Social Security Bill

HL Deb 21 May 1990 vol 519 cc679-742

House again in Committee.

Clause 4 [Computation of additional pension for purposes of invalidity pension etc.]:

Baroness Turner of Camden moved Amendment No. 16: Page 6, line 29, 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: In moving this amendment, I should like to speak also to Amendment No. 16A, as the two amendments are grouped. Clause 4 is probably the biggest benefit cutting provision in the entire Bill. It amends Sections 14 to 16 of the Social Security Pensions Act 1975, whch relate to the computation of the earnings related additional pensions payable with invalidity pension.

Section 14 of the Social Security Act 1975 provides that the weekly rate of invalidity pension is calculated according to a formula similar to that used for calculation of Category A retirement pension. Clause 4(1) of the Bill inserts a new subsection specifying that the relevant tax year used in the calculation is any tax year between 1978-79 and 1990-91 in a period in which a person is over 16 and which ends with the tax year before the tax year in which the person qualified for invalidity pension. This has the effect of ensuring that no year after 1990-91 will count towards the calculation of the earnings related addition, while preserving rights accrued between 1978–79 and 1990–91.

By the end of this century the Government think they will have saved around £350 million. It may very well be a great deal more than that, depending on what the rise in wages will be, as this is an earnings related supplement. If fact some of the organisations looking after the disabled calculate that the savings may well be £2 billion a year in the long run and about £1 billion in 20 years from now.

The money is being taken away from the long-term sick and disabled. The Government claim that they are improving benefits for those disabled early in life. In doing so, however, they are making those pay for it who become disabled at a later age. That is not acceptable. It is the usual game of making the already disadvantaged pay for the very poor or those even worse off. If there are savings to be made they should not be achieved in this way.

Amendment No. 16 would bind the Secretary of State to report on what is being done with the savings and would in a sense earmark the savings for the use of the disabled and those caring for them. Incidentally, these would be savings on the National Insurance Fund. The record of the Government in regard to the National Insurance Fund is open to a good deal of question. The orginal Beveridge conception was that this should be funded from contributions from employers, employees and the Treasury. In 1979 the Treasury supplement accounted for about 18 per cent. Since then it has been gradually reduced and in the most recent Social Security Act was discontinued altogether on the grounds that the fund was in surplus and the Treasury contribution was no longer required. Then the Government used the surplus by way of bribes to encourage people to leave SERPS and to take up private personal pensions. Now savings are to be made from the fund at the expense of the long-term disabled.

Perhaps I may say a little about the reasons for Amendment No. 16A. The object of the amendment is to establish whether the Government are correct in claiming, as they do in their paper The Way Ahead, that there has been a rapid growth of long-term occupational sick pay schemes and that the coverage is now nearly 60 per cent. However, this is not altogether borne out by independent research. According to a survey conducted in 1988, while it is apparently true that 56 per cent. of employees are covered by some form of formal long-term sick pay scheme, the spread of such schemes is very uneven. Nearly everyone in the public sector is covered in some way or other but only 39 per cent. of employees in the private sector are covered. For those working for firms with fewer than 10 employees the proportion covered falls to only 10 per cent.

Coverage is particularly low among private firms in what are described as hazardous industries, a matter with which we dealt in the previous amendment. I refer to hazardous industries such as construction, mining and quarrying. Only 4 per cent. of those firms have formal long-term sick pay schemes and only another 3 per cent. say they might make discretionary payments. Those people are most likely to be in need of long-term sick pay and yet they are least likely to get it.

Even where a firm has a scheme, it does not automatically follow that all employees will benefit from it. The survey to which I referred found that 38 per cent. of schemes excluded recent employees. The qualifying period of service was typically six months to 12 months. Manual workers were frequently excluded altogether—that was the case in 18 per cent. of large manufacturing establishments—while another 25 per cent. excluded non-salaried staff. Part-time workers were also excluded by 13 per cent. of the schemes. The noble Earl, Lord Russell, made reference in the previous debate to that and to the effect upon women workers.

There is also the question of amount. Levels of long-term sick pay are normally lower than short-term levels. Only 12 per cent. of schemes paid full basic salary, while 25 per cent. of private sector schemes paid only a flat rate benefit. Among private firms in hazardous industries, none provided full pay and 36 per cent. paid only a flat rate. Nor is there any indication that this flat rate is indexed. If it loses its value over the years because of inflation, it is of very doubtful value anyway.

Unlike national insurance invalidity benefit, which continues for as long as it is needed or is replaced by retirement benefit, almost all occupational schemes have time limits. When all these limitations are taken into account it seems quite wrong for the Government to state that it is all right to introduce the provision in Clause 4 because the intention is to encourage occupational provision and this encouragement has succeeded so well that the benefit will no longer be required. There may be a case for a small minority where occupational provision is exceptionally generous. I know from my own experience that such situations exist. If the Government wanted to pursue this line, there could be a contracting out arrangement for people in that position.

However, the proposed amendment would give an opportunity to have another look at the whole position, as a report covering these issues would have to be laid before Parliament before the provisions could be enacted. It is a sensible proposition and I hope that the Government may feel disposed to accept it. I beg to move.

Lord Henley

The Government have already provided, in The Way Ahead, which we published last January, details of our proposals for improving benefits for people with disabilities and their carers. The proposals improve the balance and structure of help for disabled people by providing better coverage with the extra costs of being disabled; creating a better balanced structure of help for disabled people who cannot work, particularly those disabled from birth or early in life; and giving better help and incentive for disabled people who wish to increase their independence by working.

We have also provided details of the costs of our proposals—both in the short and in the long term—in response to parliamentary questions. In particular, the reply my right honourable friend the Minister of State for Social Security and the Disabled gave in a Written Answer in another place on 26th January sets out estimates of costs and savings. I take the opportunity to stress, however, that estimates for the later years, contained in that reply, especially those for the year 2025-26 are subject to considerable margins of uncertainty.

Our proposed improvements will result in increases in expenditure on social security help for disabled people in every remaining year of this century. This increase is on top of the increase in spending on benefits for people who are sick or long-term sick and disabled of nearly 100 per cent. since 1978–9. Not only are we now spending £8.3 billion, but by the year 2000 we expect that spending to increase to over £12 billion. To speculate on benefit initiatives beyond the year 2000 would seem to be a somewhat fruitless exercise as it will be for the Secretary of State of the day to decide on his priorities at that time.

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.—approaching 13 million employees—worked for employers providing longer-term cover when the IFF Research Ltd. research into occupational pension was conducted in January and February 1988. We have seen coverage for long-term sickness triple in 15 years. There is every prospect that it will continue to rise. 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. They are likely to take into account the restriction on further accrual of entitlement to the additional pension part of invalidity benefit. No doubt employees and their organisations will not be slow to negotiate such packages.

It is against this background of increased occupational sick pay coverage that we have moved to restrict future entitlement to the growing earnings related element of invalidity benefit, which will avoid duplication of provision. However, it would be wrong to look at the question of occupational sick pay replacing the additional pension part of invalidity benefit in isolation. This measure is a major plank in our proposals for restructuring the range of benefits available to the disabled. Our purpose is to balance the help given to those in employment with the help for those most in need, especially, as I said earlier, to those disabled at birth or early in life. The average payment for additional pension is currently £9 a week with a maximum of £41 per week. This costs £450 million a year. If the scheme was not changed these payments would rise by 1998 to £21, £84 and £1-6 billion respectively. Growth on this scale would serve only to widen the gap between those who have worked and those who have not. We are instead concentrating resources on the two completely new benefits—the disability allowance and disability employment credit—which will give substantial extra help to disabled people. I am sure that this is the right approach.

I wish to be as helpful as I can and I will summarise for the Committee the findings in the IFF Research report that relate to this amendment. As I have already said, the report indicated that almost 60 per cent. of employees had long term sickness cover. of those covered by long term schemes 7 per cent. would receive full basic salary, whilst 57 per cent. would receive a percentage of salary and a further 19 per cent. a scale rate. In so far as duration is concerned, in the private sector 42 per cent. of long term sickness schemes continue until retirement and a further 40 per cent. have early retirement schemes. In the public sector these figures are 23 per cent. and 63 per cent. respectively. In about a third of schemes entitlement to state benefit is taken into account in determining the amount of occupational sick pay that an employee will receive. As far as employees being excluded from schemes is concerned 32 per cent. of employees would not be excluded on any grounds. of the remaining 68 per cent. 37 per cent. would have to be with the company for periods between three and 12 months and 26 per cent. would be excluded on grounds of part-time work.

In the light of the significant improvements which I have outlined in occupational sick pay cover and the potential for further growth and improvements and of the importance of this measure to our improved benefit structure, I consider that to commission the further research which would be needed to satisfy this amendment would not be a sensible use of resources. I hope, therefore, that the noble Baroness will feel able to withdraw her amendment.

