Lords Sitting of 3 March 1988

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Ripon): The LORD CHANCELLOR on the Woolsack.
The Marquess of Ely The Marquess of Ely—Took the Oath.

Air Europe: Fare Application
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
What support they are prepared to offer Air Europe in that airline's proposed application to the Civil Aviation Authority and to the French authorities for a £59 one-way unrestricted fare to Paris.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the recent European Council directive on air fares requires governments to approve proposed fares if they are reasonably related to the long-term fully-allocated costs of the applicant, while taking into account other relevant factors which include the needs of consumers. Provided Air Europe can meet those criteria and follows the proper procedures, the fares it proposes will be approved.
Baroness Burton of Coventry: My Lords, I thank the Minister for that amount of detail which will be appreciated as there are several issues at stake. Does the Minister agree that the chief issue is that Air Europe is endeavouring to make its fares cost-related rather than cartel-related which can only benefit air travellers? Secondly, can the Minister tell the House the present position: has Air Europe filed an application for the £59 fare?
Lord Brabazon of Tara: My Lords, we very much hope that UK airlines will be able to respond to the EC directive by introducing lower and more flexible cost-related fares.
In answer to the second point made by the noble Baroness, Air Europe has not yet applied but I understand that proposals for new fares will be filed shortly with the United Kingdom and the French authorities.
Baroness Burton of Coventry: My Lords, it is so nice to make some progress. Perhaps I may ask the Minister this question. If the British and French Governments disagree on this matter will it be referred to arbitration? If that is the case, perhaps I may ask if the Minister recalls that on 12th January in a Written Answer to me at col. 1224 of the Official Report he said that the EC air transport package provides:
"a speedy and binding arbitration procedure on fares;".
Can the Minister tell the House what interpretation we might put on the word "speedy"?
Lord Brabazon of Tara: My Lords, as regards whether it might be referred to arbitration, I cannot say anything definite until the proposals have been filed. Naturally, I hope that there will not be any disagreement because both governments must observe the rules for approval in the fares directive. If arbitration is necessary, the longest it could take to reach a decision is normally three months from the date when the fares were first filed.
Lord Northfield: My Lords, if we are making some progress on the cost of flights to Paris, would the noble Lord be prepared to consider the cost of flying on beyond Paris to Strasbourg? The return fare to Strasbourg is about £256 which is ridiculous by the standards of today. It is almost as much as the cost of flying to New York and back. Cannot something be done to break that part of the cartel?
Lord Brabazon of Tara: My Lords, as Strasbourg is within the EC, exactly the same criteria would apply if an airline applied for cheaper flights to Strasbourg; it would be covered by the same directive as the one which is in question today.
Lord Taylor of Gryfe: My Lords, will the Minister take note of the fact that a fare of £59 is now available and on offer between London and Paris? In contrast, the fare between London and Glasgow or London and Edinburgh is £74. Can the Minister exercise some authority to induce a measure of competition in this area so that prices may be reduced?
Lord Brabazon of Tara: My Lords, first, I should like to correct the noble Lord. The £59 fare is not yet available on the Paris route. As regards domestic fares, there is competition on the London to Edinburgh, London to Glasgow routes. There are two airlines competing from Heathrow and there is also competition from Gatwick. There is the possibility of low air fares upon those routes.
Lord Merrivale: My Lords, can the Minister confirm an article which appeared in the press on 10th February to the effect that Air Europe is refunding £25 in the aircraft, which is the difference between £84 and £59? If that is the case is it not rather a gimmick which should be discouraged by Her Majesty's Government?
Lord Brabazon of Tara: My Lords, I understand that practice is not actually happening at the moment.
Lord Underhill: My Lords, in expressing appreciation of the progress which is being made with regard to the Air Europe application, can the Minister give some assurance—if it is within the power of the Government—that the cheap fares will not be at the expense of the conditions of the persons who work for the particular airlines?
Lord Brabazon of Tara: My Lords, the conditions for people employed within the airlines must be for the management of the airlines concerned. The criteria for deciding on the new fares are set down in Article 3 of the directive. I touched upon two of them

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in my original Answer. They take into account, for example, a satisfactory return on capital; the competitive market situation, including the fares of the other carriers operating on the route; and the need to prevent dumping.
The critical fact is that if the proposed air fare is lower than that offered by another air carrier operating on the route that shall not be a sufficient reason for withholding approval.
Lord Orr-Ewing: My Lords, would it be in order to congratulate my noble friend on having at last made some progress? After nine years with a Government committed to competition, if we achieve progress in this one field where the cartel has defeated all previous efforts would it not be appropriate either to put up a plaque or even a statue to the noble Baroness, Lady Burton of Coventry, and perhaps to my noble friend Lord Bethell, as well? I should be very willing to open the subscriptions should this be necessary.
Lord Brabazon of Tara: My Lords, I am sure that your Lordships will agree with my noble friend. The Government have been working very hard indeed over the past few years in order to achieve the first stage of this EC package. I emphasise that it is only the first stage. We hope to make further progress by 1990 and even more progress by 1992. The package we have achieved in Europe is not as liberal as we should have liked and it is not as liberal as we have achieved after bilateral negotiations elsewhere. However it is a first step.
Baroness Strange: My Lords, is the Minister aware that yesterday was the birthday of the noble Baroness? Would he like to share with us all in wishing her many happy returns of the day?
Lord Brabazon of Tara: My Lords, I shall indeed be happy to follow my noble friend's suggestion and congratulate the noble Baroness on her birthday of yesterday. I know that she has been very interested in the subject of aviation for many years. Perhaps it would not be rude of me to say that her birthday more or less coincides with the anniversary of powered flight.

Works of Art: Public Access
3.10 p.m.
Baroness Strange Baroness Strange asked Her Majesty's Government:
What proportion of works of art in museums and galleries are not on public display.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, the Government are keen to increase public access to the treasures in our museums and galleries, but inevitably the proportion of works of art in museums and galleries on public display at any time varies from institution to institution and with the nature of the collection. All national museums and galleries allow
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access by members of the public to items in their reserve collections and all aim to rotate items between these reserve collections and public display.
Baroness Strange: My Lords, I thank my noble friend for his helpful and interesting reply. As he has pointed out that many works of art are not on public display, does he agree that there may be a case for some of the museums and galleries to mount more travelling exhibitions, to lease or lend those works of art where they might best be seen, or indeed to dispose of some of them instead of sitting like dragons on top of their hoards?
The Earl of Caithness: My Lords, I am grateful to my noble friend for asking a question which highlights what the Government have been doing. The Commission of Museums and Galleries has set up a travelling exhibition unit. As I am sure your Lordships are aware, the Government indemnity scheme has allowed many more works of art to be loaned between museums and galleries without the need for commercial insurance.
Baroness Birk: My Lords, in view of what the noble Baroness has said, I am glad to hear the Minister supporting the lending of works of art and travelling exhibitions. Can he say whether the Government still intend to legislate to empower trustees of the National Gallery, the Tate and the National Portrait Gallery to sell pictures from their collections? Is he aware that the trustees who are the present guardians of these collections are opposed to any selling off and that it would also be a betrayal of the generosity of donors who either have made financial contributions or have given actual works of art? These gifts will dwindle to a trickle if a policy of selling off is imposed.
The Earl of Caithness: My Lords, it is still our intention to grant to the three English national galleries the enabling power to which the noble Baroness has referred. However, I disagree with her that it would be a betrayal of gifts that were left to such galleries.
Lord St. John of Fawsley: My Lords, does my noble friend agree that disposing of works of art which are temporarily out of favour may or may not be a betrayal of the people who have left them as legacies but could be a very bad commercial judgment? If our museums and galleries had sold off Victorian pictures a few decades ago we would have lost some of the finest pictures in our collection today. Does he realise that at one time even the Mona Lisa might have been obtained for a song?
The Earl of Caithness: My Lords, my noble friend is on to a very important point about the danger of disposing of unfashionable works of art, but I am sure that the whole House has confidence in the trustees to exercise the disposal power with care. I am sure that the trustees will be very conscious about changing tastes and values. It would be wrong to restrict this enabling power where there are perhaps duplicates that could be disposed of without detriment to the collection.
Lord Kennet: My Lords, what steps have the Government taken to assess the likely effect on future donors of giving this power to our national collections?
The Earl of Caithness: My Lords, a number of galleries and museums already have this power, which they exercise very judiciously. All the Government are seeking to do is to extend this enabling power to the three galleries I have mentioned.
Baroness Seear: My Lords, will the Minister explain what he meant by "duplicates"? You cannot sell duplicates of the original. Did he mean that?
The Earl of Caithness: My Lords, you can of course have duplicates being copies.
Lord Hutchinson of Lullington: My Lords, does the Minister agree that to display works of art requires space and that one of the reasons there is so little space to do so is the philistine attitude of this Government to the provision of extra space for the national museums? That is exemplified, first, by their refusal to be responsible for the addition to the National Gallery in Trafalgar Square; and, secondly, in their failure year after year to provide a home for the Turner Bequest, paintings left by that painter to the nation.
Does the Minister agree that unless the Government become more generous about the provision of space, and not leave it to the generosity of families such as the Sainsbury and Clore families, there will be no possibility of displaying the added works of art which are obtained with taxpayers' money year after year?
The Earl of Caithness: My Lords, the noble Lord's question is a little wide of the one on the Order Paper, but I should be very surprised if one could find any museum that would not like more space.
Lord Jenkins of Putney: My Lords, will the noble Earl give the House an undertaking that when the time conies to return the Elgin Marbles to Greece there will be no question of selling them and that they will be returned as a free gift?
The Earl of Caithness: My Lords, I cannot give any undertakings.
Lord Moyne: My Lords, may I as an Irishman ask a Kerryman's question? Can my noble friend say what proportion of the proportion he was not able to give of the invisible pictures is due to galleries being closed through lack of staff?
The Earl of Caithness: My Lords, that is not a problem for the national galleries. I can assure my noble friend that at the National Gallery itself 100 per cent. of the items are on display. That can vary down to something like 25 per cent. in the National Portrait Gallery.
Lord Birkett: My Lords, is the Minister aware that many years ago there was at the GLC a plan for a museum to encompass precisely the essence of this afternoon's Question? There was a plan for a display, on a non-permanent and revolving basis, of the reserve collections of the nation. As at the time the GLC unfortunately could not find a suitable site, and since, as he will doubtless have noticed, the GLC no longer exists, he is in an admirable position to take up the initiative himself.
The Earl of Caithness: My Lords, I am grateful for the noble Lord's comments, but the question of a site is very important.
Lord Grimond: My Lords, is the noble Earl prepared either by way of extra grant or by way of direct assistance to help those galleries which are trying to put on show their reserve collections by, for instance, lending them out? Will he encourage the lending of pictures and other works of art so that they may constantly be seen by the public?
The Earl of Caithness: My Lords, I am very happy to support the noble Lord in that question. That is exactly what the Government want to do and that is why the initiatives have been taken by my right honourable friend in that direction.
Lord Aldington: My Lords, is my noble friend aware that there is at least one charitable foundation—and probably many more—which is ready and willing to borrow pictures in the reserve collections but finds when it approaches museums and galleries that there is no willingness at all to lend them? Will he make inquiries to see that the excellent intentions of the Government which he has just announced are being followed through?
The Earl of Caithness: My Lords, we are aware that there is some reluctance, but I hope that the Government indemnity scheme will help in this regard.
Lord Strabolgi: My Lords, is the noble Earl aware that there are probably about 5,000 paintings in store at Kew? Many of them have been bought under the terms of the Chantrey Bequest and many of them have never been seen. One of them was the magnificent Landseer, at present on loan to this House, which had never been exhibited during the whole of this century. Cannot the Government begin to show some initiative and generosity in the way that the French Government have done over the foundation of La Musée d'Orsay where all these paintings, hitherto having been in reserve stocks, are now being shown?
The Earl of Caithness: My Lords, in my Answer to my noble friend's original Question, I outlined some of the initiatives which the Government are taking to ensure that some works of art are released for viewing by the general public.
The Earl of Selkirk: My Lords, I wonder whether my noble friend can say how many pictures are on loan to government buildings both at home and

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abroad. I should imagine the number is fairly high and would include those at present housed at No. 10 Downing Street.
The Earl of Caithness: My Lords, I am afraid I cannot answer my noble friend's question without some prior notice.

Chieftain Tank Replacement
3.20 p.m.
Lord Gainford Lord Gainford asked Her Majesty's Government:
What replacement is being considered for the army's Chieftain tanks.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, as I informed noble Lords on 12th January (col. 1226 of Hansard), we have been considering the timescale in which we might need to replace our remaining Chieftain tanks which entered service in the 1960s, and are examining both the improved Challenger and possible overseas options.
Lord Gainford: My Lords, I thank my noble friend for that Answer. Has he any information as to the possible improvement in the new Army tanks in fire power in particular, with reference to gun laying and gun sighting? It seems in recent years that our army tanks have proved to be slightly inferior to those of other nations.
Lord Trefgarne: My Lords, we shall certainly be looking for enhanced capabilities within the areas to which my noble friend has referred in whatever tank we decide upon as the Chieftain replacement. Indeed, we are already applying such enhancements to the existing Challenger fleet and I hope that such improvements will be brought into service shortly.
Lord Irving of Dartford: My Lords, will the Minister bear in mind that the Army's recommendation was that the replacement should be the Challenger II? Does he agree with the comment made in the Independent a week or two ago that any Minister who decides that we cannot afford a replacement, or that we should go abroad for such a replacement, would in fact be passing a death sentence on the country's tank production capabilities?
Lord Trefgarne: My Lords, I am afraid I do not know about that. I and my ministerial colleagues are looking for the most cost-effective solution to the requirement to replace the Chieftain tanks. But naturally we shall take into account the implications of such a decision upon the British tank manufacturing industry.
Lord Mayhew: My Lords, do the options which the Government are considering include updating the battle tank which Vickers are now making for the Indian Government?
Lord Trefgarne: My Lords, I do not think it is correct to say that Vickers are supplying a tank for the Indian Government. As I understand the position, India is manufacturing her own tank, although I believe that Vickers do have some part in supplying some of the sub-systems. However, we shall take into account and consider all sensible options that are available to us.
Lord Morris: My Lords, in answer to a Question which was tabled in my name on 12th January, Her Majesty's Government responded by stating that no decisions on the timing for the replacement of the Chieftain tank had yet been made. Can the Minister tell the House whether there has been any progress in that direction?
Lord Trefgarne: My Lords, as I told my noble friend on the occasion to which he has referred, a decision has not yet been taken. That position remains the same; but I expect that we shall be in a position to make such a decision some time later this year.
Lord Stoddart of Swindon: My Lords, had the Government in 1938 and 1939 decided that it would be more cost-effective to buy tanks in Germany or France, where would that have left us in 1940?
Lord Trefgarne: My Lords, I am not sure whether that is a relevant question for today because the Germans, the French and ourselves are now all part of the NATO Alliance.
Lord Dean of Beswick: My Lords, does the Minister agree that if we were to lose our own domestic capacity to produce tanks of high quality by ordering them from overseas, our own capacity may well disappear never to come hack? Surely that would be to our peril as a nation.
Lord Trefgarne: My Lords, I am not sure that what the noble Lord has just said is a correct assessment of the situation. If we decided upon a tank of different origin to the one which the noble Lord referred to, then I dare say it would be manufactured in this country under licence. However, that decision has not yet been taken.

Iran-Iraq Conflict
3.24 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they, in conjunction with other governments with naval forces active in the Gulf, will arrange a meeting with the governments of Iran and Iraq.
Lord Trefgarne: My Lords, we have no plans to arrange a multilateral meeting of the type envisaged by the noble Lord. We keep in close touch with allies with naval forces in the Gulf, and maintain contact with Iran and Iraq.
Lord Molloy: My Lords, I thank the Minister for his Answer. Does he agree that there has been a

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massive escalation of the war; an increase in the attacks on commercial shipping, and that British sailors' lives are in danger on British and foreign ships? Ought we not to make some endeavour, since the United Nations has not made much of an impact in bringing about a cease-fire and subsequent peace? Should not the idea at least be examined by our Government and a proposition made to other governments who have naval vessels in the area?
Lord Trefgarne: My Lords, there has in fact been a reduction in the level of attacks on shipping in recent weeks which is of course a welcome sign. However, there has been an unfortunate escalation of the attacks between the two capital cities of Iran and Iraq—a fact which we deplore. A United Nations Security Council resolution some months ago called for a cease-fire. We believe that the right way forward is for both parties to recognise and implement that resolution.
Lord Cledwyn of Penrhos: My Lords, in the light of what the noble Lord has just said about the welcome reduction in the number of attacks upon shipping, have Her Majesty's Government any proposals to scale down our naval forces in the Gulf? Furthermore, will he say whether there are any prospects of an agreement between the five permanent members of the Security Council for an arms embargo against Iran?
Lord Trefgarne: My Lords, as regards our naval presence in the Gulf, I expect the noble Lord will be aware that we recently announced that there would be a reduction from four to three in the number of minesweepers that we have in the region. We have no plans for any other significant changes in our naval presence in that area for the time being. As for the implementation of the resolution calling for a ceasefire (Resolution 598), we think that the time has come for a further resolution to secure the implementation of the earlier one. We believe that such further resolution should be in the form of an arms embargo on Iran.
Lord Rodney: My Lords, does my noble friend think that it is within the realms of reality to suggest that our Government should call a meeting between the governments of Iran and Iraq?
Lord Trefgarne: My Lords, for reasons that I am certain he can well understand, we think it would be difficult to proceed in the way that my noble friend suggested. We think that the best way forward lies in the implementation of the earlier Security Council resolution. We wish to give all our support to the Secretary General of the United Nations in achieving that implementation.
Lord Cledwyn of Penrhos: My Lords, I welcome what the noble Lord has said regarding the possibility of a further resolution. However, can he say what action Her Majesty's Government propose to take in that matter?
Lord Trefgarne: My Lords, I can assure the noble Lord that we are actively canvassing support for such
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a resolution among all the members of the Security Council. The permanent member who is dragging his or her feet is the Soviet Union. The Soviet Union has accepted in principle the idea of a resolution to achieve an arms embargo, but has so far not agreed to the means of implementation.
Lord Kennet: My Lords, can the noble Lord say whether any progress has been made towards removing the obstacles to the creation of the United Nations naval force in the Gulf which has been proposed by the Soviet Union? The noble Lord recently told the House they were mainly to do with difficulties in regard to co-ordinating rules of engagement. Can he also say between which members of such a force would those difficulties be most pronounced?
Lord Trefgarne: My Lords, we continue to see formidable practical difficulties in the way of any such idea under present circumstances. There are not only the problems in relation to the rules of engagement and operational instructions (to which I referred on an earlier occasion); but there are also those of actually obtaining the agreement of the Security Council for such an implementation; and, for example, equitable costs and burden sharing.
Lord Mellish: My Lords, will the Minister be good enough to explain to me how it would be possible for the British Government to have conversations with Ayatollah Khomeini when the only person he is talking to at the moment is Allah?
Lord Trefgarne: My Lords, the noble Lord is right to point to the difficulties of having a sensible conversation with people of influence in Iran. But I hope that in due course they will see the force of international opinion which is behind the implementation of the United Nations resolution in this matter and will enter into proper conversations; for example, with the United Nations Secretary General.
Lord Molloy: My Lords, does the Minister agree that there is a serious side to this Question? Tens of thousands of people are being slain and maimed almost weekly. The increase in missile alerts augurs a horrendous escalation. Although Chapter VI of the United Nations charter says that mandatory sanctions cannot be imposed on anyone, the Minister said that Resolution 598 inspires hope. Would not that be fulfilled by a ban on the sale of arms to both sides?
Lord Trefgarne: My Lords, that is what I have been trying to say. We now think it right that the United Nations Security Council should move to a further resolution imposing an arms embargo. We are supporting moves to that end. We hope that the Soviet Union, which of course plays a major part in this consideration, will also reach that conclusion.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the

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Report stage of the Social Security Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Second Reading and remaining stages of the Welsh Development Agency Bill will be taken.

Social Security Bill
3.31 p.m.
Report received.
Clause 1 [Attendance allowance]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 1:
Page 2, line 8, at end insert—
("(3) In section 35(5) of that Act at the end shall be added the words or any modification which would prevent the payment of attendance allowance in respect of persons under a specified age'.").
The noble Baroness said: My Lords, I apologise for the fact that this is a rather late amendment, caused largely because I had not appreciated in Committee the concern that exists among organisations such as the Spastics Society and other specialist bodies about the needs of severely disabled children. That is what the amendment is about.
At present attendance allowance is not available to the parents of disabled children under the age of two years. The Bill presents an opportunity to do something about that. The aim of my amendment is to remove the two-year rule so that children can become eligible when it is clear that they are badly disabled. The Spastics Society points out that parents of disabled children face much greater demands on their time and resources than the parents of children who are not disabled. The argument for not providing the allowance at a younger age than two seems to hinge on the fact that all children are dependent, during the infant stage anyway, upon their parents and parents would in any event be expected to provide a great deal of constant attention to their babies.
No one would argue about that. However, children younger than 24 months who are severely mentally or physically handicapped can be difficult and demanding to care for. They may be in constant pain. They may be hyperactive. Entitlement to the allowance in respect of that group should be on the merits of the case, as for any other group. There should not be an age restriction.
One can imagine the strain put upon a family when it has such a child. It may mean the mother and the father working shifts at night to look after the child and its constant needs. Parents may have to give up jobs to share those duties. As at present there is no entitlement to attendance allowance, there is no invalid care allowance if a job has to be given up to provide such attention. Clearly that is wrong.
All sorts of ailments and conditions which affect young children put a tremendous strain on the parents. Sickle cell anaemia for one can produce a situation in which there are bouts of extreme pain
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during which the child needs to be cared for. Other conditions, such as severe heart conditions, mean that the child has to have constant attention on a 24-hours basis.
If those children were looked after in hospital, it would cost the state at least £200 a week. We should surely be prepared to give assistance to the parents who are prepared to provide that cover. For those reasons, I have tabled the amendment. I hope that it has your Lordships' support. I beg to move.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, as the noble Baroness said, there are clearly two views about the payment of attendance allowance for severely disabled children under the age of two. For the sake of argument, let us call them the hard and the soft views. The hard view is that life is tough for parents of any child under two, whether or not the child is disabled, so that there is no need to pay attendance allowance. The soft view is that any severe long-term disability or illness in a child places extra strain on parents that could and should be compensated for. That is clearly the view illustrated by the noble Baroness. She mentioned, for example, sickle cell anaemia and other long-term illnesses and disabilities which I would put in that category.
As my honourable friend the Minister for Social Security and the Disabled has made clear after extensive debate on this matter in another place, we accept that there are children whose disabilities and needs it is possible to assess before the age of two. There is no dispute on this point. The question which is at issue is whether it would be right at this time to consider a change in provision for disabled people in this one narrow area. If we were to do so, we would, with the very substantial extension of invalid care allowance that we have seen, particularly since married women became eligible, also have to consider the interaction of attendance allowance and invalid care allowance in the context of any extension to those below the age of two.
There is also the point that I asked the Committee to consider; namely, what invalid care allowance is actually paid for. It is intended as income maintenance for those who forgo the opportunity of employment to look after a disabled person. That means that we should need to examine the merits of paying the allowance to the parents (usually the mother) of a child when that parent might well have given up work in any case.
In essence, if we were to consider the extension of attendance allowance to youngsters under the age of two who have needs substantially in excess of those normally required by a child of that age, it would be right to look at the interaction of attendance allowance and invalid care allowance perhaps throughout childhood to see what an appropriate pattern for that might be. We must look at those above the age of two as well as those below to ensure that we have equitable and sensible arrangements for that sort of cash assistance to disabled children and their parents.
Having mentioned the kind of issues that it would be right for us to consider if we reviewed cash support

