Social Security and Housing Benefits Bill (Hansard, 10 June 1982)

HL Deb 10 June 1982 vol 431 cc343-61 343

§ 6.48 p.m.

§ Lord Denham
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that 344 Her Majesty, having been informed of the purport of the Social Security and Housing Benefits Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

§ Bill read a third time, with the amendments.

§ Clause 1 [Employer's liability]:

§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): moved Amendment No. 1: Page 2, line 6, leave out ("of a kind which he might") and insert ("which he can").

§ The noble Lord said: My Lords, this is a technical amendment which brings the wording of the definition of a "day of incapacity for work" for statutory sick pay purposes precisely into line with the national insurance definition which is contained in Section 17(l) of the principal Act. The slight difference in the wording caused some concern in another place in case this should allow a different interpretation—less favourable to the employee—to be put on the definition for statutory sick pay purposes. The amendment is beneficial in that it ensures that the existing interpretation by the statutory authorities as to what work a person can reasonably be expected to do will apply in the context of the SSP scheme. I beg to move.

§ On Question, amendment agreed to.

§ Clause 7 [Rate of payment]:

§ 6.50 p.m.

§ Lord Banks moved Amendment No. 2: Page 5, line 26, at end insert— ("; together with an additonal £0.80 for each child of the employee").

§ The noble Lord said: My Lords, I must apologise to the House for the fact that I have unfortunately lost my glasses and therefore find it extremely difficult to see my notes. However, I hope that what I say will have some connection with what I have written. With this amendment we are returning for the third time to the question of benefits for children. At present, there is a child dependency addition with national insurance benefit but there is no child addition provided in the Bill with statutory sick pay.

§ We agree it is desirable that eventually child benefit should be the sole means of providing for children, and I made that clear in our previous discussions of this issue. But we oppose the Government policy of reducing—or, as in the case of statutory sick pay, removing altogether—the child dependency additions without an increase in the real value of child benefit to compensate for the loss. Of that Government policy, the Social Security Advisory Committee said in their first report: In principle, we fully support the objective of successive Governments that child benefit should replace dependency additions to short-term contributory benefits, but we are equally clear that the present method of achieving this is wrong ".

§ The Social Services Select Committee in another place described it as: a shift in public policy which is entirely in the wrong direction ". 345 To maintain the overall value of child support, we tabled in Committee an amendment which would have added 85p to statutory sick pay for each child. That was to replace the present 80p per child dependency addition, but we increased it to 85p to take account of the fact that it was to be subject to national insurance contributions, which arc not at the moment paid on national insurance sickness benefit.

§ In his reply, the noble Lord, Lord Trefgarne, made several points. He said first that child benefit was the way to help and he thought we were all agreed on that. He added that in his opinion it was: inconsistent to introduce an addition which is higher than the present National Insurance benefit child dependency addition ".

§ I have explained that we added it to offset the national insurance contribution. Nevertheless, we have accepted his stricture and in the present amendment we have stuck to 80p; replacing the present 80p with exactly the same sum.

§ The noble Lord then said that it would complicate the administration to have a benefit for children. I should have thought that all one had to do would be for the employee to give to the employer the numbers of child benefit books that were held in his familly, and the employer would submit that information when seeking a refund from the Department of Health and Social Security. If the employee did not wish to apply for any benefit, he need not do so; if he was worried about his employer knowing about the number of children he had, he would not have to reveal that.

§ The second point made by the Minister was that to have that addition for children would cause intrusive inquires, and he said: It has never been the practice for payment from employers to reflect family circumstances ".

§ I have explained that the employee need not apply, if he does not wish to, for benefit for children. It is true that employers have been concerned with benefits paid to families and on the number of children there are in the family. For one thing of course, many employers require an employee to let them know precisely what they have received in national insurance benefit so that that amount may be deducted from their sick pay scheme. So far as pensions are concerned most pension schemes provide for death-in-service benefits to be paid entirely at the discretion of the employer. The employer may pay them to the widow, but he does not necessarily have to do so; he may choose some other dependents to whom to pay them. He could not make that decision—it may in fact be the trustees of the scheme who make the decision, but they always include representatives of the employer—without having the details of the family. It is perhaps not entirely correct, therefore, to say that it has never been the practice for payment from employers to reflect family circumstances. And of course there are schemes which provide for orphans.

§ In so far as those arguements about complications of the administration and intrusiveness of inquiries have any validity—and I have suggested that they have very little validity—they seem to me to be powerful arguments in those circumstances against transferring from the present system, which copes with the administration and does not involve employers in family details. The Minister went on to say that there was always supplementary benefit if people 346 should be worse off or in an unsatisfactory position as a result of the levels fixed for statutory sick pay. But we want to avoid putting more people on to supplementary benefit. There are too many people having to rely on that at the moment.

