Lords Sitting of 6 May 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 Newcastle.

BISHOP TUTU: SOUTH AFRICAN PASSPORT
Lord BROCKWAY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will support the appeal by the Archbishop of Canterbury and 24 worldwide Anglican leaders to the Government of the South African Republic for the return of the passport of Bishop Desmond Tutu, Secretary General of the South African Council of Churches.
Lord TREFGARNE: My Lords, the Government share the hope of the Archbishop of Canterbury and other Anglican leaders that the South African Government will return Bishop Tutu's passport. We have already drawn the South African Government's attention to the extent of public concern in this country over this matter.
Lord BROCKWAY: My Lords, delighted as I am by that reply, may I ask this of the noble Lord: When we become Members of this House do we not take an oath or an affirmation of support for the Church? While some of us have reservations about that, may I ask whether this is not a case where the whole House should give support to the Archbishop and his colleagues?
Lord TREFGARNE: My Lords, I am not sure that the noble Lord is entirely right in what he says about the oath that your Lordships take at the beginning of each Session, but I think that noble Lords would certainly wish to agree with the sentiments expressed by the most reverend Primate and his prelates at Canterbury.
The Lord Bishop of LONDON: My Lords, is the noble Lord aware that not only the leaders of the Anglican Communion but also a number of other people have written letters to the secular and the Church Press asking for the reasons for the withdrawal of Bishop Tutu's passport and also the reason for the detention of the Reverend David Russell, and that there has been no response whatsoever? Will the noble Lord therefore make it clear to the South African authorities that their refusal to answer these clear questions does great harm to the good understanding which should exist between South Africa and this country?
Lord TREFGARNE: My Lords, we have already made clear to the South African Government the extent of public concern in the United Kingdom on this matter. I should make it clear now that neither in the case of the Archbishop nor in that of the Reverend David Russell, whom the right reverend prelate mentioned, have we any locus standi to intervene formally; but we can and do make informal representations when opportunity arises.

UN ENVIRONMENT MEETING IN NAIROBI
2.40 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:—
To ask Her Majesty's Government what were the conclusions of the meeting in Nairobi of the governing council of the United Nations Environment Programme and what contribution the British representative made to the decisions.
Lord MOWBRAY and STOURTON: My Lords, the main purpose of the meeting was to consider detailed proposals concerning the work of the United Nations Environment Programme in the coming year. In addition, a number of decisions were adopted. I will arrange

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for the full record to be placed in the Library when it becomes available. The United Kingdom delegation played an active role in the meeting and sponsored resolutions on the World Conservation Strategy and, together with other members of the European Community, on chlorofluorocarbons.
Lord BROCKWAY: My Lords, while thanking the noble Lord for that reply and for arranging for the document to be placed in the Library, may I ask specifically whether the Government support the draft of an international strategy for reconciling economic and environmental concerns In particular, could the noble Lord answer three points? Do the Government support action to stop desert encroachment? Some 6 million hectares of desert encroach every year. Do the Government support a world plan for the wise use of forests? Between 5 million and 10 million hectares of forest are lost each year. Thirdly, do the Government support a plan to save the 1,000 animal and 25,000 plant species which are threatened with destruction?
Lord MOWBRAY and STOURTON: My Lords, the noble Lord, as usual, has given me a blockbuster to answer. We certainly support all environmental matters which are important to mankind and, where the economics of the situation coincide, we try to help as best we can. The three specific questions that the noble Lord asked are very difficult to answer. We regard this environmental programme as having a catalytic effect. We aim to help this United Nations body and we assist it considerably. The noble Lord may remember that I answered a Question on forests about three weeks ago. We obviously draw the attention of our scientific advisers to this matter and advise the United Nations' agencies and other bodies interested. The noble Lord, Lord Brockway, would be the first person to say that we had no right to interfere with a sovereign nation's rights to manage its own natural resources. This comes into the matter a little. Regarding the 1,000 animals and 25,000 plants, I do not know specifically to what the noble Lord refers, but in principle we obviously would deplore such unfortunate happenings.

SENEGAL: DEVELOPMENT AID
2.44 p.m.
Lord MERRIVALE: 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—

(a) what consideration is being given by the Commonwealth Development Corporation to a report (currently in their hands) on the multinational ICS project in Senegal to process the phosphates of Taiba to produce fertilisers; and

(b) to what extent they are encouraging development assistance and "joint venture" investment in that country.

Lord TREFGARNE: My Lords, the Commonwealth Development Corporation is awaiting the appraisal report on this project from the International Finance Corporation in the light of feasibility studies by technical consultants. Capital aid of £1 million was provided in 1979 under the special aid and trade arrangements for the purchase of an HS 748 aeroplane. A small capital project involving assistance to the cashew nut industry is under consideration. In addition, there is a technical co-operation programme covering English language teaching, a few technical experts, and some training awards. Senegal also benefits from European and international aid programmes to which we contributed.
Lord MERRIVALE: My Lords, I should like to thank my noble friend the Minister for his detailed Answer. Would he not agree that if the CDC are overcautious it could be counter-productive? Also, would he not agree that Senegal is very keen on closer links with this country, and not just on getting aid but on trade links between Dakar and London?
Lord TREFGARNE: My Lords, my noble friend is quite right. There are certainly a good many trade prospects which we hope can be developed between Senegal and the United Kingdom. It is therefore very appropriate that the Senegal Foreign Minister, Mr. Niasse, is in London just now.
Lord GORONWY-ROBERTS: My Lords, would the noble Lord agree that it would be a political as well as an economic advantage to Africa and Europe if European investment were stepped up in the next few months and years? Would he also agree that the CDC has a first-class reputation for dealing constructively with countries like this and has a fine record of achievement in such countries, especially in the matter of promoting the joint ventures?
Lord TREFGARNE: My Lords, the noble Lord is entirely right about the reputation of the CDC, although I should say that when the CDC starts operations in any new country, it requires ministerial approval, which has not yet been sought in this case.
Lord ORAM: My Lords, since the CDC relies almost entirely on Government loans for financing projects such as that suggested for Senegal by the noble Lord, Lord Merrivale, and the other projects which the Minister listed, can the Minister assure the House that the operations of the CDC in these respects will not be prejudiced by the Government's current policies on overseas aid?
Lord TREFGARNE: My Lords, as I said, ministerial approval is required before the CDC can commence operations in any new country. Each application will be considered on its merits.
Lord MERRIVALE: My Lords, I was under the impression that the Minister's approval had been given; but, as my noble friend has said that the Minister has not given approval, can my noble friend use his best influence with the Minister under the Commonwealth Development Corporation Act 1978, Section 2(4), to ask the Minister whether he will be kind enough to look into this and give his approval in the not too distant future?
Lord TREFGARNE: My Lords, this is a matter for the CDC themselves. When they have received the IFC appraisal report, they will—if they are still persuaded of the merits of this project, as no doubt they will be—make their application for ministerial approval, which we shall then consider in the usual way.

DEMONSTRATIONS: COSTS OF POLICING
2.48 p.m.
The Earl of KIMBERLEY: 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 they agree that organisers of public demonstrations should pay something towards the extra expenses incurred by the police in keeping public order.
Lord SANDYS: My Lords, the possibility of making the organisers of demonstrations liable for all or part of the cost of policing their events is among the questions discussed in the Government's Green Paper on the Review of the Public Order Act 1936 and related legislation, which was published on 24th April. While Her Majesty's Government have a good deal of sympathy with the suggestion, there are a number of practical difficulties which seem to rule it out.
The Earl of KIMBERLEY: My Lords, I thank my noble friend for that Answer. Would he not agree that the cost of these demonstrations cannot be measured just in terms of money, and that policemen's weekends are often disrupted at short notice as a result of the demonstration? Also, police from other divisions have to go to a totally different area to look after these marches. As a result, crime may become more rampant in the division from which the police have been removed. Secondly, would my noble friend not agree that it would be a very good idea if the British public were informed of the fact that demonstrators do not have to ask police permission before they demonstrate?
Lord SANDYS: My Lords, I agree with nearly all the points that have been made by the noble Earl. The reasons for the review are manifold. One of the most important aspects was of course the demand placed on police resources in terms of manpower. The Green Paper (Cmnd. 7891), which is the Review of the Public Order Act 1936, lays particular emphasis both on the growth of the numbers of demonstrations since 1972 and on the wide increase in the use of manpower needed to cope with them.
Lord AVEBURY: My Lords, does not the Green Paper say that one of the matters for consideration is whether the police should have power to ban or divert a march when they are not reasonably confident of being able to prevent a serious threat to public order from within their own resources? Would it not be useful if consideration could also be given to the question of giving powers within Greater London where the police in a division cannot be reasonably confident of containing a serious threat to public order within the resources of their division, so that demonstrations costing up to half a million pounds, like the recent one in Lewisham, which are of a purely local nature—and the disturbances in Southall might also be mentioned in this context—could be banned or diverted by the police in that area?
Lord SANDYS: My Lords, in response to the noble Lord, Lord Avebury, of course he will be aware that the Public Order Act 1936 allows the banning of a march but not of a meeting. He may also be aware that at the present moment the Green Paper is the subject of a review in another place. The House of Commons Select Committee on Home Affairs is taking evidence, both oral and written, at the present time and I think it would be inappropriate at this moment for the Government to say more.
Lord ELWYN-JONES: My Lords, could the noble Lord say when, if at all, the Government have it in mind to legislate upon this matter? The publication of Green Papers has been known in the past to be a massive implement of delay. There is a good deal of public concern about this matter, is there not? There is also an element of urgency. Could we have some indication of the Government's intentions in this matter?
Lord SANDYS: My Lords, in response to the noble and learned Lord, as the Green Paper was published only on 24th April and the Select Committee referred to is sitting at the present time, the present intention is that my right honourable friend the Home Secretary expects to make known his views at the conclusion of the discussions which are now taking place. More than that I cannot say at the moment.
Lord ORR-EWING: My Lords, could my noble friend confirm that if a hundred National Front marchers of a totally discredited philosophy gather together and march, they are sometimes opposed by more than a thousand of the so-called Anti-Nazi League? To whom do you send the bill for the disruption which is clearly there and where the responsibility rests with the counter-demonstrators rather than with the demonstrators?
Lord SANDYS: My Lords, I entirely agree with my noble friend Lord Orr-Ewing. This point is particularly stressed in paragraph 65 of the Green Paper, and perhaps I might quote it to your Lordships. It reads:
"First, it can be argued that it is unreasonable to hold the organiser of what is intended to be a peaceful march responsible for the activities of elements who may join the march but over whom he may have no control. Equally, recent events have shown that responsibility for disorder occasioned by marches can be caused almost wholly by counter-demonstrators seeking to disrupt the march …".
Lord WIGODER: My Lords, does the noble Lord think it is reasonable that the costs of maintaining public order on these occasions have to be borne by the local authority in whose area, by chance, the demonstration takes place?
Lord SANDYS: My Lords, I am sure the noble Lord, Lord Wigoder, will be aware that the whole reason for the review is to discuss this very matter.
Lord SOPER: My Lords, is the Minister aware that not all demonstrations are itinerant? Is there concern as to what goes on in the "regular pitches" on Sunday afternoons, in particular in Hyde Park? If so, will there be permission given for us to take a collection in order to defray the expenses?
Lord SANDYS: My Lords, I do not know precisely what the noble Lord, Lord Soper, has in mind, but if he would wish to use this opportunity of the Green Paper to send in his comments to my right honourable friend, or indeed to the Select Committee in another place, I am sure they will receive very close attention.

BUSINESS OF THE HOUSE
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend Lord Belstead will repeat a Statement that has been made in another place concerning the Iranian Embassy in London.
It may also be for the convenience of your Lordships to know that dinner will be available this evening at the usual time. The Report stage of the Social Security Bill will be adjourned at about 7 o'clock for approximately an hour. Consideration of modifications to the Census Order and the Industrial Training Levy (Engineering) Order will be taken during this adjournment.

DISUSED BURIAL GROUNDS (AMENDMENT) BILL [H.L.]
The Lord Bishop of LONDON: My Lords, I beg leave to introduce a Bill to amend the Disused Burial Grounds Act 1884, to enable building to take place on certain disused burial grounds, subject to the consent of the Secretary of State, and with appropriate safeguards; and for purposes connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Bishop of London.)
On Question, Bill read la, and to be printed.

EMPLOYMENT BILL
Brought from the Commons on Friday last and printed pursuant to Standing Order No. 47; read 1a.

SOCIAL SECURITY BILL
2.56 p.m.
Report received.
Clause 1 [Amendments relating to up-rating]:
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 1:
Page 1, line 22, at end insert—
("() For the purpose of any uprating order under section 125(3) of the Social Security
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Act 1975, in considering what increases in the sums in question are necessary to restore their value, the Secretary of State shall have regard to the increase in the general level of prices between 24th November 1980 and the date of any such increase.").
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Marshalled List. Probably this particular amendment could be taken very briefly because we did go over some of the ground in the Committee stage. I suggest that those of your Lordships who have considered this matter will regard the amendment as being a modest one, merely requiring the Secretary of State to make good any long-term shortfall in the up-rating of benefits. It does not—let me repeat, it does not—require him to make good a shortfall that occurs in one particular year, provided that over the whole period from November 1980 the real value of the benefits have been maintained. Thus, if I may take 1982 as an example, if in that year benefits are raised by no more than is needed to compensate for price increases, the overshoot could be carried forward and set against a shortfall in any subsequent year.
During the Committee stage the noble Baroness, Lady Young, said—and I will quote from Hansard dated 15th April 1980 at column 141:
"We feel we must give a cast-iron guarantee to pensioners. We have said that we shall keep the pensions in line with prices so that retirement pensioners will not in fact be adversely affected by the effect of inflation and increased prices because their pensions will be protected, and we think that that is a guarantee that we can keep to".
But the Bill, as it stands, does not give that guarantee, although the noble Baroness made those remarks. If the Secretary of State underestimates the rate of inflation by only a small amount each year—and he seems likely to do so this year, for a start, because I think that pensions are going up in November by 16½ per cent. and inflation will be considerably more than 16½ per cent. next November—the real value of pensions could be seriously eroded over a period of five to 10 years. But the Government's actions, in saying that they will guarantee, do not give any real assurance.
The question of making good a shortfall in relation to prices—that is to say, a fall in the real value of benefits—arose last year when the Government refused

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to honour an undertaking given by the Labour Government to make good the 1978 shortfall in the present up-rating of short-term benefits. Now in the No. 2 Bill, which I had hoped to avoid mentioning on this occasion, the Government are proposing deliberately to cut the next three up-ratings of short-term benefits and invalidity pensions by 5 per cent.
It is for these reasons and no other, and the fact that the noble Baroness herself gave an assurance along these lines on 15th April last, that there should be a cast-iron guarantee given legal force, and this amendment would do that. It is a simple amendment. It does not put the Government in any difficult situation. It merely puts on the statute book a guarantee of this kind which, by its very nature, is a safeguard and I hope that the noble Baroness will feel able to accept it. My Lords, I beg to move.
Lord BANKS: My Lords, may I support very briefly the amendment which has just been moved by the noble Lord, Lord Wells-Pestell. The danger of shortfalls arises from the fact that half the reference period, on which the increase is based, is in the future and an estimate has to be made. If the reference period were entirely in the past, the danger of shortfalls would not arise in the same way and we should not be faced with this problem. It seems to me that it is right and proper that shortfalls should be made good, and because the amendment achieves this I support it.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, as the noble Lord, Lord Wells-Pestell, has explained, the purpose of this amendment is to relate future increases of benefits to price movements since November 1980. The amendment would not affect the rates of benefit to be introduced next November, since that alone is proposed as the point of reference for the future. Nor would it change the position for the 1981 up-rating, when the Secretary of State will, in any event, be required, under current legislation as amended by this Bill, to have regard to price movements since November 1980, and it is to those that he must have reference when he comes to consider that up-rating. However
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from the 1982 up-rating onwards, the amendment would require the Secretary of State to have regard each year to price movements since November 1980, instead of since the previous up-rating.
As the noble Lord, Lord Wells-Pestell, has said, the intention of the amendment is to compensate for future shortfalls in benefit increases. However, the House should recognise that the amendment would not always be to the advantage of beneficiaries, since it would require the Secretary of State always to have regard as a minimum to price movements since November 1980, even if benefits had moved ahead of prices since that date, either as a result of up-ratings based on over-generous estimates, or of deliberate decisions to up-rate by more than price movements. So one needs to consider very carefully whether this amendment, if voted upon, would achieve the result which the noble Lord, Lord Wells-Pestell, wishes.
Under the present provisions as amended by this Bill, the Secretary of State will be required to have regard to price movements since the preceding up-rating, whether the forecast on which that up-rating was based turned out to be over-generous or fell somewhat short of the actual movement of prices. If the increase turns out to be more than that of prices, or if there is a shortfall, the courts have confirmed that there is no statutory obligation to correct the position. In the case of shortfall, it is for the Government of the day, in the light of such considerations as the size of shortfall and the economic situation at the time, to decide what action is appropriate.
For these reasons we have decided that it is essential to leave this measure of flexibility and, as I also indicated when we debated this matter in Committee, our record in office has shown that where it has been possible we have, indeed, more than kept up with prices—certainly between 1970 and 1974. I think it would be unfortunate if, at this stage of this Bill, we confused this Bill with the Social Security (No. 2) Bill which is currently before another place, or indeed confused this amendment with anything that might be done on short-term benefits, because we are in this clause dealing with retirement pensions which are, of course, long-term benefits. For these reasons, and because I do not believe that it

1523
would be right to accept this amendment as it stands, nor indeed do I think that it would necessarily be of benefit to the very people whom it is designed to help, I hope that the House will not support it.
3.6 p.m.
Lord WELLS-PESTELL: My Lords, may I ask the noble Baroness the Minister what will be the position in 1981? In November of this year, pensions are going up by 16½ per cent. and for the greater part of this year alone inflation will be in the region of 20 per cent.; it is in that area now, in May. That means that from November 1980 to November 1981, pensioners will lose a considerable sum of money and their standard of living must, of necessity, be depressed. If we had a Labour Government today, I am sure that they would be reminded in November of this year of the fact that pensioners had been existing on a pension which was considerably lower than the rate of inflation, and if the increase was only 16½ per cent. that Labour Government would be told in very precise terms that it was not sufficient to meet the financial needs of a large number of people who had already had their standard of living depressed.
Baroness YOUNG: My Lords, by the leave of the House—we are, of course, on Report, so that this is the last time that I may speak on this matter—pensions in November 1979 not only kept up with prices, but also made up the shortfall from the preceding year, 1978–79. So retirement pensions kept up with prices and did something more. What we have said is that in November 1980 there will be a further increase of 16½ per cent. and we have as yet taken no decision about what may happen in 1981, because it is too difficult at this point to predict exactly what may happen. But I say this to indicate that our record has shown that we have managed so far to keep up the standard of living of retirement pensioners. Of course, it is our wish that, as the economy improves—because they are a large number of people in the population, whose needs we are very well aware of and who need to be looked after—we shall be able to do more. But it would be wrong at this stage to make promises which it would not be possible to fulfil.
3.9 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 74; Not-Contents, 83.

CONTENTS

Airedale, L.

Fulton, L.

Pargiter, L.

Amherst, E.

Gaitskell, B.

Peart, L.

Amulree, L.

Galpern, L.

Pitt of Hampstead, L.

Ardwick, L

Gardiner, L.

Plant, L.

Aylestone, L.

Gladwyn, L.

Reilly, L.

Bacon, B.

Gordon-Walker, L.

Robson of Kiddington, B.

Balogh, L.

Goronwy-Roberts, L.

Rochester, L.

Banks, L.

Gosford, E.

Sainsbury, L.

Beaumont of Whitley, L.

Granville of Eye, L.

Seear, B.

Beswick, L.

Grey, E.

Shinwell, L.

Blease, L. [Teller.]

Hale, L.

Sligo, M.

Boston of Faversham, L.

Hampton, L.

Soper, L.

Brockway, L.

Hanworth, V.

Stewart of Alvechurch, B.

Bruce of Donington, L.

Henderson, L.

Stone, L.

Burton of Coventry, B.

Hunt, L.

Taylor of Mansfield, L.

Byers, L.

Jacques, L.

Underhill, L.

Collison, L.

Kaldor, L.

Wallace of Coslany, L. [Teller.]

Cooper of Stockton Heath, L.

Kilbracken, L.

Walston, L.

Crook, L.

Kilmarnock, L.

Wells-Pestell, L.

Crowther-Hunt, L.

Kirkhill, L.

White, B.

David, B.

Leatherland, L.

Wigg, L.

Diamond, L.

Lloyd of Kilgerran, L.

Wigoder, L.

Donaldson of Kingsbridge, L.

Milverton, L.

Wilson of Radcliffe, L.

Elwyn-Jones, L.

Newcastle, Bp.

Wootton of Abinger, B.

Fisher of Rednal, B.

Oram, L.

NOT-CONTENTS

Alexander of Tunis, E.

Ferrers, E.

O'Neill of the Maine, L.

Allerton, L.

Fortescue, E.

Onslow, E.

Alport, L.

Galloway, E.

Orkney, E.

Argyll, D.

Gisborough, L.

Orr-Ewing, L.

Avon, E.

Glenarthur, L.

Porritt, L.

Belstead, L.

Gridley, L.

Renton, L.

Bessborough, E.

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

Rochdale, V.

Bolton, L.

Romney, E.

Brock, L.

Harmar-Nicholls, L.

St. Davids, V.

Buckinghamshire, E.

Hill of Luton, L.

St. Germans, E.

Caccia, L.

Hill-Norton, L.

Sandys, L. [Teller.]

Campbell of Croy, L.

Hylton-Foster, B.

Sharples, B.

Clancarty, E.

Ilchester, E.

Smith, L.

Clifford of Chudleigh, L.

Inglewood, L.

Somers, L.

Clwyd, L.

Kimberley, E.

Stamp, L.

Cockfield, L.

Kinloss, Ly.

Strathclyde, L.

Cottesloe, L.

Lindsey and Abingdon, E.

Strathspey, L.

Cranbrook, E.

Long, V.

Thorneycroft, L.

Cullen of Ashbourne, L.

Loudoun, C.

Trefgarne, L.

Daventry, V.

Lucas of Chilworth, L.

Trenchard, V.

De Freyne, L.

Lyell, L.

Vaux of Harrowden, L.

Denham, L. [Teller.]

Macleod of Borve, B.

Vickers, B.

Derwent, L.

Mancroft, L.

Vivian, L.

Drumalbyn, L.

Marley, L.

Westbury, L.

Eccles, V.

Merrivale, L.

Willoughby de Broke, L.

Ellenborough, L.

Morris, L.

Wolverton, L.

Elliot of Harwood, B.

Mowbray and Stourton, L.

Wrenbury, L.

Energlyn, L.

Nugent of Guildford, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

3.17 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 2:
Page 2, line 19, leave out ("last") and insert ("thirteenth").
The noble Lord said: My Lords, this amendment—or, it would be more correct to say, one similar to it—was moved by me at the Committee stage. This would have made 21st November the latest date for a benefit up-rating. In practice, because the up-rating is spread over a period from Monday to Thursday, this would have meant that the Monday of the up-rating week, which is normally regarded as the up-rating date, must not be later than 18th November. It would have given to the Government the power they need to prevent the up-rating from creeping forward steadily each year by enabling them to have a 53-week interval between up-ratings—as I understand the situation, every five or six years—but it would have prevented them from doing the pensioners out of an additional week of increased pension this year by postponing the up-rating to the week commencing 24th November. I make that a period of 54 weeks instead of 52.
The amendment was defeated in Committee, but it is clear from the Official Report that the noble Baroness, if I may say this, rather misunderstood what I was trying to suggest. It may well have been my own fault. In col. 160 of Hansard of 15th April, if I may quote her, the noble Baroness the Minister said:
"We need some flexibility in the arrangements. This would be prevented if one had a fixed date—as in this case—which would have to be reviewed annually, otherwise we should be in the difficulties which the noble Lord described because it clearly has financial implications as the date creeps forward each year".
A little later the noble Baroness said:
"the Government would automatically have been committed to a very large increase of expenditure if the same date were fixed and it went on creeping forward in that way".—[Official Report, 15/4/80; col. 16½.]
If I may say so, there should be a general rule about it. If we wrote into the Bill that it should be 21st November, as the amendment suggested, then once again we should be on a fixed date. I think the noble Baroness was wrong about this. The amendment did not propose a fixed date. It merely proposed that the up-rating should be completed not later than 21st November and in principle there is here no difference from the Government's proposal in the Bill that the up-rating must be completed before 30th November. The only difference is that the Government would not have been able to do the

1527
pensioners out of an extra week's increase this year, as I suggest is their present intention.
Nor is it true that the Government would have had no flexibility in fixing the up-rating date. They would have been free to choose any Monday from between 1st and 18th November. I suggest that the present amendment gives another opportunity to look at the whole issue again without the confusion that was introduced by the view taken by the noble Baroness at Committee stage. This time the date we propose is the 13th, which means that this year's up-rating would have to take place in the week commencing 10th November; next year it would be on the 9th and so on until 1986 when it would then go back to the 10th again—unless of course the Government chose to exercise the flexibility on which the noble Baroness lays so much stress, by bringing forward the up-rating to an earlier date in the year.
If there had been no legislation, then the up-rating would have been on Monday, 10th November, and in point of fact this is really what we are asking for, but as a result of the legislation before your Lordships' House it will certainly not be on the 10th. As I understand it, it will be on the 21st and the pensioners will suffer. I ask your Lordships to agree to this amendment because I feel that in the circumstances it is a reasonable one. I beg to move.
Baroness YOUNG: My Lords, the noble Lord, Lord Wells-Pestell, said that we debated a very similar amendment to this on the Committee stage of this Bill. During the intervening period I have looked again at what was then said and have considered it in relation to the amendment that he has tabled this afternoon. I am sorry that he feels that I have misunderstood his original amendment. I recognise that his original amendment did not propose a fixed date; it proposed a date not later than 21st November, but, of course, as the noble Lord himself has explained, there are consequences which would follow from the acceptance of that original proposal which I think I made clear in my reply. But in case there is any misunderstanding about this matter, perhaps I may go through the argument again.
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The problem which this particular subsection of Clause 1 is designed to resolve is the unforeseen effect of the present legislation. At present the latest date for an up-rating moves forward progressively each year, by one day normally and by two days in a leap year. Clearly this gradual creeping forward has both procedural and financial implications. As the noble Lord, Lord Wells-Pestell, has said, had it just been left to creep forward this year the up-rating would have been on 10th November and therefore the Government would have had to pay the increase in benefits for the week beginning 10th November instead of the week beginning 24th November; and the cost of that would have been about £125 million in 1980–81.
The fact is that different benefits are up-rated on different days of the week to take account of the spread, as the noble Lord has described, and the main up-rating date has to be earlier than the final date referred to in an amendment like this. This year, as I have said, the amendment would mean that the main up-rating date would have to be 10th November. In subsequent years it would never be later than 10th November, and in some future years—for example in 1985—it would have to be on 4th November. The main up-rating date has moved forward from 17th November in 1975 and the Government could not agree to an amendment which would have the effect of fixing the latest date somewhere between 4th and 10th November.
This subsection of Clause 1 does not change the most important principle; namely, the principle of having an annual up-rating. What it does is to allow the Government some flexibility in settling the exact date by providing that the up-rating must take place by the end of the month in which the anniversary of the previous up-rating occurs. Clearly, as I think the House will understand, in view of the enormous public expenditure and the procedural implications of this matter, we must have a provision to prevent the up-rating date from creeping forward. We need to have some flexibility in the arrangements, and, in the Government's view, the end of the relevant month is the most appropriate cut-off point to have in this particular case.

