§ House again in Committee.
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.910
§ 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.
911 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 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
§ 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|
|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.|
|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.915
§ 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 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.917
§ 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.922
§ 9.30 p.m.
§ Clause 16 [Expenses of Secretary of State in making transitional payments relating to income support and housing benefit]:
§ 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".
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 924 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
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 925 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 926 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 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 927 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.928
§ 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 929 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 930 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 931 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 932 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.
933 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.
935 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.
936 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 937 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 938 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 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 939 stage of the Bill the noble Baroness will check that statement.
§ 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 940 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 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, 941 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.
§ 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.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 51 and 52 not moved.]
§ 10.45 p.m.
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 942 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.
§ 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.
§ 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 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 943 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
social fund decisions and that social fund inspectors (who review social fund officers' decisions) do not and should not fall within my jurisdiction.
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".
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.945
§ 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.
946 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.947
§ Schedule 5 [Employment-related Schemes for Pensions or Other Benefits: Equal Treatment for Men and Women]:
§ 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—
§ 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". 948 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; 949 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 950 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 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 953 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 954 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 955 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.