HL Deb 25 January 1988 vol 492 cc432-65

4.15 p.m.

Second Reading Debate resumed.

Lord Banks

My Lords, perhaps we may now return to the Social Security Bill. I should like to begin by thanking the noble Lord, Lord Skelmersdale, for his clear explanation of the contents of the Bill. It seems that after every major Social Security Act, we require further legislation in order to make the necesary corrections. This Bill, in addition to correcting the mistakes made in the Social Security Act 1986, introduces a number of measures, most of which seem designed to claw back money from claimants. In these circumstances, we find it difficult to welcome the appearance of the Bill in your Lordships' House.

I should like to look at one or two of the restrictive measures—restrictive, that is, of expenditure—which the Bill contains. I deal first with attendance allowance. The higher rate of attendance allowance is paid, as we have heard, when continual supervision is required through the night. The Court of Appeal ruled that continual supervision did not necessarily involve the supervisor being continually awake. This ruling was widely welcomed by the groups which represent the disabled, because all those needing standby supervision could now claim the higher rate. I should like to ask whether there was any other reason than the desire to cut cost which actuated the Government in deciding not to accept the law as interpreted by the courts? Is there any reason other than economy for arguing that those who require standby supervision should not receive the higher rate?

I discuss now benefit for 16 and 17 year-olds. As the noble Baroness, Lady Jeger, reminded us, 16 has been the minimum age at which benefit could be claimed since 1948. This was reaffirmed by the Social Security Act 1986, which states that a person in Great Britain is entitled to income support if he is over the age of 16. The Bill raises the minimum age to 18 while allowing payments to 16 and 17 year-olds, as was described earlier, in prescribed circumstances or in individual cases of severe hardship.

Why is there no list of prescribed circumstances in the Bill? Why does that have to be left to regulations? The noble Baroness, Lady Jeger, pointed out the degree to which government by regulation is increasing these days. Here it seems is another example of it. Surely the determination of severe hardship will place much extra power in the hands of the Secretary of State and there will have to be much invidious choice.

The Government's aim, as set out in the Conservative Party's 1987 manifesto, again to which the noble Baroness referred, was to remove eligibility for benefit from those under 18 who deliberately choose to remain unemployed, in particular those who do not enter a youth training scheme. There is no evidence that this is a sizeable group. In addition, regulations already exist to reduce the benefit of young people who unreasonably refuse the offer of a place in a YTS or who leave early for no good reason.

Between December 1983 and May 1987—that is, a period of three and a half years—25,697 persons suffered such a benefit deduction for voluntary unemployment: 23,453 of them were early leavers, and 2,244 only had refused the offer of a place on a YTS.

During that period more than one million people have entered the YTS. We should bear that figure in mind to keep everything in perspective. There are 1.4 million in the age group involved, so surely here the Government are taking a sledgehammer to crack a nut. The provision makes YTS a compulsory service, yet the voluntary nature of the YTS has been one of its basic principles. This principle was restated at a meeting of the Youth Training Board as recently as 9th July 1987. There is a fear that if the provisions in the Bill are passed much of the success of YTS will be undermined.

The Bill deals with contribution conditions for unemployment and sickness benefit. As we heard earlier, the Bill makes the contribution requirements more stringent so that fewer people will be able to claim. As I understand it, 350,000 people are expected to lose entitlement to unemployment benefit. Of these, 300,000 may qualify for income support. So it would seem that what the Government are doing here is transferring people from benefits as of right to means-tested benefits. There are already about 16 million persons dependent upon means-tested benefits in this country. I believe that we should be seeking to discover how we can reduce that number rather than how we can increase it.

On these Benches we challenge the principle of basing entitlement on contributions paid. We would prefer to combine income tax and national insurance contributions in one rate on all earnings, coupled with a percentage social security tax on employers, and then to say that all who are accepted as unemployed or sick should receive the benefit for the prescribed period regardless of contributions paid but subject to residential qualification.

I come next to unemployment benefit for occupational pensioners. The Bill reduces from 60 to 55 the age at which unemployment benefit is abated to take account of an occupational pension of more than £35 per week. The introduction of the rule to apply to those over 60 formed part of previous economy measures by the present Government. The argument was that since many of those affected were not seriously looking for work it was a reasonable provision—and retired bank managers were much cited in that connection. However, the lower one reduces the age limit the weaker that argument becomes. For example, we have to consider the case of a person who is made redundant at 55, who takes an early retirement pension which would be lower than his normal retirement pension if he had remained with his employers to normal retirement age but who has by no means given up the idea that he can secure some other work. He is not regarding himself as permanently unemployed.

We would bear in mind that unemployment benefit in any case is paid for 12 months only. It is not continuously paid from then until the age of 65. Whatever may be thought of the principle, there can be no justification, as the noble Baroness argued, for keeping the limit at £35 on the occupational pension, which is allowed without abatement. As she pointed out, to maintain the real value of the £35 as it was originally it would need to be at least £48 a week now. In my view the limit should be increased to that amount and be indexed.

With regard to exceptionally severe weather payments, the Bill enables the Secretary of State to operate a scheme of single payments to meet expenses for heating. It will permit the operation of a scheme similar to that which was in operation last winter and again this winter. All I would say about that is that it is essential to secure a more satisfactory method of triggering payment. Here again I agree with the noble Baroness. The fact that the temperature has to average freezing point or below for a week beginning on Monday and ending on Sunday is totally unsatisfactory.

The severe weather payments will come from the social fund and on these Benches our objection to that fund remains. We regret that the fund will be cash limited, although we understand that the cash limit will not apply to severe weather payments. We regret that most help will be given through loans rather than grants. We regret that the fund will operate on a discretionary basis; and we regret that there will be no right of appeal to an independent tribunal. We note that the Social Security Advisory Committee has said that the arrangements for the social fund are unfair and unenforceable and that it goes ahead without its support.

Finally, I should like to ask the noble Lord who is to reply when the Government intend to honour the commitment given by the Secretary of State to do something about the very seriously disabled people who need to pay for help to enable them to live in the community.

I have said enough to indicate why we do not welcome the Bill before the House this afternoon, although of course in accordance with convention we shall not vote against its Second Reading.

4.28 p.m.

Lord Swann

My Lords, as chairman of the Company Pensions Information Centre, a small organisation which I think will be well known to some of the Minister's officials and which provides information on the endless legislative complexities of every sort of pension not only to industry but to trade unions and others as well, I should like to draw your Lordships' attention briefly to some implications of Clause 6 about which I am concerned.

In the first place, I should like to enlarge on what the noble Lord, Lord Banks, and the noble Baroness, Lady Jeger, have said about the £35 a week limit above which unemployment benefit is abated. In 1980 that figure was described by the Government as substantial and therefore was a reasonable level at which to start abating unemployment benefit. Whether a pension income of £35 a week could really have been described as substantial even in 1980 seems doubtful to me. I am more doubtful still about so describing it today when the cost of living has risen by approximately 50 per cent. As the two previous speakers have said, why should it not be index linked, as are so many other forms of benefit and tax allowance?

Incidentally, with the help of a pocket calculator and a page of Whitaker's Almanac, my calculations suggest that the sum should be more than £48 a week. I remind your Lordships of something the noble Lord the Minister said concerning this Bill about the Government wishing to keep up with the times. Where better to make a start than on £35 a week?

My next point relates to the date at which Clause 6 will come into force, assuming that it is passed. Since it takes time for people to become aware of the niceties of new legislation and since many people might very well opt to postpone their retirement when they discover that their unemployment benefit is to be reduced, it would be unkind to fix too early a date. Therefore, I am glad to see that the Minister in another place has indicated that the clause will probably not come into force until January 1989. I hope that the Government will not have second thoughts on that.

Lastly, Clause 6 relates specifically to occupational pensions, defined in the 1980 Act as pensions derived in whole or in part from moneys paid by the employer. That definition clearly excluded Section 226, pensions available to the self-employed and those in employment but for whom the employer makes no provisions for pensions. Now, following the Social Security Act 1986, there are about to be personal pensions, which will be available not only to the self-employed and those for whom the employer makes no pension provision but also as an alternative to occupational pensions for people in paid employment for whom the employer makes pension provision.

While Clause 6 refers to occupational pensions, it makes no mention at all of personal pensions, many of which will involve employer contributions, just like occupational pensions. When I first saw Clause 6 I was minded to ask the Minister whether I was right in seeing this as a curious discrimination directed specifically against the many people who will have only modest occupational pensions of £35 a week and upwards. However, I was glad to learn that the Minister in another place had mentioned the Government's intention to introduce legislation at some unspecified time in the future bringing personal pensions into line with occupational pensions in this and other respects. That surely is only equitable.

However, I point out to the Minister that someone could, as things stand, take a transfer value from part of his occupational pension, put it into a personal pension and straightaway draw his personal pension with no abatement of unemployment benefit. It seems to me that the discrepancy will occur quite soon. Therefore, I am led to wonder why the Government do not introduce a simple amendment into Clause 6 without more ado.

4.33 p.m.

Lord Boyd-Carpenter

My Lords, may I first follow up what has been said by the noble Lord, Lord Swann, who, as your Lordships know, speaks on these matters with very great authority and practical experience. As I listened to him, I too could not understand why a distinction was sought to be made for the purposes of the clause between the occupational and personal pensions which are now, as the noble Lord said, being so very widely earned and organised. I should be very interested to hear from my noble friend, when he comes to reply, whether it is intended to introduce an amendment to the Bill putting personal pensions in the same category as occupational ones, or whether there is some subtle—and certainly to my mind incomprehensible—distinction in the Government's mind between the treatment of these two forms of pension.

