the Opposition's argument.
The point that I should like to raise at this stage—and your Lordships are generous enough to let one wander from time to time even if one is rebuked for it afterwards—is how many of the Government supporters realise that the sum of money involved in this particular matter is, I believe, £1 million. We have fought on de-indexing invalidity pensions because there was a saving of £140 million; on freezing the earnings rule because there was a saving of £16.5 million; on reducing the linking period because there would be a saving of £20 million; on abolishing the earnings-related supplement because there would be a saving of £360 million; on the reduction in unemployment benefit for occupational pensioners because of a saving of £25 million; but I say again, for the benefit of the noble Lords who have just come in, that as regards this particular matter which I think is of paramount importance; namely, the right of people to strike (and I know that there are more than two opinions on this) all that the Government will save is £1 million. It is much, much less than any of the other savings. I believe that, as a result they will have wrought havoc in industrial relations.
I ask noble Lords opposite to ask themselves whether it is worth it for £1 million. It may well be that noble Lords opposite will say, "Ah, there is a point of principle in this". I would not deny that for some noble Lords there may well be a point of principle. There is also a point of principle in it so far as we are concerned. However, Clause 6(1)(b) provides for the £12 reduction in the supplementary benefit entitlement of a claimant involved in a trade dispute. This amendment is deliberately designed to cancel that provision. The £12 reduction is entirely arbitrary. One does not know why it is £12 and not £10 or, for that matter, £14. Its effects will not only be grossly unfair, but will have far-reaching unpleasant consequences. In some strikes the union can afford to provide strike pay at the rate of £12 a week. In others, which may be equally justified, the union cannot afford that amount.
Some strikers stand to gain a great deal if the strike succeeds, others sometimes have very little to gain. Some strikers place themselves in a situation quite voluntarily, others out of loyalty or—I admit it—because they have no choice. Some trade disputes are the fault of the union and, as I tried to say previously, some are the fault of employers. Some strikers are highly paid; others are striking against poverty wages. I accept the fact that not every strike is really in respect of low wages. Yet Clause 6(1)(b) treats all these situations in the same way and imposes the same penalty.
It should be remembered that the £12 reduction does not stand by itself. Under the existing rules, the striker's own needs are ignored for supplementary benefit purposes. From this November that would mean that the striker and his family would have to manage on a income £17·55 per week below the normal supplementary benefit level if he was not on strike. Therefore, from this November there will be a reduction—because there is nothing for him—of £17·55. With the £12 reduction, it will be nearly £30 below the normal minimum in cases where there is no strike pay.
Therefore, we are really not talking about £12. I am trying to say, and probably saying very badly, that if a man and his wife and family were on normal supplementary benefit, they would receive supplementary benefit for the husband. As he is on strike, they receive nothing for him at all. So, having regard to what the benefit will be in November, he starts with £17·55 a week less. On top of that there will be a reduction of £12 benefit so far as the striker's family is concerned. So they will be £30 a week worse off than they would be if they were on supplementary benefit for other reasons. It should also be remembered that the cases we are discussing are those of strikers with families to support. The single striker hardly ever receives supplementary benefit, even under present rules. I do not think that the Minister will deny that for one moment.
One reason why this proposal is being put forward by the Government is the belief that in some cases unions could afford to provide strike pay but do not do so in the knowledge that their members can claim supplementary benefit. The idea that at the beginning of a strike the

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strikers all assemble at the local social security office to claim their benefit is, of course, totally false. The Government will not seek to say that they do. Most strikers do not claim supplementary benefit, even if they are not receiving strike pay. Most would not qualify even if they claimed, because most strikes end before any question of entitlement to supplementary benefit arises.
But if there is any substance in the suggestion that unions are discouraged from providing strike pay by the availability of supplementary benefit, it must be said that the changes made in the supplementary benefit rules in 1971 by the then Conservative Government might have been designed to produce this result. Perhaps I may say what I mean. Until that date, although the striker's own needs were disregarded in calculating his entitlement to supplementary benefit for his dependants, if his union paid strike pay up to the amount of his needs as assessed for supplementary benefit purposes, those payments were ignored. So until 1971 there was a situation that if the union made a grant to the man on strike and it was the amount that he would have received in the ordinary way from supplementary benefit if he had not been on strike but was applying for supplementary benefit for other purposes, this was ignored, and supplementary benefit was paid only for his wife and family. There was, therefore, a clear incentive to provide strike pay, because the man was allowed to keep it for himself, and supplementary benefit paid nothing at all, but only maintained the family.
In 1971 that arrangement was replaced by the present rule under which only £4 of strike pay is disregarded, and not even that if the striker is also receiving tax refunds. It would not be surprising if that change of policy had not made some unions—and I think that most noble Lords opposite are reasonable people and I believe that I can say this with their agreement—less anxious to finance some members during strikes, because when they did it was disregarded in the sense that it was not counted against supplementary benefit.
Having created this situation, the Government are now trying to get out of it by penalising strikers further, regardless of the hardship that this may cause,
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not only to those actually involved in trade disputes, but to their wives and families. I said before certain noble Lords came into the Chamber, and I want to repeat it, that we must get this in the right perspective. The Government admit that if this goes through they will save £1 million a year. This Social Security (No. 2) Bill will save the Government £562½ million, and only £1 million of that will be as a result of Clause 6.
My Lords, is it worth it? When I say that, I mean is it worth the reputation that the Government must get in carrying through legislation of this kind? Is it really worth the disharmony and unrest which this will produce? I was surprised myself when, on going into the matter, I realised that very few strikers in fact claim supplementary benefit. The noble Lord nods his head in complete agreement. I am sure I am talking to some noble Lords who think that the millions who go on strike in the course of a year immediately go down to the supplementary benefit office to claim for their wives and children. They just do not. I have given the reasons, and I shall not go through them again.
But is it going to be worth all the social disharmony, all the industrial unrest, for the sake of £1 million? Somebody may get up—I hope they will not—and say, "Oh, yes, but it's a matter of principle that strikers should not be assisted". Whatever one does, one is going to assist strikers. One is going to support their wives and families, only one is going to reduce it by £12; but one is still going to support them. So if it is a matter of principle, do not support them at all. It is all or nothing; it must be all or nothing.
It seems to me that in a matter of this kind we must get things into perspective. I think the Government would have a very good case if there were tens of thousands or hundreds of thousands in the course of one year trooping off to local social security offices demanding maintenance for their wives and families which was costing, if one likes, the British taxpayer a disproportionate sum. They cost the British taxpayer, you and me, £1 million a year. Is it a fraction of a penny per day? I do not think it is. One would have to divide it by 55 million and then by 365. It is an infinitesimal amount. Noble Lords are not sacrificing a principle