Baroness Turner of Camden

Before the noble Lord sits down, can he say whether the Government will be prepared to look at the possibility of instituting some form of contracting-out arrangement in respect of schemes which meet a certain minimum standard. We still have 40 per cent. of employees not covered by adequate schemes. It seems to me that if one were to pass the proposals in the Bill, those people would still suffer. On the other hand, in order to meet the Government's point—that is, that there are now numerous schemes which offer a good standard of occupational provision—would it be possible to have a contracting-out arrangement so that if, as I said, the scheme met a certain standard it contracted out and people did not receive entitlement to the benefit.

Lord Henley

I cannot give the noble Baroness that assurance. However, if she will allow me, I shall look again at the matter between now and the next stage of the Bill's proceedings. I cannot go any further.

Baroness Turner of Camden

I am most grateful to the Minister. We are anxious to protect people who have no cover. There are still many people in that position, especially in the manual industries. For example, people who have a chequered work pattern, who do not work for an employer for very long and who move around. of course that is a feature of the construction industry. However, if the Minister will at least look again at the matter I shall be most willing not to press the amendments. I look forward to hearing what he has to say on Report.

Lord Henley

I was not giving the noble Baroness an assurance that the Government would bring forward an amendment. I imagined that she would wish to return to the matter on Report. I said that we would look again at the matter and, if necessary, discuss the matter further at that stage.

Baroness Turner of Camden

In the circumstances, I shall withdraw the amendment and consider it further with a view to returning to the matter on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 16A not moved.]

Clause 4 agreed to.

8.30 p.m.

Clause 5 [Retrospective effect of Section 165A of the principal Act]:

[Amendments Nos. 17, 18 and 19 not moved.]

Lord Henley moved Amendment No. 20: Page 8, line 6, leave out (" and 165B" ") and insert (" to 165D" ").

The noble Lord said: I think that, although I am to move this amendment and speak also to Amendments Nos. 175 to 189, somewhere in that grouping there is an amendment tabled in the name of the noble Lord, Lord Carter.

Lord Carter

Amendment No. 175 is tabled in my name and that of the noble Earl, Lord Russell, on the Marshalled List. I think that the Minister's grouping should commence with Amendment No. 176. This may be a mistake on the grouping list.

Lord Henley

That is why I am confused. For some reason I thought that the amendment tabled in the noble Lord's name and that of my noble kinsman would be included in this grouping for discussion. I do not know whether that is correct.

Lord Carter

I think perhaps that I should formally withdraw the amendment tabled in my name from this particular grouping. In that way the Minister will be able to speak to the government amendments.

Lord Henley

In that case, we shall discuss Amendment No. 175 some time tomorrow evening.

In introducing these amendments I should like to explain why we consider it right to bring forward this measure at this particular time. There have been statutory restrictions on payment of benefit arrears since the inception of the present social security scheme in 1948. The reasons are essentially administrative: to avoid the requirement to retain records for immensely long periods of time and to discourage hopeless requests for reviews for periods in the distant past.

As part of the social security reform programme a revised set of adjudication regulations came into force on 6th April 1987. They included a new provision, Regulation 72, which was designed to allow the statutory payment of arrears of benefit in full where there had been an underpayment of benefit that was solely attributable to a mistake on the part of an official, including an adjudication officer. This provision was widely welcomed by informed social security practitioners and avoided the previous cumbersome and administratively expensive procedure of late appeal as a way of effecting the payment of such arrears.

However, legal advice revealed that Regulation 72 had an unintended side effect in that, where a social security commissioner or higher judicial authority overturned the prevailing interpretation of the law, adjudication officers' decisions given prior to that reinterpretation fell to be described as errors of law, even though they were made in good faith and in accordance with the interpretation of the law at the time. In the light of that unlooked-for effect, Regulation 72 was amended from 1st September 1987 to re-impose the 12-month limitation on arrears where adjudication officers review decisions in consequence of a reinterpretation of the law by a commissioner or higher appellate body. The Parliamentary Commissioner for Administration, however, criticised that provision as inequitable in that, when the law is reinterpreted and an affected case is not identified and reviewed immediately, the claimant will effectively lose one week's arrears for each week of the delay before a review decision is given. We have therefore decided to amend the provision accordingly.

Paragraph 7 of Schedule 6 will provide that, where a decision is reviewed on the grounds that it was erroneous in point of law by virtue of a subsequent determination of a commissioner or higher appellate authority, no benefit will be payable for any period which falls before that determination. That arrangement provides an equity of treatment that the existing backdating provisions lack. Any arrears which because of a reinterpretation of the law become payable on review of claims which were previously disallowed will in every case be backdated to a common date irrespective of how long after that reinterpreation such a case may come to light. That means that if someone had previously had their benefit claim disallowed but had come into benefit following a reinterpretation of the law, he would under this amendment have his arrears paid back to the date of that reinterpretation irrespective of how long it takes for his case to come to light. I am sure that noble Lords opposite will agree that that is a more satisfactory arrangement than that provided under the existing rules.

That caters for reviews, but what about claims? Having provided equity in the treatment of the backdating of arrears on review application, it would be illogical if we did not introduce a similar limitation on cases where a person makes a claim following a reinterpretation of the law where he is relying on that reinterpretation to give him title to benefit. This we are doing in paragraph 7 of Schedule 6, thereby providing a common start date for payment of benefit whether it be by way of a review of a claim previously disallowed or on a new claim. The difference between claims and reviews though is that for claims we are providing that the maximum amount of benefit arrears payable is limited to the absolute time limit for claiming the benefit at issue.

I should explain that an absolute time limit for claims has been an integral part of the scheme since 1948 when the limit adopted was six months. A 12 months absolute time limit, which applies to most benefits came into force in March 1969. Several benefits—child benefit, guardian's allowance, increases of benefit for a child or adult dependent—are subject to an absolute time limit of six months. It is considered that those limits give suitable protection to the rights of beneficiaries while maintaining the need to provide efficient administration. Following that through, we see no justification for extending the normal absolute time limits for making claims.

I should explain that attendance allowance and mobility allowance claims are not included in those arrangements: such claims are not currently backdated and we see no justification for introducing what would amount to a relaxation here.

In summary, we believe it to be eminently desirable that, where there is a reinterpretation of the law which brings payment of benefit to any number of people, a common date should in the interests of equity be chosen from which arrears are paid irrespective of whether the claimant has previously claimed and been disallowed or whether he is now claiming for the first time.

Subject to normal time limits on claiming, the amendments provide for this, and along with Amendment No. 20, which is a consequential of this provision and of Clause 6, I commend them to the Committee. I beg to move.

Earl Russell

Perhaps I may take it that my noble kinsman has spoken to the extent that he intends on Amendments Nos. 176 and 180, which are the ones that I wish to address. I must confess that I am somewhat concerned about those amendments. The phrase which especially concerns me is the one dealing with the treatment of court judgments. The provision that is being made by the amendments is that, when there has been a case which was unexpected to the department, other cases: shall be determined as if the decision referred to in subsection (7)(a) above had been found by the Commissioner or court in question not to have been eroneous in point of law". If I understand correctly the effect of what the Government are doing—I should be grateful to be corrected if I am wrong because I should be relieved to be told so—the purpose of the amendments is to provide that, when the Government lose a test case in the courts, the effect of that case shall stand in relation to the individual claimant in whose name the case was brought but shall not affect all the other claimants in the pipeline at the time, who are to be treated, if I understand correctly what the Government propose, as if that case had not taken place.

That is unduly diminishing the scope and the role of the courts. We are familiar, because Clause 5 familiarises us forcefully, with the fact that court cases can for future effect be reversed by legislation. The amendment provides that in relation to current cases in the pipeline the effect of the court judgment can be rendered nugatory by making it cease to apply to current cases as well as reversing it for future cases. The effect of the court judgment, if I have correctly understood, is entirely confined to the single, individual claimant. It appears to me, if that is correct, that that is driving a coach and horses through the rule of law. I should be grateful for a little more information before we leave the subject.

Lord Henley

It is a complicated matter. In Clause 5 and the amendments we are attempting for the second time to secure the policy intention that has been accepted down the years by administrations of both complexions: that is, that a person is not entitled to a benefit for any period unless in addition to any other conditions relating to it he makes a claim for it in the prescribed manner and the prescribed time. To that extent, we accept that the provision is retrospective; but we believe that it is necessary to re-establish the policy position that existed previously. We see no justification for leaving what one might call a window of entitlement between the date of the Cartwright decision, the most recent case, and Royal Assent which would remain if we were not to provide for the clause to have that retrospective effect. It is a period in which claimants could claim payments when it was not intended that they should.

Earl Russell

I understand the explanation given. I should be grateful for some reassurance about how narrow the effect of the amendment may be. It seems to be setting a precedent which I do not wish to see followed too of ten. I understand that it can be frustrating to any Administration if it finds that a case comes before the court and the statute does not mean what it thought it did. However, are there not circumstances in which one has to accept defeat? Is not losing a case in the courts normally one of them?

Lord Henley

I hope that my noble kinsman will not mind repeating his last remark; I am sorry that I did not catch it. I was talking to my noble friend.

Earl Russell

I was saying: are there not circumstances in which one has to accept defeat? Is not losing in the courts normally one of them?