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for disabled children and their parents within the fairly narrow context of the existing attendance and invalid care allowances, I do not intend to speculate about what answers we might come up with if we engaged in that exercise. Such narrow questions are about to be overtaken by events. We are committed to a wide scrutiny of attendance allowances, along with other disability benefits, following the results of the OPCS survey of disabled people, which is expected to be available in the late summer this year, and Sir Roy Griffiths' study of community care, which, as I said at Question Time yesterday, is now under consideration. They may well point to significant changes in the form of cash and other support for disabled people, including children and their parents, and we shall want to examine their reports with a great deal of care.
Sir Roy's report and the OPCS results later this year will provide the material for a wider and better informed debate about all those matters. I therefore invite the noble Baroness to withdraw the amendment. As I said, this is clearly a subject that will not go away.
Baroness Turner of Camden: My Lords, I thank the Minister for that statement. I am obliged to him for the suggestion that the issue will not go away and that there will be an opportunity to look at the matter again when we have the report, which I gather is due later this year. In view of that statement, I ask leave to withdraw the amendment. I shall look to see what the report says later this year.
Amemdment, by leave withdrawn.
Clause 2 [Introduction of retirement allowance and other provisions relating to industrial injuries benefit]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 2:
Page 2, line 45, leave out ("25") and insert ("50").
The noble Baroness said: My Lords, with this amendment we return to the subject of the industrial injuries scheme which we discussed in Committee, when I moved an amendment with which I did not proceed. That amendment would have had the effect of providing for people when they retired, when they reached normal retirement age, the same amount by way of retirement allowance as they had under the provisions for reduced earnings allowance. What the Bill does, if it remains unamended, is to remove the right to reduced earnings allowance from people who have suffered injuries at work. In its place there is a retirement allowance which is only 25 per cent. of the amount that they received as reduced earnings allowance.
I said in Committee that I thought that was very wrong because the reduced earnings allowance which is part of the industrial injuries scheme was introduced to compensate people who suffer injuries arising out of or in the course of their employment and who suffer reduced earnings as a result. It is a form of compensation for injured workers, a part of the industrial injuries scheme which I have said on a number of occasions in your Lordships' House is the only no-fault system of compensation for industrial
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injuries that we have in this country. Therefore it is extremely important.
I believe that there is a case for paying benefits to people who are injured at work over and above benefits that they would get if they were otherwise injured, because there are hazards in going to work. There are many working environments which are particularly hazardous and are likely to give cause for injury or disease which workers would otherwise not encounter. I am suggesting as a result of the discussion we had in Committee that instead of the proposal in the Bill which reduces the allowance to 25 per cent. we at least allow people to go on to what may be described as half pay. That is the aim of my amendment.
I should like at this point to speak to the next two Amendments, Nos. 3 and 4, because they are part of the same concept. Instead of people losing nearly everything and simply retaining 25 per cent., they will have half pay rather than the quarter pay which is proposed in this amendment. I therefore beg to move.
Lord Skelmersdale: My Lords, the noble Baroness has, on more than one occasion in the House, stated forcibly and with feeling her objections to the Government's proposals in relation to the industrial injuries scheme, including the introduction of a new benefit, retirement allowance. The noble Baroness has carried out the promise (or was it a threat?) that she made in Committee to return to the fray. I certainly agree that these three amendments are part and parcel of each other. The net result is that the value of the benefit paid in retirement would be doubled. I have to say that the amendments would have a further effect—the noble Baroness did not say whether it was intended or not—whereby the minimum rate of retirement allowance would be set at £12.90 a week at today's rates.
We must be clear, I believe, about the issue in question. Reduced earnings allowance, up until 1986 known as special hardship allowance—though that was something of a misnomer—is paid as compensation for loss of earnings due to industrial disablement. At present, that allowance can continue beyond retirement; we are replacing earnings beyond the point at which earnings would anyway have ceased. Clearly this is a gross anomaly. The Government recognise that fact, as do many commentators, including the TUC, the Disablement Income Group and the Policy Studies Institute. The noble Baroness has herself on an earlier occasion accepted that there was a case to be made.
Clause 2 proposes to end entitlement to reduced earnings allowance on retirement and to replace it with a new benefit, retirement allowance. This reduced benefit will be paid in broad recognition of the fact that reduced earnings during part of working life may lead to a lower earnings-related pension. This is, I suggest, an entirely fair and sensible way in which to proceed, and I hope the House will agree with me.
The noble Baroness is concerned that the retirement allowance will be set at too low a level, although I did not hear—perhaps I missed it—any real evidence to support that view. The complexities

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of earnings-related pensions are such that it would not be possible to calculate an exact figure for individuals who have received reduced earnings allowance. We have therefore adopted a broad approach, one that is simple to understand and to operate. It is broad-brush, though within that framework it is not ungenerous. It is worthy of note that the allowance will be tax free and statutorily uprated annually.
Concern has also been expressed about the size of the benefit reduction on retirement. I should like to make three points. First, if we do not make a reduction, we turn a blind eye to the anomaly and, having recognised it, perpetuate it nonetheless. I cannot think that would be the right and proper thing to do. Secondly, it would be a rare bird indeed who did not suffer a drop in income on retirement. Would that we could all be protected against it! Thirdly, we recognise that those affected by our proposals will need some time to adjust and plan. That is why we propose to give a year's notice of this change, which we plan to implement in April 1989.
So far as concerns the changes to the industrial injuries scheme, we have had a robust defence of, in effect, the status quo. For their part, the Government seek to take further sensible steps towards achieving the aims, set out clearly in the consultation paper in 1985, for an industrial injuries scheme which reflects the world of today, rather than that which existed in 1946, when the current scheme was drawn up. Therefore I ask the noble Baroness to withdraw this amendment.
3.45 p.m.
Baroness Turner of Camden: My Lords, I am disappointed with the response from the Minister to my amendment, although perhaps not really very surprised. One of the reasons I think that the amendment is a fair one is that people who have been injured at work are not in the main in the higher income bracket. So a drop in income for such people is a quite substantial matter and often a desperate one.
Secondly, this is part of an insured scheme. In other words, it is a contributory scheme to which people in employment have made contributions against the expectation that if they needed to draw benefits under it those benefits would be available. The benefits are now being reduced. When this becomes operative it will have the effect—this is what I fear—of putting people who are poor and who miss the money on to means-tested benefit. It is the view of this side of the House that it is very much better to have people covered by contributory benefits in an insured scheme than it is to have people dependent upon means-tested benefits. For all those reasons I think that my amendment is a sensible one. However, I do not intend to press it at present and will therefore withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 3 and 4 not moved.]
Schedule 1 [Industrial Death Benefit]:
[Amendment No. 5 not moved.]
Clause 3 [Commencement of payment of family credit]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 6:
Page 4, line 11, leave out ("(6) of the Social Security Act 1986") and insert ("of the Social Security Act 1986—
(a) the following subsection shall be inserted after subsection (5)—
"(5A) In subsection (5) above "the applicable amount" means the applicable amount at such date as may be prescribed,"; and
(b) in subsection (6)").
The noble Lord said: My Lords, this is essentially a technical amendment designed to give us sufficient regulation-making powers to avoid inadvertently penalising certain claimants who make renewal claims in good time before the end of their existing award. It allows entitlement to be determined on the basis of the circumstances at the date of the claim, even though it is made in advance. I can go much further if the House requires, but for the moment I beg to move.
On Question, amendment agreed to.
Lord Banks Lord Banks moved Amendment No. 7:
Page 4, line 13, at end insert—
("(2) In section 22(8) of the Social Security Act 1986 at the end insert "except that in calculating the income of a single parent for the purposes of Family Credit there shall be disregarded a prescribed amount to take account of child care expenses."").
The noble Lord said: My Lords, I beg to move this amendment. In Committee I moved a similar amendment which said that there should be disregarded an amount equal to that necessarily incurred in reasonable child care expenses. I pointed out that family credit was concerned with poorly paid families where the parent was in work. Most lone parents on supplementary benefit or income support, as it will be next month, would prefer to work. In order to work they must pay essential child care costs. Most single parents are women and the wages they can command are usually at the lower end of the scale.
The combination of low wages, high child care costs and a means-tested benefit often means that they would be financially worse off if they took full-time work. I reported to the House that the organisation Gingerbread had recently taken a family income supplement case to appeal and a tribunal of social security commissioners had stated:
"We have the greatest sympathy for the anomalous position in which the claimant finds herself as a result of returning to work. This is a classical example of the 'poverty trap', but while we are sure that it was never the intention of the legislature to create a situation in which a claimant would be better off financially by refraining from work, the law is in our view clear and it is our duty to apply it."
My amendment sought to remove the anomaly from continuing under the new system being introduced next month by introducing a disregard for necessarily incurred reasonable child care expenses. I pointed out that there would be savings for the state because not only would the state be paying out less in benefits but it would also be receiving revenue in the form of tax and national insurance.
The noble Lord, Lord Skelmersdale, advanced four arguments against the amendment. First, he argued that by including a benefit where the disregard had to be assessed in each particular case, the simple broad brush design would be frustrated. The nature

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of the family credit scheme would be changed making it difficult to administer and raising problems with regard to the investigation of reasonableness. The last point about reasonableness seemed to have some validity, so in the amendment now before the House I call for a prescribed sum to be disregarded. In other words the first "so much" of child care expenses would be disregarded. How far that went towards solving the problem I outlined at the beginning of these remarks would depend on the level at which that disregard was put. There would be no problem about investigating reasonableness.
It might then be argued by the noble Lord that even to have a disregard of a prescribed amount would destroy the broad brush approach. However, I understand that family credit will take into account tax deductible expenses. That means that the broad brush concept is already not complete.
It would surely be less difficult to take into account a child care disregard of a fixed amount than it would be to take into account deductible expenses which can cover such a variety of different items and have in this context been known to cover gardening expenses. I do not think that the broad brush argument will hold water.
The second argument advanced against the original amendment was that family credit already recognises the special needs of single parents and makes provision for them. The noble Lord, Lord Skelmersdale, said that single purse parents will receive the same rates of benefit as a couple and that the one parent benefit that they receive will be totally disregarded.
However, despite the recommendations of the housing benefit review team the housing benefit scheme will no longer recognise the fact that the housing costs of one parent families are the same as for two parent families and so they will be paying the same kind of rent. As a result of this change any gain under family credit is more than wiped out by the loss under the new housing benefit scheme.
I have the figures worked out in a particular possible case. A lone parent with a three year-old child on income support wants to work and is offered a full-time job paying £90 per week. If working full-time she would have to pay £35 per week in child minding costs. If she remained on income support her income after deductions would be £53.40. If she accepted the job, after taking into account her child minding expenses of £35 her income after deductions would be £44.55. In other words by taking the job she would be £8.85 per week worse off. So the inducement would be for her to remain on income supplement.
To provide that income supplement would cost the Government £85.40 in benefits. On family credit the cost to the state would be £20.05 taking into account tax and national insurance contributions. The effect of the disregard if it were anything over £28 per week would allow maximum credits to be paid which would make the income after deductions £62.40 per week instead of £44.55. In other words it would now be £9 better than the £53.40 that she would receive on income supplement. So the inducement would now be the other way. The inducement would be to take
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the job, and the cost to the Government would be £47.30 per week as opposed to £85.40 on income supplement. It would actually cost the Government considerably less to provide this disregard and greatly help the lone parent.
Thirdly the noble Lord, Lord Skelmersdale, argued that similar considerations apply to income support and housing benefit and that the principle that the same rules apply throughout the system would be violated. I agree that part-time workers on income support, for example, would be in a similar position. I agree that essential work expenses should be taken into account for all means-tested benefits. If this amendment is passed no doubt the Government would introduce any necessary consequential amendments at Third Reading.
Fourthly, the noble Lord, Lord Skelmersdale, said that with the starting date so near it would not have been possible to introduce the original amendment. This amendment will require the amount of disregard to be prescribed in regulations which can no doubt determine a convenient date for coming into force.
In view of all that I have said about the advantage to lone parents and the saving to the Government which this amendment would bring, I hope that the Minister will feel able to withdraw his opposition. I commend the amendment to your Lordships.
Baroness Jeger: My Lords, I rise briefly to express my support and that of my noble friends for the amendment. The noble Lord has set out the case so clearly that I need not delay your Lordships for more than one minute. However, I just wish to point out that several members of the Government and supporters of all parties have agreed that it is preferable for people to be better off when they are at work than when they are at home on benefit. This seems to be a most obvious case where that principle should be put into practice.
I would make just one special point. I am not sure whether all noble Lords are aware of the rising costs of day nurseries. Day nurseries are very expensive places to run if they are to be kept to a high standard. The difficulty is that local authorities have their problems in financing day nurseries and often have no option but to pass on higher costs than are practical for those who most need to have their children looked after.
There are of course many local variations in the standard of day nursery and other child care and in supporting this amendment I am anxious that there should be some nationwide help for single parents with small children who want to go to work and that the provision should not be a matter of geographical luck or the policies of the local authorities concerned. This provision seems to be eminently sensible and practical and I do not see that it departs in any way from stated government policies. I very much hope that we can make some progress today.
4 p.m.
Lord Skelmersdale: My Lords, it would seem from the speech of the noble Lord, Lord Banks, when introducing the amendment that my answer to a similar one in Committee was like the instruction that

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some of your Lordships put on your football coupons—perm any one from four. But I have listened carefully to what the noble Lord has said because as he pointed out we have been over this ground before.
I accept that this amendment is expressed rather differently from its various predecessors in referring to the disregard of a prescribed amount. I was listening to find out just what the noble Lord had in mind in that respect. It was not clear from the amendment as tabled whether this prescribed amount was to be a standard figure applying to all lone parents or whether it was to be more selective. I understood from the noble Lord's speech that it was to cover all lone parents. A disregard given to all lone parents would represent considerable over-provision as not all such parents would have any child care costs—in the way of day nurseries, for example, as explained by the noble Baroness, Lady Jeger—either because they were able to make arrangements with family or friends or because the children were at school and did not need the same extent of care as a pre-school child.
A more selective approach might overcome some of those problems and be better targetted, but we should still be left with some rather arbitrary decisions about the ages of children for whom a disregard could be allowed, and above all what the amount of the disregard should be, and whether it should have regard to the number of children in the family and so on. The approach of disregarding the amount actually incurred in the individual case is of course one that we have debated before and I am not sure that it would be possible under the terms of the noble Lord's amendment which seems to call for an actual amount to be prescribed. Perhaps he will correct me if I am wrong.
Having listened to the noble Lord I am afraid that I have nothing new to add. The basic principle is the same; that some amount should be deducted from a claimant's earnings in recognition of the child care costs faced by lone parents. In our view the special provision we are already making within the family credit scheme for lone parents is as far as we think it is reasonable to go.
I would remind the House that no provision is made in family income supplement at present for child care costs. We are therefore not taking away anything that is currently available. We are carrying forward the family income supplement practice in this respect and in regard to the extra concessions which are made to lone parents. Again I would remind your Lordships that they receive the same rates of benefit as do a couple and that the one parent benefit which they receive is totally disregarded. These are worthwhile extras and are a recognition that lone parents do have special needs. As I have said before, it would constitute a fundamental change of approach to introduce a further disregard for lone parents, and one that could hardly be justified if it were to be allowed on the indiscriminate basis which seems to be implied by the terms of the amendment.
I take the noble Lord's point about being able to introduce such a provision by regulations at some
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future date, which he made in answer to my statement in Committee that it would be quite impracticable at this late stage to introduce it quickly. However, for all the reasons that I have given this afternoon, I hope that the noble Lord will be prepared to withdraw the amendment.
Lord Banks: My Lords, first, I should like to thank the noble Baroness, Lady Jeger, for supporting the amendment. As the Minister says, it is quite true that this is not a new situation; it is an anomaly which already exists. I referred to a case in which the Social Security Commissioners fully sympathised with a lady who found that she was worse off as a result of accepting work and moving from supplementary benefit to family income supplement. The object of this amendment is to prevent that anomaly from continuing, as it will under the new arrangements as they stand at the moment.
The noble Lord repeated his point about family credit being for a couple and not for a single person and that any extra lone parent credit would be disregarded and so on. The fact remains that all those factors were taken into account in the example which I gave and it was quite clear that they were not sufficient to offset other factors which meant that the woman in question would have been worse off as a result of taking a job. By allowing a disregard it is possible to ensure that that does not happen and at the same time it is possible to save money for the Government. Therefore, I cannot for the life of me see why it is not done.
I stated that the disregard would mean that so much of a person's expenses in this connection would be disregarded, just as is done in other cases with earnings where an initial amount is disregarded. In this case so much of those earnings would be disregarded and the total amount that could be disregarded would be specified in the regulations. It seems to me quite easy to do that.
In view of the fact that we can remove the anomaly and save money for the Government by passing this amendment. I should like to test the opinion of the House and press the amendment to a Division.
4.5 p.m.
On Question, Whether the said amendment (No. 7) shall be agreed to.
Their Lordships divided: Contents, 100; Not-Contents, 107.

DIVISION NO. 1

CONTENTS

Amherst, E.

Campbell of Eskan, L.

Ardwick, L.

Carmichael of Kelvingrove, L

Attlee, E.

Carter, L.

Aylestone, L.

Cledwyn of Penrhos, L.

Banks, L.

Cudlipp, L.

Basnett, L.

David, B.

Beaumont of Whitley, L

Dean of Beswick, L.

Birk, B

Diamond, L.

Blease, L.

Donaldson of Kingsbridge, L.

Bonham-Carter, L.

Elwyn-Jones, L.

Bottomley, L.

Ennals, L.

Bruce of Donington, L.

Ewart-Biggs, B.

Burton of Coventry, B.

Ezra, L.

Callaghan of Cardiff, L.

Falkender, B.

293

Falkland, V.

Molloy, L.

Gallacher, L.

Morton of Shuna, L.

Galpern, L.

Mulley, L.

Graham of Edmonton, L. [Teller.]

Murray of Epping Forest, L.

Northfield, L.

Grey, E.

Oram, L.

Grimond, L.

Perry of Walton, L.

Hampton, L.

Peston, L.

Hanworth, V.

Pitt of Hampstead, L.

Harris of Greenwich, L.

Ponsonby of Shulbrede, L.

Hart of South Lanark, B.

Prys-Davies, L.

Hirshtield, L.

Rathcreedan, L.

Hooson, L.

Ritchie of Dundee, L.

Hunt, L.

Robson of Kiddington, B.

Hutchinson of Lullington, L.

Rochester, L.

Irving of Dartford, L.

Seear, B.

Jacques, L.

Sefton of Garston, L.

Jay, L.

Serota, B.

Jeger, B.

Simon, V.

John-Mackie, L.

Stedman, B.

Kearton, L.

Stewart of Fulham, L.

Kennet, L.

Stoddart of Swindon, L.

Kilbracken, L.

Strabolgi, L.

Kilmarnock, L.

Tordoff, L. [Teller.]

Kinloss, Ly.

Turner of Camden, B.

Kirkhill, L.

Underhill, L.

Lawrence, L.

Walston, L.

Lcatherland, L.

Wedderburn of Charlton, L.

Listowel, E.

Wells-Pestell, L.

Llewelyn-Davies of Hastoe, B.

White, B.

Lloyd of Hampstead, L.

Wigoder, L.

Longford, E.

Williams of Elvel, L.

Lovell-Davis, L.

Wilson of Rievaulx, L.

McNair, L.

Winchilsea and Nottingham, E.

Masham of Ilton, B.

Mayhew, L.

Winstanley, L.

Mishcon, L.

Winterbottom, L.

NOT-CONTENTS

Ailsa, M.

Gridley, L.

Airey of Abingdon, B.

Hankey, L.

Ampthill, L.

Harvington, L.

Arran, E.

Havers, L.

Barber, L.

Hesketh, L.

Bauer, L

Hood, V.

Beaverbrook, L.

Hooper, B.

Belhaven and Stenton, L.

Jenkin of Roding, L.

Bellwin, L.

Johnston of Rockport, L.

Beloff, L.

Joseph, L.

Belstead, L.

Killearn, L.

Blatch, B.

Kimball, L.

Boyd-Carpenter, L.

Lane-Fox, B.

Brabazon of Tara, L.

Lauderdale, E.

Braye, B.

Layton, L.

Brougham and Vaux, L.

Long, V.

Broxbourne, L.

Lucas of Chilworth, L.

Caithness, F.

Luke, L.

Cameron of Lochbroom, L.

Mackay of Clashfern, L.

Carnegy of Lour, B.

Macleod of Borve, B.

Carnock, L.

Marley, L.

Cayzer, L.

Melville, V.

Cottesloe, L.

Merrivale, L.

Cowley, E.

Mersey, V.

Cox, B.

Morris, L.

Craigavon, V.

Mottistone, L.

Davidson, V. [Teller.]

Mowbray and Stourton, L.

De Freyne, L.

Munster, E.

Denham, L. [Teller.]

Nelson, E.

Dundee, E.

Nugent of Guildford, L.

Ellingham, E.

O'Brien of Lothbury, L.

Elibank, L.

Orkney, E.

Elliott of Morpeth, L.

Orr-Ewing, L.

Elton, L.

Oxfuird, V.

Ely, M.

Peyton of Yeovil, L.

Erne, E.

Plummer of St Marylebone, L.

Ferrers, E.

Porritt, L.

Fraser of Kilmorack, L.

Rankeillour, L.

Gainford, L.

Reigate, L.

Gardner of Parkes, B.

Renton, L.

Gray, L.

Rodney, L.

Gray of Contin, L.

St. Davids, V.

294

Selkirk, E.

Trafford, L.

Sempill, Ly.

Trefgarne, L.

Shannon, E.

Trumpington, B.

Skelmersdale, L.

Ullswater, V.

Strange, B.

Vaux of Harrowden, L

Strathclyde, L.

Ward of Willey, V.

Sudeley, L.

Weir, V.

Swansea, L.

Westbury, L.

Swinfen, L.

Whitelaw, V.

Terrington, L.

Wise, L.

Thomas of Gwydir, L.

Wyatt of Weeford, L.

Thurlow, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.13 p.m.
Lord Carter Lord Carter moved Amendment No. 8:
After Clause 3, insert the following new clause:
("Special fund for severely disabled people.
.—(1) The Secretary of State shall establish a fund for the purpose of making payments to severely disabled people.
(2) The fund shall be administered by a Board of Trustees who shall be appointed by the Secretary of State on the recommendation of the relevant voluntary organisations.
(3) The operation of the fund shall begin on the date of passing of this Act and shall cease on 11th April 1991.
(4) The Secretary of State shall at the end of the first year of the operation of the fund and annually thereafter make and lay before Parliament a report on the operation of the fund.
(5) The deed of trust governing the operation of the fund shall make provision for—

(a) the criteria for determining the size of grants from the fund;

(b) the administration of the fund;

(c) securing that the costs of administering the fund are separate from and in addition to the total sum to be made over for the payment of grants;

(d) arrangements for adjudicating on the amount and frequency of grants in the event that a severely disabled person wishes to appeal against either the amount of any grant or the frequency of its allocation; and

(e) the responsibilities of the Secretary of State and the Board of Trustees respectively.").

