Lords Sitting of 25 May 1982

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

NHS Staff: Pay Dispute
Lord Molloy: 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 will intervene in order to resolve the current dispute in the National Health Service concerning wage negotiations.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): No, my Lords. The conduct of pay negotiations in the National Health Service is a matter for the Whitley Councils. The Government consider that the pay offers made by the Councils are both fair and realistic.
Lord Molloy: My Lords, is the noble Lord aware that if there is one thing which is totally unacceptable to the medical profession, the nursing profession, and probably the people of this country, it is the last part of the noble Lord's reply? Would he be prepared to ask his right honourable friend to consider sending the issue to ACAS in the hope of getting it resolved?
Lord Trefgarne: My Lords, if the noble Lord is suggesting that this matter should go to arbitration, I would have to disagree with him, because within the context of the cash limits an increased pay offer would only mean a reduced service.
Lord Molloy: My Lords, is the noble Lord aware that he is confusing the activities and endeavours of ACAS with a court of arbitration? It does not necessarily follow that being referred to ACAS means that there is going to be some form of arbitration. That may come later. Often ACAS will resolve things without using the arbitration machinery.
Lord Trefgarne: My Lords, there is of course already existing machinery for these purposes within the Health Service. It is in any event, as I said, a matter for the various health authorities, but I am sure that any helpful suggestion from ACAS would be carefully considered by those bodies.
Lord Jacques: My Lords, is the noble Lord aware that arbitration, both sides accepting the decision, is the best alternative to industrial action?
Lord Trefgarne: My Lords, as I said just now, arbitration is not a practical proposition in these circumstances, because, as I said, within the context of the cash limits
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which we must necessarily impose in this area, an increased pay offer, for example, could only mean a reduction in the standard of service.
Lord Rochester: My Lords, is it not greatly to be regretted that, in the absence of any general arrangements for determining pay in the public services, and when certain public servants have recently been awarded relatively high increases in their salaries, there appears to be no means by which this particular dispute can be referred to independent arbitration?
Lord Trefgarne: My Lords, the noble Lord is right to point to the lack of machinery for some of the purposes of pay determination in the public sector. That is why the Megaw inquiry, for example, which is looking into these matters in connection with the Civil Service, have been asked to make proposals, and why indeed my right honourable friend the Secretary of State has said that we would be willing to create appropriate machinery with respect to the nurses and midwives.
Lord Winstanley: My Lords, does the noble Lord accept that, perhaps because of their previous reluctance to take industrial action, health workers as a whole are among the lowest paid throughout Europe? In order to determine precisely where we in Britain stand on this matter, is the noble Lord in a position to tell the House how many health service workers are at present in receipt of the family income supplement, which the noble Lord knows is paid only to those who, in the light of their family commitments, would otherwise fall below the poverty level?
Lord Trefgarne: My Lords, I doubt that very many health service workers are in receipt of the benefit to which the noble Lord refers. The average earnings, for example, of the ancillaries is of the region of £104 a week.
Lord Shinwell: My Lords, is it not asking too much at the present time to ask the Government to intervene in wage negotiations? Have we not got another dispute on our hands? Although I usually support the workers in their demand for higher standards of living, and will continue to do so, would they not mind deferring consideration of these negotiations and demands until we have dealt with the people 8,000 miles away?
Lord Trefgarne: My Lords, there is as so often, if I may say so, considerable merit in what the noble Lord has to say, but nonetheless a reasonable offer has been made through the Whitley Councils to these various groups of employees, and we hope that they will accept them.
Baroness Wootton of Abinger: My Lords, is the noble Lord's figure of £104 a week a compound of male wages and female wages, an average of the two, or does it refer solely to male wages?
Lord Trefgarne: My Lords, it is in fact the average earnings of a full-time male ancillary worker. A number of other workers in the health service are of course part time.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that, although undertakings are given by unions in this regrettable industrial dispute that patient care will not be affected, it is inevitable that patient care will be affected however much help is given by administrative officers, and so on? I cannot understand the Government's attitude to this position, because nurses particularly should be dealt with as a special case. Secondly, the Government will not accept arbitration, will not agree to arbitration. The Government will not seek arbitration. This is the point. It is all very well—
Several noble Lords: Question!
Lord Wallace of Coslany: Is the Minister aware—and I am well able to take care of myself here without assistance from the Government side of the House—
Several noble Lords: Order!
Lord Wallace of Coslany: My Lords, is the Minister aware that it would appear that the Government are set on their course and will not do their best to try to resolve this regrettable dispute? Further, is the Minister aware that the Whitley Council have put forward a settlement which lines up with the Government's attitude? This is a matter of great importance. It is a matter that has happened before and must not happen again, and it is about time that the Government did not take advantage of nurses who, because of their membership of the Royal College of Nursing, do not take industrial action.
Lord Sandys: Questions should he as brief as possible, my Lords.
Lord Trefgarne: My Lords, the noble Lord asks that we make a special case of the nurses and midwives. We have indeed done just that. We have made available for that purpose extra funds—some £82 million—which has resulted in the enhanced offer to the nurses and midwives through their Whitley Council. As for the earlier part of the noble Lord's supplementary, about the difficulty of conducting industrial action in the health service without affecting patient care, he is quite right; it really is not possible, in our view, to conduct industrial action in the NHS, at any rate on the scale we saw last week, without affecting patient care. There was one example to which I would refer your Lordships, where the normal catering staff of 60 were replaced by only five people to serve meals in a certain hospital, and I fail to see how they could have provided a proper service.
Lord Winstanley: My Lords, as the Minister is apparently unaware of how many of these people receive family income supplement, may I ask him to arrange for his department to collect the information and then study it?
Lord Trefgarne: My Lords, I will see if the information the noble Lord seeks is available and whether it can be provided to him and the House in a meaningful form. I doubt whether there are very many such people. A large number of workers in the health
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service are part-time workers, and others achieve at least the average earnings to which I referred.
Lord Blyton: My Lords, does the Minister think it possible that the nurses' case can be sent to the Top Salaries Review Body, which could then give an award of 21 per cent.?
Lord Trefgarne: No, my Lords.
Lord Molloy: My Lords, is the noble Lord aware that Britain's nurses, midwives and health workers do not want to indulge in the activities in which they have been compelled to indulge, and that their leaders are desperately keen to see that there is no escalation of the dispute? May I ask him to ask his right honourable friend not to commit himself in any way whatever but simply to say that he will consider sending the whole issue to ACAS—a course which, I am sure, would receive the approval of the nurses, their leaders and every other sane person?
Lord Trefgarne: My Lords, I should perhaps say tha t the great majority of nurses have not so far indulged in industrial action and that, so far as I know, they do not intend to do so because, as I understand it, the rules of the Royal College of Nursing preclude that, although I gather that that may be a matter they are planning to consider. As for referring the matter to ACAS, as I said earlier, there is well-established machinery in the health service—namely, the Whitley Councils—for determining the pay of those who work in the health service, and that is the proper method to use.
Lord Sandys: My Lords, as we have spent 10 minutes on this Question, I suggest we move to the next one.

Stroke Units
2.47 p.m.
Lord Segal: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many stroke units are at present operating in England and Wales, and when their number is likely to be increased.
Lord Trefgarne: My Lords, no central record is kept of the number of wards which may have been designated locally as "stroke units". We are, however, aware of growing interest in them among the professions. The decision to set up such units is a matter for local professional and management discretion.
Lord Segal: My Lords, I thank the Minister for that reply. Is he aware that stroke units offer by far the speediest and most efficient form of treatment of the condition, and that no extra financial commitments need necessarily be involved? Is he further aware that several London hospitals, notably the new Charing Cross Hospital, already have the full facilities for a stroke unit? Will he undertake to look into the matter in rather greater depth than he has done hitherto?
Lord Trefgarne: My Lords, we want to provide the best facilities we can, within the limits of our resources, for stroke patients. I must say, however, that it is not yet proved that the units to which the noble Lord refers are necessarily the best way of doing it. A number of studies have been carried out into the matter—two in particular in 1980, of which I have the results with me—which tend to show that in certain ways, at least, it is better to treat patients in the general wards of hospitals. But the Government do not have a closed mind on the matter, and if further evidence becomes available or studies are made we shall be very willing to look into the matter further, but in the end it is a subject for the local area health authorities.
Baroness Trumpington: My Lords, is my noble friend aware that I am surprised at his last answer, that cures for stroke patients in general hospitals work as well, because a great deal of time has to be spent on stroke patients, which is not available in general hospitals?
Lord Trefgarne: My Lords, I am of course aware that there are some stroke units already in existence which are doing an admirable job, but in general, as I say, the case for them is not as clear-cut as some have had us imagine. The Government do not have a closed mind on the matter, and if further evidence comes to light, or if further experience of the existing units is more favourable, we shall be happy to consider the matter further.
Baroness Masham of Ilon: My Lords, may I ask the Minister whether he is aware that very often stroke patients take a long time to rehabilitate fully? Is he also aware that after they have been in hospital they have to return to the community, and will he ensure that the support services for rehabilitation in the community are available? These are therapists and community nurses.
Lord Trefgarne: Yes, my Lords, certainly in recent years there has been a significant increase in the number of expert therapists of different kinds available to patients, and perhaps I may write to the noble Baroness with the details. There are also the stroke clubs, in which I know the noble Baroness has an interest. Many of them are under the auspices of the Chest, Heart and Stroke Association, for which my department provides financial support.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that many people will be surprised to read his reply that this is a matter which should be left to the area health committees? If there is any point behind this Question, surely it is a national problem, not an area one, and one would have thought that guidance or suggestions ought to come from the centre, in order to be country-wide, and not be left to area decisions, as his answer seemed to suggest.
Lord Trefgarne: My Lords, the point is that circumstances vary from hospital to hospital and from district to district, and that is why it is better for local people to take decisions of this kind on the spot. If I may say so, the Health Service is not a puppet con-
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trolled with strings by my right honourable friend from the Elephant and Castle. It is much more an organisation with local roots for local people.
Baroness Masham of Ilton: My Lords, may I ask another supplementary question? I should like to ask the Minister whether he will arrange for his department to undertake some screened controls on preventing strokes, such as checking for high blood pressure?
Lord Trefgarne: Yes, my Lords. I understand that hypertension and high blood pressure are an important cause of strokes, and that is why research into the matter is going on, I think by the Medical Research Council, again with my department's financial support.
Lord Segal: My Lords, will the noble Lord undertake to see that arrangements are made for a hospital consultant to be available for domiciliary visits in the early stages of an attack, since much research into this condition is still needed?
Lord Trefgarne: My Lords, I agree that more research into this matter is necessary. There might be difficulties in proceeding along the lines which the noble Lord suggests of having specialists visit patients in their homes at an early stage, if only because of the problem of determining when that should be. However, what the noble Lord says will certainly be borne in mind.

Civil Defence Training
2.53 p.m.
Lord Renton: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps are being taken nationally and locally to train members of police forces, fire services and ambulance services in their responsibilities in the event of conventional or nuclear attacks upon the United Kingdom or in the event of radioactive fallout drifting over from the continent of Europe.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, at national level there is provision for the training of all three services referred to in my noble friend's Question at the Home Defence College. The Government have increased the capacity of the Home Defence College at Easingwold from 50 to 70 places, so providing fresh opportunities for such training. Training at local level is a matter for police authorities, local authorities, and the National Health Service.
Lord Renton: My Lords, may I thank my noble friend for that reply as far as it goes? Is he not aware that as a rule international crises occur unexpectedly and suddenly, and therefore is it not desirable that, as envisaged in Section 5 of the Civil Defence Act 1948, the Government should make arrangements for all members of police, fire and ambulance services

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to receive instruction, so that they would know what to do in these emergencies?
Lord Elton: My Lords, as to my noble friend's opening remarks, I think that we are all aware that international emergencies can arise suddenly and unexpectedly. As to his substantive supplementary question, I am aware of the provisions of the 1948 Act and indeed the Civil Defence (General) Regulations 1949, under which the requirement to which he referred exists. I can tell him that all local authorities are presently complying with their obligation under the Civil Defence Act 1948.
Lord Gladwyn: My Lords, will not the Government agree that the idea that a radioactive cloud could one day drift over the continent is conceivable only in the event of the total annihilation and vaporisation of either the United States or the Soviet Union, or both—in which case, of course, we should obviously in this country have been vaporised too? Therefore, would not the Government come to the conclusion that any precautions taken in this country against the effects of nuclear war are a total absurdity and the money should be devoted to other purposes?
Lord Elton: My Lords, I would not accept that the noble Lord's apocalyptic vision is the only interpretation of a possible international confrontation. Furthermore, the Civil Defence services are required to act in conventional emergencies, as well as in nuclear emergencies; my noble friend's Question was addressed to both.
Lord Paget of Northampton: My Lords, would not the urgency seem to be increased by the fact that the scientific press seems to be unanimous in the view that the Argentine will have nuclear weapons before the end of this year, or do we feel that the junta's humane restraint can be relied upon?
Lord Elton: My Lords, I am not certain of exactly what the noble Lord was asking me. If he was asking me whether I view the escalation of the present conflict to a nuclear level as likely, I would say, God willing, I do not. If he was asking whether I rested that expectation upon the scientific press, the answer is that I do not do that, either.
Lord Jenkins of Putney: My Lords, would it not be generally agreed that there now may well be a role for these services in the case of a conventional war? But would not many people agree with the noble Lord, Lord Gladwyn's interpretation of the probability of nuclear war, and would not the conclusion that one would draw from that be that it would be best for us to opt out of the consequences by getting rid of our own nuclear weapons?
Lord Elton: My Lords, it is entirely fanciful to suppose that by disarming ourselves we somehow protect ourselves from attack. I also think that it is fanciful to suppose that the only attack that can be envisaged will wipe everybody out at a blow. No scenario that I know of suggests that there will be no
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survivors, and I must say that if the noble Lord thinks that we should not prepare to succour those who do survive, then I simply could not agree with such a hard-hearted philosophy.
Lord Renton: My Lords, is it not possible that some irresponsible and bomb-happy dictator, in order to teach somebody else a lesson, could drop just one nuclear bomb, from which many other countries might suffer? Is not that a possibility which should not be ignored?
Lord Elton: My Lords, no possibility should be entirely ignored. I think that the best thing that I can say to reassure my noble friend is that it is intended to increase national Civil Defence expenditure by about 60 per cent., to £45 million annually by 1983–84, and local authority expenditure is, we hope, to be doubled.
Lord Leatherland: My Lords, the noble Lord says that there might be a few survivors in some circumstances. Can he arrange that I shall be one of them?
Lord Elton: My Lords, even if my term of office were to last as long as the noble Lord's life—and I hope for his sake that it does not—I could not give such a guarantee.

British Rail: Punctuality and Infrastructure
2.57 p.m.
Lord Davies of Leek: 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 with the statement in the Annual Report for 1981 of the Central Transport Committee (page 5, para. 6) that improved punctuality on the railways depends upon better track maintenance which has deteriorated because of the financial constraints imposed on British Rail by the Government.
The Earl of Avon: My Lords, the Government share the concern of the Central Transport Consultative Committee about the level of expenditure on track maintenance. To avoid further reductions in expenditure on necessary renewal and maintenance of the infrastructure, my right honourable friend the Secretary of State for Transport has announced his intention to earmark part of this year's public service obligation grant for this purpose.
Lord Davies of Leek: My Lords, I thank the noble Earl for that splendid and hopeful Answer. In order that I may streamline my supplementary question, will he again look at paragraphs 5, 7 and 40 of the excellent consultative report, so that track maintenance at least can be handled as practically as possible? Is the noble Earl aware that, if we want to move people, it is absolutely necessary to have a first-class railway system? Finally, could we not use some of the contingency fund immediately for track improvement?
The Earl of Avon: My Lords, I follow the noble Lord in his three supplementaries, though I am not quite sure what he means by the contingency fund, and perhaps we could have a look at that afterwards. We agree entirely with the idea that British Rail present a wonderful option for transport in our country. Like the noble Lord, I have read the figures, and I was delighted to see that over the last two years punctuality has remained more or less constant.
Lord Underhill: My Lords, does the Minister agree with the comments by the CTCC, and confirmed in British Rail's own annual report, that part of the problem is due to the financial targets and the fact that British Rail has therefore had to spend £90 million less on investment as a consequence of trying to reach the financial targets? Has the noble Earl seen the report that appeared in the press only this week, that British Rail has had to throw out its timetables for the excellent London-Birmingham route because of the backlog of work required on the track, and that consequently there are 25 speed restrictions between London and Rugby?
The Earl of Avon: My Lords, I have not seen the figures which the noble Lord, Lord Underhill, has just quoted to me, but, of course, I shall look into them. Perhaps I may just say that in point of fact a renewal of track does not count against the investment income; so this is a separate item which I believe ought to be spent on renewal of track, which was the point of my earlier answer to the noble Lord, Lord Davies of Leek.

Stock Transfer Bill
3 p.m.
Lord Cullen of Ashbourne: My Lords, I beg to move that this Bill be now read a second time. This is a technical and, I fear, somewhat complex Bill. Its principal function is to make certain changes to the law in order to allow the Bank of England and the Stock Exchange to introduce a computerised system for the settlement of bargains in gilt-edged securities. The Bill is not in fact needed to set up such a system; nor are the Government themselves involved in the establishment of the computerised system which the bank and the Stock Exchange have in hand. The Bill is necessary because the law as it stands does not provide for computerised transfer. In short, it is an enabling Bill.
The decision to put the settlement of bargains on computer was taken some years ago by the bank and Stock Exchange because of the strain placed on the present manual system of increasing activitity in the gilt-edged market. So that participants in the scheme can proceed with the acquisition of equipment in the knowledge that the legal obstacles to the use of that equipment have been removed, it is necessary to get the enabling legislation on the statute book. These obstacles are lifted by the first three clauses of the Bill, together with the two schedules.
I suspect that most people regard the term "gilts" as synonymous with Government securities, which are indeed the main stocks traded in the gilts market.
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There are, however, other types of security traded in that market, and most of these have their own rules, supported by, or enshrined in, legislation. Clause 1 of the Bill therefore lists the existing powers for the Government to make regulations relating to gilt-edged securities, and provides for these existing powers to be used to permit the relevant securities to be transferred through a computerised system.
Clause 1(4) allows the same provision to be made in relation to securities that are not covered by any of the powers listed in Clause 1(3). This new power would, for example, cover securities issued by foreign borrowers on the London market, and any new type of gilt that may be issued in the future. The exercise of this power will be by order subject to the Negative Resolution procedure. As a safeguard, the Treasury will not be able to bring any security on to the computerised system without the consent of the issuer of that security or the person currently liable for that security.
Clause 1 also provides that transfers made under these regulations are valid notwithstanding any existing requirements, whether statutory or contractual, for transfer of the securities in question to be by "instrument in writing". Schedule 1 to the Bill specifies the classes of security that the Government believe will need to be covered, but Clause 2 empowers the Treasury to change this list by order. Clause 3 provides further powers to make regulations. These powers will be used to establish the legal framework for the operation of the computerised system.
Clauses 4 and 5 are concerned with gaps in the existing law relating to gilt-edged securities. They do not deal with computerisation, but the Government think it right to take the opportunity presented by the Bill to remedy these deficiencies. Clause 4 amends the law on two aspects of the redemption of Government stock. First, it gives additional flexibility in the method of payment, so as to authorise block payment of redemption monies to the head office of a bank for distribution via its branches to their customers. Secondly, the Treasury is given power to make regulations to provide statutory backing for the bank's practice of requiring stock certificates to be surrendered before stock is redeemed, and of requiring an indemnity where certificates are claimed to have been lost or destroyed.
Clause 5 permits the Government to make regulations governing the storage and eventual destruction of local authority stock transfers, thus placing local authority stock transfer documents on the same basis as Government stock transfer documents. I have already explained the function of Schedule 1. Schedule 2 contains consequential amendments to a number of Acts. These amendments are necessary to bring those enactments up to date with the computerised transfer system mentioned in Clause 1.
As I said earlier, this is a complex but mercifully a short Bill, and I have accordingly made my speech short; but if I can later help noble Lords on any points I shall be very glad to try to do so. My Lords, I commend the Bill to the House and beg to move that it be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Cullen of Ashbourne.)
3.6 p.m.
Lord Bruce of Donington: My Lords, the House will be indebted to the noble Lord for having given us a good explanation of the Bill, which, indeed, can hardly be said to be one which will have an earth-shattering effect upon the majority of the population of the United Kingdom; so much so that it had a perfunctory Second Reading in another place, and I observed that its Committee stage took exactly four minutes. As a Member of your Lordships' House, I am very often a little suspicious of Bills that go through another place with such alacrity, and I think it is desirable that we have one or two matters clarified a little.
One point arose in Committee in another place, where an assurance was requested that the computer terminal in this regard should be situated in the United Kingdom. The Minister, Mr. Bruce-Gardyne, was good enough to respond by giving that assurance. That being so, there would seem to be no reason why this undertaking should not be incorporated in the Bill itself.
This brings me to another question—one which I would say reflects the expression of what is often termed "judicial ignorance". I observe that in the Bill there is reference to a computer-based system. Although it is very difficult to anticipate any legal action arising out of any breach of the provisions of the Bill itself, I can imagine a learned judge sitting in the Queen's Bench Division or elsewhere saying, on any case being brought before him, "What is a computer-based system? "—because a computer-based system is, of course, nowhere defined in the Bill.
This is not entirely academic. There is always scope within computerised machinery for breakdown, and if a breakdown took place before a purchase was finally complete—and I agree it would he a split second—it would of course leave one party who had sold stock and another party who had not yet bought it. This may be entirely fanciful, but, after all, this is a Bill, and presumably it is anticipated that at some time it might be enforced. Exactly what rights would accrue to the particular parties, unless they went to law? And if they went to law, I can imagine the learned judge saying, "What is a computer-based system? "I am not a lawyer, and I am certainly not an electronics engineer, but it seems to me that, somewhere, some definition is required. I do not want to make a long story about this, but there is another point.
This new system of transfer, even though it operates only over a very limited field, represents a subtle departure again from the whole business of concluding a contract. At one time it was under seal, or under hand, or verbal; and then there was the ordinary transfer system whereby the transferee need not obtain the signature of the transferor before the transfer of shares became effective because that was accomplished on deposit of the instrument. Now we are getting transactions done, in effect, by computer—I agree only over a limited sphere.
What I am anxious about is this. Will this be taken as a precedent? Your Lordships have been through many Bills which have been handled through many competent Ministers from the Benches opposite in which it has been prayed in aid that a particular measure was incorporated in, say, the Local Govern-
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ment Act 1972, it has lasted all these years, why should we not have it in this Bill? I am anxious to have an undertaking from the Government that, although this is probably perfectly all right, never will it be quoted as a precedent for saying, "Well, you passed it in the Stock Transfer Bill. Why legitimately object to it over a wider field?"
Finally, I am worried, particularly with a complex technical Bill, that it should make provision for regulations. It is an enabling Bill, as the noble Lord himself has said. I do not like enabling Bills, anyway, particularly where the subject is as technical as this.
I must apologise to the House for having raised, possibly in my ignorance, a number of questions which are susceptible to easy answer and which may appear to those skilled in this field to be somewhat inconsequential. Nevertheless, at the risk of somebody correcting me on the various matters that I have raised, I still think they are important and I aver that where the other place gives small scrutiny to a Bill it is up to this House to go into that Bill in rather more detail by way of getting explanations.
3.13 p.m.
Lord Terrington: My Lords, as I had the privilege six years ago of introducing the Stock Exchange (Completion of Bargains) Bill into your Lordships' House, I thought that it might be appropriate to say a few words in support of this new Stock Transfer Bill. The completion of bargains Bill was, in a way, the forerunner of the Bill we are discussing today. It was only concerned with the settling of transactions on the computer of equities and corporate fixed-interest securities by a system known as Talisman, while this Bill seeks to take modernisation of the system a stage further by introducing a new computer for settling and completing Stock Exchange bargains in Government securities through a system called BET, as explained by the noble Lord, Lord Cullen of Ashbourne.
One of the reasons why I wanted to say a few words today about the new Bill—and it is a point which the noble Lord, Lord Bruce, has raised just now—is that, so far as the Talisman system is concerned, I am in a position to confirm that the reliability of the computers has been absolutely first class. I felt that it was important that noble Lords should be aware of this fact when considering a Bill to extend computerisation to Government securities, and I am pleased to be able to make this statement with complete authority. The other reason why I am in favour of this Bill, introduced so clearly by the noble Lord, Lord Cullen of Ashbourne, is that it represents yet another stage in the modernisation of procedures of the central securities market. Having spent most of my working life in the securities industry in the City of London, I have been very aware over the years of the need for modernisation and, in fact, I emphasised this very point when I introduced the Bill to legalise Talisman.
My Lords, this is the third piece of legislation over the last 20 years that we have had towards the modernisation of procedures. The first was in 1963. It was the Stock Transfer Act which simplified the written form of transfer and was introduced by the noble Lord, Lord Clitheroe. The second was the Stock Exchange (Completion of Bargains) Act, which I introduced in 1976 and which enabled the Stock Exchange to bring