Lord Henley

No. There are occasions when it is important to try to re-establish the policy intention. We tried once and we are making a second attempt. I do not think it right that there should be a situation where claimants receive windfall payments when it was never intended that they should.

Baroness Seear

As my noble friend said, surely we must consider the implications of what the Government are doing. If the courts have shown that the statute does not mean what the Government intended it to mean, the right process would be to amend the statute. That is not to say that because the courts have given a decision that the Government do not like, they will disregard it. The precedent for that is extremely dangerous.

Lord Henley

I understand what the noble Baroness is saying. However, there always was this policy intention; it existed for years and the courts in later years said that we were wrong. We changed the law. The situation continued for some time and then the courts said that we were wrong again. I know what the noble Baroness is saying, that we are changing the law. However on this occasion, in order to prevent large numbers of what one could call "windfall" payments, with people receiving payments when it was never intended that they should, we are perfectly justified in making the legislation retrospective.

Baroness Seear

Because the Government get it wrong, they legislate badly, they lose in the courts and say, "We shall take no notice of the courts". Can the noble Lord not see how dangerous that could be? One day we might have a benevolent government—and a benevolent government is perfectly possible—who, because the Government have done it on this occasion, would be delighted to apply the rule every time the court said something that they did not like. It is extremely dangerous to adopt that course. Surely the Government must change the legislation. If they get it so badly wrong that they get it wrong twice then, for goodness' sake, they had better find somebody else to draft the Bill.

Earl Russell

I understand what my noble kinsman means about windfall payments. I understand that this is how it appears from inside the department. I also understand that the Government intended to take away the concept of entitlement. However, the courts found that there was an entitlement. This provision takes away people's property rights, something which parliaments have regularly viewed with some misgiving.

Lord Henley

I accept what the noble Baroness said about the danger of retrospective legislation. We are trying to put the statute right, as the noble Baroness says that we ought. She then complains that it is retrospective. I believe that on this occasion quite a number of claimants would receive windfall payments in a manner that Parliament never intended. One has a duty to the Treasury and public funds to see that on this occasion there is justification for a small degree of retrospection.

Baroness Seear

The moral of this whole sad story is that the Government should get their legislation right in the first place. They should not cheat when they get it wrong, which is what they propose. Because they have lost on this, they must ensure that the legislation is properly drafted, bring it back to the House and alter the law. They should not say they will not do what the court says. Anybody can say that they do not wish to do what the court says. What a precedent to set!

Lord Henley

I hoped that I had given justification for a small degree of retrospection on this one occasion.

Baroness Seear

It is no argument to the Committee that it is only a small amount. That really will not do.

Lord Henley

I am not sure that I can take this any further. I moved Amendment No. 20 and spoke to the other amendments. I commend the amendment to the Committee.

On Question, amendment agreed to.

[Amendments Nos. 21 and 22 not moved.]

Clause 5, as amended, agreed to.

[Amendments Nos. 23 and 24 not moved.]

8.45 p.m.

Baroness David moved Amendment No. 25: Before Clause 6, insert the following new clause: "Exemption for full-time students In section 20(12)(h) of the 1986 Act, at the end there shall be inserted the words "provided that no person shall be so treated solely on the ground that he is a full-time student." ").

The noble Baroness said: In moving Amendment No. 25 and speaking to Amendment No. 26 I wish to make a few introductory remarks. Those Members of the Committee who were here for debates on the student loans Bill will be familiar with the arguments, but I wish to give the picture before I move on to the amendments.

It is the Government's intention to disentitle fulltime students from social security benefits—namely, income support, unemployment benefit and housing benefit—from the beginning of the academic year 1990-91. The regulations making the amendments have not yet been laid before Parliament. On 26th April this year the Education (Student Loans) Bill received the Royal Assent. Throughout the passage of the Bill, Opposition Peers tabled a series of amendments which, if passed, would have retained entitlement to social security benefits for full-time students. These amendments covered all the issues which were raised here: income support, employment benefit during the summer vacation, housing benefit for undergraduate and postgraduate students, and regional housing costs.

During the debates on these issues in the House of Lords, concern was repeatedly expressed by Peers from all parties and none on the financial difficulties that students will suffer as a result of disentitlement to social security benefits. We all know the arguments. That contrasts with the situation in the House of Commons where there has not been a proper opportunity to discuss students' entitlement to benefits on the Floor of the House. In addition, it is not the Government's intention that this debate should take place. The amendment regulations will be laid before Parliament and are subject only to the negative procedure, even though many Conservative MPs have expressed concern about the Government's proposals to disentitle the majority of students from social security benefits.

For instance, during the Second Reading of the Education (Student Loans) Bill, Mr. Alistair Burt—and I remind Members of the Committee that he was PPS to Mr. Kenneth Baker— we should look carefully at housing costs and the abolition of benefits are a worry, particularly in some regions. It will do the Government no harm to examine that carefully".—[official Report, Commons, 5/12/89; col. 212.]

At the Report stage in another place there was no debate on social security issues. Amendments tabled were not discussed. The Social Security Advisory Committee gave advice earlier when it learned that the DSS intended to stop students being eligible for social security benefits. The committee stated: As the grant has declined in value, students have come to depend on benefits and we do not believe that this trend should be reversed by a transfer of resources to the grant system in which payments are made without reference to individual need".

The Social Security Advisory Committee has now made its report on the proposals to the Secretary of State. It has been substantially leaked. On 13th and 14th May newspapers covering that report warned of, student poverty and administrative chaos in universities and polytechnics as thousands of undergraduates apply for special hardship grants".

According to the newspapers, the committee is particularly concerned about the wholly inadequate amount of money that has been allocated to the access fund. The sums are £5 million for futher education students, £14 million for undergraduates and £6 million for postgraduates. They describe the intention to withdraw unemployment benefit from those students who have paid to acquire national insurance contributions as a "breach of natural

In an unprecedented move six members of the committee, according to the newspapers, have produced a minority report demanding that the proposals be dropped. They argue that the withdrawal of social security benefits will reduce the number of students from lower income backgrounds. The committee's report is based on a calculation that many students will lose up to £560 per academic year in housing benefit. That is £140 more than the loan they will receive.

When the amendment to the Education (Student Loans) Bill on housing benefit was sent to the House of Commons, that Chamber invoked its financial privilege and disagreed to the amendment because it involved a charge on the public revenue. It is understood that that was decided within the context of the Education (Student Loans) Bill and that it is appropriate to raise it here as a matter relating to social security. If this set of amendments were passed, they would not require additional expenditure. Rather, they would retain existing students' entitlement to social security benefits. The noble Lord, Lord Boyd-Carpenter, has gone but I believe he made that point when we were discussing this matter in relation to the student loans Bill. This Bill raises a different issue to the one we discussed on that Bill. The amendments argue simply that students as a body of persons should not be disentitled to social security benefits solely on the basis that they are full-time students. The question of Commons privilege does not arise.

The purpose of Amendment No. 25 is to ensure that students are not disentitled to claim housing benefit simply because they are full-time students. The draft amendment regulations that were published in February in relation to the Social Security Act 1986 substantially affect students' housing benefit entitlement. They A full-time student shall be treated as if he were not liable to make payments in respect of a dwelling".

That is also extended in another regulation to include the partner of a student. Therefore students and partners of students are to be treated as if they do not pay rent for their accommodation. That is clearly not the case. Approximately 60 per cent. of students nationally find their accommodation in the private rented sector. They usually pay substantial sums in respect of a dwelling. Furthermore, students living in halls of residence are not entitled to claim housing benefit at the moment. Therefore the proposed changes will not have any effect on them.

The purpose of Amendment No. 26 is to ensure that the 1986 Social Security Act stipulates that full-time students cannot be excluded from eligibility for housing benefit purely on the grounds of being postgraduate students. Students undertaking postgraduate courses will not be eligible to receive a loan. Therefore disentitlement to housing benefit represents an even greater loss of income for those students. A postgraduate student is deemed to be on his or her course of study for 52 weeks a year. Therefore a postgraduate student over 25 years of age living outside London, with an average rent of £25-40 per week, will lose out by £448-24 a year. Postgraduate students will be particularly impoverished as a result of being disentitled to housing benefit. We also have to remember that many of those students are self-financing.

Disentitlement to housing benefit will be detrimental to most sections of the student population. As approximately 60 per cent. of students nationally find their accommodation in the private rented sector, many students will be substantially worse off, particularly as a result of the establishment of market rents resulting from the so-called deregulation of the private sector by the Housing Act 1988. Under the proposed scheme of student financial support, a student with an average rent in London is left with £18.6 on which to live after paying for his or her accommodation. A student ouside London with an average rent will have £26-33 left on which to live. Both of those figures are less than the Government's own personal allowance for a single person aged between 18 to 24 of £28–80. In the case of a student in London it is over £10 below that level.

This measure is being taken simply on the basis that students should be treated as if they are not liable to make payments in respect of a dwelling. As I said before, the access funds will not be nearly enough to make up for this. The universities and polytechnics, which are being asked to administer those funds, are worried about the difficulty they will face in delivering loans and choosing who will have them, who will not have them and how much they will get. They are also worried about the administrative burden they will be landed with. I beg to move.