The noble Lord said: My Lords, in moving Amendment No. 8 I propose to introduce a new clause into the Bill to deal with a matter which has not been dealt with at any stage of the Bill so far. This results from the proposal by the Government to introduce a trust fund for severely disabled people which was announced on 9th February. The purpose of the amendment is to examine the Government's intentions and secure statutory backing for an important provision affecting the severely disabled.
I should like to explain the background to the amendment. The Government produced a Green Paper on the reform of social security in June 1985 and a White Paper in December 1985. In the period between the Green Paper and the White Paper considerable concern was expressed about the effects on disabled people of the proposed reforms in social security. In December 1985 the Disability Alliance warned:
"Disabled people, and people with disabled children, who currently receive significant amounts of additional requirements will be clear losers from the changes … The new disability premium will in no way compensate for the loss of the additional requirements and of the long-term rate".
That concern continued throughout 1986, when the Act became law. Your Lordships will remember than an amendment that was agreed in this House and which would have protected the severely disabled

295
was voted down in another place. After the Act came into force a number of meetings took place throughout the year, one between the All-Party Disablement Group, which I myself attended, and Mr. Nicholas Scott, the Minister responsible, in order to bring home to the Government the problems of severely disabled people that were bound to arise as a result of the new Act. I cannot say whether the lack of action by the Government was a result of administrative inertia or ideological fixation.
Finally, in October last year Mr. John Moore, the Secretary of State, admitted that help was required for:
"the few people who are not recognised within the scheme".
On 9th February in the other place there was an announcement by Mr. Nicholas Scott, the Minister responsible, who said:
"I have had a number of informal, confidential talks with a variety of organisations. As a result of these talks, we intend setting up a special fund in co-operation with the Disablement Income Group…This fund will make payments to those very severely disabled people who need extensive help to enable them to live independently".—[Official Report, Commons, 9/2/88: col. 172.]
So 31 months after the publication of the Green Paper, when concern was first expressed about the provisions of the Act and its effect on disabled people, and only two months—as it now is—from the full implementation of the Act, there is this proposal for a trust fund.
My amendment is not intended to introduce a debate about the philosophy of benefit. It is not about the removal of the basic right to benefit laid down by regulation—which is the situation obtaining under the present law—and its replacement by a system of discretionary grants which will be dispensed through a charity. The scheme proposed by the Government is now a fact, and I believe that it is essential that it should work both quickly and effectively to help disabled people.
Before turning to the amendment itself, I should like to put some questions to the Minister. A figure of £5 million was mentioned in the press release of the department on the day on which the announcement was made. I understand that £5 million is a grant-in-aid which will be topped up as required. Is the amount in the fund subject each year to cash limits? If the money runs out after nine months of the year, say, will the fund have to wait until the following financial year for the required topping-up?
I would also appreciate some estimate of the numbers of disabled people who will be eligible for grant. In a letter sent to me by the noble Earl, Lord Arran, in response to a Question that I asked, he said that the figure of 250 was the estimated number of claimants who would be eligible for the grant. In the week of the announcement, in a radio broadcast, the Minister referred to "a few hundreds". In the other place he referred to "hundreds and not thousands". I understand from the Disablement Income Group that it believes that the number of claimants might be of the order of 1,000 to 2,000. Can the Minister tell us what is the latest estimate of the department?
My third point concerns the expertise required to administer this scheme. Obviously, the Disablement
296
Income Group has the required experience but not the necessary numbers of people. I think that we are entitled to know how the requisite expertise will be provided in order to ensure that the trust fund works properly.
I have discussed this amendment with Mr. Peter Large of the Disablement Income Group who has expressed broad agreement with its main thrust. The first two subsections deal with the establishment of the fund and the appointment of trustees. Subsection (3) deals with the length of the scheme. The Government agree—and the Minister agreed with me on Tuesday in reply to my Starred Question—that the scheme is temporary. The purpose of subsection (3) is to stiffen the resolution of the Government and to suggest that three years is plenty of time to set up a scheme under statute which would operate instead of the trust fund. Subsection (4) deals with the important matter of an annual report.
Subsection (5)—perhaps the most important—provides that the criteria for grant aid shall be set out. We are entitled to know how the grants will be determined and the basis of those grants. On Tuesday the Minister stated that the criteria of grant-aid will be included in the trust deed.
The next subsection deals with the administration of the fund to ensure that the cost of administration will be treated entirely separately from the fund which is available for grants to disabled people. Subsection (5)(d) is of great concern to disabled people and their organisations. Since we are to have a discretionary system of grants, it is extremely important that some means of adjudication or appeal are included in the trust deed.
I very much hope that the Government feel able to accept this amendment. It they do so, it will reassure the very large number of disabled people and their organisations who have expressed considerable reservations regarding the principles and operation of the proposed fund. Acceptance of the amendment will give disabled people considerable reassurance regarding the intentions of the Government. I beg to move the amendment.
Lord Allen of Abbeydale: My Lords, I should like to say a few words in support of the amendment. Although the noble Lord, Lord Carter, for reasons that I can understand, said that he did not wish to explore the philosophic problems that arise by the provision of such a scheme, I had grave doubts before deciding to add my name to this proposal since I am not attracted in principle by a scheme that involves removing the basic rights of severely disabled people to weekly payments from the state scheme to meet their established needs and compelling them instead to apply for funds to trustees outside the official hierarchy.
One ought to say for the record that it was for reasons of this kind that six of the seven voluntary organisations which were consulted by the Government felt unable to play their part in running the scheme. I was also aware that the Joseph Rowntree Memorial Trust Fund—which administers the family fund—had also not felt able to take on the assignment. However, in the end I put my name to the

297
amendment on the grounds—like those mentioned by the noble Lord. Lord Carter—that the scheme will be brought into being; and if there is to be a scheme it is better that it should operate under a clear statutory authority that, among other things, would specifically provide that there must be some right of appeal and would also put it beyond doubt that this was a temporary scheme with a date by which it must end.
I certainly would not wish to see permanent provision for those disabled people who have to look to their weekly needs being met through some voluntary set up outside the state scheme. I was glad to note the assurances that the noble Lord, Lord Skelmersdale, gave on Tuesday about the temporary nature of this scheme.
I spent some little time in government circles and I am not naive enough to believe that the wording of this amendment will necessarily commend itself to parliamentary counsel as it stands. However, it raises the main issues to be considered under the scheme. The noble Lord, Lord Carter, has touched on most of them. I simply add this. I realise from what the noble Lord, Lord Skelmersdale, said on Tuesday that the administration details have not yet been worked out. However, can he shed any more light on who the administrative staff of the trustees would be and where they would come from as it is these people who apparently will have the dealings with the individual disabled persons?
Can I also ask whether the intention is that payments will cover the extra cost of heating, diet and laundry as well as domestic help? Presumably it must have been known whether these payments were to be included when it came to calculating the make-up of the initial £5 million that is to be given to the scheme.
Finally, can the Minister confirm that the Disablement Income Group was right in saying in its press notice— a little surprisingly to me—that help under the scheme would not be restricted to people in receipt of income support? If this is right, it makes it doubly important to know what publicity is planned and how possible applicants will know that help is available and how to set about asking for it. I shall be grateful if the Minister can vouchsafe any information to us when he replies.
Baroness Lane-Fox: My Lords, with all humility perhaps I may suggest to the noble Lord, Lord Allen of Abbeydale, that in my experience the word "rights" is fundamentally unsuitable to use about disabled people. If there were a natural right for us we would not be disabled. It must be the wish of a majority in this House that constructive thought and provision be made by a government for this small but nonetheless very important group of people. If alliance is still a meaningful word to use in this House, then I can say that I have had a very close alliance with DIG over 20 years, as have the noble Baroness, Lady Jeger, the noble Lord, Lord Ennals, and others in this House. Perhaps therefore I am not a suitable person to refer to DIG's integrity, its economy in administration and its well-informed connection with the grass roots.
However, these reasons make me very happy that in this scheme for forming a trust the buck has
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stopped with DIG. I have confidence in the DHSS and in DIG. I am therefore happy to believe that we should leave it to them to tie the so far untied ends. It is my concern that those who should be the eventual benefactors, and their families and friends, shall not now be depressed by anything that is said in this Chamber, or by others in charities and elsewhere who for some reason appear not to know all the facts, or the new benefits that this scheme is likely to bring. I therefore do not support the amendment in the name of the noble Lord, Lord Carter.
4.30 p.m.
Lord Renton: My Lords, like the noble Lord. Lord Allen of Abbeydale, I have had doubts about this clause. I have wondered whether it is right that most of our provision from public funds for those, such as the severely disabled, who are unfortunate in some way should be the subject of statutory control and the responsibility of Ministers who are answerable to Parliament. When I heard about the DIG scheme I wondered whether it fitted in as it should. I shall be interested to hear what my noble friend has to say.
He would be entitled to say that, although there is no statutory control, the fund will be charitable. That cannot be avoided because it is for a charitable purpose. As a charitable fund its administration by the trustees will be subject to such jurisdiction as the Charity commission is capable of offering, which is not very great at the moment. It will ultimately be subject to the jurisdiction of the courts if anyone manages to get a particular case before them.
I have a doubt about both the Government's scheme and that covered by the amendment. It is that I do not understand why they are both temporary. Severe disablement is generally a permanent factor and, alas, there will always be severely disabled people in our society who need care. I feel thoroughly mixed up about this issue. If we had not such an inhibiting procedure which prevents one from speaking again after the Minister has spoken, I should have hoped to hear him and then come hack. However, I must now resume my seat.
Lord Ennals: My Lords, I shall only be a minute in indicating that we on these Benches warmly support the amendment proposed by the noble Lords, Lord Carter and Lord Allen of Abbeydale. My support is in no way based on doubts about the integrity of DIG or its abilities. I feel irritated by the fact that the Government have put themselves into a situation where a Bill designed to improve benefits has created this lacuna for the most needy people. They must resolve this. Severely disabled people will be worse off and that is a great indictment of the principle on which the Bill is based.
I agree with the noble Lords, Lord Allen and Lord Renton, that if the error exists it must be put right. The hole must be filled and I believe that that is best done in a statutory way. I do not believe that severely disabled people should be obliged to go to a "charity" in order to get what I—though not the noble Baroness, Lady Lane Fox—believe to be their right. I hope that this amendment will be carried.
Lord Henderson of Brompton: My Lords, I should like to say a few words because I also am puzzled about the scheme. I am sure that all noble Lords are grateful to the Government for having made available £5 million for disabled people. I am sorry that it has not been possible to put that into statutory form and on a permanent basis. I should like to know what will happen after the scheme ends in 1991, as would the noble Lord, Lord Renton. I presume that it is a stop-gap scheme put into effect while the Government consider a proper permanent basis upon which to bring the severely disabled back into the statutory framework.
I am grateful to the noble Lords, Lord Allen of Abbeydale and Lord Carter, for tabling this amendment because it forms a properly articulated basis for discussion. I believe that many noble Lords are full of questions and would like the Minister to answer them. Those questions have been ably set out by the noble Lords, Lord Carter and Lord Allen of Abbeydale, and I should like to add only two by way of emphasis.
However, I should first like to take up what was said by the noble Baroness as regards rights. I believe that the words "human rights" can be vaguely used. They can be waved in the air as though they are unanswerable propositions merely by stating them. I believe that it is the basic right of disabled people to have a weekly payment in recognition of their needs and to say that it is right that they should rather than to say that they have rights. That may sound like a quibble but I believe that there is substance in what I say.
We all have confidence in DIG and I too should like to pay my compliments to it. I am happy that it should look after this temporary scheme. However, as the noble Lord, Lord Allen, has said, it is important that it should have machinery for seeking out potential claimants and also that there should be a proper right of appeal. I should particularly like the Minister to address those two points in his reply.
In response to what was said by the noble Baroness, Lady Lane-Fox, I believe that there is no reason for severely disabled people to be depressed by what has taken place this afternoon. They should be pleased that the noble Lords, Lord Carter and Lord Allen, have tabled this amendment in such detail that the Minister will be forced to dissolve our fears and answer most of our questions.
Lord Banks: My Lords, I should like to support the amendment introduced by the noble Lord, Lord Carter. I recently said that it appeared that the Government's proposals were replacing a statutory right to benefit with cash-limited charity. As the noble Lord, Lord Carter, has said, the scheme is now a fact, and this amendment would bring it within the statutory social security system. I believe that that is required by all the organisations speaking for the disabled, including the Disablement Income Group. It has made clear the fact that it also wishes to see these arrangements, and any which succeed them, within the statutory social security system.
Lord Seebohm: My Lords, I do not know whether it would be of any use if I said a few words about the
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early history of the Family Fund, which was a similar organisation. At the time I was chairman of the Joseph Rowntree Memorial Trust. I was sent for by the then Sir Keith Joseph, who told me that he had found so many special cases that it was impossible to cater for them all by way of regulations in a statutory way. He asked whether the trust would undertake to run the fund. At the time he was thinking of a figure in the order of £3 million, although it would be more than that now. He asked whether we at the Joseph Rowntree Memorial Trust would administer it.
I was very doubtful about the matter and expressed that doubt to my co-trustees. We discussed the position of a charitable organisation if it had to have some kind of relationship with the DHSS. We considered whether it might be dangerous for its charitable status and might end in all kinds of extraordinary squabbles and in appeals above its head. I finally told Sir Keith that the trust would carry out his request but only on the understanding that the moment the money left the Treasury, or wherever it was, and was in the trust's position it was the trusts money. It would administer the fund to the best of its ability and there would be no appeal above the trustees. After many teething troubles, it was a great success. I should add that I have not been connected with the trust for some time. I support in principle an idea of the same kind for the disabled.
It was interesting to note that, after a short time, the trust found that what appeared to be special cases were of such general application that the Government were able to take them over and deal with them under regulations. One such case was the mobility allowance. At the beginning, one of its main occupations was authorising second-hand cars so that people who had no means of transport could visit their disabled children in hospital, mental homes or wherever.
When I left the trust five or six years ago, the biggest demand was for washing machines for incontinent old people living at home. There are various other items which I believe still remain special cases and can be dealt with only on an ad hoc basis by trustees who are experienced in this field. Therefore, although I welcome the amendment I believe it must be treated very carefully from the point of view of charity if it is to be organised properly.
Lord Allen of Abbeydale: My Lords, will my noble friend confirm that the Family Fund does not go in for regular weekly payments?
Lord Seebohm: My Lords, that was not normally its job but some things go on for quite a long time; for example, before the mobility allowance came in we had to provide for the cost of taxis and transport for a regular weekly visit or something of that nature before we started buying cars, which was cheaper.
Lord Trafford: My Lords, I yield to nobody in my support for the severely disabled but, like my noble friend Lord Renton, I am in a quandary. I am slightly confused by the amendment tabled by the noble Lord. I should have preferred to say something after the Minister had given us the benefit of the answers to some of the questions asked. Unfortunately that is

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impossible and therefore I must make the two points in advance.
I believe it is right in principle that any long term properly devolved scheme for the care of the disabled—or indeed any such scheme in most other fields of social affairs—is properly a government responsibility and it is better to have it on a proper well thought-through statutory basis. If I am correct in my interpretation, these do not seem to me to be quite the same circumstances. First, it is short term. In the second place, it is a grant. In the third place, I think that if I were in the position of a possible recipient, then under those particular circumstances, I would rather have a charity with the well known integrity and ability of DIG to be administering the scheme on the short-term basis; and I question the short-term basis.
The only argument that I heard, with due respect to noble Lords who have spoken on this, concerns the question of the right of appeal. As we have just heard, in another somewhat similar scheme, which has apparently worked extremely well, that was ruled out very firmly from the word "go" by those who were to operate the scheme. I assume that might happen under present circumstances. Therefore, I remain doubtful that we would improve the situation by introducing this amendment although I accept that were we trying to produce a long-term solution to this particular problem, it should be a statutory one. As I say, in many respects I feel that under these circumstances an experienced charity is perhaps best equipped to make judgments on grants in aid. Therefore, although I have great sympathy with the amendment, I should have great difficulty in supporting it as drafted.
4.45 p.m.
Lord Swinfen: My Lords, like other noble Lords I should like to see proper financial provisions for severely disabled people. However, I do not believe that there is any need for this amendment. If there was a need for this amendment the Government would not already be setting up a fund. As everyone knows, we are changing from one system of social funding to another. There are bound to be teething problems and I believe a fund of this sort is probably the best way of dealing with the matter. To have everything set down with detailed statutory provisions means casting everything in stone. Charities are normally a great deal more flexible and are often a great deal quicker to act. They can act where necessary, even bending their own rules if required.
At the same time the change from one system to another may take rather longer than we anticipate and the system that the Government are setting up, although temporary, could be extended if necessary. Unfortunately if we agree to this amendment, we have a very definite termination date after which there may well still be a number of cases of hardship and there will be no provision to deal with them. I feel that in the long run the Government's proposals to be advised on and operated by DIG will be better than this amendment. Therefore, I cannot support the amendment.
Lord Skelmersdale: My Lords, I am very grateful to the noble Lord, Lord Carter, for tabling this amendment and to all noble Lords who have spoken to it in this short debate today. I believe we are at one in what we are trying to achieve in this area and I believe that the noble Lord, Lord Ennals, put his finger on it straight away. We are filling a lacuna and, let me add, temporarily. That lacuna is to enable severely disabled people to live independently in the community. We have already said that we intend to establish a trust fund to achieve just that end, and to make up to £5 million available to that fund in 1988–89. It will be an independent trust, set up with advice from the Disablement Income Group. This new clause seeks to put that commitment on a statutory footing. I believe that this is unecessary.
I pray in aid the wise words of the noble Lord, Lord Seebohm, speaking with all his experience of the Joseph Rowntree Memorial Trust in the early days. This statutory footing—especially the very fixed one in the amendment before the House now—would not give such a trust the flexibility which, with all his experience, he has shown is necessary to take account of rapidly changing circumstances.
After hearing what I have to say I hope that noble Lords will agree with me on that point. First, it is indeed our intention that the trustees appointed to the fund should include individuals with particular knowledge and experience of disability. We also hope to include people with, for example, legal or financial qualifications. The responsibilities of trustees must, of course, be taken very seriously, and we shall want to see that all the appropriate qualifications are represented on the board. Not only have we had advice from DIG on this matter but we have also had the advice of the Joseph Rowntree Memorial Trust. Indeed, the department consulted that trust which is offering a great deal of practical help in planning the scheme. However, the trust felt that it could not take on the task as it felt that it was outside the trust's terms of reference.
In answer to the noble Lord, Lord Henderson of Brompton, and other noble Lords, I believe it would be appropriate to say a few words about the duration of the fund. I said a few moments ago that the Government are committed to looking at the overall position of disabled people within the social security system in the light of the report by Sir Roy Griffiths on community care and the results of the OPCS survey. However, with the best will in the world what I cannot say is when such a look would be translated into legislative action and that cracks the point of three years which the noble Lord, Lord Carter, put in his amendment.
In my view it would be unwise to tie the fund down so tightly. If, for example the need for the fund were to persist for only a few weeks after 11th April 1991, under this clause we would have no option but to wind it up or to come back in primary legislation at a time when there may not be any suitable primary legislation on the stocks. That would mean we would have to stop paying disabled people the money they need if they are to avoid being taken into residential or hospital care. We cannot predict what the outcome of the studies will be and I do not think it would be

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wise to legislate for a specific timetable. In any event, 11th April 1991 may not be the uprating date for that year. Who can predict the future?
However, one point that your Lordships are clearly concerned about is how I arrived at the number of 250 for this group. The noble Baroness, Lady Jeger, has cross-questioned me on this several times. The answer is that I was advised, on a survey of just a few local officers, that it would be in the order of this number; and that is what I have consistently reported to the House. We are not talking about existing recipients; my noble friend Lord Swinfen is absolutely right. Their benefit will be protected at the point of change with real terms of protection for higher domestic assistance additions. We are addressing the problem of people who become severely disabled after next April and who claim benefit for the first time after that date. Our evidence is that this is likely to amount to a few hundred people. I have conceded already that 250 may not be exactly the right number, but we are in broad agreement with DIG that the numbers are small. We both agree that it is a few hundreds: up to 1,000.
My noble friend Lord Swinfen made the point that we are changing from one scheme to another, but I would add that the Government are protecting the group that we need to protect—the group upon which this amendment concentrates: the very severely disabled. In passing, I think there is merit in the idea that there should be an annual report on the operation of the fund, and we are examining ways of incorporating such an obligation within the trust deed.
This new clause sets out a number of details which the noble Lord, Lord Carter, wishes to ensure are incorporated in that trust deed, and I have already committed the Government in the course of a Question on Tuesday to publishing that and making it widely available. I can assure the noble Lord now, as I did then, that the eligibility criteria for the fund will be set out in the trust deed, which will be a public document. I can also assure the noble Lord that the deed will set out all those details about eligibility criteria, the duties and the role of trustees and other parties, and so on, which are usual and necessary in such cases.
We are discussing the administration details with DIG, but they cannot be finalised until the trustees are appointed; otherwise what is the point of having trustees? It is for them to determine how the fund will operate on a day-to-day basis in order to fulfil the objectives of the trust within the eligibility criteria.
The noble Lord, Lord Allen of Abbeydale, referred to appeals. I have no doubt that the trustees will wish to examine very carefully indeed decisions which give rise to dissatisfaction. Overall duties and responsibilities of the trustees will be governed, as in any trust, by the terms of the deed and by the strict rules imposed by the law on trustees, which are enforceable, as my noble friend Lord Renton has pointed out, by the High Court.
I should like to make it clear that the 5 million we have initally set aside for the fund is intended to cover
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administrative costs as well as payments to disabled people. I have been asked what these payments are for. The scheme will cover the costs of caring, which could certainly include laundry and anything else that is appropriate; but again it will be for the trustees to determine what the costs of caring actually are, including taking professional advice. We are confident that the sum available will be sufficient to cover the small group of people we are talking about, and I repeat what I said earlier this week: that future funding will be determined in the light of experience.
Finally, I should like to comment on the remarks made by the noble Lord, Lord Allen of Abbeydale, that in setting up this fund the Government are abrogating their responsibilites and forcing this group on to charity. I find it very difficult to understand the accusation that we are walking away from our responsibilities, when we are making cash available for the group. The fact that the channel for getting the cash to the group is a charitable trust fund reflects the need to deal flexibly with the needs of individual people—something for which a government scheme, with the best will in the world, has been found totally impracticable. That custom-made form of help is inappropriate in the reformed benefit scheme.
In the light of my assurances that the trust deed will be in the public domain and that many of the points raised by the noble Lord, Lord Carter, and others who have spoken today will be contained in the trust deed—and I hope I have answered all the points raised: if I have not; it is not due to want of attention or being undesirous of answering—I hope the noble Lord, Lord Carter, will be able to withdraw the amendment.
Lord Renton: My Lords, before my noble friend sits down, I wonder whether he could clarify one point. The amendment refers to helping severely disabled people. He has said that the Government's scheme is to help very severely disabled people, of whom he estimates there will be not more than 1,000. Could he enlighten the House as to the difference between severely disabled and very severely disabled?
Lord Skelmersdale: My Lords, the working definition we have been using between those terms is to distinguish between those people who but for the coming into force of the new scheme on 11th April would be on different rates under the new benefit scheme. In other words, if exactly the same injury were incurred on 10th April, the claimant would receive a higher amount than that same claimant would have received two days later. It is this anomaly that the whole scheme is designed to clear up.
Lord Carter: My Lords, I am extremely grateful to all noble Lords who have supported this amendment. Your Lordships will realise that it was put down with the intention of discovering some of the answers the Government have given (and have not given) regarding the administration of the trust fund.
I should like to deal with a couple of points very quickly. First, on the point made by the noble Baroness, Lady Lane-Fox, regarding rights, as I said in my opening speech, this is not the place to go into

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a debate on the philosophy of benefit. If the noble Baroness has a problem regarding the rights of disabled people, she should really take it up with her own Front Bench because there is the right to disability premium and severe disability premium in the new Social Security Bill.
All I would say to the Minister is that all the provisions which are in the amendment have already been agreed by the Government—I extracted them from the Hansards of this House and of another place—except for the three-year provision, and I have explained that was intended to stiffen the resolution of the Government in regard to what, in their own words, is intended to be a temporary scheme. I will read with great care what the Minister has said, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Income support and child benefit]:
Baroness Jeger Baroness Jeger moved Amendment No. 9:
Page 4, line 18, after ("circumstances") insert ("which shall include—

(a) that child benefit is not payable by virtue of subsection (1)(aa) of section 2 of the Child Benefit Act 1975 because he is living away from the parental or family home and—

(i) has no living parent or guardian;

(ii) has been in the care of a local authority within the previous 24 months;

(iii) is on bail or under the supervision of a probation officer or social worker and placed away from home;

(iv) cannot live at home because he would be threatened with physical or mental abuse and for this reason has been excluded from his home;

(v) mentally or physically handicapped or mentally ill and needs to live away from home because his parents cannot cope, but not so handicapped or so mentally ill that he is incapable of work; or

(vi) his parents or (if he has only one) parent are or is in prison, in a residential or nursing home or in hospital, or unavoidably absent abroad (but not in Her Majesty's Forces);

(b) that he is married;

(c) that he is a lone parent;

(d) that he is registered as blind;

(e) that he is incapable of work by reason of a disease or bodily or mental disablement (but not solely by reason of temporary sickness);

(f) that she is pregnant (for the period commencing 11 weeks before the expected date of confinement and ending 7 weeks after the date on which the pregnancy ends and for any other period during which she is incapable of work by reason of pregnancy);

(g) that he is in receipt of a training allowance;

(h) that he is regularly and substantially engaged in caring for a sick or disabled person or is looking after a child whose parent or other carer is ill or temporarily absent or looking after a member of the family who is temporarily ill;

(j) that he is a refugee attending a course for the purpose of learning English; and

(k) that he is a person to whom paragraph (1) of regulation 13 of the Income Support (General) Regulations 1987 (persons in relevant education entitled to income support) applies by virtue of one or more of subparagraphs (a) to (e) of paragraph (2) of that regulation.").