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the Talisman system into operation in April 1979 using computers. Now we have another and most important stock transfer Bill which, I understand, will result in the Stock Exchange and the Bank of England introducing their new computer system by 1984. I welcome this Bill most warmly.
Lord O'Brien of Lothbury: My Lords, although my name does not appear on the list of speakers, I should like to be allowed to add a word of support to this Bill. I am not in any way authorised to speak on behalf of the Bank of England, where I spent so much of my life, in the early part of which I was engaged at the very lowest possible level in dealing with transfers in the gilt-edged market, which, in those days, were relatively few in number and were dealt with by clerks who had only just abandoned their quill pen. Much has happened since then. The gilt-edged market is now of enormous volume, technology has advanced with increasing speed, and it is only right that that technology should be applied to these processes which at one time were so extremely laborious.
I am glad to see a Bill come before your Lordships which takes that process a good step further. On the other hand, I agree very much with the noble Lord, Lord Bruce of Donington, that a Bill of this character, although a highly technical Bill which interests relatively few people, is of immense importance. Everybody who engages in the transfer of securities can be affected by it. I think it is important that his point should be dealt with carefully and that in your Lordships' House we should examine the Bill very closely indeed. Nevertheless, in general terms, I add my commendation of the Bill to your Lordships.
3.18 p.m.
Lord Cullen of Ashbourne: My Lords, I am grateful to noble Lords who supported this Bill, both the noble Lord, Lord Terrington, and the noble Lord, Lord O'Brien. I agree with the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord O'Brien, that it is right that this House, as a revising Chamber, should look carefully at Bills of this kind. I am very glad that my noble kinsman, Lord Clitheroe, is in his place today. He was responsible for bringing forward the forerunner of this Bill many years ago. I know that the noble Lord, Lord Terrington, supported him on that occasion and I, in turn, supported Lord Terrington in the Talisman Bill; so the team is at work, a team which has been going for a long time.
The noble Lord, Lord Bruce, asked me several questions which I shall do my best to answer. His first question was about external terminals. The intention is that the terminals should be internal and that no terminals should be situated abroad. The noble Lord seemed slightly concerned about this. I am not quite sure why and I think it important that at the next stage of the Bill, we should know what that concern is; because the terminals will be used for checking deals and transferring money and securities. They are not used for extracting data except in relation to the terminal user's own accounts. So there is no danger of somebody with a terminal getting hold of information to which he should not be entitled. I do
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not know whether that was in the noble Lord's mind, but I think he can be reassured on that point.
Lord Bruce of Donington: My Lords, perhaps I could put it back to the noble Lord in this way: if the noble Lord himself does not consider it important, why did his Minister, Mr. Bruce-Gardyne, think it necessary at Committee stage to give the specific assurance? I put it back to the noble Lord.
Lord Cullen of Ashbourne: My Lords, personally I am happy about the situation. If the noble Lord wishes to pursue this matter at another stage in the Bill, of course he may do so.
There was a point about some breakdown in the computer, when somebody says that they bought stock and a split second later somebody says that they have not sold it. I think that was what the noble Lord was suggesting. Again, I do not think that he need worry about this because the computerised system is simply a question of settlement of bargains, and until a bargain is agreed on both sides—either by having gone through the market through jobbers, or if the transaction is negotiated outside the market—it will not enter the system. The system is simply on settlement of the bargain.
The noble Lord is concerned, as always, about this being an enabling Bill. But the purpose of this Bill is to clear away legal obstacles so that regulations can be made to develop what is a very complex system. There is no doubt about it, it is a complex system. The Bill has to get to the statute book so that the hardware can be selected and purchased, thoroughly tested and the participants in the scheme over the next year or so can be collected. The regulations which will follow this are all subject to negative procedure in this House and to the scrutiny of both Houses. It will then be the time to go into the real detail of this Bill. I would have said that this was a case where an enabling Bill was thoroughly justified. Does the noble Lord wish to speak?
Lord Bruce of Donington: My Lords, I do not want to interrupt the noble Lord. However, will he deal with the latter part of my request for assurance? This is a very technical and complex Bill. The instantaneous transmission of information becomes itself the instrument of transfer. This is the nub of it. Will the noble Lord give the House an undertaking that this will not be cited as a precedent when other Bills of this type come up, so that it will be without prejudice to our considering the whole matter anew if any other circumstances arise?
Lord Cullen of Ashbourne: My Lords, I am most grateful to the noble Lord for paying me such a compliment. He must know that I am in no position to make any such statement, either for this Government or for any other. I do not think that I have been asked any other questions. I hope that I have dealt with those few that I have been asked.
On Question, Bill read a second time and committed to a Committee of the Whole House.

Social Security and Housing Benefits Bill
3.25 p.m.
Report received.
Clause 7 [Rate of payment]:
Baroness Jeger Baroness Jeger moved Amendment No. 1:
Page 5, line 21, leave out ("£37") and insert ("£45").
The noble Baroness said: My Lords, I hope that we may take the three amendments to Clause 7 together. We were very concerned during the Committee stage of this Bill and we tried to increase the amounts that were to be paid as statutory sickness benefits. There was no response from the Government. We now make no apology for coming back again because we are still very concerned at the low level of these amounts.
May I remind your Lordships that an employee whose normal pay under his contract of service is not less than £60 is to receive £37 a week. Those who receive between £60 and £45 are entitled to £31. Others are to receive £25 a week, except for those thousands of workers who are to get nothing at all because they earn less than £29·50 a week when they are at work. It seems to us that there is a case for a more generous scale. We hope by the very moderation of our proposals that the Government will be able to agree some increases.
We are aware that the Secretary of State has discretion but no obligation to increase these amounts on review of the cost of living. We have to ask whether these amounts are to be index-linked or whether they are to be in any statutory way fixed to the cost of living. We are very worried because these amounts were written into the Bill well before March 1982 when it came to the Commons.
Surely there is already need for some uprating of those amounts, even though the rate of inflation is down now between 9 per cent. and 10 per cent. Surely, if inflation is 9 per cent. that must mean that £37 is now worth something less in purchasing power than it was in March of this year. Perhaps the Minister can tell us what the rate of inflation has already done to the amounts that were set out in the First Reading of the Bill. Also, there is the latest news from the EEC. That is bound to lead to an increase in prices in the shops for farm produce. We all know that the price of food is a bigger element in the budget of the lowest paid workers than in the budget of those who are better off.
I hope that your Lordships will agree with the modesty of our proposals. I do not apologise for coming back to this subject because it is so important. It is very difficult to see the basis of the Government's calculation of these figures. I refer particularly to the minimum income for a married man with one child to qualify for family income supplement, for instance. That is £74 a week. A man with two children can start claiming family income supplement up to £82 a week in wages.
Surely these sums are meant to indicate the poverty levels which the Government accept. Otherwise, there is no meaning in these figures. So the sums now proposed for statutory sick pay indicate a new level of
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grievous and harsh poverty. I do not want the noble Lord the Minister to tell me that all these impoverished people can claim supplementary benefits, because many of us are hoping to see a decrease in the number of people who have to ask for supplementary benefits, and an increase in the number of people whose statutory income provides for their main needs when they are ill.
It seems to us—and perhaps the Government can explain otherwise—that when a man claiming family income supplement, because his wages are up to £74 a week, becomes ill, his income drops to £37 a week. On that £37 a week he has to pay—this is new—a national insurance contribution of £3.23. That is a Class 1 contribution; and if he is fortunate enough to have any other income he may have to pay income tax.
There are two innovations here. One is that no regard is paid to the family circumstances and the number of children there may be, so that a girl typist living at home will get the same sick pay as a married man with three, four or five children to support. The second is that, unlike national insurance benefit, this new benefit is to be subject to national insurance contributions. Therefore the figures in Clause 7 of the Bill are not the real figures. From them has to be deducted the national insurance contribution. There is an exception—and this is another point on which I should like an answer. Will the contributions of those people who are so poor that they are only able to get £25 in statutory sickness benefit and are below the compulsory rate of Class 1 contributions, be credited, as happens with ordinary national insurance sick pay, so that their contribution record is kept up? If not, they are going to be in great trouble if, later in life, it is found that the deficiency in the stamps on their card means that they are in difficulties when they claim.
It seems to us a strange philosophy that with the lowest paid of all, the poorer a man is at work the poorer he is when he is ill. The Low Pay Unit reckons that 5 million low-paid workers will be worse off under this Bill than under the national insurance sickness scheme; so we feel it is fair to come back and ask the Government whether, since the committee stage, they have had a chance to look at this again. Often the lowest paid are the most vulnerable to illness and often they are badly paid just because they are disabled, inadequate or less robust than others, either mentally or physically.
In April 1981, according to official figures, more than 5 million people in this country were earning less than £60 a week. These are the people who, if they have the misfortune to fall sick, under this Bill will get £25. If such a man fell ill under the national insurance scheme—a man with a wife and two children—I have worked out that he would receive £43.62. It seems to me extraordinary that in the first six weeks of a man's illness the Government say: "You can only have £25 a week, but after that you can go back to the national insurance and get £43.62." It seems unfair to the people concerned; and at Committee stage we really did not get an answer to the philosophy behind this situation.
I understand that the Bill is not to come into force until next year. I ask your Lordships: what will these amounts be worth then? The small increases we suggest might help at least a little towards the

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payment of Class 1 contributions; but I think we have really been too modest in what we have asked for, because we have made clear on other occasions our opposition to this Bill. Unlike national insurance, it discriminates against the poorest paid. It says to the people who are poor when they are at work that they have to be poorer still if they happen to be ill. I have to point out that when there is illness in a family there are often more expenses to be incurred and therefore to drop to £25, irrespective of the number of children or other responsibilities, seems to us very unfair. I want to anticipate the Minister's reminding us that there is a child benefit of £5.25, but we know that has not kept pace with the rate of inflation; and there will be further discussion during Report stage on the question of child benefit, so I will not go further into that now.
Turning to Amendment No. 3, at Committee stage we suggested an amendment which would ensure that a person would be paid his normal earnings or £40, whichever was the lower. Today Ministers might be surprised that we have come back with a rather "meaner" amendment which refers to "£38, or whichever is the lower ". We did that in the hope that the Government will meet us. (" Some hopes!", my noble friend says.) But I can only say that we felt that £38 was better than what has been proposed, and we took the figure of £38 because it seemed to be more nearly equivalent to national insurance sick pay for man with a wife and child. However, he is still at a disadvantage because of having to pay the £3·23 national insurance contribution. Therefore he would be left in effect, even with our amendment, at £34·77 a week.
The Explanatory and Financial Memorandum says that as a result of this Bill expenditure will be reduced by £385 million in a full year. That must mean that £385 million has been taken away from the sick pay of the employees. What else can it mean? I honestly think that it is not unreasonable for us to ask for some generosity from the Government side. A reduction in this £385 million saving would surely not bankrupt the Government, and even small increases which are suggested in this modest amendment would help many families in difficult circumstances. So I end by asking the Government whether they can give some assurance about uprating, which at present is not mandatory under the Bill. Can they make any reference to the possibility of index-linking? Can they assure the House that there will he franking of national insurance cards for the poorest people, as happens at present, so that their contribution record is not disturbed?
May I also ask the Government—perhaps hopelessly, as my noble friend Lord Wallace might agree—whether they will try to look at these changes in the context of increased dental, optical and prescription charges and, for many people, increased rates and rents and all sorts of other difficulties, which are bound to result from a 9 per cent. inflation rate, however much the Government may congratulate themselves on the reduction to that figure. I beg to move.
3.39 p.m.
Lord Underhill: My Lords, may I make a brief intervention in support of my noble friend, because
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we were advised by the Minister at Committee stage that noble Lords should read Financial Effects of Statutory Sick Pay. I have done so, and I should like to quote just two or three extracts very briefly. On page 1, in the introduction, paragraph 3 reads as follows:
"An estimate is therefore made of the actual amounts of extra sick pay that employers will pay to employees. This is compared with the amount of national insurance benefit withdrawn from employees. The rates of statutory sick pay have been set so that, taken as a group, those employees will be left with about the same net income…that they would have received if national insurance benefits had themselves been taxable".
Then we find on page 4 a continuation of paragraph 10. That reads:
"By setting the rate of statutory sick pay at £37 per week (or less for those earning under £60 per week) employees, taken as a group and allowing for occupational sick pay already received, will receive about the same extra net income as they would have done if national insurance benefits for incapacity were subject to taxation".
Finally, in the summary, which details the effects of the statutory sick pay scheme, we find:
"Employees overall are left with the same net income".
The point about quoting those extracts is that they are referring to employees as a group; employees overall. The position of individual employees, which is the subject of my noble friend's amendment, is not taken into consideration, and I hope that the House will support the amendment.
3.41 p.m.
Lord Trefgarne: My Lords, the amendment and the two that follow it, which have been tabled by the noble Baroness and her noble friend, go to the very heart of this Bill. Therefore, I hope that your Lordships will forgive me if I deal with them at rather greater length than I would normally, but I hope at not quite the same length—I make no complaint of this—as that of the noble Baroness in introducing the amendment.
As the noble Baroness has explained, the effect of these amendments would be to change the rates of statutory sick pay so that £45, rather than £37, a week would be payable to someone earning £60 or more a week; £40, rather than £31, would be payable to someone earning less than £60 but not less than £45; while someone earning less than £45, but not less than the lower earnings limit of £29·50, would receive £38 or his normal earnings, whichever was lower instead of the £25 mentioned in the Bill.
The rates of statutory sick pay were debated during our Committee consideration of the Bill towards the end of April. However, perhaps that debate failed to clarify the issues concerned as fully as was necessary. This was because, as many noble Lords then remarked, the financial background to the Bill is indeed complex. I should say that the wording of the Bill itself in Clause 7 is, to my mind, straightforward enough. But the arithmetic underlying the provision of the rates of statutory sick pay is not. Nor can it readily be simplified, since complex calculations are unavoidable in estimating the financial effects of the statutory sick pay scheme on employers, employees and the public purse. This is why we have made a paper on these financial effects available in the Printed Paper Office to which the noble Lord, Lord Underhill, has referred.

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Perhaps I can provide a little further clarification now.
First, I should make it clear that I do not quarrel with the noble Baroness that there will be some individuals whose statutory sick pay, net of deductions for tax and national insurance contributions, will be less than their present entitlement to sickness benefit. The Government have never claimed anything else. What we have made clear is that the rate of statutory sick pay has been set so that, as a group, employees will be in the same financial position as they would be if sickness benefit were brought into tax. And the extra national insurance contributions that they will pay have been taken into account in estimating this.
However, before seeking to explain the arithmetic for employees as a group, I must answer the noble Baroness's point about potential individual losers. Clearly it is of legitimate concern that individuals should not be caused hardship or forced on to supplementary benefit as a result of the statutory sick pay scheme. On that we are agreed. The noble Baroness gave during our Committee discussions the example of a man with a dependent wife, who currently gets £36.40 in sickness benefit and who, at the rates specified in the Bill, will be entitled to £37 statutory sick pay less about £3·23 (at the non-contracted-out rate) national insurance contributions. Incidentally, I hope I have made it clear that the rates of statutory sick pay will be increased from April 1983 to take account of price increases. This man's net entitlement under statutory sick pay after deduction of contributions would thus be about £33·77, which is about £2·63 less than his current entitlement to sickness benefit.
However, the likelihood of married men having to rely solely on statutory sick pay during sickness is relatively small. Many will have working wives. Our sickness benefit statistics show that only one-third of all male beneficiaries receive additions in respect of adult dependants. Available data suggest that more than half of that group, in addition, receive occupational sick pay. In all, we estimate that the number of men with an adult dependant who will receive only the statutory minimum when sick after the introduction of the scheme is in the region of 600,000. But even they will not be materially worse off. At present, a married man with a dependent wife, who receives sickness benefit of £36.40, no occupational sick pay from his employer and who has no other resources, is entitled to supplementary benefit. The current supplementary benefit scale rate for a man and dependent adult is £37.75, plus £7.90 or £11.90 for each dependent child, depending on the child's age. Thus the people about whom noble Lords are particularly concerned would already be entitled to supplementary benefit. Not only is their financial position safeguarded, but we are not creating additional claims to supplementary benefit. All our estimates indicate that the statutory sick pay scheme will not increase the number of claims to this benefit. Indeed, many individuals will find that the new scheme lifts them off supplementary benefit, since for those without an adult dependant the £37 rate of statutory sick pay, even after deductions, will represent a considerable improvement over their present entitlement to sickness benefit.
I should make the point that, in the case of a married man who receives only £37 statutory sick pay, less contributions for a week's sickness, it is unlikely that
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any tax will be deducted that week. The personal tax allowance for a married man is now £2,445, which is equivalent to just over £47 a week. So in a week where his taxable income totals £37, no tax would normally be deducted, although of course the £37 would count as part of his annual income for tax purposes.
I will now turn to the financial effects of the statutory sick pay scheme upon employees as a group. The extra national insurance contributions payable by them as a result of the introduction of the scheme have been taken fully into account in the calculation of the statutory sick pay rates. I should like to reassure your Lordships on this in a little more detail, since it is very important that the House should be satisfied that there is no sleight of hand, or hidden taxation, involved in our setting the rates of statutory sick pay, as we have, and making statutory sick pay subject to tax and national insurance contributions. I should make it clear that this explanation is of the broad principles involved in our calculations. To reduce its complexity, I have not included the effect on the sums quoted of low earners, or of married women and widows who pay reduced rate contributions.
The objective in setting the rate of SSP was to ensure that employees as a group receive broadly the same net extra sick pay as a result of the introduction of the scheme as they would have received in sickness benefit if that benefit were taxable. About £365 million a year (at current benefit levels) will no longer be paid out in sickness benefit when the statutory sick pay scheme is in operation. If this sum were paid to employees and were taxable, it would give them a net income of about £255 million. The rate of statutory sick pay has been set so that employees, as a group, receive about the same amount in net extra sick pay as a result of the scheme. Because sick pay is subject to both tax and national insurance contributions, this corresponds to a gross amount of extra sick pay of about £400 million. With a statutory sick pay rate of £37, the total extra gross sick pay that we estimate will be received by employees as a result of the introduction of the scheme is, therefore, about £400 million. Taking into account the tax and national insurance contributions payable on this, employees' total extra net sick pay is estimated to be about £250 million, which is broadly equivalent to the £255 million, which we estimate would have been their net income from sickness benefit if that were taxable.
To summarise, I have explained that the scheme will not have the adverse effect on individuals which the noble Baroness fears. And I have explained that the extra national insurance contributions which will be payable by employees have been fully taken into account in setting the rates which are quoted in the Bill. Employees as a group will receive about the same pre-tax income after the scheme is introduced as they do now. It is also worth mentioning that the effect of the scheme will be to redistribute income from those on generous occupational schemes, who currently receive more when sick than when well, to those who are in less generous occupational schemes or who currently receive no occupational sick pay.
I apologise for the length of my remarks, but I hope that I have demonstrated that the fears which have prompted the noble Baroness and her noble friend to

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table these three amendments are unfounded. The amendments, if made, would mean a considerable loss to the National Insurance Fund, because employers would be able to deduct the extra statutory sick pay from their remittances of national insurance contributions. This loss would have to be made up somehow; and it is not justified, because, as I have explained, the extra national insurance contributions which employees will pay have already been fully taken into account in setting the rates of SSP.
May I just deal with two or three of the points which have been made by the noble Baroness in the course of her opening remarks. As I have said, the rates in the Bill apply from April 1982, but they will be revised and uprated from April 1983 when the scheme is introduced. The basis of the uprating will be the movements of prices, as provided for in Clause 7, although my right honourable friend the Secretary of State can vary the increase in the light of other circumstances. But Ministers in another place have given a commitment that the rates will be increased from next April. I can give an assurance that if somebody who has received the lowest rate of statutory sick pay on which no contributions are payable has a deficient contribution record in consequence, he will receive the necessary credits to top up his contribution record. This is of course no change from the present position.
Family income supplement, referred to by the noble Baroness, is awarded on the basis of recent past earnings. Once awarded, it continues in payment without recalculation for a year. It is not a measure of poverty, as the noble Baroness—perhaps inadvertently—suggested. It tops up the incomes of low paid working families. I hope that on reflection the noble Baroness and her noble friend will feel able to withdraw these amendments.
Baroness Jeger: My Lords, I thank the noble Lord for his courteous reply. He should not apologise for its length. Nor do I apologise because, as the noble Lord has said, this is the heart of the Bill and it is very important for us to try to get it right.
I am very glad that the noble Lord said that the amounts specified in the Bill which are the subject of this amendment will be increased from April 1983. I hope that this is a total commitment. One of the reasons why we put down these amendments is because it is laid down in Clause 7 of the Bill that the Secretary of State may increase the amounts and that if he decides not to do so he must put a report before Parliament. That is Clause 7(8). If there is now a total commitment not that the Secretary of State may put up these rates but that he will increase them in April 1983, in view of the movement in prices, we very much welcome it.
I welcome also—as I am sure all my noble friends do—the fact that the noble Lord has made it absolutely clear (it has not been made clear previously) that for those below the minimum rate for payment of national insurance contributions there will be credits for every week of sickness so that they do not lose out on their contribution record.
The noble Lord referred to family income supplement as topping up the wages of the low paid. But when a low paid worker is ill, is it not a fact that he will lose his family income supplement and that he will be totally
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dependent on possibly £25 or £31? I understood that the family income supplement was payable only as a supplement to wages and not as a supplement to benefit. I shall be very glad to hear the noble Lord's answer.
Lord Trefgarne: My Lords, I understand that family income supplement would continue to be payable along with statutory sick pay. Thus the fear expressed by the noble Baroness is unfounded.
Baroness Jeger: My Lords, I thank the noble Lord for his answer. That point has not been made clear in previous debates and it is a considerable reassurance. In view of what the noble Lord has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 and 3 not moved.]
Clause 13 [Appeals]:
3.56 p.m.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 4:
Page 12, line 11, leave out ("his") and insert ("the insurance officer's").
The noble Lord said: My Lords, this is a technical amendment which clarifies the meaning of Clause 13(3). The clause refers to a period "beginning with the date on which notice of his decision was given to the appellant", but there is no indication—at least as a matter of grammar—whose decision "his decision" is. The insurance officer's decision is meant, and the amendment simply clarifies this. I beg to move.
On Question, amendment agreed to.
Clause 16 [Enforcement of decisions]:
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 5:
Page 13, line 26, leave out from beginning to end of line 29 and insert—
("16.—(1) This section applies to any case where—

(a) a decision of an insurance officer, local tribunal or Commissioner in proceedings under this Part is that an employee is entitled to an amount of statutory sick pay; and

(b) the requirements of regulations made under section 8(2) of this Act (time within which statutory sick pay to be paid) have not been satisfied in respect of the whole or any part of that amount.