As to the general merits of the matter, unlike the noble Lord, Lord Swann, I take, on the whole, the Government's view. I believe that where someone has retired at 55 on an occupational pension it is difficult to treat that person as being completely in the employment market. If they are living on an occupational pension or mainly supported by an occupational pension, their position is different from that of the rest of us who expect to earn our living at least until we reach retirement pension age.

I come now to one remark made by the noble Baroness, Lady Jeger, in the course of a speech which she will not mind me saying was of some length. I do not put it more strongly, although I think from what I heard behind me one or two noble Lords may have been disposed to do so. I always try to treat the noble Baroness with the same courtesy as she treats me. But she said something to which I am bound to say I take great exception. She said that noble Lords on this side of the House did not take the proposals in the Bill seriously. Of course, she is completely wrong. Noble Lords on this side, as on the other side of the House, take a very serious and real interest in our highly complicated system of social security.

For my own part, I spent six-and-a-half years in the department covering pensions and national insurance which I believe is still a record period of service. I very much resent, as I would on behalf of my noble friends, any suggestion that, though our views may be and are very different from those of the noble Baroness and her noble friends, we have at least as keen an interest and concern for the system as she has.

Indeed, the speech of the noble Baroness had for me a certain nostalgic effect. It was so much the type of speech which others—perhaps including the noble Baroness—used to make in another place. The actual number of the clauses are different, but the general, somewhat querulous approach to the proposed changes was very familiar indeed. Whatever inconsistency the Labour Party can be accused of—and heaven knows, in the present situation, there are a great many—inconsistency in its attitude on social security legislation is not a charge which will lie. It seems always to have an extraordinary resistance to any changes which result in reduced expenditure in one direction, even though part and parcel of that reduction is an improvement in the provision in others. The noble Baroness showed this afternoon that her party has an automatic reaction against any reduction.

Those of your Lordships who have been concerned in the administration of social security, as I confess I have, know perfectly well that this is a living system which has to adopt, and adapt to, the different needs of the time. Part of the art or technique of social security administration is the technique of shifting resources from directions in which at one time they were probably quite appropriately expended into others where there is need to meet changing social conditions. It is really obscurantist—if the noble Baroness does not mind me saying so—to take the view that any reduction taken by itself must be wrong. If a living system is to operate, there must be a continual movement within it with an increase and improvement in some directions and a reduction in others.

The noble Baroness did not really touch upon what is the essence of our social security system and has been so since Beveridge—that social security falls into two different areas. There are the contributory benefits—unemployment, retirement pensions and sickness—obtainable as a right in return for contributions and fulfilment of the contribution conditions. Then, there is the other half, the area of provision for the relief of hardship. On the contributory basis, I believe there is little dispute between the sides of the House. Naturally, we argue as to what should be the exact rate. Of course, when we are in opposition we say it should be higher; that is an ordinary reflex of politicians. However, the main structure of the system has a considerable measure of all-party support. But when one comes to the relief of hardship measures, there is a real difference in philosophy between the two sides of the House.

Lord Ennals

Hear, hear.

Lord Boyd-Carpenter

I am glad for once that I carry the noble Lord, Lord Ennals, with me. The shock to my system is almost overwhelming and conjures up the idea in my mind that I may well be wrong.

There is a difference in philosophy, and I am trying to put this seriously to your Lordships. For many years it has been the policy of Conservative governments in this area of the relief of hardship to concentrate as much as possible of resources on the areas of greatest need and to accept that the areas of greatest need themselves change with changing conditions in our society.

As an example of what is being done now in this Bill, perhaps I may quote to your Lordships what was said on 27th October last year by the present Secretary of State, Mr. Moore: Thus, more will be spent on families overall, hut the greatest emphasis will be on those with the greatest needs". [Official Report, Commons, 27/10/87; col. 181.] That is the key approach to the philosophy. It is borne out, as your Lordships will be aware, by the fact that an extra £220 million is being spent on the new family credit. It will cost more than double the existing family income supplement and its associated benefits. Above all, there will be 470,000 low income families who will benefit from it, which is more than double the number being helped now. That is a very good example of the operation of the philosophy to which I was referring—the philosophy of concentrating on where the need is greatest.

Lord Ennals

Perhaps the noble Lord will allow me? Before the noble Lord leaves the point of the area of greatest need and the area of hardship, can he say what fairness there is in seeking to cash limit hardship? Surely hardship is a need which has to he met and it is not a matter which can simply be decided by the money that is available on a cash limited account. Is it not grossly unfair and not in any way linked with acts of hardship?

Lord Boyd-Carpenter

With the greatest respect, I do not think the noble Lord has really got the point when he talks about cash limiting hardship. I know he is talking about the social fund. But there is no reason whatever to believe that the operation of that fund, with the alleviations and the concessions which have already been mentioned, is going to cash limit hardship. It may well be sensible to have in mind, in dealing with these matters, some idea of what the figure is going to be. It is foolish to go in for an acceptance of unlimited liabilities without any understanding of how the funds are to be obtained. With respect to the noble Lord I do not believe that his intervention really takes the matter, or his case, any further.

On the other side—the reduction of benefit entitlements—I very strongly applaud the provisions in Clause 4. These appeared in my party's election manifesto and therefore it would appear that the people of this country approved them. I believe that few things can be worse for young people than going on social security, income support, unemployment benefit, or whatever it may be, straight from school in order to be paid to do nothing. That must be thoroughly demoralising, not to say dangerous, for young people.

The Youth Training Scheme is successful and expanding. We have allowances paid under it which are higher than the amounts of income support that the young person outside the scheme would have obtained. So there can be no suggestion of hardship where fit young people are concerned. It is good to give them financial encouragement to take advantage of opportunities to acquire training which will fit them for a job when they leave the scheme. Nothing could be worse than to give them encouragement to remain without training, living on public benefit—a pointless existence without any of the ambitions or the incentives which they will obtain under the Youth Training Scheme.

I anticipate any intervention from the noble Lord opposite by saying that it has been realised that there will be some people—very few—who cannot go into the Youth Training Scheme because of' physical disability. It has been made clear that they will continue to receive benefit.

The noble Lord, Lord Banks, said "Why do this because only a few young people do not join the Youth Training Scheme?" If the noble Lord is right—and I very much hope he is—what harm is done by enacting this provision? If it he that it will only operate on a very limited number of people, surely that is a matter for rejoicing and for congratulation. On the other hand, if even a few are to be tempted to the demoralising life of a young unemployed person—and in this House and in another place I have heard a number of speeches about the terrible demoralisation of unemployment and its effect on the young—and a limited number of them can be freed from that by this sensible and intelligent scheme, then it is a further argument for it.

The other points on the Bill are important but separate. The Second Reading stage is more an opportunity for your Lordships to discuss the philosophy of a Bill and the general approach, given that at Committee stage individual clauses, their merits or demerits, can be carefully looked at, as no doubt they will be. I stress again to the noble Baroness that they will be looked at very carefully from this side as well as from her own side of the Chamber.

The Bill is only one in a long series. It will be followed by many others. Social security is not only one of the biggest areas of public expenditure in this country; it is one of the major activities of the British Government. A British Government worth their salt are continually keeping an eye on it, seeking to improve it and to adapt it to the changing circumstances of a changing age. This Bill is one of that series.

No doubt we shall differ on many of the details but the approach and the philosophy seem to me to be right. I am very glad indeed that despite a very heavy legislative programme and a particularly heavy burden on the Department of Health and Social Security, the Government have come forward with this Bill to strengthen our social security system which means so much to a very large number of the least fortunate of our fellow citizens.

4.48 p.m.

Lord Basnett

My Lords, I wish to speak at no great length on one single issue; that is, the potential effect of the Social Security Bill on those suffering from industrial injuries. The effect of the changes proposed, with those already introduced, will weaken the support offered to those suffering industrial injuries; it will increase the amount of litigation in connection with industrial accidents; and it will undermine the purposes which lay behind the all-party support for the principles of the 1946 Industrial Injuries Act.

The debate in the other place in 1944 on the White Paper outlining the proposed industrial injuries scheme expressed a unanimous desire to introduce the new scheme to replace workmen's compensation. There was a desire for justice for injured workpeople and there was support for a new scheme which would remove the friction of litigation between employers and employees. They said that the scheme itself would promote the smooth working of industry and allow for the work of caring for dependants and rehabilitating the injured in cases of industrial injury. Less and less with the changes introduced are those objectives being achieved. The changes proposed in the Social Security Bill will further distance us from that achievement.

The changes proposed are these: ending the entitlement to reduced earnings allowance when recipients retire from regular employment; replacing it with a lower payment; freezing its payment at current cash levels for those already retired, and abolishing the industrial death benefit. There were in 1985 147,000 people in receipt of the reduced earnings allowance, and 69,000 of those received their allowance with pensions.

The reduced earnings allowance has continued to be paid into retirement because it has been accepted that a reduction in earnings levels leads to a reduced pension entitlement. It is now proposed to pay a retirement allowance at the rate of 25 per cent.—one-quarter—of the retired earnings allowance, and to freeze the payments of current allowances. As my noble friend Lady Jeger said, these measures will cut expenditure on industrial injury benefits by £2 million in 1989–90, rising to £10 million in 1991–92. More important, they will cut the protection to those needing it.

Industrial death benefit is paid to the widow of a person who dies from an industrial disease or accident. Now it is proposed that the widows of men killed by work accidents or diseases will receive the same benefits as other widows. What needs to be recognised is that the compensation in fatal industrial accident and disease cases has always been inadequate. It has failed to provide for the widows of young men left to bring up children on benefits when they expected to be supported by a partner in work. In this area in particular improvements, not cuts, are needed.

However, the significance of these proposed changes is magnified when added to the changes already made. Since 1st October 1986 industrial disablement benefit has only been payable for new claims where disablement resulting from an industrial accident or disease is assessed at 14 per cent. or more. The result is that more and more people resort to litigation, which the Industrial Injuries Act was designed to avoid.