§ As the Minister said that the matter should be dealt with through child benefit, on Report we tabled an amendment to increase child benefit to compensate for the loss of the child dependency additions. The noble Lord, Lord Trefgarne, said in reply, if I understood him aright, that the proposed level of statutory sick pay approximated to the level of income replacement which would otherwise be available from taxed sickness benefit. It does not approximate to the amount now paid to a family with children, and that was the point we were making. The Minister made two statements, one in Committee and one on Report, which seemed to point in opposite directions. In Committee he said: Turning to the other point of the amendment, which seeks to add a child dependency addition to statutory sick pay, I have already mentioned the Government's belief that child benefit, and not child dependency additions, is the proper way to provide for children ",

§ And on Report the noble Lord said: The proposition inherent in the amendment—that child benefit should be used as a device to enhance the level of support provided under the statutory sick pay proposals—seems to me to be wrong ". We are to solve the problem through child benefit and we are not to solve the problem through child benefit. He pointed out that to do it through an increase in child benefit of the kind we proposed would cost £440 million. I suggested in reply that that could be justified—because other people would he helped as well as those on statutory sick pay—but I agreed that perhaps it was not right to introduce that additional expenditure as an amendment to the Bill.

§ Consequently, we have returned to day to the modest concept of adding the child dependency addition of 80p for each child which is now paid under national insurance sickness benefit. We want to add that amount to statutory sick pay. If the Government cannot afford to increase child benefit to compensate for the removal of child dependency additions, then in our view the child dependency additions should for the time being be retained. Not to do that is to continue to follow a policy condemned by the Social Security Advisory Committee. My Lords, I beg to move.

Lord Wallace of Coslany
My Lords, I rise very briefly to support the noble Lord, Lord Banks, and to congratulate him on the masterly way in which he overcame his temporary handicap. The noble Lord has presented a very clear case—

§ Lord Trefgarne
Rear, hear!

Lord Wallace of Coslany
—and I note the applause from the noble Lord, Lord Trefgarne. On the question of child benefit he and I must of course declare an interest. He is the proud father of two very active sons, I am the proud grandfather of three very active grandsons, and we both know how expensive they can be, in particular in regard to footwear, apart from any other items of clothing. When we have a case of the breadwinner of the family being sick, the burden 347 imposed on the housewife, who is mainly responsible to look after the family, is very heavy indeed. There is every moral justification for the amendment to be accepted, and I am very pleased to support it.

§ Lord Kilmarnock
My Lords, I, too, should like to support the noble Lord, Lord Banks—and very briefly indeed, since he has made his exposition in his usual masterly way. At the Committee stage the noble Lord, Lord Trefgarne, pointed us in the direction of child benefit as the proper vehicle for the solution of the problem. Then, by setting himself against the child benefit vehicle the last time that we debated the matter, at Report stage, he boxed himself into a corner; that is to say, back into the corner of dependency additions. The noble Lord cannot have it both ways. If it cannot be done under child benefit, then we shall have to go back to the dependency addition principle. As the noble Lord, Lord Banks, has pointed out, if we do not go back to the dependency addition principle, then we shall end up again with increased demands on supplementary benefit, which is highly undesirable because it is now involving a great deal of work for which it was not originally designed. On those grounds, I should like to give my support, and that of my party, to the amendment, which, as the noble Lord, Lord Banks, has said, is a modest one.

