Lords Sitting of 23 June 1986

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on The Woolsack.
Prayers—Read by the Lord Bishop of Saint Albans.

Natural Therapies and Student Grants
Viscount Massereene and Ferrard: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now consider giving mandatory grants for students wishing to study the natural therapies, as is the custom of some award-granting committees of county councils.
The Earl of Swinton: My Lords, there is no present intention to consider giving mandatory grants to students wishing to study the natural therapies.
Viscount Massereene and Ferrard: My Lords, while thanking my noble friend for that short and sharp Answer, may I ask him whether he will not agree that if the public is turning to natural therapies—there is an average increase of 15 per cent. every year—there should surely be some help for the many young people wishing to study these therapies? Is my noble friend aware that the turnover in relation to patients going to qualified practitioners of these natural therapies is something like £60 million a year?
The Earl of Swinton: My Lords, courses in natural therapies are too varied to be designated en bloc. Some are postgraduate and others sub-degree. Only those which are degree comparable qualify for designation. Unfortunately, it has been necessary for economic reasons to impose a moratium on new designations. This has made it impossible to designate the one natural therapy course—osteopathy—on behalf of which an application has so far been made.
Lord Ennals: My Lords, in view of the fact that there is now greater recognition within the DHSS of the value of natural therapies and a greater acceptance also by patients, is it not important that medical students should have some training in these alternative therapies, perhaps in the same way as the Chinese, who practise many of these therapies, are also required to study Western medicine? Is it not important that doctors being trained for the future should have some knowledge of these forms of treatment that are increasingly popular and accepted?
The Earl of Swinton: My Lords, I am sure that would be very well worth while, but that is very much a matter for those in charge of the courses for the doctors. This is a Question on mandatory grants, which is slightly different.
Lord Ferrier: My Lords, is the noble Earl aware that this Question by my noble friend is a very important one? It pinpoints the anxiety which the noble Lord has just mentioned, about the whole problem of alternative therapies. Has the department of the noble Earl had time to study the report of the Board of Science Working Party on Alternative Therapy? Is he aware that it contains practically no reference to the steps which have been taken by chiropractors and osteopaths to train and qualify professional people for this purpose? In view of the fact that both the noble Lord, Lord Willis, and I have Motions down, will my noble friend agree that time should be made available for a full debate on this whole question of alternative complementary medicine? It is not alternative therapy, but complementary.
The Earl of Swinton: My Lords, I am sure that all Questions which are asked in your Lordships' House are important. That answers the first supplementary question of the noble Lord. I think I made it clear when I answered the supplementary question of my noble friend that the reasons these courses are not subject to a mandatory grant is not because they are considered unimportant but because they differ so much. As I said, some are post-degree and others are sub-degree. Subjects for debate are matters for the usual channels.

Complementary Medicine and VAT
2.40 p.m.
Viscount Massereene and Ferrard: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will abolish VAT payments on patients of qualified complementary medical practitioners.
Lord Brabazon of Tara: My Lords, in the area of health care, exemption from VAT has applied since the introduction of the tax to supplies by persons who are registered or enrolled on any of the statutory medical registers. This provides a clear borderline which is understood by all concerned and generally accepted as reasonable.
Viscount Massereene and Ferrard: My Lords, I thank my noble friend for that Answer. Is he aware that something over 2,000 qualified medical practitioners in the therapies have studied for many years in these therapies? Will he not agree that there should be some institute—perhaps under the auspices of the BMA—to register these practitioners and to see that they are fully qualified in the therapies that they have studied? Will he not agree that by having VAT the Government are putting a tax on the freedom of choice for medical attention on these patients who prefer to have therapeutic treatment?
Lord Brabazon of Tara: My Lords, it is open to any of these people to apply to the Council for Professions Supplementary to Medicine for exemption under the Professions Supplementary to Medicine Act 1960. If they were listed or registered by the council, they would be exempt from VAT. I suggest that it is certainly not a matter which should be decided by the VAT inspector. The best route is for them to apply to be registered, and if they were successful, they would be exempt.
Lord Ennals: My Lords, is this not a matter which should be carefully examined by the Government? There is widespread and growing interest in it, and obviously these two Questions are linked. Bearing in mind that qualified doctors—GPs—do not have to pay VAT but qualified practitioners of complementary medicine do, is there not some injustice in this? Will the Government now decide that the time has come to look again at this issue?
Lord Brabazon of Tara: My Lords, as I have just said, the machinery exists. Under the Professions Supplementary to Medicine Act 1960 it is open to any of these bodies to apply to the Council for Professions Supplementary to Medicine, and if they can get on the register through that route, their services will be exempt from VAT.
Lord Ennals: My Lords, with respect, that really does not answer the question. My question implied that the Government have some responsibility here; it is not just the professions supplementary to medicine. I asked the noble Lord—and I ask him again—to draw
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the attention of his right honourable friend the Secretary of State for Social Services to the exchange that has taken place in order that the Government themselves may take a position on this.
Lord Brabazon of Tara: My Lords, I shall certainly draw these exchanges to the attention of my right honourable friend the Secretary of State for Social Services, but at the end of the day my right honourable friend is responsible for decisions or, if there is a dispute, for the decision of the Council for Professions Supplementary to Medicine. Therefore, I would suggest that it is easier for any groups, such as osteopaths, to apply first to the council and, pending the result, if necessary to go to the Secretary of State. I certainly do not think that it would be right for the VAT inspector to be the person to take this decision.
Lord Cullen of Ashbourne: My Lords, is my noble friend aware that it is recognised throughout Europe that tax should not be paid on the provision of medical or paramedical services, and that the levying of such a tax is contrary to Article 13(A)(l)(c) of the Sixth Directive? Is he further aware that it is high time that the General Council for Registered Osteopaths, which has been in existence for nearly 40 years, is recognised as an actively professional body whose practitioners are practising the medical art?
Lord Brabazon of Tara: My Lords, far be it from me to discuss the merits or demerits of any particular group of medical practitioners. All I can say is that all the main medical practitioners are exempt from VAT at the moment: doctors, dentists, opticians, nurses, midwives and, in addition, those who qualify under the Professions Supplementary to Medicine Act; that is to say, chiropodists, dieticians, etc. If osteopaths wish to join in that group, it is for them to apply, and if they get on the register, they will not have to pay VAT.
Lord Ferrier: My Lords, what about chiropractors? This Question refers to VAT on fees. What is the use of their qualifying if the DHSS, presumably under the instruction of the BMA, is not prepared to accept that they are qualified to practise their complementary medicine? As I suggested in my last question, is this not a matter for proper examination, so that provision is made for qualified people to be accepted under the DHSS? The question of finance is very important.
Lord Brabazon of Tara: My Lords, I really have nothing further to add than that the chiropractors should apply to the Council for Professions Supplementary to Medicine in order to get on its register and therefore be exempt.

Post Office-British Telecom Liaison
2.48 p.m.
Lord Beloff: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will arrange a meeting between the chairman of the

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Post Office and the chairman of British Telecom so that they can discuss together how best to collaborate for the public good.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, no. The Government are satisfied that a good relationship exists between the two organisations. It is the Director General of Oftel's duty to consider all matters relating to British Telecom so far as public interest is concerned, and the British Telecommunications Act 1981 requires the Post Office, among other things, to have due regard to the social needs of the United Kingdom as well as to its efficiency and effectiveness.
Lord Beloff: My Lords, may I thank my noble friend the Minister for that reply? Has he noted in the press—or perhaps he knows from other sources—that in the autumn both the Post Office and British Telecom plan to raise charges to the consumer on the grounds of increased costs? I should like to ask whether a meeting of the kind that I have suggested—perhaps with the addition of the Director General of Oftel, if the Minister can afford another drink—might come to the conclusion that these costs could be lowered if, for instance, telephone directories were available in the post office and post codes were available in telephone directories?
Lord Lucas of Chilworth: My Lords, I have noticed—and, indeed, my noble friend draws the attention of the House to this—the consideration that the Post Office is giving to the question of cost, but that is very much a commercial matter for the Post Office, as indeed are charges by British Telecommunications a commercial matter for that company. The Director General of Oftel has an input into that area. So far as the Government's role is concerned, perhaps I may assure my noble friend that I shall be happy to talk with the Director General of Oftel about matters which concern your Lordships, as I would take an early opportunity to discuss with the Post Office, also, matters which concern your Lordships.
Lord Grimond: My Lords, will the Minister accept that there is some sympathy for this Question? If the meeting is to take place, might it take place in public so that we can hear what importance the Director General of Oftel and the chairman of British Telecom attach to reducing their charges? This is one of the things which would benefit the public good a great deal, but so far it does not seem that British Telecom are keen to reduce their charges.
Lord Lucas of Chilworth: My Lords, meetings in public are fine, and if the noble Lord wishes to have a meeting in public with either of those two bodies that is entirely up to him. I have to remind your Lordships that the Government have no locus in so far as British Telecom is concerned since Parliament decided that that responsibility should reside with the Director General of Oftel, who I have little doubt is making a determined effort to meet his obligations. I have said that I shall talk with the Post Office about the other matters as soon as an opportunity arises.
Lord Jenkins of Putney: My Lords, is not the problem that neither of these organisations is under parliamentary scrutiny since they were removed from parliamentary control? In these circumstances, is not the right solution for the Government to institute a measure of de-privatisation, thereby enabling us to ask questions of the persons in charge of either organisation?
Lord Lucas of Chilworth: My Lords, so far as British Telecommunications is concerned, the privatisation of that service has been of great benefit to the telephone user, the public at large, and indeed industry at large, and is a singular success in privatisation. So far as the Post Office is concerned, in 1981 it was removed as a separate corporation and is making strenuous efforts, particularly by virtue of its recent agreements, to improve its services both to its employees and to its consumers.
Lord Donaldson of Kingsbridge: My Lords, what does the noble Lord mean when he says that it has been an obvious advantage to the consumer? Is there a single consumer in this House who has found the denationalisation of the telephone system of great advantage?
Lord Lucas of Chilworth: Yes, my Lords, many.
Lord Donaldson of Kingsbridge: My Lords, would the noble Lord ask such noble Lords to hold up their hands?
Lord Ferrier: My Lords, I apologise for speaking again, but I do not often weary your Lordships. May I suggest to my noble friend that when he meets with these people he might begin on the question of the Telemessage? I wonder how many noble Lords are aware that there is a service called the Telemessage? Anyway, it does not appear in the inland compendium, even on the last page, which is "Other Services". It is a most useful service. I have written to the Post Office, and is my noble friend aware that they replied, "It is nothing to do with us; it is Telecom's business"? I have written to Telecom, and they have said, "It is nothing to do with us; it is the Post Office". May I appeal to my noble friend to tackle the question of this useful service (which is trying to replace the telegrams that we used to like) as soon as he is able?
Lord Lucas of Chilworth: My Lords, I am glad to find that, notwithstanding a certain lack of advertising, there is one of your Lordships who finds the collaborative service between the Post Office and British Telecommunications of some great benefit, and I shall be delighted to pass on that message to both those bodies.
Lord Glanusk: My Lords, would my noble friend agree that it is more important that British Telecom should talk to the cable companies and give us a co-ordinated telecommunications system which could also do away with the delivery of letters by hand?
Lord Lucas of Chilworth: My Lords, I am sure that that is an area in which British Telecommunications are engaged, and I am sure that the advancing

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technologies will be reflected in the kind of service British Telecommunications offer to their subscribers.
Lord Annan: My Lords, surely the lack of co-operation just mentioned by the noble Lord, Lord Ferrier, between these two bodies is evidence that the noble Lord ought, with respect, to pay greater attention to the point made in the Question by the noble Lord, Lord Beloff? Does the noble Lord agree that there is a distinction between a private enterprise company, which obviously has duties to its shareholders and its employees, and a public monopoly or private monopoly, which not only has duties in those directions but also has duties to the public at large?
Lord Lucas of Chilworth: My Lords, I feel that my answer to my noble friend Lord Beloff's supplementary question expressed the interest of Her Majesty's Government. I repeat that I shall discuss with the Director General of Oftel, in whom Parliament has placed the responsibility for meeting the public interest, and I shall take an opportunity of discussing separately with the Post Office those matters which your Lordships have drawn to the attention of both, and indeed the House, in the four Questions in the last three months that I have had the privilege of answering.

EC Presidency: UK Priorities
2.57 p.m.
Lord Rodney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what will be their priorities when they take over the six-month presidency of the European Communities on 1st July.
The Minister of State, Foreign and Commonwealth, Office (Baroness Young): My Lords, our priorities will be: completion of the Common Market; easing of burdens on businesses; creating conditions for employment growth; continuing reform of the CAP; sound management of the Community budget; launch of a new GATT round and renewal of the multifibre arrangement; sensitive handling of trade relations with the United States and Japan; and to ensure that the 12 member states act together in important matters of foreign policy in the spirit of the new treaty provisions signed in Luxembourg which were based on a British initiative.
Lord Rodney: My Lords, that seems to be quite a full programme. May I welcome the reference by my noble friend the Minister to the reform of the CAP? Can she confirm that the Government will do all in their power to reduce the surpluses without prejudicing the interests of the British farmer?
Baroness Young: My Lords, as my noble friend will be aware, world agriculture has been facing a crisis of over-production, but there has been substantial
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progress on the CAP over the last few years. Indeed, there have been cuts in real prices over the last four years. It is very much a continuing discussion that needs to go on, and MEPs voted for the Provan Report on 17th April; that is to say, the Parliament voted for a price freeze and cuts in production for surplus products. This was translated into a tough price package. The report of 26th February of the Public Accounts Committee of another place said that the introduction of budgetary discipline and the financial guidelines were significant steps towards improved control over total CAP expenditure.
Lord Cledwyn of Penrhos: My Lords, we wish the Government well in this ambitious programme and look forward to the results at the end of six months. Is the noble Baroness aware, for example, that the Prime Minister has said that during the British presidency positive action will be taken in relation to South Africa? Can she indicate what that positive action means, and does it include definitive and decisive economic sanctions? On the question of unemployment, which is also on the agenda and which the Foreign Secretary has described as the most "important issue facing the Community, can the noble Baroness say what new and positive proposals the Government have to deal with this?
Baroness Young: My Lords, I welcome the first remark of the noble Lord, Lord Cledwyn, because the policies that we shall be actively pursuing during the next six months have been British initiatives over some period of time. On the specific point that the noble Lord raises about South Africa, the European Community Heads of Government will consider policies towards South Africa, including the possibility of further measures, when they meet later this week; that is, on 26th and 27th June. On the noble Lord's second supplementary question about employment, the joint Anglo-Irish-Italian paper on unemployment growth into the 1990s has been presented to the Social Affairs Council and discussed within the Commission. It emphasises the promoting of enterprise and employment, flexible employment patterns, training and helping the long-term unemployed. The paper was deposited in both Houses on 3rd June. It will be discussed at the European Council and we hope that it will form the basis of a Community labour market strategy which can be adopted during our presidency. This is an issue to which we attach great importance.
Baroness Burton of Coventry: My Lords, may I ask the noble Baroness whether the liberalisation of air transport in Europe is included under the list she has read out? If it is, will she please ask the Government in their presidential six months to see whether they can give this a "push" because nothing else seems to have any effect?
Baroness Young: My Lords, I am well aware of the interest that the noble Baroness has in this subject. It is one of the issues which is of concern to us in regard to the whole question of the completion of the full Common Market. Transport is included in that.
Lord Belhaven and Stenton: My Lords, would sanctions against South Africa help the unemployment situation?
Baroness Young: My Lords, your Lordships will have the opportunity to debate the whole question of South Africa on 4th July. Perhaps I may suggest to my noble friend who raises a very important matter that this is something which we might leave to that occasion.
Lord Kennet: My Lords, may I take it that the list that the Minister of State read out was not ranked in order of importance? If it was, the question of the development of a common foreign policy in the Community should not have been last, but somewhere right up near the top.
Baroness Young: My Lords, the noble Lord, Lord Kennet, knows of the importance which the Government attach to the development of a common view on foreign policy matters in the Community. The particular list was grouped with a number of economic points and the political points came at the end, but that does not in any sense downgrade them. They are important, and all the points I have raised are important.
The Earl of Bessborough: My Lords, my noble friend will not find this question unexpected: will the matter of our joining the exchange rate mechanism of the European monetary system also be included in the items which are given priority during the six months?
Baroness Young: My Lords, my noble friend will be aware of the Government's view on the EMS—a matter which was recently the subject of debate in your Lordships' House. I could not go beyond what was said on that occasion.
Lord Mellish: My Lords, the Minister read us a list of priorities which are very exciting and very thrilling. Can she tell me what chance we have of success in any of them?
Baroness Young: My Lords, the Government have achieved a number of successes in the Community, not least our success in our rebates from the Community budget and, indeed, the success to which I referred in answer to the supplementary question of my noble friend Lord Rodney on the CAP. We attach great importance to these various economic measures which we believe will be of great benefit to all the people in this country, and they are well worth working for.

Business
3.5 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lady Trumpington will, with the leave of the House, repeat a Statement that is being made in another place on invalid care allowance.
It may be for the convenience of the House if I announce that the Committee stage of the Social Security Bill will be adjourned at approximately 7.00 p.m. for a period and that during this adjournment the Third Reading of the Airports Bill will be taken.

Wages Bill
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Wages Bill has been committed that they consider the Bill in the following order—
Clauses 1 to 11,
Schedule 1,
Clause 12,
Schedule 2,
Clauses 13 and 14,
Schedule 3,
Clauses 15 to 31,
Schedules 4 to 6,
Clause 32.—(Lord Trefgarne.)
On Question, Motion agreed to.

Civil Protection in Peacetime Bill
3.6 p.m.
Read a third time.
Lord Renton: My Lords, I beg to move that this Bill do now pass.
Moved, That this Bill do now pass.—(Lord Renton.)
Viscount Davidson: My Lords, there is happily agreement on all sides of your Lordships' House about the usefulness and desirability of this Bill. I should like very briefly to emphasise the Government's full support for this short but significant measure.
The civil defence legislation under which specific grant is paid towards the cost of local authorities' emergency planning staff and other resources is at present expressed entirely in terms of hostile attack by a foreign power: quite rightly so since this was the problem at which the legislation was aimed. But the effect is that technically staff whose costs are supported entirely by civil defence grant should not be spending any of their time on work that falls outside the scope of the 1948 Act, nor should facilities such as emergency centres be used. The Bill seeks to provide a statutory basis for greater flexibility in the use of these resources. I am greatly encouraged that there has been such widespread support for this Bill. I hope increasingly that civil defence issues can be considered without controversy and placed in their proper context, which is the broad spectrum of planning against all forms of emergency and disaster. I believe the Bill marks a valuable step forward towards a proper state of preparedness throughout the country.
I close by congratulating my honourable friend Sir Nicholas Bonsor for introducing this Bill, and for moving it skilfully through another place; and I am most grateful to my noble friend Lord Renton who took it out and has championed it most ably and successfully in your Lordships' House. They can justly feel very satisfied with their achievement.
Lord Renton: My Lords, I am most grateful to my noble friend for his very kind comments, and for

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emphasising the points that he has. I should also say that I am grateful to the hundreds of noble Lords who have curbed their enthusiasm for the Bill by not speaking, and for thus enabling us to get this necessary Bill on to the statute book as quickly as possible. It has been welcomed on both sides of both Houses. It is timely because the Chernobyl disaster tragedy has shown the need for our own local authorities to be prepared to protect our people against nuclear accidents even on the Continent. My Lords, I commend the Bill to the House.
On Question, Bill passed.

Road Traffic Regulation (Parking) Bill
Lord Dean of Beswick: My Lords, I understand that no amendment has been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged. —(Lord Dean of Beswick.)
On Question, Motion agreed to.

George Donald Evans and Deborah Jane Evans (Marriage Enabling) Bill [H.L.]
3.9 p.m.
Lord Morris: My Lords, I beg to move that this Bill be now read a second time.
In moving the Second Reading, I do not propose to say anything whatsoever about the merits of this or either of the other two Bills. Your Lordships will undoubtedly recollect that 20 days ago—namely, on 3rd June—this House agreed to a recommendation by the Procedure Committee that marriage enabling Bills should, so far as possible, be dealt with in the same way as other private Bills. In other words, that they should be give a formal Second Reading and be fully considered in a Select Committee which would then report to the House. I hope your Lordships will agree that on this, the first occasion since the Procedure Committee report was agreed to, these three Bills should be given unopposed Second Readings and be committed to an appropriate committee for full investigation.
In the case of the first Bill, the Evans Bill, and in the case of the third Bill, the Rolfe Bill, they will both be committed to a Select Committee consisting of the Chairman of Committees, a bishop, and two other noble Lords. The second Bill, the Owen Bill, falls within the terms of the Marriage (Prohibited Degrees of Relationship) Act and, as recommended by the Procedure Committee, it will therefore be considered by an Unopposed Bill Committee. The Act has not yet been brought into force and the parties wish to proceed with their marriage enabling Bill.
I should like at this stage to say that in my view the Lord Chairman of Committees is deserving of the highest praise for having initiated this adaptation of the procedure, which is a great improvement on the
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old procedure. I should also like to thank the learned Clerks, who have assisted all the way along the line. I am also delighted to be able, for a change, to congratulate the usual channels, both temporal and spiritual, on their speedy agreement to the change in procedure which, as I say, I believe is an enormous improvement. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Morris.)
On Question, Bill read a second time, and committed to a Select Committee.

Keith Owen and June Veronica Owen (Marriage Enabling) Bill [H.L.]
Lord Morris: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Morris.)
On Question, Bill read a second time, and committed to an Unopposed Bill Committee.

John Ernest Rolfe and Florence Iveen Rolfe (Marriage Enabling) Bill [H.L.]
Lord Morris: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time—(Lord Morris.)
On Question, Bill read a second time, and committed to a Select Committee.

Social Security Bill
3.12p.m.
Baroness Hooper: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Hooper.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 19 [Income-related benefits]:
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 63:
Page 24, line 8, at end insert—
("(1A) The scheme prescribed in subsection (l)(a) above shall provide for weekly payments of a community care addition to a chronically sick or disabled or elderly person, or in respect of a chronically sick or disabled child or other chronically sick or disabled elderly dependant.
(1B) Regulations shall provide that payments of community care addition made under subsection (1A) above shall be payable at a rate that shall be determined by reference to—

(a) the needs of the claimant or dependant in relation to his proper welfare and need for care and attention in a dwelling which he occupies or is to occupy as his home or in which he resides or is to reside as a member of a family, and

(b) the extent to which other benefits or payments that are payable under Part II of this Act fail to meet those needs.

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(1C) Payments of community care addition under subsection (1A) above shall be payable in addition to any other income support payment, including any premium, and in addition to any attendance allowance or mobility allowance to which the claimant or dependant may be entitled.")
The noble Lord said: We now come to Part II of this Bill, concerned with income-related benefits. Before dealing with my amendment I should like to congratu-late the usual channels on having so arranged things that we have the best part of the day on this part of the Bill, to which a number of important amendments have been tabled, not least the one which I now have the honour to move, No. 63.
The Committee will know that there are to be three schemes under this part of the Bill. The first of them is called income support. I know the noble Lord, Lord Banks, wishes to change income support to basic income guarantee, and he will talk about that later. However, I do not myself think that this amendment, No. 63, is at all altered by the nomenclature—whether it is to be income support or basic income guarantee.
The purpose of the amendment is that income support schemes shall provide for weekly payments of a community care addition to—I stress this—and only to a very small number of very severely disabled people. That is shown quite clearly in subsection (1A) of the amendment. Even so, and even to this very small number of people, the weekly payment will be made only according to the needs of the claimant's special circumstances and the extent to which other payments or benefits under this part of the Bill fail to meet those needs. So this is a heavily circumscribed amendment for a very small number—
Baroness Gardner of Parkes: Can the noble Lord possibly speak a little louder because the position he is in makes it difficult for us to hear; or perhaps he can move nearer to a microphone? I am afraid we are having quite a lot of difficulty in hearing him.
Lord Henderson of Brompton: I am so sorry. I shall move my position and see whether I can get nearer to a microphone. I apologise for being inaudible. However, I shall not inflict upon the Committee again what I have already said, in the hope that the shorthand writer has been able to take it down.
This is a heavily circumscribed amendment. It is only for a very small number of severely disabled people who are now in receipt of necessarily large amounts of supplementary benefit in the form of the present additional requirements like the domestic addition. The number of these people is of the order of 2,000 or 3,000. It may be more—I do not think it is less—but it will not be significantly more. We shall know the number more precisely when the new survey is completed; I think it is the OPCS survey. But we cannot wait for that survey. All we can be sure of is that the number is small, and so this amendment cannot cost much.
However, the difference it will make to that small number of severely disabled people will be enormous. It will literally mean the difference between life at home and life in an institution. I could give many examples, but I will not do so because I wish to be brief, and also very telling examples were introduced in another place both in Committee and on Report. I
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do not think it is really right to reiterate those unless your Lordships' Committee considers it to be necessary. I would say merely that it is the declared policy of the Government that, wherever possible, chronically sick or disabled or elderly people should be cared for at home. It is certain that the proposal in this amendment—that is, weekly payments of a community care addition—will be less costly to public funds than the cost of keeping those same people in institutions.
Therefore, by accepting this amendment the Government would at the same time be giving effect to their declared policy and be saving money. I find it hard, therefore, to see any effective argument against this amendment on grounds of either humanity or cost, and I must say that after examining ministerial statements in this Chamber and in another place I cannot find one. A similar amendment was moved in another place with all-party support and the Minister's reply was unfortunately cut off by the guillotine. Before the blade fell the Minister said—and here I quote from the Official Report at col. 128 on 19th May, 1986—
"I would not want to minimise or dismiss the genuine concern that has been expressed about [these people]",
and,
"the Government are concerned to find a solution".
I very much hope that if this amendment is not the right solution, an accepted solution will be found before we have finished with this Bill in this Chamber. The Minister went on to say that he could not accept that amendment, which was very 'similar to Amendment No. 63—again I quote from col. 128—
"because… it would entail going away from the basic structure of the Government's income support proposals,"
and,
"The amendment would lead us straight back to the present tangle of weekly additional requirements".
I do not accept that. What this amendment proposes is not a tangle, and nor would it lead to tangles. There is no other proposal, so far as I know, to provide for weekly payments of this sort except possibly the amendment to be moved by the noble Baroness, Lady Faithfull, Amendment No. 67, in case of urgent need. But that is a separate amendment and a separate argument, and one which I would support.
I can appreciate that the purists in Whitehall want to retain the immaculate state of their conception, but I would hope that the Ministers in both Houses would be rather more flexible. Surely the Minister, Mr Tony Newton, and the noble Baroness, Lady Trumpington, must be able to depart from the purity of the Bill, as drafted, sufficiently to make a small exception of this nature in order to help this very small category of very severely disabled.
I was encouraged by what the noble Baroness, Lady Trumpington, said on Second Reading. This is what she said in column 602:
"On housing benefit subsidy and administration costs, we have demonstrated our willingness to be flexible without compromising the principles of our reforms".
Well done! I wonder whether the noble Baroness would demonstrate the Government's willingness to be as flexible on income support as they have been on

15
housing benefit. They can do so simply by accepting this amendment. It can always be altered when the implications have been assessed following the OPCS survey. Meanwhile, these very severely disabled cannot wait. I beg to move.
Baroness Faithfull: I rise to support the noble Lord, Lord Henderson, on this amendment. What concerns me is that the noble Lord, Lord Henderson, has said that it cannot cost much. That is true. But if this amendment is not accepted it is going to cost a lot to some other authorities; namely, the local authority social services and the local health service. The social services are simply going to have to accept into care the elderly, the handicapped or the children—and that is very costly; it is costly in forms of finance, but it is also costly in terms of happiness. Therefore, by not accepting this amendment one is going to shift the financial responsibility from the ministry to the local authority; and most local authorities have been rate-capped. Also, I think that I am right in saying that at least 90 per cent. of the social service departments in the country have had their estimates cut.
Therefore, where do we stand? The noble Lord, Lord Henderson, has said that there are particular cases. I do not think that we have time to go through all these cases, but I would mention, for instance, the kidney cases. I would mention children in hospital and the problems which the National Association for the Welfare of Children in Hospitals experience with regard to children. I have received letters from doctors at Great Ormond Street Hospital concerning children and the extra help that they need to keep them at home. Therefore, I support this amendment.
Lord Seebohm: I wish to intervene with a very few words. I cannot believe that the Government, in their new plans, really meant for these few people to slip through the net of care. To me, it is quite astonishing if that were so, particularly if it were for purely administrative reasons. It seems to go right against the whole policy of community care. I strongly support this amendment.
Lord Renton: I, too, support the amendment. I think that it is very necessary and, as the noble Lord, Lord Henderson of Brompton, has pointed out, it cannot apply to large numbers of people. I am a little concerned as to the application of it. I want to make sure—and perhaps the noble Lord, Lord Henderson of Brompton, can help me—that it would apply to people who are living in a very small, established home of, say, half a dozen severely disabled people, some of them or all of them perhaps mentally handicapped. As parents die, the ordinary family home breaks up but the severely disabled people remain in that condition for the rest of their lives and will therefore have to live somewhere perhaps different from their original homes. Or their home maybe used—as we in the Royal Society for the Mentally Handicapped are hoping to use them, with suitable financial provision made—to enable others to come in.
I should like to be quite sure that, although the total numbers will not be increased, the community care addition which the noble Lord has in mind would
16
apply in those circumstances—it is a home, in a sense, for it is a new kind of family—and that it would not be confined to the original family.
Lord Ennals: I should like to give total support to the amendment that has been proposed. I-think that the Government, when they introduced the Bill, probably had not reckoned that there would be this, as the noble Lord, Lord Henderson, has said, small number of severely disabled people—disabled in one way or the other; mentally handicapped, mentally ill, physically handicapped—who would be worse off. In fact, it was said during the course of our Second Reading debate that the Bill would, in general, be greatly to the advantage of disabled people. I am not going to argue that at the moment.
I think that we are concerned about those who will suffer. The Government's proposals for income support will leave some claimants who now get supplementary benefit definitely worse off than they are at the present time. Some disabled, the ill and elderly people, rely on the range of additional payments paid with weekly supplementary benefit to maintain their independence in the community. I think an important point made by the noble Baroness, Lady Faithfull, was that if they are not able to maintain their independence in the community that means a very much larger payment as well as very much less happiness, if they are admitted to a home of some sort. One sometimes forgets how many additional payments there are. There is the heating addition, the domestic needs addition, the laundry addition, the blindness addition, the bath addition, the dietary addition and additions for clothing needs. If you add all these together they can come to a significant sum.
I have one case, if I may give it, which shows just what can be the consequence. This person, a young lady, due to her disabilities, is confined to an electric wheelchair; she has very little strength or length of reach in her arms; she needs help with washing, dressing and using the toilet. She receives attendance allowance. Her present supplementary benefit weekly payment is as follows. If you add up the long-term rate, domestic care allowance and the diet, heating and bathing, minus the available scale margin, she is now receiving £89·90 a week. Under the income support proposals, unless this amendment is carried, she would receive a personal allowance of £24 and the disabled person's premium of £12·25, which is £36·25. That is considerably less than half.
I do not believe that your Lordships' Committee or the country as a whole would want to see severely disabled people put into such a situation where they really have no other alternative but to go into a home of some sort or another. As I have said, I believe that the Government had not quite recognised that this would be so. I think it is worth recalling that this amendment has been supported by the British Council of Organisations of Disabled People, by the Disablement Income Group, by the Disability Alliance, which brings together very many organisations like Mencap and MIND, the Royal Association for Disability and Rehabilitation, the Royal National Institute for the Blind and the Spastics Society. All those who actually know the needs of

17
disabled people have indicated their support for this amendment.
3.30 p.m.
Lord Renton: Would the noble Lord care to add to his important list the Greater London Association for the Disabled?
Lord Ennals: I am very glad that the noble Lord intervened. That is quite right. If one listed the number of organisations dealing with particular disabilities, one would find an enormous spectrum of organisations who are absolutely united on this matter. It would be very sad if the Government did not recognise that for this small group of disabled people they should accept this amendment.
Lord Kilmarnock: We on these Benches should also like to support this amendment. Our name is not attached to it, simply because there is a convention of a limit of four names for the proposers of amendments. The noble Lord, Lord Ennals, has already mentioned the severe loss that will occur in one case, under the Government's proposals, from £89·90 down to £36·25 and there are a great many other cases which could be advanced. In one case, the loss could be from £74·70 down to £36·25; in another from £68·05 to £65·45—of course, they vary according to circumstances—and in another from £109·55 down to £81·10; in another from £44·47 to £36·25, and so on.
We want to see this very important amendment of the noble Lord, Lord Henderson, in the human context, and I should like to read out very briefly a letter that I have had from a disabled lady, Mrs. Reardon, from Peckham. She writes as follows:
"Life is very expensive when you are disabled. Heating costs become much higher when you feel the cold. I believe that heating is one of the biggest worries for a disabled person. Many of us experience weight gain or loss; for instance, losing weight through illness, putting on weight through loss of mobility or taking steroids, or fluid gain … Clothes no longer fit and need complete replacement. Diet—if you are disabled you often need to follow a special diet of fresh fish, vegetables etc. which are more expensive than the normal diet. You need smaller quantities which cost much more. I believe that mobility allowance should be extended to include people over the age of 65"—
that is a separate point. She goes on to say,
"If additional requirements are abolished, then many of us will lose a vital source of our weekly income for the above expenses and we will be discouraged from applying"—
I imagine she means discouraged from applying for the new social fund. She continues:
"Many of us have a lot of pride and will go without to try and keep out of debt".
That is the direct experience of a disabled person who is likely to be affected under the Bill as written.
One must agree also with the point made by the noble Baroness, Lady Faithfull, that if these gallant people are forced into residential accommodation the eventual cost to the state—that is to say, to all the rest of us—will be far greater. On all those grounds, I hope very much that the Government will see fit to accept the amendment.
Baroness Darcy (de Knayth): I too should like to support this amendment most warmly. I find it very worrying that, as the Bill stands, it is those in greatest
18
need who will be worse off under the new arrangements. I shall not give examples, but I should like to underline what the noble Lord, Lord Henderson of Brompton, and other noble Lords and Baronesses, have said, that we are not talking about large numbers so this should make it easier, because it is cheaper, to find an acceptable solution.
As the noble Lord, Lord Henderson, has already remarked, the Government have said that they are concerned to find a solution. However, the trouble is that at the moment, as this Bill stands, there is none written into the Bill and this amendment is a possible way of resolving the problem. People are undoubtedly very worried. I was going to quote the remarks from the lady in Peckham, whose letter the noble Lord, Lord Kilmarnock, has just read, so the Minister will be extremely glad that I can shorten my speech considerably.
I should like to add that it is acknowledged that, as the Bill stands, new beneficiaries who would have qualified for additional allowances will be worse off. But it is important to realise that those now receiving the highest additional payments will also very rapidly become worse off as the real value of their existing benefit declines. It is important to remember that the major additional payment is for domestic allowances—that is, wages—and the cost of wages is rising quicker than the cost of living, so that the decline will be particularly sharp. This is an important point.
Unless a solution is found, not only will some severely disabled people at present living in the community be forced into institutions, but it will be well nigh impossible for those trying to emerge from institutions, and to make their way in the community and live independent lives, ever to escape. I know that the Minister cares very much about the difficulties of those in greatest need, and I very much hope that she can accept this amendment, which would ensure that those problems are not exacerbated.
Baroness Lane-Fox: Because I know too much about the real need concerned in the situation referred to in this amendment, the easiest line for me to take would be to say, "Give us the money and go along with this amendment". Certainly, that is the way the many pages of propaganda that I have received urge me to vote. A high blanket payment looks very attractive in this matter, provided it is the best that the Government can do to meet the need. But 1 believe that there are matters which require more careful consideration, in order to sustain our policy to ensure that the most help goes to those in greatest need.
I see that if this amendment were adopted everyone who is severely disabled would receive this valuable extra payment, regardless of his or her own financial situation. As noble Lords know, severe disablement knows no barriers, and even the multi-millionaire is quite liable to be the victim of accident or virus that makes him very severely disabled. Under this amendment, he would be eligible to this extra payment regardless of his bank balance.
Maybe this is thought to smack of the dreaded words, "means test"; but my belief is that we want to find everyone in this category of severe disability who is trying to live on a small income and to make sure that he or she receives maximum help. Noble Lords

19
can be sure that those who are dependent for regular physical assistance simply cannot afford to put more of a strain on personal relationships, by having to be subsidised by the members of their family or by running them into debt. Whatever resources there are for those fields should be channelled here.
As I understand it, the changes in these payments will not take place until next April. I hope that by that time more will have been learned about the actual circumstances of these most severe cases and decisions taken as to their entitlement. My hope is that if the better-off are excluded, the least affluent and the really hard-up will get very considerable help according to their circumstances. This is a method that requires close attention, and I consider that the overall payment for which the Committee is being asked to vote is not flexible enough to get the best deal which is needed, and which I believe all noble Lords wish to see going to the very severely disabled.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): I hope that I can put all noble Lords out of their misery. I can appreciate the concern which has been expressed by noble Lords in discussing this amendment. It is a concern which centres on the way in which the Government's proposals might affect disabled people. The Government too are conscious of the needs of chronically sick and disabled people, and it is no intention of ours to make difficulties for them. That is why we are confident that our proposals will help disabled people overall.
My honourable friend the Minister of State, when replying in another place to a debate on a similar amendment, described the important improvements that we are making in the provision for disabled people. I certainly do not want to bore the Committee by repeating what he said; but I feel that I should touch briefly on the matters about which he spoke so that we can consider this matter in the full context.
We propose that receipt of the qualifying benefit for the disablement premium will automatically passport the claimant to that premium. At present, someone who is chronically sick or disabled would have to demonstrate incapacity for work for a year before receiving the higher long-term rate of benefit. Even where we have retained a rule on the length of time that someone should demonstrate incapacity for work, this period is 28 weeks rather than one year. These improvements have managed to enable us to have an effect which, on the figures in the technical annex published with the White Paper, means that the great majority of disabled people would gain or would face no change as a result of these proposals.
However, before I turn, in particular, to the position of those now receiving the domestic assistance addition, I should like to make three general points. First, the Committee must remember that we have made clear that no one will suffer a reduction in income when we introduce income support as a result of that change. Our transitional arrangements will ensure that. Secondly, we have never made any secret of the fact that this particular aspect of the scheme might need reconsidering when the findings of the
20
current survey of disabled people become available. We have launched the first major survey of this kind for nearly 20 years. The noble Lord, Lord Henderson, has already touched on this. Its results will feed through within a couple of years and if the survey suggests we should look again at the treatment of disabled people under income support, we shall certainly examine the matter.
Finally, we should not overlook the major issue implicit in the amendment; that is, the balance between the responsibility of the social security system and that of other statutory authorities in providing care and attention for disabled people. Community care policies are of course very much bound up with services to help maintain people in the community. Clearly we want to ensure that our social security policies are not seen as undermining wider community care objectives.
I appreciate that the substantial improvements for the great majority of people who receive a disability premium have not met the concern that has been expressed about the position of those who, with the help of the special additional payment for domestic assistance in the supplementary benefits scheme, are able to maintain themselves independently in the community. Before I come to comments which I hope will provide reassurance to the Committee, I should like to explain the present rules.
Under the present scheme payments can be made for assistance with domestic tasks. Essentially it is a payment to enable a care service to be provided, and as such is rather different in nature from other additional payments for claimants' direct expense needs. There are two important preconditions for payment. First, payments are made only if all the adult members of the family are unable—for example, because of disability—to carry out such domestic tasks. Secondly, payments can be made only for private domestic assistance. It cannot be given for a service provided by a local authority. Domestic assistance is of course provided also by local authorities in a range of different circumstances through the home help service or otherwise. As I have said, in considering the issue it is important to avoid solutions which could be seen as undermining or prejudicing local authority service responsibilities.
The supplementary benefit payments that can be made vary from relatively modest amounts—enough to pay for one or two hours of home help—to rather more extensive help for those who need continuing support where, exceptionally, someone needs to live in with the claimant, and the regulations provide for payments up to £47.20. As has been mentioned, the total number of people helped in this way is relatively small. Provisional data for the end of 1984—the latest available—shows just over 3,000 people receiving help. Generally, the amounts of help were modest. The average for all payments under this provision was less than £4.
However—and now we come to the group referred to by the noble Lord, Lord Henderson, and other noble Lords—a small group is receiving extensive help. They are the very severely disabled people who after living in residental accommodation or being cared for by their parents are trying to live an indepen-