The noble Baroness said: My Lords, I beg to move this amendment, which is a very long and complicated one. However, I am sure your Lordships will be glad to know that I am not going to make a long and complicated speech. There is a lot of concern in all parts of the House about what is going to happen to young people between the ages of 16 and
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18 who are told that they must either go on a training course or stay in further education. We are concerned about young people in that age group who may suffer from all sorts of disabilities and problems which make it difficult for them to take up these options.
When we raised this matter earlier, the Minister gave a provisional list of young people who, because of problems and disabilities which I will not read out at the moment, were to be given special consideration and would not be subjected to the rigors of this new Bill. We took the wording in the amendment almost 100 per cent. from that list, given on page 280 of the proceedings of Standing Committee E in the other place, and repeated here at an earlier stage.
When it was suggested that these exemptions should be made statutory and written into the Bill, the Minister expressed some hesitation. He very kindly wrote to me on 2nd March, but he had to tell me that the regulations had not yet been drafted. So I feel that in regard to Clause 4, which will be implemented according to regulations not yet drafted, we are in some difficulty. I understand that this is a long and complex job but I cannot see why this whole Bill could not have been postponed until this question was settled, because in my view it is the kernel of the Bill. I was not the only Member of the House who would have preferred to see the rights of these young people made statutory instead of included in a list of undecided regulations.
I understand that the regulations are still being considered and will be presented at a later date for debate. By then, however, we will have passed Clause 4. We are being asked to buy a bit of a pig in a poke. I hope that it will be possible for the Minister to look at this again as it represents genuine concern.
5 p.m.
The Earl of Selkirk: My Lords, the point raised by the noble Baroness, Lady Jeger, is important, but the amendment is very long and contains a great deal of detail. I wonder whether this can be done in a more straightforward way.
I pressed my noble friend at a previous stage to put in regulations. He explained in a letter, for which I am grateful, that this is difficult. Indeed, I accept that it is not easy to write regulations until the Bill has been passed. Nevertheless we should like to have more information than we now have.
It is within my knowledge, and I think that of many other noble Lords, that housing associations are making preparations for those children who leave their families. This happens in one way or another, and arrangements have to be made for it. The associations like to know how they stand. Reference has been made to a person leaving his family for no good reason, but what is a "good reason" for leaving the family? It is difficult to say what is a sensible reason.
I accept the Government's proposition that people should either train or be in work. It is a straightforward proposition that I think most noble Lords would accept. Are we sure, however, that we are not putting on too much pressure?
I have several questions about the effect of the proposal. What form does YTS now take? Can it take

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anybody who is in a position to go on the scheme? Has it ample room for training everybody? At the end of the day, what is the value of the training? I have not seen a YTS course in operation. Some of your Lordships may have done so, and the scheme may be very useful. If somebody leaves YTS, is he inevitably to blame for leaving or can he leave by what is described as mutual consent? We should know something about these matters. This is a vital period in anyone's life, and we should do our utmost to ensure that the years between 16 and 18 are properly used. I should like to be certain that people know how they can be used.
Baroness Gardner of Parkes: My Lords, I oppose the amendment. I support the views of my noble friend Lord Selkirk that one should either train or be in work. This was discussed thoroughly at the last stage of the Bill. It was clear that there would be provisions for exemption where necessary. The amendment is very detailed, and I am not able to support it.
Lord Henderson of Brompton: My Lords, I made a suggestion at the last stage of the Bill which was taken up by the Minister in a circulated letter. It was that the cardinal principles should be listed in the Bill. I put my name to this amendment because I thought that it was worth bringing it before the House again in an attempt to have the cardinal principles included in the Bill. I wonder why they cannot be so included. I appreciate that the regulations are still in the process of being drafted. I do not wish to impose any sense of rush on the drafting of amendments, but the Minister surely knows what the cardinal principles are. Is it not preferable for them to be included in the Bill? I appeal to him to do this on Third Reading.
As it is, we are being asked to write a blank cheque. This is not what Parliament should allow. I am strongly in agreement with the sentiments put forward by the noble Earl. Lord Selkirk. I should be happy if the Minister could undertake to put forward, say, a number of heads in the Bill so that the details could be inserted in regulations. I therefore ask him to give this serious consideration.
Lord Skelmersdale: My Lords, in answer to the last point, I undertook to consider the matter in Committee and that is what I have done. The House will recall that in response to a telling intervention from my noble friend Lord Selkirk, I gave details in Committee of the categories of 16 and 17 year-olds who would be entitled to income support throughout and of those so entitled only during the child benefit extension period. Following that, I wrote to those noble Lords involved in the debate and enclosed with the letter a copy of the provisional lists A and B covering the type of exemption case that we intend to put in the regulations.
The noble Baroness, Lady Jeger, asked why the Bill could not have been postponed until the regulations were ready. She knows the answer. Other parts of the Bill amend the 1986 legislation, and it is necessary to do this because of the imminent working of the new reformed scheme.
Baroness Jeger: Unfortunately, my Lords.
Lord Skelmersdale: My Lords, the noble Baroness says unfortunately, but that is the answer, and, I submit, a good one.
This having been done, there is a basic difficulty that the House must face. The noble Lord, Lord Henderson of Brompton, spoke of writing a blank cheque. If this were so, I suggest that regulations would never be embodied in subsidiary legislation at all. It is normal for such details to be dealt with in regulations. As noble Lords are aware, it is a far more flexible way of doing things as regulations are more quickly amended than is primary legislation. If the categories were to be placed in primary legislation, we should have considerable difficulty if it were later found that the description of the category was unsatisfactory. This point was brought home by the noble Lord, Lord Seebohm, in discussion of a previous amendment.
The suggested category descriptions given in the amendment of the noble Baroness, for instance, in some cases are not sufficiently explicit and will have to be amended or further explained in regulations. The person caring for another as described in paragraph (h) is not well-defined; nor is the phrase "temporary sickness" in paragraph (e). Because the categories were in primary legislation, we would end up not being able to help speedily enough even where we wanted to assist. However, the categories could be speedily amended when circumstances required such action if they were in regulations.
The precise wording and fine details of the exact circumstances have not yet been decided. Points made in debate and by interested parties will be closely examined to ensure that as far as possible the vulnerable groups are identified. There is of course the severe hardship power on which to fall hack. That is my answer to the noble Earl, Lord Selkirk, about the preparations that housing associations have to make.
I believe that there is not a great deal to be gained by having the suggested categories entered on the face of the Bill. I am happy to give assurances about the kind of situation that the regulations will cover. We have debated these, and I have circulated them widely. There will be an opportunity to debate the regulations when they are laid. It is not unknown in this House or indeed in another place for a Minister who is commending regulations to the House to be put in the position of withdrawing them. I can think of two occasions when this has happened in respect of Treasury regulations, which must be very unusual. I do not therefore consider that any advantage would be gained by rushing categories into primary legislation at this late stage and I therefore recommend that the amendment be rejected.
There was a particular point made by my noble friend Lord Selkirk, I believe, who asked me what form YTS has taken. The whole rationale of this clause is that in the Employment Bill currently before your Lordships there is a guarantee of a place of work in the scheme. The two provisions stand or fall together; it is an integral part.

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My noble friend also asked me about the provision for leaving YTS; for example, if a scheme is unsuitable. The guarantee extends to the age of 18 and if the first scheme or indeed the second or the third, is unsuitable then a further place will be found. In the meantime there is a bridging grant to which the young person will be entitled while he is between schemes. In those circumstances there is no question of young people not having the income that they need in order to support themselves.
I believe those to be the questions that my noble friend asked me. As regards regulations, there seems to be little point in entering into the Bill a description of a category of an exempt person when we may find very soon that on reflection we need to amend it. I am afraid that I stick with regulations.
Lord Pitt of Hampstead: My Lords, I am still worried about this clause. I do not believe we have taken into account youngsters who are estranged from their families. They are the people about whom I have been worried all along. As a consequence of being estranged from their families, they become homeless. I accept that it is quite difficult to put into the Bill details along those lines. However, it strikes me that what the noble Lord, Lord Henderson of Brompton, said in Committee, and repeated is sound. We can have in the Bill some principles with regard to the kind of people who would not be allowed to fall by the wayside.
Even the argument put forward by the Minister is not wholly without a loophole. Even if it were laid down in the statute it would still be possible to add another clause giving the Minister the power to add additional categories. That is not such an impossibility as the Minister makes out. I believe that we need to look at this matter again. I know the extent to which this question is causing worry. There is acceptance that the Government want youngsters to work, to be educated or trained and not to look for benefit. I believe that is now generally accepted.
What we are all bothered about is whether there is a proper safety net for those who have been unable to fall into either category. I am particularly worried about those whose homes have left them. Your Lordships always talk about people leaving home, but I know many youngsters whose homes have left them. It is those youngsters I am most worried about. I do not believe that question has been answered.
Baroness Jeger: My Lords, I can assure the Minister that there are many people both inside and outside this House who will be watching the development of this matter with great anxiety. I thank him for the explanations which he has given this afternoon. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord Banks Lord Banks moved Amendment No. 10:
Page 4, line 18, after ("and") insert ("in some cases").
The noble Lord said: My Lords, as the House is aware, the Bill raises the age at which income support may be claimed from 16 to 18. Sixteen and 17 year-
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olds are denied income support unless in the opinion of the Secretary of State they will suffer severe hardship through not receiving it or they are exempted because they fall within certain categories which we have just been discussing and which are to be prescribed in regulations.
In the latter case the Bill indicates that exemption will be for a prescribed period. It states:
"for '16' there shall be substituted '18 or, in prescribed circumstances and for a prescribed period, of or over the age of 16'".
This would seem to state that in all exempted cases in the prescribed categories exemption will be for a limited period.
I moved an amendment in Committee which was designed to remove the reference to a prescribed period. In his reply the noble Lord, Lord Skelmersdale, said that there would be two distinct categories of people who would be in prescribed circumstances. He has repeated that statement this evening. There would be those who are not required to be available for work and who would be entitled to income support without any time limit—that was his phrase—"without any time limit". Secondly, there would be those who would be entitled to income support only during the child benefit extension period.
The noble Lord gave examples and I was convinced by what he said that some in prescribed circumstances would within the terms of the Bill require to be exempted for a limited period. When I asked him whether everybody who is covered by prescribed circumstances will receive benefit for a prescribed period or whether some people would receive it without a prescribed period being imposed, to my surprise he said that the former was correct, which seemed to go against all his previous argument.
Assuming what the Minister said in his speech was what he meant to say, I have tabled this amendment to make it clear that the Secretary of State may prescribe a limited period and to avoid compelling him to do so in every case. I believe that that would be consistent with what the Minister was saying in his reply to me in Committee. I beg to move.
Lord Skelmersdale: My Lords, I was hoping that I should be able to satisfy the noble Lord by repeating that we intend a prescribed period to be used in all cases of entitlement, but clearly I am unable to do so. We shall have to see how we get on.
In some cases (list A) which I hope the noble Lord received, the prescribed period will be during the child benefit extension period only. During this period the young person will have ample opportunity to consider the job and YTS opportunities that are available. Once a job or a YTS place is secured, income support will cease although some people who obtain a YTS place will be able to claim income support to supplement their training allowance of £28.50. Normally this would be boarders; in other words, this would apply to people who are working away from home on a scheme. For example, it may be a specialist scheme in, say, catering which would mean that the young person could not get to it every day and would have to travel so far that it would be worth boarding.

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In some other cases (list B), entitlement to income support can exist both during and after the extension period and will last for as long as the young person still falls within the particular prescribed circumstance, for example, he is still a lone parent or is still a member of a married or cohabiting couple with a child. This effectively could be until the young person reaches the age of 18. I noticed that the noble Lord said that this would continue without any time limit. Of course the whole procedure comes to a grinding halt after the age of 18 because we are concerned in Clause 4 only with the 16–18 year-olds. In other cases in list B, entitlement will last for a shorter period; for example, the pregnant youngster for whom it is intended that benefit will only be payable for the period commencing 11 weeks before the expected date of confinement and ending seven weeks after the date pregnancy ends. Regulations will specify the prescribed period for all categories but, as I have mentioned, in many cases entitlement will last until the young person attains the age of 18, at which age the proposals in the clause will no longer apply. I do not consider that the amendment would achieve anything that is not already intended. Therefore I hope that the noble Lord will feel able to withdraw it.
Lord Banks: My Lords, those who will be able to receive income support for the whole period covered by the clause—16 and 17 year-olds—will not be subject to a prescribed period. I do not think that the noble Lord accepts that. If he accepted it —and when he said in his original speech "without any time limit", it appeared that he did—my amendment would be consistent with what he was saying. I am sorry that he is not able to accept the amendment, but I do not want to pursue it any further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 11:
After Clause 4, insert the following new clause:
("Annual review of child benefit.
( ) The Secretary of State shall review the level of child benefit in April of each year, taking account of increases in the Retail Price Index and other relevant external factors.").
The noble Lord said: My Lords, this amendment stands in my name and those of the noble Baronesses, Lady Faithfull and Lady Jeger, and the noble Lord, Lord Henderson of Brompton. In Committee we moved an amendment which would have included child benefit with the other benefits that are uprated every year. On a Division, that was defeated. However, the amendment did not actually mention child benefit although it would have had the effect described. Therefore some noble Lords will not have realised that the question of uprating child benefit was to be debated. It seems sensible therefore to afford the House an opportunity to look at the matter again in the light of this amendment, which does not go as far as the previous one since there is no obligation on the Secretary of State to take further action once the review is concluded. The implication must be that the benefit is to be reviewed with a view to uprating where increases in prices or changes in circumstances would make it necessary.
We have to bear in mind that child benefit replaced family allowances paid for the second child and subsequent children and income tax allowances for children. Thus child benefit was replacing allowances available to all families with children. Child benefit became the sole means by which all families with children were assisted, on the grounds that the period of bringing up a family was a time when people were faced with the greatest burdens. It followed that child benefit should be uprated in step with the other income tax allowances. Yet this has not happened. Since 1979 the single person's income tax allowance has risen by 14 per cent. in real terms; the married couple's income tax allowance has risen by 17 per cent. in real terms; but child benefit has fallen by 3 per cent. in real terms. People with families have become progressively disadvantaged as compared with the rest of the community.
The Government's Green Paper, Reform of Social Security published in 1985, said:
"The Government's conclusion from their study of the role of child benefit was that it had underlined the fact that there were two clear and distinct aims in helping families with the cost of bringing up children. The first is to provide extra help to families generally. The second is to provide extra help for poor families. It would be a serious mistake to confuse those two distinct purposes or to seek to restructure a benefit designed to meet one aim to meet another aim".
The Government are neglecting their own good advice. The noble Lord, Lord Skelmersdale, said that the cost of child benefit is huge. I believe it is about £4·6 billion per annum. That has to be compared with the cost of the remaining income tax personal allowances. They cost in lost revenue about £25 billion per annum. The Minister also said that child benefit was not targeted on the poorest.
I asked in Committee whether the Minister was saying that the £25 billion which goes towards the other personal allowances goes only to those who seriously need it. We know that, unlike child benefit, these allowances give most to the better off. The Government say that they are spending more on the poorest. In so far as that turns out to be so, we will all welcome it, but the Government are saying that they did not uprate child benefit this year in order to have more for the poorest through income support and family credit. The argument that child benefit should be frozen to provide funds for the poorest means that families with children are singled out to provide funds for the poorest families. There is no justification for that. If we wish to help the poorest families, as we all do, that should be paid for by the generality of taxpayers and we should not single out those who already have children to provide the money.
Child benefit has the advantage that it does not give more to the better off. It is universal so that no stigma can be attached to claiming in anybody's mind. It has a nearly 100 per cent. take-up. It does not trap people into dependence on welfare. It is a fact that the absence of an uprating this year will push 15,000 parents and 30,000 children on to dependence on a means-tested basis. It helps those who do not claim other benefits to which they are entitled and who thus fall through the net of family income supplement and income support, or family credit as

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family income supplement is to become. It redistributes from those without dependent children to those who have such children.
Personal allowances are uprated every year. By passing this amendment the House would clearly demonstrate its view that child benefit should be uprated every year as well where circumstances justify this in the shape of increases in prices or in other changes in the general position. I beg to move.
Baroness Jeger: My Lords, the clarity and expertise of the speech of the noble Lord, Lord Banks, has thankfully made my task brief. There has been a great deal of discussion throughout the country on the freezing of child benefit. I hope that the Government will take some notice of the fact that more than 70 organisations of many different political and social beliefs have joined in the campaign "Save Child Benefit". This is not a party matter.
I should like to make a couple of points. When child benefit was brought in, income tax child allowance was abolished. When child income tax allowances were being discussed no one said that we should not give them to well off people. On the contrary, the more well off they were the more they benefited from tax concessions. The genesis of child benefit is income tax law rather than social security law and so the figures of the costs we are given are an accountant's fantasy. The Treasury is saving money. The whole budget has been transferred to social security. That has absolutely distorted the finances of that department. I should like to see the Treasury having to take much more responsibility for something that stems from changes in the tax laws as much as from changes in social security arising from the abolition of family allowances.
During yesterday's debate I was reminded about this matter when many noble Lords expressed concern about the apparent insensitivity of the Government to much genuine public feeling on various issues. Child benefit is one of them. An agreement in your Lordships' House would not only be a great relief to worried mothers but would indicate at last a responsive concern by your Lordships, if not by the Government, across party lines and in the interests of the parents and children of our country. In that spirit I hope there will be wide support for this non-party amendment.
5.30 p.m.
Lord Seebohm: My Lords, in spite of what the noble Lord, Lord Banks, said, my name does in fact appear on the Marshalled List. I was unfortunately unable to speak in Committee as I was abroad and I am today speaking on behalf of the noble Baroness, Lady Faithfull, who had to leave the Chamber for an important engagement. I should say that I have pursued the matter for some considerable time, but I still feel rather bitter in view of the statement made by Mr. John Major during the pre-election period when he said most clearly:
"Child benefit will continue as a non-means tested universal payment paid to the mother and tax free. There ought to be no doubt about this".
I know the statement was not explicit about indexing, but we all thought that that issue was well covered.
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Now I must confess that I feel most let down and I expect many other people feel likewise because of the way the statement has been interpreted.
The in-word nowadays is "targeting". I think that if that word means anything it means that your shots in point of fact hit the target. We are told that on the most optimistic of views that possibly 70 per cent. of the shots might hit their target. That is possibly over-optimistic because so far it has never reached that figure at all. Perhaps I should add here that as regards child benefit, 100 per cent. of the shots actually hit the target.
In my opinion, there are three categories of need which we are talking about in this connection. First there is the 30 per cent. or 40 per cent. of the people who could rightly claim but who do not do so for reasons which are not always entirely clear. The second category is one that I think is equally important: the low paid. They do not come into the latter category but, nevertheless, they have families and consequently need strong support for the children. We know from many inquiries that without child benefit those people would not in fact be able to see their children properly clothed, shod and fed nor provided with the necessary school books.
The third category concerns people who may be quite high on the scale from the point of view of earnings of the husband but where, before we brought in child benefit, the wife was not receiving anything like enough money for the family. That situation may have arisen because the husband was a gambler, an alcoholic or just plain mean; but we know that anywhere up that scale you could have found mothers with insufficient money to treat their children in the way they ought to have been treated. There is a very strong case indeed—quite apart from the clear analysis given by the noble Lord, Lord Banks, and the noble Baroness, Lady Jeger—for looking at the matter from another angle.
A further point I should like to make is that people's circumstances change very quickly. People can be made redundant and many things can happen to change a family's circumstances. Therefore it is quite wrong in my mind to draw a hard line and say that certain classes shall receive such benefit while others shall not. We are also entering into a field of prevention. I believe that by giving child benefit, albeit much further up the scale than the Government apparently think necessary, we are in fact keeping some children out of care in the future; they can be brought up in the type of conditions that I am sure everyone in this House would wish.
Lord Boyd-Carpenter: My Lords, the debate on this particular amendment has been a vivid and for some of us a somewhat nostalgic revelation of the difficulties that face those who are responsible for social service and social security administration. It is always possible, if a particular benefit is in some cases abolished or in others restricted, to raise genuine and sincere feeling and emotion and to suggest that something terribly wrong is being done.
But, having said that, one still has to face the fact that the right honourable gentleman who is in charge of social security has the task of seeing that such resources as are available—and they are never