§ Lord Trefgarne
My Lords, as the noble Lord, Lord Wallace of Coslany, pointed out, despite the absence of his spectacles the noble Lord, Lord Banks, has explained the purpose of the amendment with his usual clarity. Indeed, as at least two noble Lords have already said, we debated the question of the level of child benefit itself at Report stage. All parties are agreed on the importance of maintaining, and the desirability of improving, the value of the benefit. As I said during that debate, the Government have made great efforts to protect its value in difficult circumstances. We are honouring the undertaking given in July 1980 by the then Secretary of State for Social Services that its real value would be maintained. This is a considerable achievement in the circumstances, especially because, as your Lordships know, child benefit is very expensive. Much as we should like to increase its value in real terms, the extra resources needed are simply not available.
However, in the context of statutory sick pay, the noble Lord's argument, with respect, is rather less convincing, and there are two aspects that I should like to clarify. First, there is the question of principle and practicability as to what the structure of SSP payments should be. The Government have explained in previous debates on this Bill, both in your Lordships' House and indeed in the other place, that in the April 1980 Green Paper we consulted specifically on the question whether there should be a higher rate of SSP for employees with dependent children. The overwhelming response received was that there should not. It was represented to us that this would greatly complicate the administration of the scheme, and that dependency additions would be inappropriate as part of a payment of sick pay by employers. The complication would of course come from the fact that the weekly rate payable would vary depending on the 348 employee's family circumstances. Instead of the three rates of statutory sick pay which we at present envisage in the Bill, there would be six, nine or even 12 rates, depending upon the numbers of children in a particular family.
It is misleading to regard SSP as directly akin to state benefit. Although it will replace benefit for the first eight weeks of sickness, SSP is not itself a benefit. It is essentially a continuation of earnings—a statutory minimum level of occupational sick pay, if one wishes so to call it. It has never been the practice for payments from employers to their employees to reflect family circumstances. Then there is the question of privacy. It has been argued that an employee would not be compelled to reveal his family circumstances to his employer if he was willing to forgo the dependency increases. But that would place him in an invidious position. It is better that, like wages and other contractual remuneration, SSP should depend only upon the contract between employer and employee, and not on the employee's family circumstances.
The noble Lord, Lord Banks, suggested that the employee could present the benefit books of the children for whom he wished to claim the addition, but I am sorry to tell the noble Lord that in fact only one book per family is normally issued. I say that without advice from my officials because I know that in my own case, with three children, we have one book, from which it is immediately apparent for how many children we are being paid our child allowances.
The first point that I want to make is that the Government have accepted the representations made that SSP should not be tailored to family circumstances, and we feel that this is the logical decision, given the nature of these payments. The second point to be made is that the child dependency additions lost to employees during the first eight weeks of sickness have been fully taken into account in setting the rates of SSP; and they have been taken into account at current benefit levels—that is, at 80p a week.
During the debate on amendments to the clause at Report stage, I gave a rather lengthy (I fear), but I hope helpful, explanation of how the SSP rates have been set to ensure that employees, as a group, will be broadly in the same net position as if sickness benefit were taxed. The full amount of the benefit savings, including child dependency additions at current benefit levels, together with the extra national insurance contributions which employees will pay, have been taken into account in setting the rates. As a group, employees on statutory sick pay are not losing the value of the child dependency addition. Nevertheless, both tonight and on earlier occasions, noble Lords have sought to argue that individuals will lose. That brings us back to the position of a man with dependent children, whose wife is also dependent on him. I dealt at length with this point during our Report stage, because it is important to reassure your Lordships that such an individual will not be materially worse off, or forced on to supplementary benefit, as a result of the scheme. I hope that I reassured your Lordships on that occasion, and perhaps you will prefer that I spare you a repetition of the arguments that I then deployed.
In view of the two points—first, that it is not appropriate, or administratively sensible, to include child 349 additions in the SSP scheme; and, secondly, that the amounts that will be lost in benefit by way of child dependency addition have been fully taken into account in setting the rates—I hope that the noble Lord will not wish to press his amendment further. However, if he is tempted to do so, I should like to tell him that, as drafted, it does not, I fear, have the effect that he intended. It provides for payments even in respect of adult children, and not just for dependent children. I fear that the making of this amendment at this late stage in the Bill's progress would also create serious difficulties in view of the doubt that it might cast on the meaning to be placed on other connected clauses; for example, the meaning of the "entitlement limit" defined in Clause 5(4) to be an amount equal to eight times the appropriate weekly rate", or the calculation of the daily rate payable, defined in Clause 7(2). Neither would it be clear what should happen if an employee's family circumstances were to change during a period of entitlement to SSP.
The amendment would have far-reaching consequences for the drafting of the Bill, which would need to be altered further if this amendment were to be made and accepted in another place. Unfortunately, the opportunity for those additional amendments has now passed. I hope that, in the light of these rather grave shortcomings, the noble Lord will wish to reconsider whether or not he should press his amendment.

§ Lord Banks
My Lords, I should like to thank the noble Lord, Lord Wallace of Coslany, and the noble Lord, Lord Kilmarnock, for the support which they have given to this amendment. I see that I ought to declare an interest. In my case it is two granddaughters. The noble Lord, Lord Trefgarne, said that the real value of child benefit had been maintained, and it has been in this year, though no't over the period that the Government have been in power. But that is really beside the point. The fact is that if you do away with a particular benefit you ought to increase child benefit in order to compensate, and that is the argument that was being put forward by the Social Security Advisory Committee.
As far as the question of complication is concerned, I do not think it is terribly complicated to provide the basic rate, which is one of the three which are already in the Bill, plus 80p for each child. It would not take us very long to produce the table for that if we were to set it now as an examination question. I do not think that would present much difficulty.
The noble Lord objected to the fact that I had said that an employee need not apply for the child addition if he did not wish his family circumstances to be known. The noble Lord said that in that case he would not have this additional benefit, he would have to forgo it. Still, he would at least have the opportunity of getting it, whereas at the moment he does not have the opportunity of getting it. So I would have thought that his position, if not 100 per cent. satisfactory in those circumstances, would be better than at the present time. With regard to child benefit books, all you need have is a number for each child. It does not really matter if you have one book or more. You need to have a number for each child and to 350 submit that number— a very simple piece of administration, I would have thought.
I think there is a fundamental difference of opinion here. As to the difficulties which the noble Lord has said there would be if this amendment were made to the Bill, I am not quite sure whether he is saying that it would be quite impossible to secure, before the Bill became law, that the amendments which he said would be consequential were made; that it would be impossible to put them in in any place.

§ Lord Trefgarne
My Lords, if I may intervene again with the permission of your Lordships, I have to say that the remaining stage after the Third Reading here in your Lordships' House tonight, assuming that the Bill is passed, is consideration of your Lordships' amendments in the other place. In that situation, it is of course not open to the other place to do anything other than accept or reject our amendments, or possibly offer amendments in lieu. It is certainly not open to the other place to introduce new amendments.

§ Lord Banks
My Lords, having considered what the noble Lord has said, and with very great regret—because I think there is an important issue of principle here, an important division between us, and I think that some of the arguments which have been put from this side of the House have not been answered—I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ Clause 18 [Claims for sickness and other benefits: provision of information by employers]:

§ 7.15 p.m.

§ Lord Trefgarne moved Amendment No. 3: Page 15, line 29, after ("Act") insert ("or of regulations made under paragraph 1 of that Schedule").