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here. They might not be supporting the Government, who I think are wholly out of step on this. But this is not the first time in this Bill that the Government, represented by their Front Bench, have been out of step with reality. There has been an abundant number of instances where they have been out of touch with reality. I ask noble Lords not to support this. I do not think they can do it in all conscience.
8.32 p.m.
Earl DE LA WARR: The noble Lord, Lord Wells-Pestell, said he feared that someone would get up and talk about matters of principle. I can put his mind at rest; I am not going to talk about matters of principle. This is a pragmatic thing. This is done because the Government recognise the extent to which this country is hurt by excessive striking. This is done in order, in my opinion, to make people think very hard of the consequences of their actions before they take them. The effect of this, in the unofficial strike, will be to penalise those who do it, and quite rightly. The effect of this in a large measure, in official strikes, will be to enable the union, if it has thought the thing out carefully, to support its members financially in doing what the union has asked them to do. This is what it is all about, as I see it, in its effect from the Government's point of view.
Let us not bother about whether it costs only £1 million. Let us not bother whether it costs £100 million or one penny. That is simply not the point. The point is that we are making it harder on those who choose to withdraw their labour, because this country is in such a way at the moment that this is the sort of thing that needs to be done. I am not sure whether the noble Lord was here, but he may know that I am one of those people who have supported, through thick and thin, the very moderate measures produced on another Bill, namely the Employment Bill, and I see this particular clause as very much in line with that. The noble Lord asked, "Why only £12?" He said that it must be a matter of principle—all or nothing. Not at all. This is a moderate measure to make people think what they are doing to the country before they do it.
8.34 p.m.
Lord BANKS: I suppose this is the first clause we have considered in the Committee stage of this Bill which has not been introduced primarily with the object of saving money, for, as noble Lords have been pointing out, had it been in operation during 1979 it would have saved only £1 million. I should like to endorse what the noble Lord, Lord Wells-Pestell, said about the number of strikers who claim supplementary benefit. I believe that the figure for all strikes is somewhere around 15 per cent. It is as low as that because most strikes are of short duration. Of course, if one gets a long strike then supplementary benefit is claimed, and if lots of workers are involved it could be comparatively expensive. But taking it overall, it is a comparatively small percentage of strikers who claim supplementary benefit.
The noble Earl, Lord De La Warr, was saying to us just now that he wanted to put some disincentive, some penalty, on striking, in order to discourage people from striking. I think much depends on how we regard this question of striking. If we say that there is a right to withhold one's labour, even if on many occasions we do not like how that right is used, then I wonder whether we are correct to try to prevent people from exercising that right by placing some penalty upon them for doing so. The noble Lord, Lord Mottistone, said that this clause would be an encouragement to the trade unions to pay strike pay. It would be perhaps a moral inducement, but there would be no guarantee that they would all do it. Indeed, as the noble Lord, Lord Wells-Pestell, pointed out, many of them could not do it because they would not be in a financial position to pay strike pay of £12 per week.
In these circumstances, it seems to noble Lords on these Benches that it is not fair to penalise strikers' families, because, as we have heard, the striker himself does not have a claim to supplementary benefit. To penalise strikers' families to try to induce the unions seems the wrong way to go about it. After all, a striker cannot determine whether he is given strike pay. It would be more logical to put an obligation directly on the unions. I do not advocate that, but I say that from the Government's point of view it would be more logical and certainly fairer. I say

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that, but I do not advocate it, even though it is true that we on these Benches are often critical of the exercise of union power.
We would like to see strikes resorted to less frequently, and sometimes we would like to see them resorted to more responsibly. But I put a rider to that. I think it is wrong to assume that all unofficial strikes are irresponsible. That is to give unions a tremendous monopoly of power. Why should they be the only people who can say whether individuals can withdraw their labour? Although on many occasions we would like to see strikes resorted to more responsibly, we would not say that that meant that all unofficial strikes were irresponsible. But I am convinced that this clause is not the way to get the better industrial relations which would result in fewer strikes and responsible strikes.
Lord UNDERHILL: It was my intention to ask precisely what was the purpose of this particular clause, but the noble Earl, Lord De La Warr, seems to have given the answer. In the Second Reading debate it was emphasised by the noble Baroness that one of the purposes was to ensure that the unions accepted some responsibility for their members and made a contribution. The noble Earl, Lord De La Warr, emphasised the damage done to the country by strikes, and, whether he intended this or not, the inference was that we are going to punish the unions for doing it.
Earl DE LA WARR: I really must ask for a moment's indulgence. I specifically said that it would make the unions think very hard before they decided whether they would bring people out on strike. That is what I said. I did not use the word "punish", and I hope that the noble Lord will withdraw that particular word because it is not right.
Lord WELLS-PESTELL: Did not the noble Earl use the word "penalise"?
Earl DE LA WARR: No.
Lord UNDERHILL: I am prepared to accept what the noble Earl says about not punishing the unions, but as I try to explain how I look at this I think he will
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understand exactly what I mean. My noble friend Lord Wells-Pestell put a powerful argument in favour of this amendment. I think that even those who may not fully support him when it comes to a vote will agree that he put up a powerful case.
The point made by the noble Lord, Lord Banks, is an important one. Is this going to help industrial relations? I do not think there is one noble Lord in this House who does not want to see the number of strikes diminished, but strikes do not just come about because people want to have a nice pleasant game. They come about because of a breakdown in industrial relations at some point. Strikers already lose heavily as it is. One would imagine from listening to some of the speeches that strikers do not suffer anything at all by coming out on strike. They lose heavily when they decide to strike, whether it be an official or an unofficial strike, irrespective of the question of the £12. Decisions to strike are not taken lightly.
As my noble friend emphasised, we are not talking here about assistance to the actual striker but the position of his family. I chose my words carefully: if it is felt that because a striker's family is going to be hit that will cause him not to come out on strike or will help to end the strike, then I believe that that is the wrong way to approach this issue. People come out on strike because there is a breakdown, and what we are likely to do as a result of this clause is to create more bitterness in industrial relations. The history of trade unionism and of strikes is such that, instead of this clause doing what the Government think it may do, it may do the opposite through the creation of a feeling of bitterness being driven into them by this decision.
The majority of strikes are unofficial. Therefore, most union rules will prevent anything being paid when there is an unofficial strike. If it is suggested that they should all be made official, then instead of shortening strikes in many cases you will prolong them. Many of the short, unofficial strikes can be got over fairly quickly. Once you start making a strike official, then the whole question of union rules and apparatus comes into it and the position is made more difficult.