1529
The implication of the noble Lord's remarks is that the Government, in these difficult financial circumstances in which we have found ourselves, are trying, as it were, to take away money from the pensioners. I think it is important to recognise in regard to this amendment, and the whole Bill, that this year, under the Budget, social security benefits will be increased by more than £3 billion in the next financial year under improvements and up-ratings. The sums of money that we are talking about must he seen in relation to that. Any changes over the system as a whole, on the other hand, will save only £270 million in 1980–81 and £480 million in 1982–83. It is against this background that we are considering our measures.
We believe we have to look very carefully at all the expenditure implications of this matter, and I hope I have said enough to indicate that the Government keep to the important principle of an annual up-rating but believe that, for the reasons I have given, there must be a degree of flexibility in the matter. For this reason I hope that the House will not support this Amendment.
Lord WELLS-PESTELL: My Lords, I am obliged to the noble Baroness for her comments and observations, but may I remind her that in her remarks a moment or two ago she said that a pension must be increased during the month in which it was previously increased. So far as I can remember, it has always been November and, as I understand the Bill now before your Lordships' House, it is going to be up-rated from the 21st. What is to prevent the Government, then, from not up-rating it until 30th November in the following year?
Baroness YOUNG: My Lords, with the leave of the House, we are not discussing the following year. We are discussing the year 1980, and we have given an undertaking that it will be up-rated on 21st November, and that guarantee has to be seen in connection with the other guarantee that it will be up-rated annually in the same month.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 74; Not-Contents, 92.

CONTENTS

Airedale, L.

Elwyn-Jones, L.

Oram, L.

Amherst, E.

Fisher of Rednal, B.

Pargiter, L.

Amulree, L.

Fulton, L.

Peart, L.

Ardwick, L.

Gaitskell, B.

Pitt of Hampstead, L.

Avebury, L.

Galpern, L.

Plant, L.

Aylestone, L.

Gardiner, L.

Reilly, L.

Bacon, B.

Gladwyn, L.

Robson of Kiddington, B.

Balogh, L.

Gordon-Walker, L.

Rochester, L.

Banks, L.

Goronwy-Roberts, L.

Sainsbury, L.

Beaumont of Whitley, L.

Gosford, E.

Seear, B.

Beswick, L.

Granville of Eye, L.

Shinwell, L.

Blease, L. [Teller.]

Grey, E.

Sligo, M.

Blyton, L.

Hale, L.

Soper, L.

Boston of Faversham, L.

Hampton, L.

Stewart of Alvechurch, B.

Brockway, L.

Henderson, L.

Stone, L.

Bruce of Donington, L.

Jacques, L.

Strabolgi, L.

Burton of Coventry, B.

Kaldor, L.

Underhill, L.

Byers, L.

Kilbracken, L.

Wallace of Coslany, L.

Collison, L.

Kilmarnock, L.

Walston, L.

Cooper of Stockton Heath, L.

Kirkhill, L.

Wells-Pestell, L.

Crowther-Hunt, L.

Leatherland, L.

Wigg, L.

Cudlipp, L.

Lloyd of Kilgerran, L.

Wigoder, L.

David, B. [Teller.]

McNair, L.

Wilson of Radcliffe, L.

Diamond, L.

Newcastle, Bp.

Wootton of Abinger, B.

Donaldson of Kingsbridge, L.

Northfield, L.

NOT-CONTENTS

Alexander of Tunis, E.

Bessborough, E.

Campbell of Croy, L.

Allerton, L.

Birdwood, L.

Clancarty, E.

Alport, L.

Bolton, L.

Clifford of Chudleigh, L.

Argyll, D.

Brock, L.

Clwyd, L.

Avon, F.

Buckinghamshire, E.

Cockfield, L.

Belstead, L.

Caccia, L.

Cottesloe, L.

Cranbrook, E.

Hill of Luton, L.

Redmayne, L.

Cullen of Ashbourne, L.

Hood, V.

Renton, L.

Daventry, V.

Hunt, L.

Robbins, L.

de Clifford, L.

Hylton-Foster, B.

Rochdale, V.

De Freyne, L.

Ilchester, E.

Romney, E.

Denham, L. [Teller.]

Inglewood, L.

St. Davids, V.

Dement, L.

Jeffreys, L.

St. Germans, E.

Drumalbyn, L.

Kimberley, E.

Sandys, L. [Teller.]

Duncan-Sandys, L.

Kinloss, Ly.

Seebohm, L.

Eccles, V.

Lindsey and Abingdon, E.

Sharples, B.

Ellenborough, L.

Long, V.

Smith, L.

Elliot of Harwood, B.

Loudoun, C.

Somers, L.

Emmet of Amberley, B.

Lucas of Chilworth, L.

Stamp, L.

Exeter, M.

Lyell, L.

Strathclyde, L.

Ferrers, E.

Macleod of Borve, B.

Strathspey, L.

Fortescue, E.

Mancroft, L.

Thorneycroft, L.

Galloway, E.

Marley, L.

Trenchard, V.

Gisborough, L.

Merrivale, L.

Vaux of Harrowden, L.

Glenarthur, L.

Milverton, L.

Vickers, B.

Gridley, L.

Morris, L.

Vivian, L.

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

Mowbray and Stourton, L.

Westbury, L.

Newall, L.

Willoughby de Broke, L.

Hanworth, V.

Nugent of Guildford, L.

Wolverton, L.

Harmar-Nicholls, L.

Orkney, E.

Wrenhury, L.

Henley, L.

Porritt, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I understand that my noble friend wishes to make a Statement now.

THE IRANIAN EMBASSY: CONCLUSION OF INCIDENT
3.37 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, with the leave of the House, I will now repeat a Statement on the Iranian Embassy incident, being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"As the House is aware, this incident was brought to a conclusion yesterday evening following an assualt by members of the Special Air Service Regiment. I regret that it proved necessary to resort to the use of force, but there was in the end no alternative. The terrorists killed two hostages. The outcome of the assault, I believe, speaks for itself. Of the 19 hostages known to be alive when the assault took place all were rescued. Sixteen have already been discharged from hospital. Three remain there. At least three gunmen are known to have been killed in the assault and another is in police custody; none
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escaped. There were no police or SAS casualties.
"Throughout five days of the siege, the Metropolitan Police patiently sought to negotiate towards a peaceful conclusion. As a result of their efforts, five hostages were, progressively, released. On behalf of my right honourable friend the Prime Minister and myself I made it clear to the Commissioner that Her Majesty's Government were not prepared to give in to the terrorists' demands for a safe conduct out of this country. Subject to that overriding consideration, we did everything in our power to persuade the terrorists peacefully to surrender and free the hostages. It was in the light of that policy that my honourable friend the Minister of State at the Foreign and Commonwealth Office sought the assistance of some ambassadors from certain Middle Eastern countries; but help from that source was not possible. The Commissioner of Police underlined the approach his officers were taking in a personal written message that was delivered into the Iranian Embassy yesterday. The help of a Muslim Imam was also sought. He spoke personally to the gunmen in an attempt to persuade them not to take action which would be damaging both to their hostages and to themselves.
"As yesterday progressed it became increasingly clear, however, that the days of patient negotiation and of

1533
personal direct appeals were not going to achieve their objectives. From the start of the siege, the gunmen had regularly threatened to kill hostages if demands were not met. As soon as it became clear that they had begun to carry out those threats, I authorised, at the Commissioner's request, the commitment of the SAS.
"I know that the House will wish to join with me in congratulating the Metropolitan Police on an operation which they carried out with skill, care and determination. Their conduct throughout was an example of the highest standards of the British police. The success of the final assault and rescue is an outstanding tribute to the professionalism and bravery of the SAS. I am sure the House, and indeed the country, will wish to join the Government in giving their thanks to all those involved—police, military or civilian. Our sympathy goes to the families and friends of those hostages who have been killed or injured.
"Finally, Mr. Speaker, I would simply add this. The way in which this incident was conducted and resolved demonstrates conclusively the determination of the British Government and people not to allow terrorist blackmail to succeed."
My Lords, that concludes the Statement on the Iranian Embassy in London.
Lord BOSTON of FAVERSHAM: My Lords, I should like to thank the noble Lord the Minister for repeating this important Statement. We on these Benches—and I am sure that this goes for noble Lords in all parts of your Lordships' House—would like to offer to the Government our warm congratulations on what was undoubtedly a brilliantly successful operation. I would hope that a way will he found to pass on our congratulations to the police, to the Special Air Services Regiment and to the other services involved, and especially to the Commissioner, Sir David McNee, and to the Deputy Assistant Commissioner, Mr. John Dellow—who was assigned to this particular post only last year—and perhaps your Lordships might agree not least to Police Constable Trevor Locke. Throughout the operation the patience, courage and swift efficiency
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of all those involved was absolutely clear. I would wholly agree that it was right to bring the SAS into the operation from an early stage.
We would also join with the noble Lord, Lord Belstead, in expressing our feelings of sympathy both for the hostages themselves in their ordeal and for their families; and for the families of those hostages who lost their lives. We also share his regret that the incident ended in violence, but clearly, in the circumstances that was unavoidable.
The handling of the operation clearly demonstrates that we in this country are not prepared to tolerate acts of terrorism; nor are we prepared to offer safe conduct to those who commit criminal acts. There are three questions that I should like to ask the noble Lord, Lord Belstead. First, is he satisfied with the security provisions at embassies, especially the more sensitive and vulnerable ones, and is this a matter which is being reviewed further after an incident of this kind? Clearly that has to be commensurate with lawful access to embassies at all times. Secondly, given the spread of Middle Eastern terrorism to this country, would he consider asking his noble friend the Foreign and Commonwealth Secretary to impress upon Middle Eastern embassies that passports should not be given under any pretext to those who are not their own nationals—this is something which apparently has been happening to some extent—and also to remind them that the carriage of arms under diplomatic protection is, at the very least, an unfriendly act and probably also a criminal act under our domestic law?
Finally, if there are lessons for us in this matter, is there not also a lesson for the Iranian Government which has praised this country's role—and we warmly welcome President Bani-Sadr's message about this—in protecting their diplomats, and yet who fail to protect the 53 Americans held hostage by the ultimate permission of the Iranian Government? Let us hope that the future for relations with Iran will he good. For obvious reasons I do not intend to put any detailed questions about the operation itself.
Lord WIGODER: My Lords, we on these Benches would also like to congratulate

1535
all those who showed such skill and bravery in the course of this outstanding operation, especially the police force including, of course, the officer who had the misfortune himself to be taken hostage, and the SAS men. It is, as was made clear in the Statement, a potentially decisive blow against international terrorism certainly as it may occur in this country, and one can only hope that our Western allies will show similar determination if there are any acts of this sort repeated in Western Europe.
I should like to put two short questions to the noble Lord. First, have the Government received legal advice—and if so what is it—as to the position when a foreign national, who cannot claim diplomatic immunity, invades the premises of another foreign power and there commits acts which are contrary to English criminal law? Can he be tried in our courts for such offences as are there committed? Secondly—supporting the matter which the noble Lord, Lord Boston of Faversham, commented upon—would the Government think it right to stress to the Iranian Government that British citizens have risked their lives on this occasion in order to rescue members of the diplomatic staff of the Iranian Government who were unlawfully and improperly imprisoned inside their own embassy? Is this not an opportunity for urging upon the Iranian Government that they might now reconsider, without risk to their own lives, the fate of those who are imprisoned in their country?
Lord BELSTEAD: My Lords, I am grateful to both the noble Lord, Lord Boston, and the noble Lord, Lord Widoger, for their response to my right honourable friend's Statement in another place. I assure both noble Lords that the obvious feeling of your Lordships' House this afternoon will be drawn to the attention—by my right honourable friend's department—of those who were concerned in this very long-drawn-out incident, and not least to Police Constable Trevor Locke.
The noble Lord, Lord Boston, made a very important point about being satisfied with the surveillance and protection of embassies. He then made a point about passports and the very important matter of the carrying of arms. I shall
1536
draw all those points to the attention of my right honourable friends the Foreign Secretary and the Home Secretary.
As regards the points which both noble Lords made about the Iranian Government, I am sure that your Lordships are aware that the Iranian Government have expressed their gratitude and appreciation for the action which was taken. However, in reply to both noble Lords I would add that naturally we shall continue to press the Iranian Government for the earliest possible release of the American diplomats being held hostage in Iran.
Finally, as regards the question which the noble Lord, Lord Wigoder, asked me, the answer is, Yes, there is no jurisdictional difficulty about the question which the noble Lord put to me. It will, of course, be for the prosecuting authorities to decide whether—and if so what—charges should be brought in relation to incidents at the embassy.
The Lord Bishop of LONDON: My Lords, I should like from these Benches to express our congratulations to Her Majesty's Government and to all who have been concerned in this incident. Obviously we deplore—as do all Members of your Lordships' House—the fact that lives had to be lost. Nevertheless, that was a price which had to be paid. It is clear that decisions of great courage and great difficulty had to be taken and we are grateful to the Home Secretary, to Sir David McNee and those working with him, and to the SAS for the courage and the skill that they have shown. It must be our hope that, as a result of the patience and the firmness which have been shown in this incident, together with the skill and the courage, these acts of terrorism will be seen to be something which is utterly abhorrent and which we will not tolerate.
Lord BELSTEAD: My Lords, I am most grateful to the right reverend Prelate. The decisions which had to be taken in the last few days were difficult—as noble Lords opposite and from all parts of the House obviously appreciate, judging by the sensitive way in which they have responded to the two Statements on this subject which have been made in the last few days. I shall draw the remarks of the right reverend Prelate

1537
to the attention of my right honourable friend, who I think will appreciate them very much.
Lord AVEBURY: My Lords, although the whole House will wish to endorse the sentiments of the noble Lord, Lord Boston of Faversham, my noble friend Lord Wigoder, and the right reverend Prelate the Bishop of London, I should like to ask the Minister about the present position of the hostages and their relatives. Is he aware that since they were released from the embassy the hostages have been held in communicado and that the relatives have been denied access to them? I have in mind one particular case where the husband of one of the hostages—a 21 year-old married woman who has been married for less than a year—yesterday evening went to St. Stephen's Hospital, Fulham, waited from 8 o'clock until 11.30 at night, and was then told that his wife had been taken away to an unspecified destination; when permission was reluctantly given for him to speak to his wife on the telephone this morning—that was as far as he could get—and he asked her whether she could come home; she said that she was unable to do so because the police required them to remain in custody as witnesses. Therefore, it did not appear to him, at any rate, as though the witnesses had agreed voluntarily to remain in police custody indefinitely or until they had given their statements.
Is it not important that equal consideration should be given to the relatives of the hostages in a case of this kind, that they are entitled to the fullest possible explanation of what is happening and the reasons why their relatives are required to remain in custody? Should not the proper explanation be given to them that they are free to leave police custody if they wish to do so?
Lord BELSTEAD: My Lords, I am aware of the case about which the noble Lord, Lord Avebury, is talking because he has asked me about it. Those who have been discharged from hospital have been taken to a place where they are receiving medical care and are being well looked after. I understand that they have all expressed a wish to remain there until the police have taken detailed statements from them, but they are free to leave if they wish.
Lord MERRIVALE: My Lords, although I agree wholeheartedly with everything that has been said regarding the bravery, fortitude and patience of the police and the courage and skill of the SAS, I should like to ask two practical questions of my noble friend. First, is he aware that a very large area indeed has been cordoned-off, with a certain amount of inconvenience to the residents? Secondly, there is a fair amount of traffic chaos in Cromwell Road and Brompton Road; can he say when, in effect, this position will be eased?
Lord BELSTEAD: My Lords, I can quite understand the concern which my noble friend is expressing, and I am sure that the cordoning-off will be taken away as soon as possible.
Baroness WOOTTON of ABINGER: My Lords, while associating myself with all that has been said by way of sympathy and admiration, I should like to ask one question in further clarification of the legal point raised by the noble Lord, Lord Wigoder. I understand that one gunman is under arrest and is not in hospital. Did I understand the noble Lord, Lord Belstead, to imply that that gunman is liable to he prosecuted for any offence which would be open for prosecution had it been committed by a British national in the same way?
Lord BELSTEAD: Yes, my Lords.
Lord ORR-EWING: My Lords, now that this unfortunate incident has come to a successful conclusion, will my noble friend consider whether we are right to be quite so easy-going about admitting huge numbers of students from the Middle East to this country? Does this not cause a very considerable problem as regards security, in view of the high tempers at the moment in that part of the world, and the many differences of opinion and unfortunate incidents which have arisen? Is not this the time to consider whether these 10,000 Iranian students are all genuine students? Have they come here for genuine courses? Have they returned at the end of, or during, those courses? Are they here on language courses? Are some of them here as visitors? What applies to Iran also applies to a number of other countries in the Middle East. At this time ought we

1539
not to review the numbers of students from that part of the world who are here, and whether or not they are genuine?
Lord BELSTEAD: My Lords, it was with precisely those thoughts in mind—although, of course, Her Majesty's Government did not envisage what was going to occur—that we put into the immigration rules what we thought was a reasonable provision about the period of time during which students should be here if they are on genuine courses. So far as visas are concerned, in accordance with the Luxembourg Declaration of 22nd April, we have decided to suspend the Visa Abolition Agreement between the United Kingdom and Iran. The exact timing of that will be fixed shortly.

SOCIAL SECURITY BILL
Consideration on Report continued.
3.56 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 3:
Page 2, line 20, at end insert—
("(4) At the end of section 125(3) and section 126(1) of the Social Security Act 1975, there shall be inserted the words "and a report on the relationship between the weekly rates of retirement pension, invalidity pension, unemployment benefit and sickness benefit, on the one hand, and the general level of earnings obtaining in Great Britain on the other").
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Marshalled List. I think that this is an amendment which can be taken fairly briefly, and I see no objection that the Government can take in this particular matter. Your Lordships will know that the Bill abolishes the obligation to take earnings as well as prices into account in future up-ratings of pensions. At the Committee stage the Government refused to consider even a compromise proposal which would have maintained the long-term relationship between pensions and earnings while eliminating the ratchet effect of the present up-rating formula.
Ministers have said that it is their intention that pensioners will share in rising prosperity, when there is any prosperity to share in. But they have not
1540
said that pensioners will get the same percentage increase as other incomes; nor have they said by how much prosperity must increase before pensioners get a share in it, or even how the increase in prosperity will be measured, when earnings rose more than prices in the year to last November.
The amendment would not impose any obligation on the Government to increase the real value of benefits, but it would oblige the Secretary of State to make an annual report to Parliament on the relationship between benefits and earnings so that Parliament could decide whether benefit-recipients were being fairly treated in comparison with the working population. This seems to me to be a reasonable amendment—to ask the Secretary of State to make an annual report to Parliament on the relationhsip between benefits and earnings. I hope that it will be one which the noble Baroness the Minister will feel able to accept. I beg to move.
Baroness YOUNG: My Lords, I am glad that the noble Lord, Lord Wells-Pestell, has explained this amendment because when I first read it, it was not entirely clear. However, it would appear that at the time when the up-rating order is laid for pensioners, information which would enable a comparison to be made between the proposed new rates of benefits and the general level of earnings should be made to Parliament. The difficulty about that is that at the time when the up-rating order is laid—normally shortly after the Budget, and in any event several months ahead of the dates when the new rates will come into effect—the only earnings figures available would be those for a past period, and would be quite irrelevant for the intended purpose of making the relationship clear.
Therefore, as regards the comparison between earnings and short-term benefits, such as sickness benefit and unemployment benefit to which the amendment also refers, I think that it is only right for me to say that no Government, either a Conservative Government or a Labour Government, have ever proposed that these should be up-rated in line with earnings, and it is not our intention to do so at the present time in this Bill.
The purpose of this amendment is to enable a comparison to be made, at the

1541
time the up-rating order is laid, between the new benefit rates and the general level of earnings. But, as I have said, as the only earnings figures which would then be available would be for a past period the comparison would not be very helpful. If it is desired to make a comparison after the new rates have come into effect information about earnings in Great Britain is in fact available and can easily be obtained from sources such as the Department of Employment Gazette.
The noble Lord in moving his amendment asked a number of hypothetical questions. I can only say that I have indicated, and my noble friends have indicated, that it is our intention as the economy improves that old-age pensioners, along with everybody else, will benefit. Our record under the last Conservative Government speaks for itself. Between 1970 and 1974 prices rose by 40 per cent., earnings rose by 55 per cent., and pensions rose by 55 per cent. This was at a time when there was no obligation to keep pensions up either with prices or with earnings, whichever was the greater. When we did have an increase in prosperity we were able to help the pensioners, as quite rightly we should do.
I hope, therefore, that I have said enough to indicate that this amendment would not enable the kind of comparison which the noble Lord wishes to be made. We have discussed at length Government policy on this, and it is our view that pensions should keep up with prices, and that if the economy, as we hope it will, picks up, then pensioners will benefit. I have also said enough to show that our record shows that in the past we have been able to do more for pensioners than the minimum that is required, and we shall hope very much that we can do so again.
Baroness WOOTTON of ABINGER: My Lords, surely everything that the noble Baroness has said relating to earnings applies equally to prices, and that at the time when pensions are up-rated they are up-rated on a guess as to what the level of prices will be in November, about six months later. If this is an obstacle to keeping pensions level with earnings, it is equally an obstacle to keeping pensions level with prices, which I understand is the intention of the Government. It seems to me that her argument is exactly the same in both cases.
4.3 p.m.
Lord BANKS: My Lords, unless the old arrangement which this Bill abolishes is observed in practice, then over a period of time old-age pensioners must be worse off under the new arrangement than under the old. The Government say, nevertheless, that they hope that if there should be an increase in the general prosperity which would be measured by an increase in earnings, that the old-age pensioners will get a share of it.
It would seem to be implicit in the reasoning behind the Bill that they will not get as great a share as the earning portion of the community. Therefore, it is important to keep before the public the relationship between the benefits and average national earnings. That is the important thing. Not so much that we should attempt to carry out a kind of shadow estimating of what would be done if the old system were still working, but that we should have drawn to our attention every year what the benefits represent in percentage terms in relation to average national earnings; what percentage of national average earnings do they represent. In that way we could see whether they were falling back, and then this would make all the more urgent that the Government should do something as well as allowing for prices in their up-rating of benefits.
Lord RENTON: My Lords, surely what old-age pensioners want—and may I say that I speak as one—is to ensure that their standard of living keeps pace with the increases in prices. Old-age pensioners are not envious people. They do not wish to make a claim for an improved standard of living for themselves because of the accident—it may be a mere accident, and it may not necessarily be an accident to the national advantage—that in a particular year earnings happen to increase by an abnormal amount in that particular year. What they are interested in is their own standard of living; and the yardstick for deciding what they should have in order to achieve that aim is surely information about prices, and earnings should be regarded therefore as irrelevant.
Lord SHINWELL: My Lords, I apologise for intervening in this debate, but I want to declare an interest, and that is my reason and purpose. This concept of