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unlimited—are concentrated where they will do the most good. I am glad to say that for a great many years it has been the social policy of the Party to which I belong to emphasise the necessity of concentrating the available resources for social purposes in the areas of greatest need. But, in order to do that it means restricting them in other areas. The amounts will never be unlimited and should never be thought to be so.
In this particular case, as my noble friend the Minister will no doubt shortly be reminding us, the concept is that child benefit is not a benefit solely concentrated on those whose need is greatest. It goes to a fair number of people who are no doubt very thankful to receive it but who are in no sense in real need. If you continue making payments to those people, under a universal scheme of this type, you have, ex hypothesi, less resources available to concentrate on the areas where the need is greatest. I am sure that there is no one in your Lordships' House who will dispute for a moment the fact that there are still areas in our society where the need is very real and where the Government have the duty to try to concentrate the resources available.
A noble Lord: Which one?
Lord Boyd-Carpenter: My Lords, I do not know what the noble Lord means by saying "Which one?". He spoke, at any rate, from a sedentary position. I was in fact coming to the question of concentration. It is the family support arrangements that are based on need. It is exactly that concentration in those areas which must be the main object of any good Minister who is in charge of social security. Therefore although it is necessary to endure, if you do so, the criticism in respect of the area from which you are, to some extent, diverting those resources, nonetheless, I do not think any serious student of socal policy can doubt that that is the right course to take. It is for that reason that I think the Government are right in this matter, and I think that the amendment, however much it may have a sentimental appeal, is not one which is consistent with intelligent, clearly thought out social policy such as I hope that the Government will always follow.
Lord Seebohm: My Lords, before the noble Lord sits down, may I just ask him, in view of what he has just said, whether he is proposing to abolish the married woman's allowance?
Lord Boyd-Carpenter: My Lords, first, in the light of what I was saying, I should stress that I was not referring to the married woman's allowance. However, were we to have the opportunity to debate that matter I should have the greatest pleasure of doing so with the noble Lord. I am far too old a hand to be caught out by such a catch question, as the noble Lord should know.
Lord Moyne: My Lords, I do not wish to cross swords with my noble friend whose rapier is always so particularly sharp, but I am afraid that my comment is a very naive one; namely, what is right in one year is surely right in another. Therefore, in order to keep it right, we have to look to inflation.
Baroness Strange: My Lords. I rise to support the amendment. In many homes child benefit is of inestimable support to the parents. When the cost of living goes up, children's appetites do not go down and their feet do not stop growing. It seems essential therefore that the benefit for children should continue and keep pace with the cost of living. If this were not so, it would not be a case of half a loaf but of no bread at all.
Lord Henderson of Brompton: My Lords, I should like to add my voice in support of the amendment. I gave way just now so that the greater authority of the noble Lord, Lord Seebohm, could be heard. His name was after all on the Marshalled List.
I do not wish to speak emotionally about this but rationally. You either have the child benefit, which I think we all feel should be the case, in which case you index it; or you do not have it and you substitute something else for it. But what you should not do is to have a child benefit which is being invisibly eroded, as this has been, by 3 per cent. since 1979 and another 4 per cent. in 1988. It is that totally unemotional view which I put forward. With the utmost respect, I do not agree with the noble Lord, Lord Boyd-Carpenter. This does not seem to have been rationally or logically worked out. If it had been, we should either have had child benefit with index linking or we should have had a valid substitution. As it is, we have neither one thing nor the other and if we allow it to go this way it will end up like the death grant.
Lord Skelmersdale: My Lords, of course I understand only too well the purport of the amendment and the strong feelings which many of your Lordships have evinced this evening on the subject. It would be appropriate for me first of all to turn to the amendment itself so ably introduced by the noble Lord. Lord Banks. I am afraid there is a basic misunderstanding here as to how decisions come to be made on whether a benefit should be uprated or not. Time does not permit me to go into the details of each and every benefit. Indeed, as the noble Lord, Lord Banks, has said, the amendment only relates to one child benefit. I have to advise the House that child benefit is already subject to an annual review under Section 63 of the Social Security Act 1986. The Act requires the Secretary of State to review the benefit in each tax year in order to determine whether it has retained its value in relation to the general level of prices. The Act goes on to provide for the benefit to be uprated if the Secretary of State considers it appropriate, having regard to the national economic situation and any other matters which he considers relevant.
The new clause would therefore do nothing more than duplicate the existing provisions. It could be argued, I suppose, that the words "other relevant external factors", to quote the amendment, are not comprised in the words of the 1986 Act, which requires the Secretary of State to review the benefit
"in order to determine whether it has retained its value in relation to the general level of prices".
That, I submit, is a weak argument because the Act then requires the Secretary of State to lay a draft of an uprating order to increase child benefit if he

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considers it appropriate having regard to the national economic situation and—this is the important bit—any other matters that he considers relevant.
There are several technical arguments which I could also adduce as to why this amendment is a strange way of going about what some noble Lords actually want, which is the annual uprating of child benefit in line with inflation. As we have been reminded, we dealt with this matter in Committee and the Committee felt so strongly that the House divided. I must advise the House that this amendment would add nothing further to the cause and is unnecessary, as the noble Lord, Lord Banks, went so far as to suggest. As he pointed out, it does not make for what many noble Lords who have spoken this evening actually want—namely, not only a review of the benefit but the automatic uprating thereof.
Having said that, I think I should be failing in my duty if I did not respond to some of the more fundamental background points which have been raised by noble Lords as to why we have not seen fit to uprate the child benefit this year.
First, I turn to the noble Baroness, Lady Jeger. I would say that child benefit should not be seen as a tax allowance. Benefits and tax allowances have different roles and cannot be compared directly. Tax allowances help all taxpayers, including those with children. They do not help the poorest who do not pay tax but nor does child benefit, which is taken into account in assessing supplementary benefit/income support and in determining family credit levels. The move away from tax allowances was partly because the tax allowance arrangement helped taxpayers, especially those paying higher rates, but did nothing for those whose incomes were below the tax thresholds, a fact which I am sure my noble friend Lord Boyd-Carpenter would confirm. Through income support and the new family credit scheme we shall be able to give even more help to those who really need it. Child benefit has been in its present form for eight years. We should judge it in terms of its effectiveness as a benefit in its own right, not by measuring it against what might have happened to the tax allowance it replaced.
Let me repeat what we have said many times in recent months about our decision to leave child benefit at its existing rate—and, incidentally, pay it to the mother from April 1988—but to divert even more resources to less well-off families by means of family credit and income support. We have no plans at present to change the basis of child benefit, but we shall continue to keep child benefit and other social security benefits under constant review.
The noble Lord, Lord Seebohm, who feels particularly strongly about this matter, raised the subject of the take-up of income related benefits and argued that diverting extra money to boost income related benefits for families with children would not help those who will not claim family credit or income support. But the take-up of income related benefits is not so bad as some people sometimes assume. In terms of expenditure, 89 per cent. of supplementary benefit is claimed, as is 88 per cent. of housing benefit and 65 per cent. of family income supplement. We expect the take-up of family credit to be higher,
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probably over 70 per cent. by expenditure, because of more extensive publicity and because the more generous benefit will inevitably become better known. I regard this as a good thing. It will be simpler for new claimants because they do not need to save wage slips: we shall approach employers direct.
Another noble Lord raised the financial implications of the non-uprating of child benefit from April 1988. Whereas uprating child benefit by 30 pence a week in line with the movement in the retail price index over the 12 months to September 1987 would have cost around £120 million net in a full year, we are putting much more than this into extra benefit for low income families through income support and family credit. Increasing child benefit would not have brought extra help to families receiving those benefits, since they are adjusted to take child benefit into account. What we have done instead has brought very worthwhile help, focused specifically on families in greatest need, whether in or out of work. As my noble friend Lord Boyd-Carpenter has been generous enough to say, he is proud to belong to a party which holds this philosophy. I certainly share his pride. I am equally proud to belong to the same party.
The figures speak for themselves. From April we shall be spending around £100 million extra on families in income support. We shall be spending over £200 million extra on the family credit, which will of course he paid to mothers. So we shall be spending much more than a straightforward child benefit uprating would have cost. Family credit, which is more generous than family income supplement, is better focused on those in need and again is payable to the mother. In these circumstances I am afraid that in this year of all years I could not accept the argument of my noble friend, Lord Moyne, that what is right for one year is necessarily right for another. We are in a whole new ballgame with the extra money which I have just described. I should also say on a slightly different point that it would be nonsense to increase child benefit to help out a minority of wives in better-off families where the income is not shared equitably.
Finally, the remarks of my right honourable friend the Chief Secretary referred to by the noble Lord, Lord Seebohm, made it entirely clear that one of our four main aims in social security was to bring more help to low income families. That is precisely what we are doing and what an increase in child benefits, which would be of no value to those receiving income related benefits, would not do. That is what we promised and that is what we are now delivering.
However, back to the amendment. As I have already explained, this new clause would not achieve the uprating of child benefit. I think the arguments on this have been well rehearsed by your Lordships and in another place. However, I want to say again that we recognise the significance of child benefit to many mothers but continually increasing its level for all is not the best way of helping low income families. Making real improvements in income related benefits as we are doing in April is a much more effective means of alleviating poverty. But to target help in this way we need the flexibility contained in the present legislation. Therefore I advise the House to reject the amendment.
Lord Banks: My Lords, I first apologise to the noble Lord, Lord Seebohm, for having omitted his name from the sponsors of the Bill at the beginning of my remarks. That was very remiss of me as I know of his continued and deep interest in this subject. I am grateful to him for his support this evening. Indeed I should like to thank all noble Lords who have supported this amendment. As I think the noble Baroness, Lady Jeger, said, this is indeed a non-party issue and that has been made clear by the support which has come to the amendment from different quarters of the House.
The noble Lord, Lord Skelmersdale, said that we should not compare what has happened to child benefit with what might have happened to the personal allowance which it replaced if it had continued in existence. However, the fact remains that families with children have gradually become disadvantaged as opposed to the rest of the community and if we freeze child benefit that is accentuated. Is that something which we want to happen? I do not think it is. We are bound to take into account the fact that child benefit replaced in part income tax allowances for children.
The noble Lord, Lord Boyd-Carpenter, spoke of concentrating what we have where it will do the most good and where it is most needed. But in saying that in relation to child benefit he is falling into the very confusion which the Green Paper produced by the Government in 1985 warned against—namely confusing benefits designed to help people with families generally with benefits designed to help the poorest of people with families. While we all want to give more to the latter, it is not right to seek to do it by taking only, or even partly, from those who have children themselves.
The Conservative Opposition in another place when this child benefit was first introduced put down an amendment which was designed to ensure not only that it should be raised at least once a year but that it should be raised twice a year. That was the case they they fought in another place at the time.
This amendment is a more modest one. It only has in mind the review taking place once a year. The noble Lord, Lord Skelmersdale, said that there is a section of an Act which states something rather similar and that therefore this provision is not necessary. He claims that this will not achieve the end which we have in mind. But I do not think that there is any doubt at all that, if your Lordships were to pass this amendment tonight, it would be clearly understood by the public outside and by the Government here that this House is in favour of uprating child benefit. I hope that in order to make that clear your Lordships will support this amendment now in the Division Lobbies.
5.53 p.m.
On Question, Whether the said amendment (No. 11) shall be agreed to.
Their Lordships divided: Contents, 97; Not-Contents, 84.

DIVISION NO. 2

CONTENTS

Airedale, L.

Attlee, E.

Amherst, E.

Aylestone, L.

Ardwick, L.

Banks, L. [Teller.]

320

Basnett, L.

Kilbracken, L.

Beaumont of Whitley, L.

Kilmarnock, L.

Birk, B.

Kirkhill, L.

Blackstone, B.

Lawrence, L.

Blease, L.

Llewelyn-Davies of Hastoe, B.

Bonham-Carter, L.

Longford, E.

Boston of Faversham, L.

Lovell-Davis, L.

Bottomley, L.

McIntosh of Haringey, L.

Brockway, L.

McNair, L.

Buckmaster, V.

Mayhew, L.

Carmichael of Kelvingrove, L.

Milner of Leeds, L.

Carter, L.

Molloy, L.

Cledwyn of Penrhos, L.

Morton of Shuna, L.

Cocks of Hartcliffe, L.

Murray of Epping Forest, L.

Cottesloe, L.

Northfield, L.

Cudlipp, L.

Oram, L.

Dean of Beswick, L.

Peston, L.

Diamond, L.

Pitt of Hampstead, L.

Donoughue, L.

Ponsonby of Shulbrede, L.

Elwyn-Jones, L.

Prys-Davies, L.

Ennals, L.

Rea, L.

Ewart-Biggs, B.

Ritchie of Dundee, L.

Faithfull, B.

Robson of Kiddington, B.

Falkender, B.

Rochester, L.

Falkland, V.

Seear, B.

Gallacher, L.

Seebohm, L.

Galpern, L.

Sefton of Garston, L.

Gifford, L.

Serota, B.

Graham of Edmonton, L, [Teller.]

Shackleton, L.

Simon, V.

Gregson, L.

Stedman, B.

Grimond, L.

Stewart of Fulham, L.

Hampton, L.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Harris of Greenwich, L.

Strange, B.

Hart of South Lanark, B.

Swann, L.

Hatch of Lusby, L.

Tordoff, L.

Hayter, L.

Turner of Camden, B.

Henderson of Brompton, L.

Underhill, L.

Hooson, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Howie of Troon, L.

Williams of Elvel, L.

Hylton-Foster, B.

Wilson of Rievaulx, L.

Jacques, L.

Winchilsea and Nottingham, E

Jay, L.

Jeger, B.

Winterbottom, L.

John-Mackie, L.

NOT-CONTENTS

Abinger, L.

Fraser of Kilmorack, L.

Arran, E.

Gardner of Parkes, B.

Auckland, L.

Harvington, L.

Bauer, L.

Havers, L.

Beaverbrook, L.

Hesketh, L.

Belhaven and Stenton, L.

Hooper, B.

Beloff, L.

Jenkin of Roding, L.

Belstead, L.

Johnston of Rockport, L.

Blatch, B.

Joseph, L.

Boardman, L.

Killearn, L.

Boyd-Carpenter, L.

Kimball, L.

Brabazon of Tara, L.

Lane-Fox, B.

Braye, B.

Lauderdale, E.

Brougham and Vaux, L.

Layton, L.

Broxbourne, L.

Lindsay, E.

Caithness, E.

Long, V, [Teller.]

Cameron of Lochbroom, L.

Lucas of Chilworth, L.

Campbell of Alloway, L.

Luke, L.

Carlisle of Bucklow, L.

Mackay of Clashfern, L.

Carnegy of Lour, B.

Macleod of Borve, B.

Carnock, L.

Malmesbury, E.

Cowley, E.

Merrivale, L.

Cox, B.

Mersey, V.

Craigavon, V.

Mottistone, L.

Craigmyle, L.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Munster, E.

Davidson, V, [Teller.]

Nelson, E.

Dundee, E.

Norrie, L.

Elibank, L.

Orkney, E.

Elliott of Morpeth, L.

Orr-Ewing, L.

Erne, E.

Oxfuird, V.

Ferrers, E.

Rankeillour, L.

321

Renton, L.

Swinfen, L.

Renwick, L.

Thomas of Gwydir, L.

Rodney, L.

Torrington, V.

St, Davids, V.

Trafford, L.

Selkirk, E.

Trefgarne, L.

Sempill, Ly.

Trumpington, B.

Shannon, F.

Ullswater, V.

Skelmersdale, L.

Vaux of Harrowden, L.

Strathcona and Mount Royal, L.

Ward of Witley, V.

Westbury, L.

Sudeley, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6 p.m.
Clause 6 [Unemployment benefit and occupational pension]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 12:
Page 6. line 34, at end insert ("provided that no day earlier than 6th April 1993 shall be appointed for the implementation of this Section.")
The noble Baroness said: My Lords, this amendment deals with the intention of the Bill to remove the right to unemployment benefit from persons aged 55 and over who become unemployed but who have a small occupational pension scheme. Your Lordships will recall that we discussed this subject at some length in Committee. Unfortunately, I was unable to persuade your Lordships that this was a very unfair measure in that people who had a very small occupational pension would be losing entitlement to which they had contributed. That was despite the fact that many people who leave employment at 55 through redundancy or some other cause nevertheless regard themselves as still available for work and would be willing to comply with the availability for work qualifications set out in section 20 of the 1975 Act.
At Committee stage I failed to convince your Lordships that that was a very unfair situation. I am now putting another proposition before your Lordships. It is that we give such people five years' notice of the change. That would enable them to make alternative and extra provision for themselves, either through additional voluntary contributions or in some other way. It seems to me to be a very reasonable suggestion and I therefore hope that the Government will see their way to accept it. It would simply put hack the date of implementation until 6th April 1993. It would enable people who would otherwise be adversely affected but would not be entitled to unemployment benefit after the age of 55–and perhaps would have a very small occupational pension entitlement—to make alternative and additional arrangements for themselves. It gives them that amount of breathing space. I beg to move.
Lord Skelmersdale: My Lords, this amendment is designed to delay the introduction of our proposal to reduce the age threshold for the abatement provision by a further four years beyond January 1989 to April 1993—beyond the life of the present Parliament. I have no doubt that the main purpose of the amendment is to ensure that this measure will never be brought into force at all. However, as the noble Baroness has said—is she denying it?
Baroness Turner of Camden: My Lords, no.
Lord Skelmersdale: My Lords, the noble Baroness says no. I accept that it is a major point, but that would be an effect. As the noble Baroness said, it would also provide a stay of execution for all those in the 55 to 60 age group despite the fact that many of them are receiving substantial occupational pensions, and give those people who will find themselves in that age bracket in five years' time even more time to plan their finances accordingly.
I believe that the Government's job is to govern, and to delay implementation of the change would undermine a fundamental objective of this clause and run contrary to the conclusion of successive governments that it is unreasonable to pay full unemployment benefit to people who retire from employment earlier than the national insurance pension age with a substantial occupational pension. Those are the people with which this clause is concerned. In most cases, those people expect and plan to retire early and are not people whom unemployment benefit is intended to cover. This clause reflects the fact that, whereas in 1981 most people retired at age 60 or over, there are now increasing numbers of people retiring earlier. It is on that fact that we base our belief that the time is now right to lower the age at which abatement takes effect from 60 to 55.
The noble Baroness talks about giving people time to adjust. However, because the change is not due to come into effect until January 1989 and was well trailed, we are giving all those who may be planning to retire in the next nine months or so ample notice of the change so that they can take it into account when planning their retirement date.
She suggested that people who retire early receive a smaller occupational pension. Yes, but the abatement provision applies only to pensions of over £35 a week. Unemployment benefit is reduced by 10 pence for each 10 pence in excess of £35 per week. Benefit is not finally extinguished until the pension exceeds £85.90 for a married man and £66.50 for a single person. I am sure that the House will agree that those are substantial weekly sums. Where the pension is lower because of early retirement that may well be reflected in a smaller abatement of benefit.
Why not use the availability condition to test whether an occupational pensioner is genuinely available for work? That would seem to be an obvious question to ask. The most effective way of testing a person's availability is by the offer of a job. However, job opportunities for occupational pensioners have always been scarce because of a shortage of vacancies for older people. By abating unemployment benefit for occupational pensioners aged 55 and over we are seeking a different, and I believe correct, solution.
Finally, to delay implementation of the change would undermine the fundamental objective of this clause and would run contrary to the view of successive governments that it is unreasonable to pay full unemployment benefit to people who retire from employment earlier than the national insurance pension age with a substantial occupational pension. For those reasons I regret that I cannot recommend acceptance of the amendment.
Baroness Turner of Camden: My Lords, I am sorry that the amendment does not commend itself to the Minister. I repeat, as I said when moving the amendment, that the main purpose is to provide people with extra time in which to make alternative financial arrangements. Your Lordships will be aware that making provision is often a long-term matter. One does not get very much if one has paid into an additional scheme over a short period of time. It is for that reason that five years is felt to be a reasonable period of notice for people in that kind of situation.
We are talking about a situation in which many people who become unemployed at the age of 55 find themselves because their firms have closed; they have been made redundant and there is no alternative work for them in the area. Many of them would be only too happy to work at almost anything should the opportunity arise. In that age group in particular it will be found that there are people—whatever may be said on the other side of the House about the work ethic and so on for younger people, and I do not always agree with what is said—who have worked all their lives and are very anxious to work somewhere if only they are given the opportunity. Very often they cannot do so and it means a drastic reduction in their income because, as the Minister said, the pension level is set at £35 and benefit applies only up to £66 for a single person and £85 for a married couple. Those are not enormous sums of money and certainly a situation in which unemployment pay can be phased out, as it were, from £35 onwards is not very satisfactory.
In Committee we discussed the fact that those amounts have not been uprated since 1981 and I believe that we obtained an undertaking at that time from the Minister that that aspect would be reconsidered. In my amendment therefore I have not sought to deal with that point although it is quite a major factor. However, in view of the fact that I have not been able to make any progress with my second attempt on this clause, I shall not press the amendment at this stage but shall beg leave to withdraw it.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 13:
After Clause 6, insert the following new clause:
("Income support.
. In regulation 22 of the Income Support (General) Regulations 1987—

(a) in paragraph (1), the words 'or (5)' shall cease to have effect:

(b) paragraphs (5) and (6)(d) shall cease to have effect.").

The noble Lord said: My Lords, I shall be very brief in speaking to this amendment, which is a retabling of one which I put forward in Committee. The Minister gave a helpful reply but there are one or two small queries arising out of it which I should like to have answered on Report.
In Committee the Minister stated that the Bill maintained the status quo in regard to income support regulations. I believe that under the present dispensation a decision is given that is favourable to a claimant when it is a matter of taking one doctor's
324
opinion against another's. That seems to me to be the right emphasis if there are two differing opinions.
So far as I can see, under the new rules the deduction will apply where the adjudication officer decides that the person is fit for work contrary to his own doctor's opinion. I do not like that rule. I should like to know whether or not the new adjudication officer's guide, which I gather has not yet been published, will reproduce the relevant provision of the present "S" manual. If it does, I shall be happy; if it does not, I shall be unhappy. I should have thought that it would be unjust and insulting to the medical profession.
My second question also relates to something that the Minister said in Committee; namely, that if the claimant won his appeal the reduced benefit would be made up to the full amount. Is that really so? The regulation seems to provide for the 40 per cent. reduction but not for its restitution should the appeal succeed. Let me put it in this way. Even if the reduction is only temporary, it is still a deterrent to an appeal, as it seems to me that if a person makes himself available for work contrary to his own doctor's advice, he will not be subject to any reduction at all. We cannot wish any person to make himself available for work contrary to his own doctor's advice.
Those are the two questions that I wish to put and I beg to move the amendment.
Lord Skelmersdale: My Lords, it is a basic requirement for receiving income support that a fit person of working age is available for work or is within one of the groups which is exempt. I think that that is common ground between us all. Even persons who are only fit for a limited range of jobs, because of physical or mental disablement, will be required to be available. Where the adjudication officer dealing with a claim for incapacity benefit decides that a person is not entitled to that benefit, he will be required to be available for work if he claims income support. Let us take the case where there is a conflict of medical opinion; for example, where there have been two references for examination by doctors of the regional medical service and they consider the claimant fit for work but the claimant's own doctor continues to advise him to refrain from work and to issue medical statements that he is incapable of work. That is the point illustrated by the noble Lord, Lord Henderson. The claimant may decide not to sign on at the unemployment benefit office.
Since the claimant is not available for work and is not exempt by reason of incapacity, because that is the matter under dispute, he will not be entitled to income support in the normal way. The Government recognise that he could suffer hardship if no payment of benefit were made. We have decided that such a claimant should not be required to be available and that income support should be paid to avoid hardship. Since the full conditions for the receipt of income support are not satisfied, it is not equitable to pay the full amount. We consider that a reduced amount is appropriate and that there should be a 40 per cent. (or 20 per cent. if appropriate) reduction in the claimant's personal allowance.

