Health and Social Security Bill

HL Deb 21 June 1984 vol 453 cc441-91

3.34 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Glenarthur.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Schedule 3 [Family Practitioner Committees]:

Lord Ennals moved Amendment No. 38A: Page 46, line 14, at end insert ("and committees").

The noble Lord said: This is a modest and largely probing amendment. On page 46, paragraph 15, sub paragraphs (d), (e), (f) and (g) deal with the role of community health councils and their relationships with the district health authorities and with family practitioner committees. It will be noted that in (d) the question of consultation is dealt with and that family practitioner committees are involved. Sub-paragraph (e) deals with the furnishing of information to councils by authorities and committees, and (f) with the advice by councils to both the health authorities and the committees. Paragraph (g) refers to the preparation and publication of reports.

It is only in the last part of sub-paragraph (e), which covers the question of entering and inspecting premises controlled by such authorities, that, for some reason, the family practitioner committees are left out. Although I am moving the amendment, I am hoping that there can be some reasonable explanation from the Minister of this omission.

The Earl of Caithness

The effect of this amendment would be to confer upon community health councils the right to enter and inspect premises controlled by the FPCs. However, the only premises controlled by the FPCs are those which they and their staff occupy. The premises from which the independent contractors operate, which provide the family practitioner services, are their own or, if health centres, are controlled by the DHAs.

I cannot think that there is anything to be gained by giving CHCs the right to inspect and enter FPC office accommodation or, indeed, that it is even desirable that they should do so. I do not even believe that this is something they would wish to be empowered to do. With that explanation, I hope that the noble Lord, Lord Ennals, will feel able to withdraw the amendment.

Lord Prys-Davies

That is a disappointing response, if I may say so. The noble Earl said that there is no good reason why the CHCs should not be given this authority. In the hospital service the CHCs are expected to visit hospitals in order to do their job properly in terms of reporting on conditions which they see within the hospital service. They report on what their eyes have seen and their ears have heard. This is a job which they do very well for the benefit of the hospitals and of the patients.

In an ideal world, the CHCs should also be entitled and at liberty to visit the health centres and the surgeries in the community and, again, report on what they see and hear. However, I accept that we do not live in an ideal world and I also accept that there is a difficulty. The difficulty in giving the CHCs this power is that, on the one hand, the hospitals are owned and managed by the area health authorities or the district health authorities, whereas the health centres are usually owned or, if not owned, are in tenancy to the doctors. Therefore, the doctors may well be opposed to a right of inspection by an outside body. They would see this as an infringement of their rights either as owners or as tenants.

I accept that there is that difficulty. But what is disappointing about the Minister's reply is that he does not accept that there is value in an outside body going into the health centres and onto the health premises and reporting on what it has seen and heard. If the Minister could accept the principle, I would hope that, either by legislative action or, if that is difficult, by administrative action, the Government could find ways and means of allowing the CHCs to inspect the surgeries and the health centres in the same way as they inspect the hospitals. Therefore, I hope that the Minister can take this hack. I accept that there are difficulties, but one ought to be able to resolve the matter by administrative action.

The Earl of Caithness

CHCs do not enter district health authority administrative offices. They enter premises from which health care is dispensed by DHAs. We do not own or control the premises of the contractors to the FPCs. There is certainly value in CHCs entering health premises, but FPCs do not control them and therefore it would probably be wrong for CHCs to have that power.

Lord Ennals

Like my noble friend Lord PrysDavies, I am not very satisfied with the Minister's reply. I certainly do not intend to press the matter to a Division, but I should like to consider whether it is a matter that we might return to at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 3 agreed to.

Clause 6 [Finance in National Health Service]:

Baroness Robson of Kiddington moved Amendment No. 39:

Page 8, line 25, at end insert ("provided that the Secretary of State or, as the case might be, the Regional Health Authority, shall not change an allotment made for a given financial year after 31st December in that financial sear unless either,

1. (i) the authority receiving the allotment consents to that change, or
2. (ii) the allotment is changed by an order, a draft of which has been laid before and approved by Resolution of each House of Parliament.").

The noble Baroness said: I rise for once with a certain amount of optimism in proposing this amendment because I would hope that this is one which the Government might conceivably agree to. It is designed to achieve two things. It is designed to enable health authorities to plan properly and, as a result, to give value for money. It could be assumed from reading the amendment that it was dealing purely with a threat of a possible cut in allocation late in the year, but in actual fact it also deals with a possible increase due to under-spending on the DHSS budget late in the year.

Let me deal first of all with the impact of a cut of allocation very late in the year. However small such a cut is late in the year, its impact is increased by the length of time since the original allocation was made. Authorities plan their expenditure based on the allocation that they receive at the beginning of the year, Therefore. if in the last month or two of the year a health authority has to make an alteration to its expenditure the impact will be very sudden and cannot be planned, and it frequently results in the closing, perhaps, of a ward or sometimes even a small hospital as the only way in which the authority can meet its cash limits on 1st April. That is not good planning and it can also result in a closure that was not desired and would never have happened if the planning process had been allowed to proceed.

On the other hand, a sudden injection of money, all to be spent before lst April, similarly poses problems. All health authorities have lists of priorities. I have been in this position many times, both as chairman of a board of governors, as a governor of a teaching hospital and as a regional chairman when at the last minute we were offered extra money. I cannot imagine any health authority which would turn round and say, "No. thank you. We don't need it". Of course they need it, but what you frequently have to do—because it is a certain sum of money that has to be spent before 1st April—is to go down your list of priorities. You have a look at what they are, and it usually turns out that one priority a long way down the list is the only one on which you can spend the money. I am not saying that that expenditure is not necessary, but it was not the highest priority on the list of the health authority, and this cannot in any sense be called good planning of NHS finances.

I should prefer both the DHSS and health authorities to be able to carry over under-spending. At the moment there is an understanding between the DHSS and health authorities that the health authorities can carry over a 10 per cent. under-spending on capital into the next year and a 1 per cent. under-spending on revenue into the next year. That is all very well. It is a very small sum of money. But the tragedy of it all is that there is no official agreement, as far as I am aware, between the Treasury and the DHSS about the carry-over of expenditure.

When this understanding between the health authorities and the DHSS started, it was a year when under-spending on the NHS budget for the year amounted to about £40 million. But because there was no agreement between the Treasury and the DHSS, this money—the carry-over which the department has and which it allows the health authorities to spend the following year—could be spent only if the accounts of the DHSS ended up the following year with a similar £40 million under-spent for that year. If it is less than £40 million, or less than the previous year's figure—I am not sure what the figures are at this moment—the whole of the health service is in trouble, because that then becomes an automatic cut in the NHS expenditure as the Treasury will not allow the DHSS to carry over the expenditure. I believe that the Secretary of State really must get the Treasury to recognise the folly of unplanned expenditure at the end of a year and negotiate official permission to carry over allocations in the interest of positive long-term planning for the NHS.

I could have phrased this amendment to ask for a six-month moratorium and no change under any circumstances. I thought that that was being a little too optimistic, and I hope therefore that the Government will agree to the three months. I beg to move.

Lord Ennals

I should like to add a word to the words of the noble Baroness. She speaks with a great deal of experience. Some of the experience of which she speaks was acquired when I was Secretary of State. It was I who had to negotiate with difficult Treasury Ministers. I can assure the noble Lord the Minister that Treasury Ministers in all Governments are very difficult. I am glad that my noble friend Lord Barnett is not here at the moment. One had to negotiate with the Treasury even a 1 per cent. carry-over. At one stage we had absurd expenditure in the last few weeks of a year rather than lose the money. I very much agree with the noble Baroness that positive long-term planning and continuity are absolutely essential. Whether her way is the best way to do it, or whether it would be better to try to up the 1 per cent. to 2 per cent., I should not like to say. They are alternative methods.

I think that the consequences of the present situation were revealed in the statement made by the Secretary of State in another place yesterday, when he made it clear that there had been a 10,000 reduction in manpower, which was far more than he had asked for. In my view, that was largely because people were rushing to live within their budget by the end of the year, and therefore probably cut out people who were essential to the service.

While I would not necessarily say that this is the only way to deal with the problem, the noble Baroness has certainly put her finger on a problem. I hope that at least it will be sympathetically considered by the Minister.

Lord Glenarthur

I, of course, entirely accept that it is undesirable for health authorities to have to cope with changes in their spending position late on in the financial year. Therefore, I have some sympathy with the spirit of the amendment of the noble Baroness, but I have to say to her that, despite that sympathy, it would in practice be an unnecessarily restrictive measure, in ways in which I think that the noble Baroness herself would not intend, although I am well aware, as the noble Lord, Lord Ennals, has said, of her experience in these matters.

The precise level of each individual health authority' s cash limit is subject to modification throughout the financial year. I am not here talking about major changes in spending power, but minor changes made for technical or managerial reasons. Perhaps I can best illustrate what I mean with a couple of examples. We operate brokerage arrangements whereby regional health authorities can manage peaks and troughs in their levels of capital expenditure by lending or borrowing funds from capital cash limits. The Department of Health acts as a broker to effect these arrangements by reducing the lender' s cash limit one year, and increasing it in a subsequent year when the money is paid back. These arrangements need to be formalised by adjustments to the respective health authorities' cash limits. It would be unnecessarily restrictive, and could lead to inefficient use of resources, if such arrangements could not be made in the last quarter of the financial year.

There are other modifications. We have had in recent years to reduce health authority cash limits to reflect any reductions in health authority costs on VAT and national insurance surcharge. This is in line with the Government' s policy that the public sector should not make windfall gains from changes designed to stimulate the private sector of the economy. Again, it would be absurd if the Government could not make any such changes in the last quarter of the financial year. Nor do I think it would be sensible to enshrine in statute, as the noble Baroness suggests, that any such adjustments should be subject to approval either by the authority concerned or by Parliament. There may well be occasions on which an authority would object to a reduction. It seems far more appropriate to leave that as a matter for resolution between health authority and health authority or health authority and department. The noble Baroness' s amendment would also mean that any regional authority which wanted to make a reduction in a district authority' s cash limit, however small, and again however technical, and where the district objected, for whatever reason, would have to seek parliamentary approval. That really would be taking a sledgehammer to crack a nut.

The noble Baroness and the noble Lord, Lord Ennals, referred to the carry-over of underspend. Here, the department does make available to health authorities the facility to carry over underspending. The department has always honoured authorities' requirements for carry-over, and the Treasury has agreed to assist the DHSS in funding capital underspending. So far as manpower is concerned, there may be some reasons for the saving against manpower targets reported by health authorities last year. But given that authorities nationally underspend by some £40 million, a saving in manpower of 10,000 was not due to a shortage of cash.

In considering a similar amendment to this Bill in another place, my right honourable friend the Minister of Health agreed that it was desirable not to make changes in the last quarter of the financial year. I repeat those sentiments, particularly on changes affecting authorities' real spending power. But for the, frankly, rather mundane purposes I have tried to sketch out, the amendment would provide an unnecessary and unwieldy power. It would be quite inappropriate to the management of cash limits. I hope that with that explanation of its further result, the noble Baroness will not press the amendment.

3. 52 p. m.

Baroness Robson of Kiddington

I quite understand the statement of the noble Lord, Lord Glenarthur, on capital cash limits but it really does not detract from my amendment. That kind of adjustment is done with the agreement of the health authorities, anyway. I cannot understand how any organisation, be it the National Health Service itself or a regional health authority, could ever get itself into the position—this applies particularly to the Department of Health and Social Security—described by the noble Lord, Lord Glenarthur, because of a change in VAT or the withdrawal for some reason of allocations from health authorities. It is very unlikely to happen in the last quarter of the year.

It is very unlikely, if there is a sound planning system within a region, that one would have to change the allocation to a district health authority in the last quarter of the year. I am trying to safeguard against arbitrary_decision by Government, for whatever reason, to cut the allocation to the regional health authorities, which then forces them to cut the allocation to the district health authorities. I am not convinced by the arguments that I have heard but I am prepared to readHansard to consider whether to bring forward the amendment in the same form, or in a different form, at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 [Professional remuneration in National Health Service]:

Lord Ennals moved Amendment No. 40:

Page 12. line 47. at end insert— ("Provided that the effect thereof does not result in a retrospecitve adjustment of remunerations for a period greater than one year."")

The noble Lord said: We are dealing here with the question of retrospection in terms of payments, particularly in relation to opticians and pharmacists. Your Lordships will, I think, agree that retrospective legislation is never viewed with great popularity and always needs to be scrutinised carefully in both Houses of Parliament. We are dealing here, as I say, with opticians and pharmacists. To an extent, they overlap. The Minister of Health, at the time of the dispute between the Government and the pharmacists, said in another place on 25th January 1984: The Government have therefore decided to take the opportunity to introduce into the Health and Social Security Bill a clause to remove doubt, for both the past and the future, by restoring the position to what Governments and professions have assumed it to be over the years. "—[Official Report, Commons. 25/1/84; col. 603.]

The noble Lord, Lord Glenarthur, on the Second Reading of the Bill here, on 21st May, said at column 13 of the Official Report: It is long-standing and accepted practice that past inadequate or excessive payments are offset in future payments".

He also said: I must emphasise that this clause does not represent any change in Government policy: it is intended simply to clarify the present arrangements, as they have been understood by the professions and the Government for many years".

So far as the opticians are concerned, neither of these two statements of the noble Lord, Lord Glenarthur, is to their satisfaction. They do not believe the statements to be accurate. They have argued that Clause 7 does not clarify the present arrangements as they have been understood by the optical profession and the Government for many years. In fact, Clause 7 introduces a change in Government policy. It introduces into opticians' remuneration for the first time the question of discounts received by some opticians from their prescription manufacturers and, moreover, includes provision for retrospection as regards additional payments or recovery of excessive past payments.

To move on to the pharmacists, this was an issue that I touched on particularly in the Second Reading debate. The final amount of remuneration due to pharmacists is determined according to the best available estimates of their reimbursable costs such as the cost of medicines, of labour, of overheads, and so on. There is in my view no reason why these estimates cannot be replaced by the actual costs incurred at the end of the year in question. The result is that pharmacists now work in a climate of uncertainty and confusion.

At the moment, I understand. pharmacists are being required to pay back £37 million of the money that they have already received. This clawback is being backdated all the way to October 1980 and is supposed to reflect the discounts on medicines which some pharmacists, but by no means all, were given by wholesalers during that period. One has also to bear in mind that many of the pharmacies have changed hands in the course of the four-year period.

One has to balance this with the fact that. as I said on Second Reading, so far the Department of Health have failed to reimburse pharmacists some £30 million of increased labour costs already incurred. There seems to be an element of tit-for-tat about this. I know the matter was taken to court, but I really do not know whether the Minister is needing to have this Bill in order to give him authority he does not now have to recoup a total of £53 million.