Other allowances have gone as well. In 1987, the hospital treatment allowance was abolished and the unemployent supplement was abolished. The need for a system to compensate people for injury or death at work remains strong. There has been a marked increase in the number of reported major industrial injuries for manufacturing and construction between 1981 and 1985. The industrial death rate from accidents at work was constantly high over that period, at somewhat more than 400 deaths a year. There were over 132,000 non-fatal accidents in 1985. The figures for 1986 further reflect this growth in non-fatal major accidents.

Our most precious asset is our workforce. Its protection and support from the ravages of its work must be one of our major concerns. That concern is not shown in the Social Security Bill.

4.55 p.m.

The Countess of Mar

My Lords, it is not difficult to understand the reasons Her Majesty's Government have brought this Bill before us. The demands made upon the National Insurance Fund have increased enormously, particularly during this Government's term in office. The elderly are living longer, and there are many more unemployed. It is the Government's policy to reduce public expenditure and thus the burden on the taxpayer. I cannot be critical of that objective. However. I find it difficult to comprehend the reasoning behind some of the measures put before us in this Bill. They seem to apply with unreasonble harshness to particular groups, especially the young.

It is clear that the Treasury does not approve of universal benefits. The debate about child benefit is a long-standing one, and I have no doubt that we shall hear more during the passage of this Bill through your Lordships' House. There have been emotive debates in another place about the payment of attendance allowance. There seems to be a lack of understanding of the difficulties of chronic and severe ill-health, and I find this depressing.

Clause 4 of this Bill is one of the least acceptable, as we have heard from other noble Lords. Unless a 16 or 17 year-old has the fortune to obtain work, is in full-time education or has an indulgent parent, he or she must attend a Youth Training Scheme. There are many objections to making the YTS compulsory, not least the fact that its success has depended on its being voluntary. Youngsters who attend colleges for further study on a part-time basis are not provided for in this Bill, and are thus deprived of an opportunity to improve their chances of obtaining satisfactory employment. It is the children of low income families who will suffer most from this omission.

The measures in this clause are complex, and as a result will deter deserving young people from claiming income support. One group which immediately comes to mind is those who suffer from a degree of mental or physical handicap which is not disabling to the extent of being sickness. They struggle to overcome the stigma of being handicapped, and may not perceive themselves as falling into that category. They may be unable to read, write or do simple sums; their ability to concentrate for any length of time may be impaired, or they may not be able to stand up to the physical demands of a full day at work.

They are not workshy. Many are deeply upset that no one seems to want them as employees, and they try incredibly hard to succeed. Their entitlement to income support is governed by regulations, and the list published during the Committee stage of this Bill in another place is exceedingly complicated. The need to prove severe hardship to civil servants in Whitehall will be an added deterrent, as they will he unable to present their case personally and there is no certainty that all the facts will be made known.

As the noble Baroness, Lady Jeger, pointed out, the use of regulatory powers by the Secretary of State for the Department of Health and Social Security is increasing, and needs to be questioned. I wonder why, in Clause 12, England warrants 13 "prescribes" while Scotland warrants only 11. Again, there is no reason why the list of groups of young people entitled to income support should not appear in this Bill. It will then receive full discussion and will be capable of amendment. There is also a need for the Secretary of State to publish guidelines for his definition of "severe hardship", and for an independent appeal procedure to be retained.

Clause 7 has also caused some concern and needs clarifying. I should like to ask the Minister what is meant by "any other body" in subsection (1)(b). If it is to be voluntary bodies such as the Salvation Army or Help the Aged, can the Secretary of State be certain that they will have the facilities to make emergency payments and that they will be willing to do so?

I understand that after the recent hurricane disaster the manager of a DHSS office in Ipswich instructed claimants to go to the Suffolk County Council social services department for payment of benefits. This created some difficulties, as there had been no prior consultation between the departments, and they were already in dispute with one another over previous payments.

If the arrangement is to work there must be prior consultation between departments and other agencies. There must also he clear rules about reimbursement. I understand that the DHSS calculated costs at £1.50 per transaction, while Suffolk County Council says that its costs were nearer £5. What will "reasonable administrative expenses" include? Some local authorities are extremely short of staff in their social services departments. Cleveland is one example. Will they be able to engage temporary staff, or draft in staff from other departments; for instance, from the county council treasurer's department? Does the Minister consider it reasonable that a local authority should advertise the arrangements in its local press? As it is only in emergencies that this clause will he required. its terms should be clear.

The Minister will be aware of the anxiety expressed by the Social Security Advisory Committee. the Social Security Consortium and other bodies about the social fund. Noble Lords have also mentioned their anxiety. The Social Security Advisory Committee described it as, both unworkable and unfair In applicants". The noble Lord, Lord Banks, also made that point. Claimants who have recourse to the fund are already on very low weekly incomes, and it is feared that deducting weekly loan repayments from their benefits will reduce their income below subsistence level. There have been a number of cases where elderly, chronically sick people or claimants with young children have been deprived of such essentials as beds and cookers since the single payment scheme came into force in August 1986. Charities have been unable to cope with the demands made upon their resources, and there has been an increase in serious debt. Will the Minister say what proposals there are for monitoring the effects of the social fund, and for avoiding hardship and poverty?

I wonder whether the Minister will give credence to a report in New Society of 22nd January 1988. The report is headed "Social funding", and says: Robin Birch, the affable DHSS undersecretary in charge of the social fund, happily declared at a recent seminar that no less than 18 per cent. of the money set aside for the fund would be spent on administration. No scrimping here, he assured his audience; there would he plenty of social fund officers to ensure fair play. But hang on a minute. Wasn't the whole point of the social security reviews to cut the cost of paying out benefits? In two short years the shame of the old system has become the pride of the new". Can the Minister say whether that 18 per cent. will be deducted from money already allocated to local offices, or whether it will be in addition to that money?

I believe that the National Insurance Fund was originally created to alleviate poverty and anxiety for those unable, for reasons of age, unemployment or sickness, to provide for themselves. The foundations of a scheme which has provided security for our citizens for 40 years are steadily being eroded and the principle that those who are able should support those who are not has been replaced by "Let the strongest man win". Is this really what we want?

5.3 p.m.

Lord Trafford

My Lords, I always find it somewhat difficult when speaking on the subject of social security to refrain from lecturing the Government on my own pet hobbyhorse of the reorganisation of social finance, which would make it simpler, better and so on. This is not perhaps an appropriate occasion on which to do so but I could point out that simplification of the system has one overwhelming virtue. We would not have every 18 months, sometimes 12 months, or at even shorter intervals, yet another Social Security Bill to go through both Houses.

Simplification has one other massive virtue which is that people can actually understand it. I very much suspect that one of the problems in social security— not only in its uptake but in its uses and values—is that people frequently do not understand it and are certainly unable to comprehend their exact entitlements. This leads to the creation of yet another industry. In-house, as we have heard from the noble Countess, Lady Mar, there are large increases in personnel in the social security department to explain how people should fill in forms, what their entitlements are and so on, while outside there are other agencies fulfilling similar functions.

Those Members of your Lordships' House who sat in another place will remember that one of their major functions week after week was trying to understand and unravel the legislation before writing letters to the appropriate Minister. I should have thought that letters to the Department of Health and Social Security were by far the most common that one sent. I see that the noble Lord, Lord Ennals, is nodding. He was on the receiving end of quite a large number of such letters; no doubt, he found the same slight irritation with the to-and-fro of that correspondence.

I was going to say a few words about the Youth Training Scheme and the loss of benefit to people under the age of 18. However, my noble friend Lord Boyd-Carpenter has said nearly all that I intended to say, which has had two benefits. First, he has expressed it better; and secondly, it has shortened my own speech. I would ask only one question. When the Minister comes to reply, will he explain the likely consequences of this provision to those in further education, allowing for the 21-hour rule and so forth? I am not absolutely clear what is the Government's position—even after the Committee stage in another place.

Bearing in mind the endless reports we have had over the years about the difficulty of the transition from school to work, and, if I may say so, the fact that the anti-work ethic has so often been promulgated in certain areas of our education establishments, I think it is true that the YTS scheme has a significant advantage and has been a great success. That is probably universally agreed. It is a useful undertaking. It provides people not only with work skills and training but with work experience which is so important for them in the many years, one hopes, after they become 18.

One would have greater anxieties but for the fact that numerous guarantees have been built in. Not least is the guarantee that each young person will have a place on YTS and that the disabled, one-parent families and various others who are likely to suffer from hardship will be taken care of. However, I shall not remain on this point; my noble friend Lord Boyd-Carpenter has already expressed much of what I was going to say. I shall therefore turn to the other matter I was going to address. I refer to the question of the attendance allowance.

I have dealt with more attendance allowance matters, questions and forms than probably any other noble Lord sitting in the House. On the whole I have not found the Attendance Allowance Board altogether ungenerous in the way that it approaches the granting of attendance allowance, whether at the lower rate—that is, day or night—or at the higher rate—day and night. It has always been understood by those dealing with the matter that those who attended at night but who did not actually carry out a specific medical or nursing function were not entitled to attendance allowance. That was the interpretation before Mrs. Moran took the DHSS to court and won; and all credit to her. However, it raises the point—and this has nothing to do with the question of hardship referred to by the noble Baroness and by the noble Countess—that it is almost impossible to define what is a higher rate attendance allowance on a standby basis when one considers the number of people who could then claim to require attendance allowance on a standby basis.

I would imagine that very large numbers of elderly people with dependants who were previously carrying on reasonably normally in the community in an expected, if not an ideal, circumstance, might then have a question of a claim. I do not say that this claim would necessarily be granted because clearly the next thing that would happen, following the Moran case, would be the introduction of various prescribed regulations to control any abuse of the system. But that, again, would make the system more complicated.

