HL Deb 17 July 1984 vol 454 cc1367-86

5.4 p.m.

Consideration of amendments on Third Reading resumed.

Schedule 6 [Protection of pensions]:

Lord Morris moved Amendment No. 15: Page 53, line 33, after ("above") insert ("but excluding any part of such excess which represents increases in the guaranteed minimum occurring after the termination of employment date insofar as such increases relate to any part of the guaranteed minimum which accrued prior to the 31st December 1984;").

The noble Lord said: I think that it will be for the convenience of the House if I speak also to Amendment No. 16.

Amendment No. 16: Page 56, line 4, after ("above") insert ("but excluding any part of such excess which represents increases in the earner's guaranteed minimum occurring after the termination of employment date insofar as such increases relate to any part of the earner's guaranteed minimum which accrued prior to the 31st December 1984.").

It is certainly not my intention to go over old ground, but I believe that at this stage it is important to clarify any misunderstandings that have occurred in previous stages of the Bill. As your Lordships will recall, this amendment would prevent some people having their present pension entitlement reduced, which will certainly be the effect if the Bill goes unamended as it stands. Indeed, I find it somewhat ironic that the pensions of some people will be reduced when there is a cross-heading to Schedule 6 which reads, "Protection of pensions".

In response to my inquiry at the previous stage of the Bill, which was: how many of the country's 20,000 contracted-out pension schemes are at present in surplus?", my noble friend replied: My noble friend asked how many of the 20,000 contracted-out schemes are in surplus. All, if they are contracted-out, must be able to meet the contracting-out liabilities. They may or may not be in surplus, but they certainly cannot be in deficit.—[Official Report, 10/7/84; col. 866–7.]. Let us be quite clear. That did not answer my question. If I may, I shall just ask that question again, carefully and slowly. How many of the 20,000 contracted-out schemes are in surplus; or, if my noble friend prefers, how many are in deficit? I ask him not to be shy. If he does not know the answer to the question, he should say so. I do not want an answer to another question.

The reason I ask that question is that my noble friend told me in his letter that many schemes would be able to meet the cost of retrospective change out of surpluses arising from investment conditions in recent years. That is not true where the terms of an insured scheme are such that any benefit that inures to the insurance company will not necessarily inure to the fund. That is a separate point.

There is a second point. My noble friend's original answer, no doubt inadvertently, contained an important factual inaccuracy. He was correct in saying that all contracted-out schemes, must be able to meet the contracting-out liabilities", and that they may or may not be in surplus. However, he was incorrect when he said that they, "cannot be in deficit".

I have had that point carefully checked with a leading firm of consulting actuaries. There is nothing to prevent a deficit in respect of the liabilities over and above the contracting-out liabilities. It is in just such cases that hardship is most likely to be caused to pension scheme members as a result of the retrospective element in Schedule 6.

At a previous stage of the Bill the noble Baroness, Lady Jeger, asked for an assurance that the legislative changes would not result in anyone's pension being reduced. I think that noble Lords will recall that she was far from reassured, if I may put the thought into the mind of the noble Baroness. The answer, at column 224 of the Official Report at Committee stage reads, somewhat cynically, I cannot help thinking: If the scheme is not properly funded, then all will suffer".

The point goes beyond that. At Report stage I gave an arithmetical example showing how people's pensions could be worsened, even if the scheme is at present properly funded. To argue, as did the noble Lord, Lord Glenarthur, at column 869, that, Pensions can only be reduced if the scheme rules permit them to be reduced", is like saying that a bankrupt company must pay its creditors even if it has insufficient assets so to do.

I ask my noble friend Lord Glenarthur another question. If anyone's pension can later be shown to have been reduced as a result of the terms of Schedule 6, do the Government have any intention of restoring the pension to its original level? At the same stage, I think it was the noble Lord, Lord Banks, who suggested that franking—and he was quite right—could be likened to robbing Peter to pay Peter. If we take Paul as the early leaver and Peter as the late leaver, in this legislation it is a question of robbing Peter to pay Paul. I suspect that my noble friend will say that that will not be the case, but that is precisely what the case will be in certain circumstances.

My noble friend Lord Glenarthur put up another red herring at the last stage. I believe that it is very important to consider this. He suggested that the effect of the anti-franking legislation would take years to build up if this amendment were passed. I quote what he said—and he somewhat over-egged the pudding: We will be faced with thousands and thousands of early leavers receiving pensions from their schemes of no more than the guaranteed minimum pension. Yet they would have paid in contributions rightly expecting to receive benefits on a much larger scale. They would have been better off to stay in the State scheme and not be members of an occupational scheme at all."—[Official Report, 10/7/84: cols. 866–7.] I suggest that the amendments tabled do nothing other than build up more gradually the anti-franking legislation. Incidentally, I am advised that in practice many schemes will choose to make their change retrospectively, if they can afford it, even if my amendment is passed, because it would be administratively convenient for them to do so. Thus, my amendment will not set back the building up of anti-franking legislation as much as my noble friend Lord Glenarthur fears.

Where a scheme cannot afford the effect of this legislation, however, my amendment will give genuine protection to the people who remain in that scheme until pension age. It is not true that if my amendment is passed many thousands of early leavers will have been better off to have stayed in the state scheme and not be members of an occupational scheme. In any case, they are guaranteed that they will be no worse off in the occupational pension scheme. They may be better off, and many will be, but they cannot be worse off.

Many will have contributed to the occupational scheme but they will have received a compensating reduction in their state scheme contributions. In no sense can they be worse off than they are now if the amendment is passed. I beg to move.

Baroness Jeger

My Lords, I shall be brief. We support the amendment and the noble Lord was certainly reading my mind correctly in saying that I was not satisfied by the noble Lord's reply to my previous question at an earlier stage about the absence of any worsening under the provisions of Schedule 6. I remain unassured.

