Lords Sitting of 29 June 1989

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Salisbury): The LORD CHANCELLOR on the Woolsack.

European Consumer Affairs Council Meeting
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they will state those items discussed at the meeting of the European Consumer Affairs Council held on 1st June, indicating both the decisions reached and progress made thereon, with particular reference to product safety, consumer credit and future priorities for relaunching consumer protection policy.
Lord Strathclyde: My Lords, the council on 1st June reached agreement on a number of issues, including amendment to the Consumer Credit Directive of December 1986 and continued support into 1990 for the European Home and Leisure Accident Surveillance System—EHLASS.
The Commission presented a proposal for a general product safety directive which was discussed for the first time by EC Ministers. The Council also noted a report by the Commission on consumer education.
The UK was unable to support adoption of a draft resolution for the relaunch of consumer policy because of its proposals relating to product quality, which would constrain consumer choice without benefit in terms of additional protection.
Baroness Burton of Coventry: My Lords, I am pleased to note that progress is being made. May I return to the last part of my Question, which deals with future priorities for relaunching consumer protection policy? We have had many exchanges in the House on this, going back some three years. Does the Minister recall that on 16th June last year at col. 370 the Government expressed disappointment at the inconclusive proposals put forward by the Commission and hoped that it would lead to a more constructive way forward ready for June 1989? It is now June 1989 and we are almost into July. Can the Minister tell the House whether we have succeeded in getting consumer affairs more closely involved with other policies in the EC, and whether the Commission has brought forward its report due in June 1989? Finally, believing that the Government wish to help on this matter, could they tell the House what they have been able to do about that?
Lord Strathclyde: My Lords, I am aware that there has been much disappointment on all sides concerning consumer policy. However, Her Majesty's Government fully support the policy adopted in the October 1986 council resolution that consumer interests should be taken more fully into account in proposals for Community legislation. The Commission has not reported formally to the council
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towards implementation of the 1986 resolution since it did so on 7th June 1988. We are sad that progress has not been as fast as we had hoped but we shall continue to press for implementation. Furthermore, we shall give serious consideration to proposals which would stimulate increased effort in that area.
Lord Brougham and Vaux: My Lords, I welcome my noble friend's encouraging words on EHLASS. Can he tell the House what is the Government's view on the future of that excellent system?
Lord Strathclyde: My Lords, I know that my noble friend has a keen interest in safety. I am able to tell the House that the Government believe that a permanent form of EHLASS should be continued after the demonstration project and that planning for that permanent system should commence without delay.
Baroness Burton of Coventry: My Lords, repeating the compliment that I believe that the Government wish to help, is there anything they can do to hasten some action by the Commission in publishing this report; have they any idea when that might be done, and could they tell us when the next meeting of consumer Ministers may be held?
Lord Strathclyde: My Lords, as the noble Baroness is aware, there has been a change in commissioners and we know that the new commissioner, Commissioner van Miert, is very keen and attaches great importance to consumer policy. The next meeting of consumer Ministers will be in November, but at this stage we do not have a fixed date or agenda.
Baroness Burton of Coventry: My Lords, I did not hear the Minister say whether he has the slightest idea when the Commission will make its report; and can he do anything to hasten that if it is in the far distance?
Lord Strathclyde: My Lords, we continue to encourage the Commission to produce its report as soon as possible. We are very keen that the report should be published.

Transport: East London Assessment Study
3.5 p.m.
Lord Hunt Lord Hunt asked Her Majesty's Government:
When they expect to announce their plans for major road development in London, in the light of the East London assessment studies commissioned by the Department of Transport.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, my right honourable friend the Secretary of State for Transport has no plans at present to add to the trunk road programme in London. The East London assessment study is looking at a wide range of options to relieve the transport related problems within the study area corridor. The consultants'

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report is expected later in the summer and decisions will be taken as soon as possible after that.
Lord Hunt: My Lords, I thank the noble Lord for that Answer. Is he aware that eight of the 12 options proposed by the East London assessment study would destroy a remarkable rural amenity known as the Parkland Walk which runs between Highgate Fields and Finsbury Park? That amenity provides recreation for many thousands of people of all ages, is a useful educational resource, a habitat for many kinds of wildlife and is a unique unifying influence on the very mixed community in that part of London. In view of the strength of local feeling on this matter, can the noble Lord assure the House that before any decision is taken to build a highway along any part of the Parkland Walk, there will be a public inquiry, as happened in 1979 when the then Secretary of State for the Environment ruled that:
"the Parkland Walk warrants special protection"?
Lord Brabazon of Tara: My Lords, I can give the noble Lord an assurance that care for the environment is included in the objectives of the assessment study, so that the special nature of Parkland Walk will be fully considered. If there was—and I am not saying that there will be—a plan to build a road in Parkland Walk, that would have to go through the normal procedures.
Lord Elton: My Lords, can my noble friend tell the House when his right honourable friend expects to receive the consultants' revised design for the East London river crossing, when as a consequence the bridge will be built, and if the programme has slipped as far as I fear it may have done, will he consider a third bore for the Blackwall Tunnel in the interim?
Lord Brabazon of Tara: My Lords, my right honourable friend hopes to make an announcement on the revised design of the East London river crossing very soon. The timing of completion will depend on the decision for the design of the bridge. However, it should be open in the mid-1990s.
As regards a third bore for the Blackwall Tunnel, the department has discussed implications for the proposed development of the Greenwich Peninsula, but there are no firm conclusions and no specific proposals at present.
Lord Underhill: My Lords, is the Minister aware that when I saw a copy of the report of the working party on the East London assessment study, I was so concerned that in six of the options there was a dismissive attitude towards Parkland Walk, to which the noble Lord, Lord Hunt, referred, that I wrote immediately to the Minister's ministerial colleague, the Minister for Roads and Traffic, and to the consultants to express my concern at that lack of consideration for environmental issues?
Is the Minister interested to know that as my information was based on excellent material sent to me by environmental bodies, last Sunday I walked the Parkland Walk with my wife, because I believe in knowing what I am talking about, and I can fully
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confirm everything that the noble Lord, Lord Hunt, said? I hope that that will be taken into consideration when the final report is issued.
Lord Brabazon of Tara: My Lords, I am afraid I have not had the opportunity to walk the Parkland Walk myself. Clearly I shall have to speak to the noble Lord outside the Chamber about its merits. I have already said that environmental considerations will be taken into account.
Earl Russell: My Lords, have the East London assessment studies taken into account the knock-on effect of the roads proposed outside the study area corridor? In particular, have they considered the effect of the proposed Parkland Walk route on Spaniard's Corner, Hampstead Tube station and Swiss Cottage? If not, why not?
Lord Brabazon of Tara: My Lords, of course the assessment will have to take account of what effects there will be on traffic outside the area. I remind the House that these are only assessment studies by consultants. They are not government proposals. Something needs to be done about the transport problems in that area and this is the best way of looking for the solution.
Lord Elton: My Lords, is my noble friend aware of the existing congestion in the Docklands? In particular, is he aware that 1,000 workers arrive every day to build more accommodation there? Their numbers will be increased by 4,000 in the next three to four weeks. They are building accommodation for 98,000 further jobs. What is the department going to do to avoid the resulting chaos, particularly at the Cotton Street junction?
Lord Brabazon of Tara: My Lords, we have a number of plans for improving the transport infrastructure in the Docklands, including road improvements, the expansion of the Docklands Light Railway and the possibility of a new Underground line to that area. As to Cotton Street, I do not have details with me.
Lord Tordoff: My Lords, is not the present chaos perhaps the result of the free operation of market forces?
Lord Brabazon of Tara: No, my Lords, it is a result of increased prosperity created by this Government in an otherwise rundown area.
Lord Tordoff: My Lords, is it not the case that this prosperity leads to chaos?
Lord Brabazon of Tara: My Lords, it is not admitted as being chaos, but I think we would rather have prosperity than none.
Lord Donaldson of Kingsbridge: My Lords, does not the noble Lord agree that it is increasingly difficult to walk anywhere in London without being knocked over by traffic, fellow citizens or tourists? Will he bear that in mind in the sense of the original Question and preserve this walk if there is any way of doing so?
Lord Brabazon of Tara: My Lords, I think I have said as much about Parkland Walk as I can.

Hong Kong
3.12 p.m.
Lord Eden of Winton Lord Eden of Winton asked Her Majesty's Government:
Whether they have had consultations with other members of the Commonwealth and the European Community, and with the United States of America, concerning the future of the citizens of Hong Kong in the light of recent events in China.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we have already spoken to our EC partners, to Commonwealth governments and to the United States. We will continue to urge the wider international community to join us in doing everything possible to restore the confidence of people in Hong Kong following the deplorable events in China.
Lord Eden of Winton: My Lords, while I thank my noble friend for that reply, can he be more precise as to the objectives of the talks? In his reply to the debate in this House on 21st June my noble friend made a number of references to mobilising the international community and to concerting action closely in the event of a major crisis affecting Hong Kong after 1997. Is it the purpose of these talks that the Government are now holding to prepare now for the sort of swift, effective and sympathetic action that would be necessary in the event of such a crisis overtaking Hong Kong later in this decade?
Lord Glenarthur: My Lords, we must be very careful to distinguish between the worst possible case—the Armageddon scenario which we discussed during that debate—and the present circumstances. While those circumstances are worrying, they are certainly far from catastrophic. What is needed now is for the international community to rally round Hong Kong in order to help restore its confidence. I am afraid I cannot provide the precise details which my noble friend seeks.
Lord Cledwyn of Penrhos: My Lords, we welcome the knowledge that consultations have taken place with our EC partners and with our friends in the Commonwealth. However, can the noble Lord say something about the nature of those consultations? With whom precisely have they taken place? What proposals, if any, were put on that occasion? For example, was the matter the subject of discussion at the summit in Madrid? We welcome also the knowledge that the noble Lord's right honourable and learned friend the Foreign Secretary is visiting Hong Kong next Sunday. Can the noble Lord tell the House whether he goes with specific proposals or to listen?
Lord Glenarthur: My Lords, my right honourable and learned friend will certainly be going to listen. That is the prime purpose of his visit. As regards
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detailed proposals, I hope that the noble Lord will understand that it would not be realistic for other countries to make specific commitments of any sort in what, after all, is a vacuum at the moment. Clearly they would want to take into account all the circumstances that might be pertinent at the time. We are not yet at that point, and I sincerely hope that we will not reach it. It would be right to prepare the ground, and the discussions taking place are general discussions which have elicited a great deal of sympathy; but no firm planning can take place in the vacuum to which I referred.
In regard to Madrid, yes, my right honourable and learned friend the Foreign Secretary discussed these matters with EC colleagues during the Council meeting in Madrid. The European Council conclusions drew attention to the great anxiety caused in Hong Kong by the recent events in China.
Lord Wyatt of Weeford: My Lords, will the Minister warn his right honourable and learned friend that the situation in Hong Kong—the low morale and the brain drain—is deteriorating far faster than is understood in Whitehall? Unless the Foreign Secretary goes with something really positive to say he may well be in danger of being lynched.
Lord Glenarthur: My Lords, I am aware, and my right honourable and learned friend is aware, that he goes to Hong Kong at a time of great anxiety. Nevertheless, it is extremely important that he goes there to hear the views expressed to him directly by the Hong Kong people.
Lord Bonham-Carter: My Lords, is the noble Lord aware that any contingency plans depend on a hypothetical situation? Does not the noble Lord agree that what we were discussing on 21st June was a hypothetical case of the worst kind? Is it not therefore necessary to discuss seriously contingency plans to meet that situation should it occur? If we were able to make such plans it would provide precisely the reassurance that the inhabitants of Hong Kong require in order to stop the present mass emigration.
Lord Glenarthur: My Lords, I think the noble Lord is in a sense muddling two different aspects. One is the need to try to restore confidence in Hong Kong so that those who make Hong Kong so prosperous remain there. The second aspect is what to do if things ultimately go wrong. As I said, general discussions on that possibility have already taken place and have elicited sympathy. No doubt they will continue. I said on 21st June that if the worst comes to the worst and the future position in Hong Kong becomes untenable, the British Government would be clearly under a strong moral obligation to act; and no doubt the international community would be mobilised to do what the noble Lord seeks.
Lord Renton: My Lords, as there are eight years between now and 1997, and a great deal could happen during that time, is it not premature for detailed discussions with other countries or the making of firm decisions? Could not that tactfully

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and persuasively be pointed out to the people of Hong Kong?
Lord Glenarthur: My Lords, I have no doubt that will be discussed when my right honourable and learned friend goes to Hong Kong. My noble friend is absolutely right in saying that it is far too early to do that sort of detailed planning. What we need is a general attitude of sympathy and support for Hong Kong, and that is what we have already achieved.
Lord Molloy: My Lords, is the noble Lord aware—
Lord Bonham-Carter: My Lords—
The Minister of State, Home Office (Earl Ferrers): My Lords, with respect to both noble Lords, it would be helpful if they were to speak one at a time. I rather fancy that the noble Lord, Lord Bonham-Carter, was about to ask a further question following the answer to his first question. The noble Lord, Lord Molloy, could then follow with his question.
Lord Bonham-Carter: My Lords, I thank the noble Earl for his intervention. Did not the noble Lord, Lord Glenarthur, misunderstand the nature of my question? By reassuring the citizens of Hong Kong that there is a plan for the worst possible situation it would stop the emigration now going on and which is so damaging to the prosperity of Hong Kong.
Lord Glenarthur: My Lords, I did not misunderstand the question at all. The noble Lord perhaps slightly misunderstands the problem. We have to try to meet two concerns. The first is the immediate concern of restoring confidence in Hong Kong so that the brain drain about which the noble Lord is concerned can be diminished. And looking to the future, we must discuss with others how best we can meet the scenario which we all wish not to happen but on which inevitably people's minds are focused at the moment.
Lord Molloy: My Lords, it is wise for the noble Lord's right honourable and learned friend to go to Hong Kong to listen to what people have to say. I am sure that he will have taken note of the many things that Members of this House and of another place have had to say about the position. Will the noble Lord make the point to his right honourable and learned friend that if at any time the people of Hong Kong feel that they wish to have discussions with the British Government or with members of the Opposition such requests will be immediately acceded to?
Lord Glenarthur: My Lords, it is not for me to answer for the Opposition. If anybody wants to talk to the Opposition, that can no doubt be arranged through their channels. The Government regularly have talks with people from Hong Kong whether they be from the Hong Kong Government or elsewhere. We shall continue to do precisely that.
Baroness Seear: My Lords, following the question of my noble friend Lord Bonham-Carter, does the noble Lord agree that people are more likely to stay put in Hong Kong if they have an assurance that in the event of the worst happening there will be somewhere for them to go? There would then be no question of wishing to get out now in order to escape while they can.
Lord Glenarthur: My Lords, the noble Baroness seems to misunderstand the nature of the problem. She seeks an instantaneous solution to a problem which is not even likely to arise in its ultimate form before 1997 and, hopefully, will never arise, as my noble friend Lord Renton said. Therefore, to go into the kind of detail which she and others are seeking is not sensible. We have to try to arrange now through discussions with other countries some mutual understanding of the nature of the problem so that ultimately, if things go seriously wrong, that can lead to the detailed planning which she seeks.
Lord Monson: My Lords, have the Government given any thought to the proposal, reported to have been made by the honourable Member for Beckenham, Sir Philip Goodhart, which would involve writing off the massive overseas debts of Latin American countries in proportion to the number of passports granted to Hong Kong citizens?
Lord Glenarthur: My Lords, the important thing is for us all to strive to make sure that Hong Kong is a success not only up until 1997 but beyond that year.
Lord Northfield: My Lords, might not Taiwan be a refuge for some of these citizens if ever the need were to arise? We all hope that it will not arise. As we do not have relations with the government of Taiwan, which is so obvious a place of refuge, how do the Government propose to bring them into the general considerations to which the noble Lord has referred?
Lord Glenarthur: My Lords, it is not for me to answer at this Dispatch Box for Taiwan. I suggest that the answer to the noble Lord's question lies more in Taiwan than here.
Lord Eden of Winton: My Lords, will my noble friend ask the Foreign Secretary to make clear to the people of Hong Kong that these international discussions have begun with a view to putting into place certain contingency arrangements? If he were to spell that out with complete clarity, would that not go a long way to restoring confidence among the people of Hong Kong?
Lord Glenarthur: My Lords, I am sure that my right honourable and learned friend will refer in general terms, as I have done, to the discussions which have taken place. However, I ask my noble friend to understand that to go into the kind of detail which he seeks is asking the impossible. We have eight years to wait. All kinds of things can change between now and then. While the point that he makes is a serious one, to get into that detail really is not sensible.

Prestwick Airport: Landing Charges
3.25 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What is the charge imposed and what other costs are incurred by aircraft landing at and taking off from Prestwick Airport en route between Scottish airports and North America in order to comply with the order made by the Secretary of State for Transport.
Lord Brabazon of Tara: My Lords, we understand that charges at Prestwick vary, depending on aircraft weight, the number of passengers and aircraft parking time. Airlines serving Prestwick as an intermediate stop will incure additional fuel costs and, in some circumstances, additional crew costs. These will depend on the circumstances of each case.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that not particularly informative Answer. Does he recall that as recently as 12th May his right honourable friend the Secretary of State for Transport, addressing the Scottish Conservative Party Conference, said:
"Why shouldn't an airline fly between any two destinations it chooses?"
Can my noble friend answer that question?
Lord Brabazon of Tara: My Lords, I think that my right honourable friend would have wished to add the words "in the same area". Prestwick is part of the Scottish lowlands airport area just as Gatwick, Heathrow and Stansted are part of the London area.
Lord Taylor of Gryfe: My Lords, does the Minister agree that Prestwick is an excellent but underused international airport? Is he aware that it is within 30 miles of the city of Glasgow, which means that it is closer to Glasgow than Gatwick is to London? Does he accept that a large number of people in the west of Scotland find it environmentally unacceptable to have additional transatlantic flights from a city centre airport?
Lord Brabazon of Tara: My Lords, I can certainly confirm that Prestwick Airport is a fine airport and that it is within easy reach of Glasgow. It will be even better placed when various road and rail improvements announced by my right honourable friend the Secretary of State for Scotland are made. I am well aware of the views of people in the Glasgow area about the additional transatlantic flights. Those views were made clear to me when the subject of this review arose.
Lord Tordoff: My Lords, in view of the supplementary question of the noble Lord, Lord Boyd-Carpenter, does it naturally follow that the Government are about to require flights from Heathrow to land at Stansted in order to improve the viability of that airport? That seems similar to taking off from Glasgow and landing at Prestwick.
Lord Brabazon of Tara: No, my Lords. The traffic distribution rules in the London area have had to be
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established owing to the congestion in the London system. I was comparing those with traffic distribution for Scottish lowland airports.
Lord Carmichael of Kelvingrove: My Lords, does the Minister accept that there is nothing like the same problem in the Glasgow and Prestwick areas that there is in the London area? Is he aware that the Scottish people are puzzled about conflicting reports on Prestwick? Is he further aware that his right honourable friend the Secretary of State for Defence and one of my honourable friends in another place have questioned closely rumours of reports and financial statements being doctored by official bodies in order to lean one way or the other between Prestwick and Glasgow? Would it not be better to conduct a full investigation and review of the advantages and disadvantages of Glasgow, Prestwick and Edinburgh so that the Scottish people could make up their minds on the basis of facts?
Lord Brabazon of Tara: My Lords, I am interested that the noble Lord should call for such a review. His honourable friends in another place from both the Glasgow and Prestwick areas made it clear to me that they did not wish any review to take place. They were not the only ones who made that clear.
On the accounting practices at Prestwick, the BAA has made changes in the treatment of certain costs and depreciation at all its airports to bring the company closer to normal private sector accounting. On the same basis as previous years, the loss at Prestwick is down to £538,000. As the noble Lord may recall, the 1985 White Paper said that we would have a review of the position at Prestwick if the airport did not show a financial improvement. As it has shown a financial improvement over the years we decided not to have a review.
Lord Kirkhill: My Lords, although this may be a little wide of the original Question on the Order Paper, would the noble Lord care to comment on the proposition that though an adequate road link between the west of Scotland's urban belt and Prestwick exists adequate rail links do not? If the latter problem were given attention, would that not overcome the difficulty referred to by the noble Lord, Lord Taylor?
Lord Brabazon of Tara: My Lords, it did not seem to me that the noble Lord, Lord Taylor of Gryfe, had encountered difficulties. However, as I told the noble Lord, the Scottish Office is discussing with British Rail and Strathclyde PTE the best way to improve rail access to Prestwick, including the possibility of a station at the airport.
Lord Boyd-Carpenter: My Lords, will my noble friend explain to the noble Lord, Lord Taylor of Gryfe, that the restriction does not reduce in any way the number of flights leaving Glasgow Airport but merely impedes the operation of them? Is he aware that Prestwick, being, as he said, a very fine airport, can only be damaged by the compulsory imposition of a stop on an airline which does not wish to stop there?
Lord Brabazon of Tara: My Lords, of course the airline could always start the flight at Prestwick Airport rather than at Glasgow Airport.
Baroness Burton of Coventry: My Lords, am I correct in saying that details of these costs and various charges have been made public from time to time? Is it the case that the Minister is unable to repeat them or that he does not wish to do so?
Lord Brabazon of Tara: My Lords, the charges in respect of the use of Prestwick Airport are laid down in the conditions of use which apply to the airport. They are therefore public to anyone who wishes to find them. My original Answer was to say that the charges and costs depended on many different factors, including aircraft weight, and so on. Thus they would vary. However, anyone can calculate the costs for themselves.

Business
3.31 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the European Council in Madrid.
It may also be for the convenience of the House if I announce that the Committee stage of the Social Security Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Report stage of the International Parliamentary Organisations (Registration) Bill will be taken.

Isle of Wight Bill
Read a second time, and committed to an Unopposed Bill Committee.
Wesleyan Assurance Society Bill
Read a third time, and passed, and returned to the Commons with amendments.
United Medical and Dental Schools Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Electricity Bill
The Parliamentary Under-Secretary of State, Department of Energy (Baroness Hooper): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage of the Electricity Bill be marshalled and considered in the following order:—

Clause 1,

Schedule 1,

Clause 2,

Schedule 2,

Clauses 3 to 11,

Schedules 3 to 5,

Clauses 12 to 26,

Schedule 6,

Clauses 27 to 33,

Schedule 7,

Clauses 34 to 38,

Schedule 8,

Clauses 39 and 40,

Schedule 9,

Clauses 41 to 69,

Schedule 10,

Clauses 70 to 89,

Schedule 11,

Clauses 90 to 96,

Schedule 12,

Clauses 97 to 100,

Schedule 13,

Clauses 101 and 102,

Schedule 14,

Clause 103,

Schedule 15,

Clauses 104 to 110,

Schedules 16 to 18,

Clause 111.—(Baroness Hooper.)

On Question, Motion agreed to.

Extradition Bill [H.L.]
3.34 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that this Bill be now read a second time. This is the first consolidation Bill for the whole of the United Kingdom this Session. It is, therefore, particularly appropriate that, once again on this occasion, I should offer my thanks—and I am sure that of the House—to the Law Commission, the Scottish Law Commission and the draftsmen for continuing their important consolidation work.
The first general legislative recognition of extradition came in the Extradition Act 1870. The Fugitive Offenders Act 1967 is currently the main legislation governing extradition to the independent members of the Commonwealth and to the remaining colonies. Part I of the Criminal Justice Act 1988 set out a new system of extradition to foreign states. The Bill consolidates this new legislation about extradition as between the United Kingdom and foreign states with the 1967 legislation about Commonwealth extradition.
The Law Commissions have, in accordance with usual practice, issued a report on this consolidation in which they make a number of recommendations for minor technical amendments in order that a satisfactory consolidation may be achieved.
There is no matter which I need draw to the attention of this House on this occasion, but we can rest assured that, if given a Second Reading, this Bill

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will be subject to the scrutiny of the Joint Committee on Consolidation Bills.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble and learned Lord for his explanation of this important measure of consolidation. As he indicated in his closing remarks, it will be referred in due course to the Joint Committee on Consolidation Bills which is manned by representatives of both Houses. For their work Parliament ought to be, and is, extremely grateful to them; in this case for work in prospect. We welcome the measure as a valuable addition to the body of the law.
The Lord Chancellor: My Lords, I am grateful to the noble and learned Lord, and I too should like to join with him in thanking members of the Joint Committee on Consolidation Bills for the work which they carry out. It is not the most exciting work that ever occupies parliamentarians; but it is extremely important and we are most grateful to them for the care which they take in so doing.
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Hearing Aid Council (Amendment) Bill
Read a third time, and passed.

Social Security Bill
3.36 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Skelmersdale.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 12 [Disqualification for unemployment benefit]:
The Chairman of Committees (Lord Aberdare): If Amendment No. 27 is agreed to I shall be unable to call Amendment No. 28.
Earl Russell Earl Russell moved Amendment No. 27:
Page 11, line 1, leave out paragraph (b).
The noble Earl said: This is, I hope, a suitable amendment with which to begin our proceedings on the Bill today. The purpose of the amendment is to remove the deletion of the word "suitable" from the requirements as regards seeking employment. I hope that it is not the Government's intention that people should have to seek unsuitable employment. However, I should say that I am not totally out of sympathy with the thinking behind the clause. I
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think it has been drafted in an insufficiently thought-out way and in a mistaken context. If it goes ahead as it is at present, it is likely not to have the effects intended.
One of the matters which concern us about this clause is that it is to operate in the context of the Government's philosophy that supposes that one of the main causes of unemployment is the unrealistic wage expectation of the unemployed. The London labour market survey, among others, clearly found that not to be the case. Moreover, we believe it not to be the case. If this clause is applied by those who believe that that is the explanation of present problems, we believe that there will be a pressure to validate the explanation and it may therefore be applied in a rather unsuitable spirit.
I admit that, in common with any academic over the age of 50, I have contemplated the prospect of unemployment, although I cannot match the noble Lord, Lord Mottistone, who told us recently that he has actually been unemployed. In those circumstances, I would not regard it as reasonable that I should expect to continue drawing unemployment benefit until the next job in my own line of work was available. That would be likely, on past precedent, to be a matter of two or three years.
However, I would be perfectly prepared to look for any work which I thought I was reasonably capable of doing. But I cannot help having a certain suspicion that were Ito apply, for example, for a job driving a van or stacking shelves in a supermarket, I might possible find that an employer suspected that I was over qualified for the job. Therefore, he might not consider my application with the seriousness I would wish. If that should happen a great many times—and I am prepared to imagine that that is possible—I might then encounter an adjudication officer who might tell me that I was not actively seeking work. In the absence of any change of employers' attitude, there is a real risk of being crushed between the upper and the lower millstone.
When I say that I would contemplate working in such jobs, I do not altogether abandon the notion of suitability. It is a restricted notion of suitability that I am outlining here. It is different from the Bill because there is no notion of suitability on the face of the Bill. For example, any noble Lord who has seen me trying to read my notes will I am sure appreciate that—if that is the correct non-sexist term—I would not be suitable for work as a sempster and I should not be suitable for employment as a docker for reasons of back trouble.
I know that the Minister has done something to answer those questions by giving us a draft of the regulations, for which I thank him warmly. The regulations suggest that the clause would be applied having regard to skills, qualifications and mental or physical limitations. That reassures some of my misgivings on the subject. If the Minister could spell out that a little more firmly I might be further reassured.
I repeat, having things in regulations is not always an adequate substitute for having them on the face of the law. I also believe that, in the context of the explanation that the Government provide for

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unemployment, change in the law might serve to generate fear. It is, I suspect, the Secretary of State's intention that it should do so. In those circumstances, we shall have unemployed people putting in great floods of applications. Since the word "suitable" is to disappear from the face of the law, we shall find them putting in a great flood of unsuitable applications. The only effect I can see of that is a rapidly increasing proportion of rejections and that, for the long-term unemployed, can have a seriously discouraging effect. In the end, it will push them further back into a dependence on benefit, making it much harder for them to escape. This is legislation which is liable to produce an effect exactly opposite to that intended.
If the Government want to have a clause to roughly this effect, they need to go back and produce a new draft, incorporating some of the Minister's proposed regulations, and to put it forward in the context of a different analysis of the causes of unemployment. I beg to move.
3.45 p.m.
Baroness Turner of Camden: We support the amendment from these Benches. I realise of course that if the amendment is carried Amendment No. 28, which I have tabled, cannot be called. In tabling Amendment No. 28, I had in mind much the same purpose as the noble Earl, Lord Russell. All the amendments in the group are concerned, as I understand it, with what we believe to be the Government's intention—to tighten up arrangements for entitlement to unemployment pay.
Under the present provisions, as we have heard, unemployed persons are required to accept suitable employment. By removing the word "suitable" from the legislation the Government clearly want to leave the way open for people to be made, after a certain time, to accept work that is unsuitable. Under the present law (Section 24 of the 1973 Act) after the lapse of a reasonable period from the date upon which a claimant becomes unemployed, people are expected to accept employment outside their usual occupation so long as the rate of pay and conditions are as favourable as those generally observed or agreed by associations of employers and employees. Furthermore, a claimant with skills may specify that he or she requires a particular type of employment. After about three months, the claimant is expected to broaden his or her horizons. That period can be longer but, generally speaking, there is already provision in existing legislation to ensure that people who have been unemployed for a certain length of time are not too choosy about the kind of employment that they are offered when they apply for unemployment pay.
We ask again: why is it necessary to alter the present law? The only reason can be that the Government believe that there are people around in numbers large enough to justify a change in the legislation who are living off unemployment pay instead of getting out and looking for a job.
When the Bill was last in Committee we had a debate, unfortunately rather late at night, on the
850
"actively seeking work" provision in the Bill, when the Government failed to answer why it was necessary to tighten up things in that way. Along with those changes goes this removal of the word "suitable" from the legislation so that people can be forced, as we see it, into low-paid employment.
There is no evidence that unemployed people are other than realistic about the wages that they would be willing to accept. A survey of 250 long-term unemployed people in Hull last year showed that over half would have been satisfied with take-home pay of less than £100 a week. Even in London, a random survey showed that a majority of the unemployed surveyed would have taken a job with take-home pay of £120 a week even with housing costs at the level that they are in London.
One member of the group surveyed had rent of £69 a week for a bedsitter, a not uncommon rent for such accommodation in London. Others were paying £35 to £40 a week in rent. What kind of wages are people to be expected to take? How is it possible to maintain even basic standards at that kind of level?
There is another question. Why should employers get away with paying substandard rates for employees? Some of the jobs are in industries where union organisation is difficult because of the shifting population and the often casual nature of the work. We have no minimum wage legislation in this country to prevent employers from exploiting vulnerable people. Why should the social insurance system help them by dragooning people into jobs which they regard as unsuitable or too low paid? All sorts of social evils flow from a system which encourages the maintenance of low pay. People should not be coerced into employment which they regard as unsuitable and which will lead them ultimately into indebtedness, a cycle of indebtedness which can, eventually, in some cases, lead to destitution and increasing numbers of homeless on our streets.
The Government argue that no one needs be worse off if he takes a job because he will be entitled to in-work benefits. But accepting a job itself involves expense—travelling to work and clothing costs, for example. People on low pay live in a cycle of debt—paying off one debt and then building up another. These new provisions, unless amended, will add to that cycle of deprivation, and therefore I hope that the Committee will agree to support the amendment. If it is carried, of course we shall not have to proceed to Amendment No. 28. All the amendments are concerned with roughly the same argument. We do not want to see people forced into low-paid, unsuitable employment by the changes in legislation envisaged in the Bill. I support the amendment.
Lord Jenkins of Putney: Are we taking Amendment No. 30 with this group of amendments?
Noble Lords: Yes.
Lord Jenkins of Putney: In that case, I shall speak to Amendment No. 30. However, if either Amendment No. 27 or Amendment No. 28 is carried it would then be unnecessary for me to move