I hope that the attendance board, after the passing of this Bill, and with this change, will nonetheless interpret the question of the full allowance with very considerable compassion. I hope that it will do so with the greatest possible allowance in favour of the applicant rather than in favour of the regulations. On the whole, in most cases that one comes across, this has fortunately in the past happened.

I am very sorry to see that the noble Lord who introduced the attendance allowance in 1971, who was sitting on my right just now, has left the Chamber. I recall very well how much I and some others welcomed the situation at that time. It has always been one of the more important and helpful aspects of social security. And, if I remember correctly, it had very considerable bipartisan support.

I do not believe that this particular change, had it been left unaltered, would have been beneficial to the system as a whole. This is one of those situations where— supporting again what my noble friend Lord Boyd-Carpenter said—there may be a difference of opinion. I trust that that is not so with regard to the question of compassion or the relief of hardship.

5.11 p.m.

Lord Stallard

My Lords, this is not the first time that I have followed the noble Lord, Lord Trafford, in your Lordships' House and it does not embarrass me one bit to be able to say that I agreed with the sense of most of what he said, as I did on the previous occasion when I followed him. I should like to be able to say the same about the noble Lord, Lord Boyd-Carpenter, but I cannot agree that the main reason for introducing the Bill is the changing scene.

I accept that there is a changing scene and that there will be changes in legislation; there will be Bills to follow Bills. That is accepted. What I cannot understand or accept is that that is a sound reason for the rapidity with which Bills are being brought before us under the present administration—not only rapidity, but sometimes they arrive on our Order Paper overlapping legislation that has not yet been implemented, as on this occasion. I suggest that that cannot be just because of the changing scene, I think that there are other reasons, and I shall mention two possible reasons for getting another Bill so soon after the introduction of the long, controversial 1986 edition.

That was an enormous Bill. As your Lordships will remember, it had 90 clauses and 11 schedules. It followed too the much vaunted review of the social security services carried out during Secretary of State Fowler's period of office. It made substantial changes to pensions, income-related benefits, maternity benefit, industrial injury benefit, funeral benefit, housing benefit and much more besides. The Bill was opposed in the other place and it was opposed in your Lordships' House, as it was by all informed and involved people outside Parliament who are concerned with the interests of the social security system.

I and many others on this side of the Chamber said then that it was ill thought out, it had been rushed and cobbled together, it was far too long and it should have been two Bills; perhaps even four. That Bill was guillotined in the other place; important new clauses were introduced and barely discussed during the Committee stage there. In fact some were introduced after the guillotine had been imposed and that further prevented discussion of very important issues. Now it is necessary to correct errors in that Act, and that is no fault of the draughtsman, who must be working under intolerable pressure to produce these marathon Bills.

So the first reason for this Bill is to correct errors and the consequences of those errors in the 1986 Act. Almost half the clauses—Clauses 2, 3, 8, 10, 11 and 12—are in the Bill mainly to correct errors in the 1986 Act. Other clauses, as has been pointed out, introduce further changes.

The second reason, in my view, for the Bill applies to all other social security legislation since 1979. We can say this and repeat it as often as we possibly can, because it is true. The reason is to effect savings in public expenditure. The 1982 think tank report set the scene, and it is worth reminding ourselves of the relevant parts of the report as stated in the Economist of 12th September 1982. I kept my copy of that cutting. I shall not repeat all it said, but after reporting the origin of the think tank report the article went on: If the Thatcher government is serious about cutting public expenditure, argues the paper, then it must consider some radical alternatives in the four areas that account for the lion's share of public expenditure: education, social security, health and defence. The think tank deals with each one in turn.". I shall not mention education and defence because they are not relevant to this debate but the other two are. The think tank paper said on social security: Big savings can be made, says the paper, if all social security payments—from pensions to supplementary benefits- no longer rise in line with inflation". On health: The paper suggests replacing the national health service with private health insurance: this could save £3 billion £4 billion a year from a 1982 83 health budget of £10 billion. The problem is that the less well-oft might underinsure, so the paper suggests that there might have to he a compulsory minimum of private insurance for everyone. In the meantime savings could he made by charging for visits to the doctor and more for drugs". Those two are relevant and justify my reason for saying that the Bill is to effect public expenditure savings.

It was against the background of that document that the then Secretary of State announced his wide-ranging review of the social security system. The position was pretty evident to all and the Social Security Consortium summed it up adequately for me when it said: The review was doomed from the outset by the Treasury's stipulation that it must not increase spending on social security, regardless of what unmet needs were identified, and regardless of the resources devoted to the 'other welfare state' of tax reliefs and allowances. The Treasury regarded the review as a way of finding money through benefit cuts, in order to fund further reductions in taxation". I think again that that adequately sums up that part of it.

But the result of that review was the 1986 Act, which was rushed through against all opposition. Only in the past few months have we been able to study and debate some of the regulations and benefit rates arising from that Act, and there are more to come. These regulations and rates have not even yet been implemented let alone monitored, and we have this other Bill, the 1987 version. You cannot justify that by saying that the scene is changing rapidly. That cannot be possible.

I wish that I had time to go through the whole Bill but I shall content myself with comments on one or two of the proposed changes. Other speakers have mentioned them, so I shall be able to cut down my speech quite a bit. To me Clause 1 clearly shows the extent to which this Government are prepared to go to find money through benefit cuts. This clause reverses the ruling of the Court of Appeal on 13th March 1987 in the case of Mrs. Moran, an epileptic, who was claiming the higher rate of benefit because her condition was such that she came under the provisions of the Social Security Act 1975. The Court of Appeal agreed that she satisfied the night condition as well as the day condition and was therefore eligible for the higher rate of benefit. That ruling obviously affects other cases.

I am not saying that that is the reason—or is it a possible reason?—for the Government deciding so quickly to rush through another piece of legislation in order to reverse the court ruling. Or is it normal procedure for this Government to ignore court rulings? If the courts get in the way, then they will change the rules: "If they do not satisfy us and will cost us public expenditure, we must change the rules and when we change them we will worsen them at the same time, if we can possibly get some more revenue from the deal".

I thought that that was fairly shabby. I think that most people who read that judgment and who were involved, as we were, in the details and in the run-up to Mrs. Moran's case, felt at the end that it was a good judgment which benefited many disabled people. It was possibly the greatest advance for some of them for many years. Any Government who dare to reverse that decision deserve all they get.

As has been said, Clause 4 raises the minimum age at which income support benefit can be claimed independently. It is raised from 16 to 18 years. The position outlined in the National Assistance Act 1948 has been mentioned. I refer to the remarks of the noble Lord, Lord Boyd-Carpenter, who always seems to get my hackles up. There was a period of comparative full employment in 1948. There was not much unemployment in 1948. The National Assistance Act provides: No application for assistance shall be made by a person who has not attained the age of 16 years". and yet the noble Lord says that he can justify the change in conditions.

In other words, the change is that there is now mass unemployment; more young people are unemployed and in more difficulty than ever before. He says that we can change the conditions because there is the possibility of a place on a training scheme. As yet there is no assured place and no assured job at the end of training. He says we can now change the conditions because of the changing scene.

Lord Boyd-Carpenter

My Lords, is the noble Lord aware that it has been stated that YTS will cover all those who desire to take part in it; therefore the only fit people who would be left drawing benefit would be voluntarily unemployed young persons?

Lord Stallard

My Lords, I do not accept that what the noble Lord says is entirely true. However, I hope we shall go into that in Committee. By that time rather than skirt over this, perhaps we shall be able to see the size of the problem and the exact nature of the proposals that are before us.

It has long been the Government's intention to change the age from 16 to 18. It is not a question of it happening because of a changing scene. Let me give a few examples. When YTS was first announced in a 1981 White Paper on new training initiatives, the intention was to remove the right to supplementary benefit from 16 year-olds. Those proposals met with considerable opposition. The Manpower Services Commission was afraid that YTS would be undermined by reluctant recruits. That is nothing to do with us; that was the MSC. The CBI and the TUC argued that YTS would only work if it was voluntary, and the Government accepted that.

The current situation, as outlined by the noble Lord, Lord Banks, is that there are penalties and restraints upon youngsters who refuse a YTS place. There is now a 40 per cent. reduction in benefit entitlement for 13 weeks. There is also a complete ban under the 1975 Act for a youngster who refuses to go on a course without just cause. Clause 26 of the Employment Bill now before Parliament reinforces that disqualification. We understand from all our research that those restraints are being implemented and they work. Therefore, as we have said, there is only the minimum left.

I think it was the noble Lord, Lord Banks, who said that this was a steamroller to crack a nut. Or are the Government hedging their options against future youth mass unemployment; or are they merely removing at least 110,000 or 120,000 people from the unemployment register? Are we preparing for another massive reduction in unemployment by the massage method? It could be any one of those, but it is not as some noble Lords opposite have said.

The 1984 reviews of the social security system did not mention the change, or said little about it. The Green Paper and the White Paper that emerged from those proposals said nothing about the position of 16 to 17 year-olds. The 1985–86 Bill was debated. There was a long discussion on an amendment to remove this benefit from 16 to 17 year-olds in Committee in the other place. The amendment was opposed by everyone, including the Minister of State, and at the end of the debate—that is as recently as 1985–86—the amendment was defeated by 25 votes to one.

The noble Lord, Lord Boyd-Carpenter, and others, mentioned the manifesto. I read the manifesto and the Queen's speech. The Queen's speech stated: My Government will consult the Manpower Services Commission with a view to providing a comprehensive employment service for unemployed people. There will be guaranteed places on the Youth Training Scheme for school leavers under 18 who do not go into employment. Legislation will he introduced to enable benefit to be withheld from those who refuse a place". That is different from saying that legislation will be introduced to enable benefit to be cut from everyone over the age of 16. That is what is said in the legislation. It is not saying what the manifesto said. I hope that we shall argue that issue in Committee because it is important.