Perhaps I can conclude by putting to the Minister one or two specific questions about this. Perhaps he could say why the retrospective parts of the Bill, and principally Clause 7(4) and the proposed Section 43B(4) of the 1977 Act, are necessary; and whether there is any connection between those parts and the Secretary of State' s attempt last year to recover £53 million from the pharmacists. Can he indicate whether the Secretary of State intends to recover this very large sum of money over a four-year period, after the Bill becomes law? If that is so, it is clear that this is legislation which is not simply to confirm the existing situation but is to create a new situation. May I ask why the Secretary of State has not recovered the money before now, if he had a legal entitlement to do so; and whether or not it is because the Secretary of State accepts that there is a real doubt as to his entitlement to do so?

Mainly, therefore, I am asking whether this provision has been introduced into this Bill to give to the Secretary of State power which he does not now have in relation to the opticians and pharmacists. I put it to your Lordships that really it is not a satisfactory situation where pharmacists, in particular, are being asked to repay to the department sums that go back over a four-year period. I am not questioning that there needs to be a degree of retrospection: there has been for a very long time, as the Minister knows. I am seeking to secure that that degree of retrospection is limited to 12 months only. I beg to move.

Lord Cullen of Ashbourne

I should like to support this amendment by the noble Lord, Lord Ennals, and to add a little more detail so far as the opticians are concerned. Remuneration for opticians in the form of sight-testing and dispensing payments has always been negotiated through the Optical Whitley Council machinery, which has never been involved in the negotiation of reimbursement rates for NHS frames and lenses, which have never been understood to form part of opticians' remuneration. The recoverable charges for the supply of optical appliances under the NHS have always been determined by the department in negotiation with the manufacturers and the Ophthalmic Prescription Manufacturers' Association.

The proposal in Clause 7 to treat reimbursement as part of remuneration is, therefore, a major change in the position as we have known it right back to 1948. Recoverable charges cannot be regarded as coming within the scope of opticians' remuneration when the optical bodies involved in negotiating remuneration are not parties to the NHS statement rate negotiations. During this period, whenever the profession' s representative bodies have raised matters relating to over-payment for specific lenses or frames, they have been told categorically by the department that statement rates operate on a swings and roundabouts basis.

As regards any question of over-payment or underpayment on interim sight-testing or dispensing fees, since the balance sheet system was introduced in 1975 both the staff side and the official side of Whitley Committees C and D have understood that the method relies upon the recovery, via the balance sheet, of an over-payment of fees such as occurred in the case of ophthalmic opticians dispensing in the early years of the 1978–82 period, and this recovery was settled against the arrears of fees found to be due for that five-year period in the March quarter of 1983.

The NHS statement rates, however, are determined by the DHSS and the optical industry in such a manner as to enable that industry to meet its material and overhead costs, and the DHSS to set the statutory charges payable by patients to enable the Treasury to recoup such of the expenditure on the statement items as the Government determine. Only recently, and certainly without any prior consultation with the optical representative bodies, has there been any suggestion whatsoever that amounts paid to opticians in contract with the general ophthalmic services, in accordance with the regulations and NHS statement, might he regarded as coming within over-payment or under-payment arrangements. We find this unacceptable as regards both the past and the present, and would be prepared to consider such arrangements for future supply payments only if the optical representative bodies were active parties to the NHS statement price negotiations.

The present position, as the noble Lord, Lord Ennals, was suggesting, is that the DHSS, without any legal authority, has offset a sum of £6 million, said to have been unintended profits received in the form of discounts on NHS frames and lenses, against arrears of fees of £90 million for NHS sight-testing and dispensing due to opticians. The purpose of Clause 7 appears to be retrospectively to validate this illegal action.

The subject of the so-called unintended profits allegedly made by opticians is covered in the 14th and 16th Reports from the Committee of Public Accounts. In this connection, it is relevant to highlight a passage from the evidence given to the Public Accounts Committee on 14th November 1983 by Sir Kenneth Stowe. Sir Kenneth Stowe said: I think we were clear in our evidence to the Committee last year and the Committee was clear in its response to that evidence that when we talk of unintended profits we are not talking about payments received by opticians which were in any way unlawful or had anything improper about them. What was at issue was precisely a question whether the rates of reimbursement which the Family Practitioner Committees were required by regulation to apply to the opticians who were in contract with them were accurately reflecting the costs which the department had intended to take into account in setting out those rates". In summary, our view is that if the DHSS have failed in past years in their duty to fix statement rates at appropriate levels, and have done so without any consultation with the optical profession, then it ill-behoves the department to bring forward a clause which, by means of retrospective legislation, introduces an arrangement whereby the Government can recover from individuals who have not been overpaid amounts which they, the Government, consider to have been over-paid to certain groups or professions providing family practitioner services. This kind of retrospective clawback seems both wrong and inequitable, and most certainly does not restore the position to what the optical profession has understood it to be over the years.

Lord Renton

I wish briefly to support my noble friend Lord Cullen. He has deployed rather fully a matter to which I was proposing to refer on the Question. Whether the clause shall stand part? All I shall say now, in supporting him, is that what he has said will enable me to make my remarks that much briefer.

Lord Harmar-Nicholls

I accept the argument of my noble friend Lord Cullen; it is sound, and has the hallmark of being in accordance with common sense. I found the remarks of the noble Lord, Lord Ennals, rather puzzling. I am against retrospective legislation of any sort. If it is the case that this payment was made within the law, then, if the NSS were not aware of certain discounts, they ought to have been. They were not alert. They should have taken into account all the things that were available for them to know when the decision was made as to what the rate of pay would be.

So I accept absolutely the argument of my noble friend Lord Cullen: that is, that they have done nothing wrong. He argued that the extra money they may have got from any discounts was more than covered by the expenses they had to incur in actually doing the job. I accept that. I do not like retrospective legislation.

But I do not think that the noble Lord, Lord Ennals, ought to be allowed to get away with the penny and the cake. If it be the case that retrospective legislation is wrong and that it ought not to be done for the reasons that my noble friend has put forward, then to say that it can be done for 12 months but not for four years smacks of wanting to be on both sides at once. If it is wrong for any retrospective payment to have to be made, all right, it is wrong. But to say that it is all right for 12 months but all wrong for four years is a pure party political attempt to be on both sides of the fence at the same time. I do not think that that is in accordance with the standards that we usually want to keep to in this House.

There ought either to be no retrospective clawback or, if the case is made that something was wrong and that they had rather more than everybody thought that they ought to have, then it all ought to be brought back to the point where it can be recognised that it was wrongly paid. My view is that retrospective legislation is disrupting; it is wrong; and it is very unfair that people who work within the law at the time should suddenly three, four or five years later be deemed to have been against the law and have to pay the penalty of clawback. I want it on the record that I do not like this idea of being on both sides at once. It is either wrong to have it at all or it is not right to have it for 12 months and not for four years.

4. 12 p. m.

Lord Glenarthur

I accept of course the views expressed by several of your Lordships that retrospective legislation is not looked upon favourably by this House or generally. But Clause 7 of the Bill puts beyond argument the remuneration arrangements for the four National Health Service contractor professions—the general medical practitioners, the dentists, the opticians and the pharmacists. The effect of the proposed amendment which has been tabled by the noble Lord, Lord Ennals, would be to exempt from the operation of the clause any determination which would result in a retrospective adjustment of renumeration in respect of more than one year. Perhaps I should explain what that would mean.

A retrospective adjustment of remuneration is, put simply, a backdating of pay levels. Clause 7 does not allow back-dating of pay if it is detrimental to those to whose pay it relates. The proposed amendment would, therefore, simply restrict to one year any backdating of pay which was to the advantage of those to whose pay it related. In other words, if we were proposing to make an award under which members of one of the four NHS contractor professions would be entitled to, say, three or four years' back pay, we should find that it had to be restricted to one year.

I do not know whether or not the noble Lord had that in mind when he put down this amendment, but certainly that is the effect of it. I do not suppose that he did have it in mind. I imagine that he was instead trying to restrict the so-called "1983 pharmacists' discount clawback,"to which he referred, to the recovery of only one year' s over-reimbursement of drug costs. I cannot accept that that would be justifiable.

I need first to explain the background to the 1983 discount clawback. A level of remuneration for pharmacists is agreed each year between the pharmacists' negotiators, the PSNC, and the Department of Health. If payments fall short of or exceed this level. offsetting adjustments are made in future payments; this is fair both to the profession and to the taxpayer. I note that the noble Lord agrees with that.

It was realised in 1980 that the average discounts which pharmacists were obtaining on drugs were considerably greater than the amount assumed in fixing the payments which were intended to reimburse them for the actual cost of the drugs they dispensed. We therefore discussed and reached agreement with the PSNC on the setting up of an inquiry into the discounts obtainable, on the understanding that compensatory adjustments would be made in the light of its report. After receiving the report last June we negotiated with the PSNC a new discount scale to offset the excessive past payments—to apply to prescriptions dispensed from 1st August 1983. Our arrangements for taking account of discounts on drugs were, however, challenged, as the noble Lord himself said.

At a hearing in the High Court in November we accepted that the form in which the changes had been made was not legally valid and undertook to suspend the operation of higher discount scales and to repay the additional amounts already deducted as a result of these scales. The PSNC' s case against the discount clawback was heard and rejected by the High Court on 9th February. Clause 7 was added in another place to put beyond argument our right to take account of discounts and to clarify the legal basis of our arrangements both for the past and for the future. We remain committed to recovering the substanital sums of public money overpaid in drug reimbursement since 1980. offsetting the overpayments by adjusting future payments.

The noble Lord, Lord Ennals, referred to £37 million. There are still items which are subject to negotiation. The £37 million is a movable sum each month; also the sum of £ 15 million is withheld in the balance sheet. The full results of the labour and overhead costs inquiry, which was referred to, are not yet to hand and will be the subject of negotiation when they are to hand.

The system of offsetting excessive and inadequate payments in future years is a well established feature of the remuneration arrangements for all four contractor professions. Final details of doctors' and dentists' actual output and expenses are not available until two to three years after target net incomes are set by the Government, and so restricting retrospection to one year would put an end to the "balancing arrangements", which work well and have the support of both the Government and the professions. Pharmacists had always considered the system to be necessary and desirable until last year, when they learned of the very large overpayment of discount which had occurred over the previous three years, and which had to be recovered.

I know—and this matter was brought out by my noble friend Lord Cullen—that the opticians are apprehensive about this clause and its possible application to the question of discounts which they have received on the prices paid for spectacle frames and lenses. The rates at which they are reimbursed for these items are intended to cover only the cost to the opticians, but we believe that the opticians may have profited from discounts from their suppliers. The sum of £6 million is currently being withheld from arrears, as my noble friend said, until we can establish how much may have been overpaid.

An inquiry into the actual amounts paid by opticians to their suppliers has recently been completed and we shall now be discussing with the opticians' representatives the scale of the problem. We shall await the outcome of these negotiations before deciding the extent, if any, to which remuneration can be adjusted to recover any amounts overpaid. However, I must make it clear that the Goverment have a duty to safeguard the taxpayers' money and cannot give up the right to consider past overpayments and underpayments when determining opticians' remuneration any more than we can consider doing so for the other contractor professions.

Finally, I should like to add that the Government and the PSNC are about to begin negotiations on a new contract for pharmacists which the Government hope will minimise the scope for the build-up of future over or under payments. I hope that, in view of the explanation which I have given, the noble Lord will at least appreciate the nature of this particular clause; the need for it, as expressed before by my right honourable friend the Minister for Health; and that the noble Lord will not press his amendment.

Lord Ennals

I have to say to your Lordships that nothing that the Minister has said has satisfied me at all. I. of course, agree—and perhaps I may address these remarks to my fellow schoolmate, the noble Lord, Lord Harmar-Nicholls—that there needs to be a degree of retrospection. That is the way in which over the years we have determined levels—sometimes up and sometimes down—but we can do it within the course of 12 months. If we had no system of adjustment in the light of, say, a year' s trading, then we should be grossly unfair to the taxpayers, let alone to the contractors because sometimes it is one way and sometimes it is the other. One cannot tell which way it will be, or how much it will be, until roughly a year has elapsed. So to that extent I go along with the Minister; but I go along with him no further.

The Minister has said that pharmacists are now discovering that they have a very large amount to repay over three years. That is a grossly unsatisfactory situation. What is his department doing if they are having to deal with a situation which goes back over three years when, in many cases. the pharmacies were owned by quite different pharmacists, who will now suffer and perhaps be put out of business? The Minister was absolutely clear that the Government are taking powers which they do not now have; that was the point of one of the questions I put to him.

Lord Glenarthur

Perhaps I may intervene briefly to say that, after years of agreeing with a system which had long operated in relation to the pharmacists and other professions, and which I am sure the noble Lord himself must have noted when he was in the position he then held, the PSNC suddenly claimed that the Secretary of State did not have the power. The noble Lord himself held this power, but apparently it is not power in statute. We do not accept that, but clearly it is desirable for the position to be clarified.

On the reason for the delay. I am sure that the noble Lord will understand that, because of the legal challenge by the PSNC, we agreed to defer recovery until the position was clarified by legislation. That is the need for legislation which is now being expressed.

Lord Ennals

I am not objecting at all to a retrospective settlement—and the amendment makes it perfectly clear that there needs to be a retrospective settlement—but that retrospective settlement should relate to payments made by both sides over a period of 12 months. It may be that the actual money is not paid until the 12 months have elapsed; but, unless my amendment is carried, or unless the Minister comes forward with something else at the Report stage, the period of retrospection could be five years, six years or seven years. The Minister could have absolutely unlimited powers. Surely noble Lords cannot tolerate that, and we should think for a moment about the morality of the issue. Of course I accept a period of up to one year, but beyond that I shall not go, and I think that it would be right to push this amendment to a Division.

Lord Harmar-Nicholls

I do not think that this Committee ought to accept this retrospective power as easily as all that. I do not think that the Government ought to take retrospective powers of this kind. In giving the explanation, my noble friend was not in a position to say that they had done anything unlawful or wrong in the conditions that then existed. All they did was to negotiate an extra discount from the supplier. If they had not been keen enough to negotiate that discount, they would have done nothing wrong, and so it would have made no difference at all to the Government' s contribution to the general payment.

Are we to penalise organisations or people for being keen enough to get the best possible price from the suppliers and then all of a sudden, because of their keenness to get a discount which previously they had not received, we bring in powers which make it unlawful? I do not agree with the noble Lord, Lord Ennals. But I think that there is a principle here which is being breached, whether one does it for 12 months or for four years.