(2) In a case to which this section applies—

(a) any amount payable in pursuance").

The noble Lord said: My Lords, this amendment has two effects, both of which are technical. First, it ensures that an employee cannot invoke Clause 16 to enforce against his employer a decision of the statutory authorities that he is entitled to an amount of statutory sick pay until the time within which that amount of statutory sick pay is to be paid has elapsed. That time will be prescribed in regulations made under Clause 8(2). Secondly, it deletes the reference in the clause to England and Wales, so as to leave the ordinary rules governing jurisdiction to determine whether the enforcement process ought to be pursued in England and Wales or Scotland.
The first part of this amendment corrects a deficiency in the Bill as drafted. As it stands, immediately the

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statutory authorities have given a decision an employee could seek to enforce payment thereunder against his employer. But there are times stipulated in Part I in which an employer may appeal against the decision of the statutory authorities. It would clearly be wrong if an employee could take enforcement steps against his employer before either the time for appealing had expired or the rights of appeal had been exhausted. The change is in the employee's interest since an employer could apply for a stay of the enforcement process if he wished to appeal against the decision of the statutory authorities. In that event, an employee might well lose the fee he had paid to initiate the action.
The regulations under Clause 8(2) will require the employer to pay SSP by the next normal pay day after the time for bringing an appeal against the decision of the statutory authorities has expired and either no appeal has been brought or the rights of appeal have been exhausted. (In circumstances where there are practical difficulties in achieving this, payment may be made by the subsequent pay day.) The amendment thus prevents a precipitate and potentially wasteful use of the court's time and that, I think, will be welcome to noble Lords.
The second part of the amendment enables an employee to enforce a decision of the statutory authorities in whichever jurisdiction is appropriate; that is, in Scotland or England and Wales. The change covers the situation in which the employee works in one country but his employer's assets are in another. This easement will benefit a small number of employees and I commend it to your Lordships. My Lords, I beg to move.
On Question, amendment agreed to.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 6:
Page 13, line 39, at end insert—
("(3) Regulations may, in relation to cases to which this section applies, make provision for payments to be made by the Secretary of State to employees in prescribed circumstances in connection with court fees (including sheriff officers' and messengers-at-arms' fees for doing diligence) incurred, or likely to be incurred, by those employees in seeking to enforce decisions by virtue of subsection (2) above.
(4) The regulations may, in particular, make provision for the recovery of payments made under the regulations from persons to whom such payments are made; and any sum so recoverable may, without prejudice to any other method of recovery, be recovered by deduction from prescribed benefits, ("benefits" having the meaning given by the regulations).
(5) Any payment made by the Secretary of State under the regulations shall be paid out of the National Insurance Fund, and any sums recovered by him under the regulations shall be paid into that Fund.").
The noble Lord said: My Lords, this amendment has the effect of enabling the Secretary of State in certain circumstances to advance to an employee an amount in respect of the court fees payable as a result of invoking Clause 16. In Scotland, the fees concerned are sheriff officers' and messengers-at-arms' fees for doing diligence. The change meets a commitment, given by my honourable friend the Minister for Social Security in another place that this help would be provided.
Noble Lords will appreciate that there are only likely to be a few cases a year brought under Clause 16. It is very much the long-stop of the Bill. Since employers will be compensated for any statutory sick pay they disburse, it is highly unlikely that any of them will
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refuse payment once the statutory authorities have given a decision that liability exists. But we have to cover the situation where an employer does refuse. Clause 16 enables an employee by a very simple procedure to invoke the assistance of civil procedures to enforce payment.
But, as was pointed out in another place, there are fees to be paid in taking this course. If the employee initiates proceedings in a county court in England and Wales he will have to pay a plaint fee, which varies according to the amount of statutory sick pay at stake. And, if the employer does not act on the court order obtained, the employee can issue enforcement process—for which further fees are payable. But fees would of course be recoverable from the employer.
Nevertheless, an employee might have to pay out between £20 and £45 in court fees in England and Wales depending on the amount of statutory sick pay at stake in order to recover that to which he is entitled. And that could, in a few cases, be a deterrent. This amendment allows us to advance to the employee any court fees which he has to pay. I stress it is a loan; we shall recover the sum from the employee when his employer finally pays up. Alternatively, we shall be able to deduct the loan from any future benefit payments. The amendment is wholly beneficial to employees and I feel sure will be welcomed by the House. I beg to move.
On Question, amendment agreed to.
Clause 26 [Interpretation of Part I and supplementary provisions]:
Lord Trefgarne Lord Trefgarne: moved Amendment No. 7:
Page 21, line 22, at end insert—
("(7) In this Part any reference to Great Britain includes a reference to the territorial waters of the United Kingdom adjacent to Great Britain.").
The noble Lord said: My Lords, with your Lordships' permission, I will move Amendment No. 7 and speak to Amendments Nos. 15 and 16 at the same time. These amendments sustain the intention of past and present social security legislation in respect of its application to our territorial waters. They are necessary to clarify the position in the light of a recent decision which has cast doubt on the previously accepted interpretation.
At least since 1948, our social security legislation has been drafted and interpreted by the statutory authorities on the basis that references to people or circumstances inside or outside of Great Britain, the United Kingdom or their constituent parts embraced not only the relevant land areas but also their adjacent territorial waters. For example, take the case of an employed earner (not being a mariner or an airman to whom special provisions apply) who sustained an industrial accident in the territorial waters of the United Kingdom. It has been accepted that he was not debarred from receiving industrial injuries benefits, even though such benefits are not in general payable in respect of industrial accidents happening outside the United Kingdom.
However, a recent decision of Mr. Justice (now Lord Justice) Slade, in Earl of Lonsdale v. The Attorney General, which I understand is not being appealed,

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casts grave doubt upon the correctness of this approach. If the intention of our past and present legislation is to be secured, we require specific provisions to this effect. The proposed amendments provide for this. The amendment to Clause 26 provides it in respect of Part I of the current Bill. The new clause proposed after Clause 43 provides it in respect of those existing social security enactments to which it is relevant. The amendment to Clause 47 provides that the new clause shall come into force when the Bill receives Royal Assent. My Lords, I hope that these arguments will be compelling and that your Lordships will see fit to agree to this amendment. I beg to move.
Baroness Jeger: My Lords, the arguments are indeed compelling and I thank the noble Lord for making them so clear. I just wanted to ask him one question. In this reference to territorial waters, I find myself thinking about people working on oil rigs who might be without this statutory definition of territorial waters, although they might be working for British firms. I am just wondering how far this question of territorial waters would go for deep sea divers and other workers on oil rigs whose work may take them some distance away. Would they be covered by this amendment? I very much hope we might get some information on this. I put the point purely interrogatively.
Lord Trefgarne: My Lords, I understand that generally speaking oil rigs do count as part of the United Kingdom even though they might be outside territorial waters. There is a whole plethora of special legislation relating to the conduct of affairs upon oil rigs. In general, I think the noble Baroness can be assured that the workers on them are properly protected.
Baroness Jeger: I thank the noble Lord.
On Question, amendment agreed to.
Clause 28 [The statutory schemes]:
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 8:
Page 22, line 15 at end insert—
("( ) In the calculation of housing benefit for a qualifying student actual income shall be used.").
The noble Lord said: My Lords, I beg to move the amendment standing in the names of my noble friend and myself. This is, of course, a different amendment from that which I moved at Committee stage, and is probably a little more simple and direct. The intention of the amendment would be to eliminate an important area of discrimination against students in the present rent allowance scheme and the proposed housing benefits scheme. All students receiving a grant are assumed to receive the full grant, when rent allowances are calculated, and this I understand will continue into the proposed scheme. However, it is very important to note that no other group of claimants is assumed to be in receipt of income which does not actually exist. Benefits are normally calculated on the basis of the actual income of the claimant.
A detailed investigation of student income and expenditure conducted for the Department of Education and Science in 1974–75 showed that over 70 per
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cent. of parental contributions were not paid in full. A survey of students at Kent University in 1979–80 revealed that only two-thirds of students had income equivalent to the value of the full grant. At Glasgow University in 1981–82 50 per cent. of a sample of 2,000 students did not receive the parental contribution in respect of which they had been assessed.
The Government have worsened the position for students in 1982–83 by assessing the parental contribution scales at their 1981–82 levels. Many students are in receipt of discretionary awards paid at very low levels. They, too, are assumed to be in receipt of grant at the maximum mandatory rate. For example, at present a student receiving a £1,100 grant with no assistance from his or her parents, and paying an assessable rent of £13 per week, should obtain a rent allowance of almost £2. If the rent allowance was calculated on the basis of actual income the student would receive about £5·50. Such a student is thus £3·50 a week worse off than a comparable claimant merely because of his or her student status. I think this is a quite clear and direct amendment, and I hope that, after consideration, the Government will feel able to accept it. I beg to move.
Lord Banks: My Lords, I should like briefly to support the amendment. I think the case has been put very clearly by the noble Lord, Lord Wallace of Coslany. It does seem wrong to single out one particular section of the community and to say, "We shall not take the actual income, what you have actually received, but we shall take something you are assumed to have received, whether or not you have done so". That does seem wrong, and therefore I support the amendment.
Lord Trefgarne: My Lords, present advice issuing from the department on this point, which is in Circular 81/77, is that when a student's educational award has been reduced because of a parental contribution, his income may normally be assessed as including the full amount of the award before the reduction. This is in line with existing supplementary benefits policy, which similarly takes account of the assessed parental contribution to the grant. The noble Lord has claimed that this can cause hardship, but I think that the noble Lord is addressing his complaint at the wrong target. If it is considered right within the grant system to look to the parent to make a contribution to his child's grant, then that is not a fact we can ignore when considering the claim for housing assistance of the student himself.
If I may say so, the noble Lord's quarrel is really with the grant system and that, with respect, is not the matter that we are discussing today. But clearly, that area has to be included in the general need to relate public expenditure to what the country can afford. It is not for housing benefits or supplementary benefit to serve as a backdoor supplement to the grant system. In particular, this would simply encourage some parents to reduce or stop paying their agreed contributions since they would know that these benefits could meet some or all of the amount instead. I am not, therefore, able to accept the amendment.
I should like to add one further point. I suppose a circumstance could arise when a student had been

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assessed as having a certain parental contribution, and for reasons outside the control both of the parent and, indeed, the student, the parent became unable to support the child on the basis that had been agreed. In those circumstances, I understand that it is possible for the student to have the grant re-assessed to take account of his parent's temporary or permanent inability to pay the contribution that had been originally anticipated. I do not, therefore, think that any genuine hardship need arise in these circumstances and I hope that the noble Lord will be satisfied.
Lord Wallace of Coslany: My Lords, I thank the noble Lord for his explanation. He has indicated that there is some ground for quarrelling with the grant system but, of course, I accept that that matter does not come within this Bill. I do not think that there is any point in pressing this amendment at this stage. I shall read very carefully what the noble Lord has said and—who knows?—I may come back to it on Third Reading. However, that is a matter for me to decide. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.14 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 9:
After Clause 28, insert the following new clause:
("Claimants' right of appeal
. Any claimant of housing benefit shall have the right of appeal to a Supplementary Benefits Appeal Tribunal against any decision of a housing or rating authority regarding such person's entitlement to or level of housing benefits").
The noble Lord said: My Lords, I beg to move Amendment No. 9, which stands in my name and that of my noble friend Lady Jeger. This is a very important amendment of principle to which I have returned. To be quite frank, it was withdrawn at the Committee stage mainly because of the lateness of the hour and out of a certain degree of consideration for the noble Lord, Lord Bellwin, who has, let us face it, been under considerable pressure. Therefore, I read what the noble Lord said at that stage and I now come back with the same amendment.
As I have said, this new clause embodies a very important principle—namely, that of the right of appeal. In Committee the noble Lord, Lord Bellwin, agreed that an important principle was involved. However, the noble Lord went on to state that the best approach for claimants was to their local council, through representations to a councillor, and not by appeal to a supplementary benefits tribunal. En other words, local councils are to be judge and jury.
We cannot escape the fact that this is a very complicated Bill the carrying out of which will present difficulties and complications for councils and councillors. Councillors themselves will find difficulty in understanding its provisions and will tend to be guided by officials. Speaking from some experience, this is not always to the advantage of the councillors or of the poor constituent involved.
With all due respect, I have been involved in local government for many years in the past and feel that it is a qualification for coming to another place in due course, but on the other hand, not all councillors are diligent and persuasive. More important still—and this is an unfortunate fact—the majority of people
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do not even remember the name of their ward representative. In my view at least 80 per cent. of people living in a particular ward—and I am taking the country as a whole, although there are notable exceptions—do not have a clue about their representative. They vote, on a very poor percentage, for their councillor and afterwards they do not have a clue who he is. To be quite frank, at the moment I honestly cannot remember who my representative is, although I did vote. I shall be quite frank about that, but given time I shall find out.
In many housing cases and local authority matters, because of the difficulties of people finding out who their councillor is, they turn to the sitting Member of Parliament who now holds a surgery. I use the word "surgery" but I hate and detest the use of that word and much prefer the phrase" citizens' advice sittings". People go to their poor old MP. From my own experience, and no doubt my noble friend will agree with me, the great percentage of the matters that come to the MP at weekends are local council matters. Some MPs have a councillor sitting with them. To say that people should go to their sitting councillor and to say, as the noble Lord, Lord Bellwin, has said, "Leave it to the councillor", is dodging the issue.
For people whose circumstances are humble and tinged with poverty and who are not in a position to chase around looking for some inspired, active and determined councillor, it is essential that included in this complex Bill there should be the right of appeal so that people can be represented. No one will deny that this is a complicated Bill which could lead to anomalies, mistakes, errors of judgment, et cetera. People in need should have the right of appeal against injustice even if, as is often the case, it involves an accidental error of judgment.
I am apealing to the House on this matter because during the passage of the Mental Health (Amendment) Bill we fought for the right of appeal on legal aid. In their wisdom and honesty, the Government have conceded that point, and I welcome it. Here again is another vital matter of principle on which I am sure many Members of this House feel very strongly. It is no good the council saying that it would put additional work on to the supplementary benefits tribunals. That is what they are for—to work and to see that justice is done. In this complicated issue involved in the Bill it is only right and decent that people should have a right of appeal, and it should not be left to some little local councillor who himself probably does not understand half of what the Government intend to do. I beg to move.
Lord Molloy: My Lords, I wish to support the amendment standing in the names of my two noble friends, and in particular to support the submission made by my noble friend who has just spoken. I really believe that it must be understood that the submission made by the noble Lord, Lord Bellwin, is totally different from the situation in real life. Let me give your Lordships an example. Supposing we carried on further, and, instead of an appeal having to be made to a councillor, it is made to a Member of Parliament and his party does not like it; there is a debate and it is put on a three-line Whip. That is how the issue will be decided: Who has the most MPs? Who has the

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most councillors? This is a crass absurdity in such an emotional issue as this. Therefore, there should always be somewhere, higher even than the other place or this House, where appeals can be made.
My noble friends are saying that in issues like this there should be the provision of a home for a family, and that there should be some higher forum to which to appeal after the local council has made its decision. To say that an ordinary person should go to his or her councillor, could create this sort of mix-up: there could be two identical cases being decided by a council. In one ward, the councillor who has been approached belongs to the majority party and he convinces his colleagues and they win; whereas the unfortunate person who lives in a ward where his councillors are in a minority will never stand a chance of winning. I do not believe that any Member of your Lordships' House would agree that that is an absurdity which we should allow to go unchallenged.
Therefore, this afternoon we have an opportunity to put that right. The new clause, in the name of my noble friends Lord Wallace and Lady Jeger, states:
"Any claimant of housing benefit shall have the right of appeal to a Supplementary Benefits Appeal Tribunal against any decision of a housing or rating authority regarding",
his or her entitlement. Both those authorities can be divided politically. It has happened in the past. I speak from some 21 years' experience in local government, having held practically every chair and having had the great privilege of being the leader of Fulham and Hammersmith Council for a number of years. I have seen this happen. I beg your Lordships to try to understand—as I am sure you will—that sometimes councillors of all political persuasion say to themselves: "What on earth was Parliament doing when it allowed us to be put in such an absurd situation, that if you belong to one party which has great strength, your constituents will be in a powerful position, but if you are councillor in a minority party, your constituents will be in a different position? They are no less British, are they? They are no less entitled to right and justice, are they? "There is a very grave danger here and I have seen it happen.
I believe that the amendment moved by my noble friend follows the tradition of our parliamentary system, particularly in the area of local government. That, perhaps above all, is why I believe that the amendment should be supported. It provides one other place outside the town hall to which a person can turn. He is not asking to have a case overturned; he is not asking or demanding something which the council has refused him. He is asking that an independent source shall judge his point of view and the authority's point of view. I believe that such a proposition would capture both the imagination and the support of Members of your Lordships' House.
The Earl of Avon: My Lords, I very much hope that what the Government are proposing will, equally, catch both the imagination and support of the House. I should like to say how much I appreciated the way in which the noble Lord, Lord Wallace of Coslany, presented his arguments, and I shall try to do the same.
I want to begin by making sure the House understands the Government's case. We totally support the
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need for review arrangements for claimants to challenge the decisions of local officers who have considered their case. But it is in the interests of everyone that these arrangements are as speedy and as direct as possible, especially when we remember that housing benefits will be a weekly benefit.
We are proposing to make regulations so that all housing benefits claimants will have the right to a review of their housing benefits determined by a committee of councillors. The committee's decision, with reasons, would have to be given to the claimant in writing. Although there are no detailed review arrangements in the present legislation, a number of authorities have, rightly, set up their own arrangements whereby claimants can challenge officers' decisions before a committee of elected councillors. The noble Lord, Lord Molloy, mentioned the word "absurdity"; but, on the other hand, this is gently happening now and so far nothing has come to the Government's attention to show that what is happening does not work.
The Government's proposal builds on this good practice and makes it a general obligation. There will also be the additional safeguard, which was announced in the other place, that Ministers will be keeping a close watch on the review procedures. We shall be asking authorities to provide the department with information about the number and kinds of reviews they undertake and the outcome. If we see particular difficulties or particular problems arising, we shall be able to amend the regulations, to ensure that equity prevails.
The Department of Health and Social Security officials have been able to establish that the local authority reaction to the outline proposal is favourable; the detailed proposals are now under consideration.
The Government put forward these proposals for a number of reasons. First, they build on existing successful arrangements in this field. Secondly, housing benefits are a local authority matter, and therefore one for which local councillors must carry direct responsibility. Democracy can only work effectively in local authorities if councillors accept their responsibilities and actively participate in the work of their authority. Our proposal is based on the fundamental principles that councillors are best placed to intervene on behalf of their constituents to review officers' decisions taken in the name of the council.
The noble Lord, Lord Wallace, said that he did not know the name of his local councillor; he also said that they did not have a clue. I thought for a moment he was going to say that this was not a very good method of doing it on the grounds that the councillor would know everybody, but he answered that argument for me by saying that they would not have a clue. I am sure that no councillor who is, frankly, worth his salt would let himself be bluffed by his officials. It was also argued that councillors are an interested party. But they exist to serve their local community, and that includes ensuring that their constituents get a fair deal.
The Government have yet to receive any concrete examples of councils, already applying the principles behind our proposals, which have acted in an unfair manner. Finally, I believe that this will give claimants the most direct and speedy remedy against decisions about which they are unhappy. The councillors are in the best position to correct mistakes quickly.