I think it is extraordinary, and rather ironic, that earlier this afternoon when we were talking about the Parliamentary Pensions Bill the noble Viscount, Lord Whitelaw, referred to the difficulty of retrospective provision. Now we seem to be at the opposite end of the argument. What we object to in Schedule 6 is that retrospective legislation can give rise to additional commitments which could not have been foreseen earlier during the strategic planning. That is exactly the difficulty. Perhaps I should not say "exactly" but it is very nearly the difficulty to which the noble Viscount, Lord Whitelaw, referred in connection with another Bill; but I must not stray beyond the rules of order in that connection.

We also had an earlier debate on the problem of retrospection in the drug tariff for pharmacists and there is a case now before the Court of Appeal in that connection. Therefore, I am sure that all parts of the House must feel that Schedule 6 is not a very satisfactory provision. I am not going in to the matter of the abolition of franking because I think that this question of retrospection and the problem of people who might suddenly find themselves in a worsening position because of Schedule 6 are the important elements. That is why we support the noble Lord, Lord Morris.

Lord Banks

My Lords, at the two previous stages of the Bill I supported the noble Lord, Lord Morris, on this point and he has not yet had a fully satisfactory reply to the very cogent points he has raised. Neither he nor I are against the abolition of franking. I have made clear that we on these Benches welcome it but we recognise the fact that if franking is abolished it will mean that some early leavers are going to have higher pensions than they otherwise would have done. We recognise that that will cost more. In so far as that refers to future years, it can be funded over the future, but in so far as it refers to past years, it puts an immediate burden on the fund. Provision has to be made immediately by those who are running the fund in order to make sure that the fund is solvent. Therefore, there is the danger that with some funds this retrospective part of the proposal could put them into insolvency or could mean that some members who have stayed and not retired early will have lower pensions than they otherwise would have done. I shall be most interested to hear whether the noble Lord is now in a position to give the assurance either that that would not happen or, if it does happen, that the Government will put it right, as the noble Lord suggested.

It is the retrospective element which we believe to be wrong. People who have been applying the practice of franking—whatever we think of it—did so quite legitimately over these past years. It is not right that they should be penalised for something which was in accordance with the rules and regulations as they stood at that time.

Lord Glenarthur

My Lords, I am sorry that my noble friend Lord Morris feels it necessary to raise this matter again. For the benefit of your Lordships who may have forgotten, if they were here when some of the issues were discussed, I think I ought to make one or two things plain.

First, it is the Government's intention, as soon as possible, to abolish franking as practised by occupational pension schemes. I need say no more than that, basically, franking is a practice where the early leaver or person who retires before state pension age may find himself receiving a lower rate of pension from a scheme than he might have otherwise expected by the erosion of other benefits in excess of the guaranteed minimum pension that may be due to the eventual pensioner. Yet the provision of that guaranteed minimum pension and its revaluation have been allowed for in the national insurance contribution rebate received by contracted-out employers and employees since April 1978. Therefore, schemes which practise franking are being over-compensated.

There is, I accept, and as the noble Baroness, Lady Jeger, and the noble Lord, Lord Banks said, no difference between us or between my noble friend Lord Morris and myself on our attitude to franking. We agree that it should be stopped. However, he and others object to the retrospection implicit in the Government's proposals. The noble Baroness to some extent prayed in aid remarks made earlier in the day by my noble friend, but I do not think I shall follow her down that road as I was not here and did not hear them.

Retrospection does not affect past early leavers, but it protects the benefits of future early leavers. That retrospection is really quite crucial. I go back and develop the theme I made, to which my noble friend referred. It is quite crucial if thousands of future early leavers are to be protected from a potential loss; a loss which no one wants to see. Let us consider the effect if my noble friend's amendment were agreed to. All future early leavers would be protected from franking but only in respect of their benefits which have accrued from 1st January 1985 and not in relation to their past guaranteed minimum pension which had accrued since 6th April 1978.

On average, that guaranteed minimum pension could amount to £310 a year and its statuory revaluation to state pension age could mean that if at the time of leaving the member had benefits in excess of guaranteed minimum amounting to £1,600 a year, then up to £30 a week could be taken away from the future early leaver when he eventually drew his pension. Those figures are fairly staggering. This can have the result that, at that time, he would only be able to draw his guaranteed minimum pension. This is not an extra benefit that we are requiring to be provided. The scheme promises him an amount based on final salary and a pension not less than guaranteed minimum pension.

It is our wish that if, at leaving, he is entitled to benefits in excess of his guaranteed minimum, that excess should be preserved and not eaten away as a result of franking. If a member who has been in a contracted-out scheme ends up with a pension that is only equal to the guaranteed minimum, then his scheme contributions have been of no benefit whatever. He would have done just as well to be in the state scheme and not a member of an occupational scheme at all.

When we last discussed the matter, my noble friend suggested that the effect of all this would be that 3 per cent. for each potential early leaver would be required immediately the legislation came into effect. I think that I should refer to this point now, although he did not specifically go into it. The arithmetic is not quite so straightforward as my noble friend indicated at the time. Not every early leaver will qualify for preservation and not all will have six years in the scheme. Not all will have earned entitlement to benefits in excess of the guaranteed minimum pension. On average, there are hundreds of thousands of early leavers each year who would have five years' service. My noble friend indicated that there may be schemes that would be unable to meet the new requirements and would be forced to reduce benefits to existing pensioners. That, I suggest, is a highly unlikely consequence. Benefits in payment in most schemes have top priority over and above all other claims. All contracted out schemes must be funded to meet their priority liabilities, including the guaranteed minimum and pensions in payment. It will be some considerable time before any payments are due as a result of the anti-franking legislation. The leaver must reach state pension age before the proposal in the Bill will benefit him.