325
The Government have taken this opportunity of clarifying the existing provisions of the supplementary benefit scheme. This payment will be made for as long as the person concerned does not satisfy the basic conditions for the receipt of benefit or until the appropriate independent adjudicating authority, in this case the Social Security Appeal Tribunal, can resolve the entitlement to incapacity benefit.
Certainly the person who makes himself available will not be subject to any benefit reduction, but that would apply whether or not he had appealed. As the income support regulations stand at present, a person involved in a situation where there is a conflict of medical opinion who does not make himself available and has not made an appeal is not entitled to any benefit at all. However, a person who has made an appeal is so entitled, albeit to a reduced amount, which as I explained in Committee is adjusted if the appeal is successful and not withdrawn if it is not successful. I suspect that the noble Lord, Lord Henderson, did not quite understand that remark.
Lord Henderson of Brompton: My Lords, I am sorry to interrupt the noble Lord, but which remark did I not understand?
Lord Skelmersdale: My Lords, the amount is adjusted if the appeal is successful and not withdrawn if it is not successful. It is that which I suspected I needed to spell out.
Lord Henderson of Brompton: My Lords, it is a very difficult sentence to understand, even at second utterance. There are double if not triple negatives.
Lord Skelmersdale: I am sorry, my Lords. The point is that if the appeal is successful the amount of money by which the claimant has been shortchanged, if you like, is subsequently made up to the full amount, so the claimant does not lose out. I think that that is one negative—but I am not sure.
One would have expected in logic that if the appeal were not successful there would be a mechanism for seeking to withdraw the reduced amount of entitlement during the time that the appeal was taking place. The point that I was making is that there is no such provision in statute and that simply does not happen. Therefore I used the phrase, "the money is not withdrawn if the appeal is not successful". I hope that I have now been able to spell out that point.
The regulation provides for the 40 per cent. reduction but does not specifically provide for its restitution if the appeal succeeds. However, if the appeal tribunal decides that the appeal should be upheld and that therefore the claimant was not capable of work, then the tribunal's decision, as in all such appeal cases, will replace the original adjudication officer's decision. It effectively replaces the officer's decision from the date that the latter decision was effective and therefore entitlement to the higher rate is due to the claimant from that date.
I appreciate that the explanation may be a little complicated. I am afraid that I cannot translate it on
326
my feet. However, I hope that it will help the noble Lord when he studies it in order to decide what to do about this matter before the next stage of the Bill.
Lord Henderson of Brompton: My Lords, the noble Lord's translation on the hoof was admirable. I was able to understand it the third time as the result of his explanation. I believe that the answers to my two questions are satisfactory. I shall read closely what the noble Lord has said. I thank him for having said it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Seebohm Lord Seebohm moved Amendment No. 14:
After Clause 9, insert the following new clause:
("Earnings of part-time firemen.
. In Schedule 8 to the Income Support (General) Regulations 1987—

(a) paragraph 7(1)(a) shall cease to have effect:

(b) after paragraph 7 there shall be inserted the following paragraph—

"7A. Any earnings derived from employment as a part-time fireman in a fire brigade maintained in pursuance of the Fire Services Acts 1947 to 1959"").
The noble Lord said: My Lords, this is a very different type of amendment. It is not putting anything new in the Bill. Its objective is to retain the status quo. I hope that it will be treated as a non-party matter. I think that even my old friend the noble Lord, Lord Boyd-Carpenter, might receive it with acclamation.
Retained fire fighters provide some 60 per cent. of fire cover throughout England and Wales, and their payments in round terms are about £40 a week. They are volunteers and without them the fire service would be very difficult to operate. The money is a supplement to their incomes as employees or self-employed persons in their main occupational fields. Traditionally, if unemployed, their income from the fire service has not been taken into consideration because they are available for full-time work. The arrangement is of long standing.
The 1987 regulations when in force on 11th April will create an unequal situation as retained fire fighters in full-time employment will receive their pay whereas those who are unemployed will have their pay reduced by all sums in excess off £15 a week. Quite apart from the question of equality, the wider implications for the community are significant. In some parts of the country, in particular in areas of high unemployment, considerable use is made of unemployed retained fire fighters who provide essential day time fire cover.
What are retained fire fighters? They are personnel who are expected to respond within four minutes of a fire call. The catchment areas of fire stations are therefore extremely restricted. A significant source of recruitment to the service may be from a single employer. If the business ceases to exist, the viability of the fire service can rely upon the continued availability of the unemployed workers. If they are now denied their small fire service income, they might reasonably ask why they should put their lives at risk when they are little better off. They could easily earn £15 without all the other responsibility incurred by being a volunteer on-call fire worker.
Limited inquiries have established that the Cornwall Fire Service, as an example, is reliant on 30 or 40 unemployed fire fighters. The Camborne station, for example, is almost entirely dependent upon unemployed workers; and a similar situation occurs at Saltash where workers have recently been made redundant in the Plymouth Dockyard. If the retained fire service is faced with a loss of volunteers in this way, it will result in fire brigade appliances being unavailable with consequential effects on life and property loss. In the longer term there may be substantially increased costs to the community if whole time fire fighter replacements have to be recruited. The Audit Commission has identified that the typical cost of a retained appliance is £25,000 per annum. The corresponding figure for a whole-time one is £250,000.
The issue is essentially one of fairness. If retained firefighters in full-time work can keep their retained earnings there is an equal case for unemployed fire fighters to be similarly treated. It also has to be borne in mind that the long-established statutory provision for disregarding these payments for unemployed persons rests upon the view that workers are in any event available for whole-time employment when they can find it. It is most undesirable to deny public spirited individuals the small sums of money to provide a very cost-effective service to the community. An amendment to the Social Security Bill would have the effect of causing retained fire fighters' earnings to be disregarded for the purpose of income support. That restores the previous position.
This matter was very vigorously threshed out in 1982. I have a letter signed by Norman Fowler, addressed to Mr. Leon Brittan, at the Home Office. I should like to read the important paragraph. He states:
"I am happy to confirm that work as a part time fireman does not affect entitlement to unemployment benefit. Similarly, any payment from employment as a part-time fireman in a fire brigade maintained in pursuance of the Fire Service Act is disregarded in the assessments of supplementary benefit entitlement. There should therefore be no problem about Mr. Wilkinson working as a part-time fireman while still retaining entitlement to benefit".
That was followed up by an official letter from the department to the county fire office confirming this decision and ending by saying:
"I enclose leaflet NI 240 which tells you more about voluntary work and social security benefits".
It therefore seems that after the correspondence took place in 1982 nothing has changed. It seems only fair that this payment of the retainer fee should be disregarded. I beg to move.
Lord Graham of Edmonton: My Lords, I rise briefly to support this amendment. As the House understands, from time to time the full implications and consequences of legislation in every situation cannot be foreseen. I hope that the Minister will be able to say that this is such a situation. I cannot believe that knowingly, willingly and deliberately the Minister and his advisers are seeking to say to unemployed people who are retained firemen, doing very dangerous jobs for the community, "Because you are unemployed, and because a certain measure has been passed, you will receive less after 11th April
328
than before." I believe that the Minister is a fair man. I believe that those who are advising him are sensible. He must know that there is this grave consequence. Where people are literally risking their lives and limbs on behalf of the community—sometimes a thankless task—they may say, or their wives or their families may say, "Is it worth it? If this is how the community, through the Government, value your life and limb, we think it is safer to be at home.".
I wish to consider the situation in Northern Ireland. In Northern Ireland 89 per cent. of fire stations are run solely by retained firemen. In Scotland 79 per cent. of fire stations are run by retained firemen. I cannot believe that the Minister and his advisers have fully appreciated the consequences.
Perhaps I may give one other illustration. At Redruth in Cornwall 25 per cent. of the retained firemen at the fire station are now unemployed. They are therefore affected by this measure. One may consider the reductions and redundancies at Plymouth Dockyard, for instance. One may have many a town where all the retained firemen are employed by one business or one company. If they are all made redundant or unemployed at the same time one is putting literally the life and limb of everyone in that small town or rural area at risk. I cannot believe that the Minister wishes to say to those good and dedicated men that we value their services less and, because they are less able than the employed person to look after themselves, they will be more detrimentally affected by this legislation.
The body that has drawn my attention to what I am certain is a lacuna in the philosophy of the Bill as it affects these people is the Association of County Councils. I am very grateful to the noble Lord, Lord Seebohm. He has reminded the Minister of what his ministerial colleagues have said in the past. Copies of the letters are available. I cannot see how the Minister can argue against the good sense shown then in particular in the light of the far worse unemployment situation in 1988–89. I hope that the Minister will be helpful in this matter.
6.30 p.m.
Lord Swinfen: My Lords, I believe that there is a great deal of merit in this amendment. When the part-time firemen are at work they must leave their jobs immediately a fire is called. How many noble Lords who employ people would be prepared to employ part-time firemen knowing that they could walk out without notice? I live in a rural community where, when the fire alarm rings, one sees men rushing across the fields to the fire station. It may be some hours before they return. If the Minister cannot see his way to accepting the amendment as a whole, can he give some indication as to whether an allowance may be made in order that they do not lose the whole of their income?
Baroness Turner of Camden: My Lords, we on these Benches support the amendment and thank the noble Lord, Lord Seebohm, for bringing the matter to your Lordships' notice. All noble Lords who have spoken have said that the retained fire service carry out an exceptional service for the community and receive very little recompense. It would therefore be

329
most unfortunate if an unlooked-for effect of the Bill would be to drive them away from the fire service. I understand that already a number of chief fire officers have expressed a fear that if the Bill passes through this House unamended there will be an exodus from the service. They will then be unable to fulfil their statutory obligations under the Fire Service Act and provide adequate fire cover for the community. I am sure that all noble Lords would regret that occurrence and I hope that the Minister will respond sympathetically to this amendment.
Lord Skelmersdale: My Lords, I should like to say straightaway that, in recognition of the valuable part played by firemen in the safety and civil defence of this country, the income support regulations already provide that their earnings will be subject to the higher (£15) disregard normally available to lone parents, people receiving the disability premium and couples under 60 who have been receiving benefit for two years. This provision recognises the special nature of the duties firemen perform and gives them the higher disregard straightaway. However, it is inconsistent in an income-related scheme intended to provide a minimum level of support to people who have no or insufficient resources of their own, to ignore larger amounts of income: the more earnings we disregard, the higher the cost to the taxpayer and the less we have to spend on improving basic levels of benefits. It must also be remembered that income support is paid to many thousands of elderly or disabled people who are unable to work and thus gain the advantage of the disregard.
It would also be divisive to disregard all the earnings of part-time firemen. My most recent information of those earnings is from 1985 but it may be that other noble Lords have more up-to-date information which the House would be interested to hear. I am informed that a fireman on the lowest rate of pay, and who attends one drill night per week and is required for turn-out once a week, will receive weekly earnings of £28. When the disregard is added to that I do not believe that he is being so badly treated. All noble Lords know that one night of training and one call-out per week is probably less than he would normally experience during the course of his work as a part-time fireman.
Certainly, it would create an inequity in the treatment of firemen under the income support scheme and the new family credit scheme which is intended for low-income families in full-time work. The amendment would mean that part-time earnings would be ignored in income support whereas in family credit a fireman, working perhaps only a few hours more, would have all of his net earnings taken into account. That cannot be right. The end result, after including any benefits payable, may be very little difference between their total incomes. It is clear that the proposed amendment has an undesirable effect on people's financial incentive to take up full-time employment and become self-sufficient. I wish to reassure your Lordships, however, that if a fireman's benefit is reduced because of the change in the earnings disregard the shortfall will be made up by the transitional protection.
The noble Lord, Lord Seebohm, said that the issue is essentially one of fairness between employed and
330
unemployed part-time firemen. I accept that this is an important issue but the Government must look at the matter in a wider sense. If part-time firemen are to be treated as an exception, why not offer the same treatment to other deserving groups? We must have fairness across the benefit system with common rules applicable to all. Part-time firemen have the same rules and the more generous £15 disregard as do other deserving groups. I recommend the House to retain the existing situation.
Lord Seebohm: My Lords, the Minister has not succeeded in convincing me of his argument. I consider that the issue is far wider than he believes it to be. The nation is in danger and the commitment undertaken by these people is one which we cannot afford to lose and which we must keep. I am 'afraid that I must press my amendment to a Division.
6.36 p.m.
On Question, Whether the said amendment (No. 14) shall be agreed to.
Their Lordships divided: Contents, 58; Not-Contents, 72.

DIVISION NO. 3

CONTENTS

Airedale, L.

Hylton-Foster, B.

Amherst, E.

Jeger, B.

Attlee, E.

John-Mackie, L.

Banks, L.

Kilbracken, L.

Beaumont of Whitley, L.

Kilmarnock, L.

Birk, B.

Kirkhill, L.

Blease, L.

Lawrence, L.

Brockway, L.

Longford, E.

Buckmaster, V.

Lovell-Davis, L.

Carter, L.

McNair, L.

Cledwyn of Penrhos, L.

Milner of Leeds, L.

Cocks of Hartcliffe, L,

Morton of Shuna, L.

Dean of Beswick, L.

Mountevans, L.

Diamond, L.

Pitt of Hampstead, L.

Donoughue, L.

Ponsonby of Shulbrede, L.

Elwyn-Jones, L.

Prys-Davies, L

Ennals, L.

Rea, L.

Ewart-Biggs, B.

Robson of Kiddington, B.

Gallacher, L. [Teller.]

Seear, B.

Galpern, L.

Seebohm, L.

Graham of Edmonton, L. [Teller.]

Stedman, B.

Stewart of Fulham, L.

Grimond, L.

Stoddart of Swindon, L.

Hampton, L.

Tordoff, L.

Harris of Greenwich, L.

Turner of Camden, B.

Hart of South Lanark, B.

Underhill, L.

Hatch of Lusby, L.

White, B.

Hayter, L.

Williams of Elvel, L.

Henderson of Brompton, L.

Winchilsea and Nottingham, E.

Houghton of Sowerby, L.

NOT-CONTENTS

Abinger, L.

Cameron of Lochbroom, L

Ailesbury, M.

Carlisle of Bucklow, L.

Arran, E.

Carnegy of Lour, B.

Ashbourne, L.

Carnock, L.

Bauer, L.

Coleraine, L.

Beaverbrook, L.

Colwyn, L.

Beloff, L.

Cottesloe, L.

Belstead, L.

Cowley, E.

Blatch, B.

Cox, B.

Boardman, L.

Craigavon, V.

Boyd-Carpenter, L.

Craigmyle, L.

Brabazon of Tara, L.

Davidson, V. [Teller.]

Broxbourne, L.

Dilhorne, V.

Caithness, E.

Dundee, E.

331

Elliott of Morpeth, L.

Munster, E.

Ferrers, E.

Nelson, E.

Harvington, L.

Orkney, E.

Havers, L.

Oxfuird, V.

Hesketh, L.

Rankeillour, L.

Hooper, B.

Rees, L.

Huntly, M.

Renton, L.

Joseph, L.

Rodney, L.

Kimball, L.

St. Davids, V.

Kinnoull, E.

Shannon, E.

Lane-Fox, B.

Skelmersdale, L.

Lauderdale, E.

Strange, B.

Layton, L.

Strathcona and Mount Royal, L.

Lindsay, E.

Long, V. [Teller.]

Sudeley, L.

Lucas of Chilworth, L.

Thomas of Gwydir, L.

Mackay of Clashfern, L.

Trafford, L.

Malmesbury, E.

Trefgarne, L.

Merrivale, L.

Trumpington, B.

Mersey, V.

Ullswater, V.

Mottistone, L.

Vaux of Harrowden, L.

Mowbray and Stourton, L.

Ward of Witley, V.

Moyne, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.44 p.m.
Baroness Jeger Baroness Jeger moved Amendment No. 15:
After Clause 10, insert the following new clause:
("Parliamentary Commissioner investigations.
In Schedule 2 to the Parliamentary Commissioner Act 1967, social fund officers should be added to the list of departments and authorities subject to investigation").
The noble Baroness said: My Lords, I rise to move the amendment standing in my name. This amendment, which suggests that social fund officers should be added to the list of departments and authorities subject to investigation by the parliamentary commissioner, arises out of earlier debates when we were unable to receive any satisfaction on the idea of an independent appeal for people who had applied for help from the social fund and who were refused that help.
I appreciate that the noble Lord, Lord Skelmersdale, has sent me long letters and has answered points in the House at length, but neither he nor the Government in another place have said anything to suggest that there should be an independent right of appeal for people dissatisfied with a social fund officer's decision. That made us think that that was an injustice. Under the present situation where people can appeal to the tribunals over the past few years an average of 25 per cent. of cases have been found in favour of the complainant.
This amendment seemed to us to be one way of giving people who are dissatisfied with a decision the right of appeal, apart from the Department of Health and Social Security and its staff. The Parliamentary Commission for Administration can only investigate complaints of maladministration by or on behalf of one of the departments and authorities listed in Schedule 2 to the Parliamentary Commissioner Act. These do not include judicial bodies for the obvious reason that the judicial system provides its own remedies for injustice. Section 5(2) of that Act excludes jurisdiction from the parliamentary commissioner on any action in respect of which there is a right of appeal to a tribunal or a remedy by way of court proceedings. It seems to us that the Act does not allow a right of appeal to a tribunal. That is one
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of our biggest complaints about it. Therefore it would seem only fair that the Department of Health and Social Security, as far as the social fund officers are concerned, should be brought within the jurisdiction of the parliamentary commissioner because otherwise they do not have any independent body to which they can look for assistance.
We realise that the status of social fund officers is very special but there is no question that they can operate independently of the department which employs them since under Section 33(10) of the Social Security Act 1986 they will be subject to the Secretary of State's direction and guidance. Therefore, there can be no right of appeal to a tribunal against their decisions nor is there any independent check on the way in which they perform their functions.
I understand that the social fund commissioner will have certain duties with regard to monitoring the decisions of the inspectors and to arranging their training but that is not much help to a person whose application for urgent and very necessary help has been turned down.
I am also not clear about the status of the social fund commissioner in relation to social fund officers. If they perform their work badly, who will know about it? Will it be the responsibility of the Secretary of State to take action in these cases or will the matter be pushed up higher and higher but always within the department? That is our concern. Therefore, it seemed to us appropriate that the parliamentary commissioner's jurisdiction should extend to social fund officers.
If this new clause is accepted, it does not provide an automatic right of appeal against social fund officers' decisions; that is a separate question. However, it would provide a means of investigating complaints about the way in which such decisions are made, including allegations which complainants might feel entitled to make about unreasonable delays, discourtesy, breaches of confidentiality and general maladministration. It would be one way of making applicants feel that at some point there is an opportunity to bring grievances against the department to someone who is not part of that department. I commend the amendment to your Lordships.
Lord Boyd-Carpenter: My Lords, I am a little puzzled about this amendment, which seeks to put social fund officers within the purview of the parliamentary commissioner. I should be extremely surprised—I may be rusty about this—if they were not already there.
Lord Trafford: My Lords, I was going to make the same point as my noble friend Lord Boyd-Carpenter and I should like to ask a further question. There is nothing in the amendment, although the noble Baroness spoke at some length about it, on the question of an appeal to a tribunal. The amendment refers only to the parliamentary commissioner. There is nothing in it about an appeal to a tribunal: yet the noble Baroness continued to refer to an appeal to a tribunal.
Baroness Jeger: My Lords, perhaps I can help the noble Lord on this. There is nothing in my amendment about an appeal to a tribunal because there is no appeal to a tribunal.
Lord Trafford: My Lords, I fully understand why there is nothing in the amendment about an appeal to a tribunal, but that was the matter to which the noble Baroness was referring all the time. In fact the amendment refers to the parliamentary commissioner and it is my understanding, as it is that of my noble friend Lord Boyd-Carpenter, that social fund officers are subject to the jurisdiction of the parliamentary commissioner. Furthermore, the parliamentary commissioner is no substitute for an appeal tribunal because, as I understand it, the noble Baroness was really asking what an aggrieved party could do about a decision taken by the social fund, not about the question of maladministration, although doubtless that could come into some aspects of these cases. In other words, there is no way in which the parliamentary commissioner can say that a particular social fund decision is wrong. He can say that the way the decision was taken was wrong, but that is nothing to do with a tribunal. As regards the amendment, my understanding is that indeed they are subject to the parliamentary commissioner, but I remain open to correction from my noble friend the Minister when he replies.
Lord Henderson of Brompton: My Lords, may I just say that the reason I put my name to the amendment was that I wanted to make sure that it is the case—if indeed it is—that social fund officers are subject to the parliamentary commissioner in respect of maladministration. If the Minister can reassure us about that I shall be happy, and I also hope that he can reassure us about whether the social fund commissioner himself is subject to the parliamentary commissioner in respect of maladministration.
Lord Skelmersdale: My Lords, I was going to start my response to this amendment by explaining why it was necessary, on the grounds that my noble friends have just adduced. But when I began my response to an earlier amendment this afternoon by saying that it was unnecessary and then went on to explain why, the instant reaction I received from the Benches opposite was, "Oh, it doesn't matter. We will divide anyway on another point. But never mind, let's get on with it."
Having got that out of the way, I will indeed say why this amendment is unnecessary. Social fund officers, being officers of the department under Section 32(8) of the Social Security Act 1986, are indeed already included in Schedule 2 to the Parliamentary Commissioner Act 1967. Section 5(1) of the Parliamentary Commissioner Act sets out circumstances of cases which the commissioner can investigate, and Section 5(2) categorises those cases which would be excluded. I could be more extensive, but I do not think it would be particularly profitable at this hour of night for me to be so. I hope that what I have said has satisfied noble Lords opposite.
Lord Henderson of Brompton: My Lords, does that include the social fund commissioner?
Lord Skelmersdale: My Lords, so far as I am aware, yes. If I am wrong I shall write to the noble Lord and also to others who are interested, and if they find it necessary to come back to the point at the next stage, of course they are perfectly at liberty to do so.
Baroness Jeger: My Lords, I think that this is all rather confusing and I would say to the noble Lord opposite that out of modesty I was not asking for an appeal tribunal, although I think there should be one. Having been turned down on that basis several times by the Government, I thought that this more modest and gentle way of giving people some help would perhaps be approved of.
I hope that the Minister has got his information by now, but I have before me a letter to an MP dated the 6th October 1987, in which the parliamentary commissioner wrote:
"The Attendance Allowance Board, along with other statutory adjudicating authorities (such as adjudication officers, social security appeal tribunals and social security commissioners) operate quite independently of central government departments and are not so listed in Schedule 21".
These social fund officers are new people; it is a new grade and they have new responsibilities. If the Minister can tell us that they will come within the purview and responsibility of the parliamentary commissioner no one will be happier than my noble friends and I.
Lord Skelmersdale: My Lords, with the leave of the House, I am advised that the social fund commissioner is not subject to the parliamentary commissioner for administration, so I misinformed the noble Lord and I apologise to him for that. He does not take the decision, of course, but it is the people who take the decisions—and it is they for whom I understand the noble Baroness wants a measure of review—whose decisions will be subject to the parliamentary commissioner. So I confirm that the noble Baroness has, under the existing statue, got what she wants on this occasion.
Baroness Jeger: My Lords, will the noble Lord read out his note?
Lord Skelmersdale: My Lords, would that I could. I understand it to say that the role of the commissioner is to appoint the social fund inspectors, to train them and to monitor their decisions; but, as I said just now, it is they who are making the decisions and it is they who are caught under the ombudsman legislation.
Lord Henderson of Brompton: My Lords, before the noble Lord sits down, would be very kindly consider whether it would be desirable for the social fund commissioner to be subject to the parliamentary commissioner? If one of his functions is to review decisions, I should have thought that he should be subject to the parliamentary commissioner because I believe that he could (though I do not know in what circumstances) be guilty of maladministration, in which case he ought to be subject to the parliamentary commissioner's scrutiny.
Lord Skelmersdale: Yes, my Lords. Since I was prepared to write to the noble Lord, Lord Henderson, anyway, I will still write even though he has got the answer to his original point following my consideration of the point that he has just made.
Baroness Jeger: My Lords, I only hope that this short debate has got rid of some confusion in all parts of the House, and in the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 3 [The Social Fund]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 16:
Page 16, line 8, at end insert ("which shall include those aged 60 or over and in receipt of housing benefit or income support")
The noble Baroness said: My Lords, this amendment to Schedule 3 concerns the new arrangements in regard to heating allowances for prescribed types of people during the cold weather. When the Bill first appeared we were all very glad to learn that the problems of heating in very bad weather, particularly as they affected elderly people, had been taken on board by the Government and that something was going to be done more positively about them than had happened in the past.
Since that time I have been in touch with a number of organisations that have concern for the elderly, and in particular Age Concern, which does a great deal of very good work looking after the concerns of elderly people. They tell me that they are particularly worried by the fact that there is an exclusion in the area of age 60 to 64 as regards women and groups who are in receipt of housing benefit or income support. It is said that this has given rise to a great deal of concern and resentment, particularly on the part of women in this category, of whom there are at least 130,000. In view of the fact that these elderly women are also ineligible for the age related heating addition, which is payable to those over 65 only, there is anxiety that the issue should receive some attention from your Lordships' House. It would be a pity, when there is clearly a genuine desire on the part of Government to do something in regard to heating allowances for the elderly in periods of exceptional cold, if this grouping were omitted. I therefore wonder whether the Government may be prepared to look at the matter again.
7 p.m.
Lord Swinfen: My Lords, while I have a great deal of sympathy with the amendment. I think that it is unwise to include in the Bill specific categories of recipient, because it narrows things down and we are liable to end up with only those people receiving the benefit. What about severely disabled people, those with young children, the chronically sick and others, whom I am sure the Government will take into account? I hope that the Minister can assure us all on that point. I believe that it would be detrimental to narrow the target area of benefit.
Lord Skelmersdale: My Lords, we have repeatedly made clear our intention to operate an extra cold
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weather payment scheme next winter under the social fund. We have also said that we will not make decisions about a future scheme until the end of the present scheme, which operates under the supplementary benefit regulations. It is clear from the drafting of the Bill that any future scheme will be regulated. This will give Parliament, if it so wishes, the opportunity to debate a future provision.
I suggest to the House that it is more sensible to consider the scheme as a whole than piecemeal. On consideration, the noble Baroness may agree that that is what the amendment does. I can say, however—I hope that this will be helpful—that this will not be subject to a budget limit, and it will be paid as of right.
Baroness Turner of Camden: My Lords. I thank the Minister for his comment, which is very helpful. I do not intend to press the amendment. I wanted to learn what the view was in relation to the problems raised by the voluntary organisations operating in this area. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 17:
Page 16, line 10, at end insert—
("(2B) The following subsection shall be inserted after subsection (7)—
"(7A) The Secretary of State shall lay an annual report before Parliament listing the number of applications accepted and refused for grants and loans under the Social Fund and summarising the purposes for which applications were accepted and the reasons for which they were refused." ").
The noble Lord said: My Lords, I moved an amendment in Committee that would have required the Secretary of State to lay an annual report before Parliament listing the number of applications refused for grants and loans under the social fund and summarising the reasons. The Minister criticised the amendment as being unbalanced since it dealt only with refusals and not with acceptances. On reflection, I felt that the criticism was justified. I have therefore tabled this amendment calling for a report on both acceptances and refusals.
It was generally agreed in Committee, I think, that whether justified or not—I gave reasons why we on this side of the House think that it is justified—there is a good deal of apprehension about how the social fund will work in practice and that consequently its operation will require to be monitored very carefully, particularly in view of the fact that the social security advisory committee has stated that the arrangements in regard to the social fund are unfair and unenforceable. There was support from all sides of the House for the amendment.
We were all very encouraged when the Minister made it clear that it was the Government's intention to make a great deal of information available. There can surely be no objection to including in the Bill a balanced provision to ensure that this will be done regularly every year. I hope that the Minister will be able to accept the amendment. I beg to move.
Baroness Jeger: My Lords, we strongly support the amendment. The social fund is a new endeavour. Many people wonder how it will work and what will happen. It is important to have included in the Bill a