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relating pensions to earnings, instead of being adopted in a general and comprehensive sense, might be applied to individual industries and persons concerned with those industries. For example, in the mining industry, where earnings are far in excess of those in other industries, the pensions of old-age miners and their dependants, wives and so on, are not related to earnings. I just mention that in passing.
I come to the matter of interest. I am an old-age pensioner. Anyway, if I am not old-age I am a pensioner. I should be delighted if my pension could be related to earnings. Whose earnings should I select? Obviously it can only be in the political arena. The earnings of my erstwhile colleagues in another place have bounded up enormously in comparison to what they earned when I was associated with them—perhaps I have no right to use the word "earned", it is what I received; whether I earned what I received is another matter—and if my pension was related to their earnings I would be receiving double what I do receive.
I want to ask the noble Baroness, who I know is very humanitarian in her principles, concepts, and general moral outlook, whether she could do something in the matter, so that people like myself—and I am speaking not only for myself; there are several other Members of your Lordships' House in a similar position—could receive pensions related to earnings in the political sphere. I should be quite content if we did not take into account people like Lord Chancellors, judges, Ministers of the Crown, but just the ordinary Member of Parliament. I should be quite content if something of that sort could be arranged.
4.8 p.m.
Lord WELLS-PESTELL: My Lords, I am sorry that the noble Baroness the Minister has not been more forthcoming. I would not press this matter but for the fact that she and her colleagues for weeks now have made a great play that when prosperity dawns it is their task to see that pensioners are going to get a share of that prosperity. But let us face the fact that prosperity is a long way off. Things are going to get much worse than they are at the present moment—and that
1544
is saying something! In the not too distant future we shall have to face up to a permanent 2 million or more of unemployed for whom we shall not be able to do anything other than give them financial help.
If this Government had not spent so much time shedding crocodile tears for the pensioners I should appear to be a little more reasonable than the House may think I am being, but what noble Lords do not appreciate is the level at which a large number of pensioners are not living but existing today. Perhaps I may be permitted to say—and I am not getting at anybody—that it does not behove anybody in your Lordships' House to declare an interest because they are in receipt of the State retirement pension. What really matters is whether that is the only income they have to live on, and I am perfectly certain it is not the only income they have to live on. It is difficult for noble Lords to place themselves in the position of a pensioner who has nothing else coming in and who must cut down his standard of living in order, for example, to have adequate heat to keep warm. I do not think a number of your Lordships appreciate the conditions under which these people are living, and because the relationship of the pension to average earnings is so low, they cannot be expected to enjoy the standard of living to which they are not only entitled but which they need to keep body and soul together.
I am sure the noble Baroness, Lady Young, will remind me, "Your Government did not do very much about it," but we were not shedding crocodile tears about the pensioners on every occasion. If this Government really want to do something, why do they not say, "we cannot do now what we want to do. We cannot raise pensions to the level we believe they should be. We cannot give the pensioners the lifestyle that men and women of 65, 70, 75 and 80, many of whom have worked hard for this country, should have, but we will see that an annual look is taken at the relationship between the level of pensions and earnings"? That is all the amendment asks for. I am not expecting anything dramatic. I am simply asking the Government to accept the amendment so that a new peice of machinery can be installed in the interests of the pensioners.
Baroness YOUNG: My Lords, noble Lords who have taken part in debating this amendment have recognised that we are in fact debating the point that was debated at length in Committee—namely, whether retirement pensions should, as the Bill proposes, have regard to prices, or should have regard to prices or earnings whichever is the greater. I recognise that those are not the precise terms of the amendment before the House, but I think that is the principle behind it. I would say at the outset that if all old-age pensioners did as well as the noble Lord, Lord Shinwell, none of them would need to worry at all, because to have the capacity to speak as fluently as he does is an object lesson to us all. The noble Lord was kind about me, but he does very well on his own without my help, if I may tell him that without any disrespect.
As a Government, we recognise—this is not just a question of repeating idle remarks—the importance of looking after retirement pensioners, of whom there are a great many in the population and some of them will undoubtedly not be well-off. Indeed, the reason why we have put so much emphasis on getting the economy right is of course that when the economy is not right it is always the poorest and worst-off who suffer most, and it is for that reason, if for no other, that there is everything to be said for making a great effort to get the economy right, so that all will benefit at any future time.
The noble Lord, Lord Wells-Pestell, said we were shedding crocodile tears and could give no guarantees. It is worth remembering not only the figures I gave when I spoke earlier about what happened to pensions under the last Conservative Government but also the fact that we introduced pensions for the over-80s and introduced the £10 Christmas bonus. I believe that both were possible because the economy improved and we were
therefore able to make small improvements. It is also worth remembering the enormous sums of money we are talking about. We should like to do more, but the whole social security programme currently costs about £20 billion a year, which of course includes other matters besides retirement pensions. It is about one-quarter of all public expenditure and it works out per year at the equivalent of £1,000 for every household in the country. We believe we are giving the help we can afford to pensioners and we wish to keep that where it is. We hope that as things improve we shall be able to do more.
For the benefit of the noble Lord, Lord Banks, and the noble Baroness, Lady Wootton of Abinger, who raised particular questions on this matter, it is possible to find out what annual earnings are doing, but of course what this amendment is asking for is annual earnings at the time of the up-rating, whereas the up-rating is fixed to the projected rate of inflation, so it is not quite a comparison of one with the other. It is possible, as I have indicated, for anybody to look at annual earnings, because they are published regularly, and it is possible to make that comparison should it be necessary. Our aim, which is quite clear, is to maintain pensions to keep up with prices and, as things improve, to do more than that. That is as far as I can go, but I believe that is a fair policy, a realistic one and one which we hope to keep to and improve upon. I hope the House will not accept the amendment.
4.17 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 79; Not-Contents, 103.

CONTENTS

Airedale, L.

Blyton, L.

Diamond, L.

Amherst, E.

Boston of Faversham, L.

Donaldson of Kingsbridge, L.

Ardwick, L.

Brockway, L.

Elwyn-Jones, L.

Avebury, L.

Bruce of Donninton, L.

Fisher of Rednal, B.

Aylestone, L.

Byers, L.

Fulton, L.

Bacon, B.

Collison, L.

Gaitskell, B.

Balogh, L.

Cooper of Stockton Heath, L.

Galpern, L.

Banks, L.

Crowther-Hunt, L.

Gardiner, L.

Barrington, V.

Cudlipp, L.

Gordon-Walker, L.

Beswick, L.

David, B. [Teller.]

Goronwy-Roberts, L.

Blease, L.

Davies of Leek, L.

Gosford, E.

Grey, E.

McNair, L.

Seear, B.

Hale, L.

Maelor, L.

Sligo, M.

Hampton, L.

Maybray-King, L.

Stewart of Alvechurch, B.

Hatch of Lusby, L.

Milverton, L.

Stone, L.

Henderson, L.

Northfield, L.

Strabolgi, L.

Hooson, L.

Oram, L.

Strauss, L.

Hunt, L.

Pargiter, L.

Taylor of Mansfield, L.

Jacques, L.

Peart, L.

Underhill, L.

Janner, L.

Pitt of Hampstead, L.

Wallace of Coslany, L.

Jeger, B.

Plant, L.

Walston, L.

Kaldor, L.

Ponsonby of Shulbrede, L. [Teller.]

Wells-Pestell, L.

Kilbracken, L.

Wigoder, L.

Kilmarnock, L.

Robson of Kiddington, B.

Wilson of Radcliffe, L.

Kirkhill, L.

Rochester, L.

Wootton of Abinger, B.

Leatherland, L.

Ross of Marnock, L.

Wynne-Jones, L.

McCarthy, L.

Sainsbury, L.

NOT-CONTENTS

Alexander of Tunis, E.

Exeter, M.

Morris, L.

Allerton, L.

Ferrers, E.

Mowbray and Stourton, L.

Alport, L.

Fortescue, E.

Newall, L.

Amory, V.

Fraser of Kilmorack, L.

Northchurch, B.

Ampthill, L.

Galloway, E.

Nugent of Guildford, L.

Argyll, D.

Geoffrey-Lloyd, L.

Orr-Ewing, L.

Auckland, L.

Gisborough, L.

Piercy, L.

Avon, E.

Glenarthur, L.

Porritt, L.

Bellwin, L.

Gowrie, E.

Redmayne, L.

Belstead, L.

Gridley, L.

Renton, L.

Bessborough, E.

Grimston of Westbury, L.

Robbins, L.

Birdwood, L.

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

Rochdale, V.

Caccia, L.

Romney, E.

Camoys, L.

Hanworth, V.

St. Davids, V.

Campbell of Croy, L.

Henley, L.

St. Germans, E.

Cathcart, E.

Hill of Luton, L.

Sandys, L. [Teller.]

Clifford of Chudleigh, L.

Holderness, L.

Sharples, B.

Clwyd, L.

Hood, V.

Somers, L.

Cockfield, L.

Hylton-Foster, B.

Spens, L.

Cork and Orrery, E.

Inglewood, L.

Stamp, L.

Cottesloe, L.

Jeffreys, L.

Strathclyde, L.

Cranbrook, E.

Kimberley, E.

Strathspey, L.

Cullen of Ashbourne, L.

Kinloss, Ly.

Teviot, L.

Daventry, V.

Lindsey and Abingdon, E.

Thorneycroft, L.

Davidson, V.

Long, V.

Trefgarne, L.

de Clifford, L.

Lonsdale, E.

Trenchard, V.

De Freyne, L.

Loudoun, C.

Vaux of Harrowden, L.

Denham, L. [Teller.]

Lyell, L.

Vickers, B.

Derwent, L.

Macleod of Borve, B.

Vivian, L.

Drumalbyn, L.

Mancroft, L.

Westbury, L.

Ebbisham, L.

Mansfield, E.

Willoughby de Broke, L.

Eccles, V.

Marley, L.

Wolverton, L.

Ellenborough, L.

Massereene and Ferrard, V.

Wrenbury, L.

Elliot of Harwood, B.

Merrivale, L.

Young, B.

Emmet of Amberley, B.

Monson, L.

Resolved in the negative, and amendment disagreed to accordingly.

Schedule 1 [Amendments of Social Security Act 1975]:
4.26 p.m.
Baroness FISHER of REDNAL Baroness FISHER of REDNAL moved Amendment No. 4:
Page 27, line 26, at end insert—
(".In paragraph 2 of section 36 leave out the words after 'full-time education' and in paragraph 7 of section 36 leave out the words 'as incapable of performing normal household duties'.").
The noble Baroness said: My Lords, I beg to move Amendment No. 4 on behalf of my noble friend Lord Wells-Pestell. I hope that the remarks I shall make on Amendment No. 4 regarding equality of the sexes will be taken by noble Lords as being applicable to the further amendments that I shall be moving. The basis of the amendments is to provide for equality between the sexes. With regard to the amendment now before the House, I wish to make the point that I recognise quite clearly that in some respects the Bill perhaps goes farther than one would expect the Government to go, but it does

1549
not go as far as women, and those actively interested in women's problems, would want it to go.
Many of the changes regarding sex equality arise from an EEC Directive which is very broad in its scope and therefore allows member countries to exclude certain matters. In relation to this particular amendment, I wish to ask the Government which clause they are using for the purposes of exclusion. I hope that they will give the reasons involved, and will justify them, and that perhaps they will give a date as to when they are to consider the possibility of review, as is desirable under the EEC regulations.
I should say to the Government that one is disappointed that in this Bill sex equality is not at all apparent even though there were long debates in both this and the other House on the Sex Discrimination Act. I know full well that matters regarding social security benefits are not covered under the Sex Discrimination Act. I spoke in the other House on that Act and I have read the debates that took place in your Lordships' House, and I recall that it was pointed out quite clearly that legislation alone would not bring about equality for women, but that it would go a long way towards creating public opinion in favour of such equality. I believe that it behoves the Government to create more public opinion in favour of sex equality, and they can do so only in legislation of this kind, where we cut out further discrimination
To return to Amendment No. 4, under this amendment we hope to remove the special test that is applied to married women who claim invalidity pension, which is known as the housewife's noncontributory invalidity pension. There is no need for me to remind this noble House that the non-contributory invalidity pension is available to people of either sex who are incapable of work. However, married women have to comply with an additional test. They have to do something more than married men, single men and single women. They have to comply with the test that they must be "incapable of performing normal household duties". Whichever noble Lord is to reply to the amendment, I should like the Government to say what they feel is included in the definition of "normal"
1550
housework, because it is true to say that many of the tasks that married women have to undertake are very strenuous, and are not just pushing the vacuum cleaner and flicking the feather duster around the house.
If married men can do the tasks around the house and still claim invalidity pension—and many married men now perform a great many household tasks; more so, perhaps, than they did 10, 15, 20 or 25 years ago—why should married women have to go through this kind of second leg to get the pension? This is an added difficulty that the married woman has to meet before she can get the pension, unlike a male or single woman.
I know that perhaps my own party were not fully sympathetic to this view, though I would have said that all the women Members in the other House were very sympathetic to it. I would point out that a very small number of women are concerned, because, if one is looking towards the future, the majority of women in this country who are working—and that is, I think, two-thirds of the women—will be covered by payments that they have already made into the National Insurance Fund. So this group of women that we are talking about now is very small in number, and cannot possibly, I should imagine, increase in size. It is on the ground of equality that I beg to move this amendment.
Baroness SEEAR: My Lords, I should like very strongly to support this amendment. It is certainly in line with the spirit of the Directive. Of course, the Directive in Article 6, provides loopholes, but it is very much to be hoped that this country—which, after all, took the lead in Europe in developing sex equality—will not hide behind this article and drag its feet. It is, as the noble Baroness, Lady Fisher, has said, only a relatively small number of people, and the costs would be slight. Surely, on this point the Government can meet the amendment.
Lord CULLEN of ASHBOURNE: My Lords, the effect of this amendment would be to abolish the "household duties" test for married women claiming non-contributory invalidity pension, or NCIP. NCIP is an income maintenance benefit. Its conditions are designed to

1551
concentrate the limited resources available on those most in need. Married and cohabiting women have their partners' income to support them when they cannot work. But, as the 1974 report Social Security Provision for Chronically Sick and Disabled People explained, families in which the housewife can do neither paid work nor her housework are seriously disadvantaged. The household duties test enables that group of people to be identified, and so make NCIP available to them.
There are presently almost 43,500 married women receiving NCIP, at an annual cost of about £31 million. To abolish the household duties test would cost about an extra £170 million at current benefit rates, and in the present economic situation this cannot have a high priority. Quite apart from this, your Lordships will be aware that the National Insurance Advisory Committee are at present considering certain issues relating to housewives' NCIP, referred to them by the predecessor of my right honourable friend the Secretary of State. They have received a great deal of evidence and representations, many dealing with the household duties test, and my right honourable friend is expecting their report within the next month or so. It would be discourteous to the committee, to say the least, if we did not wait to hear what they have to say; they have given a great deal of time and thought to the matter. I would therefore ask your Lordships not to support this amendment.
Baroness FISHER of REDNAL: My Lords, while I thank the noble Lord for that reply—and I fully appreciate that the committee has been deliberating for quite some time regarding the household duties test—may I conclude from his remarks that, after receiving that report, he might then take into consideration that which the EEC Directive says as to the periodical examination of these kinds of disadvantage to women? Can we have an assurance from the noble Lord that on receipt of the report on household duties he may perhaps more sympathetically consider a periodic examination of this pension? I listened to what the noble Lord said about the cost, but one would have thought that that would not increase but would be a decreasing cost to the Government.
1552
I want to say that this is an important amount of money to a small group of women who feel that they are not able to contribute fully to the household because they cannot work. This little amount—I think it is £7 or £8 a week—is an amount which gives them that little bit of independence; some money of their own so that they can pay somebody to do the tasks that they cannot perform themselves.
Lord CULLEN of ASHBOURNE: With the leave of the House, perhaps I may say that I have fully taken the noble Baroness's point. My Lords, £7 a week may be a small amount of money, although very important to the person concerned, but £170 million is a very large sum of money at this stage.
Lord BANKS: My Lords, I wonder whether the noble Lord could explain to us how the Government calculate the £170 million extra which they feel would result from the abandoning of this test? On what sort of evidence is this based?
Lord CULLEN of ASHBOURNE: My Lords, I am very sorry but I am afraid I cannot give a breakdown of that figure. I take it as the correct figure, it being that which I have been given by the department.
Baroness FISHER of REDNAL: My Lords, with the permission of the House, may I ask for an answer to my particular question about a periodic review, as is required under the EEC Directive?
Lord CULLEN of ASHBOURNE: My Lords, I would be very glad to give that assurance if I was able to, but it is really up to my right honourable friend the Secretary of State and I am afraid I am not in a position to give that assurance.
Baroness SEEAR: My Lords, with the permission of the House, may I ask the noble Lord the Minister whether, if he does not know how the arithmetic is done, he will ask his department and let us know? Because it is rather taxing our faith to ask us to believe that it really amounts to so high a figure as the noble Lord has given. One would like to know on what assumption that is based.
Lord CULLEN of ASHBOURNE: My Lords, I fully understand what the noble Baroness says, and I promise to write to

1553
the noble Lord, Lord Banks, with the figures and the proper breakdown.
Lord WELLS-PESTELL: My Lords, in that case, if I were to advise my noble friend—and I am not so sure that she will take the advice—not to press this amendment at this stage (there is always Third Reading), will the noble Lord undertake to let her have a reply not only to the question asked by the noble Baroness, Lady Seear, but to the questions which my noble friend has put? She asked two of them.
Lord CULLEN of ASHBOURNE: I certainly will, my Lords.
Baroness FISHER of REDNAL: My Lords, with the leave of the House, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.39 p.m.
Baroness FISHER of REDNAL Baroness FISHER of REDNAL moved Amendment No. 5:
Page 27, line 26, at end insert—
(".In subsection (3) of section 37 leave out the words from "and a woman shall not be entitled to any such allowance" and leave out paragraphs (a) and (b).").
The noble Baroness said: My Lords, I beg to move Amendment No. 5 on behalf of my noble friend Lord Wells-Pestell. This, again, is another provision which discriminates against married women. I find it hard to understand that this Government, which depend so much on the married women's vote, do not really, in practice, do very much when they are given the opportunity to be more helpful towards them. This is a discrimination against married women caring for invalids and themselves invalids. Married women are not entitled to claim an invalid care allowance, as I understand it; but single men and women and married men are able to do so.
It is rather difficult for us to understand the argument that is put up against being able to give the invalid care allowance to a married woman. I know that the assumption is that married women do not give up jobs to care for the elderly and handicapped. The handicapped must be defined as invalids and severely disabled; and the assumption that married women do
1554
not give up jobs of work to do this very worthwhile task for their relatives is to me completely erroneous. Because of the assumption that married women do not give up jobs, it seems to me that they are discriminated against.
I should like to know on what basis the Government are using this particular discrimination. If a single man or married man gives up his job to look after his father he is able to qualify. If a married woman gives up a job to look after her mother (or, for that matter, her father) she would not be able to qualify. It is difficult for us to understand why this inequality should exist, and therefore I beg to move Amendment No. 5.
Baroness SEEAR: My Lords, the House will remember that when the invalid care allowance was introduced, an attempt was made to include married women in the benefit. The Government at that time, the Government of the party now in Opposition, said that they could not see their way to do it but that they would look at it. Surely the time has come when, as the noble Baroness, Lady Fisher, has said, this plain discrimination against an important section of women should be removed. The allowance is an economy to the country because, by having someone staying at home to look after a person who is severely ill—and it is only if someone is severely ill that the invalid care allowance can be paid—that invalid person is kept out of a very expensive institution.
The idea that a married woman will not be giving up a job is surely erroneous. We know the figures of married women who are earning. I would make the point that where a married woman is staying at home to look after a severely-ill husband, it is highly probable that that severely-ill husband has been severely ill for some time and that she has been the main breadwinner. Secondly, where she is giving up work in order to look after a parent, she is quite likely to be a widow or someone who has been able to work; because she will then be free to look after an elderly parent. She is much less likely to be able to do so if she is herself a wife looking after her husband. It is very probable therefore that the kind of married woman who would be qualified for an invalid care allowance is, in fact, working and therefore will lose her

1555
earnings in order to do this task, a task which is a benefit not only to the elderly person but to the State and to the economy.
It can be but a very small number involved. Surely, the Government can meet this point. The invalid care allowance has not been taken up in vast measure, as we know. It involves a very small number of people; but a small number who are doing a very worthwhile job. If they do not get this allowance, they will be doing it at considerable cost to themselves.
Lord SANDYS: My Lords, I have listened with interest to the amendment moved by the noble Baroness, Lady Fisher of Rednal, supported by the noble Baroness, Lady Seear. A very similar amendment was moved in Standing Committee "E" of another place on 12th February this year. This amendment refers to the invalid care allowance, a benefit which, as the noble Baroness has pointed out, is not payable under the law as it stands to a woman residing with her husband, or if she is living with a man to whom she is not married but they are living as man and wife.
Baroness FISHER of REDNAL: My Lords—
Lord SANDYS: My Lords, perhaps I may finish the paragraph. The amendment would remove those restrictions so that the invalid care allowance would be available to women in that position.
Your Lordships will be aware that this allowance is intended as an income maintenance benefit. As such, its conditions have been designed to concentrate the limited resources available on those men and single women who, in the main, have little or no other income to support them because they are caring for a severely disabled relative. Both noble Baronesses referred to this situation. On the other hand, it must be remembered that women who benefit from this amendment already have their partners' incomes to support them. Where it is the partner who is being cared for, he will often be receiving an increase of benefit for care, an increase which, I am advised, could not be paid as well as the invalid care allowance which in most cases it will equal in amount.
Baroness FISHER of REDNAL: My Lords, I am sorry to have interrupted the noble Lord. I was not really following his remarks on cohabitation and all that. I could not see the argument he was putting forward until he came to the last sentence. I apologise for getting up too quickly.
Following on what the noble Lord has said, I understood from reading the proceedings in the other place that the estimated cost of introducing this was a very small amount—roughly between £23 million and £36 million—an amount which takes into consideration what the noble Baroness, Lady Seear, has said: that the number of women that this applies to is very small. As the noble Baroness, Lady Seear, has said, it is really a great saving to the National Health Service if people themselves (especially the wives or daughters who are married) are able to carry out this task. Perhaps we should be paying them much more instead of nothing at all.
Lord SANDYS: My Lords, I would remind the noble Baroness that as we are on Report stage I have to speak with the leave of the House. With your Lordships' permission I will continue. In response to the intervention of the noble Baroness, I have read the remarks of my right honourable friend, Mr. Prentice, the Minister for Social Security. The noble Baroness is quite right when she refers to the estimate which my right honourable friend gave. His words were—and I quote from col. 381 of the Commons' Official Report of 12th February:
"The estimated cost for a full year would be between £23 million and £36 million."
Unfortunately, it is very difficult to estimate the cost of this amendment since there is no way of accurately determining the number of women who would be eligible for benefit. The cost could, however, be as much as £40 million in a year; and sums of this order are simply not available. Moreover, this money would be going to a group of people who are largely provided for in other ways if they are caring for a disabled relative. I must therefore, with regret, say that the Government are unable to accept this amendment.
Baroness SEEAR: My Lords, with the leave of the House, may I make a comment on a remark made by the Minister? He said that a married woman who was giving up work would not be very much better off because the person for whom she was caring could get additional payment. I think I understood aright. The noble Lord said that the invalid—not because the married women had given up work—would get an additional sum. He said that the married woman would be no better off by getting a grant because the invalid would have received it. Perhaps the noble Lord would look at what he said. I think what he said was to that effect.
Lord SANDYS: My Lords, we are in considerable difficulty on Report because at this stage we may speak only once. Therefore, I should have to seek the leave of the House. With regret I say to the noble Baroness that I cannot give her a satisfactory answer at this stage. The best course is to communicate with the noble Baroness through the post, and it will be for the benefit of the Report stage if I do so.
4.51 p.m.
On Question, Whether the said Amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 73; Not-Contents, 109.

CONTENTS

Airedale, L.

Gaitskell, B.

Phillips, B.

Amherst, E.

Galpern, L.

Pitt of Hampstead, L.

Ardwick, L.

Gardiner, L.

Ponsonby of Shulbrede, L. [Teller.]

Aylestone, L.

Glenamara, L.

Bacon, B.

Goronwy-Roberts, L.

Robson of Kiddington, B.

Balogh, L.

Grey, E.

Rochester, L.

Banks, L.

Hale, L.

Ross of Marnock, L.

Blease, L.

Hampton, L.

Sainsbury, L.

Blyton, L.

Hatch of Lusby, L.

Seear, B.

Boston of Faversham, L.

Hooson, L.

Shinwell, L.

Brockway, L.

Jacques, L.

Stone, L.

Bruce of Donington, L.

Janner, L.

Strabolgi, L.

Byers, L.

Jeger, B.

Strauss, L.

Chitnis, L.

Kaldor, L.

Taylor of Mansfield, L.

Collison, L.

Kilbracken, L.

Thomson of Monifieth, L.

Cooper of Stockton Heath, L.

Kilmarnock, L.

Underhill, L.

Crowther-Hunt, L.

Kirkhill, L.

Wallace of Coslany, L.

Cudlipp, L.

Leatherland, L.

Walston, L.

David, B. [Teller.]

McNair, L.

Wells-Pestell, L.

Davies of Leek, L.

Maelor, L.

Whaddon, L.

Diamond, L.

Meston, L.

Wigoder, L.

Donaldson of Kingsbridge, L.

Northfield, L.

Wilson of Radcliffe, L.

Elwyn-Jones, L.

Oram, L.

Wootton of Abinger, B.

Fisher of Rednal, B.

Paget of Northampton, L.

Wynne-Jones, L.

Fulton, L.

Peart, L.

NOT-CONTENTS

Airey of Abingdon, B.

Cockfield, L.

Fraser of Kilmorack, L.

Alexander of Tunis, E.

Cork and Orrery, E.

Galloway, E.

Allerton, L.

Cottesloe, L.

Gisborough, L.

Alport, L.

Craigavon, V.

Glenarthur, L.

Amory, V.

Cullen of Ashbourne, L.

Gowrie, E.

Ampthill, L.

Daventry, V.

Greenway, L.

Argyll, D.

Davidson, V.

Gridley, L.

Atholl, D.

de Clifford, L.

Grimston of Westbury, L.

Auckland, L.

De Freyne, L.

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

Avebury, L.

De La Warr, E.

Avon, E.

Denham, L. [Teller.]

Halsbury, E.

Balerno, L.

Drumalbyn, L.

Hanworth, V.

Bellwin, L.

Dundee, E.

Harmar-Nicholls, L.

Belstead, L.

Ebbisham, L.

Henley, L.

Bessborough, E.

Eccles, V.

Hill of Luton, L.

Bolton, L.

Ellenborough, L.

Holderness, L.

Caccia, L.

Elliot of Harwood, B.

Hylton-Foster, B.

Camoys, L.

Emmet of Amberley, B.

Inglewood, L.

Campbell of Croy, L.

Exeter, M.

Kimberley, E.

Cathcart, E.

Ferrers, E.

Kinloss, Ly.

Clifford of Chudleigh, L.

Fortescue, E.

Lindsey and Abingdon, E.

Long, V.

Onslow, E.

Spens, L.

Loudoun, C.

Orkney, E.

Stamp, L.

Lyell, L.

Orr-Ewing, L.

Strathcarron, L.

Macleod of Borve, B.

Pender, L.