I accept that there may be some small schemes which will wish to consider the best way to meet their new liabilities. The Government accept that anti-franking and the early leaver legislation announced on 11th June by my right honourable friend the Secretary of State will impose costs, and I suggest that all involved will wish to consider how best to meet the new requirements. For some, both the employer and the employee may be willing to pay extra contributions. Others might adopt a restructuring of scheme benefits. Ultimately it may be decided to discontinue the scheme. If so, the anti-franking legislation, as I explained at Report, does not apply if the scheme is closed before that legislation is effective.

Alternatively, in future, one might, in extreme circumstances, see the scheme winding up, in which case the anti-franking legislation again would not apply. There is a third possibility—that if the scheme ceases to contract out before the legislation is effective, again the Bill would impose no new requirements. We have therefore, I suggest, incorporated several safeguards and emergency exits in the legislation to cover the kind of situation that my noble friend Lord Moms has postulated. He asked me a number of questions. He asked for the number of schemes out of 20,000 that were either in surplus or in deficit. The number in surplus is not known. But the answer really is that none can be in deficit if they are contracted out, as I understand it. They are subject to the Occupational Pensions Board in relation to their contracting out liabilities.

The noble Baroness, Lady Jeger, asked about the effect of anti-franking on existing pensions. We cannot get to the stage of pensions actually being reduced, because the scheme would have wound up first. If there was to be any deficiency in the guaranteed minimum pension as a result of all this, the Government would make good, on the winding up, if the scheme could not meet all the GMP liabilities. I hope that that is some reassurance for her.

On principle, we all object to retrospective legislation. I do not make any apology for repeating what I said at Report. In the case of franking, the Government believe that it would be wrong if it was not retrospective. It is the only way to protect the individual from losing out in the future. My noble friend's amendment would drastically reduce the effect of abolishing franking, and it would take much longer before the benefits became significant for future early leavers. The Government have embarked on a programme of reforms of occupational pension schemes. We have invited consultation not only on the franking legislation but also on the other proposals currently outstanding. There are, however, certain fundamental principles what we must bear in mind. A fair deal for all members of occupational pension schemes must be our aim. For too long, stayers have benefited at the expense of leavers. If the Government were faced with a choice that one or two schemes might decide to close, as opposed to a measure that will benefit thousands of early leavers, I have no doubt as to the way that the legislation should act.

The Government must protect the interests of the individual, the future early leaver, who, as I say, could lose an average of £30 a week by the time that he reaches state pensionable age. It is, I think, a matter of great regret that we cannot make any improvement for those who have already left. We believe that we have incorporated adequate safeguards for existing schemes. I assure your Lordships that retrospection in this case was not a decision entered into without careful consideration. Throughout the debates on this part of the Bill, on one thing we have been unanimous—that it is an extremely complicated subject. I know that my noble friend Lord Morris shares that view. I hope, however, that with this further explanation of this rather tortuous business, he will see fit to withdraw his amendment.

Lord Morris

My Lords, again I am grateful to my noble friend for his comprehensive answer. I should like to deal quickly with his final point. He came out with a quite astonishing contradiction in terms—

Lord Glenarthur

My Lords, did I?

Lord Morris

My Lords, yes. He referred to the early leaver reaching state pensionable age. If anyone reaches state pensionable age he ceases to be an early leaver, I should have thought. Or have I got this completely wrong?

Lord Glenarthur

My Lords, I think that my noble friend has got it wrong. Such a person will eventually reach the age known as the state pensionable age.

Lord Morris

My Lords, thank you. I shall not pursue that matter on the good grounds that I do not understand it. My noble friend also suggested that one of the evil consequences that I had tried to argue would result from the implementation of Schedule 6 was that Peter would be robbed by Paul and that the early leaver would rightly benefit but that if there were not funds in the scheme, then money could only come from the long stayers. To put it another way, my noble friend used a different term. He called it restructuring scheme benefits. What do noble Lords think that this means? That is exactly what will happen. The Government will not pay. The fund cannot pay if it has not got the money. Does anyone think that insurance companies will stump up? You have to be joking.

My noble friend talked at the last stage rather darkly of future legislation. I sincerely hope that when I come back to him, as I will, I am afraid, year in and year out, and when the result of this is monitored, he will look at the matter very closely. If the late leavers in a scheme that is very closely funded are harmed, I hope that my noble friend will reconsider this case as the years go by. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 16 not moved.]

5.28 p.m.

Lord Glenarthur

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

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

Baroness Jeger

My Lords, this Bill seems to have been with us for a very long time. It is right that this should have been so because it is a Bill that affects hundreds of thousands of people in this country. It is right that your Lordships should have given careful and close consideration to its varying proposals. I welcome the end of this unwelcome muddle of a Bill—the end at least until the next Labour Government takes it all to pieces again and puts things right. We await four promised reports on the social services. We can only hope that there will be maximum public involvement and Treasury involvement and that we shall be able to look more closely at the wider aspects of the health and social security provisions within which the provisions of this Bill play a comparatively small part.

In earlier stages we have made our views perfectly clear. We are seriously disturbed about some of the provisions of the Bill. I will summarise them briefly. There are complications about the sections dealing with the opticians and eye services, and I think that the Minister, who speaks with the best will in the world—which we all appreciate—has not made the position absolutely clear in all respects.

