Social Security Bill

HL Deb 15 July 1986 vol 478 cc797-861

3.1 p.m.

Baroness Hooper

My Lords, on behalf of my noble friend Lady Trumpington, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Baroness Hooper.)

On Question, Motion agreed to.

BaronessEwart-Biggs moved Amendment No. 45:

After Clause 28, insert the following new clause:

School meals

("(1) An education authority shall exercise their power under subsection (l)(a) of either section 22 of the Education Act 1980 or section 53 of the Education (Scotland) Act 1980, in relation to any pupil whose parents are in receipt of family credit, so as to ensure that such provision is made for him in the middle of the day as appears to the authority to be requisite and shall make that provision for him free of charge.

(2) If, having regard to the particular circumstances of any pupil or class or description of pupils, they consider it appropriate to do so, an education authority may treat him or them, for the purposes of subsection (1) above, as if his or their parents were in receipt of family credit or may remit any part of any charge that would otherwise be made for anything provided by the authority under subsection (l)(a) of either of those sections.").

The noble Baroness said: My Lords, I rise to move Amendment No. 45, which is in my name and the names of the noble Baroness, Lady Vickers, the noble Lord, Lord Kilmarnock, and the right reverend Prelate the Bishop of London. The purpose of this new clause is to restore free school meals to children whose parents will receive family credit, and also to allow local authorities to continue to exercise their discretion in favour of children from low income families who do not qualify for either income support or family credit.

The aim is to ensure that these children have the opportunity to eat a nutritionally-balanced meal in the middle of the school day. Our concern at the Government's proposals has been great. We are concerned that they plan to give cash compensation through family credit to low wage earning families in lieu of the free school meal, which of course goes direct to the child. Indeed, we have already argued against this new scheme on two occasions in Committee, and each time the Minister in her answers did nothing to dissipate those worries. The noble Baroness merely said that we produced the same arguments—which of course we had done, because we had not previously received an answer which satisfied us.

Therefore, if I may rapidly repeat those arguments to your Lordships today, first, we want to know whether this cash compensation offered in the Bill will be sufficient to provide an alternative to the present free meal. The sum proposed is £2.20 per week during the whole year, which comes to 44p per meal. There is worry among certain local authorities; and the AMA's recent analysis shows that in certain authorities the price is already at 60p. If fewer children take up the school meal entitlement it will be difficult to keep the price down to an economic rate.

Secondly, we would want to know whether the cash compensation would be targeted on the poorest families because, of course, this is a major objective, as the Government say, in this particular clause. Again, there is concern as to whether the children at present benefiting from local authority discretionary schemes will be covered by family credit and therefore eligible for cash compensation. In particular, these are children of families not working and not receiving income support, or families on invalidity or widows' pensions.

The Government have actually given no figures, but the Derbyshire County Council say that as many as 68 per cent. of their children are on discretionary schemes and may therefore lose their entitlement to free school meals under this Bill. We also need an answer from the Minister regarding those very poor families who are on family credit and also receive housing benefit. Through the interaction of these two benefits, they will receive only 44p cash compensation per week for meals instead of the £2.20. This poverty trap has been caused because family credit will count as income for housing benefit purposes. That question has been put to the noble Baroness because it is very worrying that the very poorest families should be penalised in this way and get less cash compensation for their children, who presumably will be most in need of a good school meal.

Thirdly, will that money really translate itself into a nutritious meal for the child? This is perhaps the major worry that we have felt and the one which has been expressed to us from many quarters. We are worried that families under great pressure might put aside the whole of their family credit without taking out that sum which is allotted for the school meals and will put it into the housekeeping or use it to pay some pressing bill. Indeed, the North Yorkshire County Council has shown its very great worry about this. I quote part of a letter which they have written to me. The say: The average number of meals per day which would no longer be available free of charge if the Government proposals were implemented would be about 2,800. There is no guarantee that the parents of these children who would no longer be entitled to receive free meals would make satisfactory arrangements for their children to have a midday meal, to the detriment of the children. It is this aspect which is primarily causing concern to the education committee".

That comes from the North Yorkshire County Council, which I believe has a very balanced representation of parties on its education committee.

Then, supposing that the child gets this 60p and goes to school with it—again, we have gone through these arguments before, but I must repeat them—many children are easily diverted by junk food. Junk food has become one of the great worries for all our children, and not only those from hard-pressed families. I think a great number of children would like the novelty of going into a little cafe and buying some junk food, so that they would not get a carefully worked-out meal such is as at present available to them.

These are the major worries which make us favour retaining the present system. There are several reasons why we believe that the present system is right, although of course we should like to build it up even more—and in some ways it is improving itself. To begin with, on the point of nutrition, since the 1980 Act a great deal of work has gone into seeing that there is a greater nutritional content in school meals, because the local education authorities realise the very great need for children of poorer families to get that meal, which will be of such benefit to them in the middle of the day.

Again, the local education authorities know that for many children that is the main meal of the day—there is no question about it—and that in the evening they will have a bag of crisps or something which has very little nutritional value. Also, there is a great deal of medical evidence concerning the great need for these school meals. I do not know whether any of your Lordships saw the letter in the Guardian yesterday from Sir Douglas Black, but I found it really very telling. I should like to quote one paragraph from it. He says: In 1980 a DHSS research working group, of which I was chairman, said in its report Inequalities in Health"—

and he quoted from the report. He went on: In our view any reduction in the provision of school meals or in eligibility for free school meals would mean putting further at risk the development of significant numbers of children.

He then went on to say: Nothing has changed except the accumulation of medical evidence showing that children need to be adequately nourished to achieve their potential for healthy growth and development. In view of this and the increase in public awareness and concern about the nation's health, this move by the Government seems the height of folly.

That is what Sir Douglas Black said.

The school meals service has very much improved since 1980. I do not know how many of your Lordships have been to schools at lunchtime to see children eating their meals, but I have been to several and I assure you that everything has changed. There is now a choice, the food is very attractively presented, there is a cafeteria system and children help themselves; they sit at little tables rather than at a long, old table, such as we all sat at, and there is a very great feeling of enjoyment. The proof of this is that the take-up of school meals has increased, which surely means that there is no criticism of it.

From the other point of view, I believe—and I think that many people agree with me—that the school meals service should be seen as an integral part of our school system. After all, we provide playing fields and physical education and we try to improve the classrooms to make them lighter and more airy. All these facilities have health interests at heart. So surely, in the same way, a good midday school meal is of benefit to the health of our children.

Some people argue that other countries do not have this service, but surely in this case we are leading other countries and they might well take the lead from us and copy our excellent system of having a school meal which fits in with the curriculum. There is no doubt that giving them something in kind rather than cash is the best way of helping disadvantaged families who are under pressure.

As I said earlier, the school meals service has improved but it can be run only when a certain number of children have a meal from it. If there are more children bringing packed lunches or having lunch out, there will be a lower take-up. The worry of teachers is very great, because they point out that they will be in a heartbreaking dilemma when children come without that 60p because it has gone to help pay the gas bill. What will the school do? Will it give such a child a meal and pursue the parents, or not give the child a meal at all? It has put the school teachers into a very great dilemma.

Who supports the view put forward by the teachers? The first and very important group indeed is the mothers. A survey shows that mothers would very much rather have the certitude that their child is getting a meal at the middle of the day. That gives them peace of mind and there is a lack of worry that, when the children get home, they will have to be given something substantial to eat. Every mother in the world would like to know that her child is being cared for from the point of view of nutrition.

I received a tele-message this morning which proves what I say. It came from Cheshire and said: Eleven thousand Cheshire Women's Institute members are mandated to support the amendment to rescue free school meals. We know when our next meal will be. There are hungry and under-nourished children in this country today. There should not be one".

I cannot believe that the members of the Women's Institute in Cheshire are a bunch of dangerous Reds, but they are clearly concerned, and that is how they showed it.

The last group concerned is the local education authorities. They have written in great numbers about their worries. I should like to quote one letter from the Hertfordshire County Council, which said: An attempt was made to restrict free school meals to those pupils statutorily entitled in September 1984. This had to be modified after two months because a number of children were found to be suffering hardship and an element of discretion was reintroduced".

So that education authority realised the necessity for going on with the system.

May I end by saying I am convinced that this is the best way of helping families under pressure and it will not cost more. We are not asking for more money. We are simply asking to go on with the present system and to improve it. There are many issues which I have argued in your Lordships' House, but none with greater conviction and greater sincerity than this one. I beg your Lordships to listen to the arguments that will be put. My Lords, I beg to move.

3.15 p.m.

Lord Kilmarnock

My Lords, perhaps it would be helpful, as my name is attached to this amendment, if I gave briefly the view from these Benches. The Government propose to restrict free school meals to children whose families are on income support, and this means that 470,000 children will lose the entitlement which they in fact have. This proposal is misguided for a number of reasons. Those on the new family credit scheme are to be compensated by a cash allowance, but as I showed at Committee stage this will in many cases be less in real terms than the £2.20 proposed, owing to its interaction with housing benefit. I shall not go into all the figures again, because I did so at some length at a previous stage of the Bill. Also many local authorities' meal charges are rising well above the proposed compensation level.

I turn to the question of stigma, to which I believe the noble Baroness, Lady Gardner of Parkes, referred at Committee stage. To provide free school meals for income support children only increases rather than reduces stigma, as the group is smaller than before and a distinction is made between poor children who have working parents and poor children who do not. We on these Benches are totally opposed to driving this wedge between poor children from families in work and those who are, temporarily maybe, out of work. If dad gets or loses a job, the child jumps immediately into a different category from his or her playmate, and that cannot be right.

Perhaps the most objectionable of all the Government's proposals is the quite unwarranted removal of local authority discretion. One of the reasons given by the Government for removing from local education authorities the statutory duty to provide school meals under the 1980 Education Act, while permitting a measure of discretion in the operation of the free school meal scheme, was precisely to allow local authorities to make provision more directly appropriate to the needs of their area. That was the Government's argument. At present, children from families on supplementary benefit and family income supplement are statutorily entitled to receive these meals. However, in 64 local education authorities children from low income families also receive free meals through local discretionary schemes.

In a letter back in 1979 Dr. Rhodes Boyson, then at the Department of Education and Science, justified the removal of most statutory duties concerning school meals by saying that the action was in tune with the Government's commitment to give local authorities a larger say in the provision of local services. It appears that the Government have changed their tune.

Local discretionary schemes, as well as increasing unemployment, have contributed to the increase in the percentage of children taking free school meals in recent years. In 1981–82 10 per cent. of meals were free and in 1985 the figure had risen to 15 per cent. Local authority discretion to provide meals for low income families is now to be removed and this will deny many children the meal they need. Also, the effects on local democracy and local accountability are to be deplored. A total of 470,000 will lose entitlement and 340,000 of these will lose their meals due to the loss of these discretionary schemes. The rest will lose them because they will now be on family credit and receiving the inadequate compensation to which the noble Baroness has referred.

Those are some of the reasons why we support this amendment. There are, of course, several others which I shall not go into in detail. Perhaps the most important is, quite simply, the nutritional value which was referred to by the noble Baroness. But there is also the effect on the viability of some school kitchens and, indeed, on women's jobs. The Secretary of State for Employment, the noble Lord, Lord Young, was earlier referring to projected decreases in unemployment, but I would remind the Government that the school meals service employs more than 200,000 women, largely in part-time jobs, and some of them are quite likely to suffer—in fact are almost certain to suffer—as a result of the Government's proposals in this Bill. On all these grounds it seems the wrong moment to introduce this change; at least until we see how the new system embodied in this Bill works out in practice. I hope very much that the Government will think again.

Lord Boyd-Carpenter

My Lords, the noble Lord, Lord Kilmarnock, put as one of his objections to the Bill as it stands what he described as the restriction of local authority discretion. But of course he must be aware of the fact that the amendment to which his name has been put also exercises a very considerable restriction on local authority discretion. It is quite explicit. The amendment begins: An education authority shall exercise their power under subsection (1)", and so on. Therefore, if we are looking at this matter on its merits, it is not quite fair for the noble Lord, Lord Kilmarnock, to call in aid of his side of the argument the importance of local authority discretion, to which we all attach importance.

I now come to what was said by the noble Baroness, Lady Ewart-Biggs. I hope she will not mind my saying that I found, as I always do, her speech most impressive and persuasive. She certainly put a case, with which I do not happen to agree, as effectively as I think any of us could imagine it being put. However, she did not make clear in the course of that speech, although she implied it I think, whether the free school meals which would be mandatory under her amendment would be in addition to, or in lieu of, the £2.20 under the family credit scheme. In her speech she seemed to take it for granted that this was in lieu; no doubt that was the basis on which the argument proceeded, as it did on the two previous occasions when you Lordships' House discussed it. But in point of fact, if one studies the amendment, one cannot see any provision there that it should be in lieu. If one reads the amendment by itself—and it may be that some other clause of the Bill of which I am not aware affects this—it looks as though this would be in addition, if your Lordships were to accept the amendment. As I understand the noble Baroness's speech, that was not the intention. She was, if I may use the language of the race course, backing the horse of school meals as against the horse of the family credit provision, which is initially to be £2.20.

The House has certainly discussed this matter at very considerable length. Your Lordships will recall that at the Committee stage we spent a good deal of time on it. I make no complaint because it is an important issue. But your Lordships' House has so far taken the view that the cash payment is to be preferred to the provision of meals in kind—

Noble Lords

No.

Lord Boyd-Carpenter

My Lords, that has been the view that the House has so far taken. It is a view which personally I share.

There is one point which was made forcefully during the Committee stage debate which the noble Baroness did not answer in the course of her speech. It is that while school meals may be an admirable provision, they are a provision only during school term. If you eliminate the family credit of £2.20, you leave the school holiday period entirely uncovered. Moreover, if we consider the school holiday period—and your Lordships know that school holidays now are very long: they are not only long during the normal holiday period, but most schools now have, in certain terms at any rate, a full week's half-term holiday—we see that there are a considerable number of weeks when the child is at home. If we eliminate the £2.20 allowance, we are making no provision for the child's mid-day meal during those school holidays. The argument therefore for the cash provision as opposed to the provision in kind is that the cash provision continues throughout the year whereas the school meals are provided only during school term.

Indeed, it is not absolutely certain that school meals are provided during the school term. Your Lordships will recall that during the recent action by the National Union of Teachers in the education dispute one of the first directions in which the union withdrew its labour was in the supervision of school meals. Your Lordships will know that considerable confusion resulted from that, I think, very anti-social action by that union—action which persisted in some schools for quite a considerable period. We all hope that this kind of thing will not be repeated and that in future the teachers' unions will behave more responsibly than they did earlier this year and last year. Nonetheless this introduces another element of doubt in to relying solely on school meals as opposed to cash provision. The cash provision goes to the mother, and she surely has towards her children a sense of responsibility which is greater at any rate than some teachers showed during the recent dispute.

The noble Baroness did not seem to have very much confidence in the mother. Indeed, she said that the mother might use the money provided for the child to pay some urgent bill. Nobody can generalise about every mother in the country. There are no doubt irresponsible mothers, as there are irresponsible elements elsewhere. But in general, surely your Lordships are not going to take the view that a mother provided with money for the feeding of her children is going to use that money for other purposes and let the children go short. To take that view would be a very serious reflection on the mothers of this country; and what is more important it would be a wholly unjustified one.

The ordinary mother will use her resources to provide for her children. It is surely also the fact that the ordinary mother will better know what are the needs of her children, inlcuding the dietary needs and the medical situation of the children, than can any school meals organisation. Your Lordships know that there are certain children who are allergic to certain items of diet and indeed are postively harmed by them. How you cope with them under the school meals service I do not know. The mother knows the position of the child. That is one of the arguments, apart from the very potent argument of the school holidays, for why it is safer to entrust the important question of the feeding of our children to the mothers rather than to the local authorities.

Baroness Vickers

My Lords, I should like to say a few words concerning this amendment. I do not agree—and I often have not agreed—with my noble friend Lord Boyd-Carpenter. He is always trying to persuade me to do things that I do not want to do. He has not always been successful. The Government's desire to provide freedom of choice for school meals is appreciated, and in my view is very worthwhile. I should like to say to the noble Lord who has just spoken that there is no reason so far as I can understand why the £2.20 should not be paid direct to the mother during the school holidays. She could go along to the post office and draw it out.

Lord Boyd-Carpenter

My Lords, if my noble friend will allow me, that is not proposed in the amendment before the House.

3.30 p.m.

Baroness Vickers

My Lords, this amendment may not be perfect. If we can find out the things that are not right now, perhaps we can find a better amendment for the next time we discuss this matter.

In the absence of adequate resources, what we have just heard is meaningless. Even where the cash compensation corresponds to the value of the school meals it is intended to replace, it does not compensate the mothers for the cost of time, thought, planning and catering for the lunches of the children who are at present automatically entitled to free school meals.

I still feel that the LEAs should be the judge of what children need, according to their areas. I shall concentrate on the rural areas. The rural areas have great difficulties. In a family of two children, one child may have to walk to school because the distance is just under 3 miles (there is a three-mile limit) and the other may have to catch a bus to go to his school. The buses often tour round many villages because there is a shortage of buses. In addition, the buses have to start very early. I have often seen a school bus going through my village and returning late in the evening. So there are two packed lunches which have to be provided. Freedom of choice may mean that the children do not like the same food, and there is not much choice with packed lunches, anyway.

A survey has shown that compensation will not reach the mothers and nor is it likely to be spent on children, however loving is the mother. The survey showed that one in five wives said they did not expect their husband to pass on the cash received. Single mothers who work said they might have to give up their jobs. Owing to the closure of many village schools the journeys to school have become longer and longer. Also, many villages do not have a local shop. There will be a shop in towns but the women will not always choose the best food with the money. In rural areas wages are very low. Many people earn as little as £75 to a week, so it often means that both parents need to work.

Surely it would be best for the LEAs to decide what is best for the children in their areas. They can consult the head teachers and the health visitors in the local areas. Daily packed lunches can never be as nutritious as a hot meal. The school meal may be the only hot meal for children on weekdays, except on Sundays, when most mothers try to produce a hot meal, but one in a week does not go very far. All mothers, without exception, in the Poverty Action Group survey stated a clear preference for school meals over cash compensation of the same value. One mother said, "School meals have become part of the school day". Our country and our children would be worse off without them.

Turning to diet, I remember that there was a time in this country when it was said in Europe that rickets was "the English disease".

School meals have tended to overcome all those difficulties. It was quite amazing at the beginning of the war, when children came on to school meals, how well they thrived and became stronger, and so on. They were also better clothed, but it is the food they need to make them grow well.

Therefore, before making a final decision, I hope that my noble friend the Minister will consult the LEAs. I feel certain that most ratepayers will not want a change. The young have to walk to school in the cold winters, with snow on the ground, and on rainy days, most likely without a change of clothing. Those on the buses have to undertake long tours. Therefore, I recommend my noble friend the Minister to consider with the LEAs, particularly in the rural areas, the rather more difficult lives these children have and the need for excellent food, which can be given in the schools and which has done a great deal of good over many years.

The Lord Bishop of Lincoln

My Lords, I support this amendment. The noble Baroness, Lady Ewart-Biggs, spoke with eloquence in favour of the amendment and tribute has been paid to that, so I do not want to go over the ground she covered.

There are two categories—the poverty issue and the nutritional issue. I know that the Government have a policy, which is a good one, of trying to target help on to those most in need, but it seems to me that the Bill does not do that in respect of the effect this will have on the poorest of families. The Government have not said how many children receiving school meals will be from families who will receive family credit and how many will not. Families who will receive nothing are those families not working and not receiving income supplement—that is, families receiving national insurance benefits; and that would be invalidity or widows' pensions. Therefore, this is an example of where the resources are not being targeted on to particular circumstances of need.