21
dent life; or they may be people with similar severe disabilities who are already living independently but are able to do so only with the help of extensive support. Such people will often be getting a range of support through the social security system in the form of attendance allowance, the normal weekly scale rate and the domestic assistance addition from local authorities, and often also from a voluntary organisation which may have arranged for the care which the domestic assistance addition helps to fund.
We have all along made it clear that such people would not face a cash loss at the time of the change to income support, but I appreciate the concerns that have been expressed—first, that cash transitional protection could still mean people having difficulty in paying for the care; and, secondly, that in the longer term there should continue to be some special arrangements for helping very severely disabled people to live independently. With regard to the first concern, the Government have decided to improve transitional protection arrangements for the group of very severely disabled people receiving extensive help by way of the domestic assistance addition. For these people we will continue to pay the amount for the domestic assistance addition separately from, and on top of, any other transitional protection that is required. This will, I hope, provide sufficient recognition of the different nature of this addition. It will guarantee at the time of change that they will be able to pay for the considerable assistance they now get.
In addition, while the need continues we would be prepared to increase the amount at future up-ratings so that its value is maintained. This will apply subject only to reassessment if the wider consideration I shall come on to suggests a different and better way of carrying on support for this group of people. I believe that this statement will give the reassurance that they are seeking to those now receiving large payments for domestic assistance. With regard to future arrangements, our clear intention is to seek arrangements that will continue to play a part in supporting the independent life style of the type of severely disabled people who now get extensive domestic assistance additions.
The noble Lord, Lord Renton, asked the mover of the amendment about group money. The present help would be available to people living independently, including on group money, but only if there was no one fit and able in the household to do the domestic duties or the care was not provided by local authorities. Therefore it would not apply if local authorities did the providing. It is really a matter of independent living status.
I return to what I was saying before. I am sure the Committee will understand that if we are to continue to provide specific support, it makes sense to consider the subject afresh. It is not something we can pursue solely as a social security issue. There is a range of interests and agencies involved. We shall need to take that into account in considering how the group we are concerned with—those who need extensive support for independence—should be defined and assessed.
So far as social services are concerned, the Committee will recall that we have recently discussed the Disabled Persons (Services, Consultation and Representation) Bill. The assessment of need that is
22
proposed in the Bill for certain categories of disabled people is clearly relevant to considering the needs of the people we are discussing in this amendment. It may be that special arrangements will be needed for channelling the help. It is something we will wish to discuss with those involved—the service providers, both statutory and voluntary, as well as representatives of disabled people—before taking final decisions. This is not something we have to get in place immediately. Clearly, though, if we found a better way of providing help that could be implemented before 1988, that would not preclude earlier introduction. Similarly that may overtake the need for specific transitional protection for existing recipients. It is worth taking time to consider to ensure a secure solution for this exceptional issue.
We are committed to responding to the concern, and we will pursue the matter actively. It is not something that requires an amendment to this Bill. I trust that what I have said about protecting the position of present claimants and our future intentions will provide a positive reassurance to the Committee. I ask the noble Lord, Lord Henderson, not to press his amendment.
Baroness Jeger: Before the noble Baroness sits down, may I ask her to make one point clear? We were glad to hear her sympathetic words about transitional payments for people who are at present disabled, but it is not clear to some of us what is to happen to the newly disabled. Will the people at present getting benefits, who are to be protected by transitional benefits, receive more than a person who suddenly becomes disabled after the passage of this Bill?
Baroness Trumpington: No; the new claimants will also receive protection if they come into the category of those who are receiving protection now.
Baroness Faithfull: Before my noble friend sits down, may I ask whether the Association of Directors of Social Services have been consulted and their members feel that their departments are not going to have extra financial pressures put on them? May I also ask whether the local regional hospital boards equally support this amendment?
Baroness Trumpington: My noble friend clearly did not hear me when I said that if we found a better way of providing help that could be implemented we would not preclude earlier introduction. We are going to take our time discussing this, and I will certainly bring to the attention of my right honourable friend the point my noble friend mentioned.
Lord Renton: May I ask one more question arising from what my noble friend said on my query? She said that a small group home, or a person in a small group home, would not be eligible if the home was receiving help from a local authority. If it were a small group home run under the aegis of a charity, but without help from the local authority, would the provisions my noble friend has in mind enable anyone in that small group home to be eligible, or would they still be ruled out?
Baroness Trumpington: As I said, it is a matter of independent living status. If the person living in a small group home is looked after by people already under the local authority, as I said, they would not receive the—I think I had better write to my noble friend. However, to come back to new claimants, consideration of new arrangements will cover the new claimants but obviously not the transitional protection because they are not receiving transitional protection. We will be consulting on this whole matter.
Lord Ennals: May I ask one more question before the noble Baroness sits down? The noble Baroness, Lady Faithfull, asked whether there had been consultation with local authorities. May I ask whether there has been consultation with the charitable organisations, on whom many of these people would have to fall back?
I had a meeting on Monday with 28 of the charitable organisations, some of which have a record going back over 100 years. They expressed great concern about this and also another part of the Bill, which I shall not mention now. They said that they simply did not have the funds to face any more demands upon them. Therefore, has the noble Baroness consulted such bodies as the Family Welfare Association, those bodies concerned with the elderly and those concerned with the disabled such as the Royal Institute for the Blind? All these organisations spoke in one voice and presented a petition to the Prime Minister. They are quiet charities but cannot see how they will cope with the problems that will be left.
Baroness Trumpington: At that time the charities were not aware of the statement I have made to your Lordships today. As many organisations as possible will shortly be consulted. I reiterate that transitional payments will make sure that nobody now in this situation will suffer any loss.
Baroness Fisher of Rednal: Can the noble Baroness tell us whether she is referring to the Statement that is to be made a little later or the statement she has just made?
Baroness Trumpington: I am sorry if I used words wrongly. I should have said the statement of our intentions when replying to the noble Lord, Lord Henderson, and others, concerning our intentions for this small group of people. I thought I made that quite clear.
Baroness Fisher of Rednal: Does the noble Baroness mean her brief in answer to the amendment and not the Statement we are to hear later?
Baroness Trumpington: That is so.
Baroness Gardner of Parkes: I have great sympathy with the principle behind the amendment as I have always taken an active interest in disabled groups. We have had a most encouraging reply from my noble friend the Minister and I am sure that many who wish to support the amendment would encourage the noble Lord, Lord Henderson, not to press it on this occasion. I hope that something good comes out of the consultation.
Baroness Darcy (de Knayth): I welcome the statement by the noble Baroness about domestic assistance allowance being granted separately for existing beneficiaries. I may be stupid about the new beneficiaries, but can the noble Baroness explain again? The noble Baroness said that something was going to be done, but is it to be done soon? I thought she said that the result of the survey was going to be known in two years.
Baroness Trumpington: This is quite different from the survey. I said that consideration of new arrange-ments will cover new claimants but not the transitional protection because they are new and are not losers under anything as the position stands; but new claimants will have consideration.
Baroness Darcy (de Knayth): But can the noble Baroness confirm that the new arrangements will start soon?
Baroness Trumpington: The new arrangements are for 1988, when the change to the income support begins.
Lord Henderson of Brompton: When the noble Baroness said that she would put us out of our misery I felt rather like a rabbit that had been shot and was about to be given a knock on the head. Indeed, having listened to her reply I feel that I have been put out of my misery in that sense. I am extremely grateful to the noble Baroness for what she said about the transitional provisions, and that is certainly an improvement: for that relief, much thanks. However, it does not go far enough because it does not apply to those who are newly disabled. I think it would concentrate the minds of the Government and enable them to come up with an amendment to the Bill if my amendment were carried. Therefore, I shall press my amendment.
3.58 p.m.
On Question, Whether the said amendment (No. 63) shall be agreed to?
Their Lordships divided: Contents, 116; No -Contents, 87.
Resolved in the affirmative, and amendment agreed to accordingly.
4.7 p.m.
Baroness Hooper: My Lords, I think that this may be a convenient moment to take the Statement. I therefore beg to move that the House do now resume.
House resumed.

Invalid Care Allowance
Baroness Trumpington: My Lords, with the leave of the House I should like to repeat a Statement that is being made in another place by my right honourable friend. The Statement reads as follows:
"With permission, Mr. Speaker, I would like to make a statement about invalid care allowance.
"Invalid care allowance is intended to help people who care for severely disabled people at home. It is a non-contributory benefit and depends on the claimant caring for the disabled person for at least 35 hours a week. It was introduced by the then Labour Government in 1976 for men and single women who had given up their sole means of livelihood to look after a severely disabled relative. But the legislation specifically excluded married women from benefit.
"Since taking office this Government have extended invalid care allowance to those caring for non-relatives and have also increased the earnings limit. Clearly there has also been pressure to extend invalid care allowance to married women. A case concerning their exclusion is now before the European Court of Justice and a debate is expected very shortly in another place. The Government have therefore reviewed the exclusion and have decided that irrespective of the European Court decision the allowance should be extended to married women on the same terms as married men and single persons. Accordingly, the Government will very shortly introduce an amendment to the Social Security Bill to achieve this.
"The extension of invalid care allowance to married women will mean a very substantial expansion in the scope of the scheme. At present there are less than 11,000 beneficiaries and the cost of the allowance is £13 million. We expect up to 70,000 married women to claim ICA at an additional net cost of around £55 million in a full year.
"Mr. Speaker, the extension of the invalid care allowance to married women represents a very large improvement in the provision we are making for disabled people in the community. It will recognise the vital role that married women play in looking after disabled people. I hope the change will be welcomed on all sides of the House".
My Lords, that concludes the Statement.
Baroness Jeger: My Lords, the Statement is welcome on all sides of the House. After the Government's recent disaster in the Division Lobbies, I am happy to be able to agree at least with something that is coming forward from the other side. I want to ask one or two questions. Will there be back pay for married women who have been looking after their invalid relations for many years; or when will be the starting date for the new rule? Will publicity be given to the change so that all married women in that position will know that they have a right to claim the benefit? It is most important to know about the back-pay provisions or whether there is to be a new starting date. Married women who have been caring for sick and invalid relations for many years should not be excluded from payment for that sacrifice.
Lord Kilmarnock: My Lords, we on these Benches also very much welcome the Statement. It is the culmination of a movement to that end which has extended over a number of years. The Government say that they are making the extension, irrespective of the European Court decision, but it is widely expected that it will go against them. It seems to me that they are right to pre-empt it and to take the honourable step of extending the payment to married women.
The Government have given an estimate of an additional net cost of £55 million in a full year. It is worth putting that in the context of the amounts of money that are saved by home carers, and they are very considerable indeed. The value of home care has been estimated to be between £5·1 billion and £7·3 billion each year; that is to say, if those people were being cared for not at home but in a residential institution, the cost could be in that region. If only 10 per cent. of those who were cared for at home had instead to be looked after in residential institutions of one kind or another, the public cost would be over £1 billion. The £55 million of additional expenditure estimated by the Government, which we welcome, must be seen in that context.
Along with the noble Baroness, Lady Jeger, I wish to ask about the starting date that the Government propose. Will they ensure that adequate publicity is given to the change? The figure of 70,000 married women is mentioned in the Statement; I have heard higher estimates. But it is important that all those entitled should come to know about the change. We should welcome an assurance from the noble Baroness.
We believe in the rather more comprehensive carers' benefit which I shall be proposing later, on, I think, Amendment No. 123 to the Social Security Bill. But our view has been that the extension of invalid care allowance is a vital first step in extending justice to carers, and therefore we are able to welcome the Statement.
Baroness Trumpington: My Lords, I am grateful to the noble Baroness and the noble Lord for the welcome that they have given the Statement. They are right to do so. They both asked about arrears. Payment of arrears will need to be decided in the light of the European Court judgment. The noble Lord mentioned the estimates involved. The earlier estimate of £100 million net expenditure was based on
28
a 1982 sample postal survey of attendance allowance beneficiaries, details of which were given in a Written Answer to my honourable friend the Member for Eastleigh on 27th January. However, we have now received 14,000 claims from married women in response to Mrs. Drake's case. Extrapolating from that and comparing the results with more recent data from the family expenditure survey, we have concluded that the 1982 results were unreliable and that £55 million net expenditure is a more accurate assessment, based on the 70,000 recipients.
4.15 p.m.
Baroness Darcy (de Knayth): My Lords, may I, as a member of the mobile Bench, give a very hearty welcome to the Statement?
Baroness Trumpington: My Lords, I thank the noble Baroness.
Baroness Lockwood: My Lords, may I also welcome the Statement very warmly indeed both as a Member of this House and as a former chairman of the Equal Opportunities Commission, which has been concerned about the provision since it was introduced in 1976? Much of the research which has led to the proposed change has emanated from the EOC.
May I also congratulate the Minister not only on the substance but also on the timing of the Statement? The witching hour is near. I understand that the European Court judgment is due at eleven o'clock tomorrow morning. It is greatly to be welcomed that the British Government have decided on their own initiative that the benefit is to be extended to married women; the case has been established on the merits of the argument and not on European law. I welcome that very much.
May I ask the Minister one or two questions? She said that the starting date will be determined in the light of the European Court judgment. Does that mean that if it goes against the Government and in favour of Mrs. Jackie Drake, who took the case to Europe, the starting date will go back to the commencement of the European directive on equality in social security? Will the noble Baroness confirm that that is the case?
Secondly, in the Statement the term "married women" is used; does that include cohabiting women, as that group has also been hitherto excluded? Thirdly, can she give us any idea of when the amendment will be brought forward? Will it be during the Committee stage of the Bill? How soon can we expect it? Finally, will the Minister acknowledge the enormous amount of work done not only by the EOC but also by the many organisations concerned with invalid care and the voluntary organisations which have given their support and backing?
Baroness Trumpington: My Lords, we have always accepted the aim in principle of the change. I am interested that Peers on the Benches opposite feel so deeply about this. Why then did the Labour Government specifically exclude married women? It is the exclusion, specifically in the Social Security Benefits Act 1975, which is before the European Court.
Baroness Lockwood: My Lords, I asked the Labour Government and subsequent Conservative Governments that question on a number of occasions.
Baroness Jeger: And so did I, my Lords.
Baroness Trumpington: I am delighted to hear it, my Lords. I am sorry that the Labour Government did not take notice of two such splendid noble Baronesses.
I cannot anticipate the judgment; the noble Baroness asks a hypothetical question, and I feel sure that she understands that. Yes, cohabiting women are included. Yes, I expect that there will be an amendment to the Social Security Bill, but I cannot give the exact timing of it. Lastly, yes, I appreciate the hard work that has been done on this matter.
Lord Boyd-Carpenter: My Lords, may I from these Benches also welcome this thoroughly sensible and wise Statement which has just been made? Is my noble friend aware that on the subject of back payments, experience in social administration suggests a good deal of caution, as the creation of precedents of always making back payments is apt to inhibit social progress? Will the Government have that in mind? Is my noble friend also aware that some of us are somewhat disturbed that important matters affecting the British social security system should be regarded by the European Court as being within its purview?
Baroness Trumpington: My Lords, we shall have to fulfil our legal obligations with regard to back payments in the light of the judgment. I am grateful to my noble friend for his words of welcome. He would probably not expect me to comment on his last remark.
Lord Ennals: My Lords, the noble Baroness challenged me to respond, and it was right that she should do so. I think that she sometimes has to do battle with the Treasury. That applied to the Labour Government. When the allowance was introduced we should very much have liked to introduce it for all, but that was not possible. At least we introduced it for some people and therefore we created a precedent whereby we have been able to have today's happy announcement.
Lord Stallard: My Lords, as one who has raised this question on many occasions in your Lordships' House as well as in the other place, may I also congratulate the noble Baroness on her Statement? I know that all the voluntary organisations for which I have spoken in the past, and for which I have raised the matter on a number of occasions, will also be pleased at the announcement. We are also pleased, I think, as the noble Baroness, Lady Lockwood, said, that the noble Baroness the Minister has anticipated the European Court's decision by agreeing to implement that part of the allowance for married women. To that extent we are entitled to say that, as that judgment is based on the fact that the United Kingdom was deemed to have been unlawfully excluding those women from the benefit since its inception on 30th December 1984, the same judgment will apply and back pay will have to go to 30th December 1984; otherwise we shall be deemed to be continuing the unlawful discrimination that has
30
existed since then. I do not see why the noble Baroness is afraid of anticipating the judgment which is to be given tomorrow. She has already anticipated the first part of it; the second part follows logically. If it has been unlawful discrimination, it is still unlawful discrimination, and has been since 30th December 1984.
Baroness Trumpington: My Lords, this is still a hypothetical case. We shall naturally fulfil our obligations, but we cannot anticipate the European Court's judgment.
Baroness Gardner of Parkes: My Lords, I also welcome the announcement. This is a matter that I have raised many times in the House. On Second Reading of the Social Security Bill I expressed the hope that the Government might make such a Statement before tomorrow's decision; it shows a generosity of spirit of which I consider the Government absolutely capable. I should also like to point out that this is just the last step. When I first began on this road, shortly after I arrived in this House in 1981, there were other tests—for example, the household duties test—and there were other discriminations against women. The Government have been able to deal with those. This was the last matter which was discriminatory. My name is one of four names down on an amendment on this subject to the Social Security Bill. I am therefore very pleased about the announcement.
With regard to the point raised by the noble Lord, Lord Stallard, I have read in the press that no one will be able to claim beyond the date for which they applied. All those women who have applied will be eligible, but they cannot receive payment beyond the date for which they have applied, whatever the decision. I am prepared to wait and see what happens on that. It may be that nothing can be confirmed until the decision is known. The suggestion in the press is that such married women as are entitled should claim as of now so that their claim will be at least from this date.
Baroness Trumpington: My Lords, my noble friend Lady Gardner of Parkes does an immense amount of work for women here and abroad. I should like to pay a tribute to her for that and thank her for the welcome which she gave to the Statement. She quoted the press and that slightly surprised me because I hardly ever believe more than half of what I read in the press. I must ask everyone to be patient for a few weeks while we set up the organisation necessary to work out the result of the judgment. We shall clearly want to deal with the claims as quickly as we can.
Baroness Lane-Fox: My Lords, in view of the admission by the noble Lord, Lord Ennals, of the Labour Government's failure, may I congratulate the noble Baroness the Minister all the more on proving that this Government have at heart the interests of severely disabled people? I hope that the voluntary organisations, many of which do a great deal for us, will note that fact because too many are shaky about the great deal of help that has been given by this Government in a number of disablement cases. I am pleased to congratulate the noble Baroness the Minister on today's important Statement.
Baroness Trumpington: My Lords, I am extremely grateful for my noble friend's words. I hope that the voluntary organisations which do so much good work will listen to them.

Social Security Bill
4.26 p.m.
House again in Committee on Clause 19.
Lord Banks Lord Banks moved Amendment No. 64:
Page 24, line 15, at end insert—
("and nobody between the ages of 18 and 60 shall be paid a lower rate of benefit than would otherwise be the case solely as a consequence of his or her age;").
The noble Lord said: This amendment is based on the premise that adults with the full responsibility for a household, regardless of age, need the basic level of income support. The Government's intention is that single people under 25 without children shall receive £6.60 per week less income support than those who are older. They will receive £24 per week as opposed to £30.60. That will be particularly serious for young single people who live independently.
There are some 95,000 single childless claimants under 25 who are currently householders responsible for rent and rates. At the moment those claimants receive the householder's rate of £29.50. They also receive 100 per cent. rate and rent rebate and help with the water rate. Their weekly benefit will go down to £24. That is a loss of £5.50. Under the Bill they will have to pay 20 per cent. of domestic rates and all their water rate. That has been estimated at an average of £3.5 per week. If we add that average to the loss of £5.50, we have a loss of £8,55 per week. That leaves less than £3 per day for food, heating, lighting and clothing.
If such people received the same rate of income support as the over 25s, their loss would be reduced from £8.55 to £1.95 per week. That would still be an unwelcome loss, but it would be nothing like so harsh. Would it not be better to retain the householder-non-householder distinction and abandon the age split which gives rise to so anomalous a position?
We must recognise the fact that many young single persons have no choice but to live independently. For various reasons they cannot go to their parents. Some, like those coming out of care, have no immediate family. Refugees are similarly placed. To have this age split at 25 is to say that single childless people are not fully adult until they reach age 25. It is not without significance that the age barrier of 25 will hit black people most since a higher proportion of them are under 25 and they are also twice as likely to be unemployed.
The Government admitted in the White Paper that there was much criticism of the age split when it was first proposed in the Green Paper. I hope that the noble Baroness will be able to say that the Government are prepared to think again about it. I beg to move.
Baroness Trumpington: May I ask the noble Lord, Lord Banks, this? I have it on my papers that Amendment N0.71A will be spoken to at the same time. I am not sure whether he said that when he
32
moved Amendment No. 64. Can he please enlighten me?
Lord Banks: The second amendment is not mine. I therefore did not say that it will be spoken to. I have no doubt that it will.
Baroness Ewart-Biggs: As my name is down against Amendment No. 71 A, perhaps I may support the noble Lord, Lord Banks, in his amendment and at the same time stress one or two aspects. I should like mainly to stress the concern that is felt about the special needs of young people who are leaving care and who are the most likely to have no option but to take on the full responsibility of a home. This group of claimants will be penalised on many fronts by this Bill; by the proposed lower rate of income support, which would be rectified if this amendment were passed; by the requirement that all claimants pay 20 per cent. of their rates, water rates and all subsidiary housing costs; and by the loss of single payments.
In considering this amendment, the full impact of these changes on young people leaving care needs to be examined very seriously. A substantial number of the 8,000 or so young people leaving care every year have been away from any kind of family support for a significant period. The assumption behind the 25-year age barrier that people below the age of 25 can live with or draw support from their families simply does not apply to this group.
I feel that to penalise them in the way envisaged in this Bill can only render their adjustment into adult life less likely. Indeed I think that the Government should bear in mind the possibility that more of these already very vulnerable young people will turn to crime as a direct response to the financial pressures imposed by this Bill.
I should like also to stress that such large cuts in benefit will inevitably lead young people who live independently into arrears with their rent and rates. This will have most serious consequences for the authorities which house them. It will mean that many young people will face homelessness because of the level of those arrears. I should like to support the noble Lord, Lord Banks, most strongly in his amendment.
Baroness Turner of Camden: I too should like to support the amendment moved by the noble Lord, Lord Banks. The 18 to 24 year-olds as a group appear to be targeted for substantial cuts in benefit in this legislation. The Government seem to assume that young single householders have families to go back to, and that it is their choice to live independently. Yet, as the noble Lord, Lord Banks, has said there are many groups of young single people who have no choice but to live separately from their parents; for example, the young people who have just left care; young refugees; young people who have been victims of sexual abuse or violence; and young people whose families either cannot or do not want to have them living at home.
Many young unemployed people come from families where one or both of the adult parents are also unemployed. To force the young person to go back to live at home or to remain living at home will add to the strains already being placed on the family by unemployment and poverty.

33
I should like to reinforce the point made by the noble Lord, Lord Banks. The proposals will impact especially on black people. The ratio of black to white youths who are unemployed is roughly three to one. In some areas the amount of black unemployment among the young is as high as 60 per cent. Frequently they do not have any other source of help. All too often they come from families where there is unemployment. Parents within the black community are all too likely to be unemployed and with a longer period of unemployment on average than their white compatriots or, if employed, they are on low wages. It is cruel to suggest that they should continue to subsidise non-dependent children of 18-plus. If these young people remain at home their parents will suffer hardship to subsidise them. If they are living fully independently the claimants themselves will suffer hardship. Either way it is unacceptable. Do we have to wait until frustration erupts into street violence before we take on board the fact that black unemployed people have considerable problems? What is now proposed here will add to those problems. For those reasons I support the amendment.
Viscount Buckmaster: I should like very strongly to endorse the views put forward by the noble Lord, Lord Banks, and the noble Baroness, Lady Turner, who has just spoken in the context in particular of ethnic minorities and refugees. Perhaps I may mention in this context that no less than 30 per cent. of the refugees in this country, who are the responsibility of the British Refugee Council, are under the age of 25.
Baroness Trumpington: I hope that the noble Viscount, Lord Buckmaster, will forgive me if I leave the immediate question of refugees until we come to the amendment dealing with that. Noble Lords speaking in this debate have made clear their opposition to our plans to have an age split in the income support scheme at the age of 25. The Government has been virtually accused of introducing a new "age of majority". I really feel this misses the point of the Government's intention.
Members of the Committee will recall that in the present supplementary benefit scheme there is a major structural distinction between adults who are non-householders and those who are householders. The latter receives a higher rate of support. This distinction actually had its roots in the pre-war household means test, when it was used as a means of establishing a non-dependant's independent status—and hence ability to contribute to the household.
This distinction has become increasingly out of place. First, it looks odd to have this housing-related distinction at the heart of the supplementary benefit scheme when help with housing costs comes from an entirely different scheme Secondly, as the number of multiple tenancies and various arrangements for accommodation have grown, it has become increasingly difficult to administer and determine who is a householder and who is not. Consequently, we decided to abolish this distinction. We chose in its place a completely different system. We still felt that the system should reasonably reflect a claimant's broad circumstances and responsibilities. And we wanted a system with a readily operable criterion. For
34
these reasons we proposed an age split at the age of 25. It satisfied both our conditions. It was obviously easy to operate and it broadly reflected the existing distinction; 90 per cent. of claimants over 25 (excluding those in hospital or board and lodging) are already householders, while only one in six single claimants under 25 without children are now classed as householders.
It may surprise noble Lords to learn that when we proposed in last year's Green Paper the ending of the current distinction there was some support in principle for this move. To be fair several went on to criticise the age split proposed then at age 25 for single claimants and couples. However, very quickly it became evident that concern centred on the effect of a lower rate of benefit on claimants, especially young couples with children. The point at issue could only concern couples because we made it clear the higher, over-25 rate, would be payable to all adult lone parents even those aged between 18 and 24.
The Government recognised the strength of the arguments advanced about young couples with children in the wake of the Green Paper. Consequently we modified our proposals and in the White Paper published in December we proposed that all couples over the age of 18—with or without children—would receive a single rate of benefit. This means that the age split operates only for single childless claimants. Only a small minority (one in five) have housing costs at present, and those who do will receive help with housing costs from the housing benefit scheme.
Therefore, I think that the Government have demonstrated their desire and ability to respond to concern where it is felt to have grounds. We have nevertheless succeeded in striking the right balance. We have protected those with family responsibilities including young parents whether married or single. We have enabled a higher rate of support to be payable to older single people living in other people's households—people who may themselves be sick or disabled, or supporting elderly parents. I hope that the mover of this amendment will withdraw it.
Baroness Jeger: The noble Baroness the Minister has said that the Government think they have struck the right balance, but I have to ask: what is magic about the age of 25? Why not draw the line at the age of 24 or 21? I cannot understand the justification for picking on the age of 25.
From representations which have been made, not only to me but to many noble Lords, I also understand that these single people will receive about £6·60 a week less than people aged 26 who are in similar circumstances. This seems to be absolutely absurd. I should like the noble Baroness the Minister to confirm that that is the correct figure.
I should also like to ask the noble Baroness whether it is the intention that as of now these single under-25-year-olds will receive £6.60 a week less than young people aged 26, or whether this is something for the future. I am trying to ascertain whether there will be a detriment to these people of £6.60 immediately the Bill becomes law, or whether that difficulty will affect people only in the future. How soon will these single people under the age of 25 suddenly find themselves with £6.60 less in their miniscule support? Perhaps

35
the noble Baroness can tell the Committee how much the Government hope to save by this extraordinary discrimination against the young people in our community.
Baroness Trumpington: The figure given by the noble Baroness is correct. There is no magic about the age of 25. That seemed to us to be about the right age, and I have spent quite a lot of time explaining why. On the question of costs, I cannot give the noble Baroness an answer offhand, but the cost of giving the higher rate to all those over the age of 18 is some £200 million to £250 million. Most of the money would go to people living in other people's households. If it is applied just to those aged 21 or more, the cost would be about £100 million.
Lord Banks: First, I should like to thank all the Members of the Committee who have participated in the debate and who support this amendment. Each of them referred to sections of the community who are under 25 who would be affected by the Government's proposals.
The noble Baroness the Minister argued against a distinction between householders and non-householders, and seemed to suggest that if we did not have that distinction, it would be necessary to have another and that one had to look round for another and, as it were, pick one out of the air. It seems to me that if we are to have a distinction at all, it is more logical to have one between householders and non-householders than between those above the age of 25 and those below. As I understand it, there are some 95,000 claimants who are single, who are childless and who are householders. These are the people who, as I described earlier, will suffer under the proposals which the Government are putting forward. I regret that the noble Baroness did not offer them any hope that their future might be made a little brighter. In those circumstances I should like to test the opinion of the Committee.
4.45 p.m.
On Question, Whether the said amendment (No. 64) shall be agreed to?
Their Lordships divided: Contents, 105; Not-Contents, 106.

DIVISION NO. 1

CONTENTS

Airedale, L.

Cledwyn of Penrhos, L.

Allen of Abbeydale, L.

Darcy (de Knayth), B.

Amherst, E.

Darwen, L.

Ampthill, L.

David, B.

Ardwick, L.

Davies of Penrhys, L.

Attlee, E.

Dean of Beswick, L.

Auckland, L.

Diamond, L.

Aylestone, L.

Donaldson of Kingsbridge, L.

Banks, L.

Durham, Bp.

Bath and Wells, Bp.

Ellenborough, L.

Beaumont of Whitley, L.

Elwyn-Jones, L.

Birk, B.

Ennals, L.

Blease, L.

Ewart-Biggs, B.

Blyton, L.

Ezra, L.

Boston of Faversham, L.

Faithfull, B. [Teller.]

Bottomley, L.

Falkland, V.

Brockway, L.

Fisher of Rednal, B.

Buckmaster, V.

Fitt, L.

Burton of Coventry, B.

Flowers, L.

Carmichael of Kelvingrove, L.

Gallacher, L.

Cathcart, E.

Graham of Edmonton, L.

25

Greenway, L.

Nicol, B.

Grimond, L.

Ogmore, L.

Hampton, L.

Oram, L.

Hanworth, V.

Phillips, B.

Harris of Greenwich, L.

Plant, L.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L.

Hayter, L.

Renton, L.

Henderson of Brompton, L.

Ritchie of Dundee, L.

[Teller.]

Rochester, L.

Heycock, L.

Sainsbury, L.

Hooson, L.

St. Albans, Bp.

Hughes, L.

Saint Brides, L.

Hunt, L.

Seebohm, L.

Hunter of Newington, L.

Serota, B.

Ilchester, E.

Shackleton, L.

Ingleby, V.

Shaughnessy, L.

Jeger, B.

Shepherd, L.

Jenkins of Putney, L.

Silkin of Dulwich, L.

John-Mackie, L.

Somers, L.

Kaldor, L.

Stallard, L.

Kennet, L.

Stamp, L.

Kilbracken, L.

Stoddart of Swindon, L.

Kilmarnock, L.

Strabolgi, L.

Kinloss, Ly.

Strauss, L.

Lauderdale, E.

Taylor of Blackburn, L.

Leatherland, L.

Taylor of Mansfield, L.

Listowel, E.

Tordoff, L.

Llewelyn-Davies of Hastoe, B.

Turner of Camden, B.

Lloyd of Kilgerran, L.

Underhill, L.

Lockwood, B.

Vaux of Harrowden, L.

McNair, L.

Walston, L.

Masham of Ilton, B.

Westbury, L.

Mayhew, L.

Wigoder, L.

Morris of Kenwood, L.

Williams of Elvel, L.

Morton of Shuna, L.

Wilson of Rievaulx, L.

Mountevans, L.

Winchilsea and Nottingham,

Mulley, L.

E.

Murray of Epping Forest, L.

Ypres, E.

NOT-CONTENTS

Alexander of Tunis, E.

Kaberry of Adel, L.

Allenby of Megiddo, V.

Kemsley, V.

Belhaven and Stenton, L.

King of Wartnaby, L.

Beloff, L.

Kinnaird, L.

Belstead, L.

Lane-Fox, B.

Bessborough, E.

Layton, L.

Biddulph, L.

Long, V.

Blake, L.

Lucas of Chilworth, L.

Boyd-Carpenter, L.

Luke, L.

Brabazon of Tara, L.

Lurgan, L.

Brookeborough, V.

McAlpine of Moffat, L.

Brougham and Vaux, L.

McFadzean, L.

Caccia, L.

Macleod of Borve, B.

Caithness, E.

Mancroft, L.

Campbell of Alloway, L.

Manton, L.

Coleraine, L.

Massereene and Ferrard, V.

Constantine of Stanmore, L.

Maude of Stratford-upon-

Cottesloe, L.

Avon, L.

Cowley, E.

Merrivale, L.

Cox, B.

Mersey, V.

Cullen of Ashbourne, L.

Monk Bretton, L.

Davidson, V.

Morris, L.

De Freyne, L.

Nugent of Guildford, L.

Denham, L. [Teller.]

Onslow, E.

Drumalbyn, L.

Pender, L.

Dundee, E.

Peyton of Yeovil, L.

Effingham, E.

Porritt, L.

Ferrers, E.

Portland, D.

Foley, L.

Romney, E.

Fraser of Kilmorack, L.

St. Davids, V.

Gainford, L.

Sandford, L.

Gardner of Parkes, B.

Sempill, Ly.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Strathcarron, L.

Gridley, L.

Strathcona and Mount Royal,

Hailsham of Saint

L.

Marylebone, L.

Strathspey, L.

Harmar-Nicholls, L.

Swansea, L.

Holderness, L.

Swinton, E. [Teller.]

Hooper, B.

Teviot, L.

Hylton-Foster, B.

Tranmire, L.

26

Trefgarne, L.

Wise, L.

Trumpington, B.

Wolfson, L.

Vivian, L.

Wynford, L.

Whitelaw, V.

Young, B.

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

DIVISION NO. 2

CONTENTS

Airedale, L.

Caradon, L.

Amherst, E.

Carmichael of Kelvingrove, L.

Ardwick, L.

Cledwyn of Penrhos, L.

Attlee, E.

Crawshaw of Aintree, L.

Aylestone, L.

Darcy (de Knayth), B.

Banks, L.

Darwen, L.

Beaumont of Whitley, L.

David, B.

Birk, B.

Davies of Penrhys, L.

Blease, L.

Dean of Beswick, L.

Blyton, L.

Denington, B.

Boston of Faversham, L.

Diamond, L.

Bottomley, L.

Donaldson of Kingsbridge, L.

Briginshaw, L.

Donoughue, L.

Brockway, L.

Durham, Bp.

Bruce of Donington, L.

Elwyn-Jones, L.

Buckmaster, V.

Ennals, L.

Burton of Coventry, B.

Ewart-Biggs, B.

36

Ezra, L.

Mulley, L.

Falkender, B.

Murray of Epping Forest, L.

Falkland, V.

Nicol, B. [Teller.]

Fisher of Rednal, B.

Ogmore, L.

Fitt, L.

O'Neill of the Maine, L.

Flowers, L.

Oram, L.

Gallacher, L.

Ponsonby of Shulbrede, L.

Graham of Edmonton, L.

Rea, L.

Grimond, L.

Rhodes, L.

Hampton, L.

Ritchie of Dundee, L.

Hanworth, V.

Rochester, L.

Harris of Greenwich, L.

Sainsbury, L.

Hatch of Lusby, L.

St. Albans, Bp.

Henderson of Brompton, L.

Seebohm, L.

Heycock, L.

Serota, B.

Hooson, L.

Shackleton, L.

Houghton of Sowerby, L.

Shepherd, L.

Hughes, L.

Silkin of Dulwich, L.

Hunt, L.

Somers, L.

Jeger, B.

Southwark, Bp.

John-Mackie, L.

Stallard, L.

Kaldor, L.

Stamp, L.

Kennet, L.

Stoddart of Swindon, L.

Kilbracken, L.

Strabolgi, L.

Kilmarnock, L.

Taylor of Blackburn, L.

Kinloss, Ly.

Taylor of Mansfield, L.

Leatherland, L.

Tordoff, L.

Listowel, E.

Turner of Camden, B.

Lloyd of Kilgerran, L.

Underhill, L.

Lockwood, B.

Walston, L.

Lovell-Davis, L.

Wigoder, L.

McNair, L. [Teller.]

Williams of Elvel, L.

Mayhew, L.

Wilson of Rievaulx, L.

Mishcon, L.

Winchilsea and Nottingham,

Morris of Kenwood, L.

E.

Morton of Shuna, L.

Ypres, E.

NOT-CONTENTS

Airey of Abingdon, B.

Harmar-Nicholls, L.

Alexander of Tunis, E.

Holderness, L.

Allenby of Megiddo, V.

Hood, V.

Ampthill, L.

Hooper, B.

Auckland, L.

Hunter of Newington, L.

Belhaven and Stenton, L.

Hylton-Foster, B.

Beloff, L.

Ilchester, E.

Belstead, L.

Kaberry of Adel, L.

Bessborough, E.

Kemsley, V.

Biddulph, L.

Killearn, L.

Blake, L.

King of Wartnaby, L,

Boyd-Carpenter, L.

Kinnaird, L.

Brabazon of Tara, L.

Lane-Fox, B.

Brougham and Vaux, L.

Lauderdale, E.

Caithness, E.

Layton, L.

Campbell of Alloway, L.

Long, V.

Carnock, L.

Lucas of Chilworth, L.

Cathcart, E.

Lurgan, L.

Coleraine, L.

Lyell, L.

Constantine of Stanmore, L.

McAlpine of Moffat, L.

Cowley, E.