We are glad that the Government have insisted on a professional diagnosis before people can take their prescriptions to get them filled. Filling a prescription, reading a prescription, is a skilled job, and to think that any shop person—I was going to say shop girl—can, over a counter, take a complicated prescription, particularly if it is involving different prescriptions for different lenses, and take the lenses out of boxes, as if she were selling a pair of tights and getting size 10, seems to us very dangerous. It seems to me—and I speak as an old doctor's wife; perhaps I should say a doctor's old wife—to be similar to a doctor giving a prescription to a patient and the patient does not have to take it to a pharmacist; he or she can take the prescription to a high street shop. Although this would be logical, I hope very much that the Government are not going to go down that road.

It is necessary to have considerable experience and knowledge, not only to diagnose the eye problems but to make sure that the glasses fulfil the prescription. It seems to me that while there is no professional body supervising the sale of these spectacles the customer will have no redress. The customer could get home and find that the lenses do not fit very well. He could take them back and the shopkeeper could say, "Well, you bought them yesterday, and that's the end of the matter". I think this is going to cause a lot of problems. I hope that those who sell spectacles will try to be sympathetic and helpful. It is easy to buy a pair of spectacles in a shop and then, when one gets home, find that, come the night time and one is trying to read by artificial light, they are not so good.

The other complication in this part of the Bill relates to the question of complex and expensive lenses. We have had considerable discussion about this. I go back and use as my text a statement made on the Second Reading in the other place, on 20th December, when the Secretary of State said, at col. 297: there are those with the very poorest sight who need complicated and more expensive lenses, and I am certainly prepared to consider the evidence on that to see whether they can have continued access to NHS glasses". At a previous stage of the Bill here the noble Lord assured us that special consideration would be given in these cases. But we find some difficulty in working out what this special consideration is to be. I know that it is difficult to make these assessments across the Floor of the House, but I thought that the noble Lord, Lord Ross, made his situation very clear, and I have his permission to explain his difficulty. I thank the noble Lord the Minister for sending me a copy of a letter which he sent to Lord Ross; and I have Lord Ross's permission to use that.

In parenthesis, may I say that I think that sending letters to each other is very courteous, but it does not help the public to know what is going on. How are the patients to know that they have these rights and these possibilities of help if this is a matter of correspondence across the Floor of the House? At Report stage, some of us asked why, if the Government were going to help people who needed these complex glasses and had specially difficult eyesight, this could not be written into the Bill for everybody to see.

Lord Glenarthur

My Lords, I am sorry to interrupt the noble Baroness—it is the last thing I want to do—but the fact is that other Members of your Lordships' House have not had the benefit of reading all that this letter contains. The fact is that it deals with other legislation. That is why the point that the noble Lord, Lord Ross, raised was not strictly relevant to the Bill before your Lordships, although it was relevant to his particular circumstances. If any of your Lordships, or anybody else, has a particular problem because the National Health Service is not meeting its statutory responsibilities, I should be the first to take that up with the health authority concerned, whether it be in Scotland or in England. But I do not think it is strictly relevant to the Bill before the House.

Baroness Jeger

My Lords, I thank the noble Lord. I cannot see why it is not relevant to the Bill before the House when a large part of this Bill concerns eyesight, the preservation of eyesight and the endangering of eyesight. If the noble Lord thinks it would be fairer of me, I will read out the whole letter. I see that he is shaking his head. Of course, I know that Schedule 12 to the National Health Service Act 1977 applies. I have been around a long time and I, too, know that.

The problem is that there seems to be great diversity, according to which hospital one happens to be in or which Minister or which Government are in charge. I hope the noble Lord will not think that I am unfairly extracting odd sentences from his letter, but that is the only alternative to reading out the whole letter. In regard to eye operations, he says: We intend that the present arrangements for such patients will continue. Their immediate post-operative needs are usually met by glasses loaned by the hospital. After that, practice varies but we intend to make no changes to the present arrangements whereby post-operative patients pay for the first pair dispensed after refraction but whilst their eyes stabilise the cost of replacement pairs is met by the authority. I have to ask the noble Lord why he thinks that, post-operative needs are usually met by glasses loaned by the hospital. I have not been able to find anybody who has had this happy experience. If it is the case that they, are usually met by glasses loaned by the hospital", then it means that, unusually, there must be people who do not get glasses loaned by the hospital. If the practice does vary from hospital to hospital and from region to region I hope the Minister will try to see that there is some uniformity of practice.

It seems to be very unfair that if one has one's eye out in one region one gets some help with glasses, and if one has it out in the next-door region, one does not. It is very unfair for the Government to accept that the practice varies but then say that they do not intend to alter it. That means that the Government are accepting the variability of treatment. That is one of the aspects of this Bill which worries us. I know that the Minister will tell me again that it has not to do with this Bill. But there could have been something in this Bill to put this matter right and provide for people who need these specially complex and difficult lenses to be helped, even if it meant an amendment to earlier legislation.

I should keep your Lordships here too long if I went on about all the failures of this Bill and why we think it is such a wretched piece of legislation. It leaves out any question of long-term benefit for the long-term unemployed, though this had been recommended by the Social Security Advisory Committee. It does not restore the link for uprating of pensions to average earnings, which many of us think is the best way to deal with poverty in old age. It does not provide anything to help the blind with their supplementary allowance. It brings in some provisions which make some of us feel very worried about the nation's eyesight, and we hope these will be monitored carefully.

The supplementary allowance for the blind was set at £1.25 in November 1969. If it had kept pace with inflation, it should be £8.25. But the noble Minister told me on 9th July that the present purchasing power of the blind allowance is now 25p. That is a disgrace to the whole House, and especially to the Government.

Under the Bill we have reduced the child dependency allowance by 15p a week. I know that the nation is hard up, but to take 15p a week off the child dependency allowance seems to me unfair and unrealistic. At the same time, the child benefit has in real terms gone up by only about 10p a week since 1979. I understand that at least 425,000 children will lose under this mean clause.