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provision that there must be an annual report giving full deals of the acceptances and refusals of applications for grants and loans, if only so that the House can monitor the progress of the fund and in particular how it is working out as regards applicants in need of its help. We hope that the Minister will accept the amendment.
Lord Henderson of Brompton: My Lords, I had hoped that such an amendment would be tabled by the Minister, bearing in mind the general tone and tenor of debate in Committee and the way in which he received the comments of noble Lords from all sides of the House. That said, I am grateful to the noble Lord, Lord Banks, for having tabled the amendment. It may give the Minister an opportunity to say that he is able to agree with the spirit of it and, on Third Reading, will bring forward an amendment of his own drafting.
Lord Skelmersdale: My Lords, I very much appreciate the point made by the noble Baroness, Lady Jeger, and the noble Lord, Lord Banks, that the social fund is a new form of animal and Parliament will want to know what that animal is made up of as it progresses. That is why we published the social fund budget allocations as early as November last year, and produced the guidance to social fund officers as a published document which has been available from Her Majesty's Stationery Office since November. It is also why I promised in Committee that a great deal of information would be forthcoming on the operation of the fund.
However, I understand the great interest in an annual report which would come before Parliament. That understanding has been reinforced by the speech of the noble Lord, Lord Henderson of Brompton. I am not sure at present how the drafting of such a government amendment would look. I therefore propose to the noble Lord, Lord Banks, that the Government should bring forward an amendment on Third Reading. I suggest that the noble Lord re-tables his amendment for debate on Third Reading so that we can compare the two. I should not like there to be any misunderstanding on the matter.
Lord Banks: My Lords, I am grateful to the Minister and I have no hesitation in agreeing to what he suggests. I shall retable the amendment. I look forward with interest to the amendment that the Government will propose on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ennals Lord Ennals moved Amendment No. 18:
Page 16, line 15, after ("above") insert ("except in the financial year 1988–89 and such other financial years as the Secretary of State may direct ").
The noble Lord said: My Lords, I believe it is for the convenience of the House that Amendments Nos. 18 and 19 be taken together, as they are much the same.
It has been agreed by the House that the social fund is a new form of animal. While I welcome what has just been said by the Minister, like many others, I find it a frightening animal, especially in terms of
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loans having the predominance and being cash-limited. The amendment tabled by the noble Lord, Lord Henderson, and myself was not pressed in Committee. We therefore bring it forward today.
The amendment is designed to give temporary relief to people who hitherto have been unable to claim as grants single payment benefits for essential items such as clothing, furniture, blankets, cookers and so on.
The matter of loans and the public affected by loans is becoming a serious problem. Just over 100,000 people had their electricity and 42,000 their gas cut off in 1985–86. Over 20,000 had their homes repossessed by building societies through mortgage default in 1986, an eight-fold increase since 1979. A recent survey of supplementary benefit claimants found that 56 per cent. of couples with children and 44 per cent. of one-parent families were in debt.
To repay loans a claimant's weekly benefit may be reduced by up to 15 per cent. This can he a very substantial sum of money and make life very difficult. Tied to the fact that the social fund is to be cash limited, it creates very great concern. It is not surprising to me that the Government's own Social Security Advisory Committee has said that it does not think that the social fund will work, neither will it be fair to the applicants. In a statement the committee said:
"We cannot support the social fund as it appears in the draft manual. It is dominated by a need to keep within the budget. It strikes what we regard as the wrong balance between loans and grants and between discretion and entitlement. We remain unconvinced that it will meet many of the genuine needs of some of the poorest members of society or command the confidence of agencies whose co-operation the manual itself sees as necessary."
The fact that it is cash limited has been one of the greatest criticisms of the social fund. The social fund budget and local needs vary from office to office, and because payments are at the discretion of DHSS officers, payments will vary across the country. What in one office will command a grant will, in another office, lead to a loan or in another office may lead to an outright refusal for either a loan or a grant. Bearing in mind that there is no appeal, this becomes a very serious problem.
As I have said, it has been criticised by the Government's Social Services Advisory Committee. When the Bill came before your Lordships' House in 1986 some of us very strongly argued against the cash limits. I supported an amendment tabled by the noble Lord, Lord Banks, and we were absolutely delighted with the assurance that we received from the noble Baroness, Lady Trumpington, who was then the Minister. In replying to the debate in which both the noble Lord, Lord Banks, and I had spoken, the noble Baroness said:
"We have decided, however, that the fund will not at first be subject to a formal cash limit on its introduction. A decision—and I am sure your Lordships will agree that this is wise—on a move to what will be the normal cash-limiting arrangement will be taken when we have sufficient experience of the operation of the fund."—[Official Report, 15/7/86, col. 848.]
I thought that was a very reasonable proposal and this is why I was staggered to find that the Minister later overruled the wisdom of the noble Baroness in this House. I would have expected that amendment to have been passed by your Lordships in 1986 had we not had that assurance.
I immediately leapt up after the noble Baroness's statement and said:
"She has made a statement of profound importance that I personally enormously welcome. Although there has been no opportunity for discussion, I suggest that most noble Lords on this side of the House will also welcome it. The noble Baroness said that there will be no formal cash limit in the early stage … that is an extremely important statement."—[Col. 849.]
It was on that basis that the noble Lord, Lord Banks, withdrew his amendment. We were all delighted with what had been said. It irritated us beyond measure when we found that the noble Baroness, whom we supported, was not supported by her right honourable friends. The right honourable gentleman, Mr. John Major, said on 10th March 1987:
"We intend to issue separate budgets to individual local social security offices for social fund payments (other than those for maternity and funeral expenses). Decisions on the size of such budgets, and of the fund as a whole, will be taken nearer the time of the funds full introduction in April 1988."—[Official Report, Commons. 10/3/87; col. 157.]
That was the line which the Government were taking. What we are seeking to do in this amendment is to stand by the position taken by the noble Baroness, Lady Trumpington, when she was a Minister. We are not saying that there should never be a cash limit. I am sure that neither your Lordships nor the Minister would accept it. We are saying that initially there should not be a cash limit and that the Secretary of State should have the power to decide when a cash limit is introduced based on the experience, as the noble Baroness, Lady Trumpington, said, of that first year or two years or however long the Secretary of State thought that it should be.
That is the purpose of the amendment and if we are able to gain acceptance of it it will put us in precisely the same position that we were in when, in 1986, the noble Baroness made her concession to pressures from the House. I beg to move.
7.15 p.m.
Lord Banks: My Lords, I should like to support the amendment moved by the noble Lord, Lord Ennals, and confirm what he has said about the amendment that I moved on 15th July 1986. In reply the noble Baroness, Lady Trumpington, made the concession to which the noble Lord has referred. After the noble Lord, Lord Ennals, had said what he has just reported to the House, the noble Baroness repeated the assurance (at col. 848):
"that the fund will not at first be subject to a formal cash limit on its introduction."
This amendment would simply give effect to that. I hope the Minister will be able to accept it.
Lord Skelmersdale: My Lords, listening to the speech of the noble Lord, Lord Ennals, he gave the impression of a jealous god seeking to visit the sins of a forebear onto succeeding generations, if I may be allowed to paraphrase the wording of a much older system of regulations.
I am afraid that I have to disappoint him and tell the House that there is no inconsistency in the statements to which the noble Lord referred. My noble friend Lady Trumpington was not in error in what she said during the passage of the 1986 Act. The
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meaning of her words was utterly clear in the way that we always try to make them. I cannot understand why the noble Lord should think them in any way embarrassing. Noble Lords who wish to consult the Official Report of the earlier debate will find it at cols. 847 to 850 of Hansard for 15th July 1986. My noble friend said (at col. 848) that the social fund,
"will not at first be subject to a formal cash limit on its introduction. A decision … on … what will be the normal cash limiting arrangement will be taken when we have sufficient experience of the operation of the fund."
Nobody has said anything to contradict that statement. The cash limit, when introduced, will apply to the money voted by Parliament into the fund effectively constraining the resources for the fund in the course of the year. While the cash limit will not technically apply in the first year of operation of the fund, the Government have always made clear that the fund will operate from the start to strict budgets at local office level. Additional contingency allocations will only be made to meet unforeseeable, additional demands.
I do not see that there is any way in which what my noble friend said can be construed as the noble Lord, Lord Ennals, has tried to do; namely, that the social fund officers should not have regard to the budget in determining applications for payments from the social fund. Clearly, it would be quite irresponsible to have a discretionary system without some form of direct financial control. As my noble friend said on the same occasion (at col. 847 of Hansard):
"a system operated by discretion must be subject to financial control, since otherwise it is open-ended; and in practice, setting a budget is the only way of exercising such financial control."
Turning to the first amendment, it has the unfortunate effect of preventing the Secretary of State from making any allocation at all either nationally or to local offices from the social fund in future years if he should so direct. I am sure that this would be an embarrassment to the noble Lord, Lord Ennals. It is clear that we need to have a scheme. I understand the reasons given why the noble Lords opposite do not like this particular scheme when single payments finish at the end of the month. Therefore it would be most invidious to put my right honourable friend in that position.
The second amendment would remove from the Bill the specification of the period to which a local office's budget allocation applied. That would make totally impossible any financial accountability, which cannot be a good thing. On those grounds and especially the ground with which I introduced my remarks on the comments made by my noble friend Lady Trumpington all that time ago, I hope that the noble Lord will see fit to withdraw his amendment.
Lord Henderson of Brompton: My Lords, before the noble Lord sits down, perhaps I may say that I remember the occasion as clearly as the noble Lords, Lord Banks and Lord Ennals. It was on the assurance of the noble Baroness that the amendment was not pressed. I am not clear from the noble Lord's answer whether he is saying that the noble Baroness accurately predicted what is going to happen and that the social fund is not to be cash limited in its early stages. If that is so, we can be content. If it is to be

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cash limited in its early stages, clearly a seriously misleading assurance has been given to the House. The noble Lord's answer has not cleared that up to my satisfaction.
Lord Skelmersdale: My Lords, I think that that remark was made before I sat down. Before I do sit down perhaps I may repeat what, probably inelegantly, I said earlier in answer to the noble Lord, Lord Henderson. My noble friend said that the social fund will not at first be subject to a formal cash limit on its introduction and I said that a decision on what will be the normal cash limiting arrangements will be taken when we have sufficient experience of the operation of the fund. That remains exactly the same today as it did when my noble friend said it.
Lord Ennals: My Lords, I find it very difficult to understand what the Minister is saying. There seems to be no logic about it. We are talking about the same words. He has accepted the words that I quoted as being the words that were used by the noble Baroness, Lady Trumpington. When I had made the response in which I said that I thought it was a remarkable statement of profound importance, she then repeated the assurance. She said:
"the fund will not at first be subject to a formal cash limit on its introduction".
She said that after I had welcomed the fact that she was saying that there would not be a cash limit and that the question of cash limiting would arise only after there had been sufficient experience of the operation of the fund. I do not know what words mean. Is what the Minister said right and there is no cash limit?
The noble Baroness said:
"the fund will not at first he subject to a formal cash limit".
Initially, when it is introduced in April this year, will it be subject to a formal cash limit? Is it true that cash limits have been set right down to local offices? If that is true—and I know it is true that it has gone right down to local offices—I do not see how the Minister can say that that is not a formal cash limit. The noble Baroness had herself said that it would not be subject to a formal cash limit. The noble Baroness made a second point. She said:
"A decision…on a move to what will be the normal cash limiting arrangement will be taken when we have sufficient experience of the operation of the fund". —[Official Report, 15/7/86; col. 848.]
That implies that there will be a separate type of cash limiting in the following year or the year after as against the cash limiting which exists this year.
I cannot understand how the Minister can say that this was not a concession. The House took it to be a concession. We welcomed that concession. The noble Baroness, responding to our welcome to that concession, repeated precisely, because I asked her to do so, the words that I had said. I cannot understand how, in the light of that, unless the noble Baroness was unintentionally misleading the House—I would not think of suggesting that it could have been intentional—the Minister can say that there will not be a cash limit in operation as from April of this year. Perhaps he can explain.
Lord Skelmersdale: My Lords, with the leave of the House—I really think that I must seek the leave of the
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House on this occasion—there is a basic misunderstanding between the noble Lord, Lord Ennals, and myself. What I am saying in a nutshell is that there is a difference between a cash limit and a budget. I shall explain why I am saying that. Cash limiting is, I am advised, a technical term relating to a national budget. My noble friend's assurance was that the formal cash limit related to the national allocation for the social fund. Would the noble Lord accept that?
Lord Ennals: My Lords, I know that the noble Lord has set a cash limit.
Lord Skelmersdale: My Lords, the cash limit in the technical definition I have given is not set today. It will not be set on 1st April or 11th April. What has been set is a budget for financial management purposes by which each local office has to be constrained.
Lord Ennals: My Lords, before the noble Lord sits down, or while he is standing, may I ask him whether the figure of £203 million that has been widely published, is in the handbook, was repeated by the noble Lord in the debate at Committee stage and has been made available, is an actual cash limit? As Secretary of State I was involved with cash limits for years and years. I introduced cash limits. Is that figure of £203 million, which has been stated to be the cash limit, not a cash limit? When is a cash limit not a cash limit?
Lord Trafford: My Lords, before the noble Lord. Lord Ennals, sits down, when he was in government he was concerned at one time with the introduction of cash limits. At that time, and ever since, the term "cash limits" had meant particular accounting practices. It also had particular financial consequences. That is different from a budget. If one sets up an office to administer the social fund in an area, it must have a budget or it cannot function. You cannot say, "Let us operate a social fund according to a few rules here and there". You have to say how much money it can use. You have to say, "This is the preliminary target and that is how you budget for something".
The noble Lord was Secretary of State for Social Services for some time. He knows how this applies in the health services and in many offices. A budget is set and there are certain consequences. It depends on which way you look at it —it is rather like a bottle being half full or half empty. It is a constraint on financial management. Cash limiting, which is a national undertaking when applied to the fund as a whole, is an entirely different type of account with financial consequences which are different. That is my understanding of the confusion between the two sides of the House tonight. Perhaps the noble Lord will first tell me that he accepts and appreciates the difference in significance of a local office's budget and any subsequent national cash limits that may be imposed on the fund.
Lord Ennals: My Lords, I believe that the question was put to me before I sat down, so perhaps I do not need to ask the leave of the House to reply. I am

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afraid that I do not understand, nor from my experience as Secretary of State can I distinguish, the difference between the two cases described by the noble Lord. This figure of £203 million which was accepted by the noble Lord when we debated this in Committee as being the cash limit, the total national figure, has been divided up so that it goes down to each particular office. Each office knows what figure it has and that it is the limit to which it can work. I know of one office that has only 16 per cent. of what it had last year before the restraints were applied during the present year. It is operating on a reduced amount. It knows that it has to live within that figure. That figure is divided on a monthly basis. The officers know from the instructions sent to them by the Secretary of State that they cannot move out beyond that figure. They are told that, if during the course of any month there is a claim which would take them beyond the figure that has been set, they cannot pay that money. If that is not a cash limit, I do not know what a cash limit is. Perhaps the Minister, who is a little more up-to-date, will tell me just how strict cash limits can be.
7.30 p.m.
Lord Skelmersdale: My Lords, at this point I am not quite sure exactly what I am asking leave for but, notwithstanding that, I ask for such leave. I am extremely grateful to my noble friend Lord Trafford for explaining the difference, which I endeavoured to do, between a budget and a cash limit. One cannot have formal financial responsibility without a budget. The noble Lord no doubt runs a house and therefore has a budget—
Lord Ennals: I am all for cash limits!
Lord Skelmersdale: My Lords, I am not talking about cash limits, I am talking about budgets. The noble Lord may recall that there is a power in the Bill (on page 16 of Schedule 3 at line 29) whereby it is possible to shift resources in certain circumstances between offices. That provision cannot mean that there is a cash limit on those particular offices; by definition that is impossible. Therefore I am able to confirm that the £203 million is a budget and not a cash limit. Nationally and locally social fund officers will be working to that figure. A formal cash limit, in the terms which I am sure the noble Lord understands, will be set in 1989–90: in other words, the cash limit will not apply for the first year.
Lord Ennals: My Lords, I must say that the Minister has not satisfied me one little bit. Of course I shall read carefully what he has said and look into the difference between the definitions of cash limit and budget to see whether I can decipher any way in which the Minister has moved one way—not just towards me—towards what his noble friend Lady Trumpington said to the House on that occasion so long ago. Therefore I shall not press the point at present but we shall reserve our position for when we come to Third Reading. It is an issue of great importance.
As I made clear earlier, I am not opposed to cash limits under all circumstances. Indeed, I think I
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introduced cash limits in relation to the National Health Service. That fact is absolutely right. But the question is: is the cash limit enough? In this case we have a cash limit which is not enough but which the Minister says is taking a different name. As far as I can see, it is just a cash limit. However, having said that, I shall look with great care at what the Minister has said and perhaps return to the point at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 19 not moved.]
Clause 14 [Financial provision]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 20:
Page 12, line 7, leave out ("7, 9 and 13") and insert ("8 and 9").
The noble Lord said: My Lords, this amendment is one of several which are purely technical and have been tabled merely to correct errors which I regret we discovered in Clause 14(2). I beg to move.
On Question, amendment agreed to.
Schedule 4 [Minor and Consequential Amendments]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 21:
Page 18, leave out lines 11 to 24 and insert—
("(2A) Where it has been determined that a person is to be deemed in accordance with regulations to be available for employment in employed earner's employment in respect of any day, the question of his actual availability for such employment in respect of that day may be subsequently determined on a review of the determination as to his deemed availability.").
The noble Lord said: My Lords, at the same time I shall speak to Amendment No. 22. These two amendments will enable the adjudication officer to review the question of availability in respect of a period for which the claimant's availability has already been deemed. I could be more explicit if it would help noble Lords opposite and indeed those sitting behind me, but for the moment I beg to move.
Lord Swinfen: My Lords, as far as I can see, we are now moving from double Dutch to gobbledegook. Neither amendment makes sense. I wonder whether my noble friend could possibly come back on Third Reading with an amendment in plain English that a simple person like myself could understand.
Lord Skelmersdale: My Lords, I am extremely sorry that my noble friend cannot understand the careful and constructive work that the draftsman has done on the amendments. I can assure him they concern merely two minor points. The first is a drafting amendment to a government amendment, No. 60K, which was laid in Committee, the second is a consequential, technical amendment. They relate to the Government's intention to safeguard the position of those claimants who might otherwise face a sudden loss of unemployment benefit when doubt arises about their availability for work. Under existing arrangements benefit is stopped until the adjudication officer has decided the issue.

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As my honourable friend the Parliamentary Under-Secretary of State for Employment announced in Committee on the Employment Bill in another place recently, it is our intention that in future, where a doubt about the person's availability for work arises at a Restart interview or otherwise during the course of an ongoing benefit claim, there should not normally be an immediately withdrawal of benefit while the question of the person's entitlement is being decided by the adjudication officer. The amendments fulfil that pledge. I therefore commend them to the House.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 22:
Page 19, line 34, at end insert —
("13A. At the end of subsection (1)(c) of section 104 (review of decisions) there shall be added "or
(d) the decision falls to be reviewed under section 17(2A) above;" ").
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 23:
Page 20, line 12, at end insert—
("Social Security Act l986—housing benefit
("18A. The following subsection shall be added at the end of section 30 (housing benefit finance)—
"(11) The Secretary of State may by order make provision for the modification or termination of rights to subsidy under Part II of the Social Security and Housing Benefits Act 1982 in respect of benefit paid in excess of entitlement." ").
The noble Lord said: My Lords, Amendment No. 23 would amend Section 30 of the Social Security Act 1986 so that subsidy on overpayments of housing benefit made before 1st April 1988 (under the Social Security and Housing Benefits Act 1982) can be calculated on the same basis as for housing benefit overpayments made in 1988–89, which is the first year of the reformed scheme. This would reflect the policy intention already announced to the local authorities which forms part of the package of arrangements designed to give local authorities more incentives for cost control.
It had been understood that the current provisions under Section 30 of the Social Security Act would enable the new subsidy arrangements to be applied to "old scheme" overpayments. However, it is now realised that a specific power is needed in the legislation for that purpose. The amendment would also enable subsidy to be calculated in subsequent years on the same basis for all overpayments.
I hope that the House will agree that this is a worthy decision and I therefore commend the amendment to your Lordships. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 24:
Page 20, line 14, at end insert—
(". In subsection (3) of section 17 (statutory provisions which may be modified as respects pension schemes)—
(a) the following paragraph shall be inserted after paragraph (d)—
"(dd) the Water Act 1973;"; and
(b) the following paragraph shall be added at the end—
"(h) any Act which relates to the employment of persons by a harbour authority ("harbour authority" having the meaning assigned to it by section 57(1) of the Harbours Act 1964).".")
The noble Lord said: My Lords, in Committee I was very pleased to be able to give an undertaking to the noble Lord, Lord Airedale, who was filling a lacuna—I think that is what we agreed to call it—created by my noble friend Lord Elliott of Morpeth. The amendment is a result of that "filling" and means that the Government have been able to prevent certain limited groups of employees from being denied the right to leave their occupational pension schemes when that right becomes generally available on 6th April under the Social Security Act 1986. That is because legislation relating to employment by statutory water companies and certain harbour authorities will, unless amended, continue to require employees to belong to the relevant occupational schemes.
The amendment amends the 1986 Act so that those other pieces of legislation can in turn be modified by regulations to remove the compulsory membershp requirement. Having said that, the amendment does no more than correct a technical anomaly and I commend it to the House. I beg to move.
Lord Elliott of Morpeth: My Lords, let me briefly and sincerely thank my noble friend for having so ably met the point of my original amendment moved in Committee. The amendment does, as he suggested, meet a legislative anomaly. It means in effect that in future workers in statutory water companies—and it would seem also in harbour authorities—will be able to determine the pension of their choice in line with workers in other industries. I am most grateful.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 25:
Page 20, leave out lines 28 to 31 and insert—
(""(5A) In respect of any period less than a week subsection (5) above shall have effect subject to such modifications as may be prescribed.".").
The noble Lord said: My Lords, the Social Security Act 1986 (Section 23(5)(b)) states that payment of income support to a striker shall not be made if the "weekly rate of payment" is equal to or less than the relevant sum—at the moment £17.70.
An amendment to the Bill was laid in an attempt to ensure that this "weekly rate of payment" and the relevant sum could be apportioned in respect of any period of less than a week and paragraph 21(1) of Schedule 4 currently provide for that in new Section 23(5A).
Regretfully, we have received legal advice that there could be a problem over the amendment in that the reference to the "weekly rate of payment" is confusing, because in certain cases there may not be a weekly rate because, for example, the claimant is entitled to only four days. Obviously, we needed to clear up that matter, which is why I have moved the amendment. I beg to move.
On Question, amendment agreed to.
Clause 17 [Commencement]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 26:
Page 12, line 38, leave out ("33 and 53 of the Social Security Act 1986") and insert ("and 33 of the Social Security Act 1986 and to the insertion of subsection (7A) in section 53 of that Act.").
The noble Lord said: My Lords, the amendment is less technical, but it is technical. I beg to move.
On Question, amendment agreed to.
[Amendment No. 27 not moved.]