Mancroft, L.

Cox, B.

Manton, L.

Craigavon, V.

Marley, L.

Cross, V.

Massereene and Ferrard, V.

Cullen of Ashbourne, L.

Maude of Stratford-upon-

Davidson, V.

Avon, L.

De Freyne, L.

Merrivale, L.

Denham, L. [Teller.]

Mersey, V.

Denning, L.

Monk Bretton, L.

Drumalbyn, L.

Morris, L.

Dundee, E.

Mountevans, L.

Ellenborough, L.

Norfolk, D.

Elton, L.

Nugent of Guildford, L.

Foley, L.

Onslow, E.

Fortescue, E.

Orr-Ewing, L.

Fraser of Kilmorack, L.

Pender, L.

Gardner of Parkes, B.

Peyton of Yeovil, L.

Glanusk, L.

Porritt, L.

Glenarthur, L.

Portland, D.

Greenway, L.

Renton, L.

Hailsham of Saint

Romney, E.

Marylebone, L.

St. Davids, V.

Halsbury, E.

Sandford, L.

37

Sempill, Ly.

Teynham, L.

Shannon, E.

Tranmire, L.

Sharpies, B.

Trefgarne, L.

Skelmersdale, L.

Trumpington, B.

Strathcarron, L.

Vaux of Harrowden, L

Strathcona and Mount Royal,

Vickers, B.

L.

Vivian, L.

Strathspey, L.

Whitelaw, V.

Swansea, L.

Wise, L.

Swinfen, L.

Wolfson, L.

Swinton, E. [Teller]

Wynford, L.

Teviot, L.

4.54 p.m.
[Amendment Nos. 65 and 66 had been withdrawn from the Marshalled List.]
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 66A:
Page 25, line 6, at end insert—
("( ) An award of family credit shall entitle the children of the family to receive free school meals.").
The noble Baroness said: I rise to move Amendment No. 66A, which stands in my name and the names of the noble Lords, Lord Kilmarnock and Lord Seebohm. I am also grateful to the right reverend Prelate the Bishop of London, who, although he is unable to be here today, has indicated his support for this amendment. This is an important amendment among a lot of other important amendments. This concerns the health of the country's children, and there can be nothing of greater importance than that.
May I remind the Committee of the situation regarding school meals—which concerns health—as it stands at the moment? Children of supplementary benefit and family income supplement claimants are entitled to both free school meals and free milk. In addition local education authorities have a discretion to provide free school meals for children in other low income families, as well as operating a system of differential charges which largely benefit handicapped children in special schools. The total of children currently receiving free school meals is estimated by the DHSS as 1·4 million.
The proposed change under this Bill would mean that only the children of claimants of income support, replacing supplementary benefit, will be eligible for those meals and milk. This would mean that as many as 545,000 children currently in receipt of these would lose their entitlement. The purpose of our amendment is to seek to entitle children whose parents will be in receipt of family credit to free school meals, and this would affect an estimated number of 600,000 children.
This amendment does not go so far as re-establishing the present position, which also includes children benefiting from local authority discretionary schemes; schemes which affect approximately 340,000 children. However, this objective is covered by my Amendment 125 to Clause 73, which I shall move at a later stage. In the meantime, in view of the limited objectives of this amendment, and the arguments that we shall be putting forward, I hope that the Committee will find it possible to support the amendment and that the Government will be able to accept it.
Before speaking about the vital nutritional significance of a mid-day meal for the children of low income families, may I first explain what the Government intend to do by way of compensation? Arguing that cash is preferable to provision in kind, the new family credit will include a notional sum for free meals at a level of £2·20 a week over the whole year. Superficially this may seem an attractive proposition, and we would all agree that cash has the advantage of allowing families a degree of choice. But on closer examination several disadvantages are uncovered, and I should like to mention some of these.
First, there is the objection that the amount of £2.20 is likely to be inadequate given the much higher cost of school meals in some areas than the average of 60p a day, which is the sum allocated. Moreover, it is clear that the prices of school meals are rising all the time. Already this year 20 local authorities have raised prices to over 60p for primary children. The Government's compensation scheme looks as though it is already inadequate.
My second criticism concerns the effect of the new benefit on claimants who also receive housing benefit. The Minister conceded at Committee stage in another place that this would affect approximately a quarter of those expected to take up family credit; approximately 150,000 children. The clawback against housing benefit would leave such families with only 44p per week per child to pay for the school meals.
The very fact that they will be the families claiming both on rent and on rates is proof that they are the families most in need. Therefore, if it is those children who will lose out on their school meals, then such a swings and roundabouts situation will affect the most needy children of all.
My last criticism concerns the manner of payment of family credit. The Government have still not made clear their intentions as to how this will be paid. More importantly, we do not know to whom it will be paid. There is no doubt that if family credit is paid through the father's pay packet, which is at present proposed, then the proportion allotted for school meals has to pass from his hands to the mother, who is, after all, usually the parent in charge of the nutrition of the children. In a perfect world this would happen and the parents would decide how the contents of the pay packet would be spent.
But the Child Poverty Action Group did a survey of 50 mothers of children on free meals and fewer than one in five expected their husbands to pass on the cash compensation. Although it would be a great improvement if family credit went straight to the mother, can one be sure that even then the required amount will translate itself into a meal for the child, as the mother may be under very hard pressure to pay some bills at home.
Finally, even if all that I have said goes according to plan and money goes with the child in its pocket to school, who can say that some of those children would not prefer to spend that money on chips or Coke rather than the meal which has so much nutritional significance? The chairman of the Women's Institute put this very well when she said in one of the many letters I received about school meals,
"It is feared that the type of child most dependent on meals at school is the very child who will not be given the requisite cash to pay for their lunch, and who will suffer most".
Besides the health aspect for the child, I do not think one can overestimate the importance to mothers. One cannot overestimate the relief all mothers, even those who can afford to pay for their children's lunch, feel that their children are getting a square meal at lunch time. This will make up for the breakfast that more and more children are not eating, even in the best of homes. Children seem to have given up this idea of eating breakfast so that the midday meal is taking on a greater and greater significance. It is a relief to all mothers to feel that their children are getting that meal at lunch time. For that reason many of us feel that the school meal should be an integral part of the school service. We cannot see any reason why it should be whittled away in such a manner.
My last point concerns the importance of a school meal purely from a nutritional point of view. Since the 1980 Act, which removed the requirement from local authorities that a school meal should conform to certain nutritional standards, an enormous amount of thought and research has gone into the value of a balanced mid-day meal for the children of poorer families. A DHSS report entitled Diet of British Schoolchildren was brought out only in April this year; it stated:
"The free school meal is an important factor in the welfare of children from families receiving state benefits. It appeared to be at least partly responsible for keeping the energy intakes, particularly of older children from these families up to the levels of the rest of the schoolchild population".
A recent report published by the British Dietetic Association in May this year and called Can I afford the Diet? detailed the association's concern about the eating patterns of people on low incomes. It said:
"Not only are [the poorer groups] unable to afford the dietary modifications necessary for health, but in some circumstances they simply do not have enough money for food".
The other comment that the report made was that free school meals are available for children of low income families and that the association would be very worried if the provision were to be further reduced. There is no doubt that the loss of a free school meal may have serious consequences on the health and well-being of such children. I believe I have proved from the research that has been made that the school meal has become of greater and greater importance in upholding the health of children in low income families.
We are entitled to ask why these changes have been made. The Government stated in another place in the debate that there was no net saving of public expenditure expected from that proposal, so we wonder why they want to make this change. Again, there is no complaint that school meals are bad or provide an inadequate service. Indeed, the takeup of free meals is rising and has been rising since 1981. This surely points to a demonstrable need. The Government believe that they can provide more cash help, but this claim is based on estimates of takeup that can only be speculative. There are too many uncertainties in these proposals of the Government that have not been resolved.
I hope I have demonstrated the important issue, which is to ensure the supply of proper food for our poorest children when their physical development is at
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the most critical stage. They surely should be our prime concern and we should surely resist any propositions which threaten their well-being. I beg to move.
Lord Kilmarnock: May I—
Baroness Trumpington: I should be grateful if the noble Lord would allow me to speak next because what I have to say might have a bearing on what other noble Lords have to say following me. I hope the noble Lord will allow me to speak.
This amendment seeks to provide that children in family credit families will be entitled to free school meals. The Government's proposals are to build into the child rates in family credit a cash element in place of free school meals.
As the point concerning family credit has been raised, it might be more convenient if I were to deal straightaway with the way in which family credit is to be paid. I hope your Lordships will find it helpful if I take the opportunity now rather than spend too much time on the amendments to Clause 27 to announce the outcome of our reconsideration of how family credit will be paid.
As Members of the Committee know, in the light of the strongly felt concerns my right honourable friend undertook to reconsider the mechanism by which family credit would be paid. As part of that reconsideration, further discussions have been held with the CBI, the National Federation of Self-Employed and Small Businesses, the Equal Opportunities Commission and the Women's National Commission. In addition, we have taken full account of the other representations which have been made during the debates on the Bill, including those made by your Lordships.
We have made it clear since last year's Green Paper that a central objective behind the proposal to pay family credit with wages was to align the tax and benefit systems more closely. For many years it has been argued—from all sides of the political spectrum, and including many on this side of the House—that the two systems are too separate and should be more closely aligned or even fully integrated.
The family credit proposals represent an important advance in the broad direction of closer alignment between the tax and benefit systems. In particular, if the credit were paid with wages it would operate, in effect, as an offset to payments of tax and contributions, with any residual balance being paid on top of gross pay. Nevertheless, it has always been clear that although family credit paid in this way would become an integral part of an individual's take home pay, effectively reducing his income tax and national insurance contribution payments, it would not operate like this for the employer. In particular, he would receive his instruction as a separate notification from DHSS, in addition to the PAYE coding instructions which he would receive from the Inland Revenue. And he would be required to perform a further calculation after the normal tax and contribution procedures had been completed.
It is this which has caused particular worry for the employers who would have to operate the system. If the credit could be integrated with the tax system the

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situation would be significantly different. We have made it clear, in the Green Paper on the reform of personal taxation, that we intend to consider carefully the possibility of fuller integration of the assessment of tax and family credit, taking account of the responses to the Green Paper and in the light of eventual decisions OB the long-term shape of the tax system. Something which is certain, however, is that complete integration of the two systems, however theoretically attractive, simply could not be introduced in the type of time scale envisaged for the social security reforms included in the Bill. The case for closer alignment of the tax and benefit systems has been strongly advanced by many on all sides of the Chamber. That is one important reason why we have proposed the principle of payment with wages and why it remains an objective by which we stand.
The Government will continue to consider the longer-term possibility of closer alignment between family credit and tax, particularly in the light of responses to the Green Paper, on the reform of personal taxation. But it would not be right to impose a change of this sort, particularly if the immediate cost was undue additional work for employers, particularly small employers, who have to operate the system. Accordingly, and having listened very carefully to the representations, particularly from many who support the main purposes of family credit, the Government propose that when family credit is introduced in 1988 it should be paid direct to recipients, and that the longer-term possibilities for integrating the credit more closely with the tax system itself should be assessed in the light of the responses to the Green Paper and as computerisation makes the objective more readily available.
I am sure that this decision will be welcomed in many quarters, including those who have argued for payment to the caring parent as well as those who have expressed views on behalf of employers. I shall be introducing amendments to the Bill at Report stage to give effect to the change. The detail of the new payment arrangements will be set out in the regulations; but we envisage that the wife should normally receive the payment, with the husband as the alternative payee, in much the same way that FIS is paid at present. However, we envisage that automated credit transfer, which is not currently available for FIS, should be offered as an alternative for those who wish it when family credit is introduced.
This change in the payment mechanism does not affect the central purposes of family credit: the need to improve the help targeted on low-income working families with children and to improve work incentives. Those objectives stand and the Government remain committed to them. We should be clear what family credit is all about. Family credit represents one of the central elements of the reform of social security and of this Bill. It demonstrates our commitment to provide more generous and better-targetted help for low-income families with children. We estimate that around twice as many families—over 400,000—will benefit from family credit compared with FIS, and we shall be broadly doubling the resources devoted to this group. I am sure that all will agree that the Government deserve the approbation of the whole Committee on this matter. We have listened to the
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representations which have been made, and we have taken account of the fact that integration with tax is not feasible for 1988. Accordingly, and until such time as fuller integration becomes more practical, we shall pay the credit direct.
At the end of that very important announcement, I now return—and the Committee will forgive the length of my speech but I am sure that that will help future speakers—to the amendment moved by the noble Baroness, Lady Ewart-Biggs. The amendment on its own would not achieve the intended purpose. It would also be necessary to amend Clause 73, the clause specifying dealing with the changes in school meal provision and which, in turn, amends the legislation in the Education Act governing free school meals. The noble Lords, Lord Kilmarnock and Lord Banks, have put down the necessary amendment to Clause 73.
This has been a trailer for the main discussion which we shall no doubt have on school meals when we come to Clause 73 of the Bill. Having said that, the Committee will still expect me to respond on the principle behind the amendment. At present, children in family income supplement families are entitled to free school meals. The Government propose to replace FIS with family credit, but it has been made clear from the outset that we did not intend to carry forward the free meals entitlement into the new scheme. Right from the Green Paper last summer, we set out as part of our proposals that as a general proposition we preferred that assistance should be provided, where possible, by means of cash rather than benefits in kind. We said that, accordingly, those entitled to the new family credit would not be passported to free school meals—or free welfare milk—and that the rates of benefit would be higher so as to provide cash help instead. At the same time, the discretionary power of local authorities would be ended. In the White Paper we reaffirmed our intention to make these changes, and they were incorporated into the Bill.
I shall remind the Committee briefly of the reason why we concluded that family credit families should receive cash rather than free school meals. As I have said, we believe that help should be provided in cash rather than in kind wherever possible, particularly for people who are in work. We thereby seek to ensure that low-paid working families, like other working families, have sufficient income from the pay packet to meet their needs. This removes a distinction between lower-income working families and those on higher incomes. Because family credit will be more generous than FIS, and reach more families, it would have been a significant extension of benefits in kind if we had perpetuated free school meals in the new context. All the more reason therefore to make the change when the new benefit is introduced.
Cash compensation avoids the worst of the poverty-trap effects which can occur at present. A small increase in wages can mean that family entitled to only a modest amount of FIS can lose both that benefit and their free school meals. Even where the LEA runs a discretionary scheme, free school meals can be lost as a result of a small increase in income. In a family with several children the loss can occur in stages but still very sharply on each occasion as entitlement to each of the free meals is lost. The effect is a series of steps, and

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very steep ones at that. With cash compensation included in family credit, the effect is a gradual tapering away of benefit, and the possibility of an increase in income producing a marginal tax rate of more than 100 per cent., because of the loss of the free meals, is avoided.
All children in family credit families, not just those who bother to take up the free meals which are available to them, will get the cash help. The take up of free meals is estimated to be something like 70 per cent. at present, so that the remaining 30 per cent. of families will see a substantial benefit from the changes. And the help—and this is very important—will be spread throughout the year, not just provided on school days.
The Committee should consider carefully the uncomfortable implications of continuing with provision in kind rather than cash for working families. It would mean reducing family credit entitlement for every family, on the illustrative figures, by £2·20 for each child; as a result, reducing significantly the number of families actually receiving the credit. On the illustrative figures, the numbers getting the credit would fall by up to a fifth—from around 410,000 to around 330,000—with net losses for some families, compared with their position under the Government's proposals.
In particular, families with children below school age, families with school-age children who do not actually take advantage of their free school meal and families no longer entitled to the credit and living in localities without discretionary schemes, would tend to suffer. Only a minority would get some offsetting increase in their housing benefit entitlement.
All children in family credit families, and not just those who bother to take up the free meals which are available to them, will get the cash help. The take-up of free meals is estimated to be something like 70 per cent. at present, so the remaining 30 per cent. of families will receive substantial benefit from the changes; and the change and the help will spread through the year.
Your Lordships will wish to bear in mind what I have just said about family credit. This means that the money for children's school meals will invariably be paid to the mother. I have answers to the noble Baroness's questions, but I think that I have already spoken for a very long time because of my other remarks and perhaps if there are any further questions I will answer them at the end. However, I hope your Lordships will have taken due note of the Government's new plan for paying family credit.
Baroness Jeger: I rise only to express the warm thanks of my noble friends and myself for the statement which the noble Baroness has made. I shall not make a speech about school meals, but I think the "conversion on the road to Damascus" is welcome to us all. I hope it is a harbinger of other conversions which the Government Benches might undergo before this Bill reaches the statute book.
We do appreciate that Ministers and Members of the Committee have received many representations which made' a great deal of sense from many
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concerned people with very different interests. We are very glad that the Government have taken note of that fact, and have made this change. We look forward to many more changes very soon.
Lord Kilmarnock: Perhaps I may say a word here, because I think the noble Baroness the Minister has put us in a bit of a quandary. She has made a welcome announcement concerning the method of payment of family credit, and it is indeed the case, arising from her statement, that the Secretary of State has honoured the undertaking he gave at Report stage in another place to look at the method of payment again; that is to say, whether it could go straight to the mother, for which there was a great deal of support. Obviously we welcome that, and we are delighted that the noble Baroness will be introducing an amendment to that effect later in the Bill. That is one thing, but at the same time we want to be clear that that of itself does not address the concern expressed in this amendment about the provision of free school meals. That is a slightly different point.
The announcement made by the noble Baroness concerning the method of payment does not change the method of calculation of the compensation which is offered for the withdrawal of free school meals from people on family credit, which presumably still remains whether that money goes to the father or comes to the mother, as is now proposed. It does not alter the amount of money involved, and that is the important consideration to which we must address ourselves before giving ourselves entirely up to euphoria over the noble Baroness's announcement about the method of payment.
The difficulty, so far as I can see, is that the Government argue that it is preferable to give families cash rather than free school meals. The family which is in receipt of family credit will receive £2·20 per child, which is intended to be for the purchase of school meals. However, the compensation is largely illusory because, even though the money may now be going to the mother and not to the father, the figures are exactly the same. The amount of £2·20 will be inadequate, given the much higher than average cost of school meals in some areas. From September 1986 a school meal will cost more than 60p a day in 48 local authority areas for primary schools and in 56 local authority areas for secondary schools. In 16 local authority areas the price will be over 70p. The value of compensation, be it 44p or 60p, depending on whether the calculation is based on the whole year or only on the school year, is thus already inadequate. There is also a great variation between local authority charges for school meals. They can vary by as much as 50p per day between different areas, and yet we are offered a constant flat figure.
The second point is that the poorest families in receipt of family credit will find the compensation swallowed up through reduced entitlement to housing benefit, and, as the Social Security Advisory Committee have pointed out, that is because family credit counts as income for housing benefit purposes and therefore a higher family credit payment to take account of the loss of free school meals means a lower housing benefit payment. The families who receive help at present with both rent and rates will find that

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their £2·20 compensation is reduced to a mere 44p a week, leaving these families only that much better off.
We welcome the fact, as I have already said, that whatever money will be given is to be given to the mother; but that does not in fact change the figures and therefore it does not satisfy our concern about free school meals. The noble Baroness has made the point that they are an absolutely essential ingredient in the nutritional intake of children in lower income families, whether they are "working families" or whether they are not "working families". Surely one should not discriminate between the "worthy" poor (that is, those in work) and the "unworthy" poor (that is, those who are out of work). Because they are the same children and they have the same nutritional needs. So frankly, there do not seem to be any grounds for taking children on family credit, who are by definition from very low income families, out of the free school meal system. I very much hope that your Lordships will bear this in mind during our debate and that perhaps when we come to the end of this discussion the noble Baroness will feel that she may need to write what she is proposing into the Bill at this stage.
Lord Boyd-Carpenter: The noble Baroness, Lady Ewart-Biggs, moved an important amendment with which, as she moved it, I am bound to say I felt a measure of sympathy. It has been, as I think the noble Baroness will admit, somewhat overshadowed by the major importance of the announcement which the noble Baroness, Lady Trumpington, has made and which has been welcomed in all quarters of the Committee.
Certainly it seems to me that this is a very sensible decision of the Government, from two separate points of view. First of all, the payment being made to the mother is, I am quite sure, socially right, and it should do a good deal to allay the fears which have been expressed by, among others, the noble Baroness, Lady Ewart-Biggs, as to what might happen to the money so provided. Also, of course, it is a very considerable relief to employers, and particularly to small employers, who are already burdened with having to work for the Inland Revenue by way of PAYE and for the DHSS by way of national insurance contributions, and who were about to be burdened further very considerably by having to hand over family credit with wages. Therefore, although the social advantage is the more important, the advantage to employers, particularly at a time when we are trying to encourage small employers from the point of view of dealing with the problem of unemployment, is enormously to be welcomed.
I quite agree with the noble Lord who has just spoken that that of itself does not completely answer the point of the original amendment; but there are considerations which perhaps weigh against it. One is that, as a general principle of social security administration, benefits in cash, I have always thought, are preferable to benefits in kind. You are treating the recipient of the benefit as a responsible person who will lay out the cash in a responsible way, whereas if you give the benefit in kind you are allocating it solely to a particular purpose, however worthy.
Therefore, as a matter of general principle, I have always been against benefits in kind and in favour of
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benefits in cash. It is not unimportant, from the aspect of the self-respect of the recipient, that he—and. in this case, she—is being treated as a responsible person who will lay out the money in a responsible way.
I fully agree with the noble Baroness, Lady Ewart-Biggs, that school meals serve a very important part in the nutrition of children from the poorer families. But they are subject to a considerable difficulty; that is, the limitation on the school term. They are not, after all, available in the school holidays, and noble Lords will remember that school holidays have tended to grow in recent years, including the week off at half-term in the middle of, at any rate, two of the terms of the year. During that period the school meals are not available.
As I understand it, the cash from family credit will be available and that is a very important factor in this calculation. During the term, the family whose children are getting school meals free will be quite well looked after. But it suddenly faces a gap—and, presumably, it will face the gap without the £2.20 allowance—when school is shut, whether for the long summer holidays, the Easter holidays, the Christmas holidays or these half-terms which are now so prevalent in our education system. For that reason, as well as for the general reason of principle—that is, that social security payments should, wherever possible, be made in cash and are expected to be responsibly handled by the recipients—I find myself, on balance, against this amendment.
I do not want to be thought to underrate, in any way, the value of school meals. I hope that the money will in many cases be used to buy school meals. The fact that the money goes to the mother—I hope I can say this without getting into trouble with the Equal Opportunities Commission—will I think make it more likely that the money will be spent on school meals than if it were paid through wages to the father. I dare not pursue that argument very much further; but I think the Committee will see that it has a certain amount of force. Therefore, I very much hope that this amendment will not be pressed. It has certainly given the opportunity for a most important announcement, and for an interesting debate. But if it were pressed, I should find it necessary to vote against it.
5.30 p.m.
Lord Seebohm: Like everybody else, I am immensely grateful to hear the news of the change in policy of paying cash direct to the wife. This is absolutely splendid. It will save me a lot of emotion in various speeches that I was proposing to make later on. But I am still worried about what happens on the ground. Does the mother give the child £2.20 on Monday morning to take into school for the week's food, or 60p a day, or how is it to be done? Can a young child be relied on to hand it over to the school; will the child buy jelly babies and chips on the way or possibly spend it on some other amusement?
The argument about giving people cash so that they will have a sense of responsibility, which has been put by the noble Lord, Lord Boyd-Carpenter, is a false argument for the very poor. It means budgeting. It means that they have to ignore other things which to them may be of greater urgency on any one day. Budgeting is incredibly difficult on a low income. If a

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school gives meals, the children are likely to eat them. It may be that there is another way of recovering the money from the parent, possibly by some form of deduction. I may be wrong, but I am still very unhappy about this present arrangement.
Baroness Faithfull: Like others, I should like to congratulate my noble friend Lady Trumpington on the announcement she has made concerning the administration of family credit. On the question of school meals, we are in a very real difficulty between what is idealistically right and what is realistically true. In a perfect world, I would absolutely agree with everything the noble Lord, Lord Boyd-Carpenter, said. But it is not a perfect world and there is the problem of the here and now, and there is the problem of the future.
As regards the here and now, as the noble Lord, Lord Seebohm, has said, whether the mother has the money or does not have the money, there will be a proportion who will not give their children meals, either in the holidays or in term time. I speak from personal experience, because when I was a director of social services I used to run holiday centres for children whose mothers either did not, or could not, look after them; and I realised then that there was a problem as regards food.
It seems to me that there needs to be consultation between the Department of Education and the Department of Health and Social Security. We need an educational policy which helps children. They will then grow up to be parents themselves and to understand what is good food for their children, how they should receive it and what should be done. I am president of the National Association of Home Economics Advisers and they could be called upon to mount throughout the country a scheme for assisting parents to help children—who will later be parents themselves—to understand the value of food, not only as food but as an emotional experience where families live and eat together.
Therefore, I am in some difficulty over this amendment. I should like the noble Baroness to withdraw the amendment at this stage, so that there can be further consultations with both the Department of Education and the Department of Health over school meals. But I am bound to say that, however idealistically we may think that parents should give the money to the children—and they have more money under family credit—the realistic fact is that some children will not get meals either in the holidays or in term time, and in any case it would at least be better for them to get meals during term time. I am schizophrenic over this amendment. I should like the noble Baroness to withdraw it so that at the next stage we can have further consultation about how this aspect should be administered.
Lord Donaldson of Kingsbridge: I should like to support the previous two speakers. Some years ago, for quite a period I was chairman of the National Executive Committee of the Family Service Units. We dealt, and still deal, exclusively with what are technically known as problem families. There is not the slightest question that if you are dealing with
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ordinary people the right attitude is that of the noble Lord, Lord Boyd-Carpenter. But if you are dealing with problem families, it simply means that in one case out of probably three the child, sooner or later, does not get a meal. The mother is at her wits' end, she has stacked behind the clock a dozen bills that she dare not even look at, and in the end she simply raids the child's money. It is a fact of life which must be admitted and must be met. On the whole, I am inclined to support the noble Baroness, Lady Faithfull, in believing that this needs looking at again in some detail. My own belief is that the Government have done a good thing in their credit system, but on the whole a bad thing in abolising the meal provided by the school at the school.
Baroness Gardner of Parkes: I am concerned by the amendment as it stands because it seems to imply that parents would get both the £2.20 and free school meals. I imagine that if that were the situation it might upset the whole balance of the present calculations, and might mean that there was some reduction in the family credit. I would add my expression of pleasure to that of other members of the Committee about the family credits being paid directly to the applicant, who will normally be the mother. That is an excellent thing and it is good that the mother will have this money in her hand.
At the last sitting of the Committee, when we spoke about the school meals situation, I said that there is a certain social stigma for the children who are receiving free school meals. I am sorry that that feeling exists, but it does, and other children are quite well aware of the children who are getting free school meals I thought that by giving this money to the parents it would take away any degree of embarrassment for the children.
The noble Baroness, Lady Faithfull, made a most interesting point in the suggestion that people should be educated to have family meals together. That is a good thing because in many households now no child ever sits down to the table for any meal at all. Children just wander around with food clutched in their hands and they have no sense of either a family community or, of a family meal. It is a great loss to the family that that is happening.
Those noble Lords who believe that because children are given a meal at school they eat it are equally misguided. The nutritional standards of what children eat out of a school meal are rather disappointing. It may be a case of plenty of calories, but it is not necessarily the correct balance in nutritional terms because so often children reject the things that would be of more good for their health and eat things they like better. All the nutritional surveys have shown this. Chips have been mentioned often here. There is no doubt that chips of the type which have been fried in plenty of fat, and all kinds of things we are told to deplore in terms of our heart conditions later on, are "top of the pops" for teenage and even the youngest children.
This is a very complicated matter. The amendment as it stands has the disadvantage of not being clear on the financial implications. If it was a case of suggesting that the families would have the choice of either money or the meal, that might be one possibility; but

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that would certainly require consultation. The point made that this money is provided even out of term time is highly significant, because terms take up probably 30 of the 52 weeks in a year, and in that way there would be 22 weeks of the year in which this money would not be available. I should think also that the department would find it possible because if, as has been said, some school meals are going up and that would not be enough to cover it, surely this would be the subject of a review from time to time. All benefits under the department are reviewed; they are not just determined once and once only. If school meal costs increased and this was seen to be a clear national trend, some account would have to be taken of that. I would definitely not support the amendment as it stands.
Lord Rea: I am somewhat disappointed that as a dentist the noble Baroness does not support this amendment. As the noble Lord, Lord Seebohm, said and other noble Lords have implied, if the cash gets into the hands of the children they are very likely to buy their own meals and not spend it on school meals. We shall have a chance later, when we are talking about school meals, to look more deeply at the survey which has been mentioned by my noble friend Lady Ewart-Biggs but which other noble Lords have not quoted.
The interim report on the diets of school children in this country showed that the food value of the snacks that children bought was far worse nutritionally than school meals. School meals could certainly be improved; but if the Bill goes through as it stands we will find the take-up of school meals falling considerably. This will be a very great shame, because it offers the chance to provide a health experiment which will improve the health of the whole nation, particularly the children of the lowest paid parents about whom we are talking now.
5.45 p.m.
Baroness Trumpington: I hope noble Lords will forgive me if I return to the fray, but I was asked some questions. The noble Baroness, Lady Ewart-Biggs, asked whether the switch from free school meals to extra cash means less healthy eating. That point was also taken up by the noble Lord, Lord Rea. My noble friend Lady Gardner of Parkes made a very valid point, but I think one must remember that the prime responsibility for ensuring adequate child nutrition rests with parents. School meals can play only a secondary role, but better financial support for parents all the year round helps them fulfil these responsibilities. Many of those theoretically eligible for free school meals at present do not get them. Better family credit take-up and the automatic inclusion of the extra cash should mean that around 60,000 more school-age children will be getting the extra cash compared with the numbers now getting free school meals through FIS or discretionary schemes.
The traditional distinction between school meals and others is becoming more blurred with the spread of cafeteria-style provisions in schools, a point several noble Lords have touched on. The way forward is to encourage a more attractive and healthier choice in this environment, and the school meals services of local education authorities are recognising this by
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improving their menus and marketing them more aggressively.
The noble Baroness, Lady Ewart-Biggs, said that cash compensation will sometimes be inadequate. Here I quite agree with what my noble friend Lady Gardner of Parkes said—that nothing is for ever. It would clearly be impracticable to try to compensate according to the different charges made by individual local authorities. The spread of cafeteria-type systems in any case makes the notion of a single fixed price increasingly unrealistic. Illustrative figures in the technical annex of the White Paper included an addition of £2·20 over 52 weeks, which worked out slightly above the national average weekly cost for fixed price meals based on the labour survey then available in 1984. But the actual amount of cash compensation will not be settled until the benefit rates for April 1988 are announced.
I hate to interrupt what I hope is a feeling of general euphoria about the announcement I made earlier, but I was surprised to see the name of the noble Lord. Lord Kilmarnock, on this amendment. Perhaps 1 may quote from the Liberal Party's response to the Green Paper:
"We see no justification for discriminating between those in and out of work in the benefit rates to be set to enable free school meal entitlement to be abolished".
The SDP said:
"We support in principle higher cash benefits for those on low incomes rather than payments in kind, and for this reason we have included free school meals as one of the four benefits we would abolish and replace with a much higher cash basic benefit".
The noble Lord, Lord Kilmarnock, said that compensation included in family credit would be swallowed up because it would reduce the amount of housing benefit. Families will still get the full family credit cash compensation. They could lose some of their help with housing costs. Because family credit is so much more generous than FIS, it will rule out entitlement to housing benefit in all but a relatively small proportion of families—probably around 25 per cent. But the actual proportion will depend on the eventual benefit rates and amounts of housing costs payable. Even where both housing benefit and family credit are payable, not all of the cash compensation is lost, and it is by no means always the case that only 44p of the £2·20 compensation will remain. All this is an unavoidable consequence if we are to have a proper interrelated set of income-related benefits.
Lord Kilmarnock: Perhaps I may intervene before the noble Baroness proceeds further. It is quite correct that the ideal policy of the Alliance is what the noble Baroness has stated, but the benefits proposed under our scheme are considerably higher. It certainly does not mean that we support what the Government have done here, which is, in effect, discriminatory as between poor children in households in work and poor children in households out of work; in other words, giving free school meals for one group and cash payments for the other. That seems to us to be discriminatory and illogical. The remarks of the noble Baroness refer only to the implementation of our policy when we are in a position to put it into practice.
Baroness Trumpington: I do not think the noble Lord edged his way out of that one very well.

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The noble Lord, Lord Seebohm, asked whether we could rely on children to hand over the money they have been given for school meals or for mothers to give them that money. I cannot anticipate what mums will do, but the school meals will still be there and surely, with regard to the children giving the money for the school meals, that could be said of any children and not just those in family credit families. There is no reason why they should be trusted any less than any other children.
We believe that the new arrangements in the Bill will be more efficient and better targeted. The real measure of their advantage over the present system is that we expect the cash compensation in family credit will go to over 610,000 children of school age, whereas only about 205,000 FIS children are estimated actually to take up the free school meals to which they are entitled. We estimate that around 340,000 children receive free or reduced price meals under discretionary schemes. By my reckoning that means that over 65,000 children will be better off under the new arrangements. Therefore, I hope the noble Baroness will withdraw her amendment.
Baroness Ewart-Biggs: The noble Baroness has indeed put me into a great quandary because although, like other noble Lords, I welcome the very good news she has given about the payment of family credit, it still leaves an awful lot of criticisms, which I made in my initial speech, as to the change in the school meals system. Her reply removes only one of my criticisms. Therefore, I still feel that with cash payments rather than school meals coming in kind there will be a pressure on the mother, even if she does receive the payment. I agree with the noble Lord, Lord Donaldson, that there will always be those bills which are nagging at her conscience and that money will be available for her to use to get rid of one of those worries.
Such a mother is likely to be the member of a family where the children are most in need of the nutritional value provided in a school meal. Those families having trouble with bills at home are those whose children we believe should get the nutritional value of a school meal inside them. I still feel exactly the same about that.
As regards our worries about the amount paid, the noble Lord, Lord Boyd-Carpenter, must understand that, although it sounds very generous, it will be paid over the whole year and will average 60p per day for a school year. As we pointed out, many local authorities are already putting up the price of school meals beyond that. Therefore, with school meals prices rising we still have the worry that 60p per day will not be sufficient.
The noble Baroness, Lady Gardner, has on two occasions brought up the question of stigma. I do not see how that could be removed because children from income supported families will still get free meals and suffer that stigma. I fear that is not being obviated.
Anyone who is a mother and who knows what her children like to eat must accept the responsibility which the noble Lord, Lord Boyd-Carpenter, should like to vest in a child of five, six, seven, eight, nine or
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10 in spending that money, as he should, on meals that he finds less exciting than those of his own choice in a cafeteria. I do not think that one can vest that responsibility in children.
I fear that a cash payment will have two obstacles: first, that the mother will be forced to use it for something else; and, secondly, that the child will spend it on something which does not have the nutritional benefit of a school meal; and so much work has been put into school meals during the 1980s. In choosing this moment for giving us her good news the noble Baroness has made it very difficult to divide the Committee on this occasion. However, I know the concern there is about this issue in so many groups throughout the country and I will return to it at a later stage. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Faithfull Baroness Faithfull moved Amendment No. 67:
Page 27, line 4, at end insert—
("( ) Regulations shall prescribe circumstances of urgent need in which weekly payments of income related benefits be made without regard to the procedures, conditions and calculations otherwise applicable.")
The noble Baroness said: This is a probing amendment. It will allow provision for weekly urgent need payments through regulations similar to those currently provided under the Supplementary Benefits Act 1976. This amendment applies to those who are not entitled to ordinary supplementary benefit. It is by way of being an income support scheme. It could be said to be the safety net of the supplementary benefit scheme.
I have heard from many people—there are many cases—who simply want money for various things in an emergency. For example, I have here a letter from someone who works in a hospice with terminally ill people. The letter states:
"The present system of benefits is particularly unhelpful for people with terminal illness where the condition is deteriorating rapidly; needs are changing week by week; and expenses on bedding, nursing care, prescriptions, heating and substitute care, for example are heavy and increasing".
That is an urgent need, and it is not a continuing need.
There is also the example of children in hospitals. I have heard from the Great Ormond Street Hospital where doctors are pressing parents to visit the hospital to be with their children. They tell me that those children make better progress than children who are not seen by their parents. However, parents who are on a very low income often cannot afford the fares to visit their children or cannot afford the small items that one might take to a child.
Another group of people in great difficulty are those women whose husbands leave them suddenly, and also those women who are cruelly treated and themselves leave home and perhaps go to a family aid centre. I could go on and give many other examples. I remember someone having all her money stolen at Christmas. I recall how very good the supplementary benefit people were in giving a one-off grant to that women. I shall not give a tremendous number of other examples; but as I understand the social fund, it does not appear that under this Bill it can be used to give urgent need payments such as I have suggested. I beg to move.
6 p.m.
Baroness Trumpington: I hesitate to mention the social fund at this stage of the Bill, but I must say to my noble friend that it would give money to urgent cases and in particular cases—I stress that—it would be in the form of a grant; but only in particular cases. Perhaps we may leave that matter until we come to the social fund; but certainly help would be provided in urgent cases.
Returning to this amendment, it contains an interesting proposal and I should like to congratulate the noble Baroness on raising this issue. At present, we do have urgent cases regulations which provide that people can receive benefit on an entitlement basis, even if their circumstances in normal conditions might exclude them from receipt. The noble Baroness is concerned because these will be transferred to the social fund.
There is a general but very important point that I should like to make before responding directly to the noble Baroness. If one looks at the current urgent cases regulations one can see that they cover a wide variety of circumstances—17 in all. They have in common that they are all circumstances where a normal payment of supplementary benefit would not be payable but where the person might have no other resources. I suggest to the Committee that some of them have little else in common; nevertheless, they are covered by the same wide provision and the same procedures.
For instance, one of the provisions relates to payments because a person has lost her purse or his wallet; another relates to a restricted payment in circumstances where an unemployed claimant who should have signed on at an unemployment benefit office in order to be entitled to benefit for some reason has not done so. These seem to be two different types of payment.
The reasons that I mention this point in detail is because I should like to indicate to the Committee and to the noble Baroness that we see some merit in allowing for the treatment of some urgent cases in the income support scheme rather than the social fund; or, to put it more accurately, we should ensure that the social fund deals with genuine financial crises, usually short term, that being more in line with its nature. Income support should deal with weekly benefit, including in some cases in a moderate way some circumstances where it is not possible to institute normal regular weekly payments. We have always made clear that the social fund should deal mainly with one-off payments. The more it accommodates weekly payments, the more we are departing from this principle.
My noble friend Lady Faithfull asked about the urgent need of the terminally ill. I have to tell her that there is no provision in current urgent cases regulations for terminally ill children in hospices or hospitals, etc., which often creates pressures for one-off payments, and the social fund will be able to deal with these sorts of expenses.
I can say to the noble Baroness that the Government are in sympathy with the intention behind her amendment. However, I hope that she will understand when I tell her that I cannot recommend acceptance of
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it. Given my remarks on a more sensible division of the current urgent cases provisions between income support and the social fund, I think the situation becomes clear. I expect that, in circumstances where someone has lost his money or has suffered a disaster such as fire or flood, he will receive help from the social fund, and that would mean avoiding the approach of setting out all the details in regulations.
Whatever the Committee feel about the approach of the fund in general, I hope it will agree that "urgent ' cases" is the precise area where the more flexible and judgmental nature of the fund is best suited. It is simply nonsense to believe that it is possible to provide in regulations for all alarums and excursions of human life. I suggest that this is the one area where we might all agree that there is a clear case for discretion.
I accept that this leaves those circumstances where the claimant is not facing a sudden, probably short-term crisis and is in a position where he might need several payments of benefit, even though a particular feature of his circumstances might exclude him. However, these circumstances can be accommodated. I do not believe that we should amend the Bill without good cause so I hope that the noble Baroness will accept that we are prepared to meet her concern and that there is no need to press for an amendment.
Baroness Faithfull: I thank my noble friend the Minister for that reply. In the first instance I said that this was a probing amendment because I was not at all clear whether these cases could be dealt with by income support or the social fund. Of course, what worries me about the social fund is that it is finite and I am anxious about what happens if, at the end of 10 months, it runs out and there are another two months left. However, I think it would be wrong to embark upon a debate on the social fund at this time because we shall be considering it at a later stage. Therefore, I shall look up the Act and read it very carefully. 1 shall withdraw my amendment and perhaps bring the matter up again at a later stage.
Amendment, by leave, withdrawn.
[Amendment No. 68 had been withdrawn from the Marshalled List.]
Baroness Jeger Baroness Jeger moved Amendment No. 68A:
Page 27, line 4, at end insert—
("( ) Regulations under this section shall not treat any person less favourably by virtue of the fact that he is a student attending a recognised educational establishment or, if the education is recognised by the Secretary of State, elsewhere.").
The noble Baroness said: I hope I shall be forgiven for speaking about students in the context of this Bill because in fact students are not mentioned in it. However, more years ago than I care to remember I was the Vice-President of the National Union of Students, and when I was a Member of Parliament most of London University seemed to be in my "diocese", so I have never been able to escape from the problems of students.
I feel that to a certain extent we have already dealt with the problems of many students when we were debating the question of the under-25s, who it seems are to be discriminated against as a result of a decision carried by a majority of one vote in this committee. Of course, at the moment there is a very great muddle