From the nutritional point of view, I should like only to affirm what the noble Baroness said. All authorities speaking on this have made the same point as the noble Baroness. In 1986 the report of the Royal College of Physicians made the point that this country has one of the poorest health records in the developed world. Following that, the Sunday Telegraph reaffirmed what the report said and added that the Government should take action; and take action that takes health into account. This, therefore, seems to be a very bad moment to be withdrawing schools meals.

As regards parents, I take the point made by the noble Lord, Lord Boyd-Carpenter, but I think he missed the point that for mothers in acute poverty—and there are probably 7 million souls in poverty in this country at present—however much they might want to be responsible, their circumstances make it very difficult to be so: where they are struggling with the burdens of deprivation and poverty, struggling with the burden of unemployment and with being a single parent family. The circumstances need a lot of imagination for us, who are fairly well favoured, to know what that feels like. There are many mothers who would not be irresponsible but who are burdened down by their cares and not able to make the choices that need to be made in the use of this money. For those reasons, I support what the noble Baroness is putting forward in this amendment.

Baroness Masham of Ilton

My Lords, before the Minister rises to reply, I should like to ask a question and give an example. How can it be ensured that the money given to the mothers will be spent on food for the children?

I was speaking recently to a young teacher from Leeds who had taken two small boys out for a treat. She had taken them to the cinema. On the way back she bought them some fish and chips and asked whether they wanted to eat it in the car or take it home. They said, "No, Miss, if we take it home Dad will eat it". There are parents who put themselves before their children. How can it be ensured that children will not go hungry? If they do, what can the teachers do? If the children come to school without money and food, what happens?

Lord Rea

My Lords, I should like to make a few remarks in continuing the debate about whether mothers will be responsible in finding the money for their children's school meals. During the passage of this Bill through the House I have spoken to a number of experienced teachers, school secretaries, school supervisors and managers. With one voice they declare that money paid to mothers of children who now receive school meals is quite unlikely to be given to the children to pay for school meals.

In order to qualify for a free school meal the child's family has to be very hard up. Many of us who are quite well off sometimes have troubles with bills—I know I do. If a person is on the breadline and has a couple of summonses sitting behind the clock on the mantlepiece it is obviously going to be very difficult to avoid paying them when there is the possibility of the bailiffs coming round.

I think it is my place to speak a little more about the health issues which this amendment raises and which the Bill will raise if it is enacted. I spoke about this matter at greater length at Committee stage, but, unfortunately, as it was after midnight I do not think many people were listening. I am afraid that the noble Baroness did not answer any of the points that she said I had raised. She said that no new points had been brought up, but in fact that is not true because a number of the points that I raised had not been covered in this House before.

One point that I brought up was the fact that, as is now well known and as was mentioned by the right reverend Prelate, this country is now falling behind other developed countries in its health care. One reason for this situation is the continuing and in some instances increasing gap between the better off and the poorly off people. The very next day the Faculty of Community Medicine of the Royal College of Physicians produced a report entitled Charter for Action with the aim of health for all by the year 2000, and it backed that statement up with a number of statistics.

I consider that not only do poor children need adequate food with sufficient calories but that school meals are a very important influence when it comes to preventing the scourge of coronary artery disease. We lead the world in the incidence of that disease, and it is now increasingly realised that dietary and nutritional factors play a major part in starting off the process of this disease, which begins in childhood. A very famous study was one which was done on young American servicemen who were killed in Vietnam. They were perfectly healthy young men, but when one looked at the inside of their artieries it was found that they were absolutely riddled with deposits of atherosclerosis, which is the precursor of coronary artery disease.

I consider that school meals when properly served (as many education authorities are beginning to understand) are an integral part of a campaign to improve the nutrition of schoolchildren and also to educate children to have good nutritional habits lifelong, some of which they may even take home and teach to their parents. I have no hesitation in supporting this amendment. I think it is extremely important that the Bill should be changed, and I hope that the noble Baroness will be able to give us some reassurance on that matter.

Lord Banks

My Lords, I should like to comment on one point made by the noble Lord, Lord Boyd-Carpenter. If I understood the noble Lord aright, he was concerned that there was no reference in the amendment to the notional amount of £2.20 included in family credit in order to provide for meals for schoolchildren. The noble Lord will no doubt recall that yesterday we were informed that the figures were purely illustrative. In fact, the figure of £2.20 is not in the Bill. The actual figures are not yet determined, and when they are they will appear in the regulations. No doubt when they are fixed this amendment will be taken into account if it is then part of the Bill, as I hope indeed it will be.

3.45 p.m.

Baroness Carnegy of Lour

My Lords, a number of noble Lords have expressed concern that the trouble is that the money may not turn itself into nutritious food for the people who most need it. If one questions those people who have been close to school meals they will tell you that the people who most need nutritious food are those who do not choose nutritious food but choose the rubbish.

Before the new system that we now have came into effect, which is a system where one has a choice and which often consists of a cafeteria system, there were set nutritious and well balanced courses. What used to happen was that the children who most needed the food did not eat it. It was thrown away, and there was enormous waste. That was generally acknowledged to be the trouble with the previous system, and so it was changed. As the noble Baroness, Lady Ewart-Biggs, has pointed out, since the system was changed the take-up has greatly improved. However, what happens now is that the children who most need the nutritious food actually choose the least nutritious food and the cheapest, and that is balanced by the very good quality food eaten by the others, who are the ones who know best how to choose good quality food. This is the way the economics work.

Since packed lunches have been introduced, many of the less well off children have brought packed lunches—and some of them have been better than food they would have chosen themselves, but not much better, because the best packed lunches are brought by children whose mothers know how to choose the most nutritious food. The idea that they should have the money in their pockets rather than have tokens—the children are not given a free meal in school but a token, which is perhaps the equivalent of it—will not make any difference. In fact, there is one enormous advantage, which is that it will make it more difficult to identify who is receiving free school meals, because however hard one tries in a local education authority and however much one gives everybody tokens or tries to make the system as invisible as possible, many children know who are on free school meals. That will not now be the case.

Quite honestly, I think that this discussion concerns school meals as they used to be much more than as they are now. Though I know that the noble Baroness who moved the amendment has taken a lot of trouble to talk to people in the school meals service, they are not likely to be in favour of the radical change that is proposed because at the moment they do not know what the take-up will be. My guess is that it will be even higher than it is now.

I think that noble Lords are quite wrong to feel frightened that the people who most need nutritious food will not receive it under this system. I believe that this way will be far better. It is something for which I personally longed when I was responsible for the school meals service, and I think it would be a retrograde move if your Lordships prevented this big step forward.

Baroness Fisher of Rednal

My Lords, I admired my noble friend Lady Ewart-Biggs when she moved this amendment this afternoon, and I appreciate the support that other noble Lords have given to it. For a long period of time I represented in Birmingham what is called an inner city area. I was a local councillor and later a Member of Parliament, and I can tell your Lordships that at that time in some of those schools in the inner city 95 per cent. of the children attending school were "free dinner" children. If your Lordships were now to visit such inner city areas that are suffering very severely from unemployment, it would be found that the number of children who have to take school meals is increasing month by month. As unemployment is growing in the West Midlands so the figures are going up dramatically.

I have here some figures which were given to me by the principal school meals organiser for Birmingham. I am not picking and choosing these figures; I merely rang up and obtained them. In the last fortnight in Birmingham 46,100 children were receiving school meals. If the amendment which the noble Baroness has moved this afternoon is not accepted, then 15,000 of those children will fall through the net. So that means that 15,000 families will be suffering unduly.

I think it is important that in your Lordships' House we should not be complacent. We may not always be aware of the deprivation that exists. It is easy for us to gloss over the facts that perhaps a mother might have to pay the gas bill. These people are not in the fortunate position of being able to go to the bank manager and ask for an overdraft. They are not in that category, so they have to juggle with the money that they have. They cannot even juggle with the housing benefit money any more, which is automatically taken out of the social security payments and paid direct to local authorities. So people who are on very low incomes cannot even try to juggle with their money.

It is unfortunate that the noble Lord, Lord Boyd-Carpenter, picked out one point that my noble friend Lady Ewart-Biggs raised when she said that the difficulty arises when perhaps the gas bill has to be paid. Perhaps I may say to the noble Lord, Lord Boyd-Carpenter, that if the gas bill were not paid then it may be that that mother would not be able to cook any food at all anyway.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington)

My Lords, I fully realise the emotions which this issue arouses. It is worth recalling that providing help in cash rather than in kind is very far from being as controversial as some may imagine. For example, both the Liberal Party and the SDP when commenting on last year's Social Security Green Paper supported provision in cash rather than by free meals in kind. I hope that I am not being mischievous or unfair if I refer to what the main Opposition spokesman on social services wrote in his general review of social security published last year. He described the kind of benefit structure envisaged by the Labour Party and said, quite unequivocally, that: Benefits should be paid in cash, not in kind". Elsewhere in the same document the point was made again: All benefits would be cash benefits paid weekly. They would be uprated annually in line with prices or earnings, whichever is the higher". I refer to those comments not to score party political points but to put these issues into perspective.

I do not doubt for one moment the sincerity of the concern which has been expressed, but I have to say that some of the arguments which have been put reflect a far too pessimistic view of what might happen as a result of the Government's proposals. So much so, I suspect that some noble Lords may have failed to grasp just what the new arrangements entail.

To begin with, the vast majority—around 800,000—of children now receiving free school meals will continue to do so under our proposals. There is no change to their position; and there is no question, for example, of the school meals service itself being undermined. Nor is any change proposed to the power of local authorities to subsidise the price of meals generally, if they so wish. If they wish to put resources into lower cost school meals for all children they may continue to do so; it is only differential pricing which is affected by our proposals.

I point out to the right reverend Prelate the Bishop of Lincoln and the noble Baroness, Lady Fisher, that the poorest families generally are those on income support. They will still get free school meals. Most family credit families are on higher levels of income.

Therefore, what are we doing? Of course, as I have explained to your Lordships on previous occasions, we are providing a bigger and more generous benefit, reaching more families than at present. That means that help will be extended to more children by way of cash compensation in family credit than currently receive free meals through FIS and local discretionary schemes. More children, my Lords—over 60,000 more. The Opposition want the extra money put into the family and at the same time they want to keep up the cost of free school meals for the same children. Of course, the Treasury does not work like that. In any event, one of the reasons why the end result is what it will be is that we shall be helping more children.

In contrast, if we were to accept the amendment and retain free meals instead of the extra cash for family credit families it would actually imply spending less overall. This is because the consequence would be to reduce family credit entitlement for every family at the illustrative rates—and I repeat "illustrative rates"—by £2.20 for each child, and this in turn would reduce significantly the number of families actually receiving the credit and therefore passported to free meals. Moreover, there would be further losses for families where the children do not take advantage of the free school meal, including children under five, and for those families who would no longer be entitled to the credit and who live in localities where there was no discretionary scheme for them to fall back on.

It has been suggested that some families might put the extra cash to other purposes and send the child to school with no dinner money. I recognise the concern, but I have to say that it is something we must keep in proportion. It is something which can occur today and is certainly not created by this Bill. The vast majority of children who eat school meals today—over 2 million—have to pay for them, and of course it can sometimes happen that for one reason or another they or their parents do not bring the money when they should. That situation is met, when it arises, by the general administrative powers and by the common sense of the school secretary and if necessary the local authority. There is no reason why that should not continue. Quite frankly, those parents who neglect their children are in my view a matter for the welfare services.

I am also not sure whether the important practical advantages of our proposals, for the families and children concerned have been taken on board. First, provision in cash means that the help is provided much more automatically. With our proposals only one claim is involved; all family credit families will automatically receive the extra cash as part of their normal entitlement.

Secondly, it means the help will be extended to many children who at present do not benefit from free school meals at all. It is not only those who would be eligible today but who, for whatever reason, do not bother to take the meal. It is also young children who do not attend school because they are not yet of school age. Their families too will receive the full cash compensation—at a rate which is significantly more generous than would be strictly necessary just to compensate those FIS families now getting milk or vitamins. We estimate that there would be around 200,000 children who would gain in this way, added to the 60,000 about whom I have already spoken.

Thirdly, providing help in this way will be fairer, more even and more predictable for the families concerned. It will mean that help is provided through-out the year, not just on school days, as my noble friend Lord Boyd-Carpenter said. It will end the absurd position where whether you get any help, and if so how much, can depend on the accident of where you happen to live. It must not be forgotten that around a third of local authorities have no discretionary schemes at all, and the others have all kinds of different rules of eligibility. Quite apart from the lack of consistency, such variations increase complexity and make it even harder to understand and explain to people just what is available. Our proposals would improve consistency, fairness and simplicity and they will help more families actually to get what they may be entitled to.

Fourthly, cash avoids the worst of the poverty trap effects which can occur at present. A small increase in wages can mean that a family entitled to only a modest amount of FIS can lose both that benefit and their free school meals. Cash compensation avoids these steep steps and the possibility of an increase in earnings producing a marginal tax rate of more than 100 per cent. because of the loss of the free meals.

The point was raised again by the noble Baroness, Lady Ewart-Biggs, that the cash compensation to be included in family credit will serve only to reduce the amount of housing benefit due and that in effect there will be only 44p a week left to pay for the school meals. We really must keep this particular manifestation of the interaction between the two schemes—family credit and housing benefit—in perspective.

First, the mother will still get the full cash compensation because it will be paid, as part of the family credit, to her. Secondly, entitlement to housing benefit will be affected by a number of factors, including of course receipt of family credit. On the illustrative assumptions in the Technical Annexe to the White Paper, relatively few family credit recipients would also be entitled to housing benefit. As family credit will be more generous than FIS it will rule out entitlement to housing benefit in all but a small proportion of families—something less than 25 per cent. Of those, most only receive rate rebate, so the housing benefit loss is limited to 44p. Moreover, in those families receiving family credit and housing benefit, we estimate that the great majority, around two-thirds, would still be better off overall—many of them by more than £5 a week.

The noble Baroness, Lady Ewart-Biggs, quoted from a letter written by Sir Douglas Black. I am happy to say that the Government agree with him on the importance of nutrition for all children and on the important contribution which school meals can make to that. They agree with him that many local authorities have done, and are doing, much to improve the nutritional value of school meals. They welcome those improvements which benefit children generally and not just those receiving free meals.

The noble Lord, Lord Kilmarnock, urged that even if we are to replace free school meals with cash help to family credit families we should retain discretionary powers for local authorities to provide free or reduced price meals when they consider it appropriate. In the Government's view, the need to end LEA discretionary powers follows inevitably from the switch to cash provisions in family credit. Many of the working families that are helped under LEA discretionary schemes at present will become entitled to family credit.

To allow discretionary powers to continue alongside the cash provision would mean that LEAs could choose to provide free school meals for family credit families even though the latter were receiving cash compensation in their benefit to enable them to pay for meals. Such double provision from public funds would be an absurd waste of resources and unacceptable.

We believe that the Government's proposals will be a major improvement in the help provided for low income working families. We shall be devoting more resources and helping more children. Far from helping, the amendment would deprive families of those extra resources and would narrow the range of help provided. It would be a return to paternalism in the bad sense—the paternalism which does not even try to help those less well-off to enjoy the same opportunities and to shoulder the same responsibilities as the rest of us. I invite your Lordships to extend the help available to families, and to reject the amendment.

14 p.m.

Baroness Jeger

My Lords, the noble Baroness has talked a great deal about the principle of cash benefits. Your Lordships would be in a better position to make some assessment if we knew how much the cash was. It has been pointed out that reference has been made to a mythical figure of £2.20, which the noble Baroness has described as an illustrative rate. None of us would like to go to our bank manager and take out a loan or obtain a credit card on the basis of an illustrative rate. It is an insult to your Lordships to ask us to deal today with this important problem when we have no figures—throughout our consideration of the Bill we have had no figures—on which we can make an assessment.

While I am dealing with figures, I must ask the noble Baroness on what basis she says that family credit will be more generous than family income supplement? We have no figures. How can she make that statement? What figures will she put before your Lordships so that we can make a judgment? Until we know what cash we are talking about, we cannot talk about the virtue of cash benefits.

I was appalled when the noble Baroness said that parents who neglect their children should be a matter for the welfare services. We are not talking about parents who neglect their children. I say that especially to the noble Lord, Lord Boyd-Carpenter, who I know has a great deal of experience in this matter. We are thinking about mothers who may have to decide between the school dinner money and buying a pair of shoes for their children or, as my noble friend said, paying the gas or electricity bill so that they can keep their children warm. We are not talking about wicked, neglectful parents. For the noble Baroness to say that they can be pushed on to the welfare services is totally irresponsible and unfair.

References have been made to the fact that this arrangement will make it possible for there to be dinner money all the year round. Some noble Lords have suggested that during the holidays the money may not be properly spent. Are we saying that because children may not be guaranteed meals in the holidays we shall not guarantee them nutrition during the school term? That is the logic of what has been said.

I shall also inform noble Lords who do not seem to know a great deal about how these matters work, that many local education authorities keep their playgrounds and premises open in the holidays and use their discretion to provide refreshment and nutrition especially for children of single parents or for children with both parents out at work. The noble Baroness said that one-third of local authorities do not use their discretion. Is she saying that therefore the other two-thirds should lose their discretion? Again, that is the logic of what she has said.

I was interested in what the noble Baroness, Lady Carnegy, said about the choice that many children make. We can all understand that. I think we have all done it. The answer surely is to alter the availability of nutrition in schools and not to put what is often called junk food before the children, and to ensure, as many local authorities do, a high standard of nutrition in the food that is offered.

I know that it is not customary to repeat points which have been made at an earlier stage, but on 30th June (col. 732 of Hansard) I asked the noble Baroness, although I regret to say that it was at 12.15 a.m., what consultation the Government had had with the DES, the teachers and the education authorities. They are the people who must put this absurd system into practice. She gave me no answer. Perhaps she does not have an answer. I should feel more sympathy for her if she does not have an answer.

I asked her what guidance was to be given to teachers when children arrive at school without dinner money. Good teachers have a pastoral care for their children. If the child comes from a family which the teacher knows to be poor and the child is known to be under-nourished and comes to school without the dinner money, is the teacher to refuse to give the child a dinner and throw away the dinner?

These are the practicalities which worry some of us. Some of us talk to teachers, and they put those problems to us. They already have them. There is always a child who has lost his money. One always wonders whether or not he has lost it. At present there is an element of discretion. The Bill would take away that discretion. I have had no answer from the Minister as to whether there have been discussions with the education authorities. Because she cannot give me an answer, I must conclude that it is in the negative.

The noble Baroness has not told me what teachers are to do when children turn up without money. I suspect that she has not given me an answer because she does not have one. The noble Baroness. Lady Ewart-Biggs, made an incontrovertible statement. If the noble Lord, Lord Boyd-Carpenter, thinks that there is some defect in the amendment, I am sure that he will help us to put it right with an amendment on Third Reading. The principles contained in the amendment are seemingly incontrovertible. I look forward to your Lordships making an intelligent and compassionate decision.

Baroness Trumpington

My Lords, before the noble Baroness sits down, and with the leave of the House, she has challenged me on several points and I feel that I should do my best to reply. She mentioned the adequacy of cash compensation. The figures have to be illustrative because the scheme does not start until 1988. The figure of £2.20 in the technical annexe to the White Paper should be seen as no more than illustrative. I have repeated that several times. It was based on the latest information available at the time relating to 1984, of the national average cost for fixed price meals, converted to an average over a full 52-week year rather than just in term times.

Of course, noble Lords can point to increases in the price of meals since then. We shall obviously have to look at the up-to-date position when we come to settle the benefit rates for 1988 at the time the new scheme is introduced. Only at that stage will the actual amount of the cash compensation be decided. There is no mileage in trying to argue a point on the basis of a figure of £2.20.