I should not like to think that this Committee of Parliament will easily accept retrospective powers. I opposed this in the other place, and I oppose it here. It is for the Government of the day to be aware of what is happening and to make certain of the general circumstances surrounding anything which involves the spending of public money. If the people involved have not acted unlawfully, if they have worked according to the normal ethics and the normal situation, as it existed, they ought not to be subject to retrospective powers, which in this case may cost them a great deal of money or may well affect their general standing and prestige.

Therefore, I do not think that the retrospective part of it ought to be accepted. The 12-month period means that the housemaid' s baby is a small baby, and not a big. bouncing baby. But retrospection is against the general principle, and I do not think that this Committee ought easily to accept it.

Baroness Hornsby-Smith

I find myself in disagreement with my noble friend Lord Harmar-Nicholls because he is ignoring the position of the taxpayer who has to find the money which is provided by the DHSS. Let us suppose that a contract is made under which the remuneration to these professional bodies is based on an amount to be agreed by the ministry, reduced by the discounts that they receive from their bulk-buying from the pharmaceutical companies. Let us also suppose that—and I am using a completely hypothetical figure—in those negotiations the discount is put forward by those professions as, say, 20 or 30 per cent., and on that basis the Government agree the remuneration. If subsequently—and one is always aware of the intense competition in the pharmaceutical companies—they increase that discount by 5 or 10 per cent. due to the competition of the pharmaceutical companies (and I am not in any way casting aspersions as such on the two professions named) then I think that the taxpayers, and not those gentlemen, should receive the benefit.

Lord Harmar-Nicholls

I apologise for speaking again, but there is a vital principle here. We may be dealing with a small clause and a minute amendment, but it involves an important principle. I agree with my noble friend Lady Hornsby-Smith in the sense that the public must be protected, and protected in the future, by all means. In the light of the knowledge that discounts are available, that should, and ought to, be taken into account in any future arrangements that are made. But to make it retrospective—and for four years—when people were doing nothing wrong at the time, involves a principle that we should examine very carefully indeed before we allow it to be breached.

Lord Glenarthur

First, I entirely share the view of my noble friend Lady Hornsby-Smith that in this case we are talking about taxpayers' money. Of course, to have to claim repayments for four years is unsatisfactory, but the pharmacists knew when they agreed to the inquiry that the day of reckoning would eventually come. Unfortunately, lack of co-operation with the inquiry by some pharmacists succeeded in postponing the day excessively.

We are now trying to negotiate an improved system which will avoid such delays. We propose to establish a study group with an independent chairman to supervise the conduct of inquiries to a fixed annual timetable and also to produce, again to a set annual timetable, a statement of amounts due to the profession. These proposals represent a very considerable improvement for the individual pharmacist.

The fact is that we still accept—and it has been upheld by the High Court—that we have an entitlement to recover these costs. That is the nature of the purpose that lies behind what we are trying to do. This clause of the Bill is simply in order to put the matter beyond any doubt. It is a matter of doubt. When the noble Lord, Lord Ennals, was Secretary of State he assumed that, quite rightly, he had the right to do what has been done in this particular case. All that is happening now is that we are making it quite clear beyond doubt, notwithstanding the general level of objections to retrospective legislation as expressed by my noble friend Lord Harmar-Nicholls, that in this particular case a great deal of taxpayers' money is at stake, and this must be recovered. Pharmacists were well aware in the first place that this was likely to come about.

4. 30 p. m.

On Question, Whether the said amendment (No. 40) shall be agreed to?

Their Lordships divided: Contents, 88; Not-Contents, 99.

DIVISION NO. 1
CONTENTS
Amherst, E.	Briginshaw, L.
Ardwick, L.	Brockway, L.
Attlee, E.	Bruce of Donington, L.
Aylestone, L.	Caradon, L.
Banks, L.	Carmichael of Kelvingrove, L.
Bernstein, L.	Collison, L.
Birk, B.	Cullen of Ashbourne, L.
Boston of Faversham, L.	David, B.

Dean of Beswick, L.	Mulley, L.
Diamond, L.	Nicol, L.
Donnet of Balgay, L.	Oram, L.
Elwyn-Jones, L.	Peart, L.
Ennals, L.	Phillips, B.
Fisher of Rednal, B.	Pitt of Hampstead, L.
Gaitskell, B.	Ponsonby of Shulbrede, L. [Teller.]
Gallacher, L.
Graham of Edmonton, L.	Porritt, L.
Grey, E.	Rathcreedan, L.
Hale, L.	Prys-Davies, L.
Halsbury, E.	Rea, L.
Hampton, L.	Richardson, L.
Hanworth, V.	Roberthall, L.
Harris of Greenwich, L.	Robson of Kiddington, B.
Hatch of Lusby, L.	Rochester, L.
Hayter, L.	Sainsbury, L.
Houghton of Sowerby, L.	Seear, B.
Hunter of Newington, L.	Shackleton, L.
Hylton-Foster, B.	Simon, V.
Jacobson, L.	Stallard, L.
Jacques, L.	Stewart of Alvechurch, B.
Jeger, B.	Stewart of Fulham, L.
Jenkins of Putney, L.	Stoddart of Swindon, L.
John-Mackie, L.	Stone, L.
Kilmarnock, L. [Teller.]	Strabolgi, L.
Kinloss, Ly.	Taylor of Blackburn, L.
Kinnoull, E.	Taylor of Mansfield, L.
Kirkhill, L.	Tordoff, L.
Leatherland, L.	Underhill, L.
Listowel, E.	Wallace of Coslany, L.
Lloyd of Hampstead, L.	Wells-Pestell, L.
Lockwood, B.	Whaddon, L.
Longford, E.	Wilson of Langside, L.
Lovell-Davies, L.	Winterbottom, L.
Mar, C.	Wootton of Abinger, B.
Mishcon, L.

NOT-CONTENTS
Airey of Abingdon, B.	Henley, L.
Alport, L.	Hives, L.
Ampthill, L.	Holderness, L.
Annan, L.	Home of the Hirsel, L.
Avon, E.	Hornsby-Smith, B.
Bellhaven and Stenton, L.	Ilchester, E.
Bellwin, L.	Inglewood, L.
Belstead, L.	Kinnaird, L.
Berkeley, B.	Lane-Fox, B.
Bessborough, E.	Lauderdale, E.
Caccia, L.	Lewin, L.
Caithness, E.	Long, V.
Campbell of Croy, L.	Lovat, L.
Carnegy of Lour, B.	Lucas of Chilworth, L.
Cathcart, E.	McAlpine of West Green, L.
Cockfield, L.	Macleod of Borve, B.
Coleraine, L.	Mancroft, L.
Colwyn, L.	Maude of Stratford-upon Avon, L.
Cork and Orrery, E.
Craigavon, V.	Merrivale, L.
Cromartie, E.	Molson, L.
Daventry, V.	Morris, L.
Davidson, V.	Mowbray and Stourton, L.
Denham, L. [Teller.]	Murton of Lindisfarne, L.
Dilhorne, V.	Northchurch, B.
Donegall, M.	Nugent of Guildford, L.
Dundee, E.	Onslow, E.
Eccles, V.	Orkney, E.
Ellenborough, L.	Portland, D.
Elles, B.	Remnant, L.
Elliot of Harwood, B.	Renton, L.
Elton, L.	Rodney, L.
Fortescue, E.	Romney, E.
Gardner of Parkes, B.	Rugby, L.
Glanusk, L.	St. Aldwyn, E.
Glenarthur, L.	Saltoun, Ly.
Gormanston, V.	Sandys, L.
Gray, L.	Sempill, Ly.
Gridley, L.	Shannon, E.
Hailsham of Saint, Marylebone, L.	Shaughnessy, L.
	Skelmersdale, L.
Hemphill, L.	Somers, L.

Spens, L.	Teviot, L.
Stamp, L.	Thomas of Swynnerton, L.
Strathcona and Mount Royal, L.	Thorneycroft, L.
	Trefgarne, L.
Strathspey, L.	Trumpington, B.
Sudeley, L.	Vaux of Harrowden, L.
Swinfen, L.	Vickers, B.
Swinton, E. [Teller.]	Wigram, L.
Terrington, L.	Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.

4. 38 p. m.

On Question. Whether Clause 7 shall stand part of the Bill?

Lord Renton

What I have to say is on a fairly short point on clause stand part. As I said when we were discussing the last amendment, I can shorten it because so much of the background to the short plea that I wish to make has already been described. However, I would just mention that this is a long and complicated clause, the effect of which will depend upon regulations. The regulations will in turn, in their content and in the way in which determinations are made in accordance with them, depend not only upon the provisions of this Bill but also upon the present law.

I should have thought that that kind of retrospection is something which should be avoided if possible, because we cannot fully understand the effect of what we are enacting without knowing for certain what the present law is. There is an uncertainty about the present law. My noble friend Lord Glenarthur, in dealing with the last amendment, referred to a case decided in the High Court. I assume that he did not know (but I have since told him) that that case is subject to appeal. An application was made—I must not discuss the merits of the case—to expedite the hearing of the appeal so that your Lordships would have a better idea of the present law before changing it.

I am told that the hearing of the appeal will last only a day or a day and a half, and it could easily, if the Government supported an application to expedite the hearing of the appeal, take place between the end of the Committee stage and the beginning of the Report stage. There would be great advantages to Parliament if that could be done.

I cannot expect my noble friend to give me a firm answer to this plea at the moment. All I can say is that I hope he will pass it on to the right quarters; and I repeat that it would be of great advantage to Parliament if we could have the benefit of the views of the Court of Appeal on what will undoubtedly be retrospective legislation.

Lord Ennals

The noble Lord, Lord Renton, has rendered the Committee a great service. I did not know that the matter was to go to appeal and I think he said the Minister did not know. I should have known, but it is even more the case that the Minister should have known. It would be absolutely wrong for us to go through Report stage without the courts having decided. I hope that what the noble Lord, Lord Renton, said will be taken very seriously by the Government: otherwise inevitably we shall have to come back to it at Report stage.

Lord Harmar-Nicholls

In putting up the arguments that he did on the last amendment, my noble friend relied very much on what he said was the court' s decision. My noble friend has done us a great service in letting us know of this, but we now understand that the court has not yet given a final decision. Until such time as the appeal has been heard and the decision on that has been recorded, the argument that my noble friend used so effectively on the last amendment falls to the ground. I should have thought that, in view of the strength that he placed on the court' s supporting what he said, he should recommend to his friends to hold this clause in abeyance until such time as we can see whether or not the court, through all its stages, supports what has been done as being the right thing in all the circumstances.

Lord Renton

I am not suggesting that we should not let this clause be added to the Bill now. I think that we should; hut, if we do not have the benefit of knowing the result of this appeal between now and Report stage, our difficulty in handling it at Report stage will be very great.

Lord Glenarthur

I must say that I find myself skating on ice sometimes which feels to be a little thin under my feet when we are dealing with legal matters, upon which my noble friend Lord Renton is such an expert. I hope that I said nothing in my earlier remarks which, in any way, could be interpreted as being improper in the light of the fact that there is an appeal pending.

My noble friend asks whether or not it would be possible to expedite the hearing of an appeal so that the present law can be clarified. I understand the point he is making. Whether that is possible I do not know nor do I know whether it is a matter that the Government have any control over, but I shall find out and let him know.

My noble friend cut short his remarks in light of the fact that most of the arguments had been expressed when we were dealing with Amendment No. 40. I do not think there is any point in my repeating the same arguments again. All I say to my noble friend is that I understand his concern and that of my noble friend Lord Harmar-Nicholls and the noble Lord, Lord Ennals, about retrospective legislation in general. This case seems to be a special case, in that it is awaiting decision on appeal at present. As such, I hope that my noble friend will not see fit to move that Clause 7 does not stand part of the Bill.

Lord Renton

I am most grateful to my noble friend. I should make it clear that I agree with him that this is not a matter for Government decision as to whether the appeal should be expedited. All I am asking is that the Government should agree to an application made by the appellant to expedite the appeal. That is the only extent to which the Government need to take action. The decision must be that of the court. But I think that, when the court hears the application and hears the advantage that it would be for Parliament to have the appeal expedited, the court may take a favourable view of the matter.

Lord Harmar-Nicholls

I hope that my noble friend will bear in mind that there is a point here: if it eventually goes to appeal and the decision of the Court of Appeal is different from that of the lower court upon which he relied so much, what will then be the situation? It would mean that we had amended legislation to some extent under false pretences, on what was supposed to be the legal decision given by the lower court compared with the Court of Appeal. Those are the arguments and we should use any influence—I put it no higher than that—to see if we can get the appeal decision before the Report stage in order to overcome the problems that my noble friend Lord Renton stated. But I agree with him that I do not think that at this stage we should try to remove Clause 7. That would perhaps cause more confusion than the alternative. We ought to try to use any influence we may have to make certain that the Appeal Court' s decision is not different from that of the lower court, otherwise we shall be in trouble.

Lord Glenarthur

I hope that I can come back on one particular point about the expedition of the leave to appeal. I have to say that the PSNC' s case, as I said earlier, was heard and rejected by the High Court on 9th February and its application for expedition of its appeal was rejected on 1st May. I do not know whether that will colour my noble friend' s views.

Lord Renton

Yes, but under the procedure of the High Court there is a discretion on the part of the court to hear the further applications.

Lord Wallace of Coslany

I have been very interested in listening to this very involved discussion. It is a very worrying situation. Would not the Government consider postponing the Bill until the next Session so that we can really get down to the matter?

Lord Ennals

What a good idea!

Baroness Jeger

Hear, hear!

Baroness Phillips

As a mere magistrate I am particularly puzzled and perhaps the noble Lords on the other side can explain this. How can we have a discussion on an appeal which has been lodged against something which is still in the form of a Bill? Surely it cannot have been against this, it must have been against the original Act. Therefore, is this discussion quite relevant to the clause we are discussing now?

Lord Glenarthur

It is relevant, in so far as we maintain, and it has so far been upheld by the High Court, that what we are doing is within the law and, as such, has been practised for many years in the past.

As I said earlier and not being a legal brain myself, I find it fairly complex and tortuous and I want to be careful in what I say, as, to some extent, the matter is still sub judice. I have nothing to add to what I have said to my noble friend.

Clause 7 agreed to.

Clauses 8 and 9 agreed to.

4. 49 p. m.

Lord Ennals moved Amendment No. 41: After Clause 9, insert the following new clause:

("Continuity of employment for health service officers.

. —(1) Schedule 13 to the Employment Protection (Consolidation) Act 1978 shall have effect subject to the amendments specified in this section.

(2) In paragraph 17(1) there shall be substituted for the words "paragraph 18"the words "paragraphs 18 and 18A".