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Listening to some of the speeches one would imagine that it is always the strikers at fault. There may be some irresponsible strikers, but by and large they do not come out and sacrifice their own financial position merely because they enjoy a few days off, or a few weeks off: it is because of a breakdown somewhere, and sometimes a breakdown caused by management. Yet the workers and their families are going to be made to suffer by this clause. I hope that the Government will reconsider this if only on the issue of industrial relations. It is not much use talking about removing the bitterness if we are going to create bitterness by this decision.
It is generally agreed that finance does not enter into this. It is not a question of saving on public expenditure. It is merely trying to tackle what the Government believe is a situation that has to be tackled. This is not the way to try to curtail strikes. This is not the way to try to improve industrial relations. On that aspect alone I hope that the Government will reconsider the position.
Viscount HANWORTH: One should not intervene, having just come into the Committee, unless one has heard the whole debate on the amendment. Nevertheless, having heard what the last noble Lord said I cannot resist intervening. He really must realise that in many cases the workers are called out to strike, and strike by loyalty, not because they want to do so but simply because their shop stewards who, in many cases are Communists and disruptives, call them out. I really think that the last noble Lord's speech should be seen in that context.
8.45 p.m.
Baroness YOUNG: At the beginning of his remarks the noble Lord, Lord WellsPestell, said that we should get this amendment in perspective, and I hope that in the course of this debate we can do so. First, I should like to confirm what indeed the noble Lord, Lord Underhill, said, that this clause is not about saving money. I said in my opening speech at Second Reading that, unlike the first five clauses of the Bill, this clause is not about saving money.
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While I am on that subject may I say in parenthesis that the steel strike that we have had this year cost £9 million in social security payments, and we estimate that half of this would have been saved had this particular clause of this Bill been enacted. No, the reason why we have this clause in the Bill is that it is a manifesto commitment, and we promised that we would ensure that trade unions paid a fair share of the cost of supporting the families of those of their members who were on strike. This is not in any way against trade unions or against their right to strike. Indeed, it was the noble Lord, Lord Banks, who asked whether we were denying them a right to strike. I think if he reflects on the matter—and indeed all those who considered this—he will recognise that the rights do imply responsibilities. What we are saying is that there is a responsibility which rests on the trade union, and there is a responsibility which rests upon the striker.
Lord BANKS: Would the noble Baroness allow me to intervene? What I was saying was that we should not penalise people for exercising a right. I did not say that we were preventing them from exercising the right. I said that we should not penalise them for exercising a right, and that that is what this clause does. Does the noble Baroness not agree that that is so?
Baroness YOUNG: I would not agree that we are penalising the striker in this. The striker has his right to strike. That is right. That is all part of the law of the land. It is not the responsibility of the state in those circumstances to take care of all the costs of the strike: that is what we are saying in this regard. I do not see that that is anything other than asking the trade unions to accept their fair share of responsibility in this matter, and of course the fair share of the responsibility of the striker himself not only for himself but for his family.
We have introduced this because it is a manifesto commitment, but it is not our intention to cause hardship to strikers' families. The remedy lies in fact in the hands of the trade unions. We shall bring in regulations under which up to £12 of strike pay will be ignored, and the responsibility will therefore be on the unions to be able to make good the £12 reduction

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which is proposed by this clause. I am pleased to see that one or two of the major trade unions seem to be adopting a more responsible attitude in this direction. For the trade unionist who goes on unofficial strike, or for the non-unionist involved in a trade dispute, he must be expected to make some provision for himself and for his family. We believe that it is unreasonable to expect the taxpayer to continue supporting them to the extent that he does at present.
Indeed, I was surprised to hear the noble Lord, Lord Wells-Pestell, say, why have we just had £12? Why did not we say all or nothing? I was grateful for the remarks of my noble friend Lord De La Warr, who said in fact that this was indicative that this is a moderate measure, as indeed it is. We regard this as a reasonable sum; something that could be reasonably provided by the trade unions. It is not in any way meant to be an extreme measure, as I have already indicated. It may be helpful to the Committee to know that there is some evidence that the trade unions are reacting to our proposals by increasing their strike pay. The General and Municipal Workers' Union, currently paying £10.50 dispute benefit, is increasing it to £13.50 from October and to £16.50 in July 1981; the engineering section of the A UEW has decided to increase its benefit from £9 to £12 from 1st January 1981; and later this month the T & GWU will be considering a proposal to increase its benefit from £6 to £12.
It seems to me that this is quite right and eminently reasonable. We believe that this must be seen in the context of all our industrial relations legislation and that it will encourage trade unions and those who take part in industrial action to see the strike as a last resort in all instances.
Lord WELLS-PESTELL: The noble Viscount, Lord Hanworth, was right when he said that it is perhaps not wise to intervene in a debate when you have not heard the major argument. Had the noble Viscount been here when I put the case for the Opposition, I do not say that it would have made any impression on him, but at least he would have had a clear exposition of the view we hold in regard to strikes. It would not be fair to those of your Lordships who were here at 8.15 if I were to go over all that ground
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again, but it applies to a number of other noble Lords who have come in late.
The noble Baroness, Lady Young, said that it was not the Government's intention to hurt the striker's family, but that just does not stand up. That is precisely what the Government are doing. If a family's income is to be docked by up to £12—and in cases where unions are unable to help, £12 will be stopped from their social security, bearing in mind that the husband is getting nothing—that is hurting the family. One cannot mess around and suggest that it means anything other than that, particularly when a large number of unions, because of their size and the low pay of their members, cannot pay as much by way of weekly or monthly rate as some of the bigger unions. They will never be able to build up a strike fund that will enable them to give their members strike pay.
Lord MOTTISTONE: Is the noble Lord aware that not once in his last remarks has he mentioned the responsibility of the individual towards his own family? He has been talking about the responsibilities of great amorphous masses, of trade unions and governments, but he has not taken into account the very important thing, the last resort—indeed, to some people the first resort—the responsibility of the individual towards his own family and the responsibility for his actions in and the effect that they may have on his own family.
Lord WELLS-PESTELL: The noble Lord usually listens very attentively.
Lord MOTTISTONE: I have been doing so.
Lord WELLS-PESTELL: He could not have done so tonight, otherwise he would have heard what I and the noble Lord, Lord Banks, said; namely, that very few strikers ever apply for social security. Indeed, the figure is less than 15 per cent., which means that the 85 per cent. who do not apply must be doing the very thing he is complaining they are not doing.
Lord MOTTISTONE: I am talking about actions, not money.
Lord WELLS-PESTELL: If the noble Lord wants to outlaw strikes altogether and make them illegal, regardless of what

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industrial dispute there may be, that is entirely another matter and this is not the place to discuss it. I remind the Committee that a great deal of responsibility is shown by strikers in that the majority of them, notwithstanding the fact that they get nothing for themselves, do not even apply for supplementary benefit for their wives and families. I call that being very responsible indeed. And the 12 per cent. to 14 per cent. who do apply are those who are unable to make provision for themselves.
I gather that my reference to the fact that it costs so little money makes no impression on your Lordships. I would only say that the amount involved is very small, but that the amount of chaos and industrial disorder that this clause will cause we will live to regret. I hope that some of your Lordships, who must have a real doubt in your minds, will not fail to have the courage not to vote.
Viscount HANWORTH: As the noble Lord, Lord Wells-Pestell, referred to me personally—and I am sorry I did not hear his speech—I must tell him that I know the arguments very well. One must say, first of all, that there are far too many strikes. This we must admit, and we must also admit that what is currently occurring is and has become more and more the law of the jungle. Unless we have the sanctions to prevent people from going on strike without reasonable cause, when they could have avoided such action by discussions and arbitration, it will remain intolerable that the state of our nation should be let down even further by the number of strikes we are now having.
8.57 p.m.
On Question, Whether the said amendment (No. 33) shall be agreed to?
Their Lordships divided: Contents 44; Not-Contents, 70.

CONTENTS

Ardwick, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Banks, L.

Janner, L.

Seear, B.

Blease, L.

Lee of Newton, L.

Simon, V.

Boston of Faversham, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B

Bowden, L.

Llewelyn-Davies of Hastoe, B.

Stewart of Fulham, L.

Brockway, L.

Lovell-Davis, L.

Stone, L.

Brooks of Tremorfa, L.

Maelor, L.

Strabolgi, L.

Collison, L.

Northfield, L.

Strauss, L.

David, B. [Teller.]

Peart, L.

Taylor of Blackburn, L.

Davies of Leek, L.

Phillips, B.

Taylor of Mansfield, L.

George-Brown, L.

Pitt of Hampstead, L.

Underhill, L.

Glenamara, L.

Ponsonby of Shulbrede, L. [Teller.]

Wallace of Coslany, L.

Gosford, E.

Wells-Pestell, L.

Hale, L.