§ The noble Lord said: My Lords, this is a technical amendment. It is consequential upon the amendment made to Schedule 1 on Report, enabling regulations to be made providing circumstances (other than those listed in paragraph 2 of that schedule) in which a period of entitlement to statutory sick pay will not arise. The effect of this amendment is to include such circumstances among those in which an employer is obliged to furnish information in connection with his employee's claim for state benefit. I apologise for the fact that the need for this consequential amendment was overlooked at Report stage. I beg to move.

§ On Question, amendment agreed to.

§ Clause 28 [The statutory schemes]:

§ The Earl of Gainsborough moved Amendment No. 4: Page 23, line 13, at end insert— (" (3) Regulations under subsection (1) above shall provide that in ascertaining for the purposes of a rate rebate, a rent rebate and a rent allowance the weekly income of a person to whom this Part of this Act applies and his spouse, if any, there is a total disregard of war disablement pension and war widow's pension.").

§ The noble Earl said: My Lords, in the absence of my noble friend Lord Sandford, who is unable to be here because of his ecclesiastical duties elsewhere, I beg 351 to move Amendment No. 4. This amendment seeks to provide for a mandatory total disregard of war pensions for the purposes of a rent or rate rebate which may be granted by a local authority. It would enable a local housing authority or other authority administering this matter to obtain the 90 per cent. subsidy in respect of the payments of rebate or allowance for this purpose. We appreciate—that is to say, my noble friend and myself, and the local authority associations with which we are connected—that this power may exist for giving a rent rebate. But, of course, the total cost of that would have to be paid for by the local authority, which would not receive the normal 90 per cent. which is given by central Government in respect of the payment of rebate or rent allowances.

§ I understand that the noble Lord is not likely to accept the amendment, but I hope he will be able to explain and to answer the point that I have made. This is a matter which affects people in receipt of war disablement pensions or war widows' pensions, and therefore it is an important matter in respect of which local authorities would like to be able to make the same payment all over the country, and not different payments in different areas because of varying legislation. I beg to move.

Lord Wallace of Coslany
Very briefly, my Lords, I would support this amendment because I note—

§ Lord Trefgarne
Surprise, surprise!

Lord Wallace of Coslany
Surprise, surprise, most certainly, my Lords. As an ex-serviceman I am very pleased indeed to support it. The reason why I support it is that I prefer it very much to Amendment No. 6, which the noble Earl, Lord Avon, will no doubt very shortly come forward to move. That is a permissive amendment, in that some local authorities may apply a total disregard and others may not. That is not exactly a fair deal to war pensioners, which is why I prefer the first amendment. I will not delay your Lordships any further, but will merely indicate our support for it.

Earl Haig
My Lords, I should like first to explain that because of Legion commitments in Scotland I was absent when these matters were discussed previously. On those occasions great concern and interest was shown in the welfare of ex-servicemen, and it was because of the strong support given to an amendment moved by my noble friend Lord Kinross that the noble Earl, Lord Avon, on behalf of the Government, agreed to bring forward an amendment in similar terms at Third Reading. It is the Government amendment which has our support today, rather than that under the name of my noble friend Lord Sandford. I hope my noble friend Lord Sandford will understand our position, which has been taken up in spite of his support for our previous amendment.
Perhaps I should say that I speak in my capacity of president of the Royal British Legion, Scotland, and with authority from that organisation. I do not speak on behalf of our sister organisation, the Royal British Legion, on this side of the Border. It 352 might be that the proposals which the noble Earl, Lord Gainsborough, has explained would have some advantages to them. But for Scotland, the Legion has considered the two systems and has won support for the local authority alternative.
This alternative is contained in the Government amendment which will give to local authorities enabling powers which have existed in Scotland for the last seven years. That amendment gives to ex-service pensioners rent and rate rebates without deduction of their pension and follows the principle that war pensions are in compensation for lost amenities in return for services rendered, which has nothing to do with their being supplemental income.
Existing Scottish legislation gives to local authorities enabling powers and, as I understand it, the proposed Government amendment is similar to the amendment of my noble friend Lord Kinross and brings the new Bill into line with previous Scottish legislation. Looking at this problem from the Scottish ex-serviceman's point of view, it seems to us that the advantages of letting the local council watch over the interests of individual members of a community are great. It is important that it is written into the Bill that the local authorities are entitled to disregard, and we believe that it is at local level that the concern and caring should happen and where the waiving of income should be incurred.
We do not want to involve ourselves in theories about tiers of Government and the relationship of local authorities and central Government funding; and nor do we believe that the word "mandatory" is necessary in this context. We know that the enabling system works well in Scotland and can continue to work well so long as housing remains the prerogative of local government. We know that local councillors, who are part of our social fabric, are the best people to watch over the ex-servicemen's interests in matters of housing. We believe that they will follow the procedures laid down and there will be no variance of response between one local authority and another. I would prefer to wait for the Government amendment which we would support as being the amendment in the better interest of the ex-serviceman.