(3) The following paragraph shall be inserted after paragraph 18— 18A. —(l) If an employee of a health service employer is taken into the employment of another health service employer, the employee' s period of employment at that time shall count as a period of employment with the second-mentioned health service employer and the change of health service employer shall not break the continuity of the period of employment. (2) In this paragraph "health service employer" means any of the following, that is to say—

1. (a) a Regional Health Authority, Area Health Authority, District Health Authority, special health authority Health Board or the Common Services Agency for the Scottish Health Service;
2. (b) the Dental Estimates Board:
3. (c) Any joint committee constituted under section 13(8) of the National Health Service (Scotland) Act 1972;
4. (d) the Public Health Laboratory Service Board;
5. (e) a preserved Board as defined under section 15(6) of the National Health Service Reorganisation Act 1973;
6. (f) a Family Practitioner Committee;
7. (g) the Welsh Health Technical Service Organisation; and
8. (h) a Community Health Council. ". ").

The noble Lord said: On Second Reading of this Bill. I called it a ragbag and in Amendment No. 41 I am wishing to add another rag, though a very important one, to the bag.

When I was Secretary of State for Social Services I occasionally, flippantly—and, of course, proudly—claimed to be the biggest employer in Europe. I think I have heard the present Secretary of State say words which are not dissimilar. Of course it is absolutely untrue. It is very rarely that politicians come to the Dispatch Box to say that things they have said are absolutely untrue. They get caught out, but they do not come voluntarily. I have come voluntarily.

At present, health authorities and Scottish health boards are all separate employers for the purposes of employees' statutory rights, especially to claim unfair dismissal, with the result that, if an NHS employee moves from one authority to another—I am thinking of a move from one health authority or special health authority to another—his period of continuous employment is broken and a new period starts with the new employer.

This means that, if he or she is dismissed by the new employing health authority or board after less than a year on its staff, there is no right to claim that the dismissal is unfair. If he or she has moved from one authority to another and was dismissed by the last one, and assuming that he or she was with the last one for more than the qualifying period, and an industrial tribunal finds the dismissal unfair, the basic award of compensation would be calculated only on the length of employment with the last employer and not on the whole length of NHS employment.

In other words, all NHS employees are being denied the same Employment Protection Act rights as are granted to other employees who continue to work for the same employer and who also change posts and move to different parts of the country. The purpose of this amendment is to say that all those who work for health authorities work for the National Health Service and that that is their employer for the purposes of unfair dismissal or other matters under the Employment Protection Act.

Although I am not certain whether it is exactly the same wording, this amendment was originally moved in another place in the Standing Committee of which I was a member on the Health and Social Services and Social Security Adjudications Bill. It was defeated for the obvious reason that most amendments are defeated: namely, the balance of members on the Committee. The Minister of Health, in opposing the amendment, said: As regards the legal powers of the Secretary of State and the National Health Service, we already have the legal powers to provide for continuity of employment in the way suggested, if we were persuaded that it was right to do so. However such matters proceed by agreement between management staff in Whitley Councils subject to the agreement of the Secretary of State. If the matter were raised in the Whitley Council it would be within its powers to reach agreements covering continuity of employment. The Secretary of State has the powers of approval which I have just mentioned under the National Health Service Remuneration and Conditions of Service Regulations of 1951 and 1974. That is how changes in terms and conditions of employment of staff have been made over the years.

I submit to your Lordships that the Minister was incorrect in stating that the matter was a subject for negotiation through the Whitley Council. I think that if he was asked now, he would himself admit that he was incorrect. Statutory provisions on continuous employment for the purpose of statutory employment protection rights are a matter for legislation. This position has been confirmed by both the Department of Health and Social Security and the management side of the General Whitley Council. Unfortunately, it was not possible to pursue the matter further during the latter stages of this Bill in another place because of the very speedy way in which it passed through. So this amendment provides an opportunity to seek to do so.

Currently, individual employing authorities are not regarded as associated employers for the purposes of the Employment Protection Act 1978. This can, and does, pose significant problems for all sections—doctors, and other professions, whoever they may be—working in the National Health Service. I am moving this amendment conscious that it is supported by those who represent all those working in the National Health Service. I have had representations from not only trade unions, which represent so many of those who work in the service, but also the British Medical Association, which feels very strongly about this. They have pointed out to me that the 1982 reorganisation of the health service has served to highlight further the anomalies which were created by not defining all health authorities as associated employers because, as a result of the absence of appropriate legislation on this point, complex settlements had to be reached through the Whitley Council to ensure that NHS employees' statutory rights under the EPCA were protected.

This is an opportunity to put right what is an injustice. I hope that your Lordships will agree and I hope that the Minister will accept the amendment. Perhaps I have got the wording wrong and he will find better words to put in at Report stage, but it is with the support, as I understand it, of all those in the National Health Service that I tabled this amendment. I beg to move.

Lord Kilmarnock

There is also a subsidiary point here which I should like to make. I mentioned it on Second Reading. It was strongly the view of the Royal College of General Practitioners that it was desirable that the administrative career structure throughout the health service—that is to say, as between all types of health authority—should be flexible, so that people should be able to move from an administrative job with a family practitioner committee to one in a district health authority and vice versa. If we are going to have difficulty about the transfer of employment from one type of body to another, that desirable flexibility will be lost. I wonder whether the noble Lord, Lord Glenarthur, will bear that in mind when he comes to answer the noble Lord, Lord Ennals.

Lord Prys-Davies

I should like very much to reinforce the point that has been made by the noble Lord, Lord Kilmarnock. If officers are to be encouraged to develop their skills within the National Health Service, they should be encouraged to move through the entire organisation. That is almost a prerequisite for developing effective service managers. That seems to me the positive argument for this amendment, which would make that possible.

Lord Glenarthur

The Employment Protection (Consolidation) Act 1978 provides for continuity of employment between associated employers, but continuity is broken when an employee moves to the employment of another employer who is not associated. It has been established in employment case law that health authorities are not associated employers.

In considering whether this amendment is necessary, we have taken account of the fact that NHS employees already have the benefit of counting previous service with any health authority in many of the important areas of their conditions of service. The Whitley Councils have agreed and the Secretary of State has approved that service with any health authority shall count in calculating redundancy compensation and maternity rights and in providing incremental credit in respect of salaries and leave. If there are other conditions of service which do not give this recognition, I am sure that they will be pursued.

The noble Lord, Lord Ennals, referred to the Whitley Councils. What cannot be provided by the Whitley Councils is recognition by industrial tribunals of this past service with other employing authorities. Where there has been a statutory reorganisation of the health service, we have been able to provide the continuity in all respects for the large numbers of people forced to change employer. This new clause would provide for continuity in every case where an employee decided to move, whether or not it was in the interests of the service for him to do so. The present situation has not in fact inhibited the movement of staff. I do not think that staff considering career development moves, in the way the noble Lords, Lord Kilmarnock and Lord Prys-Davies, suggested, are likely to be put off simply by the consideration that their previous service will not count in the event of their having to complain to an industrial tribunal.

I am not persuaded that National Health Service staff above all others should be placed in this advantageous position. It would be advantageous over employees in many other fields. I cannot see the justification for that, and so I hope the noble Lord will not press his amendment.

Lord Ennals

I really fail to understand the argument put forward by the noble Lord the Minister. He said they are not associated employees. That is the problem, and that is why I tabled this amendment. But as the noble Lord, Lord Kilmarnock, said, one wants to see, in the interests of the service, people free to move from one area authority to another. That is particularly so now that we have, quite rightly, following the 1982 reorganisation an increased number of health authorities.

One wants to see greater mobility where that is in the interests of the service. For the Minister to say that employees of the health service or, as they now are, the authorities, are not impaired is simply not true. I have a mountain of representations from unions and professional organisations on precisely this question, and because there is concern and dissatisfaction I cannot understand why the Minister cannot accept this proposal. He says that it would put those who work in the health service at an advantage. That it not a very terrible thing to do so far as I am concerned.

But let us suppose that we are comparing the National Health Service with Marks and Spencer. That is what the Griffiths Report was doing. If you work for Marks and Spencer and you move from Blackpool to Newingham Green, or go up to wherever it is, you are still with the same employer. Is that wrong? Is that unfair? It is the same with pharmaceutical companies or with any other big employer. It is the same with the National Coal Board—but I do not want to take that issue any further at the moment.

So for the Minister to come before the Committee and say that it would be putting people who work for the National Health Service at an advantage is really staggering. This is simply ensuring that they are not put at a disadvantage, as they now are. I have to say to the noble Lord the Minister that unless he can produce a powerful argument, which, frankly, he has not done so far, or can say that he will take this back and discuss it before the Report stage with those who represent employees in the National Health Service, I see no alternative but to press it to a Division.

Lord Prys-Davies

Will the Minister explain and identify the group of employees who would be at a disadvantage if the benefit of the individual employment laws as to continuity of employment was to be extended to the National Health Service? Which group would be disadvantaged?

Lord Glenarthur

The answer to that is: employees in all sorts of other parts of the public service, such as education and water. I could go on for some time.

Lord Prys-Davies

Does not the 1982 Act extend its provisions as to continuity of employment to local authorities?

Lord Glenarthur

I think I would need notice of that question, but I am under the impression that it does not. That is the reason for what is involved here. If I am incorrect, I should let the noble Lord know, but I do not think the Act extends in the way he suggests.

Lord Ennals

With respect, those who are employed by a local authority are in an entirely different position from those who are employed by a health authority. A local authority is an elected body. It determines its own policy and draws its own rates. It is not almost totally dependent, as is the National Health Service, on tax contributions. The National Health Service is of a unity. It is not of a unity to the extent that we should like it to be, and there have been arguments about this on other amendments. But we all wish it to be of a unity. So to say that teachers, for example, would be put at a disadvantage does not impress me one little bit.

5. 4 p. m.

On Question, Whether the said amendment (No. 41) shall be agreed to?

Their Lordships divided: Contents, 73; Not-Contents. 102.

DIVISION NO. 2
CONTENTS
Airedale, L.	Kirkhill, L.
Amherst, E.	Listowel, E.
Ardwick, L.	Lloyd of Kilgerran, L.
Attlee, E.	Lockwood, B.
Aylestone, L.	Longford, E.
Banks, L.	Lovell Davis, L.
Bernstein, L.	Mar, C.
Boston of Faversham, L.	Molloy, L.
Briginshaw, L.	Nicol, B.
Brockway, L.	Oram, L.
Bruce of Donington, L.	Peart, L.
Burton of Coventry, B.	Phillips, B.
Caradon, L.	Pitt of Hampstead, L.
Carmichael of Kelvingrove, L.	Ponsonby of Shulbrede, L. [Teller.]
Collison, L.
David, B.	Prys-Davies, L.
Dean of Beswick, L.	Rathcreedan, L.
Diamond, L.	Rea, L.
Elwyn-Jones, L	Robson of Kiddington, B.
Ennals, L.	Rochester, L.
Ewart-Biggs, B.	Seear, B.
Fisher of Rednal, B.	Shackleton, L.
Gaitskell, B.	Stallard, L.
Gallacher, L.	Stamp, L.
Graham of Edmonton, L.	Stewart of Alvechurch, B.
Grey, E.	Stewart of Fulham. L.
Hale, L.	Stoddart of Swindon, L.
Hampton, L.	Stone, L.
Hanworth, V.	Strabolgi, L.
Hatch of Lusby, L.	Taylor of Blackburn, L.
Houghton of Sowerby, L.	Taylor of Mansfield, L.
Jacobson, L.	Tordoff, L.
Jacques, L.	Underhill, L.
John-Mackie, L.	Jeger, B.
Kilmarnock, L. [Teller.]	Kennet, L.

NOT-CONTENTS
Airey of Abingdon, B.	Beloff, L.
Ampthill, L.	Belstead, L.
Auckland, L.	Berkeley, B.
Avon, E.	Bessborough, E.
Belhaven and Stenton, L.	Caccia, L.
Bellwin, L.	Caithness, E.

Cameron of Lochbroom, L.	McAlpine of West Green, L.
Campbell of Croy, L.	Macleod of Borve, B.
Carnegy of Lour, B.	Mancroft, L.
Cathcart, E.	Maude of Stratford-upon Avon, L.
Cockfield, L.
Coleraine, L.	Merrivale, L.
Colwyn, L.	Molson, L.
Cork and Orrery, E.	Morris, L.
Craigavon, V.	Mowbray and Stourton, L.
Cromartie, E.	Murton of Lindisfarne, L.
Cullen of Ashbourne, L.	Northchurch, B.
Daventry, V.	Nugent of Guildford, L.
Davidson, V.	Onslow, E.
Denham, L. [Teller.]	Orkney, E.
Donegal, M.	Porrit, L.
Dundee, E.	Portland, D.
Eccles, V.	Renton, L.
Ellenborough, L.	Rodney, L.
Elles, B.	Romney, E.
Elliot of Harwood. B.	Rugby, L.
Elton, L.	St. Aldwyn, E.
Fortescue, E.	Saltoun, Ly.
Gardner of Parkes, B.	Sempill, Ly.
Glanusk, L.	Skelmersdale, L.
Glenarthur, L.	Somers, L.
Gormanston, V.	Spens, L.
Gridley, L.	Strathcona and Mount Royal, L.
Hailsham of Saint Marylebone, L.
	Strathspey, L.
Hayter, L.	Sudeley, L.
Henley, L.	Swansea, L.
Hives, L.	Swinfen, L.
Holderness, L.	Swinton, E. [Teller.]
Home of the Hirsel, L.	Terrington, L.
Hornsby-Smith, B.	Teviot, L.
Hunter of Newington, L.	Thomas of Swynnerton, L.
Hylton-Foster, B.	Thorneycroft, L.
llchester, E.	Trefgarne, L.
Ironside, L.	Trumpington, B.
King of Wartnaby, L.	Tryon, L.
Kinloss, Ly.	Vaux of Harrowden, L.
Kintore, E.	Vickers, B.
Lane-Fox, B.	Whitelaw, V.
Lauderdale, E.	Wigram, L.
Lloyd of Hampstead, L.	Windlesham, L.
Long, V.	Wise, L.
Lucas of Chilworth. L.

Resolved in the negative, and amendment disagreed to accordingly.

5. 11 p. m.

Clause 10 agreed to.

Clause 11[Severe disablement allowance]:

Lord Ennals moved Amendment No. 42: Page 15, line 17, leave out ("period of")

The noble Lord said: We now move on to an entirely different and extremely important subject. I understand that it is for the convenience of the Committee that we should take together a considerable group of amendments. This has great merit, because it enables us to debate the central issues. I shall be referring not only to Amendment No. 42, which I beg to move, but to Amendments Nos. 43, 44, 45, 48, 55 and 56.