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about student support, and if this were an education debate, I should like to enlarge on the matter. Yet it is quite clear that many people who are most concerned for the universities think that the student support grant should be adequate for maintenance and that students should not have to go to the DHSS for some money and to the DES for other money. That just shows that we do not have a coherent policy on student support—something for which I shall not blame the Minister today. I very much hope that more thought will be given to this question.
Meanwhile, I see no reason why anyone should be excluded from the benefits of this Bill—in so far as there are any—because they are students. We know that from other places there have been some threats of changes that will be adverse to the students in this country. I know that there are to be thoughts about the grant, but meanwhile I think it must be borne in mind—and it is relevant to mention it while we are still thinking especially about people under 25—that students are getting an increase of only 2 per cent. in their grants, so far as I understand it.
The difficulty for many of them is that the contribution of their parents is assessed according to their means but there are very many parents who do not make that contribution. I know of cases where there have been divorces or separations and arguments have occurred and where a student has been assessed at a fairly low grant because his parents have been deemed to be sufficiently well off to make a large contribution to his support, but in fact the student does not get that support. Only the other day I met a girl student from a well-off family who gave her absolutely no money at all because her father said that she had no business going to college anyhow and she should stay at home and look after her mother.
That is just one example of many that I have come across. Therefore, I do not think that we can exclude the need of some of these students for a social security back-up or for some changes in the arrangements made for their grants in special circumstances. There is confusion about students' housing benefits and I understand that there has been some postponement of this matter. However, the whole thing is in a complete muddle and I very much hope that the Government will very soon start work on the examination that they are to undertake of student support. Meanwhile, I hope that the DHSS will be as generous as possible in supporting students who are in real difficulty.
Because of the recession, it is getting very difficult for students to work their way through college in the way that many do in the United States. In my day we took jobs as postmen in the Christmas holidays, went harvesting in the summer holidays or washed up in pubs at night. All those opportunities are decreasing. There is a great difficulty. Whichever department we are thinking of, we do not want students dropping out through lack of help. If help has to come through the DHSS pending the review of student grants, so be it.
I shall put everyone's mind at rest. I do not intend to press the amendment to a Division. But it is important that this point should be in our minds when we are considering the situation of our students, especially in view of the discrimination against those who are under 25. I beg to move.
Baroness Trumpington: I am most grateful to the noble Baroness for her good intentions. I would submit to the Committee that this is an odd amendment, although I think I understand why it was tabled. But, as to the amendment itself, I do not think that it is sensible to write into main legislation riders of the nature whereby particular groups cannot be affected this way or that. The correct way to proceed surely is for the Government to have powers to pursue certain policies, and if they choose to exert them in a certain way they are answerable to the normal process of law. They present Parliament with proposals and regulations; they have to explain the reasons for the policy and persuade people to accept them. It simply cannot be right to have a rigid "Hands-off' notice put round any particular group in that way.
I should add that in current primary legislation there is similarly no mention of students. This is because the current approach is more sensible. Entitlement depends upon, among other things, a person not being in employment, nor in full-time education. Regula-tions define these because there may not be a single definitive description of either: we need to cover a variety of circumstances. This is the sensible approach and I cannot commend this amendment which cuts across it.
The failure of parents to pay contributions cannot be right, whatever their difficulties. Individial students may suffer. Other people have claimed to be mothers. I, too, am a mother and have had a student son. I know the difficulties that he went through, such as mucking out monkeys at Madingley in order to get a few bob. One can sympathise with the parents. But it cannot be right for the social security system to provide help which the educational system has decided that parents should provide. The Social Security Advisory Committee strongly supported that principle in its report on the current proposals for students.
I am grateful to the noble Baroness for saying that she will not press the amendment. I hope that I have spoken enough.
Baroness Jeger: In view of the time and of the understanding that the noble Baroness has shown of the problem, I would only mention that the Government are treating students differently under the social security legislation as regards housing benefit. There is a clear difference there, and I hope that we shall not lose sight of that. But I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord McNair Lord McNair moved Amendment No. 68B:
Page 27, line 4, at end insert—
("( ) Regulations shall provide for treating a person in prescribed circumstances as satisfying the conditions of subsections 3 and 4 above if he is a person who has been recognised by the Home Secretary as a refugee under the 1951 Convention and 1967 Protocol; or he has been granted by the Home Secretary exceptional leave to remain for humanitarian reasons; or he is a person who has submitted an application for refugee status to the Home Office.").
The noble Lord said: I owe an apology to my co-signatories to the amendment, to the noble Baroness, Lady Trumpington, and to the Committee in general

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for having made a muddle with the original amendments which I put down. As was pointed out to me on Friday, they would have had an extremely unfortunate effect, and so we have had to table Amendment No. 68B in substitution at the last minute.
The purpose of the amendment is simple. It is to safeguard the rights of refugees and asylum-seekers to receive benefit under the Bill. I shall not make a Second Reading speech about how deserving refugees are, and so on. I think that I may assume that there is nobody in the Committee who does not know what a refugee is, what he is probably fleeing from and what obligations we have towards him, not only obligations of charity but legal obligations under the conventions which we have signed. Let us take all that as read and deal solely with the amendment.
At present asylum-seekers receive benefit under the urgent cases regulations. Although those are complicated and in some ways unsatisfactory, they provide a firm legal base for those claims. That legal underwriting has often been useful; for example, in appealing against initial refusals. The amendment would ensure that asylum-seekers will continue to ha have an entitlement to weekly benefit during that long year or more which normally follows their arrival in this country and the eventual decision from the Home Office as to whether to grant them refugee status.
It would clearly be unsuitable for that group of claimants, who are currently paid weekly under the urgent cases regulations, to have their needs considered under the social fund. We have been encouraged by statements in both Houses which indicate that the Government's intention is not to have weekly payments considered under the social fund and to the effect that asylum-seekers and others are being looked at in the context of the proposed income support. We had Mr. Tony Newton saying that the Government did not intend regular weekly payments to be made from the social fund; and his colleague Mr. John Major at the Committee stage in another place said that the Government were considering whether weekly payments might be better met under the income support rather than under the social fund.
Far more important, the noble Baroness who is to reply said (at col. 684 of our Second Reading debate):
"We made clear in Committee in another place that we accept that some urgent needs payments are different from other one-off payments covered by the single payment machinery, in particular, in respect of people seeking asylum. We are considering whether such cases might indeed be better dealt with in the income support scheme".
If these amendments are not accepted we are afraid that refugees, asylum-seekers and their advisers will all suffer a serious handicap and we are afraid that the refugees will have far more difficulty in their extremely difficult task of starting life all over again.
In conclusion, I repeat that the purpose is to achieve a clear legal entitlement to benefit as well as the simplification of the procedures under which claims are dealt with. That simplification would be of assistance not only to refugees, asylum-seekers and their advisers but also to the DHSS staff, whereas to leave those people to sink or swim in the muddy waters of the social fund would have implications which, frankly, frighten me. I beg to move.
Lord Ennals: I want to support this amendment as strongly as I can. The noble Lord gives a great deal of time to the problems of refugees and has a great understanding of them.
I am chairman of the Ockenden Venture. I spend almost as much time working for refugees as I do working in the Committee. I reckon that refugees sometimes have greater problems than Members of the Committee. I am not certain that everyone here fully recognises the difficulties with which the amendment is designed to deal. We are talking about asylum seekers and refugees. The new wording of the amendment defines the categories of people exactly:
"a person who has been recognised by the Home Secretary as a refugee under the 1951 Convention and 1967 Protocol; or he has been granted by the Home Secretary exceptional leave to remain for humanitarian reasons; or he is a person who has submitted an application for refugee status".
That is a clear definition.
Those people fall into a category of their own for a different reason. They have fled from oppression. They may be Vietnamese, Iranian or South African. They may come from Eastern Europe and many other parts of the world. They are all escaping from something horrible. They come because they cannot stand the circumstances under which they live. When they come here they have many difficulties over language, culture, jobs and especially a source of income. Asylum seekers who have no other source of income at present receive benefit under the urgent cases regulations. Although complicated and usatisfactory, those regulations have provided a firm legal basis upon which refugees can claim benefit.
I believe that it is necessary that such people should not be dealt with under the social fund. For a period of time, until they have settled down, they should receive an entitlement. At present they are entitled to claim for clothing, furniture and accommodation deposits under the single payment regulations. That is not nearly enough. The proposal to replace those regulations by a social fund raises serious concerns among the refugees and the organisations which work on their behalf.
Newly arrived refugees often have an immediate need for items of clothing and footwear, especially when they have had to flee their country with few belongings. Some refugees also need help in paying accommodation deposits and buying furniture. Above all, for a brief period they need a source of income upon which they can rely. If entitlement to the special payments is removed, resettlement will be made much more difficult. I say that because the Ockenden Venture spends most of its time helping to resettle refugees in Britain. I do not believe that they should be exposed to unnecessary hardships during the first months of their stay in this country.
Refugees and asylum seekers need a clear statutory entitlement to single payments for clothing, accommodation and furniture. I repeat that this is a small, compact group. I do not know exactly what the figure is. It is a small group which can be defined at any stage and for which the Committee should have great compassion.
If the wording of the amendment is wrong, of course we can put it right. I hope that the spirit of the

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amendment and the requirement it includes can be accepted by the Government.
Baroness Faithfull: I support the amendment. I do so having had an extraordinary personal experience when the Ugandan Asians came to this country. As a chief officer of a local authority I was given the duty of finding homes for and rehabilitating 15 families. At that time the local authority said it could not give them council houses. I then went to Oxfam and posed my problem. At the drop of a hat and without any more ado the then director of Oxfam gave me a cheque for £ 10,000. With that I bought a house in which I put one family. I then mortgaged that house to buy a second house. In the end I bought 15 houses with that £10,000. That was all right until it came to putting them in the house—
A noble Lord: And paying the mortgage.
Baroness Faithfull: No, all the Ugandan Asians paid off their mortgages within 10 years. There was the problem of their immediate needs. It would be no good having a discretionary payment from the social fund if one had to argue who should or should not receive it. In the case I have mentioned I knew exactly what they could have. They knew what they could have. It was therefore possible on a minimal basis to rehabilitate those families.
I should like to pay tribute to those Ugandan Asian families. Within 10 years they had all paid off the mortgages and had made a contribution back to the supplementary benefits fund in respect of the money given to them. When suddenly faced with having to rehabilitate and place families who have absolutely nothing, one must have some means of knowing exactly what they can obtain. It is of course possible to raise money, to go to voluntary organisations and perhaps run the usual jumble sale, but it is the immediacy of the help that is essential. Therefore, I support the amendment.
Viscount Buckmaster: As one who is in touch with several individual refugees I support the amendment most warmly. I endorse what the noble Lord, Lord Ennals, said about the suffering of refugees, but I shall not go into that. When they arrive here, as I have seen, they are confronted with all types of problems. They have to settle into the country, find a landlady, become used to our currency and food, and so on. If, in addition, to those numerous and weighty problems they are uncertain about their financial benefits, the difficulties can at times become almost overwhelming. I therefore fully support the noble Lord, Lord McNair, when he says that such people should have a clear, legal right to benefit.
There is another financial problem which refugees face. Perhaps the Committee will permit me to revert for a minute to Amendment No. 55, to which I spoke on 17th June. I then explained that under the SERPS arrangement refugees are now doomed to lose their pension entitlement during the period, which sometimes amounts to as long as three years, when they are waiting for the grant of asylum status and with it of course their right to work.
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In that connection perhaps the noble Baroness, Lady Gardner of Parkes—I see that she is no longer in her seat, though she was a minute ago—will allow me to correct her. On 17th June I did not recommend that such persons should have any entitlement to pension rights outside this country; in other words, before they arrived here. On rereading Hansard I think that I made that clear, but I should like to take the opportunity to clear up the matter in case any misunderstanding remains.
6.30 p.m.
Baroness Trumpington: I realise the concern which is felt by noble Lords of all parties on this issue, and I share it. It may be helpful however, before I respond directly to the amendment if I clarify the issue. The first two categories mentioned in the amendment— refugees in the internationally recognised sense and people granted leave to stay in the country—were never intended to be affected by the proposals for the reform of the benefits structure and the change to income support. If they satisfy the entitlement conditions for supplementary benefit at present, they receive it. We intend, and have always intended, that the same should apply for income support.
The concern has arisen over the category of people who have applied for leave to stay in this country and have so far not received the Home Office decision. Those asylum seekers are in a half-way stage and consequently cannot satisfy the normal entitlement conditions for supplementary benefit. At present those people are paid under the urgent cases regulations of the supplementary benefit scheme which enable payment to be made in such circumstances; namely, when a person has literally no resources but is unable to satisfy the normal rules of entitlement to benefit.
Under our proposals we have indicated that urgent needs really belong to the social fund and should be covered there rather than by the mainstream benefit—income support. This is the root of the concern, as noble Lords have indicated, because we have made clear that we expect the fund to deal mainly with one-off payments, while many of these people will require benefit to meet their weekly needs for perhaps some little while. However, as my honourable friend the Parliamentary Secretary indicated in Committee in another place in an undertaking which I repeated to Members of the Committee at Second Reading, the Government are aware of the concern felt by many. We were conscious of the arguments expressed that the circumstances of asylum-seekers were such that they required a form of income support. Repeated application for help administered on a judgmental basis and expected to respond to sudden or one-off expenses was not the approach they sought.
We indicated that we acknowledged the arguments put forward and were considering whether this group of claimants should be dealt with in income support rather than the social fund. I am very glad to be able to inform Members of the Committee that we have given the matter thought and our conclusion is that such cases should be dealt with in the income support scheme.

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It is our intention that they shall be. Just as at present asylum seekers receive supplementary benefit on an urgent case entitlement basis with access to the adjudication machinery if they wish to dispute a decision, so in future they will be entitled in broadly the same way to income support. And, just as there is a slight modification to the supplementary benefit rates to reflect the particular circumstances, so it is likely in future the income support rates for this group will be slightly different.
The noble Lord, Lord Ennals, is quite right. It is a very small group. I do not know the precise figures but I agree with his estimate that it is a small group. Having given all this assurance I hope that the Committee will not be too disappointed if I tell them that I cannot recommend acceptance of this amendment. The Bill, I understand, requires no amendment to achieve this policy objective. Indeed, as I have already explained, two of the categories mentioned in the amendment would have been covered by income support without any fuss. The third—the asylum seekers—will be dealt with under the existing provisions. I am sure that the Committee would agree that it would look odd if we specified among the sub-clauses on entitlement actual categories of claimants. This commitment will be in Hansard and I hope that Members of the Committee will accept my assurance and not press the amendment.
Lord Ennals: May I ask the noble Baroness this question before she sits down. I am most grateful to her for the concession that she has made. It is a very important one. It will presumably therefore be recorded only in her own words in this Chamber and in no way in the legislation. Is there not some way in which by regulation it could become quite clear so that the people concerned, and especially the organisations who work on their behalf, can know. A bus might run over the noble Baroness—heaven forbid, but one never knows. May be the bus would stop if it hit the noble Baroness—I do not know. But it would be very nice to have something even more than the strong and cheerful words of the noble Baroness.
Baroness Trumpington: I take exception to a bus. Why not a mini?
The noble Lord, Lord Ennals, will have learned almost as quickly as I did that the answer was yes. It can be done in regulations. In the meantime, what is in Hinsard is there for the noble Lord to read at such time as he may wish to.
Lord McNair: We seem to be making this Bill up as we go along. We have had three or four very important announcements this afternoon. I certainly must be grateful to the noble Baroness for what she has said. However, I am not very good at taking things in on the wing, as it were. I should very much like time to read under a microscope what the noble Baroness has said. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19, as amended, agreed to.
Clause 20 [Amount etc.]:
[Amendment No. 69 had been withdrawn from the Marshalled List.]
Clause 21 [Calculation]:
Baroness Jeger Baroness Jeger moved Amendment No. 70:
Page 27, line 20, at end insert—
("and shall include the whole of the amount which he is liable to pay by way of rates in respect of his home.")
The noble Baroness said: As we seem to be legislating by statement today, I hope that there may be a statement of warm welcome on this amendment. There has been a great deal of discussion and concern in the country among many people about the proposal that people, however poor they are and at whatever level of social security they are being supported, should all pay at least 20 per cent. of their rate bill. I have to ask—I was going to say to the noble Baroness but I see that it is a transvestite noble Lord—what will happen to people who are so poor that they cannot find this 20 per cent. of their rate bill? Are they to be summonsed for debt? Are they to be sent to prison? How is this money to be collected?
It seems that the people who are on social security are there because they are poor. They are on the poverty line already or below it. I can foresee terrible difficulties for these families because it will be the worst off people who have to find this money.
The other complication is that the Government are supposed to be reviewing the whole of the rating structure. It is very difficult to understand why they should bring in this sudden procedure while they are supposed to be considering a total reform of rates. I have a fear that the proposal to levy a community charge on every individual in the country will subsume this 20 per cent. contribution to the rates. This is bound to penalise people on very low incomes, many of whom at present do not pay any rates at all. I know that this is not strictly a question of social security. It is a question of the Government's rating policy. We do not yet know what that is. We know that the whole of local government finance is in a muddle at the present time. I think that it would have been better if no change had been made in the rating situation until we had the whole picture.
It is suggested that if people pay 20 per cent. of their rates that will affect the way they vote at elections. It is supposed to make them more politically responsible. This is not the real world at all. There are lodgers and grown-up children and all kinds of people voting in local elections who at present are not paying rates. To think that their voting intentions would be affected by the fact that they were being "done" for contribution to the rates I suggest is quite wrong.
I then have to ask the noble Lord: what is to happen to people on housing benefit? If the person is receiving housing benefit, that again is a measure of his poverty. He then receives a bill for 20 per cent. of the rates. Will his housing benefit compensate him for that contribution which he has to make? It is very difficult to put people in a position where they find themselves in debt to the rating authority, possibly with bailiffs coming around, ending up in court. There would be many procedures for chasing up arrears. The social services departments would have to pick up some of the pieces.
These are not problems that I have dreamed up. These are problems that have been put forward by the AMA—people who know what all this will mean at

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ground level. Take the example of a man unable to find a job but who is trying to keep up the rent and rates on his home. He knows that if he loses his home because of failure to pay the rates and becomes homeless, he has much less chance of finding a job because when one is looking for a job the first question anyone asks is, "What is your address?". It seems to me that anything that will increase homelessness is not only sad for the individual but deleterious for the country. This is bound to distress many old people who will find that, out of their pensions, even with supplement, they are supposed to pay not only 20 per cent. of their rates but the whole of their water rates.
These bills will erode any up-ratings which are likely to happen in the near future. The idea that paying this sum will strengthen local accountability is, I believe, absolutely misguided because it is not a reality. The money that people receive from social security they have received because they are hard up, so what is the sense in the Government then taking some of it back? This is something which I cannot understand. I think it means that if claimants are conscientious and try to pay their rate bills they will have to do without other things. They will have to do without heating, food and clothes, and have only the minimal things which the social security payments enable them to have.
Therefore, it is really a cut in social security for perhaps millions of people. If the figure is only in thousands, perhaps the Minister will tell me. This is not a way to deal with local government finance. I submit that it will cause more expense to local authorities in chasing these contributions; that it will cause hardship; and that it will give rise to more demands on the social fund and on voluntary organisations for help. Administratively, this is an absolute nonsense. I very much hope that this matter will be taken away. It has no place in a social security Bill. However, our amendment does have a place, considering the present muddle which the Government are in. I beg to move.
Lord Kilmarnock: As Amendment No. 85 has, by the usual channels, been grouped with this amendment, perhaps I may be allowed to say a few words about it because, to all intents and purposes, it has exactly the same effect. The amendment stands in my name and that of my noble friend Lord Banks.
The proposal that everyone should pay 20 per cent. of their rates, regardless of their circumstances, is one that has aroused the most widespread condemnation, and perhaps the most widespread condemnation, of any measure in this Bill. It will have a severe effect on millions of the elderly, for whom every few pence of extra income counts. Fifty per cent. of pensioner households will lose more than 1 per cent. of their income under the proposals; and 11 per cent. of pensioner households—that is to say, 700,000 in all—will be more than 5 per cent. worse off. Age Concern has carried out some more accurate calculations. It has calculated that 1,150,000 will lose up o £1 per week; that 1,140,000 will lose up to £2 a week; that 270,000 will lose up to £3 a week; and that 170,000 will lose £3 a week or more, of which 30,000 will lose over £5 a week.
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This, of course, takes me right back to the criticism I made during the Second Reading of this Bill, namely, that the measures in the Bill, designed to help the poorer families in work, are being introduced at the expense of the poor people out of work. Therefore, the Bill is essentially the poor paying for the poor.
There are two motives behind the Government's proposal. The first is to enable the Secretary of State to show the Chancellor some savings from this Bill, and, as I have just said, he has chosen this route of taking the money in large part from elderly pensioners and very low-paid workers in order to deliver savings of £450 million to the Treasury.
The second motive is in a sense even less savoury, because it is punitive. In effect, the Government set out to make even those with no income other than the old-age pension contribute to the rates in order to enlist their support for the curbing of local authority spending. However, if a sharp political lesson is to be administered, it is hard to see why it should be borne by the elderly poor and the low paid, whose principal concern is probably more with survival than with politics. I could not put it any better than the Social Security Consortium did when it said:
"It would draw claimants into a feud not of their making. The declared purpose of the proposal—to strengthen 'local account-ability'—in effect means that the Government wishes to deploy the threat of hardship to claimants as a lever in its quarrel with local authorities over levels of rates. It cannot be right to use poor people as political ammunition in this way, whether or not one agrees with the government on the question of rate levels".
I could not put it better, and that is why I have quoted it. There are other and better ways of reforming local government finance than by clobbering the poor.
As Members of the Committee will know by now, we favour proportional representation for local government—and Members of the Committee will not expect me not to mention it at this stage—as a means of securing a more balanced and responsible administration in local authorities. We also want to transfer non-domestic rates to central government and replace domestic rates with local income tax, which would mean that all those earning wages, and not just householders, would contribute to local services.
Other noble Lords may have different ideas about improving local government finance. Indeed, there are many proposals in the air at the moment. However, the one thing that is not acceptable to us on these Benches is that these savings should be effected by means of a levy on the very poorest members of the community. This is a most unworthy proposal, and the Government should withdraw it.
6.45 p.m.
Lord Boyd-Carpenter: The noble Lord, Lord Kilmarnock, delighted those of us who are keeping a book on the number of occasions that Liberal and Alliance spokesmen introduce the subject of proportional representation on Bills and amendments to which it is wholly irrelevant. As I personally am backing the high field, I am delighted with the noble Lord having introduced this extraordinary idea on this particular Bill.
Lord Kilmarnock: If the noble Lord will give way, perhaps I may remind him that in fact your Lordships'

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House has approved a Bill for optional proportional representation in local government, which was introduced by the noble Lord, Lord Blake, from the noble Lord's Benches.
Lord Boyd-Carpenter: It is fascinating to see the noble Lord seeking to introduce the whole reform of local government through an amendment to the Social Security Bill. That itself involves the sort of flexibility which, for example, Mr. David Owen and Mr. David Steel are showing in other respects in the politics of the Alliance.
In moving this amendment, the noble Baroness more or less admitted that it had very little to do with the subject-matter of this Bill and was indeed an attempt to pre-empt government policy on the difficult question of the reform of local government finance. However, the issue is really quite a simple one. Whether 20 per cent. of the rate burden otherwise payable is or is not the right figure, I entirely agree is a matter that is susceptible of argument; but the point of principle—and I believe that the noble Baroness, Lady Jeger, addressed her speech to it—is as to whether people in receipt of these benefits should be wholly immune from liability to pay rates.
I do not want to widen this debate into a general debate on local government, but it is plain at the moment that a basic reason for most of the problems of local government, and in particular for the very high spending of local authorities, is the number of voters in local government elections who can vote for high local government expenditure in the happy knowledge that they will not have to pay a penny towards it. Of course it is very attractive to support candidates who want to provide all sorts of delightful amenities and advantages when you are in the happy knowledge that you are insulated from any risk whatever of having to pay a penny for them.
Therefore, if one wants to introduce (as I am sure do those of us who want to see the health of local government in this country improved) a sense of responsibility into local government, you want to do everything you can to ensure that those who as voters take the decisions for the policies which their local authority is to follow should be conscious of the fact that they have to pay something towards them and that a large financially irresponsible electorate is a standing encouragement to extravagance and over-spending. This amendment is not aimed at whether or not 20 per cent. is the right figure, but at preventing that particular inculcation of responsibility into some section of the local government electorate. For that reason, I hope that my noble friend and the Committee will reject it.
The Lord Bishop of Durham: I hope that the amendment will either be pursued or that the Government will undertake to consider the matter seriously. We are in grave danger of being in cloud-cuckoo-land when we talk about principles and responsibilities—even, perhaps, when we talk about proportional representation. We are talking about people.
I feel that one of the difficulties I have so far found in the conventions of this House is that I am not
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allowed to refer to anybody on any side of the Committee, so far as I can see, as my friend, otherwise I would find myself embarrassing them. But I have close friends on all sides of the Committee, and I am well aware that supporters of the Government are not only friends of mine but people with whom I get on exceedingly well, and for whom I just care a great deal, and I beseech them to consider this matter.
There are these people who are already at the bottom rate of social security, and so on, and they honestly feel that they are being persecuted, persecuted, and persecuted. I am here this evening because I have received a number of letters which include a statement that I support amendments which will remove some of the cruelest features of this Bill.
We may not believe that, and I do not believe that my acquaintances on that side of the Committee feel that they are being cruel; and they believe quite deeply the sort of thing that the noble Lord has just said. But I implore the Committee to consider what it is like to be on the ground. It seems that many of the measures in this Bill are designed to make life more cruel for people already suffering greatly. This suggestion that you will encourage people at the bottom of the heap to be more responsible by taking a 20 per cent. charge of their rents seems to me to be nonsense and to show that if the people are not cruel who are proposing it, it is because they do not understand.
I feel obliged to say that with as much emphasis as I can on behalf of thousands of people in my part of the world. I do not want to go on about it. There is no point in going on about it. The issue is clear, and I therefore feel that either this amendment should be pressed or that the Government should undertake to consider the matter. There is a desperate need, for people in desperate need, to receive some message from the Government that they are not just tidying things up on principle; they are not just targeting, by virtue of a set of rules and calculations; but they understand the messages that are being got through. I can assure the Committee that the message of this is, "We don't care a damn. We are going to take more and more out of the poor".
Lord Houghton of Sowerby: I do not think that any right reverend Prelate on the Bishops' Bench should scorn a discussion of principles. That is the last place I would have expected a protest to come from about debating principles. Of course, we are talking about people; but we are talking about human dignity as well as about human need. My approach to this problem all along on social security—and I spent years on it both in Government and out—has been to give the income, and not to reflect the 19th century middle-class expression of the charitable impulse.
These concessions really represent the charitable attitudes of people in the 19th century. "Don't give them money. Give them benefits in kind, or pay for things for them so that they do not misuse their money and spend it on other things". It is income support that we want, and not the proliferation of concessions.
I think also that there is some harm in giving concessions which relieve people of any real idea of the burden of particular items of expenditure inessential for human needs. I shall have something to say on the next amendment about building societies and

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mortgage interest. I do not think that the state should assume direct responsibility for an increasing area of burdens put upon the people. What we need to get is the income in the hands of the people to bear them reasonably well, and to have a point of view as to whether they are excessive or reasonable.
There is something in the point that if one pays the full amount of anything, then there is a disposition for people to disregard the true cost of it to the community and to other people in it. This is not a hard line at all. What I spent my time on when I was in the Government was to try to get a satisfactory method of automatic income support to take account of the main requirements of human existence in dignity.
There is no dignity to the human being in giving things by way of a kind of charitable impulse. I come from a working-class origin, and I have always been bitter about the patronising attitude of the charitable approach. Indeed, the word "charity" was a word that we hated when I was a boy. We knew what it meant. It meant humiliation. It meant that other people were going to do things for you, and that they thought they knew what you ought to have, and they gave it to you in a way that you could not regard it as a part of your disposable income.
Income support should be the foundation of social security. The rest should follow from that. My difficulty about this and other things in this Bill is that until we know the prescribed amounts, we do not know whether the income support is going to be there. It is that approach on which we ought to insist.
My final comment here is that we should be cautious about putting particular benefits of this kind into statute law. We must have regard to what we are doing when we are making the statute law. It is inflexible when it is once put there. It needs an amending Bill to change it. This Bill is an enabling Bill over a wide area of benefits, and it is not until we see what the regulations are going to contain that we know whether or not the income support being given is adequate.
The two things have to be brought together somewhere, and one does not bring them together by putting some of them in the statute law and leaving a large variety of them to judgment and decision by Parliament by way of regulation. I approach this matter—as I shall approach Amendment No. 71 when we come to it—with extreme caution. I do not think that this is the right approach. We are all old fashioned about social security. For heaven's sake, let us get a new outlook about it. Do not let us be afraid of giving people the income. Do not let us be afraid of telling them that they have to spend it to the best advantage, like other people have to do, and arrange their affairs and family life accordingly. Otherwise, it is a handout; it is a concession.
Look at the days gone by when tobacco coupons were given to pensioners as part of their social security. It was absolutely ridiculous. Non-smokers sold them in order to add to their cash income. I would also say that no concessionary fares should be given as a matter of social security. If people like to give concessionary fares in order to get business, if the transport authorities want to get more business by enticing old-
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age pensioners and other social beneficiaries to travel, then let them do as the cinema proprietors do and offer a concession in order to get the business; but do not let us regard this as part of social security.
What we are talking about in this particular spirit this afternoon is all backward looking. We want to be looking forward. We want to have income. We want to have responsibility. Are we going to shy at the word "responsibility" now? Are the bishops going to shy at the word "responsibility" on the ground that we are dealing with people? People should have responsibility. I was astonished at the speech we heard from the right reverend Prelate. In all the circumstances, I think that this new approach on my part is surely the right one; and let us get it this way.
7 p.m.
The Lord Bishop of Durham: May I just say that I am not against responsibility. I am against people who already have satisfactory incomes, if not income support, expecting to exact responsibility from people who already are so battered that they have no chance to be responsible about anything.
Baroness Seear: The noble Lord, Lord Houghton, should remember that we are dealing with this particular Bill. We on these Benches in all our pronouncements have said that we want a completely different sort of Bill. We have asked for income support based on a tax credit scheme. We have asked for it for years, but we have not got it. If that was the kind of Bill we were dealing with, we could go along with every word that the noble Lord, Lord Houghton, has said. This is a miserable Bill that has been put together with totally inadequate consideration, as we can see by the way in which it is being reformed on the hoof, which seems to be the practical phrase—
Baroness Trumpington: On the hoof?
Baroness Seear: On the hoof; I did not invent the phrase. The Bill is being reformed as we go along. But some reform is better than none. We do not like this Bill, but it is the Bill we have in front of us. We on these Benches have said for decades—though we have not had the opportunity for reasons to which the noble Lord, Lord Boyd-Carpenter, referred this afternoon, to put this into practice—that it is right to have the kind of principles that the noble Lord, Lord Houghton, has mentioned. But we have to deal with what we have now and try to improve this miserable Bill and remove its worst defects.
Lord Donoughue: I am puzzled because I have a feeling that I may in some ways be representing the 19th century middle classes which on reflection seem to me to have some virtues that are missing in the late 20th century middle classes; but that is an historical argument.
I should like to get back to the clause and to ask two basic questions; one is, what is the purpose of the clause? Is it to raise revenue and to be used as part of the reform of local government finances? I believe that that cannot be the case because nothing that has been said indicates that that is so. Or does the clause have a

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different intention, a different flavour, concerned more with ideology than with the question of responsibility which the noble Lord, Lord Boyd-Carpenter, mentioned? I have sympathy with what the right reverend Prelate said in terms of the expectations of responsibility among some people. I think it is a delusion to believe that one can impose that through an Act of Parliament. I have some sympathy and understanding with the feeling behind it, being myself, along with other noble friends, a ratepayer in Camden. So we understand those feelings. But in fact I do not think one can impose responsibility, in the sense that is defined, upon the poorest sectors of our community in this way. I wonder whether the basic purpose of this clause is actually to teach some people a lesson. If so, I should like to suggest that that is really not a worthy objective for this Committee.
First, what is the purpose and, secondly, what is the consequence? That is what we must be concerned with. It seems to me that it is quite simple. On the one hand, if the people concerned pay, they will be pushed into greater poverty. These people are already on the subsistence level, and they will be pushed below it. I do not think we want that. Alternatively, if they do not pay, the families will be prosecuted, the families will be broken up, and there will be more homelessness. That seems to me to be an undesirable consequence. So as a clause this seems ideological and punitive. In practice either it will not work or, if it works, the consequences will be undesirable. Having posed those questions and perceived what I believe to be the answers I ask the Committee to pursue and support this amendment.
Lord Trefgarne: I have listened very carefully to the arguments put forward in respect of these amendments, but I must tell the Committee that I have not heard anything to persuade me that the Government are not following the correct course. Let me begin by pointing out a side effect of the amendments as drafted. They would provide for the full amount of a person's rates to be covered by housing benefits, but only if the person were on income support. For people above income support levels, or for people in full-time work, the maximum amount of rates built into the housing benefit assessment could still be less than 100 per cent. if the Secretary of State wished. This is just the sort of imbalance which our reforms are designed to correct—and indeed, no one has seriously argued with this aspect of them.
The new structure will treat people the same, whether they are in work or not, or on income support or not. This in turn will enable us to get rid of the highly complex and inefficient part of the system known as housing benefit supplement—and this again has been widely welcomed.
But turning to the substance of the arguments let me restate briefly the Government's case. The Committee should be in no doubt that the Government are committed to the principle of greater local account-ability of local authorities to their electorates. Our White Paper proposed a 20 per cent contribution to domestic rates as part of the process of achieving this. In particular, we are concerned that a scheme based on 100 per cent. of rates would insulate an even greater
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proportion of the population than at present from the effect of any rise in rates, and hence from their council's spending policies. A scheme based on full rates reimbursement would actually mean that everyone in receipt of a rebate, however small, would get the full value of any rise in rates reflected in increased housing benefit.
But the 20 per cent. contribution to rates is one small part of a much wider package of local government finance reforms which are still at an early stage in the consultation process. We have made it clear on several occasions that the social security structure will have to be developed in the light of discussion on the Green Paper issued earlier by my right honourable friend the Secretary of State for the Environment. In other words, the effects of the proposed contribution to rates cannot be finally determined at this stage. Equally, as we keep stressing, we will not be taking decisions about the level of income support rates until much nearer the date of implementation of the reforms.
It is therefore rather premature to be talking in terms of hardship for pensioners or others. There will be ample opportunity in due course to debate the regulations which will establish the maximum level of housing benefit which is payable. There will then be a further opportunity to discuss the actual rates of benefit to be implemented in 1988; and no doubt there will continue to be discussions within this Chamber and outside about our wider proposals for reforming rates themselves.
Several points have been raised during the course of this discussion. For example, I was asked what would happen if someone could not pay 20 per cent. of the rates. I ought to put that question into perspective by reminding the Committee that 20 per cent. of the rates would represent about £ 1 a week for a household on income support. This is clearly not the sort of sum likely to cause serious difficulties for very many people. I know some other figures were quoted, particularly by the right reverend Prelate, but the average figure is about £ 1 a week and will not I believe cause serious difficulties. It will ultimately be for local authorities to collect the 20 per cent. contribution and to decide what action to take if someone simply says he cannot pay.
But I am not trying to duck this issue, which will also arise when rates are phased out to be replaced by the community charge. We shall be happy to discuss with local authority representatives any ideas they may have for keeping this problem under control. It is one of those areas where we may have to do some more detailed thinking, particularly as our ideas begin to firm up on the wider question on the reform of rates themselves.
The noble Baroness, Lady Jeger, asked me particularly whether the housing benefit would compensate for the 20 per cent. contribution. The 20 per cent. contribution will be built into the housing benefit calculation. At present, 60 per cent. of a person's rates are reflected in the calculation. In future, it will be 80 per cent. so there is no change in principle from the present position.
A number of speakers, including the right reverend Prelate and, I think, the noble Baroness—were

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concerned that this might lead to some particular hardships—people going without homes or without food. But, as the noble Lord, Lord Houghton, pointed out, the rates of income support have not yet been decided and will be set nearer the time, taking into account all these considerations.
I was grateful for the remarks of my noble friend Lord Boyd-Carpenter. It cannot be right that three million households at present have no interest at all in the affairs of their local councils. A scheme based on 100 per cent. of rates would insulate even more than at present a trend the Government would regard as fundamentally unhealthy, with or without proportional representation. I hope that I have made it clear that the Government see considerable difficulties in the course proposed by the noble Baroness and that she will see fit not to press her amendment.
Lord Banks: I wonder whether the noble Lord could explain why it is that the Government are always so pleased when they are able to say that they have raised the tax threshold so that fewer and fewer of the people at the bottom of the scale are caught in the income tax net. Is it not correct that the Prime Minister has said that it is quite wrong that so much should be taken from those at the bottom? The thing is to raise the thresholds. But if the noble Lord's argument is to be followed, surely this means that we are not inculcating that spirit of responsibility as far as national matters are concerned with those people that we are letting out of the income tax net. Yet the noble Lord comes along and says, "We must get people into paying for local government even if they are right at the very bottom of the pile, even if they are the poorest of the poor". But not, apparently, when it comes to national matters. Can the noble Lord explain the difference between those two in the Government's thinking?
Lord Trefgarne: I wonder whether the noble Lord was listening to the remarks of my noble friend Lord Boyd-Carpenter. It is the case that many people who find themselves in this position are dependent upon benefits from their local authorities and it is, indeed, the case, sadly, that some local authorities have not been as responsible as we would have wished in setting their levels of expenditure and often for the unnecessary benefit of some people, as some would say. I think my noble friend was right, and I believe the Government are right, to say that the proper thing is to give people a sense of responsibility in this area; and I rest my case on that.
Lord Boyd-Carpenter: If my noble friend will allow me, is there not also on the question of national taxation the fact that, even if a person is taken below the income tax level, he still pays a mass of indirect taxation; and he knows that when he comes to vote?
Lord Trefgarne: My noble friend is, of course, quite correct in mentioning that. That is another point which I am sure the noble Lord, Lord Banks, will take into account.
Lord Donaldson of Kingsbridge: Why not do it in local rates equally? What is the difference?
Baroness Jeger: I think the noble Lord gave himself and the Government away a few seconds ago when he said that, unfortunately, there were some local authorities who did not do exactly—and I wrote it down—"as we wished". When has it been doctrine in this Parliament that local authorities should do exactly as the Government wish? I am sorry. I am an old reporter and I wrote it down; and I hope that Hansard wrote it down as well.
I have to ask the noble Lord, first, whether this proposed change, with the 20 per cent. rule, will come in before the community charges have been brought into legislation. Secondly, we hear too frequently from the Government side that the amounts of income support and the amounts of help have not yet been decided. So we are asked to withhold our criticism. This Bill is full of undecided regulations. That is one of the worst things about it so that both sides of the Committee are really in difficulty; because we hear about 20 per cent. but we do not know of what.
The noble Lord did not answer my question about the enforcement and the penalties and whether the Home Office has done an assessment of the increase in the prison population, the increase in the number of bailiffs who will be needed, and the increased cost to local authorities in following up people who are too poor to meet the demands.
As for my one-time noble friend Lord Houghton, I think that he should change his National Health Service glasses. Obviously, he has not read the amendment. The amendment was to increase income support—which was the very thing which he said it was not doing. What the noble Lord was saying means that he wants to take income away from these poor people by snatching back their 20 per cent. of rate payment; whereas the amendment says that in assessing the amount which they are to get, consideration,
"shall include the whole of the amount which he is liable to pay by way of rates in respect of his home".
He is to get that money. That is his income support. Then he has the responsiblity of paying the rates. I could not follow the noble Lord at all but I know that he may have had his mind on other things.
I feel that there has been no adequate answer. I am sorry about this. I have considered very carefully representations that have been made by local authorities. I cannot find anybody in the AMA and other experienced bodies, the people who have to do this job, who support the proposal. The Minister may say that it has got to be considered in conjunction with the reform of rates generally. I said that. That is why I do not think that this ought to be part of the social security legislation. It is a problem for local government finance and has nothing to do with this Bill. Certainly, this Bill should not be used to put what amounts to an extra tax of a 20 per cent. contribution on people who are so poor that they already qualify for income support. It is taking something away from the poorest people in this country. I think it is absolutely disgraceful and I shall press this to a Division.
7 18 p.m.
On Question, Whether the said amendment (No. 70) shall be agreed to?
Their Lordships divided: Contents, 89; Not-Contents, 86.
Resolved in the affirmative, and amendment agreed to accordingly.
7.27 p.m.
Clause 20, as amended, agreed to.
Baroness Hooper: This may be a convenient moment to take a break in the proceedings. In moving that the House do now resume, perhaps I may suggest that we should not reconvene before 8.25 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Financial Services Bill
Brought from the Commons; read a first time, and to be printed.

