§ 3.11 p.m.
§ Report received.
Lord Carter moved Amendment No. 1:
Before Clause 1, insert the following new clause:
§ ("Uprating of child benefit
§ .—(1) In section 63(3) of the 1986 Act, at the end there shall be added the following paragraph—
§ "(c) mentioned in subsection (1)(f) above.".
§ (2) There shall be paid out of the National Insurance Fund into the Consolidated Fund, at such times and in such manner as the Treasury may direct, such sums as the Secretary of State may estimate to be the amount by which the amount of child benefit payable in the tax year 1991–92 and in each subsequent tax year exceeds the amount which would have been payable if the sums specified by virtue of section 5(1) of the Child Benefit Act 1975 had not been increased after 31st March 1991.
§ (3) The funds required for the making of payments under subsection (2) above shall be provided by means of child benefit contributions, payable to the Secretary of State by 11 employed and self-employed earners, of a prescribed percentage of—
§ (b) for any tax year, so much of the annual profits or gains referred to in subsection (1) of section 9 of the principal Act (as computed in accordance with Schedule 2 to that Act) as exceeds the upper limit specified in subsection (2) of that section.
§ (4) In this section, "employed earner", "self-employed earner" and "earnings" have the meanings given by section 2(1) and section 3(1) of the principal Act.
§ (5) Regulations may make provisions with respect to the computation, collection and recovery of child benefit contributions payable under subsection (3) above, including provision for the application or modification of provisions of the Income Tax Acts, and may make such other provisions as the Secretary of State may consider necessary with respect to those contributions.").
§ The noble Lord said: My Lords, I do not apologise for returning with this amendment to the centrally important question of the uprating of child benefit. The matter was discussed at Committee stage when a simple uprating measure introduced by the noble Lord, Lord Seebohm, met with the usual Government response on the subject, which makes the average brick wall look like yielding jelly.
§ Before dealing with the amendment, which proposes a completely new way of dealing with the uprating of child benefit, perhaps I should remind the House of the main features of child benefit. It is a tax-free, non-means tested cash benefit of £7.25 per week which is paid for each child. It is universal, with a take-up rate of 98 per cent. It is paid to 6.7 million families in respect of some 12 million children at an annual cost of £4.5 billion. The level of the benefit has been frozen at £7.25 per week since 1987. If it had been fully uprated for inflation the benefit would now be of the order of £9 per week,
For the benefit of the House, I should point out in passing that the next Labour Government are committed to restoring the loss since 1987. Since I know that these things are looked at with some care in come quarters, I shall quote from the recent policy review document:
In the first year of the Labour Government there will be a substantial increase, at least enough to make up the loss in value since the last election".
§ There has been a long tradition of all-party support, both in and out of government, for the principle of a universal child benefit from its introduction in 1975 unitl 1987, when the Government signalled a change of heart. They did so on the grounds, first, that most of the money will go to the better-off and, secondly, the poorest—those on family credit, for example, gain nothing because child benefit is deducted from their family credit.
To deal with the second objection first, that the increase in child benefit does not benefit the poorest families, the answer was given at Committee stage by the noble Lord, Lord Jenkin of Roding, who spoke with all the authority of a former Secretary of State for Social Services. He said (at col. 606 of Hansard for 21st May) in reply to a point raised by the noble Lord, Lord Boyd-Carpenter:
Perhaps I may take issue with my noble friend on one point. He stated that child benefit confers no advantage on the really poor. That would be true if the take-up of the means-tested benefits was anything approaching 100 per cent. It is certainly better than the old family income supplement, but nobody seeks to pretend that the family credit, or the one-parent family benefit, reaches anything like 100 per cent. of the families who are eligible. The advantage of child benefit, however, is that at least it goes automatically to all families".
§ The best estimate that we have at the moment is that at least 400,000 families who are eligible for family credit do not claim it. That represents some 800,000 or more children. Those families would benefit immediately from an increase in child benefit.
§ The new clause has two aims. The first is to require the Government to uprate child benefit from 1991 onwards in line with prices. As was pointed out by the noble Lord, Lord Seebohm, at Committee stage, that does not create any additional burden on public funds; it simply prevents the Government from reducing the value and therefore the cost of child benefit by allowing it to be eroded by inflation year after year. The clause does not even require the Government to make good the losses that families have already suffered from the freezing of child benefit since 1987 and the failure of previous upratings to compensate for price increases.
§ The second aim of the clause is to overcome one of the objections that are invariably raised to any proposal to maintain or increase the value of child benefit; namely, that it involves the payment of money to people at the top of the income scale who do not need it. That objection is based on a misunderstanding of the purpose of child benefit, which is to provide a degree of horizontal equity between those with and without dependent children. That fact has led some people to suggest that child benefit should in some way be clawed back from the better-off families, either through a special tax or a means test.
§ This clause adopts a different approach, which is both simpler and fairer. It proposes that increases in child benefit should be paid for by the National Insurance Fund and for this purpose a special national insurance contribution should be levied on incomes above the present upper earnings limit of £350 a week. There would be no increase in employers' contributions; the additional contributions would come entirely from employees and the self-employed. The precise amount of the addition would depend on the rate of inflation, but it is estimated that the uprating in 1991 would require a contribution of 1 per cent. of earnings over £350 per week. For a two-child family the increase in child benefit would outweigh the additional contribution at all income levels up to and well over £350 a week. Over £500 a week the additional contributions would outweigh the benefit.
Raising the money in that way has two great advantages. First, it is extremely simple administratively, involving no special machinery and therefore no additional collection costs. Secondly, it spreads the cost over all earners rather than simply redistributing income from the better off to the worse-off families with children. That is how child benefit has been financed in the past. That
point was borne out by the noble Lord, Lord Joseph, in his pamplet Rewards of Parenthood in which he wrote:
The extra family credit for poor families with dependent children and the extra for single parents is being provided not by the population at large but by other parents through the savings on child benefit".
The difference here is that the money would come from national insurance contributions instead of from taxation. Because national insurance contributions are not a tax the question of financial privilege does not arise.
Before I conclude perhaps I may deal with the question of financial privilege because I know that that consideration may have persuaded some of your Lordships not to support the amendment regarding the uprating of child benefit moved at Committee stage. We are advised that the amendment does not raise questions of financial privilege. Even if it did, perhaps I may remind the House of what our own Standing Orders say on this matter. The Companion to the Standing Orders says:
Each House of Parliament is the guardian of its own privileges. It alone may invoke them. Until it does so, the other House is free to act as it thinks fit. It follows that, with regard to Commons financial privilege, the Lords may properly make amendments to Commons Bills which, when they come to be considered by the Commons, are deemed by them to infringe their financial privileges. It also follows that the Lords need not anticipate what view the Commons may take of any noble Lords amendments with respect to Commons' financial privilege".
I quote that because, when we debated the matter in Committee, the noble Lord the Leader of the House intervened to deal with the point. To be fair, I shall quote him exactly. He said:
I make it absolutely clear that I do not—I repeat—I do not deny the right of the Committee to make this amendment if that is its wish. It would be up to another place to assert its financial privilege if it wished to do so. I suppose that, in that event, in about a month's time, I should he at the Dispatch Box arguing again that we should recognise the financial privilege of another place. At this moment I simply ask the Committee to consider whether it is sensible or necessary to risk going round that course again".—[Official Report, 12/5/90; col. 609.]
When I re-read that statement, I felt that it was a curious approach. The Leader of the House told the Committee, before the movers of the amendment had decided what to do with it and before the Committee and another place had expressed an opinion that he would come back on the assumption that the other place would plead financial privilege. I repeat that our Standing Orders say:
It also follows that the Lords need not anticipate what view the Commons may take of any Lords amendments with respect to Commons' financial privilege".
I repeat it because I anticipate that the Government may well wish to use the argument. However, we are advised that, because there is no charge on the Consolidated Fund as a result of the amendment, it does not involve financial privilege.
§ The new clause meets all the objections which have been raised in the past to the uprating of child benefit. It is administratively simple; it adds nothing to public expenditure and it finances the proposed increase in child benefit in a way that is both efficient and equitable. I beg to move.
§ Lord Boyd-Carpenter
My Lords, as the noble Lord, Lord Carter, recalled, we had a full debate in 14 Committee on the general question of the uprating of child benefit. In view of that and of the fact that at the end of the debate the noble Lord opposite withdrew his amendment, I believe that noble Lords will not particularly wish to discuss the merits of the uprating of child benefit at any great length this afternoon.
I wish simply to comment on one matter. The noble Lord referred to the argument which I used on the previous occasion that, whatever the merits of child benefit—and they are many—it has the disadvantage of not being a targeted benefit and that, as a result, a certain amount of the money concerned goes to people who are in no conceivable need of it—I think that the figure generally accepted was about one-fifth of the recipients—whereas, at the other end of the scale, it does no good at all.
My noble friend Lord Jenkin of Roding queried the completeness of that latter statement by pointing out very properly that some people did not take up the family benefit which was offset against child benefit. That is perfectly true. But, with respect to the noble Lord, Lord Carter, and to my noble friend, I do not think that that concludes the matter.
If Parliament enacts certain social benefits and, for whatever reason, some people do not take advantage of them, I do not think that that is a conclusive argument for altering the structure of our benefit system. If, for whatever reason, people do not draw what they are entitled to, that is their decision. But the idea that we should alter the whole system and confer additional benefits on people who do not need them because some who do need them take steps to deprive themselves of them seems a reductive and absurd view of the matter.
I therefore remain of the view that although child benefit is an excellent benefit—it is the inheritor of the old family allowance for the administration of which I was at one time responsible—a much more difficult question arises over its entitlement to priority at this moment for an increase when set against all the other claims of which noble Lords are only too well aware.
It was noticeable that the noble Lord, Lord Carter, did not mention the total cost. I understand that it is between £250 million and £300 million a year. No doubt my noble friend the Lord Privy Seal will be able to give the exact figure: it is a substantial amount. That is the first point that we should have in mind. Is it a good thing to give priority to that substantial extent to a benefit which is not targeted and which has the disadvantages to which I referred over all the other claims with which noble Lords are extremely familiar?
We now come to the extremely ingenious device which the noble Lord, Lord Carter, used—I see him smiling in appreciation of his own cleverness, and he is fully entitled to do so—of putting the cost of the scheme on to the national insurance contribution. He is technically right in that contributions to national insurance are not taxation. It is not necessary, for example, in another place to adopt a money resolution, which is necessary in the case of taxation, in the case of increases in national insurance benefits.
15 That is all perfectly true. But the noble Lord attributes a certain degree of naivety to another place if he believes that a decision by this House to authorise additional public expenditure of the order of magnitude which I have already mentioned and to finance it from the national insurance contribution would be other than an intrusion upon the responsibilities and rights of another place.
It is a sad thing, particularly to me, that national insurance contributions have now become closely equated with taxation in some people's minds. In the older days of the scheme when people had a pension book and the contributions were paid separately, it was generally realised by all the beneficiaries and all the people in the scheme that they were getting good value for money. They contributed to a subsidised scheme which gave them pensions and other benefits. In recent years, with the collection by the Inland Revenue of the Class 1 and Class 4 contributions, that clarity of vision has been blurred. To the ordinary citizen who comes across it simply by way of the combined deduction from his pay of income tax and national insurance contribution, there is no clear distinction. I regret that. It has done the national insurance scheme no good. But it has happened, and we must deal with the situation as it stands.
However, my objection goes further. To use national insurance contributions to finance a benefit of this kind is an abuse of the national insurance scheme. As its name indicates, the essence of national insurance is that you pay a contribution for a benefit and that, if you do not pay the contribution, you do not receive the benefit. That is true of the retirement pension, which is the major national insurance benefit, and of the other benefits, whereas the social provision we are discussing here—the provision for child benefit—is nothing to do with contributions. It is a thing given as of right by the Government at the expense of the taxpayer.
I suggest that to use an increase in national insurance contributions for a purpose which has absolutely nothing to do with national insurance and for a benefit which does not depend upon the payment of contributions is an abuse of the scheme and in principle highly reprehensible. Therefore, in attempting very ingeniously to deal with the objections raised at Committee stage to the financing of this scheme out of taxation, the noble Lord has made his case worse. He has added a device which it seems to me the Commons would clearly find unacceptable. Even if it found it acceptable, it would seem to many of those who have been concerned with social security and national insurance benefits for many years to be a deliberate violation of the principles of the scheme.
To ask people to contribute in the guise of a national insurance contribution to financing a social benefit with has nothing to do with national insurance is to make a nonsense of our social security system. Even if the case for an increase in child benefit were stronger than I believe it to be, I should be against this amendment for that reason. Those who are concerned with our social security system and with our national insurance system will find it 16 an extremely sad and damaging proposal. I hope very much indeed that the House will not accept the amendment.
§ 3.30 p.m.
§ Baroness Seear
My Lords, I intend to follow the recommendation of the noble Lord, Lord Boyd-Carpenter, that we should not rehearse all the arguments which were put forward previously, even if I do not follow his practice, because he seems to have rehearsed a great many of them. I should merely like to say that I strongly support the new amendment for the old reasons. Child benefit is an extremely valuable benefit. It was put in when the tax concession to people with children was removed, and therefore to fail to implement this measure is to go back on what was then decided: that people with higher incomes but with family responsibilities should get some relief. It is support for the idea of a horizontal distribution in favour of those who have the responsibility of bringing up children compared with those who do not. That is a principle which it is extremely important to maintain.
I should also like to pick up the objection of the noble Lord, Lord Boyd-Carpenter, that it does not do anything for the people who are most badly off. He made the point that many people do not receive their income support or family payment. If the noble Lord's concern is that the most badly off should receive benefit, surely he ought to favour a payment which ensures that they will get it rather than stand for a payment which, as he himself admits, a great many of them do not take. We do not know why they do not understand what it is all about. Many members of the general public, in particular the least well off, are confused about the complicated system of benefits and simply do not claim them.
We know that child benefit is very well taken up. If there is concern about the take up, the noble Lord should favour child benefit rather than oppose it on the ground that there is already income benefit available. Those are reasons that we went into in considerable detail on the last occasion. I not only confirm support for the measure but I favour the way in which it is to be financed, or rather a way in which more money can be raised which reduces the additional cost that improving child benefit along the lines proposed would involve.
§ Lord Boyd-Carpenter
My Lords, perhaps the noble Baroness will allow me to intervene. How does she argue that it reduces the total cost? It merely transfers the finding of part of the money from one form of public revenue to another. It does not reduce the cost by a penny.
§ Baroness Seear
My Lords, it reduces the cost through taxation. The noble Lord made what was to me an extraordinary argument. I understand his devotion to a scheme for which he was responsible for a long time. But he cannot maintain that the national insurance scheme has been in any actuarial sense an insurance scheme. Almost from the time when it was introduced, as Lord Beveridge pointed out years ago, it was broken down by the introduction of pensions at the level at which they 17 were introduced long before anybody through the national insurance scheme had built up an actuarial claim to pensions on the level at which they were paid. That being so, to maintain that this proposal destroys the purity of the insurance principle behind the national insurance scheme seems quite extraordinary.
As the noble Lord must know, what we have in reality is in effect a combined tax of national insurance and income tax. That is what it is. But it is a most extraordinary form of income tax because there is a blip in the payment in which there is a marginal reduction in the amount that is paid by combined national insurance and income tax at the level above £350 a week. That is a most extraordinary principle on which to introduce any kind of tax which at a certain level is reduced as the income goes up. If one puts the national insurance contribution and income tax together, that is the result.
This proposal seems to me to be not only a useful way of raising a little money but also a timely way of correcting what is an extraordinary anomaly in our present system. I strongly support the amendment.
§ Baroness Young
My Lords, I very much regret that I was not able to be present at the Committee stage of the Bill when this matter was debated on an amendment moved by the noble Lord, Lord Seebohm. However, I read the Official Report with grew interest.
As I understand the purpose of this highly technical amendment, it is the same in principle as that moved by the noble Lord, Lord Seebohm; namely, to uprate child benefit each year in line with the movement of the retail prices index except that the cost to be met in this case of a new child benefit contribution would be paid for through national insurance contributions by certain people. As my noble friend Lord Boyd-Carpenter properly said, this is not the time to repeat a long debate about the principle of child benefit.
I should like to mention two matters. First, I have no difficulty in accepting the principle that it is right that the benefit should not be paid to everyone regardless of income, and I can see why the Government have made that point. Nor indeed, for that very reason, do I support the policy that has been put forward briefly by the noble Lord, Lord Carter, on behalf of the Labour Party of simply uprating child benefit in line with the retail prices index from 1987. I should like to say to my noble friend the Lord Privy Seal that, that having been said, there are many people in the country as a whole who are quite seriously concerned about the present position and its effects.
I make two points. The first, which came out during our debate at Committee stage, is that whether we like it or not the combined effect of the tax and benefit system is to help those couples without children rather more than to help those with children. It seems to me that the tax and benefit system ought to be neutral vis-à-vis couples with children or couples without children. Therefore I believe that it is having an undesirable effect.
18 My second very important point is that I believe that we tend to forget the pattern of women's lives today. They all work. Shortly before the birth of their first child they give up their job. They lose income at the very moment when family expenditure rises considerably. Therefore there is a need to look at these costs.
I hope that my noble friend and his colleagues will take a long, hard look at this situation and consider whether to look again at child allowances, family allowances, some alteration of child benefit or a mix of all three. This is a complex matter and I cannot possibly offer a suggestion. However, it is one that we need to look at in relation to its effect on the family. Although I do not support the amendment, I believe that it is a matter that we need to consider constructively.
I cannot accept the amendment because, as my noble friend Lord Boyd-Carpenter has properly pointed out, it seems to me to go entirely against the contributory system principle of a national insurance scheme: that is, one pays for a benefit that one will receive. In this case the people who will receive the benefit do not make the direct contribution. I understand that no government can accept an amendment that contains what I regard as a quite incorrect principle.
However, one matter did not emerge fully at Committee stage. I say this as a former Leader of your Lordships' House. The noble Lord, Lord Carter, was being somewhat disingenuous when he described how the amendment, were it to be passed, would be received by another place. Its effect is to commit the Government to between £250 million and £300 million of extra expenditure. Of course the noble Lord shakes his head; he refers to it as being a national insurance contribution. He is saying that we, the House of Lords, should propose an increase of national insurance contributions for certain people.
Your Lordships' House has a great many functions which it performs well. We have had such an example recently. As we all know, a great many amendments which are carried in your Lordships' House are accepted in another place. Some amendments carried in your Lordships' House against the Government are still accepted in another place. I know from my own experience as a Leader of this House that a great many amendments to legislation are made behind the scenes in order to meet points made in your Lordships' House. I regard all that as extremely valuable. But this amendment falls into another category.
§ Lord Carter
My Lords, with the leave of the House, perhaps I may seek clarification of the noble Baroness. Does she agree with the sentence that I read from the Companion to the Standing Orders which states:It follow that … the Lords need not anticipate what view the Commons may take of any Lords amendments with respect to Commons financial privilege"?However, as we have heard, this amendment does not involve financial privilege.
§ Baroness Young
My Lords, of course I accept what the noble Lord has read from the Companion to the Standing Orders. We all accept that. However, we have also to exercise judgment in public life about what it is wise to do. It is perfectly allowable for your Lordships to debate child benefit and quite proper to do so. Noble Lords should make quite clear what they believe about child benefit. But we are now on Report on the Social Security Bill. It seems to me that it would be very unwise for your Lordships' House to press the amendment this afternoon. Of course I cannot say what another place will decide. But if one tries to take an objective view it is unlikely that it would accept it. It would feel, as I do, that it is not the function of your Lordships' House to propose in legislation an increase of national insurance contributions. That is the effect of the amendment.