Strathclyde, L.

Mancroft, L.

Porrit, L.

Strathspey, L.

Mansfield, E.

Redmayne, L.

Teviot, L.

Marley, L.

Renton, L.

Trefgarne, L.

Massereene and Ferrard, V.

Renwick, L.

Trenchrad, V.

Merrivale, L.

Rochdale, V.

Vaux of Harrowden, L.

Milverton, L.

Romney, E.

Vickers, B.

Monk Bretton, L.

St. Davids, V.

Vivian, L.

Mowbray and Stourton, L.

St. Germans, E.

Westbury, L.

Netherthorpe, L.

Saint Oswald, L.

Willoughby de Broke, L.

Newall, L.

Sandys, L. [Teller.]

Wolverton, L.

Northchurch, B.

Sharples, B.

Young, B.

Nugent of Guildford, L.

Somers, L.

Resolved in the negative, and amendment disagreed to accordingly.

5 p.m.
Baroness FISHER of REDNAL Baroness FISHER of REDNAL moved Amendment No. 6:
Page 27, line 27, leave out ("sections 44(3)(a) and 47(1)(a) (which provide") and insert ("section 44(3)(a) (which provides").
The noble Baroness said: My Lords, on behalf of my noble friend Lord Wells-Pestell I beg to move this amendment, and may I also speak to Amendments Nos. 7, 8 and 9. In moving the amendment, what we require is the same test for male and female beneficiaries claiming invalidity pension for their spouses. At the moment female beneficiaries are again in a lesser position. While accepting that the Bill goes some way towards the equalising treatment, in this case it is very much less favourable because it sets a ceiling upon the husband's earnings. If he earns above this ceiling his wife may not claim for him. This is part of what is called the tapered earnings rule; that is, the dependant's increase is reduced according to the amount of earnings applicable under another clause of the Bill. While we say "thank you" because this factor has been recognised in the pensions part of the Bill, it is not taken into consideration in this particular part. Therefore, we are asking that equality shall once again prevail.
We ask the Government to recognise quite clearly that, as women are now being called upon to pay an equal amount of money for national health insurance stamps, they should also be able to look forward to equal benefits. They are not asking for any special treatment, but exactly the same value for money as men get for their national health contributions. I would ask, therefore, that this should be considered quite seriously by the
1560
Government. The other amendments which will follow are again on equality and the use of the word "spouse" instead of the words "wife" or "husband". I beg to move Amendment No. 6.
5.1 p.m.
Baroness YOUNG: My Lords, as the noble Baroness, Lady Fisher, in moving this amendment, also spoke to Amendments Nos. 7, 8 and 9, I think it will be for the convenience of the House if I reply to all four amendments at the same time. I was glad that the noble Baroness made it clear that she was grateful for the steps that we have been able to take under this Bill to give equal treatment for men and women. We are doing so under the EEC Directive. but we are going slightly further than the Directive requires us to do. In fact, just to reassure myself and to remind myself of what the noble Baroness, Lady Lockwood, said on this matter on Second Reading, I looked up col. 1283 of Hansard for 1st April 1980, where she says:
"Nevertheless, I should like to thank the Government for some of the things that have been included that they intend to do".
Then she goes on to list a number of things which are improvements.
Of course, having given some improvements, one recognises that the argument promptly moves on: "You haven't done enough". I suppose that is the kind of argument which can be applied almost indefinitely in relation to social security matters, because these things are relative and no doubt one could almost always do more. However, the fact is that if the Government were to agree to the particular amendments we are debating now, the cost would be substantial. It would, we believe, certainly go far beyond our

1561
commitment under the EEC Directive on equal treatment. Indeed, the effect would be to remove all differences in the treatment of wives and husbands as dependants of spouses receiving either invalidity or retirement pensions. The amendments would go a long way beyond the proposals of the Bill, and consequently we believe that they would entail a considerable cost. It is difficult to quantify it precisely, but we believe it would be at least £10 million in a full year and possibly considerably more.
It may be helpful, therefore, in order for the House to understand this cost if I were to give our reasons why we cannot agree to these particular amendments at this time. At present a wife cannot get an increase of retirement pension in respect of her husband, although she can get an increase of invalidity benefit. The qualifying condition for an increase of invalidity benefit is that the husband must be economically incapable by reason of illness or disability of prolonged duration. This has been criticised because it does not allow for the case where the wife is the principal breadwinner and where a couple have deliberately chosen for the wife and not the husband to be the main breadwinner.
There has for quite some time been agreement between the parties that this should in all fairness be remedied so as to allow spouses to organise their domestic circumstances in this way if they should wish to do so. We are therefore proposing to substitute a test of earnings for this test of economic capacity; but the test of earnings we have chosen is the test as it applies to wives other than those who reside with an invalidity pensioner husband. It is a test of economic dependency. The higher (now £45 a week) earnings rule for retirement pensioners' wives was extended to the wives of invalidity pensioners when invalidity benefit was introduced in 1971; but to help wives of men who had become, through sickness, unable to maintain their families, take on a breadwinner role to the extent that their circumstances would allow.
A wife who got a job with only slightly better earnings than the dependency benefit would, under the pre-1971 rules, see her contribution to the family budget whittled down because of the the loss of the dependency increase, to the amount
1562
by which her take-home pay exceeded the amount of the increase. There were some quite lowly-paid jobs, many on a casual basis, available to married women. The earnings rule, which was set in 1971 at £9.50 a week—just slightly above the average part-time female earnings at that time—provided for the gradual withdrawal of the dependency increase and so, within limits, a wife who did not have a substantial job could add all or most of her earnings to her husband's income. Obviously this would very much affect their standard of living in difficult circumstances.
The same argument does not apply to husbands of wives claiming invalidity benefit, because they would not usually be economically inactive at the time when the wife became incapable of work. If, therefore, in real terms the earnings rule had remained at 1971 levels, few wives could have benefited by the amendment now proposed. The earnings rule has risen to £45 and would have risen further but for the fact that it is agreed to be excessive for dependency purposes and is being held at the 1978 level until it again becomes a reasonable test of dependency. At this level, extending the rule would merely subsidise families in reasonable circumstances already. Since under the EEC Directive we are not bound to change the dependency test for invalidity pensioners even to the extent we propose, we believe that it would not be right to incur even more substantial expenditure by copying a provision, the social purpose of which is at best questionable.
The amendment also seeks to make dependency increases for a husband available to a women retirement pensioner. It is here that the major cost arises, because a significant number of women who are over retirement age—that is 60 for women—will have a husband under retirement age—that is 65—who has taken his occupational pension but is not yet entitled to a State pension. If he had a State pension that would, of course, prevent payment of a dependency increase. Therefore we do not think it is right to take a deliberate measure to subsidise couples in this situation, quite apart from the cost of the proposals. As your Lordships know, married women cannot provide a retirement pension on their contributions for their husbands; and we believe that there is no case for treating a

1563
husband as his wife's dependant if he happens to be below retirement age and not yet entitled to his own retirement pension.
I have explained this point in some considerable detail to the House because it is important. I recognise the reasons of the noble Baroness for raising it. If there are points of detail on which she would like me to write, I shall, of course, do so. But I hope she will accept that lengthy explanation, that we have gone as far as we can in this Bill in fulfilling our obligations under the EEC Directive, and doing slightly more, but that in the present financial circumstances that is as far as we can go.
Baroness FISHER of REDNAL: My Lords, I thank the noble Baroness for a very long and detailed reply, which was rather complicated. I often wonder whether the beneficiaries who make these claims understand how complicated they are. They are most complicated for us who try to understand them, never mind the people who have to make claims. But I thank the noble Baroness for her remarks, and one looks forward to the fulfilment of the equal opportunities Directive of the EEC. I accept her reply and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 to 9 not moved.]
5.11 p.m.
Baroness FISHER of REDNAL Baroness FISHER of REDNAL moved Amendment No. 10:
Page 28, line 13, at end insert—
("In paragraph 3(c) of section 44, at end insert "providing that such conditions shall treat male and female beneficiaries the same, regardless of the sex of the beneficiary and the sex of the person caring for the child",").
The noble Baroness said: My Lords, I shall speak to Amendments Nos. 10, 11 and 12 together. This is another complicated set of amendments which apply to cohabitees who are caring for children. The noble Baroness will perhaps explain the position much more clearly than I can, but the difficulty seems to arise that when a man claims for a woman cohabitee, or an unmarried woman with whom he is living who cares for a child for whom he may also claim, he can claim
1564
the full benefit for her. But when a woman claims for a man with whom she is living, who cares for a child for whom she may also claim, she may not claim at all if the man's earnings exceed the benefit.
Here, again, all kinds of difficulties arise because of women's earnings and men's earnings. The same arguments as are used on the tapered earnings rule, regarding the spouses of invalidity pensioners apply particularly to cohabitees caring for children. I know that it is a difficult question, and all I would say is that what we have been trying to do this afternoon is to draw the attention of the Government to the fact that there is discrimination.
What we are being told is that the discrimination must still persist, because of the economic situation of the country. One would feel happy if those on the Government Benches would say, "As soon as we have solved the economic situation of the country, we shall have no hesitation in rushing forward with all these things that do away with inequality for women." If they could give us that assurance, I might not be pressing this amendment so strongly.
But it is important for us to recognise that the exclusions which we have been discussing this afternoon, and this one, are denying full equality for women in social security. These exclusions are options that are being used by the Government, and they are not requirements under the EEC Directive. Once again, one hopes that at some future date, sooner rather than later, we shall have legislation which really gives full equality to women and not the so-called sufferance that so many women have to put up with. My Lords, I beg to move.
Baroness YOUNG: My Lords, I have listened to what the noble Baroness, Lady Fisher, has said and, in the interests of historical accuracy, I should say that we are not doing away with any measures of equality that may formerly have existed. There has always been, I regret to say, this inequality between the sexes. We have improved the situation in regard to a great deal of what is in this Bill. We have not gone so far as the noble Baroness would like, or as many of us would like, but that is for the reasons I have given.

1565
But I think we ought not to suggest that we are taking away something that existed before. That is not the case and it is only right to put that on the record.
The noble Baroness moved Amendment No. 10, but spoke also to Nos. 11 and 12. I might begin by saying on Amendment No. 10 that I am glad to be able to assure her that the changes that are being made under this Bill to Clause 44(3)(c) are such that the intention of this amendment will be fully achieved in relation to the short-term benefits. It is already the case that male and female beneficiaries can, if entitled to an increase of benefit for a child, claim an increase for a person who has the care of the child under otherwise identical conditions, the chief of which is that benefit is not being paid for another adult dependant, but we will now make it possible for a person of either sex to qualify as the dependant. So that so far as her first amendment is concerned, we are actually meeting the point under the Bill.
As regards Amendments Nos. 11 and 12, I agree with the noble Baroness that this is a rather complicated area, which introduced me to the term of "child carer" for the first time. But I shall attempt to set out the position and I hope that that will clarify it for her. The legislation in the area of dependency is, as I have said, very complicated and is not easy to understand. The effect of Amendment No. 11, as drafted, would merely be to remove our power to make regulations so as to prescribe an earnings rule comparable to that which affects the wife of a pensioner who resides with him and earns over £45 a week. We would then have to make another earnings rule under the power in Clause 46(3), which would have to be that earnings over £14 disqualified the child carer as a dependant. That, it is true, would achieve equality between child carers of both sexes, but it would, in fact, have the effect of removing an existing entitlement.
A child carer—which is the new term which I understand one must use in this connection—is something of a hybrid creature and this is what causes a lot of the difficulty. Some people merely see the term as a polite reference to a cohabitee, while the regulations, in fact, make express provision, even for a non-resident child minder undertaking her—or, in
1566
future, his or her—caring function on a commercial basis. The truth is somewhere between the two extremes. The addition to benefit represents extra money available to a beneficiary, who is responsible for a child and needs to employ someone to look after the child.
Sometimes this employment, if I may call it that, arises out of cohabitation; indeed, a man in these circumstances often qualifies only because he has assumed full responsibility for the children of the woman concerned. But it can equally be employment of a nanny; indeed, most of the case law we have arose in the context of the employment of female child carers by widows, when there was still an earnings rule for widows, and expense incurred in arranging for the care of children by a working mother was an important consideration. The Act allows us to deal with the earnings of a female child carer who resides with a beneficiary as if she were his wife. This is probably apt in the majority of cases. The effect of the amendment would prevent us from doing this, and as I am sure that that is not what the amendment is designed to do I hope that the noble Baroness will understand the explanation in this case.
So far as Amendment No. 12 is concerned, we believe that it is, in effect, academic. An unemployability supplement is an increase in the rate of an industrial disablement pension payable to someone who as a result of the relevant loss of faculty is likely to be permanently incapable of work. It is payable at the same rate as a national insurance invalidity pension and attracts dependency benefits under similar conditions. There are fewer than 400 current awards, mostly payable without dependency increases. Although I do not know this for certain, it is almost probable that none is in payment for a child carer.
In these circumstances, we believe it would be wrong to seek to impose different dependency rules, even if they need never be applied. I hope therefore that in this, as the noble Baroness has said, rather complex world she will recognise that the Bill meets the case of Amendment No. 10, that Amendment No. 11 would have consequences which I do not believe she would wish to see, and therefore should be withdrawn, and that Amendment No. 12, to the best of our knowledge, does

1567
not cover any case. The argument would be that it might cover a case in the future. For these reasons, I hope that the noble Baroness will feel able to withdraw her amendments.
Baroness FISHER of REDNAL: My Lords, may I thank the noble Baroness for her very generous reply. I wonder whether she would write to me regarding the position of the one parent family woman who is not cohabiting—not living with anybody—but who might fall into this category. I am not now asking the noble Baroness to define a caring person. Would it be somebody who was helping a one parent family woman who was trying to work and keep her child herself and not rely upon social security benefits, thus justifying her in making a claim? May I ask the noble Baroness to write to me about that? I am a little disturbed that the regulations that are before us this afternoon are subject to the Negative Resolution procedure. Sex discrimination should be subject to the Affirmative Resolution procedure so that we can all see the progress made in regard to discrimination. Very often it is on the fine details of the regulations that discrimination creeps in. I beg leave to withdraw Amendment No. 10.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 and 12 not moved.]
5.23 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 13:
Page 28, line 47, at end insert—
(". In section 167(1)(a) (which provides for parliamentary control of orders and regulations), after the words "section 20(3) (additional conditions and restrictions as to certain benefits) there shall be inserted the words" sections 41 to 49 (child dependants and adult dependants)".")
The noble Baroness said: My Lords, this amendment ought to appeal to the noble Baroness the Minister, in that its great merit is that it does not ask for any money. Therefore it may be difficult for the noble Baroness to find a reason for rejecting it. The amendment takes up the point which has just been made by the noble Baroness, Lady Fisher of Rednal. For a much wider range of benefits, it simply asks that regulations should be subject to the
1568
Affirmative Resolution procedure and not to the Negative Resolution procedure. As the noble Baroness, Lady Fisher of Rednal, said a moment ago, it is in the detail of the regulations that the real substance of the matter lies. It is the question of how much is going to be given to the various parties that is of real concern.
I should have thought that since the heart of the matter is the quantity to be paid, it is reasonable to ask that all the benefits listed in this regulation should be subject to affirmative action. This is partly because of the importance of the size of the benefit. Also, as the amendments moved by the noble Baroness, Lady Fisher of Rednal, have illustrated and as the noble Baroness, Lady Young, has agreed, there is today in our social security legislation openly and avowedly an element of discrimination. As the noble Baroness, Lady Young, has said, it is true that some moves are being made towards the elimination of this discrimination. We want it to go further and, if possible, faster. It will be in the terms of the regulations that we shall see whether progress is being made. It will not cost any money. It will not even take a great deal of time. But it is a very important safeguard to make sure that we are moving in the right direction. I beg to move.
Baroness YOUNG: My Lords, the noble Baroness, Lady Seear, is quite right in saying that this is an amendment which does not cost more money, and I am sorry that as the proceedings continue I shall be sounding increasingly like Scrooge. The fact, however, is that we have to look at all these matters very carefully in the present economic climate.
The noble Baroness asked me why, particularly in this relatively narrow area, we could not make this subject to the Affirmative Resolution procedure rather than, as the Bill requires, to the Negative Resolution procedure. It might therefore be helpful if I reminded your Lordships of the stages that regulations must pass through before they become law.
Except in cases of extreme urgency, the Secretary of State is bound to refer his proposals to the advisory committee for their consideration and he must lay the report issued by the committee before Parliament, together with the regulations,

1569
in due course. Furthermore, all regulations are considered by the Joint Committee on Statutory Instruments.
More recently, there has grown up the practice, where the subject matter is difficult—and I think one could say that is the case in these particular parts of the Bill—and certainly where dependency is concerned, of sending to the joint committee an explanatory memorandum similar to the Notes on Clauses issued when there is a parliamentary Bill. Thus, Parliament has available when regulations are laid before it a full explanation by the Secretary of State, together with a report of the advisory committee and, where appropriate, the joint committee. Either House is then, if it is so minded, able to pray against the regulations and have a debate. I believe, and we on the Government side believe, that these seem to be adequate safeguards in the context of the powers in Sections 41 to 49. In considering the matter, and the debate we have just had, it seems to me that this may well be the best way of dealing with what is an immensely complicated and technical matter.
I take the point that has been made. What is really required is a rather smaller group of people to look in considerable detail at how all this is working out. That seems to be how parliamentary procedure would in fact enable discussion on these very points to take place. It is interesting to note, incidentally, that the requirement for regulations to be submitted to the National Insurance Advisory Committee, which appears in Section 139 of the Social Security Act and Clause 10
of the Bill, makes a comparable provision for reference to the Social Security Advisory Committee.
The noble Baroness will recall—as I am sure the noble Baroness, Lady Fisher of Rednal, also recalls—that in Committee we had a debate about the influence of the Social Security Advisory Committee. If I may say so, this seems to be one way in which it, too, could be influential in making recommendations regarding the regulations when they are before the appropriate Joint Committee on Statutory Instruments. With this explanation, I hope again that the House will feel that we are providing adequate safeguards and that there would be an effective discussion of these particular sections.
Baroness SEEAR: My Lords, as one would expect, the noble Baroness, Lady Young, has made the very best of what I still think is a rather bad job. What she is trying to tell us, I think, is that a Negative Resolution is almost as good as an Affirmative Resolution. But the difference is made and it is clearly understood that affirmative action is stronger and gives more parliamentary control than a negative procedure. That being so, I am afraid I cannot accept the explanation given by the noble Baroness and I must divide the House.
5.31 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided, Contents, 69; Not-Contents, 100.

CONTENTS

Amherst, E.

Diamond, L.

Jeger, B.

Ardwick, L.

Donaldson of Kingsbridge, L.

Kaldor, L.

Avebury, L.

Fisher of Rednal, B [Teller.]

Kilbracken, L.

Aylestone, L.

Fulton, L.

Kilmarnock, L.

Bacon, B.

Gaitskell, B.

Kirkhill, L.

Banks, L.

Galpern, L.

Leatherland, L.

Barrington, V.

Gardiner, L.

Longford, E.

Blease, L.

Gladwyn, L.

McNair, L.

Boston of Faversham, L.

Glenamara, L.

Maelor, L.

Brockway, L.

Goronwy-Roberts, L.

Mais, L.

Bruce of Donington, L.

Gosford, E.

Northfield, L.

Byers, L.

Gregson, L.

Oram, L.

Chitnis, L.

Grey, E.

Peart, L.

Collison, L.

Hale, L.

Pitt of Hampstead, L.

Cooper of Stockton Heath, L.

Hampton, L.

Ponsonby of Shulbrede, L.

Crowther-Hunt, L.

Hatch of Lusby, L.

Robson of Kiddington, B.

David, B.

Hooson, L.

Rochester, L.

Davies of Leek, L.

Jacques, L.

Ross of Marnock, L.

Seear, B. [Teller.]

Thomson of Monifieth, L.

Whaddon, L.

Stone, L.

Underhill, L.

Wigoder, L.

Strabolgi, L.

Wallace of Coslany, L.

Wilson of Radcliffe, L.

Strauss, L.

Walston, L.

Wootton of Abinger, B.

Taylor of Mansfield, L.

Wells-Pestell, L.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Elliot of Harwood, B.

Milverton, L.

Alexander of Tunis, E.

Emmet of Amberley, B.

Monk Bretton, L.

Allerton, L.

Exeter, M.

Mowbray and Stourton, L.

Amory, V.

Ferrers, E.

Newall, L.

Ampthill, L.

Fortescue, E.

Northchurch, B.

Atholl, D.

Fraser of Kilmorack, L.

Nugent of Guildford, L.

Avon, E.

Galloway, E.

Onslow, E.

Balerno, L.

Garner, L.

Orkney, E.

Bellwin, L.

Geoffrey-Lloyd, L.

Redmayne, L.

Belstead, L.

Gisborough, L.

Renton, L.

Bessborough, E.

Glenarthur, L.

Renwick, L.

Bolton, L.

Gowrie, E.

Rochdale, V.

Caccia, L.

Greenway, L.

Romney, E.

Campbell of Croy, L.

Gridley, L.

St. Davids, V.

Cathcart, E.

Grimston of Westbury, L.

St. Germans, E.

Clifford of Chudleigh, L.

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

Saint Oswald, L.

Cockfield, L.

Sandys, L. [Teller.]

Colville of Culross, V.

Hanworth, V.

Shannon, E.

Colwyn, L.

Harmar-Nicholls, L.

Sharples, B.

Cork and Orrery, E.

Henley, L.

Spens, L.

Cottesloe, L.

Hill of Luton, L.

Stamp, L.

Craigavon, V.

Holderness, L.

Strathcarron, L.

Cullen of Ashbourne, L.

Hylton-Foster, B.

Strathclyde, L.

Daventry, V.

Inglewood, L.

Strathspey, L.

Davidson, V.

Kimberley, E.

Trefgarne, L.

de Clifford, L.

Kinloss, Ly.

Trenchard, V.

De Freyne, L.

Lindsey and Abingdon, E.

Vaux of Harrowden, L.

De La Warr, E.

Long, V.

Vickers, B.

Denham, L. [Teller.]

Loudoun, C.

Vivian, L.

Drumalbyn, L.

Lyell, L.

Westbury, L.

Dundee, E.

Macleod of Borve, B.

Willoughby de Broke, L.

Ebbisham, L.

Mancroft, L.

Wolverton, L.

Eccles, V.

Mansfield, E.

Young, B.

Effingham, E.

Marley, L.

Moved accordingly and, on Question, Motion agreed to.