Amendment No. 43: Page 15, line 18, leave out ("consecutive")

Amendment No. 44: Page 15, line 18, at end insert— within one period of interruption of employment; and

1. (i) that period began no later than the day on which he attained the age of 20;
• and
2. (ii) the relevant day falls within the same period of interruption of employment. ")

Amendment No. 45: Page 15, leave out lines 19 to 23.

Amendment No. 48: Page 15, leave out lines 28 to 31 and insert— ("(b) he has been both incapable of work and disabled for not less than 196 days within one period of interruption of employment and the relevant day falls within the same period of interruption of employment. ")

Amendment No. 55: Page 17, line 9, after ("Act") insert— (" "period of interruption of employment" shall have the same meaning as in section 17 of the principal Act, and for the purposes of Section 36 only, shall include a period during which a person is undergoing advanced or non-advanced education;")

Amendment No. 56: Leave out Clause 11 and insert the following new clause:

Amendments to Social Security Act 1975 s. 36. (". The Secretary of State shall by Statutory Instrument subject to affirmative resolution of both Houses of Parliament, after consultation with the Social Services Advisory Committee, make such amendments to section 36 of the Social Security Act 1975 as are necessary or desirable to comply with the provisions of the Council Direction of 19 December 1978 (79/7/EEC). ")

The reason why it is to the great advantage of the Committee to discuss all these amendments is because the earlier amendments deal with different aspects of the severe disablement allowance. The view not only of the organisations which represent disabled people but of many noble Lords and noble Baronesses who have had extensive consultations with those organisations is that the proposal contained in the Bill is very unsatisfactory.

Why do I say that? First, the Government have failed to consult about what is in the best interests of disabled people. We are dealing with a new disability allowance. I do not know of any occasion when a government have introduced a new benefit for disabled people without consulting those concerned. My experience goes back to 1969, when in another place I introduced the attendance allowance. Later I introduced the invalidity pension. Both were introduced after a great deal of consultation. That applied also to the mobility allowance and to the invalid care allowance.

We were assured that there would be consultation about the NCIB for housewives. The DHSS review took three and a half years to complete. During this period the Government gave repeated assurances that once the review had been published there would be consultation and debate. The review was published the day before the Bill itself was published. By rushing headlong into publishing the Bill only one day after publication of the review, the Government have reneged on their promise to consult. The minister for the disabled, Mr. Tony Newton, has met the organisations involved, but he did so after publication of the Bill. So far as I can see, no changes have been made. Real consultation is consultation before a Bill is published. I believe that a very serious precedent has been set.

My conclusion, when I reach it—I want to set out a number of arguments before I reach my conclusion—is that the Government ought to take away this scheme and have effective and proper consultations with their own advisory committee (which does not welcome this proposal) and also with the organisations, all of which, so far as I can see, have been critical of the proposal.

There are some fundamental objections to the proposal. There has been insufficient research. No figures are available to show how the severe disablement allowance would affect current HNCIB claimants, nor how future HNCIB claimants would fare, given the extra 80 per cent. test of disablement. The Government, I believe, are taking what I can only call a leap in the dark by coming forward with a new scheme, which, presumably, they want to last for ever but which I believe to be mistaken.

For married women, the SDA will mean a switch in the population entitled to non-contributory benefit. About 20,000 to 21,000 married women who currently do not qualify for the housewives' noncontributory invalidity benefit are expected to satisfy the 80 per cent. test in order to qualify for the SDA. The extra cost, at current benefit rates, will be, according to Government figures, about £20 million. However, out of current HNCIB recipients, 16,000 women would fail the 80 per cent. test. These women are, I know, protected by the transitional provisions which the Government are making, but if their successors were to apply they would be rejected.

The figures I have before me show that, if the household duties test were abolished around 240,000 disabled married and cohabiting women would qualify for the HNCIB on a straight incapacity for work test. The SDA will bring 21,000 women into benefit, leaving 219,000 women out in the cold. In future years, only about 500 extra married women are expected to qualify for SDA at a cost of only about half a million pounds, and 1280 women who would have qualified for HNCIB will receive no benefit at all.

I fully realise that for the Government to bring all women into the scheme would be an impossible task, for reasons of economy. No one would expect them to do so, and nor do I believe that any other government, at this stage, would feel that the resources permitted bringing in everyone without phasing or some form of test.

The problem is the nature of the tests which have been set. The system will now effectively discriminate between different groups of people on the grounds of percentage loss of faculty; age at the start of the claim; existing entitlement. It will discriminate between deserving and undeserving disabilities; and, certainly, it will still discriminate against married women. Discrimination remains against those who have a deficient national insurance contribution record. Even where SDA claimants pass both tests, they will only receive a benefit that is less than two-thirds of the contributory invalidity benefit.

The Government claim that an extra 20, 000 people will gain from this scheme, but this will not help the remaining 220,000 women who have been excluded as a direct result of the household duties test.

There are a number of other problems because disabled people are different and their disabilities are different. There is a problem with the criteria for 80 per cent. disability. A person must be assessed as having an 80 per cent. disability before the benefit can be paid—yet the method of assessment is based on the schedule for prescribing degrees of disablement used in the industrial relations scheme and the war pension scheme. I submit that that is an inadequate way of determining these cases. For instance, it is wholly inappropriate for considering disablement through mental disorder. It is wholly inappropriate for considering those who suffer from multiple sclerosis—a condition which may lead to an assessment of 80 per cent. on one day but of only 20 per cent. on another. To fix the figure at 80 per cent. is to fail to understand the nature of the problem we are facing.

It is also true that the effect of the age 20 cut-off point is disturbing. The proposal requires that if a person can show that he or she is unable to work before the age of 20, then the full benefit will be paid without further investigation. However, if the person becomes disabled after the age of 20, he will have to show that he is 80 per cent. disabled on some criterion. If one considers those who are mentally handicapped and those who are mentally ill, then certainly so far as those who are mentally ill are concerned, 96 per cent. of first admissions to mental hospitals occur in respect of those who are older than age 20. If one considers the problem of many of those who have a mental handicap, no one could easily determine the extent of their disability at the age of 20. Their situation may improve or it may worsen; I only wish that the noble Lord. Lord Renton, were here to add his weight to this, because I know that he shares a view concerning this form of test.

The 196-day rule about re-establishing a claim to benefit will also deter mentally handicapped people, as well as others, from attempting to get back into work. If they do attempt to obtain work, it is quite likely that, following any relapse, they will be continually penalised by having to spend six months reestablishing a claim to benefit.

I have put forward only a few of the objections, and I am sorry to have taken some time—11 minutes—in doing so. But I believe that we cannot consider this scheme piecemeal. There are amendments down to reduce the figure from 80 per cent. to 60 per cent. and to increase the age from 20 to 25 or 30—but that is playing around with the problem. The process can only be seen as being objective if we consider not just the definable faculty but also the ability to operate and the ability to find work.

As I said at the beginning, the Government have plunged into this without proper consultation. It may seem stange to look a gift horse in the mouth; there are aspects of this provision which are welcome, because the Government do propose to spend more money. The amount of that extra money may reduce year by year, but it will still be a new benefit. However, we must get it right. There may well be an argument for whatever is finally decided to be phased in, as we phased in the mobility allowance over a period of four or five years and as we phased in child benefit over a period of three years.

The principal feeling I have as a result of consultations with disabled people and those who represent them is that the Government have not got it right. Rather than proceed with a measure that is causing a great deal of concern and dissatisfaction, there stands on the Marshalled List Amendment No. 56 in the name of myself and the noble Lords. Lord Henderson of Brompton and Lord Molloy, and the noble Baroness, Lady Jeger. That amendment represents the views taken after a series of meetings with representative organisations.

The main view was that the Government should take this away for consultation, and should come forward with regulations. The noble Lord, Lord Stallard, has down an amendment that touches upon regulations, and the noble Lord, Lord Campbell of Croy, has also spoken of regulations. This may be the way out. We are not saying that we do not need and do not want the severe disablement allowance; we are saying that the principles are wrong and that all the organisations concerned would like to help the Government to get them right. They understand that we cannot expect the Government to plunge into enormous expenditure all at once.

I believe that consultations between the organisations concerned and the Government would lead to a satisfactory settlement for what is, after all, a new allowance and one for which, ultimately, the Government will be able to take very great credit. If they are going to take great credit for it, then I want them to take great credit for a very good scheme and not for a botched-up job.

Lord Stallard

Before my noble friend sits down, can he confirm which amendments we are now discussing? I did not quite catch the list of amendments that he read out at the beginning of his remarks.

Lord Ennals

Agreement reached across the Front Benches—which cannot, of course, bind those who are not on the Front Benches—was that we would have a comprehensive debate taking in Amendments Nos. 43, 44, 45, 48, 55 and 56.

5. 29 p.m.

Lord Campbell of Croy

The noble Lord, Lord Ennals, has spoken to several amendments and I for my part believe this to be a satisfactory way of starting on Clause 11. He also made much of the lack of consultation which many of us thought had taken place when the Bill was first published—but which we all went into on Second Reading. I shall try not to make a Second Reading speech on that point.

I can understand how it was that the Government were keen to get rid of the household duties test as soon as possible and wanted to insert its replacement into this Bill. As a result, perhaps they were not able to carry out the rounds of consultation which would normally have occurred. The noble Lord indicated that the advisory committee were not happy with this scheme. I understood that they had some reservations but that on the whole they had generally accepted it. I hope my noble friend will be able to confirm that when he comes to speak.

We are dealing here with a completely new scheme, and I regard it as being a general step in the right direction to aim at a national classification of severely disabled people. We have never had such a scheme before, except in the case of war disabled and those disabled by industrial injuries. However, if one takes either of those two schemes as a starting point, one cannot apply it direct; I believe there is agreement everywhere in your Lordship' s Committee about that.

What we are concerned with is how that system of assessing war disabled and industrially injured by percentages can be applied to the rest of the severely disabled in the community; particularly as the two systems for war disablement and industrial injuries have not had to cope with or examine people whose disability comes from illness which is congenital. I will not go into the other examples. There certainly needs to be not only a lot of thought about adaptation and augmentation of the 80 per cent. system, but also explanation to the disabled and those concerned with their interests.

On these amendments I should like to ask my noble friend if he can confirm that, as in the two schemes on which the 80 per cent. assessment is to be modelled, there will be periodical reassessment. There is certainly reassessment in those schemes, and it is very important that there should be in the new scheme. A number of disabled organisations will be worried that one classification will be expected to last for years. We do, therefore, need to know more about this scheme and the way in which the 80 per cent. is to be assessed.

I am encouraged to speak at this point because I happen by chance to be in the categor), of 80 per cent. war disabled. At the second reading debate the noble Baroness, Lady Jeger asked, "What is 80 per cent. disablement? Is it the loss of two legs or is it one leg or one arm? "I would say that on the whole both with the war system and with the industrial injury system which have been operating for many years, the code is fairly well understood now by those involved. That is why I think it is probably a good starting point for this much wider scheme.

In the earlier stages of the Bill noble Lords were speaking about spectacles and giving their own personal examples. Perhaps I can say a bit about my own personal example, A bullet having gone through my middle and over a year having been spent in hospital, it was nearly a year-and-a-half before I was able to walk again. If I had not been able to walk again and had been in a wheelchair since then, I know it would have been 90 per cent. to 100 per cent. disablement. Because I have been able to get on to my "pins"(rather unsteadily, as noble Lords will know) I have remained at 80 per cent. This is understood by the Royal British Legion and others who deal with cases in the war disablement field. This is a matter where you are told. You do not ask to be assessed. If you are wounded in war, you are told, if you are disabled, that you have to be examined every so often and you are such and such a percentage. Industrial injury is rather different because that is more a question of claiming a disability pension, and the percentage rules what the pension should be.

As the noble Lord, Lord Ennals, has said, I was hoping that further consultations and explanation could be carried out with the organisations representing disabled people, and that perhaps the adaptations and additions which may be necessary could appear in regulations, and therefore be dealt with by statutory instrument, but I believe that the existing legislation may already provide for that. Again, my noble friend may be able to tell us more about this. I believe it is possible that legislation covering the percentage system for war disabled and industrially injured which already exists can provide for orders to come before both Houses of Parliament to make additions, changes or clarifications to deal with the new kinds of cases which would come into this new system. Whether or not there would he enough flexibility in the legislation which exists at present, I do not know, but that is something which I hope my noble friend can inform us about now or at a later stage in the Bill.

I return to what I said at the beginning: I think this is a move in the right direction. I am sorry that it had to he done so quickly and that the normal consultations with the outside bodies concerned do not appear to have taken place in the normal and expected way, but I think this can be put right provided that it is accepted that the systems involving the 80 per cent. cannot just be directly applied because they will be dealing with a whole range of different kinds of cases.

Lord Banks

I should like to support briefly what the noble Lord, Lord Ennals, said in introducing this amendment and in speaking to the whole series of amendments about this part of the Bill. I should like to emphasise what he said about the question of discrimination against married women. The EEC directive of July 1979 on equal treatment for men and women in matters of social security states that the directive applies to schemes which provide protection against sickness invalidity. The non-contributory invalidity pension was designed to help those who become disabled and who have not had an opportunity to acquire a sufficient contribution record. The review of the household duties test said this: The overwhelming majority of people who become disabled while of working age and who lack an adequate contribution record are married women". We know that the household duties test prevents some 240,000 housewives from qualifying for the housewives' non-contributory invalidity pension. That would appear to be clear, direct discrimination against married women.

The substitution of the 80 per cent. disablement test will allow in 20,000 more people against the 240,000, but that is all. We understand that 16,000 women who at the present time qualify for the benefit would not qualify for it if they were applying for the first time after the new proposal comes into force. As it is, they are to be allowed to carry on, but that class of person in the future will not be included. The 80 per cent. disablement test is, therefore, a device to ensure that only a small portion of the 240,000 are included. The Bill, therefore, substitutes for the household duties test which is a direct discrimination against married women, the indirect discrimination of the 80 per cent. test. The directive applies to discrimination which is indirect as well as direct, and it would seem to me that the new proposal is not consistent with the directive.

Although we would agree with the noble Lord, Lord Campbell of Croy, that the abolition of the household duties test is a step in the right direction, the principal reason why we do not think the proposal in substitution is a step in the right direction is that it continues the discrimination against married women. Secondly, as has been pointed out, it confuses compensation for disability with income maintenance. I do not think I need to develop that point; it has been made many times. Lastly, but not unimportantly, it does seem to make the whole operation a good deal more complicated, and complexity is the bugbear of the whole social security system. For these reasons it seems sensible to suggest to the Government that they should look again at this proposal in the light of all the criticisms which I have made now, and which so many other noble Lords have made today and previously.