§ Baroness Young
My Lords, perhaps I may complete my argument. The amendment would have a counter effect on those functions which your Lordships' House does well.
§ Baroness Phillips
My Lords, the noble Baroness has put forward a very interesting argument. But what about last week when this House rejected a very important Bill brought from another place? What we are now talking about surely pales before that.
§ Baroness Young
My Lords, with respect to the noble Baroness, that situation was quite different. The issue was quite different. That Bill was not directly concerned with money. Before the noble Lord, Lord Carter, says that the amendment is not about tax, I recognise that we are arguing about an increase in national insurance contributions. I am quite clear on that point. Nonetheless it would be seen as concerning tax in another place. My firm advice would be for the Hosue of Lords to debate the matter. I hope that the noble Baroness and the noble Lord will not press the amendment. However, if they do, I hope, for those constitutional reasons, that the House will reject it.
§ Lord Colnbrook
My Lords, I shall be very brief. I wish to advance two reasons why your Lordships' House should reject the amendment. The first has been referred to by my noble friend Lord Boyd-Carpenter and my noble friend Lady Young. It is the cost. If the noble Lord, Lord Carter, thinks that it will cost nothing he deceives himself. It has been suggested by my noble friend Lord Boyd-Carpenter that such provision would cost between £250 and £300 million. I do not know the figure. I have no means of calculating it. It would obviously cost a substantial sum.
Perhaps I may look forward to the amendments that we have to consider today. We have a series of amendments in the name of the noble Lord, Lord Carter. Almost all would cost money. I have no idea how much they would cost if they were all added together. However, I hazard a guess that it might not 20 be in hundreds of millions of pounds but in billions of pounds or more. It is very easy and great fun for us to discuss spending someone else's money. If it is our own money it is a different matter. It is very nice to advance compelling, persuasive and heart-touching reasons why it is right to do this, that or the other if we do not have to pay more than a penny piece for it ourselves.
In this amendment, are we proposing something that we ought not to undertake as responsible citizens? I ask your Lordships to consider that when deciding on the amendment. I believe that we should not commit the public to spending a further £250 million or £300 million, whatever the figure may be.
The second point has also been referred to by both my noble friends. How will the cost be paid for? It is a clever argument about whether it is a tax or a national insurance contribution. My noble friend Lord Boyd-Carpenter, referred to it as being ingenious. It is ingenious. But we can see through that. I should like to quote the words of the noble Lord, Lord Carter. I wrote them down. He stated that a contribution will be levied on certain incomes. He said that it would be 1 per cent. How will he explain that 1 per cent. to anyone who has to pay it? I think he will find it very difficult to explain the difference between putting income tax up by 1 per cent. and his idea. He knows perfectly well that what he is proposing will increase taxes by 1 per cent., whatever it is called. It is not our business to do so. Whether or not another place takes exception to it or invokes financial privilege does not matter.
By this amendment the noble Lord seeks to increase taxes by 1 per cent. I do not believe that it is our business to do so. I hope that the House will reject the amendment.
§ Lord Stallard
My Lords, I have only one very short point to make. As other speakers have said, we have heard the arguments time and again on child benefit. However, in my view one point has not been made sufficiently clear. The noble Baroness, Lady Young, and the noble Lord, Lord Carter, start from the wrong position. Child benefit was not an offshoot of the family allowance; it was a tax benefit. It was a straightforward transfer from the married man's child tax allowance to be paid to the woman. That makes the matter far more complicated. We dodge that factor. It is very easy to say that it is a benefit and eventually we can erode it until we cut it out, as with maternity benefit and funeral allowance. But child benefit did not originate in that way, That is the problem which has to be discussed. It was in effect a tax allowance. It was taken away from a married man because there were great arguments about men who did not give enough to their wives for the children's upkeep, and so on. It was voted upon, and agreed generally, that it would be better to make the payment to the wife and the tax allowances were adjusted accordingly.
None of the people who now say that the benefit should be taken away from those who do not need it then argued that those who were receiving it did not need it and that it should be abolished. I did not hear arguments from the other side of the Chamber to the effect that the tax allowance for people with 21 children should be abolished. It was never put forward and never could be. We transferred the tax relief, which was a good idea.
The problem must be addressed. The noble Lord, Lord Jenkin of Roding, has done so on a number of occasions and is right in saying that an anomaly exists. However, we cannot now correct it by refusing to look at the background and by saying, "We can keep the benefit where it is, freeze it, reduce its value and eventually get rid of it. We shall then have killed two birds with one stone and saved money".
That is a dishonest way to deal with what was a tax allowance. We should be looking at a way of giving it back. No one has yet said that if we stop the payment to the mother we shall restore the married man's allowance. However, if the benefit is to be abolished and not paid to the mother it would be wise and fair to say that. It should be given back as a tax allowance. The Government are not saying that; they are saying, "Let us run it down and eventually get rid of it altogether".
A number of problems exist. My noble friend has made a good suggestion by saying that there is a way round the problem. It will give Parliament time to look further at the ramifications of the allowance and see whether it can produce anything more constructive. In the meantime, I shall support the amendment.
§ The Earl of Onslow
My Lords, I live next door to a house in which the late Marquess of Crewe lived. In 1909 he led the Liberal Party in defence of Lloyd George's Budget which imposed a national insurance scheme upon the people of this country. The argument advanced by Lord Crewe was that we did not have the right to alter national insurance. Now I see in front of me the noble Baroness, Lady Seear, his lineal descendant, arguing that we should go against the principles of the 1909 Liberal Party policy on Lords' privilege—
§ Baroness Seear
My Lords, that was 81 years ago. I cannot be held responsible for what Lord Crewe said before even I was born.
§ The Earl of Onslow
My Lords, I know that the noble Baroness is not 81 and I was not accusing her of being so. However, it is interesting to note that suddenly the Liberal Party is going back on the pre-1911 Act relating to the Lords mucking about with national insurance contributions.
By peradventure the Labour Party may win the next election. It has as one of the ideas the imposition of national health contributions above earnings of £350 per week. I can see the noble Lord, Lord Carter, shuddering with rage when a Conservative Party majority is whipped in to defeat that proposal. My noble friend Lord Belstead might argue that it has nothing to do with Commons privilege or tax but it is national insurance. I believe that the Government are wrong and that they are making a mistake in not uprating child benefit. However, we should be extremely stupid to muck about with it. We should restrict ourselves to matters we are good at and about which we argue well and are listened to, as opposed to small, technical arguments, important though they 22 may be, such as these financial matters. I shall unhesitatingly support my noble friend in the Lobby this evening.
§ Lord Cockfield
My Lords, those of your Lordships with modestly long memories, although not going back quite as far as Mr. Lloyd George, will recall that during the lifetime of the late Labour Government an amendment was passed to the Finance Bill with strong support of the then Conservative Opposition, particularly in the form of Mr. Nigel Lawson. The amendment required the annual uprating of the income tax personal allowance, unless Parliament voted to the contrary, on the ground that not to do so was a fraud upon the taxpayer. Whether one looks at the child benefit as a replacement of the old income tax allowance or as a replacement of the old family allowance—in fact it was partly one and partly the other—the case for uprating it is a very strong case indeed.
Inflation is essentially a tax and one in a most vicious and objectionable form. We as a party have denounced inflation on many occasions, not only on economic grounds but also on moral grounds. It imposes a tax primarily upon those with fixed incomes and particularly upon the poorer members of society. If this or any government were to put forward a proposal to levy a special tax on mothers of young familes, I cannot think that many of your Lordships would support it, let alone the people of this country.
I must make my views on the issue absolutely clear because, as my noble friend Lord Jenkin of Roding said, I played a major part in the development of the ideas which finally took form in the child benefit. It was a case of the Labour Party stealing the Conservative Party's clothes. I entirely agree with my noble friend Lord Boyd-Carpenter when he says that, however ingenious the amendment tabled by the noble Lord, Lord Carter, is, it is essentially a means of avoiding the mischief of the Commons financial privilege.
For the reasons explained in great detail by my noble friend the Leader of the House on the last occasion that we debated the issue, I do not believe that we should set out so to do. As the noble Baroness, Lady Phillips, reminded the House, there will be occasions when we shall wish to express a different view from that held in another place and to maintain that view. In my opinion, this is not such an occasion. For those reasons, and despite what I said at the beginning of my speech, if the amendment is carried to a Division I shall support the Government. I wanted my reasons for so doing to be known and on the record.
§ Baroness Carnegy of Lour
My Lords, like my noble friend Lady Young, I was not able to be present when the matter was discussed in Committee. However, I read with particular interest the speech to which my noble friend Lord Cockfield referred—that made by my noble friend Lord Jenkin of Roding. He explained to the Committee exactly how it was that we have reached the position of having the rather strange arrangement whereby child benefit is paid tax-free to every mother. It is paid to 23 the mother who is the wealthiest in the land and to many of the poorest. However, for reasons which have been explained, many of the poorest receive no benefit from it.
Of course child benefit is popular. Who would turn down a tax-free sum of cash in the hand every week? The question is: is it right? The second question is: if it is right, should it be uprated annually? Those questions concern only part of the amendment.
My noble friend Lord Jenkin of Roding expressed the view—and I have heard it expressed by noble Lords on the Social and Liberal Democrat Benches—that with modern technology it should be possible to arrive at a combination of measures for a more sensible system of family support. My noble friend Lady Young indicated her view that we could arrive at a better tailored system. I should have thought that any responsible government or any responsible party aspiring to government would wish to be considering that. It sounds as if the Labour Party in its review is not considering that but is thinking about continuing the present inequitable arrangement and uprating it each year.
The most important aspect of this amendment is the new part; namely, that the cost of uprating shall not be paid by the taxpayer but through national insurance by every person earning over £350 per week. I do not know how much that would cost each earner. The noble Lord, Lord Carter, said that he thought that it would add 1 per cent. to the tax bill.
§ 4 p.m.
§ Lord Carter
My Lords, the contribution would be 1 per cent. of all incomes over £350 per week. There is no charge to public funds.
§ Baroness Carnegy of Lour
My Lords, that having been said, year by year it would increase as the uprating increased. At first it would be 1 per cent. but would then increase and could end up as a considerable sum.
We have been reminded that 10 months ago your Lordships passed an amendment uprating benefit which was rejected by another place on grounds of financial privilege. There has been some discussion about the difference between national insurance and taxation. How can that portion of the amount paid in national insurance, which is passed on to the Consolidated Fund, be treated as national insurance? The National Insurance Fund is merely being used as a means of collecting money for straight taxation. I do not believe that the House of Commons will accept that although I know much less about these matters than many of your Lordships. I do not understand how this can be treated as national insurance. It is merely an increase in taxation.
Noble Lords opposite are saying that it is not an increase in public expenditure because it is an increase in national insurance. Purely and simply, it is an increase in taxation. It is an apparent increase of 1 per cent. from the pay of those earning over £350 per week. That is a very large increase, and it will grow each year as I see it. My noble friend the 24 Lord Privy Seal may deny that and the noble Lord, Lord Carter, may explain why that is not so. However, I do not understand the matter if that is not the case.
It seems to me that we do not fix increases or levels of taxation. We have no business talking about that. At this moment in the history of the House of Lords, it seems to me not only inappropriate but highly unwise even to look at this amendment. I hope that your Lordships will reject it.
§ Lord Elton
My Lords, I hesitate to intervene in a debate on a Bill on which I have not previously spoken. However, there are occasions when I believe it to be necessary to put on record that what goes on in the Chamber is of interest to those Members of your Lordships' House who are not taking part in the debate but who share the responsibility for the decisions taken. It is not always sufficient to put that on record merely by giving one's name to the Teller in one or other of the Division Lobbies.
The noise which has come from the Chamber on this occasion and which has brought me into it as a departure from my normal behaviour is not the rather surprising departure from the Labour Party's usual motto and standard which is, "to each according to his needs". It is the fact that it has been substituted by—I think I have the phrase correct—"a degree of horizontal equity between those with and those without dependent children". When I was looking after dependent children the only degree of horizontal equity of which I was aware was when they were in bed and I had my feet up. However, I believe that something else is meant on this occasion.
The first thing that catches the eye is the extent of the expenditure involved. I am not referring to taxation but to expenditure. That is not clearly quantified by the alliance of the two Front Bench speakers who have put their names to this amendment, nor, indeed, in the chain of subsequent amendments on the Marshalled List. Like my noble friend Lord Boyd-Carpenter, I can only assume that the amendment which we are now discussing will cost about £300 million, and like my noble friend Lord Colnbrook, I can only assume that the total cost of the shopping list now on the Marshalled List before your Lordships will be over £1,000 million. That is not small money and is not something which relates only to the policy of one department. We are now discussing figures which affect government policy as a whole and the management of the economy. I do not wish to go further than that in the presence of my noble friend Lord Cockfield. In his presence I am always remarkably silent when money is being discussed.
However, if this money were to be funded from a departmental Vote, another part of that departmental Vote would suffer because the money must be taken from it or the Vote of another department must be affected, or there must be a drawing on the contingency reserve if this is a new demand. If that were the case, then the Report Stage of a Bill, which is the responsibility of one department and affecting the policy only of that department, would be the wrong forum in which to 25 discuss the matter and, in my view, we should be out of order in doing so.
That is not the case. The proposal now before us contains within it a means of funding. That funding is not to be by taxation but by contributions. My noble friends in the Chamber have already pointed out that this measure may not be called taxation, but it feels like taxation, it costs like taxation, it is collected like taxation and it is spent like taxation. If it is not taxation, then it is the next best thing to it. A rose by any other name will smell as sweet and a tax by any other name will be as obnoxious.
It may be that the standing orders read out by the noble Lord, Lord Carter, permit us to proceed down this road and to dispose of very large amounts of public money by taking them out of the pockets of private citizens and putting them not into the Chancellor's pocket but, according to the words of the amendment, into the pocket of the Secretary of State. That may be the case, but to the common man it will be remakably like taxation. The other place is within its rights, simply by a Speaker's Certificate, to say that if a matter is to do with taxation then it is not to do with your Lordships. It may not be proper for the other place to behave in that way on this occasion, but we should then be arrogating to ourselves a power of taxation without the responsibility to the elector.
It is the convention—and it is a sensible convention with which we should agree—that only those voted into Parliament should be entitled to decide what shall be the cost of that vote to those who voted for them. That makes very good sense. We should agree with that. If we do not, we are putting ourselves in the position of Charles I, which was insecure and unpopular. Regardless of what are the conventions, the man in the street would not take kindly to your Lordships saying what he should pay on the very large scale proposed by the noble Lord opposite.
§ Baroness Seear
My Lords, does the noble Lord not agree that there are not many men in the street earning over £350 per week?
§ Lord Elton
My Lords, there are quite a lot, but it is the principle which counts. If this House is to start dipping into private pockets of one sort of person today, it will be another sort of person tomorrow. That is not something which this House should be doing. I believe that this argument applies to a whole string of amendments in the name of the noble Lord, Lord Carter, and other noble Lords. I hope that your Lordships will remember what has been said in debating this amendment so that it will not have to be repeated endlessly. If not, I for one shall be disposed to remind your Lordships.
§ The Lord Privy Seal (Lord Belstead)
My Lords, although my noble friend Lord Henley is in charge of this Bill from the Government side of the House, I am venturing to reply to the amendment for the same reasons as I replied to Amendment No. 1 at the Committee stage three weeks ago. That reason derives from the fact that, although given the lengthy and complex wording—and one might be forgiven 26 for not recognising it as such—the first paragraph of the amendment repeats exactly word for word Amendment No. 1 which was moved and withdrawn by the noble Lord, Lord Seebohm, in Committee exactly three weeks ago.
Its effect would be to oblige the Secretary of State to uprate child benefit each year in line with the retail prices index and would remove the discretion which the present law allows of requiring that the level of child benefit should be reviewed but having regard to all the circumstances prevailing at the time.
Whatever the merits of the case—and I realise the amendment generates deep feelings—I must say that this is a course that we are now being asked to go round for a fourth time in a period of 12 months. A year ago, during the Social Security Bill 1989, the House agreed to an amendment which provided for the annual uprating of child benefit and asked another place to think again. Another place did think again and subsequently I had to inform your Lordships that the amendment had been disagreed to for the reason of the Commons' financial privilege.
We had the amendment of the noble Lord, Lord Seebohm, three weeks ago, which the noble Lord moved and finally withdrew, and here we are yet again. I do not think your Lordships would thank me, at the start of a long day on this Bill, if I covered in detail ground which was covered only three weeks ago. But one point I must emphasise.
Once again the amendment would effectively be putting child benefit, a tax-free supplement to families whose major source of income is earnings, into the same category as national insurance benefits, which are the major means of support for people whose earning capacity is interrupted. The consequence of that would be to require the Secretary of State to give an absolutely automatic increase to child benefit, regardless of the fact that that would give no extra help to the least well-off families, those on income support or family credit, amounting to 1.5 million families with some 3 million children.
The Secretary of State would also be prevented from taking into account the fact that other families have seen substantial increases in their take-home pay. In other words, had the amendment been in operation this year, it would have committed the spending of some £250 million in a way which, as rightly stated by my noble friend Lord Boyd-Carpenter, could hardly be described as effective.
By contrast the Government have tried—and I think met with success—to direct extra help to where it is most needed; that is, over and above normal upratings to families with children through their income related benefits; extra help which, since April 1988, now amounts to over £350 million a year in real terms. We have also found extra help through income support and housing benefit for over 2.5 million less well off elderly and disabled pensioners and we have made very real improvements to the incomes of half a million seriously ill or disabled people, including children.
Despite those few remarks which I felt I must make from this side of the House, although we have kept the debate short with regard to the merits of 27 the case, I take seriously what was said by my noble friends Lady Young and Lord Cockfield regarding the situation of family support. However, the Government have taken steps to try to ensure that the most vulnerable families with children have been protected; hence the reform of social security in April two years ago. That reform channelled an extra £200 million a year to families with children; that is despite the fact that, in relation to families with children where the head is in work, over the period since the Government came into office the real value of take-home pay has risen by 34 per cent. for a married man on average earnings with two children compared with a very small percentage during the period when the party opposite were in government in the 1970s.
However, that is not the end of the amendment. The second half of the amendment would introduce a special new child benefit contribution, payable by people with higher earnings on that part of their pay or if they were self-employed, on their profits, which are currently above the limit for national insurance contributions. When the noble Lord, Lord Carter, and the noble Baroness, Lady Seear, were planning this amendment, it may have seemed a good idea at the time to pay for annual upratings by inventing a special new contribution, but with respect to the noble Lord and the noble Baroness, it is an idea which does not survive closer inspection. It is a long-standing principle of national insurance that entitlement to benefits paid out of the National Insurance Fund depends upon contributions having been paid in. But child benefit is paid without any contribution conditions. My noble friend Lord Boyd-Carpenter was absolutely right when he said that child benefit is not a national insurance benefit. Its cost is met from the Consolidated Fund, which means that the costs of child benefit are met by taxpayers in general: that is why subsection (2) of the amendment has to provide for the new special contributions to be paid into the Consolidated Fund.