Airports Bill
7.28 p.m.
Read a third time.
Clause 15 [Transfer schemes]:
Lord Underhill Lord Underhill moved Amendment No. 1:
Page 13, line 1, after ("(2)") insert ("or with such advice as may have been obtained from independent financial advisers by the principal council who submitted the scheme.")
The noble Lord said: My Lords, we are in certain difficulties in dealing with this Third Reading in so far as one appreciates how important are the issues of social security; yet at the same time one has to be fair (if that is the right word to use) to the airport operators and not least to the local authorities. It is not my usual practice to make what might be called a lengthy speech in proposing an amendment, but in moving this Amendment No. 1 it is necessary to cover a fairly wide field.
The purpose of the amendment is to provide local authorities with the opportunity to seek independent advice on the way company formation issues are handled in general and the preparation of transfer schemes in particular. The amendment also provides

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for any such independent advice to be taken into account by the Secretary of State before the determined scheme is submitted to him by a local authority.
The amendment is necessary for two basic reasons. First, there is the need to ensure that schemes reflect the interest of individual airports, that schemes are prepared properly and that all facets of company formation are considered: for instance, tax and fiscal planning. A similar amendment was withdrawn at the Report stage after the noble Earl, Lord Caithness, had referred to draft guidance on the establishment of airport companies which the Department had issued that same day.
Nothing was then known of the contents of the guidance notes. Local authorities have now had the opportunity to examine the document and they are concerned over quite a number of points. I am advised on these matters by the Joint Airports Committee of Local Authorities. It is for that reason that I have to cover a number of points to show the problems arising from the guidance notes issued on the very day that we took our Report stage.
In explaining the terms of the Airports Bill, the document is both accurate and comprehensive, but local authorities expected to see a practical guide to company formation. In this respect, the guidance notes are very disappointing and, I am advised, in some major respects misleading. The document does not acknowledge the complexities of the issue, which the department seems to treat as just another mechanistic exercise. Paragraphs 12 to 14 of the document deal with valuation and the impression is given that valuing an airport is just the same as valuing houses or vacant land. In fact, the document advises local authorities to make use of the district valuer. The fact that airport-related valuation is a specialised exercise is ignored, and I am advised that there are only three or four firms in the country with the experience and expertise to do this job of airport valuation.
Also, it is not good enough for the department to indicate in paragraph 18 of these notes that local authorities should consider the tax implications of transfer schemes. The tax dimension will determine the best way of handling a transfer and the basis on which an airport is to be valued. This will differ for each airport depending on the individual circumstances.
There is no advice given in the document about the various ways of dealing with transfer values, each one of which has its own influence on the scale of allowances which can be generated. This is just one reason why each local authority concerned needs independent expert advice, to which reference is made in the amendment.
Local authorities have repeatedly expressed concern at the tight timetable and, in this connection, the noble Earl said on 10th June that he recognised that the timetable was a tight one. But he asked noble Lords,
"to think back to the speed with which the Greater Manchester district councils managed to establish Manchester Airport plc, and that was even without the benefit of Government guidance".
He said that at col. 156 of the Official Report. In fact, I am informed that it took the Manchester authorities over 12 months to assemble the detail of the package to set up the Manchester Airport plc.
The former Secretary of State said that six months would be required to do this job. In effect, the guidance notes have reduced this period, for the schemes now have to be submitted by the end of November and the Bill is not yet passed. Bearing in mind the need for inter-local authority consultations and the decision-taking that must take place, local authorities will have two to three months in which to prepare a complex scheme. That is totally inadequate.
The guidance notes also refer in paragraph 17 to working capital, but, again, they fail to recognise that the airport companies will have different needs, which will be reflected in their financial profiles. The point is not without significance to the local authorities themselves, for the initial provision of working capital will be a cost borne by them. I must ask: Will this expenditure be taken into account for rate support grant purposes in 1987-88? The Government's decision, which the noble Earl reported to us at the Report stage, to introduce a new GREA to cover airport debt charges retained by local authorities was given a general welcome. However, I must repeat some of the questions posed at the Report stage.
In a letter to local authority associations explaining the new GREA, the department stated that this will be taken into account in settling the aggregate Exchequer grant to local authorities. When the matter was raised on Report, the noble Earl said at col. 162:
"The amounts calculated in this way would be added to the individual authorities' overall GREAs to ensure that the entire notional cost of financing past airport debt is met with the rate support grant".—[Official Report, 10/6/86.]
This is clearly impossible under current grant arrangements. Therefore, bearing in mind that in 1986–87 the Exchequer grant is only 46.4 per cent. of relevant expenditure compared with 60 per cent. in 1980–81, we must ask again: Will there be new money to meet this question of GREA? This point was also raised by the noble Lord, Lord Diamond. Will the central government grant be increased to allow for this? If not, then the new GREA is not the concession that we thought it was when announced by the noble Earl.
Further, paragraph 23 of the guidance notes demonstrates that pension increase costs to staff who have ceased employment before transfer will be borne by the local authority. These can be very high indeed and one airport estimates that the figure could be as high as £200,000. It is important that the financing arrangements for local government through the GREAs should reflect this. There may be other costs arising as a result of setting up the new companies and the transfers which should also be covered by any new GREA arrangements. Will that be done?
At all stages, amendments have been tabled with the aim of excluding a number of smaller local airports from the provisions of the Bill. Although Ministers have resisted these amendments, in the Committee stage the noble Earl, Lord Caithness, undertook to consider cases from individual airports who would argue that they should not be served with a direction. Many airports are taking this invitation very seriously,

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but they are very concerned to note the department's advice on company formation, which states bluntly that the Secretary of State intends to issue a direction to all airports caught by the appropriate clause. Therefore, I must ask the noble Earl to confirm that the offer made on 15th May stands and to undertake that the department's advice to local authorities is amended to reflect this.
There have also been lengthy debates at all stages of the Bill in this House and in another place on the role of elected members as directors of airport companies. At no stage did the Minister endeavour to discourage councillors from becoming directors, but the draft advice which has been sent out states:
"that councillor/directors will be in a position of dual responsibility in which conflicts of interest could all too easily arise".
It then goes on to warn that
"it remains the responsibility of directors to see that their role as councillors does not colour their actions as directors in relation to the company".
I ask noble Lords to note that it refers to "colour"— not to "improperly colour". This advice ignores the fact that, at least initially, the controlling authority will be the sole shareholder and that directors are appointed by the shareholders to run the company efficiently and viably and in line with the strategic objectives set by the shareholder, which will be the local authority.
The Government are absolutely right to advise prospective directors of their duties and obligations, but wrong to do so in a way which would unreasonably discourage elected members from fully participating in the running of the companies which their local authorities will own in the first instance. I ask the noble Earl: Does he accept that what I have just said should be the position?
I have indicated just some of the items in the guidance notes which have caused great concern to local authorities, and other examples could be given. But I think sufficient has been said to cause the Government to reconsider their intentions. First, I urge the Government to withdraw the guidance notes pending discussion between the department and independent experts. I ask that the timetable for the formation of companies should be adjusted accordingly, and that there should be a new approach to company formation to minimise the problems which may ensue.
Secondly, sympathetic consideration should be given to the new GREAs, taking on board all the additional costs which will fall upon local authorities, an I there should be an assurance that there will be new money provided to enable this to be done.
Finally, I propose the acceptance of this amendment to encourage local authorities themselves to obtain independent advice. The guidance notes are even silent on this issue. But I believe that what I have said indicates that such advice is absolutely essential. I therefore beg to move Amendment No. 1.
Lord Tordoff: My Lords, perhaps I may intervene very briefly at this stage just to underline what the noble Lord. Lord Underhill, has said in relation to the smaller airports. Certainly at the Committee stage I felt that we were getting sympathetic responses from
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the noble Earl in relation particularly to some of the smaller airports. But from what I have heard it seems that the guidance notes go back on the tone which was becoming apparent then. I may be wrong, and I have not had much chance to look at the guidance notes because as noble Lords know I have been away for the past week. But this is an opportunity for the Minister to reinforce the sympathetic noises that he was making at the Committee stage, particularly in relation to the smaller airports. I hope that he can do so because the financial burden on them is likely to be very considerable in terms of the changes that are likely to accrue from this Bill.
I hope that the noble Lord, Lord Underhill, is wrong in suggesting that it is the intention of the Secretary of State to press on with designating all these airports over the £1 million limit and that in fact he will use his powers within the Bill to phase the changes in such a way that smaller airports in particular can have a chance to be dealt with in a much more sympathetic fashion. It is in that sense that I ask the Minister to respond to this Amendment.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, I am very grateful to the noble Lord, Lord Underhill, for explaining so clearly and lucidly the purpose of the amendment because it could be interpreted that a purpose of the amendment was to limit the discretion of the Secretary of State to exercise his power to modify a scheme or substitute one of his own. I am glad that that was not in the mind of the noble Lord, Lord Underhill. We welcome the opportunity to permit local authorities to consult and take advice from independent parties. As a surveyor myself I should certainly have welcomed the opportunity to be consulted by a local authority on valuation matters. Of course one does not expect local authorities to have all the necessary expertise. They have to go out for advice and this advice must be listened to.
When considering transfer schemes we shall be very willing to consider that financial advice and other advice employed by the local authorities for the purpose of transfers. I can give that assurance to the noble Lords, Lord Underhill and Lord Tordoff. But it would be wrong of me to suggest that my right honourable friend the Secretary of State will necessarily be influenced in his decisions by that advice; but he will be aware of the point of view of at least that financial adviser to that council. That advice will perhaps not be transparent but will be evident in the transfer scheme put forward by that council.
The noble Lord, Lord Underhill, mentioned some of the points that have been raised with regard to the guidance notes issued to councils by my department. I can confirm that these are draft guidance notes. They are for consultation. One would not expect there not to be any sort of reaction from the councils. I can also tell the House that a whole day's seminar has been arranged with the local authorities next Monday specifically to look at the kind of points which the noble Lord, Lord Underhill, has mentioned. I hope that this will be helpful to both sides.
I turn to the timetable which the noble Lord, Lord Underhill, mentioned. As the councils have known

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our airports policy since the White Paper of June 1985, and since the Bill was introduced into another place in January of this year, there has been sufficient opportunity for the councils to prepare the way for the proposed transfers that are to take place provided the Bill is accepted by both Houses and passed.
Perhaps I may deal with the point raised by the noble Lords, Lord Tordoff and Lord Underhill, with regard to the smaller airports. It would have been quite wrong of us not to have submitted advice in accordance with the Bill. That would have been totally illogical. I do not think I could withdraw the advice to suit something that I said at an earlier stage and which I confirm tonight—of course we will look at every scheme on its merits, including a scheme to be exempted. I hope that that is some reassurance. But the policy is as stated in the Bill. It is, we believe, a good policy; but if there are special circumstances for an airport, that airport is quite free to put forward that advice. It will be looked at very carefully. However, that is no guarantee, I must say, that the special pleading will be accepted; but it will be considered.
The noble Lord, Lord Underhill. asked me whether the resources to finance a special GRE would be additional or a reallocation of the rate support grant. The answer, as ever with local authority finance, is not entirely straightforward. The rate support grant total is not determined in relation to a multitude of separately identified spending needs but in relation to an acceptable level of local authority exependiture, the appropriate level of government support and the requirements for specific grants. The GREs are used to distribute the rate support grant. That said, the House can be assured that the amount for the new GRE for airport debt will not be at the expense of other GREs. It will be added to the total grant-related expenditure on which the rate support grant settlement will be based. I cannot anticipate the Government's decision on the aggregate Exchequer grant to local government but can confirm that the additional GRE will be taken into account. I hope that that is helpful to the House at this stage.
I am afraid that I cannot answer in detail the other points on the draft guidance raised by the noble Lord, Lord Underhill; but I shall carefully look àt it and if I can help in any way, and if the points can be raised and discussed at the seminar next Monday at Birmingham airport, I hope that we shall proceed to a satisfactory conclusion. I hope that with that assurance meeting the spirit of the amendment proposed by the noble Lord, Lord Underhill, he will see fit to withdraw it.
7.45 p.m.
Lord Underhill: My Lords, I am grateful to the noble Earl for his definite reply to the point raised by the noble Lord, Lord Tordoff, and I, because that will give some encouragement. It is rather unfortunate that that was not mentioned in the guidance notes. It would have been much more helpful to the authorities concerned if they had been told in the guidance notes that the Minister is prepared to consider a scheme if they believed they had a case for exemption. It seems that unless somebody tells them or reads Hansard, the authorities would know nothing about the possibility
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of this opportunity. But I welcome the reconfirmation that the noble Earl has given. Did I understand from what the noble Earl said that the seminar is to consider the whole question of the Bill and also the guidance notes themselves with the local authorities concerned?
The Earl of Caithness: The guidance notes, my Lords.
Lord Underhill: My Lords, that of course is encouraging; but it will also set back the timetable. If the Minister is going to demand that all the schemes are in by the end of November, and we are going to have a seminar on Monday and presumably it will be something more than just a mechanistic exercise—it is really going to be considered before the final advice note is issued—then obviously the question of the timetable comes into the consideration. But I hope that all local authorities will take the opportunity to bring forward the points which they gave to me to raise today, plus many others, which are now in the minds of JACOLA.
I appreciate what the Minister said about GREA and that it will be taken into consideration. Obviously that will be a big argument to be dealt with, presumably with the central committee representing local authorities when the whole question of the rate support grant for the following year is under consideration. However, let us keep in mind that even the promise of a GREA to deal with this matter will meet only 50 per cent. of the debt charges, because I cannot imagine the Government going beyond their 46.4 per cent. of any relevant expenditure. Therefore, part of the additional costs will still have to be met by the local authorities. I hope that point will be considered.
In the light of what the Minister said, and in view of the time factor, I shall withdraw the amendment and hope that the seminar produces results which will bring about a change in the Government's guidance notes. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 [Local authority financial controls in England and Wales]:
Lord Underhill Lord Underhill moved Amendment No. 2:
Page 19, line 23, at end insert—
("( ) It shall be the duty of the Secretary of State so to exercise his functions under section 72 and section 78 of the Local Government Planning and Land Act 1980 (which relate to the fixing of, and giving directions in relation to, prescribed expenditure of local authorities) in respect of local authorities who are controlling authorities as to secure that the prescribed expenditure of each such authority is maintained at such a level that (having regard to the other functions of the local authority) the prescribed expenditure is such as to enable the authorities—

(a) to further the reasonable interests of users of airports operated by public airport companies; and

(b) to promote the efficient, economic and profitable operation of such airports; and

(c) to encourage investment in new facilities at such airports in time to satisfy anticipated demand by airport users;

and the Secretary of State shall exercise the duty imposed by this subsection in the national interest.").

The noble Lord said: My Lords, I think it is agreed that no other clause has generated such controversy in connection with this Bill than what was Clause 20.

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Over 20 amendments have been tabled to the clause since the Bill was first introduced in the other place. It is not just the local authorities who have been unhappy with it; even the Government have been moved to make their own amendments. In fact, one of the notable things about the Bill—and a number of other Bills—is that despite the long discussions in the other place in Standing Committee the Government find it necessary to bring forward amendments in Committee and on Report. When these are improvements we are prepared to applaud the Government, but when the Government are clearing up something which has been forgotten about obviously we have cause for criticism.
One of the problems for local authorities has been the lack of consistency in the arguments deployed by the Government to justify this clause. There have been attempts to argue that it is necessary because the public sector borrowing requirement should now encompass private sector resources. It has also been suggested that the clause broadly confirms the levels of control which are exercised today. However, at no time have the Government sought to answer two basic points. First, the clause imposes new and additional controls over corporate structures which are to operate, in the words of the Government, at arm's length from the local authorities. The Department of Transport has confirmed that the creation of Manchester Airport plc,
"means that its capital expenditure is no longer subject to control under Pan VIII of the Local Government Planning and Land Act 1 '80".
That was all right; but the new clause will now impose new controls over the new company. Therefore, that statement is cancelled out.
Secondly, there is the fact that the Government are adopting different controls for different corporate structures. For the BAA, when the successor company is wholly owned by the Government, control over expenditure takes, shall we say, the form of a nod and a wink by the Secretary of State. There can be no other interpretation of the provisions of Clause 9(1) and in particular the duty of the Secretary of State to exercise his power of control in the national interest. But for the local authority airports, control is fundamentally different. Airports will be forced to compete with highway authorities for funds. Their expenditure will be embraced by the definition of "prescribed expenditure".
These additional constraints more than outweigh the concession introduced by the Government that internally-generated revenues will no longer be subject to control. Taken together, the controls are more detailed. They represent more of a constraint than those which exist today.
The Government are adamant that these controls should remain even though they are far more restrictive on the local authorities than those to be employed on the BAA successor company. On the other hand, one must be fair and say that local authorities also recognise that in the past they have had no cause for complaint about the Government's record on airport investment. That has been good. There are few examples of the Government refusing to sanction airport expenditure where it has been demonstrated to be worthwhile and economical.
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However, for a number of reasons the local authorities are worried that this might change. I hope they will exercise these points at the seminar next Monday; it will be a full day.
First, the Government are changing the system and the controls. No longer will a pool for schemes of national and regional importance exist for airport investment. The new controls are more rigid and less flexible. Secondly, it will be easier for the Government to reduce the incidence of airport expenditure. Allowing the local authority airport companies complete freedom to spend their own money will simply mean a reduced call on borrowing approvals sanctioned by central government. Thirdly, how tight the purse strings are to be pulled will depend on the Government's motivations. There may be a desire to see public expenditure further reduced. There may be a desire to switch funds away from airports into, say. maintaining the roads. There may also be a desire to squeeze the local authorities in order to encourage them to privatise their airports. That is something which a number of noble Lords feared when we had our Second Reading debate.
The point of the amendment is very similar to the arguments deployed on Report by the noble Lords, Lord Harris and Lord Boyd-Carpenter, and the noble Earl, Lord Dundee. It is vital that our network of airports is administered and developed in a way which reflects the national interest. All noble Lords will agree that they must not become a political football.
What is proposed, therefore, is the imposition of a duty upon the Secretary of State to take into account certain key factors which any reasonable person would subscribe to in the way that the expenditure of airports is controlled. These factors are set out in paragraphs (a), (b) and (c) of the amendment. They are the reasonable interests of users, the need to promote the efficient and economic operation of airports, and the importance of providing facilities to satisfy anticipated demand. The Secretary of State will still be able to take into account the wider public expenditure issues. It is for that reason that the amendment refers also to the national interest.
The amendment has been modelled upon the duty imposed on the CAA in relation to the economic regulation of airports under Clause 39(2). The amendment would do a great deal to reassure local authorities and the aviation industry in general and it would underline Parliament's commitment to the regional airports. It will be seen that the amendment in no way changes the authority of the Secretary of State, but asks that these points should be taken into consideration when determining what should be the prescribed expenditure. I beg to move.
8 p.m.
The Earl of Caithness: My Lords, like the noble Lords opposite, we want to see flourishing public airport companies and we will continue to provide the same generous support, to which the noble Lord, Lord Underhill, referred, for worthwhile investment in local authority airports as we have done in the past. Indeed, the special capital allocations for airport development made by my right honourable friend under the provisions of Section 73 of the Local Government

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Planning and Land Act 1980 for the specification of projects of national or regional importance have considerable regard for the criteria which noble Lords specify in their proposed amendment.
I assure the House that priority is given to expenditure needed for the safety of passengers and users of the airport. The economics and financial return on developments are assessed and the ability of a development to provide capacity or facilities necessary for anticipated future demand is considered. All this is done in the national and regional interests, as well as that of the passenger and ratepayer.
It is worth recording that since the Government came to power special allocations in excess of £200 million have been made for projects of national or regional importance—commonly known by the delightful acronym of PONORI. I can confirm that PONORI will continue. That is one of the points that the noble Lord, Lord Underhill, raised.
The noble Lord also raised the point that we were introducing new controls. This is not true; they are not new. They are similar to those which apply to nationalised industries where there is control over external capital finance. There is no control over internally financed investment. Therefore, we see this as a relaxation of control over airport investment.
But we can take it a stage further because the noble Lord, Lord Underhill, said that there was a difference between how we were treating the BAA and the local authorities. This is not so. As long as they are both in the public sector, both are subject to the same controls on external finance; but the moment the BAA is privatised and made a plc it will escape from government controls, because it has left the public sector. Indeed, the same will apply to local authorities when they sell but 51 per cent. of their shareholding. So I think that we are treating both parties on an equal basis.
The noble Lord, Lord Underhill, then went on to say that he was concerned that we should act in the national interest. I hope that he will not have forgotten that I intend to introduce, and hope the House will accept, Amendment No. 8 and the consequential amendment, Amendment No. 10, which place a duty on the CAA with respect to the implementation of recommendations concerning airport capacity. I understand that this measure applies to all airports, and not just to BAA airports. That observation covers another of the points raised by the noble Lord, Lord Underhill.
I think it should go without saying that my right honourable friend the Secretary of State will exercise his powers to determine capital allocations in the national interest. There is no need to spell out this obligation in the way in which the noble Lord suggests, in view of the amendments that I have tabled in my name. I hope that he will be reassured and will withdraw his amendment.
Lord Underhill: My Lords, it is notable that when we wish to insert something in the Bill it is regarded as unnecessary, but when something is already in the Bill the Government find some reason why it is right for
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them to have put it in, but we must not put it in elsewhere.
The Earl of Caithness: My Lords, with respect, we listened very carefully to the arguments of the noble Lord at earlier stages of the Bill, and that is part of the reason why we brought forward the amendment.
Lord Carmichael of Kelvingrove: It is too persuasive, my Lords.
Lord Underhill: As my noble friend says, the noble Earl is too persuasive, my Lords. If one considers the points I have made on the question of the CAA under Clause 39(2) concerning the economic regulation of airports, these are the three points mentioned as being matters which the CAA must take into consideration. On these Benches we are saying that the prescribed expenditure in connection with the local authority airports should also be considered in the light of these three points. I am sorry that the Government cannot see the sanity, common sense and fairness of why that which is good enough for the CAA provision should not be in the provision for the local authorities.
I ask the noble Earl to look carefully at Clause 9(1) and then to look at the provisions now in Clause 22. There is a difference. Why should the local authorities be so concerned with what they regard as new controls? I can assure your Lordships that this is no invention of the Opposition. The local authorities have been very worried about the new controls, and that is why so many amendments have been tabled both in your Lordships' House and in the other place. The seminar will take place on Saturday—
The Earl of Caithness: On Monday, my Lords.
Lord Underhill: On Monday, my Lords—and it will be a very long day if all the points which are to be considered are given due attention. I hope that the Government will be arranging for an extension because these are the sorts of points which, together with the guidance notes, I am certain they will want to deal with at this seminar. Having put these points forward and heard the Government's reply, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 34 [Matters to be taken into account by CAA]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amend-ment No. 3:
Page 31, line 8, leave out ("in") and insert ("throughout").
The noble Lord said: My Lords, the House may remember that an amendment to achieve what I believe this amendment will do, perhaps with a little more elegance, was moved at the earlier Report stage of the Bill. I was surprised at the amount of support that it received. The amendment was not put to a vote as it was not really a life and death issue; but, nevertheless, it was very important. I was surprised at the number of people who spoke to me afterwards and said that there was a point to be made there.
The point that I am making is that instead of providing for this in all parts of the United Kingdom it should now be done "throughout the United Kingdom". It is merely a reminder to the Civil Aviation Authority that the healthy growth of airports and indeed of the air traffic industry itself can best be achieved by considering the whole of Great Britain. It is a small point, but it means a great deal to many people—certainly to me.
I hope that the Government will accept this new form of words which, as I say, is perhaps a little more elegant than the rather clumsy wording of the earlier amendment. I beg to move.
Lord Boyd-Carpenter: My Lords, this amendment imposes a duty on the Civil Aviation Authority which I think is somewhat misconceived. As it stands, the Bill includes among its duties the need to secure the sound development of civil aviation in the United Kingdom. As I understand it, that means the necessity to provide in this country an efficiently developed civil aviation industry. However, in the nature of things that industry will not operate throughout the United Kingdom. It will have to operate in areas to which people wish to fly and therefore in which airlines seek permission to land. There are areas in this country where there is no such demand.
It is a small point, and I hope that your Lordships will not feel it necessary to waste much time on it. I much prefer the very proper duty imposed under the Hill. We want a good civil aviation industry in this country and we do not want to have that development perverted or twisted so as to spread it into parts of the United Kingdom where on aviation grounds there is no need for it to be developed.
Lord Lloyd of Kilgerran: My Lords, there are two grounds on which I presume to intervene so late in the evening. First of all, I should like to thank the Minister Very much indeed for the letters and copies of letters from many places which he sent to me after the helpful discussions which took place at Report stage, when my noble friend Lord Tordoff was not able to be present. What has also inspired me to speak, if I may say so, has been (to use a word that the noble Lord, Lord Boyd-Carpenter. used when he referred to me only last week in another context) the somewhat "naive" intervention of the noble Lord, Lord Boyd-Carpenter, on this very simple matter. It seemed to me that this was a realistic and practical little point which Members of this House would find no difficulty in accepting: that we should substitute the word "throughout" for the word "in", on the lines of the argument cogently put forward by the noble Lord, Lord Carmichael.
Lord Ferrier: My Lords, may I ask the mover of this amendment whether at the back of his suggestion is the thought that we must safeguard the position of Prestwick Airport in Scotland, and for this reason the word "throughout" is therefore acceptable to him instead of "in"?
Lord Carmichael of Kelvingrove: My Lords, I think that the point I am trying to make in the amendment
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is to emphasise that the Civil Aviation Authority should look at the whole of the United Kingdom. Obviously, Prestwick would be one of the places that would be considered, and the question of the development of Prestwick would be taken into account. The insertion of the word "throughout" is really a matter of emphasis. I am sorry that the noble Lord, Lord Boyd-Carpenter, has taken it so exactly. Our language is rich because in this way one can emphasise such points. I think there is a feeling in the House that this is a good amendment.
Lord Boyd-Carpenter: My Lords, will the noble Lord accept the point that if you are legislating you have to legislate exactly?
Lord Monson: My Lords, unlike the noble Lord, Lord Boyd-Carpenter, I think that there is considerable merit in the amendment, for this reason. If and when the Channel tunnel is eventually built, it will tend to concentrate economic activity in the South-East of England to an even greater extent than is the case at present, to the detriment of the rest of the nation. That being the case, some obligation to encourage the development of civil aviation through-out the United Kingdom, including the periphery, would go some way towards counterbalancing such an undesirable tendency.
Viscount Davidson: My Lords, I thought that I could be brief. I must reassure my noble friend Lord Boyd-Carpenter that, if this amendment is agreed to, the wording will be that:
"the CAA … shall have regard to the matters referred to in subsection (3)",
one of which is:
"the need to secure the sound development of civil aviation throughout the United Kingdom".
"Shall have regard to" is an important phrase.
The noble Lord, Lord Carmichael, has pressed for an amendment of this nature throughout your Lordships' consideration of this Bill. On each occasion I have resisted his amendment in its various manifestations, while at the same time stressing the Government's deep and continuing commitment to the well-being of regional aviation. The noble Lord has, however, made an eloquent case for an expression of that commitment on the face of the Bill. I have been impressed by his arguments. The noble Lord has moved a short but pithier amendment today, designed to represent a clear statement of the Government's best intentions towards regional airports and regional air services. We regard the role to be played by regional aviation as a major plank in our wider civil aviation policies. In that light, I have great pleasure in accepting the amendment on behalf of the Government.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister for that reply.We were meeting each other across the table and splitting hairs. I am glad that he has ultimately agreed to this modest but useful amendment, which I believe will be well received throughout the industry.
On Question, amendment agreed to.
Clause 43 [References to Commission in relation to imposition or modification of conditions]:
8.15 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 4:
Page 43, line 11, leave out ("the following objective, namely the furtherance of).
The noble Lord said: My Lords, this amendment is not dissimilar to one moved by my noble friend Lord Williams of Elvel at Report stage, except that this one deals with a much narrower point. It deals with submissions by the CAA to the Monopolies and Mergers Commission or with the instructions that it is suggested should be given to the MMC in order for it to reach its judgment.
The Bill states that the MMC:
"shall …have regard to the following objective, namely the furtherance of the reasonable interests of persons granted such rights".
That form of words has never been used before with reference to the MMC.
The noble Earl when replying to a similar amendment earlier said that the words were used in Clause 37(2)(a), which in the present print of the Bill is Clause 39(2)(a). I looked that up and discovered that that was true. He also said that Section 4(1)(b) of the Civil Aviation Act 1982 contained those words. A matter of an hour or so ago I thought that I would go to the Library and take a copy of that. Under the title:
"Regulation of performance by CAA of its functions",
it states:
"to further the reasonable interests of users of air transport
services".
Clause 39(2)(a) states:
"to further the reasonable interests of users of airports within the United Kingdom".
That is all very well. But what is wrong is that all this concerns the duties of the CAA, and that is perfectly reasonable. But in this case it is suggested that the MMC should:
"have regard to the following objective, namely the furtherance of the reasonable interests of persons granted such rights".
It is totally different to ask the MMC to have specific responsibility to look at the furtherance of any interests when it is examining a possible monopoly or merger. It should be looking at the total interests. As I understand it, its remit and powers are to consider all the facts and not to follow one objective or another, except the objective of the common good.
With great respect, it seems to me that the Minister has been misled by those references which were to the powers and responsibilities of the CAA. My noble friend raised that important point earlier. It is a constitutional point. Clause 36, line 37, of the definitions states:
" 'the Commission' means the Monopolies and Mergers Commission",
and there is no reference at all to the fact that the CAA is involved in Clause 43(5)(b).
I hope that the Minister will look at that matter carefully. He promised last time that he would look carefully at the words to see whether he could make a change or bring forward another form of words. To give the MMC particular objectives other than those
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that it already has in its charter is quite wrong. I hope that the Minister will look at that carefully. I beg to move.
Lord Tordoff: My Lords, in supporting the amendment I draw your Lordships' attention to the fact that the objective of this part of the Bill is consumer protection, I assume, whereas, as presently worded, the clause seems to give protection to, for instance, the franchise holder operating on a contract based on a tender with the airports authority.
This is a difficult area. People operating a franchise at, for instance, a BAA airport have a temporary monopoly. It is in the interests of the airport authority to get the best deal for itself, which may not be the best deal for the consumer at the end of the day. Presumably that is why the MMC is brought into the act.
Although the removal of those words does not go the whole way, it goes some way to redress the proper balance. It would keep the interests of the consumer in the forefront without interfering with a contract which has been freely drawn up between the franchise holder and the airports authority on the basis of a competitive tender.
This is a difficult area to legislate for. I can see why the Government are finding it a little difficult to get the right words. I think that the amendment goes in that direction and that is why it has my support.
The Earl of Caithness: My Lords, as the noble Lord, Lord Carmichael of Kelvingrove, said, the amendment is worded differently from the amendment that noble Lords opposite put down on Report. I fear that he forgot to mention that the principle behind it is the same as the one which they pressed to a Division and on which their amendment, Amendment No. 41, was defeated. Indeed, the specific point upon which the noble Lord, Lord Williams of Elvel, felt that he had to seek the view of your Lordships' House was the term at the heart of this present amendment—the word "furtherance". That is the very word which I said I would take to have a look at.
There are two main arguments in favour of this amendment. The first is that the clause as drafted in some way jeopardises the MMC's traditional and respected objectivity in deciding upon the public interest. As I explained on Report, that is not so. The key words are, "have regard to"; not—and I must stress this—"have sole regard to". That means that the furtherance of the reasonable interests of concessionaires will not be the only factor which the MMC weighs in the balance. It will be one of many, as is always the case. The objective in question simply puts on record one of the matters that should be weighed in the balance in circumstance where the MMC is investigating business practices which relate to concessionaires.
The second argument concerns the words, "furtherance of reasonable interest". Noble Lords opposite claim that that is some sort of positive discrimination in favour of concessionaires and that furthermore "furtherance" is a concept which has no precedent in other similar legislation. However, the noble Lord, Lord Carmichael, reminded the House of the two

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precedents that I have and I beg to differ from him. I do not think that they are misleading precedents; I think that they are good ones.
I admit that in normal competition law there is no direct terminological precedent, but the intentions are exactly the same. I refer the noble Lord, if I may, to Section 84(1) of the Fair Trading Act 1973 which talks about promoting various interests and objectives, as does Section 3 of the Telecommunications Act 1984.
If I may, I shall ask your Lordships to look at Clause 39(2). There one sees that the MMC has to have regard to the CAA's objectives and promote the interests of the BAA and take into account airport users' interests. In this part of the Bill we are bringing to the MMC's attention just one instance, the concessionaires, to put them on an equal footing with the other parties to whom the MMC's interest has been drawn by Clause 39(2) of the Bill. If the concessionaires were not put on an equal footing, they could equally be ignored by the MMC to the detriment of airport users.
I must return to a point which I made at an earlier sage. The particular point of concessionaires was discussed in Committee in another place. The matter was decided upon with the help of the Opposition and the Government were defeated. The point was introduced into the Bill as a result of the defeat in which the Opposition parties joined, and to delete the matter at this stage would be entirely contrary to the wishes of another place. I think that we now have the balance right.
Your Lordships know well that I do not support unnecessary additions to the Bill. Since so many activities are carried out by concessionaires, an effective system of economic regulation must cover those activities and, because of the potential for monopoly abuse, must also cover the furtherance of concessionaires' reasonable interests in the same way as it covers the reasonable interests of the airport users to which I have already referred.
To delete the word "furtherance" would arguably weigh the scales against concessionaires—airport users' interests would be for furthering, whereas those of concessionaires would not—at the exact and only point in the Bill where it is necessary to give the MMC guidance about its attitude towards concessionaires. The Bill as it stands gives equality of treatment to both. To my mind that consistency is the right approach. I hope that with that the noble Lord will be able to withdraw his amendment.
Lord Carmichael of Kelvingrove: My Lords, I am disappointed in the reply of the noble Earl the Minster.
I thought that it was clear from what I tried to say that there was no intention that concessionaires should not be given reasonable treatment by the MMC which has, as I understand it, a good reputation for looking at things with great fairness. Here I suggest we are trying to upset that balance of fairness by giving the actual instructions on what it will pay specific attention to as against merely looking at something in the round.
I have taken note of the references made by the noble Earl the Minister to the Fair Trading Act 1973. I accept that he referred to that in the belief that it was correct, but I disputed whether his earlier examples were apposite. I still believe that the duties and
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responsibilities of the CAA are miles away from the duties and responsibilities of the MMC. That is surely one of the matters that is well enshrined in our law and is also becoming well enshrined in European law.
I feel that we have a case here and that the Bill is being unnecessarily cluttered up. Far from adding to the Bill, I am merely asking the noble Earl the Minister to reduce the Bill by about a line and a quarter. I feel that this is such an important point that I must put it to the vote.
8.26 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 53; Not-Contents, 55.