Schedule 2 [Amendments of Supplementary Benefits Act 1976]:
5.39 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 14;
Page 33, line 12, after ("except") insert ("a sum paid to a person engaged in remunerative full-time work during the period of 30 days from the beginning of the engagement or").
The noble Lord said: My Lords, I beg to move the amendment set out on the Marshalled List. We dealt with this particular type of amendment at the Committee stage, but this is a modified version. The amendment moved at the Committee stage would have enabled supplementary benefit to be paid to a monthly-paid worker on a non-recoverable basis during the first 30 days after starting a job instead of only during the first 15 days. In his reply the noble Lord, Lord
1572
Cullen of Ashbourne, said that monthly-paid workers who claim supplementary benefit currently outside the 15-day period are eligible for urgent need payments under Section 4 of the Act, which normally would be recoverable, and that the regulations would provide for this to continue.
The amendment now before your Lordships accepts that payments after the first 15 days would be made only in cases of urgent need, which gets over the difficulty of cost. The noble Lord estimated at Committee stage that this could cost as high as £30 million in the extremely unlikely event of all monthly paid workers claiming benefit for the whole 30 days. The amendment ensures that where urgent needs payments are made in these circumstances they would not be recoverable just as payments made to weekly paid workers during the first 15 days after starting a job are not recoverable. So in point of fact there are likely to be not many claims and where they are made they are not to be recoverable. That is

1573
the simple point of the amendment. I beg to move.
Lord SANDYS: My Lords, as the noble Lord, Lord Wallace, said, this amendment is a further revised version of one that he moved in Committee. This amendment would write into the face of the Bill a requirement preventing the Secretary of State from recovering an urgent needs payment made within 30 days of the start of full-time work. I think this would be undesirable on a number of counts.
First, it would give an unjustifiable preference to the weekly paid. As noble Lords will recall from our debate in Committee (cols. 549–552), entitlement to supplementary benefit continues during the first 15 days after a person takes up full-time work. This is already generous to the weekly paid. I do not think that we could justify going beyond that, as the amendment would require, by giving a blanket exclusion from recovery of any urgent needs payment made within the first 30 days, for the claimant may well be able to afford to repay any payment that is made after the 15-day period out of his wages. I would submit instead that the normal rules should apply; that is, that an urgent needs payment should be recoverable. This has been a long standing rule in the supplementary benefits scheme and I would stress the adjectival form of the word, "recoverable". Urgent needs payments will not be recovered in every case. Section 4 of the Act, as amended by this Bill, enables the Secretary of State to make regulations setting out the situations in which urgent needs payments will not be recoverable. They will not be recovered, for example, when a person has a low income by supplementary benefit standards.
As my noble friend Lord Cullen acknowledged in Committee, however, the 15-day rule is not so generous to the monthly paid. He explained then why we were unable to accept the Opposition's amendment to extend the period of 30 days in the case of the monthly paid. It is largely a matter of cost, which could be as high as £30 million. But he also made clear that the monthly paid could claim urgent needs payments if they faced great financial difficulty. I am aware that the document Social Assistance
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(para. 4.18) suggested that "if it were thought desirable" to bring the monthly paid in this respect more into line with the weekly paid then any urgent needs payments made in those circumstances should be made not recoverable. But here again I do not think it would be wise to write into the face of the Bill a general exemption from the normal powers of recovery, because the regulations that will be made will waive recovery if there is continuing hardship. And I think we must hear in mind that the monthly paid are, very often, among the higher paid in the working population. They may well, therefore, be as well, if not better, placed to cope with the repayments than the weekly paid.
My Lords, the regulations that we propose to make will broadly follow the existing rules laid down by the Supplementary Benefits Commission. Thus, a payment will only be made if it is unreasonable to expect the claimant to arrange an advance of salary from his employer. Most employers have arrangements to help the monthly paid over the period up to their first pay-day. And the Government think that such arrangements are the right way to deal with this situation. If we were to open up the supplementary benefits scheme in the manner suggested by the amendment there would inevitably be abuse and a massive shift from seeking help from one's employer—which normally has to be repaid—to seeking non-recoverable payments through the supplementary benefits scheme.
If an urgent needs payment has to be made, the regulations will waive recovery where only small amounts of benefit are at stake, and the cost of recovery could be disproportionately high, or where a claimant's income will be low, judged by supplementary benefit standards. Under the regulations, taken with section 2(1) of the Act, as amended by this Bill, it will be for a benefit officer to decide whether the prescribed circumstances apply. There will be an appeal against his decision under section 15 of the Act. Putting these rules into regulations will achieve their full publication for the first time. And, as was made clear in another place, the rules will also appear in the new Handbook to be published on the authority of the Secretary of State. My Lords, I hope that, in view of the explanation I have

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given at some length, the noble Lords will feel able to withdraw their amendment.
Lord WALLACE of COSLANY: My Lords, I should like to thank the noble Lord for going into such detail in his reply. There is still confusion over this. In my view, a weekly paid person is better off than a monthly paid person when starting a job, because he has not got to wait so long for his money; that is obvious. I accept that many employers transferring weekly paid workers to monthly pay do in fact help them out; there is no doubt about that. But, as I said at Committee stage, when you come to a point where a worker is unemployed and then gets an engagement with an employer who pays on a monthly basis, that man is in a worse position because he has to wait a month for his money. Furthermore, as I said then and I still believe, no employer could be expected to help unless he was an extremely generous, charitable person, because how is he to know that that employee is going to be satisfactory? He may have to dismiss him at the end of the month. So there is a need for some assistance to the monthly paid. I do not intend to press the amendment now. I think there is a little disagreement here, but I would not regard it as a serious disagreement. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.49 p.m.
Lord BANKS Lord BANKS moved Amendment No. 15:
Page 43, line 33, at end insert—
("Provided always that when prescribing such items and weekly amounts the Secretary of State shall ensure that proper provision is made for the recurring costs incurred by a chronically sick or disabled person by reason of his impairment.").
The noble Lord said: My Lords, I beg to move Amendment No. 15, which is in my own name and that of the noble Lord, Lord Crawshaw, who, unfortunately, is unable to be with us today. During the Committee stage I moved an amendment, again with the support of the noble Lord, Lord Crawshaw, designed to secure from the Government an investigation into the special extra costs which disablement imposes. The Government rejected that
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proposition on the grounds that research was already going on in part of the area concerned. In the course of that debate I quoted the Conservative Party Manifesto as supporting a coherent system of cash benefits to meet the costs of disability so that more disabled people could support themselves and live normal lives. The noble Lord, Lord Sandys, quoted the Minister of Social Security as saying that he was in favour of a disability income, but indicating that it would not be introduced for some time to come. In the meantime, disabled people will have to manage under a revised supplementary benefits system in which discretion is much reduced. That system is to be simplified by the elimination of discretion. There is a danger that disabled people will be simplified out of the system.
The Disablement Income Group, because of the impending reform of the supplementary benefits system, carried out a survey among four different samples of disabled people. The results of that survey showed the extent to which disabled people are dependent upon discretionary payments, and particularly exceptional circumstance additions. The survey showed the following:
"More than 80 per cent. of disabled people receive at least one exceptional circumstance addition … every week and more than a third receive two. These additions are commonly for extra heating, dietary or laundry needs.
"One in five disabled people receive more than £2 a week in additions (after deducting the 50p or 75p 'offset' which long-term claimants lose).
"The general pattern is of an increasing number and value of additions being received with an increasing level of disability. So, 9 per cent. of a severely handicapped persons' income (disregarding mobility and attendance allowances) is made up of discretionary additions; 7 per cent. of the income of the less severely handicapped comes in this form".
That illustrates the importance of the current discretionary payments to disabled people.
Severe hardship could arise, as the Bill stands, if all possible extra costs disabled people will incur are not foreseen and set down in the proposed regulations. First, the amendment would make it difficult for some future Secretary of State to change the scope of "normal", "additional" and "housing" requirements in a manner that would adversely affect disabled people. If some successor of the present Secretary of State wished to

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reduce the cost of supplementary benefits by withdrawing some special allowances now available to disabled people, the amendment would allow that to be challenged and consequently it would probably be necessary to amend the principal Act. The purpose could not easily be accomplished merely by changing the regulations.
Secondly, as it will be virtually impossible to foresee and list all possible extra costs, the amendment will require the Secretary of State to add to the list any that are shown to be needed, or introduce into the regulations some phrase allowing discretion in respect of disabled people.
A number of the extra expenses which chronically sick and disabled people incur, as a direct result of their impairment or disability, are detailed in paragraphs 62 to 82 of the annex to the Notes on Clauses. But that is not an exhaustive list. It is virtually impossible to specify all such costs in relation to all types of disability. That is why we think it essential to reintroduce a measure of discretion in respect of the disabled. I beg to move.
Lord CULLEN of ASHBOURNE: My Lords, the effect of this amendment would be to ensure that the extra expenses attributable to disablement were provided for in the supplementary benefit rates. Whatever the merits of meeting such costs, I do not think that a means tested scheme such as the supplementary benefits scheme is the right place to start. It seems entirely right, as the Bill proposes, to assess the entitlement of all claimants to supplementary benefit by reference to normal requirements, housing requirements, and additional requirements where appropriate. In this way a claimant who happens to be disabled will be treated in exactly the same way as any other person and any additional needs, such as help with heating costs, or the cost of a special diet, which a disabled person may have, will be met according to the normal rules of the scheme. The expenses for which additions will be made to weekly benefits will be laid down in the regulations, and the list of items will be added to as the need arises. This will apply also to exceptional needs payments. And I should point out that both attendance allowance and mobility allowance will
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continue to be disregarded in full in assessing entitlement to supplementary benefit.
To move beyond this takes us into the realms of a general disablement benefit As the noble Lord, Lord Banks, said in Committee and again today, the Disablement Income Group has argued for a two-part general benefit for disabled people, the first relating to income maintenance and the second to disablement costs. It is at present pressing for the latter and for a Green Paper on the subject.
The question of some form of general disablement benefit for disabled people has been a live issue for some time and your Lordships show a keen interest in the subject. Many people and groups have put foward views and proposals for the way ahead, some mirroring the views of the Disablement Income Group and others differing, quite markedly in some respects. The spectrum covers the two preferential schemes, war pensions and industrial injuries, on the one hand, and changes which would affect particular diagnostic or identified groups, on the other.
The Government's view on all this was made clear in another place and was stated in the manifesto. Yes, we are in favour of some form of general disablement benefit and that remains the long-term aim. The difficulty rests not with the aim but with the means of achieving it. My right honourable friend the Minister of State made clear in another place that, given the general economic position, the Government could not hope to introduce such a benefit within the next few years. In the interim, we consider it essential to assimilate and evaluate all the various and sometimes conflicting views being put forward, and to take account of current research into the various aspects of disablement, including the particular item of extra costs. I repeat that, against this background, the supplementary benefits scheme does not seem the place to start. I hope that, in view of the explanations I have given, the noble Lord will agree to withdraw his amendment.
Lord BANKS: My Lords, I am grateful to the noble Lord, Lord Cullen of Ashbourne, for his reply to the amendment and particularly for his reaffirmation that it is an aim of the Government that there should be some form of disabled expenses allowance. He regards this as a long-term

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aim and some of us are worried that it will be very long term indeed. But, it is at least encouraging to have it recognised as an aim.
The noble Lord argues that because there is this long-term aim there is no need to do anything in the interim; whereas I have argued precisely the opposite: that because it is agreed that this is a long-term aim something is necessary in the interim until that long-term aim has been put into effect. However, I should like to consider further the reply which the noble Lord has given and perhaps return to this matter again at Third Reading. In view of that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 16:
Page 44, column 2, leave out lines 18 to 31 and insert ("£34·85").
The noble Lord said: My Lords, I beg to move Amendment No. 16 standing in my name on the Marshalled List and, at the same time, I should like to speak to Amendments Nos. 17, 19 and 20. It is true that we have been over this ground before during the Committee stage, and I said then that I wanted to consider very carefully what the noble Lord, Lord Cullen of Ashbourne, said on that occasion. I have come to the conclusion that I want to pursue this because the object of the amendments is to ensure that the Government do not back out—and I use those words very carefully—of the proposal to give a small addition to the short-term supplementary benefit rates in this year's up-rating.
That proposal was an integral part of the nil-cost package of reforms to the supplementary benefits scheme. Although it resulted from the proposal to align the supplementary benefit rates with the national insurance benefit rates, which have now been dropped, there is no reason why the small increases in the supplementary benefit rates, which amount only to 20p per week for a single person and to 25p per week for a couple, should not be proceeded with.
I find it very difficult to believe that the Government can really put their hand on
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their heart and say that this cannot be done. I quote from column 616 of Hansard of 21st April. In the Committee stage debate, the noble Lord, Lord Cullen of Ashbourne, said:
"The report by officials on the review of the scheme, Social Assistance, argued strongly that it is families with children, rather than pensioners, who are experiencing the most difficulty in managing on supplementary benefit, so that any redistribution should be directed towards them".
I shall not deny that that is so. I do not think that anyone on supplementary benefit has anything left over at the end of the week; probably he or she has nothing left by Wednesday or Thursday. I do not deny that if it is a family, obviously they are in considerable need. But it is also true that this applies to anyone who is in receipt of a pension.
Yet while the Government persist in their intention of reducing the long-term rates which pensioners get to bring them into line with the national insurance pension rates, the Government are backing out—and I do not think that there is any other phrase with which to describe it; certainly not to describe what I mean—of the other side of the redistribution, and that is the increases in the short-term rates which are what most families with children on supplementary benefit receive. I hope that the House gets a more comforting reply from the Minister on this occasion, because on the face of it 20p or 25p may seem only a small amount; I believe that neither amount will buy a loaf of bread today—I have just been advised that they will buy a small loaf. It may not seem very much, but to a family it is necessary. I hope that the noble Lord will feel that this amendment can be accepted.
Lord SANDYS: My Lords, I am glad that the noble Lord, Lord Wells-Pestell, has chosen to move Amendment No. 16, and at the same time speak to Amendments Nos. 17, 19 and 20 because, of course, they hang as one group. The noble Lord said that he thought the Government were going to be unable to put their hand on their heart—I think that was his phrase—and say that 20p per week was too much. Indeed, I think that the Government may do so, because I re-read with interest the announcement of my right honourable friend the Secretary of State on 27th March. Of course, the figures are simply enormous in regard to

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the whole of the social security budget. I think that my noble friend Lady Young has given ample testimony of that this afternoon, and I do not wish to repeat what she has already said in any detail.
I realise that the noble Lord and his colleagues are, as they said in Committee—and, of course, I have been following the noble Lord in his quotations of what was said on 21st April—unhappy about the proposals contained in the Social Security (No. 2) Bill to up-rate the short-term national insurance benefits by 5 per cent. less than the estimated movement in prices. However, this is not the time to consider proposals contained in the No. 2 Bill, which will come before your Lordships' House in due course.
In so far as these amendments affect this Bill, I regret that I can only put in another form the arguments which my noble friend Lord Cullen expressed during Committee and some of which have been quoted this afternoon by the noble Lord, Lord Wells-Pestell. The effect of the amendments would be to raise the ordinary rates of supplementary benefit by 25p for a married couple and 20p for a single householder more than the increases already announced for next November. Under the Government's original proposals for reform of the supplementary benefits scheme, the ordinary scale rates were to be aligned with their corresponding national insurance rates in the same way as the long-term rates will be. As a result, these rates would have been increased by sums similar to those I have mentioned and now put forward again by the noble Lord's amendments, but we no longer envisage aligning the ordinary rates in November.
At the next up-rating the supplementary benefit short-term rates will be fully price-protected and, as a result, they will rise to much greater sums than the national insurance rates. The scale rates will then be greater than the national insurance rates by £1·20 a week for a married couple and by 65p a week for a single householder. The increases of 25p and 20p respectively proposed by this amendment would have been the result of alignment this November. Without alignment they are no longer appropriate and could not be justified in their own right. There would be an additional cost which could not be met from within the
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supplementary benefits package of changes as it stands today.
The noble Lord has argued that his amendment should be made so that families with children might benefit as Social Assistance, the document we have already referred to this afternoon, suggested. That document suggested that it was they who are experiencing most difficulty in coming on to supplementary benefit. But the package of reforms has been specially designed to help such families: for example, the reduction in the number of children-scale rates, the shorter qualifying period for the long-term rates and the better disregard of earnings specially designed so to do. I think that these improvements, combined with the arrangements for November, should persuade the noble Lord to withdraw the amendment.
Lord WELLS-PESTELL: My Lords, I am fast coming to the conclusion that there is not enough dynamite in this country to move noble Lords on the Government Front Bench and that one really is fighting a losing battle. In the circumstances, I have little alternative but to ask the leave of the House to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 to 20 not moved.]
Clause 8 [Provisions supplementary to ss. 6 and 7]:
6.10 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 21:
Page 13, line 26, at end insert ("including a person who would cease to be entitled to supplementary benefit by virtue of his capital resources")
The noble Lord said: My Lords, this is an amendment which we discussed at Committee stage. I was given, and the Committee were given, a fairly long and detailed reply which I wanted to consider before deciding whether to pursue it or not at this stage of the Bill. Replying for the Government the noble Lord, Lord Cullen, denied that the Government would be making a profit of the proposed changes in the treatment of capital expenditure. In fact his words were:
"there will be no question of a saving as a result of retaining the capital cut-off at £2,000. Our

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costings have been done on the basis of this figure to give a nil-cost result".—[Official Report, 21/4/80; col. 631.]
But he also stated that only some 13,000 people would lose their entitlement to supplementary benefit as a result of the introduction of the £2,000 cut-off point in place of the more flexible formula that applies at present.
As I understand the position, the level at present is £1,200, but it is also true to say that quite a substantial number can, and do, get supplementary benefit, albeit at a reduced amount, notwithstanding the fact that they have a capital of £1,200. It is clear that the figure of 13,000, which is the number of claimants with capital over £2,000 in November 1978, is now I would say far too low. Every time the benefit rates go up the amount of capital a claimant can have without losing his entitlement to benefit also goes up.
I think that there were 6,000 claimants with capital over £2,000 in December 1976; two years later there were 13,000. It is a fair assumption to say that there probably will be this November at least 20,000. All of them will have their benefit cut off on 24th November, and for many of them it is their main source of income. It seems inevitable, therefore, that the Government must—and I do not see how the Government can argue otherwise—be making a profit out of that cutoff. Twenty thousand people are going to be cut off from supplementary benefit because they have a capital of £2,000. It must stand to reason that the Government are going to save an enormous amount of money. This amendment would give the Government the power to make transitional regulations to help at least some—I say some—of these 20,000 people; if you like, those who stand to lose £5 a week or more.
If the Government are not prepared to move in this matter there is still time for the Government to reconsider the £2,000 limit, and raise it to a figure which at least restores the value of the existing £1,200 capital disregard to what it was worth when it was introduced in 1975. As I understand the situation, £1,200 in 1975 would need to become £2,350 to have the same value and purchasing power now. I think that this ought to be done, because I do not accept—it may be that I am wrong about this—that, if 20,000 people are
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going to lose their supplementary benefit in November of this year because they have a capital of £2,000, the Government are not going to make some money out of it. I think that the only way of dealing with this, if the Government will not reconsider it, is certainly to consider bringing the figure of £1,200 in 1975 up to its present-day value. I beg to move.
Lord CULLEN of ASHBOURNE: My Lords, as the noble Lord, Lord Wells-Pestell, has already said, we debated this selfsame amendment in Committee on 21st April. I cannot add a great deal to the reasons I gave then as to why the Government are unable to protect the position of existing beneficiaries who have capital over £2,000, but I am only too pleased to give the House a brief résumé of my arguments. Our proposal to introduce a simple rule whereby anyone who has capital in excess of £2,000 will not qualify for supplementary benefit replaces a provision in the existing legislation which is much more complicated for claimants to understand and for staff to operate. In the present scheme, capital of £1,200 or less is ignored altogether in calculating a claimant's resources. On amounts over £1,200, an income of 25p per week for each complete £50 of capital is assumed, and this notional income is offset against a claimant's benefit entitlement.
As I explained when we debated this on a previous occasion, the Government are unable to provide that existing beneficiaries who have capital over £2,000 should continue to receive supplementary benefit after 24th November. This is simply because there are estimated to be 13,000 of them, and to protect their position would cost about £5 million. I am afraid that the Government remain convinced that this £5 million—which would have to be found at the expense of improvements we are making elsewhere, for example, for families with children—should not be spent as a matter of priority on protecting the position of those who are, by virtue of the fact that they do have capital, among the better-off on supplementary benefit. The Government would, ideally, like to protect the position of all existing beneficiaries—and Clause 8 gives us the power to look after the very great majority of them with transitional regulations.

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There is here a question of priorities in the redistribution of resources that is being effected by the changes we propose in the supplementary benefits scheme. We do not think it is of sufficient priority to allocate such a large sum as would be needed to protect the position of people with more than £2,000 of capital. The noble Lord, Lord Wells-Pestell, argued in Committee that we were in effect making a saving on the cost-neutral package by not increasing the capital limit beyond £2,000, and he has returned to this charge again. But that is not the case. The package has been designed to be cost-neutral at the time of implementation—that is, in November of this year—and clearly, therefore, any upwards adjustment in the level of capital which we would allow beneficiaries to keep would be bound to attract an extra cost. There is a basic question here of what level of savings it is appropriate that people who are receiving means-tested help such as supplementary benefit should have.
In the Government's view, £2,000 will represent a reasonably generous level in the revised scheme, particularly as the possession of up to £2,000 will not affect entitlement to weekly benefit. As I have said before, we cannot promise to increase regularly the capital limit, but the figure of £2,000 will appear in regulations and will be kept under review in the light of the economic circumstances prevailing at the time of review.
I wish to emphasise that people with capital in excess of £2,000 are not being asked to use up all their savings. They will of course have to manage on their own resources for a time, but they will not have to use their savings below £2,000. As soon as savings are reduced to that level, it will be open to the people in question to claim supplementary benefit again. I should also emphasise, to ensure there is no doubt whatever on this point, that the value of an owner-occupier's home is not included for supplementary benefit purposes as part of any capital he may possess.
Lord DRUMALBYN: My Lords, when my noble friend refers to the value of the applicant's home, does he include with that the furniture, blankets and all the rest of it in that home?
Lord CULLEN of ASHBOURNE: Yes, my Lords; in view of that explanation, I hope the noble Lord will with-draw the amendment.
Lord WELLS-PESTELL: My Lords, there is something radically wrong with the thinking of the Government. It is quite appalling to think that they are taking their present attitude because all this will cost £5 million. I take a leaf out of the book of the noble Baroness, Lady Young, who reminded us of what the Conservative Party did for pensioners between 1970 and 1974. I remind the House what this Government did less than a year ago when they came to office. They gave 700 times that amount of money, £3,500 million, to people by way of tax deductions when they did not need it because it went to the £10,000, £15,000 and £20,000 a year people. They did not need it, but they got it, and why were they given it? It was to encourage them to work harder and stronger, the implication being that they were not pulling their weight before. Noble Lords on both sides of the House know that it did not have that desired effect, and I would not say for one moment that they did not earn their money.
Here, however, the Government are penalising part of the poorest section of the community, people in receipt of supplementary benefit, simply because they have capital amounting to £2,000. They are terrified to use any part of it because if they live much longer it will cost them that to get buried; one cannot get buried now for less than several hundred pounds. The Government's attitude on this matter is mean, and there must be noble Lords opposite who think it is mean, too. I do not mind taking money from those who have it, and I know noble Lords opposite who do not mind doing that. Indeed, I know that some noble Lords opposite are very unhappy about the way in which certain sections of the community who do not need help have been given it. The fact that the Government are not prepared to move in this matter puts me in the position where I must apply for the leave of the House to withdraw the amendment.
Baroness PHILLIPS: Before my noble friend adopts that course, may I ask the

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Minister a question on the practicality of this provision? Bearing in mind that people who do not comply with this rule break the law, I would again mention the man who was jailed because he did not reveal that he had savings in a building society. If one has £2,000 in a bank deposit account, one receives a certain amount of interest, If that interest is added to one's £2,000, one immediately goes over the prescribed amount. Does that mean that such a person would have to report that fact, and should not receive supplementary benefit, remembering that that state of affairs will occur at different times of the year? It seems that in terms of sheer practicality, a fixed sum will cause a great deal of paperwork.
Like my noble friend Lord Wells-Pestell, I am amazed at the philosophy of the Conservative Government on this subject because they are supposed to be encouraging people to save and be hardworking. This is the one group who, because they have saved some money, are to be told they cannot draw any benefit.
I think it a great mistake to insert a fixed figure in this sort of provision and I can envisage real difficulties for those drawing supplementary benefit. There is bound to be misunderstanding if, perhaps at certain times, they find they have more than £2,000.
Lord CULLEN of ASHBOURNE: With the leave of the House, my Lords, perhaps I might inform the noble Baroness that there is a fixed sum already; at present it is £1,200 and that is now going up to £2,000. Thus, we will still have a fixed sum, but a different one.
Baroness PHILLIPS: I did not like the other fixed sum either, my Lords.
Lord CULLEN of ASHBOURNE: I am not surprised, my Lords.
On Question, amendment negatived.
6.27 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 22:
Insert the following new clause:
"Publication of Supplementary Benefit Act 1976
.—(1) It shall be the duty of the Secretary of State to make arrangements for—
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(a) the publication in a single volume, in each calendar year, of the Supplementary Benefits Act 1976, as then amended, and of any regulations made under that Act and for the time being in force;

(b) sale of the publication mentioned in the preceding paragraph to members of the public at a price which shall not exceed £3·00 or such larger sum as may be appropriate having regard to increases in production and distribution costs after the passing of this Act;

(c) making copies of the publication mentioned in paragraph (a) above available for consultation by members of the public at local offices of the Department of Health & Social Security where, in his opinion, it is reasonably practicable.

