§ 8.39 p.m.
§ Consideration of amendments on Report resumed.
Lord Carter moved Amendment No. 13:
After Clause 5, insert the following new clause:
§ ("Homeless people in bed and breakfast accommodation:
payments to cover meals
In section 22(3) of the 1986 Act, at the end there shall be added the words "and the applicable amounts for homeless people placed as homeless under the Housing Act 1985 by local authorities in bed and breakfast accommodation without self-contained cooking facilities shall include an amount for each family member in respect of the additional cost of meals they are required to purchase prepared outside the accommodation."").
§ The noble Lord said: My Lords, after we have all had an excellent meal, this amendment deals with the loss of benefit to families living in bed and break fast hotels resulting from the change in benefit arrangements regarding the eating-out allowance. That loss can be as much as £70 per week in some cases. The eating-out allowance of £1.55 per person per meal was paid where there were either limited or no cooking facilities. I should like to ask the Minister what the rationale was behind the decision to treat homeless people living in bed and breakfast accommodation as though they were living at home. Are the Government satisfied that the decision has produced the desired result, whatever that was?
A report produced by the Department of the Environment in 1989 stated that 90 per cent. of units in bed and breakfast hotels had no cooker or inadequate cooking facilities.
Apart from the abolition of the eating-out allowance in April 1989 everyone now has to pay something towards hotel costs. Those charges are known as amenity charges and include a charge for breakfast, hot water, cooking, heating, lighting, water rates and 20 per cent. of rates. They are not covered by housing benefit. They are standard amenity charges which are laid down by the Department of Social Security and which have to be paid to the local authority. The charges are made regardless of whether the family eats the breakfast, whether the heating and hot water are working properly or whether there are adequate cooking facilities.
It is estimated that there are approximately 8,000 children living in bed and breakfast hotels in London alone. It is those children and their families who have suffered most from the April 1989 benefit changes.
The effects of irregular eating and poor diet on hotel families have been well documented. A report made in 1989 found that both adults and children 98 in bed and breakfast accommodation were malnourished and drew attention to a high incidence of weight loss in adults and low birth weight in babies. The abolition of the eating-out allowance, coupled with liability for amenity charges, has substantially exacerbated the problems. When one hears of problems of weight loss in adults and low birth weight in babies, one wonders whether we are talking about this country or a third world country.
The problem is not confined to the cities. I should like to quote some figures given by the district council in Wiltshire, where I live. It is a rural area consisting of small market towns and villages with a population of 67,000. Three years ago the budget for bed and breakfast accommodation for homeless familes was approximately £3,000 per year. Expenditure in 1989 and 1990 was £90,000. That figure is in relation to a small rural area. Fifty three per cent. of homeless people live outside metropolitan areas.
Organisations that work with homeless families in London report that families are experiencing severe difficulties in managing at the present levels of income. The 1988 report found that nearly a quarter of women were going without food from time to time because they could not afford it and one in 10 said that sometimes their children went without food.
The whole business is demonstrably cruel to some of the most vulnerable people in our society and it should be ended. The amendment seeks to do that. I beg to move.
§ 8.45 p.m.
§ Lord Renton
My Lords, I must apologise to the noble Lord, Lord Carter, because I have missed most of his speech. However, I have very carefully read his amendment. Business was resumed rather quickly and I was not in the Chamber when he began.
I should like to say that I very much sympathise with the motive of the noble Lord and the purpose of the amendment. However, I find some difficulty of definition in its terms. For example, the word "breakfast" is a very flexible term. We are accustomed to two definitions of breakfast: one is the Continental breakfast and the other is the English breakfast. I hope that the amendment means the latter. However, we do not know.
There is a reference in the amendment to the additional cost of meals that those people are required to purchase. The question arises: what kind of meals? Does it mean a light snack for lunch or does it mean what many people call dinner and more elevated people describe as luncheon? So far as tea is concerned, is it high tea or low tea? In the evening, does it mean supper or something more?
I sympathise with the motive behind the amendment but we are leaving a lot of uncertainty for later definition in the new clause. Therefore, I shall be very interested to hear what my noble friend on the Front Bench has to say about the matter.
§ Earl Russell
My Lords, I do not think that the difficulties of definition are quite as grave as the 99 noble Lord, Lord Renton, has suggested. There is a precisely delimited category of accommodation that is used by local authorities for the placing of people who are homeless under the 1985 Act in which meals are not provided. That is an identifiable category.
What meals those people choose to eat and what names they choose to call them by is their own affair. The purpose of the amendment is that they should be fed. They would be allowed a sum of money which was deemed suitable by the Secretary of State to allow that to take place. Beyond that point, what names they choose to give to the meals concerned is something which the Secretary of State and this House would not need to come to a decision about.
The amendment is more tightly targeted than the one which we debated on this subject in Committee. It applies specifically to those who are homeless under the 1985 Act. That is a precisely definable category and one that we can use. It applies to those without self-contained cooking facilities—again a term which can be fairly well defined. It avoids the use of the word "adequate", to which my noble kinsman in Committee took exception.
According to the classification by the Department of the Environment, 90 per cent. of those places have been found to have inadequate facilities for preparing food. I should like to give a few examples. One kitchen was shared by 15 families; one cooker was shared by 12 families, and one cooker was shared by 35 families. The shift system must present problems.
There is also a severe problem of money. Your Lordships can imagine that it is not very practical to eat out in London on the amount of money which is provided for people in that kind of accommodation. One example among many is that a family of two adults and four children receive a total sum, including child benefit, of £102.65 a week. That amounts to £17.10 per week each, which will not buy very many chips in McDonald's. One may see families in that category sitting over one plate of chips in McDonald's for a very long time. It is not an adequate nourishment. It is not surprising that the BMA has been reporting cases of malnutrition.
In that respect we must consider the question of costs. As always, I should like to ask the House to consider the costs of not accepting the amendment as well as considering the cost of accepting the amendment. The cost of ill health, as we have recently been reminded, is something about which the country and this House are very much concerned. If we spread ill health even wider, we may find that we are spending more money than we would save by passing the amendment.
The object of the exercise is to float people off benefit and get them back into employment. If one is suffering from malnutrition, one is not normally in a very good state to undertake a job interview. One comes in appearing listless, pale, vague and unable to pick up the point of the question. Overall you give your potential employer the impression that you are not alert—for the good reason that you are not. The effect of the present policy is to make it far harder for people to return to employment than it 100 would otherwise be. It is therefore far harder to escape from such accommodation and return to the ordinary world of work, which is the objective that we should all like to achieve. For those reasons, I am happy to support the amendment.
§ Lord Hylton
My Lords, I owe the noble Lord. Lord Carter, an apology for not having been in my place when he began to move his amendment. He moved it in a matter of fact way, whereas he would have been justified in moving it with a good deal of passion and even emotion. Perhaps on this occasion the Government will admit that we are in a totally non-ideal situation, with families with children being forced by circumstances, by shortage, by the kind of housing crisis which we are in, into bed and breakfast accommodation. Nothing could be less suitable.
I would go so far as to say that to push a family with children into bed and breakfast accommodation is about the worst disaster that can befall them. Let us look at the position from the mother's point of view. She is accustomed and intends to cook, cater and provide for her children. During the period of enforced inactivity she is in effect being deskilled. She is losing those attributes of which she may justifiably be most proud.
We risk breaking up those families by a degree of imposed poverty. I hope that the Government have had sufficient time to reflect on the matter since the last stage of the Bill and that they will be able to come up with a more convincing and hopeful answer than last time around.
§ Lord Henley
My Lords, the House will recall that this matter was raised in Committee and that similar amendments were also discussed during the passage of last year's Social Security Bill. Quite frankly, there is little that I can add to what last year my noble friend Lord Skelmersdale said and I have already said on those matters. I do not propose therefore to rake over all the old ground as to why the Government introduced the benefit changes for people living in bed and breakfast accommodation. Having said that, I accept, as the noble Lord, Lord Hylton, said, that bed and breakfast accommodation is not ideal.
However, I must stress that the Government firmly believe that the solutions to the problems facing those families lie fairly and squarely in the hands of local authorities and not in changes to the benefit system. The Government's prime objective is to get people out of manifestly unsuitable and expensive bed and breakfast hotels by increasing the supply of permanent accommodation. Following the Government's review of homelessness legislation, as the House will be aware, the Department of the Environment has recently announced the distribution of £112 million to local authorities for schemes to go forward in 1990–91. Of that, some £88.5 million was allocated to London boroughs in recognition of the severe homelessness pressures that they face. That is specifically to increase the availability of permanent accommodation for those living in bed and breakfast accommodation and will provide about 15,000 extra lettings over two years.
101 I should point out that using bed and breakfast accommodation for those families should be the last resort when other, more suitable accommodation is not available. The Government fully support the Audit Commission study which shows that three-quarters of local authorities using bed and breakfast could end its use altogether by using better alternatives available locally.
I should also touch on the concerns expressed about the effect of making deductions from housing benefit for breakfasts which the family does not eat. I should say on that point, first, that it is for local authorities to ensure that the meals provided are of an acceptable quality when they place the family in the accommodation. Secondly, local authorities should establish whether families wish to eat the breakfasts provided. If they do not, it would be sensible for the placement to be arranged on an accommodation only basis, in which case no deductions from benefit would need to be made.
I return to the amendment. I must say that even if I were prepared to accept it in principle, which I am not, I certainly could not accept it in practice.
Like my noble friend Lord Renton, I have problems over the definition. The amendment as drafted refers to,people … in bed and breakfast accommodation without self-contained cooking facilities".How many commercial hotels are there that have a cooker in every room? If such a situation existed, the establishment would not be bed and breakfast accommodation but would in fact be a block of flats or bedsits. I find it totally unrealistic to expect any hotel or bed and breakfast establishment to have the scope to provide such facilities. This in turn leads us to the heart of the problem.
The whole point is that bed and breakfast accommodation is unsuitable for those families. That is why local authorities are encouraged not to place them in such accommodation; and that is why the Government are committed to getting people out of bed and breakfast accommodation and into more suitable permanent housing. Furthermore, the amendment as drafted would create inequalities between those families who for one reason or another have not been placed by a local authority. As a final point, the income support rates are intended to cover all living expenses. People in board and lodging do not have the same household expenses as other claimants in normal accommodation; for example, on such items as furniture, general household equipment and household repairs and insurance. Consequently, any adjustments in benefit levels to take account of food would have to be countered by a similar adjustment to take account of reduced expenditure on other items. The House will appreciate that that would clearly be an impossible task.
For those reasons and the reasons I outlined earlier, I hope that the noble Lord will feel able to withdraw the amendment.
§ Lord Carter
My Lords, I do not intend to withdraw the amendment. The Government's answer was disgraceful. To deal with the terminology 102 of bed and breakfast, it is a well-recognised phrase in this context. There was no problem with the eating-out allowance before the change in the regulations. The amendment is intended in effect to introduce a boarder's premium. Why are the Government behaving in that way? When I moved the amendment I said that one could almost think that we were talking about a third world country. It is unbelievable. We are discussing the amendment in a thin House because most Members are having a good dinner.
The phrase used by the noble Lord, Lord Hylton, was an excellent one. He said that it was a totally non-ideal situation. That means that it is dreadful. Of course we should like to get these people out bed of and breakfast accommodation, but why do the Government not allow local authorities to build many more houses?
The Minister proudly said that £88.5 million is to be given to London. I pointed out that 53 per cent. of the homeless are not only outside London; they are outside the metropolitan countries. So we pass the buck to the local authorities. If the families are not satisfied with the breakfast, they can apply for accommodation only. Where do they buy breakfast in a market town in rural Wiltshire, which is where I live and where I explained that the bed and breakfast budget has increased from £3,000 to £90,000 in three years?
I admit that the drafting of the amendment may not be perfect, but this is no time for nitpicking, semantic games. That is no answer to the problem.
I do not apologise for taking up the time of the House for a moment to illustrate what is happening. A family comprising a single parent and four children aged under 11 living in a hotel in Shepherds Bush before April of last year received £104.80, in income support. The mother has no amenity charges to pay for the hotel. She also received £29 in child benefit. The hotel has only one kitchen in the basement, shared by 15 households. The family live on the ground floor and the mother has always found it difficult to cook in the kitchen because her youngest child is not away at school. He cannot go with her into the kitchen and she does not like leaving him in the room on his own while she cooks. It is also difficult for her to find time to use the cooker when it is free because of the demand of other families. The family has always been heavily dependent on take-away and café food.