Rhodes, L.

White, B.

Hampton, L.

Rochester, L.

Wilson of Radcliffe, L.

NOT-CONTENTS

Airey of Abingdon, B.

Glendevon, L.

Norfolk, D.

Amherst of Hackney, L.

Glenkinglas, L.

Nugent of Guildford, L.

Amory, V.

Godber of Willington, L.

Orkney, E.

Balerno, L.

Gowrie, E.

Renton, L.

Bellwin, L.

Gridley, L.

Rochdale, V.

Belstead, L.

Hanworth, V.

St. Aldwyn, E.

Bessborough, E.

Hatherton, L.

Saint Oswald, L.

Bolton, L.

Hives, L.

Sandys, L. [Teller.]

Brougham and Vaux, L.

Hunt of Fawley, L.

Soames, L. (L. President.)

Crathorne, L.

Hylton-Foster, B.

Stamp, L.

Cromartie, E.

Killearn, L.

Strathclyde, L.

Cullen of Ashbourne, L.

Kimberley, E.

Sudeley, L.

de Clifford, L.

Lauderdale, E.

Swinfen, L.

De La Warr, E.

Long, V.

Tranmire, L.

Denham, L. [Teller.]

Lyell, L.

Trefgarne, L.

Drumalbyn, L.

Mackay of Clashfern, L.

Trenchard, V.

Dundee, E.

Macleod of Borve, B.

Ullswater, V.

Ellenborough, L.

Mansfield, E.

Vickers, B.

Elliot of Harwood, B.

Marley, L.

Vivian, L.

Elton, L.

Mills, V.

Ward of Witley, V.

Forester, L.

Mottistone, L.

Westbury, L.

Fortescue, E.

Mowbray and Stourton, L.

Young, B.

Gainford, L.

Moyne, L.

Glenarthur, L.

Murton of Lindisfarne, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.6 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 34:
Page 7, line 16, leave out paragraph (c).
The noble Lord said: Under Clause 6(1)(c) persons involved in trade disputes will in future not be eligible for urgent need payments
"except so far as regulations provide otherwise".
I wish to repeat that, because it seems to me to be so extreme: under Clause 6(1)(c) persons involved in trade disputes will in future not be eligible for urgent need payments
"except so far as regulations provide otherwise".
This is an entirely unnecessary restriction, which the amendment would remove.
I consider this to be a most pernicious proposal, and I ask your Lordships' Committee to consider whether it is really human to do this. The Government have already made clear that the new supplementary benefit regulations to be made under the earlier Social Security Bill will limit urgent need payments to very restricted categories of cases. The list given in the Notes on Clauses relating to the earlier Bill included local disasters, loss of money, loss of travel tickets, visits to a dying relative, and disruption of transport.
During the Committee stage of the Bill in another place, the Secretary of State gave a rather similar list of circumstances in which strikers would qualify for urgent need payments under regulations to be made under Clause 6, the clause which we are dealing with at the present moment. As well as local disasters, theft and fares to visit a seriously ill relative, that list also included fares to take a handicapped child to school, maternity needs and essential household equipment, such as fireguards. It really comes down to a very serious, unfeeling situation when we have one list of needs for one section of the community and another list of needs for another section. It really does not seem necessary to have two separate but almost identical lists in two separate regulations, one for strikers and one for other claimants. It occurs to me that if the Government genuinely went to simplify the supplementary benefits scheme— and we hear so much about what they want to do to simplify the Acts—then they could avoid this sort of absurdity, because it is nothing short of an absurdity.
The one important respect in which it is clear that strikers are to be treated more restrictively than other claimants in regard to urgent need payments is where the striker is a single person without dependants. At present, because the trade dispute disqualification prevents the striker's own needs from being taken into account in the normal supplementary benefit calculation, single strikers can receive supplementary benefit only on an urgent need basis. The Supplementary Benefits Commission has laid down very tough rules for deciding whether a single striker should receive urgent need payments. Those rules can be summed up by saying that such payments are made only in cases of total destitution, where the striker has no other resources and no-one to whom he can turn for help. As a result, very few payments are made to single strikers in the course of the year, and where they are made the reality and the urgency of the need has to be beyond question.
Common humanity demands that adequate arrangements should be made. The Secretary of State told the Standing Committee on the Bill in another place:
"Although there is in the Bill a power to make a regulation to enable a hardship payment to be made for the single striker who has no resources and who would otherwise become destitute, it is not the Government's intention to make those regulations from the outset but to wait and see how the need develops ".
That is in Standing Committee "B", the Ninth Sitting, Part 2, on 9th May 1980, at column 983. I find this absolutely unbelievable. There are going to be no regulations; presumably the Government will wait to see how many of them collapse and die from hunger. How inhuman can a Government become?
One may not like what strikers do. We talk about their moral responsibility to society. What about our responsibility to them? I really find this quite unbelievable. How many cases of destitution will have to occur before the Secretary of State decides to use his regulation-making power? How many single strikers will have to be evicted from their homes or (I was going to say) driven begging on to the streets?
I know that that sounds very emotive. It is meant to be emotive; because it is possible. I think the Government must reconsider this while there is still time.

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It is clear that nothing will alter their determination to impose severe hardships upon families of the people involved in strike disputes—in the interests, as they feel, of better industrial relations. As we have just come through that discussion, I do not want to add to it. But deliberately to leave people in total destitution goes beyond the bounds of what is acceptable in a civilised society. I cannot think that noble Lords can really agree to that being in the Bill, and I invite the Committee to leave out paragraph (c) because it seems to me to go beyond the limits.
Baroness YOUNG: Clause 6(1)(c), to which this amendment refers, is an essential part of Clause 6 and this amendment therefore cannot be accepted. I should make that clear at the beginning. I am sure the Committee will recognise that it would not be a very sensible series of policies to reduce strikers' benefits by £12, as we propose—a matter upon which the Committee has just divided; and on which the Committee has supported the Government—if an immediate payment of £12 could then be made under the urgent need provisions to make good this deduction. That would be the effect if this amendment were agreed to.
As the noble Lord, Lord Wells-Pestell, made clear, we do not intend to exclude completely the urgent need provisions. We have power to make regulations which we intend to cover the rare and truly compassionate cases without in any way defeating the purpose of the clause. Regulations will provide for help to meet urgent need for losses of essential items due to disasters such as fire or flood, for a very expensive diet for the striker himself such as is needed by someone suffering from certain illnesses, for fares to visit seriously ill relatives or to take a handicapped child to school by special transport, for the immediate necessities for a newborn baby during a long strike and for the repair or supply of essential household equipment, such as would be needed if there were no working form of heating in winter. If experience shows that there are other rare circumstances for which similar provision should be made, we will introduce the necessary regulations. The present arrangements whereby help is given for expensive diets or extra heating needed on
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medical grounds by a striker's dependant will continue as this comes under the normal supplementary benefit rules and not under the urgent need provisions.
In the course of his remarks, the noble Lord, Lord Wells-Pestell, made a great deal about what he called the moral responsibility of the Government. I think that, as a country, if we are to talk about moral responsibility, we must talk about the moral responsibility of a great many other people, including, if I may say so to the noble Lord and his colleagues, the moral responsibility of the trade unions, when they consider their actions and the moral responsibilities of the individual strikers when they take action on these matters. This is really what much of this debate is about. It is about individual responsibility and what one should do in certain circumstances.
I think that I have made it clear that in what we are proposing here we intend that the strikers' needs provisions, which have been accepted in the past, will continue for the cases that I have enumerated; that, if there should be other rare but hard circumstances, then, of course, we will introduce regulations to cover those particular cases. But we cannot just say in this country, as it is too often said, that the moral responsibility is the Government's and that everyone else has no responsibility for their actions. We all have moral responsibilities; we all need to consider carefully our actions.
Lord WELLS-PESTELL: It has been said many times that a state ought to set the example of the good life. I hope that the noble Earl will not sit there and mumble. If he wants to say something, I hope that he will get up and say it.
The Earl of LAUDERDALE: The noble Lord has said that he expected the state to set an example of human behaviour. I simply cannot understand it.
Lord WELLS-PESTELL: That relieves me of trying to explain it to the noble Earl. If he cannot understand it, then there is no point at which I can proceed to enlighten him. I do not understand the noble Baroness the Minister saying that it is the intention of the Government to make regulations in due course. Her right honourable friend the Secretary