I believe that both my noble friends Lady Carnegy and Lord Elton were correct in saying that they suspected that the new special provisions would amount to nothing more nor less than extra tax-raising; the one function which historically lies outside the powers of your Lordships' House. It must also be said that the mechanism for raising what would be extra tax, contrary to what the noble Lord, Lord Carter, asserted when he said that it would be extremely simple administratively, would be almost impossible to operate and account for.
If the amendment were allowed employers would have to calculate, deduct and account for these extra payments on a new and separate range of earnings and at a different percentage rate from the general run of national insurance contributions. That would be a nightmare, not only for employers, but also for the Inland Revenue and the Department of Social Security with their checking and accounting role.
Unless the new contributions could be accounted for and recorded separately, which would mean changing the documentation and computer software of every business in the land, it would be impossible to check whether the new contributions had actually 28 been paid. So not only would this special new contribution be almost impossible to operate but, quite apart from the fact that in recent years the aim has been to reduce employees' national insurance contributions rather than to increase them, it is wholly wrong in principle to expect a particular body of national insurance contributors to pay for a non-contributory benefit. If we were to accept the amendment, why stop here? Why not introduce a special national insurance contribution to pay for a bit of income support of perhaps family credit?
I said to your Lordships earlier that the amendment asks the House to go round the same course for a fourth time in a period of a year. Although it is entirely a matter for the privileges of another place, I agree with noble friends who raised the question of whether we should be considering what is in effect an extra tax-raising proposal. I believe that we should not be considering any such thing and I ask your Lordships not to agree to the amendment.
§ Lord Carter
My Lords, I am grateful to all noble Lords who have taken part in what has been a good and, perhaps I may say, fairly predictable debate. It has shown how many noble Lords are prepared to ignore the Standing Orders of the House.
I deal first with the point raised by the noble Lord, Lord Boyd-Carpenter, about the money going to the better-off. I made clear that on income of over about £500 a week the contributions would be greater than the benefits and therefore, in that case, an adjustment against the better-off. To go to the other extreme and dealing with the poorest, the Benches opposite always seem to think that the only poor people in this country are those on income support or family credit. We must remember that a substantial number of people just above the poverty line do not qualify for income support or family credit and would certainly benefit from an uprating in child allowance. As I mentioned, there are about 800,000 children whose families are not eligible now and do not receive family credit.
I believe it was the noble Lord, Lord Boyd-Carpenter, who said that this is a transfer payment and that there is no direct cost to public funds. I made clear that the cost would be only 1 per cent. on incomes above £350 per week, amounting to £250 million to £300 million a year. The noble Lord, Lord Boyd-Carpenter, said, perhaps rather grudgingly, that I was technically right. I think that just means that I am right.
We were supposed to be showing some naivety in not recognising what the other place would do. I do not propose again to read out the Companion to Standing Orders but I believe that all noble Lords have got the message and almost all have been in contravention of the Standing Orders.
Reference was made to national insurance contributions and tax being mixed up. I am self-employed. I pay the Class 4 NIC. It is a separate figure. It is clearly stated. It is not a combined figure on my annual tax bill. I know exactly what it is. In using the National Insurance Fund for purposes for which it is not designed, there is a very good precedent. What about the rebate of national 29 insurance, which some people have described as a bribe, to persuade people to go into personal pension plans and away from SERPS? That is a use of the National Insurance Fund for what the noble Lord called ingenious reasons.
We have had the argument over and over again about child benefit regardless of income. I repeat that we do not hear that argument when discussing mortgage interest relief, the business expansion scheme, personal pension plans, self-employed retirement annuities, and so on.
Of course, if we are to believe what we read in the press, Mr. Newton is pressing the Chancellor of the Exchequer for an uprating in child benefit next year. It may be election year. Who knows? If there is an uprating it will be interesting to hear the arguments of noble Lords opposite who have said that an uprating in child benefit would be unfair. We will see what they say if the Government do decide to uprate the benefit next year.
The argument was put forward that this is not national insurance but a tax. There are those who sincerely believe that national insurance contributions are simply another form of taxation. I have to say that that view has been reinforced by the actions of the present Government who have raised the contribution rates substantially while cutting benefits. That is fundamentally wrong. People pay taxes to finance the whole range of public expenditure. They pay national insurance contributions for two purposes: to earn future entitlement to benefits and to enable the National Insurance Fund to provide benefits to those currently in need of them. The range of benefits financed by the National Insurance Fund varies over time and has become rather narrow under the present Government. The proposed new clause would widen the range by including the 1990–91 and the 1991–92 increases in child benefit as a charge on the fund.
The noble Lord, Lord Colnbrook, asked about the cost of the various amendments on the Marshalled List. Why do we consider social security Bills at all in this House? Every amendment to the Bill, from the Government and from the Opposition, involves some increase in public expenditure. What we have to do is to help the Government to choose their priorities by indicating the various changes and improvements that we would like to see. Some the Government accept and some they do not.
We then have this business about the awful increase in public expenditure that would result from this measure. That argument is a bit rich coming from the Government Benches when we are told on good authority that the Department of the Environment will need £3 billion to £4 billion next year just to hold the poll tax at present levels. I suggest that noble Lords opposite consider that fact before criticising the Opposition for proposing increases in public expenditure.
The noble Earl, Lord Onslow, appeared to introduce an interesting idea when he said that his party—he was obviously assuming defeat at the next election—would defeat a Labour manifesto commitment to increase child benefit. Whatever happened to the Salisbury doctrine?
30 The noble Lord, Lord Cockfield, said it all. He advanced the argument for the uprating of child benefit. His phrase that inflation is a tax on fixed incomes and the poor and that a refusal to uprate child benefit is a special tax on mothers with young families certainly struck home.
I should like to make clear that we are committed to removing the upper earnings limit and to making up the loss in child benefit since the last general election. There is no absolute commitment by the Labour Party to uprate child benefit annually. It is only fair to point that out.
The noble Lord, Lord Elton, only quoted half the socialist doctrine. It is,From each according to his ability, to each according to his needs".That is exactly what the amendment does.
If the national insurance contributions are a tax, as noble Lords opposite keep telling us, and the party opposite believes in equity, as I am sure it does, why do its members support the cut-off for the upper earnings limit of £350 a week? That is an extremely unfair tax, if one thinks about it. The Leader of the House said that we were being asked to go round the course again. Yes, we are being asked to go round the course again but I suggest that this is a novel and, as described, an ingenious approach. The ingenuity of the approach has, with respect, led noble Lords into some fair old contortions.
The extra help to those on income support and family credit, as I said, has come from other families. The noble Lord, Lord Joseph, said in the paper published by the Centre for Policy Studies:The extra Family Credit for poor families with dependent children (and the extra for single parents) is being provided not by the population at large but by other parents through savings on Child Benefit".We have also heard reference to the use of the National Insurance Fund to provide the incentive to opt out of SERPS. Yet the Government took away the earnings related unemployment benefits earned through contributions over time. Therefore, filching from the National Insurance Fund is not unheard of, even under this Government.
The cost of the new clause, which is around £250 million to £300 million as a transfer payment (not a tax) from one group to another—the noble Lord laughs but it is in fact a transfer payment from one group of national insurance contributors to another class of recipients—is the amount that families will lose next year if child benefit is not uprated. There is no cost unless the Government are prepared to freeze child benefit next year.
We have had an extremely interesting debate. There is only one way to deal with the amendment. I ask the opinion of the House.
§ 4.30 p.m.
§ On Question, Whether the said amendment (No. 1) shall be agreed to?
§ Their Lordships divided: Contents, 81; Not-Contents, 136.32
|DIVISION NO. 1|
|Addington, L.||Hylton, L.|
|Airedale, L.||Jay, L.|
|Ardwick, L.||Jenkins of Hillhead, L.|
|Aylestone, L.||John-Mackie, L.|
|Birk, B.||Kearton, L.|
|Blackstone, B.||Kennet, L.|
|Bonham-Carter, L.||Kilbracken, L.|
|Bottomley, L.||Kilmarnock, L.|
|Broadbridge, L.||Leatherland, L.|
|Bruce of Donington, L.||Listowel, E.|
|Carmichael of Kelvingrove, L.||Llewelyn-Davies of Hastoe, B.|
|Carter, L.||Lloyd of Kilgerran, L.|
|Cledwyn of Penrhos, L.||Longford, E.|
|Clinton-Davis, L.||McIntosh of Haringey, L.|
|Cocks of Hartcliffe, L.||Mayhew, L.|
|David, B.||Milner of Leeds, L.|
|Davies of Penrhys, L.||Molloy, L.|
|Dean of Beswick, L.||Morris of Castle Morris, L.|
|Donaldson of Kingsbridge, L.||Mulley, L.|
|Dormand of Easington, L.||Murray of Epping Forest, L.|
|Ennals, L.||Nicol, B.|
|Ewart-Biggs, B.||Ogmore, L.|
|Ezra, L.||Peston, L.|
|Falkland, V.||Phillips, B.|
|Fisher of Rednal, B.||Pitt of Hampstead, L.|
|Foot, L.||Rea, L.|
|Gallacher, L.||Richard, L.|
|Galpern, L.||Rochester, L.|
|Graham of Edmonton, L. [Teller.]||Russell, E.|
|Gregson, L.||Seear, B. [Teller.]|
|Grey, E.||Serota, B.|
|Grimond, L.||Stallard, L.|
|Hampton, L.||Stoddart of Swindon, L.|
|Hanworth, V.||Taylor of Blackburn, L.|
|Harris of Greenwich, L.||Taylor of Gryfe, L.|
|Hatch of Lusby, L.||Turner of Camden, B.|
|Holme of Cheltenham, L.||Wallace of Coslany, L.|
|Houghton of Sowerby, L.||Walston, L.|
|Hughes, L.||White, B.|
|Hunt, L.||Williams of Elvel, L.|
|Aldington, L.||Constantine of Stanmore, L.|
|Alexander of Tunis, E.||Cottesloe, L.|
|Allenby of Megiddo, V.||Craigavon, V.|
|Allerton, L.||Cullen of Ashbourne, L.|
|Ampthill, L.||Cumberlege, B.|
|Annaly, L.||Davidson, V. [Teller.]|
|Annan, L.||Denham, L. [Teller.]|
|Arran, E.||Derwent, L.|
|Auckland, L.||Eccles, V.|
|Balfour, E.||Eden of Winton, L.|
|Beaverbrook, L.||Effingham, E.|
|Belhaven and Stenton, L.||Elibank, L.|
|Beloff, L.||Ellenborough, L.|
|Belstead, L.||Elliot of Harwood, B.|
|Bessborough, E.||Elliott of Morpeth, L.|
|Blatch, B.||Elton, L.|
|Blyth, L.||Erroll of Hale, L.|
|Boardman, L.||Ferrers, E.|
|Borthwick, L.||Foley, L.|
|Boyd-Carpenter, L.||Gainford, L.|
|Brabazon of Tara, L.||Gardner of Parkes, B.|
|Brigstocke, B.||Gibson-Watt, L.|
|Brougham and Vaux, L.||Grantchester, L.|
|Butterworth, L.||Gray of Contin, L.|
|Camoys, L.||Greenway, L.|
|Campbell of Alloway, L.||Gridley, L.|
|Campbell of Croy, L.||Grimthorpe, L.|
|Carnegy of Lour, B.||Hailsham of Saint Marylebone, L.|
|Cavendish, L.||Halsbury, E.|
|Clanwilliam, E.||Harmar-Nicholls, L.|
|Cockfield, L.||Havers, L.|
|Coleraine, L.||Hayter, L.|
|Colnbrook, L.||Henley, L.|
|Hesketh, L.||Orkney, E.|
|Hives, L.||Orr-Ewing, L.|
|Hood, V.||Pender, L.|
|Hooper, B.||Porritt, L.|
|Hylon-Foster, B.||Rankeillour, L.|
|Ingrow, L.||Reay, L.|
|Johnston of Rockport, L.||Renton, L.|
|Kaberry of Adel, L.||Renwick, L.|
|Kenilworth, L.||Romney, E.|
|Kimball, L.||Sanderson of Bowden, L.|
|Kinnaird, L.||Sempill, Ly.|
|Lauderdale, E.||Shannon, E.|
|Layton, L.||Skelmersdale, L.|
|Long, V.||Somers, L.|
|Luke, L.||Stockton, E.|
|Lyell, L.||Strathclyde, L.|
|McColl of Dulwich, L.||Strathmore and Kinghorne, E.|
|Mackay of Clashfern, L.|
|Macleod of Borve, B.||Strathspey, L.|
|Malmesbury, E.||Swinton, E.|
|Mancroft, L.||Terrington, L.|
|Manton, L.||Teviot, L.|
|Margadale, L.||Thomas of Gwydir, L.|
|Marshall of Leeds, L.||Thomas of Swynnerton, L.|
|Merrivale, L.||Trefgarne, L.|
|Mersey, V.||Trumpington, B.|
|Milverton, L.||Ullswater, V.|
|Monteagle of Brandon, L.||Vaux of Harrowden, L.|
|Morris, L.||Wade of Chorlton, L.|
|Mountevans, L.||Wedgwood, L.|
|Mountgarret, V.||Willoughby de Broke, L.|
|Murton of Lindisfarne, L.||Wise, L.|
|Nelson, E.||Wolfson, L.|
|Nugent of Guildford, L.||Wynford, L.|
|Onslow, E.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 4.38 p.m.
§ Clause 1 [Attendance allowance for the terminally ill]:
Lord Kilmarnock moved Amendment No. 2:
Page 2, line 3, leave out from ("a") to ("and") in line 5 and insert ("severe progressive and incurable disease and his life expectancy is short;").
§ The noble Lord said: There was an interesting debate on 21st May concerning the extremely delicate subject of the definition of the terminally ill. I should like to preface my remarks by saying that I fully support the general intention behind Clause 1, which is to remove the six-month waiting period for attendance allowance for those who are defined as terminally ill. That is a good intention which we support wholeheartedly.
The only point of discussion in relation to that subject was how the terminally ill should be defined. I should like to remind your Lordships of the Government's definition in the Bill:
A person is 'terminally ill' at any time if at that time he suffers from a progressive disease and his death in consequence of that disease can reasonably be expected within 6 months".
On the last occasion the noble Lord, Lord Carter, and I proposed very similar amendments which would have introduced a degree of greater flexibility into the definition. The noble Lord, Lord Henley, when replying for the Government, gave understandable reasons as to why he preferred the Government's formulation. However, on reflection I am not entirely happy with the wording. It is such an important and delicate matter that it is worth trying to get it right. For that reason the noble
Baroness, Lady Seear, and I have put down a slightly different version which reads as follows:
A person is terminally ill if at that time he suffers from a severe progressive and incurable disease and his life expectancy is short".
§ I argued on the previous occasion that anyone who is terminally ill and who has to surmount the considerable hurdle of qualifying for the higher level of attendance allowance is, by definition, in a very poor state of health. According to Section 35(1) of the principal Act, in order to qualify for the attendance allowance the patient must be so severely disabled physically that by day and at night he requires from another person frequent, prolonged or repeated attention in connection with his bodily functions. Therefore, in order to qualify for the attendance allowance he must meet those quite stiff conditions. My argument on that occasion—and it remains the same today—was that anyone who qualifies for attendance allowance under Section 35(1) of the Act is likely to be so poorly that a six-month prognosis hardly comes into consideration.
§ I understand from Professor Eric Wilkes, one of the joint chairmen of Help the Hospices, that all survey work confirms that for the great majority of terminally ill patients the intense need is over a period of two months, or even less. Only a tiny minority of them will survive for six months or more, although a number of them will certainly do so.
§ There are other interesting and suggestive figures in existence. The Department of Social Security estimates, according to the noble Lord, Lord Henley, at col. 613 of Hansard of 21st May, when we debated the matter on the last occasion, that 58,000 people will benefit from these changes at a cost of £35 million for a full year. I wonder how those figures were arrived at. Each year approximately 140,000 people die of cancer and similar diseases. Therefore, I can only assume that 58,000 is the number of patients who are expected to die at home. Sharing £35 million among 58,000 patients amounts to £603 each, which would represent the higher rate of attendance allowance being paid for a period of 17 weeks or approximately four months. That is twice the normal survival time identified by Professor Willem Therefore, the Government's estimate may not be reached, let alone exceeded.
§ In the circumstances, it increasingly seems to me that writing in the six-month time-limit with its implicit sentence of death within that period is unnecessary as well as inhumane. If we take the many terminally ill patients who will survive for only two months, together with the few who survive for more than six months, the average will work out well below the Government's six-month limit. I submit that it is the average which will dictate the financial outlay, not the few atypical cases. Therefore, I suggest to the Government that the new wording I have proposed in the amendment embodies quite sufficient safeguards without incurring the rather dreadful overtones which are written into the Government's version.
§ Having said that—and I think those points were worth making—I must admit that I am a realist and that I understand perfectly well that the Government 34 rejected the previous amendment on the grounds that it took the matter too wide. I also accept that what I propose now takes it even wider. Therefore, I do not expect the noble Lord, Lord Henley, to rise and say that he welcomes or accepts what I have proposed. However, what I should like to hear—and I think that this is a reasonable proposition—in this extremely difficult area is an undertaking from the Government that they will look closely and monitor the effect on take-up of the phraseology in the Bill as it is at present.
§ Moreover, if we have any grounds for believing after, let us say, a year that it it is not working as well as we had hoped, that many people are falling through the net and that take-up has not been as we expected it to be, I should like to know that the Government would then be disposed to look again at the matter in a subsequent social security Bill. In that way, we would have a year to look at the operation of the clause as proposed by the Government. In my view that is not an unreasonable proposition and if the noble Lord is able to say something along those lines I shall be happy to withdraw my amendment. However, in the meantime, I beg to move.
§ 4.45 p.m.
§ Baroness Seear
My Lords, I rise to express my support for the amendment. The noble Lord, Lord Kilmarnock, has made all the relevant points most admirably. However, I have a small but very important point to make. The Bill as it stands refers to where death,can reasonably he expected within 6 months.There is a note of doom about that phrase which one would wish to avoid if possible. We think that our amendment is less cruel to people facing the likelihood of dying very quickly. For the reason that the noble Lord, Lord Kilmarnock, put forward I think it is unlikely that what is proposed would lead to any significant increase in expenditure. It would be more a humane way of expressing what we all feel.
§ Lord Rea
My Lords, I am sure that I am not alone among practising doctors in very often being caught out when trying to estimate how long a patient with a terminal illness has to live. A minority of people seem able to keep the grim reaper at bay for far longer than expected, whereas others are not so lucky and are carried off by a sweep of the scythe unexpectedly quickly. There are often more of those than there are of the others. I sometimes find that if patients are told that they have only a very short time to live or, as in the words of the Bill, death is expected within six months, they will turn their faces to the wall and give up hope.
I do not think that it would be very good news to hear the words expressed in the amendment, but they are greatly preferable to those contained in the Bill at present. I have not consulted the professional organisations but I believe that most doctors would hesitate for some time before putting their names to a specified length of time a patient was expected to live. For this reason I support the amendment and also the request that the noble Lord should give the matter further thought.
§ Lord Renton
My Lords, I too hope that my noble friend will arrange for the matter to be considered. There may be technical factors involved of which we are not immediately aware. But I was impressed by the remarks of the noble Lord, Lord Rea. I should have thought that the essence of the matter is that the disease should not only be progressive, as cancer generally is, but also incurable. It would be a mistake to limit the expression "terminally ill" to a case in which death,can reasonably be expected within 6 months".I should have thought that a time limit of any kind was inappropriate in the circumstances which we are considering. However, any medical person can give a prognosis that life expectancy is short. Therefore, by accepting the amendment, we would be much more likely to be in the realm of certainty, which is where we ought always to try to find ourselves when legislating.