The Government estimate that in removing the general entitlement to income support from the 16 to 17 year-olds, as the Minister said (our figures vary) they will save about £95 million, with some minor offsets (and they can be argued) on the income support and child benefit side. If the provision is passed, the raising of the age to 18 will take effect from September 1988; that is this year. That would be in time to affect this year's 75,000 summer school-leavers. I suppose they will disappear from the unemployment register. Perhaps there will be another speech.

There are grave doubts in my mind as there must he in the minds of others given the rapidity and the complexity of the changes. They are not easy to administer. Therefore there must be grave doubts as to whether they can he in position and functioning before September this year. I doubt it, because I am still aware of the housing benefit changes. They were cobbled together and rushed through in similar circumstances. They misfired and caused tremendous hardships, and they still do, to thousands of people who are in need. There were delays and difficulties in implementation because of the bureaucracy that was arranged around them.

Clause 5 also concerns me. It tightens up the contribution conditions for unemployment and sickness benefit. My noble friend Lord Barnett also mentioned this. The clause makes it harder for people to satisfy the contribution conditions. Again I hope we shall discuss the details in Committee. But, if the provision is passed, the restrictions will affect married women returning to work. What is laudable about that? As has already been said, it will again affect young people because they will not have had time to build up a record of several years' continuous work and thereby qualify through their contributions. No one can understand such an attack on youngsters and married women.

The noble Lord, Lord Banks, said that 350,000 people could be affected and would lose entitlement to unemployment benefit. If they lost entitlement to unemployment benefit, they would automatically drop off the register and again those numbers would disappear from the unemployment register—if those figures are correct. It is true that if they satisfy some other conditions they might qualify for income support instead. However, income support for them would be at a lower level than their previous benefit; and the provision also contains a capital rule which does not obtain for the other benefits. There is a capital rule for income support, as I understand it. We know that at least 10,000 people will lose all benefit and will drop off the unemployment figures.

The clause will result in public expenditure savings, after allowing for income support payments, of £10 million in 1988–89, rising to £70 million in 1990–91. Should the Minister think I have the figures wrong, they are in the Financial Memorandum to the Bill. Therefore, I assume that they are at least only half right.

If I had the time to go on further, I should like to speak about the changes which worsen the conditions of occupational pensioners and others, but that subject has already been mentioned. We shall have further opportunities to discuss it.

I conclude with a few words about the most controversial part of the Bill, Clause 10 and Schedule 3, the social fund. From what I have read so far I share the concern expressed in Committee in another place and by all the voluntary organisations involved with social security issues, including the Government's own Social Security Advisory Committee. After thorough consideration of the effects of the draft manual of the fund, it had this to say: A wholly regulated scheme and one which is purely discretionary both have their drawbacks. The Draft Manual attempts to mitigate the problem of local variation in the use of discretion by imposing binding directions on SFOs and by the use of very detailed guidance. We believe that the result is fettered discretion"— lovely phrase— importing some of the rigidity of the regulated system but without the advantage of certainty of entitlement and accompanying appeal rights and without ensuring that similar cases will he treated in a similar way". The Government's Social Security Advisory Committee has now made it clear that the social fund proceeds without its support. It should have been enough for the Government to say, "Well, let's have another look". But no, they are battering on ahead. I certainly share the concern.

I have tried to justify my contention about the two main reasons for the Bill's appearance in the House. Government spokesmen have said that these measures are intended to simplify the system. The noble Lord, Lord Trafford, was on the same point: they certainly will not. On the contrary, the further involvement of local authority and social services departments will make the situation even more complicated because we envisage a completely new role for social workers. I do not know whether they have discussed this, but they will be in a very difficult situation with some of the cases which will naturally go to them as a result of this legislation. So it will certainly not simplify the system, and it may well complicate it.

The Government say that the legislation will make the system fairer. I do not see that any case has been made out for that whatsoever. They say they are intent on targeting the needs. I cannot believe that they are in tune with the needs of claimants when I read some of the clauses in this Bill. The new Secretary of State in another place, Mr. Moore, said in a recent speech that his ambition was to encourage individual independence. The Minister described the new social fund as a way of reducing dependency. Of course the social fund, as I read it, may well reduce dependency on the state because it reduces access to state benefits. But it is likely to result, as has already been said, in other forms of dependency; on charities, on moneylenders and on loan sharks, with all the problems that that will entail. I hope that we shall make considerable and constructive changes during the Committee stage.

5.30 p.m.

Lady Kinloss

My Lords, of the many noble Lords who have spoken this afternoon most are very concerned about one aspect or another of this Bill. Clause 1 worries organisations of and for disabled people. They have argued since the passing of the Social Security Act 1986 that it did not do enough for disabled people. Some severely disabled people claiming for the first time in April 1988 will receive considerably less financial assistance from the benefits system than they would have done under the present system. In some cases, their needs are so great that, if no help is given, their lives could be in danger. The Secretary of State for Social Services recognised that there were some people who would not benefit under the new system. In the Official Report in another place on 27th October 1987, he is reported as saying: Clearly, those who register after 1st April 1988 will come under the scope of the new system, but we must find a way of targeting more effectively those few people whom we have not been able to recognise in the system".—[Official Report, Commons, 27/10/87; col. 191.] The Government initially argued that any financial gaps could be plugged by voluntary and social services and by help from the social fund. But organisations for disabled people believe that there is no way in which local social service departments who are already making staff cuts can be expected to fill the gaps in care which it would seem the new income support scheme would create.

It would also seem unreasonable to suggest that overstretched and under-resourced voluntary organisations would be able to take on extra duties. This brings me to Clause 10, the social fund. What happens if a disabled person applies for a grant after a particular office has exhausted its budget for that financial year? It would seem that under the proposed social fund regulations if a loan is turned down then the applicant must wait six months before reapplying. Furthermore, all loans and grants made by the social fund are discretionary. Disability organisations therefore do not believe that the social fund is an acceptable way of distributing benefit.

The Social Security Bill offers the Government the ideal opportunity to show compassion and understanding by looking at the situation again, especially for the severely disabled. One way in which such people could be helped would be by a supplement to the attendance allowance. Would the Government consider this? It would give severely disabled people the help they need.

The National Deaf-Blind and Rubella Association and the Royal National Institute for the Blind are two charities which are concerned with the social fund as defined in Clause 10. There are two areas of concern to them: those who are deaf-blind and living at home who require both parents full-time at home simply to maintain a family situation. Likewise, the multi-handicapped blind living at home in the family need all the help and benefits they can get. Then there is the problem of single parent families. Not only have they to contend with the disabled child but with loneliness as well.

The social fund regulations which come into force in April 1988 embody a principle which is a significant departure from the practice since 1948. This means that the claimant will be advised by social fund officers to seek help from relatives first—that is, supposing they have any. I wonder how members of the Government as individuals would feel if they had to do so. Then, after their relatives, claimants are to apply to charities before a loan is made from the social fund. The regulations of many charities required them to try to ensure that before making a grant available to an applicant all statutory benefits have first been claimed. The Social Security Act coming into force in 1988 seems to reverse this. Moreover, many people would quite naturally feel chary of approaching their relatives for assistance.

The trouble with the loan from the social fund is that those who it is felt will be unable to repay it will be refused a loan, thus causing poor families to become even poorer and to be caught in the poverty trap. There is a possibility of their being able to get a grant, but only in certain category cases. Would the Minister please agree to ask his right honourable friend the Secretary of State for Social Services to look again at this situation? Many charities are afraid that as they will very often have to say that they are unable to help, not only will this mean social workers having to write letters on behalf of their clients to many charities which they feel might be able to help, but for the charities themselves there will be a knock-on effect. People will say, "Oh, that charity did not help me, why should we help it'?" Hence a fundraising effort could be a disaster for the charity.

I have grave misgivings about the principle of loans in place of grants. Of the £200 million in the social fund, £140 million—nearly three-quarters—is earmarked for loans. If one approaches a bank manager for a loan he will immediately ask about collateral. In this case loans would be made to people who are not likely to have any collateral. In their desperate state they may well accept loans without the slightest possibility of repayment unless they are to encounter severe hardship—for instance, having deductions made for the payment of fuel bills. It is known that many families are forced to economise on food and are frequently at a dangerous low nutritional level. This can put the health of both children and parents at risk. It would seem to me that the social fund loan system would enhance that risk.

The most disastrous aspect of the social fund appears to me to be that many of the poorest members of the community will get no help at all from the social fund. Where the social fund officer judges that an individual is too poor to repay a loan, that individual will be turned away empty-handed unless a no-repay loan is made. This mocks the Government's alleged principle that assistance is to be targeted on those most in need.

The Social Security Advisory Committee, as the noble Baroness, Lady Jeger, has said, is intensely concerned about Clause 10 and the social fund. Perhaps I may hope that the Government will listen to the Committee and also that the Government will subscribe to the principles of the Good Samaritan.

5.39 p.m.

Lord Strathclyde

My Lords, I have two confessions to make today. First, I have never spoken in a social security debate before; and, secondly, I am not sure that I know a great deal about social security itself. However, I have chosen to talk today because this is a very important sector of government policies and it is a major cost to the taxpayer. It is relevant to all of us, and not least to those people who receive benefit today. My contribution will be small because I am here to listen to what is said, and I have very much enjoyed doing so.