In April last year her income support went down to £63.30 from £104.80. That was a cut of £41.50 per week. Added to that, she also has to pay £17.12 in amenity charges to Kensington and Chelsea. The woman pays these charges for the use of one room only. Although she pays for breakfast, the family never eats it as the quality is disgusting. The eggs are inedible and the toast is old and dry. Although she pays nearly £7 a week for heating, she has no control over it; it is either unbearably hot or too cold. For example, throughout July the heating was on full but every Sunday, even through the winter, it is switched off.
After payment of these amenity charges and the reduction of her income support, she has £46.18 per week for all meals and living expenses. That is for a 103 mother with four children aged under 11. I suggest that two or three of us could have spent that amount of money tonight on one meal. She has it for a whole week for all the family's meals and living expenses. I am not at all satisfied with the answer that the Minister has given and the only thing to do is to ask the opinion of the House.
§ 9.1 p.m.
§ On Question, Whether the said amendment (No. 13) shall be agreed to?
§ Their Lordships divided: Contents, 25; Not-Contents, 68.
|DIVISION NO. 5|
|Addington, L.||Lockwood, B.|
|Airedale, L.||McNair, L.|
|Carmichael of Kelvingrove, L.||Milverton, L.|
|Carter, L.||Peston, L.|
|Dean of Beswick, L.||Prys-Davies, L.|
|Graham of Edmonton, L. [Teller.]||Russell, E. [Teller.]|
|Hollis of Heigham, B.||Seebohm, L.|
|Houghton of Sowerby, L.||Shackleton, L.|
|Hylton, L.||Taylor of Blackburn, L.|
|Lawrence, L.||Turner of Camden, B.|
|Llewelyn-Davies of Hastoe, B.||Winstanley, L.|
|Young of Dartington, L.|
|Aldington, L.||Hives, L.|
|Alexander of Weedon, L.||Hooper, B.|
|Allenby of Megiddo, V.||Johnston of Rockport, L.|
|Arran, E.||Killearn, L.|
|Auckland, L.||Kimball, L.|
|Balfour, E.||Kinnaird, L.|
|Belstead, L.||Kinnoull, E.|
|Blatch, B.||Layton, L.|
|Boardman, L.||Liverpool, E.|
|Borthwick, L.||Long, V.|
|Boyd-Carpenter, L.||McColl of Dulwich, L.|
|Brabazon of Tara, L.||Mersey, V.|
|Brougham and Vaux, L.||Mills, V.|
|Carnegy of Lour, B.||Montgomery of Alamein, V.|
|Carnock, L.||Norfolk, D.|
|Cavendish of Furness, L.||Rankeillour, L.|
|Clanwilliam, E.||Reay, L.|
|Cox, B.||Rennell, L.|
|Cranbrook, E.||Renton, L.|
|Cross, V.||Romney, E.|
|Cumberlege, B.||Sanderson of Bowden, L.|
|Davidson, V. [Teller.]||Skelmersdale, L.|
|Denham, L. [Teller.]||Strange, B.|
|Eccles of Moulton, B.||Strathclyde, L.|
|Elliot of Harwood, B.||Strathmore and Kinghorne, E.|
|Elliott of Morpeth, L.|
|Elton, L.||Thomas of Gwydir, L.|
|Ferrers, E.||Trefgarne, L.|
|Fraser of Carmyllie, L.||Trumpington, B.|
|Glenarthur, L.||Ullswater, V.|
|Gray of Contin, L.||Wade of Chorlton, L.|
|Grimthorpe, L.||Willoughby de Broke, L.|
|Harmar-Nicholls, L.||Wynford, L.|
|Henley, L.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.104
§ 9.8 p.m.
Earl Russell moved Amendment No. 14:
After Clause 6, insert the following new clause:
§ ("Entitlement to adequate level of benefits
§ .—(1) Notwithstanding any other provision of this or any other Act, order or regulations, every person residing in any part of Great Britain, of whatever age, sex, parentage, nationality, or occupation, shall have a right to an adequate level of social security benefits.
§ (2) Any Provision of Part II or Part III of the 1986 Act or of any regulation made or direction issued under either of those Parts which, in conferring or restricting entitlement to or availability of any social security benefit or payment, discriminates or results in discrimination between categories of persons other than on grounds of differences in needs, shall have effect as if it applied to all such categories in the same way as to the most favourably treated category.")
§ The noble Earl said: My Lords, this is in effect an equal rights amendment. It is designed to prevent discrimination in the social security system. The form of words is taken from Clause 10 of the European Social Charter which is the social protection clause. That document, including this clause, has, as far as we can see, been accepted without demur or any anxiety at all by 11 out of 12 of the member states. Nevertheless, although the principle is so clearly workable in other places it seems to cause great dismay to this Government.
When my noble kinsman spoke to this amendment in Committee he was kind enough to say:
I shall not say that I feel the amendments are unnecessary; I feel that they are worse than that".—[Official Report, 21/5/90, col. 652.]
I am grateful for that remark. I hate having my amendments called unnecessary. When my noble kinsman says that, he is telling me that he finds the amendment necessary but unwelcome. I am not particularly surprised to hear that. No government like being accused of discriminating, particularly if they are.
§ There are three recent cases of discrimination against a category of people introduced in the social security system. Two of those cases constitute 16 and 17 year-olds and students. We have debated those cases today and I shall not take the House any further on that. Those are people who are discriminated against because of their age in one case and because of their occupation in another when other people of equal need are eligible for benefit.
§ The other case is the regional application of cash limits in the social fund which means that a particular misfortune which is eligible for benefit in Salcombe would not be eligible in Salford. I shall illustrate that point by one question which I am afraid is probably pertinent. If the Ravenscraig plant should be closed, would that be accompanied by an increase in the cash limit for the social fund budget for Motherwell? If that is the case, how soon would that occur and, if not, why would it not occur? If that were not the case, clearly there would be a discrimination involved here.
§ The noble Lord, Lord Boyd-Carpenter, provided us with a certain amount of exercise when the question was before us previously. He was much dismayed by the use of a broad general principle in litigation. As always the noble Lord gave me something to think about. He and I both come from 105 an English empirical tradition in which legislation has normally been specific. I like that tradition and I am at home in it. However, the strength of that tradition has always depended on the belief that the task of checking an Executive was one which fell to Parliament. This is a task which Parliament is now no longer as well fitted to discharge as perhaps it has been in times past. I need only mention the passage of Part I of the football membership Bill. It was Lord Justice Taylor and not Parliament who pointed out that that was impossible. That necessarily drives us back on the courts for providing checks on the Executive. They have to use wide general principles. I do not think that anything in this amendment is quite as wide or as vague a general principle as the doctrine used under Wednesbury in judicial review that the decision is so unreasonable that no reasonable Minister could have taken it. Nevertheless that is a doctrine which appears to be workable.
§ However—I believe the noble Lord knows this perfectly well—that is not where the main operative force of this amendment would come if it were incorporated in legislation. Parliament being sovereign may do whatever it likes. It might repeal this amendment. If a successor Parliament whom we cannot bind should wish to discriminate it may do so, but it would have to repeal this clause in express words. Therefore the effect of the amendment would be that if a future Parliament wishes to discriminate against any category of people in social security legislation it must flag the point for the attention of our successors by repealing this amendment. That is very useful. If our successors wish to discriminate we cannot stop them. We can ensure that they do so with their eyes open. I beg to move.
§ 9.15 p.m.
§ Baroness Turner of Camden
My Lords, I rise to support the amendment, to which I have put my name. As your Lordships will remember, the amendment was tabled in Committee when the Minister and the noble Lord, Lord Boyd-Carpenter, had some fun with the wording of the amendment. In particular they were concerned about the word "adequate". I have looked at Hansard since then and I do not believe that the Minister dealt adequately—if I may use that word—with the main thrust of the amendment, which, as the noble Earl has pointed out, is all about equality of treatment.
The wording of the amendment makes it quite clear that there should be no discrimination except on grounds of difference in needs. That wording is crucial. We are talking about meeting basic needs. As was pointed out in Committee and as the noble Earl has said again this evening, the wording is in line with with the proposition contained in the Social Charter, a charter which has attracted the support of all members of the EC except the UK Government. I know that reference to the Social Charter does not make the amendment more commendable to the Government because the Government do not like the Social Charter, although I believe that they may very well have to come to terms with it sooner or later. In the meantime the amendment sets out what surely ought to be the objectives of any social 106 programme: that a safety net should be constructed so that citizens may at least have their basic needs provided for when they are unable to support themselves effectively for whatever reason, and that that safety net should be provided without discrimination.
In moving the amendment the noble Earl made reference to various cases of discrimination which seem to this side of the House to breach the whole idea of equality on which we believe social provision and social programmes should be based. I supported the amendment in Committee and I commend it to your Lordships this evening.
§ Lord Boyd-Carpenter
My Lords, the noble Earl, Lord Russell, relieved my mind when he explained that this particular amendment derived from the Social Charter. That explains its woolliness. Indeed, I have often thought of the Social Charter, as I think of this amendment, in terms of the well-known advertisement from the clothing industry that there is no substitute for wool. I do not believe that if the amendment were included in the Bill it would make the slightest practical difference because it is so vaguely and imprecisely drafted that it would have no effect at all. What is an adequate level of benefits? What is adequate in one person's view is inadequate in another's. What is inadequate for most of us may be more than adequate for somebody else. We are trying to legislate and not to issue declarations of policy, and it seems to me that the legal effect of the amendment would be negligible. I cannot see that any government proposal could possibly be made ineffective on the grounds that it was alleged to be contrary to this proposed clause and therefore inadequate.
The same applies to the second half of the amendment. What is the criterion? There can be differences of need, but the question is: what is your view of what is a difference of need? In practical terms that is something which it is impossible to lay down in legislation because it depends upon opinion. The noble Earl, Lord Russell, and I may have genuine and sincere differences of opinion as to what are realities of need in particular cases.
Having said that, and having said that I believe that the effect of putting this amendment into the Bill would be nil, I am against putting it into the Bill because I very much object to clogging up our legislation with meaningless, well-meaning, long-winded statements of view like this. I very much hope that your Lordships now throw it out.
§ Lord Renton
My Lords, when I first read subsection (1), I said to myself, as I have said on previous occasions, "Long live the expression of principle". But it is no good having expressions of principle which are too vague and too uncertain in their effect.
I find great difficulty over various things here. For example, the principle is to apply to:every person residing in any part of Great Britain";but residing for how long? Surely there would have to be a qualification of residence, otherwise people would slip over from less fortunate countries and claim all our social security benefits, perhaps without having contributed much towards them.
107 I see that the amendment states that it is to apply,in any part of Great Britain".However, if we look carefully at the Bill, we find that Clause 18 is to apply to Northern Ireland and that a power is given in Clause 27 to make regulations, obviously within the terms of the Bill, for Northern Ireland. So why should there be discrimination against Northern Ireland in a statement which purports as a whole to be non-discriminatory?
On the question of age, we discussed earlier—I do not wish to go over the ground again—an amendment in respect of which it was maintained by the Government and agreed by the House that there were necessary provisions to be made in discriminating in favour of or against people of certain ages. I leave aside questions of sex and parentage because obviously those are two matters which are not likely to give rise to much difficulty. If we accepted nationality, we would be in the same kind of difficulty as I mentioned in relation to residence. As to occupation, I should have thought that it would need to be qualified by the word "lawful" because, alas, we know that there are some people in regular occupations which are not lawful.
I hope that I have said enough to show that there must be a doubt as to the wisdom of accepting an amendment on those lines.
§ Lord Hylton
My Lords, a number of intricate and drafting points have just been raised on the government side. However, I should like to urge the Government to take sufficient time to reply in some detail to the point raised by the noble Earl, Lord Russell, concerning regional cash limits on the social fund which I believe bear harshly on claimants in certain parts of the country.
§ Lord Henley
My Lords, when I responded to the amendment in Committee, I said that I was less than clear as to the intention underlying it. I think I can say that I am still less than clear as to the intention behind it.
My noble kinsman has said that it is an equal rights amendment and that it is based on Article 10 of the European charter. It may be of interest to the House to know that in that context the European Commission has formed an ad hoc group of officials, which includes a representative from this country, and has already highlighted a range of different approaches between member states in drawing up a set of common criteria relating to the question of what constitutes sufficient resources and social protection. Eight nations, including the United Kingdom, have been identified as satisfying those criteria.
The United Kingdom has a long history of social protection. We are pleased to work with other countries to enable them to benefit from our experience and to discuss with them the lessons that we have learnt from our experience to enable them to improve their position. However, we remain of the view that common legislation on topics such as minimum resources are inappropriate and unnecessary as member states are in the best position to recognise and meet the needs of the less well off.