The noble Baroness also said that I had never replied to her questions about consultation. I have a perfectly good answer in that our Green Paper on the reform of social security, published early last year, was, as she knows, a consultative document. Indeed, it was so successful that 7,000 organisationsȔ

Baroness Jeger

My Lords, has the noble Baroness the leave of the House to speak again?

Baroness Trumpington

Yes, my Lords, I asked.

Lord Soames

They hate hearing the truth.

Baroness Trumpington

My Lords, our Green Paper on reform of social security published early last year was a consultative document. It was so successful that 7,000 organisations, authorities and individuals wrote to my right honourable friend expressing views. They included representatives of children's groups, teachers' associations and local authority bodies. Their concern was primarily with the level of the cash benefit and paying money to the mothers rather than through the wage packet. But the proposals were fully aired, and I see no need to consult further. I hope that the noble Baroness has been able to hear something of my answers.

Baroness Ewart-Biggs

My Lords, I should like to thank those noble Lords who have contributed to the debate. I am most grateful for the support that I have received from noble Lords in all parts of the House. Only two have spoken against the proposal, the noble Lord, Lord Boyd-Carpenter, and, I am sorry to say, the noble Baroness, Lady Carnegy. I can perhaps say one thing to the noble Lord, Lord Boyd-Carpenter. I was grateful to the noble Lord for his suggested changes to the amendment. It has already been said that if there is need for further change, we would be delighted to do that on Third Reading. The noble Lord may have an awful lot of experience, but he has not had the experience of being a mother. I do not believe that he can possibly know, amid all the preoccupations that mothers have at tough times in their lives, how the removal of one preoccupation—namely, the knowledge that their children are being properly fed at lunch time, without the worry of finding the money, saving it or losing it, or stopping the husband taking it to the pub—represents a most important factor. I should have thought this was borne out by the fact that 80 per cent. of mothers, far from feeling that it was patronising or that their dignity was at risk, said that they should like to go on with the school meal and not have the cash benefit, even if it was higher. That is surely incontestable.

As to the remarks of the noble Baroness, Lady Carnegy, I agree that there will always be children who like junk food. However, from what I saw of the meals offered to them, there was no junk food. Surely the fact that children may choose the least nutritious food does not mean that we should not offer nutritious food in a school meal. That does not seem an argument against continuing the long haul towards producing good school meals for our children.

The noble Baroness, Lady Trumpington, in my view, left a lot of questions unanswered. She did not mention the fact that the present take-up of school meals is 70 per cent., that the present take-up of FIS is 50 per cent., and that the expected take-up of family credit could be 60 per cent. The figure of the enormous extra number of children who will gain from the cash benefit is really only notional. I do not believe that she can lay it down in black and white in any way at all.

The noble Baroness did not answer questions as to whether families out of work or families receiving widow's invalidity insurance would benefit from the scheme. Those families, I should have thought, are the poorest. Having heard her answers I am not really any happier than I was previously. I realise, however, that there is a feeling among certain noble Lords on the other side that they have to get somewhere else—

The Lord President of the Council (Viscount Whitelaw)

No, my Lords.

Baroness Ewart-Biggs

So, my Lords, I should now like to test the opinion of the House.

4.15 p.m.

On Question, whether the said amendment (No. 45) shall be agreed to?

Their Lordships divided: Contents, 117; Not-Contents, 154.

DIVISION NO.1
CONTENTS
Addington, L.	Kilbracken, L.
Airedale, L.	Kilmarnock, L. [Teller.]
Allen of Abbeydale, L.	Kinloss, Ly.
Amherst, E.	Kirkhill, L.
Ardwick, L.	Lawrence, L.
Attlee, E.	Leatherland, L.
Banks, L.	Lincoln, Bp.
Birk, B.	Llewelyn-Davies of Hastoe, B.
Blease, L.	Lockwood, B.
Blyton, L.	Longford, E.
Bottomley, L.	Lovell-Davis, L.
Briginshaw, L.	McIntosh of Haringey, L.
Brockway, L.	McNair, L.
Brooks of Tremorfa, L.	Marsh, L.
Bruce of Donington, L.	Masham of Ilton, B.
Buckmaster, V.	Mayhew, L.
Burton of Coventry, B.	Milford, L.
Caradon, L.	Morton of Shuna, L.
Carmichael of Kelvingrove, L.	Munster, E.
Chandos, V.	Nicol, B.
Chitnis, L.	O'Neil of the Maine, L.
Cledwyn of Penrhos, L.	Oram, L.
Darcy (de Knayth), B.	Parry, L.
David, B.	Phillips, B.
Davies of Penrhys, L.	Pitt of Hampstead, L.
Dean of Beswick, L.	Ponsonby of Shulbrede, L.
Denington, B.	[Teller.]
Diamond, L.	Porritt, L.
Dowding, L.	Prys-Davies, L.
Elwyn-Jones, L.	Rathcreedan, L.
Ennals, L.	Rea, L.
Ewart-Biggs, B.	Reilly, L.
Ezra, L.	Roberthall, L.
Faithfull, B.	Rochester, L.
Fisher of Rednal, B.	Ross of Marnock, L.
Fitt, L.	Sainsbury, L.
Gallacher, L.	Seear, B.
Gladwyn, L.	Seebohm, L.
Glenamara, L.	Sefton of Garston, L.
Graham of Edmonton, L.	Serota, B.
Gregson, L.	Somers, L.
Grey, E.	Stallard, L.
Grimond, L.	Stedman, B.
Halsbury, E.	Stewart of Fulham, L.
Hampton, L.	Stoddart of Swindon, L.
Harris of Greenwich, L.	Strabolgi, L.
Hayter, L.	Strauss, L.
Henderson of Brompton, L.	Taylor of Gryfe, L.
Heycock, L.	Taylor of Mansfield, L.
Houghton of Sowerby, L.	Tordoff, L.
Hunt, L.	Turner of Camden, B.
Hunter of Newington, L.	Underhill, L.
Hylton, L.	Vemon, L.
Ingleby, V.	Vickers, B.
Irving of Dartford, L.	Wallace of Coslany, L.
Jeger, B.	Wells-Pestell, L.
John-Mackie, L.	Whaddon, L.
Kearton, L.	Wigoder, L.
Kennet, L.	Williams of Elvel, L.

NOT-CONTENTS
Ailesbury, M.	Ashbourne, L.
Airey of Abingdon, B.	Atholl, D.
Aldington, L.	Barber, L.
Alexander of Tunis, E.	Bauer, L.
Allerton, L.	Belhaven and Stenton, L.
Ampthill, L.	Beloff, L.
Argyll, D.	Belstead, L.
Arran, E.	Bessborough, E.

Blyth, L.	Lucas of Chilworth, L.
Boyd-Carpenter, L.	Lurgan, L.
Brabazon of Tara, L.	Lyell, L.
Brougham and Vaux, L.	McAlpine of Moffat, L.
Broxbourne, L.	McFadzean, L.
Bruce-Gardyne, L.	Macleod of Borve, B.
Caccia, L.	Mancroft, L.
Caithness, E.	Margadale, L.
Cameron of Lochbroom, L.	Maude of Stratford-upon-
Campbell of Alloway, L.	Avon, L.
Carnegy of Lour, B.	Merrivale, L.
Carnock, L.	Mersey, V.
Cathcart, E.	Middleton, L.
Cayzer, L.	Milverton, L.
Coleraine, L.	Montgomery of Alamein, V.
Crathorne, L.	Morris, L.
Cross, V.	Mottistone, L.
Cullen of Ashbourne, L.	Mowbray and Stourton, L.
Davidson, V.	Moyola, L.
De Freyne, L.	Newall, L.
De La Warr, E.	Noel-Buxton, L.
Denham, L. [Teller.]	Northesk, E.
Denning, L.	Nugent of Guildford, L.
Dilhorne, V.	O'Brien of Lothbury, L.
Donegall, M.	O'Hagan, L.
Dormer, L.	Onslow, E.
Drumalbyn, L.	Orr-Ewing, L.
Dulverton, L.	Peyton of Yeovil, L.
Duncan-Sandys, L.	Portland, D.
Dundee, E.	Portsmouth, E.
Eccles, V.	Radnor, E.
Eden of Winton, L.	Rankeillour, L.
Ellenborough, L.	Ridley, V.
Elliot of Harwood, B.	Rochdale, V.
Elphinstone, L.	Rodney, L.
Elton, L.	Rugby, L.
Erne, E.	St. Aldwyn, E.
Ferrers, E.	Saint Brides, L.
Forester, L.	St. Davids, V.
Fortescue, E.	Saint Oswald, L.
Fraser of Kilmorack, L.	Sanderson of Bowden, L.
Gardner of Parkes, B.	Sayile, L.
Gisborough, L.	Selkirk, E.
Glanusk, L.	Sharples, B.
Glenarthur, L.	Shaughnessy, L.
Gridley, L.	Skelmersdale, L.
Grimthorpe, L.	Soames, L.
Hailsham of Saint	Strathspey, L.
Marylebone, L.	Swinton, E. [Teller.]
Hampden, V.	Terrington, L.
Hemphill, L.	Teviot, L.
Henley, L.	Teynham, L.
Hives, L.	Thomas of Swynnerton, L.
Hood, V.	Thorneycroft, L.
Hooper, B.	Thurlow, L.
Hylton-Foster, B.	Torphichen, L.
Ingrow, L.	Torrington, V.
Kaberry of Adel, L.	Tranmire, L.
Kemsley, V.	Trefgarne, L.
Killearn, L.	Trenchard, V.
Kimball, L.	Trumpington, B.
Kimberley, E.	Vaux of Harrowden, L.
Kinnaird, L.	Vesty, L.
Knollys, V.	Vivian, L.
Lane-Fox, B.	Whitelaw, V.
Lauderdale, E.	Wolfson, L.
Layton, L.	Yarborough, E.
Lindsay, E.	Young, B.
Long, V.	Young of Graffham, L.
Lothian, M.	Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 3 [Housing benefit finance]:

4.24 p.m.

Baroness Hooper moved Amendment No. 46: Page 41, line 8, leave out ("less such deductions as are specified in the order") and insert ("with any additions specified in the order but subject to any deductions so specified").

The noble Baroness said: My Lords, on behalf of my noble friend Lady Trumpington, I beg to move Amendment No. 46. I propose to refer also to Amendments Nos. 47 and 48.

I am sure that noble Lords are well aware of the Government's view that the arrangements for subsidising local authorities' costs under the reformed housing benefit scheme must provide authorities with more incentives to monitor and control costs than the present arrangements. We have been discussing with the local authority associations our proposals to channel more support for authorities' costs through the rate support grant system, and they have made a number of alternative suggestions to us about the future arrangements. We have made clear to the associations that we are determined to get more control into the subsidy system, and if they are prepared to accept this then the Government are prepared to consider alternative approaches. We are therefore seeking to amend the Bill to give us the necessary powers to implement alternative arrangements in the event that it is established that these would fulfil our objectives.

Perhaps it would be helpful if I explained a little further that for administration costs we are proposing to take a permissive power—this is Amendment No. 47—to pay a direct grant which would be related to efficiency considerations rather than reimbursement of actual costs, as under the present arrangements. This power will not be used unless we are satisfied that such a direct grant would better meet our objectives than our original proposal to include housing benefit administration costs in the rate support grant arrangements. The amendment to subsection (4) of this clause—which is Amendment No. 48—is consequential on the main amendment and makes purely technical provision, as in existing legislation, for local authority accounting procedures.

For benefit costs we have accepted that our original proposal to support 20 per cent. of these costs through the rate support grant would not achieve the desired results. An alternative approach of paying a direct grant partly on actual costs and partly related to some measure of need is being explored. The amendment we propose to subsection 2(a)—which is Amendment No. 46—will permit calculation of benefit subsidy on this basis.

From this it will be recognised that detailed work now needs to be done in consultation with the local authority interests to devise arrangements which meet our objectives of more cost control in the subsidy system and an adequate level of support for authorities' expenditure on the housing benefit scheme. These amendments are intended to enable us to get on with the consultations which will be needed in the knowledge that the legislation will enable us to implement the new arrangements. The details will be set out in the annual subsidy order as they are at present. I beg to move.

Baroness Fisher of Rednal

My Lords, can the noble Baroness tell me whether I am on the wrong amendment? Did I understand correctly that the Government intend to reduce the subsidy payable on housing benefit to 80 per cent, of the benefit paid over to claimants? Am I right in saying that the remaining 20 per cent, is then having to be funded by the general rate fund and the rate support grant? Before I continue any further, am I right or wrong in what I am saying with regard to the amendment which the noble Baroness is moving?

Baroness Hooper

My Lords, with the leave of the House, if the noble Baroness is referring to reimbursement of benefit costs there should be only an 80 per cent. reimbursement of payment. The remaining 20 per cent. could be supported through direct grant—again related to some measure of need rather than actual payments—or a mixture of direct grant and RSG as an alternative to the original proposal to include 20 per cent. in the RSG. The intention is that the Bill will be amended to permit this, but, as I have said, it is a question of further consultation.

4.30 p.m.

Baroness Fisher of Rednal

My Lords, with the leave of the House, I thank the noble Baroness for that explanation. It is as I have it before me, which is what Birmingham City Council have worked out. They say that the Government intend to reduce the subsidy payable on housing benefit to 80 per cent. of the benefit paid over to claimants. The remaining 20 per cent.—and I think this is what the noble Baroness was saying—will be funded by the general rate fund and the rate support grant. Therefore, in Birmingham's housing revenue account this change will amount to a loss of £ 11.8 million per annum to the council. That is the way it was reported to the full council meeting a fortnight ago.

If the Government intend also to abolish the 60 per cent. subsidy on the administration of the housing benefit costs, that too will result in a loss to the city of £1.5 million. If the Government are also saying in the amendment—and it is difficult for me to understand it from what the noble Baroness said—that the administration costs have to be borne entirely by the rate fund, that again is a net loss to the City of Birmingham of £1.5 million.

Obviously that will mean eventually that these costs will result in an 8.5p rate rise for the city when these two amendments—if they are the correct ones, and I now understand that they are—come into effect. That is the effect that they will have on the city of Birmingham.

Baroness Hooper

My Lords, again with the leave of the House may I say that I think that the noble Baroness has not taken into account the effect of the rate support system. But I should reiterate that the Government have never been seeking to make savings from the proposed changes to the subsidy arrangements but to provide support for authorities' costs in a way which gives more incentive to cost control and efficiency. I believe that the noble Baroness is arguing along the wrong lines.

Baroness Fisher of Rednal

My Lords, with the leave of the House I read out what they say about the general rate fund and the rate support grant.

On Question, amendment agreed to.

Baroness Hooper moved Amendments Nos. 47 and 48:

Page 41, line 13, at end insert—

("(2A) For each year the Secretary of State may pay to an authority as part of the subsidy under subsection (1) above an additional sum calculated, in the manner specified by an order made by the Secretary of State, in respect of the costs of administering housing benefit");

Page 41, line 23, after ("rebates") insert ("and any costs of administering such rebates").

On Question, amendments agreed to.

Lord Kilmarnock moved Amendment No. 49;

After Clause 32 insert the following new clause:

("Appeals on housing benefit

1. .— (1) A person who has claimed housing benefit may appeal against any determination of that claim.
2. (2) Any appeal under subsection (1) above shall be to a social security appeal tribunal under the procedure laid down in sections 100, 101 and 104 of the Social Security Act 1975 and section 15 of the Social Security Act 1980, and any reference to "adjudication officer" in those sections shall be construed as including reference to the appropriate authority responsible for administering housing benefit under section 29 of this Act.
3. (3) Section 30(3) of this Act shall only be operative insofar as any regulations made under that section comply with the procedure established in subsection (2) above.")

The noble Lord said: My Lords, this amendment dealing with housing benefit appeals was moved late at night on Monday, 23rd June, by my noble friend Lord Banks. We bring it back because we feel it deserves a further airing at a time when more of your Lordships are present. The proposal is fundamentally a simple one. Since the rationalisation of all housing benefit payments in the hands of local authorities, appeals on housing benefit decisions have been confined to a local authority review procedure which has given rise to some criticism. This centres mainly on the membership of the review boards. The councillors on these boards often come from the housing committee and frequently feel their responsibility for, and an identity with, the decisions brought before them for review. The composition of these boards is therefore open to serious question on grounds of fairness and natural justice.

The proposal in the amendment is simply that in future claimants may appeal to a social security appeals tribunal under the procedure laid down in Sections 100, 101, and 104 of the Social Security Act 1975, and Section 15 of the Social Security Act 1980. These tribunals are working successfully in all other branches of the social security sytem, and there seems no good reason, now that the old supplementary benefit and local authority housing benefits have been unified, why a current unified housing benefit should not be subject to the same appeals procedure. Not only would justice be better served but there would be certain administrative savings—this was a point made by the noble Lord, Lord Stallard, in Committee—in not having to service review boards and train councillors when there is a perfectly adequate, and generally respected, adjudication machinery servicing the rest of the social security system.

In another place the Government conceded in Committee that there was a strong case for the rationalistion of all adjudications. Mr. Newton, the social security Minister, spoke of a "benefit-wide formula" in the quest of basic harmonisation. In answer to my noble friend Lord Banks, the noble Lord, Lord Trefgarne, acknowledged also that there were strong arguments for bringing housing benefit within the purview of the social security appeal tribunals, and reaffirmed at col. 142 that the Government are "actively pursuing the issue".

What further action is required other than the acceptance of this amendment? What better vehicle than this Bill to take a step for which the Government appear to accept the arguments? If there are other preliminary steps that require to be taken, can the Government say what they are?

I gather that in Committee in another place the Minister promised consultations, but that was months ago. Have consultations started? The Housing Benefits Standing Committee has met since then but has not, I understand, discussed this matter. Why not? Will the Government accept that it is not good enough to consult only with the local authorities, who, after all, administer the system, but that other outside bodies such as Citizens' Advice Bureaux should also be involved? In short, where have we got to, and when can we expect a conclusion? I beg to move.

Lord Stallard

My Lords, this amendment was moved at the Committee stage. As I recall it, in reply the noble Baroness gave the impression that she had not ruled it out completely but was going to consider the matter further between then and now. I hope she has had a chance to consider it further, because most of us certainly have, and the more I consider it, the more important I think it is that the noble Baroness accepts this amendment.

If we look at the clauses—and there are about five or six which affect housing benefit—we see that there are something like almost 20 different regulations which will affect this housing benefit. We know the muddle that the housing benefit scheme has been in ever since it was conceived and implemented in about 1983. There are some authorities which have not yet sorted out the interim arrangements, and certainly some other authorities are just beginning to get into contact with the original scheme.

There have been hundreds of mistakes. I nearly said thousands, and I would probably be more right if I said there have been thousands of mistakes. We know that there have been many mistakes on the DHSS side of other benefits. Here is a benefit which is muddled between the two of them. It is in the Social Security Bill, and some people have to inform the DHSS and apply to the DHSS if they intend to claim housing benefit.

The local authority then have to discuss the housing benefit. They have to take into account all the regulations—and I have not seen the regulations—that will be laid: regulations, for instance, like those contained in Clause 20, making provision, for the purposes of this Part of the Act, the housing benefit, as to circumstances in which a person is to be treated as being or not being in Great Britain". I do not know. It is like the Zola Budd regulations. Then it goes on: continuing a person's entitlement to benefit during periods of temporary absence from Great Britain". And then: as to what is or is not to be treated as remunerative work or as employment: as to circumstances in which a person is or is not to be treated as engaged or normally engaged in remunerative work or available for employment". There are 20 such regulations. Does anybody believe that if the DHSS and the local authority between them are given a group of regulations like that, they will be able to manage them capably? I do not. I do not have that kind of faith in either of those two bodies, especially when I consider that currently on the DHSS side, with supplementary benefit, 35 per cent. of all cases that are to go to appeal are withdrawn before they get that far because of initial mistakes in the first decision.