§ Lord Carter
My Lords, we on these Benches support the amendment. We discussed the matter in Committee, as the Minister will remember. All noble Lords who have spoken to the amendment have put the case extremely well, and I am sure that the Minister will have listened with particular care to the remarks made by my noble friend Lord Rea.
As we have agreed on each occasion when we discussed this both on Second Reading and in Committee, it is a difficult and sensitive matter and Members on all sides of the House wish to get it right. I am sure that the amendment has been tabled in that light. I hope that the Minister can give us an answer which will show, as the noble Lord, Lord Renton, said, that at least the Government will consider this approach.
§ Lord Boyd-Carpenter
My Lords, I support what my noble friend Lord Renton has said. I ask my noble friend the Minister to think carefully about whether not necessarily this formula but some formula other than that in the Bill can be devised. I had in mind the possible effect on the patient who learns that he has been granted the allowance, and who if he is a person of some education and background can discover that he has received it only because the doctor has indicated that he is unlikely to last six months.
I agree that it would not be nice to know that one's doctor had indicated that one's expectation was short, but there is a certain imprecision about that phrase which I can well see from the administrative point of view is a nuisance but which from the patient's point of view may be relevant. There is something unhappy about granting an allowance which, if the patient concerned were to look at the statute or ask any legal adviser, he would learn was granted on the basis that he was under sentence within six months.
§ Lord Henley
My Lords, I am pleased that everyone in the House welcomes the clause generally. All noble Lords recognise that there are problems of definition. I do not see the amendment as being the way forward. I hope that I can convince the noble Lord, Lord Kilmarnock, that that is the case. If he 36 feels that he can do better at a later stage it will be right to reconsider the matter because it is a difficult one.
As your Lordships will be aware, the effect of the amendment, as the noble Lord admitted, would be to widen the scope for payments to be made and to make it difficult for claims to be adjudicated. It relaxes the test of likelihood of death within six months by introducing an indeterminate prognosis that death from the illness can reasonably be expected within a short time. As we all know, the purpose of the clause is to enable those who die of a progressive disease within the six months after they claim attendance allowance to be able to qualify for and receive the allowance at least a few weeks before they die. If the amendment is accepted the qualifying period will be removed for people who may live considerably longer and who can in any case receive the allowance after six months under the existing rules.
Everyone who has spoken feels that it is desirable to remove the reference to an expectation of death within six months. The noble Baroness, Lady Seear, referred to there being a note of gloom contained in the provision. We fought long and, hard about the phrase, but we concluded that the definition must be specific.
I shall deal with the issue of doctors. The noble Lord, Lord Rea, who, as his noble friend Lord Carter stressed, has a great deal of experience in these matters, said that a doctor would not like to give such a stark warning that the patient was going to die. My noble friend Lord Boyd-Carpenter also referred to that point. Doctors are not being asked to give a prognosis. That will be decided by the attendance allowance board on the basis of information about the claimant's medical condition in the form of a factual report provided by the claimant's doctor; so it is not the claimant's doctor who says that in his view the claimant will die within six months. That is a matter of adjudication to be decided by the attendance allowance board.
The short life expectancy definition for which the noble Lord, Lord Kilmarnock, asks can obviously mean anything from a few days to a few years. We believe that it would be impossible to adjudicate upon such an imprecise definition fairly. It would be confusing for the doctors making the decisions and for the claimants and their advisers.
I come now to the undertaking sought by the noble Lords, Lord Kilmarnock and Lord Rea. We accept that the question is a difficult one. We have decided that the clause as it stands is the best way forward. Nevertheless, I give noble Lords an assurance that we shall study how the provision is working. As the provision is in primary legislation, I imagine that further primary legislation would be required if within a year or so it were found that the measure was not working well enough, but I would have to seek advice on that point. In the meantime, I give an assurance that we shall keep an eye on how the provision works.
I stress that we found the decision a difficult one to make. We must therefore monitor how the provision works. If, as the noble Lord suggests, it 37 does not work correctly, it will obviously be open to the Government at some later stage—not in the Bill because we are talking about monitoring for a year or so—to come back and seek a new definition. On that understanding, I hope that the noble Lord will feel able to withdraw the amendment. I see that the noble Baroness, Lady Seear, is seeking some elucidation.
§ Baroness Seear
My Lords, before the noble Lord sits down, will he tell us how the process will work? He says the doctor who knows and has examined the patient will not be the one to say that the limit is six months. He then went on to talk about some committee which does not see the patient but sees what the doctor says. It, in its infinite wisdom, says that there is a six-month limit. How will that be done? It seems an odd way to determine upon what date a person will die.
§ Baroness Phillips
My Lords, I should like to follow what the noble Baroness has said. Do the Government not care that they appear to the country and to the voters to be an uncaring Government? This is another clear example of that attitude. They have a dispassionate idea that some committee will say that the person may or may not die within six months. If the Government are worrying about the money, the balance may be that some people will die before the six months. Therefore, surely the determination does not need to be in specific months.
I find it strange that the Government, who will have to go to the country eventually, discuss this matter in such an uncaring and dispassionate way. The Minister has just said that the Government will consider the matter and may change their point of view within a year or two; but we are dealing with legislation now. This seems a small point upon which they could give way. What is the consideration? Is it money? There cannot be any other reason. Do they not care how they appear?
This is the House of Lords at its worst. People do not come to listen to the debate, but they will flock in to support the Government without having heard the argument. Can we appeal to the Government to be compassionate for once on a simple and straightforward issue?
§ Lord Henley
My Lords, the noble Baroness's intervention has not been helpful. She will be aware that Clause 1 was brought forward as a result of representations on this matter made during the passage of last year's Bill. The Government have responded. There are, as all noble Lords have accepted, great difficulties over definition. We have tried to find a way around the difficulties, and we are finding a way around them.
In response to the noble Lord, Lord Kilmarnock, I said that it may in the end be found that our definition is not the right one and that we may have to seek to make changes; that, in the meantime, this is the best that we can do; and that I did not think that the amendment, which widened the definition excessively, was the right way to proceed. At no point did I mention the subject of cost. I was careful 38 not to do so. I hope that noble Lords noted that point. There is a cost implication involved, but I did not bring that point into the discussions. I hope that the noble Baroness will take note of that point.
The noble Baroness, Lady Seear, asked about the Attendance Allowance Board. I said that information on the claimant's medical condition was provided in the form of a factual report produced by the claimant's doctor. The Attendance Allowance Board is made up of eminent clinicians and specialists, with a wide range of knowledge and experience over the whole spectrum of medical life. The board will use its medical judgment to decide whether conditions are met from the information provided by the GP's factual report which will list the diagnosis, the present condition and treatment.
I hope that that will satisfy the noble Baroness. She will know that a great many applicants for benefit have to go before some board because there must be a process of adjudication. The noble Baroness would be the first to say, "Oi", if there were no form of adjudication; there must be one. I now refer the matter back to the noble Lord, Lord Kilmarnock.
§ Lord Kilmarnock
My Lords, I thank the noble Lord. He has tried to come some way towards me. I do not believe that he has quite taken on board my argument that the average length of survival dictates the financial position. I gave figures to show that in many cases, if not the majority, it does not reach six months. It is an argument that ought to be borne in mind.
With regard to widening the definition too far, the word "short" should quite clearly exclude such long-term incurable diseases as the results of a stroke, multiple sclerosis or similar cases. Perhaps the noble Lord would tell me this before I decide what to do. Whatever is stated in the statute—and it seems to me that it will remain as it is—it is important that the definition should not appear on the form. Perhaps I may take it that the form which the doctor has to complete and which either the patient or the patient's representative might see would not contain the definition that it is proposed to put in the statute. Is that the position?
§ Lord Henley
My Lords, I shall have to write to the noble Lord about the details on the form that the doctor would have in front of him. I am not sure what the position is but I shall let him know.
§ Lord Kilmarnock
My Lords, it is an important point. We should like to see the form in draft before it is agreed.
The noble Lord was kind enough to encourage me to try again to see whether by this process of approximation we could do better in the final stages of the Bill. In view of what he has said—he has given an undertaking that the Government will keep the matter under review—I am inclined not to pursue the matter at Third Reading.
I hope that the Government have taken fully on board that the short debate we have had this evening indicates the concern of noble Lords. The House will wish to keep a close eye on the matter. We shall 39 expect the Government to give us answers before the next social security Bill, or at the time of it, on the experience of the formula and the take-up. If necessary, we can come back to it on the next Bill. We are told that we shall have a social security Bill every year in the House and I imagine that that will be the case next year.
Given the undertaking by the noble Lord that the Government will take this seriously, keep it under review and monitor it, we shall no doubt probe with Questions before we come to the next round of social security legislation. On those grounds, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 5 p.m.
Lord Carter moved Amendment No. 3:
Page 3, line 10, at end insert:
("(8) In the Social Security (Attendance Allowance) (No. 2) Regulations 1975, regulation 2(1)(c) shall cease to have effect.").
§ The noble Lord said: My Lords, we debated this amendment and it was withdrawn at the Committee stage in order to give the Government a chance to consider the matter. We said that we would come back to it on Report to see how they had got on with their consideration.
The amendment concerns the requirement that those applying for the attendance allowance must have been resident in Great Britain for at least 26 weeks in the year immediately preceding the claim. As we said at Committee stage, it is not at all clear why the requirement is imposed. The first and most important qualifying requirement is that the claimant is,
ordinarily resident in Great Britain".
When we discussed this in Committee, the Minister agreed that his right honourable friend the Minister of State, Mr. Nicholas Scott, had said in another place during the Committee stage that he would look at the provision. To be fair, although the Minister did not promise an amendment at this stage of the Bill, perhaps he could tell the House whether the Government have reached any conclusion on the matter.
At Committee stage we raised the problem of the terminally ill, which was discussed on the last amendment, involving those who come home literally to die. Surely they at least should be excluded from the requirement, which seems to be met in any case by the first qualifying requirement,
ordinarily resident in Great Britain".
I beg to move.
§ Lord Henley
My Lords, I do not think that I can take the noble Lord much further today. As he knows, at the previous stage I stated that my right honourable friend the Minister of State for Social Security had said in another place during the Committee stage that he would examine this provision. He intends to consider the area of non-contributory benefits in general, as I said on the last occasion. I hope that the noble Lord will accept that it would be right to examine this entitlement as part of that consideration.
40 I cannot help the noble Lord about the timing, but as soon as possible I shall be the first to let him know. In the meantime, I hope that he can withdraw the amendment.
§ Lord Carter
My Lords, I had hoped that the Minister would be able to tell us when the long promised review would be complete. After all, it is not that technical and I should have thought it was comparately straightforward. I have heard what the Minister has said and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord Carter moved Amendment No. 4:
After Clause 1, insert the following new clause:
§ ("The homeless: entitlement to benefits
§ . In Schedule 1A,. Part I, of the Income Support (General) Regulations 1987, after paragraph 4, there shall be inserted the following—
§ "5. A person who has experienced a period of homelessness lasting for 7 days or more, shall be automatically entitled, except that in these circumstances entitlement would be for 3 months following the last day of homelessness.
§ 5A. For the purposes of the above paragraph homelessness is defined as having no accommodation in a night shelter, or other similar emergency short-stay hostel.".").
§ The noble Lord said: My Lords, this amendment seeks to deal with the problem of a small number of homeless young people by enabling them to have a breathing space in which to find accommodation and a job. It provides that income support should be paid to young people who have been homeless and that that income support is to be paid for three months. We know that young people aged between 16 and 17 are not automatically eligible for income support. They either have to prove estrangement or that they come into some other limited special category before they are considered for benefit.
§ We know that in 1989 the Government allowed a useful and welcome concession for young people in night shelters. These young people will be considered for income support and we understand that in practice it has meant that they receive it. However, when they move out to take up places in hostels, they lose this privilege and are not automatically entitled to benefit, needing to prove estrangement or to make a special case.
§ The amendment will assist young people who have been homeless for a week or more. Once young people find accommodation in a hostel or return home, as we all appreciate, they need a breathing space of a few weeks to sort out their lives, get their clothes together and decide what to do. An automatic entitlement to income support for three months would give them this valuable time and improve their chance of eventually finding a job or a suitable training scheme.
§ The second and equally important benefit of the amendment is that it will assist young people in finding accommodation or returning home. Many establishments at present will not house 16 and 17 year-olds because they know that if they are unemployed or not on YTS they will receive no income. Hostels, hotels and parents might be more willing to accept young people if they pay their way until they find a job or a training scheme. The 41 precedents for this amendment include the regulations applied to young people just out of school or detention who are entitled to income support during the child benefit extension period. We feel that to accept the amendment would not involve a great cost. It would help to solve a real problem. I beg to move.
§ Earl Russell
My Lords, on behalf of these Benches I am glad to support the amendment. It makes the vital point of providing a breathing space. Anyone who has advised young people in a crisis, as any university teacher has, must realise that that can be absolutely vital. Disasters which seem quite overwhelming if people have to carry on the next day as if nothing has happened seem a great deal smaller if there is a week or two in which to get on their feet and absorb and digest what has happened.
The amendment also deals, I think satisfactorily, with a block in the progress of teenagers obtaining housing. Hostels are normally in business; the owners have to make a living. If they have to rely on teenagers who they know are unlikely to receive income support, who may have to wait a long time for a YTS place and therefore may be unable to pay the rent, naturally they have misgivings.
There are reports of a good deal of trouble in this area. Haberdasher's House at Centrepoint reports that it has to rely on charity to pay the bills. However, not every hostel or hotel that might take in teenagers can do so. If it could be made clear that those people had a three-month entitlement to income support, it would enable them to get a place to live for long enough to look for a job or for a YTS place and get themselves into sensible employment. That is, after all, normally what we want to see at the end of the day.
The Government's concession on income support for those in night shelters has been welcome. It has worked a great deal better than a number of other concessions in this area. However, what is difficult with the problem of accommodation is to get people beyond that stage. The estrangement premium, although we welcome it, works a lot less effectively than the night shelter measure.
I shall refer to a case history as I think it illustrates how the difficulties arise in this area. A 16 year-old from Nottingham quarrelled with her parents and left home on 15th January this year. She found herself living on the streets. She could not find a YTS place and she lost all her possessions. She got into a night shelter and obtained income support. She managed to get on her feet and left the night shelter at the end of the maximum period of stay. However, then she could not obtain a place to live because she had no income support. Some six weeks later she found herself back in the night shelter and obtained income support. Then she was referred to a hotel where she received no income support. She positively wanted a YTS place as she wanted to be a hairdresser. However, she could not get a place and the was finally evicted for rent arrears.
That is an example of a teenager who was trying to break out of the cycle of dependency but has not succeeded because the way was barred. That is an inefficient and inhumane procedure. The 42 amendment would provide a much better way of achieving the objective we all have of getting young people into decent employment than the situation as it is at present. I am happy to support the amendment.
§ Lord Hylton
My Lords, I was happy to add my name to this amendment when asked to do so. The noble Earl, Lord Russell, has referred to an alarming and serious case. There must be many like that. We have to bear in mind that no young person normally makes himself or herself voluntarily totally devoid of any kind of shelter. Such people hope to find a place with a friend or relation, but if they fail to do so they end up on the streets. However, we want to keep them off the streets.
The Minister may be aware that for some considerable time now—something like a year and a half—I have been in correspondence with his right honourable friend Mr. Nicholas Scott about the particular difficulties that have been posed to individuals and organisations who operate hostels by the changeover from the former system of benefit and support for individuals and hostel finances to the current system. I know that the Government have tried to be helpful. They have introduced interim arrangements and modified arrangements and have carried out a lot of consultations and discussions. However, the fact remains that some hostels still fear that they may have to close down. I suggest that the amendment would help them to remain in business.
§ Lord Milverton
My Lords, I hope that my noble friend on the Front Bench will be able to give his support to this amendment. I believe it contains something real and worthwhile. I also have received correspondence about cases, such as the case mentioned by the noble Earl, Lord Russell. I am sure that there are many young people who, as the noble Lord, Lord Hylton, said, do not wish to be out on the streets but who desperately want to find employment. The thing which has struck me in recent years and which endlessly makes me ask why it occurs is the sight of young people begging.
When I inherited my title and first started to come to this House I cannot remember seeing at Paddington Station young people sitting down at the tube entrance and begging. I have started to see that happen in perhaps the past two or three years. I have been asking myself ever since why that happens. I still ask myself that question and I would still like an answer to it.
I believe that Her Majesty's Government have tried and are trying to solve this problem. Possibly the Government could be helped by responding sometimes to some of the methods suggested by noble Lords on the opposite side of the House. If Her Majesty's Government feel that they cannot accept the amendment, it would be nice if they gave a concrete reply stating why they cannot accept it. I ask the Government to do that thoroughly.
§ 5.15 p.m.
§ Baroness Fisher of Rednal
My Lords, I wish to add my support to the movers of the amendment. I 43 follow on from what the noble Lord, Lord Hylton, said. Since the Government changed the methods of payment for hostel provision and for the young people we are discussing, the problem has got worse. One could go as far as to say "thank you" for the meagre amount which is given. However, any of us who are working with young homeless people know of the problems that exist. I have knowledge of the work of St. Basil's in Birmingham which is the largest organisation in that city that helps homeless young people. Its books show that every year the organisation helps about 1,500 young people.
While the interim payment is helpful to start with, St. Basil's finds that if young people are not willing to go through the programme of rehabilitation to encourage them to remake their lives and to encourage them to leave the night shelters and enter hostels, the initial payment is completely wasted. The rehabilitation of these young people is important. Many of them have gone through severe traumas in their own homes. As others have said, no young person leaves home and walks the streets voluntarily because he thinks it is exciting. Most of these young people are in quite a state. One needs to carry out concentrated work with them in order to help them.
The initial payment gives these young people a little breathing space but it does not help the organisations such as St. Basil's which are in the position of helping these young people. The noble Earl, Lord Russell, referred to Centrepoint in this connection. St. Basil's is constantly asking for charitable funds despite the fact that it is a charity itself. It approaches all kinds of organisations for funds to keep the whole thing running. It receives inner city partnership money but, like all local authorities, Birmingham has many calls upon its finances. Therefore many charities find themselves being given a lesser amount by the city. At present St. Basil's is undertaking a major fund-raising campaign. It needs to raise £1.5 million within the next 18 months in order to keep its work going.
The initial funding which has been agreed, about which the Government have changed their minds, is wasted money unless it is continued for at least three months. Obviously one would like it to continue for longer, but it is a wasted investment if it is provided only for the short time envisaged at present. Therefore, I urge the Minister to tell the House this afternoon that the Government realise the seriousness of the situation. All of us are very concerned about young people sleeping out. It is something that we cannot accept and ought not to accept. When people see young people sleeping out they say, "Why doesn't the Government do something about it?". In supporting the amendment this afternoon I am asking what more the Government can do to help the young homeless.
§ Baroness David
My Lords, the amendment has great similarities with Amendment No. 41 in the names of the noble Baroness, Lady Faithfull, the noble Earl, Lord Russell, and myself. The Minister will know what I feel about Amendment No. 41, for all the reasons already given. I too, support Amendment No. 4.