We have discussed—and I shall not go into it in detail again—the severe disablement allowance. Whatever changes there may be—and some might be helped and some might not—there are 16,000 people at present receiving benefit who will be excluded under the Bill because of the alteration in the provisions.

Clause 14 treats occupational pensions as earnings for taxation purposes. I should not have thought that it was really within the Conservative philosophy that people who have saved and who have put their money into their pensions should then find that their earnings, on which they have probably already been taxed, are now to be taxed again as income.

I hope that I have said enough to make it clear that we do not think much of this Bill. We wish that the Government had waited until a wider review of the whole of what is usually called the welfare state and the social security arrangements had been prepared. This is just another piecemeal bite at a very big problem. Therefore, I am not happy, That the Bill do now pass.

5.42 p.m.

Lord Banks

My Lords, I should like to thank the noble Lord, Lord Glenarthur, and the noble Earl, Lord Caithness, for the manner in which they have presented their case throughout the different stages of this Bill, even when we have strongly disagreed with that case. We are grateful to them, too, for supplying the information which we needed for our discussions. I should like particularly to thank the noble Lord, Lord Glenarthur, for arranging the discussion on the severe disablement allowance, which was very valuable indeed. On the Opposition side of the House, from the Opposition Front Bench the noble Lord, Lord Ennals, forcefully assisted from time to time by the noble Baroness who has just spoken, has made a considerable contribution and so have other noble Lords, not least my noble friends Lady Robson and Lord Kilmarnock.

I still believe that a degree of qualification on the part of those who are called upon to dispense spectacles is desirable. I am still concerned about the effect of the proposals for optical appliances on those on comparatively low income. I regret that, although the household duties test is to be abolished, the severe disablement allowance will still indirectly discriminate against married women.

My unhappiness remains about the failure to match the abolition of the child dependency additions with a sufficient increase in child benefit. Finally, I am concerned that the Government did not show greater understanding of the effect of retrospection in the otherwise welcome proposals which we have just been discussing to abolish franking. We on these Benches will certainly wish to monitor very closely the working of the Bill's provisions in practice.

Lord Ferrier

My Lords, the speeches that we have just heard make clear that this Bill was not wrongly described as a "rag-bag of a Bill". It would not serve any useful purpose for the House to divide over its passage at this juncture, but from what your Lordships have heard in the last two speeches it is clear that there are a number of features of the Bill which have caused me and others to described it as a rag-bag of a Bill.

As the debates in this House have shown, it has been astonishing to many of us that the DHSS decided to merge in one Bill certain measures about opticians, which some regard as extremely dubious measures, with regulations in connection with social security. In case any of your Lordships wonder how it comes about that I am concerned with social security, I would remind your Lordships that it is a matter of importance to all of us on whichever side of the House we may sit.

More than a quarter of a century ago I took part in a debate in which Lord Pethick-Lawrence and Lord Beveridge also spoke. It might interest your Lordships to know that from that debate stemmed an alteration in the wording from the then current term, "national assistance", to "supplementary benefit". As matters stood at that time, the words "national assistance" stuck in the gullets of some proud old people who refused to "go on the parish". That has been overcome by the words "supplementary benefit", which have a much wider connotation today than they had at that time. I mention this matter because it has been suggested from the other side of the House that Peers on this side know nothing about the problems of poverty or destitution. But that type of criticism is of course only material for a party political knockabout.

As for this Bill, in my view the Short Title appears misleading. It does not cover all the ground. Along with other noble Lords, I was very sorry to hear from my noble friend Lord Mottistone that my noble friend Lord Cullen is unwell. I hope that my noble friend Lord Mottistone will convey our good wishes to my noble friend Lord Cullen for his early recovery, because he has great knowledge of this matter which he has applied to assist our discussions. My noble friend Lord Cullen said at col. 780 on 10th July that he could not help commenting: that in the not too distant future the Government may well wish that they had not gone down this road. That comment rather confirms what the noble Baroness, Lady Jeger, has been saying. Perhaps it would have been much better to wait. In fact this afternoon there have been indications from various speakers that this legislation has been premature in regard to taxation, in regard to pharmacists and the like.

The question of the timing of the Bill seems to be very mistaken. I do not know to what extent noble Lords studied The Times leader on 12th July. It referred to the Institute of Fiscal Studies publishing a report on that day on the reform of social security. That leader mentioned a pamphlet Action on Welfare published on that same day by the Social Affairs Unit, which also referred to the need for reform. Could we not have waited? In my view the speech made by the noble Lord, Lord Ennals, on Clause 4 has a bearing on this very matter, but we need not pursue that now.

Be that as it may, my heart has gone out to the hard-working Ministers who have had prematurely to propel this Bill through the House despite the appeals that have been made to the contrary. I think that it was the noble Lord, Lord Wallace of Coslany, who begged the noble Lord to withdraw his Bill and to bring it up next Session, and I think that the noble Baroness, Lady Jeger, cried out, "Good idea". However, here we are.

From what I have said, noble Lords will have gathered that I am not content that the Bill should be passed, but I hope that what I have said will be on the record and will be taken into consideration. My noble friend Lord Cullen may well be right that it will not be long before we have to go over all the ground again with, let us hope, the problem of the opticians separated from that of social security.

5.50 p.m.

Lord Kilmarnock

My Lords, I should like to associate myself with my noble friend Lord Banks in thanking the two Minsters on the Government Front Bench for the way in which they have handled the Bill and for the courtesy that they have constantly shown to us, although in the end we have not managed to make very much impression on the Bill.