We know, too, that there were 12,000 supplementary benefit decisions last year (and every year) upheld by the appeals tribunal. There are vast numbers of mistakes made in these cases. How are ordinary people to obtain redress for the mistakes? They are told that it will be reviewed by the town hall; if they speak to the town hall about it, it will be reviewed. As I believe I said at Committee stage, there is some misunderstanding; benefit for the main part is administered by local authorities. Since housing benefit was introduced there has never been an adequate system of appeal or redress against any of the decisions of housing benefit officers. It is true that a review of a decision may be made by a board consisting of local authority councillors, and some of those councillors may also be members of the housing committee, which is the committee responsible for administering the scheme in the first place. That does not even smack of natural justice. I am not saying that those people who give of their time and expertise would deliberately make mistakes, but it is possible, is it not, that they will uphold the decision of the original housing committee? In my view that kind of review and that kind of board can in no way be seen to be independent; nor is the board expert in housing benefit law or in conducting appeals. These are both specialist areas in their own right, and yet this important benefit, because it involves a series of regulations and clauses, will lead to a worsening of the existing conditions of many thousands of people.

We know that if the 20 per cent. rates burden goes ahead, there will be further difficulties. I shall not weary the House with statistics, but we know that many thousands of people will have to find sums ranging from £75 to £200 or £300 per year more than they are having to find now to pay the extra rates. We also know that the rate arrears are worrying every local authority.

Very often the main safeguard against distraint and imprisonment at the moment is housing benefit. If it were not for the fact that housing benefit exists and can be claimed in its entirety, people would fall further into rate arrears than they are at the moment, with all the penalties that that would incur.

If we increase the burden by imposing this rate contribution on housing benefit, we shall increase the dangers. Surely it is only natural justice that those people involved and implicated in such an important decision affecting everything that they have ought to be able to appeal to an independent tribunal of some kind. I can see no answer to the proposition set out in the amendment. I am happy to support it.

4.45 p.m.

Baroness Gardner of Parkes

My Lords, I am slightly confused by this amendment. I feel I do not fully understand what it would do, and having listened to the debate on it there are a few questions I should like to ask of those who support it. The noble Lord, Lord Stallard, mentioned that so many mistakes had been discovered. To me that indicates that there is already some good way of finding out when things have gone wrong. If that is so, why do we need another procedure of this type? There are a few points in his speech that I should like to query. I take issue with one in which he said that a panel of three local councillors would not necessarily be impartial or fair. I think that is not correct. A panel of three locally elected councillors will always represent at least two parties, and possibly more. They can be completely relied on to judge a case fairly and on its merits. I really must stand up for local authority and locally elected members to that extent.

Housing benefit is a complicated issue. Part of it is for local authority housing and is called one name, whereas in regard to a privately rented dwelling it has another name. All of this makes it complicated. One is a rent rebate or a rate rebate, when the landlord is the local authority. As I understand it, the rent allowance is the benefit paid when a landlord is a private landlord or a landlord other than the local authority. The whole idea of that system has always been that the private landlord should not have any idea that the tenant is being assisted. As I understand it, the payment is made to the tenant so that he pays his private landlord without the landlord being aware of the circumstances of the tenant. If this system has changed, I should be very happy to be corrected on the point, but that is how I understand it has always worked.

With the present review system, the review is carried out by people who are very involved directly in the housing sphere; by that I mean local councillors. Local councils are still one of the predominant providers of accommodation for tenants. The private rented sector has shrunk very much over recent years. No one knows more about the management of council housing than local councillors. The noble Lord suggested it might be harmful if they sat on a housing committee. I would suggest the opposite—that it might be helpful if they sat on a housing committee. I am not satisfied about the appeal tribunals, though I see merit in having social appeal tribunals for other matters.

The noble Lord discussed the various categories of circumstances under Clause 20 which might need to be considered, such as whether someone was resident in this country, or whether they may qualify in different ways. I can see that a different case may be made out there. It is possible that certain types of decision—such as whether someone is eligible for housing benefit at all—might be considered appropriate to go to some other form of tribunal. But whether the housing benefit being received is right down to the pence and pounds is a different issue. I think that is better dealt with on a smaller, more local level rather than by a larger, more expensive, independent procedure of the type being discussed.

My own experience of housing allowances of all types, including housing benefit for private or council accommodation, is that very good charts are available from the local authorities consisting of a sort of ready reckoner system so that the tenant can assess his own situation, his own rent, in relation to his income. The high level of rent assistance still available is quite remarkable. It is usually very helpful for people to be able to assess their own cases.

There is much to be said for extending that system so that people could much more easily look up a chart showing their entitlement and see for themselves whether what they are getting is right, and then have a simple type of review. But any long-term or major review of the type set out in the amendment might create a whole new structure and greatly extend not the scope of the tribunals but the time that it would take for cases to be heard, and therefore the time that other cases that might be of a different nature would be held up.

I am not really happy with this amendment, and I do not feel that it has been explained as clearly as I should have liked. This is a complicated subject and is therefore difficult to follow. My opposition may stem partly from a lack of understanding, but I would not support the amendment.

Lord Banks

My Lords, the proposition is an extremely simple one. What the amendment is proposing is that, instead of having these appeals heard by a body which includes people some of whom sit on the housing committee and some of whom feel a responsibility for the decisions of that committee, they should be heard by an entirely independent, genuinely independent, appeal process. Since such a process exists for the rest of social security, it seems reasonable that it should be the one used.

The noble Lord, Lord Trefgarne, in replying to this amendment when it was moved at an earlier stage, said he agreed that there were strong arguments for bringing housing benefit within the purview of social security appeal tribunals. He said that the Minister of State had undertaken to consider that further. What we are hoping to elicit this afternoon is how much further that has been taken.

Baroness Hooper

My Lords, we have had a good discussion on this today although the issue has already been debated, albeit late at night, and I can really only help the House by restating the Government's position. My right honourable friend the Minister of State has said that we have a lot of sympathy with the argument that adjudication arrangements for housing benefit should be brought into line with those for other social security benefits. But this is not only a very important issue; it is also a very complicated one, involving difficult questions concerning the relationship between local authorities, their staff acting as adjudication officers, appeal tribunals, and so on. Major administrative changes may also be involved. And all this, it has to be said again, against the background that we have no clear evidence that the present review arrangements are not generally working in practice. In spite of what the noble Lord, Lord Stallard, has said this afternoon about thousands of mistakes, little or no criticism has been received from individuals.

It would be ill-judged in these circumstances to make a commitment now to change housing benefit adjudication arrangements from April 1988 in the way suggested by the new clause. We would need detailed discussions with all the interested parties and we cannot foresee at this stage what changes would be involved, or even feasible, and over what sort of timescale they could be introduced. Commitment to a specific timetable without that basic information would be reckless indeed—I think the queries raised by my noble friend Lady Gardner of Parkes this afternoon illustrate this—especially as authorities are already likely to be fully stretched implementing the structural reforms.

The noble Lord, Lord Kilmarnock, said that if the Government are actively considering the situation, why not take advantage of this Bill and accept this amendment now? The amendment commits the Government to a particular timetable. Under this amendment new arrangements would have to be in place by April 1988.

I can inform the noble Lord that discussions have already taken place with the office of the Chief Adjudication Officer and local authority associations. But this change, simple perhaps in principle, involves major considerations of organisation and administration. Existing arrangements for other benefits cannot simply be translated into housing benefit because housing benefit is administered by some 489 independent local authorities. In the circumstances, it would be irresponsible of the Government, in recognising the arguments of principle, simply to brush aside the very real practical issues which have to be thought through in order that they may succeed.

I hope that I have said enough. As we have said all along during the passage of this Bill in this House and in another place, the Government have an intention to review housing benefit adjudication. Perhaps in addition, and to reassure the noble Lord, Lord Kilmarnock, and other noble Lords, I can quote from the discussion in another place when my right honourable friend the Minister said this: We have a time problem. Ministers have a great deal of sympathy for some of the points made about the problems. I hope that honourable Members will accept that there is a great deal to be thought through, including the relationship between the Chief Adjudication Officer in the department and the officials in local authorities who must decide who is a non-dependant and so on. Equally, if we were to accept the amendment, the take-on problems for local authorities would have to be considered carefully in conjunction with the work involved in implementing the new scheme". It should be evident that we have accepted that the possibility of introducing appeal rights to social security appeal tribunals should be examined alongside this. That is a clear commitment and, bearing in mind the long and detailed discussions which we will now have to undertake, I ask the noble Lords who are the promoters of this amendment to withdraw it.

Lord Kilmarnock

My Lords, I am grateful to those who have spoken in this short debate. I am sorry that the noble Baroness, Lady Gardner of Parkes, was confused. The rationale behind this amendment is that if the appeal on housing benefit is kept as in the Bill, it will be the only social security benefit which does not have a right of appeal to a social security tribunal. It will be simply the only one. I am sure that the noble Baroness, Lady Gardner, was right—I wish to cast no aspersion upon councillors—to point out that many councillors will, and do, endeavour to be impartial. But they are, in effect, sitting in judgment on their own council's decision and it is important not only that justice should be done but that it should also be seen to be done.

With respect to the noble Baroness none of her arguments about the probity or the expertise of councillors really affects the normal right of the citizen at the end of the day to a proper appeal procedure. As my noble friend Lord Banks and the noble Lord. Lord Stallard, pointed out, this happily exists in the shape of the existing social security appeal tribunals; so it is not a question of setting up any new structure or any new machinery.

The noble Baroness went on to say, I think, that she had had no evidence of malfunctioning in the existing system. That was not the view of the legal action group which investigated this problem. They say: We know through our members that a number of judicial review proceedings have been taken in relation to inadequately made decisions by these review boards. We note that in many of the cases which have been taken, the housing benefit review board has accepted, after taking counsel's advice, that it should review its original decision". I do not know what volume of injustice there has been, but obviously the system is not working as smoothly as the noble Baroness seemed to suggest.

If I may say so, the noble Baroness, Lady Hooper, who, as always, answered in a helpful way, has rather blown up the potential difficulties in the way of making this relatively simple change. My noble friend Lord Banks said it was a relatively simple matter. I agree with him there, given the fact that we have a perfectly good appeal tribunal which we could use. Had housing benefit still been within the purview of supplementary benefit, surely there would have been absolutely no doubt over what would be the proper forum of appeal; it would be the social security appeal tribunal.

The time problem to which the noble Baroness referred seems, frankly, to be simply one of getting started. As I said in my opening remarks, some months ago the Minister of State made a commitment on consultations, and we have heard no evidence from the Government this evening that any of those consultations have taken place. So I hope very much that as a result of this short debate the Government will be prodded into getting on with something with which fundamentally they seem to agree.

In fact I might have prodded them a little further by pushing this to a Division but the Government got in a lot of people to vote down free school meals who are now, I am reliably informed, still in the Library and the Tea Room and who have not had the advantage of listening to this short debate. So in fact I think that to press this to a Division might be a counter-productive exercise. I will therefore end on a note of exhortation by asking the Government to take note of what has been said in the Chamber and, please, to get on with the job. On that note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5 p.m.

Clause 33 [The social fund and social fund officers]:

Lord Pitt of Hampstead moved Amendment No. 49A: Page 43, line 29, at end insert— ("in respect of maternity needs which will be sufficient to meet the normal requirements of a newly born baby and that payment shall be payable to the mother not less than six weeks before the expected date of confinement.")

The noble Lord said: My Lords, this is a simple amendment, which I hope the Minister will accept. It is intended merely to safeguard the maternity grant. It seems to me it would be a pity if the maternity grant was for less than was necessary and that if in fact the mother was still in financial difficulties at the time. That is one of the purposes of this amendment.

The second purpose is to make sure that the mother gets it early enough to be able to use it sensibly for the purpose for which it is given. That is all: I hope the Minister will accept that. We have moved from a specific grant to a discretionary grant and what I am asking for is a commitment that the grant will be adequate. I hope the Government will agree to that, and I beg to move.

Baroness Gardner of Parkes

My Lords, this is a very interesting amendment, in that it more or less takes us to the situation where we would hope a great deal of money would be given to those mothers in real need, as opposed to a general handout to everyone. But, although I am in sympathy with the merits of the amendment, I cannot see that it should be necessary because I understood that the whole principle of this Bill was that by not giving out blanket handouts to everyone there would be more for cases of real need. If that is so, then I believe that that will happen and we do not need to add this little bit of text to the Bill. I hope that the Minister, when she replies, will be able to assure us that cases will be dealt with on their merits.

Another point about his amendment is that it is in itself slightly "blanket" and it does not take into consideration the differing needs of one mother as against another. It deals with the needs of the baby but it does not take into consideration what other means might also be available. I think it is rather wide and, as I say, I hope that the spirit of this amendment will be taken into account in the original Bill.

Baroness Trumpington

My Lords, our proposals for maternity expenses have been spelt out clearly in both the Green and the White Papers. I listened carefully to the remarks of the noble Lord, Lord Pitt, about adequacy. I am not persuaded that we should alter these proposals now; but I understand and appreciate very well his remarks about adequacy.

The social security system has long recognised that having a baby leads to a number of extra expenses. Not only does the social security system realise it, but so does the mother: there are baby clothes, a cot and so on—and I speak from experience. But the current system is an unsatisfactory mixture. On the one hand, there is the universal maternity grant of £25. It is expensive in global terms because it is available to everyone, but it is criticised for not giving enough help to people on low incomes. On the other hand, there are supplementary benefit single payments based on totting up the need for each item, down to nappies and a plastic bottle, which are restricted to people on supplementary benefit. What we are proposing is a more rational use of resources which will provide a reasonable contribution to the cost of providing for a baby for people on low incomes, in or out or work. The payment will be a flat rate amount, likely to be around £75, or three times as much as the current maternity grant.

I should just like to remind your Lordships that the proposals enable us to give more help to people on low incomes, not on supplementary benefit. There will be greater fairness between those in work and those out of work. We believe that a reasonable sum is better than an attempt at precise provision in the present supplementary benefit scheme. We are replacing a system which bases payment on the separate need for each of a list of items with one that provides a standard sum in all cases.

Briefly, we have aimed for relatively simple arrangements in setting out our proposals, picking out where appropriate the best of supplementary benefit or maternity grant rules. I should perhaps point out here that people will be able to get maternity payments from 11 weeks before the expected birth to three months afterwards. That is like maternity grant but more generous than the supplementary benefit rules, and it is more generous also than the six weeks contained in the amendment put forward by the noble Lord, Lord Pitt of Hampstead. So I hope the noble Lord will have found a certain degree of reassurance in my remarks.

Lord Pitt of Hampstead

Yes, my Lords, I found a certain amount but I wish the noble Baroness had said what I hoped she would say: that in fact the Government will try to see that it is adequate, and that although £75 is the present proposal this sum is going to be reviewed and that we will make sure it is always adequate. That was all I was really trying to get from the Minister. All I really wanted was an assurance, which would be down in Hansard, that in effect the Government will always see to it that this grant is adequate for the needs of the mother. I now beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Henderson of Brompton moved Amendment No. 50: Page 43, line 32, at end insert— (" ( ) Social fund payments may be repayable in prescribed circumstances but not otherwise.").

The noble Lord said: My Lords, in Committee there were four amendments which dealt in one way or another with the question of whether social fund payments should be made as grants or by way of loan. Various objections were taken by the noble Baroness and by the noble Lord, Lord Boyd-Carpenter, to points in those amendments, including the one which I moved. I think it is only right to come back on Report with an amendment which I consider goes a very long way towards meeting the points that were raised by the noble Lord, Lord Boyd-Carpenter, as well as by the Minister.

I was most encouraged by what I called the emollient reply of the noble Baroness to my amendment on the last occasion. In many of the things she said she went quite a long way to meet us. For instance, in col. 629 on 30th June, she said: We have always made it clear that payments from the social fund, including those to support community care needs, will be in the form of grants and not loans.

That was a very welcome statement, and she went on to say in the same column: With regard to young people leaving care, I am glad to say that that is one of the vulnerable groups for whom we shall be considering grants to set up home in the community".

So I am encouraged by that reply and, I may say, by talks in between, without any promises, to believe that the Government view and the kind of view which I am putting forward, together with my noble friends, are not too far apart.

First, I would say that this amendment is still about the same subject—that is, the undesirability of loans to those who are on income support—but it is very different from the previous amendments, in view of the remarks of the noble Baroness. The amendment reads: Social fund payments may be repayable in prescribed circumstances but not otherwise".

This, in effect, means that in the normal course of events social fund payments will be by grant. But it does not rule out loans by any means, because it gives the Government power to prescribe circumstances by, I think, regulations under which there shall be repayable payments from the social fund. It does not go against the principle, which has been one of the bases of this package for social reforms by the Government, that "some social payments should be recoverable". Again, I take those words from the speech of the noble Baroness, Lady Trumpington, in Committee at col. 616 of the Official Report of 30th June.

Again I emphasise the fact that this amendment is recognising the Government's principle that some social payments should be recoverable. We do not deny that. The noble Lord, Lord Ennals, agreed with the noble Lord, Lord Boyd-Carpenter, that of course there are some cases where it would be desirable for loans to be repaid; and I do not think there is any argument across the Floor of the House, or between any quarter of the House, about that. That position of the Government is respected. But in respect of those recipients of social fund payments who are on the poverty line, it does not seem to be acceptable that there should be repayments. This amendment also deals with the question of fairness, which the noble Baroness raised, and I shall deal with that later.

I think it was in connection with the amendment of the noble Lord, Lord Banks, that the noble Baroness said that it was technically a horror. I hope that she does not find this amendment technically a horror. If she does find that it is in any way deficient, then of course it could be amended on Third Reading. What I find is that, not technically but in reality, it would be a horror if repayment applied to those on income support. That is really the basis of our amendment.

Another point which the noble Baroness made was that the, maximum rate of recovery has not yet been decided, but … we intend to have one".

Those are words from her speech at col. 618. Very well, my Lords. Of course there must be a rate which will be determined in due course, but that will be the exceptional case where it is decided that the recipients will be capable, in all the circumstances, of repaying a loan and this we accept. But the moment you start talking about a maximum rate of recovery, it brings one onto the reality of the actual repayment.

After all, those who are on income support may already be in debt. They may have rent and fuel direct deductions. Then, on top of that, there comes whatever is decided by the DHSS they should pay in respect of a loan from the social fund. I do not think it is acceptable that the rent and fuel direct deductions should have added to them further deductions in respect of benefits which are received from the social fund. The family would already be below the poverty line, and it would become that much more below the poverty line if any thought of repayment was considered for those in that condition.

This matter of debt is something which we all ought to take extremely seriously. I believe that families as a whole are far too indebted. Even for the rich it is a burden and those who profit from it are the moneylenders. I believe that those who are so unfortunate as to be in need of receiving social fund payments, and who may already be in debt for essential services of one sort or another, should not have any further burden put on them by this Bill.

Therefore, I particularly commend this amendment to the House. I would ask the noble Baroness to accept from me that I say this not just because I have put my heart before my head—I have not. I am considering the conditions of those who would have to repay a loan, which involves the consideration of what the noble Baroness might be pleased to call my heart: but I am also considering, quite hard-headedly, that this amendment would not only be socially beneficial but would cost the country less.

So many of the people who are in this unfortunate position are not just the poor but the inadequates of life—the more feeble people. They are not the clever ones who have, I grant and fully acknowledge, been able to work the system in the past. They are likely to be the inadequates who, through extreme financial deprivation, probably as much by muddle as by poverty, are least able to cope. This sort of situation, when you have inadequacy and poverty together, leads, as I think is freely acknowledged, to the break-up of homes, to trouble with the children and even to criminal offences. All these things, apart from being anti-social, are extremely expensive on the social services, extremely expensive on the courts, and extremely expensive on the prison system.