§ Lord Henley
My Lords, I shall respond later to Amendment No. 41. I have already discussed the amendment with the noble Baroness. Perhaps I may also say that I am happy to investigate any individual cases of difficulty such as the one mentioned by my noble kinsman Lord Russell, as is the Training Agency.
This amendment seeks to extend eligibility to income support for homeless and 16 and 17 year-olds for a period of three months.
As noble Lords know, income support was withdrawn from the majority of 16 and 17 year-olds in September 1988. Instead of relying on state benefits young people are being encouraged to invest in their own future by continuing in their studies, getting a job or taking up the Government guarantee of an offer of a suitable YT place. That guarantee is being met. It applies to all young people who want and are able to undertake youth training, including the homeless.
Income support is still payable to the most vulnerable groups of young people. I must stress that homelessness is no bar to entitlement to income support, which is paid without time restriction to, for example, disabled people and lone parents. Other young people who either have no parental home or have good reason why they cannot live at home are entitled to income support during the same period as the child benefit extension period.
In addition to the normal rules, income support can be paid where the young person would otherwise suffer unavoidable severe hardship. This safety net enables young people at serious risk to receive benefit while looking for a job or youth training place. Since November 1989 every young person claiming benefit is automatically considered under the severe hardship provision if not otherwise entitled to income support.
These rules are delicately balanced to offer financial help to vulnerable youngsters, without providing an incentive to leave home. The amendment, if accepted, could encourage some young people to sleep rough rather than look for accommodation.
We recognise that some youngsters, especially the homeless, need special consideration in the provision of a YT place. We have not ignored that need. In March of this year the Secretary of State for Employment announced a package of measures to ease access to YT. Those measures especially help the homeless.
First, homeless young people who are willing to enter YTS but are not ready for a mainstream place, for example, because they are not presentable to employers, will automatically be referred for initial training. Secondly, direct links between hostels and individual training providers are being developed, building on the success of a pilot scheme in Birmingham where all those dealing with homeless young people, including initial training providers, social workers, careers officers and hostel staff, were brought together. It resulted in effective procedures and contacts between those groups, improving the help initial trainees receive. As a result, any homeless young person who has been offered a hostel place is 45 found an initial training place on the same day. That secures the hostel place and, if it subsequently emerges that the young person is on an inappropriate initial training scheme, a transfer to another provider will be arranged. This provides a model of how to develop resource networks to help training providers and other professionals to take appropriate roles in supporting trainees with their problems.
In addition, improvements are being made to the way applications for YT places are dealt with. These include the establishing of guarantee liaison officers in each Training Agency area office to act as a focal point for investigating those rare cases where there is difficulty in YT placement. Guidance to careers officers is being revised so that it adequately covers the importance of taking account of the special needs of difficult and vulnerable groups.
I cannot accept the amendment because it does not seem to me to be in the best interests of the disadvantaged young people involved. The existing benefit provision and the improvements to the YT operation which I have described ensure that help is available for those who are vulnerable, especially the homeless. Consequently, no young person need be without an income. I hope, therefore, that the noble Lord will feel able to withdraw the amendment.
§ Earl Russell
My Lords, before my noble kinsman sits down, would he agree that the use of the perverse incentive in the context of going out to sleep rough credits teenagers with a degree of perversity worthy of the Marquis de Sade?
§ Lord Carter
My Lords, obviously that was a very disappointing answer. I said when I moved the amendment that very little cost is involved. Every time we try to deal with the situation the argument seems to founder on the assumption—which is almost an obsession with the Government—that young people belong at home with a stable job, on a training place, are never estranged or subject to abuse or violence, and live in a loving environment. Life For many young people is not like that.
The noble Lord, Lord Milverton, put the point extremely well. He said that he has seen changes in the past few years. I am sorry to say that it is the changes in the social security regulations which have brought about the problems for young people that the noble Lord described.
It is very difficult to understand why the Government cannot accept the very modest change that we propose. We hear about the guarantee of a YTS place, but we are advised that that is not the case in many areas. When the Government say that our proposal would encourage young people to sleep rough in order to obtain income support, I wonder whether the members of the Government live in the real world. There was no attempt to understand the problem that we described. I am tempted to divide the House, but I shall withdraw the amendment and have one last attempt at changing the Government's mind at Third Reading. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.46
Lord Carter moved Amendment No. 5:
After Clause 1, insert the following new clause:
§ ("Severe disablement allowance.
§ In Part III of Schedule 4 to the principal Act, for paragraph 2 there shall be substituted the following paragraph—
|"Severe Disablement allowance (section 36)|
|The weekly rate specified in section 6(1)(a) of the Pensions Act"").|
§ The noble Lord said: My Lords, the amendment was discussed at Committee stage but withdrawn in the hope that the Government would reconsider their objection to the amendment, which seemed to be entirely on the grounds of cost.
§ The severe disablement allowance is a basic, non-contributory, income-replacement benefit payable to people of working age who are incapable of work and who have not paid national insurance contributions which would entitle them to the equivalent of the contributory incapacity benefit; namely, invalidity benefit. Severe disablement allowance is paid only at 60 per cent. of the basic rate of invalidity benefit because the Government consider that people who have not made any or the correct number and type of national insurance contributions should receive less than those who have paid at the full rate.
§ The purpose of the amendment is to increase severe disablement allowance to the rate of the basic invalidity benefit and to end the discrimination which exists between those who have been able to work and thus make national insurance contributions and the severely disabled who have never been able to work and therefore receive only 60 per cent. of the basic invalidity benefit. In Committee, the noble Baroness, Lady Blatch, accepted the need for additional help and accepted a recommendation of the Social Security Advisory Committee that SDA should be raised progressively until it reaches the same rate as invalidity benefit, but she turned down the amendment on the grounds that it would cost an additional £110 million a year.
The amendment which is now before the House gives the Government the opportunity to say that they will at least make a start in reducing the differential between SDA and IVB, although we understand that they may not be able to go all the way at the beginning. I should like to ask the Government three specific questions: first, is there a firm commitment to uprate severe disablement allowance; secondly, is there a timetable for the uprating of SDA; and, thirdly, are the age-related additions to the SDA, about which I am sure we shall hear when the Minister replies, the planned first stage in such an uprating and, if so, when can we expect the second and subsequent stages? I beg to move.
§ 5.30 p.m.
§ Earl Russell
My Lords, I should like to support the amendment. This is another of a crop of amendments to which we come from time to time which deal with the difference between contributory and non-contributory. The severe disablement allowance is lower because it is non-contributory.
Although I understand the force of the contributory principle and the arguments put for it, 47 if one applies a contributory principle to benefits for disability, one discriminates according to the age at which people become disabled and particularly therefore against congenital disability and disability which happens in youth. That infringes the principle of equal benefits for equal disability which is a principle of some importance.
§ Baroness Blatch
My Lords, as the noble Lord explained, the purpose of the amendment is to increase the basic weekly rate of severe disablement allowance to the basic weekly rate of invalidity benefit.
There is, of course, a link between the two benefits in that they are both available to people who are long-term sick. Invalidity benefit is the contributory benefit; severe disablement allowance is non-contributory and thus available to people who have not paid the required national insurance contributions.
Both severe disablement allowance and its predecessor, non-contributory invalidity pension, have always been at a lower rate than invalidity benefit on the basis that it would not be fair to people who are paying national insurance contributions to pay non-contributory benefit at the same rate for the same contingency.
We know of the representations which have been made to pay the two benefits at the same rate. There was a recommendation to that effect by the Social Security Advisory Committee in its report, Benefits for Disabled People: a Strategy for Change. In framing its recommendation, however, it acknowledged that it would be necessary to move by stages towards the alignment of the rates. The reason for that is the considerable additional expenditure, to which the noble Lord, Lord Carter, referred, which the change would bring about. We estimate that the gross cost would be around £250 million a year and the net cost around £110 million a year.
Our policy for the future of benefits for people who are disabled was set out in The Way Ahead which was published on 10th January this year. That set out our conclusions based on our review of the current benefit system in the light of the findings of the surveys of disability undertaken by the Office of Population Censuses and Surveys. One of those conclusions was that priority for additional help should be given to people disabled earlier in life.
The action which we are taking currently is to introduce age-related additions to severe disablement allowance in Clause 2 of the Bill. For people who become incapable of work before they reach age 40, that will mean that they will receive an additional £10 a week, making a total of £38.20, by way of severe disablement allowance. The cost of bringing in those additions will be £50 million a year.
In principle, there is nothing between the noble Lord, Lord Carter, and the Government on this issue. It is a question of what is achievable. I hope that the noble Lord will recognise that this is a positive step based on the report's, recommendations. The noble Lord and the noble 48 Earl, Lord Russell, tempt me to go further, but this is a positive step and I hope that, in that positive spirit, the noble Lord will consider withdrawing the amendment.
§ Lord Carter
My Lords, I did not realise that I was tempting the noble Baroness to go further or too far.
Again, that was a disappointing answer. The argument is that it is unfair to those who have paid national insurance contributions. The disabled have not chosen not to pay national insurance contributions; they have not paid them because they are disabled. That is the point of the amendment. The Minister mentioned a net cost of £110 million. It was pointed out earlier with regard to the first amendment that we on this side of the House propose amendments which cost money, but that cost shows just how much the refusal to uprate severe disablement allowance costs the disabled. The age-related element is a start, but it does not go nearly far enough. We must therefore ask the opinion of the House on this matter.
§ 5.36 p.m.
§ On Question, Whether the said amendment (No. 5) shall be agreed to?
§ Their Lordships divided Contents, 66; Not-Contents, 117.49
|DIVISION NO. 2|
|Addington, L.||Hughes, L.|
|Airedale, L.||Hunt, L.|
|Ardwick, L.||Jay, L.|
|Aylestone, L.||Jenkins of Hillhead, L.|
|Barnett, L.||John-Mackie, L.|
|Bonham-Carter, L.||Kilbracken, L.|
|Bruce of Donington, L.||Listowel, E.|
|Carmichael of Kelvingrove, L.||Llewelyn-Davies of Hastoe, B.|
|Carter, L.||Longford, E.|
|Cledwyn of Penrhos, L.||McNair, L.|
|Clinton-Davis, L.||Mayhew, L.|
|Cocks of Hartcliffe, L.||Milverton, L.|
|Darcy (de Knayth), B.||Molloy, L.|
|David, B.||Morris of Castle Morris, L.|
|Davies of Penrhys, L.||Nicol, B.|
|Dean of Beswick, L.||Northfield, L.|
|Donaldson of Kingsbridge, L. [Teller.]||Ogmore, L.|
|Dormand of Easington, L.||Phillips, B.|
|Ennals, L.||Pitt of Hampstead, L.|
|Falkland, V.||Richard, L.|
|Fisher of Rednal, B.||Rochester, L.|
|Foot, L.||Russell, E.|
|Gallacher, L.||Seear, B.|
|Galpern, L.||Seebohm, L.|
|Graham of Edmonton, L. [Teller.]||Stoddart of Swindon, L.|
|Gregson, L.||Taylor of Blackburn, L.|
|Grey, E.||Taylor of Gryfe, L.|
|Hampton, L.||Turner of Camden, B.|
|Hanworth, V.||Wallace of Coslany, L.|
|Harris of Greenwich, L.||Walston, L.|
|Hirshfield, L.||Wigoder, L.|
|Houghton of Sowerby, L.||Williams of Elvel, L.|
|Ailesbury, M.||Auckland, L.|
|Aldington, L.||Balfour, E.|
|Alexander of Weedon, L.||Belhaven and Stenton, L.|
|Allenby of Megiddo, V.||Beloff, L.|
|Allerton, L.||Belstead, L.|
|Bessborough, E.||Layton, L.|
|Blatch, B.||Long, V. [Teller.]|
|Blyth, L.||McAlpine of West Green, L.|
|Boardman, L.||McColl of Dulwich, L.|
|Borthwick, L.||Mackay of Clashfern, L.|
|Boyd-Carpenter, L.||Macleod of Borve, B.|
|Brabazon of Tara, L.||Mancroft, L.|
|Bridgeman, V.||Manton, L.|
|Brigstocke, B.||Margadale, L.|
|Brougham and Vaux, L.||Merrivale, L.|
|Campbell of Alloway, L.||Mersey, V.|
|Campbell of Croy, L.||Monk Bretton, L.|
|Carnegy of Lour, B.||Monteagle of Brandon, L.|
|Carnock, L.||Montgomery of Alamein, V.|
|Cavendish of Furness, L.||Mottistone, L.|
|Clanwilliam, E.||Mountevans, L.|
|Cockfield, L.||Mountgarret, V.|
|Constantine of Stanmore, L.||Munster, E.|
|Cottesloe, L.||Murton of Lindisfarne, L.|
|Craigavon, V.||Nelson, E.|
|Cross, V.||Norrie, L.|
|Cumberlege, B.||Onslow, E.|
|Davidson. V. [Teller.]||Orkney, E.|
|Deedes, L.||Orr-Ewing, L.|
|Denham, L.||Pender, L.|
|Derwent, L.||Perth, E.|
|Eden of Winton, L.||Porritt, L.|
|Ellenborough, L.||Rankeillour, L.|
|Elles, B.||Reay, L.|
|Elliott of Morpeth, L.||Renton, L.|
|Elton, L.||Romney, E.|
|Fanshawe of Richmond, L.||St. John of Bletso, L.|
|Ferrers, E.||Sanderson of Bowden, L.|
|Foley, L.||Skelmersdale, L.|
|Fraser of Carmyllie, L.||Somers, L.|
|Gardner of Parkes, B.||Stockton, E.|
|Gibson-Watt, L.||Strange, B.|
|Gridley, L.||Strathclyde, L.|
|Grimthorpe, L.||Strathmore and Kinghorne, E.|
|Harmar-Nicholls, L.||Sudeley, L.|
|Havers, L.||Swinton, E.|
|Henley, L.||Terrington, L.|
|Hesketh, L.||Thomas of Gwydir, L.|
|Hives, L.||Trumpington, B.|
|Hood, V.||Ullswater, V.|
|Hooper, B.||Vaux of Harrowden, L.|
|Hylton-Foster, B.||Wade of Chorlton, L.|
|Ingrow, L.||Wedgwood, L.|
|Johnston of Rockport, L.||Willoughby de Broke, L.|
|Kaberry of Adel, L.||Wise, L.|
|Killearn, L.||Wolfson, L.|
|Kimball, L.||Wynford, L.|
|Lauderdale, E.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 5.43 p.m.
Earl Russell moved Amendment No. 6:
After Clause 1, insert the following new clause:
("Income support: equal treatment of over and under 25's
(1) In paragraph 1 of Part I of Schedule 2 to the Income Support (General) Regulations 1987, after the words "(applicable amount and polygamous marriages)" there shall be inserted the words "except that, for this purpose, any person aged less than 25 to whom any paragraph in Part II of Schedule 1A applies or would apply if he were aged 16 and had not reached the relevant date determined under regulation 13A(3)(b) shall be treated as if he were aged 25".
(2) In paragraph 1 of Part I of Schedule 2 to the Housing Benefit (General) Regulations 1987, after the words "17(a) and (b)", and in paragraph 1 of Part I of Schedule 1 to the Community Charge Benefits (General) Regulations 1989, after the words "8(a) and (b)", there shall be inserted the words "except that, for this purpose, any person aged less than 25 to whom any paragraph in Part II of Schedule 1A to the Income Support (General) Regulations 1987 applies, or would apply if he were aged 16, claiming income support and had not reached 50 the relevant date determined under regulation 13A(3)(b) of those regulations, shall he treated as if he were aged 25".").
§ The noble Earl said: My Lords, this is an ambitious amendment. For some time and for a good deal of last year we have heard about various detailed problems arising from the treatment of young people under social security. The argument of this amendment is that the problems keep coming back because the whole policy of treating differently over-25s and under-25s is a mistake and ought to be abandoned lock, stock and barrel. I also remind the Government that there will be only one more social security Bill in which they can put right this matter before a general election and that footage of young teenagers on the run is good box office.
I should rather have the situation put right now. However, I think we have to address the whole issue of whether there is any sensible justification for treating people under 25 differently from people over 25 in our social security system. Their costs are exactly the same: their housing costs the same, their transport costs the same and their food costs the same. The only possible justification for treating them differently is the one that was given by the Minister's right honourable friend the Prime Minister in another place when she said that they:
have a home to live in belonging to their parents".—[Official Report, Commons, 7/6/88; col. 704.]
§ That is not true by any means of all the teenagers who end up sleeping rough. Forty per cent. of them have been in care and have no home to go to; some 40 per cent. of them have been thrown out by their parents. We are reminded of just how often that happens. Human parents, just like parents of fledgling birds, appear to reach a point at which their patience snaps. Sometimes they reach it too soon and at an inappropriate moment. We cannot continue with the policy of supposing that teenagers ought to live at home unless we are prepared to grasp the nettle of enforcement and place an obligation on parents to house the teenager. If we do not do that, we put very severe economic pressure on the teenager to do what the teenager is often absolutely unable to do. That seems to me to be misguided, not to say extremely inefficient, and capable of giving rise to very considerable hardship, which I shall not retail again because it has already been brought to your Lordships' attention.
§ There is also the question of whether it is wise for family relations and for mental and physical health to insist that in all circumstances, however difficult, parents and children beyond the age of 18 should always continue to live in the same place. There are some cases in which parents and children develop what I can only describe as an allergy to each other. In such cases I cannot see that it does any good to insist on yoking them together. In fact many of us are used to meeting situations—not very many but they exist—in which one can only help the persons concerned by advising that they live on their own.
§ This policy also attempts to achieve something which in the whole history of mankind has never been accomplished. Never has there been a time when all people under the age of 25 who could not otherwise support themselves have been induced to live at home. The idea that one can run away and 51 seek one's fortune is as old as the hills and it is beyond the power of this Government to eradicate it.
§ We are told that if we change the law in this point we shall create a "perverse incentive" to leave home. I have done my level best to get my mind round that doctrine. I cannot do it. To me it does not make any kind of sense whatever. In the first place the sums are wrong. No social security benefits that people are likely to receive will equal the whole cost of independent living. Nor indeed will they match the comforts and the physical provisions of a well appointed home. If the Government think that there is an economic incentive to leave home, they have simply done their sums wrong.
§ In fact, I believe that that is the result of a very internalist departmental view. It is the effect of comparing benefit when living at home with benefit when living away from home and not taking any other factors in the equation into account. It is only from that internalist perspective that the doctrine of the perverse incentive could possibly have been arrived at.
§ It also implies a very curious conception of human nature. Most teenagers with whom I deal are a great deal more concerned with bringing their emotional lives under control than with making themselves a few extra shillings. They are concerned about long-term emotional satisfaction, not immediate financial profit. I do not say that they are indifferent. It is just not their highest priority.
§ I simply cannot imagine any of the people whom I teach leaving home, throwing up all the comforts of a well appointed house and breaking emotional ties—which matter considerably to most of them and which it is at present in fashion to take seriously—to endure the very dubious pleasure of being a teenager on the run and sleeping on the streets in the weather that we had in January, which was not particularly inviting.
It is a very strange notion that people will adopt those priorities. To those who advance such arguments I can only say that the words of John Stuart Mill seem to be appropriate:
We will not do such persons the injury of supposing that their conception of human nature is drawn from their own consciousness".
I beg to move.