§ Lord Davies of Leek
My Lords, I followed this matter with interest and also looked at the noble Earl's amendment, which on the surface is saying in simple English that what Clause 28 does is to empower the Secretary of State with the Treasury's consent to make regulations requiring authorities to act on rent rebates, et cetera. The amendment by the noble Lord, Lord Sandford, and the noble Earl, Lord Gainsborough, is broader than the amendment of the noble Earl, Lord Avon. I can see no reason, if the Government are accepting the noble Earl's amendment (which I am delighted to see), why they cannot go to the length of accepting the war pension amendment put down by Lord Sandford and the noble Earl, Lord Gainsborough.
As one who had about two years' experience in the Ministry of Pensions, I had to deal at times exclusively with war pensions and in my own family I had a sister-in-law, now, I regret, deceased, whose husband as a young captain was killed in World War II. She and their two children struggled along on a war pension basis, and it took years before the rights of many of 353 these people were investigated. I am sure that, particularly now, when we are talking about (and I must be careful of my phraseology) the Falkland incident—because we have not declared war; and I hope we never have other such incidents—the country would welcome a review of the position of the war pensioner.
Both sides of the House are well informed on this, and for years an effort has been made to clarify the position. All I ask is that the Government should consider accepting this amendment. When the noble Earl, Lord Avon, gets up to speak I am sure he will make some explanation of the differences. Nevertheless, I support the original Motion put down, and, whatever the voting may be, I hope the House will divide to indicate how we feel on both sides of the House in some cases. It is not a party political question but is about the problems of war widows and their dependants.

§ Lord Trefgarne
My Lords, at Report stage the House showed great sympathy for an amendment which drew attention to local authorities' discretionary powers to disregard war disablement and war widows' pensions under their local schemes. The Government have, as promised, put down a revised amendment to this end which my noble friend Lord Avon has it in mind to move shortly. The amendment which we are now discussing would provide for a total statutory disregard of such pensions—in other words, the disregard would be mandatory and not discretionary and local authorities would be able to claim a 90 per cent. subsidy from central Government towards the cost of the disregard.
I can, of course, understand the noble Earl's reasons for wanting to introduce a total statutory disregard of war pensions. We will accept the special nature of such pensions, and that they are deserving of some special recognition. The existing rebate and allowance schemes provide for a £4 statutory disregard of such pensions, and the Government propose to carry this forward into the housing benefit scheme. We should like to do more, but I am afraid that further central Government money is simply not available. I must remind the House that the housing benefit scheme is to be introduced on a nil cost basis, but the additional cost of central Government of a statutory disregard such as is proposed in this amendment would be in the order of £10 million. This extra money could only be found by reducing the help given to other claimants, and in the circumstances the Government's first priority must be to concentrate what resources we have at our disposal on giving help to those most in need. If the amendment were carried, the money would have to be found at their expense.
I must also draw noble Lords' attention to other, possible repercussive effects if the amendment is carried. There is a statutory disregard of £4 of war pensions under the supplementary benefit scheme. It would be extremely odd for there to be a statutory disregard of all war pension payments under housing benefit whereas the poorest pensioners received only a £4 disregard under supplementary benefit. It will come as no surprise that extension of full disregard of war pensions to supplementary benefit would also be very expensive. Nor would the effects stop there. Other groups of disabled people, for example the industrially 354 injured, would naturally seek the same disregards of income.
This whole question of the amount and type of income which shall be statutorily disregarded in means-tested schemes is a complex one and one which is kept under constant review by Government in the context of available resources. It is not a matter which should be approached piecemeal, especially at the Third Reading of a Bill. Neither House has taken the opportunity before today to debate this particular point during the passage of this Bill. Your Lordships may feel that we have now left ourselves with insufficient time to consider with proper care the wider implications of this proposal.
In any case, I am sure the right solution, in the context of housing benefit, is for local authorities to continue to have powers to give total disregards to war pensions in their local schemes, if they wish. In that the House on Report warmly supported the amendment of my noble friend Lord Kinross which sought to encourage local authorities to do just that, I would ask the House to adopt the same approach tonight; that is, to leave this matter to local authorities. I hope that the noble Earl, Lord Gainsborough, will withdraw his amendment.

The Earl of Gainsborough
My Lords, I am grateful to the noble Lord, Lord Trefgarne, for what he has said. He spoke of a sum of' £10 million. That does not seem to me to be a very large sum if that is all it is going to cost. It seems to me a pity that the Government could not have conceded this point. It would not necessarily have to come out of some other fund; it could come out of central Government funds, and and it is not a large sum.
I realise that the British Legion in Scotland are well satisfied with what arrangements they have north of the Border. They often have better arrangements north of the Border than we do south of the Border. This would not necessarily be supported by the British Legion of England and Wales. I am very grateful for the support of noble Lords on the Labour Benches. In view of what the noble Lord said, I feel that we must wait for the amendment by the noble Earl, Lord Avon. I think I understand what he is going to say and perhaps in this case it would not be right to press this amendment to a Division. Although I am disappointed, as I know my noble friend Lord Sandford will be, I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ Clause 30 [Local schemes]:

§ 7.32 p.m.

§ The Earl of Avon moved Amendments Nos. 5 and 6: Page 25, line 21, leave out from (" section ") to end of line 22. Page 25, line 37, at end insert— (" (1A) The power to modify a statutory scheme under this section shall be subject to any exceptions specified in the scheme; but nothing in such a scheme shall preclude the making of modifications which secure that, in determining the resources of any person (whether the occupier or any other person whose resources fall to be aggregated with his), any war disablement pension or war widow's pension payable to that person shall be disregarded.

§ In this subsection "war disablement pension "and" war widow's pension" have the same meanings as in the Pensioners' Payments and Social Security Act 1979.").