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of State apparently wants to wait to see what happens. If it is the intention of the Government to do something, why not make those regulations now? I cannot really see why the regulations should not be made now. There are already two lists of benefits that can be given, and if there is going to be a special urgent needs list for strikers I cannot see why that list and regulations could not be made available very soon.
I do not want to go over the ground that we went over before. There is no common ground between Members on this side and those on the other side of the Committee on this issue, I cannot get noble Lords opposite to see that comparatively few strikers ever apply for supplementary benefit. They are using (shall I say?) an enormous tractor to crack a small nut. Industrial relations are not going to improve with a Government taking these steps.
However, I realise it is quite pointless to continue. I make no impression because noble Lords' minds are made up. I am forced to the conclusion—and I regret it—that there is only one thing in the minds of many noble Lords opposite: to put on the statute book regulations which will have a punitive effect upon strikers. I am afraid that in industrial relations you are going to pay the price when this Bill goes on the statute book.
Lord DRUMALBYN: May I ask one question? There are those with many opinions. As has been said, one cannot indict a whole nation; it may be very difficult to indict a whole trade union. There are different opinions. The minority cannot control what the majority, however misguided, may decide. 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?
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. We have not had this suggestion mentioned here; I have seen it elsewhere. But I share the view that it is wrong in principle to expect the public to pay to meet the needs of families of strikers, or indeed the strikers themselves, when the strikers are actually doing damage to others. The
1090
strikers should at least be able to look after their own, to make certain they do not do damage to those to whom they have obligations. But there is the difficult case that they may not be able to avoid doing that. 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.
I do not like to use the word "principle". That is obviously a dirty word in the eyes of the noble Lord opposite. It covers what we need to secure; a sense of responsibility and at the same time that the public will retain the overall responsibility for ensuring that all needs are met, on the understanding that in this particular case whatever is provided is repaid.
9.25 p.m.
Lord WELLS-PESTELL: I am most grateful to the noble Lord for his intervention. He does me a very great injustice. I said nothing that would lead anyone in this Chamber to suggest for one moment that I think the word "principle" is a dirty word—in fact I have been throwing it about quite a bit this evening. I think there are principles involved and I said to the noble Lord, Lord Mottistone, that we feel this is a principle. I accept the fact that noble Lords opposite also have a principle, one which is different from mine, and so I do not think that the word "principle" is a dirty word. There are times when we could do with a little more of it: I accept that.
If the noble Lord will not mind my saying this, I do not want to be drawn on the question of assistance being given to a striker during the strike and that being subject to repayment afterwards. It sounds attractive on the face of things. But what I feel is a mistake—and I will withdraw this gladly and apologise if I am wrong—is that the Government really did not discuss this matter with the TUC when they were framing legislation. My recollection is that the Government did not do so. The Government have not shown a great deal of enthusiasm for discussing matters with the TUC. It is very unwise of them. I am not saying they never discussed industrial matters; I am talking about this particular Bill. I feel that if there had

1091
been discussions a better way may have been found, but I think it is helpful that the noble Lord, Lord Drumalbyn, has raised this matter.
Viscount SIMON: Before the noble Baroness responds, I wonder whether she could help us, when she speaks, over one thing. The noble Lord, Lord Wells-Pestell, read a statement made by the Secretary of State in another place which certainly seemed to suggest that the Government did not intend to introduce regulations right away, but would wait and see how things developed. The noble Baroness rather gave me the impression that the Government were quite ready to produce regulations, and she gave an outline of certain things that would be included in them. I suspect that there is a procedural difficulty in introducing the regulations before the Bill is passed, and I thought that the noble Lord, Lord Wells-Pestell, was perhaps asking for too much in asking for regulations now. Could the noble Baroness tell us whether the Government intend to introduce these regulations as soon as the Bill becomes law?
Lord WELLS-PESTELL: If the noble Baroness the Minister will allow me to speak before she does, I think perhaps I should repeat my quotation from the Secretary of State when he was speaking to the Standing Committee on the Bill in another place. He said:
"I think there is in the Bill a power to make a regulation to enable a hardship payment to be made for the single striker who has no resources and who otherwise would become destitute. It is not the Government's intention to make those regulations from the outset but to wait and see how the need develops".
9.29 p.m.
Baroness YOUNG: Perhaps I might take the opportunity to answer the point raised by my noble friend Lord Drumalbyn as well as that raised by the noble Viscount, Lord Simon, on this matter. May I say that the regulations to which I referred in my remarks, to help meet urgent needs for losses of essential items (and I listed them), will be made before the clause comes into force. I cannot say definitely that they will be available before the Summer Recess, but they will definitely be made before November, when part of the Bill would come into force. May I
1092
also go on to say that the list of circumstances, which the noble Lord, Lord Wells-Pestell, quoted for ordinary claimants, was, in fact, illustrative only. There will be a much fuller list which will be more substantial. I hope that that clears up these procedural points which are very important. I would not wish there to be any misunderstanding on that point by the Committee.
My noble friend Lord Drumalbyn raised a rather separate point which, if I understood him correctly, was that the full supplementary benefit should be paid to a striker's family in certain circumstances, on the understanding that it would be repaid when the striker went back to work—
Lord DRUMALBYN: If I may intervene, I did not go so far as saying "full supplementary benefit". I asked that payment would be made in accordance with need.
Baroness YOUNG: 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 be 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 and would be very difficult, although I understand the reasons why my noble friend put it forward—
Lord DRUMALBYN: I am sorry to intervene again, but my noble friend begged the question by talking about a "benefit". What is being asked for is a payment in case of need, not a regular benefit.
Baroness YOUNG: Yes, I appreciate the difference. The fact is that it would be a payment of money which, if I correctly understood the point, would have to be repaid. However, I will write to my noble friend about this matter. 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. However, I hope, with what I have said

1093
on the main point about the regulations, that the Committee will agree not to accept this amendment.
Their Lordships divided: Contents, 38; Not-Contents, 69.

CONTENTS

Ardwick, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Banks, L.

Janner, L.

Seear, B.

Blease, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B

Boston of Faversham, L.

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

Stewart of Fulham, L.

Bowden, L.

Stone, L.

Brockway, L.

Lovell-Davis, L.

Strabolgi, L.

Brooks of Tremorfa, L.

Maelor, L.

Strauss, L.

Collison, L.

Northfield, L.