§ Baroness David
My Lords, I fully support the amendment, which stands in my name also. The noble Earl has moved it so admirably that there is little left for me to say. Those who have brought up people of this age group know that they cost as much as those over 25 in the amount they eat, what they wear, the space that they take up and so on. I endorse the noble Earl's other point. Although there are moments when parents and children long to be apart, the perverse incentive is not there. I warmly support the amendment.
§ Lord Renton
My Lords, apart from the merits of the amendments, I hope that your Lordships will reject it because it creates a great deal of confusion. 52 We deal with primary and subordinate legislation in quite different ways. Primary legislation is intended to state matters which are of lasting effect and which should, although they do not always do so, state the principles on which we legislate. Subordinate legislation is intended to deal with more detailed matters, sometimes filling in the details that the primary legislation does not fill in for good reasons. Subordinate legislation can also be more easily amended and is therefore suitable for matters that need to be amended from time to time.
However, this provision amends the Income Support (General) Regulations 1987 and the Housing Benefit (General) Regulations 1987, which would create more confusion than noble Lords opposite have fully realised. We have the statute book and the separate volumes of collective subordinate regulations. We do not normally have cross-references on the statute book to the subordinate regulations. I do not recollect there being insertions in the book of regulations saying that the regulation has been amended by statute. We do not proceed in that manner. I therefore hope that on reflection the method used by the amendment will be considered to be not only unusual but unsuitable.
On the merits, rightly or wrongly, we have been able to justify various examples of age discrimination on our statute book. There is reference to the age of 16 for some purposes and the age of 25 for others. Without going into the precise merits of using those ages in relation to those regulations, I do not think a case has so far been made out for changing the law as proposed.
§ Lord Boyd-Carpenter
My Lords, my noble friend Lord Renton has spelt out the rather odd nature of the amendment. It seeks to amend two sets of regulation by statute. Apart from being odd and inconvenient, it is a perfectly futile method of proceeding. In the event of the amendment being carried against the Government, there is nothing whatever to prevent the Government using their regulation-making power to withdraw the amended regulations and replace them in their present form. The operation is therefore legislatively futile.
Perhaps I may ask the noble Earl or the noble Baroness in whose names the amendment stands, whether they have any idea what the provision would cost. It seems unfair for them to ask your Lordships to consider on its merits a proposal which they have so far shown themselves unwilling to cost.
§ Lord Donaldson of Kingsbridge
My Lords, the last two speakers have given technical reasons for not achieving the alteration put forward by my noble friend. That may be right. But we should obtain their help to make the alteration unless they profoundly disagree with it. If they do, I cannot think why.
§ Lord Henley
My Lords, I thought that my noble friend Lord Renton explained why he disagreed with the amendment on other than technical grounds, but so be it. The amendment seeks to give the over-25 rate of personal allowance to certain income support claimants under that age who have to live away from home. It also introduces similar provisions for young 53 people claiming housing benefit and community charge benefit. The young people involved are mainly those who have no parents or who cannot or do not live with their parents for certain prescribed reasons.
There are a number of reasons why the Government are unable to support the amendment. First, a straightforward distinction in benefit levels on the basis of age and family circumstances was one of the main elements in the simplification of the new income-related benefit system introduced in April 1988. The House will recall that under the old supplementary benefit scheme distinctions were based on householder or non-householder status.
That scheme proved to be extremely complicated both for claimants to understand and for our staff to administer, involving detailed and often personal questioning to establish entitlement. The effect of the proposed amendment would simply be to reintroduce many of those complexities into the new arrangements, together with a new level of questioning necessary to determine whether someone had good reason for living away from home.
The House will be aware that arrangements along those lines were introduced in July last year to enable certain 16 to 17 year-olds to qualify for income support at the higher 18 to 24 year-old rate. However, those changes were made in recognition of the particular problems facing a relatively small group of the most vulnerable youngsters. It would be a very different matter to extend similar provisions to all young people under the age of 25, as the noble Lord who moved the amendment has proposed.
That would involve a considerable increase in operational costs, not only for local social security offices but also for individual local authorities, which are of course responsible for administering the housing benefit and community charge benefit schemes. I remind the House that under the changes introduced last July, the higher 18 to 24 year-old rate of personal allowance was extended to all 16 to 17 year-olds claiming housing benefit only, not just those in the special circumstances prescribed for income support. There were therefore no operational implications for local authorities.
But I would not wish the House to think that the Government are opposing the amendment purely on operational grounds. The levels of income support for young people under the age of 25 not only take account of the fact that the majority are likely to live in someone else's household but also reflect the lower earnings expectations of this age group generally. I am sure that the House will agree that it would be wrong for benefit levels to provide an attractive alternative to seeking work or training or an encouragement for young people to leave home unnecessarily. That was the position under the old supplementary benefit scheme and I have no wish to reintroduce these perverse incentives into the reformed structure.
As I mentioned earlier, last year the Government recognised that the level of benefit was causing difficulties for some 16 to 17 year-olds and we took steps to improve the position. But I do not accept 54 that the same problems apply to the level of benefit paid to 18 to 24 year-olds. I believe that this is adequate, without being over-generous. I would, of couse, remind the House that those entitled to income support will also qualify for the maximum housing benefit and community charge benefit covering 100 per cent. of their eligible rent and 80 per cent. of their community charge. I would also point out that lone parents and couples over 18 already qualify for the over-25 rates in recognition of their extra responsibilities and that anyone who is entitled to a premium will receive it at the full rate irrespective of their age.
My noble friends Lord Renton and Lord Boyd-Carpenter rightly said that changes in this area would be more appropriately dealt with through secondary rather than primary legislation. They said that we should not go down the road of amending regulations in primary legislation. My noble friend Lord Boyd-Carpenter asked about the cost of the amendments and I am advised that it would be some £47 million.
We remain committed to the age-related structure of personal allowances and income support in its present form. It provides the most straightforward and effective approach and I hope that the noble Earl will feel able to withdraw his amendment.
§ 6 p.m.
§ Earl Russell
My Lords, on any matter concerned with parliamentary drafting one must listen with care to the noble Lord, Lord Renton. I sympathise profoundly with his arguments against putting general principles into regulations. He and I have often spoken together about the matter. But it was not I who put the general principle into regulations.
We in this House cannot amend regulations unless we invoke a procedure by passing an Act authorising ourselves to do so. Once a provision is put into regulations we can use legislation only to remove it. I share the noble Lord's regret that that is so but I feel entitled to say, "Please, it wasn't me; I didn't put it there".
That is now the only way in which the problem can be addressed. We cannot refrain from addressing it simply because the Government put more general principles into a past regulation than we should like to see. Perhaps in future the Government will be careful not to repeat the same mistake because it is liable to lead to legislative confusion.
The noble Lord, Lord Boyd-Carpenter, rightly and properly raised the question of cost. My noble kinsman, whom I thank for his reply, gave a figure of £47 million. With an injustice of this magnitude I should not regard the cost as an obstacle if I were entirely convinced by it. But I am sure that my noble kinsman will concede that in the costing there is an element of the hypothetical. Under a different benefit regime we do not know how many teenagers living away from home would succeed in obtaining a place to live and in obtaining employment. Therefore, instead of being a charge on the Exchequer they would become net contributors. That is the whole basis of my approach to the Bill.
We are blocking off opportunities which will allow people to escape from dependence on benefit and 55 obtain employment. This is an extreme example of that. Increasing the number of taxpayers is a far more painless method of paying for a programme than is raising the rates of taxation. It is my contention that accepting the amendment will have the effect of putting more teenagers in employment and, therefore, increasing revenues. I shall not be surprised if, in the end, there is no net cost. If there is it will be small. I can see that the noble Lord, Lord Boyd-Carpenter, is not convinced. His position is conjectural; so, I admit, is mine. But when we have what is a crying injustice I do not see that we can do anything else.
My noble kinsman the Minister dealt with the lower rate and justified that by claiming that there is a lower earnings expectation. But his argument does too much; it commits him to things he may not have intended. I shall take one obvious example; the average earnings expectation of women is lower than that of men. I hope that my noble kinsman is not about to introduce the same argument for saying that we should give women lower social security benefits than men. If he does so I shall oppose it because it would be discriminatory. I believe that the present policy is discriminatory in the same way. As for the doctrine of perverse incentive, I can say no more—words fail me. I commend the amendment to the House.
§ 6.6 p.m.
§ On Question, Whether the said amendment (No. 6) shall be agreed to?
§ *Their Lordships divided: Contents, 54; Not-Contents, 113.56
|DIVISION NO. 3|
|Addington, L.||Hughes, L.|
|Airedale, L.||Hunt, L.|
|Ardwick, L.||Hylton, L.|
|Barnett, L.||Jay, L.|
|Bonham-Carter, L.||Kilbracken, L.|
|Carmichael of Kelvingrove, L.||Kinloss, Ly.|
|Llewelyn-Davies of Hastoe, B.|
|Cledwyn of Penrhos, L.||Lockwood, B.|
|Darcy (de Knayth), B.||McNair, L.|
|David, B.||Masham of Ilton, B.|
|Davies of Penrhys, L.||Morris of Castle Morris, L.|
|Dean of Beswick, L.||Nicol, B.|
|Donaldson of Kingsbridge, L,||Northfield, L.|
|Dormand of Easington, L.||Ogmore, L.|
|Ennals, L.||Peston, L.|
|Falkland, V.||Pitt of Hampstead, L.|
|Fisher of Rednal, B.||Richard, L.|
|Foot, L.||Rochester, L.|
|Gallacher, L. [Teller.]||Russell. E. [Teller.]|
|Galpern, L.||Seear, B.|
|Graham of Edmonton, L.||Shackleton, L.|
|Gregson, L.||Stoddart of Swindon, L.|
|Grey, E.||Taylor of Blackburn, L.|
|Hampton, L.||Turner of Camden, B.|
|Hanworth, V.||Wallace of Coslany, L.|
|Harris of Greenwich, L.||Walston, L.|
|Houghton of Sowerby, L.||Williams of Elvel, L.|
|Aldington, L.||Allerton, L.|
|Alexander of Weedon, L.||Ampthill, L.|
|Allenby of Megiddo, V.||Auckland, L.|
|Balfour, E.||Layton, L.|
|Belhaven and Stenton, L.||Lindsey and Abingdon, E.|
|Beloff, L.||Long, V. [Teller.]|
|Belstead, L.||McColl of Dulwich, L.|
|Bessborough, E.||Macleod of Borve, B.|
|Blatch, B.||Manton, L.|
|Boardman, L.||Margadale, L.|
|Borthwick, L.||Merrivale, L.|
|Boyd-Carpenter, L.||Mersey, V.|
|Brabazon of Tara, L.||Mills, V.|
|Bridgeman, V.||Monk Bretton, L.|
|Brigstocke, B.||Montgomery of Alamein, V.|
|Brougham and Vaux, L.||Morris, L.|
|Campbell of Alloway, L.||Mottistone, L.|
|Campbell of Croy, L.||Mountevans, L.|
|Carnegy of Lour, B.||Mountgarret, V.|
|Carnock, L.||Munster, E.|
|Cavendish of Furness, L.||Murton of Lindisfarne, L.|
|Clanwilliam, E.||Nelson, E.|
|Cockfield, L.||Norrie, L.|
|Colwyn, L.||Onslow, E.|
|Constantine of Stanmore, L.||Orkney, E.|
|Craigavon, V.||Orr-Ewing, L.|
|Craigmyle, L.||Pender, L.|
|Cross, V.||Rankeillour, L.|
|Cumberlege, B.||Reay, L.|
|Davidson, V. [Teller.]||Renton, L.|
|Deedes, L.||Romney, E.|
|Denham, L.||St. John of Fawsley, L.|
|Eden of Winton, L.||Sanderson of Bowden, L.|
|Elles, B.||Seebohm, L.|
|Elliot of Harwood, B.||Skelmersdale, L.|
|Elliott of Morpeth, L.||Stockton, E.|
|Elton, L.||Strange, B.|
|Fanshawe of Richmond, L.||Strathclyde, L.|
|Ferrers, E.||Strathmore and Kinghorne, E.|
|Fraser of Carmyllie, L.||Sudeley, L.|
|Gardner of Parkes, B.||Swinfen, L.|
|Gibson-Watt, L.||Swinton, E.|
|Gray of Contin, L.||Terrington, L.|
|Gridley, L.||Thomas of Gwydir, L.|
|Grimthorpe, L.||Trefgarne, L.|
|Halsbury, E.||Trumpington, B.|
|Harmar-Nicholls, L.||Ullswater, V.|
|Havers, L.||Vaux of Harrowden, L.|
|Henley, L.||Wade of Chorlton, L.|
|Hives, L.||Wedgwood, L.|
|Hooper, B.||Whitelaw, V.|
|Hylon-Foster, B.||Willoughby de Broke, L.|
|Ingrow, L.||Wise, L.|
|Johnston of Rockport, L.||Wyatt of Weeford, L.|
|Kaberry of Adel, L.||Wynford, L.|
|Kimball, L.||Young, B.|
§ [*The Tellers for the Contents reported 54 names, the Tellers for the Not-Contents 113 names. The Clerks recorded 54 and 114 names respectively.]
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 6.13 p.m.
Lord Carter moved Amendment No. 7:
After Clause 1, insert the following new Clause:
§ ("Uprating of income support for 16 and 17 year olds.
§ In paragraph 1 of Part I of Schedule 2 to the Income Support (General) Regulations 1987, delete the table and insert the following—
|"Column (1) Person or Couple||Column (2) Amount|
|(1) Single person who lives with his parents, or any person acting in the place of his parents, and aged|
|(a) less than 25;||£28.80|
|(b) not less than 25.||£36.70|
|(2) Single person who does not live with his parents, nor any person acting in the place of his parents.||£36.70|
§ The noble Lord said: My Lords, I shall speak also to Amendment No. 8. I admit immediately that these amendments have the same technical problem as that raised on the last amendment by the noble Lord, Lord Boyd-Carpenter. However, it is open to the Government to agree to amend the regulations to achieve what we wish to achieve on this matter. If the Minister agrees to that, we shall withdraw the amendment.
§ We now return to the problem of providing income support for 16 or 17 year-olds. Amendments were proposed in Committee to deal with that problem but the Government were unable to accept them despite the fact that considerable unease was expressed on all sides of the Committee regarding the effects of the changes in benefit regulations in 1988. They removed benefit from 16 and 17 year-olds. However, the Government have been forced to concede some changes in the regulations since then.
§ The effects of that removal are well documented: the difficulty of finding and paying for accommodation which results in the vicious Catch-22 situation of no home, no job; no job, no home; the increase in youthful crime and begging; the creation of cardboard cities for the young homeless, and many other undesirable social effects which we have discussed on a number of amendments.
§ Young people are said to be guaranteed a YTS place to compensate for that removal of benefit. Youth Aid estimates that at least 45,000 16 to 17 year-olds are without a job, a YTS place or any benefit. The cost of applying these amendments to those young people would be £70 million or £80 million. However, we should ask ourselves about the social cost of not helping them. In Committee the noble Lord, Lord Hylton, pointed out the cost of the police, the courts, the prisons and the health service. I believe it is a social obscenity that a rich country allows substantial numbers of its young people to live it such appalling conditions.
§ All that seems to stem from a curious obsession by the Government that young people belong at home in employment or on training schemes, living in a stable family background. That is a perfectly laudable objective but is a long way from the home lives of many young people.
§ In the recent recess I visited Prague and I had many interesting discussions regarding the new freedoms there. More than once I was asked: how is it that a rich country like yours has on its streets young people who are begging and living in cardboard boxes? I was told that that would not have been possible under their previous regime, oppressive though it was. I had no answer to that question. To accept this amendment would mean that that question would never need to be asked. I beg to move.
§ Earl Russell
My Lords, I intend to contribute only one point on this amendment. I wish to answer a question asked of me by the noble Baroness, Lady Blatch, on 24th May. She asked me to give detailed evidence of cases of people who had applied for YTS places and were unable to obtain them. I have a 58 file of some 130 hardship cases of which, on my calculations, 70 are of people who had applied for YTS places and were unable to obtain them. Those come from one organisation and I am told that a much larger file is on the way. I should be grateful for my noble kinsman's advice on how, in what form and to whom he wishes those cases to be presented.
They seem to me to come under a number of fairly regular headings. By far the commonest heading is pregnancy, the employer saying very reasonably that a girl who could not complete the training was not suitable for the YTS. The second category is illness. For example, a girl was not accepted for the YTS because she was epileptic. Again, one can understand the employer's point of view, but that girl must live. We have here the problem of the dual nature of the YTS; namely, that it is both a government scheme to support teenagers who could not otherwise live and an employer-led scheme to provide worthwhile work for employers. There is a potential contradiction there.
The third very common category is that of those who did not obtain a YTS place because of the short time for which they were available. For example, several cases in that category were of people intending to join the army. They were to join up at a date two or three months ahead but were not given a place because they could not do anything useful in the time available.
There were cases of behaviour problems where of course one can see the employer's point of view. However, starvation is not usually thought to be the appropriate punishment for behaviour problems. There are problems regarding geographical area. Last year it was Glasgow; this year it seems to be Manchester and Chesterfield where the supply of places simply is not sufficient for the need. There are problems of geographical availability. I was not surprised that one case came from the Western Isles.
There are problems with poor English. Again I can see the employer's point. Poor English limits a teenager's usefulness to an employer, but I hope that it does not deprive him or her of the right to live. That is not all. Since we discussed YTS in Committee and the noble Baroness, Lady Blatch, again repeated the government guarantee of a place for every teenager, we have had some striking press publicity regarding the difficulties of YTS.
In the Independent on 31st May the chairman of the East London Managing Agents Network, Mr. Ernest Large, said that it was not able to offer a guarantee to the next batch of school-leavers. He said that the consensus is that East London can no longer offer the guarantee.
In the Independent on 4th June the National Council for Voluntary Organisations said that the cuts in YTS funding from the Government mean that the voluntary sector's contribution is at risk. Voluntary and community groups provide 7 per cent. of YTS places. In the Daily Telegraph on 8th June, which is not normally thought of as part of our Left-wing press, Sir Clifford Chetwood, chairman of the Construction Industry Training Board, was quoted as saying that he was undertaking a fundamental review of youth training programmes 59 because of government cuts. They provide 10 per cent. of the total YTS places. In today's Independent we have a headline,Charities set to lose 5,000 training places as funding is cut".In those circumstances I wonder whether when my noble kinsman replies he will repeat the doctrine of a government guarantee, and whether if he does so, he will risk finding, as junior Ministers do from time to time, that he is occupying a position whence all but he have fled.
There are other cases of people who genuinely cannot be expected to apply for YTS places. For example, someone who has been thrown out of her parent's home, and when found has not eaten for three days, clearly needs a little while before she is fit to undertake training.
A surprisingly large number even among 16 and 17 year-olds are carers. For example, one young person was engaged in caring for a blind father. I know that my noble friend Lady Seear will say more about that later. There are cases of considerable distress on which I shall not elaborate. Forcing people in those situations to rely for subsistence on applying for a YTS place, which probably is not there anyway, is appropriately described as social cruelty.
§ Lord Milverton
My Lords, I feel sympathetic to the amendment. I received some material on the matter and, taking into account what has been said today and at different times on the subject, I am happy to support it.
§ Baroness Seear
My Lords, I reinforce my noble friend's comments regarding the effects of cuts in government spending for schemes of this kind—schemes for special needs groups with which I am associated. I specifically refer to young offenders, who are difficult to train and place. The cuts in government funding have led to drastic reductions in the training offered and because of that the people concerned will find it extraordinarily difficult to earn any money.