It was the optical clauses which received perhaps the greatest amount of debating time and I certainly do not want to go back over all that ground again. However, there is still one loose end for which we must put down a marker. It has been mentioned several times this evening, and I make no apology for mentioning it again. It is the question of the complex prescriptions. The noble Baroness, Lady Jeger, quoted the Secretary of State at Second Reading in another place, but we have much more recent quotations available to us from the noble Earl, Lord Caithness, who, on 10th July in this House at col. 799, in response to an amendment which I moved, said: It does, however, give me the opportunity to confirm to the noble Lord, as he has already pointed out, that the Government are concerned about this and we are making very serious efforts to get this particular point right". A little later in the same column he said: We believe that the most vulnerable members of our society ought not to have a financial barrier placed between them and the glasses they require". In the following column he went on to draw our attention to the provision in the schedule, which allows the Government to make arrangements for a person: of such other description as may be prescribed". We shall look with great interest at these regulations when they are brought before your Lordships' House, because we do not think that the Government have yet met us on this point, despite a number of promises, half-promises and indications that they might. The real question here is whether or not severe visual impairment is a matter for the National Health Service—that is, the general optical service. In effect, the Government say that it is not a matter for the National Health Service and, therefore, should be means tested. Our view is totally opposite to that. That is a point on which we are not satisfied and on which we shall certainly want to keep a beady eye when the regulations come before us.

On the question of the family practitioner committees, the road that the Government have gone down is the opposite road to the one which we on these Benches would have wished to follow. We particularly dislike the excessive extension of patronage in the hands of the Secretary of State, which enables him to make something like 3,000 direct appointments to family practitioner committees up and down the land. We believe that this is an unhealthy development. But I must say that in this part of the Bill we secured virtually our only success; we persuaded the Government to recognise the rationality of allowing nurses to have direct representatives on family practitioner committees. We won the argument and in this case the Government listened to the argument and agreed to the necessary amendment. Therefore, that is a minor, but I think significant, success about which we can be pleased.

With regard to the severe disablement allowance, many of us are still rather unhappy about the discouraging effect that Clause 11 may have on the young disabled, because it may discourage them from continuing with education and training with a view to securing a job. That is worrying. Some of us are still extremely worried about the effect of the method of testing mental handicap and mental illness. We had some conversations about this and we understand that a code of practice will be drawn up for the particular area of mental illness.

Finally, I very much agreed with the noble Lord, Lord Ferrier. While we have been debating this Bill, a number of reports of considerable interest—in fact, of great interest—have appeared advocating a thorough reform and simplification of the whole system. The most thoroughgoing was the report by the Institute of Fiscal Studies, to which the noble Lord referred, which describes the social security system in this country as: a patchwork quilt falling apart at the seams". On the same day The Times summed it up by saying: Britain's social security system is in a mess. It is inefficient in relieving poverty, disruptive of the labour market, difficult to understand and costly to administer. There is widespread agreement that it needs to be reviewed and then reformed". This Bill only highlights that necessity. Of course, we are aware of the areas of inquiry initiated by the Secretary of State, but let us hope that when the Secretary of State next introduces social security legislation into Parliament it will be not a dog's breakfast similar to this Bill, but a comprehensive attempt to deal with the fundamental problems.

5.56 p.m.

Lord Northfield

My Lords, I should like to say how grateful I am to the Ministers on the Government Front Bench for their courtesy in responding to the campaign which I and others have been waging during consideration of this Bill for greater freedom than the Bill actually offers for those purchasing spectacles. Despite my compliment, may I chide the Ministers for their inconsistency. On the one hand, they said to the noble Lords, Lord Mottistone and Lord Cullen: The consumer can be trusted to look after himself in judging the quality and service of sellers of spectacles"; on the other hand, they said: The consumer cannot be trusted to look after himself in having himself tested regularly for glaucoma". I hope that this inconsistency in their attitude will bear in on them as the years go by, and that we shall finally get away from that restriction on freedom to which this provision amounts.

I am glad that at last—and this is the milestone that this Bill represents—the professional and commercial activities of opticians are being separated. Alas! competition has to be pressed and enforced in all commercial activities. We cannot rely on a high degree of self-denial from monopoly activity in our society. It was right that real commercial competition should be introduced into the actual dispensing of these items, many of which, of course, are fashion items rather than simple appliances. I hope that my noble friend Lady Jeger on the Front Bench will allow me to say that even today opticians do not let the girl serving at the counter go into the back room and start making up spectacles. That task is performed by a highly specialised professional company for all opticians.

Baroness Jeger

My Lords, I must not let that comment go on the record. I said absolutely nothing of the sort. I was talking about what would happen after this Bill comes into effect.

Lord Northfield

My Lords, yes. Perhaps I can rephrase the remark in a way which does not upset my noble friend. She implied that after the Bill becomes law someone serving at a shop counter, who has very little knowledge, will go into a back room and start making up spectacles. That is no more likely to happen after the Bill becomes law than before, because in this trade this task is performed by a highly professional, separate company which does it for many opticians. It is a highly skilled task that nobody pretends to do in a back room.

In future, under this Bill, first, consumers will be armed with their prescriptions, which the Minister says opticians will have to hand to them. Secondly, the consumer will receive restrained but helpful advertising of the service that unregistered dispensers and others can offer. So the consumer will have greater choice of where he can go and a greater indication of where he can get the best buy.

Thirdly, I hope that the consumer will then shop around. I hope that he will reflect on the value of the standard made-up spectacles that are available and which can save him a great deal of money, particularly if he does not need very much of a correction in his eyesight. All this will increase competition. I hope that it will have its effect on prices and that it will be good for the whole opticians' trade. It is now up to the opticians and these new unregistered dispensers to make the competitive system work, and I am pretty sure they will.