108 I should also deal briefly with the question of the social fund and regional differences first highlighted by my noble kinsman Lord Russell and by the noble Lord, Lord Hylton. My noble kinsman raised the question of what might happen, for example, in the the event of the closure of Ravenscraig.
I think that I can only refer to our record, which is one of flexibility and responsiveness. For instance, we held back money in 1989–90 and we shall do so again in 1990–91 to deal with unforeseen and heavy demands falling on offices after some disaster or unforeseen circumstances. For example, we allocated about £170,000 to five offices in north London to cover additional costs arising from the arrival of large numbers of Kurdish refugees in the summer of 1989. We also provided extra money for our Rhyl office to cover applications arising from the recent floods, which the noble Lords will remember, in North Wales at Towyn. I think that that gives more than ample evidence to demonstrate the flexibility offered by the social fund.
My reasons for being unable to recommend acceptance of this amendment are unchanged from when I spoke last. As I indicated the last time, the question of what is "adequate" for a particular individual inevitably involves the exercise of subjective judgment and is not a yardstick which can be given legislative force. Pinning the right to a level of benefit which can be regarded as "adequate" effectively nullifies the clause and renders it meaningless.
When we last debated the clause, the noble Lord, Lord Carter, intervened and asked why we considered that the word "adequate" was acceptable in the National Health Service and Community Care Bill but not in this amendment. The noble Baroness, Lady Turner, again put that point and suggested that my response on that occasion was less than adequate. I hope that I can convince her otherwise on this occasion.
At Committee stage my noble friend Lord Boyd-Carpenter, in a very helpful intervention, commented that there is all the difference in the world between the Secretary of State having to satisfy himself that certain provisions are adequate, for which he is answerable to Parliament, and laying down in a statute that a particular level of benefit should be "adequate". Indeed, as the noble Lord, Lord Carter, himself pointed out on that occasion, every person will have different requirements.
The fact is that the use of the term "adequate" in that Bill was not of the Government's making. It was the desire of this House in an amendment that the word should be included, and the Government will, I am sure, be looking very carefully at that when it comes to be considered in the other place.
When I spoke on this clause in the previous debate, I explained why we have felt it right to devote such an unprecedented level of resources to the social security system. That is in itself a recognition of the obligation owed by the state to those of its citizens who have to live on limited incomes and depend on what the state provides. I commented on the wide range of needs which the social security system meets. I explained that our policies have been to protect the position of those most in need. I 109 explained how in many cases we have been able to go further and achieve improvements in the position of those dependent on benefits. I emphasised that one of the major objectives that we set ourselves in the major restructuring of the benefit system was to ensure that resources were most effectively targeted on those who need them most.
The reforms that we introduced in 1988 brought about a more flexible and responsive structure of income-related benefits which has enabled us to achieve that objective. The system of personal allowances and premiums has enabled us to target help effectively towards priority groups, reflecting the particular needs faced by those groups. I can only repeat the Government's view, that to attempt the assessment of individual needs in the way this clause would imply could have enormous administrative and financial implications.
I remain of the view that this clause would effectively undermine the very structure which has facilitated the achievement of those objectives. For once I do not agree with my noble friend Lord Boyd Carpenter, who said that the amendment would make no difference. I am afraid that it would make a difference. What it requires is nothing less than that all categories should be treated the same—pensioners, lone parents, disabled people, families, single people, students, people in trade disputes, people who leave work voluntarily, people who care for the severely handicapped, people who do not satisfy residence and presence conditions laid down for particular benefits, war widows and so on. To treat them in the same way for all benefits (as this clause would seem to imply) would be counter to all logic. To bring their benefit up to one, most favourable, level would be inordinately expensive and would not help those most in need.
The noble Lord said that there was discrimination against certain groups. We would be the first to admit that there are occasions of favourable discrimination. We discriminate in favour of some groups. The amendment of the noble Lord would presumably prevent that. Perhaps I may give some examples.
The House will know of the favourable discrimination in the preferential rates of the war widows pension and other war pensions. War widows receive such discrimination in recognition of the special circumstances of their bereavement. There is special help in the benefit system for lone parents in recognition of the extra costs that they may face in particular when working. In income support there is a special premium when working. In income support there is a special premium for lone parent families or lone parents. The first £15 of any part-time earnings are disregarded. In family credit lone parent families receive the same adult credit as two parent families and one parent benefit is totally disregarded when calculating their income. From October the lone parent earnings disregarded in housing benefit and community charge benefit will rise from £15 to £25 a week. There are the age premiums in income support. The noble Lord's amendment would render all those impossible.
My noble kinsman on earlier occasions complained that he thought I might say that it was 110 an unnecessary amendment. He came back to that again today. I repeat that it is worse than unnecessary. It is wrong and damaging. It would tie the hands of Ministers in a wholly unrealistic manner. As I indicated before, it could spell the end of differential disregards for different groups or for any of the entirely justified special arrangements for groups which apply under the present system. I should be very surprised if my noble kinsman wished to do that.
I hope that in the light of that explanation my noble kinsman will feel able to withdraw his amendment.
§ 9.30 p.m.
§ Lord Boyd-Carpenter
My Lords, before the noble Lord sits down, will he deal with one small point in reference to my observation? He referred to the position of war widows. But surely they are nothing whatever to do with the social security system. They are provided for under the Royal Warrant, which is quite distinct and separate. It would not be affected by this amendment.
§ Lord Henley
My Lords, I should certainly need to take advice on my noble friend's point. But certainly in relation to the other groups that I specified, we discriminate—we make no bones about it—in favour of certain groups. I have explained why we do so and which groups they are.
My noble friend may be right that war widows come outside the social security system because they come under the Royal Warrant. Whether my noble kinsman's amendment would affect them I do not know. I would have to take advice. I stand by the generality of what I said. We discriminate in favour of certain groups; and I see nothing wrong in that.
§ Baroness Turner of Camden
My Lords, before the noble Lord sits down, will he look at the text of the amendment in the name of the noble Earl. Lord Russell, and myself? The second paragraph states,or results in discrimination between categories of persons other than on grounds of differences in needs".In other words the amendment as phrased would meet the point that he has made.
§ Lord Henley
My Lords I am not sure that I accept that. I have received some advice. I refer to the point made by my noble friend Lord Boyd-Carpenter on war widows. War widows have special disregards under the income related benefits. They benefit therefore under the social security system. The noble Earl's amendment would not allow that.
§ Earl Russell
My Lords, I have been interested to see what a lively response the amendment has provoked. It encourages me to think that it may have been of some importance and was worth putting down. It appears to have ruffled so many feathers that it may have been rather useful.
I welcome what my noble kinsman said about European co-operation so far as it went. I also welcome what he said about the social fund contingency fund. So far as it goes—and I stress the qualification—that is good. It looks as though the 111 argument about the social fund is bound to continue. That may well be so. But it would have to go a good deal further in the direction indicated before it met the problems.
There was an amusing discrepancy between my noble kinsman and the noble Lord, Lord Boyd-Carpenter. The noble Lord, Lord Boyd-Carpenter, said that the amendment would make no difference. My noble kinsman in effect said that it would wreck everything. They cannot both be right.
I also wonder why, if the amendment is either so insignificant or devastating as the noble Lords suppose, it has proved so remarkably acceptable on the other side of the Channel. Does social security legislation become so desperately more difficult as soon as one has sight of the white cliffs? I do not see why that should be the case.
Throughout the debates on the Bill my noble kinsman has also expressed a great deal of dismay whenever he has caught sight of the word "adequate". I understand that; the word is obviously a grave reproach and I can see why it is liable to cause dismay.
I understand and engage with the points made by the noble Lord, Lord Boyd-Carpenter, about legislation by general principle. However, if we are 112 not to have the reform of Parliament—and it does not appear that we shall have that within the next year—this is the way in which we must go. In any constitution there must be a means of saying to an Executive power, "No, you can't do that". It is now becoming very difficult to do that in Parliament with any powerful effect. If it is not done in Parliament, it must be done in the courts, and there it must be done by general principle.
The US constitution is not meaningless. Nor is it the best way to go about making the provision; I prefer this way if we can make it work. However, if noble Lords will not support the changes which will make it work, they must support the approach by the general principle. They must have one or the other.
At the end of the day I have not had what I wanted; namely, an explanation as to why the Government believe that they are entitled to discriminate. Instead I have a silence on which I shall forbear to make a Johnsonian comment which might cause unnecessary effect, if offence. However, I heard what was said by the noble Lord, Lord Renton, about the effect of the amendment on Northern Ireland. I believe that he has a point and for that reason—and for that reason alone—I beg leave to withdraw my amendment.
§ Amendment, by leave, withdrawn.113
§ 9.45 p.m.
§ Clause 7 [Computation of additional pension for purposes of invalidity pension etc.]:
Baroness Turner of Camden moved Amendment No. 15:
Page 7, line 8, at end insert:
§ ("(4) Before the foregoing provisions of this section come into force, the Secretary of State shall lay before both Houses of Parliament a report on—
- (a) the proportion of persons receiving an additional invalidity pension who are also receiving sick pay under an employer's scheme;
- (b) the proportion of such persons who are not receiving such sick pay because of restrictions imposed by the employer's scheme and the nature of those restrictions;
- (c) the extent to which such sick pay and invalidity pension together replace the earnings lost through sickness;
- (d) the expected maximum duration of such sick pay;
- (e) the extent to which such sick pay is expected to be adjusted to take account of increases in earnings or prices;
- (f) the proportion of employees who, if they fell sick in the immediate future and remained unable to work for more thin 6 months, would become entitled to such sick pay.").
§ The noble Baroness said: My Lords, in Committee I said that Clause 7 was probably the biggest cost-cutting provision in the Bill. It abolishes the earnings-related invalidity pension established with all-party support in the Social Security Act 1975. The reason given is that the Government believe that to continue will inhibit the growth of occupational cover and also, through constraints inevitably imposed on their ability to do more for those with no such entitlement, widen yet further the gap between those who have never been able to work and those who have.
When we raised the matters in Committee, pointing out that not everyone was covered by an occupational sick-pay scheme, the Minister said:
Over the last 15 years the growth of occupational sick pay schemes has been impressive. Nine out of ten employees are now covered for short-term sickness. Just under 60 per cent. … [have] longer-term cover … I believe that a tighter employment situation in the 1990s will lead to employers continuing to develop sick pay packages to attract people into their employment."—[Official Report, 21/5/90: col. 682.]
Of course, that would be admirable if it happened but there is no guarantee of that.
§ Moreover, coverage of such schemes tends to be patchy. Many of them cover only staff employees; manual workers are excluded. Part-time employees, mostly women of course, also tend to be excluded. Almost all occupational sick pay schemes have time limits, unlike the national insurance invalidity benefit which continues while it is needed or is replaced by retirement benefit. Many schemes do not cover recently-appointed employees. There is often a service requirement. Coverage is particularly low in hazardous industries and small firms. The construction industry is a case in point. Those are the industries where accidents resulting in prolonged disability are most likely to occur.
§ In view of the Government's reliance on occupational schemes filling the gaps left by the withdrawal of that benefit, it seems fair and reasonable to ask, as the amendment asks, for steps 114 to be taken to assess the degree to which sick pay from an employer's scheme is actually doing that. That is why the amendment spells out five categories on which the Government shall report before putting the proposals in this clause into effect. It will be seen that they cover some of the problems to which I have referred such as duration, whether the sick pay is adjusted to take account of increases in earnings or prices, the proportion of employees covered, and so on.
§ Finally, during the debate in Committee I suggested to the Minister that it might conceivably be possible to introduce some form of contracting-out arrangement if the Government are determined to proceed and believe that occupational schemes are fully able to fill the gap. I have not drafted such an amendment at this stage because I understand and appreciate that it would be very complicated to draft and would probably require fairly extensive consultations if the Government decided to proceed with such a scheme. However, when I made the suggestion I received the impression that the Minister did not entirely turn it down. Therefore, I should be interested to hear whether he has had further thoughts on the matter since our Committee stage.
§ In the meantime, if that or something similar is not possible, my amendment provides some sort of brake and safeguard before the scheme proposed in Clause 7 proceeds. I beg to move.
§ Earl Russell
My Lords, I support this amendment. Here we have a saving of some £350 million and, as a Parliament, it is proper that we should want to know what is happening to that money.
I agree with and shall not elaborate on the points made by the noble Baroness, Lady Turner of Camden, about occupational schemes. There is much to be said in favour of them but their disadvantage is that they are inherently patchy. If your Lordships look at Mr. Frank Field's book on the underclass, he stresses very strongly how much that is made up of people who do not benefit from such schemes. If they are relied on, there will be a group of people slipping through the net who are not properly provided for, as the noble Baroness outlined. They will be cases of quite considerable hardship.