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Against this, the Government find the Opposition's proposal unattractive. We do not believe that the supplementary benefit appeals tribunals are appropriate to intervene in local authority matters. They form part of the independent supplementary benefit adjudication system. This is a specialised role and their main task is to review decisions of the independent supplementary benefit officers. At the moment they have no expertise in the calculation of housing costs using the existing rebate rules and needs allowance formula. Extending the remit of the supplementary benefit appeal tribunals to housing benefits would therefore require them to take on a new and, in many ways, very different role. They would have to develop expertise from scratch in the housing benefit rules at a time when they are still building up their knowledge of the new supplementary benefit scheme introduced in 1980. But, more to the point, they would have to come to terms with the very different, and political, world of local authorities. The Government do not believe that the traditions and existing role of the supplementary benefit appeals tribunal would fit them for this, without significant changes in their outlook and membership.
Thus, our proposals offer claimants a direct and speedy means of seeking and securing a review of their housing benefits claim from the body that can best help them—their local council. The alternative proposed by the Opposition requires a major shift in the operation and outlook of the tribunals. I believe that believers in local democracy should support the Government's proposals.
Lord Wallace of Coslany: My Lords, to some extent the Government are coming a little closer to what I am after. May I say very bluntly and directly that this is in no way a political point and has nothing to do with any political complexion of any council? This is just a question of principle so far as I am concerned. I cannot accept that a committee of local councillors would deal with these matters. If the noble Earl had been on a local authority, as I have, and sat in the old days on the old poor law appeals committee, as I used to on Saturday mornings, he would realise that some councillors have not got a clue about these things and some are not always sympathetic. This is a point we must bear in mind. Therefore, we want something a little more direct, more legal, so far as the individual is concerned.
The noble Earl said that the Government feel that this should be a matter for the local authority. He said that in his and the Government's opinion the appeal tribunal should not get itself involved in local matters. But I would point out to the noble Earl and others that in point of fact there is an ombudsman in another field dealing with local authority cases, so the Government have taken that principle along and there is no reason why they should not do it now. I shall be quite frank with the noble Earl, the trouble with him is that he reads a very good brief so charmingly that it melts a heart of stone, but with me, it is not a question of a heart of stone: my heart, is more in the principle behind the amendment. I honestly think that, although—and I give the Government credit—they have crept a little towards what I want, this is
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just not good enough. Therefore, I shall press this amendment to a Division.
Lord Molloy: My Lords, before my noble friend sits down, may I point out to him that I do not know who wrote the brief that the noble Earl read out so well, but it could well be that from a similar source we have had information and pamphlets pointing out the need to bring together the department and social security? There was a similar example given here today where the commission could easily operate in conjunction and in liaison with the local authority.
It is difficult for any of us when on one particular day the argument is in favour of bringing the supplementary benefits tribunal nearer to local authorities, and asks us to understand that this will help both ways, to be told, when we are presented with an opportunity, no, they must be kept apart. I hope it will be the former that the Government will accept and that they will be prepared to accept the case so ably submitted by my noble friend Lord Wallace.
Lord Wallace of Coslany: My Lords, my noble friend said "before I sat down". He certainly made excellent use of the Report stage before I had said that I had nothing further to say. I think that the House should reach a decision on this vital question of principle.
4.34 p.m.
On Question, Whether the said amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 71; Not-Contents, 114.

DIVISION NO. 1

CONTENTS

Airedale, L.

Kaldor, L.

Ardwick, L.

Leatherland, L.

Aylestone, L.

Lee of Newton, L.

Banks, L.

Listowel, E.

Beswick, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Bishopston, L.—[Teller.]

Longford, E.

Blease, L.

Lovell-Davis, L.

Blyton, L.

MacLeod of Fuinary, L.

Boston of Faversham, L.

McNair, L.

Briginshaw, L.

Mayhew, L.

Brockway, L.

Milford, L.

Brooks of Tremorfa, L.

Molloy, L.

Byers, L.

Oram, L.

Chitnis, L.

Peart, L.

Collison, L.

Phillips, B.

David, B.

Pitt of Hampstead, L.

Davies of Leek, L.

Ponsonby of Shulbrede, L.—[Teller.]

Davies of Penrhys, L.

Donaldson of Kingsbridge, L.

Rochester, L.

Elwyn-Jones, L.

Ross of Marnock, L.

Elystan-Morgan, L.

Shinwell, L.

Evans of Claughton, L.

Somers, L.

Gaitskell, B.

Stedman, B.

George-Brown, L.

Stewart of Alvechurch, B.

Gosford, E.

Stone, L.

Gregson, L.

Strauss, L.

Hampton, L.

Taylor of Mansfield, L.

Hooson, L.

Underhill, L.

Hughes, L.

Vernon, L.

Hunt, L.

Wallace of Coslany, L.

Hutchinson of Lullington, L.

Wedderburn of Charlton, L.

Jacobson, L.

Whaddon, L.

Jacques, L.

Wigoder, L.

Jeger, B.

Winstanley, L.

Jenkins of Putney, L.

Wootton of Abinger, B.

John-Mackie, L.

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NOT-CONTENTS

Addison, V.

Kinloss, Ly.

Adeane, L.

Kinnaird, L.

Ailsa, M.

Kinross, L.

Airey of Abingdon, B.

Kitchener, E.

Alexander of Tunis, E.

Lane-Fox, B.

Alport, L.

Lauderdale, E.

Ampthill, L.

Long, V.—[Teller.]

Auckland, L.

Loudoun, C.

Avon, E.

Lucas of Chilworth, L.

Bathurst, E.

Lyell, L.

Belhaven and Stenton, L.

McAlpine of Moffat, L.

Bellwin, L.

McFadzean, L.

Beloff, L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Blake, L.

Mar, C.

Bridgeman, V.

Marley, L.

Cairns, E.

Massereene and Ferrard, V.

Cathcart, E.

Merrivale, L.

Chesham, L.

Mersey, V.

Clifford of Chudleigh, L.

Mills, V.

Clitheroe, L.

Milverton, L.

Cork and Orrery, E.

Morris, L.

Craigavon, V.

Mowbray and Stourton, L.

Craigmyle, L.

Newall, L.

Crawshaw, L.

Onslow, E.

Cullen of Ashbourne, L.

Orkney, E.

Daventry, V.

Oxfuird, V.

Davidson, V.

Porritt, L.

Dilhorne, V.

Rankeillour, L.

Dormer, L.

Reay, L.

Drumalbyn, L.

Redcliffe-Maud, L.

Ebbisham, L.

Reigate, L.

Eccles, V.

Renton, L.

Ellenborough, L.

Renwick, L.

Elliot of Harwood, B.

Rugby, L.

Faithfull, B.

St. Davids, V.

Ferrers, E.

St. Just, L.

Fortescue, E.

Sandford, L.

Fraser of Kilmorack, L.

Sandys, L.—[Teller.]

Gainford, L.

Selkirk, E.

Gibson-Watt, L.

Sempill, Ly.

Glanusk, L.

Sharpies, B.

Glenkinglas, L.

Shrewsbury, E.

Gormanston, V.

Spens, L.

Gridley, L.

Stamp, L.

Grimston of Westbury, L.

Stodart of Leaston, L.

Hailsham of Saint Marylebone, L.

Strathclyde, L.

Strathspey, L.

Halsbury, E.

Sudeley, L.

Hankey, L.

Terrington, L.

Harmar-Nicholls, L.

Trefgarne, L.

Hatherton, L.

Trumpington, B.

Henley, L.

Vaux of Harrowden, L.

Hylton-Foster, B.

Willoughby de Broke, L.

Inglewood, L.

Windlesham, L.

Killearn, L.

Wise, L.

Kilmany, L.

Wynford, L.

Kimberley, E.

Resolved in the negative, and amendment disagreed to accordingly.
4.42 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 10:
After Clause 28, insert the following new clause:
("Claimants in hostels.
. Claimants living in hostel accommodation shall be treated on the same basis with regard to housing benefits as all other claimants.").
The noble Lord said: My Lords, this is a probing amendment similar to one I moved in Committee, which I withdrew at that stage. The main issue, as I said then, is the principle that people who live in hostels should be treated on the same assessment basis for entitlement to housing benefit as all other claimants.
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I will not repeat what I said in Committee, when the noble Lord, Lord Bellwin, went a long way to meet my point of view and confirmed the Government's sympathetic approach to what is admitted to be a difficult problem. By and large, the Government have indicated action which will go some way to meet the requirements of the new clause. In another place, the Minister agreed to meet organisations concerned with the problem. Perhaps we can be told whether consultations have now taken place and what, if any, results there have been. That is the information I want, because on this issue the Government should have consultations with organisations involved with the problem. I beg to move.
The Earl of Avon: My Lords, as the noble Lord, Lord Wallace, said, my noble friend Lord Bellwin explained in Committee at some length the Government's reasoning on the amendment, and that actually followed discussions with the local authority associations and voluntary organisations most concerned. The Government therefore decided that the most practical way of helping boarders in receipt of supplementary benefit was to provide for them to continue to receive their housing assistance via the supplemantery benefit scheme. I should emphasise that the term "boarders" includes, but does not refer exclusively to, hostel dwellers, so there is no question of singling out hostel dwellers as a different class for different treatment.
My noble friend has already explained the special difficulties which would be faced by boarders in receipt of supplementary benefit if they were required to claim housing benefit to cover the rent and rate element of their board and lodging charge, and I do not therefore propose to repeat the arguments. Suffice it to say that the Government have taken this decision in what we firmly believe to be the best interests of the claimants concerned. There is no question of hostel dwellers or other boarders being treated less favourably, or receiving less benefit, than they would otherwise. On the contrary, the Government proposal will ensure that they receive their full entitlement to housing assistance as speedily, and with as little fuss, as possible. That, I am sure, will be important to those whose need is urgent. Those not in receipt of supplementary benefit will of course be treated in the same way as all other claimants. They will be eligible for housing benefit if they live in the hostel as their home for a minimum of two weeks. That will be a considerable improvement on the existing situation, where many hostel dwellers have to serve qualifying residential periods of as long as six months. The noble Lord asked specifically about consultations. The ministerial correspondence with the bodies concerned is in hand. I hope I have allayed his fears and that he will feel he has probed far enough.
Lord Wallace of Coslany: I thank the noble Earl for that reply, my Lords, and I am glad that consultations are proceeding. It is obvious—I wish to be frank about it—that the Government are seized of the problem. It is a complicated and growing problem because unfortunately more and more people are being forced into hostel accomodation. However, I

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am not dissatisfied with Government action so far. I thank the Minister for his reply and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 30 [Local Schemes]:
Lord Kinross Lord Kinross moved Amendment No. 11:
Page 25, line 38, at end insert—
("(6) Without prejudice to the generality of the powers conferred by subsection (1) above, a variation under that subsection of the statutory scheme may provide that in ascertaining for the purposes of a rate rebate, a rent rebate and 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 Lord said: My Lords, my noble friend Lord Campbell of Croy, whose name also appears to the amendment, has asked me to explain that he is in the United States doing his best to promote British business. The amendment is in exactly the same terms as one I moved in Committee, when I withdrew it so that our advisers might consider what the Minister had said. Immediately after the Committee stage, the Minister gave to Lord Campbell and me independently what I took to be an assurance that if the pressure was maintained and an amendment tabled, the Government would accept it, although it was pointed out that its drafting might need amending, which was quite acceptable to me because my drafting is never very satisfactory. My noble friend Lord Campbell was left in no doubt that the Government would table their own amendment to the same effect; in case they did not, the amendment now before the House was tabled. It was with some surprise, therefore, that I received a letter later from the Minister asking me to withdraw my amendment, which noble Lords can see I have not done.
The amendment requires some explanation. It seeks to re-enact certain existing legislation which authorises local authorities in Scotland to make variations in their model schemes for rent rebates and allowances and their standard schemes for rate rebates. The legislation is contained in the Housing (Financial Provisions) (Scotland) Act 1972 and the Local Government (Scotland) Act 1973, both of which contain a subsection to the effect that in assessing the income of a person who applies for a rate or rent rebate or allowance, there is a total disregard of war disablement pension and war widow's pension. That is permissive and not mandatory, but the specific reference to the disregard of war disablement and war widows' pensions has proved of great advantage to the war pensioner and war widow in Scotland because, as a result, at present all nine regional, three island and 53 district councils operate a total disregard, as do the five new town development councils and the Scottish Special Housing Association.
The object of the provisons to which I have referred is to draw the attention of local authorities in Scotland to the fact that war pensioners are in a very special position. This special position comes about because the pensions are paid as compensation for loss of the amenities of life, and not as a supplement to income. For the same reason war pensions are not subject to income tax. There is no doubt in my mind that had it
1102
not been for this legislation, this advantageous position—that is, for the war disabled—would not subsist. But this legislation is not being carried forward into the Bill. It is in order to obtain for the war pensioners throughout the United Kingdom the more advantageous legislation on this matter, which at present applies only to pensioners in Scotland, that I have put down the amendment. If the amendment, or another to the same effect proposed by the Government, is not accepted, we shall be thrown back on the more limited partial disregard of a fixed sum of £4 of war pension permitted and referred to in English legislation.
I do not doubt the sincerity of the Government when they say that they recognise the special nature of war disability and war widows' pensions, and at a time when alas! the number of war pensioners and war widows is increasing as a result of the Falklands crisis, that is gratifying to know. The Government say that they are anxious to do their best for the war pensioners. In such case they should be prepared to perpetuate the more favourable Scottish legislation, which would then apply throughout the United Kingdom and give all war pensioners, wherever they live, the best.
I agree with the Government that the Bill enables local authorities to give a total disregard of war pension, but I disagree as to the method by which the specific reference to the disregard should be brought to their notice. The Royal British Legion, Scotland, favours the existing Scottish method of drawing attention to the war pensioner by referring to him in the primary legislation, whereas the Government think it enough to refer to the power in a circular to local authorities. The proof of the pudding is in the eating thereof. All the local authorities in Scotland have given effect to the 100 per cent. disregard. I ask the Government to perpetuate the existing legislation by accepting the amendment.
The noble Lord tells me that his parliamentary counsel have advised that my amendment would not make sense in legal terms, since it is not required to achieve the legal effect desired. Lawyers are very ingenious people. I do not claim to be a lawyer myself. I retired a year ago, not with all that ingenuity, but I am sure that with their ingenuity parliamentary counsel can emulate their predecessors and produce some form of legislation which will perpetuate the Scottish position. This is not a party political matter; nor indeed is it a political matter. It is a matter of justice to the ex-serviceman who has been disabled in war, or his widow. I ask for the support of the House for the amendment. I beg to move.
Earl Cathcart: My Lords, I should like to support the amendment proposed by my noble friend Lord Kinross. Perhaps I should declare some interest in what the amendment tries to achieve, since not only am I a member of the Royal British Legion, Scotland, but I am also deputy president of the British Commonwealth Ex-Service League, which also wishes to support the amendment. I should also say that I was very sorry that I was not able to be present at the Committee stage.
The details and principles raised by the amendment are very complex, but my noble friends Lord Kinross and Lord Campbell of Croy both explained in great detail at the Committee stage what they wanted. As

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my noble friend Lord Kinross has said this afternoon, the disregard proposed arises because war pensions are paid as compensation for loss of the amenities of life and not as a supplement to income. I think that that really needs to be stressed.
I am quite certain that the disregard would not have operated so successfully in Scotland had there not been specific reference to it in the two Acts referred to by my noble friend Lord Kinross in his speech in proposing the amendment. Clause 28(5)(b) of the Bill before us repeals the relevant subsections of the two Acts and relies on drawing the attention of local authorities by means of an advisory circular. I can only hope that the Department of Health and Social Security will issue frequent reminders of the disregard; otherwise through the passage of time its effect will become diluted over the years, and there would not be on the statute book a section through which the British Legion could impress on local authorities their responsibility in establishing this principle, which is so important to ex-servicemen. I therefore beg to support the amendment.
Baroness Elliot of Harwood: My Lords, I, too, should like to support the amendment. The noble, Lord, Lord Kinross, has put the matter very clearly and very simply. I was approached by the noble Earl, Lord Haig, who, I think, is president of the British Legion, Scotland, and who unfortunately cannot be here today. I know that he feels very strongly about this matter. When something is working well, is a success, and fills an important gap in this type of legislation it is a great mistake not to continue it. So often legislation is concerned with changing things when change is not necessary. The existing legislation and the amendment that is being put forward reflects exactly what is happening and what should continue. I hope the Government will realise that certainly in Scotland we should be extremely disappointed if the legislation is not continued. If it is a success, why not let it continue, and include it in the Bill, so that it would cover more people? So I very much hope that the Government will do what Lord Kinross seeks and accept the amendment.
Lord Wallace of Coslany: My Lords, from this side of the House I wish to support the amendment and draw to the attention of the noble Earl what he said during the Committee stage, as reported at col. 66 of Hansard of 10th May. He stated:
"First, I said that the amendment is unnecessary. That is because Part II of the Bill essentially sets out enabling powers to set out the details of the housing benefits scheme in regulations. The enabling powers are sufficiently wide to provide for total disregards of war pensions, so no further primary legislation is required".
That is all very well, but the question is, What do the Government say? Do they, or do they not, intend that war pensions should be disregarded? If they were to make a simple declaration of faith on that, I am sure that the noble Baroness and others would be satisfied.
Lord Drumalbyn: My Lords, I wish to join in supporting the amendment. I believe that there are two important aspects which I hope my noble friend will be able to clarify. First, so far as Scotland is concerned,
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the total disregards are to be continued. I very much hope that that is so. I understand that the complete application of the disregard by all the local authorities and other authorities in Scotland has been achieved without mandatory powers. That, of course, is extremely creditable, not least to the British Legion, of which my noble friend Lord Kinross is chairman, and the other sponsor of the amendment last time, the noble Earl, Lord Haig, is president. That was the situation, I remember, when I visited them in my then capacity as Minister of Pensions and National Insurance.
I think it is equally important from another point of view; that in previous times we have had separate legislation for Scotland. Now, in this case, Scotland and England have been drawn together. Whenever Scotland comes together with England, I think we have to be quite certain that Scotland does not lose thereby. On the contrary, as my noble friend anticipated my saying, we would hope that as usual Scotland will bring benefit to England. The second aspect of it is that there should be benefit to England, and that what has happened in Scotland will become the rule—not the law, necessarily, but the rule—in England. My noble friend Lord Avon said (again at col. 66) that, under the Bill,
"In fact, local authorities will have power under Clause 30 to frame more generous schemes within their areas which disregard war widows' and disablement pensions completely".
That is the situation is Scotland. The Bill will not enable Scotland to have more generous treatment, because it already completely disregards such pensions.
My Lords, that is the second aspect I want to ask about; that is, how this is going to come about in England and Wales. I hope it will come about in the same way as in Scotland. It may be that in Scotland we have closer regard for the law than they have South of the Border, and that in England people prefer to have circulars to guide them. But what on earth is to prevent them from doing both? I would have thought that my noble friend was absolutely right to enshrine this amendment, or something like it—he himself ought to know, but he may not have drafted it in the same perfect way as those who do nothing but drafting—in the legislation; and of course there should be circulars to draw the attention of members and officials of local authorities to what is in the legislation. This is the best way to do it, and I hope my noble friend will be able to say that this is what will be done.
Lord Sandford: My Lords, I rise to support certainly the intention of my noble friend Lord Kinross, if not his precise amendment. My chief reason for doing so is that, as president of the Association of District Councils—the 300 housing authorities who operate this scheme in England—I am anxious, as my noble friend Lord Drumalbyn has said, that the same happy situation should prevail in England as already prevails in Scotland. I am not yet absolutely clear what factors lead to this state of affairs. It could, I think, be one of two or three. Certainly the fact that the chairman and the president are the noble Lord, Lord Kinross, and the noble Earl, Lord Haig, is a help. So is the fact that a friend of mine, another former naval person, is in charge of the pensions for the British Legion in Scotland. That must be an advantage as well.

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I suspect it is something to do with the legislation, in which case it is clearly necessary to do something in this Bill. I cannot think that it is the meanness of the district councils in England which has anything to do with it. The Scots are perhaps a generous people, but, then, so are the English. I really think there is something which needs to be done in the legislation so that the benefits which are being felt in Scotland are available in England. It may not be by means of my noble friend's amendment, but I hope that my noble friend on the Front Bench will either accept the amendment or enter into a firm undertaking to produce an amendment for the Government at the next stage.
Lord Somers: My Lords, I should like to add one or two words of support from these Benches. It is only too easy to find economic or political reasons for avoiding doing that which is absolutely morally essential, and I sincerely hope that the Government will think very deeply over this amendment and will not fall into the trap of just taking the easy political way.
Lord Hughes: My Lords, from this side of the House I, too, should like to support the amendment. I am tempted to do so by what has just been said. It has not apparently been for economic reasons that the Government are talking against it. I once sat on the Government Front Bench and the most unsatisfactory briefs I ever had as a Minister were the ones which were headed "Resist" and which then followed on to say, "It is not necessary to put this in, because it is already covered in the Bill". It is a good principle that, if there is any risk of disaster, belt and braces are worthwhile, and all that is being asked for in this case is that the braces should be supplemented by the belt.
I was more than a quarter of a century in local government, and during all that time this principle applied in Scotland. It has not changed with the reorganisation of local government; the new authorities accepted it in the same way as the old town and county councils had accepted it. For these reasons I invite the noble Earl to alter his brief, if it is still being presented in that form, and, instead of resisting the House, to resist his advisers.
The Earl of Avon: My Lords, there is very little in my brief which has not been quoted at me from one side or the other during the course of this debate. Having sat through the discussions when we in this House talked about devolution, I wonder what would happen to my supporters if we had lost Scotland at that particular time. Of course, there is nothing economic or political in this, as noble Lords know. I think I must stress just one or two things, particularly as my noble friend Lord Drumalbyn asked me about one point. The Government wholeheartedly agree that authorities should be able, as now, to disregard war pensions completely when they assess claimants under local schemes. Nothing in the housing benefit legislation will prevent authorities from so doing.
A lot has been said about the precedent of Scotland, and perhaps I may explain that. The existing Scottish legislation is not actually relevant. Under current Scottish legislation, Scottish authorities must seek the approval of the Secretary of State before making any
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enhancement of the national scheme. That is why the Scottish provisions at present give authorities power to disregard war pensions; otherwise, permission would be required in individual cases. But in England and Wales no prior permission is required in this area. We have decided up to date with the housing benefit to bring Scotland into line with the simpler English and Welsh provisions. The Scottish authorities will no longer need the Secretary of State's permission to make local modifications. General legislative clearance will not be required.
However, of course I have listened to all sides of the House in this debate, and what I should like to say to my noble friend is that if he will withdraw his amendment I will undertake to bring forward an amendment in similar terms at the next stage, having duly consulted my noble friend.
Lord Kinross: My Lords, I thank my noble friend for that very welcome statement. I am very happy to do what he wants, and, on condition that he brings forward an amendment at the next stage of the Bill, I am happy to withdraw this amendment. Before doing so, for the record I think I should say that I am not chairman of the British Legion (Scotland), though I was some 15 years ago. I thank noble Lords for their contributions. I have not heard any voices from any side of the House against the amendment and therefore, on the undertaking given by the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 [Subsidies to authorities]:
The Earl of Avon The Earl of Avon moved Amendment No. 12:
Page 27, line 34, leave out from ("period") to end of line 36 and insert ("of twelve months ending with 31st March 1983.").
The noble Earl said: My Lords, I think that this is a simpler amendment. Its purpose is to ensure that those authorities which are already spending money in preparing for the introduction of the new scheme can be reimbursed for that expenditure. Without the amendment, it would not be possible under the present definition of the words "initial year" to pay a subsidy for any expenditure incurred before Royal Assent. With the first phase of the new scheme only a few months away, it is clear that some authorities are already incurring development costs. The Government have undertaken that all necessary costs of this type will be met in full by the Exchequer, and the amendment makes it possible for us to honour that commitment in full, irrespective of the particular point in the financial year when the spending takes place. I trust that this will command the general support of the House. I beg to move.
On question, amendment agreed to.
Clause 39 [Industrial injuries]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 13:
Page 33, line 12, leave out from beginning to end of line 18 and insert—
("Sickness benefit in respect of industrial injury.
50A.—(1) In any case where—

(a) an employed earner is incapable of work as a result of a

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personal injury of a kind mentioned in section 50(1) of this Act; and

(b) the contribution conditions are not satisfied in respect of him;

those conditions shall be taken to be satisfied for the purposes of paragraph (a) or, as the case may be, (b) of section 14(2) of this Act as that paragraph applies in relation to sickness benefit.
(2) In the case of a person who—

(a) is entitled, by virtue of this section, to sickness benefit under subsection (2)(b) of section 14; and

(b) is not also entitled to sickness benefit under subsection (2)(c) of that section;

the weekly rate at which sickness benefit is payable shall be determined in accordance with regulations.
(3) In subsection (1) above "contribution conditions" means—

(a) in the case of a person who is under pensionable age, the contribution conditions specified for sickness benefit in Schedule 3, Part I, paragraph 1; and

(b) in the case of a person who has attained pensionable age but has not retired from regular employment, the contribution conditions for a Category A retirement pension specified in Schedule 3, Part I, paragraph 5.").