Lord Henderson of Brompton

May I briefly say that I think the range, diversity and number of amendments put down to Clause 11 in themselves show the concern of all the disablement organisations at the new severe disablement allowance. This should, I think, give the Government cause for thought.

I should like to address my remarks, however brief, to Amendment No. 56. This is designed to give time for consultation to take place. The amendment states: after consultation with the Social Services Advisory Committee". Of course, I hope that the Social Services Advisory Committee will consult all the disablement organizations, and so on. So many of their fears could then be allayed.

We are told that the Government' s own advisory council has been consulted, and that it is reasonably happy. But I believe it still has its own reservations: for example, about the proposed method of assessment, and how it can be measured with any degree of consistency across the country, and so on. This seems to me to be very well intentioned, but, of course the road to hell is paved with good intentions. We all agree that the household duties test must be abolished, and we are delighted that the Government have come up with that. On the other hand, they seem to be in a rush because of the council directive. Incidentally, Amendment No. 56 refers to "Direction"when it should be "Directive".

The council directive of 19th December 1978 is about the progressive implementation of the principle of equal treatment in matters of social security. I am told that the Government are either compelled or desire to comply with this directive by the end of this year. When one has so many people (I believe all the relevant organisations) unhappy about this well-intentioned proposal to introduce the severe disablement allowance, would it not be a good idea to allow a little time? If we leave it until, say, December, the Government could have consultations and could then introduce it by a statutory instrument subject to affirmative resolution of both Houses, and then, in time, comply with the directive. In that way they could legislate in December, early January or even later. I believe that it is not unknown for member countries not to implement directives until after the time limit has expired. Therefore, at this stage—this has turned out to be rather a Second Reading debate—I should like to concentrate on Amendment No. 56 and ask the Government to give it, or something like it, serious consideration.

Lord Kilmarnock

I strongly support what the noble Lord, Lord Henderson of Brompton, has said. Indeed, I am in total agreement with everything said by my noble friend Lord Banks. There is only one point which I should like to raise. The Social Security Advisory Committee has been referred to on a number of occasions in this debate. I believe it was the noble Lord, Lord Campbell of Croy, who said that it was broadly supportive of the new scheme but that it had reservations. In fact, it has some severe reservations which I shall quote on a later amendment. I shall be quoting from a letter that the acting chairman wrote to the Minister responsible for the disabled.

The point to be made at this stage concerns consultation—a point made by the noble Lord, Lord Henderson of Brompton. At the beginning of his letter to the Minister, Dr. Donaldson, the acting chairman, said: As you are aware, we have been taking a special interest in disablement benefits and in ways in which gaps in the existing benefit system might be filled. We were, therefore, doubly interested in the announcement of the proposed severe disablement allowance, and although there is no requirement on you to consult our committee we felt you might nevertheless like to have our comments". There may not have been a statutory requirement on the Government to consult the Social Security Advisory Committee, but is it not rather extraordinary that the Government should set up this body and then, when about to introduce an extremely important change in arrangements for the disabled, leave the Social Security Advisory Committee simply to volunteer comments on the Government' s scheme? That seems to be an extraordinary way of using a useful body which itself could have put the whole issue out to consultation and come back to the Government with a consensus of informed opinion on the whole new scheme being proposed.

I leave that thought with the Minister. I strongly back up what the noble Lord, Lord Henderson, said, and I add my voice to his plea not to rush into this very complicated area of legislation.

Baroness Lane-Fox

I support my noble friend Lord Campbell of Croy in believing that this is a step in the right direction. I feel this very strongly because I have been attacked for many years since the housewives' duties test was first brought in. I also think that it should be realised that before the housewives' duties test was brought in there was very close consultation, so that, although we now regret that there was not more consultation, we cannot say that it always brings the right answer. I think we should bear that in mind.

I also back up what the noble Lord, Lord Henderson of Brompton, said. My own feeling is that I should like to see some flexibility in the present arrangement. I was going to ask that the age group of 20 to 25 be monitored, particularly in so far as mental cases are concerned. I should also like to know whether my noble friend the Minister will consider giving us the length of time to which the Government would agree—perhaps a timescale—for this monitoring, before some change could be made if it is found that it is not a good effect which is being had on this age group.

Earl Attlee

The noble Lord, Lord Campbell of Croy, told us a short time ago of his 80 per cent. disability allowance arising from the war. As we all know, the noble Lord may be slightly unsteady on his pins but he can certainly walk unaided through the Division Lobbies. He has good eyesight and he speaks clearly. As he has said, he has an 80 per cent. disability.

With permission, I should like to give the actual case of a Mrs. Shapiro. She has multiple sclerosis. Her condition varies from day to day. On good days she can walk quite well but is subject to blackouts, and her balance is unpredictable. There are times when her speech goes completely. She is almost completely blind, and her concentration is so poor that she cannot finish a sentence. She has poor muscle control and cannot lift or carry objects. She needs help with running the home, although she can look after herself reasonably well.

Mrs. Shapiro will not qualify for severe disability allowance. It is very unlikely that she will be assessed as 80 per cent. disabled. She cannot claim disablement allowance because she is able to look after herself. She has tried to claim mobility allowance, but her walking difficulties are so variable tha she has been repeatedly turned down. Mrs. Shapiro has not worked for five years, and she will never be able to work again. Under the new rules there will be no benefits that she can claim.

Lord Campbell of Croy

Perhaps the noble Earl will give way, as he kindly referred to me at the beginning of his comments. I have also been sent a copy of that case. I think that it proves my point. There is no assessment for a lady of that kind now—or, if there is, it is only a narrow one for certain purposes—whereas if the system which is a starting point for this scheme comes into force she will probably qualify.

Earl Attlee

I was not going against what the noble Lord said. The letter I have states that even under the new scheme this woman will not be able to claim. I thought that if one was almost blind one would get the 80 per cent. This steering committee represents over 50 organisations. I presume that if it sends to so many noble Lords this kind of a case, it must know what it is saying.

Lord Campbell of Croy

Perhaps I should come in again. I think that that is the difficulty. If there had been more consultations, they would have realised what 80 per cent. disablement under the war disablement and industrial injuries assessments consists of and how that was likely to be applied to these other cases. Personally I think that the anxieties that have been raised about that case are probably wrong. As I tried to explain in my intervention, if the scheme is brought in on the basis of the kind of assessment which I and others have to go through, then of course she would be in it.

Lady Saltoun

I was slightly mystified by part of what the noble Lord, Lord Banks, said. As I read it—perhaps I am being very stupid—Clause 11 is totally impartial between men and women, married or unmarried.

5. 51 p. m.

Lord Glenarthur

Before I deal specifically with the amendments, I, too, feel, as the noble Lord, Lord Ennals, did, that I ought to make one or two general observations about SDA which are relevant to the consideration of any of the other amendments to follow, which we shall discuss in due course. First, I think that it is important to remember that these new benefit proposals will initially bring an extra 20,000 disabled people to benefit for the first time. I know that it has been stressed today, but I make no apology for mentioning it again. That will be at an additional cost of some £20 million a year over and above our current expenditure on NCIP and HNCIP. This is a considerable step forward at a time when resources are extremely scarce.

I should, however, like to emphasise that the fact that we have been able to find this extra money for the severely disabled at this time does not mean that our resources are unlimited. Like the last Labour Government, we have not been able to find the resources to pay non-contributory invalidity pension on a straight test of incapacity alone for everyone. In the circumstances, therefore, we have tried to direct what money is available, including the extra resources we have been able to find for SDA, to what we regard as priority groups—namely, the congenitally handicapped and the severely disabled.

Amendment No. 56—which is really the substantive amendment, as I see it, in the way that the noble Lord, Lord Ennals, suggested—would have the effect of removing Clause 11 from the Bill and substituting a new clause requiring the Secretary of State to introduce new proposals by regulations after consultation with the Social Security Advisory Committee. On a point of general principle, this would be to embark on the somewhat unusual and, I believe, undesirable course of amending provisions which are presently contained in primary legislation by means of subordinate regulations. But there are a number of other reasons why such a procedure would be particularly inappropriate in this case.

I understand the concern which has been expressed about the lack of consultation on our proposals for the introduction of severe disablement allowance; although I ought to point out that these proposals have not been brought forward without much very serious deliberation and thought. They embody the recommendations of the officials' review of the household duties test which was carried out following a report by the National Insurance Advisory Committee in 1980. The length of time taken to complete the review is itself an indication of the complexity of the subject and the depth in which we have explored the options. We were faced with a choice. On the one hand, we could have embarked on a lengthy programme of consultation and allowed the household duties test—which the officials' review found to be flawed both in operation and as a concept; and this view has been expressed by noble Lords who spoke earlier this afternoon—to continue in existence for at least another year. On the other, we could have taken the opportunity of including provisions in this Bill, which would allow discussion of our proposals to take place within the framework of the progress of this Bill through Parliament. I should also mention that over recent months my honourable friend the Minister for the Disabled has met with organisations of and for disabled people on a number of occasions to discuss the new benefit.

In the scrutiny which this clause has already undergone in another place we have seen this consultative process at work. The Government have not been inflexible or unwilling to listen to constructive proposals. We have been able to extend the passporting arrangements, and we have taken particular account of the argument that the conditions for SDA could act as a disincentive to those who wish to attempt work. We have accordingly undertaken to make regulations providing that, over and above the normal linking rule, periods of capacity for work up to an aggregate of six months will be ignored in assessing whether a claimant has been continuously incapable of work since on or before his twentieth birthday. But we have given a clear undertaking also to monitor the new benefit closely to ensure that the scheme operates in a fair and consistent way.

It is difficult to imagine what further modifications might have been achieved had we delayed for yet further consultation in the way which the noble Lords, Lord Ennals and Lord Kilmarnock, suggested. There is no consensus among our critics about what should replace SDA. We have always made it clear that resources would not permit their preferred option of extending NCIP to married women on the same basis as to men and single women. This would, as the noble Lord, Lord Ennals, is aware, cost an additional £275 million a year. From what the noble Lord said, he, too, did not think that that was particularly sensible.

As I said, none of the alternatives to SDA discussed by the officials' review, or produced since then, were both practical and affordable. As my noble friend Lady Lane-Fox said, extensive consultation is by no means an infallible recipe for success. She prayed in aid the much disliked household duties test, which was itself, as she said, the product of a very lengthy process of consultation and pilot studies lasting some two years, and look where we are now!

The noble Lords, Lord Ennals and Lord Kilmarnock. both challenged the views in the SSAC on this matter. My noble friend Lord Campbell of Croy seemed to agree with what I am going to say—that in fact its views are broadly supported. It said, for example: We should say how pleased we are that the Government are acting to eliminate the discriminatory household duties test and to institute a benefit which is available on equal terms both to women and to men. We regard this as an unequivocal advance". It went on to say elsewhere: We are particularly interested in the proposal to use an 80 per cent. loss of faculty test, in conjunction with an incapacity test, as the basis of the new allowance. We are aware that there has been long experience of the use of this test for industrial injuries and war pensions purposes, and if it can successfully be applied to the kind of civilian disablements most likely to be encountered in NCIR/HNCIP, we would regard SDA and the loss of faculty test as a potentially important building block in the development of a comprehensive benefit system". The SSAC seems to adopt the view adopted by my noble friend Lady Lane-Fox that this at least is a step in the right direction.

The amendment also refers to the EC directive on equal treatment. This was a point raised particularly by the noble Lord, Lord Banks. Whether or not any benefit contravenes the EC directive is something that can be decided only by the European Court. The household duties test is obviously unsatisfactory regardless of any question of equal treatment. That is why we decided to abolish it. But in considering an alternative it was right that any new benefit should make no distinctions on grounds of sex or marital status: and SDA embodies this approach.

Turning to Amendment No. 42 and the amendments linked with it, SDA, like NCIP, is intended primarily as an income replacement benefit for those disabled from birth or in childhood who, because of their disability, have never had the chance to work and build up a contribution record that would enable them to qualify for the contributory sickness or invalidity benefits. We therefore think it right that those who became incapable of work on or before age 20 should continue to be able to qualify for a noncontributory maintenance benefit simply on a test of incapacity for work.

The large majority of those now drawing NCIP are likely to come within this category. As with NCIP, SDA will be payable from age 16 unless a young person continues in normal full-time education. In such cases, it will become due when that education ceases or in any event from age 19, provided, of course, that a person can show that he is incapable of work.

In this context, we regard age 20 as a reasonable age to set for the easier qualifying rule. Age 16 would, in many ways, be more logical for a benefit aimed at giving priority to the congenitally handicapped. The age 20 limit would give someone four years from minimum shool-leaving age to see whether, despite his disability, he is able to find and hold down a job. While many would be unable to do so, some might wish to try and we would not wish to deny them the opportunity to do so.

These amendments are concerned with modifying the rules proposed for SDA, firstly, by removing the requirement that a person must have been continuously incapable of work, or continuously incapable of work and disabled, for a period of 196 days in order to qualify; and, secondly, by extending the easier qualifying condition to those who have been incapable of work for a total of more than 196 days in a period of interruption of employment, including periods of education, which began before age 20.

On the first point, SDA, like NCIP, is a benefit which is designed for the long-term sick. It is therefore appropriate that entitlement should first arise only when a person has been continuously incapable of work for a minimum length of time. The proposed 196-day qualifying condition simply reproduces the conditions which have applied to NCIP or HNCIP since their introduction. I should make it clear that once title to SDA has been established, the nomal "linking rules"will apply; namely, that a person will be able to requalify for SDA immediately where there is a break in entitlement of eight weeks or less, or where the subsequent spells of incapacity are separated by a period of registered unemployment, including periods of attendance on an MSC approved training course, including the YTS scheme.

I cannot agree that these linking provisions should be extended to the initial qualifying period, as proposed in some amendments. In effect, this would mean that a person could establish title to SDA through a series of relatively minor illnesses linked through periods of unemployment or education over a period of many years. Such a person could by no means be described as long-term sick, and is not therefore the sort of person for whom the benefit is intended.

I turn now to the question of extending the easier qualifying condition for SDA. Although, in our view, the age 20 limit is both logical and fair, I accept that there will be individuals who continue in education beyond age 20 and who thus never have an opportunity to build up a contribution record, and there will be those who have not managed to find a job before they reach the age of 20.