My other reason for misgivings about relying on an occupational rather than a state scheme is that I am worried about the element of tax on industry in this sort of proposal. I quite appreciate that there is no such thing as a free lunch. Somebody must pay if we are to provide pensions for any sort of disability. The question is whether the cost should fall primarily on the taxpayer or on the industrial firms. It is a very competitive world industrially and any welfare measures which fall specifically on a firm will put up the price of its goods. Mr. Iacocca recently pointed out that the cost of health insurance adds 700 dollars to the price of a Chrysler car. I wonder whether the best way to deal with our balance of payments deficit is to put up our industrial costs, and whether it would not be more equitable, efficient 115 and better for our national life to share the costs around in the widest possible way—that is, by letting them fall on the taxpayer.
It is true, as GATT rules remind us, that you may not subsidise your industry. However, just as accountants tell us that we need not arrange our financial affairs so as to attract tax, so we need not arrange our industrial affairs so as to attract costs. I am happy to support the amendment.
§ Lord Henley
My Lords, as the noble Baroness explained, she tabled an identical amendment to this at Committee stage. This debate is therefore a re-run of the one we had on that occasion.
I appreciate that the reasoning behind the amendment is to try to establish with greater precision the extent of the growth of occupational sick pay for the long-term sick. But the very detailed information which the Government would need to collect to meet the requirements of the amendment would entail further extensive research and would not in our view be a sensible use of resources.
As the noble Baroness is aware, in 1988 the Department of Social Security commissioned a study into occupational sick pay cover by IFF Research Ltd. Its report filled a huge gap in our knowledge—the last similar study was in 1974—and showed that there had been a significant growth in occupational sick pay cover over the intervening 15 years. Over 90 per cent. of employees now have short-term cover and just short of 60 per cent. work for employers with long-term cover. That is three times as many as in 1974.
The noble Baroness, both today and during Committee, quoted figures from the report which showed that coverage is still patchy in some industries and that some employees who work for employers providing long-term sick pay cover may not always satisfy the qualifying conditions of the employer's scheme. I fully accept that there is still some way to go before we have reached the development of occupational sick pay that we should all like. But an increase in long-term cover from 20 per cent. to approaching 60 per cent. is no bad start.
The noble Baroness, in mentioning certain groups which she felt were not adequately covered, mentioned the case of women in the workforce. As I said at Committee stage, 61 per cent. of the female workforce are now covered, which compares favourably with only 54 per cent. of the male workforce. One should like both to improve, but the female workforce is at present covered better than the male workforce.
There is every reason to believe that the impressive growth in coverage over recent years has by no means peaked and will continue to improve. The Government will do all they can to encourage that, and I am sure that both employers and employees will play their full part. As I said during Committee stage, I believe that a tighter employment situation in the 1990s will in itself be conducive to the continued development of these schemes.
116 The noble Baroness asked me during Committee—she referred to it again this evening—if the Government would look into the possibility of introducing some form of contracting-out scheme so that employees not covered by occupational sick pay would continue to retain their title to additional pension under the present rules.
We have considered the noble Baroness's proposal, but I have to tell her that in our view there would be a real danger that that would merely inhibit the growth in occupational schemes which we are currently seeing. Some schemes might limit sick pay provisions to less than additional pension entitlement, while some employers might decide against the introduction of occupational sick pay altogether. That would be contrary to the objectives as set out in The Way Ahead. Moreover, the increased expenditure would seriously affect our proposals for improving provision for the more vulnerable among the disabled population.
In conclusion, I should like to re-state that although the growing coverage of occupational sick pay provides an important and vital backdrop to our proposals for additional pension it should not be viewed in isolation. This measure is a major element in our proposals for restructuring the benefits available to the disabled. The ever-increasing cost of additional pension paid with invalidity pension—if no changes are made it will increase from a current £450 million to £1.6 billion within 10 years—is only serving to widen the gap between those who have worked and those who have not. As your Lordships know, rather than continue on that path we propose instead to concentrate our resources on two new disability benefits—the disability allowance and disability employment credit—which will give major additional help to disabled people. The Government believe that that is the right approach.
The information requested in the noble Baroness's amendment could only be collected at additional time and cost, which would delay the Government's whole disability package. It is not in our view the sensible or right way to proceed. I hope that the noble Baroness will withdraw the amendment.
§ Baroness Seear
My Lords, the noble Lord did nothing to reply to the very important point made by my noble friend as to who should bear the cost of these pensions—whether it is an appropriate burden to place on industry or whether it is something which is better carried by the taxpayer.
The Government's whole trend is to push every possible payment on to industry. I wonder whether they have worked out the implications of that. For example, many industries which are labour intensive will have to struggle to maintain their position. They are not highly profitable. If one places additional burdens on those labour-intensive industries it will be far more difficult for them to survive. The case for making it a taxpayers' burden rather than an employers' burden needs discussion and I am surprised that the noble Lord has not responded in any way.
§ Lord Henley
My Lords, I take the point made by the noble Baroness. Of course we do not want to overburden industry with such expense. However, we have seen a growth over the past 15 years from some 20 per cent. to 60 per cent. in long-term coverage. In terms of short-term sick pay it is about 90 per cent. If over these past few years, when there has not been the tighter employment market, industry has been able to expand from 20 per cent. to 60 per cent. I see no reason why that progress cannot continue.
§ Baroness Turner of Camden
My Lords, the noble Lord will not be surprised to learn that I regard his response as extremely disappointing. He has not adequately dealt with the point made by myself and the noble Earl, Lord Russell, that there still remains a large proportion of the working population—perhaps what is now known as an underclass—without any kind of occupational cover. The noble Baroness, Lady Seear, made the point about the burdens being passed on to industry and commerce if everyone is now to be urged to introduce occupational pension schemes and that we would not noticeably be better served by making it a further requirement on the taxpayer or the community as a whole.
I have to say that, despite the reference to the improvement in the disability package, none of the organisations looking after the disabled that have been in touch with me—the Disability Alliance, RADAR, and so on—welcomes the abolition of the additional invalidity pension. Indeed, I have received extensive briefing from the disabled organisations, which are very concerned at what they see as a levelling down rather than a levelling up. There is great concern about what may happen, particularly to the poorer element of the working population, the less well paid and the people in transitory employment who become disabled and who then do not qualify for an occupational sick pay arrangement.
I do not intend to divide the House at this stage of our proceedings because it is late but I must record for the benefit of Hansard that I find the Minister's response extremely disappointing. Having said that, I ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Baroness Turner of Camden moved Amendment No. 16:
Page 7 line 8, at end insert:
("(4) The Secretary of State shall lay before both Houses of Parliament a report on the expected long-term increase in the balance of the national insurance fund resulting from the provisions of this section and his proposals for applying that increase for the purpose of improving benefits for people with disabilities and those caring for them.").
§ The noble Baroness said: My Lords, I do not intend to spend much time on this amendment because to some extent I have already made the case in speaking to Amendment No. 15. It is clear that the Government will save a substantial amount of money under the provisions of Clause 7. In fact, a figure of £350 million has been mentioned and 118 various estimates are floating around. Certainly a substantial amount of money will be saved once the clause is in operation.
The object of the amendment is to ensure that the money saved is to some extent devoted to the welfare of the disabled, and that seems to me to be the right approach considering that the money will have been saved on additional pensions for the disabled. The intention of the amendment is that the money should be applied,
for the purpose of improving benefits for people with disabilities and those caring for them".
That seems to me the least that should be done in the light of the decision of the Government to do away with the benefit introduced, as I said in moving an earlier amendment, in 1975 on an all-party basis. I beg to move.
§ Lord Henley
My Lords, this is another amendment which we discussed in Committee and I can only repeat what I told the noble Baroness on that occasion.
The Government have not sought to hide the expenditure effects of their proposals. My right honourable friend the Minister of State for the Disabled provided a very detailed Written Answer in another place on 26th January which set out our estimates of the savings and costs of all the proposals in The Way Ahead up to the year 2025–26. I would, however, stress that when referring to the Answer your Lordships would do well to note the cautionary words at the end to the effect that considerable margins of uncertainty must inevitably attach to figures that go beyond the end of the century.
As I pointed out when we discussed the matter in Committee, our proposals will lead to increases in expenditure on social security for the sick and disabled in every year until the end of this century. Expenditure on the long-term sick and disabled is projected to go up from £8.3 billion to about £12 billion by the year 2000.
No government could look with absolute certainty to future decades and commit future governments to specific benefit initiatives so far in advance. It will be for the Secretary of State of the day to decide on the priorities at that time. The report proposed in the amendment would therefore be a pointless exercise and I hope that the noble Baroness will withdraw her amendment.
§ Baroness Turner of Camden
My Lords, the noble Lord will not be surprised to learn that I am disappointed with that response. It is quite clear that money will be saved by implementation of the clause and the Government do not intend to devote the money saved to further benefits for the disabled and their carers, as is proposed in the amendment.
There is not much point in dividing the House on the amendment. It is fairly late at night and we have a thin House. I therefore beg leave to withdraw it, although I repeat my disappointment with the response.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 17 not moved.]119
§ Baroness Turner of Camden moved Amendment No. 18:
§ After Clause 7, insert the following new clause:
§ ("Conditions of approval of occupational and personal pension
§ The Chancellor of the Exchequer shall amend the general conditions of approval of occupational and personal pensions schemes by the Inland Revenue so as to permit provision of payments out of any such scheme of an amount related to a person's accrued or prospective retirement pension under the scheme, such payments to be made throughout any period in which that person is entitled to the payment of an invalidity pension from the National Insurance Fund and to cease at the end of that period.").
§ The noble Baroness said: My Lords, the purpose of the amendment is to follow on from the discussions in relation to Clause 7. The Government have made it quite clear that they intend to go ahead with their proposition to do away with the additional pension because they believe that the gap can be covered by the provision of occupational sick pay arrangements. The object of the amendment is to cope with that situation.
§ I shall not make out the case that I have already made in regard to the entire issue of additional pensions. On this side of the House we do not believe that there is any guarantee that the gap will necessarily be filled by occupational provision. However, the idea of the amendment is to nudge occupational schemes in the direction of providing payments out of pension schemes in cases where an individual is entitled to an invalidity pension from the National Insurance Fund. The intention is to try to fill the gap that inevitably occurs when there is disability and no provision is made for it.
§ The wording of the amendment is careful. We do not say that occupational schemes have to do so. We are saying that general conditions of approval of occupational and personal pension schemes by the Inland Revenue should be amended so as to permit the provision of payments out of any such scheme of an amount related to a person's accrued or prospective retirement pension under the scheme. It is entirely permissive. Such payments would be made throughout any period in which that person is entitled to a payment of invalidity pension. This is a sensible provision in view of the Government's view that occupational provision will eventually replace the additional pension which is being removed under Clause 7. I beg to move.
§ 10 p.m.
Baroness Darcy (de Knayth)
My Lords, as I added my name to the amendment—by mistake it has been added to the next amendment—perhaps I may support the noble Baroness warmly but briefly as she is such an expert on the subject and has reviewed the case for the new clause so clearly and compellingly.
The proposed abolition of the earnings related invalidity pension has caused widespread concern to disability organisations, as the noble Baroness, Lady Turner, said. Replies to Parliamentary Questions in the other place showed clearly that the main purpose of occupational pension schemes is for permanent retirement, and they in no way meet 120 the needs of those who may become disabled in mid-career and who may be able to return to work after two or four years or whatever.
If the Government believe in occupational pension schemes, and they have shown clearly that they do, if they abolish the earnings related invalidity pension they have an obligation to ensure that occupational pension schemes are encouraged fully to meet the needs of those who become disabled during the course of their working life. The new clause, as the noble Baroness said, is a small step in the right direction. I hope that the Minister will be able to say something encouraging on the issue.
§ Lord Henley
My Lords, as the noble Baronesses have explained, the amendment would require the Government to amend the tax rules for occupational and personal pension schemes to allow them to pay a pension to persons in receipt of invalidity benefit.
I should first make it clear that it would not be appropriate to change the tax rules for personal and occupational pensions in that way. Those rules exist primarily to ensure that the generous tax privileges enjoyed by approved schemes are used to provide an income in retirement. The tax rules are therefore concerned only with the limits on the maximum tax privileges contributions or benefits that may be paid.
That does not, of course, mean that the tax rules prevent pension schemes from providing for early payment of pensions. If the scheme trustees or managers are satisfied that a person can no longer carry on working, they may pay an incapacity pension, and a number do so. It is for the trustees to set their own criteria for determining incapacity: there are no tax approval conditions covering that point. The trustees' requirements for granting incapacity pensions may not therefore coincide precisely with the conditions which qualify a person to receive invalidity benefit.