(2) The Department of Health and Social Services for Northern Ireland shall make copies of the publication mentioned in subsection (1) of this section available for consultation by members of the public at local offices of the Department where, in the opinion of the Department, it is reasonably practicable.")
The noble Lord said: My Lords, we had a long and, I think, helpful debate on this matter in Committee. I raise it again because the length of the discussion was such that I wanted to study in Hansard what had been said and because the Government, in a burst of generosity, decided to consider the matter. That they have done, and I am grateful for the letter which I have received on the subject from the noble Lord, Lord Cullen of Ashbourne.
The amendment is much the same as the one we discussed on that occasion, except that I have inserted £3 instead of £1, fully conscious of the fact that that is not a realistic figure in the circumstances, and the new clause differs from that moved in Committee in certain other respects. The suggested maximum price for the publication, as I said, has been raised from £1 to £3. I realise it will be quite a bulky volume, since the regulations will be both numerous and complicated. As for the requirement to place copies in local DHSS offices for consultation, that is qualified in the new clause by the phrase,
"where … it is reasonably practicable.",
though it is hard to accept the statement of the noble Lord, Lord Sandys, that there would be practical difficulties in doing it. I have been trying to discover, with help what those difficulties would be, but I have been rather unsuccessful.
Then there was the requirement to supply copies to tribunal members. That has been omitted because Lord Sandys gave an assurance that that was already

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being done. Despite the noble Lord having given that assurance, in the letter sent to me by the noble Lord, Lord Cullen of Ashbourne, on 30th April, I was told:
"In the meantime, I should like you to know that it is our firm intention that every supplementary benefit appeal tribunal member should have copies of the law relating to supplementary benefit".
Whether they have it now or will get it is, perhaps, beside the point; the point that was made then has obviously been taken up.
I am grateful for the fact—which I understood from the letter that the noble Lord, Lord Cullen of Ashbourne, sent to me—that talks are taking place involving the Secretary of State, the DHSS, and Her Majesty's Stationery Office regarding the possibility that an annual publication of the law might be available at a cheaper price—I would hope far cheaper than the Yellow Book. Obviously we want a publication at a reasonably low cost. I do not know whether the noble Lord can say whether any progress has been made, but in view of his letter I do not propose to go into this matter in greater detail, though I have come prepared to do so.
I should like to end on the point that I made on the last occasion. As I understand it, what a person is entitled to know will be laid down by law, and those people advising clients, such as social workers, CAB workers, and others, will need to have that information. I consider it to be of supreme importance that a suitable, informative handbook is available. I appreciate that discussions are going on between the Government and Her Majesty's Stationery Office, but I wonder whether this is a matter which the Secretary of State for Social Services could perhaps take up with one of the national voluntary organisations, or some kind of trust. Much of the literature that we have today in professional social work has in the past been financed by trusts. Going back more years than I care to think of, I recall the Charities Digest, which the old Charity Organisation Society, now the Family Welfare Association, published year after year; and I believe that it still does publish it. I do not think that there is a better Charities Digest to be found anywhere.
There may well be a trust which exists to undertake this kind of work. I should
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be happy to save the Government money if I could, and perhaps I could then direct them what to do with the money that had been saved. I am sure that there must be trusts that exist to do this kind of work. Certainly in this country there is a national organisation co-ordinating all the social services.
I leave the thought with the Government, because I think it of extreme importance that a document of this kind is available for people at grass roots level—I mean the ordinary social worker who every week is inundated with not just a few, but dozens of, inquires from clients and other people who come to see him. I wonder whether the noble Lord can say any more on this matter. Perhaps he will take the opportunity to say whether the Secretary of State is giving consideration to providing facilities within DHSS offices. I have heard that this possibility is being explored, and I should be grateful to know whether a suitably qualified person, able to advise claimants, is likely to be available in local offices. I beg to move.
6.34 p.m.
Lord SANDYS: My Lords, since we are on Report we have a particular difficulty, because in view of what the noble Lord has been saying I believe that it would in many respects have been easier to discuss some of his suggestions more happily and more readily had we been at the Committee stage. I am sure that the noble Lord, Lord Wells-Pestell, wishes to perform a public service, and from the Government's point of view we have listened with interest to what he has said in regard to the production of a document which would be of particular value to social workers.
Since we last discussed this matter in Committee on 22nd April, my noble friend Lord Cullen of Ashbourne has written to the noble Lord, Lord Wells-Pestell, and the noble Lord has, in somewhat guarded terms, welcomed what was stated in that letter. I think that it would be for the benefit of all your Lordships if I were to explain what we are intending to do.
We accept the principle inherent in this amendment; namely, that there are arguments of convenience and cost in claimants' advisers having access to a published version of the law at as low a price

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as is economic. That does not mean that we could undertake, at a time of economic difficulty, to make such a volume available at low cost with the help of a subsidy; but there may be other ways of moving forward. My officials are in touch with Her Majesty's Stationery Office and are looking at the existing publication of the law—the Yellow Book, referred to already—to see whether it is feasible to produce it in the form envisaged by the noble Lord, Lord Wells-Pestell. This might of itself enable one volume to be produced at a lower cost. We are also having regard to the increased demand which such an annual publication might stimulate. Again, this is a factor which will have a bearing on the cost at which it can be produced.
Turning to the letter which my noble friend Lord Cullen last week wrote to the noble Lord, it was there indicated that claimants would be free to check on the law in social security local offices. I hope that this assurance meets one of the points of the noble Lord's amendment. I should also mention to the noble Lord that facilities for advice points in 400 local offices are being considered. As this matter is not at a very advanced stage of discussion, I do not think that I can at present say much more about it.
I would ask the noble Lord to withdraw his amendment so as to allow us the maximum flexibility to pursue the matter. I am well aware that he has varied the terms of the amendment as a result of assurances given at Committee stage and in the light of the letter referred to earlier. I think it would not be desirable to incorporate in the statute the figure of £3 because it may just not be possible, with the best intentions in the world, to produce the publication at precisely that figure. Though I cannot today give the noble Lord a categorical assurance that we can meet the amendment in its entirety, I hope that I have said enough to reassure him about the Government's intentions in this matter.
I believe that the kind of volume which the noble Lord has in mind would be a highly technical, legally-based document, and therefore it would perhaps be as well if it were prepared and edited by lawyers within the department, who would be responsible for what it contains. I am
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aware of what the noble Lord has said, and we have noted what he has suggested in regard to the Family Welfare Association. I do not know whether this is a possible line or avenue for further discussion, but I am obliged to the noble Lord for making that suggestion.
Lord WELLS-PESTELL: My Lords, I am grateful to the noble Lord for his frankness and for dealing with this matter reasonably thoroughly. It was not my intention to take this amendment to a Division. I wanted to comment upon the letter that the noble Lord, Lord Cullen, had sent me, which I felt was very helpful indeed. I think, looking back, it is the best progress we have made so far in dealing with the Social Security Bill, No. 1. What I am hoping is that the noble Lord, or somebody on the Government Front Bench, will be able to give the House some concrete evidence of success in this matter before the Bill receives its Third Reading and passes through your Lordships' House.
I think I should like to correct only one thing. I was not meaning to give the impression that this proposal ought to be carried out by the Family Welfare Association; I was merely instancing that it was that organisation which had published this book, Charities Digest, for many years. I think the noble Baroness will be familiar with it, and will know that it is an extraordinarily valuable book. I was merely saying that it might in some way be possible to get some sort of trust which specialises in this sort of thing. I do not think they are going to do it for the Government—and one cannot altogether blame them for that—but if this was going to be a publication which was going to be made available at a reasonable charge to grassroots social workers and others who have to advise people, then I think there might be something to interest them in it.
As I say, I am grateful to the noble Lord for what he has said, and to the noble Lord, Lord Cullen, for his letter. I hope that both noble Lords and the noble Baroness the Minister will pursue this question with the Secretary of State, so that perhaps by the time we reach Third Reading something can be said which will show that it is very much on the stocks in theory,

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if not in practice. With that, I ask the leave of the House to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 9 [The Social Security Advisory Committee]:
6.42 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 23:
Page 14, line 27, at end insert ("and the Committee may advise the Secretary of State or the Northern Ireland Department on any question that could have been referred to it under this subsection, whether that question has been referred to it or not.").
The noble Lord said: My Lords, I am aware that this amendment covers much the same ground as did Amendments Nos. 73 and 74 which I moved at the Committee stage, but I am hoping that it might be more acceptable to the Government. Its object is to remove any doubt about the powers of the advisory committee to advise on questions that have not been referred to it by the Secretary of State or, for that matter, the Northern Ireland Department. At the Committee stage the noble Lord, Lord Sandys, said—and I quote from Hansard of 22nd April, col. 669:
"it would not be appropriate or practicable to give the committee as one of its major tasks the interpretation of social security law".
This amendment, if it is read carefully in relation to where it will be in the Bill, does not do that, but merely confirms that the committee may advise on changes in the law if it wishes to do so. The noble Lord, Lord Sandys, said that they would be able to do this, but, if I may say so, it is far from clear from the Bill as it stands, since Clause 9(1)(a) refers to—and I quote:
"advice and assistance to the Secretary of State in connection with the discharge of his functions under the relevant enactments",
which presumably does not include advice on improving those enactments. It seems to me that when you are setting up a very powerful body like the advisory committee—and it will be a powerful body—it should have the opportunity laid down in the Bill to give advice to the Secretary of State or to comment on the improvement of any enactments which he may see fit to make.
The noble Lord, Lord Cullen, objected to Amendment No. 74 on the ground that it threatened the independent status of insurance officers and benefit officers. This was not its intention, and the above amendment gets round the difficulty by simply providing that the committee can take up on its own initiative questions that could have been referred to it by the Secretary of State; for example, questions relating to the operation of any of the relevant enactments. I accept that this new amendment is infinitely better than the other one. I think we ought to be able to get from the advisory committee any skill or expertise that they have which they can put forward by way of comment and observation, and that at the same time they should have power to draw the attention of the Secretary of State to any matter which they feel he ought to consider. I hope the Government feel that they can accept this amendment, because I think it is an improvement on the Bill as it stands at the present time.
Baroness YOUNG: My Lords, the same kind of principle as the one that the noble Lord, Lord Wells-Pestell, has been arguing for in this amendment was of course raised in the Committee proceedings in another place, and in fact arose in our Committee proceedings on the Bill in this House. I hope I can show to the noble Lord, Lord Wells-Pestell, that in fact it is not necessary to add these further words to this particular clause, because throughout the proceedings on this Bill both in another place and here in your Lordships' House the Government have stressed that the new committee will be free to decide activities which it might undertake, in addition to considering matters which will be referred to it by the Secretary of State and the Northern Ireland Department. The phrase in brackets which occurs in both Clause 9(1)(a) and Clause 9(1)(b)—and I quote—
"whether in pursuance of a reference under this Act or otherwise"—
was inserted into this Bill in another place in response to Opposition anxiety on the scope of the new committee's powers; but the fact is that when the amendments to make these additions were moved it was made clear that the phrase is in fact declaratory in effect. It simply confirms that the new committee's

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duty to give "advice and assistance" is not restricted to matters which have been referred to it.
If I have understood him correctly, that is the nub of the noble Lord's argument, and is the nub of the concern of Members of your Lordships' House who are concerned that the committee can deal only with matters referred to it, and cannot have any initiative. My understanding of it is that the committee's powers to consider matters are not restricted to matters which have been referred to it; and, as I have already said, the Government believe that the committee will be free to decide the activities that it might undertake, as well as considering these other matters that are to be referred to it. It follows, therefore, that the absence of a similar phrase in Clause 9(1)(c) is in no way significant. There is more than ample confirmation of the new committee's powers of initiative in subsections (1)(a) and (1)(b). I hope, therefore, that the noble Lord will see that we are in fact meeting precisely the point that he wishes to be met in this clause, and will feel able to withdraw his amendment.
Lord WELLS-PESTELL: My Lords, having listened to the noble Baroness the Minister, I feel that I have been given certain assurances which I do not think were given on the previous occasion. I think we now have it quite clearly set down what the position is; I accept that, and it goes some way to meeting my amendment. In the circumstances, I beg the leave of the House to withdraw my amendment.
Amendment, by leave, withdrawn.
Baroness YOUNG: My Lords, I wonder whether this might be a convenient moment to break for dinner. I believe that there is quite a lot of discussion to come on further amendments, and it might be more convenient to break now than to start another amendment.
Lord WELLS-PESTELL: My Lords, I am grateful to the noble Baroness for proposing what I was about to propose. On the next amendment, No. 24, I regret
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to say that I shall be a long time. I could not do it by seven o'clock. Perhaps the House would like to get fortified for the occasion.

CENSUS ORDER 1980
6.51 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I beg to move the Motion which stands in my name on the Order Paper. The last Government's proposals for the 1981 Census, published in Cmnd. 7146, included a proposal to ask for the number of cars and vans available for use by members of each household. The present Government examined rigorously each of the questions our predecessors had proposed. At first sight, the question on cars and vans did not seem to be essential, and it was therefore not included in the order.
Since the draft order was published, the Secretary of State for Social Services, the Minister of Transport and the Registrar-General have received many requests, particularly from local authorities and Members of Parliament, for the question to be reinstated in the census. When this House considered the draft order on 22nd April, several noble Lords on both sides made the same point and I undertook to put their arguments to the Secretary of State for Social Services. When it was debated last week in another place, amendments were indeed approved to enable this information to be obtained. Noble Lords pointed out that if the question on cars and vans is not in the census, then many local authorities will have to carry our surveys to obtain this information for themselves, and that the total cost of these surveys would exceed the saving achieved by omitting the question from the census. I understand that the cost of adding this question is about £50,000 and my information is that to conduct a special survey of an area containing around half a million households (such as Merseyside) to obtain this information would alone cost this amount.
The extent of car ownership by households largely determines whether demands are put on facilities for cars or for public

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transport, so the answers to a question on car availability in the census would indicate the areas where these different demands deserve the greater attention. A question in the census is the only satisfactory source of statistics of car availability in local authority and smaller areas, and value is increased by cross-analyses with other topics in the census.
Consultants and market researchers are also among the users of the figures. For example, there are no local statistics on household income, but the census statistics on possession of a car, and especially two cars, are widely used (particularly in market research) as a general indicator of income level or economic status. In view of the widespread requests for a question on cars and vans to be included in the census, I hope that your Lordships will agree that this is a modification which should be made to the draft order.
Moved, That the following modifications be made to the draft Order in Council laid before the House on the 20th of March:
1. The substitution for item 16 of Schedule 2 of the following item:
"16. Whether the private household to which the return relates—
(a) has exclusive use or whether it has shared use of—

(i) a fixed bath or shower which is permanently connected to a water supply and to a waste pipe;

(ii) a water closet with entrance inside the building;

(iii) a water closet with entrance outside the building;

(b) normally has available for use by members of that household a car or van, and if it has, the number of cars and vans available."
2. The substitution for item 19 of Schedule 3 of the following item:
"19. Whether the private household to which the return relates—
(a) has exclusive use or whether it has shared use of—

(i) a fixed bath or shower which is permanently connected to a water supply and to a waste pipe;

(ii) a water closet with entrance inside the dwelling occupied by that household;

(iii) a water closet with entrance outside the dwelling occupied by that household;

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(b) normally has available for use by members of that household a car or van, and if it has, the number of cars and vans available ".—(Lord Cullen of Ashbourne.)
Lord UNDERHILL: My Lords, I think that the whole House will be grateful to the noble Lord, Lord Cullen, for his moving this modification to the order and particularly for the frank way in which he did so. When this order was originally before this House a number of noble Lords questioned whether or not the Government had had correct advice. It is clear from what the noble Lord has said that the advice given at the time was wrong. It was absolutely clear to many of us, particularly from these Benches, that this is a question which should have been asked. It would have given valuable information not only to the department but to the local authorities. I am grateful that the Government have now decided to reconsider the matter.
It would be wrong for us to be churlish and to say that they never should have made the original order. They were obviously dominated by a mood of false economy, as was admitted by the noble Lord, Lord Cullen, and therefore we are pleased that the Government have listened to representations made by various sections of this House, of another place and from local authorities. For that we are grateful and hope that the modification will be approved.
Lord HALE: My Lords, may I make a single observation? What does the phrase "normally has available" mean in relation to a family which may have half a dozen members, some going here and some going there? Does it mean garaged on the premises or does it mean normally standing on the premises? The words, "normally has available", are words which, it seems to me, the noble Lord might care to consider. I raise the point because I would not quite know how to answer that question in relation to my own establishment.
Lord CULLEN of ASHBOURNE: My Lords, the point is well made.

INDUSTRIAL TRAINING LEVY (ENGINEERING) ORDER 1980
6.56 p.m.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie)The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie) rose to move, That the draft order laid before the House on 14th April be approved. The noble Earl said: My Lords, the draft Industrial Training Levy (Engineering) Order, 1980 has been placed before you today and I beg to move that it be approved. The levy orders have been debated here in each of the last two years—last year it was presented by myself and in 1978 by the noble Lord, Lord Wallace of Coslany. This, therefore, is the third occasion that an Engineering Industry Training Board Levy Order has been put forward for approval. The whole House is, I know, well aware of the great importance of the engineering industry as one of the key wealth-creating sectors of the economy as our debate on the Finniston Report bore witness.
The House will know that under the Industrial Training Act 1964, as amended by the 1973 Employment and Training Act, industrial training boards raise and collect levy from establishments within their scope for the purpose of encouraging adequate training. There is exemption from levy liability for small firms and for other firms who meet the boards' training criteria. The membership of the boards comprise equal representation of employers and unions in the industries concerned together with members representing educational interests.
This particular levy order, as in the last two years, requires parliamentary approval because one part of it involves a levy of 2 per cent. on large employers in respect of site workers in the mechanical and electrical engineering construction sector. Under the Act, an order giving an industrial training board power to raise a levy in excess of 1 per cent. of emoluments, or pay roll, must be approved by both Houses. The order is in most respects identical to last year's. For the main part of the engineering industry the proposed levy is 1 per cent. of a firm's aggregate wage bill, with small firms with less than 60 employees excluded from levy liability. For the foundry sector, the proposed levy is also 1 per cent., with establishments having payrolls of less than £25,000 per annum excluded.
For the engineering construction sector the proposed levy is 2 per cent. on large companies in respect of site workers and, unlike the other sectors, there is no provision (except in the case of head office staff) for firms to be exempted in recognition of having met their own training needs. The 2 per cent. levy will therefore apply to all site employees of companies wholly or mainly engaged in engineering construction activities. It will not apply to off-site workers such as head office staff; for them, the levy will be 1 per cent. on employers where more than 30 people are employed. No levy will be payable on the first £50,000 of an employer's payroll for site employees; the next £450,000 will attract levy at I per cent.; and the payroll above £500,000 will be levied at 2 per cent. Consequently, only large employers will pay the 2 per cent. and then on only part of their payroll. The board estimates that the levy will raise some £2·6 million which will then be used to finance the training necessary to the industry.
The proposals, which have received detailed consideration and consultation, have been unanimously approved by the Engineering Industry Training Board and by the Manpower Services Commission. The two employer associations, the Oil and Chemical Plant Constructors' Association and the Engineering Employers' Federation, who together represent the majority of employers in the engineering sector were consulted about the 2 per cent. levy. They have reported agreement, but only nine out of the 104 firms consulted opposed. I beg to move.
Moved, That the draft order laid before the House on 14th April be approved.—(The Earl of Gowrie.)
7 p.m.
Lord BLEASE: My Lords, I wish to express thanks to the noble Earl the Minister for his very comprehensive and lucid explanation of this order. As the Minister has said, the proposals contained in the order have already been given detailed consideration and approval by the Engineering Industry Training Board, the Manpower Services Commission and by relevant employers' associations. The order has also been scrutinised by the Joint Committee on Statutory Instruments. Nevertheless, I think that it is

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important that while we have this wide support for the order as the Minister has said, in this House we ought to stress our concern and interest in measures to promote effective training developments in this wealth-creating sector of our economy. I do not need to add—because the Minister has often repeated it—that training requires to be under continuous review as a vital component in the maintenance of efficient and competitive production.
I should like to take this opportunity to join with all those who have publicly paid tribute to the useful work of the Engineering Industry Training Board, and especially to the leadership and drive given to the progressive training developments by the board chairman, the noble Lord, Lord Scanlon. There are two aspects of the Engineering Industry Training Board which I wish to mention briefly. I understand that the Board have established and developed an engineering careers information service. I consider it very important so far as universities and polytechnics are concerned that this particular service should be encouraged and developed in ways that will ensure that at academic level and practical level the polytechnics and universities may provide within their faculties for the needs of the engineering industry in the United Kingdom.
The Engineering Industry Training Board also operates a wide range of advisory services, including an export training and development service. This is another aspect of the board's work which I feel sure could be encouraged to the progressive benefit of our country's needs at this particular time. Finally, may I say to the noble Earl that I hope he will suitably pursue what he considers to be appropriate encouragement to the Engineering Industry Training Board in these two particular aspects. With those few remarks, I am very pleased to give support to the order.
7.4 p.m.
Lord ROCHESTER: My Lords, I apologise to the noble Earl for not being present when he began his explanation of this order; but may I join the noble Lord, Lord Blease, in thanking the noble Earl for the clear way in which I heard him explaining the part of the order that I was
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in my place to hear. We, too, welcome the provisions of this order, as we did the order which was laid before the House last June. We are particularly pleased to approve the raising of a training levy in the engineering industry. As the noble Earl well knows, this is likely to be used largely for training in skilled occupations in some of which, despite the increasingly high rate of overall unemployment in the country, there is still a shortage of people.
I should like to take advantage of this brief debate to ask a few general questions relating to the work of the Engineering Industry Training Board in skilled training. I apologise for not having given notice of these questions, but the noble Earl will find them of such a general kind that he will not have much difficulty in answering them. When the Minister introduced a similar order last year, he spoke of a discussion document entitled, Review of Craft Apprenticeships in Engineering. In that document there were proposed fundamental and, in my view, much needed changes in the apprenticeship system: for example, moving away from the serving of a set period of time (which, in my experience, is too long), to the achievement of certain standards of performance based on job requirements. My understanding is that that welcome initiative met with a somewhat disappointing response. I wonder where the matter now rests and whether the noble Earl can give us any indication of the likelihood of any progress being made in that field.
Secondly, there are a large number of firms—including, no doubt, some in the engineering field—which have found that in furthering the national interest (if I may put it that way) in training more apprentices than they are likely to need later as craftsmen they are substantially and increasingly out of pocket. It is very expensive indeed to train even one apprentice. With the pressure on costs to which the industry is subject, my information is that the position has now been reached where some of these firms may feel obliged before long to review the whole question of whether they can continue such training on the present scale. I wonder whether the Minister has anything for our comfort.
In the debate on industrial training last December (in which I am afraid I was unable to take part) the noble Earl spoke

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of a review of the whole system of training of this kind. That would take account of the need for arrangements in this field to be closely related to the skilled needs of industry and to be cost-effective. He said at that time that the Manpower Services Commission were aiming to make recommendations some time this summer so that the Government could reach decisions with them on future training arrangements, including the whole industrial training board system.
In passing, this review is especially timely in relation to certain misgivings which a number of firms have recently expressed relating to industrial training boards, basically concerning whether the firms are getting what they conceive to be value for money. The alternative is to do rather more on their own. We on these Benches would be glad to know whether there is any more precise indication now regarding when the Government's decisions in this field are likely to be made known. With those few remarks, and apologising again for having rather sprung them on the Minister—and, for that reason, I will understand if he is not able to give me full answers now—I too have pleasure in welcoming this order.
The EARL of GOWRIE: My Lords, I am grateful for the general welcome which both the noble Lord, Lord Blease, and the noble Lord, Lord Rochester, have given to this order. I certainly make no apology for commending the order, but it is not inconsistent with my commending it for me to feel that all is not generally well with the system of industrial training in this country; and that is why we are reviewing it very seriously. It is no secret that, if we were able to, we would like to see a general debate on the subject, possibly with a view to a Bill being introduced in the next Session. But of course that is not directly for me; other people are involved.
I am very pleased to follow the noble Lord, Lord Blease, in acknowledging the way the ITB has given a lead here under the able leadership of the noble Lord, Lord Scanlon. It has, of course, taken full account of the changing industrial and economic needs of the country in preparing its plans and assessing priorities. I should like to pay tribute to the work it
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has done over the years to ensure a satisfactory amount of training in the key transferable skills of craft technician and professional engineer levels. But, I am sure that, were he here, the noble Lord, Lord Scanlon, would agree with me that there is still a lot to do.
The noble Lord, Lord Rochester, asked me about the reform of engineering craft training. In March 1978 the Board published a discussion paper, which I think the noble Lord has in mind, on the results of a review of the craft apprenticeship system. It contained proposals for raising the standards of skills and achieving flexibility in their use, recognition of craft status on the achievement of standards rather than time serving, the development of courses in schools to shorten the period of off-the-job apprentice training and a financial mechanism for making up the intake of apprentices to the level required to meet industry's needs.
Widespread consultations were held but I think it is no secret that because some of the proposals proved to be very controversial the Board has subsequently been concentrating on the industrial aspects of the proposals as they affect employers and craft unions. What has emerged so far is, I am able to tell the noble Lord, Lord Rochester, that exemption requirements are to be tightened to encourage more employers to train to module standard; and the length of the introductory stage of first-year training is to be more flexible so that young people who have taken appropriate technical courses at school can make an earlier start on the next stage of training. That, I think, is a satisfactory beginning, but I am sorry to say that there has been no agreement so far on the radical part of this paper's proposals, with which I must say I agree—that is to say, the recognition of craft status upon the achievement of standards rather than time serving. We have quite a way to go there.
On the two other general issues raised by the noble Lord, Lord Rochester, I think he wished for a short comment from me on the review of the Employment and Training Act. I have given some indication that the matter is in progress and that I might be able to bring something before your Lordships' House. I am hopeful of doing so in the next Session.

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Generally, we are, of course, aware of some of the criticisms that can be levelled against arrangements for industrial training. For instance, there is an increasing need to address cross-sector problems more earnestly and to consider local labour market difficulties in a more coherent way. That is why the Manpower Services Commission is engaged on its fundamental review of the 1973 Act. I cannot predict the outcome of the review but I have made my own interest and concern clear to the House and I hope I shall have a bit more to say on it within the reasonably near future. In the meantime, to return to the order, I beg to move that it be agreed to.
Lord LYELL: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
[The Sitting was suspended from 7.15 p.m. to 8.0 p.m.]