Taylor of Blackburn, L.

David, B. [Teller.]

Peart, L.

Underhill, L.

Davies of Leek, L.

Phillips, B.

Wallace of Coslany, L.

George-Brown, L.

Pitt of Hampstead, L.

Wells-Pestell, L.

Gosford, E.

Ponsonby of Shulbrede, L.

White, B.

Gregson, L.

Rochester, L.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Glendevon, L.

Norfolk, D.

Amherst of Hackney, L.

Glenkinglas, L.

Orkney, E.

Balerno, L.

Godber of Wellington, L.

Renton, L.

Bellwin, L.

Gowrie, E.

Rochdale, V.

Belstead, L.

Hanworth, V.

St. Aldwyn, E.

Bessborough, E.

Hatherton, L.

Saint Oswald, L.

Bolton, L.

Hives, L.

Sandford, L.

Brougham and Vaux, L.

Hunt of Fawley, L.

Sandys, L. [Teller.]

Crathorne, L.

Killearn, L.

Shannon, E.

Cromartie, E.

Kimberley, E.

Soames, L. (L. President.)

Cullen of Ashbourne, L.

Lauderdale, E.

Stamp, L.

de Clifford, L.

Long, V.

Strathclyde, L.

De La Warr, E.

Lyell, L.

Sudeley, L.

Denham, L. [Teller.]

Mackay of Clashfern, L.

Swinfen, L.

Drumalbyn, L.

Macleod of Borve, B.

Tranmire, L.

Dundee, E.

Mansfield, E.

Trefgarne, L.

Ellenborough, L.

Marley, L.

Trenchard, V.

Elliot of Harwood, B.

Mills, V.

Ullswater, V.

Elton, L.

Monson, L.

Vickers, B.

Forester, L.

Mottistone, L.

Vivian, L.

Fortescue, E.

Mowbray and Stourton, L.

Ward of Witley, V.

Gainford, L.

Moyne, L.

Westbury, L.

Glenarthur, L.

Murton of Lindisfarne, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
9.41 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 35:
Page 8, line 38, leave out subsection (6).
The noble Lord said: We have come to the last amendment for which I am responsible, and I am sure there will be a feeling of pleasure all the way round. Certainly there is so far as I am concerned. At least I shall be doing something tonight which will meet with the approval of noble Lords opposite.
This is an amendment which I hope that the Government will accept. One
9.32 p.m.
On Question, whether the said amendment (No. 34) shall be agreed to?
can always hope. Ministers have admitted that the number of people claiming supplementary benefit is expected to increase by about 110,000 as a result of the cuts in national insurance benefits in this Bill. But they have also admitted that this figure is based on the assumption that only 75 per cent. of those becoming entitled to supplementary benefit will claim it. This means that the number of people living below the supplementary benefit level will increase by some 37,000, plus their dependants, which is thought to be in the region of about 100,000 people.
This is not acceptable, and I am sure that the Government do not feel that it is acceptable. We feel strongly that special measures should be taken to ensure that

1095
those 37,000 people—the figure, as I have said, may well be an underestimate in view of the current trends in the number of unemployed people—are made aware of their entitlement and are encouraged to claim.
Lord MACKAY of CLASHFERN: I wonder whether the noble Lord is thinking of Amendment No. 36?
Lord WELLS-PESTELL: Yes, I am dealing with No. 36.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Amherst of Hackney): I called Amendment No. 35.
Lord WELLS-PESTELL: I beg your Lordships' pardon. I am very grateful to the noble Lord for intervening. I beg to move Amendment No. 35, page 8, line 38, leave out subsection (6). Clause 6(6) provides for the possibility that the changes in supplementary benefit rules for people involved in trade disputes may come into force before the other changes in the supplementary benefits scheme resulting from the Social Security (No. 1) Bill. Since the No. 1 Act changes are to come into force this November, it is not clear why the trade dispute rules should need to be changed before then, unless the Government believe that their policies have brought industrial relations in this country to such a low ebb that panic measures may be needed during the next five months.
If it is the intention to bring Clause 6 into effect before November, the Government must know by now precisely what modifications in the provisions of the supplementary benefits Act will be needed and that information should be laid before Parliament in the form of draft regulations instead of the Government
taking powers, as Clause 6(6) proposes, to make whatever modifications the Secretary of State considers appropriate. This seems to me to be quite a reasonable thing to expect of the Government, and I hope that the noble Baroness, the Minister, will be able to give us a very clear reason as to why it is going to be done in this way rather than in the way the amendment suggests. I beg to move.
Lord MACKAY of CLASHFERN: I am sure we are all glad to know that the noble Lord, Lord Wells-Pestell, is going to address us once more and that his threat that his present speech was the last one has turned out to be incorrect. So far as this particular amendment is concerned, the Government's intention is to implement the proposals in Clause 6 of this Bill at the same time as the changes in the rules for supplementary benefits introduced by the Social Security Act 1980 become operative, namely, 24th November 1980. That is the intention. However, we feel that we should be able to keep our options open and be able to introduce the new rules for strikers' benefits at an earlier date than November if the industrial situation should ever require it. It is not that we anticipate anything in the nature of panic, but we would think it appropriate if the industrial situation would appear to require it that the power should exist to bring these special rules into effect. We do not expect ever to have to make use of this subsection, but we do think it wise to preserve this freedom, and I therefore invite your Lordships not to accept this amendment.
9.45 p.m.
On Question, Whether the said amendment (No. 35) shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 69.

CONTENTS

Ardwick, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Banks, L.

Janner, L.

Seear, B.

Blease, L.

Llewelyn-Davies, L.

Simon, V.

Boston of Faversham, L.

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

Stewart of Alvechurch, B

Bowden, L.

Stewart of Fulham, L.

Brockway, L.

Lovell-Davis, L.

Stone, L.

Brooks of Tremorfa, L.

Northfield, L.

Strabolgi, L.

Collison, L.

Peart, L.

Strauss, L.

David, B.

Phillips, B.

Taylor of Blackburn, L.

Davies of Leek, L.

Pitt of Hampstead, L.

Underhill, L.

Evans of Claughton, L.

Ponsonby of Shulbrede, L. [Teller.]

Wells-Pestell, L.

Gosford, E.

White, B.

Gregson, L.

Rochester, L.

Wynne-Jones, L.

Hampton, L.

NOT-CONTENTS

Airey of Abingdon, B.

Glenkinglas, L.

Norfolk, D.

Amherst of Hackney, L.

Godber of Willington, L.

Orkney, E.

Balerno, L.

Gowrie, E.

Renton, L.

Bellwin, L.

Hanworth, V.

Rochdale, V.

Belstead, L.

Hatherton, L.

St. Aldwyn, E.

Bessborough, E.

Hives, L.

Saint Oswald, L.

Bolton, L.

Hunt of Fawley, L.

Sandford, L.

Brougham and Vaux, L.

Killearn, L.

Sandys, L. [Teller.]

Crathorne, L.

Kimberley, E.

Shannon, E.

Cromartie, E.

Lauderdale, E.

Soames, L. (L. President.)

Cullen of Ashbourne, L.

Long, V.

Stamp, L.

de Clifford, L.

Lyell, L.

Strathclyde, L.

De La Warr, E.

Mackay of Clashfern, L.

Sudeley, L.

Denham, L.

Macleod of Borve, B.

Swinfen, L.