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Amendment No. 30 because Amendments Nos. 27 and 28 are general in their application whereas Amendment No. 30 is more particular in its application. Therefore, as the whole contains the part, I should not need to move Amendment No. 30 if either Amendments Nos. 28 or 29 are carried. However, in case that does not happen I must briefly say why it will then be necessary for me to press Amendment No. 30. I speak mainly for members of Equity whose employment pattern is quite different from that of most people. As I said on a previous occasion, they are the last remaining pool of casual labour.
The Parliamentary Under-Secretary gave an assurance to a delegation from Equity at a recent interview that the Bill would not impinge on the rules on availability which now exist and that the adjudication officers would be sensitive to the individual's background and working patterns. That is the point. With particular application to Equity, he said that adjudication officers would take into consideration any very short contracts which claimants had been able to obtain when assessing the duration of the permitted period. That is quite important because if they are ignored no Equity member can re-qualify for unemployment benefit.
I am afraid that these assurances have not allayed Equity's fears as to the effects of the new clause upon their members. The present availability rules have already caused problems and difficulties. Equity members have been subject to suspension of their benefits when they have suffered a period of unemployment of over three months. It is their view that the clause will seriously exacerbate the situation and that promises of sensitivity need to be translated into legislation. Hence the need for the amendment.
A permitted period of 13 weeks is insufficient for the bulk of Equity members to obtain substantial work within their own expertise, due to irregular patterns of employment. The great majority of contracts are of extremely short duration, often only one or two days a week. As regards the bread and butter fill-in work such as commercials, videos, training films, voice work and extra work—usually for only one day—such short contracts, indeed all contracts of less than eight weeks' duration, do not constitute a break in a claim for unemployment benefit. Therefore they are not taken into consideration in assessing people. Actors may appear to be continuously unemployed when they may have obtained many short contracts in the period, contracts which keep them firmly within the entertainment industry or profession as it was called at one time.
However I ask the Minister to confirm that evidence of short contracts within the permitted period of 13 weeks would ensure that a further permitted period should be granted and that subsequent short contracts would constitute breaks in claim with a fresh review of the permitted period after each fresh contract.
The noble Lord will remember that unemployment is endemic and unavoidable in the entertainment industry and even the most established actors may suffer long periods of
852
unemployment when there are no suitable parts available. Unlike most other people, an actor can only go for parts which are consistent with his physical appearance, age, voice and so on.
It is generally acknowledged that professional performers work extremely hard in the job searching activity. Many employ agents who seek work on their behalf, while additionally they make their own efforts. That will include placing photographs in casting directories, writing letters, telephoning casting directors for contracts, subscribing to professional journals and using the Equity job grapevine service.
The method by which employment is achieved is usually through auditions. These are more frequent than the usual job interviews and the moderately successful actor may go for two or three auditions a week, usually arranged at very short notice. An agent may ring up in the morning about an audition in the afternoon. Actors need to be available and flexible if they are to continue to attend auditions and pursue employment within their own fields.
An actor who has attended many auditions and demonstrated a high degree of job searching activity could reasonably expect to obtain employment within three months. Again, a valuation could be made on the number of very short contracts that he obtained. A combination of these factors would constitute reasonable expectations. If the noble Lord can say that that is the case then maybe it would not be necessary to pursue the matter to a Division.
Finally, a very large number of members remain committed to a profession which, apart from a few exceptions, is ill paid. A recent survey of the income of Equity members showed that more than half had an income from work of less than £5,000 a year. It is not—as I thought—a highly paid job for the majority of people seeking work in that field. If more and more people are denied access to unemployment benefit, which this amendment would provide, as a consequence the pool would be reduced.
I bring this necessarily rather detailed explanation to an end. I made it because the case is special. I hope that the Minister and the Committee will acccept the amendment, if it should prove necessary for me to move it. However, I hope that it will not.
Baroness Phillips: I wish to intervene in connection with the amendment which we originally decided to discuss, Amendment No. 27. The Bill is not only horrifying but saddening. It is a clear example of what we can only describe as a return to the 1930s when people were forced to take any kind of employment. I do not wish to say very much because my noble friend on the Front Bench has covered it all. I merely add that if people are forced to take any kind of employment, very often they find it extremely difficult to return to their original employment. Their sidelines are cut off. I plead with the Government: surely we have not gone back to a situation where we have to save through the most unfortunate group in the population, who are unemployed through no fault of their own but through circumstances over which they have no control. I beg the Government to accept these very simple but heartening amendments which would at least make us feel that the Government are not the

853
grinders of the faces of the poor that they appear to be through this particular piece of legislation.
Baroness Faithfull: Since my Amendment No. 29 is in the list of groupings and also bears the name of the mover of Amendment No. 27, perhaps I may speak to it although I regard it as a probing amendment, particularly as it concerns two other departments—the Home Office and the Ministry of Health. I apologise to my noble friend the Minister for not having given him notice of this amendment.
The amendment has a slightly different slant on the matter. It is to prevent people being coerced into seeking and accepting employment which will lead them into debt and destitution. Last week we had a debate on homelessness. There are a number of people—particularly single people, single mothers, widows, the unmarried mother and the woman who is separated and not receiving maintenance from her husband—who, if they are offered a job which carries with it expenses for travelling, for placing their children in a nursery, a creche or with a child minder would have their income brought down to the level where they could not pay their rent, could not pay their mortgages (if they had them) and they might not even be able to feed the children. Therefore it seems counter-productive to ask these people to accept a job at a level which will bring them into destitution or into debt.
I am bound to speak personally here. I have often had to accept children into care. That costs the country a great deal of money. So looking at the problem from the country's point of view, quite apart from the point of view of the happiness of the family, it is counter-productive. However, I take this as a probing amendment in as much as I have not consulted the Minister. Further, three other departments would also need to be consulted.
4 p.m.
Lord Henderson of Brompton: I disagree, with great hesitation, with the noble Baroness on one point only. I do not regard this as a probing amendment. If this amendment does not succeed, it will be necessary for one of the alternatives which have been offered to be very seriously considered in its place. I agree 100 per cent. with everything else that the noble Baroness said. However, her cautionary words do not carry me with her. I feel this is a very important amendment, and by no means a probing one.
Lord Skelmersdale: This is an enormous block of amendments. I only hope that I am capable of doing justice to them in the way that other Members of the Committee clearly have in addressing their bits and pieces. I start by saying that the noble Baroness, Lady Turner of Camden, is quite right. Amendments Nos. 27 to 30, 32 to 34 and 56 are all to do with disqualification for unemployment benefit under Section 20 of the 1975 Social Security Act. As the Committee is aware, the present legislation requires it to be shown that employment is suitable in the case of the individual claimant before a sanction can be considered in relation to a failure to follow up
854
the particular employment opportunity. Whether a sanction should then be imposed currently depends on whether the claimant has shown good cause for not following up the vacancy. In other words, as the noble Earl, Lord Russell, has said, the clause is about the unrealistic expectations of the unemployed. That is why we wish to change the law.
The noble Baroness quoted two recent labour market surveys. I should say straightaway that we have never suggested, even with or without the surveys, that the majority of unemployed people are not seeking work. However, the London survey found that more than a quarter of those questioned had not looked for work in the past week, and that nearly half of this group had not been seeking work in the past month. Overall, 5 per cent. admitted that they had never looked for work since becoming unemployed. This does not paint a picture of active job search among a significant minority of the unemployed. Furthermore, the Hull study, to which the noble Baroness also referred, which is sponsored by the Campaign for Work, found that 55 per cent. of people who had been unemployed for between six and 12 months had applied for fewer than three jobs in the preceding six months. Applying for one job every eight weeks—that is the average—is not very frequent.
We are concerned about those people who hold out for jobs paying wages that they can no longer command and who use unrealistic expectations so that they can continue to live off benefit. As regards the batch of amendments we are currently discussing, most of the current provisions which set down what employment shall not be deemed to be suitable all have regard to the rate of pay in the employment. While we believe it is right that, immediately after becoming unemployed, a claimant should be able to concentrate on looking for work which offers a rate of pay similar to that which he has been receiving, we do not believe that an automatic right to a certain level of pay is helpful. From what the noble Earl said at the end of his speech, I rather think he takes that attitude too. However, the law states that there is no compulsion on the noble Earl, or indeed any other unemployed or potentially unemployed person, to take that attitude. It cannot be right that people should continue to expect to be paid on the basis of a job they left months or even years previously.
Consequently, we propose to replace the two concepts, suitability of the employment and whether the claimant has good cause for failing to pursue it, by one concept, that of good cause alone. Apart from the issue of a recognised rate of pay, the two concepts are currently very similar. Recently unemployed people with skills that are still relevant to the labour market and who have experience that is still new, can reasonably expect to look for a period of time for jobs in their usual occupation at rates of pay they used to receive. This is why we are allowing a permitted period of up to three months in which claimants will be able to do just that.
The Committee will no doubt wish to have a clearer indication of the way we propose to use the powers in new Section 20(4) relating to the good cause question when a claimant fails to follow up an

855
employment opportunity. In the regulations we shall require adjudication authorities to consider whether the job in question would be likely seriously to damage the claimant's health. We shall be providing similarly for account to be taken of a claimant's sincere religious or conscientious objection to the work, his need—I think this is important to many Members of the Committee—to care for someone else in his household, lengthy travelling time and high work expenses. These matters will be specifically mentioned because we think it is clearly right to take them into account. There will, nevertheless, remain room for the adjudication authorities to take account of other matters which they may consider relevant in any particular case. I hope that the Committee can now see that the provisions will safeguard claimants from losing benefit, even after their permitted period, if they fail to follow up employment which it is not reasonable to expect them to take.
Amendment No. 30 is to do with the permitted period. During this period a person will be able to escape disqualification for unemployment benefit if he turns down or fails to take up an opportunity of employment if that employment is not in his usual occupation or is at a level of remuneration lower than he is accustomed to receive. The amendment seeks to extend this period if this person can reasonably expect to find employment in his usual occupation within three months. This I think will go some way towards helping the noble Lord, Lord Jenkins of Putney. We think that three months is sufficient. The amendment however would encourage claimants to be less flexible in their efforts to find work than we think reasonable. It could enable someone who can pick up the occasional very short period of employment, for example, to go on receiving benefits month after month.
The noble Lord, Lord Jenkins of Putney, specifically asked me a question about members of Equity's short-term contracts, and referred to what my honourable friend the Under-Secretary of State had said and written both in another place and from the department. The key question of the noble Lord, Lord Jenkins of Putney, concerned whether actors would receive a new permitted period after short contracts. The answer is "Yes". We intend to provide in the regulations that a claimant may obtain a new permitted period after each period of employment, however short that may be.
The measure is not designed to penalise unemployed people but to encourage them to be more realistic about the sort of labour market potential they have. Bearing in mind the helpful addition of the new Section 20A on page 11, line 24, opening the possibility for claimants to have repeated periods of three months to look for the sort of job they did previously, and to reject any job which is not in this category, does no one any favours and is fair neither to the contributor nor to the claimant.
Amendment No. 34 seeks to provide that the definition of "employment" means employment that is appropriate to the claimant having regard to his age, qualifications, experience, skills, rate of
856
remuneration and other relevant factors. I cannot support the amendment, but I think that what I have already said on the subject of the permitted period and good cause will have helped convince the Committee that the amendment is unnecessary. The Employment Service will act in good faith in seeking to offer vacancies that are within a person's skills and capabilities and which are, in terms of pay and conditions, generally within the range of what is representative in the local labour market in the occupation concerned.
The Employment Service will be the final arbiter in this matter. I have said it will act in good faith but, more importantly, no job will have to be accepted unless the employment agency says it is reasonable. Suggestions have been spread around that this measure will force people into starvation wages. I wish to make it quite clear that the Employment Service will not allow that under any circumstances whatsoever.
Amendment No. 33 seeks to add an additional set of circumstances in which an adjudication officer would be required to determine a permitted period. The Bill provides that this period will only be determined if a question of disqualification for unemployment benefit is put to the adjudication officer. The amendment seeks to provide that a person should be able to request that the question of his particular permitted period should be adjudicated on before any question regarding disqualification under Section 20 has arisen. The purpose, no doubt, is to ensure that claimants are clear as to their position when the Employment Service has advised that the period will be less than 13 weeks. I believe that to be an unnecessary procedure.
We shall ensure than an unemployed person is given suitable advice about the likely effect of the permitted period provision in his particular circumstances in a relaxed atmosphere. Claimants know where they stand.
No one has spoken to Amendment No. 56 and therefore I think that it would be helpful if I did not refer to it at this stage.
Baroness Turner of Camden: It is consequential.
Lord Skelmersdale: My noble friend Lady Faithfull spoke to Amendment No. 29. I undertake to look very much further at that amendment, in conjunction with the other departments which she mentioned. I regret that I have not yet been able to do so.
I have to confess that, unlike some amendments that have been put down to this Bill, I readily understand what my noble friend and her supporters are getting at here, but I find it very novel. This amendment seeks to introduce into legislation a new concept of assessing the claimant's financial situation once he is in work against a level of what the amendment calls "sufficiency". That is not defined in the amendment and gives me my first difficulty. The amendment would allow a person to turn down a job without risk of benefit penalty if, taking account of working expenses, his new income was insufficient to support himself. While the thought behind the amendment seems at first sight

857
to be eminently reasonable, there are a number of problems with this approach.
It suggests that if the claimant takes up the job in question there can be a precise calculation of the amount which is sufficient for the claimant's support. Who is to decide? If the adjudication officer is to rely on the claimant's assessment, clearly there would be cases where the claimant inflates the amount and there would be an unreasonable, inflated cost to the public funds. On the other hand, if the adjudication officer were to decide on his own, it might easily be unfair to the claimant. Whichever route is chosen, and the amendment does not specify whether one of my alternatives or a third or even a fourth is intended, one could never achieve the 100 per cent. reliability in the calculations which would be necessary if benefits were to depend on them.
The amendment also refers to income. On that side of the equation the first problem that arises is to know in advance of getting the job precisely what the take-home pay and in-work benefits will be. There are many jobs where pay varies from week to week because of special payments, hours of work available including overtime, tax fluctuations, special deductions and so on.
I fear that the amendment would lead us into a minefield of problems and would be relatively unfruitful. Because of the availability of housing benefit and family credit, which goes well up the income scale, to say nothing of reductions in income tax and national insurance contributions, nearly everyone is now better off in work than on benefits. The amendment, even if it offered a workable arrangement, would, consequently, be of very little effect. However, I repeat that I am perfectly prepared to undertake discussions on that particular amendment.
We are very proud of our proposal in Clause 12, which is very germane to this set of arguments, that people who have been unemployed for at least 26 weeks and who have recently gone back to work will be able to leave the job between the sixth and twelfth week after starting it without benefit penalty. This provision is a helpful reassurance to claimants should they fear that a job might not work out for them, and an encouragement to overcome doubts about their ability. I would expect this to be the normal scenario within which the new provision would operate. But there is another type of situation in which we want to be helpful.
Let us suppose that an individual who has recently taken a job is having doubts about it. His employer becomes aware of this and is able to offer him alternative work within the organisation. After considering the position, the individual decides that he does not want to take up the offer and leaves the employment. I recall a case, which I believe was widely reported in the newspapers, where exactly that happened. Someone was promoted from a job with a weekly wage to one with a monthly salary and found it very difficult in those circumstances and ultimately left that employment.
The individual then runs the risk of being disqualified for receiving unemployment benefit because he has neglected to avail himself of a
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reasonable opportunity of employment. This disqualification would be under Section 20(1) of the 1975 Social Security Act. However, we have sought to provide for this sort of case in new Section 20A(2)(b).
There is an amendment which seeks to remove that provision. I cannot believe that that is intended. If the amendment were accepted it would mean that the claimant I have cited would be at risk of being penalised, although he may well have been under stress from the job he was already trying. While the adjudication authorities could take this into account in determining whether disqualification was appropriate, and if so, for how long, we think it more desirable to avoid the question completely. Thus the proposal is entirely beneficial to claimants.
There is one last question which must answer and which was raised by my noble friend Lady Faithfull. Lone mothers with child-minding expenses cannot, she suggested, afford to go to work. They are not required to be available for work and can, therefore, claim income support. I hope that that will help my noble friend.
The Members of the Committee who have participated in this debate feel very strongly about the particular amendments to which they have spoken. This is a complicated subject, and that is why I have taken some time to discuss it. Members of the Committee may therefore feel that they would be better advised to take the matter away and consider it further, in the same way as I have said that I will look at the amendment of my noble friend Lady Faithfull, and, if necessary, come back to the various amendments at a subsequent stage. However, I am in the hands of the Committee.
4.15 p.m.
Earl Russell: I should like to thank the Minister for the care and the detail of that reply, which contained many things which will be worth studying. Nevertheless, so far as concerns Amendment No. 27, I am afraid that the Minister lost me before he was through his first paragraph. Dr. Johnson's famous phrase:
"the triumph of hope over experience"
is, I think, not an appropriate description of a second marriage. But I think that it is an appropriate description of the Minister's first paragraph.
The Minister again repeated the belief about the unrealistic expectations of the unemployed. I know the passages in the London labour market survey which the Minister quoted. Like the Minister, I regret them. But it seems to me that those passages go to show that a great many of the long-term unemployed have the expectation that employers will not look at their applications. I hesitate to describe that as an unrealistic expectation. I should be delighted to be persuaded otherwise.
That survey also draws attention to the fact that London fares are in danger of becoming a new poverty trap. The figure it gives for the average wage expected by the London unemployed is £118 a week. Taking account of the cost of living in London, I find that very hard to regard as unrealistic.

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We have here a clause which is being put forward to validate a dogma—a dogma which is in danger of collapse in the face of the evidence. I have seen a great deal too much of the way in which people whose theories are collapsing underneath them desperately try to create validation for them to be happy with the way this kind of clause would be administered if left in law. I commend the amendment to the Committee.
4.18 p.m.
On Question, Whether the said amendment (No. 27) shall be agreed to?
Their Lordships divided: Contents, 95; Not-Contents, 115.

DIVISION NO. 1

CONTENTS

Addington, L.

John-Mackie, L.

Airedale, L.

Kennet, L.

Amherst, E.

Kilbracken, L.

Ardwick, L.

Kilmarnock, L.

Aylestone, L.

Leatherland, L.

Blackstone, B.

Listowel, E.

Blease, L.

Llewelyn-Davies of Hastoe, B.

Blyth, L.

Bonham-Carter, L.

Longford, E.

Boston of Faversham, L.

Lovell-Davis, L.

Bottomley, L.

McIntosh of Haringey, L.

Briginshaw, L.

McNair, L.

Broadbridge, L.

Mayhew, L.

Bruce of Donington, L.

Milner of Leeds, L.

Burton of Coventry, B.

Mishcon, L.

Campbell of Eskan, L.

Molloy, L.

Carmichael of Kelvingrove, L.

Mulley, L.

Northfield, L.

Carter, L.

Ogmore, L.

Cledwyn of Penrhos, L.

Peston, L.

David, B.

Phillips, B.

Dean of Beswick, L.

Pitt of Hampstead, L.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L.

Dormand of Easington, L.

Prys-Davies, L.

Elwyn-Jones, L,

Rathcreedan, L.

Ezra, L.

Rea, L.

Faithfull, B.

Reilly, L.

Falkender, B.

Robson of Kiddington, B.

Falkland, V.

Rochester, L.

Foot, L.

Rugby, L.

Gallacher, L.

Russell, E. [Teller.]

Galpern, L.

Sainsbury, L.

Gladwyn, L.

Seear, B.

Graham of Edmonton, L. [Teller.]

Seebohm, L.

Serota, B.

Grimond, L.

Shepherd, L.

Halsbury, E.

Stallard, L.

Hampton, L.

Stedman, B.

Hanworth, V.

Stoddart of Swindon, L.

Hatch of Lusby, L.

Strabolgi, L.

Hayter, L.

Tordoff, L.

Henderson of Brompton, L.

Turner of Camden, B.

Hirshfield, L.

Underhill, L.

Houghton of Sowerby, L.

Wallace of Coslany, L.

Hunt, L.

Whaddon, L.

Ilchester, E.

White, B.

Jay, L.

Williams of Elvel, L.

Jeger, B.

Willis, L.

Jenkins of Putney, L.

Winterbottom, L.

NOT-CONTENTS

Aldington, L.

Balfour, E.

Alexander of Tunis, E.

Bathurst, E.

Alport, L.

Beaverbrook, L.

Arran, E.

Belhaven and Stenton, L.

Auckland, L.

Bellwin, L.

860

Beloff, L.

Layton, L.

Belstead, L.

Long, V.

Bessborough, E.

Lucas of Chilworth, L.

Blake, L.

Mackay of Clashfern, L.

Blatch, B.

Macleod of Borve, B.

Borthwick, L.

Marley, L.

Boyd-Carpenter, L.

Massereene and Ferrard, V.

Brabazon of Tara, L.

Merrivale, L.

Brougham and Vaux, L.

Monk Bretton, L.

Bruce-Gardyne, L.

Monson, L.

Butterworth, L.

Mountgarret, V.

Caccia, L.

Mowbray and Stourton, L.

Caithness, E.

Munster, E.

Caldecote, V.

Murton of Lindisfarne, L.

Campbell of Croy, L.

Nelson, E.

Carnegy of Lour, B.

Norfolk, D.

Carnock, L.

Onslow, E.

Carr of Hadley, L.

Orkney, E.

Coleraine, L.

Oxfuird, V.

Colwyn, L.

Pender, L.

Constantine of Stanmore, L.

Penrhyn, L.

Cranbrook, E.

Peyton of Yeovil, L.

Cullen of Ashbourne, L.

Plummer of St. Marylebone, L.

Davidson, V. [Teller.]

Denham, L. [Teller.]

Porritt, L.

Dilhorne, V.

Pym, L.

Dundee, E.

Rankeillour, L.

Eccles, V.

Reay, L.

Eden of Winton, L.

Reigate, L.

Ellenborough, L.

Renton, L.

Elliot of Harwood, B.

Rochdale, V.

Elliott of Morpeth, L.

Rodney, L.

Erroll of Hale, L.

St. Davids, V.

Ferrers, E.

St. John of Bletso, L.

Fortescue, E.

Saltoun of Abernethy, Ly.

Fraser of Kilmorack, L.

Sanderson of Bowden, L.

Gainford, L.

Sempill, Ly.

Gardner of Parkes, B.

Shannon, E.

Gisborough, L.

Skelmersdale, L.

Glenarthur, L.

Somers, L.

Grimston of Westbury, L.

Strange, B.

Hacking, L.

Strathclyde, L.

Hailsham of Saint Marylebone, L.

Strathspey, L.

Sudeley, L.

Hankey, L.

Terrington, L.

Hardinge of Penshurst, L.

Teviot, L.

Henley, L.

Thorneycroft, L.

Hesketh, L.

Trafford, L.

Hives, L.

Trumpington, B.

Hood, V.

Vaux of Harrowden, L.

Hooper, B.

Whitelaw, V.

Hylton-Foster, B.

Wise, L.

Killearn, L.

Wyatt of Weeford, L.

Lauderdale, E.

Resolved in the negative, and amendment disagreed to accordingly.
4.26 p.m.
Lord Henley: I think that this is a convenient moment for the Statement to be made. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

European Council Meeting, 26th-27th June
4.27 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister about the

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meeting of the European Council in Madrid. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement about the meeting of the European Council in Madrid on 26th and 27th June, which I attended with my right honourable and learned friend the Foreign and Commonwealth Secretary. The full conclusions of the Council have been placed in the Library of the House.
"Economic and monetary matters were the main item on the Council's agenda. Agreement was reached on four points. First, the objective of progressive realisation of economic and monetary union was reaffirmed. This objective was first set in 1972, before Britain joined the Community, and has subsequently been reaffirmed on numberous occasions, including in the Single European Act passed by this House. But no definition of it was agreed in Madrid.
"Second, the report of the Delors Committee, which sets out an approach to economic and monetary union by stages, was accepted as a basis for further work—but not the only basis. It will be possible to bring in other ideas and other approaches.
"Third, the Council agreed that the measures necessary to achieve the first stage of progressive realisation of economic and monetary union will be implemented from 1st July 1990. These include: completion of the single market; abolition of all foreign exchange controls; a free market in financial services; and strengthening of the Community's competition policy by reducing state aids. They are all matters for which the United Kingdom has campaigned strongly and where we are well ahead of the great majority of our European partners. No decisions were reached on what would follow this first stage, and stages 2 and 3 of the Delors Report were not endorsed. Indeed, several delegations—not only the United Kingdom—made clear that they had substantial difficulties with them.
"Fourth, it was agreed to carry out the preparatory work for the organisation of an eventual intergovernmental conference to lay down subsequent stages. But such a conference would meet only after implementation of the first stage has begun and when there has been full and adequate preparation. Its decisions would have to be reached by unanimity and would require ratification by this House.
"In short, Mr. Speaker, we made as much progress as can be made at this stage while leaving longer term issues for futher discussion by finance Ministers and central bank governors over the months and years ahead. We have ensured that there is nothing automatic about the move to subsequent stages.
"Very difficult issues remain to be resolved. As my right honourable friend the Chancellor of the Exchequer has made clear, stages 2 and 3 of the Delors Report would involve a massive transfer of sovereignty which I do not believe would be
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acceptable to this House. They would also in practice mean the creation of a federal Europe. The Government support the objective of closer monetary co-operation but will work for solutions which leave crucial economic decisions in our own hands.
"Although Britain's membership of the exchange rate mechanism of the European monetary system was not an issue at this Council, I reaffirmed our intention to join the ERM. But we must first get our inflation down; and we shall look for satisfactory implementation of other aspects of the first phase of the Delors Report, including free movement of capital and abolition of foreign exchange control.
"The Council also discussed what is called the social dimension. On this the United Kingdom's record is, of course, very good and I took with me to Madrid our own document setting out our substantial achievements in this field. We have also ratified the Council of Europe's social charter, unlike some of our Community colleagues. The council's conclusions on this subject recognise that the highest priority is to create the conditions for more jobs. The Government do not believe that the Community's proposed social charter would help achieve this aim. Indeed, we believe that imposing exta burdens on industry would make the Community less competitive. That is the main reason why my right honourable friend the Secretary of State for Employment was unable to accept the conclusions of the June Social Affairs Council. I confirmed that refusal in Madrid.
"But the conclusions of the European Council did bring out a very important point, raised by many governments during the discussion: that national legislation and voluntary agreements have a legitimate role in achieving the Community's social dimension, and not everything has to be the subject of directives from the European Community. We shall be putting this view very strongly in the further discussions which will take place.
"Mr. Speaker, I will summarise very briefly the outcome of the Council's discussions on the other main issues.
"The Council reaffirmed the priority task of completing the single market with the emphasis on the areas of particular importance for the United Kingdom: financial services, technical standards, transport and public purchasing. The Council's discussions demonstrated that there will not be a withholding tax on savings—a proposal which the United Kingdom has consistently opposed. The Council welcomed the progress being made in the fight against fraud in relation to the Community budget. The Council showed there is wide acceptance of our need 1:o keep checks at frontiers against drugs, terrorism and criminals, while making free movement of ordinary law-abiding citizens a greater reality.
"In political co-operation, the heads of state and government expressed their utter condemnation of what has happened in China and agreed a series of measures which match those the United

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Kingdom is already taking. The Council also expressed its understanding for the anxiety which has been caused in Hong Kong by the atrocious happenings in China.
"Mr. Speaker, in conclusion I would like to congratulate the Spanish Government on their presidency of the European Community over the past six months, in particular for the progress made on the single market, with over 60 directives agreed. I also congratulate the Spanish Prime Minister, Sr. Gonzalez, on bringing a difficult European Council to a successful conclusion.
"I believe that the main outcome of the Council—agreement to implement a first phase of economic and monetary union—is very much in the interests of British industry and the City of London while fully protecting the powers of this House. Far from being isolated, as some have claimed, the United Kingdom was able to play an important role in bringing the Council to these sensible and practical conclusions.
"It is in the same spirit of determination to strengthen co-operation with other members of the European Community, while arguing always for cutting constraints on enterprise and free competition and leaving to member states those decisions which properly belong to them, that we shall approach the undoubtedly difficult discussions of the Community's future which lie ahead."
My Lords, that concludes the text of my right honourable friend's Statement.
4.35 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord the Leader of the House for repeating the Statement, which we shall need time to study in greater detail. We must welcome the Prime Minister's much more conciliatory attitude at the Madrid summit. As we have read, commentators observed that she gave considerable ground and that she was less aggressive compared with previous meetings. The Times reported yesterday that she had made considerable concessions. We must study all these matters. However, it all indicates that a different mood appeared to animate the right honourable lady who was persuaded to be more constructive. We must scrutinise the Statement to see if that is true.
Noble Lords will recall that there were debates in this House on 3rd May and 7th June during which the main issues of the Statement were dealt with at length. At that time there was a good deal of confusion as to the Prime Minister's views on both the Delors proposals and the social charter. That was bad for the Government and bad for Britain because we seemed to be approaching historic events with an apparently indecisive leader and a divided government.
Against that background perhaps the noble Lord will clarify certain points in the Statement. First, the Prime Minister agreed that Britain will join the EMS. The Statement lists a number of measures which are to be taken and notes that the first stage will begin on 1st July 1990. Does that mean that Britain will
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by then be a full member of the system? Or does that depend on our inflation rate? If our rate is higher than that of the other members, could that mean a possible delay of several years until the rate comes down to the average of the Community? That is certainly not clarified in the Statement; it is however a matter of the utmost significance.
Again, the Statement states clearly that there is little hope for progress on stages 2 and 3 of the Delors Report and that several countries had difficulty with them. The implication is that the right honourable lady had a number of allies at the conference who agreed with her. Can the noble Lord say how many governments shared the views of the Prime Minister?
The Statement then refers to "a massive transfer of sovereignty" and "the creation of a federal Europe" as a consequence of stages 2 and 3. Does the noble Lord agree that in practice this means that we cannot expect any progress beyond stage I in the foreseeable future? We on this side of the House accept that any concrete steps towards stages 2 and 3 should await the full implementation of stage I but we feel that further explanation is necesssry to support the arguments about sovereignty and federation.
Furthermore, does the Statement as it stands mean that the creation of a central bank will now be postponed until the first stage is completed? Or is it possible that a majority of our partners could proceed with the establishment of a central European bank in Frankfurt and Paris? That is a matter of central importance to this country. The establishment of a central bank in Frankfurt and Paris, if it happens, would be a most damaging blow. There are historic reasons why a central bank for Europe should be established in London if one is to be established at all.
We are very concerned about the Government's attitude to the social charter, which is contrary to the views of the other 11 member states. Can the noble Lord confirm that the charter's provisions will now be incorporated into directives that will be subject to majority approval in the Council of Ministers?
Finally, we welcome wholeheartedly the statements made in Madrid on China and Hong Kong and on progress in the fight against fraud. Later we shall want to know the details of the progress that has been made; so far we are given to understand that fraud is increasing in the Community in a frightening way.
The final achievements mentioned in the Statement are matters which we should like to welcome. They demonstrate that the Community can, with goodwill and a spirit of co-operation, prove itself to be an outward looking and progressive force in international relations. However, by and large, despite its length, the Satement is still vague on the major issues. We shall need to debate it fully in due course.
Baroness Seear: My Lords, we should like also to thank the noble Lord the Leader of the House for repeating the Statement and to raise one or two issues with him.