355

§ The noble Earl said: My Lords, on Report, we debated an amendment from my noble friends Lord Kinross and Lord Haig drawing attention to local authorities' discretionary powers to disregard war disablement and war widows' pensions under their local schemes. I explained then that for technical reasons the Government could not accept that amendment, although we fully supported the aim of my noble friend. In view of this, and in particular the the support which the amendment enjoyed in the House, I undertook to bring forward an amendment in similar terms today.

§ I hope the House will agree that this amendment meets that pledge. It draws attention to the provision of disregards for war pensions. It even has the added bonus, if I can use the term, of writing into the statute the fact that the Secretary of State cannot modify the housing benefit scheme by regulations so as to prevent authorities from disregarding war pensions in their local schemes, if they wish. This Government would certainly not wish to prevent local authorities from disregarding war pensions, but we did this, on the advice of parliamentary counsel, to give the provision a positive legal application. I hope though, that my noble friends will see it as an unexpected—but useful—safeguard for the future. I was able to consult my noble friend Lord Kinross briefly before the Government tabled these amendments. I believe that he found them acceptable. I would now ask the House to do the same. I beg to move.

Lord Kinross
My Lords, it only remains for me to express my gratitude to the noble Earl, Lord Avon, for having introduced this amendment which is not in exactly the same terms but expresses the same sentiment and principle as I did in my amendment. It is slightly differently worded by parliamentary draftsmen on his side. It is in a different place in the clause but it is of equally good effect. In particular, it carries forward the reference to the disablement pensioners and war widows which is the essential point that I wanted. It only remains for me therefore to thank him and other noble Lords on all sides of the House who supported me at Report stage and to assure the noble Earl, Lord Gainsborough, that I am sure the English Legion and other ex-service organisations will be able to take advantage of this benefit which Scotland has had for some time.

§ Baroness Jeger
My Lords, we accept gratefully and with appreciation the amendment that the noble Earl, Lord Avon, has moved. But I must put on record some anxiety. I am sure that all our thoughts tonight are with the soldiers, sailors and airmen in the Falklands. Some of them might lose their lives; some of them might be wounded. Why should it be that if one of them lives in Wiltshire and another in Gloucestershire there should be a difference in their housing benefits? I accept what the noble Lord has said about the importance of having local authority decisions; but it seems to me that when men are fighting together and working together on a common project it is absolutely wrong that the benefits which they will get in their housing should depend on where they live. This seems to me to be quite irrational and unfair. Although I am sure that we do not want to 356 oppose the amendment which the noble Earl has put down, because it takes us some way towards our aim, I feel that we must put on record that we think it is totally irrelevant that the housing benefit of an ex-soldier or his widow should depend on the luck of where he lives. I very much hope that as a result of the debate in the House tonight local authorities up and down the country will decide that they must be generous and that they will all take on board the right that the House has given them tonight to make this generosity available for ex-servicemen and their dependents.
It is in that spirit that we are not opposing the amendment: but we want to make it absolutely clear that we are very much hoping that local authorities will use this power which has been given them so that there is not going to be this geographical distinction between one service family and another which seems to us totally illogical and wrong. We would have preferred the amendment of the noble Lord, Lord Kinross; but with the reality of politics I can say on behalf of my noble friends that we accept Amendment No. 6 and we hope that it will be widely used.

§ Lord Davies of Leek
My Lords, accepting that reality, I should like to thank the noble Earl, Lord Avon, for the explanation that he gave. While I should have liked to have seen the other amendment on the Marshalled List, nevertheless this is a step forward. The time may come when it is more appropriate for us to face this problem. Consequently, in thanking the noble Earl I say I am grateful at least for this being on the record.

§ On Question, amendments agreed to.

§ Schedule 1 [Circumstances in which periods of entitlement do not arise]:

§ Lord Trefgarne moved Amendment No. 7: Page 45, line 5, leave out (" the coming into effect of the current contract ") and insert (" that on which the current contract came into force").

§ The noble Lord said: My Lords, with your Lordships' permission, I speak to Amendments Nos. 7 and 8 together. These are both technical amendments. I beg to move.

§ On Question, amendment agreed to.

§ Schedule 4 [Amendments and transitional provisions]:

§ Lord Trefgarne moved Amendment No. 4: Page 54, line 10, leave out ("(a)").

§ On Question, amendment agreed to.

§ 7.39 p.m.

§ Lord Wallace of Coslany moved Amendment No. 9: Page 61, line 1, at end insert— (" (4) In paragraph 3 for the words from "(b)" to "Northern Ireland;" there is substituted the following—

"(b) one after consultation with organisations representative of workers;
(e) one after consultation with the head of the Department of Health and Social Services for Northern Ireland;
(d) not less than three after consultation with organizations representative of local authorities.".").

357

§ The noble Lord said: This amendment is a modified version of the one that I moved on Report, but withdrew for further consideration and to take into account the Government's views as expressed by the noble Earl, Lord Avon. In general, the Government's opposition was on the grounds that they wanted generalists and not specialists on their new committee. I think that is a fair interpretation of the reply given by the noble Earl, Lord Avon. This new amendment provides for appointments after consultation with local authority associations, and not specifically with rating and housing authorities. The number of appointments in the amendment has been increased from two to three because it would now bring in the social service and education interests which I understand are already represented on the existing committee.