Earl Russell

If the Government had simply said that they did not consider the social security system the most appropriate way of supporting students, I would not have felt the need to argue with them. The appropriate response to that belief, if they had held it, was to increase student support to a level which raised students above benefit levels; in fact to float them off benefit. The right honourable friend of the Minister, Mr. Scott, admits that the Government have not done this. In a letter he was kind enough to send to me on 20th April he stated: this is not simply a case, as you suggest in your letter, of raising student support above benefit levels and therefore making our proposed regulations redundant. The taper system in Housing Benefit for example means that only a proportion of income above benefit levels (65 per cent. for rent allowance assessment) is taken into account when calculating benefit entitlement. Therefore it would require a maximum loan considerably higher than currently envisaged in order to float all current student claimants off benefit". I am grateful to the right honourable gentleman for that admission. It seems to me a rather important one.

The Government are leaving students below benefit level and denying them social security support in that situation. That is why I argued earlier this afternoon that the Government's policy is discriminatory. I do not withdraw that phrase. Even if the Government were providing a large enough loan to raise students in principle above benefit levels, they are well aware—I have heard the noble Baroness, Lady Blatch, say this at the Dispatch Box—that a high proportion of parents fail to pay their full parental contribution. As there is still a substantial parental contribution in the assessed student support, the Government will not, I think, deny that those students who do not receive that contribution are well below the level that they assess for their needs, even though that level is itself below benefit level. So we have here cases where people, through no fault of their own, are put well below social security benefit levels, which God knows are low enough in the first place. Those people are then told that they are not entitled to any further support.

This is a discriminatory measure and I do not see the justification for it. I do not think that the Government have got their sums right on this either. We have been given figures which result from a very small sample survey conducted by a contract research firm. It gives results which most of us find quite incredible. I beg the pardon of the Government for saying this, but it seems to me to illustrate the disadvantage of not having research done by academics. If the Government thought that British academics were interested parties, there are others in foreign countries who would have been impartial and willing to help.

I have noticed in replies given by Ministers in another place a steadily diminishing confidence among them that they have their sums right. With the leave of the Committee I shall quote a few replies that have been given recently. On 5th March Mr. Meacher asked the Secretary of State total cost of housing benefit paid to students in each region and in Great Britain during the summer vacation of 1989". Mrs. Shephard replied: Information is not available in the form requested". Mr. Meacher asked what was: the total number of claims paid, the average length, and total cost of unemployment benefit paid to students in each region and in Great Britain during the summer vacation of 1989". Mrs. Shephard replied: I regret that this information is not readily available and could be obtained only at disproportionate cost".—[official Report, Commons; 5/3/90, col. 535.] Mr. Battle asked the Secretary of State: the average amount of benefit or support, of each kind, received by a student in full-time higher education". That is the crucial question. Mrs Shephard replied: Information about the amount of benefit claimed by students is not routinely collected and is not therefore available in the form requested".—[official Report, Commons, 22/2/90; col. 893.] The starting point of our case is that the Government simply do not know what the correct figures are. In our opinion, because it coincides with our daily experience, the figures collected by the NUS are much closer to the truth, save only that the NUS has slightly undersold its case. It gives an average figure, for example, of rent being paid in London of £45. In my experience, most of our undergraduates pay £50 or occasionally a little over, but, although the NUS understated its case, it has come close to the truth. It calculates that students in London lose up to £1, 000 a year. That is a substantial amount of loss.

There is also substance in the point made by the Social Security Advisory Committee that, if students are taken out of social security, there must be some form of benefit directed to need. The loan is flat rate except for the London allowance—£40, or 20 tube journeys a year in from Zone 2. There is no regional evidence in that. As we know that regional housing costs vary grossly, some people will be much worse off than others.

With regard to residential homes, the Secretary of State has admitted that there is a strong case for local limits. I am glad that he has done so, but, if that case has substance for residential homes, it also has substance for students.

There is a particularly strong case to be made on behalf of postgraduate students, who are scandalously underfinanced. The supply is diminishing. In some subjects, particularly the sciences, the position is becoming increasingly difficult. As the Government are so worried about completion rates, they might take on board the fact that it is a great deal more possible to complete your work quickly if you are adequately financed.

However, the main reason for pressing the case for postgraduates is that the logic of the Government's case simply does not apply to them. The logic of the Government's case is that, because students have the loan, they do not need social security. Postgraduate students will not receive the loan, so I simply cannot understand the logic of taking them out of social security. It looks like a determination of principle to argue that students should not receive social security benefits. If there is a reason of principle behind that, I hope that, before tonight's debate is finished, we shall know what it is.

Finally, I shall beg the noble Baroness when she replies not to rely once again upon the access funds. In proportion to the needs, those sums are Maundy money.

9 p.m.

Baroness Blatch

Student support should be provided through a single source. The educational maintenance system is that source which is advocated by the Government. The administrative burdens on local authorities should also be reduced. Despite the noble Earl's description of the sums as derisory, the introduction of top-up loans and access funds has a real purpose. During our debates in this Chamber, those funds were substantially increased. Contrary to the assertions that have been made, that will not be at the expense of students. We firmly believe that the vast majority of students will find that the new resources available to them will outweigh any loss of benefit entitlement.

The Government have taken careful account of the impact of housing costs and the impact that they can have on students' income. The mandatory grant system acknowledges the exceptional costs faced by students in London, for example. The loan scheme will do the same. The allocation of the access funds will take account of variations in students' housing costs. The access funds will be able to target resources more effectively on local needs than other forms of educational support have been able to do in the past. The educational institutions themselves will administer the funds according to local demands and, in distributing the funds to the funding councils, the Government have had due regard to the differences in relevant accommodation costs between their respective sectors, the numbers of students in each sector and the proportion of those students living in private sector accommodation.

The amendments would not simply overturn our proposed policy on housing benefits for students. As I understand it, contrary to what the noble Baroness, Lady David, said, they would also, by allowing students in halls of residence to claim, create entitlements where currently none exists. As the student grant includes an element to cover such accommodation costs, there would be a double provision. Moreover, many fruitless claims are likely to result, putting a pointless burden on local authorities.

The public expenditure implications of allowing students to have recourse to the benefit system on top of the other means of student support are substantial. We are putting well in excess of £10 million additional resources into the educational system, creating a new system of student support. It would not make sense to leave the housing benefit arrangements as they are, much less to extend them.

The noble Earl, Lord Russell, referred to the fact that there was no increase in the additional moneys being put in by the Government through both the access funds coupled with the loan scheme which would outweigh the amount of loss of benefit. The figures are absolutely conclusive in that respect—£178 million is to be made available through the loan scheme and an additional £25 million is to be made available through the access funds. The loss of benefits totals only £68 million. That leaves more than £100 million excess funds available to students. From an independent survey carried out on students' income and expenditure, we estimate that in 1990–91 those students who actually claimed benefits would have received on average £315 in a full year. Instead of that level of benefit, students will have available to them a loan of £420 in most cases.

The total amount available to students in loans and access funds will outweigh what would have been available in benefits. We estimate that in the first year of the scheme expenditure on loans will, as I have just said, be £178 million compared with savings on social security expenditure of only £68 million for those within the scope of the loans. Additionally, and I continue to repeat it, we are making available £25 million through the access funds and the Government will be spending well over £100 million more on students next year as a result of the new support system. Indeed, students in this coming year will have available to them an increase of 25 per cent. Of funds over the previous year.

However—this point was raised by the noble Earl, Lord Russell, and the noble Baroness, Lady David—we acknowledge that there is concern in some quarters about the effect on individual students of the loss of benefit entitlement. We accept that a few students might have been able to claim more in benefits than they would have had available to them in loans. I can reassure the Committee that the Government have not neglected the position of such students. It is a relatively small number but if a small number of students are in financial difficulty as a result of the withdrawal of benefit entitlement, they will be able to apply for assistance from the access funds.

The calculation has been made that if access funds were made available to all students they would be derisory. It is our intention that they should be made available to those students who particularly need them and where the decision and determination for their use is made at a local level.

The noble Earl, Lord Russell, made reference to the discrepancies in statistics. Evidence from a survey commissioned by the Department of Education suggests that a high proportion of students claimed housing benefit and income support. However, the Department of Social Security's statistics suggest that the figures are substantially lower. Those statistics are based on actual caseload counts or, in the case of housing benefit, on a 1 per cent. sample of claims. Therefore we believe those figures to be more reliable. They bear out our view that only a minority of students in practice will lose benefits.

A further point mentioned by the noble Earl concerned the problems raised for postgraduate students. Grant provision is intended to cover postgraduates throughout the year. Noble Lords should also bear in mind that postgraduates have an access fund specifically to deal with any financial problems which may arise from withdrawal of benefits. Proportionately, the access fund for them is significantly greater than that for other students.

There was one other point which I believe was raised by the noble Baroness in relation to the partners of students. I can assure her that income support benefits will be available to partners of students but in assessment the student's income will be taken into account.