The noble Lord said: My Lords, the terms of this amendment are forbiddingly technical, though their purpose is clear. The amendment is designed to ensure that, after injury benefit has been abolished on the introduction of SSP, people over pension age—that is, 60 for women and 65 for men—who are injured at work, will be entitled to state sickness benefit, until, under the ordinary rules, that benefit comes to an end. This means until they retire or they reach the deemed retirement age, 65 for women and 70 for men.
Clause 39 brings forward two changes to the industrial injuries scheme which were announced in the White Paper, Reform of the Industrial Injuries Scheme, published last November. The first abolishes injury benefit and the second applies the resultant savings to improving the provisions for disablement benefit. Injury benefit, as your Lordships will know, is the scheme's incapacity benefit. When it is abolished, benefit cover will be provided for most people by statutory sick pay (SSP) followed by state sickness benefit. Some injured people, however, will not have paid sufficient contributions to qualify for sickness benefit. Clause 39(4) already provides for the contribution tests to be waived for them, but it does not cover the case of people over pension age for whom the tests are different. For them, entitlement depends on the rate at which retirement pension would be payable if they had retired. Not everybody, however, qualifies for a retirement pension, and some qualify for only a modified rate of pension. The amendment enables them to get standard rate sickness benefit during periods of incapacity due to industrial accidents or diseases. It will also enable those who would be entitled to retirement pension at a higher rate than standard sickness benefit to receive benefit at that higher rate.
Sickness benefit will not be payable in any case after retirement; or if retirement has not been taken place by then, after the deemed pension ages of 65 for women and 70 for men in accordance with the normal rules. I hope that the House will find this amendment agreeable. I beg to move.
Baroness Jeger: My Lords, we welcome this improvement to the Bill and are glad that help is to be available for the older workers and for those whose
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contribution records may be in default. Perhaps I may ask the noble Lord whether he is satisfied that these changes will not have the effect of making anybody worse off and, if there are to be people worse off, who those people are who are to be put at a disadvantage by the abolition of the old injury benefit. We know that many disabled workers in the past have benefited from the industrial injuries legislation and we have some concern that this change may not be helpful to everybody.
I noticed during the Second Reading of the Bill in your Lordships' House that the Minister said:
"The money saved by this measure is being used to make disablement benefit—the scheme's long-term benefit—available from a fixed date in all cases. This will be 15 weeks after the accident or the incidence of the prescribed disease. These changes will bring substantial benefit to the more seriously disabled, and that is one of the principles underlying our proposals for the reform of the Industrial Injuries Scheme as a whole". [Official Report, 6/4/82; col. 127.]
My Lords, will the Minister give some indication as to how this reform of the industrial injuries scheme is taking shape and whether he can assure the House that no workers, disabled or suffering from industrial diseases, will be worse off?
Lord Trefgarne: My Lords, I am not aware of any category of persons who would be worse off as a result of this provision than if the change were not to be made. It will not affect many people in total. I have a figure of about 9,000 people altogether who will be affected. I hope the noble Baroness will forgive me if I do not go into greater detail about sickness benefit and injury benefit at this moment.
On Question, amendment agreed to.
Clause 43 [War pensions.]:
Lord Molloy Lord Molloy moved Amendment No. 14:
Page 38, line 30, leave out ("six") and insert ("ten").
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Marshalled List. This amendment will be recognised as the limited backdating of awards. I should like to say at the outset that the Government, even with the Bill in its present form, have improved the situation considerably and I should like to make it clear that I understand that. But, in my judgment, the particular subsection in which this change has been made does not go to the extent that it should. Nevertheless, we are grateful for gradual improvements. My concern is this. Let us suppose that an ex-serviceman claimed a war pension in 1950 and was rejected, he then went to an appeals tribunal and lost; and then, perhaps years later, in 1973, he decided, on medical advice or without medical advice, to appeal again. This time he was successful. Hitherto, the pension has started from the date on which appeal was successful. This meant that for all the time he was wounded and hurt and his life was affected a grateful country did not bother to recompense a penny to such a man.
This particular amendment at this time in today's circumstances ought to be extremely closely scrutinised, because I hope we shall not have a situation in five or six years' time when somebody is able to say: "I was at the Falkland Islands. I did not think I was

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wounded at the time; but then something bad happened to me. I made an appeal and it was turned down, and later I made an appeal and was successful. Now I have lost five or six years". We do not want those men to say to us: "You were so full of praise for us at the time but now when the law says I have to be paid for something that I suffered, you are backsliding on the commitment".
At the same time, I have to say that the Government proposal is a considerable improvement on the previous situation. When one goes on to examine the proposition, under the old system, if a man had been wounded, say, in the Second World War and, five or six years later, submitted his case and was turned down, he might later have submitted it again because this time—and this is the point your Lordships must bear in mind—there had been such an advance in medical science that some of the things they did not know in 1950 were now available to them. This is particularly so in regard to the causes of disabilities. I know that your Lordships will take that point particularly seriously because it is the submission of the Royal British Legion. I do not think that we ought to treat that organisation with any form of hilarity. As the vice-chairman of the Greenford branch, I suppose I ought to claim some interest in this. We have always argued that this limiting of back-dating of awards is morally wrong. The only loophole that we had was that the Secretary of State had discretion to order the pension to start from the very first application. That has not always been done.
Most of the cases that have been coming up in the past 25 or 30 years have of course come from the Second World War. There have been a few more from the hostilities in Northern Ireland. Now—alas!—there may be a few more in the not too far distant future arising from the Falklands issue. I ask this House to bear with me and treat this amendment seriously. 1 believe—as I know full well the Royal British Legion believe—that the limited back-dating of awards is both unjust and unfair, particularly where a person is entitled to compensation for a longer period. It is our view that payment should be backdated to that period when they should have commenced. I cannot think what is wrong with that.
If the medical people say, "Yes, what you have been suffering from for the past 20 or 30 years all started from the time when you went down the scrambling nets on D Day", or, "It started when you clambered ashore on the Falkland Islands—regrettably, it was not seen immediately, but now we are convinced that is the day when your award should have started", I cannot see anything wrong in that. I know 1 am speaking for the Royal British Legion when I say that payments should be back-dated to that period. I hope that I am a reasonable pragmatist as well.
In conclusion, I want to thank the Government and congratulate them on the advance that they have made. My amendment seeks to delete six years and insert 10 years. It is another move forward, step by step in the Fabian tradition. Bearing that in mind, I hope that the Government will be prepared to move that little further on the road to fair play and proper justice. I beg to move.
Lord Trefgarne: My Lords, the effect of the amendment, as the noble Lord has explained, would be to
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increase from six to 10 years the period which payment of awards of war pension in certain appeal cases could be back dated.
May I explain briefly how the appeal system works. Where an ex-serviceman's claim for war pension is rejected, he can appeal to the independent pensions appeal tribunal. If the tribunal uphold the department's decision, he can turn to the High Court or, alternatively, use what is known as the" joint application procedure. This latter procedure is more favoured by appellants. A good example would be where an appellant is able to produce fresh evidence. If the department agrees that the fresh evidence is sufficiently cogent, the two of them approach the president of the pensions appeal tribunal jointly to have the earlier appeal tribunal decision set aside and the appeal reheard. If the second tribunal finds in favour of the ex-serviceman, my department make an award accordingly.
In such cases, it has been the practice to fix the commencing date of the award as the date of the representations leading to the joint application, that is, the date the fresh evidence was produced. This practice has been quite consistent with the general policy on commencing dates of awards as reflected in war pensions legislation. The commencing date is customarily taken as the date of the start of the action which results in the award. This policy has been generally accepted as fair, given that a claim to war pension has no time limit and can be made at any time.
However, because of advice from our lawyers that in appeal cases this policy was not supported by the legislation, it became necessary to clarify the position. It follows from what I have said that it would have been consistent to legislate in this clause for no back-dating. But we felt this was not sufficiently generous. We propose therefore to pay back to a date appropriate to the original appeal unless this was more than six years before the date of the representations leading to the joint application, in which case arrears will be set at six years. Altogether it is anticipated that arrears will be payable in some 200 cases. In some cases there will be individual payments of several thousand pounds.
The situation in which we are limiting the payment of arrears is where the pensioner has waited a number of years before bothering to reactivate his case. It seems only fair that, in such circumstances, some kind of limit should be placed on the extent to which pension is back-dated. We chose six years as being a generous measure of back-dating, on a par with for example the time allowed for income tax purposes when someone wants to claim arrears of a tax allowance. Back-dating for social security benefits is a good deal less favourable. For instance, there is a maximum back-dating of 12 months for claiming retirement pension; and with a benefit such as attendance allowance there are no arrangements for back-dating at all. Time limits for claiming are, of course, a fundamental feature of all social security payments.
I should add that the Secretary of State's discretionary powers to backdate an award of war pension further than six years will remain and will be exercised as at present—that is, where the appellant was prevented by physical or mental incapacity from acting earlier or where there is evidence that misdirection or

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material error on the part of the department contributed towards the original decision to reject. The position is therefore that the Government have already departed substantially from normal policy and practice in accepting a period of six years for payment of arrears. I do not therefore think that a further extension to 10 years is justified. I hope that the noble Lord will be persuaded by that and withdraw his amendment.
Lord Davies of Leek: My Lords, is the noble Lord aware that I remember a similar case that we had to deal with when I was in the Ministry? In the case of pneumoconiosis a man may not find out and the doctors may not assert that his lungs are sufficiently incapacitated for a long period of time. It often takes a long time and many a coroner has given the result of death as pneumoconiosis contracted more than 10 years earlier. Exactly the same situation can happen in the modern, sophisticated world in which we are using new materials, new plastics; and, particularly in wartime, there are fumes that were not encountered in the old conventional days. While I do not want to lengthen the debate, there is a case for looking into this. Some maladies take quite a long time to activate. It would have been worthwhile looking at 10 years rather than six as in this clause.
Baroness Jeger: My Lords, we are all indebted to my noble friend Lord Molloy for the way in which he moved the amendment. As a wounded ex-service man himself who saw a very rough time in the last war we know that he is speaking from experience. Of course, we appreciate the improvements that have been made by the Government. I would take slight exception to the noble Lord having referred to ex-servicemen not bothering to make their claims. There are all sorts of reasons why there are late claimants. It may be that the symptoms did not manifest themselves for a considerable time. It is not always because the late application is due to people not bothering. I am sure that the noble Lord was not implying any fault on the part of these late applicants. I am not very impressed that the figure of six years was chosen because that is the period for claiming back income tax, I think the noble Lord said. That seems a total irrelevance. I found myself wondering, when thinking about this amendment, what was the medical magic in six years rather than four, five, seven or, as we suggest, 10. I do not think we can take this discussion much further today, but I hope that in other places and at other times it may be further considered, because it seems to me very fair.
As the noble Lord, Lord Davies of Leek, said, with sophisticated weapons of all sorts nowadays it may well be that symptoms sometimes may take a long time to develop. I was in America last summer and I found there a great deal of evidence about illness developing among Vietnam veterans several years after they had returned to their families and gone back to work. They seemed perfectly all right to begin with and then there was some sudden psychiatric or physical breakdown which was attributable to war service. So it may be that we can accept six years today, but I hope that, especially in view of these dangerous times in which many of our ex-servicemen
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are being exposed to the latest terrible weapons of war, we shall not look upon this matter as closed.
Lord Molloy: My Lords, if I may reply very briefly, I am bound to say to the noble Lord, Lord Trefgarne, though I say it without any malice, that I was in no way enamoured or convinced by his submissions. The probability is that if he had been replying in that vein with some form of understanding, it would have been a more warming speech and one which would have given us something to hope for. I should like to illustrate a point made by the noble Lord, Lord Davies, because one of my former comrades, only just four years ago developed an illness—and we all came down with a great cluster of parachutes together, landing among a lot of S-mines, and so on—and it was only when he thought he had a kidney stone that it was discovered. He had been feeling discomfort for some 20 or 30 years, there was a suggestion that it might be indigestion, ulcers, that it might be this, that and the other.
Eventually, he had a kidney stone operation, but inside was a piece of shrapnel and it was on its way down moving to a very dangerous area. It was the pain which had saved his life. He had suffered pain for 30 years and of course it had an effect upon his earning a living. There was no way in which a grateful nation because of legislation passed by us, could make amends. In so far as I believe that the day will come and in so far as I once again say that the Government have improved the situation, I hope I shall have an opportunity later to come back to this issue. In view of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Trefgarne Lord Trefgarne moved Amendment No. 15:
After Clause 43, insert the following new clause:
("Application of social security legislation in relation to territorial waters
.—(1) The following enactments are referred to in this section as the "listed enactments"—

(a) the Family Income Supplements Act 1970;

(b) the principal Act;

(c) the Industrial Injuries and Diseases (Old Cases) Act 1975;

(d) the Child Benefit Act 1975;

(e) the Supplementary Benefits Act 1976;

(f) the Pensioners' Payments and Social Security Act 1979.

(2) The listed enactments shall have effect, and be deemed always to have had effect, as if—

(a) any reference to Great Britain included a reference to the territorial waters of the United Kingdom adjacent to Great Britain;

(b) in any reference to the presence or residence of a person in the United Kingdom (however expressed) the reference to the United Kingdom included a reference to the territorial waters of the United Kingdom; and

(c) in any reference to a person residing or being in Northern Ireland (however expressed) the reference to Northern Ireland included a reference to the territorial waters of the United Kingdom adjacent to Northern Ireland.

(3) Where any of the listed enactments is derived from an earlier enactment (whether directly or indirectly) anything done under or by virtue of a provision of, or made under, that earlier enactment which contained a reference of a kind mentioned in paragraph (a), (b) or (c) of subsection (2) above shall have effect as if that reference had at the material time been the extended reference provided for by that paragraph.
(4) The Secretary of State may by regulations make such provision in respect of any enactment (including a listed enactment) as he considers necessary or expedient in connection with the operation of that enactment in relation to the territorial waters of the United Kingdom.").
The noble Lord said: My Lords, this is consequential to Amendment No. 7. I beg to move.
On Question, amendment agreed to.
Clause 47 [Short title etc.]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 16:
Page 40, line 22, after ("42") insert ("(Application of social security legislation in relation to territorial waters)").
The noble Lord said: My Lords, again, this amenment is consequential to Amendment No. 7. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Circumstances in which periods of entitlement do not arise]:
5.36 p.m.
Lord Trefgarne Lord Trefgarne moved Amendment No. 17:
Page 41, line 7. at end insert ("or in such other circumstances as may be prescribed
The noble Lord said: My Lords, this amendment is essentially technical. It brings Schedule 1 (which sets out the circumstances in which periods of entitlement to SSP do not arise) in line with Clause 3 (which sets out the circumstances in which periods of entitlement to SSP end).
Clause 3(5) enables regulations to be made providing for a period of entitlement to SSP to end otherwise than in accordance with Clause 3(2). But there is no corresponding power in Schedule 1 to make regulations providing that a period of entitlement shall not arise in circumstances other than those listed in paragraph 2 of that schedule. This amendment provides such a power.
Apart from the circumstances already provided for in Clause 3(2) and Schedule 1, it is intended to make regulations providing that an employer's liability for SSP ceases if an employee is taken into legal custody; that is, if he or she is arrested or sentenced to a term of imprisonment. As with all other categories of exclusion from SSP, employees in legal custody may become entitled to sickness benefit, subject to the existing regulations covering such circumstances. It is not at present proposed to make any other use of these regulation-making powers. I beg to move.
On Question, amendment agreed to.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 18:
Page 41, line 11, leave out ("twelve weeks") and insert ("three months").
The noble Lord said: My Lords, in moving Amendment No. 18 I should like to speak also to Amendments Nos. 20 and 21. These amendments bring the definition of short-contract workers for the statutory sick pay scheme into line with that in employment protection legislation. This fulfils an undertaking given by my honourable friend the Minister for Social Security in another place. Alignment of the definitions in the two statutes constitutes a simplification for employers and for others who have to apply or understand employees' statutory rights under various enactments.
The Government accepted amendments to achieve this same objective at Report stage in another place.
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At that time, a short contract was defined in employment protection legislation to be one of 12 weeks or less; the amendments then made brought the statutory sick pay definition into line with this. However, the Employment Bill, which will shortly be considered by your Lordships, has since been amended to provide for a change in the definition in employment protection legislation, from "12 weeks or less" to "3 months or less", which is a simplification for employers who have to operate it.
To restore the equivalance of the two definitions, it is therefore necessary to amend Schedule 1 to this Bill again. It was accepted by all parties in another place that it would not be sensible for there to be two definitions of a short contract for the purposes of two different statutes. I commend these amendments to the House.
Lord Wallace of Coslany: My Lords, I should like to ask just a simple, innocent, little question. What is the difference between 12 weeks and three months? Secondly, if it is three months and there is a difference, is it three calendar months?
Lord Cullen of Ashbourne: My Lords, the difference between 12 weeks and three months is one week—13 weeks as against 12 weeks.
Lord Wallace of Coslany: Would the noble Lord allow me? That depends on which part of the year you are talking about.
Lord Cullen of Ashbourne: That may be so, but three months is a quarter of a year and 13 is a quarter of 52, so perhaps we can leave it at that.
On Question, amendment agreed to.
Baroness Jeger Baroness Jeger moved Amendment No. 19:
Page 41, line 33, at end insert ("which is not an official dispute").
The noble Baroness said: My Lords, I beg to move this amendment; and may I pre-empt whatever criticism may come from the noble Minister about the drafting of this amendment. I am aware that it may be defective but I thought it was important for us to try to clarify some of these regulations in Schedule 1. In the first place, I should like to refer back to the Committee stage when the noble Lord, Lord Trefgarne, promised to write and clarify some of our doubts. I know it is often a formality in your Lordships' House to thank noble Ministers for their courtesy and kindness, but in this case I mean it most sincerely, because the noble Lord took a lot of trouble and sent me a stack of case law, which has kept me awake night after night and which I still find very difficult to understand.
But I must come back to this problem because it seems to me that, so far as industrial relations are concerned, the less case law we have the better, and the more we can make the situation clear in statute law the better for everybody. Too much reliance on case law puts the people most closely concerned at a great disadvantage. Here I am thinking of the workers themselves, of shop stewards, trade union officers, employers and especially small employers, who may not have a lot of professional advice available.
In spite of the detailed letter and the information

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which was sent to me—of course I know it was sent to other noble Lords—it does not become public and therefore it is not information which is available to the majority of the people concerned. During the Committee stage, the noble Lord said at col. 794 of the Official Report on 27th April:
"It is better for both the employee and employer if the state takes over … so removing sickness during stoppages from the employment arena".
I feel that the effect of the schedule, as it stands, is precisely the opposite; that it puts sickness benefit and entitlement to statutory sickness benefit right in the centre of the employment arena.
I cannot move this amendment without referring very briefly to paragraph 7 on page 42, which lays down that non-payment of sick pay does not apply to employees who prove that at no time, on or before the relevant date, did they participate in or have a direct interest in the trade dispute in question. Our amendment is to make it clear that disentitlement to statutory sickness benefit should not apply where a man or woman has been engaged in an official stoppage.
I thought that many supporters of the Government believed very much that there should be secret strike ballots before stoppages of work. I am genuinely confused about what will happen in a workplace—I do not know why the noble Lord laughs, because he can sometimes get confused and I am being very honest and modest—if there has been a secret ballot in support of a strike. The strike takes place, and any worker falling sick while the strike is on is disentitled to statutory sickness benefit, under the schedule as it stands, unless he can go to his employer and say "I was against it, anyhow. It was the others." That contradicts the secrecy of the ballot. What is the use of a secret ballot if, in order to get statutory sick pay, a worker has to say "I voted against"?
This is a genuine query. If there is a ballot before strike action—we know that this happens already in several unions, especially in the National Union of Mineworkers—is the whole of that workforce to be debarred from statutory sickness benefit? Quite honestly, 1 rather wish they were, because I cannot imagine anything worse for industrial relations than to have some people saying, "I can have my statutory sickness benefit, because he is a sheep and I am a goat and I did not vote in the ballot for the strike."That seems to me very dangerous and unreal. It is not how people work together.
In the Minister's letter to my noble friend Lord Mishcon, he stated:
"I think it will generally be quite clear to all concerned whether an employee is participating in, or is directly interested in, a dispute".
I must contradict that. It is not quite clear in many complicated circumstances that that is, indeed, the case. We have put down this very limited amendment in order to try to get some clarification. We have put it down very modestly, referring only to official disputes, because we recognise that the situation is much more complicated in unofficial disputes.
I cannot help wondering how this would apply to the present National Health Service dispute. It might be said that all the workers in the National Health Service have a direct interest in an official strike, in
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the sense of supporting it. But a worker could be on a rota for emergency duty and, in the present sad situation, a nurse could be on a picket line one day and the next day could be working in the intensive care unit or the maternity ward, because the unions have agreed that they will give that kind of cover. Then, if that nurse goes sick next week, is she, or is she not, entitled to statutory sick pay under Schedule 1?
I submit that the differentiation between one worker and another is invidious and impracticable. If a worker becomes sick while his colleagues are on official strike, he can hardly be said to be participating in the strike. If he is ill at home, how can I-.e be participating in the strike? But he may be sympathetic to the strike, and may even have voted for it before he became ill. So I submit that the Government would be economising by paying him statutory sick benefit. The employer will get the money back anyhow.
As I understood what the Minister said in Committee, if statutory sick pay is refused, the worker can go to the DHSS and, if his contributions are in order, he will get national insurance sick benefit which is at a higher rate than statutory sick benefit. He will also get relief from contributions, as well as money for his wife and children. So I cannot see what the Government want to do, because the very provisions which debar workers engaged in disputes from getting statutory sick benefit will benefit those workers. It cannot be at all punitive, because they will just go down to the DHSS and get more money. I did not make that up; I could not have done. It was the Minister who said at col. 793 of the Official Report of 27th April:
"There is no question that sickness benefit would be withheld in these circumstances, subject to the normal rules".
So I move this amendment with a genuine sense of inquiry as to the Government's objective and as to the practicalities, especially in modern situations such as we have in my example of the National Health Service. I move the amendment to give your Lordships and the Government an opportunity to make the situation clearer to the rest of us. My Lords, I beg to move.
Lord Davies of Leek: My Lords, there are eight or nine circumstances in Schedule 1 where there would be no entitlement to sickness benefit. What this amendment does is to clarify the situation by asking us to add the fact that a dispute is not official. As matters now stand, if one is sacked while taking industrial action, one can still claim unfair dismissal, unless the employer has discriminated against one. But if a person is taken ill a day or two before a strike is announced, will he or she be regarded as having supported the strike, even if they were at home? This needs clarification because, ultimately. it will lead to legal discussion. If someone falls ill during industrial action, an employer may be justified in assuming that he is supporting the strike. But if someone is ill before official action begins, difficulties arise. Clarification of this clause is needed would be adding only tautological remarks if I said more. I have made the point. It is a little deeper than superficially we are inclined to think.
5.50 p.m.
Lord Banks: My Lords, may I return briefly to the point which I made during the Committee stage