Imposing requirements on the type or amount of benefits that schemes must provide is not proper to the tax rules and would fall to a Social Security Bill, should it be decided that that was desirable; but it is not a course that the Government would wish to follow.
It is important to remember that occupational and personal pension schemes are voluntary arrangements. No employer is forced to establish a pension scheme for its workforce, nor to provide particular amounts or types of benefits. Those benefits offered by pension schemes, or for which a person contributes under a personal pension scheme, reflect what can be afforded.
The new clause would allow a person in receipt of invalidity benefit to draw upon his or her retirement fund. The inevitable result would be to diminish the money set aside to provide for security in old age. Some employers may be prepared to make good that loss to the retirement fund, but that will not always be the case; and in the case of personal pension schemes, the loss will inevitably be a permanent one. It would also be wrong for the Government to force an increase in the employer's costs in this way.
I appreciate that the noble Baroness may have been motivated to move the amendment by the 121 Government's proposals to curtail future entitlement to additional pension with invalidity benefit, but I cannot accept the new clause.
As I have already made clear on previous amendments this evening, the Government will continue to encourage employers to introduce and enhance occupational sick pay schemes, thus building on the significant growth in those schemes in recent years; but we do not believe that statutory requirements should be imposed in the way proposed in the noble Baroness's new clause. In the light of that explanation, I hope that the noble Baroness will feel able to withdraw the amendment.
§ Baroness Turner of Camden
My Lords, I thank the noble Lord for his explanation of the Government's position. Of course I understand that the main objective of pension schemes is to provide for an income in retirement. That point is not in dispute. However, a number of pension schemes already provide for an early pension where there is sickness or disability. All that my amendment sought to do was to nudge schemes in the direction of perhaps making this provision if they did not already do so. That why the wording is entirely permissive:so as to permit provision of payments out of any such scheme".However, in view of the explanation and the lateness of the hour, I do not intend to press the amendment this evening. I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 19 not moved.]
Lord Carter moved Amendment No. 20:
After Clause 7, insert the following new clause:
§ ("Review of social security provision
§ The Secretary of State shall review social security provision for chronically sick and disabled people and shall lay a report on his review before Parliament by 31st March 1991.").
§ The noble Lord said: My Lords, the purpose of this amendment is to ensure that the Secretary of State should lay before Parliament by March next year a report on the social security provision for chronically sick and disabled people. We feel that such a clause is important at this time because of the effects on disabled people of the 1986 Social Security Act, the shortcomings of the OPCS surveys which are now well known and the lack of meaningful consultation with the disability organisations on this Bill and on the White Paper, The Way Ahead. There is also the fact that this Bill makes straightforward cuts in disability benefits—notably the abolition of the additional pension and the abolition of the reduced earnings allowance.
§ We know that April 1988 saw the biggest changes in social security since the war. There was much concern during the passage of the Bill that disabled people would lose out. There has been no assessment of the effects of the Act on disabled people. There has been the scrapping of the domestic assistance payments; the move from flexible additional requirements payments to flat rate disability premiums and the move from one-off payments for essential items to the cash limited social fund, where payments are discretionary. Those are some of the main changes which adversely affect disabled people.122
§ We feel that the major problems we face with the White Paper and the Bill on the OPCS findings are not only that the OPCS greatly under-estimated the costs that some severely disabled people face but fundamentally the survey was commissioned before the effects of the 1986 Act. This was pointed out at the time. The disability organisations estimate that at least 1 million disabled people have lost out because of the 1986 Social Security Act.
§ Your Lordships will be aware of the findings by DIG, the Disabled Income Group, which were published: Not the OPCS in 1988 and more recently Short Changed by Disability. At least the surveys document the extra expenditure resulting from disability. They show that this is much higher than the OPCS estimated. For example, the survey by DIG discovered that the most severely disabled people needed not far short of £90 per week compared with the OPCS estimate of about £12 per week as the extra cost of disability. The survey suggested that one in three disabled people in the sample admitted that they go without food from time to time because they cannot afford it. One in three of those questioned experienced continual debt and deep dissatisfaction with their financial lot.
§ When the OPCS surveys were first commissioned—and the Government should have credit for commissioning them—the Minister responsible for the disabled at the time. Mr. John Major, said that the results of the surveys were expected to be published in 1988 and would provide the evidence for a comprehensive review of benefits for long-term sick and disabled people. Of course we did not receive that comprehensive review but simply had the White Paper which was followed within a few days by this Bill.
§ The Minister must be aware of the deep sense of anger and frustration among disabled people and their organisations regarding the lack of consultation in producing the White Paper and the failure to implement the promise given by Mr. John Major of a comprehensive review of benefits. The amendment seeks to place a duty on the Secretary of State to conduct such a review and report to Parliament. I beg to move.
§ Lord Boyd-Carpenter
My Lords, this amendment asks for two unnecessary provisions. The first is for the Secretary of State to do what he would do anyhow. Any Secretary of State for Social Security will review the various benefits which it is the duty of his department to administer the whole time. Imposing a statutory duty on him to do so has no practical effect whatever.
The second provision demands that he should lay a report before Parliament. That sounds plausible but it ignores the fact that any Secretary of State is responsible the whole time to Parliament and he or his colleagues have to answer questions put in either House of Parliament on any aspect of his administration. The Opposition in either House can always arrange a day to debate these matters. It is therefore wholly unnecessary to put into the Bill a provision providing for a statutory review, the two aspects of which will, as I have said, be operated in any case.
§ Earl Russell
My Lords, the noble Lord, Lord Boyd-Carpenter, is of course correct as far as he goes. However, I do not think he has answered the underlying purpose of this amendment. It is perfectly true that review is always taking place. However, some reviews are a great deal more serious, comprehensive and substantial than others. The OPCS surveys are often mentioned by Ministers in this House as a reason for not doing anything yet. Those surveys have built up a large body of expectation. I believe the noble Lord, Lord Boyd-Carpenter, knows perfectly well that to build up a large body of political expectation that one is going to do something and then not do it may be rather unwise. That is the real point behind this amendment.
§ Lord Henley
My Lords, I am most grateful to my noble friend for his comments. It is now five years since the Government commissioned the Office of Population Censuses and Surveys to carry out a major survey of the circumstances of disabled people. I know that the noble Lord, Lord Carter, does not seem to think much of that survey. As has frequently been pointed out to us, that is a considerable length of time in the lives of many of these disabled people who may or may not be receiving some of the current range of disability benefits.
I quite understand that the noble Lord may argue that after five years of waiting for the comprehensive findings of those OPCS surveys he feels he can wait another year for the Government to conduct a review of existing benefits, and then produce a report. But I think that we must strike a balance between the desire for further consideration of our proposals and the need to see the Government act urgently on the findings of these reports. We would, I think, have been open to quite justifiable criticism if our sole response to the receipt of the six reports had been to say, "We shall come back to you in 18 months' time (or more) with our conclusions to see what all this means for the benefit system".
The noble Earl, Lord Russell, said that the OPCS surveys were used as an excuse for doing nothing. However, he now suggests that we should use the amendment of the noble Lord, Lord Carter, as an excuse for doing nothing for even longer. That seems quite extraordinary.
I recognise of course that noble Lords will differ in the interpretation they put on the findings of the OPCS reports. That is why we have looked and will continue to look with particular interest at the comments of Members of this House, and of those organisations with experience in this field, and at other smaller surveys which some of these bodies have commissioned.
But the prime lessons which we have drawn from the OPCS findings are, I think, not ones which we needed a full-scale formal review to establish. In particular, I think it shines through that much more attention needs to be given to promoting the independence of disabled people who wish to work and who, under the current arrangements, have no incentive to do so. Quite clearly we also need a 124 benefit structure which addresses itself to the needs and circumstances of disabled people, in particular those who have been disabled from early in life and have been deprived of the opportunity to benefit from the contributory system. Equally clearly there are people under pension age who need more help with the extra costs of their disability than they are currently getting and who are simply at the moment not qualifying for mobility allowance or attendance allowance.
We have set out the fundamental lines of our proposed response to the OPCS reports in The Way Ahead. The noble Lord should not fear that we are intent now on simply pressing ahead and ignoring his and others' comments on these proposals. But as it is we have set ourselves a deadline which is now less than two years off for the introduction of fully worked up new benefits precisely so that we have the time to make sure that these benefits will be smoothly delivered, will be widely known about and will have any rough edges knocked off them by the comments that the noble Lord and others will no doubt wish to make, as we work up the details in the light of those comments. To delay the essential, detailed work for another year and hence effectively to delay for at least a year the introduction of new benefits which will direct much-needed new assistance to new groups of disabled people would be unforgivable. In the light of the assurance that we shall continue in good faith to consider all the comments made by the noble Lord and others and all those groups with expertise in this field on our proposals as we work them out, I hope that the noble Lord will feel able to withdraw his amendment.
§ 10.15 p.m.
§ Lord Carter
My Lords, the noble Lord, Lord Boyd-Carpenter, said that the amendment was unnecessary. Would that it were so. The Minister referred to the good faith of the Government. I have to disappoint him. The Government are not trusted by the disability organisations working in this field. We had the OPCS survey. The message was that we should wait for OPCS. We then had the White Paper, without any consultation with disability organisations working in the Field, and we had the Bill within days of the White Paper. There was the promise of an independent review, then an internal review, then no consultation at all, the White Paper and then the Bill.
The OPCS survey was fine so far as it went. It provided some very useful information. Those fully worked-out proposals helped 8,000 people out of a total 6 million. We all know the real answer—there has been a Treasury victory over the results of the OPCS survey.
At this stage in the proceedings I do not propose to divide the House, but I have to tell the Minister that the disability organisations and disabled people do not feel able to place their trust in the Government in this matter. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 21 to 25 not moved.]125
Lord Henley moved Amendment No. 26:
Page 3, line 28, leave out subsection (2) and insert:
("(2) In Schedule 20 to the principal Act (glossary of expressions), the entry relating to "entitled" and cognate expressions—
§ The noble Lord said: My Lords, this is a minor technical amendment. I beg to move.
§ On Question, amendment agreed to.
§ [Amendments Nos. 27 and 28 not moved.]
Lord Henley moved Amendment No. 29:
Page 8, line 39, leave out subsection (5) and insert:
("(5) Paragraph 48 of Schedule 10 to the 1986 Act shall have effect, and be taken always to have had effect, as if it had originally been enacted with the amendment made by subsection (4) above.").
§ The noble Lord said: My Lords, this is again a technical amendment. I beg to move.
§ On Question, amendment agreed to.
§ [Amendment No. 30 not moved.]
§ Clause 12 [Late claims for widowhood benefits where death is difficult to establish]:
Baroness Blatch moved Amendment No. 31:
Page 10, line 6, leave out ("that subsection") and insert ("subsection (1) above").
§ The noble Baroness said: My Lords, this is a minor drafting amendment intended to clarify the wording of Clause 12. I invite the House to accept the amendment. I beg to move.
§ On Question, amendment agreed to.
Lord Carter moved Amendment No. 32:
Page 11, line 3, at end insert:
("(6) Regulations may provide that any of the provisions of this section shall apply subject to prescribed modifications where a man claims a benefit, entitlement to which depends on whether or when his wife has died.").
§ The noble Lord said: My Lords, the amendment deals with what appear to be two anomalies in the Bill. Clause 12 allows for late payment of benefits to widows where there is either delayed discovery of the husband's body or a claim arising from the presumption of death where the husband's body has not been discovered. The intention of the amendment is to discover, first, whether it is entirely clear that all the benefits to which the widow would otherwise have been entitled can be claimed as a result of the operation of Clause 12. In other words, is a widow who will receive the benefits as a result of Clause 12 in exactly the same position as a widow in the more normal situation where there is no delay in the discovery of the husband's body? Secondly, why is there an invidious distinction in the Bill between widows and widowers? In these days of equal opportunities and separate taxation, surely all surviving spouses should be treated equally. I beg to move.126
§ Baroness Blatch
My Lords, Clause 12 is a provision which relates specifically to widows. The amendment seeks to extend the effect of the provision to widowers. In doing so it reflects, in part, an Opposition amendment which was put down in another place and was subsequently withdrawn after debate.
It may be helpful if I give a brief indication of the reasons behind this rather unusual but wholly beneficial provision. We have been concerned about the benefit position of a small number of widows who claim benefit late through no fault of their own. The type of case that we have in mind is where the widow's claim is delayed for more than 12 months because her husband has disappeared and there is a lengthy delay—possibly some years—in the discovering of his body, or indeed if his body is not found, where she has to rely instead on the presumption of death provisions. In such a case, Clause 12 will enable arrears of benefit to be paid all the way back to the date of widowhood—subject of course to the offset of any other benefit received during the period—instead of being limited to a maximum period of 12 months as at present.