So I ask the noble Baroness to consider this as a hard-headed proposition, and to accept that this amendment, or something like it, will not cost the country more. It will probably save the country money as well as save a number of very unfortunate people from the disintegration of their personalities and of their families. My Lords, I beg to move.

Lord Ennals

My Lords, I want warmly to support this very important amendment. I certainly do not want to repeat the issues that we covered when we debated this at Committee stage. We had a jolly little exchange between the noble Lord, Lord Boyd-Carpenter, and the right reverend Prelate the Bishop of Southward about what "normally" means. In a sense, the purpose of this amendment is to see that we do not have any argument about what is normal, because there would be listed items. But I must say that I have absolute horror about forcing people into debt. I argued the point on the last occasion—and I shall not develop it again this time—that there are many people for whom debt is misery; and debt sometimes leads to suicide. I very much agreed with the point made by the noble Lord, Lord Henderson of Brompton, that we are often dealing with those who are inadequates.

I want to look at two groups of people who would be affected by this amendment. Before doing so I have to say that the feasibility of a payment scheme based primarily on loans depends to a large extent on the basic level of benefits under the new income support scheme. That is obvious. We do not know what that level will be so we are to an extent debating in the dark. But the great majority of claimants of single payments are lone parents struggling to bring up their children on what we can only call a subsistence income; and they are people who have been unemployed for long periods; many of them have had psychiatric problems or are suffering from other medical problems. It is at those two groupings that I should like to look just for a few minutes.

When I was a Member of the Select Committeé on Children in Care in another place, we observed in our report—and the report was published after I had left another place—that by and large children in care are the children of the poor. It is sad but it is a fact. The committee also pointed this out: The high proportion of children in care come from families on supplementary benefit. Factors such as low income, poor homes, single parent families and large families may well increase the likelihood of children coming into care. The links between basic financial stress, mental difficulties and child abuse have been well established—all too well established. There are then good reasons for any government to protect the children of families depending upon benefits.

But even the Government's own technical annex to the White Paper makes it clear that 260,000 lone parents will be worse off as a result of the switch to the income support scheme. In my view, this underestimates the problem for a number of reasons. Perhaps I can give three of them. The figures in the annex do not appear to take account of the loss of weekly additions. If a lone parent is receiving a heating addition of, say, £4.45, the loss will be greater than indicated in the annex. Secondly, subsidiary housing costs such as home insurance and water rates will no longer be separately assessed. These could add a further £1.40 a week to the losses incurred. The third example is that no account is taken of the repayment of loans; and yet the Government have indicated that 10 per cent. of benefit would be withdrawn automatically throughout the repayment period. If more than one loan is given deductions could rise to 15 per cent. Fifteen per cent. of what? If it is 15 per cent. of very little, one is left with less than very little. If all the factors to which I have referred are taken into account, lone parents could be worse off to the extent of some £13 per week.

All the professional and local authority associations whose members will have to deal with the human consequences of the Bill have concluded that they could not work with a social fund based largely upon loans. I put in the word "largely". Many of them have said that there should be no loans at all. But it has been agreed across the House that there are certain cases for loans. I am not disputing that at the moment, and the amendment accepts that there are certain circumstances for loans.

One of the main reasons for the decision that was taken by local authorities and professional bodies—and it certainly was not taken lightly—was the predictable impact of loans on child care. Social workers envisaged that in a large number of cases their work to maintain children in their own homes would be rendered almost impossible. Families who struggle from one crisis to the next on benefits, which the SSAC recognised to be "at a very basic level", will simply not survive intact if the loan scheme is implemented. I remember Sir Keith Joseph, when he was Secretary of State, referring to the circle of deprivation. The problems mount and mount, become bigger and bigger, and more and more intractable. So the lone parents are one group.

The other group of claimants whom I want to mention are also people close to my experience—people who are unemployed over long periods or intermittently, a sizeable number of whom are people who have lived for long periods in institutions—some for more than 20 years. Some 30,000 psychiatric hospital beds have been closed over a period of 13 years. Tens of thousands of people who 13 years ago would have been hospitalised now depend on supplementary benefit, and more and more mentally handicapped people are attempting an independent life in the community. We would all welcome that. We would all say that it is right that people who are, or have been, in long-stay institutions but who could be sustained in the community should be brought into the community. But we must bring them into the community under circumstances in which the community can care for them. How much more difficult it must be for people with very pressing psychiatric problems or limited capabilities to cope with a loan as opposed to a grant, quite apart from the fact that a reduction to 80 per cent. of benefit and the repayment of loans simply is not realistic for the great majority of claimants. If they are receiving only 80 per cent. of what they would have received they are already in difficulties.

One knows from what was said in another place by Mr. Tony Newton that this issue is causing the Government some concern. Mr. Newton said at the Committee stage in another place: Work on this part of the Bill"— grants or loans for one-off expenses or community care needs— is at an earlier stage of development than the arrangements for maternity or funeral arrangements". So the Government were looking at the problem of grants or loans. He went on to say: This Government will be giving further consideration to details in the considerable period—two years—before the planned introduction of this part of the fund". So quite clearly he was recognising that it could not be done just by loans and that therefore there needed to be some kind of structure.

This amendment which was moved very ably by the noble Lord, Lord Henderson, seeks to provide the right framework within which that consideration can be given. The Government have proposed that social fund payments will be repayable except in limited prescribed circumstances. In the light of the concerns expressed about such an approach by the Social Services Advisory Council, the Association of Directors of Social Services, the British Association of Social Workers and the local authority associations, we hope that the Government will agree that grants should generally be payable but that loans may be given in prescribed circumstances.

We have not sought in this amendment to prescribe the circumstances, but the Bill is proceeding and before long will be on the statute book. So we need such an amendment which gives freedom to the Government, which of course we can discuss when they come forward with the regulations, to prescribe what are the circumstances in which there should be grants and in which there should be loans. In this way the flexibility which the noble Baroness has often, quite rightly and understandably, asked for is given to the Government. I hope that she will see that this amendment gives great freedom to the Government and, in a sense, provides a framework in which the further consultation referred to by Mr. Tony Newton can be carried forward. I hope this amendment will be accepted.

5.30 p.m.

Baroness Faithfull

My Lords, I should like to take up two points made by the noble Lord, Lord Henderson, on this amendment. First, as a director of social services it was part of my role to collect debts. It is very expensive collecting debts, and I wonder whether the Government have recognised exactly what procedure will be involved in the collection of debts from people who have no money. The noble Lord, Lord Ennals, remarked on this.

I once decided to collect a debt—and much good it did me! The mother disappeared and the three children involved came into care. It was far more expensive. Therefore, one has to consider how to collect debts from people who do not have any money. Secondly, the magistrates are in a difficulty because there are certain cases where they can only impose a fine. How can you fine someone for a debt they have not paid with money they do not have? Therefore, one must think very hard and long about the sanctions. Collecting money from such folk is extraordinarily difficult.

My second point arising from the speech of the noble Lord, Lord Henderson, is on the whole question of debt. In this country we must face the fact that there are very many people in debt. The rate debt is appalling. The housing debt is appalling. If my noble friend the Minister is wondering what are the alternatives, I suggest that we should think of developing the finance advisory centres which are being set up. I am thinking in particular of the Birmingham Settlement. People who are in debt and want help with the management of their money are able to go to a club and receive counselling help from people—mostly businessmen who have retired and who give their time for nothing. I am not supporting debt because I think debt is wrong, but the Government's proposals for dealing with it are counter-productive.

Lord Kilmarnock

My Lords, I do not think that a great deal needs to be added after the eloquent and, to use his own term, hard-headed speech of the noble Lord, Lord Henderson of Brompton. Indeed, the noble Baroness, Lady Faithfull, has just given some underpinning to his claim that what he proposes might, in the long run, save money rather than cost money.

The noble Lord, Lord Ennals, made the point of the really drastic effect there would be of a 10 per cent. or 15 per cent. reduction in the weekly income of such families throughout the period of repayment of a loan, with the possible result in the break-up of the family and the additional expenses thereby incurred. There is a further point that has not been mentioned. Social workers have pointed out that if loans are to be introduced instead of single payments a considerable amount of their time will be spent writing letters to charities and, when all else fails, negotiating with the DHSS managers for a review of the position.

In an unusual public expression of concern recently, 28 grant-giving charities issued a strong warning to the Government against the introduction of a social fund based upon loans. They said: We are particularly troubled by the possibility that money will be given by way of loan rather than as an outright grant. It is clear that under the Direct Deductions Scheme for fuel and rent debts, many families have discovered that the money left available for their every day basic needs, and even for food, is insufficient. Compulsory deductions for the repayment of loans from the Social Fund will reduce still further the money available for other purposes. We are concerned that in such cases, malnutrition may be a very imminent risk. Some of the undersigned organisations are already having to make grants to help children who are unable to attend school due to the lack of clothing and footwear". I have one other quote, and it is from Mr. Robert Morley, the Director of the Family Welfare Association. Recently he said: FWA's experience shows that already there is a return to 1930s style poverty with children being unble to attend school through lack of adequate clothing and shoes. Each year it has to turn away many hundreds of applicants, and last year its service was closed for nearly half the year through lack of funds". In view of the obvious social consequences of loans for the great majority of claimants, whether families with elderly or disabled people, and in view of the very widespread concern reflected in your Lordships' Chamber this evening at the Government's proposal that the bulk of the social fund payment should be in the form of loans, we on this these Benches very much hope that this amendment will have the Government's support. As the noble Lord pointed out, there is a considerable degree of flexibility for the Government to decide whether to use loans to a greater or a lesser extent.

Baroness Trumpington

My Lords, the noble Lord, Lord Henderson, will no doubt be disappointed that I cannot agree to this amendment, but I hope he will allow me to commend the manner in which he moved it, which was gracious and compassionate.

This amendment raises two issues; namely, the role of regulations in a discretionary system and the dividing line between grants and loans. Let me immediately take up the point made by the noble Lord, Lord Faithfull—I am sorry; I mean the noble Lord, Lord Henderson—who quoted my remarks in Committee concerning maternity and funeral payments. I reaffirm that maternity grants are just that, and that funeral payments will not be recovered from the applicant's own resources, although they may be recouped from the deceased's estate if it can meet the cost.

The issue of regulations has been extensively debated in Committee, and I will not rehearse all the arguments again. Suffice it to say that our proposals are based on the belief that to detail in regulations every circumstance in which a payment should be made—whether it be a loan or a grant—would be over-restrictive. It would retain some of the problems of the present system of single payments. What we have been aiming for with the social fund is a scheme which can respond flexibly and quickly to the needs of people on low income. Having said that, we are of course considering carefully the position of regulations in the social fund following the amendments which were passed in Committee.

Turning to the question of loans, we have made it quite clear that we believe that loans should form an essential element of the social fund since the present open-ended commitment to assist one group of low income families when others do not have the choice appears to us to be inequitable. For example, we must look at the position of pensioners with incomes just above the supplementary benefit level, or low paid workers whose earnings may actually be less than supplementary benefit. Faced with expenses for which they have not been able to budget, they have to rely on credit or hire-purchase, or perhaps an approach to a moneylender, and so face even higher interest rates. If they cannot use those sources of finance they have to go without. By contrast, someone with a similar income but on supplementary benefit could claim a single payment and receive a grant running into several hundreds of pounds. This must raise questions of fairness.

Lord Henderson of Brompton

My Lords, perhaps the noble Barness will give way on that point. The noble Baroness raised that issue in Committee. This was a case to bleed the heart; and I gave her another case to bleed the heart, of those below the poverty line and on the poverty line who had these direct deductions for fuel or rent as well as having to repay a loan. The Social Security Advisory Committee which advises the Secretary of State took the view, which I can quote from its report, that very few working people have incomes as low as those of people dependent upon income support. So although the noble Baroness is talking about hard cases and about the jealousy principle, there are only a very few of these people. Most people who are in work have very considerably higher incomes than those who are on income support. Although of course I respect that argument, as I said in Committee, it does not carry all that weight because there are so very few of these people.

Baroness Trumpington

My Lords, I do not think that alters what I was just saying, which is that the very poor people can obtain credit only at a very high cost. If they need something and their need is very great, they have the fallback of the social fund. To be in debt is perfectly frightful and can lead to the break-up of families. I agree with the sentiments that have already been expressed on that subject this afternoon. I am sensitive to the particular point that the social fund will increase the indebtedness of the poor, and indeed the noble Lord, Lord Henderson, has just spoken about that subject, but the use of credit is, and always has been, widespread among all sectors of our society. However, poor people are disadvantaged—I regret that I have to repeat it—by having access to only high-cost credit. The social fund will help people who are on very low incomes to budget by offering them interest-free advances of benefit.

Equally, the noble Lord, Lord Ennals, has said that people on very low incomes cannot afford to get into debt. I could not agree more; but again at risk of repeating myself, people not on supplementary benefit receive no help at all and have to cope on their own, and so the present arrangements are hardly fair. For people who obtain loans we are proposing a limit on the amount which can be deducted from benefit, and generally there will be a maximum period allowed for loans. This will ensure that the level of recovery is not too high and will not go on for too long.

Another point I would mention is that this is a voluntary process. Nobody is actually telling people to take loans. They will or they will not take them by their own free will. Equally they may be eligible for grants in certain cases. As regards the problem of repaying loans from benefits, the rates of recovery and the maximum period, which were spoken of by the noble Lord, Lord Ennals—

Lord Ennals

My Lords, if I may—

5.45 p.m.

Baroness Trumpington

My Lords, may I get on please? We have not finally decided on all matters of detail relating to the operation of the fund. The full scheme will not come into effect until 1988, which is nearly two years away. The maximum rate of recovery has not yet been decided. The purpose will be to ensure that people who are having social fund payments recovered do not have an amount deducted which is too large and that deductions do not go on for too long a period.

Of course there are rules at the moment which govern the amounts which can be deducted from benefit for various purposes. For example, if a person has a housing debt, the maximum deduction is 5 per cent. of the single householder rate. For a single fuel debt, the maximum deduction is 10 per cent. of the single householder rate. There are also rules governing other deductions and governing the priority of debts when there is more than one deduction to be made. So it is yet another area where we can examine the way in which so far similar rules have operated in the scheme and so build on that experience.

The noble Lord, Lord Ennals, implied that the automatic response will be loans and not grants, even where people seeking help have severe psychiatric problems or where there is a serious risk of a child going into care. As I explained before, there will also be grants in certain circumstances to promote community care, and the types of situation mentioned by the noble Lord are indeed among those wherein we would expect social fund officers to consider the possibility of community care grants.

My noble friend Lady Faithfull spoke of the difficulty in recovering the loans from poor people, but our main proposal aims to recover loans from weekly benefit, normally from income support, in reasonable weekly amounts. Recoveries will therefore generally be deducted at source and will thus avoid many of the problems suggested by the noble Baroness. This issue has been debated at some length also, and as your Lordships will recall, an amendment which called into question the principle of loans was defeated in Committee.

While there will be circumstances in which we would want to make a non-recoverable grant, we are convinced of the fairness of making an interest-free loan that will be recoverable on the basis of an individual's need and his ability to repay; but to prescribe the exact circumstances in which a payment would or would not be recoverable could lead to just the sort of rigid system from which we are trying to get away in single payments. I fear that I cannot recommend this amendment to your Lordships.

Lord Henderson of Brompton

My Lords, I cannot think what is rigid about this amendment. I myself do not believe that the noble Baroness has addressed her mind to the text of this amendment, which says that: Social fund payments may be repayable in prescribed circumstances". What can be more flexible than that? It is not rigid; by regulations one may prescribe the circumstances. I wonder whether the noble Baroness can tell me in what respect that is rigid.

Baroness Trumpington

My Lords, with the leave of the House and before the noble Lord sits down, it is the word "prescribed" which sends us straight back into the single payments situation.

Lord Henderson of Brompton

My Lords, there I think I must disagree with the noble Baroness and ask the House to recollect that this provision does the same as any other which is to give a Minister regulatory power to lay before both Houses, or even not to lay before both Houses, regulations to prescribe certain circumstances which can then be brought into operation; and if those ensuing "certain circumstances" prove that the regulations are to his satisfaction, or ought to be modified or altered in any way, then further regulations may be prescribed for that purpose.

This amendment has built into it just the kind of flexibility for which the noble Baroness has been asking and just the kind of flexibility for which the Minister has been asking. So I cannot understand that aspect of her reply. In fact, as the noble Baroness said at the outset that she cannot agree to this amendment, I have very little for which to thank her, alas. Perhaps I should thank her for her intentional compliment to me at the beginning of her speech, but even more perhaps I should thank her for her unintentional compliment when she referred to me as the noble Lord, Lord Faithfull. That is the only thing for which I can truly thank her, and I do indeed thank her without any qualification whatsoever.

I particularly regret that the noble Baroness should take this line because it is a more rigid line than she took in Committee. I have already quoted three or four passages from her speeches on that occasion which led me then to call her reply "emollient". I cannot, alas, do that now. Let me quote one more excerpt from her speech in Committee: We are, on the whole, talking about exceptions when we talk about people who will not get a grant immediately".—[Official Report, 30/6/86; col. 686.] That was very promising. I thought that we were on Common ground there, in view of that and other indications that the Government were in the process of modifying or qualifying the wording of the Green Paper and the White Paper, and that the Government now recognise the need for grants in most situations. That was the impression which the noble Baroness gave, and that was the kind of impression that I thought Mr. Tony Newton was giving when he said that time was needed, that the Government's mind had not been made up, and that they would consult and consider over the next two years. As the noble Lord, Lord Ennals, so rightly said, all that the amendment is doing is providing the machinery for that consultation process eventually to be crystallised in the form of regulations.

The Government's attitude has hardened. As I said, the noble Baroness spoke like a sucking dove in Committee and I thought that she would say today, "Yes, we accept the amendment but perhaps not in the precise form in which you have moved it, but in some other form which I can suggest on Third Reading which could produce the same result or something like it". However, instead of going along the path which she was treading in Committee, she has suddenly taken a U-turn and gone back on the line which she was taking in Committee. I ask the noble Baroness to think about what a very bad impression it gives—people who are on the poverty line will have social service grants made repayable so that they will be living below the poverty line. Can that be the intention?

If the noble Baroness resists the amendment, the Government's intention will be plain: they want people to exist (because of the deduction of loan payments) at a level of income which is below the generally accepted poverty line. I cannot believe that the Government want to find themselves in that position. I am reminded of the story about Harold Nicolson when he was a Labour candidate for Croydon. Someone asked him whether he did not agree that the poor were down-trodden by the Conservative Party. He said that he would not put it like that, but that sometimes the Conservatives were not very careful where they put their feet. This is one such occasion. The Conservatives are not being very careful where they put their feet, and unfortunately I must therefore press the amendment.

5.53 p.m.

On Question, whether the said amendment (No. 50) shall be agreed to?

Their Lordships divided: Contents, 112; Not-Contents, 124.