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We are of course glad that the summit went off without any undue explosion and that we emerged at least not evidently in a second tier, as many people had feared would be the result. To that extent we congratulate the Government that the result is at least less bad than many people had anticipated. There are a number of points that we should like to raise although I agree with the noble Lord the Leader of the Opposition that this matter needs a full debate and cannot be adequately dealt with on a Statement of this kind.
We on these Benches attach very great importance to the further stages. There is real anxiety that the Government wish to go only as far as stage 1 and to use delaying tactics in relation to the development of stages 2 and 3 which are required if the movement towards a genuine European union is to take place. On page 6 it is said that there will be an intergovernmental conference to lay down the subsequent stages. Can the noble Lord tell us how soon that is likely to take place? Is it a delaying tactic or is it intended that we shall move with all speed to considering having this intergovernmental conference which will thrash out such difficulties as there are and will make it clear whether the Government intend to go further or merely to attempt to obtain the immediate short-term benefits of the single market.
We are interested in the claim, so often repeated, of the threat to sovereignty in this country and that we must maintain economic matters in our own hands. Will the noble Lord the Leader of the House agree that whenever the German Bank changes the German base rate it sends a shudder through the City of London? That being so, to what extent can it be said that we retain full economic control in our own hands? Is it not better to recognise that sovereignty in these matters has to be pooled—indeed has already been pooled—and that it would be in our interests to have institutions within which we can handle these matters rather than having to react ad hoc as we do at present?
On the matter of joining the exchange rate mechanism, I suppose it can be said that this brings us a minimal step forward towards the fulfilment of joining the exchange rate mechanism which we have been told ad nauseam will take place when the time is ripe. The excuse for not doing so is that we need to bring down inflation. There are a great many people—including, I believe, the noble Lord's colleague, the Chancellor of the Exchequer—who believe that inflation would be lower had we been in the exchange rate mechanism. I am interested and encouraged incidentally to hear the Leader of the Opposition share our views on this matter. I had understood that Mr. Neil Kinnock had been of the view—shared by Mrs. Thatcher—that in fact we should wait until inflation comes down.
On the question of the social dimension, we should like to stress the importance of exploring this with a determination to participate. It seems to us crystal clear that one cannot have an effective development on the economic side unless one is prepared to accompany it with appropriate developments on the social side and that such distinction is entirely
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artificial. We need surely to explore fully what social measures are needed if the economic measures are to be fully effective and not to meet the resistance which economic measures without accompanying social measures are bound to give us.
Finally, we are glad that the summit condemned what had been going on in China and sympathised with the position of people in Hong Kong. However, was there not a wonderful opportunity in Madrid, but one apparently lost, to ask that our partners in Europe should consider the future of the people in Hong Kong and to consider on a Community basis what kind of guarantees could be given to the threatened people of that territory?
4.45 p.m.
Lord Belstead: My Lords, I am grateful to the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, for their responses to the Statement of my right honourable friend. The noble Lord, Lord Cledwyn, appeared to be concerned that she had made considerable concessions at this European summit which he felt would reflect adversely on her. It was a great step forward to have a European Council which took practical first steps on economic and monetary union—a progressive realisation towards which has been an objective of both the noble Lord's party and mine over the past 15 years or so—but sensibly went no further without proper study, which is a matter that has been agreed by all. It was something for which my right honourable friend the Prime Minister worked very hard. To be able to fix job creation as the very top priority of the social dimension was a second great step forward and something for which my right honourable friend again worked very hard. If one looks at the foreign press as well as our own, one sees reports of a constructive and positive approach by my right honourable friend at this important Council.
The noble Lord asked me questions about economic and monetary union. The Community's commitment to progressive realisation of EMU, as I have said, dates from our accession, repeatedly re-affirmed by Labour Governments in the 1970s and repeated in the preamble to the Single European Act which this House approved. However, the point is that at Madrid there was not agreement to the Delors prescription other than for stage 1.
The noble Lord asked me to clarify my right honourable friend's Statement about joining the exchange rate mechanism. He asked in particular whether the level of inflation of this country could act almost as a permanent brake. In judging the right time for sterling to join ERM, we shall be looking primarily at progress against United Kingdom inflation and, on completion of the Community single market, in particular at the abolition of exchange controls by our major Community partners. The timing is a matter for Her Majesty's Government alone. However, I must underline that my right honourable friend's Statement at Madrid was received very positively indeed.
The noble Lord asked whether there were many governments sharing my right honourable friend's

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wish that there should be no automaticity between moving from stage 1 to stages 2 and 3. There were indeed several governments who shared my right honourable friend's concerns on those matters. The noble Lord was concerned that some of the member states might go it alone with regard to the creation of a central bank. There was much talk before the Council of some member states going ahead on closer monetary co-operation without the United Kingdom. However, the results of this Council showed no tendency for other member states to go it alone in that way. On the contrary, every effort was made at this Council to achieve unanimity. Conclusions were reached unanimously. The results therefore demonstrate that the predictions of imminent break-up were quite premature. One important matter from this Council is the wide areas of agreement on the conclusions that were reached.
Finally, the noble Lord said to me that the social charter was important. He asked whether what had happened meant that it was now the basis for a stream of Community directives. The answer is no. The social charter was not endorsed. It was sent off for further study. The importance of what is called subsidiarity—namely, the desirability of member states doing alone what it is right for member states to do alone—and the highest priority being given to job creation under the social dimension of the Community are the matters which come out of this Council.
I hesitate to cross swords with the noble Baroness, because I am afraid that she knows a great deal more about these things than I do. But I was surprised when very early in her rejoinders she said that stage 3 of Delors is required. I do not know whether she has observed that stage 3 refers to absolutely rigid exchange rates. That for the moment is something about which there is no agreement to proceed to. The caution reached unanimously by those attending the Council is very desirable.
The noble Baroness asked me when the inter-governmental conference would be convened. The outcome of Madrid ensures that there will not be an inter-governmental conference in the near future. The conclusions state that it can begin only after implementation of the first stage of Delors has begun in July 1990 and when there has been full and adequate preparation. I believe that that answers the questions put to me.
Baroness Stedman: My Lords, from this Bench we should like to offer our thanks to the noble Lord the Leader of the House for repeating the Statement. One of our national papers described the result as neither a fiasco nor a triumph. But we welcome the much more flexible approach of the Prime Minister and we support the decision to accept the first stage of the Delors Report as a basis for further work. We believe that it is right to take more time to consider the further stages of the report in order to bring in other ideas and other approaches. We believe that it is right to use this time for a very full investigation and consideration of all the aspects of the Delors proposals but not as a delaying tactic to prevent Great Britain from playing its proper role in Europe.
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We congratulate the Prime Minister on listening to the advice of her Chancellor of the Exchequer and Foreign Secretary. We welcome the ratification of the social charter by Her Majesty's Government and also the proposal for the inter-governmental conference, after the necessary detailed preparation work has been done. We too have found it helpful. to have the comments on the wider issues mentioned in the Statement and, like the other noble Lords who have spoken, we feel that the subject is wide enough and serious enough to warrant a full debate in your Lordships' House.
Lord Belstead: My Lords, I am grateful to the noble Baroness, but I should make just one point. Her Majesty's Government did not ratify the social charter, as my right honourable friend's Statement makes clear. The Statement says that the main reason why the Secretary of State for Employment was unable to accept the conclusions of the June Social Affairs Council was that we believed that extra burdens on industry, which are inherent in the social charter, would make the Community less competitive and the refusal was confirmed in Madrid.
What was agreed about the social dimension in Madrid was that there are certain things which can be done better by member states—the jargon is subsidiarity—and are thus better left to member states, and other things which are better done by the Community as a whole which are better left to the Community as a whole. The top priority for the social dimension is the creation of jobs. It is right to bear in mind that during the mid-1980s the United Kingdom created more jobs in this country than all the other Community countries put together.
Viscount Eccles: My Lords, I am strongly in favour of joining the EMS, but we ought to congratulate the Prime Minister on providing time and space to discuss the two further stages, because what the world wants now is not a European currency and a European central bank but a world bank. We want the dollar and the yen where we can have a reserve currency again. The European currency would not be anchored to anything. I hope that what we shall do with our European allies now is to work with the Americans, the Japanese and others to establish a world currency and, if you like, a world bank. Trade is not now continental. It has become global. There is a great difference today from what existed 25 years ago when I was very keen on this European unity. I think now that it is not enough.
Lord Belstead: My Lords, I was most interested in the intervention of my noble friend on that point. He congratulates my right honourable friend on the caution over moving so that there is no automaticity between stage 1 and the other stages of the Delors Report. But then he put his individualistic and most interesting construction on how he sees the way forward. In rejoinder I hope that he will feel that the United Kingdom has not only been wise at this Council but is also being quite adventurous in the way in which we have led the way in the abolition of exchange controls, in the way in which we have

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issued ecu-dominated United Kingdom Treasury bills and in the way in which we are pressing hard for the liberalisation of financial services.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that if future government action and policies match the rhetoric of this Statement, many of us on this side will be quite happy? If the Prime Minister really believes that stages 2 and 3 involve a massive transfer of sovereignty, leading eventually to a federal Europe, and will oppose that kind of move, she will have a lot of support from all sides of the House and indeed throughout the country.
On the other hand, if the actions do not match the rhetoric, as over the Single European Act, many of us will be very disappointed indeed and will oppose any government actions further to subsume this country into a federal Europe. The noble Lord will know what I mean about the Single European Act. Indeed he will know that my noble friend Lord Bruce of Donington and myself warned the Government and the Prime Minister what would happen if that Act were passed. Nevertheless the Prime Minister forced the Bill through the House of Commons on a guillotine and it subsequently passed into this House. Can the noble Lord give me the assurance that the Prime Minister will stand by what she has said in this Statement and lift the vision of this country to a Europe which embraces not just 12 European states but the whole of Europe in a co-operating body of sovereign nations working towards their own good and the good of the world?
Perhaps I may just ask one further question in relation to the social charter. The noble Lord will understand that this country was under attack often from countries very much smaller than ourselves which perhaps are not quite as developed as we are. Did the Prime Minister ascertain from those countries whether they have implemented the European social charter, which has existed since 1960 and which in large measure has been put into operation by various governments in this country? Did she put that to the other countries? Did she also say that worker participation should be organic and that it simply is not good enough to put workers on boards of large organisations when people on the shopfloor still have no say? Those are the kind of things that the ordinary British people want to hear.
5 p.m.
Lord Belstead: My Lords, first I should like to assure the noble Lord, Lord Stoddart, that I know that anything my right honourable friend the Prime Minister said she would intend to stand by. But I ought to make clear in reply to the noble Lord what are the next steps on economic and monetary union. Very briefly they are these.
The European Council asked the competent bodies—that is, the Council of Finance Ministers, the General Affairs Council, the Commission, the Committee of Central Bank Governors and the Monetary Committee—to adopt the provisions necessary for the launch of the first stage of Delors on 1st July 1990, and then to carry out preparatory
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work for the organisation of an intergovernmental conference to lay down subsequent stages, that conference to meet once the first stage had begun and to be preceded by full and adequate preparation. That is the next step on the progressive realisation of economic and monetary union. I do not think I want to pick up the other points which the noble Lord put to me. I was interested to hear what he said.
The Earl of Onslow: My Lords, can my noble friend please help me on this? If we go into EMS with completely free exchange rates throughout Europe, either interest rates will get very much sharply apart in each different country, and, consequently, people will be borrowing, say, deutschemarks at 4 per cent., buying sterling and lending that sterling on at 8 per cent. and making a happy little amount of money while the exchange rates keep together; or, alternatively, if the level of interest rates is kept too low to keep the pound down, what will happen surely, is that the internal money supply will increase very sharply and, consequently, inflation will grow from it.
Lord Belstead: My Lords, if I may say so, my noble friend's question is hypothetical and I hope things would never happen in that particular way. It is precisely for the sort of reasons that my noble friend puts, but for other reasons as well, that we have made a statement which my right honourable friend made at the Council which was cautious, but which was meant to be positive and was received positively.
Lord Monson: My Lords, on behalf of all those throughout Europe—not just in this country—who value national independence, diversity and self-determination, will the noble Lord the Leader of the House thank his right honourable friend the Prime Minsiter and congratulate her on the success of her Peninsular Campaign to resist the ambitions of those who seek to impose uniformity, bureaucracy and central control upon Europe?
Lord Belstead: My Lords, I am grateful to the noble Lord for the way in which he has received this particular Statement, Nonetheless, I draw the attention of the House to what I said just now to the noble Lord, Lord Stoddart. Serious work was undertaken at Madrid, next steps were agreed and I have outlined what those next steps are.
Lord Kennet: My Lords, the noble Lord has rightly reminded the House of the long period of years over which successive British governments have adopted economic and monetary union as the final objective and this present Statement reaffirms that long-term objective yet again. Of course, it was in the Single European Act and in everything else. Nevertheless the Statement—I am coming to the question—goes on later to say:
"The Government support the objective of closer monetary co-operation but will work for solutions which leave crucial economic decisions in our own hands."
That was the Prime Minister's language.
For the moment can the Government clarify this? To state both those things implies the judgment that

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settling our national exchange rate is not a crucial economic decision. I think myself that that is a perfectly sustainable judgment. But one would have to realise that there might be an apparent contradiction between adopting EMU as a long-term goal and saying that we are going for solutions which insist on keeping crucial economic judgments in our own hands.
If the noble Lord could say something to the House which indicates that the Government are aware of the possible misinterpretation there, and could confirm that the Government's view is that the exchange rate is not a crucial economic decision, that would do much to clarify the Government's attitude to the whole matter.
Lord Belstead: My Lords, I think the noble Lord's reference is to the view of Her Majesty's Government on the wishes of the Delors Committee, so far as stages 2 and 3 were concerned, not to the statement which my right honourable friend made so far as the exchange rate mechanism was concerned. I think it would be tedious if I went over the ground as to why the Government were highly cautious about stages 2 and 3 and reached a unanimous agreement that there should be no automaticity between stages 1 and 2.
But put in very brief shorthand, we believe there is a lack of democratic accountability so far as stages 2 and 3 of Delors are concerned. We believe that the treatment of fiscal policy under stages 2 and 3 of Delors means that there would be binding rules for member-States' budgetary policies, which would be essential is supporting monetary union, and that would go far farther than normal even in federations. We also believe that there were certain aspects of regional policy which we would not be able to support under Delors 2 and 3. I think it was to that area that those words were referring.
Lord Bruce of Donington: My Lords, will the noble Lord clarify the point a little further than he did when dealing with the question put to him by the noble Lord, Lord Kennet? The earlier part of the Statement reads quite unequivocally that there was agreement—and that presumably means the agreement of Her Majesty's Government as well—on the objective of progressive realisation of economic and monetary union, which the Statement says was reaffirmed. But a little later, when the Prime Minister is describing what she actually supports, the Statement reads:
"The Government support the objective of closer monetary co-operation"—
—I ask your Lordships to note the words; not "union" but "monetary co-operation"—
"but will work for solutions which leave crucial economic decisions in our own hands"—
not "economic union", but "economic decisions in our own hands." I should be glad if the noble Lord could explain the apparent difference that exists in two parts of the Statement.
As my noble friend Lord Cledwyn of Penrhos said, we shall have to examine the Statement in far greater detail and, almost like an insurance policy, we shall have to look at the small print. But in the meantime,
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and on the assumption that further government statements may be made during the course of the next few weeks on this very vital matter, will the Government take steps to ensure that they speak with one voice and that we shall not have, as we have had over the last three months, the Governor of the Bank of England contradicting the Chancellor of the Exchequer, the Chancellor of the Exchequer contradicting himself and the Prime Minister, and the Prime Minister contradicting them both? Can we have some assurance that the statements we get from the Government on further developments will reflect a united Government and a single opinion?
Lord Belstead: My Lords, I think we are starting to go over the ground again. I assure the noble Lord, Lord Bruce, that there is no difficulty about the aim of progressive realisation towards economic and monetary union which has been, under both governments, the objective of the United Kingdom since we joined the Community.
However, the point is that at Madrid there was no automaticity, as it is called, no automatic movement from stage one of Delors to stages 2 and 3 and that was unanimously agreed, and I believe quite rightly, if I may say so on behalf of my right honourable friend.
The noble Lord finally asks me what the Government mean by economic co-operation. We mean that other member states have now started to do some of the things which we have already done; for example, the abolition of exchange controls.
Lord Peston: My Lords, I hope that the noble Lord will forgive my intervention because I know that this has gone on for a little longer than perhaps some noble Lords may wish, but it is a very important matter. His right honourable friend the Prime Minister used the words:
"progressive realisation of full economic and monetary union to which we are committed".
Perhaps I may ask him to convey to his right honourable friend that many of us believe that once we are committed to that, which we are, then it is inevitable that our national sovereignty will decline somewhat. I also ask him to convey to his right honourable friend the Prime Minister that anybody who has studied this subject believes that something akin to the Delors Report must be the basis of eventual monetary union. There is no other way to do that.
Lord Belstead: My Lords, I hesitate to cross swords with the noble Lord because in personal terms he is an expert and I am not. However, I believe that it is very important that I should say on behalf of Her Majesty's Government that when I say that we are committed to progressive realisation of economic and monetary union, exactly what form that is to take is to be the subject of further study by the council, the Commission, the Committee of Central Bank Governors and the monetary committee. There is no automaticity —and I repeat no automaticity—between Delors stage 1 and other stages.
Lord Ezra: My Lords—
Lord Denham: My Lords, we have now been 37 minutes on this Statement. The House has agreed by its own rules that it should be limited to 20 minutes. Of course, it is a very important Statement but we are now getting into a debate. I believe that we should move on to other business.
Lord Ezra: My Lords, many of us wish to speak on this subject. I shall not ask the question which I was going to ask and which I have tried to ask for the last half-hour. However, I ask the Leader of the House whether we can have an early debate on this subject so that we can express our opinions on this important matter.
Lord Belstead: My Lords, that would have to be pursued through the usual channels.

Social Security Bill
5.13 p.m.
House again in Committee on Clause 12.
[Amendment No. 28 not moved.]
Baroness Faithfull Baroness Faithfull had given notice of her intention to move Amendment No. 29:
Page 11, line 34, at end insert ("or
(c) to seek or accept employment at a rate of remuneration such that his net income, after deducting any work-related expenses would be insufficient to support himself.").
The noble Baroness said: I have already spoken to this amendment and the Minister has replied. There is just one point in his reply on which I should like to comment. I shall read Hansard tomorrow but I believe he said that expenses could not always be calculated. I would point out that if you work in Newham and have a job in the West End, you can calculate your expenses from Newham to the West End. Secondly, if you find a child minder or a place in a nursery for your child, you will know exactly what expenses will be incurred. Having said that, my noble friend kindly said that he would look again at this amendment, so I shall not move it.
[Amendment No. 29 not moved.]
[Amendment No. 30 not moved.]
Earl Russell Earl Russell moved Amendment No. 31:
Page 11, line 34, at end insert ("or
"(c) to seek or accept employment at a rate of remuneration such that his net income, after deducting any work-related expenses, would fall as a result of accepting such employment.").
The noble Earl said: I move this amendment with a certain amount of optimism. I listened to the Minister's reply to Amendment No. 29 which suggested that people should not be compelled to take a job at a level which made them unable to support themselves. I believe the Minister said that the employment service would not accept this under any circumstances. I was relieved to hear that. It made me wonder whether the Minister might be prepared to accept the slightly more precise wording of Amendment No. 31.
I understand that the principle stated in this amendment was originally that of the noble Lord,
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Lord Joseph. The amendment attempts to recall the Government to some extent to their own free market principles. The problem with governments which go in for philosophies is that they tend to forget about them only when they happen to be right. The Minister will no doubt wish to say that the amendment would apply to only 0·15 per cent. of people on benefit. I accept that figure. The point of the amendment is to try and keep it that way. We fear that if the Bill goes through as it stands the figure could change very rapidly.
This is a case where the Government need to be more consistent in their thinking. We have heard today and previously in Committee about the unemployed pricing themselves out of the market and having unrealistic expectations. Surely, what is sauce for the goose is sauce for the gander? If a job does not offer to pay a living wage, then that job is pricing itself out of the market. If the job cannot afford to pay a living wage, then surely it is uneconomic.
There are circumstances—and I believe that we on these Benches might recognise rather more of them than the Government—where it is possible to justify subsidising what would otherwise be an uneconomic job. However, I believe that that is something which needs a good deal of care and attention. I believe that one has to have a very clear objective which one has to identify and justify and or one has to show with some detail and careful costing that the alternative would cost more.
If the Bill goes through, we have a blanket situation where people may be pushed into accepting jobs which pay below benefit level and then receive subsidy from benefit. I believe that this is a blanket subsidy to uneconomic jobs; it is a new Speenhamland system. It seems to me to be indiscriminate. It is liable to subsidise inefficiency and increase the already very large number of people in full time employment who nevertheless are at a low enough level of income to be in need of income support.
I know that we cannot stop employers paying wages below benefit level. If the unemployed wish voluntarily to take a job at below benefit level and to receive a certain amount of benefit on top, they have that right. The fact that so many choose to do so appears to be evidence in favour of the proposition that a large number of the unemployed genuinely wish to work even where there is no economic benefit, simply for the satisfaction of doing a job of work. We do not propose to stop that.
What concerns us on these Benches is the prospect of using the power of the state and using the threat of denial of benefit to force people into taking uneconomic jobs. It is a blanket subsidy to employers; it is inefficient; and it is a degree of coercion for which I can see no justification. It will have the further effect—I should resist the temptation to take a perverse pleasure in it—of making the Prime Minister appear to be the heir of Louis Blanc.
Baroness Turner of Camden: I rise to support the noble Earl, Lord Russell, in this amendment. To some extent I spoke to it on the first amendment. I

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agree absolutely about the subsidies which can be regarded as being made available to employers who are offering employment at uneconomic levels. We on these Benches would regret to see unemployed people forced into employment which pays below benefit levels.
The amendment refers to "work-related expenses" and that seems to us very important, because most jobs also involve expenditure in actually accepting the jobs. There is the cost of travel, which in London is considerable, and the cost of providing oneself with appropriate clothing. Often, after people have been out of work for a long time, they do not have the proper clothing in which to go to work and that has to be acquired if they are to present themselves for work.
This is a compassionate amendment. The intent is to ensure that people are not forced to accept work which is below a certain level. We do not in this country, regretfully, have any legislation on a minimum wage which prevents employers from offering work at below a certain level of payment. We do not have that legislation and I wish that we did. Such protective legislation as we did have has long since disappeared under this Government. Therefore it seems to us quite legitimate to have an amendment of this kind to prevent the degree of exploitation which otherwise we fear may very well become widely applicable if the Bill goes through unamended. I therefore support the amendment.
Lord Henderson of Brompton: Perhaps I may say a few words before the Minister replies. Although my name does not appear on the amendment, I very much support it. I expressed the view on Amendment No. 27 that if it were not carried it would be necessary to carry one of the subsequent amendments, and this is one that I believe is necesssary.
When the Minister was replying to the noble Earl, Lord Russell, on Amendment No. 27 he repeatedly referred to "usual" employment. Unfortunately, the word taken out of the Bill is "suitable". The word "suitable" seems to be exactly right and should remain in the Bill. This is nothing to do with whether employment is "usual", which is a narrower word. I draw particular attention to the fact that the Minister was referring to "usual", which is not the word taken out of the Bill and not the word which the noble Earl seeks to restore.
Having said that, without the word "suitable" this is the minimum amendment which should be included in the Bill in its place. It is humane and I support every word uttered by the noble Earl. It is not compulsory in any way. As I understand the amendment, it is still possible for a person to take work at a rate of remuneration such that the net income would be insufficient to support him if he wishes to do so. If that is so, there is nothing wrong with this amendment and I support it unreservedly.
Lord Skelmersdale: As has been made clear from what the noble Lord, Lord Henderson, just said, this amendment seeks to introduce into legislation the concept that a person should not be disqualified from receiving unemployment benefit if he turns
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down or fails to follow up an opportunity of employment which would leave him less well off than he had been on benefit.
I can understand what noble Lords, and the noble Earl in particular, are getting at, but I have to say that there are a number of problems with this approach. The amendment refers to income. I have already said on a previous amendment that I have difficulty with the word "income" in such amendments. How is the applicant to know in advance of getting the job precisely what the take-home pay will be? As I said earlier, there are many jobs where the pay varies from week to week because of special payments, overtime and so on. I shall not repeat the list now.
From the figure of take-home pay other work expenses have to be deducted. The noble Baroness, Lady Turner, appreciates the problem of unsuitable clothing. I agree that this might occur when someone has been living in squalid conditions, perhaps even living rough. In spite of what was said in Committee last week, there are occasions when people who have been living rough successfully apply for work. These initial expenses may be quite heavy in the first week or two of work if tools, working clothes or equipment have to be bought. It may be necessary to buy a new pair of jeans if serving in a shop and, on rare occasions, perhaps even a suit needs to be purchased. I fully appreciate the point made by the noble Baroness. However, we must all realise that these are initial expenses that subsequently will tail off.
Therefore, under this amendment a system would be needed to deal with these so that high expenses on starting a job would not automatically rule out that job for the individual claimant. Once a net figure for take-home pay, less expenses, is arrived at, one then has to add income from other sources—housing benefit or family credit, or perhaps payments from other members of the household—which are used in the calculation of other social security benefits. Claimant advisers already make an estimate on these lines to help claimants who may not understand their possible title to in-work benefits; but that estimate, well informed as it is, cannot be 100 per cent. accurate.
Once we get this sort of situation into legislation, estimates are not good enough. The noble Earl may also be surprised to learn that there is no protection in the existing legislation to allow people to refuse a job simply because it pays less than they receive either in unemployment benefit or income support. Indeed, social security commissioners have ruled against people who have contested disqualification on the ground that the job paid less than their benefit.
The noble Earl prayed in aid the remarks that I made in answer to the last group of amendments when of course I was speaking about poverty wages. I intended to say—and I repeat—that the employment office will seek to offer suitable jobs at suitable rates, which meets the concern expressed by the noble Baroness, Lady Turner. I should add that if the employment counsellor is wrong, having quoted a rate for the job which the claimant subsequently finds was too high, the claimant can turn down that job without any benefit penalty whatever. I hope

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that that explanation goes some way to assisting the noble Baroness.
Perhaps I may spell that out in a little more detail. Claimants will risk losing benefit only if they turn down a job offered to them through the employment service. I spoke earlier about the approval of the employment service, but it comes to the same thing. This offer will be made after full discussion with one of the employment service counsellors, who will take into account all the circumstances in deciding whether the vacancy is appropriate for the claimant. I repeat, the employment service will act in good faith and will in many cases make detailed calculations on the likely in-work income. I say yet again that one has to be precise if one is to use the new proposal in this amendment.
The Committee will be pleased to hear, as I was, that the employment service has increased its capacity to give personal advice to claimants on such benefits by bringing into use a further 600 special benefit computers in addition to the existing 300. Family credit ensures that few people could really be worse off in work. Through our tax and national insurance contribution changes, and through benefit changes, including the introduction of family credit, we have ensured that in practice nearly everyone is better off in work than remaining on unemployment benefit or income support.
I return to the noble Lord, Lord Henderson, with whom I started. He deprecated the fact that the word "suitable" does not appear in the Bill. Under current law, "suitable" is defined by reference to the rate of pay. That is what we want to avoid. It is not realistic for any unemployed claimant to expect to receive the going rate of pay, but we should not be offering jobs which in other respects—conditions and type of work—are not suitable for the claimant.
I hope with those very careful explanations the noble Earl will not find it necessary to press this amendment.
5.30 p.m.
Earl Russell: I thank the Minister for that reply which, as he says, was careful. He accused me of attempting to introduce into law the concept in this amendment. I am aware that recent decisions by the commissioners tend to take the line that a person may lose benefit for refusing a job by which he may be worse off. I am also aware that not so very long ago, when the noble Lord, Lord Joseph, was Secretary of State, most of us believed the law to be as the amendment asks it to become. We have here a case of tightening the spirit in which the regulations are administered. This has appeared in a good many places recently. When the noble Lord accuses me of trying to introduce something into law he may not be inaccurate but he is slightly cutting a corner.
The noble Lord is worried about a notion of expenses. He makes the point that they are hard to calculate. I can understand that, but they are hard to calculate for claimants too. They give rise to a real problem. To an extent it is fair to say that we have two problems. The problem of work-related expenses is one about which a good many of us are
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not happy but which may perhaps require more lengthy consideration. We have also the problem of subsidising uneconomic jobs. I take the noble Lord's point about family credit. But does he accept that if family credit is regularly used to subsidise low wage jobs it will not be easy to keep down the social security budget and it will not make it easy to attempt any practical form of targeting? It is liable to become a blanket and inefficient subsidy. I would find it helpful if the noble Lord could reply to that point before I decide what to do with the amendment.
Baroness Phillips: Before the Minister replies perhaps he can explain why these answers are made so complicated. Is this deliberate, or is the Civil Service unable to explain in simple terms some of the clauses of the Bill? It seems to be assumed that we are dealing only with people who are also in receipt of other benefits. Surely people who have been made unemployed remember clearly the income they received when they were working. Surely that is a deciding factor in determining the benefit.
Perhaps I should put it in simple terms in case the Minister does not follow what I am talking about. If I received an income of £200 a week, surely it is not unreasonable that after six months I would only take a job that also offered me £200 a week. By that time it would be worth less anyway under this Government. Heavy weather is being made of straightforward facts which every worker understands. Someone loses his job. He knows what he has lost. He knows what he would need in order to take another job.
I cannot let this opportunity pass without mentioning the fact that yesterday we heard another new word when dealing with pensions. We were told about lower and higher "quintiles". I looked up the word in the dictionary. I thought of mentioning it to the Prince of Wales who seems interested. What exactly is a "quintile"? It is crazy. In the Statement today we heard about automaticity. That is another one. I have a collection of them now. They may be modern terms but they do not help explanation. In his replies the Minister is making heavy weather of simple amendments to which we could have much shorter and clearer answers.
Lord Skelmersdale: I should not really refer to the Question which I had the privilege to answer yesterday. However, if it will help the noble Baroness, a "quintile" is a fifth.
Baroness Jeger: Why not say "a fifth"?
Lord Skelmersdale: Because a "quintile", for some unknown reason within social security statistics, is more readily understood. I am sorry that it was not readily understood by the noble Baroness. That is what I was informed, and that is why I used the word. However, we digress somewhat dramatically from the question which the noble Earl put to me.
I do not believe that family credit subsidises employers paying low wages. It is there to help working families with children who do not have enough money coming in from their earnings. The amount of family credit received depends on the

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individual's personal circumstances, rather like income support applicable levels which depends on individuals' personal circumstances. An employer has no means of knowning those unless the employee tells him. Therefore if the employer deliberately offered an unrealistic wage hoping for it to be topped up by the state, he would be unlikely to recruit the best workers.
Earl Russell: I am not quite sure that I followed the Minister. Is he saying that it is not reasonable to expect an employer to pay a living wage to someone with children? That would be quite a significant statement.
Lord Skelmersdale: No, but there are all kinds of other considerations besides children which go into the calculation of the applicable amount.
Earl Russell: We have not heard the last of this. We have here a good many issues running round together and becoming confused with each other. By the leave of the Committee, it might be best to come back to this matter on a later occasion with a different draft—perhaps two different drafts. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 32 to 34 not moved.]
Clause 12 agreed to.
[Amendment No. 35 not moved.]
Baroness Seear Baroness Seear moved Amendment No. 36:
After Clause 12, insert the following new clause:
("Extension of invalid care allowance payments.
. In section 37 of the principal Act, the following subsection is inserted after subsection (6)—
"(6A) An invalid care allowance under this section shall continue to be paid for a period of six months after the death of the person who has qualified for an attendance allowance and who was in the care of the holder of the invalid care allowance." ").
The noble Baroness said: This new clause relates to the invalid care allowance which, as the noble Lord will be aware, is dependent on the attendance allowance. Once the attendance allowance is paid, anyone looking after the person receiving the attendance allowance is eligible to receive the invalid care allowance. When the invalid care allowance was first introduced it carried with it not only a payment to the person who was doing the caring, which was important in its own right, but also an insurance stamp qualification to keep up pension payments for the carer. It also entitled the carer to draw unemployment benefit as soon as that was appropriate. In recent years the pension right has been retained but the unemployment benefit has been withdrawn.
A person may on his own have been—this is typical of many—looking after someone who is chronically ill and gradually declining. The situation may go on for years with the person drawing the attendance allowance becoming increasingly demanding and the person doing the caring having little contact with the outside world. But, as soon as the person dies it is assumed that the carer can go back into employment. The whole point about
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eligibility for unemployment benefit was that it gave carers a breathing space in which to get themselves together after they had buried the person they were looking after. I shall not repeat the phrase which has now become something of a cliché about being required to go from the graveside to the Jobcentre, but that is what it is all about.
We are simply asking, by way of this amendment, that there should be a period of time after the death of the person being cared for during which the invalid care allowance should be continued. If the Minister likes to say that he will put back the right to unemployment benefit, that will be fine. But, if that is not on the agenda, we ask that the invalid care allowance should be continued for a period to give the carer time to get him or herself together. It can be a most difficult and distressing time, with a great void emerging in the life of that person. He or she has been out of touch with the labour market; indeed, out of touch with most social contacts. It takes time to become re-established. We are asking that a period of time should be allowed during which the allowance could be continued and that it should not be cut off immediately the person being cared for dies. I beg to move.
Baroness Jeger: I rise briefly to express my support for the noble Baroness. All of us must know of cases where a son, a daughter or a wife has given up work in order to care for someone who is very ill. The situation may last for many years. When death arises it cannot be an immediate release for the carer. A person may have to sell the home and perhaps move. Moreover, the person will have to try to pick up the threads of life and look into the prospects for a new job, as well as dealing with many other personal and emotional problems.
It seems to me that it would be generous of the Government if they were to permit the allowance to continue for six months. I do not think that a period of six months is to long. Indeed, those of us who have had experience of clearing up estates and dealing with all the consequences of the decease of someone who has been looked after for a long time will surely appreciate that six months is not too long.
In any case, I hope that the Minister will be able to appreciate the point and remember how much money the Government have been saved by the devotion—usually of women, but not always so—of those who care for their relatives at home. They take the burden which would fall on the hospitals and institutions where such people would otherwise have to be looked after. I hope that we shall receive a sympathetic reply to this amendment.
5.45 p.m.
Lord Boyd-Carpenter: I hope that my noble friend will look sympathetically at this amendment. I doubt whether it is technically sound, but it seems to me to be based on quite an important social point. Obviously one will listen to what he says, but I hope that he will indicate appreciation of the situation which occurs when someone dies and the carer suddenly finds himself or herself left alone in the world. It is, on the whole, very much in the public and private interest that such care should be given