When the Bill was drafted I have no doubt that the Government believed that they were funding all people who wanted a YTS place. That is no longer so. If the noble Lord cannot comment on it this evening perhaps between now and Third Reading he will look at the implications of the changes which the Government have made regarding the cuts in funding because they drastically alter the situation.
§ Lord Hylton
My Lords, this amendment is much narrower than the previous one. I support it on the grounds of the cost not only of clothing but also of shoes, as any parent who has children in this age group will readily understand. Many of these young people are still growing and therefore need not fewer but more clothes and shoes in the course of one year than older people.
§ Lord Henley
My Lords, my noble kinsman spoke of the position of junior Ministers at the Dispatch Box. I thought he intended to quote,The boy stood on the burning deck".60 I cannot remember how it continues, but I seem to remember he was all alone.
Perhaps I may first say that I shall be very pleased to see any of the cases collected by my noble kinsman. He asks where they can be sent. He can send them to me at the Department of Social Security, Richmond House, Whitehall. I will certainly look at them.
I shall deal with the amendments in opposite order, starting first with Amendment No. 8, which seeks to change the provisions for 16 and 17 year-olds by extending eligibility to income support to any 16 or 17 year-old who is unable to secure employment or a suitable place on a youth training scheme.
Income support is not payable to most young people under 18 years of age. It was withdrawn from the majority of 16 and 17 year-olds in September 1988. The Government did that to prevent young people going straight into the benefit culture on leaving school. Dependence on state benefits so early on in a person's career is clearly not in the interests of the young person, their families or society as a whole. The withdrawal of benefit was accompanied by the introduction of a guarantee of the offer of a suitable youth training place for anyone who wants one. That guarantee is being met.
There is no reason why a young person who wants and is able to undertake youth training should be without a place. As my noble friend Lady Blatch said in Committee in March of this year, there were approximately 160,000 unfilled youth training places. On that occasion she went on to quote the number of unfilled places throughout the kingdom in every area, again in answer to the claim by the noble Earl, Lord Russell, that there were geographical black spots, which I do not accept.
Perhaps I could touch on the newspaper articles quoted by the noble Earl, Lord Russell—the Independent articles of 31st May and 4th June and the Daily Telegraph article of 8th June. The top priority for training and enterprise councils is to meet the youth training guarantee. That is properly a matter for the training agency. It will investigate any cases where it is alleged that the guarantee is not or will not be met and will take remedial action.
Income support is still payable to the most vulnerable groups of young people. It is paid without time restriction to, for example, disabled people and lone parents. Other young people who either have no parental home or have good reason why they cannot live at home are entitled to income support during the same period as the child benefit extension period. Whether or not a young person is offered a place in his or her chosen field depends on the circumstances. If he or she does not apply until the child benefit or bridging allowance is about to run out, it may not be possible to provide what is wanted right away, but every effort will be made to find a suitable place as quickly as possible.
In addition to the normal rules, income support can be paid where the young person would otherwise suffer unavoidable severe hardship. That safety net enables young people at serious risk to receive benefit while looking for a job or YT place. Since 61 November 1989 every young person claiming benefit is automatically considered under the severe hardship provision if not otherwise entitled to income support.
Apart from extending entitlement to young people estranged from their families, we have not been persuaded of the desirability of any major change. We remain convinced that our policy on young people is the right one. The income support rules provide help for those youngsters who may be incapable of work or training while also offering temporary help to those who may not be able to take up training or job opportunities immediately.
We have always recognised that some youngsters need special consideration in the provision of a YT place. That does not mean that we should give up on them. Indeed, we cannot afford to give up on them. Their problems can be accommodated in a number of ways: first, through YT itself, which aims to provide quality training tailored to the needs of the individual. This includes those youngsters with special training needs such as those who lack motivation or who have disabilities. Secondly, initial training offers in-depth assessment and remedial help for young people who would otherwise have difficulty in being accepted or coping with YT. This is intended to bring youngsters with particular problems—for example, the homeless and those with severe emotional or behavioural problems—to a point where they are ready for mainstream YT.
In addition, in March this year the Secretary of State for Employment announced a package of operational improvements in dealing with applications for YT places. These included the establishing of guarantee liaison officers in each Training Agency area office to act as a focal point for investigating those rare cases where there is difficulty in YT placement and the revision of guidance to careers officers so that it adequately covers the need to take account of the special needs of difficult and vulnerable groups. The existing provision and the improvements to the YT operation which I have described ensure that help is available for those who are vulnerable and that no young person need be without an income.
Turning to Amendment No. 7, this seeks to introduce a scale of benefit rates for the under-25s which would be determined on whether or not they live with their parents or guardian. Those people under the age of 25 living with parents would receive the equivalent of the present 18 to 24 year-old rate, while those who live away from home would receive the over-25 rate.
We have discussed the rationale behind the present age-related allowances in some depth in regard to Amendment No. 6, which the House recently rejected. Therefore, I shall not go over those arguments again. I simply say that it would not be acceptable, or indeed right, to introduce into the system something that would clearly act as a perverse incentive to the under-25s to leave home unnecessarily.
On a practical level, this amendment may look deceptively simple to operate but we must look at the principle involved. The amendment would mean 62 that any young person who chose to move to a nearby relative's or a friend's house could increase benefit by almost £8 per week while to all intents and purposes the household circumstances would be the same.
I have already said that the Government consider that the present arrangements for under-25s provide adequate income in different circumstances. There is no justification that I can see for increasing the benefit presently paid to 16 and 17 year-olds who are living at home with parents. The present 18 to 24 year-old rate payable to those youngsters who have no option but to live independently is adequate without being over-generous.
Finally, I should touch on the question of cost, as I always ought to do. I am advised that these two amendments would cost around £74 million. The present arrangements enable the Government to be flexible in responding to the special needs of certain groups while retaining a structure which is straightforward and effective. I hope that the noble Lord will feel able to withdraw the amendment.
§ 6.30 p.m.
§ Baroness Seear
My Lords, before the noble Lord sits down perhaps I may point out that he has not referred to the fact—and there is no argument about this—that the Government have cut the amount of money available for all these schemes, including the money going to the TECs. Large numbers of people concerned with these schemes have been making representations to the Government in that respect. The noble Lord may say that it has been found that previously the schemes have been grossly over-funded. I do not think many people would agree with that. If that is not the case, the Government must at least admit that such cuts are making it more difficult to fulfil the undertaking. Perhaps the noble Lord will agree to review the position now that these cuts are taking place to see whether the Government can say, as they have said previously, that there are places available. What was true in the past is not going to be true in the future with less money coming forward.
§ Lord Henley
My Lords, I said that there were about 160,000 vacancies throughout the country in March of this year. I also repeated the Government's guarantee that all young people will he able to take up a YT place.
§ Lord Carter
My Lords, when we were discussing last year's social security legislation and the subject of disability benefits I said to the then Minister, the noble Lord, Lord Skelmersdale, that it would save the time of the House if he stood up, said "OPCS survey" and then sat down. In discussing this subject today if the noble Lord were to stand up, say "a perverse incentive" and sit down it would be equally time-saving.
Again, his answer was very disappointing. The Government seem to be completely stone-faced on this issue. They refuse to accept the problem, as they did when they first introduced the changes in the regulations which led to the problem and were then forced to make concessions—concessions which had 63 been pressed on them from the outset. There seems to be a gulf in the understanding between the Government and those people who have to deal with the problem.
The Minister referred to 160,000 unfilled places. As I said in moving the amendment, we are told by Youth Aid that there are 45,000 young people without a job, a YTS place or benefit. I ask the Minister: what are those 45,000 young people supposed to do? It is clear that the Government cannot understand or recognise the problem, but to divide the House would achieve nothing. Therefore, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ The Deputy Speaker (Lord Elliott of Morpeth)
My Lords, before calling the next amendment I have to inform the House that the figure for those voting "Not-Content" in the last Division was wrongly given as 113. The figure should have been 114.
§ [Amendment No. 8 not moved.]
Baroness Seear moved Amendment No. 9:
After Clause 1, insert the following new clause:
§ ("Housing benefit for under-25s
. In section 22 of the 1986 Act, after subsection (2) there shall be inserted the following subsection—
(2A) In relation to housing benefit the applicable amount for a person aged under 25 shall be the same as if he were aged 25".").
§ The noble Baroness said: My Lords, in the absence of my noble friend Lord Russell I briefly move this amendment. This is very much in line with the case that we have been making on previous amendments. The removal of housing benefit for the under-25s can be a serious handicap to people in that age group who have to be away from home. In particular, it affects the position of students—a point that we have made on a number of occasions—and specifically graduate students, who are not now able to receive housing benefit. We wish to see that restored and that is the purpose of the amendment. I beg to move.
§ Lord Henley
My Lords, this amendment would abolish the lower applicable amount for young people aged under 25 in housing benefit only. It would have the effect of basing the calculation of housing benefit on the full adult rate of personal allowance in all cases, irrespective of age or personal circumstances.
The House will of course be aware that as a prudent Administration we are concerned that public funds should be disbursed both sensibly and sensitively. Every change to the existing scheme of income related benefits carries a cost. The estimated cost of this amendment at current benefit rates would be about £11 million. We are realists and as such we recognise that in reality the overwhelming majority of single people live at home with their families. This position is reflected in the structure of housing benefit, community charge benefit and income 64 support, which all have a reduced personal allowance for younger claimants. A lower benefit rate acknowledges the reality that most of those aged under 25 are non-householders, with no liability for housing costs. Equally important, these young people have lower income expectations than older people, as I said on earlier amendments. It is therefore right that the benefit system should also reflect that.
Common rules which apply to income support and housing benefit, together with the latter's rent taper, apply to extra income. This means that all young people in employment or on YT who successfully claim housing benefit, and who must be living independently in order to be eligible, will be left with at least their income support applicable amount to live on after paying their housing costs.
As I have already said, we consider it right that this applicable amount should be lower for single people under the age of 25 than for those aged 25 and over. We have discussed this on all previous amendments. Those who are lone parents or who are disabled will benefit from the special premiums and higher earnings disregard which apply to those groups, irrespective of age. For couples and lone parents there is no age divide above 18 in recognition of their special status.
There is a scheme to help with housing costs. It should not offer young people the incentive to leave home by increasing the applicable amount in income support.
The Government undertook to monitor the effects of the 1988 social security reforms and they are continuing to do so. We have responded to representations of 16 and 17 year-olds who are living independently and finding it difficult to manage on the lower rate of benefit. We do not accept that the same situation applies to the rate for 18 to 24 year-olds. We consider that that rate is sufficient without being overgenerous.
I am sure the House will agree that it would be wrong if benefit levels provided an attractive alternative to seeking work or training or encouraged young people to leave home unnecessarily. That was the position under the old supplementary benefit scheme. We are concerned not to reintroduce those anomalies into the reform structure. I hope that the noble Baroness will feel able to withdraw the amendment.
§ Baroness Seear
My Lords, I do not find that to be a satisfactory answer. The noble Lord has repeated the points that he made in the previous debate. He has again produced the argument that because expectations of earnings are lower the benefits rates should be lower. He did not answer the point made by my noble friend that one does not apply that argument because women's expectations of earnings are lower than those of men, and the logic of that situation would require them to do so. However, the noble Lord is obviously quite implacable in regard to that matter, and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.65
§ Clause 2 [Severe disablement allowance: age related addition]:
Lord Carter moved Amendment No. 10:
Page 3, line 11, at beginning insert:
("( ) In section 36(4) of the principal Act, for paragraph— (c) there shall be substituted the following paragraph—
(c) he does not satisfy the prescribed conditions as to presence in Great Britain; or".").
§ The noble Lord said: My Lords, the amendment returns to a problem that was raised at Committee stage when the response of the Government was not wholly satisfactory. The requirements for applicants for severe disablement allowances are that Great Britain must be their normal place of residence, that they must have been resident in Great Britain for 10 our of 20 years prior to the claim, and that they must have been physically present for each of 196 qualifying days of incapacity.
§ The residence requirements do not coincide with those for invalid care allowance, attendance allowance, mobility allowance, housing benefit and income support. The Minister of State, Mr. Nicholas Scott, undertook in another place to examine the problem. The noble Baroness, Lady Blatch, confirmed at Committee stage in this Chamber that the Gavernment were reviewing the situation with a view to rationalising the various anomalies.
§ The Minister wrote to me and pointed out that the noble Baroness, Lady Blatch, in reply to an amendment that I moved in Committee had quoted a cost of £14 million a year. It appears that that figure was incorrect and that the amount should have been £1.4 million. Perhaps those who advise the noble Baroness will remind her whether it was Gladstone or Disraeli who had trouble with "those damn dots". The answer was wrong by the power of 10, but I do not propose to say any more about that matter. I think that is extremely decent of me!
§ The amendment gives the Government an opportunity to reveal the outcome of their review and to convince the House that the expenditure of £1.4 million is so great a burden on the social security budget of £54 million that the amendment cannot be accepted. I beg to move.
§ 6.45 p.m.
§ Baroness Blatch
My Lords, I am not comforted by the fact that I did not spot that mistake in my previous presentation. I am only comforted by the fact that so many other people did not spot it.
Severe disablement has, in common with the other non-contributory benefits for people who are disabled, qualifying conditions relating to residence and presence in Great Britain. The presence conditions are that a person claiming the allowance must be present here and have been present here for 24 weeks out of the continuous period of 28 weeks for which a person must have been incapable of work before qualifying for severe disablement allowance. The presence conditions are therefore fairly easy to meet.
The residence conditions are that the person must have been resident in Great Britain for 10 of the last 20 years (or 10 years since birth in the case of a 66 person aged 20). The effect of the amendment would be to remove the power to make regulations relating to residence and thus the current so-called 10 in 20 test.
That test is different from the tests which apply to the other benefits for people who are disabled; namely, attendance allowance and mobility allowance. The test for severe disablement is the same as applied to its predecessor, non-contributory invalidity pension. When the latter was introduced in 1975 the residence test which was adopted was the same as for non-contributory retirement pension. There is an affinity between the two benefits in that they are available to people who have not paid the required national insurance contributions to qualify for the contributory benefits provided for the same purpose. On the other hand, attendance and mobility allowances are benefits which are provided specifically to help with the extra costs of disability and they have no contributory counterparts. The residence and presence conditions are much easier to fulfil for those two benefits.
We are already looking at the question of whether or not changes should be made which will bring the tests for those benefits more into line. The tests for attendance and mobility allowance are being considered in preparation for the new disability allowance, which will bring those two benefits together. We are looking at the tests for severe disablement allowance at the same time. I am not able to tell your Lordships when we shall be able to reach a conclusion, as there are a number of other questions which have to be considered in modifying current arrangements to fit into the disability allowance. It would be premature at this stage to accept that the residence test for severe disablement allowance should be removed altogether.
There are points of principle to be taken into consideration, such as the relationship between the eligibility criteria for contributory and non-contributory benefits that are provided for the same purpose. There is also the question of cost. At this point, I should like to apologise to your Lordships for an error which was made in quoting the cost when the amendment was debated at Committee stage. The gross cost of providing severe disablement allowance to our estimate of 1,000 people who would be expected to gain from the amendment is £1.4 million. That is still a substantial sum.
The point has been made that the test affects the mobility of labour, but the point to bear in mind is that some people who are working abroad can qualify for contributory benefits by paying national insurance contributions while abroad or through reciprocal arrangements with other countries. We are aware, however, that members of their families may not be able to gain entitlement in that way.
We are aware of the representation made on behalf of service families who have spent a number of tours abroad in the 20-year test period. The noble Lord, Lord Boyd-Carpenter, expressed concern in relation to that point at Committee stage.
We believe that the number involved is very small. A social security commissioner has held that, in 67 certain circumstances, it may be possible for a person to be regarded as resident here even though abroad on consecutive tours of duty. We already have special arrangements to help members of service families with the presence criteria and we are looking sympathetically at finding a way of making arrangements to help with the residence criteria. The extent to which we need to act on that matter will to a great extent depend upon what conclusion we reach about the appropriate residence conditions for claimants generally.
In conclusion, I hope that the points I have made show that it would not be advisable to make a change to the residence rules for severe disablement allowance without carefully considering the effect it would have on its relationship to other benefits. We have the matter in hand, but, because of the need to consider these possible implications for other benefits, I do not think that I can give a date by which we can reach our conclusions.
I hope nevertheless that the noble Lord will withdraw the amendment so that residence and presence conditions for benefits for disabled people can be considered in the round.
§ Lord Carter
My Lords, this is a highly complicated matter. One is tempted to observe that the Minister's reply would perhaps be easier to understand in the original Sanskrit!
We understand that a review is being carried out. I thought that the noble Baroness should have spared us the description of a substantial sum of £1.4 million among 1,000 people. She sounded almost as convincing about that matter as about the figure of £14 million that she quoted at Committee stage. However, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Baroness David moved Amendment No. 11:
After Clause 4, insert the following new clause:
§ ("Exemption for summer vacation employment
§ . In section 20(12)(d) of the 1986 Act, at the end there shall be inserted the words "provided that no person shall be treated as not available for employment solely on the grounds that he is a student during the summer vacation appropriate to his course." ").
§ The noble Baroness said: My Lords we were successful with two or three amendments at Committee stage in relation to students and housing benefit. However, the present amendment proposes to retain the student entitlement to income support during the summer vacation.
§ The Government published draft amendment regulations on 19th February. They will have the effect of taking students out of entitlement to housing benefit all year round and income support and unemployment benefit during the summer vacation. To date, those regulations have still to be laid before Parliament. The intention is to redefine the student's period of study so as to include the summer vacation. That is stated in the draft amendment regulations. It will have the effect of deeming the student during the long vacation as being not available for employment, and therefore not entitled to income support: availablility for work being one of the main conditions for entitlement to income support.68
§ It is our contention, and that of the NUS, that by every definition other than that of the Government's proposal, during the summer vacation a student is available for employment, and therefore should be entitled to income support, subject to meeting the normal conditions of eligibility.
§ Indeed, considering that it is impossible for a student to finance himself or herself during the summer vacation on the amounts of money available under the Government's new system for financial support, students will need to find employment. While virtually all students endeavour to find work, it is not always possible to do so. What provision do the Government plan to make for that?
§ The amendment seeks to ensure that students who actively seek work, but who do not succeed in securing a job, will not be left destitute, hence the change in status from availability for employment to non-availability for employment created by the extension of the period of study to include the long vacation. That, in our opinion, is ill-considered and will cause many students and their parents a great deal of financial hardship. It will of course make them more dependent upon their parents, which is what we thought the Government were trying to avoid.
During the numerous debates on students and social security throughout the passage of the Education (Student Loans) Bill, it became clear that the Government did not know how much money in total is presently expended on social security benefits for students. The total figure of £68 million which was offered was sometimes confused with the total for housing benefit. During the 15th Sitting of Standing Committee B, Mr. Robert Jackson, the Parliamentary Under-Secretary of State said:
We should compare that with savings to the Exchequer from the withdrawal of students' access to benefits calculated on the basis of the Research Services Limited surveys of £68 million only
However, during debate in your Lordships' House on Monday, 19th March, the noble Earl, Lord Caithness, used that figure in answer to a question from the noble Lord, Lord Adrian, to refer specifically to the removal of housing benefit:
As I understand it, the value of the benefit withdrawn is £68 million". [Official Report, 19/3/90; col. 47.]