SOCIAL SECURITY BILL
Further considered on Report.
Schedule 3 [Social Security Advisory Committee]:
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 24:
Page 71, line 34, leave out lines 34 to 36.
The nole Lord said: My Lords, your Lordships will he aware that this amendment was tabled at the Committee stage, when it was numbered 82. I have tabled it again for two reasons. I said at the time that I wanted to read very carefully what the noble Lords, Lord Cullen and Lord Sandys, had said, and I am rather glad that I did because I think that the noble Lord, Lord Cullen, was wrong in his comments and observations. I may be wrong, but I think that as a result, quite unintentionally, he misinformed the Committee as to the effect of my amendment. That is my main justification for burdening your Lordships again with this matter.
Secondly, I do so because of the importance of the issues involved, and I think it is worth while explaining in more
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detail precisely why the amendment is necessary. At the Committee stage, the noble Lord, Lord Cullen, said in col. 700 of Hansard for 22nd April:
"The intention of this amendment is to require the Government to refer regulations which specify the rates of child benefit to the Social Security Advisory Committee".
He went on to explain why it would be wrong to do that.
Let me make it absolutely clear that that is not at all the intention behind the amendment. The paragraph of Schedule 3 which states that regulations about the rates of child benefit need not be referred to the advisory committee is paragraph 14(1). The purpose of this amendment is to delete paragraph 14(2), but not to delete paragraph 14(1). Paragraph 14(2) provides that regulations reducing the children's allowance payable with national insurance benefits, following an increase of child benefit need not be referred to the advisory committee.
In point of fact, we see at the bottom of page 70:
"PART II REGULATIONS NOT REQUIRING PRIOR SUBMISSION TO COMMITTEE"
On the face of it, it is reasonable that they should not he referred to the advisory committee. The adjustments of National Insurance benefits to take account of an increase of child benefit ought to be a matter of simple arithmetic, and therefore, I submit, entirely non-controversial. If that were so, it would be pointless to refer them to the advisory committee.
This year, however, the Government are using this regulation-making power in a way that my noble friend Lord Wallace, in moving the Committee stage amendment, described as "a blatant swindle"—his words, not mine, but I do not necessarily disagree with him. Like many swindles, it is somewhat complicated and what I want to do, if I can, is to explain it simply.
There is a principle that Governments of both parties have followed ever since 1948 in considering how much should be paid as an addition to national insurance benefits. For a dependant child, one has to look at the total amount payable for the child, including child benefit or family allowance, as it was called until 1977, as well as at the actual national insurance

1607
addition. That is what this Government did when calculating the present children's rate in last year's uprating.
I ask your Lordships to take, for example the amount paid for each of his children to a man who is unemployed or sick. Before the November 1979 up-rating, it was 85p per child. With the child benefit of £4 payable to the wife, that made a total of £4·85 a week for each child. When the Government came to up-rate the 85p National Insurance addition, they took the total amount of £4.85, not just the 85p, and increased it by 17½ per cent., which was the expected rate of inflation. That gave them a new total of £5.70 per child, to be provided partly by child benefit and partly by an addition to the national insurance benefits.
As child benefit was not being increased on that occasion, the National Insurance addition for a child had to be raised to £1.70; that is, £5.70 less the £4 child benefit. In other words, to produce a 17½ per cent. increase in the total amount allowed for a child, the Government had to double the national insurance addition from 85p to £1.70, which is precisely what they did. They deserve no special credit for doing it, because they were merely following the established convention. But the fact remains that they did. This year, the calculation is a little more complicated, because child benefit is also going up in November by 75p per child.
The last time an increase in child benefit coincided with an up-rating of National Insurance benefit was in November 1978, and it was worth looking back to see what was done by the Labour Government on that occasion. I hope that the noble Baroness the Minister is listening, because I now want to tell her what the Labour government did, as she has treated us on more than one occasion to an account of what the Conservatives did.
Before the November 1978 up-rating, the addition to sickness or unemployment benefit for a child was £2.20 a week. Child benefit was £2.30, so that the total amount payable for each child when the father was sick or unemployed was £4.50 a week. That year, prices were expected to rise by 7 per cent.—that was in the halcyon days, when prices did not rise very much—so the figure of £4.50 per
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child was increased by just over 7 per cent. bringing it up to £4.85 from November 1978—an increase of 35p. But child benefit was increased that November by 70p per child, which meant that the national insurance addition for a child could be reduced by 35p, from £2.20 to £1.85. Nobody complained about that because the net effect for national insurance beneficiaries was that they got the full 7 per cent. increase which they needed to restore the total value of their benefits. In fact, the reduction in the national insurance additions for children was generally welcomed as a step towards the goal of raising child benefit to a level at which there would no longer be any need to make extra payments for the children of people receiving short term national insurance benefits.
So much for the past. I turn now to what the Government are doing this year. The total amount payable for the child of a sick or unemployed person since last November is £5·70, made up of £4 child benefit and £1·70 national insurance addition. The estimated inflation rate this year is 16·5 per cent. Following the principles established in previous years, the total amount of £5·70 per child should be increased this November by 16·5 per cent., or 95p, making a new total of £6.65. Child benefit must be deducted from that total to arrive at the new rate of national insurance addition.
The new rate of child benefit from November will be £4·75. By deducting £4·75 from £6·65, one is left with £1·90 per week. To put it another way, the total increase needed to restore the real value of the payments for the child of a sick or unemployed person this November is 95p. Of that total, 75p is being given as an increase in child benefit, and the other 20p ought to be given as an increase in the national insurance addition for a child, raising it from £1·70 to £1·90. But instead of doing that the Government are reducing it from £1·70 to £1·25.
The result is very odd indeed. First, the up-rating percentage of 16·5 per cent. was applied to the £1·70 national insurance addition instead of the full amount of £5·70 per child. That produced an increase of 30p. If the calculation had stopped at that point, I should not have complained. In fact, that was how the Labour Government did it in 1977. But

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having left the child benefit element out of the calculation up to that point, the Government then went on to deduct the 75p increase in child benefit from the national insurance addition.
There is no predecent for this—none whatever. Nor is there any logical justification for it. The net result is that the real value of the payments for the child of a sick or unemployed person, taking child benefit and the national insurance additions together, will be a cut of 65p this November—a cut of 9·8 per cent.
Precisely the same thing is happening with the child's addition to long-term benefits, including invalidity pensions, except that here the loss for each child is not 65p but 70p. Unfortunately, it seems that what the Government are doing, while totally—and I make no excuse or apology for saying this—unprincipled, is, I have to confess, not actually illegal. Section 17(1) of the Child Benefit Act 1975 gives to the Secretary of State the power to make regulations reducing the national insurance additions for children
"to such extent as he thinks appropriate"
whenever child benefit is increased. Clearly, when the Child Benefit Act was passed, nobody imagined that the Secretary of State would use that power as an underhand way of reducing public expenditure at the expense of the families of the unemployed and the sick. And it is an underhanded way of doing things. That, however, is what he is doing.
That brings me to the purpose of the amendment. Paragraph 14(2) of Schedule 3 excludes from the classes of regulations that must be referred to the advisory committee those made under Section 17 of the Child Benefit Act, the very section under which the cuts which I have explained are being made. As I said earlier, if regulations under that section were being used to make a simple arithmetical adjustment of a non-controversial nature, then there would be no point in referring them to the advisory committee. But that is clearly not the case.
The adjustments which the Government are proposing to make this year are, as I think I have demonstrated, by no means simple. It has taken me some time to understand them. Nor can they possibly be regarded as non-controversial. That
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is why we regard it as essential that in future years regulations made under Section 17 of the Child Benefit Act should be referred to the advisory committee, whose report upon them would then be laid before Parliament. If future Secretaries of State—and I say "if future Secretaries of State"—use their regulation-making power in an honest and straightforward way, they will have nothing to lose by submitting their proposals to the scrutiny of the advisory committee. Parliament will gain from the knowledge that the regulations have been considered in draft by an independent advisory body which can be relied upon to draw attention to any misuse of the Secretary of State's powers.
Having regard to what has happened—I have used, I acknowledge, fairly strong language because I thought it was right and proper that I should do so—I think that proposals should be submitted to the advisory committee. Parliament will gain from the knowledge that the regulations have been considered in draft by an independent advisory body. If the Secretary of State has nothing to fear, this is precisely what he ought to do. I hope—although it is a forlorn one, I acknowledge—that the Government, if they will not accept this amendment, will at least say that they will read carefully what I have said and consider not only the implications but the advisability of doing something along the lines which this amendment indicates. My Lords, I beg to move.
8.19 p.m.
Lord BANKS: My Lords, I have listened with very great care to what the noble Lord, Lord Wells-Pestell, has said. It certainly seems, on the face of it, that something rather extraordinary has happened this year with regard to the way in which social security benefits may be varied following an increase in the rate of child benefit. This seems to suggest that he is perfectly right to call for any variation of this kind to be referred, as the amendment would have it, to the advisory committee, and I hope the Government will give very careful consideration to what he said.
Lord CULLEN of ASHBOURNE: My Lords, although we have already considered this amendment during the Committee stage, I am grateful to the noble

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Lord for raising this matter again. This enables me to clarify what I said then in reply to the noble Lord, Lord Wallace of Coslany. In my reply I referred to the "regulations which specify the rates of child benefit". This was possibly somewhat misleading since what is actually at issue is whether regulations which provide for changes in the rates of other social security benefits following an increase in child benefit rates should be referred to the Social Security Advisory Committee, and I think that was what the noble Lord, Lord Wells-Pestell, was referring to.
That being said, I must make it clear that we are no more favourably disposed to this amendment than we were when it was moved in Committee. The Government do not consider it appropriate for the Social Security Advisory Committee to comment on any regulations which specify rates of benefit. I must repeat what I said when we last discussed this amendment:
"Benefit rates must remain the clear and final responsibility of Parliament acting on the decisions of the Government of the day. There is no case or need for an intermediary in this matter."—[Official Report, 22/4/80; col. 700.]
The noble Lord, Lord Wells-Pestell, went into a wealth of detail about the calculations that have been made this year and I would remind him that he said that the same method was adopted in 1977 by the Labour Government, at which time there was not an increase in the child benefit to be deducted. However, what he has said—which was very detailed and I think was not easy for anybody to take in at the time—will be studied with great care by the Government and I hope that the noble Lord will withdraw his amendment.
Lord WELLS-PESTELL: My Lords, there is very little left for me to do, seeing that the Government have set their face against accepting a single amendment from either these Benches or the Benches of my noble friends on the Liberal side. The Government have erected the thickest and highest and widest wall that I have ever encountered since I have been a Member of your Lordships' House: one can get neither over it nor under it, nor round it.
The whole consideration of this Bill has been a useless exercise. It has meant a
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great deal of hard work, certainly so far as the Opposition is concerned, and I am sure that I speak for my friends on the Liberal Benches. There has not been a gleam of hope shining out from the Government side. The only time that the Government took an amendment back to look at it was when one of their own supporters said I was right and another said the matter ought to be looked at. The Government took it back because they were pressed by two Members on their own side, but they shut their ears so far as I was concerned.
I do not quarrel with that, but what I am saying is that the whole of the Government's view when we discussed this matter in Committee was based on (shall I say?) deleting paragraph 14(1) of Schedule 3 and not paragraph 14(2). The noble Lord has given no explanation at all about that; that has not come into his calculations. It has not come into the comments and observations he has made tonight. I should have thought that the approach tonight must have been made on much the same supposition, that we were talking about paragraph 14(1) and not 14(2).
I do not know whether the noble Lord is saying that the Government will look at this. I should be happy to leave it there if the Government are prepared to say that they will look at it in order to see whether there is some validity in what I have said. If the Government have nothing to be afraid of, why not refer this kind of matter to the advisory committee? What is the use of having an all-powerful, competent committee of able people if they are not going to be used in these rather delicate matters? After all, the Secretary of State lays down policy; I do not quarrel with that. It is the function of the Secretary of State to lay down policy, but it surely should go to an independent body to see whether the implementation of that policy does justice to the recipients.
I will ask leave of the House to withdraw this amendment. I do so on the understanding—no, not on the understanding because I cannot lay down conditions, but in the hope that the Government will look at this and perhaps will be able to write to me in some detail as to what their thinking is in the light of the amendment that I have moved tonight and what I have had to say.
Lord SANDYS: My Lords, before the noble Lord withdraws his amendment, he has made some very extravagant and, I think, unnecessary charges against Her Majesty's Government tonight. He has even suggested using explosive upon us on these Benches, but I think he should reflect on his remarks on Second Reading in which he welcomed the Bill to a limited extent. Further, I think he was incorrect in two respects. First, he suggested that the Government had refused to take back all amendments except one. In fact, there were two, to my knowledge, and there may have been others, which we would reflect upon. One was Amendment No. 26 in Committee, which he will recollect that he moved himself, and the other was Amendment No. 76A which he will remember was moved by my noble friend Lady Faithfull.
Lord WELLS-PESTELL: My Lords, I am fully aware of that and I do not join issue with the noble Lord on this. What I am saying is that any amendment which I moved was not taken back by the Government at my request; it was taken hack by the Government at the request of others, not on this side of the House. I take the noble Lord's point, that this is a Report stage and we ought not to turn it into a Committee stage, and therefore if the noble Lord is not going to say anything more perhaps I ought to follow suit and say nothing more myself. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.29 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 25:
Page 72, line 19, leave out paragraph 17.
The noble Lord said: My Lords, again I want to say that this amendment was tabled at the Committee stage, when it was Amendment No. 83, and its object is to ensure that the main body of supplementary benefit regulations which will form the basis of the reformed supplementary benefits scheme are referred to the advisory committee, and that a report on them by the advisory committee is laid before Parliament in due course. At the Committee stage the noble Lord, Lord Sandys, opposed the amendment on two grounds. The noble Lord first of all argued that, because the advisory committee
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would not start to operate until November, the amendment would apply only to regulations made after that time in what the noble Lord called the "fag end".
In fact in Hansard of 22nd April last, col. 701, the noble Lord, Lord Sandys, said:
"In practice, therefore, paragraph 17 can be effective for only a relatively short time, that is, for the fag end of six months after Royal Assent".
The effect of the amendment would be that all regulations made within the first six months after Royal Assent would have to be referred to the advisory committee unless either they were excluded by other provisions of Clauses 10 and 11 or the committee itself agreed that they should not be so referred. In the case of regulations made before the advisory committee was set up, there is provision under Clause 10(7) for referring them to the committee as soon as is practicable after they are made unless the committee agrees that they should not be referred.
So there would be no risk of the committee being overloaded with a mass of inconsequential regulations. It would be up to them to decide which were the important ones which should be referred to them. Nor would there be any question of the regulations having to be held up while the advisory committee considered and reported on them. The whole point of Clause 10(7), which was inserted in the Bill by an amendment moved by a Conservative Member in another place, is to enable urgent regulations to go forward without first being referred to the advisory committee. Once the regulations have been made they can be referred to the committee which will thus have an opportunity to convey its views to Parliament when it has had time to study the regulations in detail.
If I may say so, this disposes of the second ground on which the noble Lord, Lord Sandys, opposed the amendment at Committee stage. He argued that because the revised supplementary scheme must be fully operational from November there would be no time to consult the committee. The answer is quite simply that the advisory committee would be consulted after the regulations had come into force. If the advisory committee proves to be an effective body—and that will depend on who its members are, how much time

1615
they devote to it, whether it is adequately staffed and how much support it gets from Ministers and officials in the department—one of the most important jobs it could do in its first few months would be to give detailed scrutiny to the new supplementary benefits regulations, which will from November affect the living standards of millions of people in this country. The fact that the committee would be doing this when the regulations are already in force is in some ways a positive advantage, because they will be able to see how the regulations will be working. It does seem to me that this would make a very valuable contribution. I can see no reason at all why it should not be used in this way.
I think I have—I would naturally think so—satisfactorily dealt with Lord Sandy's objections. I would hate to feel that it is just intransigence on the part of the Government. I know they want to get this Bill through as quickly as possible, and obviously one of the best ways of getting a Bill through this House is to get it through without it being amended. I know they want to go on to an even more disagreeable Bill, the No. 2 Bill. But it really is no justification for knocking things down for the sake of expediency. Once this Bill is on the statute book, albeit considerably amended in due course by the No. 2 Bill, there will nevertheless be things which will be there for years and years to come. If we are going to introduce a new Bill, let us introduce it in such a way that it will give the best possible service to the community. My Lords, I beg to move.
8.36 p.m.
Lord SANDYS: My Lords, the noble Lord, Lord Wells-Pestell, is in a mood this evening of some extravagance, and he has charged us with intransigence among many things. I think the Government cannot be charged with that particular fault because there are many aspects which I think one should draw to your Lordships' attention which arise out of the Renton Report on the drafting of legislation. If I may say so to the noble Lord, I think one of the chief difficulties the noble Lord, Lord Wells-Pestell, suffers from is that he wishes to write too much into an Act of Parliament. Your Lordships will see—and I hope the noble Lord, Lord Wells-Pestell, will care to refresh
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his memory on the Renton Committee—that it does commend a restriction when it comes to the over-elaboration of terms which might lead to greater complication.
The Government recognise that there may be problems, and I speak in general terms. A new body is to be set up; that is, the Social Security Advisory Committee. The noble Lord, Lord Wells-Pestell, wishes that piece of machinery, as the Government themselves wish it, to work as rapidly as possible and in the most efficient manner. But the noble Lord makes a number of suggestions. First, the noble Lord is quite right to suggest that Clause 10(7) could operate on the supplementary benefit regulations; that is, they could be referred to the committee after they have been made. But this would still mean overloading the committee with what would amount to a study of virtually the entire supplementary benefit scheme.
I was surprised that the noble Lord should have again moved this amendment, which we discussed during Committee stage. I should like to expand a little on the remarks that I made at that time. I will not weary your Lordships by repeating the case for rejecting the amendment since this has already been fully explained in Committee. The reference is at cols. 701–2 of the Official Report. However, I think it would be of interest to your Lordships if I remind you that it was argued in another place that the supplementary benefit regulations made in the six months after Royal Assent should be referred to the Social Security Advisory Committee after they have come into operation. This is an important point.
The Government's view was that this would put an unreasonable burden on the committee. But a promise was made that the proposal would be reconsidered, and this has been done. I understand that my right honourable friend Mr. Prentice, the Minister for Social Security, has written to the Opposition in another place confirming the Government's view as previously stated. The Minister said that it would be very unwise to load the committee, in its early days, with what would amount to a study of the whole supplementary benefits scheme. The committee would be left with very little, if any, time to undertake studies on its own initiative. It might also have difficulty in completing its other statutory tasks in a reasonable time.

1617
The Minister also pointed out that the committee would not be excluded from looking later at any regulations made in the six-month period if it wanted to do so. Equally, the Government would welcome the flexibility to allow the reference of particular regulations to it if, for example, their implementation proved difficult or controversial. Throughout the debates on the new committee, Ministers have emphasised their desire to give it freedom of manoeuvre and to have such freedom themselves in making use of it. The proposal in the amendment to refer the regulations to the committee after they had come into operation, could prevent both objectives being achieved at a crucial stage in the committee's development. We believe that the noble Lord, Lord Wells-Pestell, is misguided in his view about this. He accuses the Government of intransigence: may we accuse him of over-elaboration of the task before the Social Security Advisory Committee.
Lord WELLS-PESTELL: My Lords, I am familiar with the Renton Report. Obviously it is unwise to write too much into a Bill. However, I have been in your Lordships' House a good many years and I have been in the political field a good many years. I know from experience—as most noble Lords in your Lordships' House know only too well—the gaps that are found in almost every peice of legislation. I can remember amendment Bills being put before Parliament one after another to fill up those gaps. I am not convinced that sufficient time and thought has been given to the function of the advisory committee. It is very easy to say that this is a new Bill and that they have this and that to do and that they will not have time to do all this. It may be that I have missed it, but I never remember anyone saying how often the advisory committee will meet; whether it will he a full-time occupation or a part-time occupation and, if so, I do not recall anyone defining what the part-time will be.
Social security, and any legislation relating to it, is always most involved. I do not know of anything as complex as social security. And it is because of its complexity that I think that it is necessary that we should have no loose ends. I do not know whether the noble Lord can tell me—I am sure that the House would give him leave to speak if he can tell me—
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how often the advisory committee is expected to meet. That is perhaps a question which some of us should have asked sooner. However, it is not a question of overloading the committee. There has been no evidence before us that the function of the advisory committee will be so impossible that it cannot carry out the task already assigned to it in the Bill. I do not want to put too much work on it, but 'here are certain matters which I have dealt with this evening which I think ought to go to the advisory committee, rather than be left exclusively to the Secretary of State.
Lord ROSS of MARNOCK: My Lords, can the noble Lord give us some idea as to how many such regulations are likely to be decided on in the first six months? It is a tremendous power. We build up a new scheme, a new advisory committee, but then we say that for the first six months we shall not pay any attention to it—the first six months of the life of this particular Bill. It is asking a great deal to take on trust that this shall be done. If that is the case, it undermines the position of the advisory committee right from the start.
Lord SANDYS: My Lords, the noble Lord, Lord Ross of Marnock, knows very well that, when in another place he was Secretary of State for Scotland, he had responsibilities as regards the new legislature intended by his Government for Scotland, and he accused the Opposition in those days of drafting too many schemes as regards the legislature in its early days. It is very difficult when a new committee is established to prejudge what the chairman and the body of committee members will do.
I suggest to the noble Lord, Lord Ross, that, in exactly the same way as he proposed that the legislature in Scotland should make its own rules of procedure for its internal administration, this committee should not look for its internal administration to an Act of Parliament, but it should have freedom of manoeuvre. The noble Lord, Lord Wells-Pestell, seeks to deny it that freedom of manoeuvre. He wants to know at this stage, long before the chairman is appointed or the members are appointed, how many days a week they will meet. If we seek to make these instructions at this stage we are denying the freedom of manoeuvre both of the committee

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and of the chairman. That is highly undesirable for a new body.
Lord ROSS of MARNOCK: My Lords, will the noble Lord answer one simple question: if the amendment is passed does it give the advisory committee more freedom or less freedom?
Lord SANDYS: My Lords, undoubtedly it will give the advisory committee less time and less freedom.
On Question, amendment negatived.
Schedule 4 [Consequential and minor amendments of enactments]:
8.48 p.m.
Lord BANKS Lord BANKS moved Amendment No. 26:
Page 74, line 12, at end insert—
("The Housing Subsidies Act 1967
15.—(1) The provisions of section 24(1)(B) of the Housing Subsidies Act 1967 shall have effect where a person borrows, or two or more persons borrow jointly, from a qualifying lender on the security of a freehold or leasehold estate of the borrower, or of one or more of the borrowers (including an estate held jointly or in common by the borrower, or one or more of the borrowers and one or more other persons) in land in Great Britain, and the following conditions are satisfied:—

(a) that the loan is or was made as part of a scheme under which not less than nine tenths of the proceeds of the loan are or were applied to the purchase by the person or persons to whom it was made of an Annuity ending with his life or with the life of the survivor of two or more persons (in this section referred to as "the Annuitants") who include the person or persons to whom the loan is made;

(b) that at the time the loan is made the person to whom it is made or each of the Annuitants had attained the age of 65 years; and

(c) that the person or persons to whom the loan is made or each of the Annuitants uses the land on which it is secured as his only residence.

(2) The borrower or borrowers may by notice in writing to the lender in such form as the Ministry may direct (in this section referred to as an "Option Mortgage") elect that the loan shall be subsidised in accordance with the provisions of Part II of the Housing Subsidies Act 1967 and the Option Noice shall be treated for all purposes as if it were art Option Notice made under the provisions of section 24 of the said Act.")
The noble Lord said: My Lords, I beg to move Amendment No. 26 in the
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name of the noble Baroness, Lady Vickers, and myself. I should begin by declaring an interest as I did when we first discussed this matter in this House; and as I have done on many other occasions in this House, and as I forgot to do when we discussed the matter in Committee, for which I apologise to the House. I am an insurance broker, being a director of a subsidiary company of a firm of Lloyd's Brokers.
When at the Committee stage I moved this amendment the noble Lord, Lord Cullen of Ashbourne, agreed to take the matter back and consider it again. I withdrew the amendment, with the leave of the House, and promised to bring it back at the next stage of the Bill which I now do, again with the support of the noble Baroness, Lady Vickers. During the Committee stage the amendment received support from all parts of the House: Government Back Benches, Opposition Benches, Liberal Benches and Cross-Benches. I think that it was seen by all who spoke as an elementary act of justice,
Elderly taxpayers raising a mortage on their house to purchase an annuity had been rightly or wrongly—and I believe rightly—made recipients of Government assistance through being granted tax relief on the interest on the mortgage. Elderly non-taxpayers—those too poor to pay tax and most in need of the additional income—had been left out, with the result that these arrangements were often of no advantage to them. The amendment proposes that help should also be given to the elderly non-taxpayers by extending to them the option mortgage scheme which would allow them to pay a reduced, Government-subsidised rate of interest on the mortgage, thus making the scheme helpful to them and enabling them to increase their income. The point is very simple. If it was considered right—and a specific decision to that effect was made by Parliament in 1974—to help elderly taxpayers seeking to increase their income in this way, surely it is even more important to help the elderly non-taxpayers whose need is clearly greater.
The noble Lord, Lord Cullen of Ashbourne, has been good enough to send me and those who spoke in the Committee stage discussion a letter setting out his views after further consideration. I am grateful to him for that. I do not think

1621
that I should attempt to express an opinion about those views until after he, or one of his colleagues, has had an opportunity of outlining them to the House. For the moment I shall content myself with inviting the House to perform the elementary act of justice to which I have referred. I beg to move.
Baroness VICKERS: My Lords, I, too, should like to thank the noble Lord, Lord Cullen of Ashbourne, who kindly agreed to look again at this amendment. I hope that he will look on it favourably. I should like to mention the fact that in the House of Commons the Prime Minister answered a Question about the extension of option mortgage schemes to elderly home-owners in the following way:
"My right hon. Friend the Secretary of State for the Environment has the lead responsibility for the option mortgage scheme, and my right hon. Friend the Secretary of State for Social Services is responsible for social security policy; but any question of extending the option mortgage scheme in the way my hon. Friend suggests would involve the interests of a number of different departments and would be for consideration jointly by the Ministers concerned".—[Official Report, Commons, 30/4/80; cols. 542–3]
In these debates we should very much like to know who are the Ministers concerned, because as I understand it, the matter has been passed from the Department of the Environment to the Department of Social Security, and both departments have acknowledged it. Tonight it is essential that we get some answer from the Government as to who will be responsible for this very important amendment. Is it to be a legislative mongrel all its life? Are we never to have the point settled? It has been going on since about 1974. I believe that we should get it sorted out tonight. I believe my noble friend Lady Young is going to be kind enough to answer on behalf of the Government tonight. We must have some definite proposition put before us. If my noble friend can tell us the various Ministers who might now be involved, it would be very helpful.
This amendment would help public authorities and voluntary bodies, because, if the people who will have these mortgages were not enabled, by an increase in their income, to go on living in their homes, they would need housing either by local authorities or by voluntary bodies concerned with providing old people's housing.
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We know that that is already in short supply and this amendment would perform a public service and be of personal benefit to the individual.
The other point is what will happen to those who have already taken up these schemes. Surely it will be very hard to remove people of that age group from the benefits of the scheme which they entered into with no knowledge or reason to expect changes. That is the minimum we must do in justice; we must get this matter cleared up. But we must do more than that, which is what the amendment seeks to do. I believe that we must make it possible for these schemes to continue in the future. In my opinion and in the opinion of many people who were in the Committee when we last discussed this, these schemes are very helpful to the public in general.
If I may, I should like to mention one other matter. There are six million owner-occupiers who are not pensioners who receive the vast majority of the £1,643 million given in tax relief and option mortgage subsidy. Very little of this amount goes to the 4½ million pensioner-households who have normally paid off their mortgages. As for expenditure from the DHSS, the retirement pension is available to all, and only 300,000 elderly owner-occupiers collect a supplementary pension, either because they are welt enough off not to need it or because they have a few savings, and so, although they may he struggling, do not need the actual relief.
When we discussed this before I mentioned that most of these people are in the age range that has been through two world wars. They had planned for their retirement, and were mostly very thrifty people. All that has been upset by two world wars and the tremendous inflation which we have at present. Therefore, I should like real consideration to be given to this. If my noble friend Lady Young cannot accept this amendment, perhaps she can set us on the way to finding a solution to this very real problem.
Lord GISBOROUGH: My Lords, the main problem lies particularly with those people who have been locked into this scheme, and who, as my noble friend Lady Vickers has explained, started it when they were paying tax and are no