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and should not be discouraged by dealing with people too harshly when the necessity for the care ends. I hope that my noble friend will be able to say something helpful on the matter.
Earl Bathurst: I rise to support the remarks made by my noble friend Lord Boyd-Carpenter. Many of us in this Chamber have seen the tragic circumstances of the so-called "carers". It may be that such people have been in the same place for many years. The house may have to be sold and they may well have nowhere to go. I do not know whether the wording of the proposed new clause is exactly correct, but if the noble Lord could achieve something through his right honourable friend, I believe that it would encourage many other people to take on the very onerous job of caring for elderly relatives, great friends or even previous employers. I hope that he can find some reason for supporting this new clause.
Lord Skelmersdale: I think that perhaps I have found something in the new clause. I should like to say straightaway that I understand the problem. However, I am concerned as to whether this is the right solution. While I was listening to the noble Baroness, Lady Seear, my flighty imagination took me into a small village church where I was listening to the lines of the marriage service. "Consider the reasons why marriage is ordained", is one of the lines in that service. I beg the noble Baroness to look at the reason why invalid care allowance was ordained: it was an allowance which was perfectly properly invented, and subsequently extended, to enable people to be supported while they were caring for someone else who was drawing attendance allowance.
That situation is fine. However, when people stop "caring" one wonders whether an invalid care allowance should continue, bearing in mind that the rationale has then disappeared, and whether other social security benefits should not take over.
Lord Carter: Like what?
Lord Skelmersdale: I shall come to that point shortly, in my own inimitable way.
It is true that the rules governing the use of contribution credits to gain entitlement to unemployment benefit were changed last year. I know that it has been argued, especially by the noble Baroness, that such changes had a harsh effect on former carers in the way she described. However, the truth is that former carers can still use their credits to qualify for unemployment benefit under the current rules in much the same way as they could under the old rules. On average, a carer is out of the full-time employment market and receiving invalid care allowance for about two years. That was one of the reasons why we fixed on the changes which we discussed last year. On returning to the employment field after that period, the credits awarded during that period can be used to gain entitlement to unemployment benefit.
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The Committee will appreciate that the social security benefit system offers a wide range of financial support to meet various circumstances: retirement pensions for people no longer of working age who have retired from regular employment; unemployment benefit (which we have just discussed at great length) for those of working age who are without a job; sickness or invalidity benefit for those who are incapable of work; and invalid care allowance for those who have withdrawn from the full-time employment market in order to become carers. Those are but a few examples.
Underpinning all those aspects is the income support scheme. Having said that, I said that I would like to be helpful in the matter. I understand that there is clearly a difference between those who have not paid contributions for so long that they have effectively severed their link with the employment market and those who have clearly maintained such a link by making themselves available for full-time employment and claiming unemployment benefit until they had to sever it in order to care for a severely disabled person.
As my honourable friend the Parliamentary Under-Secretary of State indicated in another place on 17th February, we recognise that former carers in such a situation are a special case. For that reason we shall be bringing forward regulations to extend for them and for people in other deserving groups who are in the same situation through no fault of their own or for an extremely good reason the usual 26-week period used in establishing whether a claimant can requalify for unemployment benefit. As I said, this is intended to be helpful. Moreover, I think that it will go a long way towards satisfying my noble friends Lord Boyd-Carpenter and Lord Bathurst.
I appreciate the problem and we are looking at it. Indeed we have brought forward a solution; but I shall certainly be prepared to consider whether it is a complete solution between this and the next stage of the Bill's proceedings. But I have to say that at this stage without any commitment because I shall need to study the problem.
Baroness Seear: I thank the Minister for that reply. In view of the fact that he is prepared to consider the matter, I would not dream of pressing the amendment to a Division at this stage. However, I give him notice that I certainly shall do so if he does not bring forward a satisfactory solution in the meantime. I should very much like to have the opportunity to discuss the issue with him, if that were possible.
I am not quite sure how the regulations which are being brought forward will work in this case. As he rightly said, there is a world of difference between the people who have been out of the labour market for only two years and many carers who have been out of that market for a very long time. Many of us feel that they are doing a job and see the invalid care allowance as something in the way of pay for the job that they are doing. They are looking after people in need of care who, as the noble Baroness, Lady Jeger, said, would otherwise be in institutions at great cost. I am not in any way wedded to the amendment. The

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Minister has said that he understands the problem and perhaps we may talk about it to see what can be done at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 [Income support and unemployment]:
[Amendment No. 37 not moved.]
Baroness Faithfull Baroness Faithfull moved Amendment No. 38:
Page 13, line 1, at end insert—
("(3) In section 22 of the 1986 Act (income related benefits) after subsection (8) there shall be inserted—
"(9) In relation to income support and housing benefit the applicable amount for a person in board and lodging accommodation shall include an amount in respect of his being a person in board and lodging accommodation.
(10) For the purposes of this section "board and lodging" accommodation means—

(a) accommodation provided to the claimant or, if he is a member of a family, to him or any other members of his family, for a charge which is inclusive of the provision of that accommodation and at least some cooked or prepared meals which are both prepared and consumed in that accommodation or associated premises; or

(b) accommodation provided in a hotel, guest-house, lodging-house or other similar establishment where facilities for the preparation of food are inadequate to the needs of that person.

(11) regulations may prescribe the circumstances in which the facilities for the preparation of food are deemed to be inadequate." ").
The noble Baroness said: The amendment deals with board and lodging and mainly single people, but not only; it also deals with the dreaded bed and breakfast accommodation which is a scandal in our society and, what is more, an expensive scandal.
Housing benefit covers the cost of accommodation, and the theory is that one can pay for meals out of income support. The problem arises because income support is calculated on the basis that one is feeding oneself in one's own home. If one is in board and lodging or bed and breakfast accommodation, one only has breakfast, and sometimes not even that. One has to go out for all one's meals or, alternatively, in bed and breakfast accommodation, buy meals and bring them in and often cook them on the ground floor while living on the fifth floor.
One receives a living allowance which is thought to include all meals, but in fact does not. That applies to homeless families and young people. On 10th April this year, most homeless people, especially families living in bed and breakfast accommodation, suffered a severe drop in income as a result of changes in the social security system. Those changes were designed to place boarders on the same footing, as I have already said, as people in self-contained, permanent accommodation.
The loss of the eating-out allowance will have serious consequences for the health and well being of people in lodgings and bed and breakfast accommodation. It will also lead to an increase in homelessness as people are priced out of even basic accommodation. We are especially concerned at the effects the changes will have on children. Most parents are forced to rely on expensive take-away
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food due to the lack of cooking facilities in bed and breakfast accommodation. This is a serious matter for families, children and for 16 and 17-year-olds. With the closure of mental hospitals, a number of mental patients are also going into bed and breakfast accommodation or lodgings, and they cannot live on what they receive. I beg to move.
Earl Russell: I support the amendment. The whole problem of bed and breakfast is a major one. I know that the noble Earl, Lord Caithness, in his review of homelessness, is taking it into account. I hope that he will take into account what the noble Baroness has said. The problem is an immediate one. The basic purpose of the social security system is that people should have enough to eat. That purpose is not being met.
In a great many cases, bed and breakfast means exactly what it says—no more and no less. In a great many other cases, where there are supposed to be shared cooking facilities, the sharing breaks down and people are allowed in only, say, between four and five in the afternoon when their turn comes, or all the pots and pans have disappeared. It is not the situation in which one has the highest standards of responsible housekeeping. I do not believe that it ever will be.
In those circumstances, people are naturally pushed into eating out. The Committee can perhaps imagine the difficulty of eating out in London, night in, night out, with a family on income support levels. It cannot be done. People are pushed over the line from bad diet into real hunger. It is not only in Ethiopia that that is capable of happening. It is capable of happening in London. While I cannot see an immediate substitute for bed and breakfast until local authorities are allowed to spend their capital receipts, nevertheless, while the system continues we must keep people alive. They cannot live on faith until the noble Earl, Lord Caithness, has finished his review, which is why I hope that the amendment will be carried.
Lord Seebohm: I support the amendment. The real problem behind it is housing. For the young people about whom we are talking there should be hostel accommodation similar to student accommodation at universities and such places. Once that happens, an amendment of this nature would be unnecessary. Given the desperate shortage of housing that now exists, there is no alternative to doing precisely what the amendment suggests.
Lord Pitt of Hampstead: I too support the amendment. I referred to the issue on Second Reading. It is one of the serious issues confronting us. The problem of homeless people using bed and breakfast accommodation is a difficult one. One of the consequences, as the noble Earl, Lord Russell, has said, is that people have to eat out. We all know the cost of eating out. The April regulations have made the position difficult. They place people who eat out in the same category as people who look after themselves and get their own meals. Putting them in the same category has created the problem. People in bed and breakfast accommodation now receive

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much less than they did before. They do not have enough to enable them to feed themselves and their children.
Health problems result from bed and breakfast accommodation, as we have mentioned before. An additional health problem results from the diet. People have limited finances and cannot provide themselves with a proper diet. I am talking especially about children. An additional health burden is being created. I hope that the Minister will take the matter seriously because something needs to be done about these people.
Lord Auckland: I hope that my noble friend the Minister will look sympathetically at the amendment. Those of us who have seen this accommodation, and I must confess I have seen it only on the television screen, will be aware of the problems faced by those who run such hotels and boarding houses. Anyone who has had experience in the hotel industry—I have family involved in the hotel and catering industry, although not necessarily the type about which we are talking—is aware of the problems of running these establishments and being able to provide adequate accommodation, feeding and so on. I therefore believe that subsection (11) of the amendment is especially vital.
It is difficult for the small hotels and those who operate them to provide the necessary accommodation and facilities, bearing in mind the costs involved. My noble friend the Minister may say that they can get grants for doing that. This may well be the case. I believe that the last part of the amendment is extremely important and I hope that my noble friend will consider it sympathetically.
6 p.m.
Lord Trafford: I have great sympathy with large parts of the amendment; the aims are entirely laudable. I agree with my noble friend Lady Faithfull, as I do with Members of the Committee who have spoken from the other Benches, that there are difficult and serious problems that we have to tackle. What concerns me is whether the amendment produces a suitable answer in this field. What I mean is that, as I understand it, and as I read the amendment—and I am sure that somebody will correct me if I am wrong—the basic aim is to revert to the old system.
The problem with the old system, as is fairly generally recognised, is that parts of it became something of a racket. In other words, there was a tendency to increase the numbers in the field; to increase the number of people in hotels and in bed and breakfast accommodation and then the landlords raised the charges. At that time it did not matter so much to clients or claimants in those circumstances. Therefore it does not seem to me to be a proper answer to the problem—and problem there is—simply to revert to the old system. That is what the amendment appears to do.
I shall not go into enormous detail as to how I personally think we ought to deal with the social provisions and social support necessary in these
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fields because that conflicts even more with the views of my noble friend on the Front Bench than the current amendment. Be that as it may, the amendment appears to me to have that defect.
After all, we do not wish to reinstate the two basic defects of the previous system. One was the great increase in numbers, the other the great increase in cost when that cost was not necessarily properly directed or well targeted towards dealing with the basic problem. I do not disagree at all with the points made by my noble friend Lady Faithfull in that respect, with regard either to the payments—I am not sure who made the point; I think it was the noble Lord, Lord Seebohm, or the noble Lord, Lord Pitt—or with regard to health.
However, the amendment is merely likely to restore all the evils of the previous situation without necessarily any great improvement or move forward in a field where we desperately need to take appropriate action, not necessarily for the next six months but in planning forward into the coming decade.
Lord Henderson of Brompton: I wish to add my support to the amendment since my name is down to it on the Order Paper. It is absolutely essential for something to be done. We all regard the present system as indefensible. As the noble Baroness, Lady Faithfull said, it is a national scandal and one hopes that it will be phased out as soon as possible.
Meanwhile the problem is urgent because since the recent changes in the social security payments those in the unfortunate position of having to live, either by themselves or with their families, in bed and breakfast accommodation have suffered the loss of up to 30 per cent. of their benefit. Previously they lived on a bare subsistence, but with the loss of the benefit they are now almost starving. We cannot tolerate that. While the situation exists, the benefit must be restored in some way to those who have lost up to 30 per cent. of it.
The way to do it is along the lines that we suggest in the amendment, not necessarily every dot and comma of it but through something similar. As has been said throughout the Committee, people have to eat out and that is very expensive. There is not merely the problem of eating out; they have other expenses for tasks which they cannot carry out in their bed and breakfast accommodation, such as laundry. Sometimes they are allowed to cook in their hotel or lodgings but they may have to pay a service charge. All these costs have to come out of a benefit which has been reduced by up to 30 per cent. If we do not do something for these families and single people, there will be dire distress. There is a loophole which was perhaps inadvertently introduced by the Government and which they should now close.
Baroness Macleod of Borve: Perhaps I may add a few brief words on the amendment. It is difficult for Members of the Committee, unless they have actually been to some of these hotels as they are called, to understand the situation. These are nowhere near what any of your Lordships think of as a hotel; they are dosshouses/hostels where people live several to a room. They have a roof over their

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heads; they are very lucky if, as one noble Lord said, they have any breakfast. They are then left to while away the time, doing practically nothing because they are unemployed. They are not unemployable but, on the whole, unemployed. Time is very difficult for them. They are young, middle-aged and old-aged people. We simply must do something for them because the situation is very bad indeed.
I agree with my noble friend Lady Faithfull, that we should be ashamed of letting people in our midst, as they are, sink so low that perhaps they do not want to live. They do not know why they are alive. Their morale is erased by the standard at which they are forced to live. I think of the illnesses; there is a recent increase in tuberculosis. There is their food, and not only that but they have to pay for laundry, as the noble Lord has said. Occasionally they need a new pair of shoes or some warm clothing. Where do they get it, and how do they pay for it? I sincerely feel that it is up to us to see that the situation is rectified as far as possible. We know it is a problem which we must tackle.
Lord Stallard: I too wish to support the amendment. Most of what I wanted to say has already been said, but I certainly support the return—if that is what it is; it is an attempt to return—and the reintroduction of the system that existed. The changes were designed to place people in board and lodging or bed and breakfast accommodation on the same basis as people in self-contained accommodation. From what we have heard today and what we know, by nobody's imagination could one compare the squalid conditions in which most of these people live in the so-called hotels referred to by the noble Baroness; nobody could say that that amounts to the same as living in self-contained accommodation. To suggest it is utter nonsense. If only for that reason, I support the amendment.
I wish to pick up the point which the noble Lord, Lord Trafford, made, that he did not think this was the right thing to do because it would mean a return to the rackets. We all know and are well aware of the rackets that go on. I do not think that is any excuse for reducing the amounts paid mainly to families. It is the children in the families who suffer. The greatest changes and the most reductions were made in the children's part of the allowances. So the more children a family had the more they lost with the new regulations brought in on 10th April. That is no excuse to cut the allowances of these people. It is a reason to improve the management and to deal with the abuses of the system. Some local authorities, to their credit, have tried to do that. However, that is certainly not a reason for saying that we should not return to the system of paying these people a reasonable allowance to eat out as it will reintroduce the abuses. I do not think that that is the answer.
Lord Trafford: With respect to the noble Lord, I do not believe I said that. I was trying to say that we knew the defects of the previous system. I did not say that nothing should be done. I was merely suggesting that we should ensure that we do the right thing, whereas previously we were not doing the right thing. It was known that under the previous
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system many abuses occurred. The system contained many defects. I was not suggesting that nothing should be done and that the defects of the previous system were an excuse to do nothing. I was making a plea to do something, but to do it correctly.
Lord Stallard: If I misinterpreted the noble Lord, I apologise. However, I do not think that I did. I am absolutely certain that the noble Lord said that this provision was not the right way to achieve our objective and that all we are doing here is to reintroduce the premium that existed before for people living in these squalid conditions. I support wholeheartedly the move to reintroduce the premium.
Lady Saltoun of Abernethy: In support of this amendment I would say that, if one is a good cook, housekeeper and manager, one can feed a family adequately on income support provided one has one's own kitchen where one can safely store the necessary ingredients. If no kitchen is available, I should imagine it would be pretty well impossible. It would certainly be impossible for people recently discharged from mental hospital who are perhaps a trifle inadequate.
Baroness Jeger: I support the amendment. However, we must all realise that the amendment deals with symptoms. It deals with the symptoms of the Government's total failure to provide adequate housing for the people of this country. I regret very much that the bed and breakfast system has somehow been slotted into housing policy in a way that is expensive, extravagant and deleterious to health. Many reports have been received from health visitors and others about the terrible effects of such accommodation on young children. We hear from school teachers of non-attendance at school and of the difficulties when children moving from one hotel to another and therefore to a different education authority have the sequence of their education broken.
Members of the Committee who are doctors will agree that sometimes one has to deal with symptoms. While we are in despair about the Government's housing policy, we wish to make life a little more bearable and healthy for those who are victims of the Government's failures. I have visited many establishments offering bed and breakfast accommodation in central London. The racket that goes on is abominable. Local councils are paying for bed and breakfast, but I have been to places where no breakfast is provided. Certain establishments may simply provide a gas ring on the fifth floor and perhaps a leaky kettle. People must buy whatever they need to eat or drink. When I raise these matters I am told that such conditions are an indication of the failure of the environmental health officers of local authorities as they have powers of inspection and can take certain action. Unfortunately there is not a single local council in London so far as I know which does not have a shortage of environmental health officers to carry out this difficult and demanding work.
I hope that the Government will try to deal with the fundamental causes of the bed and breakfast

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racket. Those subjected to the situation must have more help. I agree very much with the noble Lady who has just spoken. A good housewife can come to terms with a good kitchen. If one does not have a good kitchen, one cannot make the right meals for one's children or for oneself.
I notice that Amendment No. 43A is grouped with this amendment—
Noble Lords: No!
Baroness Jeger: I am sorry, but the groupings list I have states that Amendment no. 43A is grouped with this amendment. I can only apologise if someone has given me an incorrect groupings list. I shall return to Amendment No. 43A. For the moment I support the amendment before the Committee.
6.15 p.m.
Lord Winstanley: The noble Baroness, Lady Jeger is absolutely right in suggesting that this amendment, which I warmly welcome and which I very much hope the Committee will support, is in reality a stopgap measure to deal with an immediate and very urgent situation. It is an attempt to deal with that situation while other very necessary things are being done so that we can get rid of the absurd, inhuman and totally uneconomic idea of housing the homeless in bed and breakfast accommodation. It is a ludicrous arrangement; the economics of it defy all understanding. As the noble Baroness has said, other things have to be done. In the meantime, something must be done here and now for people who are in a desperately difficult situation.
My heart always sinks when I hear that the noble Lord, Lord Trafford, has sympathy with a cause that I espouse. The noble Lord said he did not think that we should implement this measure, although he did not say what we should do instead. He agreed that something should be done, but he did not think that this was the right way to achieve our objective. The noble Lord suggested that this provision could in the end lead to a return to some of the racketeering that existed before. It could only lead to that over a very long period. It is no one's wish that an amendment of this kind should prove necessary for a very long time. None of us should tolerate a situation in which a government allowed this situation to continue for a long time. The idea that people are queueing up and clamouring to get into this intolerable situation and that more and more will be seeking out bed and breakfast accommodation is quite ludicrous.
I accept what the noble Lord, Lord Trafford, said about the long-term possible effects of a change back to the previous benefit system. Racketeering could occur in those circumstances, but it would take time to become established. What is needed now is immediate help for people in immediate and urgent difficulties. While that help is being given we hope the Government will address themselves to the deplorable situation of homelessness in general and to the housing situation. I support the amendment; I earnestly hope that the Committee will do likewise.
Baroness Faithfull: Before the Minister replies, I must say that I am in a real dilemma. I am grateful to everyone who has spoken and I agree with everything that has been said. However, being a realist, I agree with my noble friend Lord Trafford. It hurts me to say this, but the minute the people who run bed and breakfast establishments hear that the benefit has been raised they will put up the rent. Although the noble Lord, Lord Winstanley, says that that will take a long time to occur, I have to tell him that it would only take a week because the rent is paid weekly.
I still stand by my amendment, but I look forward to hearing what my noble friend the Minister has to say. I believe that people in bed and breakfast accommodation must receive the money they lost under the earlier legislation. But how are we to prevent rents being increased within a week if benefit is increased? I shall be interested to hear what my noble friend the Minister has to say. I feel I must make that point so that he can refer to it when he replies.
Baroness Phillips: Surely the noble Baroness would agree that that is not a reason for not introducing legislation? There will always be someone outside this Chamber who will find a way round almost everything we do in Parliament. However, that is not a reason for not including an amendment such as this in the Bill.
Baroness Faithfull: I agreed with my noble friend Lord Trafford when he said that something must be done. I agree with the noble Baroness. Of course something must be done. However, I should have thought of this before: suppose we go forward with the proposal and the people who run the bed and breakfast accommodation put up the rents. In that case the families and their children will not be any better off. That is what worries me, and that is the point I should like my noble friend the Minister to address.
Baroness Blotch: I am grateful to my noble friend Lady Faithfull for expressing that reservation, and I hope that that is not taken as a cynical comment. I believe that there is universal sympathy with this issue, but a distinction has to be made between what has occupied most of those Members of the Committee who have spoken.
My noble friend Lady Macleod mentioned the squalor which people have to endure. Some of the responsibility for that situation lies with local authorities which could do more to make sure that if they pay for bed and breakfast, breakfast is provided. I believe that a great deal more could be done.
I should like to return to the reservation of my noble friend Lady Faithfull. Simply 1.o return to the system which applied before 10th April would encourage an increase in rents. That would happen very quickly and the very people we want to help would not be helped.
There is another group of people who, although they did not live in squalid conditions, were encouraged to leave home—young, single people—knowing that board and lodging expenses would be met and that

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they would be paid an allowance to cover three meals a day, which I believe is an outdated concept. One has only to examine the figures to see the incredible rise in the number of young people leaving home and staying at seaside resorts, or other parts of the country, and not necessarily living in squalor. Landlords have found it very useful to have tenants at those times of the year when there are no tourists.
I believe that there is a practical problem in the suggestion that we revert to the system which applied before 10th April. However, there is certainly a problem. I believe that all energies and minds should be addressed to doing something practical which would really help people and rescue them from such dreadful conditions.
The one point for which I have the greatest sympathy is that mentioned by the noble Baroness, Lady Jeger. We should be looking at the reasons why people find themselves in such a position and tackling the causes of the problem. At the moment I believe that there is a real dilemma for the Minister.
Lord Skelmersdale: There is certainly a real dilemma for the Minister! Perhaps I may dispose of the question of the long-term effects. Members of the Committee on all sides of the Chamber have mentioned with approval what my noble friend Lord Caithness is trying to do in the field of housing. I know that noble Lords opposite do not approve 100 per cent. of some of his actions. Nevertheless, he is making great efforts to persuade local authorities to do all those things which all Members of the Committee, including myself, want to see done—to get people out of bed and breakfast accommodation and ensure that others never have to move into such accommodation. There is no question about that whatsoever.
For some time local authorities have had great difficulty in administering their housing stock. In London in April 1988 there were over 23,000 empty local authority houses. Of those, 9,000 had been empty for one year. It is interesting to note in that connection that there are some 10,000 homeless families—almost as many families as there are local authority dwellings which are empty for more than one year. The problem need not exist. It would not exist if someone other than local authorities were directing housing policy in this country. I believe that if someone else were responsible the problem would not exist.
The noble Baroness looks amazed at what I have just said. I do not say on behalf of the Government that we shall strip responsibility for housing away from local government because there are many other considerations in the housing field which do not weigh on this particular problem. However, I say that if those local authorities put their empty dwellings back into use quickly this problem need not exist.
Baroness David: If the Minister has studied the Audit Commission report he will know that there are many reasons why there are too many empty houses. If the local authorities were given more money in order to maintain those houses and put them into good order there would not be so many.
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I disagree very much with what the Minister has said. He has tried to put the entire responsibility on to local authorities. That is quite unfair.
Lord Skelmersdale: In answer to that point, one cannot earn rent from an empty property.
I shall respond to the point made by the noble Baroness about the Audit Commission, which estimates that if the average national re-let period could be cut to six weeks in London and three weeks outside London the number of people in bed and breakfast accommodation could be reduced by 2,400.
I did not necessarily want to give a housing speech, but the way the debate has developed I must. The noble Lord, Lord Seebohm, brought .the subject up originally. I emphasise what I said earlier. Southwark takes 24 weeks to let a flat or house. That is well above average and is a sign of inefficiency, to say the very least.
To return to the amendment, I agree with those of my noble friends behind me who have said that by reintroducing the premium one will inevitably reintroduce the abuses. The noble, Lord, Lord Winstanley, said that that would take ages. The point which my noble friend Lady Blatch raised is very pertinent. The split into income support and housing benefit took place only on 10th April. I know that the cynics say that the electorate's memory is very short. I can assure the Committee that landlords' memories are a great deal longer than from 10th April to whenever this measure comes on to the statute book and is implemented.
I have another difficulty with the proposal. The amendment states:
"In relation to income support and housing benefit the applicable amount for a person in board and lodging accommodation shall include an amount in respect of his being a person in board and lodging accommodation".
What is that amount? How am I to argue to the powers that be for a sum of money to deal with this particular problem? They will turn to me and say that I do not know what I am talking about and do not have the least idea how much money is involved. From this amendment, no, I do not know how much money is involved.
A number of Members of the Committee have raised the pertinent point of the amount of money needed for people to live, whether in bed and breakfast accommodation or elsewhere, if they do not happen to have a cooker. The proposed amendment provides for a higher rate of income support to extend to any accommodation similar to a hotel, guest house or lodging house where cooking facilities are inadequate. I have already—both last week and today—picked holes in amendments which do not define their terms. As I read the amendment it is quite likely that that could include multi-occupation bedsits where cooking facilities are already provided. In theory, therefore, there is the possibility that landlords and claimants might remove adequate facilities in order to receive a higher rate of benefit. Clearly, that would be quite wrong.
Of course I am aware from this debate that noble Lords are concerned about homeless families who

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have been placed in board and lodging accommodation by local authorities. I share that concern, as I hope I have already made clear, but amending the benefit provisions in the way proposed is not the way to address the problem. As we all know, local authorities are encouraged not to place homeless families in board and lodging and, if they must, to keep them there for as short a time as is humanly possible.
Lastly, the amendment assumes that the normal rates of income support are not adequate to cover the cost of food if the claimant lives in such accommodation; that is to say, the accommodation described in the amendment. That immediately raises the problem of attempting to define and determine what might be regarded as adequate or inadequate cooking facilities in any particular case. There is a prospect that claimants would have to be asked intrusive questions about their cooking facilities, with local office staff perhaps forced to impose a nationally set standard on, for example, the number of hot plates available for a family member. That would plainly be ridiculous. Income support personal allowances and premiums are intended to cover all normal day-to-day living expenses.
I believe that the main point to remember is that meals allowances payable under the old rules were too generous. As has been mentioned by the Committee this afternoon, eating habits over the years have changed. No one is suggesting that we are a less healthy nation as a result. Indeed, we are rather proud of the health of the nation. Perhaps I should not stray into matters covered by another department in which I had the honour to serve recently, but it is a fact that we obtain extremely good value for money in that respect.
Lord Winstanley: I am quite sure that the noble Lord would not say that anyone should be proud of the health of families living in bed and breakfast accommodation.
6.30 p.m.
Lord Skelmersdale: I did not say that anyone should be proud of the health of families living in bed and breakfast accommodation. I was pointing out that, across the country, wherever people live, eating habits have changed and, I believe, have changed for the better. The adequacy or otherwise of—
Lord Stallard: The noble Lord made the point about cost. He has said more than once that the Government were being generous in their allowances. A few minutes ago, he said that he could not lawfully go to the DSS and say, "How much may I allow? What is the sum I am supposed to give?"
At present, homeless families placed in bed and breakfast accommodation by local authorities receive £10.85 per week from the DSS for every member of the family. There is nothing generous about that. That sum is intended to cover lunch. The noble Lord will spend that sum tonight. The DSS allowance for dinner is £10.85. So those meals are
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not provided out of the basic charge. What is over-generous about that? Why cannot the Minister go to the DSS and say, "Leave it as it is. We shall deal with the abuses, the shortages and empty properties in the way that we normally deal with them", instead of saying that the Government are determined to fight those rapacious landlords and squalid hotel-keepers at the expense of every bed and breakfast family in the country. That is no way to go about the matter.
Lord Skelmersdale: By my calculations, ¤10.85 for two meals a day is £21.70.
Lord Stallard: That figure is per week.
Lord Skelmersdale: I apologise to the Committee; that figure is per week. Perhaps we can all get a little less emotional and calm down for just a moment. The calculation that I was trying to make comes to £21.70 a week. The figures mentioned by the noble Lord, Lord Stallard, have just been confirmed to me as absolutely correct. However, it might be relevant to point out that my medical advice is that an authoritative source calculated the cost for a moderately active man as £9.46 a week in 1986 which, in today's terms, comes out at around £10.80 a week.
Lady Saltoun of Abernethy: Perhaps the noble Lord will tell us whether that sum was calculated for someone being cooked for at home or for someone who had either to eat every meal in a restaurant or buy it from a takeaway?
Lord Skelmersdale: The noble Lady jumped in just as I was about to say that the figure is closely reflected in the average shopping basket which is about £11 a week. We all know that the average person has cooking facilities. That is true, but there will be occasions when it is not appropriate to have cooked meals all the time. No one has suggested that an uncooked meal cannot be eaten in a bed and breakfast hostel.
There is yet another point; namely, that, with the permission of the landlord, the applicant himself can have a cooker. Those are very poor people. How will they get their cookers?
Baroness Jeger: The social fund stops that.
Lord Skelmersdale: The social fund does not stop that. I have just had it confirmed that, so long as the landlord does not mind having a cooker in the place—I cannot see any good reason why he should—application to the social fund would be likely to succeed.
I have gone into enormous detail and strayed over a large number of points, but a large number of points were put to me. I certainly understand the problems of this group of people, but, returning lastly to—
Baroness Seear: Is there any reason why landlords should not be told that they must give permission for a cooker? Why should it only be in cases where

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they are prepared to give a cooker? If they let people have a bed, they could perfectly well be told that, along with a bed, they must allow a cooker or any other bits of furniture that one would like to tag on. Presumably, one can obtain the cooker from social security, if one cannot afford it from anywhere else.
Lord Skelmersdale: Yes—one can obtain the cooker from social security, as I have just said, but it is the landlord's dwelling. It is possible that, on the one hand, the landlord might be perverse, but, much more likely, it could be that the wiring in that particular establishment would not be up to the strain of having a cooker. That is why I tried to say that it was not a complete, but a partial solution to the problem.
I have accepted on behalf of the Government that the problem exists, but I have also warned of the great dangers which I know that my noble friend Lady Faithfull recognises in her amendment. If I could be told of another way forward, I should be delighted to follow it up, but, at the moment, with the greatest regret in the world, I cannot suggest that noble Lords should agree to the amendment.
Baroness Blatch: Perhaps I may ask my noble friend a question, although it may be difficult to obtain a reply straight away. We seem to have honed down the problem to the allowance being adequate if there is access to cooking facilities and to whether it is adequate for eating out seven days a week. The allowance for two parents and one child would be just over £65 a week to provide two meals per day for those people. It seems to me that, with access to cooking facilities, that is possible. It is not ideal, but it is possible. Clearly, if there is no access to cookers, there is a problem. Are we talking about a high percentage of people who are boarded out by local authorities where there is absolutely no cooking facility whatever? It seems to me that, if that is the problem, we should address the practical problem of perhaps providing some assurance, even within legislation, that, if a local authority must accommodate a family in that kind of accommodation, there will be access to cooking facilities.
Lord Skelmersdale: If I had the wit after this long debate to make a summary of the position that I have arrived at in my mind, the words of my noble friend Lady Blatch would serve the purpose very well indeed. I am grateful to her for those words. We know that there are roughly 10,000 such people, but I should have to confirm that fact. In considering the matter, I think that we should all get our facts right and establish exactly what we are talking about and seeking to achieve, and as I said earlier, the cost of it.
Earl Russell: The noble Lord says that he recognises the problem but that it is a great deal too difficult to do anything about it. With respect I find it very hard to accept that answer as satisfactory.
Lord Skelmersdale: No, I did not say that it was too difficult to do something about it. I said that I was absolutely convinced in my own mind—and
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certainly I am supported by some of my noble friends behind me who have spoken—that this was not the right way to deal with the problem. That is a different matter.
Lord Henderson of Brompton: What is the Minister prepared to do about it? He recognises the problem and says that the amendment is inadequate for certain reasons which I and others in the Committee I am sure understand. But he cannot leave the matter simply saying that the amendment is inadequate. Surely it is for the Minister to find a solution if this amendment will not do.
Lord Skelmersdale: That may very well be so, but I cannot do it off the top of my head.
Baroness Faithfull: Perhaps I may take up various points which have been raised. Unless one has visited a bed and breakfast place one does not, and cannot, understand the situation. The noble Lords, Lord Winstanley and Lord Pitt, have obviously visited bed and breakfast places and know about them.
The first point that I should like to make is that the social security rules were changed in April. I have not yet discovered why they were changed. However, there is no doubt about it. As regards living expenses, before April there was an extra food allowance for those in bed and breakfast accommodation. It is, I believe, correct, as the noble Lady, Lady Saltoun, says, that under the social security Acts family credit and family income support assume that one is in one's own home and using one's own kitchen. So my first question is: why were the rules changed?
My second point concerns the suggested additional cooking facilties. These places are run privately: the one terror of the occupants is that they may be turned out into the street. I invite the Committee to consider what would happen if cookers were ordered to be put in each room and on each landing. The owners of the accommodation would not do it. Indeed, I should not want them to do it because of the fire hazards involved. There would certainly be difficulties; so that is a problem we are up against.
It is very expensive to eat healthily. I love cold meats, salads and eggs, but the cost is high. I have received a letter from the noble Lord, Lord Sainsbury—unfortunately I do not have it with me because I did not know that this point would arise—giving figures for the rise in the cost of food at Sainsbury's supermarkets. One can go to no better place. Well, there are places just as good but I pay tribute to the quality of the food at Sainsbury's, even though the noble Lord, Lord Sainsbury, is not in the Chamber at the present time.
I believe that there is a very real dilemma. I regret that I did not think of the point about owners raised by my noble friend Lord Trafford. As is apparent, I have no high respect for the people who run bed and breakfast places. I am absolutely sure that they will put up the charges and that the people who stay there will not benefit.
I am very grateful that every noble Lord who has spoken has supported the amendment in spirit. I suggest that the matter should be discussed with