I should first say that the fact that someone had been studying for a degree course, for example, would not necessarily be considered incompatible with his being incapable of work—indeed, SDA can be paid to people who are in full-time education over age 19—although an adjudicating officer would of course take this fact into account in deciding whether a person had been continuously incapable of work since before age 20. Thus, the first point to emphasise is that a disabled person who continues in full-time education would still qualify for SDA on the basis of an incapacity test alone. But this would not help a person who first became incapable of work after age 20 while still a student, or following a period of unemployment which extended back before that age. Amendments Nos. 42 to 45 and Amendment No. 55 seek to extend the rules to enable such people to qualify for SDA without having to satisfy the 80 per cent. disablement test.

The difficulty here is that if we were to make a concession for those groups we would have to be able to justify that against the legitimate claims of all the other groups who might be adversely affected by the age 20 cut-off; for example, those who had been looking after elderly relatives or bringing up a family and who had a deficient contribution record as a result. Any concession as proposed in these amendments would also complicate the scheme both for claimants and administration; and, of course, it would have a cost, though the numbers involved are uncertain.

As I said earlier, SDA is intended primarily as an income replacement benefit for the congenitally handicapped, and we are not presently convinced of the justification for making concessions which would single out particular groups or categories of claimants from among those who first became incapable of work after age 20 and who find themselves without an adequate contribution record.

We shall be carefully monitoring the new scheme, and if it transpires that within the general structure of the benefit there are serious consequences for certain categories of claimant, we shall look at possible remedies. My noble friend Lord Campbell stressed the point about flexibility. The method of assessing disablement under the industrial injuries and war pensions schemes is more flexible and adaptable than many have assumed. The schedule of prescribed degrees of disablement mentions only specific disability. such as loss of limbs and blindness, but these only serve as bench-marks. The essential question that the adjudicating doctors have to determine with reference to these bench-marks is: how does an individual claimant differ from a normal healthy person of the same age and sex?

The existing system has also been more widely tested and tried and applied to a wider range of conditions than is often appreciated. For example, psychiatric conditions are assessed mainly in relation. to war pensioners. I have been able to see this virtually at first hand through my own responsibilities for war pensions. Similarly with industrial injuries, doctors have to assess the extent of disability resulting from a wide variety of prescribed diseases.

There is already a power in paragraph 2 of Schedule 8 to the Social Security Act 1975 to define further in regulations the principles of assessment, and this would apply equally to SDA. We do not envisage that the introduction of SDA will necessitate changes, but the power is there if needed. I hope that my remarks have indicated that there is more flexibility in the present system than is often appreciated. I hope that that will satisfy my noble friend.

My noble friend also asked if there would be periodic reassessment of disabilities. The medical adjudication officer will assess both the level of disablement and the period covered. Where 80 per cent. disablement is accepted, the case will automatically fall for reassessment at the end of the period of the award, although in many cases we anticipate that the original assessment would in effect be for life. Where 80 per cent. disablement is not accepted, it is always open to the claimant to reapply for SDA at any time if he thinks that his condition has worsened. My noble friend Lady Lane-Fox referred to monitoring and asked how long it would be before changes to SDA would be considered. I think I have answered that. We plan to monitor the scheme closely from its introduction, and certainly for the first two years. We shall consider changes as part of this monitoring system.

The noble Earl, Lord Attlee, asked about a particular case—that of Mrs. Shapiro. It is always difficult to get involved in individual cases. I shall study closely in the Official Report what the noble Earl said. I can confirm that those registered blind or partially sighted will be 80 per cent. disabled. The noble Lord, Lord Ennals, asked whether it would not be more sensible to phase in the scheme. In order to enable claims to be processed within existing medical staffing levels, it will be necessary to phase in the benefit for new claimants. I stress the words "new claimants". It is estimated that there are about 21,000 married women who would have failed the present household duties test but who will qualify for SDA as 80 per cent. disabled.

Generally speaking, intermittent or fluctuating conditions, such as epilepsy or multiple sclerosis, will be assessed on the basis of the average degree of disability likely to be present over a given period. As with other disabilities, the assessment will be made on the basis of the history of the person' s condition to date, his present condition and expert knowledge of the natural course of the condition in question. Where necessary, specialist medical opinion will be obtained. The percentage degree of disablement will reflect the way that the disability affects the individual' s ability to live and enjoy life compared with a normal person of the same age and sex. I should point out that such conditions are not unknown in the industrial injuries and, indeed, the war pensions field. For example, epilepsy is not uncommon following head injury; and multiple sclerosis has been accepted as attributable to or aggravated by service in the forces.

Finally, several of your Lordships have raised points on the additional 80 per cent. disablement test which will apply to those who first become incapable of work after age 20. These are matters which I think are more appropriate for discussion on later amendments which are not in this particular block. Suffice it to say that the additional disablement test for those who first become incapable of work over age 20 is intended to concentrate the available resources on the most severely disabled.

In effect, this is what the household duties test does at present. We intend to replace it with a much fairer and more objective test, using the same principles of assessing disablement as have been used successfully since 1917 in the war pensions scheme. I have not met many people who are concerned with that scheme who do not think that it is a good one, a fair one, and indeed one that works very well.

Lastly, I must repeat that these proposals do bring another 20,000 people into benefit. As I said, there is no consensus for an alternative, and on that basis I hope the noble Lord will not feel that by adopting the amendment which he proposes he should deprive those others of the benefits which my noble friend Lady Lane-Fox described as a step in the right direction.

Lord Campbell of Croy

Just before the noble Lord. Lord Ennals, rises, may I say that I am most grateful to my noble friend, because he has replied to many of the points, particularly ones that I have raised, about the way in which the proposed 80 per cent. assessment will be carried out. I noted particularly that he reassured all those concerned about the question of periodical reassessment; and also that there are powers, which the Government already possess in legislation, which would enable them to adapt and add to the criteria for assessment. In view of the fact that we have been taking so much time on this Bill, it may be agreeable to the Committee to know that, because of the answers which the Minister has already given, I am not proposing to move Amendment No. 53.

Lord Ennals

I, too, am most grateful to the noble Lord. He has reassured me on a number of important points. I cannot say he has satisfied me; I will come to that in a moment or two. But I want to say that I think the whole Committee welcomes the abolition of the household duties test, though I would not follow the logic of the noble Baroness, Lady Lane-Fox. She said we consulted and got it wrong. I hope she does not go on to say. "Therefore, consultation is a bad thing". It is true that we did consult, and it is true that we got it wrong. But I hope that will not be a precedent for getting it wrong again.

Fortunately, there is no element of party considerations in this. We are always at our worst when we are dealing with party political issues. What has been said by a number of noble Lords is that the test of the loss of faculty, which is designed to assess the amount of compensation—this has been the old experience with industrial injuries and war disablement—is not really an appropriate method of assessment for people whose disabilities are not the result of accident or trauma. I think the Government admitted in Standing Committee in another place that there is a range of disabling conditions which neither the industrial injuries scheme nor the war pensions scheme has experience of measuring.

The noble Lord dealt with a number of them. He dealt with the question of congenital handicaps, cerebral palsy and multiple sclerosis. He said—I was very reassured by what he said—that an assessment would be made, based not on how someone was on a particular day but on the general condition of a person over a period of time. However, I think many of us have documented cases about people with these conditions being tested to see what percentage disability it is considered they have, and they have come well below the 80 per cent. level.

There has been some argument about the attitude of the Social Security Advisory Committee—the SSAC. It is true that in their letter to Mr. Newton, the Under-Secretary of State, they expressed concern that the proposed method of assessment could not measure these conditions with any degree of consistency across the country. One might get a different conclusion reached in one area compared with another.

The concern that is still very much with me is that the experience of industrial and war disablement assessments is not really appropriate in this field. We have not been able to touch on what is almost the largest number—those who have had a mental illness and those with a mental handicap. I know the noble Lord mentioned that there have been such tests for people who have a mental illness as a result of war, but this is a minute proportion of those who might qualify and who certainly are unable to work, though their loss of faculty is very difficult to define.

There is no point in trying to divide the Committee in what in a sense is the main amendment, that is, Amendment No. 56, which suggests that we should do it another way. What I want to suggest to the Minister, and I hope he will consider it carefully, is that he should meet privately with noble Lords on all sides of the Committee who have a special interest. Some have expressed concern and some have expressed broad support, but with some reservations. I wonder whether we could spend some time with him for discussion which it would be difficult to have across the Floor of the Committee. It would provide an opportunity to discuss a number of issues on which he might be able to satisfy us. Certainly in his speech today he answered, I thought very helpfully, a number of the concerns that have been put forward.

I have a number of questions, but I am not going to put them to him now because we have got a difficult timetable. I suspect there are a number of other noble Lords who also have questions. We have still the Report stage to come, and if the noble Lord were prepared to set aside an hour or an hour-and-a-half when he could meet with noble Lords, if that were the wish of noble Lords and Ladies, then at this stage I would not wish to press any of my amendments. I should like that consultation, and further consultation with the organisations who are specially interested, to see whether there is anything further we would wish to do when we come to Report stage.

Lord Glenarthur

I am grateful to the noble Lord for the way he has received the comments that have answered, I hope, some of the points that have been raised. Of course, I understand that this is a complicated area and that it might be possible to reassure people by a detailed explanation, which is not always possible across the Floor of the Committee; I understand that.

If any of your Lordships would like a private consultation on what the Bill means, or what are the effects of existing legislation, such as I referred to in answer to my noble friend Lord Campbell, I should be very happy to organise that and I can make the necessary arrangements. I hope it might clear up quite a number of issues and also save us a great deal of time,which I am sure will please my noble friend the Chief Whip.

Lord Henderson of Brompton

I should like to welcome this turn of events. I agree with what the noble Lord, Lord Ennals, has proposed, and I welcome the Minister' s response. If I may say so, I was very impressed by his answer about the careful monitoring and the undertakings about that, as well as the flexibility and so on.

Equally, I think that the main amendment of this series—Amendment No. 56—has served as a very useful vehicle for debate. I take the Minister' s point that really it is not a proper way of going about legislation. So for technical reasons, in any case I would not have wished to press Amendment No. 56. But it has served a useful purpose. I welcome the prospect of talks.

Lord Stallard

May I say that I am not too happy about this procedure. Sitting behind on these Benches, I am a wee bit worried about whether this normal channels procedure is now taking place across the Front Benches rather than in the open. If this kind of procedure is going to take the place of detailed discussion of Bills, I would be very concerned.

Lord Ennals

I am most grateful to my noble friend for giving way. That was not my suggestion at all. I would not like that. I think that all noble Lords who have taken an interest in this, whether they are on the Front Benches, the Back Benches, or the CrossBenches—certainly this includes my noble friend Lord Stallard—should be able to do it in that way. I think my noble friend has misunderstood.

Lord Stallard

I accept what my noble friend says, and he has assured me part of the way. I should certainly not like the discussion that ought to take place in public to be superseded by special meetings between Members on various points. Although such meetings are useful as well, there should still be the public discussion.

Lord Glenarthur

Perhaps I may intervene briefly to reassure the noble Lord. There is absolutely no intention that the public discussion should be in any way curtailed. It is merely a question of trying to clarify certain points which would otherwise form the basis of an amendment which was not necessary at a later stage in the Bill. I think that the suggestion of the noble Lord, Lord Ennals, is a very good one, and it is one that I should like to adopt.

Lord Banks

I merely wish to say very briefly that we on these Benches should like to be associated with the proposal which has now been put forward, and, if possible, to participate in it along with the others.

Lord Kilmarnock

I agree entirely with what the noble Lord, Lord Banks, has said. The gneral response to the offer by the noble Lord, Lord Glenarthur, shows that that is the way in which we should proceed prior to the Report stage. It might be helpful to the noble Lord, Lord Stallard, if I make a comparison with what happened on the Rates Bill. Several of us had private consultations with the noble Lord, Lord Bellwin, including the noble Baroness, Lady Faithfull, to see whether the noble Lord could meet us on a certain point. The noble Lord went a certain way, but he did not completely satisfy us, and so we later, on the Floor of the House, had a very extended and very full debate, and divided on an amendment of the noble Lord, Lord Ennals. So the proper parliamentary process was not short-circuited at all.

Lord Ennals

I am glad that there has been a ready response from the noble Lord the pm Minister and also from noble Lords on different sides of the Committee. Under those circumstances, I beg leave to withdraw the amendment that I have tabled, and I shall not be moving a number of others that have not yet been reached.

Amendment, by leave, withdrawn.

[Amendments Nos. 43. 44 and 45 not moved.]

6. 23 p. m.

Lord Henderson of Brompton moved Amendment No. 45A:

Page 15. leave out lines 19 to 23 and insert (": and (c) beginning not later than the day on which he attained the age of 20 and ending immediately before the relevant day he has been, other than for a period not exceeding 28 weeks, on each day, either—

1. (i) a student attending a course of full-time education, or
2. (ii) engaged on a Government approved Youth Training Scheme. ")

The noble Lord said: I beg to move Amendment No. 45A, which stands in my name and that of the noble Baroness, Lady Lane-Fox. I can be quite brief. This amendment is designed to bring some flexibility into the application of the age of 20 rule in respect, in the first place, of: a student attending a course of full-time education": and, secondly, a person: engaged on a Government approved Youth Training Scheme".

I understand from utterances from the Government Front Benches in both Houses that the Government cannot, for reasons of cost, raise the age from 20 to 25. Therefore, this is an attempt to introduce a little flexibility where I think it is necessary as regards the age of 20.

I hope that the Government will see the special educational problems of those with multiple handicaps or mental disorders, to name only two classes of handicapped people. The SDA could well be a disincentive for those in that unfortunate condition to stay on in full-time education. One must remember that people who suffer from congenital handicaps of one sort or another may be very late entrants into full-time education, and if they start late then special consideration should be given to their staying on late.

The upper limit for entry of disabled young people to the youth training scheme has recently been increased to 21, and I understand that they can stay in the scheme for up to 18 months. So the rigid application of the age of 20 rule could act as a disincentive and. indeed. it could cut right across the Government' s own YTS intentions in regard to disabled young persons. If the Government wish to implement their own policies in regard to youth training schemes, it seems to me that the age of 20 requires modification in that respect.

I wonder whether the DHSS has, in fact, consulted with the Departments of Employment and Education about this matter. If not, I very much hope that they will do so and will either accept this amendment today or, if they cannot do so, will come back at a later stage with an amendment which is better drafted and to the same effect. I beg to move.

Lord Glenarthur

The effect of this amendment is in many ways similar to that of the group which we discussed just now—namely, Amendments Nos. 42 to 45—in that it would extend the easier under-20 qualifying rule to two specific categories of claimant who might first become incapable of work after the age of 20 without having had the opportunity to build up an adequate contribution record. I do not think that I need repeat all the points that I have already made, but will simply re-emphasise the fact that we do not consider it right to single out particular groups for such concessions in this way.