I believe that the total amount of funds available to students more than outweighs the loss of benefit. The Government have gone a very long way to meet the needs of postgraduate students, disabled students (about whom we spoke earlier) and those particular students who live in high cost rented areas.

With that explanation, I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness David

I thank the noble Baroness for her reply. However, she still ignores the evidence that has been collected about the way in which students will be worse off when the situation develops, as it will, next year.

With regard to the access funds, there are no guidelines about the administration, which is bound to be chaotic. Universities and polytechnics do not know how they will manage. Various promises have been made that access funds will be available not only to compensate for benefits but also to include child care costs, mature students, special education equipment, special travel costs and part-time students—and that is only £14 million for undergraduates.

I am assured that the amendments as they stand do not affect the present arrangements for halls of residence. They would not mean that students in halls of residence would have housing benefit available. I still believe that the situation has been totally badly assessed by the Government. I shall have to test the opinion of the Committee. The answer was not satisfactory.

9.12 p.m.

On Question, Whether the said amendment (No. 25) shall be agreed to?

Their Lordships divided: Contents, 86; Not-Contents, 53.

DIVISION NO. 4
CONTENTS
Addington, L.	Kennet, L.
Adrian, L.	Kirkhill, L.
Blackstone, B.	Kirkwood, L.
Boston of Faversham, L.	Lockwood, B.
Briginshaw, L.	Lovell-Davis, L.
Bruce of Donington, L.	McIntosh of Haringey, L.
Butterfield, L.	McNair, L.
Callaghan of Cardiff, L.	Mason of Barnsley, L.
Carmichael of Kelvingrove, L.	Mayhew, L.
	Milner of Leeds, L.
Carter, L.	Mishcon, L.
Cledwyn of Penrhos, L.	Molloy, L.
Clinton-Davis, L.	Monkswell, L.
Darcy (de Knayth), B.	Morris of Castle Morris, L.
David, B.	Mulley, L.
Dean of Beswick, L.	Nicol, B.
Donoughue, L.	Northfield, L.
Dormand of Easington, L.	Ogmore, L.
Ewart-Biggs, B.	Oram, L.
Falkender, B.	Park of Monmouth, B.
Falkland, V.	Peston, L.
Fisher of Rednal, B.	Pitt of Hampstead, L.
Gallacher, L.	Prys-Davies, L.
Galpern, L.	Rea, L.
Graham of Edmonton, L. [Teller.]	Richard, L.
	Ritchie of Dundee, L.
Grey, E.	Rochester, L.
Harris of Greenwich, L.	Ross of Newport, L.
Hatch of Lusby, L.	Russell, E. [Teller.]
Hirshfield, L.	Seear, B.
Hooson, L.	Serota, B.
Houghton of Sowerby, L.	Shackleton, L.
Howie of Troon, L.	Stallard, L.
Hughes, L.	Stoddart of Swindon, L.
Irvine of Lairg, L.	Strabolgi, L.
Jay, L.	Taylor of Blackburn, L.
Jeger, B.	Tordoff, L.
Jenkins of Putney, L.	Turner of Camden, B.
John-Mackie, L.	Underhill, L.
Kagan, L.	Walston, L.

Wedderburn of Charlton, L.	Wilson of Rievaulx, L.
Whaddon, L.	Winchilsea and Nottingham, E.
White, B.
Williams of Elvel, L.	Winstanley, L.
Willis, L.

NOT-CONTENTS
Arran, E.	Johnston of Rockport, L.
Belhaven and Stenton, L.	Joseph, L.
Belstead, L.	Long, V. [Teller.]
Blatch, B.	Lucas of Chilworth, L.
Borthwick, L.	Lyell, L.
Brabazon of Tara, L.	McColl of Dulwich, L.
Brookes, L.	Mackay of Clashfern, L.
Brougham and Vaux, L.	Macleod of Borve, B.
Buckinghamshire, E.	Monk Bretton, L.
Butterworth, L.	Mottistone, L.
Caithness, E.	Mountevans, L.
Carnock, L.	Reay, L.
Cullen of Ashbourne, L.	Saltoun of Abernethy, Ly.
Davidson, V. [Teller.]	Sanderson of Bowden, L.
Denham, L.	Skelmersdale, L.
Donegall, M.	Strathmore and Kinghorne, E.
Downshire, M.
Eccles of Moulton, B.	Suffield, L.
Elliot of Harwood, B.	Swinton, E.
Elliott of Morpeth, L.	Teviot, L.
Ferrers, E.	Thomas of Gwydir, L.
Fraser of Carmyllie, L.	Ullswater, V.
Henley, L.	Vaux of Harrowden, L.
Hesketh, L.	Vinson, L.
Hives, L.	Wise, L
Hooper, B.	Wynford, L.
Jenkin of Roding, L.	Yarborough, E.

Resolved in the affirmative, and amendment agreed to accordingly.

9.20 p.m.

Baroness David moved Amendment No. 26: Before Clause 6, insert the following new clause: ("Exemption for postgraduate students In section 20(12)(h) of the 1986 Act, at the end there shall be inserted the words "provided that no person shall be treated solely on the grounds that he is a postgraduate student, " ").

The noble Baroness said: I spoke to this amendment when speaking to Amendment No. 25. I beg to move.

On Question, amendment agreed to.

Baroness David moved Amendment No. 27: Before Clause 6, insert the following new clause: ("Housing Benefit: students In section 21 (6) of the 1986 Act, at the end there shall be inserted the words "and may provide for the regional or local level of housing costs and any payment for the purpose of meeting such costs to be taken into account in determining the maximum housing benefit where the claimant is a full-time student." ").

The noble Baroness said: This amendment deals with housing benefit but tackles a slightly different aspect of the problem. It ensures that the variations in local and regional housing costs are taken into account when determining the amount of benefit payable.

Everyone knows that the amount of housing benefit a person receives is dependent among other factors on the level of rent. As is well known, there are vast differences in rent levels across the country because of issues of supply and demand. That is particularly so since the Housing Act 1988 came into effect, with some rents in the private sector in London doubling. The noble Earl, Lord Russell, mentioned the different rents in London and elsewhere. However, even students outside London with an average rent of £25.40 would lose out by £173.10. Therefore, again a student is using all of his loan to pay his rent. Students on courses of more than three years' duration—some are of four, five and even seven years—will lose out to a much greater extent.

The Government justify their case in terms of increase in resources to students, but we know that the figures are far from accurate and were not thoroughly researched. Therefore, it is easy to foresee a situation in which students vote with their feet and give up going to colleges in high-cost areas. The depression in the demand for places in London has been noticed. The withdrawal of housing benefit will mean that colleges in London and the South East will face major falls in applications. The Government may mistakenly believe that loans will tempt more students into college but surely they cannot believe that making them worse off will be an incentive. I beg to move.

Earl Russell

I am happy to support the amendment. As the noble Baroness said, it does not merely relate to London. Throughout our debates on the subject there has been a chorus of concern about regional housing costs in many areas other than London. The Committee may recall the speeches made on the subject by my noble friend Lord Addington. They may also recall the speech made on the Second Reading of the Student Loans Bill by the noble Baroness, Lady Faithfull, about housing costs in Oxford. The concern is widespread and something more than merely the London allowance is needed to deal with it. I support the amendment.

Baroness Blatch

The housing benefit entitlement is calculated on the basis of the individual claimants' eligible housing costs. Therefore, the benefit will reflect regional and local levels of rent.

When speaking to Amendments Nos. 23 and 24 the noble Baroness, Lady David, spoke also to this amendment, as did I, because I addressed the regional variations in housing costs. I am happy to repeat what I said then.

The Government have taken careful account of the impact which housing costs may have on students' incomes. The mandatory grant system acknowledges the exceptional costs faced by students, particularly in London. The loan scheme will do the same. The allocation of the access fund will take account of a variations in students' housing costs. In fact, the access funds will be able to target resources more effectively on local needs than other forms of educational support have been able to do in the past.

It will be for the educational institutions—and this is very important—to make the determination. They will administer the fund according to local demand. In distributing the funds to the funding council, the Government have had due regard to the differences in relevant accommodation costs between the respective sectors, the number of students in each sector and the proportion of those students living in private sector accommodation. I also made reference to the individual student who would be in particular difficulties; that is, a student who would lose more in benefit than would be available to him or her in loans.

I should make the point that the assessment of housing benefit for students differs only in so far as the amount of rent on which benefit is payable is reduced by a specified weekly amount. That rent deduction is made only during the period of study, so that a student grant payable for that period includes an amount towards accommodation costs. The amount of the deduction made mirrors the provision made in the grant and is set at one of the two levels—one for students in London receiving a higher grant and one for students elsewhere. If the aim of the amendment is to seek to remove that rent deduction, it is misplaced. It is only right that the deduction should be made, as the student grant includes an element for accommodation costs. Not to take that into account would create a wasteful duplication of provisions and would place students who live in privately rented accommodation in a more advantageous position than those living in halls of residence and other college-provided accommodation who do not have access to housing benefits.