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longer paying tax. The interesting thing is that it appears that if such a person were to sell his own house and move next door or to another house, he would be able to receive the benefits of the scheme. Furthermore, it seems that if he was simply to sell his own house and buy it back, he would also have the benefit of the scheme. Therefore, the scheme is available to these people through the back door, but is not available through the front door. It seems right to regularise this position. The other point is that if the Bill is not the correct Bill in which to include this matter, can we please be told which Bill is the correct Bill?
Lord GARDINER: My Lords, I was unfortunately precluded by another engagement from attending the Committee stage of the Bill when this amendment was discussed before. As President of Help the Aged, I have some knowledge of the conditions of the old people about whom we are talking. I have, of course, read the whole of the debate on the Committee stage of the Bill and I suppose that its most striking and unusual feature was that there were actually more supporters for the amendment speaking from the Government side of the Committee than from the Opposition side of the Committee.
Perhaps I may add one more Conservative voice—that of Mr. Robert Carr, as he then was, in the other place on 20th June 1974. He said:
"This plan has many advantages. First, it has the obvious advantage for the people concerned who may wish to go on living in the house which has become their home, among their friends, or, if they might not mind moving, are unable to move because it is difficult for them to buy a new house and the pressure on publicly or voluntarily provided homes for old people is in short supply and the demand is greater than the supply.
Secondly, it helps public authorities and voluntary bodies because if these people were not enabled, by an increase in their income, to go on living in their own homes, they would need housing either by local authorities or voluntary bodies concerned with providing old people's housing. So it is a public service as well as a personal benefit".
The two questions which I should like to ask the Minister are as follows. First, in assessing the cost, have or have not the Government taken into account the additional cost of providing either for old people's homes or in other ways for the
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housing of the people concerned who can no longer afford to go on living in their own homes? Whether this comes out of Government funds or local authority funds, it all comes out of public funds. Secondly, have they taken into account the point which was raised by the noble Baroness, Lady Vickers, that under Clause 21(5) it is for the Minister to decide when to bring such an amendment, if carried, into effect?
We all know and have been assured that there will be halcyon times under this Government—whether shortly to arrive or perhaps not quite so shortly. Would it not be much better to accept the amendment with the proviso that it will not come into effect unless and until the appropriate Minister decides that the time has come when it should come into effect?
Lord CAMPBELL of CROY: My Lords, like the noble and learned Lord, Lord Gardiner, I also was unable to be here when this matter was discussed in Committee; over the years I, too, have followed proposals of this kind. But I am going to introduce a note of dissent into the debate because I am hoping that the Government will be able to take action in due course, but in a much broader field. I believe that to tack on this as a schedule to a Social Security Bill is the wrong way of proceeding.
I am actuated to speak in this debate because I was involved in the original Housing Subsidies Bill 1967, to which this schedule refers in this amendment. Indeed, I was on the Opposition Front Bench dealing with that Bill, and Part II of it introduced the option mortgage scheme. It introduced the option mortgage into legislation and the scheme into this country. I spent many hours on that Bill in the Commons Standing Committee upstairs, dealing with all the complications.
It was not in principle a matter which was dividing the two main parties. The Labour Government were bringing it in with the encouragement of the Conservative Opposition. But we spent a great deal of time involved in all the complications and getting that Bill changed and amended. Even then, when it emerged as an Act, it was still the subject of a great deal of discussion and interpretation later on questions such as when the option could be used, and how many times people

1625
could change their minds, and whether they could foresee in the future what their income was going to be and what the threshold of taxation was going to be. It was very complicated, and I can certainly tell the noble Lord who inquired about it that a number of departments were involved, and the Treasury was certainly very much involved, because it was a new concept in exemption from taxation.
I am not only speaking because I was concerned with the original option mortgage scheme, but I am also the chairman of a building society board and also the chairman of a small insurance company which, among other things, handles mortgages, and to the extent that I am affected by this amendment I declare an interest. I would encourage the Government to consider broader changes of the kind which have been suggested. I do not think that the way to do this is piecemeal, by dealing with a single category of elderly people. Were the schedule to be added to the Bill it would create as many anomalies as it seeks to remove. For example, the elderly who were paying rent and not owning their own homes. Because of the interest which I have had in this subject over the years, I can see the appeal of trying to help the elderly to make the best possible use of the capital which is locked up in the dwellings that they occupy. To produce a new form of subsidy in this Bill, however, in the way suggested is not the right way to proceed.
I do not think that we can wait for a major overhaul. I have in the past spoken in favour of the tax credit scheme, to which I know a great many of my noble friends subscribe. But we are told, in contrast to what the noble and learned Lord, Lord Gardiner, said just now about halcyon days, that the Government are in fact facing a period of economic difficulties before we reach the halcyon days further ahead. Unfortunately, those economic difficulties have postponed the tax credit scheme, which would deal with this kind of situation because it is intended to rationalise and simplify the whole system of subsidies, tax allowances, and benefits.
I hope that the Government will commission a full examination of housing subsidies and mortgage tax exemptions in
1626
order to produce a wider and fairer scheme, but I could not support this amendment. I hope that the Government will, in thinking out a scheme, also consider all the repercussions and associated effects so that they can be foreseen and provided for.
9.4 p.m.
Baroness YOUNG: My Lords, I and my colleagues have listened with great interest to the speeches that have been made. We very much respect the views that have been put forward and the sincerity with which they are held. I make no apology at all for the fact that many of those who sit on this side of the House support this Amendment—a point that was made as though somehow this was a rather improper use of the House's time. But this is not a narrow party political point; it is a matter which affects Members of the House wherever they may sit.
I very much appreciated what the noble Lord, Lord Banks, said in moving this amendment. He explained that he had received the letter from my noble friend Lord Cullen setting out the arguments about this, and that he still felt unable to withdraw his amendment and felt that he should bring it back at this stage of the Bill.
There are two general points that I should like to make before turning to deal in detail with the amendment itself. The House is of course master of its own procedure and, unlike another place, is not subject to rulings on points of order. I think that none of us would want to alter this. But it is made clear in the Companion to Standing Orders, on page 114, that the test to be applied to the admissibility of an amendment is whether or not it is relevant to the subject matter of the Bill. But the decision upon this matter, and the action to be taken on that decision, can only be made by your Lordships' House. It is only right to draw attention to the fact that the amendment in the names of the noble Lord, Lord Banks, and the noble Baroness, Lady Vickers, seeks to amend the Housing Subsidies Act 1967 and to introduce a major change in a scheme providing for housing expenditure by extending it to pay subsidies for income maintenance for a limited category of house owners who do not pay tax.

1627
Noble Lords will have noted that this Bill has as its Long Title
"to amend the law relating to social security and the Pensions Appeal Tribunals Act 1943".
Those of us who have been through all the provisions of the Bill know that it is concerned with amendments to the statutory provisions relating to the up-rating of retirement pensions and other long-term benefits under the social security scheme. It introduces a package of reforms of the supplementary benefit scheme. It sets up a Social Security Advisory Committee, and provides for the extension of equal treatment for men and women in social security, and makes a number of other minor and technical amendments.
It is difficult to see a connection between the intentions of the Bill and the subject matter of this particular amendment. I really must draw this to the attention of the House, and I am glad to have heard what my noble friend Lord Campbell of Croy said on this matter because it is relevant. There is moreover a constitutional aspect. The amendment involves additional expenditure which was not envisaged in another place when they passed the Money Resolution. If the House agrees to the amendment it is likely that the Speaker would consider the amendment to infringe the financial privilege of another place.
He would then draw the attention of the other place to this amendment and the other place would be perfectly entitled to agree to the amendment and waive their privilege. If another place were to disagree to the amendment, such a disagreement would be made the ground of privilege alone, and that would be made clear in the Message to your Lordships' House communicating the reasons for the Commons disagreement; so we are dealing with something that is outside the terms of this Bill and is relevant to the Housing Subsidies Act 1967.
I was asked a specific question about which Ministers are actually concerned with it. Clearly the option mortgage scheme is the responsibility of the Secretary of State for the Environment, who is responsible for housing policy; it is also relevant to the Chancellor of the Exchequer, who has responsibility for taxation policy and tax reliefs; to the Secretary of State for Industry for the
1628
oversight of the insurance industry; and the Secretary of State for Social Services for social security and income maintenance. That said, the amendment is not strictly relevant to this Bill, and I must make that point.
The noble and learned Lord, Lord Gardiner, asked why we did not accept the amendment and say we would bring it in when circumstances permitted. I think he will recognise from what I have said that it would not be right to accept the amendment in relation to this Bill for the reasons I have given, although I now come to the more detailed reasons because it is an important point and it is right that we should not just argue it on particular constitutional points, important though I believe them to be. What I think has appealed to all parts of the House is in a sense the simplicity of the argument about option mortgage, which goes as follows: mortgages for house purchase and improvement qualify for tax relief on mortgage interest; so do mortgages taken out to purchase a life annuity; the option mortgage scheme exists to give mortgagors who pay no tax a benefit equivalent to that which tax-payers get from tax relief; and therefore the option mortgage scheme should cover life annuity mortgages as well as house purchase mortgages. This conclusion, while understandable at first, is far from self-evident when one goes into the matter more deeply.
First, there is no general principle that tax reliefs should have matching subsidies. Indeed, the subsidy for house purchase and improvement through the option mortgage scheme is almost unique in this regard. It may be helpful to remind the House of the circumstances in which the option mortgage scheme was introduced. At that time, in 1967, all interest payments on any kind of loan were eligible for tax relief, including the loans for the purchase of annuities covered by this amendment. Yet the option mortgage scheme was introduced for only one specific category of loan; that is, mortgages taken out to buy or improve a home. This was a deliberate act of policy designed to encourage home ownership. Tax relief on mortgage interest has long been regarded as a means of encouraging home ownership and many people argued that it was essentially a subsidy analogous to housing subsidies or

1629
rent rebates in the public sector. Looked at in this way, it was felt to be unfair that the person who was below the tax threshold did not enjoy the subsidy which was available through tax to the great majority of home-buyers.
By contrast, tax relief on loans to purchase life annuities has never been regarded as an instrument of public policy. Indeed, tax relief on loans generally, was withdrawn for a period—from 1969 to 1972—while tax relief, including the option mortgage subsidy for house purchase and improvement, continued. In 1972, tax relief on loan interest generally was restored. But in 1974 the Labour Government again sought to withdraw tax relief generally with the main exception of mortgages taken out to buy or purchase a home. During the passage of the 1974 Finance Bill through the House of Commons, an amendment was passed to retain relief on mortgages taken out to buy an annuity.
The point made by the noble and learned Lord, Lord Gardiner—and I speak in the absence of my noble friend Lord Carr of Hadley—was not quite correct because on that occasion my noble friend was not speaking about the option mortgage scheme; he was opposing the Labour Government's proposals to withdraw tax relief on mortgage interest for annuity purchase. As he said, it would have caused hardship to withdraw the facility from those already benefiting and who had already entered into commitments, so that is not really an element in the present situation.
Indeed, the reasons for the House of Commons decision was based on two arguments. First, it was said that it was unfair to change the rules of the game in midstream and, secondly, it was argued that changes in the 1974 Budget operated with particular harshness on this group of people. The exceptional hardship imposed on this group of people arose in very large measure from the fact that the income element in an annuity is chargeable to tax. When, therefore, a person bought one of these annuities, the first effect was to increase his tax bill; but this was then more than offset by tax relief on the interest on the mortgage. But when in 1974 the Labour Government proposed cancelling the tax relief, the income element in the annuity remained
1630
chargeable to tax. As a result there was a big increase in the tax bill, reducing the validity of the extra income purchased. This was an undeniable hardship and the decision by the House of Commons that the mortgage interest should continue was designed to meet this hardship.
But none of this provides an argument for extending the option mortgage scheme to such mortgages. On the contrary, there is, first, the general point of principle that the option mortgage scheme was designed to encourage home ownership. This is not the position here at all. In the present case the purpose is to increase the income of elderly people who already own their homes outright. I do not argue that that is a less worthy objective; but simply that it is an objective well outside the purpose of the option mortgage scheme. The fact that it would be technically possible to use the option mortgage scheme to pay subsidies for income maintenance should not blind us to the fact that what is being proposed is a completely new departure.
May I comment on the point made by my noble friend Lord Gisborough, who asked whether or not an elderly owner-occupier could obtain an option mortgage subsidy by selling his house to an insurance company, and then repurchasing, and taking out an option mortgage? Such a device would be quite contrary to the intentions of the legislation, which are to enable people on low incomes to purchase, or improve, their houses. Successive Governments have relied upon the co-operation of the leading institutions for the successful operation of the option mortgage scheme, and I am sure that these institutions would not seek to bend the rules in the way that is described.
Let us look at the merits of the case for introducing a subsidy to match the tax relief which is available for these mortgages. As I said earlier, this particular tax relief is not regarded as an instrument of public policy. Comparatively little use is made of it. It cannot therefore be argued—as it could in the case of mortgages for house purchase—that the tax relief constitutes a widely-used benefit which could be extended to non-taxpayers without greatly widening the scope of the benefit. If the amendment were passed, it is likely—and I do not think that this would be disputed by those companies

1631
which offer these annuities—that the companies' schemes would be more attractive to non-taxpayers than to taxpayers.
We believe that the issue comes down to this: should we use taxpayers' money to provide extra income for a particular group of old people—those who own their own homes outright—provided that they mortgage their homes with an insurance company to obtain a life annuity? Let us assume that the target group for such assistance would be old people whose income is too high to qualify for a supplementary pension, but not high enough to pay tax. Would one choose to single out from that group those who already have the benefit of owning their homes and who thus pay no rent? It is true that tenants in these circumstances can claim a rent rebate or a rent allowance, but that does not meet the whole of their rent by any means. The reason why outright home owners receive no equivalent rebate is because they bear no equivalent cost.
There is the point that, in the case of annuity purchase by a taxpayer, the annuity itself, except for the capital element in it, is liable to tax. To this extent the allowance of mortgage interest relief offsets the additional tax liability on the annuity. Looking at the scheme as a whole therefore, there is an additional tax relief on the interest on the one hand, but there is additional tax liability on the annuity on the other.
If we take the case of the person who is below the tax threshold and who remains below it when the annuity is paid, the position is that there is no tax relief on the mortgage interest, but equally there is no tax liability on the annuity. The one is the counterpart of the other.
We believe that it would not be right to give relief on the mortgage interest by way of a subsidy under the Option Mortgage Scheme while at the same time continuing to exempt the annuity from tax because the annuitant's total income was below the tax threshold. To do this would result in a non-taxpayer getting a better overall return from the transaction than if he were a taxpayer. And all of this of course must ultimately be paid by taxpayers in another capacity.
1632
I have gone into this question in very considerable detail. I hope that the House will recognise that we have taken a great deal of trouble to consider this matter very thoroughly. I do not feel that it would be right for the House to dismiss it without giving it very full consideration and, as I have indicated, a great many different departments of the Government are involved, and my colleagues and I have been fortunate in having advice from all those different departments.
I was asked about the question of costs. It is difficult to estimate with accuracy the likely cost of the amendment because of the unknown factor of how many people would actually take advantage of its provisions. We estimate that the current cost would be of the order of £10 million a year, but of course if the take-up were greater—as the noble Baroness, Lady Vickers, suggested it might be—then the cost would be considerably higher than that.
Finally, it is very difficult to make cost comparisons between the subsidy that would be given, were the amendment to be carried, and the costs if elderly people had to give up their houses and live in old people's homes. If such people are in difficulties, then someone who is an owner-occupier in fact has the lowest outgoings of all householders, and if his income is low he will be eligible for rate rebates. If he is eligible for supplementary benefit, not only will he have help with his rates but he will also have help under an extra heating allowance.
Finally, these people would of course have the opportunity to sell their homes and go either into some kind of private accommodation or into local authority accommodation, if that was the alternative. It is very difficult to say what the costs of either of these two schemes might be, but what we are talking about, in fact, is either one subsidy or another. I believe that on these matters it would be quite wrong to introduce a new form of subsidy in this Bill, where, for the reasons which I gave at the outset of my remarks, the amendment is outside the terms of the Bill, outside the Long Title of the Bill and is really an amendment to a Housing Act, not to a Social Security Act at all.
I hope that the House will feel that the Government have considered this matter

1633
very carefully. They feel unable to accept the amendment for the reasons I have given. They are technical reasons as well as constitutional reasons, but they are important, and I hope very much that with this explanation the noble Lord, Lord Banks, and the noble Baroness, Lady Vickers, will feel able to withdraw this amendment.
9.22 p.m.
Lord BANKS: My Lords, I should like first of all to thank those noble Lords who have supported this amendment—the noble Baroness, Lady Vickers; the noble Lord, Lord Gisborough; and the noble and learned Lord, Lord Gardiner. The noble Lord, Lord Campbell of Croy, while not altogether unsympathetic to the purpose of the amendment, wanted something which would go rather further, and he mentioned the problems which had been encountered in setting up the framework for this particular provision. I have no doubt there were problems, but we now have the framework and, so far as I am aware, the framework is not proving difficult to operate, and I see no reason why that established framework should not be extended to this particular group.
The noble Lord, Lord Campbell of Croy, also mentioned those paying rent; but, of course, as the noble Baroness, Lady Young, pointed out, they can, if the circumstances are appropriate, enjoy a rent rebate. Already help has been provided for the taxpayers. It has been decided to do that as a specific decision. If that had never happened, then one might say, "There are innumerable reasons why we should not embark upon this particular course". But since that has already been done, it seems only right that help should also be given to the non-taxpayer. The noble Lord, Lord Campbell of Croy, wanted a further examination. He wanted to go much further—a tax credit scheme. I agree with him 100 per cent. on that—that is what I should like to see—but it may be some time before we see that. This is a simple adjustment which could be done so quickly and so speedily that it seems wrong to hold it up until some large, wider scheme is introduced, which we hope to see one day.
I am extremely grateful to the noble Baroness, Lady Young, for the very
1634
thorough explanation of the Government's case which she has given. I appreciate that they have given it a good deal of thought. She began by dealing with what she described as the constitutional issue; and in the letter which he wrote to me the noble Lord, Lord Cullen, said:
"The amendment amends the Housing Subsidies Act 1967, which is the responsibility of the Secretary of State for the Environment".
He added:
"I am advised that the amendment does not appear relevant to the Social Security Bill".
This is the point which the noble Baroness made; but, as the noble Baroness, Lady Vickers, said, where would it appear relevant? On 13th July 1977, Mr. Joel Bartlett, then in office at the Treasury, said this in a letter to my colleague Mr. John Pardoe:
"It would not he in order to meet Miss Turkam's point"—
and she raised this very point which is contained in the amendment before us tonight—
"in the course of the Finance Bill. What she is seeking is not a tax relief but an equivalent subsidy, and this cannot be provided in a Finance Bill".
So we learnt this was not to be solved by looking to a Finance Bill.
The noble Lord, Lord Cullen, said that the amendment amends the Housing Subsidies Act 1967, which is the responsibility of the Secretary of State for the Environment. On the 5th October 1977, Mr. L. B. Hicks of the Department of the Environment, writing to Mr. J. M. Selwyn, who had also raised the same point as is contained in the amendment, said:
"I have consulted our legal advisers [the legal advisers to the Department of the Environment] on the point you raised. As you appear to be proposing a subsidy on life annuities taken out by persons over the age of 65 years on the security of their only or main residence, I presume your objective is to augment the general income of the elderly. The departmental responsibility for this area of public policy rests with the Department of Health and Social Security".
If the legal advisers to the Department of the Environment took the view that this was a matter for the Department of Health and Social Security, they must have regarded it as coming under the heading of either health or social security. It is clearly not health; so it must be social security; and the Long Title of the Bill (as the noble Baroness reminded us) is

1635
"An Act to amend the law relating to social security and the Pensions Appeal Tribunals Act 1943".
The noble Baroness, Lady Vickers, quoted the answer given by the Prime Minister to a Question put to her on 30th April in another place, when she was asked which department is responsible for policy on the extension of option mortgage schemes to elderly home owners on low income who wish to purchase home income plan life annuity. She replied.
"My right honourable friend the Secretary of State for the Environment has the … responsibility for the option mortgage scheme"—
Not surprisingly; since at the moment it applies to those purchasing their house—
"and my right honourable friend the Secretary of State for Social Services is responsible for social security policy"—
a clear implication that this is a matter for social security policy, whatever else it may be.
"Any question of extending the option mortgage scheme in the way my honourable friend suggests would involve the interests of a number of different departments and would be for consideration jointly by the Minister concerned".
It seems to me that the Ministers concerned have had a long time to consider the matter jointly. This is a matter relating to social security, and it falls within the Long Title of the Bill. I also suggest that this buck-passing has gone on long enough and that it should now cease.
The amendment involves, we were told, additional expenditure not envisaged by the Commons when they passed the Money Resolution. If that is meant to imply that the amendment is outside the scope of this Bill, then I have just dealt with that point. If it is meant to imply that this is an amendment which asks for further money to be spent, it is not unique. Many of the amendments moved in connection with this Bill and other Bills before this House would involve additional expenditure. The noble Lord, Lord Cullen, as I reminded the House at Committee stage, moved an amendment to the Social Security Bill 1979 which would have involved additional expenditure; and he pressed it to a Division.
We are told that we should not use this scheme for helping elderly non-taxpayers because it was originally designed to help house purchase. I do not see why we should not use the scheme for another
1636
purpose if we find that it will be useful for that purpose. It is a bureaucratic nonsense to suggest otherwise. While I accept that there is no general principle that tax reliefs for taxpayers have to be matched by subsidies for non-taxpayers, nevertheless I believe that the argument in favour of this in this instance is overwhelming.
It has been applied in the case of those purchasing their houses. Recognition of the need to help non-taxpayers has led to the replacement of child income tax allowances by child benefit. In both these cases, the arguments in favour of helping non-taxpayers as well as taxpayers were so strong as to carry the day. I believe that they are just as strong in the case that we are now considering. I believe that there are no arguments against the case that we are now considering except that it would cost more money.
The Government now say that it would cost £10 million. I believe that that may be ark exaggeration. The subsidy being worth 2·05 per cent. and the average loan expected to be about £13,000, the subsidy would be worth an average of £266 per annum. If the take-up were 10,000 people, the cost would be £2·66 million in a full year, excluding any savings on supplementary benefit. There is the point made by the noble and learned Lord, Lord Gardiner, that there are other expenses which are likely to arise if people are unable to continue to live in the houses which they own because of the paucity of their income.
Even if the cost were £10 million, the option mortgage scheme now costs £193 million. I do not believe that it would be the end of the world if it cost £203 million. Tax relief—if we want to get some kind of comparison—for purchase or improvement of properties is £1,450 million; rent and rebate allowances are £560 million.
In conclusion, I come back to the point where I began in moving the amendment: it is an elementary act of justice if one is helping elderly taxpayers to increase their income in this way to help also the elderly non-taxpayers whose need is greater. My Lords, I appeal for support for this amendment in the Division Lobby.
Baroness YOUNG: My Lords, by leave of the House, may I make one point about the expense, because the noble Lord said that I had not fully answered this matter, and I did not go into it in great detail. It is said that if 10,000 people took advantage of the scheme, the cost would be between £2 million and £3 million. What we do not know and what the proposers do not know is how many people might take an advantage of it. The difficulty is that it is an open-ended commitment; it is another open-ended commitment that the House is looking at. The Government's estimate is based on an assumption that perhaps 10 per cent. of the people eligible might take it up. This is where we think that it would be a minimum of £10 million.
Lord BANKS: My Lords, by the leave of the House, may I say in reply to that point that we know the number of those who have taken up the option which is now available to those who are taxpayers. I believe that is something like 3,000. It is unlikely that those who are non-taxpayers would be so out of balance with that particular number as the noble Baroness suggests.
9.34 p.m.
On Question, Whether the said Amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 61.

CONTENTS

Airedale, L.

Ellenborough, L.

Robson of Kiddington, B.

Amherst, E.

Gardiner, L.

Rochester, L.

Ampthill, L.

Gladwyn, L.

Seear, B.

Ardwick, L.

Gregson, L.

Sharples, B.

Balogh, L.

Hale, L.

Stamp. L.

Banks, L.

Hampton, L. [Teller.]

Stone, L.

Barrington, V.

Hatch of Lusby, L.

Strabolgi, L.

Blease, L.

Ingleby, V.

Swinfen, L.

Boston of Faversham, L.

Irving of Dartford, L.

Underhill, L.

Brockway, L.

Janner, L.

Wedderburn of Charlton, L.

Chitnis, L.

Kaldor, L.

Wells-Pestell, L.

Collison, L.

Kilmarnock, L.

Whaddon, L.

Cork and Orrery, E.

Lloyd of Kilgerran, L.

White, B.

Craigavon, V.

McNair, L.

Wigoder, L. [Teller.]

David, B.

Pitt of Hampstead, L.

Winstanley, L.

Davies of Leek, L.

Ponsonby of Shulbrede, L.

Yarborough, E.

de Clifford, L.

NOT-CONTENTS

Airey of Abingdon, B.

Elton, L.

Massereene and Ferrard, V.

Alexander of Tunis, E.

Exeter, M.

Monk Bretton, L.

Amherst of Hackney, L.

Ferrers, E.

Mottistone, L.

Balerno, L.

Fortescue, E.

Mowbray and Stourton, L.

Bellwin, L.

Galloway, E.

Nugent of Guildford, L.

Belstead, L.

Glenarthur, L.

Onslow, E.

Bessborough, E.

Glenkinglas, L.

Orkney, E.

Brougham and Vaux, L.

Godber of Willington, L.

Renton, L.

Caithness, E.

Gowrie, E.

Rochdale, V.

Campbell of Croy, L.

Gridley, L.

St. Aldwyn, E.

Cockfield, L.

Grimston of Westbury, L.

St. Davids, V.

Colville of Culross, V.

Hill of Luton, L.

Sandys, L. [Teller.]

Colwyn, L.

Holderness, L.

Strathcarron, L.

Crathorne, L.

Hood, V.

Strathcona and Mount Royal, L.

Cullen of Ashbourne, L.

Killearn, L.

Swansea, L.

De La Warr, E.

Lindsey and Abingdon, E.

Trefgarne, L.

Denham, L. [Teller.]

Long, V.

Trenchard, V.

Drumalbyn, L.

Lyell, L.

Vaux of Harrowden, L.

Dundee, E.

Macleod of Borve, B.

Vivian, L.

Eccles, V.

Mansfield, E.

Young, B.

Elliot of Harwood, B.

Resolved in the negative, and amendment disagreed to accordingly.