I particularly wish to talk about Clause 4 and the role of young people. I was a youth not so long ago, so perhaps it is appropriate for me to talk about that. I very much welcome the proposals under Clause 4, for several reasons. First, I have always felt that it is extremely sad for us as a modern, civilised nation to allow young people over 16 to simply leave school and opt for the dole. That is a negative option and, so far as I can see, creates a lower level of young who exist entirely from benefits. I agree with what the noble Baroness, Lady Jeger, said earlier about young people not wanting to be unemployed, but when they become unemployed they sometimes get used to it and find it very difficult to get out of it. I think that these proposals avoid that trap.

Secondly, these young people often leave school with the most rudimentary of skills, sometimes not even the essential scholastic skills, and have neither the incentive nor the ability to find a worthwhile job which could suit them.

Thirdly, in the longer term it creates a group who have no experience of disciplined, regular work and who will come to terms with that discipline only with great difficulty. I do not know the figures but I suspect that there must be a fair proportion of young people who have not held a job for some years, are now used to living on unemployment benefit and would find excuses to refuse a job if it was offered to them.

I believe this situation is untenable, and the Government would not be acting responsibly if it were allowed to continue. Many people condemn the YTS as purely being cheap labour for jobs no one else wants to do, but it is a scheme which has helped over 1 million young people, which costs the taxpayer over £1 billion and in which over 100,000 employers participate. It is perhaps not surprising that some people have not succeeded in seeing the benefits of the scheme and therefore condemn it as being a glorified form of cheap labour.

Furthermore, it has been suggested that jobs under the scheme lack any sort of quality; but I believe that with the virtual abolition of unemployment for 16 to 17 year-olds companies participating in the scheme will see their trainees as being their future lifeblood and produce the quality of jobs and training that we all so much desire. I am also pleased to see that the Government are giving those on the YTS a training allowance which has been set above the basic supplementary rates. Young people will therefore have an additional financial incentive to find work on the scheme. That can only be beneficial to their future development.

I also commend the Government for allowing a safety net for those young people who for a variety of reasons, such as disability or single parenthood, will still be eligible for benefit. These proposals show this Government's continued concern for young people. Again, the noble Baroness, Lady Jeger, said earlier that the Government did not care for young people. I do not believe that is so, because they have a desire to see young people back in worthwhile work. I know that there will be many comments to make on this Bill in Committee, and I look forward to that. In the meantime, I support this Bill's Second Reading.

5.45 p.m.

Baroness Turner of Camden

My Lords, this Bill, although short, is a very important one. It follows hard upon the heels of the comprehensive and far-reaching Act of 1986 and is based on very similar principles. I believe that it is a thoroughly bad Bill with very few, if any, redeeming features.

It seeks to make savings at the expense of the young, the disadvantaged, the disabled and, in the main, underprivileged people. Basically its philosophy is one of so-called targeting of benefits. Here I agree with the noble Lord, Lord Boyd-Carpenter, that there is a difference in philosophy between our side of the House and his side of the House on this issue, because in my view the targeting is really a euphemism for the kind of means testing so hated by previous generations of poor people, and with good reason. That is why there is a relatively low take-up of means-tested benefits, even now. It is low compared with child benefit, which is a universal benefit, where take-up is of the order of around 100 per cent.

We on this side of the House are concerned about the Government's attitude to child benefit as a result of the refusal to uprate it. We would remind the Minister that child benefit has a very substantial degree of support in the country, where it is fully understood that it has taken the place of child tax allowances, which were not targeted but which were applied across the board to all who paid taxes.

I should like to deal with the Bill in a little detail because I want to give the House an idea of the areas where we shall be seeking amendments in Committee. First, I shall deal with Clause 1. As we have heard, this seeks to amend existing legislation about entitlement to attendance allowance at nighttime in order to come to terms with the Moran judgment. The Minister claims that the clause has not been introduced to save money, although it is clear that there will be some small savings. One wonders therefore why it is necessary to bother with it at all. Could the Government not have accepted that the Court of Appeal in the Moran case had interpreted the law in a compassionate and humane way and allow that to stand?

I think that the wording in Clause 1 will lead to all kinds of difficulties in practice. Some of these points have already been raised by other noble Lords this afternoon including the noble Lord, Lord Banks, and my noble friend Lord Stallard. We shall certainly be seeking to explore this further in Committee.

I now come to the clause dealing with industrial injuries benefits. It is fairly clear to me after some two and a half years in your Lordships' House that the Government do not much care for the industrial injuries scheme. The Social Security Act 1986 removed entitlement to disablement benefit for cases where disablement is assessed at less than 14 per cent. We on this side of the House opposed that at the time when the Bill was before your Lordships. I myself moved a couple of amendments, but without success. We now have a further erosion of the scheme; an ending of entitlement to reduced earnings allowance when recipients retire from regular employment and its replacement by a new benefit, retirement allowance, at the rate of 25 per cent. of the previous REA entitlement. Further, industrial death benefit is to cease for deaths after 11th April 1988 and there are other restrictions and cuts to which my noble friend Lord Basnett has already referred in some detail.

Provision for injured workers has had a somewhat chequered history in this country. Before the industrial injuries scheme was introduced by the Labour Government after the war there had been the Workmen's Compensation Act, under which an injured worker had to decide whether to opt for very small weekly compensation payments or whether he would sue his employer at common law for negligence. That was a pretty iniquitous system and it meant that in practice many employers got away with unsafe conditions because workers simply could not afford to forego the weekly payments and run the risk of not getting anything at all if they sued. I speak with some knowledge of that scheme because I started my working life working on employers' liability for a very large insurance company.

The industrial injuries scheme was an attempt at a no-fault system of compensation for industrial injuries, since an injured worker did not have to make that choice. Provided the accident arose out of or in the course of employment he or she could secure benefit under the industrial injuries scheme and could also sue at common law if it was believed that the accident was the result of negligence. However, the scheme has gradually been eroded. The replacement of the reduced earnings allowance by a retirement allowance of 25 per cent. of the maximum level of £25.80 per week will mean a benefit loss of around £19.35 per week for injured people. That is quite unacceptable to us.

The claim is that the changes will cut expenditure by £2 million in 1989 to 1990 and by £10 million by 1991 to 1992. Those savings are being made at the expense of people who have had accidents or suffered diseases at work. It is generally accepted that there are risks in going to work. That is why employers have to carry employers' liability insurance, although it must he said that only 10 per cent. of all accidents at work result in successful common law claims. Some work environments are hazardous no matter what the Health and Safety Executive does to improve health and safety standards. Moreover, the scheme is part of a separate insurance for which contributions have been paid. There is no case for a cutback of this nature. That is an area in which we shall be seeking revision when the Bill is in the Committee stage.

I turn now to a clause which a number of your Lordships have described as the most controversial in the Bill. That is Clause 4, which seeks to remove entitlement to income support for persons between 16 and 18 years of age. That matter has already been discussed quite amply this afternoon. One of the aims of the clause appears to me to be not so much to encourage but to coerce young people into YTS schemes. However, as has already been said, it has always been the desire of the Manpower Services Commission that participation in YTS schemes should be voluntary. That is also the view of the TUC and the CBI.

Efforts have been made by many employers to improve the quality of YTS schemes, and we welcome that. However, the image of a cheap labour scheme with nothing very much at the end of it still clings to YTS. If that image is to be dispelled, we must ensure that the schemes provide high-quality training and proper opportunities for achieving recognisable qualifications. YTS should be able to attract young people. Coercion will be counterproductive. In any event, employers themselves are not happy about poorly motivated trainees, which is one of the reasons why the CBI has taken the view that it has over voluntary participation. Moreover, as a number of noble Lords have said, recent research appears to indicate that 91 per cent. of all unemployed school-leavers would actuall prefer some employment to receiving benefits. There is already substantial provision to prevent abuses of the benefit system.

There are other aspects of the proposals which give us cause for concern. Although the Minister says there will be protection for some young people suffering from severe hardship, that is to be a discretionary power in the hands of the Secretary of State. There is no indication that there will be any mechanism for appeal if a hardship application is rejected.

Subsection (3) of the clause seems likely to cause problems, since the net result would appear to be to make young persons entirely dependent on their parents. Moreover, there is a substantial difference between the amount of child benefit which will be payable and the current supplementary benefit—£18.75 per week at current levels, compared with £7.25 per week of child benefit. That in itself could place some strain on low income families. We believe that the Government's proposals in that part of the Bill are based on populist inaccuracies of the kind that have appeared in a number of newspapers and have been aired from time to time in the less reputable parts of the media. We are unhappy about that and we shall be seeking revisions at the Committee stage.

I turn now to Clause 5 and the proposal to tighten up contribution conditions for entitlement to unemployment benefit and to sickness benefit. In general, those provisions extend the period for which a person has to work and pay contributions both after first entering employment—for example, school-leavers, students, immigrants and so on—or on re-entering the employment market after a period of absence such as is experienced by parents bringing up children and those caring for others at home. Most of those people are women, and indeed it is women who are most likely to be hit if the provisions become law unamended. They, more than men, are likely to have had an interrupted work pattern. In the main, they care for children and for the sick and disabled in the family. They will lose their right to unemployment pay in many instances and they will he forced on to income support instead of receiving unemployment benefit.

Clause 6 extends to people aged 55 or over the provisions first introduced in 1981 under which an unemployed person with an occupational pension suffers a reduction in unemployment benefit. That has already been dealt with to some extent by a number of noble Lords, including the noble Lord, Lord Swann. It is estimated that such an extension to people of 55 would extinguish unemployment benefit for 27,000 people and would reduce benefit for 7,000 more. As several noble Lords have said, it would save £15 million in 1988–89, rising later to £65 million.