I have been repetitious, but this point has been addressed by the noble Baroness and myself in speaking to the previous amendment. I hope that she will feel able to withdraw it.

Baroness David

My disbelief on this amendment is just as great as it was on the previous amendments. I do not believe that the Government have their figures right and I shall again divide the Committee.

9.28 p.m.

On Question, Whether the said amendment (No. 27) shall be agreed to?

Their Lordships divided: Contents, 77; Not-Contents, 53.

DIVISION NO. 5
CONTENTS
Addington, L.	Graham of Edmonton, L. [Teller.]
Adrian, L.
Blackstone, B.	Grey, E.
Briginshaw, L.	Harris of Greenwich, L.
Butterfield, L.	Hatch of Lusby, L.
Callaghan of Cardiff, L.	Hirshfield, L.
Carmichael of Kelvingrove, L.	Hooson, L.
	Howie of Troon, L.
Carter, L.	Hughes, L.
Cledwyn of Penrhos, L.	Irvine of Lairg, L.
Clinton-Davis, L.	Jay, L.
Darcy (de Knayth), B.	Jeger, B.
David, B.	Jenkins of Putney, L.
Dean of Beswick, L.	John-Mackie, L.
Donoughue, L.	Kennet, L.
Dormand of Easington, L.	Kirkhill, L.
Ewart-Biggs, B.	Kirkwood, L.
Falkender, B.	Lockwood, B.
Falkland, V. [Teller.]	Lovell-Davis, L.
Fisher of Rednal, B.	McIntosh of Haringey, L.
Gallacher, L.	McNair, L.
Galpern, L.	Mason of Barnsley, L.

Mayhew, L.	Russell, E.
Mishcon, L.	Seear, B.
Monkswell, L.	Shackleton, L.
Morris of Castle Morris, L.	Stoddart of Swindon, L.
Mulley, L.	Strabolgi, L.
Nicol, B.	Taylor of Blackburn, L.
Northfield, L.	Tordoff, L.
Ogmore, L.	Turner of Camden, B.
Oram, L.	Underhill, L.
Park of Monmouth, B.	Wedderburn of Charlton, L.
Peston, L.	Whaddon, L.
Pitt of Hampstead, L.	White, B.
Prys-Davies, L.	Williams of Elvel, L.
Rea, L.	Wilson of Rievaulx, L.
Richard, L.	Winchilsea and Nottingham, E.
Ritchie of Dundee, L.
Rochester, L.	Winstanley, L.
Ross of Newport, L.	Winterbottom, L.

NOT-CONTENTS
Arran, E.	Hooper, B.
Belhaven and Stenton, L.	Jenkin of Roding, L.
Belstead, L.	Johnston of Rockport, L.
Blatch, B.	Joseph, L.
Borthwick, L.	Long, V.
Brabazon of Tara, L.	Lucas of Chilworth, L.
Brookes, L.	Lyell, L.
Brougham and Vaux, L.	McColl of Dulwich, L.
Buckinghamshire, E.	Mackay of Clashfern, L.
Butterworth, L.	Macleod of Borve, B.
Byron, L.	Monk Bretton, L.
Caithness, E.	Mottistone, L.
Carnock, L.	Mountevans, L.
Cullen of Ashbourne, L.	Reay, L.
Davidson, V. [Teller.]	Sanderson of Bowden, L.
Denham, L. [Teller.]	Skelmersdale, L.
Donegall, M.	Strathmore and Kinghorne, E.
Downshire, M.
Eccles of Moulton, B.	Suffield, L.
Elliot of Harwood, B.	Swinton, E.
Elliott of Morpeth, L.	Teviot, L.
Ferrers, E.	Thomas of Gwydir, L.
Fraser of Carmyllie, L.	Ullswater, V.
Grantchester, L.	Vaux of Harrowden, L.
Henley, L.	Vinson, L.
Hesketh, L.	Wise, L.
Hives, L.	Wynford, L.

Resolved in the affirmative, and amendment agreed to accordingly.

Clause 6 [Late claims for widowhood benefits where death is difficult to establish]:

[Amendment No. 28 not moved.]

Clause 6 agreed to.

Clause 7 [Recovery from damages etc. of sums equivalent to benefit: further provision]:

9.36 p.m.

On Question, Whether Clause 7 shall stand part of the Bill?

Their Lordships divided: Contents, 58; Not-Contents, 69.

DIVISION NO. 6
CONTENTS
Adrian, L.	Brougham and Vaux, L
Ampthill, L.	Buckinghamshire, E.
Arran, E.	Butterfield, L.
Belhaven and Stenton, L.	Butterworth, L.
Belstead, L.	Caithness, E.
Blatch, B.	Carnock, L.
Borthwick, L.	Cullen of Ashbourne, L.
Brabazon of Tara, L.	Davidson, V. [Teller.]
Brookes, L.	Denham, L. [Teller.]

Donegall, M.	Mackay of Clashfern, L.
Downshire, M.	Macleod of Borve, B.
Eccles of Moulton, B.	Monk Bretton, L.
Elliot of Harwood, B.	Mottistone, L.
Elliott of Morpeth, L.	Mountevans, L.
Ferrers, E.	Reay, L.
Fraser of Carmyllie, L.	Saltoun of Abernethy, Ly.
Grantchester, L.	Sanderson of Bowden, L.
Greenway, L.	Skelmersdale, L.
Harmar-N cholls, L.	Strathmore and Kinghorne, E.
Henley, L.
Hesketh, L.	Suffield, L.
Hives, L.	Swinton, E.
Hooper, B	Teviot, L.
Jenkin of Roding, L.	Thomas of Gwydir, L.
Johnston of Rockport, L.	Ullswater, V.
Joseph, L.	Vaux of Harrowden, L.
Long, V.	Vinson, L.
Lucas of Chilworth, L.	Wise, L.
Lyell, L.	Wynford, L.
McColl of Dulwich, L.

NOT-CONTENTS
Addington, L.	Lovell-Davis, L.
Birk, B.	McIntosh of Haringey, L.
Blackstone, B.	McNair, L.
Callaghan of Cardiff, L.	Mason of Barnsley, L.
Carmichael of Kelvingrove, L.	Mayhew, L.
	Mishcon, L.
Carter, L.	Monkswell, L.
Cledwyn of Penrhos, L.	Morris of Castle Morris, L.
Clinton-Davis, L.	Mulley, L.
David. B.	Nicol, B.
Dean of Beswick, L.	Northfield, L.
Donoughue, L.	Ogmore, L.
Dormand of Easington, L.	Oram, L.
Ewart-Biggs, B.	Peston, L.
Falkender B.	Pitt of Hampstead, L.
Falkland, V.	Prys-Davies, L.
Fisher of Rednal, B.	Rea, L.
Galpern, L.	Richard, L.
Graham of Edmonton, L. [Teller.]	Rochester, L.
	Ross of Newport, L.
Grey, E.	Russell, E. [Teller.]
Harris of Greenwich, L.	Seear, B.
Hatch of Lusby, L.	Shackleton, L.
Hirshfield, L.	Stoddart of Swindon, L.
Hooson, L.	Strabolgi, L.
Howie of Troon, L.	Taylor of Blackburn, L,
Hughes, L.	Tordoff, L.
Irvine of Lairg, L.	Turner of Camden, B.
Jay, L.	Underhill, L.
Jeger, B.	Whaddon, L.
Jenkins of Putney, L.	White, B.
John-Mackie, L.	Williams of Elvel, L.
Kennet, L.	Wilson of Rievaulx, L.
Kirkhill, L.	Winchilsea and Nottingham, L.
Kirkwood, L.
Lockwood, B.	Winstanley, L.

Resolved in the negative, and Clause 7 disagreed to accordingly.

9.45 p.m.

Lord Cledwyn of Penrhos

Before we proceed further with the Committee stage of the Bill, I point out that we have reached a position where the Government have been defeated in the Division Lobby on four occasions on matters of considerable importance. They have been defeated on disability and on the victims of road accidents. We take the view that such defeats on one of the central Bills of the Government's manifesto must give Ministers reason to pause for a moment. On this side of the Committee we regard it as an extremely serious position. I must call on the noble Lord the Leader of the House to state the Government's intentions against that background.

Lord Belstead

The Government intend to continue with the Bill this evening to the point that it was agreed through the usual channels we should reach. We shall of course as a government be considering the result of these Divisions in the usual way.

[Amendment No. 29 not moved.]

The Deputy Chairman of Committees (Lord Grantchester)

I am advised that as Clause 7 does not stand part of the Bill I cannot call on Schedule 1 and the amendments thereto.

Schedule 1 [Amendments relating to the recovery from damages etc. of sums equivalent to benefit]:

[Amendments Nos. 30 to 33 not moved.]

Clause 8 [Liability to maintain dependants]:

Earl Russell moved Amendment No. 34: Page 10, line 19, 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: Clause 8 relates to maintenance for single parents. The object of the clause is to assist in recovering maintenance from fathers, an objective supported from these Benches. The object of the amendment is to create a £10 disregard on income support for the first £10 of maintenance recovered. The purpose of such an amendment is to create an incentive to operate the system as this is one case where we think the Government are doing something which on the whole is sensible. We should like to help them to succeed. The amendment is offered in that spirit.