The noble Lord. Lord Henderson, has indicated that he is concerned that a young person who has qualified for SDA by the under-20 rule might be discouraged from attempting to take part in the youth training scheme or from trying to continue his education on the grounds that, should these attempts at rehabilitation fail, then he would have to satsify the 80 per cent. disablement test. In this connection I should point out that periods of attendance on a youth training scheme course, like periods of unemployment, form part of a period of interruption of employment and would therefore serve to link the periods of incapacity. The easier under-20 qualifying rule would, therefore, still apply.

As regards further education, SDA, like NCIP, can continue to be paid to someone engaged in full-time education from the age of 19 provided, of course, that the person can show that he or she is incapable of work.

The noble Lord asked whether or not there had been any consultations with the Department of Education or the Department of Employment on this matter. I can tell him that, yes, there were consultations, certainly, before these proposals came forward. I cannot tell him exactly the nature of the consultations, but certainly the departments concerned all talked to one another. I hope that, on the basis of that explanation, which I hope has clarified some of the points that he raised, the noble Lord will see fit not to press the amendment.

Lord Ennals

I hope that the noble Lord, in the answer that he has given, is not ruling out, in the consultations which we have already discussed and agreed upon, the discussion of points such as have been raised by the noble Lord, Lord Henderson. I should like to have strongly supported the noble Lord's amendments but I do not wish to make a speech now. This is the type of matter that we could usefully exchange views about and then come back to, if we need to do so, at the Report stage.

Lord Glenarthur

I fully accept that, at the end of the day when we have discussed these matters in a less formal forum, we may not necessarily be able to agree, in which case it is fairly obvious that we shall have to consider discussions in your Lordships' House. But it is important, that the areas of misunderstanding are cleared up. In any case, some of the points which the noble Lord, Lord Henderson, raised have been covered by the answer I gave.

Lord Henderson of Brompton

I see the noble Baroness nodding that she is in agreement with the proposal that I should withdraw the amendment, as indeed I shall. In doing so I should like to thank the Minister for his helpful reply, which has, indeed, answered some of my questions. However, any questions which have not been answered can be pursued in the discussions which the noble Lord, Lord Ennals. has proposed and which the Minister has accepted. With those comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Stallard moved Amendment No. 46: Page 15, line 20, leave out ("20") and insert ("25").

The noble Lord said: I am grateful to the noble Lord the Minister for the assurances that he gave to my previous question a few moments ago. But I am not altogether happy about this omnibus procedure. We have had almost another Second Reading debate in which we have discussed a number of points and the noble Lord has replied as one would expect him to reply to a Second Reading debate, by answering all the points. That seems to be the pattern that will be followed for the other amendments which are about to be moved.

This is the third day of the Committee stage of this Bill and we have only just started what, to many of us, is the most important part of the Bill. We began with what appeared—and I do not make a blanket criticism—to be a very rushed discussion on some very serious points. I have the impression that we did not give those points the consideration that many people outside this Committee think they deserve. I am referring to all the voluntary organisations which spend so much time, effort and, very often, expense on mounting their own observations on these Bills and supplying Members of both Houses with excellent, well thought-out, and well-written briefs which we discuss. I think that they deserve a little more discussion than we have been able to give them. It seems as though we are hurrying up our discussion because the Government's programme must be completed willy-nilly before we rise for dinner. I do not think that that is a very good procedure.

I understand all the factors which noble Lords have to bear in mind when we reach this stage, and I appreciate how unpopular it is when someone stands up and says what I have said. But I feel strongly about the point and I still feel strongly that a number of amendments will not be given their due consideration. Although ministerial assurances are always welcome, they are not the same as amendments which are written into a Bill. Nor can we constantly refer at the Report stage, of any other stage, to what the Minister has said here or in another place, or to an assurance given here or elsewhere. If it is not in the Bill and has not been accepted, the situation becomes more and more difficult. I take the view that we must make the effort to get these amendments written into the Bill before we pass to the next stage of discussion. That is why I shall be brief in moving Amendment No. 42 because much has already been said. I want to move it because, again, it implies a specific principle.

The Earl of Caithness

Is the noble Lord addressing himself to Amendment No. 46? He referred to Amendment No. 42.

Lord Stallard

I apologise; I meant Amendment No. 46. It raises a detailed, and a precise, point. I am suggesting that the age should be raised from 20 to 25 for all. This would cover all people affected by the Bill. I am not saying that it is the ultimate, but that is what I am moving.

At the beginning of my remarks I said that a number of organisations had discussed this and other points. I should like to quote what MIND says: MIND believes that this arbitrary cut off age of 20 is inappropriate in general but particularly so for mentally disordered people". It makes a very well-reasoned case in respect of that proposition. The Spastics Society says: The Society believes that the youth exemption age of 20 years is far too low". Again, a great case is made out.

The Disability Alliance says: We totally reject the age cut-off which the Government is implementing to discriminate between groups of disabled people". RADAR makes almost the same comments. DIG says: The age of 20 (governing whether a test of incapacity for work and 80 per cent. disablement test are to be applied) is as arbitrary as is the 80 per cent. disablement criterion. There is no logical argument (except to save money) for applying a single test before age 20 and a double test after that age". These are serious points which have not been answered in the overall reply that the Minister gave to the omnibus debate that we had on a number of amendments. I think that they all need a reply. Some of these organisations say that there should be no age limit at all. MIND says that if there is to be an age limit, it should be 40. Given that, I think that the compromise in the amendment in my name and that of the noble Earl, Lord Attlee, is reasonable and is one which the Government should be prepared to accept. That is not to say that we do not welcome (because we do) the concessions made following the Committee procedure on the Third Reading in another place. Of course we welcome any concessions, but we still think that the age of 20 is arbitrary and too low.

The Spastics Society has pointed out to the Minister for the disabled and to others the peculiar and particular situation concerning a number of its people. It has produced evidence from its own colleges to prove the point that this cut-off may act as a disincentive to many youngsters to continue in further education. That is a point that has been mentioned by others, and it is certainly something with which I would agree.

Those of us who have been involved with mentally and physically disabled youngsters know that, not because they are not bright or not intelligent but because of their particular illnesses or recurring illnesses, because of treatment or therapy which they may need. it may well take longer for them to go through the educational process. They do not reach the same level as other people at the same age. Therefore, for those reasons we must be more flexible when we discuss people in that age group. I thought that the Spastics Society and other organisations such as DIG and RADAR made an excellent point. It is a point that ought to be considered. There should be not an assurance but an acceptance that, in view of all those circumstances, the age ought to be increased. I could give the statistics that were quoted in the other place, but I shall not weary the Committee with them. We know that the facts that I have stated can be backed up by ample statistics.

From the evidence that has poured in from all quarters. we also know that not only the organisations which I have mentioned are concerned, but many individuals are concerned, too. I have received letters from ex-constituents, from people I know, and from committees on which I have served saying that they, too. should like to be involved and are concerned about this age limit, this cut-off. In reply to correspondence and questions in another place the only reason—I nearly said "excuse"—that we en able to glean so far from the Government is that of expense.

I think the Minister mentioned that it would cost £10 millon to increase the age limit to 25. The Government have not produced any evidence; no evidence is ever produced to say that they have taken into account the amount that might well be saved on supplementary benefit which would not be taken up because these people would fall into a different category. We have seen no evidence to justify this. There is always a frightening figure produced. They say that if we press our amendment, it would cost so much. Again, that is not a procedure which I accept, and I should have thought that certainly in this Committee we should probe a little deeper into statements and replies of the Government concerning what, in my view, is a very serious situation.

Therefore, bearing in mind all the other remarks and comments that have been made along the lines that I have indicated, I hope that the Minister will feel able to accept this modest compromise and, rather than give us an assurance, say that he will agree that this is a reasonable amendment and that he will be able to accept it. I beg to move

Earl Attlee

If I heard him correctly, the noble Lord the Minister said that the logical cut-off age was 16 but that they had made it 20 because, as most people left school at the age of 16, there would still be four years in which to see whether or not they could work. As the noble Lord, Lord Stallard, has just explained, if you are disabled, the chances are that you will require additional education because you may have learning difficulties. Therefore. I should have thought that most disabled people would stay in full-time education well beyond the age of 16. Accordingly, the nice four-year period that the noble Minister was talking about for disabled people will not be there. It seems to me therefore logical to put the age up from 20 to 25.

6.40 p.m.

Baroness Darcy (de Knayth)

I should like to add a brief word of support, because I do not think I am going to get a word in otherwise because I have got into a slight muddle with this general discussion that we have had. The two amendments I was supporting were the two in the name of the noble Lord. Lord Stallard, so I did not get in on the general discussion at the beginning.

In a way it was a pity that we had this omnibus discussion, because there were two clear and separate issues. I am sure that the noble Earl. Lord Attlee, would agree that one was on the question of the SDA altogether, and the other was the question of amending the SDA in some way. However, I am grateful that the Minister has offered to have talks. and if some good can come out of it I shall be delighted.

I should like to support Amendment No. 46 for various reasons, and they have all really been covered. The congenitally disabled certainly take longer—and the Minister has shown that he appreciates this—to complete their education. They may not be as bright, or they may be extremely bright and have interruptions through operations and such things. I think that the Minister said that the congenitally disabled would be all right provided they were in education after the age of 20. and that they would then not have to pass the double test. I see that the noble Earl is nodding, and I am delighted to see that, because it is right that the congenitally disabled should be given a chance to prove themselves. The National Bureau of Handicapped Students state: Research has shown that the mentally handicapped frequently make the most important leaps in their learning ability in the late teens and in the early twenties". I think that the noble Lord, Lord Glenarthur. said that this would not help those who were not congenitally disabled—for instance, the student who perhaps has an accident at the age of 19 while attending university. Such people would have to undergo the dual test when they had completed their education, because they would not have qualified before reaching 20. They would not have been congenitally disabled.

This is why I support age 25. because it is important to recognise that early days of disablement are particularly difficult, puzzling and worrying. However bright the disabled person may be, neither we nor those around him have really any idea what he is capable of. I have seen this many times at Stoke Mandeville. It will take several years to achieve full potential.

It may be tempting to take the easy way out and opt out of continuing education if you fear that you may not pass the 80 per cent. loss of faculty test eventually. I hope that the Government will look kindly on this amendment. I am sure that they want to encourage people to continue their education and to develop their full potential wherever possible and earn their living and support themselves.

The Earl of Caithness

The noble Lord, Lord Stallard, said that for many people this was the most important part of the Bill. I think that the opticians found that Clauses 1 to 4 were more important. In fact we adopted very much the same procedure on Clauses 1 to 4, where we had almost a Second Reading debate specifically on opticians, and then went through all the amendments just as we are going to do here. I do not think that the fact that we looked at so many amendment en blochas in any way impinged on the further amendments that we can consider. Of course we are delighted to help in any way we can from this Front Bench.

Unlike the earlier set of amendments, which seeks to modify the easier qualifying rule for particular groups, this amendment seeks a general extension of qualifying age for entitlement to SDA simply on a test of incapacity for work. I do not intend to repeat what mn noble friend Lord Glenarthur has already said on the reasons for applying a different rule to those becoming incapable of work on or before age 20. It is sufficient for me to reiterate that we think that this is a fair and sensible basis for a provision for a benefit which aims at giving priority to the congenitally handicapped or those disabled in childhood.

We have listened carefully to what has been said in your Lordships' House, in another place, and in representations from organisations of, and for, disabled people. While we will of course monitor—and I stress that we will monitor—the effects of the new scheme carefully, we are at present not convinced of the case for raising the age limit to 25. The SDA, like NCIP, is intended to be an income maintenance benefit primarily for people of working age who are congenitally handicapped and have never been capable of work. Given this priority, the logical cut-off point for the easier qualifying condition is age 16 rather than age 20.

I do not think I am giving away any secrets at all when I say that it was quite a major concession to move the age up from 16 to 20 before the Bill was produced. In effect, the concession to raise to 25 would mainly benefit not the congenitally handicapped, who are the ones we are really trying to help, but those who first become incapable of work early in life and who, for one reason or another, find themselvs without an adequate contribution record.

There seems to be no obvious reason for having a more favourable rule for those in this position who become incapable of work before age 25 than for those becoming incapacitated later in life. Most of those who would benefit would be married women who have given up work to bring up a family, or indeed have never started it. Based on the proportion of married women contributors aged 20 to 25 who received invalidity pension, our best estimate is that the extra costs might amount to around £10 million a year, and possibly more. We do not regard expenditure on such a proposal as justified, particularly when set against the other competing priorities in the social security field.

The noble Baroness, Lady Darcy (de Knayth), raised the point of education and SDA after age 20. I would confirm that for somebody after age 20 or more who is undergoing full-time education, that will not in itself be a bar to receiving SDA, and a person who has already qualified for SDA but is undergoing further education will still receive the benefit provided he can show that he is incapable of work. I hope on this basis that the noble Lord, Lord Stallard, will withdraw the amendment.

Lord Stallard

I am grateful to the noble Minister for his reply. He tempts me to go into another long speech about age 16 and the major concession he mentions, but I shall retain that for Report stage. I was a bit disappointed that he did not take the point about the disabled, and that they go on longer before they get to the same point as others. Nor did he seem to be seized of the point about disincentive raised by the noble Lord. Lord Henderson. As the noble Lord mentioned, youngsters can now go into the youth training scheme when they are 21, and they stay for 18 months. The fact that this cut-off is where it is will be a disincentive, so the SDA provisions will be a disincentive to that kind of thing.

Nor did the Minister touch on the fact that employers may well not be too keen now to offer employment or to make adaptations to their premises for youngsters in this age group. That is another disincentive. There are a number of points I should have liked to be more satisfied on, but I realise that I am not going to get much further in tonight's discussion. With those words, I am quite happy to withdraw the amendment and reserve my position for the Report stage.

Amendment, by leave, withdrawn.

Lord Denham

This may be—

Lord Ponsonby of Shulbrede

I should have thought that the next one or two amendments would not take very long. They are linked with the previous amendment.

Lord Denham

Are they going to go on the nod?

Lord Ponsonby of Shulbrede

They are very brief.

Lord Denham

I am worried about the intervening business, because we are slightly late. I think it would probably be safer if we resumed the House now and took the other amendments immediately after the order that we are about to discuss.

Lord Ponsonby of Shulbrede

Is it possible to say that we shall not resume consideration of the Health and Social Security Bill before a quarter to eight?

Lord Denham

As soon as the Northern Ireland Order is finished we come back to this again.

Lord Ponsonby of Shulbrede

But not before a quarter to eight.

Lord Denham

I very much doubt that it will be before a quarter to eight. If we get the business through tonight, I am happy with that arrangement.

I beg to move that the House do now resume.

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

House resumed.