However, most people who take early retirement at 55 do so as a form of compulsory redundancy. I can speak with some knowledge of that matter because in my time as a union official I was responsible for negotiating a number of voluntary redundancy schemes. Few people of that age regard themselves as not being available for work. Most people would be only too happy to work if work was available for them. In many parts of the country it is not. They suffer reduced pensions because in most occupational schemes they have not reached normal retirement age and they therefore are not entitled to a full pension. If the Bill goes through unamended, it will make it more difficult for unions and employers to negotiate voluntary early retirements, particularly in areas where the prospect of obtaining alternative employment is slight.

Moreover, unemployment benefit is not a charity. It is a benefit for which payment has been made. The employee who retires early has paid both for his occupational pension, which in any event would be reduced, and for his unemployment benefit. If he or she can satisfy the condition of being available for work, he or she should be entitled to receive that benefit. I emphasise that the scheme is an insurance scheme. One wonders how a private insurance company would fare if it reneged on insurance contracts in that way. Again, that is an area where we shall he seeking amendment.

Turning to the social fund, there has been much criticism of the social fund concept, not only from our side of the House. In the main, our concerns are that the social fund will be cash limited, will give help through loans rather than grants, will be discretionary and will give no right of appeal to an independent tribunal. My noble friend Lady Jeger dealt with that matter at length. Concern about the Bill still remains. Since those who will be applying for assistance from the social fund are from the poorest in our society, how is it to be expected that they will be better able to cope if they are given loans which they must repay? We voiced our dissatisfaction with that provision when the Social Security Act was debated and we still oppose the whole idea.

Schedule 3, dealing with the social fund, indicates that further assistance will be available to those persons who require help with heating during the winter. The wording of Schedule 3 is very unclear. While I welcome any improvement, clearly it would be better if older people were entitled to a prescribed heating allowance to cover the winter months. That would remove the element of doubt and the insecurity which still remains with the wording that appears in Schedule 3. That has long been the policy demand of organisations with special concern for the care of the elderly. The Government should have heeded that, and Schedule 3 presented an opportunity to do something about it. We shall attempt to do that when the Bill is before your Lordships.

All the proposals in the Bill would effect savings, except that it is alleged that the extension of YTS will cost more. However, I do not think that investment in training, which should be undertaken anyway, should be set against social benefits affecting in the main poorer people and those least able to look after themselves. The Government's proclaimed philosophy is that people should be encouraged to stand on their own feet. The proposals in the Bill, as the noble Lord, Lord Banks, has said, will have the effect of removing the benefits for which people have contributed and forcing them on to income support or means-tested benefit. That does not seem to me to be necessary or desirable, particularly in circumstances in which we are constantly being told that the economy is improving, that the Chancellor has money to spare, that we are in surplus and that tax reductions could be on the way. That makes it even more imperative that we look after the disadvantaged and do not remove, in a quite exceptionally mean way, quite small benefits which nevertheless mean a lot to people who rely on them. I regret that the Government have seen fit to introduce this Bill and sincerely hope that it does not leave your Lordships' House without substantial amendment.

6 p.m.

Lord Skelmersdale

My Lords, as I said in my opening remarks, this is a short Bill but it is wide-ranging. The noble Baroness, Lady Jeger, described the Bill as a gallimaufry. I must confess that I could not spell the word "gallimaufry" and so I looked it up in the dictionary. One definition is that it is a heterogeneous or, in other words, a diverse matter. I certainly agree with her on that point. I rather suspect that it is the last point on which I shall agree with the noble Baroness on the Bill.

Nonetheless, I found the debate most interesting. Not surprisingly, a wide number of points were raised. One set of points—having absolutely nothing to do with the Bill—I do not propose to answer today. The noble Baroness, Lady Jeger, was the first of many speakers to devote what I considered a disproportionate amount of their speeches to general aspects of the social fund already found acceptable by this House—on a division, it is true. I accept that they are important points that deserve answers. But, as I said, they have nothing to do with the Bill. Therefore, unless any of your Lordships objects, I propose to write an encyclical answering all the various points. I shall circulate it to noble Lords on all sides of the House who have taken part in the debate so that we all know exactly what we are talking about. Any noble Lord wishing to come back to me as a result of that letter is perfectly entitled to do so. Following normal practice I shall make a copy available in the Library for those noble Lords who have not received the encyclical. I hope that that procedure will be sufficient.

As I said, a vast number of points have been raised. I think that perhaps it would be best to go through the Bill clause by clause if there is time. Under the new provision of Clause 1 disabled people qualify if, in order to avoid the risk of substantial danger, someone else is required to be awake and watching over them for a prolonged period or at repeated intervals during the night. The daytime and alternative night time conditions of entitlement remain unchanged.

My noble friend Lord Trafford, for whose words of wisdom I am extremely grateful for the second time today, described himself as very experienced in the matter of attendance allowance. He said that he had always understood that standby attendance did not entitle a claimant to attendance allowance. That is absolutely true. He went on to say that the board has always interpreted the matter fairly, which I also believe to be true. Our intention and that of the Attendance Allowance Board is simply to return to the position as it existed before the Moran judgment. The board has assured us that it will not seek to tighten its interpretation and that the same sorts of people who qualified before the Moran judgment will continue to qualify.

I should make the general point that as a result of the Moran judgment the law is in a considerable amount of uncertainty. What constitutes continual supervision for the purposes of Section 35(1) of the 1975 Social Security Act has been considered in various social security commissioners' decisions since the benefit was introduced in 1971. Some supported our understanding that continual supervision required the overseeing or watching over of disabled people by someone else, the frequency or regularity of the need for supervision being factors to be taken into account. In other commissioners' decisions, however, it was held that anticipatory supervision, in other words, someone being available to intervene if and when a dangerous event occurred, might he sufficient to satisfy the continual supervision criteria.

Not only is that an anomaly in the findings of the commissioners; there is also an anomaly in the finding of the Court of Appeal. In the case of Regina v. The Secretary of State for Social Services ex parte Connelly in 1986 (AER 998 is the reference) the court considered continual supervision at night and considered that the real basis of decision in that case was whether the risks involved to the claimant gave rise to substantial danger. Although the court considered the possible effects of the claimant being left alone by night, the decision did not comment on or over-rule previous law.

I can tell the noble Lord, Lord Stallard, that in the Moran judgment, the court did not award higher rate attendance allowance to Mrs. Moran. The court made clear in its judgment that it had no power to decide entitlement to the allowance. Satisfaction of the medical conditions for entitlement is a matter for the Attendance Allowance Board and its delegates. The court said that the board's interpretation of the law in respect of the night time supervision condition—an interpretation based on the decision of a tribunal of social security commissioners—was wrong. The court set out its interpretation of the law and returned the case to the Attendance Allowance Board for further consideration in the light of that interpretation. The board has done so and its decision has been notified to Mrs. Moran.

It was, I think, the noble Lord, Lord Basnett, particularly who zeroed in on Clause 2. The noble Lord mentioned the relationship between the industrial injuries scheme and levels of litigation. I am advised that there is no evidence linking any increase in litigation with the introduction in October 1986 of a 14 per cent. threshold for the payment of disablement benefit, and I can see no reason why that should be so. However, the. noble Lord has made the point and I shall consider his remarks in my general reading of the Official Report. Claims for damages at common law can only succeed when an employer is shown to be negligent whereas the industrial injuries scheme is based on a "no fault" principle.

The noble Lord suggested that the number of occupational accidents is rising. I believe this to he untrue. Although accident trends were rising during the period from 1981 to 1985, the latest report from the Health and Safety Executive shows that this movement has been arrested and that there are signs that the number of accidents in construction is now declining. I am advised that the number of fatal accidents during 1986–1987 is the lowest on record. It is believed that the incidence of occupational disease has also been substantially reduced.

Many noble Lords majored on Clause 4 and the Youth Training Scheme—not surprisingly, as I did so myself in my opening speech. I am particularly grateful to my noble friend Lord Strathclyde whose contribution I very much welcomed. He is quite right in stressing the value of training for young people. He claimed to be the youngest of those who have spoken. I think that that is probably true but looking at the Front Bench opposite, there may be some dispute as to whether or not I am the second youngest.

Many of your Lordships will have children and grandchildren who are in the 16 to 17 year-old age group and may, I suggest, be closer to what those young people think than either my noble friend or myself. However, YTS provides a guarantee of a good quality training place to all young people under 18. With such a guarantee for the able bodied and a safety net for those who are not able to take up a place, there is no longer any reason to continue paying income support to the under-18s. That is our aim in Clause 14.

The noble Baroness, Lady Turner, pointed out that the Government's philosophy is that people should be encouraged to stand on their own feet. I suggest that you do not proffer such encouragement by allowing young people to go straight from school into the benefit culture.

The noble Baroness, Lady Jeger, suggested that the new rules went beyond what our manifesto commitment said. The Government have decided that the best way to avoid youngsters becoming accustomed to and reliant on state benefits when there is no need to be so is to remove general entitlement to school-leavers from the outset. The YTS guarantee is open to them, and child benefit and other dependency additions as appropriate will be available, as the House knows.

I accept that there is another, reverse, way of doing it; namely, the existing situation could be kept and one could excise from it. What the Government have chosen to do is to do away with the existing procedures and then add to them for particular groups of people. I accept that it could he done either way, but this is the way that the Government have decided to do it.

The severe hardship rule places an extra power in the hands of the Secretary of State. That was suggested by the noble Lord, Lord Banks. The Government are removing part of the safety net by disentitling people under 18 except in prescribed groups. It is reasonable, therefore, to place in the Bill a discretion to re-entitle people. The power will he exercised by the Secretary of State in cases not prescribed in regulations where severe hardship would otherwise arise.

The very existence of the power demonstrates that the Government are being realistic in acknowledging that it is impossible to legislate for every conceivable situation that could arise. The power has been given to the Secretary of State as centralisation of such discretion will result in standardisation of treatment, as it has with the exercise of such discretion in relation to boarders who claim exemptions from the time limit rules. In 25 per cent. of such referrals the Secretary of State's decision is, I am advised, in favour of the claimant.