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my noble friend the Minister. I promise that the amendment will be brought back at the next stage of the Bill with wording that may make it possible for him to agree to it. On that understanding I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 39 and 40 not moved.]
Clause 13 agreed to.
6.45 p.m.
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 41:
After Clause 13, insert the following new clause:
("Applicable amounts
—. (1) In paragraph 1 of Part I of Schedule 2 to the Income Support (General) Regulations 1987, after the words "applicable amounts and polygamous marriages" there shall be inserted the words "except that, for this purpose, any person aged less than 25 to whom any paragraph in Part 11 of the Schedule 1A applies or would apply if he were aged 16 and had not reached the relevant date determined under regulation 13A (3)(b) shall be treated as if he were aged 25."
(2) In paragraph 1 of Part 1 of Schedule 2 to the Housing Benefit (General) Regulations 1987, after the words "17(a) and (b)" there shall be inserted the words "except that, for this purpose, any person aged less than 25 to whom paragraph in Part 11 of Schedule 1A to the Income Support (General) Regulations 1987 applies, or would apply if he were aged 16, claiming income support and had not reached the relevant date determined under, regulation 13A(3)(b) of those regulations, shall be treated as if he were aged 25.").
The noble Lord said: This amendment has been grouped with the succeeding amendment, Amendment No. 42. With the leave of the Committee I shall discuss them together. Those who have put their names to these amendments are concerned with the plight (if that is not too strong a word) of 16 and 17-year olds since the changes in their entitlement to income support in September 1988. Withdrawal of entitlement has led to some very real heartbreak. The assumption that all young people are able obtain places on youth training schemes is not borne out by the evidence. For those who cannot find places on such schemes and who are not able to live at home, the financial and social consequences of those changes are extremely serious.
To confine myself to Amendment No. 41, the purport is to enable those aged 16 or 17 who cannot live at home and who have not found employment or a place on a youth training scheme to have the same amount of money as that given to 18 or 19-year olds or even an adult. I defy anyone to say that there is a difference in the cost of living for a 16 or a 17-year old who has no home and an adult who has no home. They are in exactly the same position. I cannot see why they should not be provided for at the same rate.
I shall not go into great detail beyond stating that particular proposition and asking the Government to consider providing the same rate of support. I gather that if the rate of support is the same as that for someone aged 25 then the same applies in relation to housing benefit. I shall not go into the second limb of the amendment which concerns housing benefit.
I do not wish young people who have no home, no job and no place on a youth training scheme to be in the position of having no money and having to go onto the streets. Very recently this Chamber debated the subject of homelessness when this problem was pinpointed. It seems to me to be entirely necessary for it to be addressed in this Bill. Young people should be provided with adequate support. Sixteen and 17-year olds who are driven on to the streets because they have no home, did not obtain a youth training scheme place or have no job are the criminals of the future. They are our responsibility. We must ensure that such a thing does not happen to them. I hope very much that the Committee will support my plea that they should be properly provided for.
Very often these young people have come from bad homes. They may have been abused at home and that may be the reason why they cannot go back there. As the noble Lady who sits beside me described on an earlier amendment, they may be inadequate in some way. If they are, it is even more important that they should be given enough money on which to live.
As I have said, I cannot see why it should be less expensive for a 16 or 17-year old to live in such circumstances than it is for an adult. I beg to move.
Baroness Faithfull: As this amendment is grouped with Amendments Nos. 42 and 43A, perhaps I may speak to Amendment No. 42 and support the noble Lord, Lord Henderson. I have received letters from the National Council for Voluntary Child Care Organisations, which covers 75 voluntary organisations; I have received a letter from the Scottish Council for Single Homeless, which covers Edinburgh and Glasgow; I have received a letter from the Scottish Association of Children's Panels, from the British Association of Children's Panels and from the National Children's Bureau. I have therefore received letters from throughout the United Kingdom on this matter.
Amendment No. 42 covers two types of young people. It covers those who have been in the care of a local authority under the social services department, most of whom were cases referred to the local authority by the courts. Therefore it was on court orders that they were removed from home. In all likelihood they do not have homes to return to. It covers young people who have left home on account of harassment and perhaps cruelty. I am thinking of a girl who has an unemployed stepfather. He turned her out of the home. She wanted to go for fear of damage being done to her.
These two amendments do not cut across Her Majesty's Government's policy that, wherever possible and practical, boys and girls of 16 and 17 years should be encouraged to live at home and be the responsibility of their parents. However, that is quite clearly not possible with these two categories. If these amendments are not carried, the following situation will arise. Young people will become homeless, and I have it in very good authority that many of them are homeless because they cannot find accommodation in which to live on the amount of money that they are receiving. Because they do not

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have accommodation, they cannot obtain a job. Because they do not have a job, they cannot obtain accommodation. It is therefore the chicken and egg situation.
Those under 18 years receive £20·80 for 12 weeks or 16 weeks from the time they leave school until about Christmas-time. The 18 to 24 year-olds receive £27·40. Those over 25 years receive £34·90. Young claimants living independently are hardest hit by the age barrier. As the noble Lord, Lord Seebohm, said, we are back to housing again. Whether one is under 18 or is 28 or 30, housing is not graded. No low grade affordable housing is available for people. Therefore one does not need the amount of money to be graded because if one is 16 or 17 years one has to pay the same amount as those who are 25 or 30 years old.
We were very grateful to the social security department for saying, some time ago, after representations that the 16 to 17 year-olds could draw the same amount as the 18 year-olds. However, the problem still arises when at the end of the 12 weeks the money runs out and they are not entitled to income support. They do not have jobs. As the noble Lord, Lord Henderson, said, although statistically there are a sufficient number of YTS places for the number of children who need them, in practice it does not work out that way. I know of a number of children who want a job or want to have a YTS place but cannot find one. A number of employers have found that 16 and 17 year-olds are a liability rather than a positive help at work. After all, businessmen have to consider the production of goods.
We have this amendment because young people should be put on a firm financial footing in order to be able to obtain a job and because it is not fair that through no fault of their own young people have been in care.
Finally, under the Children Bill we moved that the local authorities should aid and assist children who had been in care. However, we lost the amendment. The provision in the Bill is that the local authorities may aid and assist. Therefore these young people may not receive help from the local authorities although they have been in care.
I know that many other noble Lords have much to say on this matter. However, I hope that we shall think carefully about these young people. They will become a serious social problem in our country unless we look after them at this stage.
Baroness David: I should like to support Amendment No. 42 very strongly. During discussion on the Children Bill we tried to address the problem of young people leaving care. We were told very firmly that it was a social security matter. Luckily, we have a Social Security Bill. Perhaps we can now do something about the problem.
A great many people have shown sympathy and understanding on this issue. We were all moved by the sight of the young people who came to the House when the Children Bill was being discussed—invited by the noble Baroness, Lady Faithfull. It made the position real for all of us. It is up to us to do
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something about this problem. I know that Mr. Scott improved the situation slightly, but it is only slightly better. The problem is by no means resolved. We must carry one of these amendments to this Bill.
Earl Russell: I must apologise for standing between Members of the Committee and their dinner. It is always an uncomfortable place to be. Nevertheless, this is probably the most important single issue in the Bill. I hope that Members of the Committee can bear to go hungry for just a few minutes in order to discuss it. I support Amendment No. 41 to which I have my name and Amendment No. 43A. I support also Amendment No. 42, to which I would have had my name if the noble Baroness, Lady David, had not beaten me to the tape by about a yard.
The problem is that a great many of the teenagers concerned simply cannot live at home. That was well brought out in the admirable feature in the Independent last Saturday. Thirty-eight per cent. of homeless teenagers have been thrown out or abused by their parents and are in no position to go home. Forty per cent. of them have been in care and have no home to go to. Therefore asking those teenagers to live at home is in the most literal sense a case of pie in the sky. It is simply not possible.
In a number of areas YTS places are not as freely available as is needed. Glasgow among others has been cited—a quite substantial centre of population. It is also quite difficult to get a YTS place when one has no fixed address. That concerns many of these people. It can also be a problem for those who have been abused. A case has been brought to my attention of a teenage girl. She had left home because she was being abused by her father. She was found a YTS place in her home town. Her father persistently followed her and continued to attempt to abuse her. Very naturally she left town and was deprived of benefit for having wantonly thrown up a YTS place. The word "wantonly" might perhaps have been applied in a different context in that situation. In many of these cases one cannot possibly expect the teenagers to live at home.
Amendment No. 43A draws attention to a Scottish dimension: the younger age on leaving care and the difficulties which are caused to the Scottish stop-over hostel system. There is much doubt as to whether they are properly classified as night shelters within the context of the Minister's small but welcome concession of March.
All this involves the setting up of a great deal of bumbledom. It has involved in Scotland the asking of a great many personal questions of teenagers by people not entirely qualified to do that. We had in the Independent feature on Saturday a defence of the present situation by Mr. David Willetts, which I thought very easily could have been signed "Marie Antoinette". He said that the social security system ensures that people have the money to pay rent. If someone is held not to be eligible for full rate income support, I do not see how he is meant to pay rent. It is difficult enough to pay rent on full income support, as we have just been hearing. In this kind of situation, it is next to impossible.

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Mr. Willetts was also pleased to argue that there was no simple solution, certainly not one which required the Government to spend more money. That is a painfully familiar line of argument and not a particularly helpful one. People have to do something to live. At Second Reading, the noble Baroness, Lady Faithfull, drew attention to the spread of prostitution as a result of these regulations. She is right. The notice boards at my local newsagents around Kilburn are full of a mushrooming spread of advertisements for massage. I do not believe that any of those offering that massage are likely to be applying for licences under the London Local Authorities (No. 2) Bill.
The Government talk about a dependency culture, but we all depend on somebody or something. I do not see that dependency on the state is necessarily more sapping for the character than any other kind of dependency. I certainly do not see an improvement. If we give up a dependency on the state we are forced instead to have a dependency on the ponce or the fence.
7 p.m.
Lady Saltoun of Abernethy: I should like to add another point to those already mentioned. The idea that someone under 18 needs less to live on than someone over 18 is not only quite ridiculous but I believe it is the other way round, because many 16-to 18 year-olds are still growing. That means not only that they need more food, but they outgrow their clothes and have to have new ones.
I should like strongly to support what the noble Earl, Lord Russell, has just said. The noble Lord, Lord Henderson, said that hunger and homelessness are driving young people onto the streets and into crime. But they are also driving both girls and boys onto the streets and into prostitution. I believe that that is absolutely wicked.
Baroness Gardner of Parkes: I should like to ask a question of those who have moved these amendments; in particular my noble friend Lady Faithfull. I understand how one differentiates precisely the teenagers who have come from local authority care. But how in a case such as that described by the noble Earl, Lord Russell, does one establish the cause of someone walking out of a YTS scheme or going to a job and giving it up? How can one establish the cause of that? I can remember in the past circumstances where many patients in the section in which I was working, on leaving school preferred not to take a job because it was so much nicer just to collect the money and go on living the life they lived when at school.
I should like to know how one selects the deserving case, and how this provision can be made in such a way that it does not deter the young from seeking work. I think it is helpful when people cease education if they can go on into employment and training.
Earl Russell: Perhaps I may cursorily answer the noble Baroness. The case to which I referred came
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before the courts. I should have been perfectly happy to accept the verdict of the court.
Baroness Jeger: We support these amendments. I feel that the case has been well outlined. If the noble Lord is not prepared to accept the facts as put before him by the various speakers tonight, I hope that he will read, as he probably has, some of the literature which most of us have received from the voluntary organisations that are dealing with the problem at the coalface. They are the people who are trying to look after homeless young people. Their message to us is of too many failures and too few resources to solve the problem.
It is no use our saying, as has been said in another place, that these young people should be at home with their parents. We know all the reasons why they are not. One of the cases that I have come across most frequently is where there has been a marriage breakdown followed by a second marriage and possibly an impossible relationship with a new stepfather or stepmother. Sometimes a new baby is the impetus that causes a teenager to feel thrown out, or at least to have to get out.
I hope that with all the case histories that are available and all the impartial information which is before the Government, the Minister can help us this evening.
Lord Boyd-Carpenter: The problem with all social security legislation—and your Lordships will perhaps know that I have some experience of that—is that one deals item by item with the various aspects of it. It is always possible, only too easy to make a powerful, strongly emotional case, sometimes a strong intellectual case, for the particular proposition which is being debated. On the other hand, the Minister has the responsibility of looking at all the various directions in which the now vast expenditure on social security goes and trying to work out his priorities. Without expressing very strong opinion on this amendment, I should with great respect say to your Lordships that if one is to consider this responsibly one must look at it not merely on its own merits but also in comparison with and in relation to the very large number of other matters that the Committee and people outside are discussing, where there is a perfectly good case to be made for improvement.
It would help us in reflecting on this if, when my noble friend replies, he could give some estimate of what the cost of the amendment would be and perhaps set that cost against the other matters with which he has to deal, including the one he sympathetically indicated earlier this afternoon it was his intention to consider.
Lord Pitt of Hampstead: When the Minister replies, I hope that he will not be thinking merely of the financial cost of paying the benefit, but of the cost, which matter has been raised by at least two of the speakers, of the consequence of what is happening. We now have young people on the street, homeless and in danger. The cost to the state of allowing that situation to go on is very much greater than whatever may be the cost of providing those

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young people with benefit. Therefore I hope that when the Minister replies he will tell us that the Government will look much more sympathetically on young people who are estranged from home.
To answer the noble Baroness, Lady Gardner, what is really needed in the department is some counselling. One of the ways to help is to have people to see these young persons and decide whether it is right that they should be allowed to do what they want to do, which is to leave, or whether they should be persuaded to stay at home in spite of the difficulties. When people need to be allowed to leave home, and want to leave home, they should be able to get the benefit; and if they are to live independently the benefit should be sufficient to meet the cost of living independently. There are the two problems and I hope that when the Minister replies he will address himself to both.
Lord Skelmersdale: I will try to be a brief as I can, but I should start by making a general point rather like my noble friend Lord Boyd-Carpenter. I cannot at this moment furnish the Committee with the actual cost of either one of these amendments —though I hope to do so by the time I have sat down—but clearly it would be substantial.
Talking on this general theme for a minute, I believe that social security and the safety net provided by the state, has, over the last 20 or so years—indeed, ever since Beveridge in 1948—slowly got better, bigger and more comprehensive. At the same time, there have inevitably had to be priorities at any particular moment. I think that was the point which my noble friend Lord Boyd-Carpenter was addressing to the Committee.
These three Amendments, Nos. 41, 43A and 42, are attempts by noble Lords to amend existing income support and housing benefit legislation. Their aim is to increase the rate of benefit paid to people under 25 who are living away from home. It has already been mentioned that we have recently announced not a concession but a very good improvement which will provide extra help for 16 and 17 year-olds on income support, who for good reason have to live independently or, in the words of the noble Earl, perhaps I could say estranged. From July, this group will get the personal allowance normally appropriate to 18 to 24 year-olds—£27.40 compared with £20.80 at April 1989 rates.
This new clause in Amendment No. 41 seeks to give the over-25 personal allowance to income support claimants under 25 who live away from home. It also makes a similar concession for some young people claiming housing benefit. The people who would benefit from this amendment are chiefly those who have no parents or persons acting as such. And it would help those who cannot, or do not, for certain specified reasons, live with their parents.
When I first read Amendment No. 43A, I thought it had a similar intention so far as income support was concerned, the main difference from Amendment No. 41 being that, rather than giving the over-25 personal allowance as such, the additional amount would be paid as a premium. However, as
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I read the amendment again, it became clear that the effect would not be nearly so straightforward. I cannot think, for example, that it was ever the intention that a person estranged from his parents would see a reduction in his benefit at age 18; nor that a lone parent estranged from her parents would see a reduction in her benefit at age 25; nor that some disabled young people living away from home in specially adapted accommodation would receive less benefit than able-bodied young people who were estranged from their parents; nor that a young person could increase his benefit entitlement by over two-thirds by leaving home and following an unsettled way of life, even where he and his parents were on good terms. Yet these are some examples of the apparent effect of this amendment. I am sure that this could not have been the intention of the noble Earl, Lord Russell.
All these propositions have, I am afraid, several problems in common. First, we need to look at the whole of the benefit provision for people under 25 who are living on their own. If they are on income support—and I think this is a fact that many noble Lords did not appreciate—or living at the same level, maximum housing benefit is available; and, of course, maximum housing benefit, as we all know, covers rent and 80 per cent. rates. Housing benefit, as well, is payable from the age of 16 under the law in this country. So the various problems which have been suggested in this area simply should not arise. I would need to know in very much more detail—and I shall be happy to look at specific examples—where problems of this sort arise. But even after paying their 20 per cent. contribution to domestic rates, young people are left with a personal allowance which is sufficient without being over-generous.
Secondly, the way income support is structured reflects the average earning power of different age groups. That of the under-25s is lower than that for older people, and that is one reason for relating personal allowances to age in income support. The intention of this new clause is to return to one of the perversities of the old supplementary benefit scheme. There we had a householder/non-householder test. For non-rent and rates expenses before April 1988, someone under 18 would have received £18.75 if living at home, but £30.40 if living away from home. We thus had a real financial incentive for young people, particularly those under 18, to leave home. That clearly was wrong, and I think it is accepted across the Committee that it was wrong—
7.15 p.m.
Earl Russell: Is the Minister seriously suggesting that people will leave home for the sole reason of enjoying the luxury of living on a benefit of £30 a week?
Lord Skelmersdale: No, but knowing that you have a higher income than you warrant would certainly be an inducement. It is not the sole reason, and there may be all sorts of other reasons why a young person wants to leave home. However, we of course accept that for a few young people continuing to live at home is not an option. This is a particular problem

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for 16 and 17 year-olds, and that is why my right honourable friend announced on 13th March that we are relaxing the rules for those in this group who have to live independently.
I would remind the Committee that on top of the personal allowance any premiums that are applicable would also be payable. So a 16 or 17 year-old lone parent claiming income support, who cannot for good reason stay in the parental home, will have a total benefit of £49·55 a week from July when we introduce the changes. On top of this, I say again, all the rent and 80 per cent. of the rates will be met from housing benefit. I think the answer to my noble friend's point is that if the rent goes up, so does the housing benefit.
The noble Lord, Lord Henderson, cast aspersions on the realisation of the youth training scheme guarantee. I am informed reliably that over 141,000 unfilled places existed in the YTS scheme in May 1989. That is not to say that sometimes, in a particular local area, an individual course is not available and for that reason there are travelling expenses paid. But if there is any difficulty for a particular individual, training agents can specifically seek a suitable place and, on the rare occasions when a particular training scheme within a recognised travelling area is not available, this is what happens. For example, even in Scotland, which is a widely flung area, there were 13,770 unfilled places at the end of May.
Having said that, of course we also recognise that some young people could be worse off taking a YTS place or a job than on income support because of the effect of housing costs and expenses associated with their training or work. Therefore, we have decided to extend the over-18 personal allowance to all 16 and 17 year-old housing benefit claimants, not just those in special circumstances prescribed for income support. If we were to consider making any further concession to housing benefit claimants, we should want to do so on the same basis. However, while we thought it right to direct some help towards 16 and 17 year-olds, we believe that to introduce an increase of the order proposed for all under 25 year-olds would not be right. It may provide a perverse incentive for some young people to leave home needlessly.
I return to the problems of those people who leave youth training scheme places without obtaining a job. The Committee will remember that we discussed that matter at some length during the passage of last year's Bill, and severe hardship payments on income support are currently available in such cases. Each case is considered on its merits in the light of the individual facts. Full details are obtained from the claimant. Severe hardship provision is working. There have been 10,721 decisions up to 23rd June. Of those, 65 per cent. were successful.
Given what I have said and the other very pressing problems in the sphere of social security, many of which affect disabled people, which we discussed at length last week, perhaps one should take a large degree of notice of what my noble friend Lord Boyd-Carpenter said in his short general speech and
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perhaps these amendments will not be pressed to a Division.
Lord Boyd-Carpenter: Before my noble friend sits down, has he the figures for the cost of these amendments?
Lord Skelmersdale: I regret that I have not because I have no way of telling at this moment how many 18 to 25 year-olds there are who would be on income support.
Lord Pitt of Hampstead: Before a decision is made on this, will the Minister consider providing guidelines which will make severe hardship less severe? From the cases which have come to me, it appears that if a more flexible—I do not like that word—or softer attitude were adopted, we may find that we have fewer problems.
Lord Skelmersdale: Yes, I believe that that is a very valuable suggestion. I shall look into it and write to the noble Lord when I have discovered whether it is possible to move in that area. One clearly has to protect the young person and also do a balancing act in protecting the taxpayer. However, I shall certainly look into the point raised by the noble Lord.
Lord Henderson of Brompton: I should like to follow up what the noble Lord, Lord Pitt, said. At the same time, I wish to record my thanks to the Minister of State and Mr. Nicholas Scott for receiving the noble Baroness, Lady Faithfull, and myself on fairly similar matters a few months ago. I should like to thank them for their undoubted sympathy and, perhaps I may say, receptivity of the ideas which we put forward.
I also record my gratitude to the Secretary of State for the concessions which he made after that which have gone some way to meet the hardships that undoubtedly still arise. One matter at which the Secretary of State agreed to look was that the social fund should be administered with more flexibility. Despite the fact that the noble Lord, Lord Pitt, dislikes the word "flexibility", it is that sort of sympathetic flexibility which one wishes to see used more and more under the new dispensations introduced by the Secretary of State.
I believe that, if we are pressing the Secretary of State in this way and if he is true to the movements he has made in the past, he will make concessions in that way in regard to these amendments which we are now proposing.
In regard to what the noble Lord, Lord Boyd-Carpenter, said, it may be necessary to look with cold calculation at the cost of these amendments. However, if we are to look at the proposal solely as a matter of cost, we should also in the cold calculation take into account the considerable cost of putting these young people at risk if we do nothing about them. The future cost of looking after them in care, in institutions or in prison would be huge compared to looking after them when they are homeless, without a YTS placement and without a job. That calculation also needs to be made.

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In addition to that, I say:
"High Heaven rejects the lore,
Of nicely-calculated less or more.
One might put into the balance the human calculation which the noble Lord, Lord Pitt, asked the Minister to consider. That is something which must weigh in the balance.
This amendment has received support on all sides of the Committee. Under the new dispensation which the Minister has brought before Parliament and which is now enacted, one understands that there are difficulties, but something must be done about these people. It is a problem which needs a solution. It may be that the amendments of the noble Baroness, the noble Earl and myself are not exactly right, but we must have something in the Bill on Report, whoever it comes from, and I very much hope that it will come from the Minister.
Having said that, I should like to withdraw this amendment. I believe that the noble Baroness will be prepared to do that or perhaps not to move her amendment, and I hope that the noble Earl will agree to do likewise. I hope that meanwhile the Minister and Mr.Nicholas Scott will consider the special problems of these young people and bring forward at the next stage a proposal to meet the concerns expressed from all sides of the Committee. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Faithfull Baroness Faithfull had given notice of her intention to move Amendment No. 42:
After Clause 13, insert the following new clause:
("Income support for persons aged 16 or 17
. In regulation 13A of the Income Support (General) Regulations 1987—
(a) for paragraph (3) there shall be substituted—
"(3) In the case of a person to whom any paragraph in Schedule 1A applies, the relevant date is the date on which he attains the age of 18.";
and
(b) in paragraph (7) the words "(3)(b) and" shall cease to have effect.").
The noble Baroness said: As I said earlier, this amendment refers to a small group of people; that is, 16 and 17 year-olds who have been in care or who for various reasons have had to leave home. Therefore, we are talking about a small number of people.
I am sad that it is not possible for the Minister to give the figures asked for by my noble friend Lord Boyd-Carpenter because I believe that he would find that the cost would not be substantial. I also say to my noble friend Lord Boyd-Carpenter that if we give these children a chance for independent living on a sound financial basis, that is a good investment, because from there they will be able to obtain a job, look after themselves and come off income support altogether. I believe that that is a very important point. My amendment moves towards a constructive independence on the part of young people.
My noble friend Lady Gardner of Parkes asked how one knew whether a child had to leave home and whether there were reasons for it. I believe I am right in saying that there is an adjudicating officer
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and that most social service departments know where there are difficulties. Surely the adjudicating officer is the person who looks into such situations.
I have to say that I do not believe a great deal of research into this has been done. I support the Scottish Association of Children's Panels which has written to me giving its view and why it wants the amendment. It states:
"We would repeat what we have said previously, that it is in the interests of everyone in society that disadvantaged young people are given every chance to begin independent living on a sound financial basis".
It is because I want to see these children independent of the state that I believe they should be put on the right lines to begin with.
Having said that, like the noble Lord, Lord Henderson, I should like to discuss this with my noble friend the Minister to see whether we can work out a constructive way of assisting these children. On that basis, I do not move the amendment.
[Amendment No. 42 not moved.]
Lord Henley: Perhaps this would be a suitable moment to adjourn the Committee stage and return at 8.30 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

International Parliamentary Organisations (Registration) Bill
7.31 p.m.
Viscount Montgomery of Alamein: My Lords, I beg to move that this Report be now received.
Although no further comments on the Bill are required, it might be of interest to the House to know that today is precisely the 100th anniversary of the founding of the Inter-Parliamentary Union in 1889. To mark the occasion, this morning in the Members' Lobby of another place Mr. Speaker unveiled a bust of Sir Randal Cremer, the distinguished liberal thinker and co-founder of the IPU with Mr. Frédéric Passy from France.
It was only a small ceremony, but a significant landmark in the various events that are taking place this year which lead up to the important IPU centenary conference taking place in London in September. I beg to move.
Moved, That the Report be now received. —(Viscount Montgomery of Alamein.)
Lord Cledwyn of Penrhos: My Lords, I associate the Opposition with the remarks of the noble Viscount, Lord Montgomery, and congratulate the Inter-Parliamentary Union most warmly upon its centenary. It is one of the few international institutions I know which has done no harm but which has achieved a great deal of good. Anyone who has attended an IPU annual conference will appreciate that. I wish the IPU many happy returns of the day.
Lord Glenarthur: My Lords, perhaps I may be associated with the remarks of my noble friend Lord Montgomery and also the noble Lord, Lord Cledwyn. One hundred years is a very good start. We look forward to a further 100 years. I join with both noble Lords in wishing the IPU every success for the future.
Report received.
[The Sitting was suspended from 7.35 to 8.30 p.m.]

Social Security Bill
House again in Committee.
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 43:
After Clause 13, insert the following new clause:
("Employment rehabilitiation
. In paragraph 7(1) of Schedule 8 to the Income Support (General) Regulations 1987, after the word "derived" there shall be inserted the words "from employment in a work progamme for the rehabilitation of persons who would otherwise be unlikely to obtain remunerative employment or".").
The noble Lord said: This amendment stands in my name and those of the noble Baroness, Lady Faithfull, the noble Lord, Lord Ennals, and the noble Baroness, Lady Jeger, so it has support from all sides of the Committee. It is about employment rehabilitation. It concerns,
"the rehabilitation of persons who would otherwise be unlikely to obtain remunerative employment".
The amendment is the result of the experience of a large number of organisations that run work schemes for people who have recurrent mental health problems.
A group of working practitioners who manage rehabilitative work schemes have come together. I should like to name them. They are the Richmond Fellowship, St. Mungo Community, the Carr-Gomm Society and last but by no means least, the Peter Bedford Trust. They have been worried by the fact that some of those whom they look after in these rehabilitative work schemes may earn up to £15 a week while others who are their peers and people they work with can earn only up to £5 a week. Those in receipt of a disability premium can earn £15 a week. Those who are not in receipt of the premium can earn only up to £5 a week. On the face of it this seems most unfair and is most discouraging to those who need every kind of encouragement and who may for one reason or another not be in receipt of a disability premium.
The aim of the organisations that run the schemes is to seek to integrate or reintegrate people who suffer from disability into the community and establish so far as is possible their capacity to live independently. I ask the Minister seriously to consider whether this anomaly—for it is nothing less than an anomaly—should be eliminated.
I know from personal experience that people with disabilities sometimes wish not to parade them and in particular not to register them. Quite a number of people are certainly eligible for and are entitled to seek registration as disabled but choose not to do so because they do not wish to be labelled as disabled.
That is a perfectly legitimate and honourable thing to do, or not to do as the case may be. A mentally or physically disabled person who feels for some reason or another that he can hold his head high without registering and that it would somehow label him in his application for employment if he registered as a disabled person should be encouraged and not discouraged. A provision which penalises those who take that point of view should be eliminated. That is what the amendment is about.
It is unfair that one person working in a rehabilitative scheme can earn £15 and another can earn only £5. It is something which no one would deliberately perpetuate. This amendment gives the noble Lord the opportunity to make the necessary change. It would not be costly to give encouragement to those who have decided not to register for what can be perfectly good reasons. It is quite wrong that they should be put at a disadvantage compared with those of their colleagues who are in such schemes and who for one reason or another have decided to register. It is that small but important inequality which the amendment seeks to eliminate. I beg to move.
Baroness Faithfull: I rise to support the noble Lord and I do so because I have practical experience of what it is like to be responsible for industrial training units in local authorities which are run for the mentally disadvantaged and the mentally handicapped.
I have three points. First, from the point of view of rehabilitation, if people in the unit are all doing the same work and the same training but are drawing different money, human nature being what it is, the ones drawing less money will do less well than those earning a higher figure. Secondly, from the point of view of justice, they feel that it is important that people doing the same work should draw the same amount of money. My third point concerns rehabilitation. The great aim of these centres is to rehabilitate. If one takes away this incentive and if people feel that justice is not being done, they will not work towards rehabilitation because they will feel that what happens in the centre will happen outside.
This is an important amendment. It is based on my personal experience of running such a unit. I very much hope that Members of the Committee will support it.
Baroness Jeger: We have talked today about the many disadvantaged people in our society; but I think that this is the first time that we have referred especially to people who are disabled and particularly those who are mentally disabled or handicapped. I think that it is only right for us to ask the Minister whether he can give us some idea of the Government's thinking on the matter.
Many of these voluntary schemes are helping people out of a position of hopelessness. They give them a feeling that they can be productive and useful members of the community. I agree with the noble Lord, Lord Henderson, that many of those people could seek registration as disabled but choose not to do so because they do not want to be so labelled.