§ The main and vitally important point of the amendment is that the Government should consult with the local authority associations to ensure that appointees enjoy the confidence of local government, and I may add that is a very desirable objective. I beg to move.

§ Lord Trefgarne
My Lords, as was announced during the Committee stage in another place, the SSAC will be assuming responsibility for advising Ministers on housing benefit. I should not like noble Lords to think that SSAC will not have available the expertise to cope with the new responsibilities. As my noble friend Lord Avon explained on Report, DHSS Ministers and the chairman of SSAC, Sir Arthur Armitage, agreed that the membership of SSAC should be increased by two, specifically to allow the committee to be strengthened for its new responsibilities.
The noble Lord's amendment is slightly different from one he put down on Report. My noble friend Lord Avon explained why the Government could not accept that amendment. I am afraid we must also resist this amendment tonight, on the grounds that it is both unnecessary and inappropriate. The amendment is unnecessary, if the noble Lord is anxious to ensure that there is a local authority "voice" in advice given to Ministers on housing benefit, because the local authority associations will have direct access to Ministers to provide this advice themselves. Clause 36(1) provides that the Secretary of State must consult the associations before making housing benefit regulations, or amending regulations, except for uprating regulations. Ministers recognise that housing benefit is a complex matter, and that local authority expertise has much to contribute to its development.
I also said the amendment was inappropriate. In seeking to provide for consultations with local authority associations over the membership of SSAC, I fear the noble Lord may have misunderstood SSAC's role. The committee is there to give advice on a wide range of social security matters, and, where necessary, on competing claims and priorities. Apart from the Northern Ireland representative, whose inclusion on the committee is self-evident, all the members on SSAC, including those appointed after consultation with the CBI and TUC and the disabled person on the committee, are generalists. That is, they are all appointed on their abilities to consider the whole range of social security issues. They are not appointed to provide expertise in particular areas. While it is the case that local authorities have a major involvement in housing 358 benefit, that is only one of SSAC's many interests. Indeed, apart from housing benefit, authorities have little direct involvement in other areas of SSAC's work. Other bodies or groups could make an equal claim, on the arguments advanced by the noble Lord, to be consulted about members of SSAC. If these claims were granted (and if this amendment were carried there would be no good reason why they should not) the process would quickly become unwieldy and would make the committee very much larger. As my noble friend explained on Report, Ministers and the chairman of SSAC are anxious to avoid that, as it would obviously weaken SSAC's ability to advise on specific issues in their wider context or to keep the whole spectrum of social security matters under review. I hope the noble Lord, Lord Wallace, will be persuaded by these considerations with withdraw his amendment.

Lord Wallace of Coslany
My Lords, the noble Lord, Lord Trefgarne, of course has caused no surprise by the fact that he will not accept my amendment, because after some many weeks and months on these Benches one gets used to that. But he has made the point—I want to be fair—that there is consultation with Ministers by local authorities. As to whether one more or two more people on the committee will make it too large, that is a matter for argument. There is a theory that small committees get business done and large committees never get anywhere. I can see the point, and I would frankly admit it. I do not think this is a very urgent matter to press before the House, bearing in mind the hour, the situation and those who are feeding themselves well and truly while we work on. In the circumstances, I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ 7.46 p.m.

§ Lord Trefgarne
My Lords, I beg to move that the Bill do now pass. May I, very briefly, express my gratitude to those Members of your Lordships' House who have taken an interest in this Bill. On a personal note, may I thank noble Lords for their tolerance of me as a "new boy" to social security. It is a major Bill. It recasts the arrangements for income maintenance during sickness and rationalises the provision of help to people on low incomes with their rent and rates. As with most social security legislation, there has been much technical material in the Bill but, despite this, there has been a loyal band of your Lordships taking part in the debates, and I particularly welcome the constructive approach of the noble Baroness, Lady Jeger, and her colleagues on the Opposition Front Bench.
Inevitably, much of our discussion has been on the effects of the Bill on individuals. I think that your Lordships have, as so often, done a valuable job in clarifying the intentions of the Bill's provisions as they affect ordinary people. We on the Government Benches have welcomed this approach and have done our best to clarify the provisions and explain their effect. I fear that some of that explanation and clarification was hardly necessary for the noble Lord, Lord Banks, who once again displayed his knowledge and expertise in this area.
359 I will not detain your Lordships any longer, save to offer my special thanks to my noble friend Lord Cullen of Ashbourne for his help to me personally during the later stages of this Bill. Unhappily for us, my noble friend has now retired from the Front Bench. I hope he was not persuaded to do so by the rigours of this measure. My Lords, I beg to move that this Bill do now pass.

§ Moved, That the Bill do now pass.—(Lord Trefgarne.)