It is our intention under Clause 4 to extend the treatment of the child as dependent on his parents up to the end of the calendar year for summer school-leavers and an extra three months for leavers at other times. The only exceptions will be children living away from home with good reason, as will be specified in regulations; for example, those at risk of physical or sexual abuse, married couples with or without children, cohabiting couples with children and those who are not required to be available for work, such as the long-term sick and one-parent families.

I understand that this year there are likely to be 600,000 school-leavers, of whom 200,000 are expected to go straight into a job and 360,000 on to the YTS. Thus what we are talking about are 40,000 extra places to be made available on the YTS. The noble Baroness, Lady Jeger, asked about the training allowances given to the YTS people. A supplement can be paid on top of the YTS allowance to cover board and lodging costs, and in appropriate cases income support would also be available. That will also cover the problem when young people have to move away from home.

The 21-hour rule and the impact on part-time study was another point raised by the noble Baroness, Lady Jeger. The principle behind the change comes from the manifesto commitment that the Government will take steps to ensure that those under 18 who deliberately choose to remain unemployed will not be eligible for benefit. Young people studying under the 21-hour rule are first and foremost unemployed and seeking work, even though they are filling some of their time with part-time study. It is right that they should be treated in the same way as all other unemployed 16 and 17-year olds.

Those genuinely seeking to improve qualifications have the option of staying at school or going to a college of further education on a full-time basis. Part-time study may equally be undertaken at night school while in employment or on the YTS. Study without restriction on the hours of attendance can still he undertaken during the three-month or four-month period during which child benefit will continue for those seeking employment or YTS placement. Those aged 18 and over will not be affected.

The noble Countess, Lady Mar, mentioned the opportunities for mentally and physically handicapped young people. The YTS has been designed to cater for all young people, including those with mental and physical handicaps or learning difficulties. As I pointed out, additional funding is available for employers to provide specially designed training programmes for disabled young people, or those who require sheltered training. Some 12,000 special grants were available in 1987.

The noble Baroness, Lady Jeger, asked: what are the Government doing about using their powers to disqualify a person from unemployment benefit, if it is decided that he or she is voluntarily unemployed? At present the maximum disqualification period is 13 weeks. In the light of the increasing incidence of voluntary unemployment the Government intend increasing the maximum disqualification period to 26 weeks from April 1988. The same periods apply to a reduction of supplementary benefit and income support, normally a reduction of 40 per cent. of the claimant's benefit.

We recognise that in so far as voluntary unemployment is a problem we should take steps further to extend the period of maximum disqualification. However, it is maximum disqualification. On our view it is the right approach, bearing in mind the choice and advice given to young people. We prefer the positive approach of encouragement to train, gain skills and experience for a career which this will give.

The noble Countess, Lady Mar, suggested that children from low income families will suffer in all this. During the child benefit extension period those parents in receipt of income support will be able to claim a dependency addition in respect of any 16 or 17 year-old child who has registered for a job or a YTS place. There will, therefore, be no reduction in such a family's income during the child benefit extension period. After that period there will be money coming in from the YTS training allowance, and so the family as a whole should not be disadvantaged.

The noble Lord, Lord Stallard, suggested that Clause 5 will result in a large reduction in the count of unemployed. It is expected that a large majority of those affected by the contribution changes will continue to register in order to qualify for other benefits or national insurance credits. Therefore to that extent it is unlikely that it will affect the figures. However, some married women are not entitled to claim income support, and people over 60 may leave the register. It is estimated that the count may be reduced for these groups by about 10,000 people.

Savings on Clause 5 were mentioned. The gross savings on unemployment benefit rise to £380 million by 1990–91, as the noble Baroness, Lady Jeger, said. But there are increased costs on means-tested benefits such as income support. The net savings are £68 million. I shall have something else to say on savings a little later—perhaps quite rapidly, looking at the time!

I was interested in the speech of the noble Lord, Lord Swann, who declared an interest as chairman of the company pensions information system. I can confirm to him that the changes in Clause 6 will not come into effect until January 1989. I can also tell him that it is our intention that personal pensions should have the same effect on benefits as do occupational pensions.

For most people the new arrangements to facilitate their taking up personal pensions or to enable them to transfer from occupational pensions to personal pensions will not come into effect until later this year. I understand that it will he some time thereafter before any significant effects are felt. We shall be introducing the necessary amendments to legislation in due course. This is a very complex area which we do not wish to rush. Although I shall he interested in the noble Lord's assessment of the problem, I do not think it would be practical to make amendments in this Bill to cover that eventuality.

There was a suggestion, among the many others made by the noble Baroness, Lady Jeger, that those aged 55 to 60 are being unfairly disadvantaged under Clause 6. This clause is an extension of the abatement arrangements for the over-60s introduced seven years ago. It is likely that many in this age group will not wish to take a further job but I accept that some will do so. If they do, and if they unfortunately should become unemployed, they will suffer total withdrawal of benefit only if substantial amounts of occupational pension are in payment. A married man claiming for his wife at current rates continues to receive benefit until his occupational pension exceeds £85.90 a week for a single man. His pension would have to be £66.50 before benefit is withdrawn.

The noble Countess, Lady Mar, asked me what is meant by "other bodies" in reference to emergency payments. In certain circumstances, for example when a local authority is unable or unwilling to enter into an agreement to make emergency payments on behalf of the Secretary of State, an agreement could be reached with any voluntary body which has regular contact with a particular group of social security claimants. Inevitably there will be occasions when it is more appropriate for the Secretary of State to use a voluntary body as an agency rather than local authorities. This stipulation provides for that.

I said that there were two parts of Clause 10 and Schedule 3 which I would respond to now because they refer to exceptionally cold weather payments. The provision gives us power to make payments from the social fund in respect of extra heating attributable to cold weather. The word "extra" is particularly important because in so much of what we have heard it is suggested that this concerns just cold weather payments. It is indeed for exceptionally long periods of severe weather, and whether it starts on a Monday, a Sunday, a Saturday or any other day of the week does not matter. Effectively what it means is that an exceptionally long period of weather varies between seven and 13 days.

As I understand the position, this has always been the case, even under the last Labour Government. But, looking at the noble Baroness's face, I should like to check that and perhaps write to her. I hear her say that perhaps I had better. I have given the offer and I will do it. I have already said that these payments will be made on the same basis as maternity and funeral payments, and they will not have to be funded from the budget limited section of the social fund.

The noble Baroness, Lady Jeger, also referred to the regulations in force this winter which relate to cold weather payments under supplementary benefit regulations. We have yet to decide the details of the scheme for exceptionally cold weather payments from the social fund.

Lastly, the noble Lord, Lord Banks, asked about the severely disabled living in the community. As the House will know, my right honourable friend the Secretary of State has given a commitment to meet the special needs of very severely disabled people living in the community, who are in the very small minority of disabled people who lose from the introduction of income support. He is still considering this matter in consultation with organisations representing disabled people and he will make an announcement in due course. Of course I shall make sure that your Lordships also have the benefit of that announcement.

The noble Lord, Lord Banks, and the noble Lady, Lady Kinloss, also raised that point. We shall be considering a long-term solution once we have the report of Sir Roy Griffiths on his overview of care in the community and the result of the OPCS survey on disability. In the meantime we are considering how best to find an interim solution.

There is one more point that I should like to make. It is absolute nonsense, as my noble friend Lord Boyd-Carpenter pointed out rather in advance of the speech of the noble Lord, I was amused to see, for the noble Lord, Lord Stallard, to say that the purpose of the Bill is savings. I do not deny that it accounts for some modest but necessary and worthwhile savings in expenditure. On the social security programme it will save some £80 million in the coming year, rising to £222 million in 1990–91, although, as the noble Lord himself pointed out, these savings will be substantially offset by increases in the cost of YTS. But the saving should be seen in the context of social security benefit expenditure as a whole.

This has risen from around £16 billion in 1978–79 to £44 billion in the current year, an increase in real terms of about 38 per cent., and it is set to rise to around £46 billion in the next financial year, at a time when unemployment benefit is being reduced because the number of claimants is less. So I think that the figures speak for themselves.

This is a heterogeneous Bill. This Government are not prepared to sit back and leave young school-leavers to sink into unemployment and dependence on benefit. It is not fair to them, and equally it is not fair to taxpayers that they should have to subsidise those who deliberately choose unemployment. We are instead guaranteeing them an opportunity of good quality training to equip them for the future and to help them lead independent lives. While undergoing this training they will get a YTS training allowance, which is worth considerably more than income support rate for the under-18s. Deliberate unemployment at the taxpayer's expense need not and will no longer be an option for those who are able to take up a YTS place.

For all the reasons that I have enumerated in my winding-up speech, I commend the Bill to your Lordships.

The Countess of Mar

My Lords, before the noble Lord sits down, I know we are not going to get any answers to our questions about the social fund, but his excuse that it was not relevant to this Bill does not hold water as far as I am concerned. Clause 10 might be just one sentence. Schedule 3 has 10 paragraphs in it. A number of them deal with financing, and our questions were about the financing of the social fund. I know that we are not going to get any answers to our questions now, but I think the noble Lord was perhaps wrong in saying what he did.

Lord Skelmersdale

My Lords, the noble Countess can hold that view if she wishes, but I have already spoken for 28 minutes and it would probably take me another seven minutes to respond to the various points on the social fund, which we have accepted is a discrete subject. Therefore, as I said at the beginning, I should prefer to respond to all the points globally by letter to make sure that they are properly answered rather than give a gabbled and garbled response, which I am frightened of doing at this moment.

On Question, Bill read a second time, and committed to a Committee of the Whole House.