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I remember when we had the Year of the Disabled in this country. Many people who had problems did not want to join in because they did not feel that their disability ought to be accountable; they wanted to be ordinary and able to work and earn their living. Of course we must accept that many of them will never reach full earnings capacity. However, we ought to help them to do as much as they possibly can.
I am sure that the Minister will correct me if I am wrong on this—he always does readily enough—but I understand from some of the voluntary organisations which are doing so much valuable work that there is a considerable block to the attempts of some of the work schemes to foster the ambitions of the disabled. I also understand that there is a financial disincentive to work through the limits on earnings for people on income support. I am told that at present earnings are limited to £5 per week, unless someone is on the disability premium. In that case a person can earn £15 a week. I see that the Minister is nodding his head; I find that very strange and something of a paradox, because it is not helpful in regard to the struggle which these people are facing.
Lord Skelmersdale: I hope that the noble Baroness does not think that it is strange for me to nod my head; I happen to be agreeing with her.
Baroness Jeger: I rejoice to hear that. I hope therefore that the Minister will agree with me that something ought to be done to remove this paradox. I also hope that we shall soon hear fom him some good news which will make it possible to help, in the words of the amendment, people who are,
"in a work programme for the rehabilitation of persons who would otherwise be unlikely to obtain remunerative employment".
I commend the amendment to the Committee.
Lord Lloyd of Kilgerran: I rise briefly to support the amendment moved so eloquently and movingly by the noble Lord, Lord Henderson. I can do no more than repeat a phrase from his speech: this amendment could do something to get rid of an inequality. Indeed, it would be most important for rehabilitation circumstances.
I was also most impressed by the presentation made by the noble Baroness, Lady Faithfull. She movingly supported the amendment because she was speaking from personal experience. However, I must be fair to previous speakers. I should also like to join the noble Baroness, Lady Jeger, in saying that something must be done about this matter. It may be that the drafting of the amendment can be improved but the basic substance of it is extremely important.
8.45 p.m.
Lord Skelmersdale: I am the first to acknowledge that a very good way of giving people self-expression and self-reliance is through work and training. Therefore I am most grateful to the noble Lord, Lord Henderson, for bringing this matter to the attention of the Committee. However, what no one has
912
mentioned is the fact that a very small proportion of disabled people are actually in remunerative work, as has recently been revealed by the mammoth survey of disabled people and their finances, social affairs and so on carried out by the Office of Population Censuses and Surveys.
Even when the first report was released I was devilling—if that is the right word—within my department to find out, first, why there were clearly not enough people in that position, and, secondly, what we should do about it. Having said that, we are still awaiting all the OPCS reports—a phrase that noble Lords will have heard me utter before, sometimes approvingly and sometimes disapprovingly. However, we are in the process of undertaking the biggest investigation ever in the history of this country into the circumstances of disabled, handicapped and disadvantaged people. One of the aspects which I hope will emerge from our research is that we shall be able to help the very people whom noble Lords who have spoken on this matter desire to help.
The question is whether we should try to help such people in advance and, if so, how we should do so. It would be easy for me, especially at this time of night, to start nit-picking with this amendment, but I shall resist the temptation to do so. However, it is worth saying that provision already exists for people to take advantage of the higher earnings disregard if they satisfy the conditions for receiving the lone parent or disability premiums or if they are a member of a couple who are under the age of 60 and have been receiving supplementary benefit or income support for two years or more.
I should say that the Government are not slow to change the rules under which income support is paid when our monitoring or research show that a change is necessary. For example, changes which we made in respect of 16 and 17 year-olds have already been referred to in today's discussions. I am glad to say that the Government are commissioning a comprehensive research programme to monitor the effects of the rules relating to earnings disregards to which this amendment is directed. We shall be studying developments closely to see what changes, if any, need to be made in the light of the findings.
I accept the point made by the noble Lord, Lord Henderson, about inequality. People in that situation are treated no differently from others, as I have said. In all areas of work people may be paid the same level of earnings. But, if one is directing state support to any particular group of people, the Government believe, and believe very strongly, that they should direct the greatest help towards those people who are most disadvantaged, such as disabled people. They also believe that they should offer the greatest incentive to those people who need it most, such as lone parents and certain long-term unemployed couples.
I think that the Committee will also wish to consider the various other forms of training which are available. The Government's employment training programme makes provision for a wide range of people, including those with disabilities and other problems, such as learning difficulties, to learn

913
new skills. But that is not all, because so do the youth training schemes and the education services, which extend education to young people in those circumstances to the age of 19, as the noble Lord, Lord Henderson, will know.
Participants in employment training normally receive income support on top of their training allowance and a training premium of up to £12 a week. That premium is fully disregarded in income support and serves to encourage people by giving them a lead over other benefit recipients. In addition, some training managers make a voluntary payment of up to £5 a week, which may also be disregarded.
Since comprehensive provision for training and education is made in this way, we see no need to make special provision for higher earnings disregards for individual organisations which choose to run their own schemes outside the existing government provision. As I said, the higher earnings disregard is already available under existing rules to those who satisfy the conditions for receiving it. Having said that, I repeat what I said earlier. This is a problem which needs to be looked at properly and thoroughly. I do not believe that that can be done within the context of the Bill, but I assure the Committee that it will most certainly be looked at.
Lord Henderson of Brompton: With that encouraging response from the Minister it would be churlish and indeed foolish of me to press the amendment. I am grateful to him for what he said. I recognise that the OPCS has yet to deliver its final report. We should perhaps respond to the Minister with a plea for time to consider the matter in the context of other cases.
I am glad to welcome and endorse the principle accepted and said by the Minister to be the Government's principle, which is entirely unexceptionable—that the greatest help should go to those who are most disadvantaged. I am glad to have that utterance from him. I am grateful to the noble Lord, Lord Lloyd of Kilgerran, for adding to the all-party support for the amendment. We shall keep the Government up to their promises by asking questions from time to time.
When the Government come to study the matter, I hope that they will give full credit to disabled people when there are reasons which may decide them not to register. Until now I have had an assurance that Ministers for the Disabled have recognised that for good, honourable and understandable reasons, disabled people do not like to register. That dislike of registration should be respected. When the Government conduct the review I hope they will remember that fact. Having said that, with the Committee's permission I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 43A:
After clause 13, insert the following new clause:
("Estrangement premium.
.—(1) In Part III (premiums) of Schedule 2 to the Income Support (General) Regulations 1987 add at the end—
"Estrangement Premium.
14B, the condition shall be that the clamant is a person 16 or over but under the age of 25 who is estranged from parents and responsible for meeting his own housing costs or is of no fixed abode as defined in regulations."
(2) In Part IV (weekly amounts of premiums specified in Part III) at the end add—
"(7d) Estrangement premium

(i) aged 16–17 £14.10.

(ii) aged 18–24 £7.50"").

The noble Earl said: The amendment has already been debated. I remind the Committee only that it is the amendment which provides for an estrangement premium for teenagers estranged from their parents. I was deeply dissatisfied with the Minister's reply to the amendment. The notion of a perverse incentive to leave home makes me think that the Government seriously overrate the attractiveness of their social security benefits. The notion of that economic perverse incentive suggests an almost Marxist obsession with economic motives. I cannot think of a better way of registering my dissatisfaction than by saying I beg to move.
8.52 p.m.
On Question, Whether the said amendment (No. 43A) shall be agreed to?
Their Lordships divided: Contents, 18; Not-Contents, 45.

DIVISION NO. 2

CONTENTS

Airedale, L.

Phillips, B.

Carter, L. [Teller.]

Pitt of Hampstead, L.

Dormand of Easington, L.

Russell, E. [Teller.]

Faithfull, B.

Seear, B.

Henderson of Brompton, L.

Stallard, L.

Hirshfield, L.

Strabolgi, L.

Jeger, B.

Turner of Camden, B.

Lloyd of Kilgerran, L.

Underhill, L.

Nicol, B.

Winstanley, L.

NOT-CONTENTS

Allenby of Megiddo, V.

Hesketh, L.

Ampthill, L.

Hives, L.

Arran, E.

Home of the Hirsel, L.

Balfour, E.

Lindsey and Abingdon, E.

Barber, L.

Long, V. [Teller.]

Belstead, L.

Lucas of Chilworth, L.

Blatch, B.

Macleod of Borve, B.

Brabazon of Tara, L.

Monk Bretton, L.

Brougham and Vaux, L.

Mottistone, L.

Caithness, E.

Norfolk, D.

Campbell of Alloway, L.

Plummer of St. Marylebone, L.

Carnegy of Lour, B.

Carnock, L.

Rankeillour, L.

Colwyn, L.

Renton, L.

Constantine of Stanmore, L.

Rochdale, V.

Craigavon, V.

Saltoun of Abernethy, Ly.

Cranbrook, E.

Skelmersdale, L.

Davidson, V. [Teller.]

Strathclyde, L.

Denham, L.

Trafford, L.

Dundee, E.

Trefgarne, L.

Ferrers, E.

Trumpingtcn, B.

Glenarthur, L.

Westbury, L.

Henley, L.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.1 p.m.
Clause 14 [Housing Benefit to take the form of payments or reductions]:
[Amendment No. 44 not moved.]
Baroness Gardner of Parkes Baroness Gardner of Parkes moved Amendment No. 45:
Page 13, line 16, at end insert—
("(3) In section 28 of that Act, the following is substituted for subsection (6)—
"(6) For the purposes of assessing housing benefit an authority shall disregard in determining a person's income the whole of any war disablement pension or war widow's pension payable to that person.").
The noble Baroness said: This amendment is quite clear and simple. It mentions the earlier Act in which there was disregard for the 'whole or part of any war disablement pension or pension for war widows, but this is for the whole pension. I move the amendment because there is great dissatisfaction among people in receipt of a war pension, whether it is a war disablement pension or a war widows' pension; but the disregard for housing benefit purposes varies tremendously around the country.
The British Legion tell me that they have just conducted a survey and 43 per cent. of local authorities disregard only the statutory £5; 41 per cent. disregard the total pension; 5 per cent. have a partial disregard above the £5 and 11 per cent. have different schemes. In some areas there is an assessment of pecuniary need and the total is disregarded if it involves a war pensioner and only £5 if it is a war widow. One unique local authority says that if the injury was attributable to the war the recipient is accorded a total disregard. But if the injury was aggravated by the war the recipient is allowed only the statutory £5 disregard. As Members of the Committee can see, the whole matter is very complicated and unsatisfactory. Pensioners find it distressing that, depending on the area in which they live and not on their own circumstances or needs, the figure is set in this arbitrary way.
When the Minister replies, I hope he will bear in mind that I emphasise that people in receipt of war pensions do not consider them as pensions but as compensation for the loss of amenity—the loss of a limb, the loss of some degree of movement or the loss of a husband. We should realise that the additional amount for the war widow is about £12 a week over 40 years. That works out at roughly £10,000 since 1946. If we compare that with the loss of a husband due to industrial injury, £10,000 is a paltry sum for people who, in many cases, lost their husbands during the war, but in other cases nursed a very sick husband for a long time, even after the war. It is a small compensation. It is a debt of honour which I believe the country owes to these people. That has always been acknowledged and is why these people are already treated differently from other pensioners. It is accepted that they are different.
I am not sure whether the technical details of my amendment are correct. I do not wish the fund to come from the local authority's money for housing, particularly after April next year when the community charge is introduced. That will create great problems for local authorities. Therefore I want
916
it to come from the social security fund or the Treasury fund. If my amendment is worded in a way that does not allow for that, I shall certainly ask for advice on how the amendment can be worded in order to bring it about.
With regard to war pensioners, from the 1914 war there are 3,134 people in receipt of war pensions. From 1939 onwards there are 194,000; of those, about 150,000 would have been volunteers or conscripts. That is a different situation. Those who went in as career soldiers have the right to draw a contributory pension or an additional pension, so their situation is different. But the others have just the basic amount.
Of the war widows from the 1914 war, there are 4,454; from the Second World War up to the present there are 53,117. Again, some people do not quite come into any category, or they just miss out because of a date or something of that sort. It should be pointed out that in the other place an amendment was moved and passed on the Local Government and Housing Bill; therefore the principle was accepted. However, it has not gone any further under that Bill because it is more appropriate to this Bill.
This is a probing amendment today because I need a lot of information from the Minister. I wish to know the right way of putting the amendment, but I think that the principle is unquestioned and should be supported. I wish to see that the amendment will avoid differentiation between those receiving housing benefit, whether the tenant is a council or a private tenant. That is another important category. It is also highly relevant to know whether this is the appropriate place in the Bill, and whether the position is covered in the way I wish.
I hope the Minister will be able to tell us what the cost of this provision would be. What would the cost be if it were given to everyone, and what would be the cost if it were given only to those widowed or disabled as a result of the 1914 war? I have mentioned the number of pensioners, but it may be that only a comparatively small number of them are in receipt of housing benefit. Perhaps the Minister can tell us how many of these pensioners receive housing benefit; then we would know what kind of monetary figure we are talking about. It is difficult to assess the situation at present.
I had a few words with the Minister on this matter earlier. I told him that one of the problems is that even if a statutory disregard were set at a much higher figure, it may be of help to some people but it would not help the 41 per cent. of people who are now eligible for a total disregard. If that kind of solution were economically possible, there would have to be further consultations with the British Legion and the War Widows Association of Great Britain. Those bodies would need to consult their members to assess what percentage of them would be worse off and what percentage would be better off. At the moment over 40 per cent. of the people concerned are only allowed the statutory £5, but over 40 per cent. are allowed every penny. The situation is anomalous, and this causes distress to these people. They are a most deserving section of the community; they should have all our sympathy. I beg to move.
Lord Trafford: I have a feeling that the noble Baroness has answered her own questions to some extent. Irrespective of the points she was making about the worthiness of the war widows and the war pensioners, which I accept and entirely endorse, if I read the amendment correctly it suggests to me that the discrepancy will be perpetuated rather than evened out. As I understand it, the noble Baroness is moving the amendment to try to even out the discrepancy. The wording of the amendment suggests to me that that discrepancy would continue, and that the distress that that caused would be continued. I believe the wording needs to be changed.
The third line of the proposed subsection (6) states; "the whole or part of any war disablement pension". That provision would allow a discretion which could give rise to the very trap to which the noble Baroness referred.
Baroness Gardner of Parkes: There may be a little confusion here. When my amendment was originally printed it included the words "or part". Those words are not now included in my amendment. I should make that clear to the noble Lord.
Lord Trafford: I may have misread the terms of the amendment. I take the point that the noble Baroness has made. I think I was looking at an earlier draft of the amendment. I apologise if I have made an error. However, I think the amendment does not change the fact that any disregard as regards housing benefit still depends upon income. That makes a considerable difference. The matter is also left to the local authority concerned, as that is the authority which pays the further disregard at the present time. The £5 disregard is paid centrally. Therefore, as I think the noble Baroness said, the matter becomes rather more complicated than it appears on the face of it. I believe, too, that one should look at this matter further. However, I question whether this amendment will achieve the objectives that the noble Baroness quite laudably sets out.
Lord Lloyd of Kilgerran: I wish to support the general theme of this amendment which was introduced so comprehensively by the noble Baroness, Lady Gardner of Parkes. In doing so, I must declare an interest in that for several years now I have had the privilege of being a vice-president of the War Widows Association of Great Britain. I have regularly attended the very moving and special service held at the Cenotaph every year especially for war widows.
I also wish to say how much excellent work has been done by the noble Baroness, Lady Gardner of Parkes, in support of the War Widows Association of Great Britain during the time that she also has been an officer of that association. In introducing this amendment, the noble Baroness said it was a probing amendment. I shall add nothing further to that, except to say that I hope some sympathy will be expressed by the Government this evening concerning the basic theme of this amendment.
Baroness Faithfull: As the daughter of a war widow of the 1914–18 war, I have deep sympathy with the intentions behind the amendment. However, I am not sure that it is an equitable amendment. I do not see how it could possibly be consistent. A colonel draws one type of pension, a brigadier another, a lieutenant another and a corporal another. Does the amendment apply to all those who draw different levels of pension?
Secondly, one would want a consistent policy throughout the country; I do no: see that the amendment makes for a consistent policy. Thirdly, a number of war widows and children of war widows live with relatives, as I did myself. Lastly, if I were fighting—and I always would fight, as the noble Baroness is doing—for better financial support for war widows at all levels, I would rather fight for a better pension than for housing benefit. While I have every sympathy for the proposal, I cannot see how it could be administered equitably among all the war widows in the country.
It is perhaps a personal view but if, as my noble friend Lord Boyd-Carpenter, pointed out, only a certain amount of money is available under the Bill I would prefer that it was paid to the 16 and 17-year olds and the various other people who have been mentioned and the war widows dealt with in some other way.
9.15 p.m.
Lord Henderson of Brompton: I should like to say a word in support of the noble Baroness, Lady Gardner of Parkes, and add two points to what has been said. First, this proposal is consistent with the treatment accorded to war disablement pensioners and war widows by the Inland Revenue in that war disablement pensions and war widows' pensions are disregarded for the purposes of assessing income tax. Therefore what the noble Baroness proposes is consistent with existing practice.
Secondly, I should like the Government to take into consideration that this is inevitably, alas, a diminishing band of people, if one disregards the possibility of any future war. As the noble Baroness has said, their numbers are not great. There are fewer than 5,000 from the First World War, and fewer than 200,000 war pensioners and 50,000 war widows from the Second World War. Those numbers will fall. That means a diminishing burden on the taxpayer—a fact that should be weighed when this mater is considered.
There is certainly an element of unfairness in regard to war pensions generally. One must acknowledge that. They have been put in a special category. Disablement income is disregarded for tax purposes: all parties have agreed to that. It is a discrimination which has existed for a very long time and people would be very loath to depart from it.
Having said that, I agree that I would rather the money was spent on the 16 and 17-year olds for whom the noble Baroness and I have been pleading. However, I believe that this is a mater to which the Government should, in all fairness and consistency, have regard. I hope very much that whatever the deficiencies of the amendment the Government will

919
consider the principle which has been so ably put forward by the noble Baroness, Lady Gardner of Parkes.
Lord Skelmersdale: The Committee will be aware that Her Majesty's Government appreciate and are sensible of the great debt owed to those injured or killed in the service of their country and to their dependants. I should add to that very distinguished group those killed or injured as a result of service in any of the forces who are also eligible for war disablement pension whether or not they fought in a conflict. We do not indeed make special provision for their particular needs. Like all war pensioners, war widows receive compensation over and above civilian benefits to show our appreciation of the fact that they have suffered and borne the suffering of their husbands who fought for the welfare of the whole nation. It is right and proper that we should do so.
Since taking office, we have introduced improvements to the war pension scheme whenever it has proved possible. The noble Lord, Lord Henderson, has just mentioned the matter of tax. That is one of the improvements that we were delighted to make. The pensions and allowances themselves are tax free and often paid at preferential rates. Some allowances, such as comforts allowance, age allowance and clothing allowance, have no equivalent in any other scheme.
For civilians' income-related benefits, of which housing benefit is one, all forms of income are normally taken fully into account. Any disregard that is granted represents an additional cost to the taxpayer and is therefore a concession that must be justified. Such a concession is already made in respect of war disablement pensioners and war widows in the statutory national schemes for the income-related benefits. In these, as my noble friend Lady Gardner said, the first £5 per week of any war pension is ignored. In addition, in housing benefit there is discretion for local authorities to extend at their own cost that disregard, and that discretion is specially designed for and restricted to war pensioners. No one else may receive it. It is this local discretion, enshrined in Section 28(6) of the Social Security Act, that my noble friend's amendment seeks to modify.
I think that I should clear up any doubt that may be in the minds of noble Lords as to how many local authorities exercise that discretion. We recently did a survey of the 483 authorities that administer housing benefit. Three hundred and nine of those operate a local scheme, and 166 do not. Eight local authorities have not even bothered to reply to the questionnaire, so I am not quite sure what conclusion one can draw from that.
I must say at once that I can see no advantage in substituting for one form of discretion which is exercised locally and for which any local council choosing to exercise its discretion in that way must account to its local rate—or community charge—payers, another which shifts the starting point from a voluntary to a compulsory disregard
920
while still retaining local discretion as to whether that disregard shall be partial or total. In an interesting exchange between my noble friend Lady Gardner and my noble friend Lord Trafford, we established that that was the reason why my noble friend had changed her amendment. I am grateful to her for that.
However, the great problem with using additions to housing benefit and increasing the disregards thereto is that my noble friend's amendment, which creates a replacement for Section 28(6) of the Social Security Act 1986, would remove the power that local authorities currently have and jealously guard to increase the amount of benefit paid in exceptional circumstances. I believe that my noble friend's laudable intention is that the poorer war widows and war disablement pensioners should receive more money. I do not think that one would argue with that premise, but housing benefit is a rather blunt instrument to use to do that.
It may help if I give an example. A war widow aged 65, paying rent of £25 a week, has a total income of £62.75, all in her war widow's pension. In assessing housing benefit, the local authority disregards £5 under the statutory scheme and, under its discretionary local scheme, disregards a further £10. The result is that all but £1·07 of her rent is rebated. The proposed amendment to disregard the whole of her war widow's pension would mean that all of her rent would be rebated and she would therefore see herself a little better off. But the amendment would also mean that another war widow, also paying £25 a week, who has an additional income of £46 a week—which is just under £2,400 a year extra income above the war widows's pension—would suddenly become entitled to a total rebate of her rent. She would gain £25. Because of the way housing benefit taper works, it would be possible for the minimum rent rebate or allowance of 50 pence to be still in payment with total net income, including war widow's pension, of over £146 a week. That is a great deal of money, amounting to £7,600 a year after tax. The poorer pensioner therefore receives just a little more while the better off can obtain a great deal by increasing the disregard as steeply as the amendment proposes.
My noble friend asked me a large number of questions about the statistics for war widows and war disablement pensioners. It would perhaps be more productive if I were to write to her. During my tenure of office as Minister with special responsibility for war pensioners, I sought ways in which to help this particular group of people. In the early stages I considered something along the lines of housing benefit, but for the reasons that I have just given to the Committee I was forced to discard that route.
Baroness Gardner of Parkes: I thank the Members of the Committee who have spoken on this matter. I noticed that the noble Lord, Lord Lloyd of Kilgerran, declared his connection with the War Widows' Association. I shall do the same. I was the first honorary president and the noble Baroness, Lady Vickers, is currently the president of that association. I am sure that if she were well enough she would be here to speak on this point.

921
My noble friend Lady Faithfull raised the point that brigadiers, colonels and such would benefit in the same way. I do not follow the last argument of the Minister on that point and I shall carefully read Hansard tomorrow. In reply to the noble Baroness, one would only benefit if one were in a category that was receiving housing benefit. A person would not benefit if he were sitting in a beautiful home somewhere and did not need housing benefit. My amendment covers only those who have a degree of need. The Minister put forward a rather curious case in which he quoted an additional discretionary relief of £10. That did not offer a true parallel at all. The problem arises in the first instance because one place gives the discretionary relief, and another place does not give it.
Lord Skelmersdale: If the noble Baroness will forgive me, perhaps I may interrupt her for a moment. The point about a discretionary system such as we have at the moment is that some local authorities will disregard nothing except the statutory £5; others will use partial disregard and yet others total disregard. I gave an example of a typical partial disregard.
Baroness Gardner of Parkes: I understood that precisely, but the next example compared that with an authority which gave only a statutory disregard, which distorted the equation. The problem lies in the difference between the disregards given in different areas. The disregard is not in any case at all related to the circumstances of the people concerned, although I am given to understand by the British Legion that there are one or two of the much smaller number of local authorities which have a particular scheme that takes need into account. But that is very rare. On the whole, a policy decision is made that every eligible person living in the local authority area will have either a total disregard, a 50 per cent. disregard or just the £5 disregard. On the whole there is a blanket disregard for the local authority in question.
That is what is causing the hardship. Those who happen to live on one side of the street and come under one authority will receive only £5 whereas those who live on the opposite side of the street and come under a different authority will receive the total disregard. That is where the dissatisfaction arises.
There has been quite a lot of support for this amendment. I ask the Minister to discuss this matter further with me and look again at it. I shall certainly have further discussions with the British Legion and the War Widows' Association about it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Housing benefit subsidy]:
[Amendment No. 46 not moved.]
Clause 15 agreed to.
9.30 p.m.
Clause 16 [Expenses of Secretary of State in making transitional payments relating to income support and housing benefit]:
Lord Stallard Lord Stallard moved Amendment No. 47:
Page 15, line 17, at end insert—
("(3A) In paragraph 1(1) of Schedule 3A to the Income Support (General) Regulations 1987, at end of the definition of "eligible housing benefit", there shall be added—
"or, in a case where that amount has not been determined, the largest amount to which, in the opinion of the adjudication officer, he may have been so entitled")
The noble Lord said: From 10th April this year social security benefits were changed quite dramatically for boarders; that is to say, claimants living in hostels, guest houses, bed and breakfast accommodation and as lodgers in private accommodation. From that date boarders entitled to income support no longer received one payment of income support to cover all their weekly needs. Instead, they had to make a second claim for their housing costs from the local authority housing benefit section.
It is true that not all claimants were affected in the same way. A few people gained. But by and large most people who were put in that position lost as a result of the changes in social security and housing benefit. Those under 25 years whose income support before the change had been the same as that for any boarders over 25 years in the same circumstances now had a reduction of £7.50. It was for no other reason than that they were under 25. They were the wrong age group. The DSS claims that most people under 25 are not living independently. I do not know how it obtains its statistics because in my experience that is not true.
Under the Housing Act 1985 homeless families living in local authority bed and breakfast accommodation also lost money as a result of the changes to the benefit for children. As I said in an earlier debate, the more children they had, the more they lost. We shall continue to debate that again because it is bound to arise every time we discuss this issue.
The Government had pledged that those who were worse off as a result of these changes would receive a transitional payment. The DSS decided that those youngsters under 25 would not receive transitional payment apart from some exceptional cases. For homeless family losers, the DSS decided that the maximum period of transitional protection should be 13 weeks. We have also debated that issue. However, we ought to remind ourselves what the Government said in those circumstances. In its original consultation paper, the DSS states:
"Claimants who would otherwise lose benefit as a result of change would receive transitional protection…The addition would normally be payable for up to a year".
That is stated in a report called Help with board and lodging charges for people on low incomes, December 1986. It sent out an information sheet (INF 5) to all boarders, which stated:
"Most people who are getting Income Support will not get less money each week just because of this change".

923
On 10th April the Minister of State in another place, Mr. Nicholas Scott, on Channel 4 News, said of the families,
"They will get transitional protection to see them through the most difficult part. Almost everybody will get transitional protection".
That is what the Government said.
But what happened to boarders in London? I shall say what happened, and it happened all over the country. A survey was carried out by the Local Organisations Network, which brings together a number of organisations connected with housing homeless families. In the week commencing 2nd May it found that the DSS offices had done paperwork on only a small minority of homeless families, and that was three weeks after the drop in the benefit.
Four weeks later another survey referred to the Paddington DSS area. Paddington is the area that covers the Bayswater hotels about which we heard so much last year and about which we know so much. They are widely used for homeless families. Paddington DSS reported that it had processed 184 out of 625 transitional protection cases and was paying transitional protection to just 98 claimants. I do not blame the DSS offices. The main reason for the delay lies with Ministers and the Government. The DSS local offices could not assess transitional protection without first knowing what the boarders were going to receive.
I and others have been asking ever since what would be the position in hostels for those boarders in bed and breakfast accommodation. Before the local authorities could decide, they had to know what level of benefits would attract the full 97 per cent. Government subsidy. It took the Government until 23rd March to decide. That was less than a fortnight before the deadline for calculating the transitional protection on time. A month later the Government withdrew that decision under protest and to my knowledge they have still not announced the subsidy arrangements. No wonder the whole thing is held up and people are not receiving benefits. A great deal of confusion, hardship and misery is being caused, and many homeless families fear that when their cases are processed they will receive nothing because of the way the DSS makes its calculations.
The old DSS ceiling for London of £70 for accommodation and meals was well below the normal market level, as a survey of 528 bed and breakfast hotels clearly shows. But the local authorities have to pay housing benefit on a reasonable rent. We should have discussed that on a previous amendment, had it not been withdrawn.
We are left now with a situation where people may or may not be entitled; they do not know to what they are entitled and the DSS cannot work it out, and the local authorities have not been able to come up with anything. They can do nothing about it. The amendment seeks to draw attention to those delays. The fact is that many boarders transferred to housing benefit in April and still have not received their transitional protection two and more months later because local authorities have not been able to work
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it out. The amendment suggests that in these cases the adjudication officer should award the maximum transitional protection that he judges the case merits until such time as he can calculate the correct amount. I believe that our amendment is reasonable in the circumstances. I beg to move.
Lord Skelmersdale: I assume that the noble Lord was also speaking to Amendment No. 48?
Lord Stallard: Yes, I was.
Lord Skelmersdale: These amendments concern the arrangements which have been made transitionally to protect certain groups of claimants living in board and lodging accommodation who would otherwise have received less benefit overall as a result of the changes introduced in April, as the noble Lord explained.
I do not think that it would be profitable to delay the Committee with a further explanation of these changes and the Government's reasons for introducing them, because we have covered this in earlier debates. However, I should perhaps explain in more detail the way in which transitional protection is calculated.
In simple terms, the amounts involved are calculated by comparing a claimant's entitlement to income support immediately prior to 10th April with their total income support and housing benefit under the new arrangements. Where the latter figure is lower, transitional payments of income support can be made to make up the difference.
The noble Lord, Lord Stallard, at one point in his speech asked why there was only three months' protection. The answer is that three months was the period of protection used in April 1985 when the centrally determined financial limits were first set. Landlords showed then that they could adjust to the new benefit rules, not surprisingly when one considers that it was the benefit system that encouraged many of them to provide lodgings in the first place. There is no reason why landlords and claimants should not now be able to adjust to the new reforms within three months' protection, especially as they put lodgings on the same footing as any other similar houses in multiple occupation.
As the Committee will know, housing benefit is administered by local authorities and the Committee will therefore appreciate that local social security offices are not in a position to calculate transitional protection until they have been notified of the housing benefit award. The calculation of housing benefit takes account not only of the claimant's income and requirements but also how much of the rent is eligible for benefit. For example, deductions may have to be made for such things as meals, fuel and laundry which may be included in the overall accommodation charge. In addition, the local authority is required to consider whether the accommodation charge is reasonable having regard to the cost of similar accommodation in the area.
Amendment No. 47 seeks to put this responsibility on the adjudication officer. Noble Lords will appreciate from what I have said that this would not be a straightforward task for the adjudication officer

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to undertake. In particular, he would not have sufficient knowledge of the local rent levels in order to be able to arrive at a reasonable judgment. In practice, therefore, I believe the proposed amendment to be unworkable.
I appreciate the concerns which have been expressed by the noble Lord about delays in determining housing benefit entitlement which have, in turn, delayed the award of transitional payments. Although the changeover to the new arrangements has generally gone well across the country, I understand, like the noble Lord, Lord Stallard, that there have been difficulties in some areas, notably in London, because of problems with particular local authorities.
Like the noble Lord, Lord Stallard, I, too, am concerned about the delays as there is no good reason why the local authorities involved should not have determined these cases within 14 days, as required by the housing benefit regulations. This is not an unreasonable requirement, particularly as local authorities were given ample time and additional resources to deal with these extra cases. The solution to the problem therefore lies in the hands of local authorities.
Amendment No. 48 would remove the special arrangements that have been made for families not sponsored by a local authority and reduce the period of transitional protection for this group from 52 to 13 weeks. I find it rather difficult to believe that this is what the noble Lord intended to do by his amendment. We believe that the arrangements which I have described strike the right balance between giving claimants time to adjust to the new rules, and removing the perverse incentives present in the old system for landlords to provide and for claimants to seek board and lodging accommodation. I cannot believe that extra payments should be required, either because of the direction of a local authority, or because on rare occasions, through their own independent desires, people live in certain accommodation.
Lord Stallard: I am grateful to the noble Lord the Minister for replying, and I am also grateful to all those other Members who would have participated had it not been for considerations of time. I must confess that I am very disappointed, first, that the Minister, as is his wont, blames the local authorities and particularly the London local authorities. But I said to him that these local authorities, and, again, particularly the London local authorities, have to know what levels of benefit would attract the full 97 per cent. government subsidy. That is important to London local authorities who are in dire straits as it is, and who are not looking forward to further problems with the community charge and about how much of this will go into the community charge. There are whole problems that local government is facing in London.
So I would have been happier had the Minister forgotten that part of his speech and just told us how soon he expects to be able to make a definite announcement about the permanent arrangements for these payments, so that all the authorities, the
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DHSS, local authorities and everybody concerned, can make up the books and pay the transitional payment. The noble Lord did not, so I am quite happy to reconsider, to read his words and to reserve my position on that amendment.
The noble Lord also mentioned the second amendment. He will have noticed that I did not really speak to the second amendment. It had been my intention to move it when we came to it, though I recognised that there was a flaw in it So I shall not bother to reply to that part of his answer, but will wait till we come to the amendment. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 48 not moved.]
Clause 16 agreed to.
Clauses 17 to 21 agreed to.
Clause 22 [Recovery of sums equivalent to benefit from compensation payments in respect of accidents, injuries and diseases]:
9.45 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale moved Amendment No. 49:
Page 22, line 7, at beginning insert ("subject to subsection (1A) below").
The noble Lord said: I should also like to speak to Amendment No. 52 and, although it is not in the grouping, Amendment No. 51. The three amendments are inextricably intermingled and I do not believe that I could sensibly talk about one and not the other.
We have now come to a clause which has had the remarkable result of uniting the TUC and the CBI in opposition, not to mention the law societies and the Association of British Insurers. I am not a lawyer and I cannot claim to move easily in this rather complicated topic. However, I was a member of the Pearson Royal Commission on compensation for personal injury and had some concern then with issues of this kind—not that anyone took the slightest notice of our report when it was issued.
Perhaps I may make it clear at the outset that I am not opposed in principle to the desire to avoid duplication of compensation. Indeed, that was one of the main findings of the Royal Commission. For example, last year I welcomed the provision in the Criminal Justice Bill, as it then was, which gave statutory effect to the existing practice of deducting social security payments from compensation for criminal injury.
However, I am concerned that any such arrangement should be fair. It seems to me that the proposal in this clause is unfair, as I shall seek to explain. It is not without interest that in a White Paper issued by this Government in 1981, Cmnd. 8402, about reforming the industrial injuries scheme, the possibility of proceeding on the lines now set out in the clause was floated but the White Paper concluded that that was not an option which could usefully be pursued.
It is also interesting that the Public Accounts Committee whose report in 1987 no doubt