This wholly beneficial provision, following as it does the improvements which we introduced in the 1989 Act for women widowed before April 1988, is further indication of our commitment to improving the benefit position of widows.
I turn now to the question raised by this amendment; namely, that of extending the provision to widowers also. On the general principle of whether provision should be made by way of a "widower's benefit", current EC law provides that survivor's benefit is exempt from equal treatment legislation. We have consistently argued that we see no merit in introducing a universal state insurance benefit for widowers on a par with those currently provided for widows. We repeated that view recently in the Government response (Command Paper 1038) to the report of the Select Committee of this House. To extend existing benefit provisions for widows to widowers would cost in the region of £300 million a year. The available evidence indicates that widowers are more likely to have higher earnings than widows and are less likely to have dependent children. As a consequence, we have made it clear to the Commission that the equalisation of survivor's benefit should be removed from the third draft directive entirely.
It follows in relation to this new provision, for the reasons I have already outlined, that there has never been any intention to extend it beyond the benefit payable to widows. We have sought to make a significant improvement in the benefit provision for a small number of women widowed in particularly unfortunate circumstances. We see no justification in extending the provision to widowers as well.
In response to the question which the noble Lord, Lord Carter, asked about the right of widows to all other benefits, I am able to give him an absolute assurance that that is so. In the light of that explanation, I hope that he will feel able to withdraw his amendment.
§ Lord Carter
My Lords, it seems to me that the Government's attitude is like the attitude towards the housemaid's baby: they do not mind dealing with the problem so long as it is a small one. I understand the point about the cost. We understand why that is the reason the Government will not extend the provision to widowers. I am grateful to the Minister for her reply. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 13 (Liability to maintain dependants]:
Earl Russell moved Amendment No. 33:
Page 11, line 4, at beginning insert:
("( ) In section 22 of the 1986 Act, at the end of subsection (8A) there shall be inserted the words "and shall provide for £10 of any payments made to that person in any week by another person for the maintenance of that other person's child or children to be disregarded." ").
§ The noble Earl said: My Lords, this amendment is offered in no unfriendly spirit. We have sympathy with the proposals that the Government offer in the clause. We put forward the amendment in the hope that it might perhaps make them work better.
§ The amendment is in effect about incentives. The Government frequently talk about incentives. They do not only apply above £30,000 a year; they are needed and useful at all economic levels. It is particularly important to get the new system up and running that there should be some incentive to both the caring parent and the absent parent to make use of the system.
§ Among caring parents, there will obviously be a certain amount of reluctance to go and get maintenance orders and set the system in operation. It may be a matter of pride; on occasion, it may be a matter of shame. In those cases where a relationship has broken up in acrimony, it may simply be a matter of a bad smell, and of the parent not wanting to go anywhere near the issues. There may be a weariness or an anxiety about the sheer amount of hassle involved in going through legal procedures which, in an emotive area such as this, are not always pleasant, and are certainly time consuming and burdensome. I regret to say that there are also cases in which single parents feel a genuine fear of using legal proceedings to recover maintenance. I regret that very much but since it is so we have to live with it and try to deal with it.
§ It is important, if the caring parent is to have an incentive to name the father and allow proceedings to be brought, that she or, as it might be, he (the caring parent may be male on occasion) should be somewhat better off as a result of doing it. The effect of this amendment would be to allow a £10 disregard for whatever is recovered as a maintenance order. So in effect if it is put through one is £10 better off. If one is no better off at all, why bother to do it? Why should one bother to name the father and go through it all?
§ There is also the question of making the system work so far as the absent parent is concerned. If he were co-operative, the absent parent would not have put us in this position in the first place. He would not in fact have started from here in the first place. 128 It is only when the absent parent is unco-operative that the machinery which the Government propose in the clause is in the least necessary. So we have to be able to convince the absent parent that his children will be better off if this machinery is used. Again, the amendment would make it possible to do that.
§ The absent parent may perhaps not be consumed with zeal for saving public money. If all that happens by his shelling out is that the Treasury is saved money, he may try to evade the system. There is a very considerable problem of enforcement of maintenance orders, as I am sure the noble Baroness knows very well. Too much recalcitrance can clog up the system of enforcement. So, again, it is important to assure the absent parent as well as the caring parent that the children will be better off if one goes through the complicated procedure of obtaining a maintenance order.
§ The procedure that we recommend in this amendment is used in Australia and the United States. In both those countries it is regarded as essential to the smooth working of the system. Because we hope that when it comes in the system will work, we want to have this put into effect. The issue of cost will come up but there is no saving to public funds in the clause if it does not work and people do not use it. With this amendment we suggest that a small expenditure may well result in a very much larger saving and that the objective of achieving a saving will not be accomplished at all unless a little bait is put into the task of catching it. I beg to move.
§ Lord Carter
My Lords, the noble Earl has explained the background to the amendment so well that there is little to add. It is true that there needs to be an incentive: in this case that one is £10 better off having the maintenance order than not having it. We believe that a disregard will also be an incentive for the father to pay if he knows that his children will thereby be better off. There is also the longer term benefit of encouraging a lone parent to claim maintenance. There will come a time when the lone parent may be able to seek employment. Having a maintenance order with this disregard may make all the difference as to whether the lone parent can afford to take that job, or find that the family is poorer than if it stayed on benefit, having paid the child care costs.
§ Baroness Blatch
My Lords, this amendment was raised and debated at the Committee stage of the Bill. It proposes that £10 of any maintenance payments made in any week in respect of one or more children should be disregarded when calculating income for benefit purposes. This will be a change from current practice whereby the full amount of maintenance paid is taken into account when assessing the amount of benefit payable.
I listened carefully to the arguments put forward by the noble Earl, Lord Russell, and the noble Lord, Lord Carter. I am pleased that they support our objective to increase the amount of maintenance recovered from liable parents.
129 The noble Earl put forward the view that a maintenance disregard would aid the Government in that objective. I welcome the intention behind the amendment. However, I am not persuaded that a £10 disregard would have only a marginal cost. A large number of absent parents would need to start paying maintenance to offset the significant extra benefit costs. In any event, the Government are of the firm belief that it is right that absent parents should meet their responsibilities for their families so far as they are able.
Mention is sometimes made of the Australian and American arrangements. The Government are aware that a maintenance disregard is part of those systems which we are examining as part of our wide-ranging view of the whole maintenance system. As yet no decisions have been made.
It is important to remember that absent parents have a clear duty to maintain their families. The fact that so many do not do so—three-quarters of lone parent: families are dependent on income support, the absent parent paying no maintenance—results in substantial benefit expenditure. Income support for lone parent families costs £1.9 billion a year. Absent parents should do more to meet their responsibilities. They should not leave it to the benefit system.
A maintenance disregard would clearly benefit some lone parent families receiving benefit. But it would mean, for instance, that one lone parent family on income support would be better off than another family whose circumstances were the same in every respect except that maintenance was being paid in one instance but not the other.
We must also look at the effect of the incentive on lone parents who wish to leave income support and support themselves and their families by working. Disregarding some of the maintenance while a lone parent family is on benefit would make it harder to be better off working and not receiving benefit. For those reasons, I hope that the noble Earl will feel able to withdraw his amendment.
§ Earl Russell
My Lords, I thank the noble Baroness for that reply. I am grateful for the sympathy for the principle of what we are trying to do. I am glad that its helpful intent is recognised.
I am a little disappointed by what she said about costs. There is a possibility that the Government may be spoiling the ship for a ha'porth of tar. That would be a pity. However, I hope that they will continue to think about the matter, as I believe they are doing. I do not consider that they would think any harder if I divided the House. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 10.30 p.m.
Baroness Blatch moved Amendments Nos. 34 to 36:
Page 11, line 8, after ("is") insert ("or was").
Page 11, line 29, at beginning insert ("there is in force").
Page 11, line 30, leave out ("is").130
§ The noble Baroness said: My Lords, with permission I shall move all three amendments as they are part and parcel of the same matter.
§ Amendments Nos. 34 to 36 are minor technical amendments which do not affect the policy intentions behind Clause 13. They merely aim to put beyond doubt that the new arrangements introduced by Section 24A will apply to orders already in existence as well as to orders made after the new provision has come into effect.
§ I am advised that the position with regard to Section 24B is already beyond doubt. It was always the intention that the benefits of the new provision should be able to extend to lone parent families where there are DSS and private orders already in existence. The amendments remove any possibility of confusion. I beg to move.
§ On Question, amendments agreed to.
Baroness Blatch moved Amendment No. 37:
Page 12, line 17, at end insert:
("(5A) If, in a case where the Secretary of State gives notice under subsection (3) above, a payment under the order is or has been made to him wholly or partly in respect of the whole or any part of the period beginning with the day on which the transfer takes effect and ending with the day on which the notice under subsection (3) above is given to the liable parent, the Secretary of State shall—
§ The noble Baroness said: My Lords, this is a technical, tidying-up amendment which does not affect the policy intention. I am sorry to introduce what appears to be a further complication to what is already a very complex provision. But I am sure that noble Lords will not argue with the principle that the Secretary of State should pass on to the appropriate persons maintenance received by the DSS for the period after the lone parent leaves income support.
§ As your Lordships know, Section 24A will enable certain rights under a DSS order to be transferred to a lone parent who is leaving benefit. That avoids the need for the lone parent to go to court to get her own order. The transfer is made by the Secretary of State issuing a notice to the court and to both parents. Transfer takes effect from the date the lone parent leaves income support, so the transfer notice will usually be issued slightly after the date the transfer takes effect.
§ The Secretary of State ceases to be entitled to receive payment or exercise rights in relation to the personal allowance element when the notice is issued.
§ It has been suggested that there may be some uncertainty about what happens if there is a payment of maintenance including a personal allowance element for the short period between the two dates. 131 The amendment merely makes clear that the money will either be paid to the lone parent or repaid to the absent parent as appropriate. I beg to move.
§ Lord Carter
My Lords, a minor point has been made to us and in answer perhaps the noble Baroness will write to me. It has been pointed out that the effect of the amendment could produce some slightly odd results if the liable parent, having received a refund from the DSS, is then required to pay the money to the dependent parent as a result of a variation of the court order. No doubt the noble Baroness will wish to read Hansard and then write to me.
§ Baroness Blatch
My Lords, with the leave of the House, that is an interesting, further complication. However, I shall of course write to the noble Lord.
§ On Question, amendment agreed to.
Baroness Blatch moved amendment No. 38:
Page 12, line 32, leave out ("The giving of notice") and insert ("A transfer").
§ The noble Baroness said: My Lords, this a minor, technical, tidying-up amendment which is similar in intent to Amendment No. 37. Subsection (7) ensures that the person who should have received maintenance payments which were not made retains the right to pursue them despite the transfer of other rights. The amendment merely removes any possibility of confusion as to the effective date of transfer in this situation. I beg to move.
§ On Question, amendment agreed to.
Baroness Blatch moved Amendment No. 39:
Page 15, line 14, after ("section") insert ("in England and Wales").
§ The noble Baroness said: My Lords, this is merely a small drafting amendment. The arrangements in Scotland for enforcing maintenance orders are different from those in England and Wales. That means that the provision that the Secretary of State should notify the Legal Aid Board if a court awards arrears of maintenance by a lump sum, and he is aware that a debt exists to the board, has no effect in Scotland. The amendment makes it clear that that provision applies only in England and Wales, rather than leaving that to be deduced from the clause as it currently stands. I beg to move.
§ On Question, amendment agreed to.
Earl Russell moved Amendment No. 40:
After Clause 13, insert the following new Clause—
§ ("Deduction for providing family care.
§ In section 22(8) of the 1986 Act, at the end there shall be added the words ", provided that, in calculating a person's earnings from any employment, including self-employment, there shall be deducted the amount of any expenses reasonably incurred by him without reimbursement, to enable him to carry out his duties in connection with that employment, in respect of the making of reasonable provision for the care of another member of the family".").
§ The noble Earl said: My Lords, the amendment relates to a proposed child care disregard on income support for single parents resuming work. It is an amendment which deals with incentives. Indeed, it does more than that; it does what I have been 132 concerned with all day: it helps to make it possible for people to return to employment.