DIVISION NO. 4

CONTENTS

Airedale, L.

Kaldor, L.

Banks, L.

Kilbracken, L.

Barnett, L.

Kilmarnock, L.

Beaumont of Whitley, L.

Lockwood, B.

Birk, B.

McNair, L.

Blease, L.

Mayhew, L.

Boston of Faversham, L.

Monson, L.

Burton of Coventry, B.

Morton of Shuna, L.

Carmichael of Kelvingrove, L.

Mountevans, L.

Cledwyn of Penrhos, L.

Nicol, B.

Crawshaw of Aintree, L.

Northfield, L.

Cullen of Ashbourne, L.

Rochester, L.

Dean of Beswick, L.

Seear, B.

Elwyn-Jones, L.

Serota, B.

Ennals, L.

Shackleton, L.

Ewart-Biggs, B.

Silkin of Dulwich, L.

Fisher of Rednal, B.

Stallard, L.

Gallacher, L.

Stoddart of Swindon, L.

Gifford, L.

[Teller.]

Gladwyn, L.

Strabolgi, L.

Glenamara, L.

Taylor of Blackburn, L.

Graham of Edmonton, L.

Tordoff, L. [Teller.]

Grey, E.

Turner of Camden, B.

Hampton, L.

Underhill, L.

Houghton of Sowerby, L.

Whaddon, L.

Jeger, B.

Williams of Elvel, L.

John-Mackie, L.

Ypres, E.

NOT-CONTENTS

Arran, E.

Kinnoull, E.

Ashbourne, L.

Lane-Fox, B.

Belstead, L.

Layton, L.

Biddulph, L.

Lindsey and Abingdon, E.

Boyd-Carpenter, L.

Long, V. [Teller.]

Brabazon of Tara, L.

Lyell, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Caithness, E.

Molson, L.

Cameron of Lochbroom, L.

Montgomery of Alamein, V.

Carnock, L.

Munster, E.

Davidson, V.

Napier of Ettrick, L.

De La Warr, E.

Norrie, L.

Denham, L.

Orkney, E.

Dundee, E.

Sanderson of Bowden, L.

Elliot of Harwood, B.

Seebohm, L.

Elliott of Morpeth, L.

Shannon, E.

Faithfull, B.

Sharpies, B.

Ferrier, L.

Skelmersdale, L.

Fortescue, E.

Stanley of Alderley, L.

Gardner of Parkes, B.

Swinton, E. [Teller.]

Glanusk, L.

Trefgarne, L.

Glenarthur, L.

Trumpington, B.

Harmar-Nicholls, L.

Vaux of Harrowden, L.

Hooper, B.

Vickers, B.

Kaberry of Adel, L.

Vinson, L.

Killearn, L.

Wynford, L.

Kimball, L.

Young, B.

Kinloss, Ly.

Resolved in the negative, and amendment disagreed to accordingly.
8.34 p.m.
Clause 52 [Special provisions relating to groups of airports]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 5:
Page 55, line 1, after ("imposed") insert ("or modified").
The noble Earl said: My Lords, I beg to move Amendment No. 5 and, with the leave of the House, speak to Amendments Nos. 6, 7 and 11. These are technical. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment Nos. 6 and 7.
Page 55, line 2, after ("40(3)") insert ("or (4)").
Clause 58, page 58, line 17, leave out ("as respects") and insert ("with respect to").
The noble Earl said: My Lords, I beg to move Amendments Nos. 6 and 7 together.
On Question, amendments agreed to.
Clause 68 [Monitoring of aircraft movements]:
The Earl of Caithness moved Amendment No. 8.
After Clause 68, insert the following new clause:
("Duty of CAA with respect to implementation of recommendations concerning airport capacity.

.—(1) If, after considering any recommendations made to him by the CAA in pursuance of section 16(2) of the 1982 Act (recommendations concerning airport capacity), the Secretary of State so directs, the CAA shall take such steps as it considers appropriate for the purpose of encouraging or facilitating the provision (whether by an airport operator or any other person) of any facilities or services that are necessary for the implementation of those recommendations.

(2) The steps taken by the CAA in pursuance of subsection (1)—

(a) may, without prejudice to the generality of that subsection, include the furnishing of information, the provision of assistance to persons requesting it and the provision of advice (whether or not requested); but

(b) shall not include the carrying out of any works of construction or alteration or the defraying of, or the making of any contribution towards, expenses incurred by any other person in carrying out any such works.

(3) Before embarking on the performance of its duty under subsection (1) with respect to any recommendations the CAA shall consult the airport operator in the case of any relevant airport as to the manner in which that duty is to be performed by the CAA.

(4) Without prejudice to the generality of section 11 of the 982 Act, a scheme or regulations under that section may make provision for charges to be paid in respect of the performance by the CAA of its duty under subsection (1) above with respect to any recommendations, and for such charges to be paid by—

(a) the airport operator in the case of any relevant airport, and

(b) any person for whom assistance or advice has, at his request, been provided by the CAA in pursuance of that duty;

but if such provision is not made by any such scheme or regulations the CAA shall be entitled to recover an amount or amounts in respect of any expenses reasonably incurred by it in performing that duty from such one or more persons falling within paragraphs (a) and (b) above as the CAA considers appropriate.

(5) An airport is a relevant airport for the purposes of subsection (3) or (4) if—

(a) the recommendations referred to in that subsection relate to the airport, or

(b) the airport is subject to economic regulation under Part IV, and it and any new airport to which those recommendations
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relate would be airports serving the same area in the United Kingdom;

and the reference in paragraph (b) above to airports serving the same area in the United Kingdom shall be construed in accordance with section 31(6).

(6) Section 4 of the 1982 Act applies in relation to the performance by the CAA of its functions under this section.").

The noble Earl said: I beg to move Amendment No. 8 and, with the leave of the House, speak to Amendment No. 10.
My Lords, I gave a commitment at Report stage, in the wake of an enlightened debate on an amendment—Amendment No. 23—moved by my noble friends Lord Dundee and Lord Kinnoull to come back to your Lordships' House on the question of the provision of airport capacity. I have looked again at the arguments made at Report, and have had further meetings with noble Lords interested in this question.
The Government's firm view remains that airport operators will have a very strong commercial incentive to provide the necessary services and facilities to meet demand. Revenues at airports and hence profitability are directly linked to the throughput of passengers. Because the regulatory regime will act to restrain the level of charges, airport operators' major source of increased profits will be volume growth. Their future profitability will depend crucially on the provision of capacity to accommodate this growth.
In addition all airport operators experience some competition. At the London airports it is competition with Continental hubs for the lucrative inter-lining traffic. If sufficient capacity is not provided, this traffic will go elsewhere. It is therefore in the operators' own interests to provide appropriate facilities.
Nonetheless, the Government recognise the very real concerns which have been voiced in your Lordships' House and have therefore prepared a new clause to go into the Airports Bill. The new clause would impose a fresh duty on the Civil Aviation Authority, expanding upon the authority's existing duty under Section 16(2) of the Civil Aviation Act 1982.
Under that section of the 1982 Act the CAA already has a duty to consider the need for airport capacity and to make recommendations to the Secretary of State. Under the new clause which this amendment would put into the Airports Bill, the Secretary of State in receipt of such a recommendation would be able to direct the CAA to take appropriate steps to encourage or facilitate the provision of such facilities and services as are necessary to give effect to its recommendations.
The Government regard this additional provision in the Bill as a valuable buttress to the clear economic incentive that airport operators already will have to provide capacity in a timely manner.
As a further buttress, the Government intend also to put into the memorandum of association of the successor company to the BAA, an object to provide or cause to be provided at airports under its control (or the control of any of its subsidiaries) such services and facilities as are necessary or desirable to satisfy anticipated demand by the users of those airports.
I make no claim to originality in declaring this intention. In fact, it echoes a suggestion made to the

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House by my noble friend Lord Kinnoull during the Committee stage in the House, when he quoted a letter which Sir Peter Masefield had written to The Times on 15th April, advocating such an objective.
We may not always be original but at least we listen to your Lordships. I hope that the combination of these two additional measures meet the concerns voiced at Report stage. I thank your Lordships for the constructive suggestions in this matter and commend this amendment to your Lordships' House.
Lord Underhill: My Lords, this appears to us to be a reasonable amendment. I noted that the noble Earl referred to the BAA memorandum; but from my reading the provision would apply to all airports. The CAA can take action following a request from the Secretary of State on all airports, not just those under the BAA. So far as I understand the amendment, the CAA will be limited to the furnishing of information, the provision of assistance, and the provision of advice. It has no power itself to carry out any of the additional facilities that might be required. We also note that the CAA has the obligation to consult the airport operator before taking any steps. That seems to us to be very reasonable.
However, can I put this point to the noble Earl? The CAA are given a very wide discretion by this clause. The cost of the action taken by the CAA will be recoverable from airport operators or any third party developer. That I think is made clear in the amendment. It appears to us that the CAA should either be required to make charges by way of regulations or if it seeks to recover its costs without making a scheme or regulations, it should either agree with the airport operator the sum to be paid to it or, in default of agreement, the matter should be determined by the Secretary of State.
It would be very helpful if the Minister could give some assurance that the CAA would not be entitled to recover from the airports any costs which it incurs in attending and being represented at public inquiries into new airport developments. Practically all new airport developments would have to be the subject of planning inquiries. In all major airport inquiries in the last 10 years the CAA has attended to give evidence as an independent expert. If it were the case that its costs and expenses were being paid by one of the main parties to the inquiry, it might well undermine public confidence in the independence of the CAA and thereby the credibility of its evidence.
Therefore, it would be helpful if the Minister would confirm that this amendment applies, first, to all airports and not just to BAA airports and, secondly, if he could clarify the point regarding planning costs which the CAA itself might incur in attending inquiries.
The Earl of Dundee: My Lords, I am very grateful to my noble friend the Minister for what he has said and for the skilful solution that he has provided to what has been a difficult problem. This problem has been how to safeguard the timely provision of airports' capacity in a way which at the same time would not be counter-productive. On the one hand, there was the concern that the various measures and incentives contained in
94
the Bill until today did not go as far as they should and ought to go further. Airport owners will always want to promote the national interest if they can, but under the Bill their first responsibility is to their shareholders, and what is the best policy for the first consideration might not always be so for the other.
It can easily be envisaged that in the event, for example, of a world recession airport owners might well be discouraged by high interest rates from a long lead investment and in the short term, whether or not there is a recession, it is often more profitable not to expand and develop, since new capital does not have to be found as a result. Certainly in the previous draft, as also in the present one, as my noble friend reminded us just now, the provision of capacity is encouraged through economic incentives to the owner, through the economic and regulatory powers of the CAA, and through the planning process.
Yet these safeguards are neither sufficient in themselves nor in combination to protect the proper development of British aviation at all times. While it might always be alleged that commercial interests would somehow never actually conflict with national interest at any time, under the previous draft the Government would have been powerless to intervene if in fact the two had ever conflicted. Hence the case for going further and for introducing some amendment accordingly. On the other hand, how do you succeed in going any further with this type of matter without producing some counter-productive effect?
There are obvious difficulties arising from reserve powers when given to the Secretary of State or from the imposition of statutory duties on the airport owner. In either case the wrong balance can easily be struck. This might then cause the commercial value of an airport company to suffer and equally it might lead to an undesirable level of interference with normal aviation decisions.
However, my noble friend's amendment achieves the right balance and in a far better way than the related amendments which I tabled at previous stages of your Lordships' Committee. In the first place, under the amendment, the Secretary of State will relate directly to the Civil Aviation Authority and thus not directly to the airport owner. Secondly, and deriving from Section 16(2) of the Civil Aviation Act 1982, the CAA has an existing power strengthened and thus does not need to have a whole new power invented. As a result, the effect of the amendment is that the provision of capacity can now be looked after in the last resort without thwarting or frustrating commercial interests and routine decisions in the normal course of events.
It is also very useful to have put into the memorandum of association of the successor company of the BAA the objective to which my noble friend referred of providing necessary capacity and facilities. No doubt this objective may not be legally binding, yet it corresponds to and complements my noble friend's amendment concerning the CAA's strengthened powers. Thus, in combination with this amendment, it serves to give clarification and guidance.

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As well as congratulating my noble friend on his skill and good judgment in achieving such an effective solution to this difficult problem, I should also like to thank him for the great courtesy and patience with which, between the various Committee days, he was always prepared to consider a succession of different amendments on this theme, and not least to thank him for his constructive attitude in helping to iron out the imperfections which these previous amendments contained.
8.45 p.m.
Baroness Burton of Coventry: My Lords, what is being proposed in this new clause and what the Minister has just said is of course in response to Amendment No. 23, which was moved on Report by the noble Earls, Lord Dundee and Lord Kinnoull, and myself, and which was supported very strongly by the noble Lord, Lord Boyd-Carpenter, who pointed out most graphically what would happen if adequate accommodation were not provided for the British civil aviation industry after privatisation. The noble Lord was insistent that adequate airport capacity must be provided.
Since the Government tabled this amendment I have had another look at Section 16(2) of the Civil Aviation Act 1982 and I have listened to what has just been said by the Minister and by the noble Earl, Lord Dundee. However, I am still not clear in my own mind on the major point that I raised at the Report stage, and I hope that the noble Earl, Lord Caithness, can give a me a clear answer tonight. On the matter of capacity at airports after privatisation, do the Government accept the advice of the Civil Aviation Authority in its paper CAP 522? The chairman of the authority, Sir John Dent, emphasised very strongly indeed that there was a need to provide additional runway capacity before the end of the century. As it takes approximately 10 years to bring a new runway into service, the House would like to know what action the Government propose to take.
I should like to ask the Minister whether he has noted the warning which has been given by the Association of British Travel Agents that the travel industry will be plunged into chaos and disruption unless Gatwick gets a second runway. At col. 184 of the Official Report of 10th June, the noble Lord, Lord Boyd-Carpenter, said:
"the Civil Aviation Authority knows much more about civil aviation than the Department of Transport ever has or ever will".
I would suggest that the Association of British Travel Agents is in the same category as regards the charter industry.
As both organisations stress the need for additional runway capacity, what do the Government propose to do? Is any action at all indicated in the new clause? As I understand the present discussion and proposals now before the House, the Government suggest that the Civil Aviation Authority be given a fresh duty to strengthen its role. I too believe in the CAA and would welcome any additional strengthening, but what I want to know and what the civil aviation industry wants to know is: does this additional strengthening mean that additional weight—and I would ask the Minister to note words "additional weight"—will be
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given to the views of the CAA on runways, or do the Government not include runways in airport capacity?
The Earl of Kinnoull: My Lords, I should like to add my congratulations to my noble friend and to express gratitude for the manner in which both my noble friend, his honourable friend, and indeed his department have brought forward a very comprehensive amendment to try to meet the arguments that have been advanced during the passage of the Bill. I believe that much of this amendment meets the anxieties that have been expressed by the airlines on this question of capacity and I wish this new clause well, in the hope—because undoubtedly the problems of capacity will remain with us and rear their heads in the future—that this new clause will add something in the way of assistance to civil air transport.
Lord Boyd-Carpenter: My Lords, I too should like to thank my noble friend Lord Caithness, first, for the enormous amount of trouble that I know he has personally taken over this matter between the various stages of the Bill and then for the new clause and the announcement about the inclusion in the articles of association of the BAA. All this constitutes a substantial improvement in the Bill. Your Lordships' House and the civil aviation industry owe this largely to the determined action of my noble friends Lord Kinnoull and Lord Dundee, who have pursued the matter with great vigour and also great parliamentary skill through various stages of the Bill. All this undoubtedly amounts to an improvement in the position as compared with the Bill as it arrived.
There is one small point of fact with which perhaps my noble friend would deal when he replies. As I understand it, his announcement about the inclusion of a new article in the memorandum of association applies only to the BAA company and. not to the others, whereas the general powers given to the Secretary of State and the CAA apply to all the aerodrome owners.
Having said gratefully that this is a considerable improvement, I cannot pretend that it goes the whole way to meet the apprehensions that I share with the noble Baroness, Lady Burton of Coventry, about the fairly near future provision of runway capacity in this country. The noble Baroness referred to the recent report by the Civil Aviation Authority clearly stating that further runway capacity would be required in the London area before the end of the century. As the noble Baroness said, if that is really to be achieved, action will have to start quite soon.
I do not wholly share the confidence of my noble friend on the Front Bench that commercial considerations will see to it that that capacity is provided. There can be a volume of business which, while fully and profitably occupying the airport capacity in the London area, does not allow room for expansion. Any of your Lordships who have had experience of seeking to extend airport capacity, and in particular runway capacity, know very well that great determination, not to say obstinacy, is required to bring about such an expansion.
I have the utmost confidence in Sir Norman Payne and the British Airports Authority as it stands, and I hope and believe that they will have this in mind. They

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will certainly need support from the Government because of the rather parochial reaction of public opinion in this country to any proposal to increase airports, and in particular runway, capacity. The great British public wants adequate airport capacity reasonably accessible to it so that it can use it on business or to go on holiday—but not near its home. In a small country such as this to achieve a place where this can be provided raises considerable difficulties. Those difficulties demand great determination on the part of those seeking to build and construct them.
Therefore, while it is a good thing to have brought in the Civil Aviation Authority which, as the noble Baroness said, is the expert body on our civil aviation problems, and while it is valuable to have added the Article of Association, I think my noble friend will correct this only in respect of the BAA. These are advances, but I hope that my noble friend the Minister is not going to feel that he has done all that needs to be done.
Either he or his right honourable friend, or his right honourable friend's successors, will before long have to face the problem of additional runway capacity, or see the pre-eminent position of the London airports in international traffic gradually passing to our European rivals with enormous economic loss to this country.
One's confidence in the determination of Ministers to achieve this is not, I must confess, strengthened by the action of the former Secretary of State for Transport in overriding the Civil Aviation Authority's grant of that vitally important helicopter licence between Heathrow and Gatwick. That seems to me a somewhat ominous decision, although one is happy to reflect that that particular right honourable gentleman is no longer responsible for civil aviation.
Lord Tordoff: My Lords, would the noble Lord forgive me for a second? Would he bear in mind that the same right honourable gentleman is now in charge of the environment, which might make the situation even worse.
Lord Boyd-Carpenter: My Lords, that is an arguable view. For once I find myself not wholly out of sympathy with the noble Lord, Lord Tordoff. But at least he is not responsible directly, although he was responsible for one of the most foolish decisions that a Minister has taken for a long time. However, this is not a moment to dwell on that, it is a moment to thank particularly my noble friend Lord Caithness for the hard work that he has done. I believe, from having been fairly close to what has happened, that it would not have happened if it had not been for his personal and individual efforts in the department and with his colleagues. For that British civil aviation, as well as your Lordships' House, should be sincerely grateful.
Lord Mountevans: My Lords, I know that the Minister will not be surprised if I do not entirely come down with all those who so enthusiastically support this amendment. I am not persuaded that the thrust of the amendment, and indeed the mechanics mentioned by the noble Lord, Lord Underhill, are relevant. I almost feel that they are irrelevant. In fact, I feel that they are an unnecessary intrusion into the day-to-day operation of our airports, and in terms of finance an
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unnecessary burden on those who I think most of us accept are competent to run airports.
The amendment touches on and treats new capacity. I wonder whether the Minister might agree that new capacity is really a matter of market demand rather than a matter of expressions made by the CAA in response to either airports or those other people mentioned in the amendment. Your Lordships will not be surprised that I am not happy with the CAA being empowered by this amendment to encourage the provision of further facilities, or to implement recommendations concerning new capacity.
The Bill at the moment takes us roughly where we should be in terms of capacity, and I am reluctant to see third parties brought in. But my main concern is one raised by the noble Lord, Lord Underhill. The elements concerning the CAA's ability to recover from airports or others such charges as it incurs in respect of attending, or being represented at, public inquiries.
During the past 10 years—in fact possibly longer—the CAA has attended public inquiries in respect of airports but it has always done so as an independent adviser, respected not only for its competence but for the very independence that I have just mentioned. I therefore wonder whether it is right that the CAA should be put in a position by this amendment of having what seems to be an open-ended ability to recover costs from airport operators or third parties. These very provisions, as the noble Lord, Lord Underhill, said, could be detrimental to the respect in which the CAA is held in terms of its independence and impartiality. These very provisions could contribute to the destruction, the lack of credibility, of such evidence as the Civil Aviation Authority might give.
I should therefore like to ask the Minister for an assurance that the CAA will continue to be an independent body in this particular context, and that it may continue to attend inquiries as an independent body, perhaps financing its presence from its own funds. If this is disbarred, may I ask that charges should be agreed in advance with the third parties, because I believe that this, too, would serve to take away the open-ended commitment and would serve to preserve the authority's reputation for impartiality? If that proved impossible, may I ask the Minister for an assurance that the powers to define charges by way of regulation would be the first line in this context? If not, I feel that we may shortly find ourselves with an Airports (Amendment) Bill.
9 p.m.
The Earl of Caithness: My Lords, I am grateful for the general welcome to the amendment given by most noble Lords, but I understand some of the concerns expressed by the noble Lord, Lord Mountevans.
I must apologise if I did not make myself clear when I moved the amendment. Of course my noble friend Lord Boyd-Carpenter and the noble Lord, Lord Underhill, are absolutely right that the new clause, which is the CAA's duty, extends to all airports. The additional part that I inserted as a buttress applies only to the BAA. I am sorry if I did not make myself clear. I hope I have solved that problem now.

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The noble Baroness, Lady Burton of Coventry, asked me about CAP 522. The airports policy White Paper, as the noble Baroness and the House will know, catered for demand in the London area until 1995, and we believe that still to be the case. As to the injunctions of the ex-chairman of the Civil Aviation Authority in his preface to CAP 522, we naturally keep a careful watch on developments. We do not necessarily agree with everything Sir John Dent states. But we take account of them and bear them in mind, as I am sure will the new chairman of the CAA, particularly in connection with the duty of his authority under Section 16(2) of the Civil Aviation Act 1982. I can tell the noble Baroness that we have not yet come to a decision on CAP 522. We are still discussing it, and I draw her attention to a Starred Question which my noble friend Lord Boyd-Carpenter has down I believe from memory for 2nd July on this matter.
I turn now to the point raised by the noble Lords, Lord Underhill and Lord Mountevans, referring to the CAA and the recovery of its costs. The CAA has a choice in this matter. It can either recover its costs by scheme or regulations under Section 11 of the Civil Aviation Act 1982 or directly where the test is one of reasonableness. The latter leaves the power of adjudication to the courts. They will decide what is reasonable rather than the Secretary of State, and I am sure the House will agree that this is the right way forward. With regard to the costs of the CAA in giving expert evidence to a planning inquiry, these costs will not be recoverable under this clause where the CAA is giving that evidence in its normal capacity as an expert witness.
I disagree with the noble Lord, Lord Mountevans. We have agreed on many things in relation to this Bill, but I disagree with him that the CAA's reputation will be diminished by this new clause. I do not believe so at all. I believe it can act as an expert witness with its normal high standards, and with this new clause it could only be enhanced. It would only be if the CAA were specifically taking a step pursuant to its duty under this clause that the possibility of such costs could be recoverable and that that question would arise. I can only repeat that I am grateful for the general welcome. I hope I have satisfied the fears of the noble Lord, Lord Mountevans. I commend this amendment to the House.
On Question, amendment agreed to.
Clause 74 [Supplementary provisions relating to transfer schemes]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 9:
Page 73, line 17, at end insert—
("( ) For the purposes of this Act, and of Schedule 4 as it applies by virtue of subsection (3), the granting of a lease of any property by a scheme under section 1 or 15 to the transferee under the scheme shall be regarded as a transfer of that property to him by the scheme.")
The noble Earl said: My Lords, as your Lordships know, I had some difficulty in understanding the amendment of my noble friend Lord Dudley, Amendment No. 23, at the Committee stage of the Bill. After considering the Official Report carefully,
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however, I came to the conclusion that his point probably was that where a local authority owns the freehold of an airport it should, by means of a transfer scheme, be able to create a leasehold interest in favour of the transferee company and retain the freehold.
Our policy on leasehold interests to be held by public airport companies is that only in the most exceptional circumstances would we consider it appropriate for the freehold interest not to be transferred. But if that exceptional case can be made out—and here again I come to the point that we shall consider such matters, which I hope the noble Lord, Lord Tordoff, will be pleased to hear—then we would wish there to be the flexibility to admit of the creation of a new leasehold interest.
To put the matter beyond doubt we propose the amendment in my name. The amendment also extends to Clause 1 as the BAA might also need the same flexibility. I am therefore grateful to my noble friend for drawing this point to the attention of the House. I hope the House will be able to agree with the proposed amendment. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, the Minister said that he studied the amendment of the noble Earl, Lord Dudley, very carefully before he understood it, and he only hopes that he has understood it now. He will appreciate that I had to take advice on the amendment that was put down. I understand on the advice that I was given that the amendment appears to be innocuous, though as the Minister said this has made it a little firmer. The purpose is to ensure that all references in the Bill to transfers of property are to be deemed to include transfers of leasehold interests. I think the amendment can be welcomed because it at least contemplates leases of airport land being part of a transfer scheme.
I think the serious point of the amendment, which is welcome, is that the issue of leasehold transfer is but one example of the need for the Government to recognise the importance of flexibility when considering the appropriateness of terms contained in proposed transfer schemes for regional airports of varying size, asset base and profitability; The Minister has said that, as long as he is there, there will be a wide looking at things and not a narrow interpretation. Therefore, difficult though the amendment is to understand, with his explanation and with the advice I have been given I am happy to welcome the amendment.
On Question, amendment agreed to.
Clause 84 [Short title, commencement and extent]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 10;
Page 79, line 38, at end insert—
("section (Duty of CAA with respect to implication of recommendations concerning airport capacity):")
The noble Earl said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Application of Part IV to associated companies of airport operators.]:
The Earl of Caithness moved Amendment No. 11:
Page 84, line 44, leave out from ("construed") to end of line 45 and insert ("as references to those provisions as modified by paragraph 2 and paragraph 4(a) above.").
On Question, amendment agreed to.
The Earl of Caithness: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Caithness.)
Lord Underhill: My Lords, perhaps I may briefly make a few comments. First of all, we have had useful debates and discussions on the Bill, but, frankly, it is a Bill which in our view is completely unnecessary. As we said at Second Reading, we regard the BAA as an efficient organisation. It has carried out its duties—and that has been stated even tonight—and there is no indication at all that the local authorities, whatever might be their political complexions, have fallen down on the job at their airports. There has been praise from the Government side for developments that have taken place in various aspects of local authority airports.
I would remind your Lordships that we are the first industrialised nation to have privatised airports as a general policy. I hope that that will be kept in mind. We are pleased that, despite the general opposition to the Bill, the BAA is to be kept as one unit and that there is to be a separate Scottish group. I should like to thank my colleagues, Lord Carmichael of Kelvingrove and Lord Williams of Elvel, who is not here tonight but who has been of great help to us in understanding some of the financial and legal complexities of aspects of the Bill.
This is not the time generally to analyse the Bill. I am pleased to welcome the assurances given about Stansted, the loans and charging, and that there will be no subsidisation, but I regret that that is not in the Bill. Similarly, we are very pleased with the Government's assurances on individual shareholdings, foreign shareholdings and the special share that the Government are going to have. But again we are sorry that that is not on the face of the Bill. The Government have accepted a number of improvements to the Bill, but there are still a number of defects to which I could draw attention, though I do not think I should do so at this hour since we want to return to the social security legislation.
Before I close from these Benches I should like to thank the noble Earl, Lord Caithness, and his colleague the noble Viscount, Lord Davidson, for their courteous attention throughout the passage of the Bill, and, as I think the noble Lord, Lord Boyd-Carpenter, mentioned, the assiduous way in which they followed up certain problems and correspondence. I think that that is appreciated by everyone. We are sorry that the Bill exists, but we appreciate the effort they have put in and the courteous way they have treated the House. We wish that we did not have the Bill. There are still great improvements to be made on the local government side in Part II of the Bill and I hope that the seminar to be held on Monday will result in the
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Government making changes in their notes of guidance.
Baroness Burton of Coventry: My Lords, I regret the passing of this Bill and it would be hypocritical to say otherwise. But perhaps first of all I may make a pleasant remark, and that is to thank the noble Earl, Lord Caithness, and the noble Viscount. Lord Davidson, for the way that they have conducted this Bill and for the very pleasant attitude that has prevailed throughout.
On Second Reading in another place the Alliance tabled an unsuccessful amendment to decline to give a Second Reading to the Bill. We on these Benches are still of that opinion. I myself remain fundamentally opposed. I remain fundamentally opposed because I believe that the Government's plan to privatise the British Airports Authority has nothing whatever to do with any pressing need to revise the structure and methods of managing the authority or to correct any faults in the airports system. It is primarily a political objective. As I said on Second Reading, when I asked the BAA whom they thought would benefit from this privatisation, the answer straight away, without any thought, was, "Oh, the Government and the shareholders". It was I who had to remind them of the customers and the airlines.
Right through to the end of the discussions on the Bill tonight these fundamental objections have remained and, indeed, they have been enhanced by what the Minister said to me earlier tonight concerning the Civil Aviation Authority. I think that this is a bad Bill. The local authorities do not like it and I believe that our air charter industry is in grave danger because of it. The House knows my views on Stansted. and I continue to believe that the long-term subsidisation essential for the scale of development at Stansted demanded by the Government now—and I hope that the Minister will note the word "now"—will be at the financial expense of regional development.
The British Airports Authority, assisted by the Government, has refused the second runway which is obviously needed at Gatwick and has thereby, in my view, and in that of many other qualified observers, denied Gatwick its full potential development and thus gravely hindered the development of the civil aviation industry in this country. I had already noted the Question by the noble Lord, Lord Boyd-Carpenter, for July, and I hope he will get a satisfactory Answer to it.
I have made a grave accusation, but in view of what the Minister has said to me in reply to my earlier remarks tonight, the accusation is fully justified. I end as I began: I do regret the passing of this Bill.
9.15 p.m.
Lord Boyd-Carpenter: My Lords, I disagree always unhappily with the noble Baroness, with whom I agree on so many other things. I disagree rather more happily with the noble Lord, Lord Underhill, but I disagree with both of them on the question of the quality of this Bill. I think it is a good Bill. To say that is not to cast any reflection whatever on the British Airports Authority, particularly under its present dynamic chairman, or indeed on many of the local

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authority airports, some of which (notably Manchester) have been very well run and very progressively developed. But the fact that an organisation is good does not mean that it cannot be made better and I believe that the process of privatisation will have that effect.
That is not now just an assertion of faith: it is evidenced by what has happened and is happening in a number of other industries which under the Government's policy have been privatised in recent years. They are going from strength to strength; they are better, more enterprising and more profitable. I hope and believe that the same salutary and healthy process will apply in this extremely important national activity.
The only other thing I want to say is what pleasure it gives me to see Clause 69 of the Bill, by means of which at least something is salvaged in respect of Sunday trading. No doubt the débacle with regard to the rest of Sunday trading in this country will tend to make the airports even more profitable, because the demand from the public for shopping there will grow. I understand the immunity from the Sunday restrictions applies not only to shops through the Customs and immigration barrier but also to those in the open. If those shops get even more business, that will enable the airports authority to raise their rents and will make the airports even more pofitable. So, whereas the unfortunate right reverend Prelates are going to have to shut the bookshops in their cathedrals and lose the yield from them, the airports, on the other hand—the other form of "sky pilots" if I may so call them—will gain from this. I welcome the latter although I deplore the former.
I should like also to add my tribute to the noble Earl who has been in charge of the Bill—in the intervals, as I understand it, between jumping into the Channel with a parachute and other vigorous activities of that sort. He really has conducted this Bill in a model way and has preserved, as the noble Lord, Lord Underhill, so rightly said a friendly and pleasant atmosphere; yet very largely he has managed to get his way, and that is, after all, the first duty of a Minister. I should like to say, if he will allow me to, that his performance on this Bill augurs extremely well for the conduct by him of even more difficult legislation in the future.
Lord Mountevans: My Lords, I welcomed this Bill on Second Reading and tonight I should like to say farewell to it with affection. Because those who are socially secure may be feeling rather insecure at the moment, I shall be brief: without the element of health they will be as sick as a parrot.
There have been disagreements on some of the amendments and on some of the points of detail on this Bill, but I think those who have the airports industry and its future at heart will be broadly satisfied with the Bill as it leaves us tonight.
I, too, should like to join the noble Lord, Lord Boyd-Carpenter, and indeed almost everybody else, in applauding the noble Earl the Minister and the noble Viscount, Lord Davidson, for their assiduity and their unfailing courtesy. Not only that, but I should like to extend special thanks to their officials, who gave me
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great assistance with the "shops" amendment which the noble Lord, Lord Boyd-Carpenter, has just mentioned. I think I should like only to wish this Bill well.
Lord Tordoff: My Lords, perhaps I may say two things. First, may I offer public thanks to my noble friend Lord Lloyd of Kilgerran for standing in for me so ably during the Report stage when I was on Select Committee business? I should also like to say that I am pleased that the Third Reading has come during this week and not during last week, when I was also away, although not on business.
May I join in the thanks to the noble Earl, and specifically take this opportunity of thanking him for his assistance on the amendment that was passed at Report stage in relation to the payment for activities at the airports forced upon the airports authority by the Secretary of State—what has been referred to as the "VIP lounge amendment". I am most grateful to him and to his officials for the assistance that they gave on that matter.
I said on, I think, Second Reading that when the noble Earl found himself caught in the crossfire between my noble friend Lady Burton of Coventry and the noble Lord, Lord Boyd-Carpenter, he should run for cover. He has not run for cover, although he has been in the crossfire and I greatly admire him for the way in which he has stood up to the crossfire in the House. I am sure that he has the respect of noble Lords on all sides for the way he had handled this Bill.
It is not a happy Bill. Although there have been moments on this Bill when I found myself in agreement with the noble Lord, Lord Boyd-Carpenter, rare though that may be, I cannot go along with him in his support for this Bill. It is motivated by trying to raise funds for other government purposes, and for very little else, although I have no doubt that the British Airports Authority are pleased to, as they say, have the Government off their back. That may be a worthy objective, but it is not necessarily a good national objective.
In response to what the noble Lord, Lord Boyd-Carpenter, said in relation to other industries or activities that have been privatised, I can only say that, yes, of course, it is very easy to run a profitable enterprise if you are running a monopoly, and if your shares have been put on the market at a price which is lower than their true value. I only hope that it does not happen so far as the British Airports Authority is concerned.
It is interesting that the majority of our deliberations have related to local authority airports, and the dissatisfaction which we have with the detail of the Bill still rests in that area. I hope that the seminar which will take place next week will give some assurance to local authorities that the flexibility, to which the noble Earl the Minister has referred this evening, will be turned into practicalities. With that, and supporting what my noble friend Lady. Burton of Coventry has said about the regret that we have at this Bill going on to the statute book, I nevertheless thank the noble Earl and the noble Viscount for their courtesy and help and wave the Bill farewell.
The Earl of Caithness: My Lords, over the last few weeks, we have enjoyed some 30 hours of debate on the Airports Bill—debate which, as is customary in your Lordships' House, has been courteous and incisive and which has amply demonstrated your Lordships' knowledge of the aviation world and recognition of its importance.
If I may just recap on some of the things we have discussed, Part I, which provides the powers to enable privatisation of the BAA, was discussed extensively. Two particular points of concern emerged, the first of which was that there should be some statutory restriction on undesirable takeovers of the BAA. The Government brought forward proposals to meet this concern in relation not only to the BAA but also to local authority airports.
The second main point which arose was in relation to the question of cross-subsidy of Stansted and whether the airport's development will have a detrimental effect on the development of regional airports. The Government are committed to the development of regional airports, and to ensure that no airport can engage in predatory behaviour which will harm that development have provided powers in the Bill which will enable the CAA to stamp out predatory and harmful pricing policies wherever and whenever they occur. In exercising those powers, the CAA will disregard any commercial advantage that an airport such as Stansted receives through being a part of a larger group. I do not think that such a strong safeguard against predation exists anywhere else.
Part II of the Bill, which will put local authority airports in the commercial world in which they belong, has perhaps taken up more hours of debate than any other. Here, too, several improvements have been made. Apart from the clause which allowed for restrictions on share ownership, which I have already mentioned, there was the amendment of my noble friend Lord Dundee, which added a provision relating to the future arm's length relationship between local authorities and their airports by requiring separate accounts to be kept for service contracts between them. I am most grateful to him for that. Not least among the improvements were the Government amendments agreed to by your Lordships at Report stage.
At Committee stage, my noble friend Lord Dudley raised an important point, and I was pleased that the House was able to accept an amendment this afternoon to meet that point. It was as a result of the close attention paid by noble Lords—the noble Lords, Lord Underhill and Lord Tordoff, among others—to the details of Clause 14 schemes for transferring property and liabilities from local authorities to public airport companies, and in particular the arrangements for past airport debt, that we decided to introduce a new special GRE provision to cover any such debt left with local authorities. This will assist us in establishing viable airport companies, while at the same time taking account of the financial implications for transferor authorities of not transferring debt to the companies. This solution has been generally welcomed.
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I was equally pleased to meet a particular point on Part III of the Bill, relating to the CAA's duty to have regard to the sound development of civil aviation throughout the United Kingdom. I trust your Lordships will agree that the Government have reacted positively to the concerns expressed by accepting the amendment of the noble Lord, Lord Carmichael of Kelvingrove.
During our discussion on Part III of the Bill the Government were accused of having too little regard to the environmental implications of their airports policy. I must repeat the assurances I gave then that this is not so, and that the Secretary of State's powers are sufficient for him to ensure that the environmental issues are taken fully and properly into account whenever necessary. As proof of our concern for environmental matters, I offer the Government amendment accepted by your Lordships on Report, which provided for the monitoring of track-keeping by aircraft. This provision will make a significant contribution to the Government's constant efforts to reduce aircraft noise disturbance around airports.
Part IV of the Bill was improved by your Lordships' acceptance of the Government amendments, and this strengthened the Bill's scheme of economic regulation of airports. We can be assured that the CAA's powers in Part IV of the Bill will enable it to guard against and remedy any possible abuse of an airport operator's monopoly, thus providing strong and effective safeguards for airlines and their passengers, and for other airports.
I cannot end without mentioning some other improvements made to the Bill. The most recent among these of course has been the new clause that was inserted into the Bill this evening with your Lordships' approval, giving the Civil Aviation Authority a fresh duty with regard to the provisions of airports capacity. My noble friend Lord Boyd-Carpenter leant powerful and persuasive support to the campaign waged by my noble friends Lord Kinnoull and Lord Dundee on this issue. My noble friend Lord Dundee also successfully moved a new clause to enable the Crichel Down rules to be applied to sales of land acquired under compulsory purchase powers, while the noble Lord, Lord Mountevans, had similar success with the amendment to exempt airport shops from Sunday trading restrictions.
Noble Lords on the Benches opposite, and indeed some of my noble friends, also scored a notable success with their amendment enabling compensation to be paid as a result of directions given under Clause 67. I think what I have just said proves that throughout the passage of this Bill the Government have been willing to accept good, sensible and necessary amendments wherever possible, in order to improve the Bill.
In conclusion, I should like to thank all your Lordships—in particular noble Lords opposite—for your patience and help in steering this Bill through the House. I should like to express my thanks for the patience of those who are about to take on social security for waiting so that we could give this matter the proper airing it deserves. It would be remiss of me not to give a special mention to my noble friend Lord

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Boyd-Carpenter who has assisted the House considerably with his knowledge and personal experience of aviation matters. We are all grateful to him. I should also like to thank my noble friend Lord Davidson for his continued assistance and support.
I am sure your Lordships will agree that this Bill is
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taking off from this House in a better state than when it landed here several weeks ago. Its improvements are a credit to all those who have contributed so constructively to its passage. I commend the Bill to the House.
On Question, Bill passed, and returned to the Commons with amendments.