Welsh Development Agency Bill
7.41 p.m.
Lord Trefgarne: My Lords, I beg to move that this Bill be now read a second time.
The purpose of the Bill is to raise the statutory financial limit for the Welsh Development Agency from the present level of £450 million to £700 million. The limit was last increased by the Industry Act 1981 when it was expected that a further change would not be needed until 1989. Current forecasts indicate however that the limit will be reached early in the forthcoming financial year owing to the agency's acquisition last October of industrial assets from the Cwmbran Development Corporation and the considerable increase in WDA resources which the Government have provided for 1988–89. It is therefore necessary to increase the limit now so as not to inhibit the agency's vital contribution to the redevelopment of the Welsh economy.
It is customary when setting financial limits to determine a figure sufficient to cover a period of about five years. Accordingly, the Bill proposes that the limit should be £700 million.
Your Lordships may find it helpful if I explain briefly the Welsh Development Agency's remit. Its main aims are to further the economic development of Wales, improve its international competitiveness and enhance the environment. It pursues those objectives through a wide but complementary range of activities: the provision of modern industrial property, the promotion of inward investment and new technology; business advice and venture capital; land reclamation and, increasingly, urban renewal.
Since 1979, the WDA has invested no fewer than £700 million at today's prices in its mainstream activities. In addition, it has given a further £150 million specifically to assist areas affected by the steel closures of the late 1970s and early 1980s. It has used the resources well. For example, its factory lettings have risen every year since 1981 and are on course to achieve an all-time high of 2.3 million square feet in the current financial year—12 per cent. up on 1986–87. The jobs thus generated should also achieve record levels.
The Principality's success in consistently attracting an agreeably high share of inward investment has contributed to that performance. And in the current financial year alone, the agency's inward investment arm is likely to secure 90 projects bringing in £160 million of private capital and up to 7,500 jobs. Wales is now firmly on the map as one of the very best locations for industrial development in Europe.
Backing up the push for increased investment, are the WDA's business and technology advice divisions. Both are reporting record activity, and a surge of inquiries from existing or would-be entrepreneurs. Thirty-nine thousand business inquiries were
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handled in 1987 alone, nearly a fifth more than in the previous year. The WDA's venture capital arm is also ensuring that viable projects are not thwarted by a lack of risk capital.
If in addition to greater prosperity economic progress is to deliver a better quality of life, there is a parallel need to enhance the environment and remove the legacy of decay associated with the old traditional industries. The agency has a key role to play here, and an enviable track record. Since 1979, it has invested £130 million at today's prices in the land reclamation effort. When schemes in its existing programme are complete, 9,000 acres of derelict land will have been cleared and turned over to productive use to the benefit of all the communities involved. Reclaimed land, particularly in the valleys, is a major asset and a marvellous opportunity for development. The clearest evidence of the impact of the drive to transform the Welsh economy is the heartening fall in unemployment. The seasonably adjusted rate has fallen in each of the past 20 months, and the CBI has forecast that Welsh industry is preparing, in its words, for a huge injection of investment cash over the next 12 months, well ahead of the rise predicted for the UK as a whole. It is vital to build on this success, and the Government have committed themselves to doing so.
The Government have increased the agency's gross spending power—the sum of the direct taxpayer contribution and the receipts from rents, factory sales and other sources—by a massive 31 per cent. in 1988–89 by comparison with the budget for the present financial year. Its new budget will therefore be £113 million, with a further £232 million planned for the following two years.
As a result, the agency has been able to launch a remarkable factory building programme aimed at creating 1·5 million square feet of new working space: 75 per cent. more than in the current year or, to put it another way, 75 per cent. more than the new build in the entire three-year period prior to May 1979. That huge 40 per cent. boost in cash resources will provide accommodation for 4,400 jobs in 1988–89 alone, rising to 13,000 when resources for the two later years are taken into account. New measures, including a property development grant, have also been introduced to enable the agency to encourage private sector developers to play a greater part in the provision of industrial property in Wales.
The agency's business development unit has been given the important task of delivering the Government's initiative on consultancy assistance; and WINtech, its technology arm, is developing a range of new measures geared to stimulating innovation, technology transfer and the use of advanced manufacturing technology.
Resources earmarked specifically for rural areas are also being increased. The budget for the agency's rural affairs unit will rise fourfold to £2 million to promote rural enterprise and diversification of the rural economy. In a move to accelerate rapidly the drive to improve the environment, the WDA will be able to spend £75 million on land reclamation and urban renewal over the next three years, again, 40 per cent. more than originally planned. A good proportion of this total will be invested in the valleys. The WDA is a powerful weapon in Wales' economic

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armoury. I commend the Bill to your Lordships so that the agency can build on its past successes and pave the way for many more.
Moved, That the Bill be now read a second time.—(Lord Trefgarne.)
7.50 p.m.
Lord Prys-Davies: My Lords, I should at the outset declare an interest. The law firm with which I am associated acts for the Welsh Development Agency. We give this short Bill a very warm and unqualified welcome. The record to which the Minister has referred has demonstrated that the setting up of the Welsh Development Agency in 1975 was an event of enormous significance to the economic life of Wales. We were not then to know that the years which lay ahead would be so harsh for many of the older Welsh industrial communities. But of this we can be sure—that if the WDA had not been in position and working flat out in partnership with the Welsh Office and Welsh local authorities, the scars of the recession would have been far more deeply embedded right across the face of Wales.
The WDA has gathered strength. It has helped in many a community to turn some of our problems into opportunities. The new large developments along the M.4 lifeline, as far west at least as Bridgend and on Deeside, have provided a large number of jobs, not only in production, administration and sales but also in the all-important research and development sector. We want companies to establish all these operations, including the research and development work, lock, stock and barrel in Wales. Experience tends to show that once all these operations are established in Wales the company will usually stay there.
The Minister has referred to the WDA's record of attracting soundly based inward investment. We welcome this investment, but of course it represents only a small fraction of the WDA's investment programme. I think that that is a good thing, because there is by now increasing evidence to indicate that the key to industrial regeneration is the development of new export-oriented small and medium-sized local companies. I read the other day that in Japan 25 per cent. of manufacturing employees work in companies with fewer than 20 employees.
Although we acknowlege, as we must, that the WDA has made an immense contribution to the Welsh economy, unemployment remains high in Wales. It stands at 148,500. That is some evidence, I fear, that we have longstanding and profound economic problems of our own in the Principality. Therefore we welcome very much the Secretary of State's decision to increase substantially the financial resources which are to be made available to the WDA so that it can help to make a significant inroad into the present level of unemployment and we would hope, to remedy the basic weaknesses of the Welsh economy.
I should now like to make a few comments on four or five issues. First, when the WDA was set up a great deal of importance was attached to building factories which were ready for letting. I appreciate that the agency has just announced that it will be embarking on an ambitious programme of factory building during the next three years; it is overdue. I understand that there are gaps in the provision of
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such factories in parts of Wales. Perhaps the Minister can tell the House how many district councils are without advanced factories ready for letting or at least without an adequate reserve of such factories.
My second point relates to the reclamation of derelict land. The Minister has made the point that the WDA has a very good record on land reclamation. Again one remembers that when the WDA was set up the then Secretary of State for Wales saw it as a natural place in which to continue the work of land clearance and land reclamation which had started after the tragedy in Aberfan, and linking the land clearance and land reclamation wherever possible with the task of factory development. Wales has an immense legacy of derelict land and it will continue for some decades to pick up the bill for the freedom of the past to spoil and pollute.
However, notwithstanding the magnitude and urgency of the problem, I understand that the land reclamation units of the local authorities and possibly of the WDA itself are often faced with major problems when seeking to purchase derelict land in the valleys from two state corporations: British Coal and British Rail. I am told that British Coal takes a very narrow view of its responsibilities to the communities which the coal industry plundered and polluted for generations. It will demand the highest possible price; it will delay a sale in the hope that one day a market will eventually emerge for the site, irrespective of the fact that the interests and wellbeing of the local community may best be served by speedy reclamation of the land and its subsequent treatment.
Likewise I understand that British Rail tends to demand a price which is based on an after-use of the land which British Rail envisages rather than on the needs of the local community as approved by the county councils and the district councils. I am advised by a senior county council officer that the WDA itself wishes currently to purchase a site for industrial purposes from British Coal but that the latter wants to sell it for retailing, which is not even approved by the county council for the district council.
So while these difficulties are being argued about for months and sometimes for years, valuable resources are being tied up. This is a sad commentary and it leads me to ask whether the Secretary of State for Wales, who, after all, has immediate and intimate involvement with all aspects of government policies in Wales and who is close to the painful urgency of Welsh economic problems, can find ways and means to intervene to resolve the difficulties which are being experienced with these two corporations.
On the other hand, to be fair to British Coal and British Rail, if they are statutorily bound to look in their books and to seek the highest price, based if need be on a change of planning use, can the Secretary of State persuade his colleagues in the Government to change the rules? In such situations what makes sense is that the position should be looked at in the round, whether it is British Rail, British Coal, the Welsh Development Agency or the local authorities, and that one hand should know what the other is doing.

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My third point relates to the agency's urban renewal unit, to which the noble Lord, Lord Trefgarne, has also referred. It is my belief that the local authorities have no clear understanding of the precise policies and the detailed role of this unit, nor indeed of the resources which are available to it, although the noble Lord has thrown some light on the resources which will be available henceforth. Again the county council officials are unclear as to how this unit relates to the county councils and possibly to the Land Authority of Wales. This uncertainty, or rather ambiguity, was brought to the attention of Welsh Office Ministers in the debate on the Bill in another place. But in addition to the questions raised in another place about the urban renewal unit, I should like to ask two other questions.
How do the objectives, the functions and the powers of this unit compare, for example, with those of the urban renewal unit of the Scottish Development Agency? Can the Minister confirm whether it is intended with the resources that have now become available that the unit should play an active forward planning role, or is it simply to act as a means of channelling funds to approved projects?
As I said, there is some uncertainty and lack of understanding of the urban renewal unit of the WDA. That seems to me to point to the need for a clear statement by the WDA about the unit's objectives, functions, powers and policies so that the planning officers of the county councils and the local authorities throughout Wales are aware of its remit. They can then decide how they can best work with it in common harness.
Fourthly, I readily acknowledge the significance of WINtech, which is the technology arm of the WDA for higher education in Wales. It is particularly important now that Treasury funding for the universities is increasingly favouring those colleges and departments which are strong on research as against those which are weak on research. We are particularly pleased that, as a result of the increased funding going to the WDA, the activites of WINtech will be expanding in the years ahead. The universities are facing a crisis, and WINtech probably more than any other single undertaking can provide the support which the University of Wales and its colleges require in science and technology.
My noble friend Lady White, who is President of the University of Wales Institute of Science and Technology, which is merging with the University College Cardiff, is speaking in the debate. I am sure that she will dwell on the importance of collaboration between WINtech and the University of Wales and its colleges in the creation of centres of scientific and technological excellence in Wales.
I had intended to refer to the relationship between the WDA and the craft industries and to say something about the consultant's report on the future of this particular industry. It is important for rural Wales. Indeed it is important not only for rural Wales but also for the Principality. I understand that there are about 3,000 craft businesses in Wales. But the detailed information upon which I could have based
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my comments has not reached me. I would however be grateful if the Minister would take note that a number of people who are involved in the craft industries in Wales have their reservations about the consultant's report and about the fact that they will be given every opportunity to put forward alternative proposals and that the Secretary of State and the Welsh Office will give them every consideration.
I have no other questions for the Minister. As I said at the beginning, we very much welcome the Bill, and our hope must be that the additional funds which are becoming available to the WDA will enable the agency not merely to support the Welsh economy but to tackle the root causes of our economic problems in the Principality.
8.5 p.m.
Lord Hooson: My Lords, like the noble Lord, Lord Prys-Davies, I very much welcome this Bill, and I do not know of anybody in Wales who does not welcome it. What I thought was refreshing when I read the debate in another place last evening was the concentration of the present Secretary of State on the Welsh economy. He did not regard it merely as an extension of the British economy. He recognised its dependence; but, nevertheless, he treated it as something distinct and separate. That is very important in Wales because our social and cultural life cannot flourish unless the economy of Wales flourishes.
We have lost so much socially and culturally through young people in particular having to go away to find jobs. In fact the greatest export of Wales, whatever its other exports have been this century, has been that of bright young people. Other parts of the world have had the benefit of them. Although I am in no way a nationalist, I think it is a great pity that the Welsh economy was allowed to decay in the way that it did.
I also congratulate the Secretary of State the right honourable Peter Walker on refusing to be confined to an economically ideological straitjacket of thought prescribed for him by the Prime Minister. It is very significant that in Wales he has departed from the philosophy preached by the Government and has recognised the great importance of public investment as a necessary prerequisite very often to the flourishing of private enterprise.
Everyone who knows Wales knows perfectly well that without public investment over the years the Welsh economy would have been in a dreadful state by today. As some noble Lords know, I have been associated with one of the most successful private enterprise firms in this country which developed in my part of the world. All those who are concerned with that development know perfectly well that it could not have taken place without the investment of public money as well as the flair and enterprise shown by those who created that company.
Therefore it is very important that we have the public money in Wales to build the advance factories. Advance factories do not in themselves create a healthy economy but they are necessary for it. The creation of the necessary infrastructure, the social

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investment and the cultural patronage is very necessary too. It is necessary because a minority culture like the Welsh culture cannot survive in poor social conditions or finds it very difficult to do so. The future of the Welsh language and the Welsh way of life depends on patronage. In our time the patronage very often has come from public investment and public authorities.
The economy of Wales cannot be transformed overnight into one that is totally or mainly dependent on private enterprise. That is why this Bill is so important and why the setting up of the Welsh Development Agency was so important. It is why the setting up of the Mid-Wales Development Corporation was so important.
I remember writing a booklet in 1961 with Dr. Geraint Jenkins, the present curator of the Welsh Folk Museum, in which we advocated the setting up of a development corporation for Mid-Wales. When it was eventually set up I saw how it gradually transformed Mid-Wales by means of a partnership between public enterprise and private enterprise. That was so necessary because the Welsh economy so decayed in the earlier parts of this century.
Some time ago I read in Trevelyan's Social History of England that the wages of Welsh industrial workers, particularly in Merthyr Tydfil and the anthracite coal mines, were the highest wages paid to industrial workers anywhere in Europe in the latter part of the nineteenth century. But the wealth generated in Wales in those days was largely exported; with some notable exceptions, there was no, or very little, reinvestment in Wales. The wealth was taken away from Wales. This measure is part of the great repair job that successive governments have had to perform in Wales in this century. It is taking some time. I venture to think that the Welsh Development Agency and the Mid-Wales Development Corporation will be needed for many years before their work in Wales is complete.
In Wales we also lacked national institutions to enable us to fight the battle to restore the Welsh economy. A great deal has been done in the last few generations to repair that lack. When I was a boy in North Wales Cardiff meant nothing to me. When I was a student in Aberystwyth, Cardiff simply did not rank as a capital city. When I met Scottish students I realised immediately that Cardiff did not have a place in the Welsh mind in the way that Edinburgh had in the Scottish mind. That situation has changed a great deal over the last 30 or 40 years. Cardiff is very much more a capital city now. There are national institutions, but we still lack sufficient public and private institutions. When I say private institutions let me put that in context. I do not think that Cardiff has yet begun to be the financial centre of Welsh investment that Edinburgh is for Scottish investment. We do not have the private financial institutions that have been set up there. A beginning has been made but there is a long way to go.
On the other hand, Cardiff has changed and stimulates the Welsh economy more than it used to. It means more. I regret to say that we still suffer from pretty poor communications between north and
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south. That is a point to which the development agency and the Mid-Wales Development Corporation could address their minds.
While I welcome this Bill, I think that those agencies will need much more money in the future because there is a great deal of repair work to be done. I know from personal experience the enormous economic pressures placed on both industry and commerce to develop in other parts of the country.
Perhaps I may make two suggestions. The Government should consider extending the remit of the Mid-Wales Development Corporation to incorporate other rural areas. They could also do a great deal to encourage mature students to go to business schools. The young entrepreneur in Wales with two or three years' experience in industry or commerce often needs formal training to equip him for the competition that is required if private industry is to flourish. It would be very helpful if the Welsh Development Agency were to make it possible for mature students who have such experience in industry and commerce and the right kind of academic background to have a year at business school, preferably in Wales or even elsewhere. The Mid-Wales Development Corporation could do likewise. That would help a great deal in transforming a small business into something which is much more ambitious and much more likely to flourish and develop into a large business.
Altogether I think that the Government are to be commended on this Bill.
8.15 p.m.
Baroness White: My Lords, I wish to join in the gratification that has been expressed this evening that, as the noble Lord, Lord Hooson, has said, the Government for once have abandoned their basic philosophy and decided that instead of cutting their contribution, investment is the best policy. This is a Bill which I think all of us must welcome very warmly.
Before intervening in the debate on a particular aspect which I should like to touch upon, I should like to pay tribute to the foresight of those who originally established the Welsh Development Agency and also, as the noble Lord, Lord Hooson, has very rightly said, the Mid-Wales Development Corporation. I should also like to pay tribute to the members of the authority, including Mr. John Williams, the Chairman, Sir Donald Walters, and also to the staff.
Although the Bill does not deal directly with Mid-Wales, I should also like to pay a tribute to Mr. Leslie Morgan and his colleagues and staff for what they are doing in the more rural areas of Mid-Wales. It has not been an altogether easy progression and I think that we can congratulate ourselves that we have been able to call into public service in this particular sphere people of knowledge, experience and dedication to the needs of the Principality.
Today I wish to mention one particular aspect of the work of the Welsh Development Agency which

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closely affects the constituent institutions of the University of Wales as well as the local authority colleges of higher education. That is the arm of the WDA known as WINtech, which my noble friend Lord Prys-Davies has already commended. I hope very much that the increased funding which is provided for in this Bill will directly or indirectly affect and encourage the work of WINtech. As some of us know from experience, WINtech is playing an increasing part in developing high technology and other appropriate activities in Wales. It is through WINtech that support is provided for university centres of excellence which seem likely to become focal points of international esteem. I am not using that word without due consideration; it really means international esteem. It is work which can meet the challenge of research and advancing technology in any part of the industrialised world. Such centres must combine academic quality with industrial relevance and also either have or have good prospects of obtaining substantial non-government finance.
WINtech was set up following a report produced in 1983 at the request of the noble Lord, Lord Crickhowell, when he was Secretary of State for Wales. Since its inception WINtech has maintained and supported half a dozen very important university projects, including two at Swansea, three at Cardiff and one at Bangor. The largest of these are the Telecommunications Centre at Bangor and the Semiconductor and Micro-Electronics Centre at Cardiff. I am glad to say that the latter enterprise at Cardiff is a most happy and successful conjunction between UWIST and University College. I believe that in due course we shall enjoy other similar successes. That is a hope which I am certain is shared by my noble and learned friend Lord Elwyn-Jones, who is President of University College, Cardiff, and therefore my opposite number in this joint enterprise.
Some weeks ago, having provided substantial funding for the Semiconductor and Micro-Electronics Centre which is at the forefront of certain elements in this field, WINtech organised a successful visit to Cardiff by journalists from the scientific and technological press so that knowledge of the work being done there could be transmitted to appropriate industrialists throughout the kingdom, and in fact throughout the industrialised world.
At the moment about half the funding for the centre comes from Government sources, including WINtech, and almost half from industry.
In reply to a journalist's query, Professor Vernon Morgan of UWIST remarked:
"There's hardly a single major UK electronics company that isn't supporting us either in cash or in kind."
Without the encouragement of WINtech, that remark could not have been made.
However, equipment costs are rising and the squeeze on government-funded research at the university level is becoming tighter almost day by day. Just one essential machine at the centre costs around £½ million to buy, and there are in addition
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the fairly high running costs consequential upon that purchase. As Professor Robin Williams of University College remarked:
"Getting funds to keep this sort of thing going is getting more difficult".
We have a united fear, warned Professor Morgan, that:
"the country will get cold feet at the last minute, and we'll lose out to the US".
May we trust that the increased funding for the Welsh Development Agency, and through it to WINtech, as provided for in the Bill, will help to resolve those problems and help to keep us in the lead—a lead which in certain areas we have already attained?
WINtech is also the channel for the distribution of Mr. Kenneth Baker's largesse for the technology centres, nine of which have been designated in the UK. The aim of those centres is to emphasise industrial and managerial training and capability rather than the industry-oriented research which is the main preoccupation of the university centres to which I have just referred. The Wales Technology Centre is not in fact a physical entity but an administrative unit, covering public sector colleges and the Polytechnic of Wales as well as the university institutions. We wish it well, but frankly it would be encouraging if rather more than the £100,000 that is at present available in total were to be found for the needs of the Principality.
Nevertheless, the work undertaken by WINtech, whether directly or as an agent, is a most important element in the current exciting and enthusiastic movement to modernise Welsh industry, to attract appropriate new industries and to raise our education institutions to the highest level. I have some sympathy with the suggestion made by the noble Lord. Lord Hooson, that it would be helpful both to the rural and industrial areas if young people in particular or those who have had a slightly longer experience of industrial affairs were able to supplement that experience with some well devised training in managerial and financial expertise.
I hesitate to do a commercial for the Cardiff Business School but I applaud that initiative which has very recently been undertaken, again on a joint basis with members of staff and students from University College, although it was started by UWIST, and which now has almost 800 students—that number includes overseas students. I am quite sure that an energetic programme is possible, and I have no doubt in due course will be undertaken, which I hope will supplement the kind of work that WINtech is encourging and which will make its contribution to the renaissance of modern industry in the Principality.
8.25 p.m.
Lord Trefgarne: My Lords, I am greatly obliged to both the noble Lords and the noble Baroness for their interventions and for their unanimous welcome to the measure which I venture to bring before your Lordships' House tonight. Having been squeezed out

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of the dinner hour by earlier business, I am as always under constraint to be very brief at this moment. I wonder whether the noble Lords and the noble Baroness will allow me to reply to them in writing rather than to detain your Lordships tonight.
Perhaps I may just say once again how grateful I am for the welcome that has been accorded to this measure. I promise all who have participated in the debate the most careful study of what they have said
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and a full and considered reply as soon as I can arrange it.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 15th February), Bill read a third time, and passed.
House adjourned at twenty-seven minutes past eight o'clock.