§ Clearly, single parents with a child to care for cannot return to work unless they have some facilities to care for the child. Nowadays not everyone has a friendly, handy grandmother in the near vicinity. The mobility of labour, if nothing else, tends to make that a great deal more difficult. Therefore, a high proportion of single parents returning to work must pay for child care. If what they pay is only slightly less than what they are receiving from part-time work they do not have the incentive to do it. Of course, part-time work is often what those with children to care for are seeking. Therefore, the work must be made financially possible. The cost of child care is rising and we may be looking at as much as £40 per week. That is a considerable sum to meet out of part-time earnings which are not the most luxurious rates of pay in the world.
§ One may quantify what is involved in the amendment. Thirty-six per cent. of married women, who tend to rely mainly on their husbands for child care, work. Forty-two per cent. of widows, who do not lose benefit for the amount that they spend on child care, work part-time. However, only 24 per cent. of single parents, who lose benefit as soon as they return to work, work part-time. Therefore, if one compares the 42 per cent. of widows with the 24 per cent. of single parent families, one has what approaches a controlled experiment.
§ We have here a poverty trap—something which is making people worse off if they go back to work than if they stay in it. I understand that to be contrary to government policy as it is contrary to common sense. Therefore, one would think that the Government might be interested in doing something about it. So far, they have not shown themselves to be very willing and I hope that they may be more forthcoming this evening.
§ The Government always tend to come back with the word "complexity". I have been quite exercised by what the Government mean by the word "complexity" in the context of social security because they often come back, as they did this evening on the amendment to remove the differential age-related rates for income support, and say "complexity" when as far as I can see we are simplifying the rules.
§ I rather suspect that when they say "complexity" they mean anything which increases the number of heads of entitlement. If what we are dealing with does not correspond with life as it is experienced and you have to try to squeeze the two together like a jigsaw for which you do not have the right pieces, then the complexity increases rather than diminishes.
§ It seems to me that a disregard for the cost of child care is a simple notion. I cannot see any complexity about it. I cannot see how married women, or indeed single parents, can be expected to go to work if they cannot afford the child care. To discourage people from working is contrary to government policy, to the public interest and, I should have thought, to good sense. I beg to move.133
§ Baroness Blatch
My Lords, this amendment seeks to alter the way in which certain employment expenses are treated across the income related benefits. The proposal is to disregard the cost of caring for another member of the family if the costs are reasonably incurred in connection with employment.
The amendment as drafted is wide ranging. Not only would it apply to child care costs incurred by lone parents across all the income related benefits but it would apply also to all families on benefit where an adult or child needed care. That would be a major change to the benefit system which does not aim to cover specific work-related expenses at all. It would be very hard to draw the line at that expense when many people may incur work expenses such as travel to work costs. The cost of allowing all work-related expenses would be heavily significant.
As regards lone parents and child care costs, this amendment would create an imbalance between people in work and people out of work. People in work who are not receiving an income related benefit are not generally protected from employment expenses. To introduce such a provision could well mean people wanting to stay within the benefit system or even changing their arrangements to come within it. That would be a retrogressive step. As noble Lords know, the benefit system already provides special help for lone parents in recognition of their dual responsibilities as child rearer and breadwinner.
There is or should be another source of help for lone parents with child care costs. Regular payments of maintenance can make a significant difference when a lone parent must consider child care costs. As noble Lords will be aware, the Government are reviewing the maintenance system and we are taking action in the current Bill to improve the system in the meantime. Absent parents have a clear obligation towards their families and maintenance can be very helpful to lone parents wishing to work.
On child care, we do not see it as the taxpayers' role to be the provider of child care through the benefit system. Parents are best placed to make decisions as to the care of their children. The Government's role is to help them to have the greatest possible choice of child care provision and to ensure standards. The Government welcome the initiatives which employers and voluntary organisations are taking in this area. Employers are also recognising that help with child care can help them to recruit and retain staff. The Chancellor's Budget measure on workplace nurseries will also assist. It will help to increase the supply of workplace nurseries. That will make it easier for lone parents at all income levels, whether they are full- or part-time workers.
To sum up, the implications of the amendment are significant and would add substantially to benefit costs and to the complexity of the benefit system. It would distort the choices available to all families and make more people rather than fewer dependent on benefit.
The noble Earl, Lord Russell, made reference to some statistics but I am not clear how he arrived at those figures. For example, the general household 134 surveys in 1985 to 1987 show that 37 per cent. of married women work part-time, while the noble Earl, Lord Russell, gave the figure of 36 per cent. For widows the figure was 35 per cent., while the noble Earl quoted 42 per cent. The annual statistical inquiry shows that for lone parents on income support around 70,000, or 10 per cent., worked part-time, while the figure given by the noble Earl is 24 per cent.
It will be difficult to argue specifically on those figures, but there is nevertheless a discrepancy between the figures used by the noble Earl and those I quoted on behalf of the Government. However, in the light of that reply I hope that he will feel able to withdraw his amendment.
§ Earl Russell
My Lords, I become very puzzled by the Government's resistance to the amendment. It is a matter of plain common sense and I cannot understand what the point is which causes them to resist it.
The talk of people wanting to stay within the benefit system seems to me to be in danger of becoming obsessive. After all, we are debating the question of people attempting to return to part-time work, which I would not normally interpret as being evidence of their wanting to stay within the benefit system.
The noble Baroness says that it is not the taxpayer's role to provide child care. As a general rule perhaps it is not, but it is the taxpayer's role to provide education; when one enters the realm of nursery education the boundaries may become blurred. It is the taxpayer's role to use his money as usefully as possible, and in some contexts it should be regarded as an investment. Spending taxpayers' money to keep people on benefit while depriving them of the opportunity to get off it by doing work does not seem to be particularly constructive.
The noble Baroness speaks of employment. I know that employers are doing more than they were. I welcome what her right honourable friend the Chancellor of the Exchequer did in the Budget, but it is still not very much. We are discussing part-time work. Of all categories, those are the people for whom employers are least likely to be doing anything significant. That is not the answer.
The Government seem to me, as they have seemed so many times today, to be forcing people back into benefit and depriving them of the way out. They talk of fear of a dependency culture. It seems to me that they are trying to create one. Perhaps some day I shall understand what they are driving at. I shall not find out by dividing the House, so I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 10.45 p.m.
Baroness David moved Amendment No. 41:
Before Clause 14, insert the following new clause:
§ ("Income Support: persons under 18
. In regulation 13A of the Income Support (General) Regulations 1987, for paragraphs (2)(b) and (3) there shall be substituted the following sub-paragraph—
(b) for the period for which that paragraph applies or, if the date on which he attains the age of 18 falls within that period, for so much thereof as falls before that date".").
§ The noble Baroness said: My Lords, the noble Baroness, Lady Faithfull, unfortunately was not present at Committee stage and cannot be here again tonight. She asked me to apologise to the House because she feels very strongly with regard to the amendment, and that is the reason her name heads the list of those supporting it.
§ The noble Baroness and I went to see the Parliamentary Under-Secretary of State, Mrs. Gillian Shephard, last Wednesday regarding the amendment. At the end of our discussion on the amendment at Committee stage, the noble Baroness, Lady Blatch, said that Mr. Nicholas Scott would have an ever-open door and that we could go and knock on it. We did knock, and saw not Mr. Scott but Mrs. Shephard. However, she was extremely kind and responsive.
§ For those noble Lords who were not present at Committee stage, the amendment seeks to abolish the time limits on income support entitlements for 16 and 17 year-olds living away from home, and instead to allow 16 and 17 year-olds to claim income support until they find a suitable youth training place or employment. It will give them a little more time to become adjusted to their situation and we hope get them started on a better way of life.
§ We have had much discussion on income support for young people so I do not need to go into all the details of what has been going on and what they need, but having had a satisfactory interview with Mrs. Shephard, I hope I can now sit down and hear what the Minister has to say. I beg to move.
§ Lord Henley
My Lords, I am grateful that the noble Baroness saw my honourable friend Mrs. Shephard. I can assure her that she would have received equally pleasant treatment from my right honourable friend Mr. Scott.
The amendment seeks to change the provisions for 16 and 17 year-olds by extending eligibility to income support until 18 years of age to those who are presently entitled only during the child benefit extension period.
I think I should say in passing that the noble Baroness suggested that we group this amendment with earlier amendments. At the time I said that it was perhaps not appropriate but I think I rather regret that suggestion and the noble Baroness might have been right. However, I respond briefly as in speaking to earlier amendments I have already outlined the reasoning behind the Government's policy on 16 and 17 year-olds, in particular the provisions available to the vulnerable groups.
We have continuously monitored the effect of the changes. We have done this through the collection of information from local DSS offices and from the severe hardship unit. We have also set up regular meetings with representatives from voluntary groups involved with young people as a way of gaining feedback. There have also been a number of reports published by, for example, NACAB and Shelter which we have carefully considered. As a result, we have introduced a number of changes primarily to improve the way claims from young people are dealt 136 with, but significantly to pay the 18 to 24 year-old rate of benefit to those who have to live independently.
For example, since November 1989 all 16 and 17 year-olds are interviewed to ensure a full investigation of all claims from young people. In addition, recognised contact points have been set up in DSS local offices for local voluntary groups with difficult cases. In May 1990 a special leaflet was launched to give young people up-to-date and clear information about the benefits to which they may be entitled.
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.
As I said, we continue to monitor the operation of the policy. In particular, we shall be looking at the impact of the administrative changes introduced in November and March on those young people who left school this Easter and those who will leave this summer. This will be the first real opportunity to assess the effects of these changes.
I cannot support this amendment because it does not seem to me to be in the best interests of the disadvantaged young people involved. These are young people who need the most help and I cannot accept that giving them unfettered entitlement to income support until they reach 18 years of age is good for them. 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 and that no young person need be without an income.
I apologise for bringing the noble Baroness back from her dinner because I earlier suggested that the amendment should not be grouped with others, but I hope she will feel able to withdraw it.
§ Baroness David
My Lords, I am extremely disappointed with that answer, as I am sure the noble Baroness, Lady Faithfull, will be too. Mrs. Shephard kindly gave me the letter which was written to the noble Lord, Lord Joseph, about the many things which have been done as a result of the Government's misguided plan to remove benefit as from September 1988. They have had to make a number of changes because the policy was so misguided. I am sorry to say that they do not realise that it is still misguided. The amendment does not ask for undiluted help until the age of 18; it asks for help until those people concerned obtain a youth training place or employment. It does not go as far as the Minister suggested.
However, without the benefit of the advice of the noble Baroness, Lady Faithfull, I shall not divide the House. I know that the noble Baroness feels strongly about the matter. Therefore, I beg leave to withdraw the amendment, but warn that it will be coming back at Third Reading.
§ Amendment, by leave, withdrawn.137
§ Clause 14 [Income support in respect of accommodation charges for certain persons in residential care and nursing homes]:
Lord Carter moved Amendment No. 42:
Page 16, line 13, at end insert ("and shall ensure, as far as is practicable, that the amounts prescribed by him are sufficient to meet the cost of any such accommodation which would be met by a local authority in the case of persons other than qualifying persons").
§ The noble Lord said: My Lords, in moving Amendment No. 42 I should also like to speak to Amendment No. 43. This matter was discussed at length in Committee, and therefore I shall deal with it briefly. To deal with the matter briefly does not devalue its importance. We make no apology for returning to a matter which is causing great concern to many elderly people, their relatives and those who care for them.
§ The amendment seeks to address the problem that is being faced by many elderly and disabled people in homes where the charges are in excess of the income support limits. It seeks to provide a structure for ensuring that the department has the power to make additional payments to individuals and to top up the current income support limit where it is reasonable to do so. It seeks to refine the mechanism proposed in Clause 14 to allow for individual assessment to be made, if requested, of the sufficiency of the benefit to pay a reasonable charge.
§ We feel that the Government have still not addressed the problem of the existing residents in care who will continue to have to meet residential charges from income support. There is evidence from many quarters that, despite the April uprating and that which is promised for August, many residents will face a substantial shortfall.
§ Clause 14 gives the Secretary of State the power to collect information regarding fees. To repeat the question that has been asked before but which has not yet been answered, we should like to know when the information will be available and when it will be acted upon. What help is available for residents who face a shortfall now?
§ The amendment seeks to refine the mechanism proposed in Clause 14 to allow individual assessment to be made, if requested, of the relationship between the benefits and the charges.
§ We told the Minister at Committee stage of the many harrowing cases that have been brought to the attention of those of us who support the amendments. We hope that the Minister will be able to give us a more helpful and understanding reply than he did on that occasion. I beg to move.
§ Earl Russell
My Lords, I should like to add my support to the amendment The Secretary of State is aware of the problem. He has already taken some action, but it is not sufficient to close the gap between the cost of residential homes and the amount which is given under income support. We hope that the amendment will give more power to the Secretary of State's elbow.