Social Security Bill
9.30 p.m.
House again in Committee.
Clause 21 [Calculation]:
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 71:
Page 27, line 34, at end insert ("and shall include an amount which shall be the whole of any mortgage interest for which a member of the family is liable on the home of the family.").
The noble Lord said: Before we broke for dinner the noble Lord, Lord Houghton of Sowerby, said that he felt we should be extremely cautious about Amendment No. 71, which I am now moving. He said that income support should be the foundation of social security. But as my noble friend Lady Seear pointed out, we are dealing not with some ideal world with a properly unified tax benefit system but with the Bill now before us and the hardships that will arise under it. Those are the matters to which we have to address ourselves.
The amendment seeks to ensure that the payment of mortgage interest continues to be made by the DHSS for home owners during the first six months that they claim benefit, after which period an unemployed person is entitled to full supplementary benefit and mortgage relief; which is the present position. Therefore, the amendment does not seek to do anything which is not actually being done.
Widespread alarm has been caused by the Government's proposals to cut by 50 per cent. the payment of mortgage interest during these crucial six months. These proposals, which were sent to the Social Security Advisory Committee back in May, would affect some 90,000 people. Those most affected are precisely the people the Government encouraged to buy council houses under the right-to-buy policy. Quite a number of people who recently availed themselves of the right to buy their own homes have now found themselves out of work. If they cannot keep up their payments over the six-month period, they will be made homeless and will have to be housed in rented accommodation at far greater public expense. It seems to be quite unfair that new home owners should not have the equivalent support which is given to tenants with their rents. It is particularly unfair that even a relatively short period of unemployment might lead to the loss of the home.
It is unlikely that the building societies will be able to renegotiate mortgage payments for people in that situation, as the Minister for Social Security, Mr. Newton, suggested in another place, without the present guarantee. The reason is that the number of properties repossessed for non-payment trebled between 1982 and 1985 and doubled as a percentage of the total number of building society mortgages. I do not refer to bank mortgages because they are smaller in number, but there have been adverse experiences in that area, too. I have the figures. Out of a total number of mortgages in 1982 of 5,664,000, the number of that area, too. I have the figures. Out of a total number of mortgages in 1982 of 5,664,000, the number of properties repossessed for non-payment was 5,950. However, in 1985 out of 6,636,000 mortgages there were 16,590, repossessions. Likewise, the loans in
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arrears for six to 12 months have more than doubled and loans in arrears over 12 months have trebled. Therefore, on those figures it would not appear that the building societies are likely to be able to take on that responsibility themselves.
There is also a geographical factor. The number of loans in arrears and property repossessions are greater in the North than in the South-East. The building societies have been more ready to lend to those with marginal job and income security in the knowledge that mortgage interest relief was available as a last resort. That is important in regions such as the North of England where the type and range of jobs is often determined by cyclical factors. Moreover, the building societies argue that they have been encouraged to increase lending against the Government's guarantee in order to boost the Government's home ownership policy.
Frankly, it is not much comfort, as the Minister claimed in another place, that the proposal was set out in the Government's Green Paper, paragraph 2.92, and repeated in the White Paper, paragraph 3.41. These references simply do not mean that this is a good proposal.
The cost of the current relief for home owners in this unfortunate situation is in the region of £60 million; the saving aimed at by the Government in halving that relief is in the region of £30 million. These are indeed quite large sums of money, but when they are set against the £4 billion of mortgage income tax relief, a good deal of which goes to people on high and even on very high incomes, it would seem to be quite immoral to remove 50 per cent. of the support in order to make a current saving of £30 million pounds.
I very much hope that the noble Baroness will tell me that the Government have thought again and have no such intention, in which case not a small number of new home owners, who have been encouraged to buy their homes by the Government, will breathe again. If the Government cannot give me that assurance, I think it becomes particularly relevant to know the result of the consultations with the building societies and other interested bodies that were referred to in the Green Paper, and also to know the views of the Social Security Advisory Committee, to which, as I have already said, these proposals were put out in the middle of May. I do not think it is necessary for me to say anything more at this stage. I shall be very interested to hear what the noble Baroness will say, and I beg leave to move the amendment.
Lord Houghton of Sowerby: I should like to say a few words on this amendment. In fact, I almost threatened the Committee with doing so, but I shall not get as worked up over this amendment as I did over the last one. Last time it was the provocation of the right reverend Prelate the Bishop of Durham that started me off, and I apologise to him if I was too harsh.
Last Friday this Chamber was full of building society men. They came to Parliament in order to obtain a new charter for their activities and to emphasise the great benefits that they bring to the community in the form of home ownership and a

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sense of security and so on, which they do. It seems to me that we ought to hear what the building societies have to say on this point. I do not think that we should regard this question as wholly a matter in which state aid should come to the rescue of people who are in debt.
The building societies claim to be an industry. I never used the word "industry" in respect of building societies until they began to use it themselves. I called them "a movement". However, they say they are an industry and so I shall say that building societies are mortgage brokers, who are in business under very favourable conditions and under the protection afforded by the law that is applicable to building societies. As the noble Lord, Lord Kilmarnock, pointed out a few moments ago, those who take out a loan for a mortgage to buy their own house have the benefit of exceedingly generous tax reliefs. There is a debt on the part of the borrower to the lender of the money on security of the house. So in one respect the borrower is in the same relationship to the building society as is a debtor to a creditor.
In those circumstances, I think we should look at the content of that relationship. Since the first step that is taken by a borrower who is in difficulty is, if possible, to go to his building society in order that some payment arrangements may be made, there is the acknowledgement of that relationship right from the outset. Building societies will usually allow the repayments of the capital sum to be deferred on condition that the borrower continues to pay the interest.
That is the normal arrangement when borrowers get into difficulties and want to reduce their outgoings immediately. That postpones the completion of the repayments of the capital and it puts off the day when the house is clear of mortgage. That is a disadvantage, but it does not present any immediate financial problem to the borrower.
However, the payment of interest may do so. We shall have to ignore the fact that the interest is heavily discounted by the amount of tax relief that has been given so long as the borrower is a taxpayer. We have to look at the net outgoings that arise on the mortgage outstanding and see what bearing they have on the financial position of the borrower. The question then is what the state should do in relation to that net obligation that the building societies usually require for some arrangement regarding financial difficulties.
It is not the relationship between a tenant and a landlord; it is the relationship between a person who has borrowed money and an organisation which has lent money. But the risk for the borrower when he is in difficulties is the risk of foreclosure. Unhappily, that may become an increasing problem with which the building societies have to contend.
The building societies, with their enormous resources and the social obligations that they have over the wide field of home ownership—and they are the principal bodies in it—ought to consider their own position. There is a Bill before us which has already had its Second Reading and is to go into its Committee stage one day soon. It seems to me that this is a matter
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which we ought to debate on that Bill and see what the response of the building societies is. After all, they are in close consultation with the Government all the time on that Bill. I am not complaining about that. It is right and proper that they should be. But we want to know a bit more about the building societies' angle on the matter.
The first suggestion that I make is that it would probably be more appropriate if we came back to the subject when we know what the building societies have to say about it. After all, if citizens are in debt to other organisations, the state does not necessarily come in and say that it will help them pay it off. The grocer does not come to social security to be paid off with the threat that he will not supply it any more.
The building societies are in a special position. Even a landlord cannot just push a tenant out. He has to go through the process of obtaining an order for possession. The building societies are in a much stronger position to get possession of a house than a landlord in trying to get possession of his property. That is important.
I believe that I am right in saying that the matter which has given rise to this amendment is being debated in another place this week. I understood that there was to be some debate in another place on the proposal of the Government which has been referred to. That may be another reason. I put it no higher than that. I do not feel that necessarily the interest payable on a mortgage should be wholly a charge on the state in certain circumstances or be insisted upon by the lender. There are all sorts of problems and aspects as between lenders and borrowers. That is not the only field in which people lend money. Hire purchase and other debts are incurred. Other money is borrowed. If one goes to the moneylender one probably does not receive the same consideration. I do not know.
I must not say any more. I must not give any comfort to the Benches opposite, because when I do, they are defeated. That is not good for them. Could we not try and look at this matter from the point of view of the building societies' responsibilities? They after all are the lenders. They are the people to whom the money is owed. I do not think they should remain silent on this problem.
9.45 p.m.
Baroness Trumpington: The noble Lord, Lord Houghton, knows that he is my flavour of the month, whatever happens in the vote. The purpose of Clause 21 is to provide a framework for the calculation of income-related benefits. Regulations will set out the details, including the calculation of the amount of mortgage interest for income support purposes. While that is a matter for secondary legislation, I should make it clear that the Government do not accept that the income support scheme should meet the full amount of the mortgage interest payments which are due.
The Green and White Papers on social security reform reflected our concern at the effect of the guarantee of mortgage interest for all supplementary benefit claimants. The present arrangements under the supplementary benefits scheme for providing help with mortgage interest payments—arrangements

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which the noble Lord's amendment seeks to perpetuate under the income support scheme—mean that there is a 100 per cent. guarantee of immediate state help for people out of work who are buying their homes when others in work on comparable incomes have a much greater burden to carry for themselves.
In our view, that is unfair. We have therefore referred to the Social Security Advisory Committee draft regulations introducing changes in the arrangements for meeting mortgage interest payments. The regulations provide that the amount of mortgage interest payable will be limited to 50 per cent. for the first six months for all people under 60. The advisory committee has invited comments from the public and interested organisations, which will include the building societies, and its report will be submitted to the Secretary of State in due course. Final decisions will then be taken in the light of that report and of all the other considerations which apply.
In reply to the noble Lord, Lord Kilmarnock, we propose to limit to 50 per cent. the amount included in the assessment for mortgage interest for the first six months of the claim. Thus only people coming on to benefit will be affected. We intend to carry forward into the income support scheme the changes in help with mortgage interest which are introduced in the supplementary benefits scheme.
The Committee will have an opportunity for a full discussion of those changes when the regulations come before this place. I therefore ask the mover of the amendment to withdraw it.
Baroness Jeger: There are one or two important questions. If it is the Government's intention that for the first six months there should be payments of mortgage interest from the social fund, then at the end of the six months if a person obtains a job, I presume that that help will cease. After the six months, if that person loses his job will he lose any help?
I understand that the idea is that if someone is unemployed or on social security for six months and then obtains a job, that person's benefit in this connection ceases. That will be very unfair for people who obtain a job for a short time. It will be an incentive for people to stay out of work for over six months so that they will continue to have their mortgage interest paid. If they obtain a job and work for an interim period then they will lose that payment.
I hope that the noble Baroness can help us on this matter. I shall not go into all the general questions about the building societies' attitude to the problems that will arise from this. There will be many more defaults. Already 10 per cent. of homeless families are in that position. They have been turned out because of mortgage payment failures. I believe that the present Government's ideas will only increase the number of families thrown out of their homes because of mortgage default. I do not think that the Government want that to happen. I hope that we look again at this six-months rule and decide that it is not fair when compared with the assistance that the Government give to well-off mortgage payers.
Baroness Trumpington: I always listen with enormous interest to what the noble Baroness, Lady Jeger, says, but I think that in this case she has the
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social fund muddled up with income support. The help will be available from income support, not the social fund. If one is in work, one cannot now get supplementary benefit. Similarly one will not get income support. The noble Baroness, Lady Jeger, raised questions of linking arrangements for people who have two spells of benefit with only a short time in work. I shall consider this along with other matters.
Lord Kilmarnock: I am grateful to those who have spoken in this short debate. The noble Lord, Lord Houghton of Sowerby, has mentioned the Building Societies Bill and that might indeed be the proper vehicle under which some new arrangement can be devised. Perhaps the noble Baroness will tell us whether the Government are considering making any provision in that regard in coming to some new arrangement with the building societies in return for the new privileges which are being granted under that Bill.
The noble Lord also mentioned that tax relief is given when the borrower is a taxpayer and is still in work. That does not help him when he has no income other than unemployment benefit. If citizens are in debt in other areas, as the noble Lord, Lord Houghton, said, the state does not step in. But the roof over one's head is a little different from any other commercial debt, and that is particularly the case when there has been a great government-sponsored campaign in favour of increased home ownership. People who have paid attention to that campaign have, I think, some right to be considered when they suddenly, and perhaps unexpectedly, fall on hard times.
The noble Baroness, Lady Trumpington, said she does not accept that the payment of help should be at the rate of 100 per cent. under the income support scheme. But why have the Government accepted so far that such interest shall be paid after the first six months? What is the difference in principle? That seems to me to be an extraordinary lacuna. It is rather like throwing a lifebelt to someone so far ahead that he is not likely to be able to reach it.
The noble Baroness said that the Social Security Advisory Committee has invited comments from the public and various bodies, including the building societies. Obviously it will be of interest to know what views it receives. I hope that we shall know them very soon. It has also been mentioned that the subject will be tackled in another place next week. Therefore I do not think that we should push our luck any further today. I believe that we should consider what we want to do about this before the next stage of the Bill. I have no doubt that we ought to come back to it, but perhaps we need a little more information, and I think we want to know what representations have been made to the Social Security Advisory Committee.
I thought I heard the noble Baroness say that only new entrants to unemployment would be 0affected. If she did say that, it does not strike me as being particuarly fair. On all those grounds I do not think that this is the moment to press this amendment to a Division. I shall read the debate and try to obtain some more views on this matter. I can almost certainly promise the Minister that we shall be reverting to this matter at the next stage of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 71A not moved.]
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 72:
Page 27, line 34, at end insert—
(" ( ) Regulations shall provide that the prescribed amount shall include amounts for partially sighted people").
The noble Baroness said: I beg to move the amendment standing in my name and the names of the noble Lady, Lady Kinloss, and the noble Lord, Lord Kilmarnock. As many Members of the Committee are aware, for quite a number of years I have been involved with the needs of blind persons as children, as they reach middle age and as they grow old. It is because of that interest in the needs of the blind that I tabled this amendment.
The Royal National Institute for the Blind, the National Federation of the Blind of the UK, and the National League of the Blind are all very concerned and have urged me to make representations on their behalf regarding the partially sighted, and their claims should not be ignored in the Bill. At one time partially-sighted people used to be called "partially blind persons", but the definition has been changed to "partially sighted". However, they are exactly the same people. They are defined as those who are substantially and permanently handicapped by congenitally defective vision or in whose case illness or injury has caused defective vision of a substantial and permanent handicapping character. In other words, many of them have very serious handicaps and very defective vision, almost bordering on being registered blind.
At present the rules for severe disablement allowance recognise partially-sighted people as being among those who are 80 per cent. disabled. They are normally accepted as passing the 80 per cent. test without having to produce any further medical evidence. Thus, part of the social security system as we have it now recognises the disability of partial sight.
I know that partially-sighted claimants would not automatically receive disablement premiums, as is the case in the Bill before us. I understand that some would benefit but that it is not automatic. The proposals for the housing benefit changes in the Bill would affect many partially-sighted people. At present partially-sighted people are able to claim housing benefit and any extra needs in respect of the higher needs allowance. This would no longer be so under the Government's plans in the Bill.
The proposed income support and disablement premium would replace the present supplementary system under which additional requirements are payable for particular needs in addition to the basic benefit. Many partially-sighted claimants currently receive additional requirements in this way. For example, the diet addition, which is worth £3.70 a week, is paid to people with diabetes, and in many persons who have diabetes that is associated with loss of sight. Partially-sighted people would lose such payments without any replacement if they could not get the disablement premium.
It is because of these anomalies regarding the partially sighted that I ask the Minister to be
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considerate, and that they should be included among the blind to enable them to have automatic access to premiums on grounds of disablement. I am aware that the matter was raised in the other place in Committee on 11th March. The Minister replying gave an assurance when he said:
"I do not wish to give an undertaking to include partially-sighted people at present, but I do not rule out giving the matter further consideration."
I hope that the noble Baroness; when she replies, will be able to say that some further consideration has been given. I beg to move.
Baroness Trumpington: May I ask the noble Baroness whether she is moving Amendment No. 72 and speaking to Amendments Nos. 72A, 72B and 72C?
Baroness Fisher of Rednal: I am speaking only to No. 72.
10 p.m.
Lady Kinloss: In supporting this amendment I hope that the Government will consider the plight of the partially sighted with sympathy. The noble Baroness, Lady Fisher, in moving this amendment has covered so many of the points of worry concerning the partially sighted that there is only one matter I should like to mention. It is that partially-sighted claimants would not automatically receive the disablement premium, although some would receive it. For example, claimants who are classified as incapable of work would receive the disablement premium, while those who are unemployed would not. But surely a partially-sighted claimant is clearly disabled in either case, and would have needs which should equally be recognised.
Baroness Trumpington: Forgive me if I return to the noble Baroness for a moment. In the groupings I have, which I think all Front Bench speakers have, they were all grouped together. I hope the noble Baroness will forgive me. I shall now speak only to No. 72.
Lord Ennals: Perhaps it would be helpful if I were to say a few words about Amendment 72B, which is part of the group.
Baroness Trumpington: We have to get it straight, because the noble Baroness, Lady Fisher, may wish to speak separately to the others. As I understood it, the grouping was as I said. Unless the noble Baroness, as the mover, agrees, I do not see that we can suddenly start speaking to No. 72B.
Baroness Fisher of Rednal: It appears that the usual channels have broken down. I did not know anything about it. I spoke to No. 72.
Baroness Trumpington: The usual channels have been repaired, and I am now going to speak to the grouping, if that is agreeable. Before I turn to the specific amendments in this grouping I should like to make some general comments. The structure of income support is one which enables help to be directed towards particular groups by means of premiums. This is a sensible approach. It is not

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different from the current scheme, which also attempts to give additional help in particular ways.
But although the approach is different it is a much more practical structure. This is because we are moving from the current system of additional requirements. Few people I have come across are friends of these particular elements of supplementary benefit. The result is a mass of regulations, often extremely complicated. That results in confusion and uncertainty among claimants about their rights. This simply cannot be right; but if we agree that this is not the correct approach, then I am worried by the kind of amendments we are now discussing.
These amendments seek to reintroduce exactly the kind of complication which has bedevilled the supplementary benefit scheme. Here we are attempting to bring about a system of income support which will benefit claimants considerably, yet we continue to seek to add bits here and there to deal with specific matters. If we carry on down this road we shall undermine the important reform we are seeking to bring about. The difficulties become evident as we turn to the specific amendments.
I must stress a further point: one of our main objectives is closer alignment between the income-related benefits, income support, housing benefit and family credit. That is, people on low incomes should receive help on the same broad basis not set primarily be separate rules or the particular benefit they have claimed. It is inconsistent with this objective, which has been widely welcomed, if we retain for one group of claimants a whole further set of additional payments. Such an approach would immediately rule out any serious prospects of a tax benefit solution which some Members of the Committee advocate. In the present structure that simply implies the re-invention of housing benefit supplement.
We must beware of criticising the present scheme, arguing for change and then resisting any particular proposal which is part of a different and, we believe, more coherent approach. That is simply to argue for never making any change.
Turning to Amendment No. 72, this is a slightly different amendment from most of the others we are discussing in this part of the Bill. Most of these seek to insert into the Bill a provision which the person moving the amendment feels that our proposals are removing from the scheme, but which the noble Baroness thinks should be retained. This amendment seeks to write into the income support scheme a provision which has never existed in the supplementary benefit scheme.
Several features of the present scheme give special recognition to blindness; most notably there is a special weekly addition for blind people. As the noble Baroness (who does a lot of work for the blind) will be aware, special recognition has long been a feature of welfare provision in this country dating back to before the last war. It was institutionalised in the national assistance scheme and carried forward into its successors. This approach is unusual for social security. Generally help is not directed to a particular diagnostic condition but to the effect of a condition on someone; for example, incapacity for work or inability to walk. Provision for blindness is virtually unique. When
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considering our proposals for the reform of social security, we decided that we should not end this particular help—despite the fact its approach is so different. Consequently, blindness is a qualification for the disablement premium or, in the case of a child, the additional family premium.
I am sure that the Committee approve of this. However, I cannot agree to the proposition implicit in this amendment that we extend this approach and include partially-sighted people in the help we have decided to continue to give blind people. As 1 have indicated, this would be new as there is no provision specifically directed at partial-sightedness in the supplementary benefit scheme at present. We must be careful about widening this fairly circumscribed and unique help. We would begin to encounter particular difficulties which always occur when you are drawing lines and directing help at particular conditions rather than the effect of those conditions. Partial-sightedness can cover a wide range of visual handicap. At one extreme it can be similar to blindness, but at the other extreme it may only be extreme short-sightedness. In assessing which groups should receive extra help, it does not make sense to base help on too wide-ranging a condition.
I can mention that we have accepted that severe disablement allowance will bring entitlement to the disablement premium. Partial-sightedness when linked to incapacity for work makes this benefit payable so help can be directed to these people. But I cannot promise to go further than that.
As regards Amendment No. 72B, we had a very lengthy debate on this issue or on very similar matters in relation to Amendment No. 63 when we discussed a community care addition. I think it is evident that there is considerable overlap between the arguments for a community care addition and those for a domestic assistance addition. The debate on the former reflected that. It became clear that the impetus for a community care addition largely arose from concern about possible losers to people who receive the domestic assistance addition. I explained then that the Government were prepared to make two improvements to their proposals, first, to give better transitional protection for existing cases, and, secondly, to seek new arrangements so that help can be given to support new cases of severely disabled people with similar needs.
Members indicated, however, that the scheme should contain a community care addition to concentrate the Government's mind, I recall. The Government will need to look carefully at this and its implications for our immediate proposals for income support and the wider intention I mentioned to look at this matter. As a result, I hope that the noble Baroness—or, rather I think it will be the noble Lord—will be content if I tell him that I shall carefully note his comments when he makes them. When he has made his comments, we shall take them fully into account, and we shall look at the implication of the amendment for the introduction of a community care addition.
I am actually speaking to all three amendments which were grouped together. Again, on 72C, this is another unusual amendment in one respect. Much of

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the criticism that we have been facing has been directed at elements that we are supposed to be taking away from claimants. Many of the amendments that I respond to are attempts to retain elements of the existing scheme. This amendment seeks to introduce a new provision altogether because there is no equivalent in the current scheme for an addition to be paid on account of pregnancy.
I am not opposed to new features simply because they are new but we have to consider very carefully the justification for introducing a new provision, especially when it will mean additional resources having to be found. It is difficult to cost this proposal because one would have to decide the rate of the addition, but our preliminary estimates would put it in the range of £10 million to £50 million, depending upon exactly how it would operate.
However, it is not on cost alone that I am not in favour of the proposal, although obviously cost is important when you think of all the other competing priorities. The Committee will already have heard me announce this afternoon improvements in transitional protection for people receiving the domestic assistance addition. I must oppose Amendment No. 72 and the further amendments when they are moved.
Lord Kilmarnock: Before the noble Baroness decides what to do about her Amendment No. 72, it seems extraordinary to hear the noble Baroness the Minister boasting that the Government have retained the blindness addition under the new arrangements when that remains still stuck at £1.25 a week, where it has been, in my recollection, for a great many years. Had it been increased in line with inflation, it would have been eight or ten times—I cannot remember how many times—that amount. So that does not seem to me to be a very good ground for self-congratulation. Neither, in fact, does it meet the point raised by the noble Baroness, Lady Fisher, because the partially sighted do not get it and it does not act as a passport to the disabled person's premium. Also in previous debates we heard that the disabled person's premium would cause considerable losses for a wide range of people; that is to say, it would if it were not for the amendment of the noble Lord, Lord Henderson. So I do not think that the answer given by the noble Baroness, Lady Trumpington, was a very good one.
I should like to say that in a Bill which has been proclaimed as being a new Beveridge and a total overhaul of the social security system it seems absolutely extraordinary that nothing is being done for the blind. They are being left exactly where they have been for I do not know how many years. There is absolutely no improvement in their condition and it looks as though the arrangements for the partially sighted are likely to fall short of even what is done at present. I do not know what course the noble Baroness wants to take this evening, but I am sure that this is a matter to which we ought to return at a later stage.
10.15 p.m.
Baroness Fisher of Rednal: Perhaps I may thank the noble Lady, Lady Kinloss, and the noble Lord, Lord Kilmarnock, for their support. I was extremely
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disappointed with what the noble Baroness the Minister said, because quite obviously the partially sighted are now recognised for severe disablement allowance under the supplementary benefits scheme. For the noble Baroness to talk as though there are a few things that we do not want to alter is really rather hypocritical because these people are already recognised as having 80 per cent. disability. They have to undergo an examination regarding their shortsightedness. It is not the same as going to an optician and saying, "I cannot see very well at night to read the Standard". It is a very severe test and it is recognised by the Supplementary Benefits Commission. These partially sighted people receive a severe disablement allowance. What the noble Baroness is saying tonight is, "You can forget all about that." I feel sure that she really did not mean that; at least I hope she did not, because otherwise these people will be automatically written off in this new Bill.
I felt rather disappointed with the reply of the noble Baroness. On 1lth March when the Bill was in Standing Committee the Minister was a little more forthcoming. I should like to repeat for the benefit of the noble Baroness, so that she might understand, what he said:
"I do not wish to give an undertaking to include partially sighted people at the present, but I do not rule out giving the matter further consideration".
I did not hear the words "further consideration" from the noble Baroness this evening, and I was extremely disappointed about that. I hope that following my reminder of the assurance that was given by the Minister she will be able to give us a similar reply tonight.
Lord Ennals: Perhaps I may say just a few words in support of my noble friend Lady Fisher. The noble Baroness said that she would take very seriously the arguments I was going to put forward in regard to Amendment No. 72B. I should not like her to spend her time fruitlessly and so I shall write to her and set out the very powerful arguments. I accept her word that she will look at this very carefully. But the argument that Amendment No. 63 removes the need for what is sought here is one that I certainly do not accept.
Baroness Trumpington: I shall await the noble Lord's letter with interest and I shall certainly reply to him as soon as possible. The noble Baroness, Lady Fisher, talked about recognition in regard to the severe disablement allowance, which is different from supplementary benefit. Blindness entitles a person to the new disablement premium. The blindness addition is not being retained. I can only repeat the reply about further consideration as given by my right honourable friend the Secretary of State for Social Services.
Baroness Fisher of Rednal: May I ask the noble Baroness which is that? Is it the one where he said, "I will give the matter further consideration"?
Baroness Trumpington: Yes.
Lord Kilmarnock: May I ask about the blindness addition? I thought the noble Baroness said earlier that

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it was being retained. Is that simply part of the transitional arrangements that she was talking about earlier?
Baroness Trumpington: I said we had accepted that severe disablement allowance will bring entitlement to the disablement premium. I do not know whether that is what the noble Lord is referring to.
Baroness Fisher of Rednal: We are in a little difficulty. Is the Deputy Chairman asking me what I am going to do about Amendment No. 72? In view of what the noble Baroness has said, I shall not press the amendment to a Division tonight, though I am very tempted to do so. I hope, as she said that further consideration will be given to this, that that will leave me free to raise the matter at a later stage. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Ampthill): Is it your Lordships' pleasure that this amendment be withdrawn?
Baroness Trumpington: No.
10.21 p.m.
On Question, Whether the said amendment (No. 72) shall be agreed to?
Their Lordships divided: Contents, 33: Not-Contents, 55.

DIVISION NO. 5

CONTENTS

Airedale, L.

Kinloss, Ly.

Banks, L.

McNair, L.

Blease, L.

Masham of Ilton, B.

Boston of Faversham, L.

Ponsonby of Shulbrede, L.

Buckmaster, V.

[Teller.]

Crawshaw of Aintree, L.

Rea, L.

Darcy (de Knayth), B.

Robson of Kiddington, B.

Dean of Beswick, L [Teller.]

Rochester, L.

Durham, Bp.

Seear, B.

Ennals, L.

Stallard, L.

Ewart-Biggs, B.

Stoddart of Swindon, L.

Fisher of Rednal, B.

Taylor of Blackburn, L.

Gallacher, L.

Tordoff, L.

Halsbury, E.

Turner of Camden, B.

Houghton of Sowerby, L.

Underhill, L.

Jeger, B.

Whaddon, L.

Kilmarnock, L.

Wigoder, L.

NOT-CONTENTS

Ampthill, L.

Elliott of Morpeth, L.

Belstead, L.

Elton, L.

Biddulph, L.

Faithfull, B.

Boyd-Carpenter, L.

Ferrier, L.

Brabazon of Tara, L.

Gardner of Parkes, B.

Bridgeman, V.

Glanusk, L.

Brougham and Vaux, L.

Glenarthur, L.

Bruce-Gardyne, L.

Gormanston, V.

Caithness, E.

Holderness, L.

Cameron of Lochbroom, L.

Hooper, B.

Carnegy of Lour, B.

Killearn, L.

Carnock, L.

Kimball, L.

Colwyn, L.

King of Wartnaby, L.

Craigmyle, L.

Layton, L.

Davidson, V.

Long, V.

Denham, L. [Teller.]

Lyell, L.

Dilhorne, V.

Macleod of Borve, B.

Elliot of Harwood, B.

Marchwood, V.

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Marshall of Leeds, L.

Skelmersdale, L.

Monk Bretton, L.

Swinton, E. [Teller]

Montgomery of Alamein, V.

Trefgarne, L.

Mottistone, L.

Trumpington, B.

Mountevans, L.

Vaux of Harrowden, L.

Onslow, E.

Vickers, B.

Orkney, E.

Wynford, L.

Renton, L.

Young, B.

Sanderson of Bowden, L.

Young of Graffham, L.

Seebohm, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.30 p.m.
Lord Stallard Lord Stallard moved Amendment No. 72A:
Page 27, line 34, at end insert—
(" ( ) In prescribed circumstances the applicable amount in respect of a householder shall be increased by a prescribed amount if the home is difficult to heat adequately, or by a larger prescribed amount if the home is exceptionally difficult to heat adequately or is part of an estate built with a heating system of which the Secretary of State has in his discretion recognised the running costs to be disproportionately high.")
The noble Lord said: I confess that it is a new experience for me, even with the present Adminis-tration, to be moving an amendment to which the Minister has already replied on the basis that it is something to do with normal channels of which we know nothing. It is somewhat contentious, I feel, and an arrogant use of an inbuilt majority, for the Minister to say before the amendments have been moved: "I have already replied so do not expect me to say any more, and if you do not like it we will vote." That ought not to be the spirit, and it certainly has not been until now. It makes Members of the Committee feel almost guilty in moving what they consider to be reasonably important and constructive amendments.
Fortunately, I did not quite hear the reply to my amendment so I can move it in almost complete innocence of the rejection that was no doubt spelt out by the noble Baroness. However, I heard her refer to one or two of the other amendments to the extent that they would put something into the scheme that did not already exist. This amendment is different in that heating additions are already in existence under the supplementary benefit schemes. Therefore, the amendment seeks to ensure that claimants of income support who live in homes that are more difficult than others to heat will continue to receive extra help with heating costs.
In a study of the possible effects of the Bill's proposals on claimants of income support who are at present on supplementary benefit and receiving heating additions, the National Right to Fuel Campaign concluded that the majority of supplementary benefit claimants receiving a heating addition stand to lose out significantly. The justification for that claim is set out in a series of tables circulated to many Members of the Committee and to the department concerned, but because of the lateness of the hour I shall not read out the figures. It is enough to say it has been proved that it is the claimants in the worst housing, with the most severe heating problems and in the greatest need, who lose out the most.
The White Paper itself said that there had been support for the absorption of heating additions within

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normal benefit, but it said reservations had related mainly to the level of the premiums, the impact on existing claimants and the possible gaps in provisions. That was in the White Paper. Of course, it is the level of premiums which, when added to basic allowances, will determine whether or not claiming households gain or lose out from income support.
It has been calculated that, at the proposed levels for the components of income support, 1,923,000 claimants will have less income than under supplementary benefit with heating additions. I do not find that particularly amusing, and nor do the claimants. In fact, they think it is a disgrace. It is totally unacceptable that such a situation should exist. The fixed premium rates cannot take into account the extra cost of fuel to those households that are the most difficult to heat. The amendment provides an opportunity to draw attention to the absence of any specific help with heating costs under the income support scheme.
I briefly explained the amendment to the noble Baroness. "Prescribed circumstances" mentioned in my amendment are similar to those under the existing supplementary benefit scheme. This would be where accommodation is difficult to heat for a range of reasons. The "prescribed amount" mentioned in the amendment would be paid at two rates for the prescribed circumstances. These are all familiar terms within the existing schemes. There would be two amounts: first, a lower amount for homes which are difficult to heat due to any one identifiable factor which would be definable in regulations. That is not new, either. These factors would include the age of the property, lack of insulation, disrepair, exposure, damp, large window area, large room volume, high ceilings, and so on. The present lower rate for that kind of circumstance is £2.20 per week.
Secondly there is the higher amount for homes that are exceptionally difficult to heat due to the presence of more than one identifiable factor. This rate should be awarded automatically to unmodernised pre-1919 housing, flats and high-rise blocks above the fifth floor, to housing with well known design defects—for instance, some deck access housing, some system built housing, "no fines" concrete construction and so on—and where there is reliance on expensive sources of fuel like peak electricity, paraffin, bottle gas, underfloor heating, etc. At present there is an allowance for these kinds of circumstances of £5.45 per week.
Hard-to-heat estates are mentioned in my amendment. Again there are two rates. The lower rate for four rooms or less is at present £4.40 per week, and the higher rate for five rooms or more is at present £8.80 per week. At the moment there are approximately 400 estates which have been designated by the Secretary of State as hard to heat. It is estimated that there are 100,000 households on supplementary benefit currently in receipt of this addition.
By proposing to pay exactly the same levels of income to thousands of households within each client group, by implication the Government have assumed that each of the households in the various groups lives in an equally thermally efficient home, that they buy
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fuel of equal thermal value, use equally efficient appliances and enjoy just the same health. That is just not the case, and so fuel poverty will increase.
This amendment recognises that there are some homes that are more expensive to heat than others. If we do not accept this amendment and put in the additions that I have mentioned—and the noble Baroness still has time to change her mind—we shall simply perpetuate the chaotic state that has been with us for the last few winters and with which we ought to be dealing now before next winter. In this Bill we certainly ought not to be worsening the conditions of the people who live in those houses. I beg to move.
Baroness Trumpington: I apologise to the Committee and must say that I am not surprised that the noble Lord, Lord Stallard, cannot remember what I said, because I did not say anything.
This is an interesting amendment on what is clearly a matter of considerable importance. The whole question of help with heating was debated extensively in Committee in another place at a time of year when it would be fair to say that the matter was more in people's minds than perhaps it is today. While I have listened carefully to the noble Lord, who advanced his case with his customary clarity, I must confess that I am not inclined to accept the approach that he is recommending. I hope that the noble Lord will forgive me if I suggest that the amendment is completely at odds with the approach that we are proposing.
This Bill will replace the current system of supplementary benefit, with its complex system of additional requirements based on the need for detailed questioning to establish individual entitlement, with a new system of income support with additional premiums based on clear-cut, easily identifiable criteria. Just because we do not call such extra payments "heating additions" does not mean that people will not have extra money for their needs, including heating. This amendment reproduces the current provision of heating additions on accommodation grounds and writes them into the new system of income support. In doing so, it highlights some of the more obvious difficulties inherent in the current scheme: How do we determine what is meant by heating a home "adequately"? When does such a home become "exceptionally difficult" to heat adequately? What constitutes a "disproportionately high running cost"?—and so on.
I accept that our offices need to take those decisions, as with the present scheme. However, I should have thought that the current experience of heating would have demonstrated the difficulties of the provision. We have conflicting evidence of the value of heating additions; the existence of one does not necessarily mean that more is spent on heating. Many variables dictate heating, and so on. We must also remember the interaction with the basic benefit as well, which covers heating. We believe that the system of premiums is the best way of directing help to those people who need it. The structure of premiums will cover the special needs of pensioners, disabled people, lone parents and families.
I should also like to point out to the noble Lord two further matters. First, his amendment picks on just