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discussion of this matter. I think I am right in saying that then it was explained to us by the Government spokesman that the reason for the inclusion of this provision in the Bill was because it is not easy, once a person or a body of workers are on strike, for them to deal with the employer and that therefore it would be better if they could deal directly with the Department of Health and Social Security. I said at the time, and I still think, that there is a good deal in that argument from the point of view of the workers.
The difficulty which I saw then and to which I do not think I have heard an answer is that statutory sick pay and sickness benefit are not the same. If somebody who would be entitled to statutory sick pay is told that he cannot have it he may not qualify, either, for sickness benefit, so he has no benefit as of right. That seems to me to be the difficulty. They are not the same. If it were a question of two different ways of achieving the same aim, clearly it would be more satisfactory if one could achieve it without having to involve the employer if employees were on strike against him. But that is not what this is. These are two benefits for which the qualifications are different, and the actual amount paid is not the same.
I am not sure that the amendment helps us to get round that problem. As I understand it, the amendment says that a person who is on unofficial strike would have to go to the Department of Health and Social Security but that the person who was on official strike would have to go to his employer. Therefore we should still have the problem of dealing with the employer while perhaps the majority of people are on strike, so we should not have solved the problem. I shall be most interested in what the Government spokesman has to say to us about these problems.
Lord Trefgarne: My Lords, the noble Baroness will not, I suspect, be surprised to hear that the Government cannot accept this amendment, which introduces an unnecessary complication into the rules governing statutory sick pay. As it stands at present the rule relating to entitlement to SSP during a strike is straightforward. If an employee falls sick during a trade dispute his entitlement is to sickness benefit, not to SSP. If your Lordships will pause for a moment and consider those two separate terms, the difference in the circumstances will, I think, be apparent.
There are two reasons for adopting that approach. First, it is simple and will be understood both by employees and employers. It also mirrors what happens in many occupational schemes. Secondly, it will avoid putting the employer in a difficult position. If an employee claimed he was sick during a trade dispute the employer would have to decide whether there was incapacity or not. The decision might be a hard one to make, given that there clearly existed a difficult industrial relations situation. It is better for both the employee and the employer if the state takes over, as it does now.
The amendment would remove the easily understood rule and replace it by one in which payment or otherwise would depend upon the nature of the dispute. It would be difficult to operate and to justify. For example, consider the fairly frequent situation in which a dispute begins as an unofficial one and is made official at a later date. Employee "A" falls sick during the unofficial period and claims sickness
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benefit; this would continue to be paid to him for as long as he was incapable of work, even if the incapacity lasted into the official period. Employee "B", in exactly the same circumstances, falls sick after the strike is official. Under this amendment he would be entitled to SSP. What justification is there for different treatment of these two employees, whose circumstances differ only because they fell sick during different phases of the same dispute?
The amendment would also, in our view, harm industrial relations and put suspicion on sick employees where none need exist. An employee who falls sick during a dispute, official or unofficial, is vulnerable to the suggestion that his incapacity is not genuine. To ask an employer to pay SSP in these circumstances will only make a bad industrial relations situation worse. May I for a moment refer to my own experience. As is the case with many noble Lords, I have been concerned with the management of small businesses. I can well imagine a situation in which the manager or perhaps the owner of a small business might deeply resent the industrial action being taken, perhaps without justification. To ask him at the same time to make payments to these employees who were part of the industrial dispute and who may or may not be claiming sick pay properly would only make a difficult situation even more difficult,
The noble Baroness also referred to secret ballots. The position is that how the employee votes in the ballot is largely irrelevant in these circumstances, because in this case the question which would have to be answered is whether or not he is participating in the dispute. The fact that he has voted for or against it is not a matter which need occupy the manager in determining whether or not the employee is eligible for sick pay. In any event, the employee is not obliged to claim a disinterest in the dispute to get his statutory sick pay. If he prefers, he can simply go and get his sickness benefit, which, as the noble Baroness pointed out, is sometimes at a higher rate.
If I may refer to the point which was raised by the noble Lord, Lord Banks, the fact is that the employee is no worse off than at present. If he does not get sickness benefit now, he will not get it in the future, either. The fundamental objection to the amendment moved by the noble Baroness is the harm which it would do to industrial relations. The Government genuinely believe that in these circumstances it is better to remove the matter from the industrial arena and for the state to take over responsibility for the payments. I hope that the noble Baroness will be persuaded by these observations and will see fit not to press her amendment.
Baroness Jeger: My Lords, I thank the noble Lord for his explanation, but I remain unconvinced. I would take him up especially on the point that if a man is sick, obviously he is not participating in the dispute. But my amendment has to be read with paragraph 7 on page 42 which says that he did not participate in, or have a direct interest in, the trade dispute in question. This seems to me to be an unanswered point. The employee can be sick and have an interest in the trade dispute. As a result of the trade dispute he might get a rise or better conditions, even though he may be unconscious at some point during the dispute.
The noble Lord quite fairly gave two examples of workers in different situations. But I do not propose

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to create two situations. It is the noble Lord and the Government who are creating two situations—who are saying to one worker, "You can have statutory sick pay" and to another, "No, you must have national insurance sick pay". I should prefer—I agree to this extent with the noble Lord—to keep this out of the employment arena. Therefore, I should like all employees to be entitled, provided that their contribution records are in order, to national insurance sick pay. It seems to me that this schedule is disadvantaging people who fall outside paragraph 7 on page 42. It is what some employers may look upon as the good workmen, who do not go on strike, who have to put up with mean amounts of statutory sick pay, whereas all the "cowboys" can go off to the DHSS.
I am still not convinced that this makes sense, but I am sure that however much longer we go on discussing it tonight we will not make sense of it. I say to the noble Lord that I am very anxious about the effect of splitting into two categories workers involved in industrial disputes. I very much regret that the Government are going ahead with this schedule in its present form. I hope they will watch the situation very carefully. We will want to have further discussions and, while acknowledging the total inadequacy of my amendment, I believe that the discussion we have had today has been helpful, and it may well be a subject to which we might want to return. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.1 p.m.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 20:
Page 41, line 45, leave out ("twelve weeks") and insert ("three months").
The noble Lord said: My Lords, I spoke to this amendment when moving Amendment No. 18. I beg to move.
On Question, amendment agreed to.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 21:
Page 42, line 11, leave out ("twelve") and insert ("thirteen").
On Question, amendment agreed to.
Schedule 2 [Relationship with benefits and other payments, etc.]:
Lord Banks Lord Banks moved Amendment No. 22:
Page 47, line 4, at end insert—
Child Benefit
(".Before the provisions of this Act with regard to Statutory Sick Pay come into force, the Secretary of State shall ensure that Child Benefit is increased to offset the non-incorporation in Statutory Sick Pay of the allowances for dependent children available with Sickness Benefit in the year ending November 1982.").
The noble Lord said: My Lords, I beg to move Amendment No. 22, which stands in my name and that of the noble Lord, Lord Kilmarnock. At Committee stage I introduced an amendment which was designed to deal with provision for children. However, it was linked to a proposal to abolish the three-tier
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system of payment of statutory sick pay. Noble Lords may remember that the noble Lord, Lord Mottistone, suggested that it would be better to deal with the two issues separately. I thought he was right, and I withdrew the amendment at that stage. That amendment sought to provide a benefit for each child which, after the payment of the employee's national insurance contribution, would be roughly equal to the current child dependency addition under national insurance sickness benefit of 80p. per week.
The noble Lord, Lord Trefgarne, said he thought we were agreed that the way to help children was through child benefit. I pointed out that the problem was that child benefit was not being increased to offset the non-incorporation of child dependency additions in statutory sick pay. What we were objecting to was the reduction in total benefit due to the fact that there was no increase in child benefit to compensate for the absence of any statutory sick pay benefit for children. The Government are also reducing the value c f the child dependency additions under sickness and unemployment national insurance benefit, but again, of course, with no increase in the real value of child benefit to compensate.
The first report of the Social Security Advisory Committee had something to say about this Government's policies. In Chapter 2, paragraph 31, they say this:
"We support the Government's objective of including the short-term child dependency additions in child benefit but only in so far as the overall value of child support for people on contributory benefits is maintained in real terms".
I repeat that last phrase:
"… only in so far as the overall value of child support for people on contributory benefits is maintained in real terms".
The Committee go on to say:
"We consider that the methods used by the Government for uprating the dependency additions does not achieve this. The result is that total family support for people on contributory benefits does not keep pace with inflation".
What the Social Security Advisory Committee say is precisely what the supporters of this amendment say.
In Chapter 3, paragraph 30, the Committee go on to say:
"In principle we fully support the objective of successive governments that child benefit should replace child dependency additions to short-term contributory benefits. But we are equally clear that the present method of achieving this is wrong".
That is the point of view we are expressing this evening; that the present method used by the Government to achieve a generally accepted aim is wrong. That it is wrong is evidenced by the fact that there has been a drop of 13 per cent. in the real level of child support provided by the combination of child benefit and the short-term child dependency addition between April 1979 and November 1981. This, of course, increases dependence on supplementary benefit—and that, surely, is something we all want to avoid.
Having failed to incorporate the child dependency allowances in statutory sick pay and having expressed a preference for dealing with the matter through child benefit, the Government are surely obliged to increase child benefit to compensate. This the amendment would ensure. At the same time, if they accept the amendment, the Government will be helping to compensate those on sickness and unemployment benefit

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who have had their child dependency additions reduced, and indeed all other recipients of child benefit—for all of whom child benefit is lower in real value today than it was when the present Government came to office. I beg to move.
Baroness Jeger: My Lords, this amendment has been so ably moved by the noble Lord, Lord Banks, and with such a wealth of expert detail that I rise only to say that the amendment has our fullest support. We think that the problem of child benefit has not been taken on board in this Bill, and we hope very much that what the noble Lord, Lord Banks, has said will be taken into account by the Government. It certainly has our support.
Lord Kilmarnock: My Lords, as the noble Baroness, Lady Jeger, has said, there remains extremely little to add to what has been said by the noble Lord, Lord Banks. It seems to me that this amendment gives the Government a chance to remedy both the injustice perpetrated in the Bill by the non-incorporation of allowances for dependent children which were previously available, and also to restore child benefit to its proper level. This would be enormously popular and would go a long way towards reversing the Government's poor record in respect of social security benefits.
When talking about child benefit, it is very important to recall that we are not talking about charity. Child benefit was phased in between April 1977 and April 1979 to replace the income tax child allowances and the social security family allowances. It is not a novel form of charity, and it is interesting to observe that in the report of the Social Security Advisory Committee, to which the noble Lord, Lord Banks, referred, in table 3.2 on page 31, they demonstrate that child benefit—that is to say, excluding child depedency addition—across the board is now worth 8 per cent. less in real terms than when its phasing in was completed.
If the noble Lord, Lord Trefgarne, is going to argue that it is too expensive to provide what the noble Lord, Lord Banks, has called for, I would remind him, as I have reminded the Government on a number of occasions before in this House, that the Government have saved something like £1.5 billion in real terms on the social security system by various measures they have introduced since they came to office. They have also a shortfall of £2 million on the PSBR. I would like to suggest to the noble Lord, Lord Trefgarne, that this is the time for an imaginative gesture and that he has the money in hand to make it.
Lord Trefgarne: My Lords, if this amendment were to be accepted by the House, the effect would be to increase the general level of child benefit by 80p a week for each child in a family. The principal aim of the proposition, I presume, is to produce the equivalent of a child dependency addition for statutory sick pay by increasing child benefit by the amount of the child dependency addition to sickness benefit which is currently in payment. At the same time, of course, the amendment, if accepted, would enhance the value of child benefit, which in any case is to be increased from its present level of £5·25 to £5·85 per child per week when the uprating becomes effective in November 1982.
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The advantages, in avoiding complexity in the statutory sick pay arrangements, and in avoiding the necessity for those who run employers' sick pay schemes to delve into the circumstances of families, have been debated in other places at other times. But I would make the point that with no additions for dependents the proposed level of statutory sick pay approximates to the level of income replacement which would otherwise be available from taxed sickness benefit. There is, therefore, no specific provision for dependency additions in the sick pay provisions.
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. Child benefit is a universal benefit available to everyone with children and not just the recipients of sick pay. There are always good arguments for improving the level of child benefit and few of us would disagree about the important role it plays in contributing to the costs of bringing up a family. But I find it difficult to accept that the level of the benefit should be debated in the narrow field of statutory sick pay. The rate of child benefit is always debated in the general context of the Budget proposals and that seems to me to be the appropriate forum in which to assess each year the appropriate level of this comprehensive benefit.
If I may just say something about the level of child benefit, in November this year the rate will go up by 60p to £5.85 a child a week, and this will not only protect the benefit in line with the forecast of a 9 per cent. increase in prices between November 1981 and November 1982 but will make good the 2 per cent. shortfall which became evident at last November's uprating. This restoration and maintenance of value will fulfil the undertaking which the Secretary of State gave in another place in July 1980. The undertaking was that the value of child benefit would be maintained at its November 1980 level—subject to economic and other circumstances.
Maintaining and improving the rate of child benefit is always an attractive proposition. But truly the cost is staggering. The 60p rise I have mentioned will cost an additional £330 million in a full year and in 1982–83 the total annual cost of child benefit will be in the region of £3,800 million. The cost of increasing child benefit by 80p a week, as the amendment proposes, would be £440 million in a full year. We have to match expenditure with available resources and we have made great efforts to protect the value of child benefit in difficult circumstances. This is, I think, a creditable achievement and as far as we may go at the moment. I hope, therefore, your Lordships will think that the amendment ought to be withdrawn.
Before I sit down may I pick up two points made by the noble Lord, Lord Banks. Child dependency additions to national insurance benefits, which are of course in payment in some cases at the present time, are in fact being phased out. This indeed has been the policy of successive Governments and not just this one. As for further increases in child benefit, in addition to the one to which I have referred taking effect later this year, strictly speaking, that is, of course, a matter for the Budget, but it is certainly being considered within the context of available resources.
The noble Lord, Lord Kilmarnock, was referring to

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the general savings that had been made in social security matters generally in recent years. The uprating of social security benefits in November this year, in addition to the child benefit uprating to which I have referred, will cost £3 billion in a full year, which I submit is no mean achievement. As I said, the child benefit increase will cost £330 million in a full year. I do not think the Government can be accused of being mean or parsimonious in these matters. We are making available enormous additional sums for these purposes. I hope, therefore, that noble Lords will see fit not to press this amendment.
Lord Banks: My Lords, I would like to thank those who have supported this amendment, and I am grateful to the noble Lord for his reply, even if I do not find it a very satisfactory one. The noble Lord said that there is to be an increase in November in child benefit, and of course we know that; but we know, as he said, that that is merely to account for inflation and for a shortfall in the previous year. It in no way compensates for the removal of the child dependency additions. The noble Lord said that the child dependency additions were being phased out. Well, that was not news; we had already referred to that and we knew that they were being phased out. The complaint was that they were being phased out without any compensation, no compensating increase in child benefit. It is to that that we were objecting.
I agree with the noble Lord that the cost would be £440 million if what we proposed in this amendment were to be brought into effect. But of course we have to bear in mind that child benefit is a replacement for allowances against income tax. How much does it cost to increase the income tax allowances? One has to see it in that context. I believe that an expenditure on this scale could be justified because it would compensate for the non-incorporation of child dependency additions in statutory sick pay. The reduction in child dependency additions in sickness and unemployment benefit would also be compensated for, and for others the fall in the real value of child benefit since the present Government came to power would to some extent be compensated for, and the general decline in the relative position of families over the years would be offset.
While I agree that it may not he right to attempt to bring in what I believe would be a very justified measure as an amendment to this Bill in the House of Lords, I think that in tabling this amendment we have underlined the case for an increase in child benefit; we have drawn attention to the Government's policy of removing or reducing child dependency additions with no compensating increase in child benefit, a policy which the Social Security Advisory Committee described as wrong. If the Government will not increase child benefit, then child dependency additions should be retained and at their present value. It may well be that we shall return to that point at a later stage. In the meantime, 1 beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 [Amendments and transitional provisions.]
Lord Trefgarne Lord Trefgarne moved Amendment No. 23:
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Page 52, line 45, at end insert—
("9A. In section 15 of the principal Act (invalidity pension) the following subsection is inserted at the end—
"(6) Regulations may make provision in relation to entitlement to invalidity pension

(a) corresponding to that made by or under section 50A of this Act in relation to sickness benefit for persons who have attained pensionable age but have not retired from regular employment;

(b) restricting entitlement to invalidity pension in cases where in respect of one or more of the 168 days mentioned in subsection (1) above the person claiming invalidity pension (whether or not he has attained pensionable age) would not have been entitled to sickness benefit but for the provisions of section 50A(1) of this Act."").

The noble Lord said: My Lords, this amendment is consequential upon Amendment No. 13. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 24:
Page 55, leave out line 16 and insert—
("18A. In section 32 of the Social Security Pensions Act 1975 (contracted-out schemes) the following subsection is added at the end—
"(7) An occupational pension scheme which—

(a) at any time before the coming into operation of the first regulations made under paragraph (a) of subsection (2) above did not satisfy that paragraph; but

(b) would have satisfied it if those regulations had then been in operation;

shall, for the purpose of determining whether the scheme satisfied that paragraph, be treated as if those regulations had been in operation at that time."
19. In section 61(2) of the Act of 1975 (duty").
The noble Lord said: My Lords, the 20th 13ulletin of the Occupational Pensions Board, issued in March 1982, drew attention to certain doubts as to the effect of the interaction of the preservation requirements under the Social Security Act 1973 and the contracting-out arrangements under the Social Security Pensions Act 1975 in relation to the "buying out" of scheme benefits via insurance policies or annuity contracts. We are advised that, as the social security legislation stands at present, in those circumstances any annuity contract must comply with the stricter contracting-out requirements concerning requisite benefits, and the wider options permitted under the preservation requirements are not then applicable.
It is recognised that annuities may already have been issued in good faith which do not meet the precise contracting-out requirements but which meet the statutory requirements for alternatives to short service benefit. It is also possible that some scheme rules may have provided for annuities meeting the preservation requirements and the contracting-out requirement only as far as guaranteed minimum pension was concerned hut not covering requisite benefits in excess of it.
To remedy the above situation, it is intended to make regulations under the powers contained in Section 32(2)(a) of the Pensions Act to modify the contracting-out requirements of Sections 33 to 37 for requisite benefits in excess of guaranteed minimum pension in relation to early leavers where annuity contracts are purchased. In addition, it is necessary to take action to enable those regulations to have retrospective effect. We have finally been advised that this may only be achieved via primary legislation.
I apologise to your Lordships for the short notice