It is not clear, where the gap exists, who ought to meet it. Most residential homes do not have 138 immense reserves of funds on which they can draw. They do not have great borrowing powers at the bank. At present levels of interest rates the expense of borrowing could be prohibitive. They are in the position of practically everybody else who is carrying out a public service on behalf of the Government. They are having to carry out the job at a loss. Whether they can go on doing so is doubtful.
I should like to quote some information that was supplied to me by Brent Age Concern. According to Department of Health guidelines there are supposed to be 25 local authority residential home places per 1,000 people. In 1987 Brent had 10 homes representing 431 places; that is 10.31 per 1,000, which is less than half the number stated in the guidelines. There is very little private or voluntary provision. Brent is not an area where one gets much of that kind of thing. We now have only six homes, some of which do not meet the new registration requirements. To bring them up to those standards will cost money. Here we have an absolutely typical illustration of the way in which local authority finance works. The council is to sell two of the homes in order to finance the refurbishment of the other four. That is asset stripping public finance. So we shall be left with 200 places only—under five per thousand. That is less than one-fifth of the guidelines. If we go too far down that road, it is an awfully long way back again. I hope that the Secretary of State will manage to do something before we have gone over the waterfall.
§ 11 p.m.
§ Lord Renton
My Lords, both speakers in support of the amendment stated in short and simple terms what they hope it will achieve; but in fact the matter is most complicated and has unusal implications. I only hope that at this late hour I can find sufficient lucidity to try to explain what will happen.
If we take the first of the two amendments, we find that it adds a few lines to the new subsection (2A) as set out in Clause 14, which is a subsection that deals with the way in which the Secretary of State is to take into account information provided by local authorities or other prescribed bodies or persons—they are not yet prescribed; that can be done under the Bill—for the purpose of deciding for income support the amounts to be provided in respect of accommodation, and can do so in respect of any area for people who qualify in cases where prescribed conditions are fulfilled.
Of course, the circumstances will vary enormously. Many homes properly charge different amounts for different individuals according to their needs and circumstances. There will be a problem in that the local authorities will be tailoring the amount of support that they give under the new scheme to the needs of individuals and to each home.
The Secretary of State will therefore not have an easy task under the first part of Clause 14 as it stands. If the words are added:and shall ensure, as far as is practicable, that the amounts prescribed by him are sufficient to meet the cost of any such accommodation which would be met by a local authority in the case of persons other than qualifying persons".139 we shall be fettering the discretion that he would have to exercise in what, as I say, are complicated enough circumstances.
In those cases in which the qualifying person is not satisfied, or it seems that the proprietor or the manager of the residential care or nursing home is not satisfied, the matter can be referred by either of them to an adjudication officer for review. He will not carry out the review. He has to refer it to a tribunal unless—this is a strange and unusual situation—he decides (it is a quasi-judicial decision that he will have to take) that a tribunal has already made a case in relation to another qualifying person in the same home; in other words, unless he decides that there is already a precedent. That may not always be clear, bearing in mind that it is the circumstances not only of the home but of the individual that have to be borne in mind. We find the adjudicating officer, with his quasi-judicial function, having to decide whether or not it shall be referred to the tribunal for a judicial decision.
The complication does not end there, because he may also decide not to refer it to the tribunal. This appears at line 10 of page 10 of the Marshalled List. He may do this if he decides that the advice of the local authority—which has already been given to the Secretary of State, so we are going round in circles—or other prescribed body or person with knowledge of the home in question".is such that he himself can determine the matter without reference to the tribunal. Frankly, I do not think we are doing justice or trying to achieve justice for the people whom we are trying to help if we impose such a complex system and procedure as that which these two amendments impose. I very much hope that my noble friend on the Front Bench will say that we should not do this. It is far better to leave it to the Bill and the new arrangement as it is.
§ Baroness Seear
My Lords, it may well be that the amendment could have this effect which is not totally acceptable, and no doubt the proposals are complicated. But the problem is not complicated at all. It is the gap between people's income in these institutions and the charges. If the Government do not like the amendments put forward—and no doubt they can put many arguments against them—the burden is on them to explain how, in a simpler way, they will bridge the gap. That gap is a matter of great urgency at present both to the persons concerned and the institutions. If the institutions close down, we shall be in a difficult position. If the Government do not like the amendments, what are they going to do?
§ Lord Renton
My Lords, I wonder whether the noble Baroness agrees that if the owner of the residential home will be the person making the application for the increased charges, the owner will have a vested interest in the result of the reference to the adjudication officer or the tribunal. We want to see these people fairly treated, but I do not believe it is right that there should be a procedure which is double-edged and could be used merely to jack up charges.
§ Baroness Seear
My Lords, the noble Lord asked me the question before I sat down, so I take it that I am in order if I reply, although it is Report stage. It is simple. I have already said that I understand that the Government regard these proposed amendments as too complicated or inadequate in some way or another. However, the burden is on them to do something about the extremely urgent problem.
If they tell us that they do not accept the amendment but will come back at Third Reading with something that will bridge the gap and is more acceptable administratively in terms of their own theories about what ought to be done, then all well and good. But the problem will not go away just because we withdraw the amendment. It is on the Government's plate to find some way of dealing with a problem which is not academic and will wait a long time for resolution. It is there and urgent. There will be disastrous consequences unless something is done about it.
§ Lord Harmar-Nicholls
My Lords, I wonder whether the noble Baroness is right in saying that it is the Government's job, once a general point has been made, to find a specific answer that will fit in with the Bill. If the noble Baroness and her friends are satisfied that this unfairness exists, and if they cannot find words which will straighten out what they consider to be unfairness, why should it automatically be the job of the Government? It may well be that this point, in the view of the Government, is well covered in the Bill already. It may well be that what is already there could be properly and sensibly applied. I do not accept the noble Baroness's point that because an attractive proposition is made in general terms a government who introduce a Bill have an obligation to provide the wording when noble Lords opposite had every opportunity to do so both in Committee and on Report.
§ Baroness Seear
My Lords, with the leave of the House, I must reply to that. I did not of course say that it is because the amendment may not be acceptable that there is an obligation on the Government. I said there was an obligation on the Government because the problem is real and urgent and the amendment is trying to deal with it. If the matter is not dealt with properly, that urgent problem will not go away. It is, I suggest, a problem for the Government to deal with.
§ Lord Hylton
My Lords, I wish to support as strongly as I can what the noble Baroness, Lady Seear, has just been saying. I believe that what I want to say applies not only to this group of amendments but also to Amendment No. 45. Ever since about 1948 it has been thought right, proper and appropriate that a certain very small minority of the total elderly population should be accommodated in residential or nursing homes and that these people should be largely but not entirely funded from public sources whether that funding comes from local authorities or from central government. Can the Government explain why that is no longer thought to be right and why it is that 141 we are deemed no longer to be able to afford this type of accommodation for this category of people? If, as a result of the Government's recent changes in accepted policy, low income and often frail elderly people are going to be squeezed out of their present accommodation, where are they going to go? Are they going to be taken in, at far greater expense, by hospitals? If that is not the case, what will happen to them?
§ Lord Henley
My Lords, the noble Lord, Lord Hylton, has completely missed the point. Of course we shall continue to pay the costs of people in homes. I believe that expenditure in this field has gone up from some £10 million a year to something well over £1 billion in the past 10 years. What we are discussing here is the maximum amount which the Government will allow for income support for people in homes. Noble Lords opposite feel that the amount is inadequate and have pressed this point again and again. I hope I can assure them and the noble Baroness that we have done something. I shall try to respond to the various points that have been made.
As everyone knows, we debated these issues in some detail in Committee and we debated the same subject on the National Health Service and Community Care Bill when, if I remember rightly, the amendments were pressed to a Division and the Committee rejected them.
I hope again to persuade the movers of the amendments to withdraw them because I believe that the Government's strategy on this matter is right. I say this although I have listened with care to the arguments of noble Lords opposite. I repeat the fact that the Government recognise the importance of protecting the position of those who will not be covered by the new community care arrangements as from next April. However, I simply have not been convinced that the movers of the amendments have thought through the practical implications of their proposals.
The House will be familiar by now with the reasons why we are continuing the income support system for people who are already resident in homes by next April. Noble Lords will be familiar with the three separate themes in the Government's response to concerns expressed about the position of these people. We have addressed the level of the current income support limits in response to concerns expressed in another place via the additional uprating to take place this August. We are addressing the whole question of the level and structure of the limits as they will apply from April 1991 and are commissioning further research to that end. Moreover, we have this clause in the Bill which is designed to help us use the information that will become available as a result of practical decisions and negotiations by local authorities after 1991 to set new local limits for income support.
As I have explained previously, for real and sensible practical reasons we will not be able to use this new source of information from April 1991. The noble Lord, Lord Carter, asked when it will be available. It will come through after that date as local authorities gain practical experience of negotiating 142 their own fees. The noble Lord then asked when it will be acted upon. As the Bill suggests, we shall respond as soon as we have sufficient information to be able to set local limits. We are about to consult the local authorities about the important practical details of the precise data that we need and the timescales on which we need it.
The point that has been made most forcefully, by the noble Lord, Lord Carter, and the noble Baroness, Lady Seear, concerns the gap that exists at present. I have already said what the Government are doing about the present position. I have just mentioned that we have increased the limits through an extra, mid-year increase in those limits. We shall still consider increases for next summer in the usual way.
We have commissioned research. Moreover, it should not be forgotten that both health authorities and local authorities have always had a responsibility to help people needing health care or residential care.
I do not believe that it would serve any purpose for me to deal in detail with my objections to the amendments. I have spelt them out in detail on previous occasions and I believe that it would weary the House to go over all those points yet again. However, I should like to respond very briefly to one point made by my noble kinsman Lord Russell. He talked about provisions in Brent. That was irrelevant to the amendment because local authority homes are not funded through income support.
The noble Earl also talked of asset stripping. I should like to revert to an expression that I used on a previous occasion when I talked of my fears about these amendments when I referred to them as a blank cheque on the Exchequer. They are just that; they are attempts to allow residential homes to set any fee they like. That would not be in the best interests of the Exchequer. Nor would it be in the best interests of other residents in those homes who are not dependent on income support.
Having said that, and having explained what we are doing. I hope that at this hour the noble Lord will feel able to withdraw the amendment. If he does not feel able to do so we shall most certainly resist the amendment.
§ Lord Carter
My Lords, we have had a most interesting debate. We keep bringing this problem to the attention of the Government but still they refuse either to acknowledge it or to deal with it. The information that they want is available. Many of the voluntary bodies have the information now. If the noble Baroness, Lady Ryder of Warsaw, were here she could certainly tell the Government about the shortfall experienced by residents of the Cheshire Homes.
The noble Lord, Lord Renton, referred to the complication of the amendment. It is complicated. I thought that the noble Lord was answered extremely well by the noble Baroness, Lady Seear, who said that the complications would not arise if the Government would only provide a satisfactory answer to the problems that exist now. The shortfall after the increases to which the Minister referred will still be of the order of £30 to £60 per week for some residents.
143 Local authorites are already negotiating contracts and fees with voluntary and private providers of residential care, so there is no need to wait until the middle of next year to implement Clause 14. The local authorities are already in a position to supply the information. The Government are reluctant to do this because the local authority information would reflect the extent of the discrepancy between income support limits and the cost of providing residential care. We know that many homes are now accepting fees from income support claimants that are well below their costs.
The Government have three options. They can increase the national limits or introduce the new regional limits proposed in Clause 14 to a level that is near to average costs and charges. We admit at once that such a move would cost a great deal of money and would undoubtedly act as a stimulus to significant increases in prices. I recognise the Government's problem; it is not the fees but the costs with which they are concerned.
The second option would be to keep the limits at more or less their current levels and thus avoid increasing prices, and in addition adopt a mechanism—and this amendment is but one—which allows individuals who are suffering hardship because the fees are well above the limit to apply to their local department of social security. Clearly, the closer the income support limits are to the true costs of care, the fewer individual claimants would need to resort to the mechanism of the amendment.
Thirdly—this is what is happening—the Government can continue to sit on their hands and say, "There is nothing we can do to solve that short-term problem. It will not be too bad"—that is almost what the Minister said in Committee—"because if people are evicted, they can always turn to the local authority or the health authority, which both have the residual powers to help those who are destitute or in need of care".
The Government are sitting on their hands and choosing to pick holes in every mechanism that is offered to deal with the problem. They can afford to do that because after April next year the local authorities will be forced to pick up the pieces and accept the financial responsibility for distressed and evicted residents.
I do not propose to divide the House at this time of night. If I withdraw the amendment, the problem will not go away. However, I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 43 and 44 not moved.]
§ Moved accordingly and, on Question, Motion agreed to.