Lord Mottistone

My Lords, having already made a few remarks, I should like briefly to thank my noble friends for the courteous way in which they handled the whole of this Bill—at least the part in which I was interested. Although they did not give a great deal, they at least helped us to resist anything worse from people like the noble Lord, Lord Northfield, and the noble Lord, Lord Rugby. I hope that the result, which is a kind of compromise, will be successful in all its work. I am also grateful for the fact that my noble friend Lord Glenarthur, in accepting an amendment today which I had proposed before, recognised that it was sensible to have some amendments which we could feel recognised the importance of the opticians. I hope that the relationship between them and the DHSS will be splendid in the future. Unlike my noble friend Lord Ferrier, I wish the Bill a good passage.

Lord Stallard

My Lords, may I delay the House for a few seconds. I too should like to thank the noble Lords who have been responsible for the passage of this Bill so far through the House for the courtesy and gracious manner in which they have dealt with the various amendments that I and others have tried to have passed. I also agree with those noble Lords who have described the Bill as a "ragbag". It is a ragbag, and that is a reasonable thing to call it. It was at least two separate Bills, if not more. We were all sad that the Government felt it necessary to roll them all into this one omnibus measure.

I would be wrong if I did not say that I have been disappointed that the Government were unable to accept an amendment that I should have loved to have had carried. That is the amendment on the introduction of the severe disablement allowance. I shall not go into the details any more but I fear that that will introduce more problems than it will solve. The introduction of a new criterion for disablement, the 80 per cent. criterion as well as inaccessibility for work, and so on, will create more problems than it solves. I was sorry that the Government were not able to do more about that, particularly on the housewives' NCIP.

The invalid care allowance is something else I was keen on. I know that noble Lords and noble Baronesses on the Government side who spoke on this share the concern we have felt for a long time. Again, I hope that the Government will be able to give that further consideration as a result of experience following the passage of the Bill. I was more than disappointed, having twice moved an amendment to increase the age allowance from 20 to 25, and then a reasonable compromise from 20 to 23, when the Government were unable to meet us even on those modest attempts to amend this, and make the Bill more palatable and acceptable certainly to the congenitally handicapped who would benefit from that kind of concession.

One of the things I am pleased about is the promise that the noble Lord gave us during the course of one of the amendments that there would be a monitoring process of the Act. That is important so far as I am concerned. I will take every opportunity to pursue this question of the monitoring, and keep a close watch on it and use whatever parliamentary devices are available to me to make sure that the points we have raised in the past may be covered by that monitoring arrangement. With those few, I hope constructive, criticisms I too join others in thanking the Ministers again. We shall watch the Act closely and its implementation.

Lord Somers

My Lords, just before we conclude, from these Benches, I also should like to thank the noble Lords on the Front Bench for the way they have manoeuvred this Bill to its final close. I feel that any criticisms which one might have of the Bill are, at this stage, rather like bolting the stable door after the horse has gone, so I shall leave it at that.

Lord Ennals

My Lords, just a few final words from this side of the House before the Bill passes. The only matter I want to defend the Government on is having a miscellaneous provisions Bill. It makes it a ragbag, but there are times when there are good things which one wants to do and one puts them all in a bag and brings them forward. The trouble is that there are not any good things in this bag. That is why at the beginning I called this a "ragbag". As one plucks out each little bit from the bag one realises that there is not a single item which it was necessary to bring forward at this stage or in this form. But we have made some advances, and therefore I too thank the Ministers on the Government Bench for their courtesy and helpfulness.

We have plucked a few things from our debates. One is on the special disability allowance. There is much more understanding of what the Government have in mind. We shall look carefully at the new code of practice, or code of assessment, when it is drawn up. The Government now recognise clearly what our concerns were. We have a nurse on the family practitioner committee, as was said by the noble Lord, Lord Kilmarnock. We have a few extra commas, colons, and brackets as a result of the re-formulation of a paragraph on which I moved an amendment earlier in the day. As the noble Lord, Lord Mottistone, said, we also have a modest concession on the title of optical practitioners.

One of the good things about the debate is that it has been non-partisan. I would say that in the sense that there has been as much wisdom spoken on both sides, and I would cap that by saying that there has been as much nonsense spoken on both sides of your Lordships' House. I am glad to see that my noble friend is still with us in heart and spirit and smiling upon us. It is perhaps helpful that this should be the atmosphere in which we conduct the debate.

When I look through it, it is a shoddy Bill. I am not going to go through it all because we have said it all before. I am just going to finish up with a question. Having thanked the Minister, I want to get something clear. If he cannot answer it now, will he write a letter? I want to know who is right. I want to know whether he is right or whether the Minister of State is right. Of course he has to say that the Minister of State is right. This relates to our dear friend Lord Ross of Marnock and other people in his position. I am quoting from the noble Lord, Lord Glenarthur, regarding Schedule 1, paragraph 7, line 1 of the Bill, when, he said: Post-cataract patients will be able to get their glasses from the hospital, because the glasses have to be changed regularly over a period of years until the eyes settle down. The same arrangements will be maintained. There is no reason, therefore, for people to fear that because they have had a cataract operation they will have to go to enormous expense to keep their eyes correctly focused. Their glasses will continue to be dispensed by the hospital. This arrangement will continue for the length of time that the eyes are settling down."—[Official Report, 10/7/84; col. 791.] That was jolly nice, but that was not at all what Kenneth Clarke said in answer to a letter sent to him by the Royal National Institute for the Blind with a particular interest in this. He said: In the case of post-operative patients we have no intention of altering the present arrangements whereby their immediate post-operative needs are met by the loan of glasses". As my noble friend said, we would find it difficult to find anyone who has had any loaned glasses. Nor do we propose to alter the existing arrangements whereby patients pay the appropriate charge for their first pair of glasses. When the noble Lord, Lord Glenarthur, in column 791 made his assurance, I intervened to say, My Lords, is this point made clear in the Bill which is before us? If it is, it is a very encouraging reassurance. The noble Lord said at column 792: I am unable to find it in the Bill at the moment". Perhaps, having had the opportinity of reflecting on this, he will clear this up because it is an important point which affects many people who are post-cataract patients, and it will affect many people in the future. Apart from that question, I just want to say that perhaps that part of it is part of the most raggedy part of the bag.