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at which we bring forward this proposal. In the mean-time, I beg to move.
On Question, amendment agreed to.
6.21 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 25:
Page 57, line 18, 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;
(c) one after consultation with the head of the Department of Health and Social Services for Northern Ireland;
(d) not less than one after consultation with organisations representative of authorities operating rate rebate schemes; and
(e) not less than one after consultation with organisations representative of authorities operating rent rebate and rent allowance schemes.").
The noble Lord said: My Lords, I beg to move Amendment No. 25, standing in my name and that of my noble friend. This is quite a simple amendment and very direct and I do not see why it should not be accepted, but you never know your luck! The Social Security Advisory Committee is expected to assume, in relation to housing benefit, the very useful functions currently undertaken by the Advisory Committee on Rent Rebates and Rent Allowances. Since the advice tendered by the committee to the Secretary of State may have considerable effects on the work and responsibilities of the local authorities operating the rent rebate and rent allowance schemes, it is clear that these authorities should have the same opportunity of contributing to the advice and assistance tendered to the Secretary of State in these areas through representation on the committee, as have employers, workers, et cetera, in relation to other aspects of social security. Such representation can best be effected by the appointment of the proposed additional members being made by the Secretary of State after consultation with the relevant local authority associations.
I would add that this amendment is supported by the Association of District Councils. I hope that the Government will see fit to accept it, because it would bring a degree of expertise into the committee which would be very welcome. I beg to move.
The Earl of Avon: My Lords, as was announced during the Committee stage in another place, the Social Security Advisory Committee will assume responsibility for advising Ministers on housing benefit when the new scheme is introduced. I should not like noble Lords to think that the Social Security Advisory Committee will not have available the expertise to cope with the new benefit. Department of Health and Social Security Ministers and the Chairman of the Social Security Advisory Committee, Sir Arthur Armitage, agreed that the membership should be increased by two, specifically to allow the committee to be strengthened for its new responsibilities. But both Ministers and the chairman of the committee take the view that the Social Security Advisory Committee should remain a fairly small committee, in which all the members are involved in all the main subject areas, if it is properly to fulfil its role of advising Ministers. We believe that it would obviously weaken the committee's ability to advise on specific issues in
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their wider context, or to keep the whole spectrum of social security matters under review, if the committee were so large that it had to operate through subcommittees.
Clearly, this philosophy means that there must be flexibility: individual members, whatever, their background, must be willing to cover the range of subjects covered by the committee, and Ministers in their turn must have flexibility to appoint the most appropriate people to the committee. I believe that this particular amendment limits that flexibility. Apart from the Northern Ireland representative, whose inclusion on the committee is self-evident, all the members on the Social Security Advisory Committee, 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. The arguments that there must be local authority representation on the committee to advise on housing benefit could be echoed, for other bodies, in other areas of the committee's work, which are equally, or more, complicated or detailed. To avoid the committee becoming too large, specific representation has been avoided in all policy areas, and the Government would therefore wish to resist it today for housing benefit.
I can assure the House that, while Ministers must retain sufficient freedom to ensure that all the main social security areas are adequately covered in the committee, they are anxious to ensure that the Social Security Advisory Committee will be sufficiently geared up to cope with housing benefit. It is still too early to say who might be appointed to achieve this, but the Government's amendment to this Bill in the other place, increasing the size of the Committee by two, is a firm indication that we are live to this need. At the same time, it should not be imagined that the committee is currently devoid of local authority expertise; some of the members have been members of authorities with housing responsibilities.
I hope that these points will reassure the noble Lord that we have looked into this matter seriously. We believe that a committee of the size of about 11 is the right number to be really effective. I very much hope that the noble Lord will not feel the need to press his amendment.
Lord Wallace of Coslany: My Lords, the trouble, as the noble Earl will probably admit, is that the Government are too conservative with a small "c". I am only asking in this amendment for the maximum of four more people and, quite frankly, it seems somewhat ridiculous to say that that would make the committee too large. I still think that it is very essential and perhaps the Secretary of State will bear in mind that there is a need for somebody with definite local authority experience. It is no good saying that there should be someone who might in the past have had some local authority experience. We want somebody who knows his job; a person, for instance, like the noble Lord, Lord Bellwin, or a character of that type who knows what he is talking about. He is a good local authority man as distinct from the other members of the Front Bench, who do not have a clue. I regret

1127
the asperity that has suddenly crept into this debate because I was trying to be kind and gentle with the noble Earl because he has been so nice to me all the way through.
I shall not prolong the proceedings. I am feeling a bit peckish myself. I think that perhaps we might have another think about this matter. I shall take some advice on it. Indeed, it is quite obvious that I have had advice from a certain association and I shall be in touch with them and see what they say. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 5 [Repeals]:
The Deputy Speaker (Lord Ampthill): My Lords, we now come to Schedule 5. In the Fifth Schedule the numbering has been omitted in the Marshalled List and the two amendments should be numbered 26 and 27. So the next amendment is No. 26.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 26:
Page 60, line 55, column 3, at end insert (""benefit or" and paragraph 11 or, as the case may be,"").
The noble Lord said: I beg to move Amendment No. 26, my Lords, and I should like also to speak to Amendment No. 27. Both these amendments are technical. They add to the schedule of repeals further references to injury benefit which are made redundant by the abolition of that benefit by Clause 39 of the Bill. The references are in Section 65(4) of the principal Act, as it will be amended when Schedule 1, paragraph 1(1)(b) of the Social Security Act 1980 comes into force, and in Section 3(2) of the Social Security (No. 2) Act 1980. I beg to move.
On Question, amendment agreed to.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 27:
Page 61, line 55, at end insert—

("1980 c. 30.

The Social Security Act 1980.

In Schedule 1, in paragraph 1(1) (b) the words "benefit or" and "paragraph 11, or as the case may be," and in paragraph 6 the words "of injury benefit and".

1980 c. 39.

The Social Security (N0. 2) Act 1980.

Section 3(2).").

The noble Lord said: My Lords, I have already spoke to this amendment. I beg to move.
On Question, amendment agreed to.

Community Enterprise Programmes
6.30 p.m.
Lord Wells-Pestell Lord Wells-Pestell rose to ask Her Majesty's Government whether they will state their policy in respect of community enterprise programmes and the proposal to reduce substantially the grant being made to Elephant Jobs Limited of London SE1.
The noble Lord said: My Lords, I beg to move the Question standing in my name on the Order Paper. As your Lordships will see, it falls into two parts. It is:
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"To ask Her Majesty's Government whether they will state their policy in respect of community enterprise programmes",
and to give me an opportunity to draw to your Lordships' attention what is happening to an organisation in South London known as Elephant Jobs Limited.
It is not my intention to say anything at all about the Government's policy in relation to community enterprise programmes because I think I am right in saying that the noble Lord, Lord Kilmarnock, will deal with that. So far as possible, I do not want to impinge upon what other noble Lords will say, and I know what two or three of them are likely to say. I want to make my own position perfectly clear. I, personally, have no connection with Elephant Jobs Limited. I am not a member of its committee; I have never been associated with it; I intervened because it is under threat of closure by the Government within the next month. My friends in South London, particularly those in the professional social work services and the probation service—with which, as your Lordships know, I was connected for some years—are appalled at the prospect of this organisation being closed down.
The position is that Elephant Jobs Limited was started in 1976 by the Blackfriars Settlement and by Cambridge House, in order to provide a work experience for young people. In the last six years no fewer than 850 young people have passed through that job centre—I think each of them having done a year's work—and have left not only with work experience but with some new experience. Some of them, between 18 and 25 years of age, are engaged on community enterprise projects; the rest, being between 16 and 18 years of age, are engaged in the Youth Opportunities Programme. Both schemes are administered and run by the Manpower Services Commission.
During that time, as I said, it has given work to 850 young people. I cannot say how many of them were black; I cannot say how many of them were white; but I should think it is pretty well down the middle. As the right reverend Prelate the Bishop of Southwark, who is taking part, will say, that is an activity of supreme importance in an extremely difficult area of London. At the present moment 154 young people are engaged.
I made my own inquiries to see whether there was any real justification for closing it down and the more that I have inquired into it and the more people that I have seen, the more difficult it has become for me to realise that it is a necessity. As I have said, this work is known by a large number of people in the area and I have not yet found anyone who has had any adverse criticism to make of it.
When I tabled this Unstarred Question, I hoped that I would be in a position to withdraw it some days ago, because I had an opportunity of discussing the matter with the noble Lord, Lord Lyell, who will be answering tonight, who was good enough to make arrangements for me to meet him and some of his advisers at the Department of Employment about a week ago, where we had a very full and frank discussion. At the end of it, I was even more bothered about it closing down because I could not believe that there was a good and sufficient reason for doing so.
Later the same morning the right reverend Prelate the Bishop of Southwark and I went along to see the

1129
Minister of State in the Department, Mr. Michael Alison, and I think I can speak for the right reverend Prelate when I say that we were deeply grateful to him, not only for seeing us, but for giving us a tremendous amount of time with his advisers, including one from the Manpower Services Commission. I do not know how the right reverend Prelate felt when he left, but, out of the two meetings, I did not find much to give me encouragement for the future.
Perhaps I could just explain what it is all about. At Elephant Jobs in South London, they have most of these 155 young men working on community enterprise programmes. That means that they do something of communal significance as distinct from individual significance. They will, perhaps, try to organise some sort of play centre; they might try to organise some sort of playground; they might redecorate and repair a centre. It is some community enterprise. Over the six years this is precisely what they have been doing.
But the criteria laid down by the Manpower Services Commission has, in fact, changed from time to time. It started off with a job creation programme, and it was much broader than it is at the present moment. Then it was changed to a special temporary employment programme and that went on until April 1981, when, to qualify for continued assistance, centres of a similar kind were expected to concentrate on community enterprise projects.
But during that period Elephant Jobs had developed other skills; for example, they have a small pottery section where they turn out excellent pottery, because I went down to see exactly what they did for myself; they turn out some really first-class wool carpets; they have a small silk screen printing section—it does not employ very many people. However, these three have developed into skills. It is perfectly true that they are able to sell some of these things privately and on the market, and, apparently, as I understand it—and I do not think that I have got it wrong—this is the nub of the problem, because obviously these job centres are not supposed to engage in some kind of activity that will probably cause unemployment in the community. That I understand and that I accept. But no one can say that what this particular group of young people is doing is ever likely to do that.
In fact, on their committee they have business men who know precisely what is going on. They have on their committee a trade unionist, who also knows what is going on, and neither has taken any exception to it. If I may be permitted to say so, I can be sure that the trade union representative would take exception to it if it was likely to interfere with the employment of other people.
I regard it as a fairly insignificant contribution when it comes, shall I say, to competing with the outside world. I do not think one can really say that they are competing. This I gather is the problem; it may be that this kind of activity—I do not know what the noble Lord is going to say—that seeks to provide a work experience for young people has to be looked at afresh. I think the time has come when it has to be looked at afresh. We cannot have these hard and fast and rigid lines between this activity and the other. I can see no reason why they cannot both continue.
I want to say here and now that the Manpower
1130
Services Commission has behaved extremely generously to this particular organisation over the six years that it has been going. They have had hundreds of thousands of pounds. Without that help, it would have been impossible to channel 850 people and give them about a year's work experience through the centre. They were looking forward this year to a grant of something like £700,000. I think my figures are right. It is a sizeable venture. The amount that the Manpower Services Commission has given year after year since 1976 has been increasing. I should like to say that the Manpower Services Commission has in fact made a remarkably generous contribution to that, and to many other similar organisations. But what grieves me is that this is likely to come to an end.
I took exception when I heard that they were going to be cut off in about a month. There is some disagreement between me and the Government as to whether it really is a month or whether in fact they were given longer notice. The fact is that, so far as I can tell, whatever notice they were given was not much longer than that. I want to ask your Lordships is it reasonable, when an organisation has been going for six years and has made a contribution of this kind, to expect them to cease within one month, which they need not do if they will conform to the required criteria, which I understand are exclusively community enterprise programmes and not the other activity that they are engaged upon?
Following the discussions that the right reverend Prelate and I had with Mr. Michael Alison last week, we were not given any promise. I do not know whether the right reverend Prelate has been given any since. But there was some suggestion, "It is due to finish at the end of June. Perhaps it could go on until the beginning of September ". But the Government department concerned is being totally unrealistic if they think that an organisation of that size and, if I may say so, that calibre, can completely reorganise within a period of three months.
I have had some discussion with this organisation recently, I am sure that the right reverend Prelate has too, and they are willing to conform. They realise that if this is what is required of them, then they must meet the requirements. But what I want to say to the Government is that it is unrealistic to expect them to be able to do so by the beginning of September. What I should like the Government to do—because I presume that the Manpower Services Commission has to get authority from the Government to do what it is doing —is to give the Manpower Services Commission authority to continue to grant-aid this organisation until 31st March next, which is not much more than six or seven months. Within that time they will be able to meet the criteria expected of them now.
The Government have a vested interest in this. The Government have a vested interest in keeping people at work, and of finding work for people who have not got work to do. But they have a far greater interest, or should have, in keeping young people employed even if it is only giving them work experience for one year. I have seen some of the stuff they have turned out. It amazes me what people who had no equipment, no experience, no knowledge of what had been done there when they went there, had been able to do and had done. I recognise that they must

1131
concentrate on the community enterprise programmes and, as 1 say, they are quite willing and happy to do that. But I feel that they have to be given time to be able to do this.
I have tried to put the position fairly. It would be lamentable if they were not permitted to carry on. I do not want to deal with the whole question of community enterprise programmes because I am hoping that the noble Lord, Lord Kilmarnock, will have something to say about it. 1 hope your Lordships will feel at the end of this short debate that it is important that something is done so far as this particular organisation is concerned.
6.47 p.m.
Lord Byers: My Lords, the House will be grateful to the noble Lord, Lord Wells-Pestell, for raising this question of the community enterprise programme and particularly the plight of Elephant Jobs. I have been in correspondence with the Secretary of State for Employment and the Manpower Services Commission over Elephant Jobs in the past few weeks. I was grateful for the extension of their life by three months but, as the noble Lord said, this time is running out and, so far as I can see, they are due to close by the end of June.
I should like to support everything that the noble Lord has said. I hope that in the time that is left, and in a further extension (if, as I hope, it will be granted), the importance of keeping the project, particularly Elephant Jobs and others in the community enterprise programme, in being will be recognised as part not merely of a contribution to employment but as a contribution to social policy itself. I have knowledge of two of these projects; not only Elephant Jobs but also the Burnbake Trust, which is in the same position and is doing a very good job indeed.
Marks and Spencer, to whom I have acted as a consultant on community involvement over the last five years, has helped both of these projects by providing people either to run them or to help run them. The people we have seconded to do this job have been extremely impressed by the transformation of these trainees, these 18-year-olds and older, as a result of the training they have had. This is something which I would be loath to destroy, because once you see what they have been able to achieve in a year you realise what a tremendous social contribution they have made.
The training which they get in the 12-month period is not in any way limited to training in a craft or a skill. They get that, but that is probably the least important facet, important as it is. The point that has to be hoisted in is that they learn while they are there the discipline of the workplace. They learn to arrive on time to get up early enough to be there by eight o'clock; they learn how to behave; how to maintain reasonable standards of hygiene and appearance; the use of acceptable language, not an easy thing to teach; consideration for others; they learn about quality control and what it feels like to have something returned to them as being not up to standard. Those are important aspects of the training they receive. In addition they improve their literacy and life skills. They also produce and sell things and I can see nothing
1132
wrong in that; it is important that they should have the experience of being able to come up to the standards required in the market place.
We cannot afford to close down that type of project today. Instead, we should be increasing the capacity of the community enterprise programme from 30,000 to 60,000 because we have here the chance to defuse, to their own advantage, many of those who would otherwise be among riot leaders in high risk areas of our inner cities. From what one can see of the way they behave during their training, one of the first lessons they learn—they confess it quite openly—is that they do not want to go back to getting into mischief because of having nothing to do. They want to have a job from eight o'clock until the workshop closes, and it is the turning point in the career of many of them.
Nothing should be done to disturb, for example, the picture-framing activities of the Burnbake Trust. It seems excellently run, the people are getting a skill and selling their products, but they are not undercutting others. So far as Elephant Jobs are concerned, I understand there have been problems over what is called (I do not know the details) financial accountability. The suggestion has been made that their operations are outside the scope of the existing criteria for a community enterprise project; that is, the criteria agreed between the Secretary of State for Employment and the Manpower Services Commission.
On that issue I would make two suggestions. The first is that financial accountability should be dealt with in the normal way, by bringing in accountants to ensure that the financial systems are improved and that they are given systems which they can operate so as to make sure they are financially accountable. I am sure they would accept that. Secondly, so far as the criteria are concerned, if it is difficult to bring the project within the existing criteria, the criteria in a case like this should be reviewed. It is easy to close down a project of this kind. It is extremely difficult to start it and build it up again.
Those of us who are in the business of job creation—indeed, that is the business we are all in; every one of us is interested in the subject because we want more jobs created—are struggling and striving to encourage people to put up projects which will take our young people off the streets and give them an opportunity of learning something worthwhile, as in this case, not just immediately but, one hopes, for the rest of their lives. It is terribly disheartening to those of us who are interested in job creation—be they small businesses, training workshops or whatever—to be told that a project which is going very strongly and is doing such good work must be closed down. I hope the Government will think very seriously about the whole project and, before taking any action to close it down, will visit these two units and others.
6.54 p.m.
The Lord Bishop of Southwark: My Lords, we have had two excellent speeches from the noble Lords, Lord Wells-Pestell and Lord Byers, and I hope the House will forgive me if in some respects I cover something of the same ground; it is sometimes a help if the same points are made from a slightly different angle, and I want strongly to support all they said about Elephant Jobs. I first heard that name about a year

1133
ago, shortly after I had come south to my present diocese, and the speaker was Canon Peter Challen, a senior chaplain in the South London Industrial Mission and chairman of the board of Elephant Jobs. I admit that when I first heard the name I was rather intrigued, thinking it might have something to do with a product rather than, as it turned out, an area, but I quickly learned. I quickly learned too, as noble Lords have heard, that it is a major enterprise; it must be one of the largest funded by the MSC, and it involves a substantial commitment by many organisations and individuals, many of them in a voluntary capacity.
Earlier this year, I heard from a number of quarters that Elephant Jobs were threatened with imminent closure. The first threat actually came some months ago, and I thought it might be helpful to the House if I read an extract from a letter which I received at that time from the Vicar of St. Matthew's, Brixton, which underlines one of the points that has been made. He wrote:
"It has been the most successful of all the enterprises run in South London"—
he means of this kind—
"and, speaking as the Vicar of Brixton, I can say that many young people from this area have been, and are, employed by it".
He and others were devastated by the possibility that it might have to go and have urged me and others to do all we can to try to avert that. Since then, there has been an extension, which is shortly to run out, and some of the difficulties have already been resolved.
Both noble Lords spelt out clearly the kind of background to the problems which remain. The key problem, as I have understood it, centres both on the definition of "community benefit" within the community enterprise programmes and the speed with which an organisation like Elephant Jobs can change some of its present activities while remaining viable. From the many conversations, including the helpful ones, to which reference has been made, with the Minister of State—I was most grateful for the opportunity to have those conversations—it appears that key problem can be laid out in at least three ways.
The first is that it had been known that there were difficulties relating to the definition of "community benefit" in relation to this particular craft section for some months, and I think it is fair to say that there was initially, and still is perhaps, on the board and elsewhere, some resistance to the idea that change would have to come, if only because the definition seemed to be capable of varied interpretation, as has been said. The enterprise had been running happily for some years without any question being raised about that, and it has been an important part of the activities. There was, therefore, a very understandable hope that the MSC might be in a position to continue to be a little more flexible.
It could also be argued—indeed, I would want to argue the point—that a phrase like "community benefit" should include the whole question of how you are helping the people involved, rather than just thinking in terms of the particular things you may be doing for this centre, that club or whatever it may be. The fact that you are providing people with new or further skills in the all-important aspect of work experience is of itself an enormous community benefit. I put it in that positive way first, though there is a negative side, too,
1134
in that you are perhaps also doing something to avoid the increase of social tension in areas of high unemployment. That, therefore, is the first point; that there was, so to speak, for that very understandable reason, a certain slowness to respond to the sudden new threat.
Then came the realisation that, if action had to be taken, it would be difficult to find alternative outlets for products of such a rather particular, high quality kind because they are, after all, not the sort of things which are required by, say, local youth club. They do not need hand-made rugs or hand-made pottery. Other people are glad to have those in their homes and are glad to pay money for them; and in some cases they have replaced goods imported from abroad, which in itself seems to be quite significant. That also presents a considerable problem—how do you find either a new market for the goods, or change the activity into something different, given that you have the particular equipment, machinery, and so on?
So while I think that we all appreciate that the MSC is operating under its particular constraints—and that includes applying a kind of three-month rule if a particular activity is not conforming to the rules; I realise that a national organisation is trying to maintain consistency—Elephant Jobs is operating under equally great, I would say much greater, constraints in trying either to find new markets, or to find new products which can be made with the existing equipment that it has.
I want to add my own small plea to that which has already been made on behalf of many people, that the enterprise, if it has to change, be given enough time to change in the ways required. That cannot be done in the next three or four weeks, it really cannot. Alternatively—and I suppose that it would be better from most points of view—perhaps a little more flexibility can be built into the whole definition (which we shall be hearing more about) of community benefit in such a way that the enterprise might be able to continue this extraordinarily valuable piece of work that it is doing alongside so much else.
7.2 p.m.
Lord Kilmarnock: My Lords, the plight of Elephant Jobs has been most eloquently put by the noble Lord, Lord Wells-Pestell, and backed by the right reverend Prelate, and the noble Lord, Lord Byers, has set the community enterprise programme in a slightly wider context. Among the main criteria listed for community enterprise schemes we find included
"economic benefits to the community",
which is the phrase invoked by Elephant, as I understand it, in its defence. Then there are a number of main headings under which eligible schemes are listed. These are: environmental improvement, provision of social amenities; and social and cultural work—for many of which there will be no off-setting payments received. But there is no reason why saleable goods and services should not qualify, and indeed it is so provided in the sponsors' handbook, in paragraph 24. I think that the noble Lord, Lord Wells-Pestell, was a little doubtful about this, but it is certainly in the sponsors' handbook.
Logically craft production should also be possible. Indeed it could be argued that some of the products of craft training are likely to be saleable goods.