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stimulated the Government into tackling this problem, was told that the scheme now before us would save £150 million per year and that the cost of administration would be small. According to the memorandum attached at the beginning of the Bill, that figure has somewhat drastically shrunk to £38 million, and the Minister was good enough to tell me in a reply to a Written Question that to administer the clause will require an extra 100 civil servants at a cost of some £1 million per year. In addition, there will be the extra burden on resources caused by the increased work of the insurance companies, the lawyers and various others involved.
Therefore, we have before us a long clause, which has 12 closely printed pages of schedule and then a supporting regulation still to come. However, in all that elaborate structure and wealth of words there are two remarkable gaps. The first is one on which the Royal Commission placed a good deal of emphasis; namely, that like benefits should be deducted from like compensation. That is a principle which this clause ignores. Compensation can be awarded for both pecuniary loss and non-pecuniary loss or solatium, to use the rather more euphonious word employed by the Scots. It seems to me quite wrong that social security awards designed to compensate for financial loss or financial needs such as injury, industrial injury, invalidity, unemployment benefit or mobility or attendance allowances should be set against not merely the pucuniary element of a compensation award but the whole award, including that part of it which consists of compensation for pain and suffering, mental distress and loss of quality of life.
What the clause contemplates is that social security payments can be set against awards made because of the loss of amenity caused, for example, by the prospect of a lifetime of pain, the loss of a leg or the fact that an individual's expectation of life has been shortened. We on the Royal Commission thought that this kind of approach was wrong and that like should strictly be set against like. I remain of this view and that is the intention of Amendments Nos. 49 and 52.
I am acutely aware of the problems of dealing in these amendments with settlements out of court where no one may quite know just how the total agreement has been made up. Indeed, it was evidently one of the reasons why the Government did not pursue this possibility in their 1981 White Paper. The amendment contemplates dealing with these problems by a further set of regulations. I do not for one moment suggest that the drafting of such regulations would be easy, but if this problem cannot be tackled, the operation of the scheme will not be fair and just.
The second point (this is the point involving Amendment No. 51) deals with contributory negligence—a factor which affects the tort award in a considerable number of cases, especially, I suspect, road traffic cases. The Law Reform (Personal Injuries) Act 1948, which has held the field so far, includes specific provision for contributory negligence. This clause does not, and that omission could result in grievous injustice.
I give a simple illustration and I hope that the lawyers will forgive me for the great simplicity of it. I recognise that I am speaking in the presence of some of the greatest legal luminaries in this field. I cite a hypothetical case in which a court awards damages of £10,000 but then reduces the figure by 50 per cent. because of contributory negligence. It so happens that the social security payments are also calculated as amounting to £5,000. If this amount is deducted in full from what is left of the court award, the individual receives nothing from that award, just as if he had been 100 per cent. culpable instead of only 50 per cent.
The amendment suggests that the social security payment should be reduced for the purposes of the calculation by the same percentage as the tort award, so that in my rather crude example the deduction for the social security payments would be reduced by one half, to £2,500. That sum would then be taken from the reduced court award of £5,000, leaving the individual with £2,500 instead of nothing, as would happen under the clause as presently drafted. As I said, that is an extremely simple and crude illustration; but we have examined some cases which have arisen in recent years and that examination demonstrates that the individuals concerned would have received only derisory compensation in addition to their social security payments.
Here again, however, there is the formidable problem of dealing with out of court settlements, where no one may quite know just how the total is made up and when the two parties may agree on the total but have differing views as to exactly how it has been arrived at.
There are a number of other considerations with which I shall not attempt to deal at this stage. There is for example, the position of interim tort payments, and just what the somewhat obscure provisions in the clause about costs actually mean. I know that we have a separate amendment which will enable that point to be pursued. There is also the risk of more cases going to court. I believe that the Government hope that parties will be encouraged to settle early as the liabilities cease from the day of settlement. But alas that is likely to be more than overriden by an increasing reluctance to settle for amounts which would fall short of what the court would be likely to award if the claim were pursued and proved to be successful.
But there is one other relevant consideration on which I must take just a few more moments of the Committee's time. The clause exempts small payments but it does not tell us what "small" means. It is not easy to assess the impact of the clause in ignorance of that amount. At Second Reading the noble Lord, Lord Henley, said that a figure of £1,500 had been mooted. In another place the Solicitor General said (at col. 554 of the Official Report of 3rd March) that the figure was to be £5,000. We are not altogether unaccustomed to the Government speaking with two voices, but what are we to make of these two statements? Anyway, a figure of £10,000 would be more realistic, and by making a fairly high proportion of the awards for non-pecuniary loss covered by that concession it would to some extent palliate the worst effects of this clause if the

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Government remained determined to go ahead with it.
But as regards my two main suggestions, I realise that the Minister may argue that the structure is so complicated that to remove one brick would be likely to bring the whole of it tumbling down and that the problem of dealing with out of court settlements is beyond the wit of man. If he takes that view, I can only say that if fairness cannot be achieved on these two vital issues in the way that my amendment suggests, the Government had better not try at all to pursue this particular way of avoiding duplication of compensation.
I realise that in speaking I have probably got wrong some of the technical references, but I hope that what I am trying to achieve by these amendments has emerged with sufficient clarity for the Committee to be able to form a view. I beg to move.
Lord Campbell of Alloway: Perhaps I may briefly—and briefly because at this hour of night nobody wants to hear a long speech—support wholeheartedly everything that has been said by the noble Lord. He produced a reasoned argument. I made my own notes which are not even worth using against his form of presentation. He knows his subject. He has produced it in a fair, reasonable and objective way. It must command the support and attention not only of noble Lords on all sides of the Committee but of the Government.
If it is a question of removing a brick, right, remove the brick and let the edifice crumble. And why not? It is a rotten edifice. The sooner it is taken away and restructured, the better for all of us, the better in the interests of a fair resolution of this situation, and the better for the Government whom I support in the long run. They may resent my criticism from these Benches. However, they may be thankful of it one day if they realise that everything the noble Lord, Lord Allen of Abbeydale, said, is measured, reasoned, accurate and totally well-founded; and not to be ignored.
I support without qualification everything that the noble Lord said regarding Amendments Nos. 51 and 52. I also support, for reasons which I am not prepared to weary Members of the Committee with at this hour of night, everything he said. I have with me my notes on Amendments Nos. 57 and 58 as regards the limit of £10,000 but, again, I shall not weary the Committee with them. It is an intolerable imposition; it is an intolerable supposition that they should produce this system which will work a manifest injustice on small payments, at all events under £5,000 and probably under £10,000.
I have with me the details which are readily available. I suspect that the details are even known to the Ministry and to the Government. Therefore, let the Government not ignore the plain force of the argument: that if they produce the Bill in this form and insist upon trying to bring it through this place, they may not succeed. I say that because it will work a manifest injustice. I say again (and I shall say no more) better to remove the brick and let the whole edifice fall. Let the Government take this back and
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produce a sane, reasonable, rational and fair resolution of the problem.
Having said that, I agree without qualification with the Government's policy. I know what is behind these amendments, and I know the spirit which prompted them. I support the spirit 100 per cent. I am not against the Government on policy; but they have made a total dog's dinner of how to implement it.
10 p.m.
Baroness Turner of Camden: I am against this clause altogether. However, I put my name to the amendments tabled in the name of the noble Lord, Lord Allen of Abbeydale, because it seemed to me that it would be better to have at least this amelioration of the clause rather than the clause as it stands in the Bill at present.
As I said on Second Reading, the Government have managed to arouse the ire of a whole number of people with the proposals contained in Clause 22. There are different reasons for that. I say that because they are an unlikely group of allies; indeed, this has already been referred to by the noble Lord, Lord Allen. The TUC opposes the proposition in Clause 22 because it believes, as I do, that it is another blow at the industrial injuries scheme. The CBI opposes it because it believes that its member firms will have to pay a great deal more in insurance premiums—which they certainly will have to do.
The Association of British Insurers also opposes the proposition for similar reasons. It believes that insurance premiums will have to rise to enable people undertaking employers' liability insurance to cope with all the extra work involved in the bureaucratic arrangements which are contained in this clause and the relevant schedule. For what? It seems to me that there is nothing a great deal wrong with the present system. The system allows for a part of the social benefits to be taken account of when damages are assessed, without going through the procedure as set out in Clause 22 and in the accompanying schedule.
In any event, industrial injury benefit was intended to be payable on a no-fault basis. It was, and is, sufficient for an injured employee to show that the injury arose out of, or in the course of, employment. He or she can only succeed in a claim for compensation when pain and suffering and the future prognosis are taken into account, if the injury has been caused by someone else's negligence.
There may also be contributory negligence which must be taken into account. That is largely the reason for the amendment tabled in the name of the noble Lord, Lord Allen of Abbeydale, and supported by myself. It so happens that I have had a most comprehensive and excellent briefing from the Law Society on this point. The briefing says that the clause as at present drawn would entitle the DSS to recover all benefits paid from the amount of the award without regard to the fact that the award had been reduced by a finding of contributory negligence. The process of recovering compensation, especially when there is an element of contributory negligence, is in itself stressful for the victim. It is

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time-consuming and it incurs additional expense. Because of the low awards for non-pecuniary damages, a 100 per cent. clawback of benefits in a case where there had been a finding in excess of 50 per cent. contributory negligence could exceed the total damages awarded so that the victim recovers no compensation for the accident. Yet the Government assert that the injured person would not be damaged by the provision. Plainly, that is nonsensical.
Nor is there any provision in the clause for what happens when there is an interim settlement. In my capacity as a union official, I have had a great deal to do with industrial accident and disease claims. In many cases the prognosis may not be clear and the case may therefore take a long time to settle. I remember a case involving one of our members, a laboratory technician, who was extremely badly injured in an explosion at work. As a result, the man, who was only 35 years old, was totally paralysed. The case took about five years to settle. However, we managed to secure an interim payment which enabled some apparatus to be set up on a computer basis allowing the man to lead some sort of a life. Eventually, we were able to settle the case for a large sum of money. But what happens about interim payments? That is not made clear in the Bill.
I have little to add to the excellent case presented by the noble Lord, Lord Allen of Abbeydale. I agree with everything that the noble Lord, Lord Campbell of Alloway, said. The provision is absurd. It will not produce much for the Exchequer. The saving to the Treasury is of the order of £35 million a year. Over and above that, staff will have to be taken on in Civil Service departments to cope with the extra administration required by the provisions of Clause 22.
What is this all about? People are not receiving double compensation. In fact, if the provision goes through, in many cases people will not receive compensation for pain and injury suffered. That is iniquitous. I hope that the Government will listen to the wide range of institutions and people who are urging them to think again.
Lord Mottistone: I am shown on the Marshalled List as wishing to oppose the clause altogether. However, to enable business to proceed faster for us all it might be better to have a general debate on the basis that the noble Lord, Lord Allen of Abbeydale, has put forward a complete argument not only for his own amendments but also for striking out the clause. In fact he concluded on that topic.
I was intending to try to delete the clause in the hope that my noble friend the Minister would listen because, as my noble friend Lord Cambell of Alloway said, we must consider it again. The noble Lord, Lord Allen of Abbeydale, said that if one brick were taken away the whole would fall. That is not a way to solve a problem.
However, the noble Lord having set out the case for removing the whole clause I shall not delay the Committee as much as I would otherwise have done. I shall stand on that. Having also said a little on Second Reading, there are only two or three points that I should like to make which no one has yet
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mentioned. We have had support from all sorts of people. I have had support from the Faculty of Advocates in Edinburgh, as no doubt other people have had, which shows that there is a broad brush understanding that the clause is faulty. The arguments against the system are flawed. The Government suggest that employees receive double compensation—both social security benefits and tort awards. They also suggest that employers are being subsidised by the state as the tort awards are reduced to take account of social security benefits.
Neither of these arguments is valid. Employers and employees contribute to the national insurance fund which pays for most of the benefits paid to the injured person at work. The state contributes nothing, as from April this year. So it has not been deprived. The present arrangements whereby the injured person keeps a portion of the benefits to which he is entitled and the damages award paid by the employers' insurer is proportionately reduced in line with the benefit paid, is a compromise which rightly reflects the fact that both the employer and the employee have paid contributions to the national insurance fund. This a fundamental point which I think other noble Lords have not made quite so strongly, but it is important.
It is obviously inequitable to require employers to insure themselves twice—once through employers' liability premiums and again through national insurance contributions. Similarly, it is unfair to reduce the tort awards made to employees as they have paid for their social security benefits through their national insurance contributions. The situation is terribly unfair. That is the burden of the argument of the noble Lord, Lord Allen of Abbeydale.
I could continue on that theme but there are in addition two other points to make. My noble friend the Minister very kindly alerted me to the fact that the Government were triggered off on this by the report of the Comptroller and Auditor General which was circulated by the National Audit Office, who took over in 1986. That then gave strength to the Committee of Public Accounts to make its report in 1987. This I had some difficulty in finding because it is so long ago. As soon as I saw the reports it became obvious that the Committee of Public Accounts only took evidence from the Treasury. It did not take evidence from the CBI, the TUC the insurers, or others, all of whom are very interested parties, and, what is more, know how it works and why the balance is right. So it is a flawed basis for an argument. So far as I can see, the Comptroller and Auditor General did not take evidence from anybody. He just came up with the idea.
Against that, we must put the fact that the Pearson Commission, of which the noble Lord, Lord Allen of Abbeydale, was such an illustrious member, took evidence from all the people concerned, many more than I have mentioned. So also did the Industrial Injuries Advisory Council which ought to know. Both of those bodies have declared—perhaps I should not say declared against this clause—that their reports have been diametrically opposed to what Clause 22 tries to achieve. Therefore the Government's basis for proceeding is founded on no consultation with the people most concerned.

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It seems to me that the solution is for my noble friend on the Front Bench to say, "Okay, we'll have another look at Clause 22 and not the amendments which noble Lords have put down. If, when we tackle the matter, we see that it is not reasonable to bring it forward at this stage, we shall remove Clause 22 from the Bill". It is too late to have a great battle about it now at Committee stage, but in the event that the Government do not act in a way which I call reasonable, we shall have to charge very heavily at Report stage.
Earl Russell: I wish to express full agreement with everything said by the noble Lords, Lord Allen of Abbeydale, and Lord Campbell of Alloway. Beyond that, with respect to the arguments of the noble Lord, Lord Mottistone, I am entirely in favour of the principle of saving time. But I am in the hands of the Committee. I have a good many arguments against this clause which I wish at some stage to develop, but they go rather wide of the amendments on the Marshalled List. If the Committee wishes me to take some liberty with the rules of order and develop them now, I am happy to do so. If it wishes me to take some liberty with time and develop them later, I am equally happy to do so. I should welcome guidance.
10.15 p.m.
Lord Mottistone: I hope I may give some advice to the noble Earl. In view of the fact that we have had a general debate, this should be the only debate. I advise him that if he has detailed comments to make, he should keep them for Report stage when we shall return to the charge.
Lord Allen of Abbeydale: As these are my amendments, I am in the embarrassing position that I am not opposed in principle to avoiding duplication of compensation, as I said, in that I differ from some Members of the Committee who have spoken. What I am against is doing it this way. However, it seems to me that, if we were going to come to a decision to delete Clause 22 from the Bill at this stage to give the Government an opportunity of devising some other way of doing this we would have to do that today. We could not very well delete the clause on Report, as I understand it.
Lord Campbell of Alloway: With respect to the noble Lord, that is a misconception. I have spoken strongly against the Government, but it would be wrong to force them in the sense that one does not give an opportunity to the Government to reconsider this clause and bring it back to the Chamber at another stage of the Bill. That would be unreasonable, and I would not support any such attitude. I support the attitude that we should accept that the policy of the Government is right but the way they propose to implement the policy is not acceptable as it appears at the moment to the Committee. However, we should at least, in all fairness, give the Government a chance to consider their position. I would be no party to any other form of conduct.
Lord Griffiths: I, too, am very troubled about this clause. I support my noble friend Lord Allen of Abbeydale in his comments both on the unfairness arising from ignoring contributory negligence and on the principle that one should offset compensation for loss of earnings against loss of earnings and not against awards for pain and suffering. That would be the result of this clause. However, I have another rather wider concern. Under our system of compensation, ultimately, when one analyses it, it is the public who pay the compensation. Under the present system, if one is injured by the fault of another, one's sources of compensation are twofold. The first source is one's social security benefit. The second is payments from insurance. Payments from insurance come from the public. It is quite illusory to think that the payment for one's injury is being paid by an identified tort feasor. That is not the case. The whole point of insurance is that one spreads the risk. Let us see how this works out.
At the moment if one is injured, one receives part of one's compensation from social security payments. Who provides the money for that? The answer is the public, through taxation. The other part comes from insurance payments. Who ultimately provides the money for the insurance? The answer again is the public.
If one becomes injured as a result of the negligence of a workman, if one is a fellow workman one's injury will be covered by the employer's liability insurance. If one is injured as a member of the public by a workman because, for example.. he has left a patch of oil on the floor of Sainsbury's and one falls over as a result, one will be compensated through the employer's liability insurance. In order to pay for those insurance premiums the firms in question set the prices at which they sell to the public at a given level. If they have to pay more for their insurance premiums they will charge more for their goods in order to recover their costs.
This scheme, under which the insurers will have to pay back to the Department of Social Security, will result in the public paying more for goods to pay for the raised premiums. The source of the money is ultimately exactly the same. One is taking it out of one pocket and putting it in another. One achieves nothing; one is only churning the money over.
What worries me about the scheme is this. At the moment the vast majority of personal injury cases are settled. If they were not our legal system would break down under the impact of the extra litigation. It is stretched to the limit as it is. I have no doubt that the provisions in this Bill will make settlement much more difficult. The whole art of settling is to have grey areas, to have nothing defined at any point. Under this system the insurer will say, "Look here, I have a bill from the Department of Social Security and I shall have to send them a cheque for £7,000 when I settle with you. I am not going to pay you £9,000, which is your asking figure, I shall only pay you £2,000 because I have to deduct it". W.H. Thompsons for the plaintiff Will say, "Settle this for £2,000? We'll see you in court". And they will. The position will be very difficult indeed. That is the anxiety that I have about the scheme.

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I am not averse in principle to saying that any money which has been received from social security should be brought into account against that element of the compensation which is comparable. I always thought that the 50 per cent. was a very odd compromise and I do not see why one should not have to give credit for all the money one has received. Let that be so, and when people negotiate for settlement they will know that if they cannot settle that will be the result ultimately when they go to court. But to try to force it into the settlement structure will unsettle a system that has evolved over 45 years, works well and saves our courts from being overwhelmed. I believe that if the scheme is introduced now there is a real risk that our courts will be overwhelmed, in addition to the unfairness which has been identified by the noble Lord, Lord Allen.
Lord Colwyn: The debate on this amendment has turned into a debate on whether Clause 22 remains part of the Bill. At the risk of not being able to speak later, I should like to say a few words from a slightly different approach, that of the medical defence organisations. I must declare an interest as a member of the Medical Protection Society and a director of its dental protection division.
Those with most to lose under this clause are patients and, ironically, the Treasury. The main objection to the clause is that most of the benefits which will be paid to victims of accidents will be related to national insurance contributions which are wholly separate from general taxation. In those circumstances, the contributions which most, if not all, of the plaintiffs in medical negligence cases will have paid are akin to payments for any normal accident insurance policy. It is quite wrong, therefore, to deny people benefits which result from a policy for which they have paid. The question of whether or not they receive additional payments from third parties is quite irrelevant.
Those points were raised by a number of noble Lords on Second Reading on 25th May. In his closing speech in that debate, my noble friend the Minister addressed the matter. He said:
"Only three of the 13 benefits are contributory, so the charge of double insurance [contributions] which was levelled at me… fails".—[Official Report, 25/5/89; col. 566.]
However, in his answer, he has clearly recognised that there is a difference between contributory and non-contributory benefits. I should therefore like to ask him whether he will consider exempting contributory benefits from the scope of the clause while leaving in non-contributory benefits. That may not satisfy all noble Lords, but I offer it to the Minister as a suggestion, if he is seeking a compromise.
I have a further reservation about the clause; namely, the increase in bureaucracy that will result from it. As has been pointed out, the provisions will necessitate an increase in the staff of the Department of Social Security in order to handle the certificates required by the clause. There will also need to be a corresponding increase in the manpower of the medical defence organisations and insurance companies.
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I wish to address in particular the problems of the medical defence organisations. They are non-profit making bodies which are in part funded, albeit indirectly, by the Department of Health. Under the new proposals, the department will take direct financial responsibility for NHS hospital doctors. Whichever system is in place, it is clear that funds come ultimately from the health department. Under the provisions of the clause, a whole bureaucratic system would be established whereby officials in the Department of Health would deduct money from awards in order to pay it to the Department of Social Security, which in turn pay it out in benefit to the same victims for whom it was originally intended. Thus, far from representing a saving, Clause 22 would increase the cost to the public purse and reduce the funds available to the health service. I do not think that it would be in the best interests of patients.
Perhaps I may again assist my noble friend the Minister by suggesting a compromise. Schedule 4 lists a number of payments which will be exempt from the general provisions of the clause. Will the Minister consider adding awards in respect of medical negligence to the exempt list? The vast majority of claims in that area will be funded ultimately by the public and a concession on that point would save, rather than spend, taxpayers' money.
Lord Pitt of Hampstead: Before the Minister replies, I wish to ask a simple question. If I insure myself against an accident and then go to court and obtain compensation, I do not know that I have to pay back what the insurance company will pay me. I cannot see what the difference is between that and the benefits that one receives through national insurance, because the state has already withdrawn from national insurance and the contributions for the National Insurance Fund come only from the employer and the employee. In effect, therefore, the only difference between that and the insurance that I will have carried privately is that my employer pays as well as me. I cannot see where the state comes in in terms of wanting to withdraw the benefit that I have been paid as a result of my contribution because of the compensation that I have received. I wish that someone would explain that point to me.
Lord Griffiths: I can assure the noble Lord that, if one has taken out a personal accident policy oneself, that is not taken into account in diminution of any award that one receives. At the moment, it is a matter of statutory control that one must give 50 per cent. benefit. However, I believe that there is a real difference between the provision of an insurance policy which one decides to take out oneself using one's own money and a form of taxation which one must pay and about which one has no option.
Lord Pitt of Hampstead: I do not see the difference if the state is not contributing. That is the point.
10.30 p.m.
Earl Russell: The Government seem to have cast themselves in the part of Becket. By that name, I do not mean the honourable Member for Derby, South

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in another place; I mean the archbishop. The archbishop insisted on the very simple principle that God does not judge twice for the same offence. That, in itself, was not a bad principle; but, by his single-minded pursuit of that idea through a complex web of issues, he spread intellectual devastation around him.
Similarly the Government seem to have nailed their colours to the mast of the principle that not even Beveridge compensates twice for the same injury. In pursuing that simple principle through a very complex mass of legislative precedents, they seem to me to have made an equal confusion. The Minister in another place repeatedly referred to compensation as coming from the taxpayer. With respect, the Minister was speaking before the approval of Clause 3 of this Bill. That seems to me to have made a very big difference to the situation. By removing the Treasury supplement it has ended the Exchequer contribution and has made it now irrelevant to invoke the taxpayer.
This is a contributory scheme. I agree with the noble Lord, Lord Colwyn. This is a scheme for which they have paid. In order to implement it, the Government have dreamed up an extraordinarily complex bureaucratic nightmare. I cannot see how any noble Lord can plough his way slowly and painfully through all the complexity of Schedule 4 of this Bill without thinking that it has set up a quite unnecessary complication.
We have here a clause which has been opposed, as many noble Lords have said, by every relevant organisation. But so extreme is the anti-professionalism of some supporters of this Government that one or two of them have actually quoted that fact as an argument in favour of the clause. It reminds me of J. S. Mill's principle that it is not right that ignorance should be entitled to as much power as knowledge. I think that the Government have made a dog's breakfast of this clause, and they ought to take it away and think about it.
Lord Skelmersdale: I find these debates absolutely amazing. We have a long string of complaints before I have even opened my mouth, and words are put into my mouth which I do not have the least intention of saying to the Committee. Having said that, before turning to the details of the amendment, I think that it would assist the Committee if I put the matter into the context of the principles which Clause 22 embodies.
Some Members of the Committee have referred to some principles, and other Members of the Committee to other principles; some Members have liked the principles to which they referred, and others have liked the principles to which others have referred, and vice versa. I believe that there is a slight muddle.
The social security system exists to bring immediate financial help in the event of injury or disease, irrespective of the cause. Quite separately it is open to the individual to seek compensation if the injury or disease was caused by the negligence of another person. Since the introduction in 1948 of the benefit system the view has been taken that these
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two payments should not overlap. That was a point made by the noble and learned Lord, Lord Griffiths. Once compensation is paid, it should be less any benefits paid for the same purpose.
The noble Lord, Lord Allen of Abbeydale, in what, if I may say so, was a masterly introduction of this very wide ranging debate on this clause and schedule, produced an example of an award of £10,000 reduced by £5,000, or 50 per cent. It is assumed that the person has already had £5,000 in benefits. There is not to be double compensation—the principle that I have just enunciated, which I know that the noble Lord accepts. The person has already had £5,000 in the form of benefits. If only £2,500, or half the benefits, are deducted, he receives £2,500 in compensation plus the £5,000 in benefits that he has already had, making a total of £7,500, which is more than it was ever intended that he should end up with in total compensation.
I think that that is an example of the problems—
Lord Campbell of Croy: That is not right.
Lord Skelmersdale: My noble friend says that that is not right, but I should be very happy to discuss the point with him.
Indeed, one of the requests that went home during the course of this debate was that I should hold discussions on this clause with as many noble Lords and their advisers as noble Lords themselves feel appropriate, and I shall be delighted to do that. I may say in passing that, with my advisers, I spent very nearly two hours, I think, with the noble and learned Lord, Lord Griffiths; and if we did not agree on anything else, we certainly agreed that this was a very complicated subject indeed.
Having offered those discussions, I think that it would be appropriate at this time, of night to introduce those discussions by writing to noble Lords who have spoken, explaining how we see the existing scheme operating.
On the operation of the scheme, although the Association of British Insurers is opposed in principle to the procedure in Clause 22 and Schedule 4, it has co-operated with officials in a working group and has indicated that the scheme can be operated. That is not the impression that came from many Members of the Committee who have spoken. Who else is on that working group? The Trades Union Council, the Law Society and the Confederation of British Industry are also members of the working group. There is no suggestion from them that the scheme cannot be made to work.
The noble Baroness, Lady Turner, asked about interim payments. I understand exactly from the example that she gave, and indeed other examples of which I have heard, why it is very important to deal with interim payments because one does not know what the final settlement will be for possibly many years. It might be as many as 20 years. Officials have agreed with the Association of British Insurers a way of dealing with interim payments without delay and without causing difficulties. It will be an administrative arrangement and no legislation will therefore be needed. I am sure that before the next

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stage of the Bill the noble Baroness will check that statement.
Baroness Turner of Camden: I will.
Lord Skelmersdale: She says that she will—threateningly!
I am not sure that it would be appropriate to speak to the individual amendments which have been mentioned. However, it is appropriate to say that the legislation as drafted takes a straightforward view. The benefits to be recouped will be those which have been paid because of the injury for which compensation is to be made. I should point out that under current law deduction at the 50 per cent. level continues for the first five years of benefit no matter how much earlier the settlement may have been reached. Recoupment will apply only up to the date that compensation is paid, or five years whichever is the earlier. These are the benefits which we have paid and which have been received by the victim.
The recoupment will be made from the whole of the compensation payment for the simple reason that it is impossible to break down heads of damage, as they are called. When the settlement is made by a court, there will be specific heads of damage. But if it is not arrived at by a court—and I should say that at the moment in only 1 per cent. of cases is a judgment made—there is no breakdown of the various damages.
General damages, other than for loss of earnings or expenses, include estimates of future loss of earnings and care and attendance. If we were being asked, as we were in another place, to take like from like, we would not confine recoupment to benefits paid up to the date of settlement but would have projected into the future, reflecting the losses which are likely to occur and the benefits which are likely to be paid. As it is, by restricting recoupment to the date of settlement, we estimate that 80 per cent. of victims will be no worse off and in many cases better off than under the present rules. It may even be an inducement to victims to settle claims earlier, which must be in the beneficiary's interest.
I said in opening my remarks on this general debate that I would certainly be prepared to consider this matter with noble Lords and, if appropriate, their advisers. I should be more than happy to continue these discussions because I get the impression that the Committee, like myself, finds this clause and the accompanying schedule difficult. Certainly some members of the Committee want the thing to work, with or without the break that has been referred to in the amendment moved by the noble Lord, Lord Allen of Abbeydale. I, too, want it to work; therefore, I should like to get it right.
Lord Allen of Abbeydale: I realise that this is a very complicated subject. I hope the noble Lord will forgive me if I say that his reply falls perhaps a little short of the normal standards of clarity which we are accustomed to hearing from him in reply to amendments. He said that the points raised had been muddled. I do not think they were muddled by contributors to the debate. I also believe that inevitably the discussion turned into a debate on
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whether the clause as a whole should remain, rather than the specific amendments to which I was speaking. There has been a remarkable absence of any voice in support of what is in the Bill, apart from what we have just heard from the noble Lord, Lord Skelmersdale. He says that the scheme in the Bill can be made to work. No one has quarrelled with that, but we are saying that if it is made to work it will not be fair.
What we have not heard is any solution to the points I made about the particular ways in which it will be unfair and on which we have heard much more authoritative voices than my own.
I am particularly muddled about his complaint about my illustration of the £7,500. What is wrong with a man receiving £7,500 I cannot imagine. If one takes the 1948 Act as it works at the moment, using the same figures, the way that would work, as I understand it, is that one would start with £10,000, deduct half the social security payments for the next five years—in this case, £2,500—and then apply the percentage for contributory negligence to what was left. Thus, with his social security payment and the court award, he would do rather better than I have been suggesting in my illustration.
But we do not want to get bogged down in detail. I am at a loss to know what to do. I get the impression that the Government think that what I am proposing is unworkable because of the difficulty about out of court settlements. That may be so, but we are left with the main question, whether it is right to have in the Bill a proposal which tackles this problem at all in this way. It has already been explained that, on the Government's own figures, it would require 100 more civil servants, and that the saving would be nothing like the saving which was indicated to the Public Accounts committee.
I am perhaps speaking to the question whether the clause should stand part. It may be that I should content myself with withdrawing the amendment and leaving others to speak. But I suppose it would be permissible under our procedure, on which I am no expert, to leave the clause as it stands and an amendment could be put down at Report to delete that clause and substitute something more acceptable. Others more expert than I would be able to say that. I think in my general puzzlement I had better ask for permission to withdraw the amendment and say that I shall study with great care what the Minister has said. May I so move?
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 50:
Page 22, line 8, leave out ("gross amount") and insert ("net amount after deducting the costs incurred by the victim in procuring the payment,").
The noble Baroness said: I am in some doubt as to whether to proceed with this amendment. We have had a very long debate on the clause as it stands and, as I said when I was speaking to the amendment that has just been withdrawn by the noble Lord, Lord Allen, it seemed to me that we were really debating the clause as a whole rather than particular amendments.
I feel inclined not to press the amendment at the present time. I do not know how the noble Earl,