Further Parliamentary Questions answered on 5th June by Mrs. Shepherd confirmed that confusion. The noble Earl, Lord Caithness, repeated in the debate on 26th March that students obtaining housing benefit at the moment would claim about £68 million. So there is no agreement.
§ The point being made here is that the Government are not in possession of the figure for the expenditure on social security benefits for students. Until that information is known, they should refrain from taking students out of social security. The amount of money in the hardship or access funds to be set up by the Government is totally inadequate to begin to meet the needs generated by loss of benefits. Grants are to be frozen at current levels from this year, and the loan facility does not compensate for loss of benefits.
§ During other debates on the Bill the House was informed of the great hardship experienced by 16 to 69 18 year-olds as a result of their income support being withdrawn. Similarly, the Government's current problems regarding the poll tax are an example of what can happen if major changes are pushed through without sufficient forethought and without adequate information.
§ The Government should think carefully and act extremely cautiously before withdrawing the income support safety net from students. I beg to move.
§ Earl Russell
My Lords, the case in favour of the amendment is that students cannot live on the amount of money available to them at present unless they are available for employment during the long vacation. That is pretty well common ground among all the people who teach them. In theory, though, I can understand the Government's case here. I understand the argument which says that they ought not to be available for employment during the long vacation.
I have this afternoon been trying to explain to my special subject class that they need to read 1,200 pages of original sources during the long vacation to be able to cope with the work next year. Clearly they cannot do that unless, for a substantial part of the vacation at least, they are not available for employment; but if that were to be realistic, there would have to be a realistic level of support for 52 weeks of the year. While there is not, availability for employment during the vacation is a necessity.
I should like to ask my noble kinsman one other question. We are told that there are in prospect regulations designed to disentitle students from social security benefits. If those regulations were to come forward while the present Social Security Bill is still under consideration, we could have a rather confused situation. I should be grateful to receive the Government's assurance that any decision on that issue will wait until a decision has been taken about our amendments which will shortly be sub judice in another place.
§ Baroness Blatch
My Lords, the amendment, if carried, would prevent the Government from carrying out their policy of withdrawing income support, and housing benefit from most students. By doing so it would lead to a substantial increase in public expenditure and maintain the inappropriate administrative burden that student claims place on local authorities and Department of Social Security local offices. The amendment goes even wider. It would maintain, against our intent, the current position whereby students can claim income support during the summer vacation. Top-up loans are intended to provide financial support over the whole academic year. To allow able-bodied students to have recourse to an income maintenance benefit such as income support would result in an element of double provision.
The benefit entitlement of students was debated at length during the passage of the Education (Student Loans) Act and we have heard the arguments many times but, in view of the obvious concerns that the amendment displays, I feel that a re-statement of the Government's position is needed.
70 It is a fundamental plank of the Government's student support policies that financial assistance provided to students out of public funds should be directed through the education system according to educational criteria. We do not believe that the social security system is an appropriate mechanism for channelling support to students for the following reasons. First, the decision to undertake full-time study is a decision to opt out of the labour market: it is not the function of the benefit system to subsidise able-bodied people without family responsibilities in that way. Nevertheless, we recognise the need to protect those in vulnerable groups, such as students with families and disabled students, and have undertaken that those in such groups will retain eligibility for benefits.
Secondly, the benefit system was never intended for the support of students. For a variety of reasons the scale of student claims has increased significantly over the past two decades, putting an unintended and inappropriate burden on the welfare system; and, thirdly, the short-term, cyclical nature of students' benefit claims generates administrative problems and costs which are out of of all proportion with the amounts actually claimed.
For all those reasons, the Government believe that it is now appropriate to remove students' entitlement to benefits and place the responsibility for student support where it properly belongs—with the education system. Not only is support through the benefit system inappropriate for students, it is also unnecessary. The Government's policies are generous to students, giving the great majority more in loans than they might otherwise have claimed in benefits.
From the independent survey carried out on students' income and expenditure we estimate that in 1990–91 those students who claimed benefits would have received an average of £315 over a full year. Instead of that level of benefit, students will have available a loan of, in most cases, £420.
The total amount available to students in loan and access funds will far outweigh what would have been available in benefits. We estimate that in the first year of the scheme expenditure on loans will be £178 million compared with savings on social security expenditure of only £68 million for those within the scope of loans. Additionally we are making £25 million available in the access funds. The Government will be spending well over £100 million more on students next year as a result of the new student support system.
We acknowledge that there is concern in some quarters about the effect on individuals of the loss of benefit entitlement and we accept, of course, that a few students might have been able to claim more in benefits than they will have available in loan. I can reassure your Lordships that the Government have not neglected the position of such students: if a small number of students are in financial difficulty as a result of the withdrawal of benefit entitlement, they will be able to apply for assistance from the access funds.
However, I am sure the House recognises that we must be fair to the taxpayer. The amendments would 71 deprive the taxpayer of a substantial part of the savings made by removing students from the benefit system. To compensate, we are already making more resources available to students. It would be an unnecessary and inappropriate burden on public expenditure if they were to retain access to the benefit system as well. I urge the noble Baroness to withdraw the amendment.
§ Lord Boyd-Carpenter
My Lords, before the Minister sits down, would she be good enough to answer the question already put to her? It was when the regulations under the student loans Act withdrawing social benefits from students will be laid. Can she also remind me whether they are subject to the affirmative or negative procedure?
§ Baroness Blatch
My Lords, I can give assurances on both points. The regulations will not be laid until this Bill has received Royal Assent. It is my pretty firm understanding that they are subject to the affirmative resolution.
§ Baroness David
My Lords, before the noble Baroness sits down could she answer one question? Do the Government expect students to work in the long vacation?
§ Baroness Blatch
My Lords, whether a student works in the vacation is very much a matter for the student.
§ Baroness David
My Lords, I do not consider that an answer. I wonder whether the Minister can try again. I do not believe that that is at all a satisfactory answer. We heard the old arguments over and over again while we were going through the student loans Bill, and now we hear them on the Social Security Bill. We clearly do not agree about the expenditure and what the student will have to live on, whether or not it will be adequate. We believe that it will be inadequate. Some students will not have enough to live on if they cannot get work in the summer vacation, without becoming dependent on their parents. Some parents may not be able to support them.
I should like to have better figures. I hoped that the noble Baroness would write to me and say how the Government work out their figures. I read out figures that were contrary. Some were based on housing benefit, which the amendment has nothing to do with. What are the Government's figures? What do they believe has been paid in social security, and do they expect students to manage on the amount available for them to live on, considering the amount that they have to pay out?
If the noble Baroness cannot give me any of those answers now, I hope that she will try to write to me. In the meantime, I shall withdraw the amendment and reserve my right to come back at Third Reading.
§ Amendment, by leave, withdrawn.72
§ 7 p.m.
Baroness David moved Amendment No. 12:
After Clause 4, insert the following new clause:
§ ("Determination of days for which benefit is payable
§ . In section 17(2)(a) of the principal Act, at the end there shall be added the words "provided that, in the case of a student, nothing in any such regulation shall prevent any day on which he is attending his course of education from being treated as a day of unemployment." ").
§ The noble Baroness said: My Lords, again this amendment concerns support for students but deals with a rather different matter: to preserve students' entitlement to unemployment benefit during vacation.
§ The draft amendment regulations which were published on 19th February included the intention to take students out of entitlement to unemployment benefit during vacations. This is particularly harsh. Unemployment benefit is a contributory benefit so only those people who have made enough of the appropriate class of national insurance contributions will actually receive it.
§ The rationale forming the Government's arguments regarding students and social security has been that students have voluntarily withdrawn from the labour market and therefore should not be entitled to social security. This, however, does not deal with the issue that many students will have worked before going to college and will therefore have paid national insurance contributions. They would be entitled normally to receive unemployment benefit, certainly in their first summer vacation, on the basis of those contributions.
§ In the case of such students, their contributions will count for nothing save entitlement to their pensions. Furthermore, such students will face double jeopardy in that, on completion of their courses, they will be ineligible to claim unemployment benefit as it will be more than a year since they last paid national insurance contributions.
§ The unemployment benefit situation will be particularly detrimental to mature students who may have worked for a number of years before taking the decision to pursue a course of higher education. Those are students who are deemed to be independent by the DES mandatory award regulations.
§ There is a particularly strong moral argument here: that a group of people who have totally satisfied the contribution conditions to receive a benefit are being denied entitlement solely on the grounds that they are students. This is an unprecedented move and we contend that it is totally unacceptable.
The Social Security Advisory Committee, in the report on the proposals to the Secretary of State—which was extensively leaked to the press in mid-May—showed itself to be very concerned about the matter. It described the intention to withdraw unemployment benefit from those students who had paid the required national insurance contributions as,
a breach of natural justice".
The Government are also unsure as to the amounts of money that will be saved as a result. I shall give two examples. First, in a reply to a question from
Andrew Smith, MP, on 5th June 1990 to the Secretary of State for Social Security as to the savings to public expenditure expected in respect of the proposed withdrawal on entitlement to unemployment benefit, Gillian Shephard replied:
In the next financial year reductions in public expenditure are estimated to be £51 million from housing benefit and £28 million from income support and unemployment benefit. It is not possible to provide a disaggregated figure for unemployment benefit as separate details of claims are not kept".—[Official Report, 5/6/90; Col. 568.]
Secondly, in reply to another Question from Andrew Smith to the Secretary of State for Social Security, again on 5th June 1990 (at Col. 569 of Hansard), regarding the numbers of students currently in receipt of unemployment benefit during the long vacation, the answer from Gillian Shephard was:
I regret that information on the numbers of students receiving unemployment benefit is not readily available and could be obtained only at disproportionate cost".
Those replies not only reinforce the uncertainty on the potential savings for the Government via benefit withdrawal to students—the figures have changed yet again from those I gave on the last amendment—but confirm that the Government do not know the consequences of their actions.
§ In the light of the doubts surrounding the effects of taking students out of social security entitlement, I had intended to ask the Minister to reassure us about the amendment regulations. I believe that she has already done so, and I am satisfied that these will not be laid before the Bill receives Royal Assent. I beg to move.
§ Lord Carter
My Lords, when we discussed the first amendment today dealing with child benefit, noble Lords opposite waxed long and eloquent about the sacrosanct nature of the national insurance fund and the relationship of contributions to benefits. Those noble Lords will be able to deal with the points that my noble friend has made about the obvious lack of relationship between contributions and unemployment benefits to students.
§ Lord Boyd-Carpenter
My Lords, I am a little puzzled by the drafting of the amendment. I understand its intention, which the noble Baroness explained perfectly clearly. However, apparently it provides that the regulations could not treat any day on a course as being a day of unemployment. Does that cover term time when a student is supposed to be working? It seems a little odd that the student should be able to establish that he was unemployed, when he was working during term. He was quite plainly not available for any other employment. Although I have a great deal of sympathy, as the noble Baroness knows, with the general objection to the withdrawal of social security benefits from students, I wonder whether the amendment goes too far.
If I am right in the way in which I read it, it provides that the term during which the student is working in college or university should be treated as a time of unemployment. If so, it seems to be going too far, although recalling my own undergraduate days, it might have been applicable to one or two of my contemporaries.
§ Lord Hylton
My Lords, I wish to support the amendment particularly as it applies to mature students. Any government ought to encourage this group, if only because of its much higher degree of motivation as compared with the general run of students in the country. We must remember that grants for mature students are, in most cases, discretionary. Many local authorities refuse to take up that discretion and make use of it. Therefore those who have contributed over quite a number of years in some cases to national insurance and social security should be entitled to benefit in the way suggested.
§ Baroness Blatch
My Lords, this amendment, if carried, would prevent the Government from carrying out their policy of withdrawing unemployment benefit from most students. That would lead to a substantial increase in public expenditure, which, alone, would be unfortunate but the effect of this amendment goes even wider. It would recreate an entitlement that was withdrawn in 1986. It would enable students to receive unemployment benefit not just in the summer vacation but also at Christmas and at Easter. That would result in an inappropriate financial double provision by the state.
The aim of unemployment benefit is to provide a short-term measure of compensation for people who are normally working but who have to face an unforeseen contingency of unemployment. The Government do not believe that students fall into such a category. Indeed the position of a student during vacation might be likened to that of an employee on recognised or customary vacation from normal employment, and who is unable to claim unemployment benefit. Students have chosen to follow a course of study and will now have all their financial needs dealt with under the education maintenance arrangements.
Top-up loans are intended to provide financial support over the whole academic year. To allow able bodied students to have recourse to an income maintenance benefit such as unemployment benefit would result in an element of double provision. Furthermore, I should point out to noble Lords that in practice very few students meet the contribution conditions for unemployment benefit. For those who have paid contributions, their value will carry forward for the purposes of other benefit entitlement and for retirement pension eligibility.
The benefit entitlement of students has been debated at length—I have said that once before and I must repeat it—during the passage of the Education (Student Loans) Act. We have heard the arguments many times, but in view of the obvious concerns that these amendments display I feel that we must continue to restate the Government's position. It is a fundamental plank of the Government's student support policies that financial assistance provided to students out of public funds should be directed through the education system according to educational criteria.
At the risk of repeating myself I should say that we do not believe that the social security system is an appropriate mechanism for channelling support 75 to students. The benefit system was never intended for the support of students. Further, the short term, cyclical nature of students' benefit claims generates administrative problems and costs which are out of all proportion with the amounts actually claimed.
For all these reasons the Government believe that it is now appropriate to remove students' entitlement to benefits and place the responsibility for student support where it properly belongs—with the education system.
In response to a point raised by the noble Baroness about the efficacy of the figures that we use, I should say that an independent survey was carried out on students' income and expenditure. We estimate, as a result of that survey, that in 1990–91 students who claimed benefits would have received an average of £315 over a full year. Instead of this level of benefit, students will have available to them, in most cases, loans of £420. The total amount available to students in loans and access funds is £178 million. Based on actual data, the loss of income support will be £68 million and £25 million will be available in the access funds.
We acknowledge that there is concern in some quarters. On the previous amendment I said that we would make provision for the most vulnerable. I apologise for the repetition but there was an insistence on these two very similar amendments being taken together. I urge the noble Baroness to withdraw her amendment.
§ 7.15 p.m.
§ Baroness David
My Lords, these two amendments deal with two different matters. One deals with contributions from national insurance funds whereas the other deals with the matter of being available for work. I should say to the noble Lord. Lord Boyd-Carpenter, that I understood that Amendment No. 12 represents the technical way of dealing with the matter and that the wording is directly related to that of DSS draft regulations and the way the Government wish to withdraw the unemployment benefit. I am not an expert on drafting amendments but I was assured that what I had stated in the amendment would achieve what I had intended. I hope I am correct on that point.
As the noble Baroness said, she has repeated the figures. We do not agree with those figures. The figure of £315 may represent an average but there may be many students who cannot manage on that and who will lose out. We are sure of that. We simply do not agree on the figures. However, I do not think the noble Baroness answered the moral question concerning a person who has paid a contribution. I refer particularly to the mature students whom the noble Lord, Lord Hylton, mentioned. Is it fair that such people should not be able to draw the benefit which is due to them if they cannot find work? I hope I shall receive a reply to that point.
§ Baroness Blatch
My Lords, I am looking for some confirmatory nodding heads but my understanding is that a mature student would receive benefit until his contribution element ran out. However, it 76 appears that I am wrong on that. I must write to the noble Baroness on that point.
§ Baroness David
My Lords, I am not satisfied. There is a moral problem here and a breach of natural justice. I shall divide the House.
§ 7.16 p.m.
§ On Question, Whether the said amendment (No. 12) shall be agreed to?
§ Their Lordships divided: Contents, 35; Not-Contents, 97.77
|DIVISION NO. 4|
|Addington, L.||Lockwood, B.|
|Airedale, L.||Lytton, E.|
|Birk, B.||Mason of Barnsley, L.|
|Carter, L. [Teller.]||Napier and Ettrick, L.|
|Darcy (de Knayth), B.||Nicol, B.|
|David, B.||Ogmore, L.|
|Davies of Penrhys, L.||Park of Monmouth, B.|
|Dormand of Easington, L.||Peston, L.|
|Ewart-Biggs, B.||Prys-Davies, L.|
|Fisher of Rednal, B.||Russell, E.|
|Graham of Edmonton, L. [Teller.]||Seear, B.|
|Hanworth, V.||Stoddart of Swindon, L.|
|Hollis of Heigham, B.||Turner of Camden, B.|
|Hylton, L.||Walpole, L.|
|Kinloss, Ly.||Walston, L.|
|Lawrence, L.||Williams of Elvel, L.|
|Llewelyn-Davies of Hastoe, B.||Young of Dartington, L.|
|Alexander of Weedon, L.||Harmar-Nicholls, L.|
|Allenby of Megiddo, V.||Henley, L.|
|Arran, E.||Hesketh, L.|
|Auckland, L.||Hives, L.|
|Balfour, E.||Hooper, B.|
|Beaverbrook, L.||Hylton-Foster, B.|
|Belstead, L.||Ingrow, L.|
|Blatch, B.||Johnston of Rockport, L.|
|Bledisloe, V.||Kaberry of Adel, L.|
|Boardman, L.||Kimball, L.|
|Borthwick, L.||Kinnaird, L.|
|Boyd-Carpenter, L.||Layton, L.|
|Brabazon of Tara, L.||Lindsey and Abingdon, E.|
|Brougham and Vaux, L.||Liverpool, E.|
|Buckinghamshire, E.||Long, V.|
|Carlisle of Bucklow, L.||McColl of Dulwich, L.|
|Carnegy of Lour, B.||Macleod of Borve, B.|
|Carnock, L.||Manton, L.|
|Carr of Hadley, L.||Margadale, L.|
|Cavendish of Furness, L.||Merrivale, L.|
|Clanwilliam, E.||Mersey, V.|
|Craigmyle, L.||Mills, V.|
|Cranbrook, E.||Milverton, L.|
|Cross, V.||Monk Bretton, L.|
|Cumberlege, B.||Montgomery of Alamein, V.|
|Davidson, V. [Teller.]||Morris, L.|
|Denham, L.||Mottistone, L.|
|Eden of Winton, L.||Mountgarret, V.|
|Elles, B.||Murton of Lindisfarne, L.|
|Elliot of Harwood, B.||Norfolk, D.|
|Elliott of Morpeth, L.||Norrie, L.|
|Elton, L.||Onslow, E.|
|Ferrers, E.||Orkney, E.|
|Fraser of Carmyllie, L.||Orr-Ewing, L.|
|Gardner of Parkes, B.||Pender, L.|
|Glenarthur, L.||Rankeillour, L.|
|Gray of Contin, L.||Reay, L.|
|Greenway, L.||Rees, L.|
|Gridley, L.||Rennell, L.|
|Grimthorpe, L.||Renton, L.|
|Romney, E.||Thomas of Gwydir, L.|
|Sanderson of Bowden, L.||Trumpington, B.|
|Skelmersdale, L.||Ullswater, V. [Teller.]|
|Strange, B.||Wade of Chorlton, L.|
|Strathclyde, L.||Whitelaw, V.|
|Strathmore and Kinghorne, E.||Willoughby de Broke, L.|
|Wyatt of Weeford, L.|
|Swinfen, L.||Wynford, L.|
|Swinton, E.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 7.23 p.m.
§ Baroness Blatch
My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion I suggest that the Report stage should not be resumed before 8.25 p.m.
§ Moved accordingly, and, on Question, Motion agreed to.