Drumalbyn, L.

Mansfield, E.

Tranmire, L.

Dundee, E.

Marley, L.

Trefgarne, L.

Ellenborough, L.

Mills, V.

Trenchard, V.

Elliot of Harwood, B.

Monson, L.

Ullswater, V.

Elton, L.

Mottistone, L.

Vickers, B.

Forester, L.

Mowbray and Stourton, L. [Teller.]

Vivian, L.

Fortescue, E.

Ward of Witley, V.

Gainford, L.

Moyne, L.

Westbury, L.

Glenarthur, L.

Murton of Lindisfarne, L.

Young, B.

Glendevon, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 6 agreed to.
9.53 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 36:
After Clause 6, insert the following new clause:
"Duty of Secretary of State to ensure claim of benefit
(.It shall be the duty of the Secretary of State to make such arrangements as may be practicable with a view to ensuring that any person becoming entitled to supplementary benefit under section 1 of the Supplementary Benefits Act 1976 as a result of the provisions of this Act claims that benefit.")
The noble Lord said: I beg to move Amendment No. 36. I am grateful to the noble and learned Lord, Lord Mackay of Clashfern, for inviting me to make a second appearance. It is not often that I receive invitations in your Lordships' House to do that. However, having said in some detail what I wanted to say in relation to this amendment, perhaps your Lordships will allow me to say just two sentences rather than go all over it again.
Several noble Lords: Hear, hear!
Lord WELLS-PESTELL: In that case, perhaps your Lordships will accept this amendment! What we are concerned about—and I know that the Government are concerned about this—is the number of people who fail to take up benefits to
1098
which they are entitled. We are wondering whether the Department of Health and Social Security could launch a special take-up campaign for this particular group. It is important that people who are living below the level of supplementary benefit should, by some means or other, be informed that they are entitled to apply for, and would be successful in applying for, supplementary benefit. I know from personal experience that a tremendous amount is done in this area. It is not due to the department not moving in this particular area. I wonder whether the Minister would be good enough to look at this matter with the department to see whether anything more could be done than is being done at the moment. I beg to move.
Lord MONSON: Although I have been in favour of very few of the Opposition amendments so far, I can support this amendment wholeheartedly. The fact that so many highly-deserving people fail to take up the supplementary benefits to which they are absolutely entitled, whether through timidity or ignorance of their rights, really is a national scandal. I said "highly-deserving people", because many of the less deserving, in the moral rather than in a strictly legal sense, make certain that they claim every single penny that is going, aided and abetted by such dubious organisations as the Claimants Union.
In contrast, tens of thousands—perhaps hundreds of thousands—of elderly people whose sole income is the state retirement

1099
pension fail totally to claim any supplementary benefit out of shyness, misplaced pride or ignorance of the facts. I think that something should be done to rectify this, and this amendment seems to be a practical way of setting the ball in motion.
Lord MACKAY of CLASHFERN: As has been explained by the noble Lord, Lord Wells-Pestell, the proposed new clause would place on the Secretary of State an obligation to improve as best he can the take-up of supplementary benefit among those becoming entitled because of reduction in their contributory benefits. The amendment draws attention, as does the Explanatory Memorandum to the Bill, to the fact that there will be some increase in supplementary benefit claims: 110,000 extra beneficiaries as a result of Clauses 1 and 4: about a 4 per cent. increase in the existing case load.
Naturally the Government accept that they have an obligation to ensure that people who may be entitled to supplementary benefit are aware of that fact. This they already do by various means of publicity—in post offices, unemployment benefit offices and in the order books of social security beneficiaries. They are also continually seeking means to impove the impact and quality of their publicity. The obligation to help people know and claim their rights is not, of course, peculiar to potential claimants once this Bill becomes law.
The take-up of supplementary benefit is believed to be about 75 per cent. and the amount unclaimed was estimated for 1977 to be over £300 million. Later figures are not available. The reasons why the other 25 per cent. do not claim seem to be complex. The Supplementary Benefits Commission discussion paper, Take-up of Supplementary Benefit, which was put out in 1978, says:
"… some mixture of pride, ignorance, a sense of stigma, reluctance to make the efforts which a claim calls for, a desire for self-sufficiency on the part of an individual or family, an unwillingness to become involved with a government agency and a feeling that the whole business is not worth while".
The Government are far from complacent about this level of take-up, but it is important not to get the problem out of perspective. Many of the entitlements not taken up individually are small, and the expectation of a disproportionately small
1100
gain is clearly a significant factor in failure to claim.
It is also right to bear in mind that the incidental effects of the savings measures in the Bill do not make a dramatic difference to the numbers on supplementary benefit. Such difference as they do make is the inevitable outcome of maintaining the "safety net" intact, and in the light of what has been said earlier in these debates, it is most important to remember that the Government are maintaining the safety net intact. The new pension schemes will be making a dent in reliance on means testing, and this is our long-term aim.
The new clause is understandably rather vague in effect. Clearly, whether a person should exercise his right to claim supplementary benefit is essentially a personal decision for him; there can be no compulsion about it. Moreover, until a person has claimed benefit and made a statement of his financial circumstances and commitments, it is most unlikely that the department would be in a position to decide whether or not he had a title to benefit. But simplification of this scheme and a continuing regard to clear information and adequate publicity are certainly our objectives. We hope that your Lordships will feel that we will pursue these objectives without the necessity of enacting a clause of this kind. I would invite the noble Lord to be kind enough on this occasion to withdraw his amendment. It would be a very nice gesture for the last one.
Lord WELLS-PESTELL: It would be a very nice gesture on the part of the Government to accept one amendment out of 37; make no mistake about that. I wanted to ask the noble Lord whether he would explore with the Government, through the appropriate department, whether there is any possibility of asking BBC 1 and BBC 2 and ITV—the three television channels—if they will give just a few seconds to draw attention to the fact that supplementary benefit is available to people. I do not want to suggest the wording, but I think it would be a very generous gesture on their part. It would not cost them a great deal of money. They would lose perhaps a few hundred pounds every time they showed it, but they can well afford to make that kind of contribution.