Lord Glenarthur

My Lords, I am the first to recognise that this is a wide-ranging Bill. I do not think it would he appropriate for me to detain your Lordships at this stage for yet another detailed exposition of its contents or even of what its contents might have been had the noble Baroness, Lady Jeger, had her way. I was chided by the noble Lord, Lord Kilmarnock, to the effect not that it was a ragbag of a Bill (which my noble friend Lord Ferrier said) but that it was a dog's breakfast. All I can say is that if it had had the various additions which the noble Baroness, Lady Jeger, had wanted, the dog would have done very well in the morning.

I should like to refer briefly to those areas which have attracted most attention. A good deal of the debate on the Bill has centered on the provisions in Clause 1, which are concerned with increasing competition in the private market and ending state involvement in the provision of glasses. We believe that as a result most people who wear glasses will in future have a wider choice and their glasses will be cheaper. I appreciate that there are those who would have liked us to have gone even further down the path of liberalisation. The noble Lord, Lord Northfield, as we all know, has tirelessly pursued this aim over the years, and so I am glad that at least some of his wishes have been realised, as indeed have been some of those of the noble Lord, Lord Rugby, who has also pursued the matter with a great deal of vigour in your Lordships' House.

But we remain convinced that we have struck a sensible balance by retaining the present link between sight testing and the sale of glasses and by ensuring that all glasses sold shall accord with a recent written prescription. We also believe that while ending general NHS supply, we have made sure that no one need be denied access to glasses on financial grounds, and I hope that these safeguards at least will find support from my noble friends Lord Cullen and Lord Mottistone.

I, too, share the wish that has been expressed that my noble friend Lord Cullen will soon be back with us again. I know only too well what a powerful advocate he has been for his cause over the years.

Before we leave the subject of glasses, I wonder whether, in reply to the noble Lord, Lord Ennals, I may try to remove some of the murk that appears in the water over the question of hospital patients and their glasses. If I do not manage to do it now, I shall probably have to write to him yet again to try to elucidate it. The fact is that loaning glasses after operations is accepted practice. While the patient is still an in-patient, his eyes are unsettled and it is not appropriate to test them. The hospital will, therefore, loan glasses which will be of some help, but that will not meet the full optical needs. Once the eyes have settled, and while he is an out-patient, the postoperative patient has his eyes tested and the glasses dispensed. He pays for the glasses, but because the eyes will adjust in the fullness of time, he does not pay for subsequent pairs until the eyes settle, and when frequent changes of glasses are not required.

The procedures perhaps vary from one region to another because the clinical practice of ophthalmologists is different, and it is a matter for local health authorities to check the performance of the regions looking after their hospitals. Even more it is a question principally of the clinicians meeting their patients' needs. There is no evidence that patients anywhere are less generously treated than I have described. The noble Lord asked me whether this was written into the Bill. It is not written into the Bill because it refers to the hospitalised service, and that comes under the National Health Service Act 1977, I think. If either the noble Lord, Lord Ennals, or the noble Lord, Lord Ross, has any evidence of specific cases where it is going wrong, I can only suggest that the noble Lord brings it to my attention and I shall have it looked in to. I hope that that will satisfy them.

I turn to Clause 5 and its related schedule. Changes in the status, accountability and structure of family practitioner committees will provide a firm focus for the provision of family practitioner services. They represent an essential plank in our strategy of ensuring that primary health care continues to be responsive to community needs. I am particularly grateful to my noble friend Lady Cox, the noble Baroness, Lady Robson of Kiddington, and the noble Lord, Lord Kilmarnock for their contributions to the debates on these provisions. I am pleased that we have been able to accept their amendment to give community nurses statutory representation of FPCs.

In our discussions on Part II of the Bill, we have profited from particularly informed and constructive debates on our proposals for the introduction of severe disablement allowance. I am grateful to the noble Lord, Lord Banks, for his comments in this respect. I trust that my noble friend Lord Caithness and I have succeeded in alleviating a number of the main concerns that have been expressed.

I think I can safely say that there is now a broad measure of agreement on all sides of your Lordships' House that severe disablement allowance does indeed represent, if not a perfect solution to a difficult problem, a least a step in the right direction and a significant improvement on the present position.

Much of the debate on the provisions in the Bill which will put beyond doubt the arrangements for professional remuneration in the family practitioner services, and which will produce a better deal for future early leavers from occupational pension schemes by abolishing the now discredited practice of franking, has concentrated on the retrospective aspects of those clauses. Indeed that was reflected in amendments which we discussed earlier this afternoon. While I understand the concern which has been expressed, I hope that I have convinced your Lordships that in these particular instances retrospection is not only necessary, but also desirable.

I thank all those who spoke on the Motion that the Bill do now pass for their kind remarks about both my noble friend and myself. In conclusion, it only remains for me to express my appreciation of the thoughtful, constructive and thorough manner in which your Lordships have considered the diverse provisions of this Bill. I am grateful for the constructive approach adopted, particularly behind the scenes, by the noble Lord, Lord Ennals, and the noble Baroness, Lady Jeger. In particular, I should like to thank my noble friend Lord Caithness for this admirable assistance to me in what has been his first venture into the complex, even tortuous, field of health and social security legislation. I am most grateful to him; and at least he has been spared discussion on the subject of franking.

On Question, Bill passed, and returned to the Commons with the amendments.