§ Baroness Jeger
My Lords, I should like to emphasise what the noble Lord, Lord Trefgarne, has said about the noble Lord, Lord Cullen of Ashbourne. We have often co-operated, consulted and worked together, and I very much hope that whoever succeeds him will find that there is co-operation on these Benches in the interests of the community of this country in this very important field. I can only say to him—I hope I am not embarrassing him—that I have much enjoyed working with him.
The Motion before your Lordships is that this Bill do now pass. I have to make it clear from these Benches that it passes without our commendation and without our blessing. In our view it is a wicked gallimaufry of a Bill, for it mixes up sick pay and housing subsidies in an unacceptable muddle, and as far as I can recollect, for the first time in history of modern social security it takes away any connection between contributions and benefits. It seems to me that for the first time it relates benefits to wages and not to contributions. This is a new and, I think, a very wrong situation. It means that men and women who have been paying national insurance contributions in good faith on the understanding that in sickness they would receive certain stated amounts, are now to find that with their contributions paid up their benefits are not to relate to their contributions, but to their wages.
This must mean—I am sorry the noble Lord is shaking his head at me, but I have in front of me the clause of the Bill which lays it down quite clearly—that the statutory sick pay for the first eight weeks is to be related to the wages which a person is receiving. This is quite different from the original set-up. As I understand from the figures that I have obtained from the department, national insurance sick pay is £22.50 for a single person, plus £13.90 for a dependent adult, plus 80p for each child and from that money national insurance contributions are not deducted, as they are to be deducted under this Bill. So it seems to me from my bad arithmetic that a couple with two children will receive less money under this scheme than they receive under the national insurance system, and that all those people who are earning between £34 and £44 a week are bound to be worse off. So that is a reason why we are fundamentally opposed to this Bill.
We understand that, as from April 1983, men and women at work will receive less than they understood they would get. This is set out clearly in Clause 7 and it seems quite wrong. The effect of this Bill is that the sick poor will be made poorer. There is no way of getting out of that. The poorest workers are to receive £25 a week, irrespective of how many children or adult dependents they have to take care of, and for the first eight weeks of an illness their poverty is bound to be increased.
360 We also feel that industrial relations will be poisoned by the provision that workers on strike will not get sick pay, unless they prove that they had no interest in the strike. We feel that that is very damaging and divisive for industrial relations. So far as the housing provisions are concerned, the objective appears to be to save Government staff by increasing local government staff. We also note that sick pay is to be taxed and we see this Bill as making life more impoverished, more difficult and harder for the poorest people in this country. That is why, though we are not voting tonight we must register the fact that we do not welcome the passing of the Bill.

§ 7.53 p.m.

§ Lord Banks
My Lords, the noble Lord, Lord Trefgarne, referred to himself as a new boy in this sphere of social security, but I think that the whole House has been greatly impressed by his versatility. He seems to pass from airports to foreign affairs and then to sick pay with the greatest of ease, and he certainly has not appeared during the discussions on this Bill to be a new boy. I am sorry to learn that the noble Lord, Lord Cullen of Ashbourne, will no longer be assisting him in this sphere, because it has always been a great pleasure to work with the noble Lord, who has always been so helpful and so courteous.
When this Bill first came before this House, I said that we on these Benches were opposed to the establishment of statutory sick pay, but we supported in principle, though with considerable reservations, the housing benefit. That remains our position after sitting through the debates which we have had in this House. I regret that the efforts made by the noble Lord, Lord Kilmarnock, and myself and by the Opposition Front Bench to improve statutory sick pay have not been successful. I regret, in particular, the fact that the 5 per cent. abatement was not removed and that we have not been able to deal—as I would think, satisfactorily—with the question of provision for children which we were discussing earlier. But I hope that these two reductions in benefit will eventually be made good.

§ Lord Kilmarnock
My Lords, I always feel on Third Readings of social security Bills that we are coming to the end of a ritualistic dance. We know exactly where we shall finish up at the end of the minuet. I too, should like to congratulate the noble Lord, Lord Trefgarne, on his speedy mastery of his new department, and I should like to add my personal appreciation of the great courtesy that has been shown to me by the noble Lord, Lord Cullen. I am sorry that he is not now in his place and hope that he will read the report tomorrow. I saw he was wearing slightly festive dress, so I hope that he has gone off to a celebration.
I cannot extend to the Government's policies the congratulations which I have conveyed to the noble Lord, Lord Trefgarne. It seems to me that every time we come to the end of a social security Bill in this House, we are left with the story of pinching and scraping 80p here, refusing to uprate there and so on. This has an effect not only on the rising number of poor in this country, who were referred to by the noble Baroness, Lady Jeger, but also on the level of economic 361 activity. I find it hard to understand how the Government can expect businessmen to invest with confidence in the future when there is little or no prospect of growth in the aggregate demand from the population as a whole. So it seems to me that there are two elements, the humanitarian element and the economic element, which often seem to be forgotten when the Government approach social security matters.
With those few remarks, I think that I can simply associate myself with what the noble Lord, Lord Banks, has said, both on the statutory sick pay and on the housing sectors of the Bill. We are completely at one with the Liberal Party on these matters.

§ Lord Trefgarne
My Lords, with your Lordships' permission, I again thank all noble Lords for their participation in the debates on this Bill. I am sorry that I have not been able to persuade all of your Lordships to the views that I advanced. I fear that that was hardly to be expected. May I just make one point? The noble Baroness, Lady Jeger, complained that, unusually, this is a benefit which is related to wages. But it is not a benefit that we are introducing; it is an extension of occupational sick pay. I would not wish your Lordships to go away with any thought that that was the Government's view, although I understand that the noble Baroness may wish to disagree.

§ On Question, Bill passed, and returned to the Commons.

§ [The Sitting was suspended from 7.58 until 8 pin.]