1101
The other point is that I noticed that in my own doctor's surgery there was no reference to the social security benefit, although doctors' waiting rooms carry an enormous number of notices. I wonder, again, whether there could be discussions with, I imagine, the BMA to see whether doctors' surgeries and waiting rooms could be used for this purpose.
Lord MACKAY of CLASHFERN: I am grateful to the noble Lord for these suggestions and I shall certainly draw them to the attention of my right honourable friend the Secretary of State.
Lord WELLS-PESTELL: I think somebody ought to please somebody in your Lordships' Committee, and perhaps we will set the example. With the leave of the Committee, I withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
10.2 p.m.
Lord BANKS Lord BANKS moved Amendment No. 37:
After Clause 7, insert the following new clause:
"Secretary of State to review cost of living for chronically sick
(.—(1) The Secretary of State shall review current provisions in the United Kingdom, and such other countries as seem to him to he appropriate, for meeting the extra costs of daily living as a chronically sick or disabled person and shall publish a consultative document setting out the various means by which these people could be compensated for both the extra expenses they actually incur as a result of their chronic sickness or disability and the extra expenses they should incur if their needs as chronically sick or disabled people are to be met.
(2) The review shall commence not later than three months from the date on which this Act receives the Royal Assent and the consultative document shall be published within a period of twelve months from that date ").
The noble Lord said: During the Committee stage of the Social Security (No. 1) Bill, I moved an amendment requiring an inquiry to be held into the extra cost incurred by disabled people by reason of their disablement. The noble Lord, Lord Sandys, said that an inquiry was going on into the position of disabled people with families and that there would be a report by the end of this year. But that,
1102
of course, is covering only part of the field, welcome though it is. There is a need for a general investigation of this problem.
As I understand it, there is general agreement in the Committee on the concept of a disablement income, which would be in two parts. One part would be for income maintenance, to replace earnings, to take account of inability to earn, and the second would be a disablement costs allowance to make up for the extra costs which a disabled person has to meet. The first of those benefits would be taxable; the second would not. Although there is agreement on that in principle, I understand that the Government's view is that it cannot be afforded at the present time, but the point is that further investigation is necessary. Public discussion in which the Government participate is necessary.
The question of extra costs and how they are to be met needs informed public discussion. The new clause which the amendment seeks to insert requires a consultative or discussion document to be published by the Government on the disablement costs allowance, the second of the two parts of the disablement income which, as I have already said, I understand we all agree in principle. The details of a disablement costs allowance must be settled so that the allowance can be introduced as soon as, in the opinion of the Government, the state of the economy allows.
I understand that this question of a Green Paper was first raised by the Disablement Income Group with the last Government in May 1978, and that after that time informal discussions continued. I understand also that preparations for issuing a Green Paper were set in hand and significant progress was made by April 1979. Unfortunately, it would appear that this work stopped with the advent of the new Government.
We have seen in our discussions on this Bill and on the No. 1 Bill how those on invalidity benefit have been hit by both Bills: the breaking of the link with earnings; the 5 per cent. abatement; the substitution of the 13-week linking rule by an eight-week rule. We have heard of the fears that the reformed supplementary benefits system might not be flexible enough to meet the needs of the

1103
disabled. All this makes a consideration of the extra costs of disablement all the more important and all the more urgent. All this amendment asks is that the Government should make a start in considering the matter themselves and in stimulating public discussion about it. I beg to move.
10.7 p.m.
Viscount INGLEBY: I should like to support this amendment asking for a discussion document, a Green Paper, on the disablement costs allowace; on the extra cost necessarily incurred by disabled people in their daily living which, as the noble Lord, Lord Banks, has said was supported by all three parties in their election manifestos. If I may, I quote for a moment from the Conservative manifesto, which referred to a,
"coherent system of cash benefits to meet the cost of disability so that more disabled people can support themselves and live normal lives. We shall work towards this as swiftly as the strength of the economy allows".
We all know that the economy does not allow it at the present time, but there would be a lot of work to be done before this could be implemented. This amendment allows a year for the discussion document, and then no doubt there would be a year or two after that before it was actually implemented; in other words, in two or three years' time perhaps, when we all hope that the black clouds over the economy would have turned to blue.
A start should be made now. As the noble Lord, Lord Banks, said, the York Study covers only part of the field, being families with handicapped children, and does not cover adult handicapped persons. I very much hope that all parties will stand by their election manifestos, and that the Committee will support this reasonable amendment.
Baroness ELLIOT of HARWOOD: May I say one word. In the last 10 years I have had a lot to do with the disabled and the integration of the disabled into the community, and into the ordinary way of life. The various kinds of disablement, the conditions under which disabled people live, and the way in which one can integrate them, are so valid that it is important to know what are all the possibilities.
1104
Costs vary, conditions vary, communities vary, and sometimes things are easier than at other times, but it is vital to have this integration between the disabled and the ordinary community. An inquiry of this kind would make it much easier, and at the end of the day I think save a great deal of money, because we would then know far more about what the conditions are and what money was required. I hope that the Government will accept this proposal.
10.10 p.m.
Baroness YOUNG: The noble Lord, Lord Banks, argued his case cogently, as he always does; and he expressed similar views during the proceedings on the first Social Security Bill. Unfortunately, as he will appreciate, the difference between us remains the same. The amendment concentrates on one aspect of possible future provision for disabled people, namely, a cash benefit to compensate for the extra costs of disablement and reflects the conviction that a consultative document would bring us nearer to the position we would all like to reach on this matter.
The noble Viscount, Lord Ingleby, quoted from the Conservative Party manifesto and was supported by the noble Baroness, Lady Elliot of Harwood. I wish to reaffirm that it is our intention to move forward, as quickly as the economy will allow, to improvements in the overall structure of benefits for people who are disabled, and to do so for all the reasons that have been put so well to the Committee. What that structure will be and what its relation to the costs of disablement will be I cannot say at this stage. We have been discussing the need for savings and economies throughout the Bill and I think it would be the general view of the Committee that there can be no question but that the economy at present allows no scope at all for even a more modest improvement in the existing schemes, and is unlikely to do so for some time. The realistic issue therefore is how we spend the time in the interim.
We are well aware of the views of the organisations representing disabled people. They express them to us from time to time and my right honourable friend the Secretary of State and his colleagues are always willing to listen to them and to the ideas they put forward. In particular,

1105
we are seeking to evaluate significant current research which is available and which will be available in the foreseeable future. That research has taken years of study and application to bring to fruition, and some of it is concerned with the extra costs to families with disabled children. It is bound to be of significance in our deliberations and at this juncture we believe it would be premature to consider issuing a consultative document or Green Paper, as has been suggested.
On the question of schemes of other countries, which is sometimes raised, noble Lords will be aware that the Library of the House has copies of the comparative social benefit tables for member states of the European Communities showing the position as at January 1979. There are, moreover, regular contacts between DHHS officials and officials from other countries concerned with these schemes.
I recognise that this will be a very disappointing reply to the Committee, but our long-term intentions remain the same as we stated in our manifesto, and we shall move forward when we judge that the economy is right and we are able to do so. I hope I have said enough to assure the Committee of our view about this, and I would say to the noble Lord, Lord Banks, who said he felt a Green Paper or consultative document would provide an opportunity for discussion, that the fact that he has raised this point, both on the first Social Security Bill and again on this one, has given your Lordships an opportunity to consider the matter, and what he said will be taken into account in the general deliberations on the future of this issue.
Lord BANKS: I thank the noble Viscount, Lord Ingleby, and the noble Baroness, Lady Elliot of Harwood, for the support they gave to the amendment, and I thank the noble Viscount in particular for correcting me in describing the investigation which is at present going on; I think I described it as being into the position of handicapped people with families whereas of course it is, as he said, an inquiry into the position of families with handicapped children.
The noble Baroness, Lady Young, was afraid we would find her reply rather dis
1106
appointing; and it was. Of course, I welcome the assurance she gave, but it would have been much more satisfactory and encouraging had she been able to say that an inquiry of this kind would be launched.
The noble Baroness stated as one objection to the amendment that it provided for an inquiry into one aspect of assistance for the disabled—namely, cash benefits—and it is possible that we ought to have asked for a Green Paper or an inquiry which would cover the whole field of assistance to the disabled. Although the reply of the noble Baroness was somewhat disappointing, I should like to consider it further and perhaps return to the subject at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Schedule agreed to.
House resumed: Bill reported without amendment.

COUNTY OF KENT BILL [H.L.]
Committed to a Select Committee in respect of opposed provisions.
WESLEY'S CHAPEL, CITY ROAD BILL
Returned from the Commons with the amendments agreed to.