DIVISION NO.2
CONTENTS
Addington, L.	Jenkins of Putney, L.
Airedale, L.	John-Mackie, L.
Allen of Abbeydale, L.	Kilbracken, L.
Alport, L.	Kilmarnock, L.
Amherst, E.	Kinloss, Ly.
Ampthill, L.	Kirkhill, L.
Ardwick, L.	Lawrence, L.
Attlee, E.	Listowel, E.
Banks, L.	Llewelyn-Davies of Hastoe, B.
Barnett, L.	Lockwood, B.
Beaumont of Whitley, L.	Longford, E.
Birk, B.	Lovell-Davis, L.
Blease, L.	McIntosh of Haringey, L.
Blyton, L.	Mackie of Benshie, L.
Bottomley, L.	McNair, L.
Briginshaw, L.	Mayhew, L.
Brockway, L.	Morton of Shuna, L.
Brooks of Tremorfa, L.	Mulley, L.
Bruce of Donington, L.	Munster, E.
Buckmaster, V.	Nicol, B.
Carlisle, Bp.	Northfield, L.
Carmichael of Kelvingrove, L.	O'Hagan, L.
Chitnis, L.	Oram, L.
Cledwyn of Penrhos, L.	Parry L.
Craigavon, V.	Phillips, B.
David, B.	Pitt of Hampstead, L.
Davies of Penrhys, L.	Ponsonby of Shulbrede, L.
Dean of Beswick, L.	Prys-Davies, L.
Denington, B.	Ripon, Bp.
Diamond, L.	Roberthall, L.
Donoughue, L.	Rochester, L.
Elliot of Harwood, B.	Ross of Marnock, L.
Elwyn-Jones, L.	Russell of Liverpool, L.
Ennals, L.	Seear, B.
Ewart-Biggs, B.	Seebohm, L.
Ezra, L.	Sefton of Garston, L.
Faithfull, B.	Serota, B.
Fisher of Rednal, B.	Shannon, E.
Fitt, L.	Shaughnessy, L.
Foot, L.	Silkin of Dulwich, L.
Gallacher, L.	Somers, L.
Graham of Edmonton, L.	Stallard, L.
Greenway, L.	Stedman, B.
Grey, E.	Stewart of Fulham, L.
Grimond, L.	Stoddart of Swindon, L.
Halsbury, E.	Strabolgi, L.
Hampton, L.	Taylor of Gryfe, L.
Harris of Greenwich, L.	Taylor of Mansfield, L.
Henderson of Brompton, L.	Tordoff, L.
[Teller.]	Turner of Camden, B.
Heycock, L.	Underhill, L.
Hunt, L.	Vernon, L.
Hunter of Newington, L.	Vickers, B.[Teller.]
Hylton, L.	Wallace of Coslany, L.
Hylton-Foster, B.	Wells-Pestell, L.
Irving of Dartford, L.	Williams of Elvel, L. Jeger, B.
Jeger B.

NOT-CONTENTS
Aldington, L.	Bathurst, E.
Alexander of Tunis, E.	Bauer, L.
Allerton, L.	Belhaven and Stenton, L.
Atholl, D.	Bellwin, L.

Beloff, L.	Lindsey and Abingdon, E.
Belstead, L.	Long, V.
Bessborough, E.	Lothian, M.
Birdwood, L.	Lucas of Chilworth, L.
Blyth, L.	Lurgan, L.
Brabazon of Tara, L.	Lyell, L.
Brougham and Vaux, L.	McFadzean, L.
Broxbourne, L.	Margadale, L.
Bruce-Gardyne, L.	Marsh, L.
Caithness, E.	Massereene and Ferrard, V.
Cameron of Lochbroom, L.	Maude of Stratford-upon-
Campbell of Alloway, L.	Avon, L.
Carnegy of Lour, B.	Merrivale, L.
Carnock, L.	Mersey, V.
Cathcart, E.	Middleton, L.
Coleraine, L.	Mottistone, L.
Cowley, E.	Newall, L.
Crathorne, L.	Onslow, E.
Crawford and Balcarres, E.	Orr-Ewing, L.
Davidson, V.	Peyton of Yeovil, L.
Denham, L.[Teller.]	Plummer of St Marylebone,
Donegall, M.	L.
Dormer, L.	Portland, D.
Drumalbyn, L.	Portsmouth, E.
Dundee, E.	Rankeillour, L.
Eccles, V.	Renton, L.
Eden of Winton, L.	Rochdale, V.
Ellenborough, L.	Rodney, L.
Elphinstone, L.	St. Davids, V.
Elton, L.	Saint Oswald, L.
Fanshawe of Richmond, L.	Sanderson of Bowden, L.
Ferrers, E.	Savile, L.
Forester, L.	Selkirk, E.
Fortescue, E.	Sharpies, B.
Fraser of Kilmorack, L.	Skelmersdale, L.
Gardner of Parkes, B.	Soames, L.
Gisborough, L.	Stodart of Leaston, L.
Glanusk, L.	StrathcIyde, L.
Glenarthur, L.	Strathspey, L.
Gray, L.	Swinton, E. [Teller.]
Grimthorpe, L.	Teynham, L.
Hailsham of Saint	Thomas of Swynnerton, L.
Marylebone, L.	Thomeycroft, L.
Hanson, L.	Torphichen, L.
Hemphill, L.	Torrington, V.
Henley, L.	Tranmire, L.
Hives, L.	Trenchard, V.
Home of the Hirsel, L.	Trumpington, B.
Hood, V.	Tryon, L.
Hooper, B.	Ullswater, V.
Ingrow, L.	Vaux of Harrowden, L.
Kaberry of Adel, L.	Vestey, L.
Kimball, L.	Vivian, L.
Kimberley, E.	Whitelaw, V.
Kinnaird, L.	Wise, L.
Knollys, V.	Wolfson, L.
Lane-Fox, B.	Yarborough, E.
Lauderdale, E.	Young, B.
Layton, L.	Zouche of Haryngworth, L.
Lindsay, E.

Resolved in the negative, and amendment disagreed to accordingly.

6 p.m.

Clause 34 [Awards etc.]:

Baroness Trumpington moved Amendment No. 51: Page 44, line 18, leave out ("direct") and insert ("determine").

The noble Baroness said: My Lords, I beg to move Amendment No. 51 and to speak at the same time to Amendments Nos. 52 and 53. These amendments are purely technical and drafting. I beg to move.

On Question, amendment agreed to.

Baroness Trumpington moved Amendment No. 52: Page 44, line 20, leave out ("direct") and insert ("determine").

On Question, amendment agreed to.

Baroness Trumpington moved Amendment No. 53: Page 44, line 24, leave out ("directs") and insert ("determines").

On Question, amendment agreed to.

[Amendment No. 54 not moved.]

Lord Banks moved Amendment No. 55: Page 45, line 8, leave out paragraph (c) and insert— (" (c) whether it is reasonable to expect that some other person or body may wholly or partly meet it; ")

The noble Lord said: My Lords, this amendment would leave out paragraph (c) on page 45, which states that an officer must consider: the possibility that some other person or body may wholly or partly meet it"— that is to say, meet the loan. The amendment would delete that and insert that an officer must take account of: whether it is reasonable to expect that some other person or body may wholly or partly meet it

Having read the answer given by the noble Baroness when the amendment was moved in Committee, I cannot see that the amendment does not cover the points which she made. I draw her attention to the concern expressed by the Law Society of Scotland in its comments on this Part of the Bill. It indicated that the use of the word "possibility" diminished to an unacceptable extent the rights that the clause gives to claimants.

The Law Society of Scotland proposed that a reasonableness test should be incorporated, and this amendment is entirely in line with its suggestion. In view of those legal objections, I hope that the noble Baroness will accept the amendment or show why it would not meet all the Government's requirements. I beg to move.

Lord Ennals

My Lords, I shall be brief. The noble Lord, Lord Banks, made the point that we had a fairly full debate on this matter in Committee. The amendment is designed to meet the problems that were raised in Committee. I am unhappy with the principle of an officer saying, "Well, it may be that someone else could pay this; maybe an aunty could pay it; maybe we could find a relative to pay it, or maybe someone will be leaving a legacy or something." The officer could say, "Maybe some charity will pay. Has he gone to the British Legion or to SSAFA?" All sorts of different things may be suggested.

We recognised that the Government were not going to accept the amendment that was tabled in Committee. The amendment has been changed to: whether it is reasonable to expect". It is not merely whether "it is possible". Of course it is possible that some other organisation may pay. If one writes to 100 organisations, one of them may say, "Yes, we will raise that money." But is it reasonable to expect that it would?

Like the noble Lord, Lord Banks, I find it difficult to think that the Minister may say that there is something wrong about the words: whether it is reasonable to expect". "Possibility" is too vague. The reasonable nature of the proposal is about as far as I think one could reasonably go.

Baroness Trumpington

My Lords, I wonder whether I may ask the noble Lord, Lord Banks, a question before I begin. In the groupings that I have, I thought that he would be speaking to Amendment No. 56 at the same time.

Lord Banks

My Lords, I, too, saw that grouping. It was no doing of mine. I think that they are two separate points.

Baroness Trumpington

My Lords, I am happy to proceed in the way that the noble Lord, Lord Banks, wishes. We have already discussed this amendment at some length. The noble Lord, Lord Banks, gave fair warning that he would return to it. I explained last time that all we are aiming to do is to ensure that the social fund has the same ability to take account of available sources of help as the current scheme has. For example, as I mentioned, we do not currently pay for repairs to council houses, since that is the council's responsibility. We think it only reasonable to be able to apply the same kind of provision to the social fund. We are not introducing some new principle.

I think it is fair to say that, when we debated this last time, there was a fair degree of acceptance that in principle it made sense to have this sort of flexibility in the social fund, too. But some noble Lords were, I think concerned at the wording of the Bill. The Bill refers to, the possibility that some other person or body may wholly or partly meet [the need]". It was implied that this would somehow give social fund officers carte blanche to assume help was available from all sorts of unlikely sources, or would require the officers to investigate such possibilities each time someone sought assistance. I was delighted with the new examples given by the noble Lord, Lord Ennals, because last time he even suggested—tongue in cheek, no doubt—the local rugby club as a source of help.

If we intended to run the social fund like that, there would indeed be cause for concern. But we do not; and nor does the Bill as drafted suggest that we do. The Bill does not include an overriding principle which says, "Social fund payments shall never be made if it is within the bounds of possibility that someone else could help out". All it says is that social fund officers must look at all the circumstances of the case; must take account of various factors, including the nature of the need and the availability of other help; and must follow the directions and guidance: and the guidance and directions will themselves indicate when it is appropriate to consider the availability of outside help.

I should also like to stress—since the amendment seeks to insert the word "reasonable" into this particular subsection of the Bill—that social fund officers will be expected as a basic principle of administrative law to exercise all their functions "reasonably". They must not take decisions which are arbitrary, or which are based on prejudice or unwarranted assumptions. That applies just as much to a social fund officer's judgment about, say, the extent of an applicant's need as to the view that he forms about the availability of other help. If the question of help from elsewhere is relevant to a particular case, the officer will be expected to assess that possibility reasonably on the grounds of the available evidence.

I would therefore suggest that this amendment is not necessary. I understand the concern expressed that social fund officers should act reasonably. I trust that I have allayed that concern. Social fund officers must act reasonably in all their dealings. I hope therefore that the noble Lord, Lord Banks, will not press the amendment.

Lord Ennals

My Lords, before the noble Baroness sits down, I counted in the noble Baroness's reply how many times she used the word "reasonably" in relation to how judgment would be made. She used the word 10 times. That seems absolutely to support the case for the amendment. The possibility is not enough. It is a matter of being reasonable about it, surely?

Lord Banks

My Lords, I do not think that the noble Baroness attempted at all to deal with the complaint put forward by the Law Society of Scotland. If she wishes to do so, I shall be happy to give way. It seems that the noble Baroness does not wish to deal with that point. I shall remind the House what it was. The Law Society of Scotland indicated that the word "possibility" diminished to an unacceptable extent the rights that the clause gives to claimants. It suggested that there should be a reasonableness test incorporated by way of amendment. That is what we have done. I do not believe that the noble Baroness has shown why the alternative suggested in the amendment is unsatisfactory to the Government; nor do I think that she has dealt with the legal point that I raised with regard to the view of the Law Society of Scotland. In those circumstances I should like to take the opinion of the House.

6.12 p.m.

On Question, whether the said amendment (No. 55) shall be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 130.

DIVISION NO.3
CONTENTS
Addington, L.	Fisher of Rednal, B.
Airedale, L.	Foot, L.
Amherst, E.	Gallacher, L.
Ardwick, L.	Graham of Edmonton, L.
Banks, L.	Grey, E.
Barnett, L.	Grimond, L.
Beaumont of Whitley, L.	Hampton, L.
Birk, B.	Hanworth, V.
Blyton, L.	Harris of Greenwich, L.
Bottomley, L.	Heycock, L.
Brockway, L.	Houghton of Sowerby, L.
Brooks of Tremorfa, L.	Howie of Troon, L.
Buckmaster, V.	Hunt, L.
Carmichael of Kelvingrove, L.	Irving of Dartford, L.
Chitnis, L.	Jeger, B.
Cledwyn of Penrhos, L.	John-Mackie, L.
David, B. [Teller.]	Kennet, L.
Davies of Penrhys, L.	Kilbracken, L.
Dean of Beswick, L.	Kilmarnock, L.
Denington, B.	Kirkhill, L.
Diamond, L.	Listowel, E.
Donoughue, L.	Llewelyn-Davies of Hastoe, B.
Elwyn-Jones, L.	Lockwood, B.
Ennals, L.	Longford, E.
Ewart-Biggs, B.	McIntosh of Haringey, L.
Ezra, L.	McNair, L.

Mais, L.	Stallard, L.
Mayhew, L.	Stedman, B. [Teller.]
Morton of Shuna, L.	Stewart of Fulham, L.
Murray of Epping Forest, L.	Stoddart of Swindon, L.
Nicol, B.	Strabolgi, L.
Northfield, L.	Taylor of Gryfe, L.
Oram, L.	Taylor of Mansfield, L.
Phillips, B.	Tordoff, L.
Pitt of Hampstead, L.	Turner of Camden, B.
Ponsonby of Shulbrede, L.	Underhill, L.
Prys-Davies, L.	Vernon, L.
Rochester, L.	Wallace of Coslany, L.
Ross of Marnock, L.	Whaddon, L.
Seear, B.	White, B.
Sefton of Garston, L.	Wigoder, L.
Serota, B.	Williams of Elvel, L.
Silkin of Dulwich, L.

NOT-CONTENTS
Aldington, L.	Hylton-Foster, B.
Alexander of Tunis, E.	Ingrow, L.
Allerton, L.	Kaberry of Adel, L.
Alport, L.	Kimball, L.
Auckland, L.	Kimberley, E.
Bathurst, E.	Kinloss, Ly.
Bauer, L.	Kinnaird, L.
Belhaven and Stenton, L.	Knollys, V.
Beloff, L.	Lane-Fox, B.
Belstead, L.	Lauderdale, E.
Birdwood, L.	Lawrence, L.
Blyth, L.	Layton, L.
Brabazon of Tara, L.	Lindsay, E.
Brougham and Vaux, L.	Lindsey and Abingdon, E.
Broxbourne, L.	Long, V.
Bruce-Gardyne, L.	Lothian, M.
Butterworth, L.	Lyell, L.
Caithness, E.	McFadzean, L.
Cameron of Lochbroom, L.	Macleod of Borve, B.
Campbell of Alloway, L.	Margadale, L.
Carnegy of Lour, B.	Massereene and Ferrard, V.
Carnock, L.	Maude of Stratford-upon-
Cathcart, E.	Avon, L.
Coleraine, L.	Merrivale, L.
Colwyn, L.	Mersey, V.
Cowley, E.	Middleton, L.
Craigavon, V.	Mottistone, L.
Craigmyle, L.	Munster, E.
Crathorne, L.	Nathan, L.
Crawford and Balcarres, E.	O'Hagan, L.
Davidson, V.	Onslow, E.
De La Warr, E.	Peyton of Yeovil, L.
Denham, L. [Teller.]	Plummer of St Marylebone,
Donegall, M.	L.
Dormer, L.	Portland, D.
Drumalbyn, L.	Portsmouth, E.
Dundee, E.	Rankeillour, L.
Eden of Winton, L.	Renton, L.
Elliot of Harwood, B.	Rochdale, V.
Elphinstone, L.	Romney, E.
Elton, L.	Russell of Liverpool, L.
Faithfull, B.	St. Davids, V.
Fanshaw of Richmond, L.	Sanderson of Bowden, L.
Ferrers, E.	Savile, L.
Forester, L.	Seebohm, L.
Fortescue, E.	Shannon, E.
Fraser of Kilmorack, L.	Sharpies, B.
Gardner of Parkes, B.	Skelmersdale, L.
Gisborough, L.	Soames, L.
Glanusk, L.	Stodart of Leaston, L.
Glenarthur, L.	Strathclyde, L.
Gray, L.	Strathcona and Mount Royal,
Greenway, L.	L.
Hailsham of Saint	Swinton, E. [Teller.]
Marylebone, L.	Teviot, L.
Halsbury, E.	Teynham, L.
Hemphill, L.	Thomas of Swynnerton, L.
Henley, L.	Thorneycroft, L.
Hives, L.	Torphichen, L.
Hood, V.	Torrington, V.
Hooper, B.	Tranmire, L.
Hunter of Newington, L.	Trefgarne, L.

Trenchard, V.	Vestey, L.
Trumpington, B.	Vickers, B.
Tryon, L.	Vivian, L.
Ullswater, V.	Whitelaw, V.
Vaux of Harrowden, L.	Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.20 p.m.

Lord Banks moved Amendment No. 56: Page 45, line 10, leave out paragraph (d)

The noble Lord said: My Lords, this amendment would leave out paragraph (d) on page 45, line 10. That paragraph says that in determining an award a social fund officer must take into account: where the payment is payable"—

that is, where it is a loan— the likelihood of repayment and the time within which repayment is likely".

The amendment would strike that out.

When moving this amendment in Committee I pointed out that before the social fund officer reaches the stage of deciding the likelihood of repayment he will presumably have satisfied himself that the applicant has a need and has no resources from which to meet the need, and that no other person or body can meet the need. I asked if the applicant, having shown that he had no resources, was to be refused the loan on the ground that he had no resources to repay it. The noble Baroness did not answer that question, and I give her the opportunity to do so today. Is the ability to repay to affect the amount of the loan? If the likelihood were being assessed—because if there were no likelihood of repayment a grant rather than a loan would be made—then I should understand it. But if there is no prospect of a grant—and the text would seem to imply that—and if there is a recognised need, I cannot see why the likelihood of repayment should be taken into account. I wonder whether the noble Baroness could explain why it is necessary to take that into account in those circumstances. I beg to move.

Baroness Trumpington

My Lords, we have already considered this amendment, at Committee stage. It basically stems from our proposal that some social fund payments should be made as advances of benefit to help people with unexpected expenses or budgeting problems rather than necessarily as outright grants. We discussed that issue at some length during Committee, including the arguments of equity in favour of our proposal. Your Lordships rejected another amendment which would have called that principle into question. I do not think, therefore, that I need rehearse yet again the arguments in favour of loans from the social fund.

As far as this amendment is concerned, however, I fear I must repeat myself a little. Subsection 34(10) sets out a number of the factors which a social fund officer should take into account when making a decision. This consideration with which the amendment is concerned is one which we believe quite reasonably refers to a feature which must be taken into account when considering a loan. As payments will be recoverable, it makes sense that when a social fund officer reaches decisions about whether to award a payment, or what its value could be, he should pay regard to the effect of recovery on the person receiving help. Primarily the payment will be aimed at meeting the need of the individual. But there is a balance to be struck between this, on the one hand; and ensuring, on the other hand, that too great a strain is not put on the person concerned, and that the repayments do not extend indefinitely. Similarly, in deciding payments, some regard must be paid to whether recovery is likely at all.

On the last occasion, the noble Lord, Lord Banks, said that I had not answered his question on this amendment, and he said so again this evening. 1 have looked at Hansard and he was, if I understand him rightly, suggesting that we were trying to put applicants into a Catch 22 situation. His argument seemed to be that before making a social fund payment we shall look to see if the person concerned has resources to meet the need. If he has resources, he does not need a loan. If he does not have resources, he will not get a loan because he will not be able to pay it back.