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Lord Russell, feels about this, because he has his name to the amendment as well. My inclination is not to move it now and to press on with the rest of the clause.
Earl Russell: I want just to say a word in favour of the amendment.
Baroness Turner of Camden: If I formally move the amendment, the noble Earl can make his point. I beg to move.
Earl Russell: It seems essentially inequitable that someone might go to court, win an award of damages and be worse off as a result because he had to pay part of the award to his lawyers and part of it to the Department of Social Security if the two sums together come to more than the total award. It is rather like the unfortunate situation of the lady who was bankrupted by being left £1 million in shipping shares. The shipping shares were left in the spring of 1929 and were valued for death duty in the autumn of 1929. I suggest that the operation of this clause is about as unpredictable as that.
Lord Skelmersdale: The noble Earl talks about unfairness but the situation that he describes can happen now with the existing 50 per cent. offset. The trouble is that it is doubly unfair, as it were, because the 50 per cent. offset does not even help pay for social security benefits or anything like that. It goes straight into the coffers of the insurance company and that cannot be fair.
Baroness Turner of Camden: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 51 and 52 not moved.]
10.45 p.m.
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 53:
Page 22, line 25, at end insert ("being benefits paid or likely to be paid only by reason of the accident, injury, or disease in respect of which the compensation payment is made.").
The noble Lord said: This is a probing amendment of no great consequence at all, particularly at this hour of the night, compared with the amendments with which noble Lords have been concerned and on which the noble and learned Lord, Lord Griffiths, has spoken with authority in the light of a lifetime of experience on the question of the difficulties of compromise.
But the amendment is worthy of brief consideration. It is technical. It reflects the assumption, as stated in Clause 22(1)(a), that relevant benefits as part of total benefits are only those paid or payable by reason of the accident, injury or disease. But the draftsman, for some wholly inexplicable reason so far as relevant benefits are concerned, has defined them in Clause 22(3) without including the crucial consideration which is the subject matter of this amendment.
As, clearly, this whole clause has to be reconsidered, I ask whether in that process the last eight words of Clause 22(1)(a) could be excised and whether Clause 22(3), the defintion clause, could
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include the substance of this amendment so that in the interests of intelligibility and ease of reference one can see what "relevant benefits" mean. I beg to move.
Lord Skelmersdale: I should like to say at once that my noble friend has identified the policy intention, and we both agree on that. However, moving and slightly changing the words to which my noble friend has drawn attention concerning the definition clause would not help as a solution because relevant benefits are left to be prescribed by regulation. My right honourable friend Mr. Scott set out in another place on 2nd March which benefits will be prescribed as relevant benefits, and I shall be happy to repeat those if the Committee so desires.
However, I believe that it would be appropriate to ask why the benefits are not listed in the main legislation, and that is probably relevant to what my noble friend said. As we all know—and some of us may regret—social security is a constantly changing and evolving system. If benefits are changed in name or a new benefit is invented, it is preferable to add to or change the list of benefits by regulation rather than by primary legislation, especially when the changes to the benefits themselves may be made by regulation and not by primary legislation.
Lord Campbell of Alloway: There is a total misconception of the fundamental point being made. It is better that I should discuss the matter with my noble friend and his advisers in the privacy of his room. This is a fundamental misconception which is best dealt with round a table rather than in Committee at this hour of night. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Faithfull Baroness Faithfull moved Amendment No. 54:
Page 23, line 18, at end insert ("or section 58 of the Criminal Justice (Scotland) Act 1980".).
The noble Baroness said: Like other Members of the Committee, I am in great difficulty regarding this amendment. Other Members of the Committee have received a letter from the Faculty of Advocates in Edinburgh, and as is well known to the Committee, great concern has been expressed by them regarding Clause 22. If Clause 22 is to be in the Bill, then I am asked by the faculty to move this amendment. I beg to move.
Lord Skelmersdale: I should like to congratulate my noble friend on spotting a genuine error in the Bill and, in those circumstances, I am delighted to accept the amendment.
Baroness Faithfull: I thank the Minister.
On Question, amendment agreed to.
Clause 22, as amended, agreed to.
Clauses 23 to 25 agreed to.
Clause 26 [Pre-consolidation amendments]:>
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 55:
Before Clause 26, insert the following new clause:
("Jurisdiction of the Parliamentary Commissioner.
. In Schedule 2 to the Parliamentary Commissioner Act

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1967, social fund officers and social fund inspectors shall be added to the list of departments and authorities subject to investigation.").
The noble Lord said: The discussion on Clause 22 has taken well over an hour and I hope that this amendment will not take anything like that amount of time, but I cannot deal with the matter in a minute. I must expatiate a little.
The amendment is to add social fund officers and inspectors to the jurisdiction of the parliamentary commissioner. When this matter was raised last year by the noble Baroness, Lady Jeger, everyone in the Chamber, including the Minister, was quite sure that social fund officers came under the jurisdiction of the ombudsman. The Minister himself categorically stated that social fund officers were already included in Schedule 2 to the Parliamentary Commissioner Act. Not only did the noble Baroness and I believe that to be the case but the noble Lord, Lord Boyd-Carpenter, said so. He said:
"I should be extremely surprised—I may be rusty about this—if they were not already there."
Not only did the noble Lord, Lord Boyd-Carpenter, from the Government side believe that they were already included, but also the noble Lord, Lord Trafford, who said:
"I was going to make the same point as my noble friend Lord Boyd-Carpenter."
He added that,
"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."—[Official Report, 3/3/88; cols. 332–3.]
With the Minister, the noble Baroness, the noble Lords, Lord Boyd-Carpenter, Lord Trafford, and myself all in agreement, one would have thought that there would be no gainsaying that. Not at all. I then put down some Questions to the noble Lord, Lord Skelmersdale, and after a stalling reply I received a two page letter from him on 7th September 1988—September, and I believe our debate was in March 1988! The Question for Written Answer was answered on 10th October 1988 to the effect that the officers are not subject to the jurisdiction of the ombudsman.
That shows that it took six months for the Minister to reach a negative conclusion—a conclusion which negatived his positive utterance six months earlier; so there must have been some doubt for them to have argued the toss for six months before reaching a conclusion.
Not surprisingly, the report of the ombudsman for 1988 confirms one's impression—not that there is any doubt—that the Minister has got it wrong. In paragraph 29 of his 1988 report the ombudsman says that he is slightly surprised that he has not had any work in connection with the social fund. He goes on to say that that is because the social fund is deemed to be outside his control. These are his words:
"In the event—and I confess, rather to my surprise—I have received virtually no complaints about the way the social fund machinery is working. I have thus not had occasion to explore the possible jurisdictional difficulties arising from the Government's recently expressed—and perhaps questionable—view (in answers to Parliamentary Questions) that social fund officers do not act as agents of the Secretary of State when making independent
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social fund decisions and that social fund inspectors (who review social fund officers' decisions) do not and should not fall within my jurisdiction."
He concludes:
"The Department therefore take the view that any maladministration by social fund inspectors is also outside my jurisdiction. This is an area in which I find it particularly difficult to foresee how things may develop; but I have little doubt that the subject is one which will need to figure on my successor's agenda."
That is a very polite way of saying that he disagrees with the Government's finding.
I have had a look at the legislation on this and I must say that I agree with what is implicit in the ombudsman's report. The main burden of the reply I received from the Minister was that social fund inspectors were like adjudicating officers; that they have an adjudicating role and that adjudicators not being answerable to the parliamentary commissioner neither should the social fund officers. I believe that to be a non sequitur. I do not believe that the Minister's finding can be supported in the words of the Act.
I turn to the Social Security Act 1986. Section 32(2) says:
"Payments may be made out of that fund"—
the social fund—
(b) to meet other needs in accordance with directions given or guidance issued by the Secretary of State".
Therefore payments may be made out of that fund only,
"in accordance with directions given or guidance issued by the Secretary of State".
The officers acting in accordance with that statutory requirement are not independent of the Secretary of State. They are, and must be, acting in accordance with directions given or guidance issued. This is plainly stated in subsection (8):
"The Secretary of State appoint officers…for the purpose of performing functions in relation to social fund payments such as are mentioned in subsection (2)(b) above".
That is:
"in accordance with directions given or guidance issued by the Secretary of State".
The same is said in Section 33.
It is explicitly stated in the statute itself that the social fund officers are acting in accordance, and can only act in accordance, with the directions given or guidance issued by the Secretary of State. Therefore they cannot be compared with independent adjudicators. The same also applies to social fund inspectors. That is why I have included the inspectors in the terms of the amendment.
I shall not go through it again, but the reply that I had from the Minister and the reply to my Question for Written Answer are inferior in authority to the words of the statute. For that reason he should look at this again and agree, as he originally thought was the case and as all noble Lords thought was the case when the noble Baroness moved her amendment in March of last year, that social fund officers and social fund inspectors should come under this jurisdiction. That should happen by virtue of the statute, which all of us expected, and naturally expected, should be the case of officers who act in accordance with directions given or guidance issued by the Secretary of State. I beg to move.
11 p.m.
Baroness Jeger: Not unexpectedly, I support everything that the noble Lord has said. In view of the irrefutable case which he has made out I hope that the Minister will repeat his last performance and graciously accept the amendment.
Lord Skelmersdale: As the noble Lord said, this matter has been running for a very long time, or at least in terms of ministerial careers in this Chamber it has been running for a very long time.
None the less, there has been some confusion with the noble Lord. Social fund officers are officers of the department under Section 32(8) of the Social Security Act 1986 and so are already included in Schedule 2 to the Parliamentary Commissioner Act 1967. Thus the administrative functions that they undertake on behalf of the department already come within the parliamentary commissioner's jurisdiction. When performing those statutory functions, which are independent of the department—that is, deciding on payments and undertaking reviews—they are outside the jurisdiction of the Parliamentary Commissioner.
In those respects I still submit to the noble Lord that their role is similar to that of the adjudication officers, who make independent decisions about benefit claims but also perform a variety of administrative tasks on behalf of the Secretary of State which are connected with their adjudication responsibilities. It has long been accepted that when acting in their independent role adjudication officers are not answerable to the Parliamentary Commissioner.
The position of the social fund inspectors is, I accept, somewhat different; they are wholly independent of the department and are therefore not covered by Schedule 2. They are appointed by the Social Fund Commissioner who is herself independent and they are answerable to her. Social fund officers do not perform executive or administrative functions. Their sole function is to provide an independent second-tier review of decisions made by social fund officers. Their role is therefore comparable to that of the social security appeal tribunals and I understand that it is not the practice of the Parliamentary Commissioner to investigate them or their support staff. Any maladministration by social fund inspectors is, I conclude, a matter for the Social Fund Commissioner to deal with and there has been nothing in our experience of the first year of the social fund to suggest a need to change these arrangements.
Having said that, I shall of course continue to look into the matter. It is something which sooner or later the noble Lord and I must resolve. However, it is clear that up to this moment we have been unable to do so.
Lord Henderson of Brompton: If I may say so, I did not find that reply very convincing. Surely it is not for the department to decide who is and who is not susceptible to the jurisdiction of the Parliamentary Commissioner. That must be a matter which is decided independently of the department.
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The report of the Parliamentary Commissioner states in the politest possible way that he disagrees with the conclusion of the Minister. If it is found that the ombudsman takes one view and the Minister another, then surely this must ultimately be a matter for adjudication by a court. It cannot be settled by the authority of the Minister. It cannot be said that, "That is that"; that it has long been accepted that one category of person does not come within the jurisdiction of the ombudsman, therefore this kind of person also, because he is akin to adjudicators, does not come under such jurisdiction. That is not the case.
I referred to the Act which set up the Social Fund, but the noble Lord did not do so. The Act states in explicit words that these officers must act in accordance with directions given, or guidance issued, by the Secretary of State. That is as plain as a pikestaff, for goodness sake! Surely the ombudsman should be able to have jurisdiction over any matter of maladministration by the officers, if not by the inspectors. I should have thought that he ought to have jurisdiction in respect of both of them.
I wonder whether the noble Lord will agree to accept my amendment in the interim, as suggested by the noble Baroness, Lady Jeger.
Lord Skelmersdale: No, I am afraid that, most regretfully, I am unable to do so. I say that because I think that the noble Lord is under a misapprehension when he suggests that the advice which I gave him, and the advice upon which I prepared the comments I made this evening, came from within my department. The matter of the ombudsman comes from the office of the Minister for the Civil Service and, as I understand it, there are constant discussions between my right honourable friend's officials and the officials of the Parliamentary Commissioner. Therefore, unilaterally, so to speak, I am not in a position to accede to the noble Lord's wish or that of the noble Baroness.
Lord Henderson of Brompton: This is a matter which has been going on for well over a year now. Surely it is time that we reached a conclusion. Perhaps we can reach a definite conclusion on Report. With that understanding, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 agreed to.
Clauses 27 and 28 agreed to.
Clause 29 [Regulations and orders: general provisions]:
[Amendment No. 56 not moved.]
Clause 29 agreed to.
Clauses 30 to 33 agreed to.
Schedules 1 to 3 agreed to.
Schedule 4 [Recovery of Sums Equivalent to Benefit from Compensation Payments in respect of Accidents etc: Supplementary Provision]:
[Amendments Nos. 57 and 58 not moved.]
Schedule 4 agreed to.
Schedule 5 [Employment-related Schemes for Pensions or Other Benefits: Equal Treatment for Men and Women]:
Lord Mottistone Lord Mottistone moved Amendment No. 59:
Page 54, line 43, at end insert—
("(h) any additional pension payable under a scheme to a man at any time between the ages 60 and 65 for as long as—

(i) there is a difference in pensionable age for men and women under the State scheme, and

(ii) the additional pension does not exceed—

(aa) in the case of a scheme which is a contracted-out scheme an amount equal to the basic component of the Category A retirement pension under the Pensions Act, or

(bb) in the case of a scheme which is not a contracted-out scheme an amount equal to the basic component and the additional component of the Category A retirement pension under the Pensions Act,

which would have been payable to him at that time under the Pensions Act had his pensionable age under the State scheme been 60 (but disregarding any increase for deferred retirement under section 12 of that Act), and

(iii) the additional pension ceases to be payable when he reaches pensionable age under the State scheme.").

The noble Lord said: I put forward my arguments on the taxing problem of bridging and integrated pensions on Second Reading (cols. 553 and 554 of Hansard). I do not propose to go over the basic arguments again.
The amendment is designed to make it possible for integrated pensions to remain equal for both men and women throughout ages 60 to 65. The argument that we had on Second Reading was essentially one of the legal interpretation of the directive on which the clause is based. I argued, based on counsel's opinion, which has not changed since the Bill has been amended, that there was sufficient derogation within the directive to ensure that in the interim period until such time as our state pension ages are brought into line, which will be the subject of another directive to which we shall have to give legal backing in due course (which will probably not be for many years), we can have a provision which enables the integrated pensions to remain fair, as they are today, with adjustments to women's pensions between the ages of 60 and 65 in order to ensure that that fairness is achieved.
The whole aim of the directive is to have equality of pensions for men and women. In this country many of the larger companies have worked out and negotiated a special way of achieving that. The Bill as drafted will turn the fairness that has been achieved, after long study and discussion with all the parties concerned, into unfairness. The matter rests on the interpretation of the directive. As I said on Second Reading, it seems that the Government have had new legal advice since the directive came through when they thought that there was sufficient derogation within it. The advice that the CBI has at its disposal is that the Government are wrong. As I said on Second Reading, the best solution is for the two lawyers to meet.
The most satisfactory outcome would be that my noble friend swallows his pride and says on behalf of his department, "Yes, we are wrong after all".
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That would be simplest. I am certain that the department is wrong, not only wrong about how the directive is interpreted but wrong in the sense of achieving the aims of the directive. There are two points here. If the Minister does not take the course I suggest, then perhaps between now and the Report stage he will agree to a meeting between the lawyers, albeit under his auspices. I should go along to listen and make sure that they do not fight. With that background, I beg to move.
11.15 p.m.
Baroness Turner of Camden: Once again I find myself in agreement with the noble Lord, Lord Mottistone, on this issue. At Second Reading I said that in principle I supported the EC directive on equal treatment, and of course I do. The intention is admirable. However, we have a problem in this country which successive governments have repeatedly failed to address. The state pension scheme has different retirement ages or different pension ages for men and women.
For many years, the TUC and other organisations have been pressing for both sexes to have the same pension age in the state scheme. The TUC's view is that it should be 60. That has repeatedly been rejected by successive governments on grounds of cost. A committee of your Lordships' House, of which I had the honour to be a member, recently published its findings as a result of the EC directive, and no doubt we shall shortly debate the matter. It is because we shall have an opportunity of discussing the issue quite soon that I have not tabled an amendment on equal pension ages.
However, as the noble Lord, Lord Mottistone, has indicated, because of the anomaly in this country, certain companies which have wished to introduce retirement at 60 for both sexes have had to take special measures in order to make it acceptable to both sexes. The pension schemes to which I refer are contracted out of the government scheme and, as the noble Lord, Lord Mottistone, has said, are integrated with the state scheme. By that is meant that what the individual receives under the state scheme is taken into account. Women of course receive the basic state pension at age 60; men have to wait until 65. Companies wishing to achieve a common retirement age of 60 for both sexes could not possibly have succeeded in doing so if they had insisted that men had to wait until the age of 65 before getting the fully integrated pension. So they have introduced bridging pensions to enable that to be effected.
As the noble Lord, Lord Mottistone, has said, the Government at first appeared to think it was all right. Now they seem to think that the provision of bridging pensions could be illegal under the EC directive, since it means that the company pay more to one sex than to another, although the end result was to achieve equality for both sexes.
As I said at Second Reading, this is by no means the view of all lawyers, despite what the government lawyers have said. I have seen at least one legal opinion which appears to assert that the situation is not as the Government appear to believe it to be; that the directive does not, as the Government appear to think, forbid the continuation of integrated schemes;

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and that there is no support in case law for the Government's restricted view of the directive.
In view of all this, it seems sensible to do what is suggested here. I hope that the Government will take the amendment on board. I am quite certain that it is in line with what the directive aims to achieve, which is equality for both sexes in pension provision. It seems that it helps to clarify the situation.
I hope that the Government will accept that I have been briefed by the CBI, as has the noble Lord, Lord Mottistone, and that I have also received information from other sources. The managers of a number of very good pension schemes have been in touch with me to point out that, if the Government persist in their attitude, they will be placed in very extreme difficulty. They are, after all, attempting to achieve equality in pension provision at age 60. As I said earlier, that is what the TUC has been aiming for for a very long time. I therefore support the amendment.
Baroness Seear: I wish briefly to support this amendment which is very much in line with the next amendment standing in the name of the noble Lord, Lord Henderson, and myself. I think there can be no doubt that the intention of the amendment is in line with equal opportunities and not contrary to it. If the noble Lord will take the provision away and have the discussions suggested by the noble Lord, Lord Mottistone, that would undoubtedly be very helpful in clarifying the legal position. If the worst comes to the worst, a test case either way could be taken to the European Court. That, no doubt, is where the matter will land up unless we come to a sensible solution here. It is a pity to have yet another case go to the European Court if the matter can be settled here. I believe that the acceptance of this amendment would go a considerable way in that direction.
Lord Allen of Abbeydale: I should say that the Select Committee to which the noble Baroness, Lady Turner of Camden, referred received its own legal advice which tended to coincide with that received by the Government. We thought that the proposal as set out in the amendment was a very sensible proposal. We had made a recommendation that representation should be made and that the next directive, to which our report relates, should be amended to enable this to be done. But, for what it is worth, our view was that under the present law and the present directive that could not be done. As has been said, the real solution is to have equal pension ages.
Lord Skelmersdale: There is nothing like cutting gordian knives with a knot, or rather gordian knots, with a knife, if I may say so to the noble Lord, Lord Allen of Abbeydale. Having said that, I wish to express considerable sympathy with my noble friend's amendment which continues to legalise bridging pensions. That sympathy extends to the situation that the schemes which that amendment is trying to alleviate will find themselves in from 1993.
I can assure the noble Lord, however, that we have looked long and hard at the exact wording of the
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exception and it is with regret that we have concluded that bridging pensions in integrated schemes are beyond the scope of the derogation. Indeed, such is the effect of its limited scope that, as my honourable friend announced in another place, we shall be bringing forward legislation in a future Bill to amend the current conditions for schemes to be used for contracting out of SERPS to meet an analogous situation between the ages of 60 and 65.
As the noble Lord, Lord Allen of Abbeydale, has said, we are backed up in our belief by the very powerful Select Committee on the European Communities in that to adopt my noble friend's amendment would have the United Kingdom in breach of its obligations under the treaty and leave both the Government and individual schemes vulnerable to an unfavourable judgment by the European Court.
In the light, therefore, of the Select Committee's conclusion, I am reinforced in my view that the Government's understanding of the directive is correct. We shall respond to the Select Committee as soon as possible. However, I am bound to comment on the suggestion of the noble Lord, Lord Allen of Abbeydale, in the report. I am afraid I do not have a great deal of confidence that we should succeed in any attempt at renegotiation in Brussels of a directive which had already been agreed to. We shall consider whether that can be passed off onto the next draft directive, which is what I think the noble Lord, Lord Allen, suggested. We shall make it a consideration in our response to the Select Commitee's report.
Lord Allen of Abbeydale: I just wanted to confirm that we are not suggesting that the directive which is being implemented by this legislation could be altered. We thought that the position could be corrected in the next directive, which is the subject of our report.
Lord Skelmersdale: I am grateful for that clarification.
Whenever, and if ever, agreement is arrived at and the situation changes, the Committee should be in no doubt that we shall bring forward amending legislation in a future social security Bill prior to 1993 to continue the payment of bridging pensions. If we are allowed to do it, of course we shall do so the instant we are allowed to. However, at the moment we are reinforced in our view that we are not allowed to, which is the message which I am afraid that I must give to my noble friend Lord Mottistone. He asked for a meeting between his advisers and my advisers on this issue. I am delighted to acccede to his request.
Lord Mottistone: I think that this is a rather rigid view of what may be only a two-year problem. It is all very well to say that one has to slick to one's guns, but it will cause enormous trouble and a great deal of expense for the people who have arranged the pension schemes for something which everyone agrees has to be put right in any event. My noble friend said that the position would be rectified in a social security Bill in two years hence but in the meantime the damage would have been done.
Lord Skelmersdale: No. The point I made was that the proposals in the current Bill do not come into effect until 1993. If we were allowed to change things, there would be time to change them in a social security Bill. It is relevant for the Committee to ask why we have made provision in this Bill and not waited until a future Bill. We are advised that the pension industry wants to get started and wants the longest notice possible. Therefore, once we had taken legal advice and heard from the committee of which the noble Lord, Lord Allen of Abbeydale, is the distinguished chairman, we decided to get on with it.
Lord Mottistone: Do I understand from that that, because this part of the Bill will not be enacted for another four years, there is time to make the correction in the meantime? Is that what my noble friend is saying?
Lord Skelmersdale: Yes, that is what I am saying. However, it has now been widely agreed that the likelihood of being able to correct this matter in Brussels is small, and therefore the Government propose to have the matter settled for the moment in this Bill so that the occupational pensions industry can get on with reforming its schemes
11.30 p.m.
Lord Mottistone: That is not quite what I hoped that my noble friend was saying. However, there is one other aspect of the matter. I asked the CBI whether it knew the attitude of the Commission in Brussels. I gather that the Commission is totally relaxed about the matter and will not invoke desperate actions against us because our intentions are the same as the Commission's intentions. Although it is only an unofficial discussion at this stage, at the working level the Commission was rather surprised that we were so fussed about the matter, particularly when it was explained that the whole principle of our integrated pensions is the equality which is central to the issue.
What is puzzling is why the Government are sticking so sharply to their legal guns when no one else is very fussed about the issue, when there is time to spare and when other legislation is coming along. Obviously, I shall not budge my noble friend now. But it seems that someone somewhere is being over-meticulously correct out of fear of being taken to court. I do not believe that that is the case; I consider that it is a case of making a mountain out of a mole hill. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 60 not moved.]
Schedule 5 agreed to.
Schedules 6 and 7 agreed to.
Schedule 8 [Minor and Consequential Amendments]:
[Amendments Nos. 61 and 61A not moved.]
Lord Pitt of Hampstead Lord Pitt of Hampstead moved Amendment No. 62:
Page 78, line 23, at end insert:
("Income support: pregnant women aged 16 or 17
17A. In Schedule 1 to the Income Support (General) Regulations 1987, after paragraph 4 there shall be inserted the following paragraph—
"4A. A person who is pregnant." ").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 63. Both amendments deal with pregnancy and are intended to help. The first is to help pregnant 16 and 17 year-olds who do not receive any support until the last 11 weeks and who have rarely worked long enough to qualify for unemployment or sickness benefit. Although they are theoretically guaranteed a YTS place which would give them some income in pregnancy, young pregnant women are sometimes sacked—this is an important point—from their YTS placements or their jobs by unsympathetic employers. Again, they have not worked long enough to be protected from unfair dismissal, so the only protection they can obtain is income support during the whole of their pregnancy. That is important not only for them, but also for their babies, given the question of dietary care of infants.
I gather that 16 and 17 year-olds cannot even claim free welfare milk and vitamins, whereas everyone else can, until late in their pregnancy when they qualify for income support. All those grounds make it necessary to give them income support from an early stage. I hope that the Government will accept the argument. Parents are not always able to help them—although, theoretically, they should do so—because they are often too poor themselves.
Under the other amendment pregnancy would entitle one to family premium. Those most in need of help are usually first-time mothers. The point at issue is the expenditure that occurs when people are pregnant. Although family premium is not a large sum of money, it will help them to meet some of the basic expenditure that arises at that stage. That is the reason for the amendment.
I do not think that there is any need for me to go deeper into the matter. I hope that the Government will treat these amendments sympathetically. They are both related to pregnancy but each is different. One relates to 16 to 17 year-olds and enables them to receive income support throughout the whole of their pregnancy. That is absolutely essential because they need it. The other concerns first-time pregnant women. Their expenditure can be helped out by the family premium. I therefore hope that the Government will accept these amendments. I beg to move.
Earl Russell: I shall not detain the Committee for long, but this matter is of some importance. The present law creates a good deal of hardship. I shall quote only one case that has been drawn to my attention. It is the case someone who was at first unable to obtain a YTS place because she was too near the 11 weeks before birth limit at which she would have had to give it up. She had £15 on which to support herself and possessed only one skirt that she could get into. That is slightly more than hardship and at that stage of someone's life, they ought to be offered support.
I have not yet been able to see a text of the Secretary of State's remarks on this subject made to

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the Select Committee of another place yesterday. I imagine from what I have heard that I would agree with some of what he said.
But there is a strain here of attempting to deter people from getting into such a condition. That is something which has behind it a very long history. Deterrence has been tried in more extreme ways than are being tried at present. Constantly when working I come across cases in which it has been ordered that a woman should be whipped until her back was bloody and sent back to her home parish. I understand that the Secretary of State is not proposing anything remotely resembling that, but even on that scale it did not act as a successful deterrent. It did not achieve the effect of stopping it.
I think that this is an attempt to deter and to avoid, as the Minister put it earlier today, a perverse incentive which casts the Secretary of State in the part of Danae's father, and that, as we all know, is a losing part.
Being a pregnant child is near enough to a contradiction in terms anyway. It is a rather unpleasant condition and I do not think that we need to use disincentives in the law to make it even more unpleasant than it is already.
Lord Skelmersdale: I think that I mentioned way back in the early reaches of the afternoon in relation to Amendment No. 42 that, when we introduced the provisions for 16 and 17 year-olds, we ensured that the most vulnerable young people retained entitlement. I am sure that this is what the whole Committee would have expected us to do, and that is what we did. This includes those who are pregnant and within 11 weeks of the expected week of confinement or who at a time before this date are incapable of work by reason of an illness or medical condition arising from the pregnancy. These are the same rules as apply to all pregnant women, irrespective of age. Amendment No. 62 seeks to extend entitlement to all young women aged 16 or 17 who are pregnant, whatever the stage of the pregnancy.
The general removal of entitlement to income support for that age group was balanced by the guarantee of the offer of a place on the youth training scheme to any young person who wants one. That guarantee, as I said earlier, is being met. All 16 and 17 year-olds are covered by the guarantee. This includes those who are pregnant. If any young woman who was pregnant was to meet any problems in getting into YTS, the training agency would make arrangements for suitable training to be provided for as long as she or her medical advisers considered appropriate. There is therefore no justification for giving entitlement to pregnant girls before the point at which they are no longer required to be available for work. Clearly I cannot comment on individual cases at the Dispatch Box, but I should be very surprised if the case mentioned by the noble Earl just now was not covered by what I have just said.
Amendment No. 63, like Amendment No. 62, seeks to make changes for pregnant women. This amendment seeks to increase the amount of benefit
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paid by extending the family premium to families which include a pregnant person.
It is likely that the noble Lord, Lord Pitt, intended that the young people who would benefit from Amendment No. 62 would also benefit from Amendment No. 63.
Lord Pitt of Hampstead: Yes, some of them will; but it is more general. It is people with their first pregnancies, not necessarily 16 or 17 year-olds but older than that also.
Lord Skelmersdale: I am grateful to the noble Lord for that clarification. However, there is a problem. In common with other single pregnant women, such people unfortunately would not also benefit from Amendment No. 62 because quite simply a single person is not a family. As noble Lords will be aware, the family premium is already paid to all families with children.
The only people who would receive the family premium under this amendment who do not already qualify for it would be couples expecting their first child. I am not presently persuaded that pregnancy, of itself, gives rise to special needs, over and above those already catered for by the issue of free milk and vitamins and the social fund maternity payment, which would justify a special premium. But even if I were, I could not see any justification in giving such a premium for a minority of pregnant women only.
I can do no better than advise the noble Lord, Lord Pitt of Hampstead, to consider what I have said, and at this stage to withdraw his amendment.
Lord Pitt of Hampstead: I shall obviously have to come back on Report. I am quite disappointed that the Minister is so unhelpful. One of the problems about this nice statement that young people have a YTS place is this. They could be sacked because the employer is unsympathetic. There is also the question of the short period of training and whether it makes sense anyway, if they work for only a short period and then, because they are close to the confinement day, they have to finish. It seems to me that in the case of 16 to 17 year-olds there are other benefits to which they would not be entitled—free milk and vitamins, and so on—because they are not receiving income support. However, by giving them income support during the whole of the pregnancy, one would be helping the children in a specific way.
I am not talking about the mothers. I am talking about the children that they are bearing. It is important that they are able to nourish themselves so that they nourish the child. That seems to be a matter which has not been grasped by the Minister's advisers. During pregnancy, young people of 16 or 17 years need even more help than people in their twenties, and so on.
Far from them not being entitled to receive income support because of their age, they are even more in need of it. Therefore there is more justification for their receiving it than the people in their 'twenties who will receive it. I should like to ask the Minister to chat with his advisers and consider this matter again.
In the case of family premium, it is a way of helping those who are bearing their first child and

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who have more expenditure than they can cope with. The family premium is not very high; but receiving it during the 40 weeks would enable them to meet some of the expenditure. A shopping list costed at Mothercare prices comes to £64. That will buy one maternity dress, two nursing bras, two pairs of support tights, one skirt or pair of trousers and two tops. It is that kind of thing.
Again the Health Visitors Association publishes a minimum list of equipment necessary for a new baby. This costs a total of £360 at current prices, or £250 if some major items are available second-hand. Only a third of that equipment could be bought with the £85 that they would receive. For that reason, we suggest that for someone who is pregnant receiving the family premium will be of great help.
I shall withdraw the amendment, but I wish the Minister to look at it again and chat some more with his advisers. I do not believe that he has grasped this matter, because I know that he is not an unsympathetic man.
I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 63 not moved.]
Schedule 8 agreed to.
Remaining schedule agreed to.
House resumed: Bill reported with amendments.

Great Yarmouth Port and Haven Bill [H.L.]
Reported from the Select Committee with amendments, and recommitted to an Unopposed Bill Committee.
House adjourned at fourteen minutes before midnight.