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one group of heating additions. That would not make for sensible legislation. In the premium structure we are trying to target extra income, including that for heating, on people who are most likely to need extra help. Secondly, his description of the situation highlights only too clearly the complexity of the present scheme. I can assure the Committee that the resources currently spent on heating will be included in the resources allocated to the next scheme.
Lord Stallard: I am grateful to the noble Baroness for that reply; but it fails to meet the point. The complexity of the existing scheme is not a reason for making the situation worse for people who live in homes that are hard to heat. That is the point which the noble Baroness failed to deal with. In the proposals in the Bill there is a one-off figure for everybody in the premium. There will be anomalies. People who live in homes that are especially hard to heat will not be dealt with. That is what the amendment tries to cover.
I recognise what the noble Baroness says. I was tempted to divide the Committee, but I shall not be as foolish as some. I shall reserve my position, having listened to the noble Baroness, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 72B to 72E not moved.]
10.45 p.m.
Baroness Faithfull Baroness Faithfull moved Amendment No. 73:
Page 28, line 9, at end insert ("save that where a claimant or his partner is a child minder, an amount equivalent to two-thirds of income from such child minding shall be disregarded")
The noble Baroness said: This amendment concerns the child-minding service. That service could be called a home industry, and it gives a very good service to mothers and children. Some women in receipt of supplementary benefit prefer to stay at home and look after other people's children. Many of them are single parents. Those who seek their help pay them a certain amount per child. The child-minders register with a local authority, and they are, so to speak, supervised by a local authority or at any rate given help.
Child-minders in receipt of supplementary benefit have only one-third of their income from that activity counted for calculating their or their partner's entitlement to benefit. The remainder is treated as expenses, reflecting the costs incurred by child-minders in providing food, outings and equipment for safety, mobility and play. The Bill proposes that income support should replace supplementary benefit, but it makes no mention of continuing that arrangement. The first £5 of income—£15 for single persons, the disabled and the long-term unemployed —would be ignored, and anything else would be taken into account. There would be no allowance for work expenses.
The effect of that would be to make a substantial cut in the weekly income of child-minders. A child-minder caring for three children, each at £30 a week, with a husband who has been unemployed for one year and who is in receipt of supplementary benefit, will, under income support, be £59 a week worse off. The purpose of the amendment is to allow the continuation of the two-thirds rule for child-minders in receipt of
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income support to safeguard their weekly income and the quality of the child-minding service.
I am disappointed that the noble Lord, Lord Houghton of Sowerby, is not in his place because I feel sure that he would wonder why it should be any different from any other home industry. The difference is that child-minders cannot charge more than a certain amount in the open market because if they do they will not have people asking them to look after their children. Secondly, child-minders have to spend a proportion of the money that they earn for child-minding on food for the child or children; on a fireguard, for instance, because the local authority demands that proper fire precautions should be taken; and on play equipment. As everyone knows, play equipment has become expensive. If the child-minder is really interested in the child or children, she must spend money on books and so on.
Child-minding is a strange service. It is a service to women who want to go out to work part-time. It is a service that helps the women providing it, and yet some of the pay that they receive must be spent on caring for the children. If they do not care properly for the children and do not have the proper equipment, the local authority social services department can forbid them to take in children. They are required to give a good service. It is for that reason that we ask that the one-third should be disregarded in their supplementary benefit. I beg to move.
Baroness Trumpington: I am very sorry, but may I once again tell my noble friend that in the agreed groupings I have this amendment down as being moved with Amendment No. 74 being spoken to. Perhaps the noble Baroness, Lady Ewart-Biggs. will confirm that.
Baroness Faithfull: May I ask my noble friend the Minister for clarification? While the two amendments concern child-minders, they are different. I am sure that the noble Baroness, Lady Ewart-Biggs will be prepared to speak to the other amendment, but they are different. Does my noble friend wish them to be taken together?
Baroness Trumpington: It is not for me to say whether I wish them taken together. It was agreed that they should be taken together.
Baroness Faithfull: By whom?
Baroness Trumpington: It is up to the movers.
Baroness Ewart-Biggs: There is a link between the two amendments in that the child-minding service is at stake in them both. As the noble Baroness, Lady Faithfull, said, the first amendment concerns the child-minder, and the second amendment relates to the mother whose child is being minded. I am prepared to speak to the two together if that would be helpful.
I support what the noble Baroness, Lady Faithfull, said about the importance of protecting the child-minding service. There is no doubt, as she said, that one of the consequences of the first amendment would be that if a child-minder does not have her earnings

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disregard for child-minding she will not declare her earnings. That will mean not only that she will be on the wrong side of the law but that she may fall foul of the social services by not registering as a child-minder.
This could mean a return to that illegal and back-street child-minding which was rife in the early 1970s when Brian and Sonia Jackson produced a very serious report about the child-minding service. That resulted in an enormous effort between local authorities and local child-minding organisations to get together. It had a huge effect on improving the service. This was to the benefit of those very children that needed caring child-minders to look after them, to have the necessary equipment—as the noble Baroness has said—and to produce a really high quality service.
I think that is for the benefit of so many children that the child-minding service should be given as much support as possible. However, from the point of view of the second amendment, this mainly benefits the single working parent. If the Government do not allow child care costs to be treated as a work expense, as at present, it will affect mainly the many single parents who have only the one viable option, while claiming supplementary benefit, which is to find part-time work.
That is an option only if the parent does not have to bear the cost of child care. To change this, as the Government appear to intend in this Bill, would be a very great disincentive for single parents to work. I think that everybody recognises that it is of enormous importance for a single parent to go out to work, not only from her own point of view, but it is of very great importance for the children. It means that if she stays at home there will be a social isolation. She will be more prone to depression. She will be a less good parent. In this situation she might place her children in cheaper and less satisfactory care. From both points of view it is the children who will suffer!
I hope that, for these reasons, the noble Baroness in reply will look favourably at these two amendments, which will be of assistance to child minders, to single parents and to children.
Baroness Trumpington: With regard to Amendment No. 73 I fear my noble friend Lady Faithfull has not been sufficiently persuasive, in as much as I cannot recommend this amendment to Members of the Committee. This amendment seeks to write into main legislation something which is currently set out in regulations and is a sensible manner of dealing with the matter in question.
The whole question of treatment of resources is a complex one—particularly once you have accepted that, for a variety of reasons, certain easements should be introduced into the treatment of income. Thus, as well as the special disregard for child minding expenses, other types of income are also disregarded in part—for example, war disablement benefits—or in full—for example, attendance allowance, mobility allowance, Victoria Cross and similar gallantry awards. I think that it will be clear from this that it would not be sensible to attempt to cater for this degree of detail in primary legislation. Instead, the Committee will see that Clause 21(8) provides us with the power to make the necessary regulations concern-
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ing the treatment of resources. My noble friend can be sure that we shall give—in fact we undertake to give—sympathetic consideration to the matter when we come to frame the regulations.
With regard to the further amendment, Amendment No. 74, to which the noble Baroness, Lady Ewart-Biggs, spoke, few would doubt that the present scheme has retreated too far into complexity and obscurity. We think that for three main reasons we should take the opportunity to simplify the present rules on work expenses.
First, neither family income supplement nor housing benefit assess work expenses, whether for child-minding or travel to work separately. These are the basic means-tested benefits for those in work and it is extemely odd that the treatment of part-time work expenses for those out of work is both more complicated and more generous than for those in low paid full-time work. As Members of the Committee will be aware, one of the key themes in the social security reform is the need to develop a common approach to common problems. An important aspect of this is the need to align the rules on the treatment of earnings across the three income-related benefits. Our proposal to assess earnings on a net basis without allowing deductions for work expenses is consistent with this approach.
Secondly, the available evidence suggests that the part-time work expenses, including child-minding expenses, of those on supplementary benefit is relatively low. In the nature of things on supplementary benefit, most part-time work is undertaken locally. The only specific evidence on what average work expenses are comes from a study into the operation of the tapered earnings disregard for lone parents carried out by the social policy research unit of the University of York in 1982. It showed that the average weekly costs of child care and travel to work for the minority of lone parents on supplementary benefit who had part-time work were £0·94 and £1·18 respectively. So we are not talking in the- average case of large sums of money.
Thirdly, our proposals on earnings disregards generally offered substantial improvements over the present arrangements and provide greater incentives to take part-time work. The Government believe that these proposals represent a real improvement in the position of lone parents. The social policy research unit at York, to which I referred earlier, has re-examined its findings to see the effect the proposals would have on the sample of lone parents in its study. It found that almost 80 per cent. of lone parents in part-time work would gain, with an average gain of £2·37.
Of course, there is always a case for going further. I recognise that. But I consider that the Government's proposals are a substantial step in the right direction. We shall, as we have made clear, monitor them carefully and, if necessary, reconsider them in the light of the experience of their operation. I hope that what I have said at some length will permit the noble Baronesses to withdraw their amendments.
Baroness Faithfull: I should like to thank my noble friend the Minister very much for her explanation.

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Perhaps I could just speak to Amendment No. 73 and then the noble Baroness, Lady Ewart-Biggs, can speak to Amendment No. 74. On Amendment No. 73, I have listened with interest to what the Minister has said and shall read it with care and consider the matter. Therefore, at this moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 74 not moved.]
1 1.p.m.
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 75:
Page 28, line 16, at end insert—
(" (8) Payments made to a person in respect of expenses incurred or to be incurred by him in connection with any unremunerative voluntary work undertaken by him shall be disregarded.").
The noble Baroness said: I rise to move Amendment NO.75, which is an extemely important amendment, and I hope that it is a probing amendment because its purpose is to clarify the position with regard to unemployed people drawing expenses to do voluntary work. It is at present widely believed in the voluntary sector that the intention to place a ceiling of £5 on the amount of expenses which can be claimed before affecting the benefits of unemployed people doing some part-time work will catch into its net unemployed volunteers—volunteers doing important work like being involved in hospital car schemes, for which of course expenses are often in excess of £5.
I really cannot tell the Members of the Committee the concern which this possible implication has caused. I receive letters not only from the volunteer centre and the National Association of Volunteer Bureaux but also from very many organisations which use unemployed volunteers. They all tell me of the disastrous consequence for some of their schemes if their fears are true. For example, there is the voluntary car scheme run by the community council of Shropshire which provides transport for those unable to use public transport or when there is no public transport. It provides transport for essential journeys. About 1,000 volunteer drivers are involved, and some of them would fall in the category of unemployed. The chief officer explained how certain hospital trips into Shrewsbury, and so on, can involve a round trip of 40 to 50 miles for which the mileage allowance, though it is as low as 10p a mile, would soon exceed the £5 limit.
There are many other examples, such as projects covering holiday centres for severely physically handicapped adults who rely completely on the help of volunteers in return for their travelling expenses. Many of these would be jeopardised if the volunteers were unemployed and would no longer be able to come. Not only would this particular work suffer, but also it would be a great impediment to unemployed people being drawn back as active members of the community. No doubt many efforts are being made to draw back people who have been unemployed for a long time to play an active part in the community. It seems to be encouraging that so many of them are willing to give their services for nothing, in return for their travelling expenses; even a small expense would be of great importance to the unemployed. I fell sure that there must be some misunderstanding, and I shall be most interested to hear the noble Baroness's answer
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in the hope that this great fear will be removed from the volunteer centres and the minds of the volunteers. I beg to move.
Baroness Vickers: I should like to support this amendment. I note that in the White Paper on page 26 in paragraph 3.37 it is stipulated that the earnings of unemployed people in excess of £5 per week would be treated as income when considering their entitlement to social security benefit.
I want particularly to speak about the rural areas. Many of the people we are concerned about have no pensions at all. There are still many people in the country who have worked on farms and who simply have to have social security because they have no pension. Many of them are keen to help. They drive their cars, but petrol is expensive, and they do work which I am sure that the noble Lord, Lord Houghton, if he were here, would be pleased to hear about. They are keen to work if they are allowed to. In fact, I have arrangements with some of them to do odd jobs for me, and I have seen the social security people and I am allowed to give them up to £8 a week.
This help is essential in rural areas because distances are great and in many areas there are few buses. Therefore, it is necessary to have some form of help, and I think that £5 may be useful over the week. We should think of the wear and tear on the cars and the work that these people do. I think it would have a devastating effect on voluntary organisations if they were not allowed to pay these people something. After all, they are working for it, and they are doing a good job. It would save a lot of money if these people could have some soupçon, something to help them carry on with their voluntary work.
Baroness Gardner of Parkes: I do not understand this point about payment made for expenses incurred. Surely that would be just a direct reimbursement. I know that in regard to payment of expenses in connection with work in the magistrates' court, or anywhere else where I have served, if it is a reimbursement, it is not considered a remuneration. Therefore surely we automatically disregard it rather than have it built into the amendment.
Baroness Faithfull: I support this amendment. Perhaps I should say to my noble friend Lady Gardner of Parkes that we are talking of those who are in receipt of supplementary benefit. Perhaps we have it wrong, but as we understand it, if they are reimbursed over £5 it counts against their supplementary benefit. We may be wrong, but that is what we understand; perhaps the Minister would make that clear.
Like the noble Baroness, Lady Ewart-Biggs, and my noble friend Lady Vickers, I have had a great number of letters from various organisations. It is quite worrying how those organisations will suffer. Examples are the Scouts and those who are dealing with and helping discharged prisoners. I shall not keep the Committee at this late hour, but it will be a loss to the country if these people are unable to help the organisations for which they are working and, what is more, doing good work. Therefore it is cost effective to have these volunteers, quite apart from the reaction from the volunteers' point of view. If they do not have

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a job, at least they feel they are making a contribution to society which they would not be able to make if their supplementary benefit was cut—if they were not reimbursed.
Baroness Carnegy of Lour: I wonder whether the noble Baroness, Lady Ewart-Biggs, would clarify this. I, like my noble friend Lady Gardner, do not understand. Are we talking about voluntary workers who are doing non-remunerative work and get their expenses back, which may be more than £5? Or are we talking about the pay that they receive over £5? If it is expenses that they are getting back there is no question of that being income, because they have already spent it. Will the noble Baroness clarify what her amendment means before we go any further?
Baroness Ewart-Biggs: The noble Baroness, Lady Faithfull, and I have done our very best to pass on the worries that have been expressed to us, which are that it is widely believed in the voluntary sector—we made it quite clear that this may be a misapprehension—that the intention to place a ceiling of £5 on the amount of expenses which can be claimed before affecting the benefits of unemployed people doing part-time work will catch into its net unemployed volunteers doing work such as hospital car schemes, for which the expenses are often in excess of £5. This has been read into this Bill and we are asking the noble Baroness when replying to say that they have misinterpreted this Bill and that they need have no fear. This is as we have understood it.
Lord Banks: Is it not correct that expenses will be treated as income as far as these people are concerned so that if they receive, as has already been said, expenses in excess of the earnings disregard, which is now £5 instead of £4, that that will go against their benefit? That is the point to which objection has been taken, since expenses are often considerably in excess of that amount.
Lord Kilmarnock: To give a concrete instance to the noble Baroness, Lady Carnegy, as I understand it, a volunteer who volunteers four days a week and whose bus fare costs £1·80 a day, spends £7.20 a week. If these new proposals come into force it would appear that the maximum reimbursement of expenses which such a volunteer could receive would be £5 and that he or she would therefore be £2.20 worse off out of pocket in addition to undertaking four days of unpaid work on behalf of the community. That is the position as far as I understand it.
Viscount Buckmaster: I rise to support this amendment. Briefly, I should like to make three points. First, as those members of the Committee who have for a long time been involved in voluntary work will agree, 10 or 15 years ago it was quite easy to get voluntary workers who would come and give their services for nothing. Now, as I have found myself, all such workers insist on having their out-of-pocket expenses, particularly their transport, paid. Secondly, today many of these voluntary workers come from long distances. The third point I should like to make in connection with unemployed people is that many of
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them take voluntary work, as the noble Baroness, Lady Ewart-Biggs, has said, and do so as a stepping stone to paid employment later.
Baroness Trumpington: There have already been many debates both here and in another place about the level of detail which could be contained in primary legislation. I must say to the noble Baroness that the level of detail contained in this amendment is perhaps better left to the greater flexibility of regulations. Let me reassure the Committee that there is nothing new in this. Regulations currently set out the detailed rules of the treatments of the various kinds of resources under the supplementary benefits scheme. Thus, there is scope for dealing with the treatment of expenses for voluntary work and the new subsection (8) of Clause 21 provides similar flexibility to make regulations for the three income-related benefits. I can assure the Committee that the Government value the important work done by voluntary workers. My honourable friend the Parliamentary Under-Secretary of State made this quite clear in Committee in another place. I understand the concern that people should not be put off volunteering by this change. We have a great deal of sympathy and admiration for the valuable work undertaken by volunteers. Genuine expenses will continue to be disregarded. Therefore, the amendment is unnecessary.
There are two issues here. First, how earnings—that is, the advantage people get from work—are defined; and, secondly, how much regard should be read into such earnings when deciding the amount of benefit. The £5 disregard is to do with the latter. What is at issue here is different: whether certain expenses should count as earnings, as my noble friend Lady Gardner has said. It is on this latter point that we can undertake to give careful and sympathetic consideration when we frame the regulations.
Baroness Ewart-Biggs: I think that the noble Baroness has dimmed the fears. What does the noble Baroness mean when she says, "genuine expenses"? All the examples that we gave were of travelling expenses. Sometimes, we were given different examples of how much was charged per mile when cars were being used; but I should like to know what the noble Baroness meant by "genuine expenses".
Baroness Trumpington: There are cases and cases, and there are expenses and expenses, as everybody knows. I think the examples given are about magistrates or other people of that kind claiming expenses. People who serve on tribunals, I believe, get their expenses. Genuine expenses, is what I said.
Baroness Gardner of Parkes: Perhaps I may intervene here to explain to the Committee that the phrase usually used in connection with reimbursements is "expenses necessarily incurred in connection with" whatever it happens to be.
The Lord Bishop of Durham: That is the problem. It is quite easy if it is concerned with magistrates or recognised things. I can assure the Committee from experience, specially of my wife locally with volunteers who are trying to do jobs which are of value in the community but which would not be "Establishedly"

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recognised like magistrates, and so on. They have problems with regard to their social security payments if hey are getting almost any sort of payments at all. I am sure that the noble Baroness has given us the type of assurance that we want; but I hope that she will be quite clear that in pursuing this matter it will not only be thought about what you might call "regular expenses" but also expenses for worthwhile but not so easily recognised charitable and voluntary efforts. The Government have produced a document about building businesses and not barriers. I hope they will apply the same principles to building community efforts and not barriers.
11.15 p.m.
Baroness Trumpington: Perhaps I may just follow up what the right reverend Prelate has said by going back to the question of general expenses, which I think he has expressed rather well. I accept that there is a case for disregarding certain types of voluntary payment: for instance, the petrol expenses of volunteers who help housebound people to go shopping, to visit relatives and so on. Those are the kinds of expenses I am talking about, and I am happy to repeat again the undertaking of my honourable friend the Parliamentary Under-Secretary in another place to look sympathetically at this whole area when drawing up the detailed regulations for income support. There will of course be an opportunity for your Lordships fully to debate these regulations before the introduction of the new scheme.
Baroness Ewart-Biggs: The noble Baroness has not actually said anything about whether a driver who incurs petrol costs of more than £5 will be reimbursed—
Lord Trefgarne: Yes, she has.
Baroness Ewart-Biggs: Then in that case I will centainly read carefully what the noble Baroness has said. If we are not content with it, we will bring it back at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 21 agreed to.
Clause 22 [Trade disputes]:
Lord Trefgarne Lord Trefgarne moved Amendments Nos. 75A to 75C:
Page 28, line 22, leave out ("he were").
Page 28, line 24, leave out ("him") and insert ("the person").
Page 28, line 26, at end insert ("or to be within the maternity period.
(A) In subsection (1) above "the maternity period" means the per ad commencing at the beginning of the sixth week before the expected week of confinement and ending at the end of the seventh week after the week in which confinement takes place.")
The noble Lord said: On behalf of my noble friend Lady Trumpington, I should like to move Amendments Nos. 75A, 75B and 75C en bloc. The effect of these amendments is to remove the trade dispute disqualification from a pregnant striker for six
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weeks before her expected week of confinement until seven weeks after confinement. Needless to say these amendments do not apply to men. I beg to move.
On Question, amendments agreed to.
Clause 22, as amended, agreed to.
Clauses 23 and 24 agreed to.
Clause 25 [Failure to maintain—general]:
[Amendments Nos. 75D and 75E not moved.]
Clause 25 agreed to.
Clause 26 [Prevention of duplication of payments]:
Lord Banks Lord Banks moved Amendment No. 76:
Page 34, line 30, leave out ("income support") and insert ("basic income guarantee").
The noble Lord said: I beg to move this amendment. I did not envisage when I set it out that I would be launching on it at this time of night, but I shall attempt to be as brief as I possibly can. I must apologise to the Committee since this amendment was intended to refer to page 24, line 6, and to substitute "basic income guarantee" for "income support" in that line. In other words, I was seeking an alternative title for income support. Somehow—the fault was entirely mine—the substitution has been related to the use of the phrase "income support" in line 30, page 34.
While the amendment is somewhat incongruous in its present context, I believe that my original intention can be served by discussing the amendment as now placed. It is in identical terms to one submitted during the Committee stage in another place by Sir Brandon Rhys Williams. I introduce it here for a similar purpose. The purpose is to raise a question as to how far it is desirable that we should seek to solve the problems of social security by relying on means-tested, income-related benefits. We have reached the position where some 8 million people are dependent on supplementary benefit and presumably will be dependent on income support. There has been a great increase in recent years in the numbers of people so dependent. Increased unemployment has been an important factor. The question is: are we content with this trend and with the present situation, or should we seek to develop our social security system in such a way that the numbers on means-tested benefits are drastically reduced? That is a question raised by Part II of the Bill.
Would it not be better to reduce means-tested benefits by paying everyone a basic income, based on the turning of income tax allowances and social security benefits into positive payments or credits which could be offset against tax? Not only would a tax credit or basic income guarantee system integrate income tax and social security benefits; it would also considerably reduce the need for, and the extent of, means-tested benefits.
If we could reach the ideal situation where the credits could be set at a minimum equivalent to the social security subsistence level, think of the simplification that that would achieve! There would be

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no need to reduce when unemployed, for example, and there would be no problem about part-time earnings when unemployed. However, I recognise that that would almost certainly require marginal rates of income tax, which would be unacceptable. Therefore, it would continue to be necessary to have higher credits when not in work for whatever reasons, and income support for those on low incomes, but a move away from more reliance on means-tested benefits would be made.
I was sorry to read in the Government's Green Paper on the reform of personal taxation, to which the noble Baroness, Lady Trumpington, referred earlier today, that the Government reject what they call all-embracing, big bang solutions, among which they include the sort of scheme that I have been describing. They say that such a scheme would conflict with the contributory system, although that would not disturb us on these Benches. We want to see a combined rate of income tax replacing present income tax and national insurance contributions, with employers' national insurance contributions becoming a payroll tax.
Secondly, the Government say that such a scheme would imply quite unacceptable increases in public expenditure. If it is combined with a continuing means-tested element, as I have suggested, I do not believe it would. Thirdly, they say that it would involve a great deal of upheaval. I believe it would be better to have one such upheaval and to get it over, rather than to have minor upheavals of the kind that we are experiencing at the moment at regular intervals.
The object of this amendment is to ask: what is the ultimate destiny of the income-related benefits which we are setting up in this part of the Bill? What sort of a social security system are we trying to achieve, and of which they will form a part? I certainly hope that the Green Paper will not be the Government's last word on this issue. I beg to move.
Lord Trefgarne: As the noble Lord will know, the Government have not been without sympathy for some of the objectives to which he has referred. This is not the first occasion that the noble Lord, and those with whom he sits, have raised propositions of this kind. Indeed, I have had the privilege of answering one or two of them in the rather distant past. During the course of his remarks the noble Lord, Lord Banks, recited some of the arguments which the Government have deployed from time to time in answer to the points contained in his proposals. I think the noble Lord forgive me at this time of night if I do not recite them all again.
However, perhaps I may refer to some other steps which the Government have been able to take to achieve a more coherent relationship between the tax and social security systems. We have, for example, effectively brought most of the short-term national insurance benefits into tax. The proposals in this Bill to assess the new family credit and housing benefit on the basis of net income represent for the first time a real alignment of the tax and income related benefit assessment formulae, ensuring that we will stop the absurd position where an increase in gross earnings
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can actually result in a marginal tax rate of more than 100 per cent., and the transferable allowances proposed in the tax Green Paper would reduce the number of people who are both paying tax and receiving income related benefits. They would therefore reduce the present overlap between the two systems, the very cause of much of the present disquiet.
I could deploy at some length arguments against some of the proposals put forward by the noble Lord, Lord Banks. I hope your Lordships will forgive me if I do not do that at this time of night, but I shall be happy to write to the noble Lord with them. They will, I fear, not be news to him.
Lord Banks: I am grateful to the noble Lord for his reply, and I recognise that at this time of night he perhaps could not go into it in more detail. I think it was important that this aspect of the implications of this Bill should be considered. We are relying more and more on means-tested benefits, and we ought to consider whether this is the way in which we want to see the social security system go.
I welcome most of the moves which the noble Lord mentioned the Government have made, but it still seems from the Green Paper that, welcome though they may be, they are going to be piecemeal moves of a limited character, and that for the moment the Government have set their face against any more widely developed scheme. I hope that they will not do that permanently, that they will not close their minds entirely, and that they will be prepared to consider the future development of the social security system over a long period of years and not just the immediate future and what they must do by 1988.I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 agreed to
[Amendment No. 76A not moved.]
Clause 27 [Payment and recovery of family credit]:
The Deputy Chairman of Committees: Before calling Amendment No. 77,I should remind the Committee that if it is agreed to I cannot call Amendments Nos. 78 to 82.
[Amendments Nos. 77 to 84 not moved.]
Clause 27 agreed to.
[Amendment No. 85 not moved.]
Clause 28 [Arrangements for housing benefit]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 85A:
Page 37, line 10, after second ("payments") insert ("by way").
The noble Lord said: With the Committee's permission, I should like to take Amendments Nos. 85A and 85B together. They will clarify the position of private tenants who pay an inclusive rent to their landlords by making clear that part of their payment can be treated as a payment by way of rates and hence eligible for a rate rebate. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 85B:
Page 37, line 14, at end insert—
(" (1A) Regulations may provide that in prescribed cases a payment made by a person entitled to a rent allowance shall be treated for the purposes of subsection (l)(a) above as being, to such extent as may be prescribed, a payment by way of rates.")
On Question, amendment agreed to.
Baroness Vickers Baroness Vickers moved Amendment No. 85C:
Page 37, line 29, leave out from ("authority") to end of line 38 and insert—

("(a) so as to provide for disregarding, in determining a person's income (whether he is the occupier of a dwelling or any other person whose income falls to be aggregated with that of the occupier of a dwelling), the whole or part of any war disablement pension or war widow's pension payable to that person.

(b) to such extent in other respects as may be prescribed,

and any such modification may be adopted by resolution of an authority.")

The noble Baroness said: I should like to speak to Amendments Nos. 85C and 85D together. As the Committee will know, housing benefit is a national scheme, and most of its provisions are set out in regulations. The local authorities are able to exercise a certain amount of discretion. They can operate local schemes within certain limits in order to give extra benefits to a particular group. Many of them use this power to grant extra benefit to war pensioners, including war widows.
There is specific reference to this group in the current primary legislation, the Social Security and Housing Benefits Act 1982.I hope the noble Lord the Minister will consider the removal of the general power which enables local authorities to operate local schemes and to continue to operate them for war widows and war pensioners. As drafted, it would appear that this Bill does not achieve this objective, because it would still require the Secretary of State to make regulations before local authorities are able to operate local schemes for war pensioners. I hope that the noble Lord the Minister will consider that the discretionary power is best written into primary legislation.
I know that my noble friend the Minister has always been interested in war pensioners. If accepted, this amendment will tidy up the wording and will achieve a certain amount of parity with the present position, with local authorities having the power to exercise discretion in respect of war pensioners when assessing their housing benefit. It will be written into primary legislation and not left to regulations.
The second amendment is consequential on the first and removes a reference to the subsection. If the amendments are accepted, that would be very helpful. I beg to move.
Baroness Gardner of Parkes: I rise simply to add my support to the amendment for the war widows.
11.30 p.m.
Lord Trefgarne: I have listened carefully to my noble friend, and I should like to underline the Government's commitment to war pensioners; a group whom the whole Committee will agree deserves special priority. The Government's intention so far as
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housing benefit is concerned is that the new scheme should match the arrangements which exist at present. In other words, there will be a statutory partial disregard of a war disablement or war widows pension beyond which local authorities may do more, if they wish, at their discretion. We have decided to keep this power to operate local schemes for war pensioners in spite of the fact that we intend the general power to operate local schemes to be removed on the grounds that it is inconsistent with our wider objective of a national, equitable scheme. This special treatment of war disablement and war widows' pensions is a mark of the priority we attach to this group. I accept the amendments.
Baroness Vickers: May I say thank you to my noble friend the Minister? I am grateful to him and I am sure that the amendments will help many people in future.
On Question, amendment agreed to.
Baroness Vickers Baroness Vickers moved Amendment No. 85D:
Page 37, line 40, leave out ("(6)") and insert ("(5)(a)")
On Question, amendment agreed to.
Clause 28, as amended, agreed to.
Clause 29 agreed to.
Clause 30 [Housing benefit finance]:
Baroness Faithfull Baroness Faithfull moved Amendment No. 85E:
Page 39, line 1 1 at end insert—
("( ) shall include an amount being not less than 60 per cent. of the cost of administering rebates and allowances.")
The noble Baroness said: I apologise for moving an amendment at this late hour on which I cannot be brief, however much I try. I shall speak also to Amendment No. 85F. These two amendments concern housing benefit subsidy. Amendment No. 85E provides that the amount of specific subsidy for housing benefit administration costs should be not less than 60 per cent., which is the current percentage payable.
The Government propose that housing benefit administration costs should be included in the rate support grant arrangements on the basis that this will encourage greater efficiency on the part of local authorities. But the Association of District Councils considers that the rate support grant is not a suitable mechanism for attracting subsidy to authorities actually incurring the costs. This is because some local authorities do not receive any rate support grant—for example, South Buckinghamshire and Camden—and would effectively receive no subsidy under the revised arrangements.
Rate support grant is itself under review because of its unsatisfactory nature; a fair general formula for distributing subsidy to authorities incurring the costs has yet to be devised and this may prove impossible. By the very nature of the rate support grant some of the money transferred would go to authorities, such as county councils, not administering housing benefit. An exemplification recently produced by the DHSS for discussion with the local authority associations has shown very many local authorities losing as a result of the transfer.
I am informed that repeated assurances were given by the Government to local authorities at the time when the housing benefit scheme was set up that the Government would meet local authorities' additional costs. Individual authorities which will now lose subsidy feel that the Government are reneging on that undertaking, which was only given within the last years. So that is the substance of Amendment No. 85E.
As regards Amendment No. 85F, which is before the Committee, the Association of District Councils considers that a high rate of specific subsidy should be payable for housing benefit. This amendment provides that the subsidy should not be less than 95 per cent. Indeed, ideally, in the view of the Association of District Councils subsidy should be 100 per cent., on the basis that the relief of poverty is a national and not a local responsibility. The rate of subsidy is too important a matter to be left completely at large, as it is in this Bill. The current rate of subsidy is 100.6 per cent. for claimants who are on supplementary benefit and 90 per cent. for others. Thus, 95 per cent. is the approximate current overall level of subsidy.
The Government stated in the Green Paper that they:
"have it in mind to bring forward proposals to set direct subsidy initially at 80 per cent. The remainder of the costs would have to be met by local authorities and would be taken into account in rate support grant".
Their objective is to encourage a greater incentive for local authorities to monitor and control expenditure. But the scope of this is extremely limited, given that housing authorities have been under pressure from central government and the Audit Commission to increase rents and that there is the danger of drying up the supply of private rented accommodation. Moreover, the proposed transfer to rate support grant is open to a number of objections, even if the total amount of subsidy were to be maintained. A substantial part of the transferred subsidy would in fact, because of the way in which the rate support grant is distributed, accrue to county councils and residuary bodies which do not administer housing benefit. None of the transferred subsidy could be received by authorities which do not receive rate support grants. Rate support grant is itself under review and is an unstable and unsatisfactory system to join at this stage.
I have cut short one long paragraph that I intended to read. I should, however, say that last week I noticed press reports of the House of Commons Public Accounts Committee dealing with housing benefit administration costs. I have with me a report which I had hoped to read to the Committee, but I shall spare Members at this late hour. The burden of the report is that the staff numbers and costs of local authorities administering the scheme have risen and need to be better controlled. I beg to move.
Lord Trefgarne: Like my noble friend, I shall cut short the remarks that I might otherwise have made in reply to her amendment. Perhaps I may just say to my noble friend that I understand that discussions are now under way with the local authority associations about this matter. I hope that a sensible way forward will be found, and on that basis I hope that my noble friend will feel able to withdraw her amendment.
Baroness Faithfull: I thank the Minister for his reply. As there are discussions taking place, I shall wait to see what happens. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 85F not moved.]
Clause 30 agreed to.
Clause 31 agreed to.
Lord Banks Lord Banks moved Amendment No. 86:
After Clause 31, insert the following new clause:
("Appeals for housing benefit

.— (1) A person who has claimed housing benefit may appeal against any determination of that claim.

(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 28 of this Act.

(3) Section 29(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: This amendment deals with the procedure by which housing benefit is determined and reviewed. It rationalises adjudication by moving the jurisdiction over housing benefit to the social security appeal tribunals. I should like to read to the Committee what the Legal Action Group said in its response to the Green Paper:
"Housing benefit review boards in their current form show, in our view, some of the disadvantages which will be encountered in a more extreme form by the social fund. 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. The reports which we have received from our members indicate that the review boards that they have attended have not in the main been satisfactory. There is a clear difficulty which consistently recurs over the councillor membership of the review board. The councillors often come from the housing committee and frequently feel a responsibility for, and an identity with, the decisions which are before them for review. We regard it as extremely unfortunate that the Government has not been able to see its way to the institution of a genuinely independent appeal process for housing benefit. We find this strangely at odds with the resources that the Government has been prepared to put into the social security appeal tribunal system".
The Government conceded in Committee in the House of Commons the amendment which requires the making of regulations for reviews of determinations relating to housing benefit. But they are only "looking very carefully" (that is the phrase that was used) at the rationalisation of adjudication on benefits, which would mean that all adjudication was carried out by the independent social security appeal tribunals.
In other areas of the Bill relating to the notification of a right of appeal with reasons for the adjudication officer's decision, the Government are pursuing what Mr. Newton described as a "benefit-wide formula" in the quest for the "basic question of harmonisation". However, in the area of adjudication, which is of substantial importance—that is to say, an independent forum for the appeal—harmonisation is not being sought. One wonders whether harmonisation is a good policy only when it is to the benefit of the executive

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and not when it is to the benefit of the appellant. I beg to move.
Lord Stallard: I support the amendment so ably moved by the noble Lord and outlined by the Legal Action Group. When the new housing benefit system was introducted in 1982–83, one of the features which gave some cause for concern was that there was no independent right of appeal. Under the two separate systems which had preceded the new scheme, the position in that respect had varied. In relation to benefit for rent and rates paid through supplementary benefit there was a right of appeal to an independent tribunal, but there was no such appeal right in relation to rent and rate rebates paid by local authorities.
In bringing together those two systems, the new scheme adopted the least satisfactory of those two approaches.
There is no independent right of appeal within the current housing benefits system when a claimant is unhappy with a decision. There is of course the right to ask the local authority to review its decision, and such a review is relatively structured. After an internal review by officers, the claimant can go on to a review board made up of councillors if he or she is still not satisfied. That review board is supposed to endeavour to act independently, but that is surely unrealistic. However conscientiously the members of the review board may try to forget the fact, they are nevertheless members of the authority which took the decision which is the subject of argument; in fact they may even be members of the housing committee which was even more concerned with that very decision. That is not independence, nor is it natural justice.
Apart from considerations of elementary natural justice, there are other factors to be taken into account. It has sometimes been claimed that local authorities would not favour the introduction of a right of independent appeal. After speaking to a few members of local authorities, mainly in the London area, I must confess my impression is that local authority opinion on that matter is divided. I am sure that many would welcome the opening up of the system.
First, many local authorities are increasingly taking a consumer-conscious approach to administrative matters and are aware of issues relating to consumer rights. Secondly, there would be certain administrative advantages in not having to service the review boards, train councillors and so on when that is merely duplicating an adjudication machinery which already exists within the social security system. I refer of course to the social security appeals tribunals to which we shall probably have to return later.
Thirdly, if a body of case law were to be developed through decisions of the social security commissioners, that would avoid unnecessary recourse to the courts, which is the only option at present, beyond the level of the review board of councillors, where a claimant feels that a decision is wrong in law.
Case law is important for another reason. The housing benefit system is part of the social security system. It is therefore part of a system of citizenship rights and should therefore apply with reasonable consistency across the country. The social security
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adjudication system incorporates a body of case law designed to achieve just that. Local internal reviews do not and cannot achieve that result.
The proposal is that where a claimant is dissatisfied with a decision he or she could appeal to the local social security appeal tribunal. Of course there would then be a fresh look at the case by a local authority officer, just as happens in the local DHSS office when an appeal notice comes in about a social security benefit. Nobody suggests that every case will shoot straight off to the tribunal without proper reconsideration by administrators. If matters are not resolved, there would then be a right of appeal to an independent body. Justice would be seen to be done. In the minority of cases which might raise a tricky legal question there would be an opportunity for a further appeal by either party to the social security Commissioners so that case law to guide future decisions could be established.
Such an approach would be fair and it would be seen to be fair. It would make use of a social security adjudication system which is tried and tested and designed to do such a job. It has the additional virtue of having no significant extra costs. That must appeal to the noble Baroness the Minister, if she heard it. It would be widely welcomed by claimants and by consumer-minded local authorities. I support the amendment.
Lord Trefgarne: We have said all along that we intended to examine closely housing benefit adjudication. My right honourable friend the Minister of State agreed in another place that there were strong arguments for bringing housing benefit within the purview of social security appeal tribunals and undertook to consider that further. I reaffirm that we are actively pursuing the issue. With that assurance I hope that the noble Lord, Lord Banks, will feel able to withdraw the amendment.
Lord Banks: I should like to re-emphasise that the question of having an independent forum of appeal is extremely important. I am glad to know that the Government are still considering it. I wait with interest to see what is their final decision on the matter. I may well return to the matter at a later stage of the Bill. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ennals Lord Ennals moved Amendment No. 86A:
After Clause 31, insert the following new clause:
("Fraud investigation. The Secretary of State shall issue directions to his officers for the purpose of ensuring that claimants who are not reasonably suspected of wrongfully claiming benefit under this Part of this Act are not subjected to investigation for the purpose of detecting fraud.")
The noble Lord said: I shall move this amendment briefly. I had hoped that it would not be necessary, but it is. It is clear in what it says:
"The Secretary of State shall issue directions to his officers for the purpose of ensuring that claimants who are not reasonably suspected of wrongfully claiming benefit under this Part of this Act are not subjected to investigation for the purpose of detecting fraud."
A few days ago the department established in 60 local offices board and lodging control sections which were designed to check on board and lodging centres in

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their areas to see in how many cases there was fraud. It is clear that they have made inquiries or are available to make inquiries whether or not they have evidence against a particular person. I think that that is absolutely wrong. People are innocent unless they are proved guilty or there is some reason to believe that they are guilty.
I hope that we can have an assurance from the Government that no one will make any assumption that because people are unfortunate enough to be homeless, or unemployed, or poor, or living in lodgings, because they are homeless, they are in some way claiming benefit unjustly. That is why I believe that it is necessary at this stage, in view of the actions taken by the department, that this should be carried through. I beg to move.
Lord Trefgarne: I am bound to say that I think the amendment proposed by the noble Lord is somewhat perverse.
The practical consequence of his clause, were the Committee to accept it, would be to impede significantly the department's ability to combat a serious abuse of the benefits system in relation not only to hotel claims but to wrongful claims to social security benefits generally. Members of the Committee will know that the department has sufficient evidence to confirm in particular that fraudulent claims from people resident in hotels are at an unacceptable level, as recent exercises at some local offices have demonstrated.
Moreover, the codes of practice issued by the Home Office under the Police and Criminal Evidence Act 1984—and to which the department must have regard—entitle the investigating officers, in trying to discover whether, or by whom, an offence has been committed, to question any person from whom they think useful information can be obtained.
The clause of the noble Lord is completely at variance not only with the codes of practice but with the sensible investigative practices adopted by all other organisations and agencies charged with the duty of investigating offences. I am afraid therefore that I cannot accept what is proposed.
Lord Ennals: I am sure that no one will object to the DHSS or any other department taking appropriate action against fraud or against suspected fraud. This was done when I was Secretary of State myself. What I find objectionable are some assumptions of guilt concerning groups in particular areas. It is to that that I object. The noble Lord has given me an assurance that it will not be done. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hooper: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at seven minutes before midnight.