That is very ingenious, but it is not what will happen. There is a big difference between having the resources to meet a pressing need for a large item of expenditure—a new cooker, say—and having resources, including entitlement to weekly benefit, from which a reasonable sum can be repaid each week. Indeed, that is precisely why we are proposing help with budgeting problems. All we are saying is that, before making a loan, the social fund officer should take into account, among other factors, matters such as other possible debts which might affect the size of any loan.

We shall aim to ensure that nobody is burdened with a commitment which they are unable to meet. This is the reason why we shall be having rules on the maximum deductions that can be made. Clearly, however, there will be a need for a degree of flexibility in exceptional cases. In cases of genuine crises our officers will be able to consider a number of options. These could include extending the period of recovery; or, exceptionally, an officer could decide to defer the recovery of the latest payment. I cannot accept this amendment.

Lord Banks

My Lords, the noble Baroness said that there might be other debts and that this was one of the factors that the officer would be seeking to evaluate in trying to judge the likelihood of repayment. She said that if there were other debts that might affect the size of the loan. But if we are talking here of needs—not of whether the person should have a loan to purchase a new car or a matter of that kind, but whether an established need is to be met—then it is difficult to see how the other debts can be relevant to whether or not payment is made.

I am not at all clear what the officer is supposed to do if, as the Bill says, the payment is repayable and he comes to the conclusion that there is no likelihood of recovery. What does he do then? I am afraid I do not know. I do not think that the position is very clear or satisfactory. However, I do not think I shall pursue it further this evening. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Banks moved Amendment No. 57: Page 45, line 12, leave out paragraph (e)

The noble Lord said: My Lords, Amendment No. 57 would leave out paragraph (e). An officer, in determining an award, must consider any relevant allocation made under Section 33(4). If we look at Section 33(4), we see that it says: The Secretary of State may allocate an amount, or allocate different amounts for different purposes, for awards by a particular social fund officer or group of officers in a financial year".

I want to ask the question: is the social fund officer required to do this to see if there is an allocation to cover a particular type of need, or is he required to do so merely to see how much money is in the fund?

In the course of her reply to this amendment when it was moved in Committee the noble Baroness, Lady Trumpington, said that the social fund will not run out of money. She said it is merely a case of budgeting. If the officer is looking to see how much is in the fund, and not to see if a particular purpose is covered, it is difficult to see why he should be required to do so. If every established need will be met, who does he need to do so? The retention of this paragraph—unless the officer is looking to see whether the purpose is provided for—would appear to be unnecessary, and in that case it ought to come out. If it remains it will give rise to the fear that needs will be met only if there is cash in the kitty at the right time. I beg to move.

6.30 p.m.

Baroness Trumpington

My Lords, this amendment would delete the provision requiring social fund officers to pay regard to the budget allocation available to them. If passed, it would make the social fund uncontrollable financially. We are aiming, in the social fund, to give one-off payments for exceptional need related to an individual's overall circumstances, rather than by set rules which can prove, and have proved, too rigid and too complex. But a system operated by discretion must be subject to financial control, since otherwise it is open-ended; and in practice, setting a budget is the only way of exercising such financial control.

The dangers of losing financial control are already clearly before our eyes with the example of single payments. In 1979, the year this Government took office, 1.1 million payments were made to claimants, at a cost of £38 million. But since 1982 there has been extremely rapid growth. In that year 1.6 million payments were made, at a cost of £88 million. In 1983 the figure rose to £ 142 million. In the last two years the cost has doubled again to £308 million. Overall, the number of payments is now four times higher and their real cost nearly five times higher than in 1979. Those are frightening figures. Moreover, the growth far exceeds changes in the claimant population. In 1979 366 payments were made for each 1,000 claimants on benefit. The rate in 1985 for each 1,000 claimants on benefit was 866. In the last two years alone the rate of payments for each 1,000 claimants has doubled.

No responsible government could allow expenditure to grow at £100 million a year, and we have proposals for change that have been referred to the Social Security Advisory Committee. The alternative to a social fund operated with discretion and within a budget, and one much less desirable, I suggest, would have to be a tightly-drawn, regulated system with inflexible rules of entitlement in order to define the limits of help matched to available resources.

But I am aware from our previous exchanges on this subject that at the heart of your Lordships' worries lies the question as to whether the budget will be sufficient to meet all the calls on it and whether it will run out during the year. We have already given an assurance in the White Paper that maternity and funeral payments will not be constrained by the budget. So let me now explain the financial nature of the fund and how we shall make sure that it remains solvent.

First, let us take the national budget. The social fund proper begins in April 1988. In order to establish the initial size of the budget we aim to undertake a thorough survey as to how the current scheme is operating, how needs can be defined and met, and how those in need can best be protected. That survey, together with an analysis of the geographical spread of single payments, will enable Ministers to make realistic decisions in due course, with up-to-date data about the initial financing of the new system.

We have decided, however, that the fund will not at first be subject to a formal cash limit on its introduction. A decision—and I am sure that your Lordships will agree that this is wise—on a move to what will be the normal cash limiting arrangement will be taken when we have sufficient experience of the operation of the fund.

Our intention is realistic: to establish the fund with sufficient money to agree reasonable requests for loans for essential items; to make a start on help with community care to meet urgent needs, as well as making funeral and maternity payments. And we want to do that on the basis of the best possible available data. As the White Paper says, the purpose of a budget for the fund is to establish a system where there is effective monitoring and control on expenditure.

I suggest that worries about individual offices running out of money can be set aside. Social security offices are accustomed to managing budgets. It must be remembered that that will be done by keeping a running total of actual spending and comparing it with profiles of expected expenditure. There will thus be an early warning of any developing problems. There will be a reserve pool of money at regional level for deploying to any district that might need it—for instance, following a flood in a particular area—and contingency arrangements will be made to transfer funds between individual offices should the need arise.

Returning to my original point, a discretionary fund needs to be controlled by a budget, and I hope that I have reassured noble Lords that we are working towards setting a realistic budget with good local controls. There will be an overall budget for the social fund, and that will be allocated to local offices. There is also likely to be a broad division between money available for grants and for loans respectively. But there will not be a set sum for every particular circumstance, such as replacing broken cookers. That could militate against the flexibility that we want for the social fund. Social fund officers will therefore check what is available in the local office budget for loans or grants. I hope, in the light of the assurance I have given, that the noble Lord will not press his amendment.

Lord Ennals

My Lords, I thank the noble Baroness for the statement that she has just made. She has made a statement of profound importance that I personally enormously welcome. Although there has been no opportunity for discussion, I suggest that most noble Lords on this side of the House will also welcome it. The noble Baroness said that there will be no formal cash limit in the early stage. I do not know at what stage the noble Baroness might change her mind, or at what stage her mind might be changed for her, but that is an extremely important statement.

We had argued from this side of the House, on Second Reading and in Committee, that since it was a demand-led service and one could not assess what the demand would be, then, as in the case of a doctor who is demand-led, to put a cash limit on that demand would be virtually impossible. Since this House in its wisdom, and by a very substantial majority, decided to have an appeal system, one cannot possibly have a cash limit when there is an appeal system that can make adjustments to decisions taken by the officials.

On behalf of these Benches I congratulate the noble Baroness on her most important statement. One of the provisions of this Bill that we have criticised most has been the cash-limited budget. Of course there is a difference between a budget—one has to budget for everything—and a cash limit, which is a firm, fixed figure. We have always argued that such a limit would not make sense. From the bottom of my heart I thank the noble Baroness for what we have. No doubt if she seeks the leave of the House to speak again, to say that I have welcomed her statement too much and that at some stage or another there might be a cash limit, I shall recognise that point.

My second point is this. The noble Baroness explained that it was necessary to take the measures that she is taking because there had been four times the number of applicants for special needs and that that demand had been met, in money terms, at five times the cost. The noble Baroness will know why that is so. It is so because there are four times as many people who desperately need special payments. That is because there is increasing poverty in certain sections, and particularly because of the dramatic rise in unemployment. If there are that many more people needing help, there will be that much more money paid to give that help. It is in a sense the Government's own economic and social policies that have created the situation in which the Government have decided that they must take some action, at the expense of those who are the poorest in our society. Having made that point, I do not want to withdraw at all from my congratulations to the noble Baroness on her statement on her own behalf and that of her right honourable friends that this scheme will start without a cash limit to it.

Lord Banks

My Lords, I too am grateful to the noble Baroness for her statement. It has made much clearer how it is intended that the fund shall work, and it is encouraging to know that there will be no cash limit. Particularly in view of that, I still do not see why it is necessary in those circumstances for the officer to have consideration in regard to what is in the kitty. Are needs to be determined by the amount in the kitty, or are they to bé determined objectively according to the degree of need itself? I would hope that it would be the latter. There seems to me to be a degree of inconsistency there, but I hope that in due course that inconsistency can be sorted out. In the meantime I beg leave to withdrawn the amendment.

Baroness Trumpington

My Lords, before the noble Lord sits down, and with the leave of the House, I must first thank noble Lords opposite for the warm welcome they have given to my words. However, for the record I must repeat that what I said was that we have decided that the fund will not at first be subject to a formal cash limit on its introduction, and I said that a decision on what will be the normal cash limiting arrangement will be taken when we have sufficient experience of the operation of the fund. I think I must underline that.

Lord Banks

My Lords, I think we shall want carefully to study what the noble Baroness has said. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 [Widowhood]:

Baroness Jeger moved amendment No. 58: Page 47, line 16, at end insert ("in the case of a widow whose husband died after the commencement of this subsection").

The noble Baroness said: My Lords, I am sure that the Minister will be glad to know that in moving Amendment No. 58 I am not proposing to plough backwards over the debate we had in Committee about some general questions concerning help for widows. But I raise the question again because I have had so many anxious queries, and often queries that I find myself unable to answer. This may be entirely my fault and so I hope that the noble Baroness will make some of the points on these problems clear even to me, and then I can pass on what she has said.

Part of the confusion arises because the Green Paper, in volume II, page 56, paragraph 5.54, states: The changes proposed will not affect the benefit currently being received by any existing widow".

Then the White Paper states on page 47: The personal extension of widowed mother's allowance payable to women with children of 16 to 19 who have left school but are still at home would be discontinued".

It goes on: We will ensure that no existing widow will lose the benefit she is receiving currently".

Many widows feel that the money that they were expecting to receive after their children leave school is already in train; that it is a current benefit; although they have not yet begun to receive it. It is money on the table for them under the regulations in force when they became widowed. This sudden detriment for someone who is already widowed will mean a serious loss, and there is a great sense of unfairness about it.

I have carefully read the relevant papers, and I am aware that the noble Baroness, at col. 690 on 30th June, said that when a widow moves from one category of widow's benefit to a succeeding benefit after the change she will have to put up with the new rules. That brings in an element of hardship and certainly of confusion. The situation will be confused further by the change in age—the increase from 40 to 45, and from 45 to 50, according to which category of widowhood one is unkindly thrust into.

As I read the Bill, it seems that a widow under 50 will find when her child leaves school that her widowed mother's allowance ceases altogether. This seems detrimental, and I can only pass on to your Lordships the point that there are many widows in this coutry who feel a sense of injustice and unfairness. They have looked on this as a contractual benefit that they receive mainly as a result of the contributions of their late husbands, and to take away something for which their husbands have contributed makes many women feel that there is an element of unfairness.

Although it may be an allowance not yet in payment, it is an anticipated allowance for which the widow has budgeted and which she has regarded as built in to the existing provision for widows, and therefore there is a feeling of serious loss. Many of them thought that they would go on to standard pension when their widowed mother's allowance ends, but they now find that they will go on to a reduced pension if they are under 55, and lose everything if they are under 45.

I hope I have the facts right. I can assure the noble Baroness that I raise these problems not lightly but most sincerely. I am sure that she will deal with them sincerely, and perhaps help some of us to understand the implications for these older widows. I beg to move.

6.45 p.m.

Baroness Trumpington

My Lords, I have previously given an assurance that no one will lose the category of widow's benefit in payment at the time of the change. Where, however, a widow moves from one category of widow's benefit to another after the change, then the new rules will apply. Thus, a widow who ceases to be entitled to widow's allowance or widowed mother's allowance after the new age limits come into force would be considered on the basis of the new rules.

Women receiving WMA with children of 16 to 19 will continue to receive the allowance. However, where a woman with WMA after the start of the new arrangements has a child who leaves school, she will have the new rules applied to her and she will go on the appropriate rate of widow's pension according to her age, rather than the personal rate of WMA. The noble Baroness has correctly understood the position.

Any other course of action would perpetuate complex transitional arrangements for very many years. It is perfectly reasonable to apply new rules to all claims decided after they come into effect and, indeed, to do otherwise would lead to mistakes and, arguably, to injustices. On the basis of the assurance that there will be no loss of the existing category of benefit I hope that the noble Baroness will agree that our proposals will operate fairly and will agree to withdraw the amendment.

Baroness Jeger

My Lords, in a way that is a disappointing reply. The noble Minister says that there will be no loss of cash benefit, and then she confirms my reading that there certainly will be—and it will be a big cash loss as soon as the child leaves school. I have not received an answer that many widowed mothers in this country will appreciate. I can only say that I shall do my best to make the Government's views known, and with that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Trumpington moved Amendment No. 59: After Clause 36, insert the following new clause:

("Invalid care allowance for women.

.—(1) Section 37(3) of the Social Security Act 1975 shall have effect, and shall be treated as having had effect from 22nd December 1984, as if the words from "and a women" to the end were omitted.

(2) The Social Security Benefit (Dependency) Regulations 1977 shall have effect, and shall be treated as having had effect from 22nd December 1984, as if the following sub-paragraphs were substituted for sub-paragraphs (a) and (b) of paragraph 7 of Schedule 2 (increases of invalid care allowance)—

1. "(a) a spouse who is not engaged in any one or more employments from which the spouse's weekly earnings exceed that amount; or
2. (b) some person (not being a child) who—
1. (i) has the care of a child or children in respect of whom the beneficiary is entitled to child benefit, being a child or children in respect of whom the beneficiary is entitled to an increase of an invalid care allowance or would be so entitled but for the provisions of any regulations for the time being in force under the Act relating to overlapping benefits;
2. (ii) is not undergoing imprisonment or detention in legal custody;
3. (iii) is not engaged in any one or more employments (other than employment by the beneficiary in caring for a child or children in respect of whom the beneficiary is entitled to child benefit) from which the persons' weekly earnings exceed that amount;
4. (iv) is not absent from Great Britain, except for any period during which the person is residing with the beneficiary outside Great Britain and for which the beneficiary is entitled to an invalid care allowance." ").

The noble Baroness said: My Lords, I beg to move Amendment No. 59, and at the same time speak to Amendments Nos. 80, 82 and 84. This amendment fulfils the promise made in another place on 23rd June by my right honourable friend the Secretary of State, and which I repeated in your Lordships' House. That promise was to bring forward in the Social Security Bill legislation which would extend invalid care allowance to married women, and those living with a man as his wife, on equal terms with men and single women. The amendment and the consequential amendments which are now before your Lordships will remove the discrimination against married women which the previous Labour Government wrote into the Social Security Act 1975. It does so with retrospective effect form the date on which the directive came into force.

As your Lordships will be aware, when we announced our decision on 23rd June we did not know what the European Court would decide the following day and, in particular, what the court judgment might say about arrears. In the event, it was silent on the point. We concluded, however, that whatever the legal position about our obligation to pay arrears back to 22nd December 1984, we would nonetheless do so provided the conditions were satisfied at that date. Payments which go back beyond 12 months will be made on an extra-statutory basis.

We have already received some 20,000 claims from married women, and the number is growing daily. We expect to have received an estimated 70,000 by the end of the year. We have decided that in the interests of fairness any married woman whose claim is received by the 31st December 1986 will be able to have arrears back to 22nd December 1984, if she satisfied all the conditions at that date.

This will give married women carers ample time to get a claim into us and we shall be writing individually to as many attendance allowance beneficiaries as we can to bring this to the attention of their carers as well as issuing other publicity material. Any claims received after 31st December 1986 will, of course, be subject to the normal time limits which apply statutorily to all claims for invalid care allowance.

I know that the Government's decision has already been warmly received and I feel sure that this measure will be welcomed widely as a recognition of the role which substantial numbers of married women carry out as carers. I think I need only add that we have taken the opportunity in the amendment to provide for adult dependency addition to the allowance to be payable to married women with the same retrospective effect as the benefit itself. I am happy to commend this amendment to your Lordships.

Baroness Lockwood

My Lords, as there is a later amendment in my name and in the names of the noble Baronesses, Lady Seear and Lady Gardner, and the noble Lord, Lord Henderson of Brompton, I should like to speak in this debate to this amendment because I believe this amendment will be welcomed on all sides of the House. In the House a number of us particularly welcome this amendment because we have been involved in the problems arising from the discriminatory nature of ICA since its introduction in 1976.

The amendment is indicative of the progress that has been made since that date in our attitude to married women. The fact that when the benefit was introduced it was available to men, married and single, and to single women but not to married women was a residue of the Beveridge concept that married women with few exceptions would be financially dependent on their husbands. It is now clearly recognised—the amendment today endorses it—that married women are more likely than not to be in paid employment and that their contribution to the family income is substantial and is growing. Indeed the number of women who are now earning more than their husbands is rising and it has been a very real sacrifice for those married women who have had to remain outside the employment market or who have had to give up a job to care. It has been a sacrifice not only of the immediate income, but of future pension prospects. Therefore the extension of ICA is some financial recompense for that sacrifice. It does not affect their pension, but it is an immediate financial recompense.

As the noble Baroness has said, this is a recognition of the contribution married women make not only to the welfare of the family but to the community as a whole because of the very real social contribution that they make. In welcoming the amendment we have to acknowledge the work that has been done by the Equal Opportunities Commission, by the consortium of voluntary organisations who have worked together so hard particularly in this last 12 months to produce an amendment and also by Mrs. Jackie Drake and her family. Mrs. Drake took the case of discrimination to the courts here and then to the European Court of Justice. I think we have to recognise her courage in doing that, because it is an ordeal to take a case to court, but to take a case to the European court is an even greater ordeal. While Mrs. Drake was doing this she had her small son to look after and she was still caring for her mother. I should like to place on record our thanks and appreciation for her contribution towards this amendment.

The Minister will forgive me if I raise one or two points for clarification. The first relates to carers who might, between the end of December 1984 and the coming into operation of this Bill, have ceased to be carers. There are all sorts of reasons why a women may no longer be a carer: the invalid may be in hospital or may even have died. Will the back pay, which we very much welcome, be available to such women for the period when they were carers between December 1984 and today?

Secondly, again I welcome the fact that the noble Baroness says that a letter will be going to all those who are in receipt of an invalidity benefit so that they can alert their carer to the extension of this benefit. That is an essential first step, but I think we might need further publicity because that is not always a certain way of getting the message through. If we look at the timing of the Bill it probably will not be on the statute book until October and claims have to be in by the end of the year so there is a very short period in which to publicise it. May we ask for an intensive publicity campaign immediately on this benefit, or if not could we consider extending the date of closure for claims beyond the end of this year?

Having said that may I underline once again how very pleased and gratified are all of us who have worked in this area with the amendment that the noble Baroness has moved? On a personal note I wonder whether she will forgive me if I am not in my place to hear her reply to my questions. I had anticipated that the amendment would be coming earlier and I have to be on a train travelling north very shortly for a long-standing engagement. But I felt I must be associated with the amendment.