The proceedings for recovering maintenance are necessarily tedious and may possibly be painful. If there is not some advantage in doing it people will not do it. This applies to the business of persuading the father to pay, as the father is always liable, if he is the somewhat irresponsible person that the system envisages. He may say, "Why should I pay all this money just to save the Treasury? They have plenty anyway". It will assist in recovering maintenance if we can assure him that his child will be receiving a slightly larger total sum than would be the case if he paid nothing at all.

The position is similar for the mother. She has some disincentive to operate a system which involves a great deal of argument, a great deal of hassle and possibly a certain amount of discontent. There have been cases where the mother has been afraid to call on such a system. If she is not a penny better off at the end of it she may well suffer a disincentive to bother. That could defeat the effects of the clause.

A disregard of the kind we propose in the amendment is in use in both the Australian and the United States benefit systems. Both have found that it is a considerable help in trying to get people to operate the procedure of recovering the money. I know that it would cost the Treasury a certain amount of money but the sum would be neglible. The assistance which it could bring in the form of recovering more money from fathers than would otherwise be the case would produce the possibility that it would result in a net saving to the Treasury. I hope that the amendment will not be objected to on the ground that it would involve cost to public funds. Any such cost would be negligible. In our view, what is put forward would make the system proposed by the Government a little more effective. It is offered in an altogether sympathetic spirit. I beg to move.

Lord Carter

On these Benches we think that this is a very sensible amendment. It is a disregard which would provide a strong incentive for the payment of child maintenance. We believe that the argument put forward by the noble Earl is a good one. In our view there is a longer-term benefit in encouraging the lone parent to claim maintenance. There may come a time when the lone parent may be able to seek employment. The mere fact of having a maintenance order may make the difference between whether the lone parent can afford to take up that employment or finds that the family would be poorer, after paying the child care costs, than if they stayed on benefit. The disregard would help to overcome that situation.

Baroness Blatch

Amendment No. 34 does not address anything in Clause 8, but rather it seeks to amend the way in which maintenance payments are treated for the purposes of income support. More specifically, this amendment proposes that £10 of any maintenance payments made in any week in respect of one or more children should be disregarded. Currently, in assessing the amount of income support payable, and indeed also for assessment of supplementary benefit previously, any maintenance received is taken fully into account. In this respect it is similar to most other types of income.

In considering this amendment, we need to remember what is actually happening. Income support is available to lone parent families who need it, and it is absolutely right that it should be so. But support for these families should not be left to the social security system. Absent parents have a clear legal duty to maintain their families. Yet for three quarters of lone parent families dependent on income support, the absent parent pays no maintenance at all. That is the situation for some half a million families. They should not leave it to the benefit system. Income support for lone parent families costs £1-9 billion a year. It is right that the benefit system should receive some recompense from absent parents for the support it provides for their families.

Maintenance is still extremely important for the lone parent family receiving income support. It is income which the lone parent can take if he or she leaves benefit and takes up work. It is also vital that the absent parent should not get into a habit of non-payment, so that regular maintenance is available to help the lone parent who wants to work. It is clearly right that the wider review which has been undertaken should look at all the factors involved in decisions about paying or not paying maintenance, and this is one aspect which we shall consider in this context. But we also have to look at the balance of costs and other aspects.

I move on now to Amendments Nos. 35, 36, 37, 38 and 40. These together seek to ensure that when a claimant leaves income support, then the rights to receive all payments under a Section 24 maintenance order can be transferred to the claimant, not just those payments in respect of the children. A consequential amendment is made to the provisions for transferring an order back to the Secretary of State or the lone parent reclaiming benefit.

Clause 8 includes a number of measures to improve the action taken by DSS to obtain maintenance under the current maintenance system. At present, where parents are divorced or were never married, we can only seek to recover the benefit paid because of the children. In these situations, the new Section 24A empowers courts to consider the cost of caring for the absent parent's children, and to have regard to the income support personal allowance paid for the caring parent when making a DSS order for maintenance. Courts already have powers to have regard to the mother's costs in caring for children under family law.

Provided that there is no private maintenance order, Section 24A also allows the Secretary of State to transfer rights under a DSS order to a claimant who leaves income support. When the parents are divorced, or were never ever married, this will not apply to any amount for the caring parent's personal allowance. We considered transferring rights to receive the personal allowance as well, but after careful thought rejected that idea. Although, as I have said, under family law the courts can award an amount for the children which includes an element for the caring parent's own costs as carer, it is possible that that may be less than the income support personal allowance. of course, the fact of leaving benefit itself implies a change of circumstance.

In practice many absent parents cannot afford to pay the full amount of the children's allowances and we anticipate only a small number paying a contribution for the caring parent; but, where they do, a move off income support by the caring parent would be likely to trigger an application from the absent parent to reduce the amount that has to be paid. There is much less acceptance by the absent parent of the need to recognise the caring parent's costs than of the responsibility to support the children. One of the objectives of seeking transfer is to secure continuity of maintenance income for the caring parent and to avoid the need for her to return to court. If transfer were instead to provoke variations the measure would be counter-productive. That would be the likely effect of this amendment.

We recognise the concern that has been expressed on this point and will look at the issues raised as part of our wider review of the maintenance system.

For the reasons and because of the promises I have just given, I recommend to the Committee that both amendments are rejected.

Earl Russell

I must confess to a little disappointment in that reply. We do not propose that the maintenance of children be left entirely to the social security system. I had thought that I had made that clear in my speech. We propose a £10 disregard, which is a limited fraction of total income support, to encourage people to use the system of recovering the sum involved from the father. I do not see that that is a proposal to leave it to the social security system. I understand that the Minister is worried about that. I was not offering the amendment in any such spirit. I hope that that can be understood.

I entirely agree with the Minister that it is necessary to look at the balance of costs, but when she looks more closely at it the Minister may find that the balance of costs is a fine one, and that in any case, on the worst interpretation, the amount the amendment would cost the Government would be small. There is the possibility that it could save the Government some money if it made the machinery for recovering money from fathers more effective than it would otherwise be.

I do not intend to divide the Committee at present. The amendment was not offered in that spirit, but there is a possibility of returning to the matter on Report. I hope that by the time we reach that stage, the Government may have thought a little further about what is being proposed here, which does not seem to me in any way to conflict with their objectives. I would be grateful if between now and Report they would consider the matter in the light of that remark. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 35 not moved.]

The Deputy Chairman of Committees

If Amendment No. 36 is agreed to, I cannot call Amendment No. 37.

[Amendments Nos. 36 to 38 not moved.]

10 p.m.

Lord Henley moved Amendment No. 39: Page 11, line 25, leave out ("subsection (6)") and insert ("subsections (6) and (6A)").

The noble Lord said: The amendments are primarily tidying-up amendments to ensure that the interim improvements we are making to our maintenance arrangements under the current system work in the way intended.

First, we are clarifying the position regarding any arrears that may be outstanding at the time of any transfer of rights under a DSS order to the lone parent or any transfer back to the Secretary of State. If there are any arrears at the time of transfer to the lone parent, and those arrears relate to the period when the order was held by the Secretary of State, then he retains the right to take enforcement proceedings in respect of those arrears. Similarly, when an order is transferred back to the Secretary of State, the lone parent retains the right to take enforcement proceedings on any arrears accrued during the time she held the order.

Secondly, we are setting out precisely when the transfer of rights takes place. When the transfer is to the lone parent on her leaving benefit, the intention is that the transfer should take effect from her ceasing to receive income support. While there will be a small element of backdating we believe it is right to ensure continuity of payment and it will simply be a question of forwarding any money received by the Secretary of State following a transfer which should properly be made to the lone parent. Where it is a question of transferring rights back to the Secretary of State the transfer can be made when benefit recommences or at a later date where a transfer is not immediately necessary because payments continue to be made regularly for a period. In such cases the date of transfer would be specified in the notice itself.

The next two amendments are technical corrections and do not affect the policy at all. The final amendment is a new provision introduced to safeguard the interests of the Legal Aid Board. Where the lone parent was legally aided for the original proceedings, the Legal Aid Board can recover any money still outstanding in respect of the costs of that action from an award of arrears of maintenance ordered to be paid as a lump sum. Where the lone parent has taken her own proceedings both she and her solicitor have a duty to notify the board. The solicitor will usually do this and will arrange payment. Special arrangements are needed where the Secretary of State has taken action to obtain arrears. This amendment will provide for the Secretary of State to notify the board in any case where arrears of maintenance are awarded as a lump sum following action he has taken to enforce a claimant's order and legal aid costs are outstanding.

There is no change of principle here; the provision merely helps give practical effect to the Legal Aid Board's existing claim on lump sum payments for outstanding legal aid costs. I commend these amendments to the Committee and beg to move Amendment No. 39.