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Elephant apparently produces hand-tufted carpets, silk screen prints, jewellery and pottery, as the noble Lord, Lord Wells-Pestell, has told us. But it seems to be the carpets that have got it into trouble by achieving a certain amount of commercial success; they have actually made money. According to the rules, trading receipts have to be paid back to the MSC, which seems fair enough so long as wages and some running costs are subsidised. But it seems a pity that immediately anything is sold over the counter, the MSC seems to get cold feet and wants to withdraw abruptly, quite regardless of whether or not the enterprise is in a state of commercial take-off. I hasten to add that I am not in any sense an enemy of the MSC. In fact shortly after the Recess I shall be introducing in your Lordships' House a debate on the MSC Youth Task Group Report, for which I have the greatest admiration.
The threat of sudden withdrawal of support is bound to make sponsors think twice before entering the rather onerous covenant required of them. I have recently, for example, become aware of an aborted scheme—it did not come off—in North London, where the local authority nudged some qualified people in the direction of a craft workshop which would have done some contract sewing work for local schools and other institutions, as well as design work of its own. A number of keen, young trainees would have been taken out of unemployment. What happened? No sponsor could be found. Approximately £63,000 would have to have been put up for a year for three instructors and six trainees; the operation could be closed within four weeks, at any time; and the fact that all the money earned had to be immediately ploughed back foreclosed on the possibility of a viable business coming into being at a later date. In short, although all the ingredients were there, no one would take on the responsibility for it. Enthusiasm ebbed and turned to bitterness. For one of the promoters CEP became
"a no-hope Government scheme, panacea, a cover-up for gross ineptitude and inability to tackle unemployment at grass-roots level".
Well, it is a pity that that kind of bitterness should be created quite unnecessarily. I think it has to be accepted that CEP builds in quite heavy disincentives, in particular to private sponsors. Of coul se, I understand about accountability for public funds and possible shortcomings of those unaccustomed to accounting procedures. But we must get this in proportion. None of this is a huge bonanza for anyone. As Elephant's directors say very frankly, in, I think, paragraph 5.2.2(9), in answer to their own question:
"Has there been any secondary private gain on the part of sponsors?— it is a matter of opinion, but probably not, other than experience gained".
In essence these schemes are an effort of good will and hard work for low material reward, or they are nothing.
I was slightly alarmed when the noble Lord, Lord Wells-Pestell, left the broader issues in my lap, because I thought that, with his much greater experience, he would probably refer to them himself. However I think it is just worth taking a quick look at the future of the community enterprise programme—which was touched on by the noble Lord, Lord Byers, too—
1136
because I believe that it has a very important role to play in the future. The CEP evolved out of STEP, which had become restricted to special development areas in inner cities. Its importance is that it casts its net wider, and now that the number of long-term unemployed is in the region of 1 million—1 million, my Lords—its potential clientele is very large indeed. Not surprisingly, there have been calls for its expansion. The MSC itself wanted 60,000 places for 1982–83—I think that the noble Lord, Lord Byers, also set his sights at 60,000 places—and was restricted to 30,000 by the Department of Employment. I personally regret that. Youth Aid called for a guaranteed place lasting 12 months for all who are eligible. This is certainly desirable in the long run, but I doubt whether it could be achieved except in a number of stages.
In the meantime, it seems to me that the first step should be to advance to the offer of a place to all those aged between 19 and 24 who have been unemployed for six months or over; and here is my first question to the Government. Can the noble Lord tell us whether the Government will support this objective, and if not, what do they propose to do about this age group, which can really not be said to be any less, or much less, disadvantaged by unemployment than the 16- to 19-year olds, about whom we are all so rightly concerned?
The next point I want to make is that whatever the numbers to be catered for under the community enterprise programme, the role of the sponsor is absolutely vital, and we shall need not only public sector sponsors, such as local authorities, but private sponsors, voluntary bodies, enterprise trusts, and so on as well; other wise we have no hope of meeting the needs. But if sponsors are presented not only with a formidable set of obligations, but also with uncertainties over interpretation of the rules, they will simply, and quite understandably, not come forward, as in the case that I outlined earlier.
I can myself almost off the cuff think of a number of ways in which the sponsor's position could be made less unattractive. First, the regulations should not be changed at short notice, or subjected to capricious interpretation. The noble Lord, Lord Wells-Pestell, touched on this. Secondly, the phrase,
"economic benefit to the community",
should be interpreted with some imagination; or if it is not to be treated with some flexibility, what in fact it really means should be clearly specified. Thirdly, where goods and services are traded it would be sensible to allow a moratorium of, say, two years on the return of any trading income, provided that it is put to reserve or reinvested, or otherwise used to build up the enterprise. It would then be much easier to judge whether it had any hope of becoming self-supporting. Finally, it should be accepted that even where the production of goods and services does not approach this point, such activities do make a valuable contribution to training, employment, and morale—a point that I think has been made by all noble Lords who have spoken so far—and are therefore deserving of support from public funds.
I am not asking the noble Lord, Lord Lyell, to accept or reject any of these ideas this evening, because I seriously think that they require further study and debate; but I am asking him to agree—and I think

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he can hardly fail to do so—that the whole question of sponsorship should be reviewed. This point was also made by the noble Lord, Lord Byers.
Next, I want to ask the noble Lord whether the MSC has considered the cost to the Government if a withdrawal of one-third of the present level of support brings about a collapse of Elephant Jobs. The aim appears to he to save some £230,000, but if 150-odd people become unemployed as a result, even on the Government's own estimate made in 1980 the cost in benefits, revenues foregone and national insurance contributions would be in the region of £500,000 a year; and if more recent estimates are to be given credence, as I think they should, the cost could well equal the whole of the £700,000 grant. All that would be achieved is further misery and disillusion at little or no real saving. I simply cannot believe that the MSC intends that or that the Government want that.
In conclusion, my Lords, when the noble Lord comes to reply will he not agree that the queries that I and other noble Lords have raised, and the considerations that I have myself tried to advance, are in fact all good reasons for helping Elephant to put its house in order? I think the noble Lord, Lord Byers, said that they should be given the free facility of proper accountants coming in and telling them how to do it. Surely these are good reasons for helping Elephant to put its house in order, if it is in fact in breach of some minor regulation, rather than for harassing it out of existence. Is not the restoration of the threatened reduction, at least for one year or to the date that the noble Lord, Lord Wells-Pestell, suggested, the only fair and sensible course?
7.12 p.m.
Baroness Ewart-Biggs: My Lords, I, too, should like to thank my noble friend Lord Wells-Pestell for raising this very important subject of the future of Elephant Jobs, and also, in a more general way, the subject of the future of community enterprise programmes. I feel that after the previous speaker there is little I can add, but my reason for wishing to say a few words in this debate is because of my interest and personal involvement in an organisation in Paddington which is called the Beauchamp Lodge Settlement, which is one of a small group of voluntary organisations in Westminster that sponsors an adult employment scheme similar to Elephant Jobs. It is in this way that I have become acquainted with these job schemes generally, and have also been made very much aware of the important contribution that Elephant Jobs have been making to the community.
So, in the first place I can really only reiterate what my noble friend and previous speakers have said: there is an overwhelming case for continuing the grant to Elephant Jobs. No one could deny that the need for the scheme is absolutely unequivocal, operating as it does in a deeply-deprived area of South London where, as we know, the unemployment figures arc well above the national average, and operating as it does in an area which contains many coloured communities. It is indeed a fact that out of the 154 workers employed by Elephant Jobs, who are all threatened by the withdrawal of its grant, one-half are black and many are living in the Brixton area. Indeed, as the noble and
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learned Lord, Lord Scarman, said in his report on the 1981 Brixton riots:
"Unemployment is a problem which faces both white and black people, but there is evidence that its weight falls disproportionately heavily on black people".
Furthermore, there can be absolutely no doubt that Elephant Jobs have absorbed disabled workers and ex-prisoners from the dole queues, and have truly helped some of the most disadvantaged members of the community.
So, as I have said, there really can be no doubt that Elephant Jobs are playing a vital role in relieving social pressures caused by unemployment in an area where social pressures are already very great indeed. Having agreed on that, as my noble friend and the previous speakers have said we are just left with the question of whether or not the Elephant Jobs scheme does or does not fall within the meaning of the Manpower Services Commission's criterion for such schemes. It is a matter of defining what constitutes an appropriate contribution to the community, as again previous speakers have said. Elephant Jobs say most adamantly that their employment schemes and craft and building sections do without doubt bring great benefit to the community; and, as I have already said, and as other noble Lords have said, there is tangible evidence that this is so. On the other hand, the Manpower Services Commission say that Elephant Jobs have deviated from the guidelines laid down regarding community benefit criteria, so clearly an impasse has been reached.
Thus I, too, should like to advocate most strongly that if the Government cannot agree either that Elephant Jobs craft workshops do fall within the meaning of the criteria laid down, or, failing that, that they will amend the criteria to accommodate them, then surely the Government should, as we have all advocated today, allow Elephant Jobs a stay of execution for at least 12 months to enable them realistically to seek alternative funding. This, surely, is the least that the Government can do.
Finally, coming out of my slight experience of the work being done by the Beauchamp Lodge Settlement in the Paddington area, may I conclude with a few comments on the subject of community enterprise programmes in general, and the anxieties being experienced by those involved in them. In the light of the present employment situation it is very important for them to know, first, what is the Government's exact attitude towards the present employment schemes. Secondly, it is very important to define what the precise co-ordinating system should be among the Manpower Services Commission, the local councils and the voluntary organizations—in fact, all those bodies concerned with employment schemes.
So, on the first point, what undertaking can the Government give that the Manpower Services Commission's work and policies, as agreed at recent meetings, will continue? Furthermore, will the Government make a clear definition, as they see it, of the community enterprise programme and its community role? Because there can be no doubt that such issues as these are put in cause when successful schemes such as those which have been firmly established by Elephant Jobs are challenged. If the Government wish to change the rules, then those new rules must be clearly defined and understood.

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Finally, on the question of the actual process of co-operation between all agencies, both statutory and voluntary, engaged in this all-important task of reintegrating into the community those of its members who through no fault of their own have fallen outside the system, there is concern that the apparatus set up to co-ordinate these efforts is no longer adequate to deal with the present situation. The Manpower Services Commission have had failures in planning, it is felt. In the first place they expected local authorities to be the main sponsors for programmes, whereas in fact it has been the non-statutory bodies, already worried about unemployment, who have responded more quickly than councils. In the next place, the Manpower Services Commission—and this is yet another fear which has been expressed to me from the Beauchamp Lodge Settlement—have not established any feed-back system whereby they might learn from experience and consequently alter schemes accordingly. All in all, the voluntary organisations regard the role of the Manpower Services Commission more as that of a policeman overseeing schemes rather than acting as a partner within them.
From the point of view of the voluntary organisations actually sponsoring schemes, I know that the Beauchamp Lodge Settlement, for one, find they that are not themselves properly prepared to receive workers. Their own supervisors need training in administration and managerial skills. They need to be more informed on unemployment law, PAYE, health and safety, et cetera; and through having been unemployed the workers they take on have low morale and very little confidence. Thus the burden for the sponsoring organisations is especially heavy. Their employees are finding it difficult to create the structure in which successfully to carry the burden. They feel strongly that they need help in building the structure; otherwise, they fear, their present efforts in taking on workers merely provide a cosmetic effect of keeping people off the unemployed list.
In my view there is no doubt that the crisis currently experienced by Elephant Jobs Limited has put many questions at issue. As to the question concerning the all-important area of re-channelling to the common good the energies and talents of those people who drop outside the system, it seems vital for the Government to face to up those questions and answer them in their interest and in the interest of all concerned in an area of such great importance.
7.20 p.m.
Lord Lyell: My Lords, I am sure that the whole House will feel that it is a tribute to the noble Lord, Lord Wells-Pestell, that the House is so full on an evening like this to hear the noble Lord put his case; and he put the case of the matter of Elephant Jobs very well before us today. First, I should like to thank the noble Lord, Lord Wells-Pestell, for his traditional courtesy. As he has already explained to your Lordships, he had one brief meeting with me and another meeting, in conjunction with the right reverend Prelate, with my right honourable friend the Minister.
I should like to express the gratitude of my department to the noble Lord for his remarks about the generosity and help given by the Manpower Services
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Commission in this and in other fields, but the subject which we have before us tonight and which has been raised eloquently by the noble Lord, Lord WellsPestell, and mentioned by every other speaker, is the position of Elephant Jobs Limited. As your Lordships will be aware, the case has been in the news over the last few weeks and Elephant Jobs have put their own case in a very able and vocal manner. I hope that this evening, the Unstarred Question asked by the noble Lord, Lord Wells-Pestell, will give me the opportunity to put the case as the Government see the position.
As your Lordships are aware, Elephant Jobs has been funded since 1976 under the Government's special employment programmes; first, under the jobs creation programme, then the special temporary employment programme and, most recently, since 1st April 1981, under the community enterprise programme. In order to improve the cost effectiveness of all these programmes, the qualifying criteria have changed in various respects from programme to programme. Under the community enterprise programme, the two main relevant criteria are that the jobs supported under these programmes should not put real jobs at risk and, secondly, that the work done had to be of community benefit.
Community benefit among other things, is, essentially the production of subsidised goods and services which would not normally be produced but for the programme—for example, the clearance of a derelict site or the construction of an adventure playground. The work done under the programme must be of benefit to the community at large and not simply the limited number of people who are provided with jobs under the programme. For this reason, schemes which produce goods or services for sale on the open market normally do not qualify for support because to fund them might put real jobs in other organisations at risk.
Out of a total of 111 places approved for funding under the community enterprise programme at Elephant Jobs, only about 40 places are affected by the dispute over the interpretation of "community benefit". I should like to explain in more detail the reason why the MSC feels unable to renew funding for these 40 places. Elephant Jobs are receiving payment in full for their managers'/supervisors' and employees' wages as well as a contribution towards their running/operating costs. All this is paid by the Manpower Services Commission. Elephant Jobs are competing in the same market place with private industry for sales of their jewellery, pottery and carpets, but private industry has to pay wages and operating costs from their sales. For this reason, Elephant Jobs are at a distinct advantage. They could be putting real jobs at risk or frustrating the creation of real jobs.
Furthermore, at a meeting on 11th May this year, Elephant Jobs met their constituency MP, the right honourable gentlemen Mr. Bob Mellish, and they also met the chairman of the MSC. The chairman advised Elephant Jobs to bring these places within the qualifying criteria of "community benefit". If they could not bring these jobs within the qualifying criteria, they were advised to try to transfer the jobs to the workshop supported by the youth opportunities programme, where there are different qualifying criteria. I understand that Elephant Jobs see this particular matter as a question of principle and, as far as we know, have

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apparently not heeded this advice that they were given. In not heeding the advice, they are putting all their other places which are approved under the community enterprise programme and the youth opportunities programme at risk. In total, they have 150 places approved under these programmes and are currently employing 50 people. I think your Lordships will be interested to learn that the hundred or so vacancies could be filled twice over in the Southwark/Lambeth area, which includes the area where Elephant Jobs carry on their work. Also, the community benefit aspect was examined by the MSC special programmes board meeting on 18th May this year. This independent board has representatives of employers, trade unions, educationalists and voluntary organisations on it. They all concluded that the definitions as now. applied by the Manpower Services Commission was the right one. I understand that the chairman of the MSC has written to my right honourable friend the Minister of State at the Department of Employment giving him details of their decision, and my right honourable friend is now considering the chairman's and the special programme board's recommendations.
The other aspect of Elephant Jobs which is causing concern affects some unsatisfactory financial features. I must say that there is every hope that they will be resolved, Elephant Jobs have now stated that they are resolved and, as we have been discussing this, we can now say definitely that an auditor from MSC will be verifying this in the near future with the assertion of Elephant Jobs that this problem has been overcome. I would stress that officials of the MSC have devoted a considerable amount of their time to helping Elephant Jobs over these particular financial issues but I hope your Lordships may hear with me if I spell out in detail the matters of substance which are involved at the moment. First, Elephant Jobs have operated a second bank account through which receipts from all sales made by the scheme were passed. When remitting these funds to the scheme, Elephant Jobs Limited deducted 23·08 per cent. The MSC requires all revenue pertaining to schemes to be remitted to the scheme's account and MSC is now trying to establish from Elephant Jobs Limited in writing the reason for this deduction.
Between November 1980 and July 1981 the scheme undertook work on private dwellings for which it appears no invoices were raised at the time. This is wholly contrary to the Manpower Services Commission criteria in respect of work being of community benefit. This work provided private gain for its recipients and this was clearly unacceptable. I believe that the situation has been partially resolved in that invoices have now been issued and one of them has been paid. This is one of the matters on which the auditor will be reporting.
The last factor is the charitable status of Elephant Jobs itself. The Manpower Services Commission suggest that sponsors under the community enterprise programme should obtain charitable status and so avoid paying a national insurance surcharge of 3.5 per cent. Elephant Jobs do not have this status and so this is resulting in a additional expenditure for the commission to reimburse. This matter is still awaiting resolution because Elephant Jobs do not wish to obtain
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charitable status and the Manpower Services Commission are awaiting the reasons for this standpoint.
It has been suggested in various quarters outside this House that these are matters of little substance. I hope your Lordships will agree, in view of what I have described, that this is not the case. Some other matters affecting rents, VAT accounts and assets registers have either been resolved or are well on the way to resolution following the audit last year by the Manpower Services Commission.
The Government, the Manpower Services Corn-mission and noble Lords who have spoken this evening are all in agreement that the jobs sponsored by Elephant Jobs under the community enterprise programme and the Youth Opportunities Programme are worthwhile and useful. However, this does not mean that all Elephant Jobs schemes can automatically continue to receive indefinite funding regardless of whether they meet the agreed rules. Let me summarise the present position and the steps the Manpower Services Commission have taken to try and keep Elephant Jobs going.
First, despite serious departures from normal MSC accounting procedures (which were well known to Elephant Jobs), Elephant Jobs were allowed three months funding after their schemes expired in March this year to put matter straight. Secondly, MSC officials went over every aspect of the financial problems with Elephant Jobs offering help and advice and suggesting ways of resolving the problem. Considerable MSC staff resources were devoted to Elephant Jobs, offering free financial advice. Thirdly, MSC have discussed the qualifying criteria of both CEP and YOP and have suggested ways in which the 40 places affected can be brought within the criteria. Finally, only yesterday, the chairman of the MSC offered an extension of funding provided that Elephant Jobs bring their schemes into line with the criteria.
In conclusion, let me stress that there is no reason why Elephant Jobs should close. They claim they have resolved the financial problems. If that is so (and it will be examined by an auditor) then these problems cease to exist. The remaining difficulties affect only 40 to 150 places currently funded with Elephant Jobs. Even if the difficulties cannot be resolved, there seems no point in closing down worthwhile opportunities for the sake of those 40 places, of which 15 are at present filled. But I believe that the difficulties can be resolved, and MSC have offered suggestions as to how this might quickly he done.
I should like now to try to answer some of the questions raised. 1 hope I will cover most of them. I shall examine the questions very carefully and will write to your Lordships if I leave any gaps.
Lord Wells-Pestell: My Lords, when the noble Lord has finished with his reply to the questions, will he sit down very slowly to give me the opportunity of asking a question before he sits down?
Lord Lyell: My Lords, I cannot guarantee to sit down so slowly as to depart wholly from the procedures of your Lordships' House. If the noble Lord could make it a very quick question I could probably give him the benefit of the doubt; but I could not guarantee to answer his question tonight. I hope that

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will keep him in anticipation. We have had so far a fairly good run on this particular problem. I shall try to answer most of the points that he and other Members of your Lordships' House have raised this evening.
The noble Lord, Loaf Wells-Pestell, raised one particular point about the local trade unions who he understood did not object to the jobs which were sponsored under the programme. This may well be the view of the local trade union representatives. I doubt whether it is a view that is shared by the trade union representatives of the special programmes board, and indeed the trade union commissioners of the Manpower Services Commission. The production of these goods must be in direct competition with private industry which is producing the same type of items. As I have already described, the cost of the production of these goods is not comparable.
Great play has been made of the number of jobs which are at risk. I would stress once again that there are 150 places at Elephant Jobs which are approved under the community enterprise programme and the Youth Opportunities Programme. Of these, 111 places are approved under the community enterprise programme which has been the main thrust of the noble Lord's Question this evening. As I have mentioned, only 40 of these 111 places are affected by the community benefit definition and 15 of these particular places are currently filled.
The noble Lord, Lord Byers, raised two major points. He mentioned financial accountability. I hope I stressed in the course of my remarks that the Manpower Setvices Commission's auditor is helping to try to resolve these problems which cover all aspects of auditing —not just finance, but also stock control and one or two other aspects of the auditor's task. It is the responsibility of each sponsor in the scheme to see their way to keeping adequate records. As I have said in my main remarks, I hope that this problem is either resolved or is very near to resolution.
The noble Lords, Lord Byers, Lord Wells-Pestell, and others referred to the problem of the qualifying community benefit criteria. When the community enterprise programme was introduced in April 1981 there was a shortage of sponsors. As I am sure all of your Lordships are aware, Elephant Jobs had worthwhile objectives so funding was very definitely continued. Because of the large number of schemes which are coming forward for support which come within the qualifying criteria, the Manpower Services Commission have had to review these schemes where the qualifying criteria for support are more doubtful. This is one area where Elephant Jobs are at the moment found to be situated.
The right reverend Prelate also raised the point of the condition of community benefit in Elephant Jobs. As I am sure he is aware, and as your Lordships will be aware, jobs supported under the Government's special employment programmes must not put real jobs at risk. To do so would mean that support would be withdrawn by employers and trade unions on whom we rely for the operation of these special measures. The community benefit condition ensures that real jobs are not put at risk. The jobs supported under the community enterprise programme are benefiting the community at large and not just a narrow
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sector of it.
The noble Lord, Lord Kilmarnock, raised a number of pertinent and rather detailed points. I shall attempt to cover the majority of them. He first of all raised the problem of the guarantee, as he called it, of a place for the older young person. I think he classified them as from 19 to 24 years of age. I understand that there are approximately 250,000 young people between the ages of 19 and 24 who have been unemployed for more than six months. A programme on this scale would have to be financed by taxation or borrowing. Therefore we think it would jeopardise jobs elsewhere, but my right honourable friend the Chancellor of the Exchequer has pointed out that a new programme to help the long-term unemployed will shortly be launched to help 100,000 people, at a net additional cost of £150 million. So I hope we can go some way towards covering that aspect which was raised by the noble Lord, Lord Kilmarnock.
The noble Lord also raised three other points, one of which was the cost of making Elephant Jobs' employees redundant. Elephant Jobs is not being closed to save money but because it has not yet satisfied the rules. No money would be saved if Elephant Jobs closed, because the places would immediately be taken up by other sponsors in the Lambeth and Southwark areas, as I mentioned earlier. I hope the noble Lord will accept that the community enterprise programme in no way discourages sponsors. We have found that there is no shortage of sponsors; indeed the programme is heavily over-subscribed, and clearly many sponsors are happy to come forward. The noble Lord, Lord Kilmarnock, raised a point on economic benefit, which was also mentioned by other speakers, including the noble Lord, Lord Byers. I should like to say that if it were a sufficient criterion merely for jobs to he provided, then the great firms mentioned by the noble Lord, Lord Byers, such as Marks and Spencer, Woolworths or any other trading company, would qualify for subsidy under the scheme. I can hardly think that would be the intention of your Lordships, especially as regards the special help we are trying to give under the community enterprise programme and also under the Youth Opportunities Programmes.
Lord Byers: My Lords, if I may intervene, when the noble Lord is taling about Elephant Jobs, is he giving any credit at all to the life skills which are taught at Elephant Jobs? To get a playground made is quite different to bringing people in at 8 o'clock and teaching them the life skills they need for work.
Lord Lyell: My Lords, if that is relevant to, and part of, the community enterprise programme, I am pleased to give credit to it. I am not sure whether it is. However, if I have not totally covered this point, then I will write to the noble Lord. I cannot be sure but I do not think the kind of programme which was outlined by the noble Lord, praiseworthy though it is, is covered under the criteria of the community enterprise programmes, or indeed is at issue under the 40 places filled with 15 persons.
In conclusion, I would say that if Elephant Jobs were to close it will be because they have failed to meet the requirements that are accepted by all other sponsors. Moreover, if they do close, the Manpower Services

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Commission will fund the same number of places elsewhere in this region, and so there will be no loss of opportunity. However, I hope, as do the Government, that they will not close, and I hope that all your Lordships who have spoken this evening will urge Elephant Jobs to seize the opportunities which have been, and will continue to be, offered by the Manpower Services Commission to keep their worthwhile projects going.

Port of London Bill
Returned from the Commons with the amendments agreed to.