Baroness Seear

My Lords, I welcome this amendment. I welcome it not only from these Benches but in my capacity as chairman of the National Council for Carers and their Elderly Dependants, which fought for the initial invalid care allowance in the 1975 legislation. At that time such allowances were not contemplated. It was breaking new ground. We were grateful to the new Labour Government. The Minister at that time recognised the problems of married women but, with new allowances of this kind, felt that it was not possible to go the whole way and make a grant to married women as well as to single carers and to men, married or single. The amount of money involved in making the payments to men, married or single, was very much smaller than the amount of money involved in making payments to women.

This is a very great advance and it will be a very great comfort to many people who, as the noble Baroness knows, are doing an extraordinarily tough, often lonely and extremely dispiriting job—a job in which there is a great shortage of money, often a very big reduction from the money that they were able to earn, or an absence of any money except that which their husbands are prepared to give them while they are doing the caring job. To know now that they will have money which is really their own while they are doing a caring job is something they can really appreciate.

7 p.m.

Baroness Lane-Fox

My Lords, may I add my grateful thanks for the amendment to the Bill and for the ICA. An epic new benefit of this proportion really deserves special welcome and I hope that the media and the voluntary organisations will pay it the due regard that it really deserves. The invalid care allowance will make a substantial improvement both to the finances of the carers and, still more perhaps, to the morale of the victims to whom the care is given. The allowance has been sought for years and this Government and the noble Baroness the Minister deserve real credit for realising its importance. Anyone who has been cared for by long-suffering married mothers, sisters, let alone wives and other married women, will know what a good move the Government have now made.

It is excellent that the allowance is to be retrospective to last December. Some of us have a retrospective guilt for the unpaid burden of care for our invalidity that goes back 50 years. I realise that that is a digression, but, like all other noble Lords, I know numbers of cases now who will benefit from this allowance and, knowing the hard-fought priorities in this field, I congratulate all the more the Minister and the Government.

Baroness Gardner of Parkes

My Lords, as my name is on the later amendment, No. 62, which we shall not now be moving, I feel that I too would like to thank the Minister for this amendment. When in the past, I think in my first year in this House, I raised this issue in an Unstarred Question the Government then indicated that they would very much like to do it but that it was a very heavy financial commitment. I am only too delighted that now we have reached the point were it is actually coming about. All the good things have been said. I will not delay the House more. I am grateful to the Minister for bringing forward this amendment.

Lord Ennals

My Lords, in the same way that from these Benches we never hesitate to criticise the Government for all their failures, I think it is right, proper and courteous that we should pay due respect to the Government for the decision that was announced by the noble Baroness and for the amendment which she has placed in the Bill. From this Front Bench I want to thank her and the Government for the steps they have taken and to add to the point made by my noble friend Lady Lockwood about publicity. I think it important that maximum publicity—maybe through television—should be undertaken in order that this benefit be known; because the words that are said here are not automatically fed into every household. I think it is important that everyone should know of this advance, particularly those in need of claiming it.

Baroness Trumpington

My Lords, may I say how grateful I am for the words of welcome from all parts of the House. I should like to single out particularly my noble friend Lady Lane-Fox and to say how glad I was to hear her words. May I thank all noble Lords?

I must reply to the two questions from the noble Baroness, Lady Lockwood, who gave notice of her intention to leave. The first question she asked was about people who qualified after 22nd December 1984 and who have ceased to be carers. The answer to that is that married women who satisfy the conditions for ICA on or after 22nd December 1984 but who have ceased to be carers in the meantime may claim for any period during which they satisfied the conditions.

On the point of publicity, a new leaflet and claim form is in preparation and should be available during August. A letter will be sent to as many attendance allowance beneficiaries, and constant attendance allowance beneficiaries, as possible. It will set out the changes and will ask the disabled person to pass it to his or her carer. The new leaflet and the letter will coincide with advertisements in the press announcing the extension. I think that about sums it up.

On Question, amendment agreed to.

Schedule 3 [Industrial injuries and diseases]:

Baroness Turner of Camden moved Amendment No. 60: Page 104, line 4, leave out ("14") and insert ("4").

The noble Baroness said: My Lords, I rise to move the amendment standing in my name and that of my noble friend Lord Scanlon. This is about the Industrial Injuries Scheme. At the Committee stage I moved an amendment, which I did not press to a vote, the object of which was to maintain the present situation in which individuals who have had accidents at work may claim, and be accorded, disablement benefit according to the seriousness of their condition even in cases where that disability is assessed at being below 14 per cent. The Government's position, apparently, is that they believe that small amounts of money should not be spent on relatively trivial injuries. Of course, it depends what is meant by "trivial". Most manual workers suffer from what may appear to be minor injuries, particularly to hands or fingers, at some time in their lives. To them those injuries are painful and disabling.

What the amendment seeks to do is to meet the Government position partially by deleting "14 per cent." as the threshold figure and substituting "4 per cent.". If the Bill passes unamended some injuries which can be serious and disabling would attract no disablement payment at all. Some examples of these are as follows. The loss of the whole middle finger of either hand currently attracts a 12 per cent. entitlement and a gratuity of £2,697; the loss of phalanges of the index finger of either hand, a quite serious loss if you are in a situation where the use of your hands is important, which goes for most of us, attracts currently 11 per cent. Loss of toes attracts less, It attracts about 9 per cent. and a gratuity of £2,095.

When I spoke in Committee on the earlier amendment I gave examples of conditions and injuries suffered by workers for which they now obtain a small sum of money. It is small but it is important to them. A 14 per cent. gratuity is of the order of just over £3,000 and there is a descending scale of payments thereafter. There has long been an acceptance in this country that work is often a rather hazardous place. Some working environments are inherently more hazardous than others. It was because of this that we had the Health and Safety at Work Act, since everyone agrees that it is necessary to reduce the risks as far as possible.

However, it is not going to be possible to do this completely and for this reason. For a very long time we have had legislation to give special protection to those at work. There was the Workmen's Compensation Act 1925, later amended in 1940. This legislation was widely perceived as unsatisfactory, and led after the war to the introduction of the Industrial Injuries Scheme which successive governments until this one, had been prepared to honour. I said at Committee stage that the Industrial Injuries Scheme is the nearest thing we have had in this country to a no-fault system of compensation for accidents at work. In some countries, notably New Zealand which is sometimes quoted as an example, there is a low-fault system under which workers can collect their compensation payments without having to prove negligence.

However, I believe that a basic state system of the kind that we have, plus the ability for workers to take action at common law if they can establish that their injuries arise as a result of negligence, is the best possible arrangement. This does mean, however, preserving the system that we have. One of the features of the industrial injuries scheme was that it was based on the concept that when assessing damage to individuals comparison should be made with other individuals of the same age and sex who had not been injured. That enabled account to be taken of the general disability that had been suffered, and not just a reduction in earning ability, which was dealt with separately.

We have an obligation, as a society, to compensate those who are injured, often through no fault of their own but because of the environments in which they have to work, if they are injured providing goods and services to the community. If the amendment is passed—the 4 per cent. amendment which I put before your Lordships—there will be some minor injuries which will not be covered. We accept that. We on these Benches would have preferred to have stayed with the original concept that any degree of disability could be regarded as ranking for an assessment; but we have accepted the argument that the Government do not want to spend money on what they regard as relatively trivial injuries.

I hope that the amendment will commend itself to the House. I began my working life a long time ago working in the accident claims department of a very large insurance company specialising in employers' liability claims. Then I became a trade union official and I looked at the issue from the other side, so to speak, and I have to tell your Lordships that only about 10 per cent. of all workers injured actually succeed in getting any damages at all for their injury a. common law. It was for these reasons that we had the Industrial Injuries Act. I hope we can preserve at least some protection for people who have injuries of the kind to which I have referred, and that they will continue, if the amendment is passed, to receive some benefit which otherwise they would not have if the Bill stands unamended. I beg to move.

Lord Murray of Epping Forest

My Lords, we are discussing here more than a mere change in the quantum of industrial injuries benefit. The change proposed in the Bill touches on the central principle of industrial benefit—on whether compensation should be paid at all for certain categories of physical or mental injury, for pain, suffering and disfigurement. The fact is that the great majority of current industrial awards of this sort are for less than 14 per cent. The sufferers from the most common complaints, such as occupational asthma and vibration white finger, and most of the benefit payments, are indeed less than 14 per cent. The change proposed in the Bill would have the effect of largely descheduling injuries of this sort. There has been a steady decline in injury claims on industrial disablement benefit from about 200,000 in the mid-1960s to about 120,000 now. I think that is partly because of the work of the Health and Safety Commission, to which my noble friend referred. The proposed change has attracted widespread independent criticism, notably from the Industrial Injuries Advisory Council, and I think it indicates a somewhat offhand attitude towards industrial injuries which should not be encouraged. I therefore warmly support the amendment.

7.15 p.m.

Lord Stallard

My Lords, I, too, should like to support this amendment, as I did when it was first moved during the Committee stage. Like my noble friend Lady Turner, I started my working life on the shop floor and, as a trade union representative, I can remember the difficult situations and the hardships caused by injuries on the shop floor both before and after 1948. I can also recall, since going to the other place, the number of attempts which have been made to try to change this legislation, and the kind of resistance that that has created among people who are still working on the shop floor.

We have never taken the view that the Government seem to be taking, that anything under 14 per cent. is a minor injury. I thought the noble Baroness, Lady Turner, excellently outlined this point, because to a precision engineer, for instance, the loss of a finger is not a minor injury. It can affect his whole earning potential for the rest of his life, and there is nothing minor about that. To someone in the construction industry the loss of toes or a badly injured foot can prevent him using scaffolding, ladders or other equipment that is normally used in the construction industry. These are not minor injuries to the people concerned: they are very serious injuries. The scheme as it existed did at least compensate to some small extent for some of those injuries.

I said that the 1948 scheme existed almost unchanged until 1980, when the Government introduced a discussion document on how the scheme might be changed. As far back as 1980 they had it in mind that this would have to be changed. They pursued it in 1981 by means of a White Paper, which contained proposals something like these for reducing the dual provision for disability benefits provided through the industrial injuries scheme and the national insurance scheme.

In 1983 the industrial injury benefit was abolished and disablement benefit became payable from a common starting date; that is to say, 15 weeks after the onset of the disablement. But, not satisfied with that change, in 1985 the Government issued another consultation paper, still determined to get changes into the scheme. In that consultation document in 1985 they proposed further changes. It is those changes, with very slight modifications, which are included in the Bill before us now—changes that have been outlined both by the noble Baroness and by my noble friend Lord Murray.

As with other changes, the Government present the changes in this Bill as a tidying-up measure to simplify the system. It is designed to concentrate resources on the most severely disabled and to compensate for the loss of earnings, rather than for relatively minor degrees of disablement. I hope we have dealt with that, because there is no such thing as a minor degree of disablement in the industries in which certainly I was involved—engineering, woodwork and construction. However, the real reason was given in the Official Report of the other place on 29th April 1986 at col. 1825, in Committee, when it was divulged that: the changes will result in savings of between £40 million and £50 million in a full year". That is the real reason for these changes, as for most of the changes that appear in this Bill: there is to be a saving of between £40 million and £50 million per year. But a saving at the expense of whom? It is at the expense of people who are employed in dangerous industries, working dangerous and hazardous machinery, and who suffer sometimes horrific injuries which certainly affect the rest of their lives.

I do not think the Government have made out a case simply on the basis of saving what is really a paltry sum of money at the expense of injured workers. The amendment does not seek to go back to 1 per cent. I do not myself believe we ought to have changed from 1 per cent., but the amendment would accept that we go back to 4 per cent., and that instead of 14 per cent. we should stay at 4 per cent. I think that is a reasonable concession, and it goes certainly much further than most people would like to go. I hope the Government will see that this is a constructive attempt to be fair to the people who suffer these injuries in industry, and I would support the amendment.

Baroness Seear

My Lords, I should like very much to support this amendment. It is many long years since I was dealing with cases of this kind, but I very much want to endorse what the noble Baroness, Lady Turner, said. Common law is a quite inappropriate method for getting redress for people who suffer injuries at work, simply because in the great majority of cases there is no negligence. It is difficult enough to prove when there is, but in a great many cases there is no negligence; so common law can really benefit only a very small proportion of the people who are injured at work.

But seemingly small injuries can mean a lifetime of disadvantage. To cut a tendon in your finger and to reduce its flexibility is very serious for someone whose hands are instruments that he uses in his work. A seemingly mild case of dermatitis can be a very serious handicap indeed to someone who is earning his living by manual work. To cut out all the people below 14 per cent. would undoubtedly create unfairness and hardship to people who suffer from what to white collar workers, mental workers, may seem trivial but to manual workers is very serious indeed.

Baroness Trumpington

My Lords, I am sorry to say that the Government cannot accept this amendment. Our aim is to redress the imbalance between support for those disabled at work and those disabled by other causes. We are particularly concerned to do more for sick and disabled people on low incomes. That is why we are proposing to devote substantial additional resources to the disability premium to be paid with income support. We are also proposing more help for those who have suffered the worst industrial injuries. The most severely disabled will qualify for up to £24 a week extra through the full payment of reduced earnings allowance. At present, they cannot receive the allowance.

The other side of the equation is less help for those who suffer minor injuries at work. I stress the word "minor" because many of those with disablement below 14 per cent. suffer only temporary disablement and the average lump sum paid is less than £400. Indeed, the great majority do not suffer a drop in earnings capacity. For those whose earnings potential does suffer, we are providing the safeguard of continued eligibility for special hardship allowance, which will be renamed "reduced earnings allowance".

The noble Lord, Lord Murray, and the noble Lord, Lord Stallard, talked about sufferers from diseases like occupational asthma who would effectively be denied benefit, but many of those who suffer from occupational asthma will qualify for loss of earnings compensation. This they will get through the reduced earnings allowance, which in most cases will be as much as £25 a week. The allowance will also be paid to skilled workers, such as those mentioned by the noble Lord, Lord Stallard, who lose earnings as a result of minor injury. I believe that the Government's proposals strike the right balance. The amendment of the noble Baroness is essentially a wrecking amendment. It would set the threshold for payment so low as to make the change pointless, and I urge your Lordships to reject it.

Baroness Turner of Camden

My Lords, I am very disappointed to hear what the noble Baroness had to say. I thought I made it clear when I moved my amendment that we were not just concerned with loss of earnings, because that is not what the industrial injuries scheme was originally concerned about, although it was part of it. It was an attempt to ensure that people were compensated for loss of faculty, loss of the ability to lead a life in the same way as someone who had not had a similar injury. It was not just a matter of losing earning ability, which comes under a separate part of the industrial injuries scheme.

I do not accept what the noble Baroness said about the wrecking nature of the amendment. I have made an attempt to meet the Government's points made in Committee, when they were concerned not to have to make payments in respect of trivial injuries. The point of my amendment was to try to cover those injuries which, to the manual workers who suffers from them, are certainly not trivial. Because of that, I intend to press my amendment.

7.24 p.m.

On Question, Whether the said amendment (No. 60) shall be agreed to?

Their Lordships divided: Contents, 68; Not-Contents, 112.

DIVISION NO.4
CONTENTS
Airedale, L.	McNair, L.
Amherst, E.	Morton of Shuna, L.
Ardwick, L.	Mountevans, L.
Banks, L.	Mulley, L.
Birk, B.	Murray of Epping Forest, L.
Brockway, L.	Nicol, B.
Brooks of Tremorfa, L.	Oram, L.
Buckmaster, V.	Parry, L.
Carmichael of Kelvingrove, L.	Phillips, B.
Cledwyn of Penrhos, L.	Pitt of Hampstead, L.
David, B. [Teller.]	Ponsonby of Shulbrede, L.
Dean of Beswick, L.	[Teller.]
Donoughue, L.	Prys-Davies, L.
Elwyn-Jones, L.	Rea, L.
Ennals, L.	Ritchie of Dundee, L.
Ewart-Biggs, B.	Rochester, L.
Gallacher, L.	Ross of Marnock, L.
Graham of Edmonton, L.	Seear, B.
Hampton, L.	Serota, B.
Hanworth, V.	Stallard, L.
Harris of Greenwich, L.	Stedman, B.
Heycock, L.	Stewart of Fulham, L.
Houghton of Sowerby, L.	Stoddart of Swindon, L.
Howie of Troon, L.	Taylor of Blackburn, L.
Irving of Dartford, L.	Taylor of Gryfe, L.
Jeger, B.	Taylor of Mansfield, L.
Jenkins of Putney, L.	Tordoff, L.
John-Mackie, L.	Turner of Camden, B.
Kagan, L.	Underhill, L.
Kennet, L.	Vernon, L.
Kilbracken, L.	Whaddon, L.
Kilmarnock, L.	White, B.
Kirkhill, L.	Wigoder, L.
Longford, E.	Williams of Elvel, L.
McIntosh of Haringey, L.

NOT-CONTENTS
Aldington, L.	Campbell of Croy, L.
Alexander of Tunis, E.	Carnegy of Lour, B.
Allerton, L.	Carnock, L.
Ashbourne, L.	Cathcart, E.
Auckland, L.	Coleraine, L.
Bauer, L.	Colwyn, L.
Belhaven and Stenton, L.	Craigavon, V.
Belstead, L.	Craigmyle, L.
Boyd-Carpenter, L.	Davidson, V.
Brabazon of Tara, L.	De La Warr, E.
Brougham and Vaux, L.	Denham, L.[Teller.]
Butterworth, L.	Donegall, M.
Caithness, E.	Drumalbyn, L.
Cameron of Lochbroom, L.	Eden of Winton, L.
Campbell of Alloway, L.	Elliot of Harwood, B.

Elliott of Morpeth, L.	Mersey, V.
Elphinstone, L.	Middleton, L.
Elton, L.	Mottistone, L.
Forester, L.	Munster, E.
Fortescue, E.	Onslow, E.
Gardner of Parkes, B.	Orkney, E.
Gisborough, L.	Pender, L.
Glanusk, L.	Plummer of St Marylebone,
Glenarthur, L.	L.
Gray, L.	Portland, D.
Grimston of Westbury, L.	Portsmouth, E.
Hailsham of Saint	Rankeillour, L.
Marylebone, L.	Renton, L.
Halsbury, E.	Renwick, L.
Harmar-Nicholls, L.	Rochdale, V.
Hemphill, L.	Sanderson of Bowden, L.
Henley, L.	Savile, L.
Hives, L.	Seebohm, L.
Home of the Hirsel, L.	Shannon, E.
Hooper, B.	Sharpies, B.
Hylton-Foster, B.	Skelmersdale, L.
Ingrow, L.	Soames, L.
Kaberry of Adel, L.	Stodart of Leaston, L,.
Kimball, L.	Strathclyde, L.
Kinloss, Ly.	Swinfen, L.
Knollys, V.	Swinton, E. [Teller]
Lane-Fox, B.	Teviot, L.
Lauderdale, E.	Thomas of Swynnerton, L.
Lindsay, E.	Torphichen, L.
Lindsey and Abingdon, E.	Torrington, V.
Long, V.	Tranmire, L.
Lothian, M.	Trefgarne, L.
Lucas of Chilworth, L.	Trenchard, V.
McAlpine of West Green, L	Trumpington, B.
McFadzean, L.	Tryon, L.
Macleod of Borve, B.	Ullswater, V.
Margadale, L.	Vestey, L.
Marshall of Leeds, L.	Vivian, L.
Masham of Ilton, B.	Waldegrave, E.
Massereene and Ferrard, V.	Whitelaw, V.
Maude of Stratford-upon-	Wise, L.
Avon, L.	Zouche of Haryngworth, L.
Merrivale, L.

Resolved in the negative, and amendment disagreed to accordingly.

7.32 p.m.

Baroness Hooper

My Lords, in moving that further consideration on Report be now adjourned, I suggest that we do not resume proceedings on the Social Security Bill before half-past eight. I beg to move.

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