Earl Russell

Perhaps I may ask my noble kinsman to explain a little further the thinking behind Amendment No. 45. I have been trying to work out exactly what it is getting at. I am not quite sure that I have understood it. The provision is clearly concerned with the recovery of money for legal aid costs, but I am not entirely sure that I follow the legislative prose carefully enough to understand exactly who is recovering what from whom. I should be grateful if my noble kinsman could enlighten me a little.

Lord Henley

It is rather complicated. The final amendment, Amendment No. 45, is to safeguard the interests of the Legal Aid Board. Where the lone parent is legally aided for the original proceedings, the Legal Aid Board can recover any money still outstanding in respect of the cost of that action from an award of arrears of maintenance ordered to be paid as a lump sum. The provision safeguards the interests of the Legal Aid Board. Does that satisfy my noble kinsman?

Earl Russell

I apologise for taking the matter further but this makes me begin to wonder whether we are entering the area of Schedule 1 and the discussion which has just taken place. Is this a case where one recovers money from the father? Will that money pay the costs of the Legal Aid Board and not support the child? Is the money deducted from what would otherwise go to the child?

Lord Henley

I did not notice that we had discussed Schedule 1. Sadly, by odd procedural moves of the noble Baroness opposite, we have been prevented from discussing it. The noble Lord, Lord Byron, had some amendments down and I am sure we would all have taken a great interest in considering them but he was unable to move them. It is in the interests of the Legal Aid Board. I do not think that the child will lose out, just as the noble Earl knows full well that under Section 22 of last year's Act, which would have been affected by Schedule I, it would not be a case where the individual lost out.

Earl Russell

Is this a case where a government amendment applies the same principle as Section 22 of last year's Act? That is what I was trying to find out.

Lord Henley

I think I had better come back in detail on that. I do not think that that is the case but perhaps the noble Earl will accept my assurances to that extent and allow me to press the amendments. I shall write to him to make sure that I have got the position right and to make sure that he understands what I have been saying. I commend the amendments to the Committee.

On Question, amendment agreed to.

The Deputy Chairman of Committees

Amendment No. 40 contains a misprint. The Marshalled List should state: Page 11, line 44, leave out from ("rights") to end of line 49.

[Amendment No. 40 not moved.]

Lord Henley moved Amendment No. 41: Page 11 line 49, at end insert: ("(6A) The giving of notice under subsection (3) or (6) above does not transfer or otherwise affect the right of any person— (a) to receive a payment which fell due to him at a time before the transfer took effect; or (b) to exercise the relevant rights in relation to any such payment;

and, where notice is given under subsection (3), subsection (5) above does not deprive the Secretary of State of his right to receive such a payment in respect of any personal allowance element or to exercise the relevant rights in relation to such a payment. (6B) For the purposes of this section— (a) a transfer under subsection (3) above takes effect on the day on which the dependent parent ceases to be in receipt of income support in consequence of the cessation referred to in paragraph (c) of that subsection, and (b) a transfer under subsection (6) above takes effect on— (i) the first day in respect of which the dependent parent receives income support after the transfer under subsection (3) above took effect, or (ii) such later day as may be specified for the purpose in the notice under subsection (6), irrespective of the day on which notice under the subsection in question is given.").

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Mottistone moved Amendment No. 42: Page 13, line 10, at end insert (", provided that a court shall only exercise the power to make a maintenance order within the meaning of the Attachment of Earnings Act 1971 (power to attach earnings) if the liable person consents to the making of such an order.").

The noble Lord said: New Section 24B of the Bill was introduced by the Government fairly late in another place. It reflects, as I see it, their concern, shared, I believe, by most Members of the Committee, that people should not be allowed to walk away from their family obligations. The provisions of the new section allow the DSS to step in and seek enforcement of maintenance orders in order to recover what it is paying out in family income support where an order already exists but is not being enforced by the man, or usually the woman, concerned.

One means of enforcement which the Government seem to favour is an attachment of earnings order. That has two basic problems. As the Committee will know, I am advised on this matter by the CBI. The CBI informs me that employers have grown accustomed to handling the small volume of attachment of earnings orders currently made by the courts for civil debts. They have accepted the burden as a public duty although the charge they may levy on their employees offers no realistic compensation for the administrative cost. One company has worked out that the cost per transaction can be as much as £5 whereas the most that is ever charged is 50p. Most companies do not even charge that amount because they do not think it is reasonable to make a charge on their employees.

A sideline to what I am discussing in the amendment but a point worth making is the fact that companies are doing the Government's job for them in the same way as they do with the pay as you earn scheme. If they are to obtain compensation for that, it seems to me that it should come from the Government and not from the employee. However, I make the point in passing. That is one of the snags of using attachment of earnings orders as a means of enforcement.

Generally the quantity of orders has been kept within reasonable limits because the magistrates' courts have moved forward in a sensible manner, always obtaining the individual's acquiescence before imposing an attachment order. However, the Government are now showing growing enthusiasm for the use of attachment orders for debts where acquiescence may not be present.

My amendment seeks to ensure that an individual's acquiescence is obtained before the courts enforce an attachment of earnings order. If the Committee cares to think about that, it will appreciate that if people are called upon in relatively large numbers by their employers to hand over money which does not concern the employer—he is merely acting as an agent—it could lead to quite serious industrial relations troubles. Companies are extremely worried about the possible implications. Provided that the person who is liable for the attachment of earnings order has been persuaded by the court that he should consent to it voluntarily, everything will be perfectly all right. If it is done voluntarily, it will not lead to trouble. However, if it starts to be imposed without the voluntary feature, the industrial relations problems might be very great.

Under the present arrangements, employers must actively institute the recovery of the administrative charge rather than apply for it automatically—that relates to applying for it from the employee's point of view—but they will be reluctant to do so where the debt is not accepted by the debtor. That comes back again to the problem of collecting the expenses for running the scheme. Companies will not want to do that. They will be even less inclined to do it. There has been no offer on the Government's part to cover those administrative costs.

Companies are concerned that it will cost them money which they can ill afford these days. As we all know, they must be competitive in world markets, so anything which unreasonably inflicts extra costs on companies is not in the interests of the country, let alone the Government. In addition, companies might possibly be put in the position of experiencing industrial relations problems at a time when many have managed to achieve a much happier industrial relations climate than they had some 15 or 20 years ago.

I hope that the principle of the amendment will be accepted by the Government, although the way in which it is presented may not. I hope that I shall receive some encouragement. During the course of the passage of the Bill through this place, we may arrive at a solution which reflects the Government's undoubtedly right decision to try to ensure that people who walk away from their families should not be allowed to get away with not contributing to their support. At the same time, I hope that that will not put a great strain on industry. Such a strain might well arise for quite the wrong reasons and reasons which are not connected with the main purpose of this part of the Bill. I beg to move.

Lord Carter

I shall be extremely interested to hear the Minister's reply. At first sight, it appears that the amendment is concerned to look after companies and their administrative cost at the expense of lone parents. Perhaps I have misunderstood the noble Lord's explanation.

Lord Mottistone

Perhaps I gave the wrong emphasis. The amendment tries to save companies having problems with industrial relations. The administrative costs are part of the problem, but they are not the main reason for the amendment. The main reason for the amendment is that, until now, in the relatively few cases for which an attachment of earnings has been required, courts have been able to obtain acquiescence from the person concerned before making the order for attachment of earnings. Everything has been all right because it has been agreed to.

Under the Bill, if my amendment is not accepted, it will be possible for courts to order people to pay through attachment of their earnings what they should pay in any case. However, if that is to happen on a relatively large scale within a company, people in the workforce will start to say, "Look, what on earth is my employer doing collecting that money which has nothing to do with the company?". The worry is an industrial relations worry, not a money worry.

Lord Carter

I am grateful to the noble Lord for that explanation. I shall withdraw what I said and say instead that the amendment looks after the company's industrial relations at the expense of lone parents. Surely, if the liable person does not consent to the making of such an order, the lone parent will suffer. The Government will have to make that balance of judgment. I shall be interested to hear the Minister's response.

Lord Harmar-Nicholls

I find it difficult to go along with my noble friend because, as I read the amendment, it removes the principle which supports an attachment of earnings at any time.

Some people objected to PAYE being introduced as part of the tax system of this country. It was justified on the grounds that everybody must make his or her contribution according to his or her means in order that the country's bills could be paid. If we start moving away from the need in urgent cases for the ultimate sanction of attachment of earnings, we remove one of the weapons which enable us to get people to pay their just dues.

I understand exactly what my noble friend means. As an employer of labour I have a lot of sympathy with employers who have the onus of having to do things which are not their business. They have to do the Government's job. However, we accept it as a principle, as I said, with regard to PAYE and in other cases. I do not think that at this stage we should start in a separate way to undermine the force of the principle of justice in having attachment of earnings as a way of sorting out matters.

Lord Mottistone

My noble friend misses the point, which is that hitherto in applying attachment of earnings the courts have always sought and obtained the acquiescence of the people who have to pay. My amendment simply preserves the status quo. Without it we fear that the status quo may not be maintained.

Baroness Seear

While I understand some of the objections that the noble Lord, Lord Mottistone, raises, it is of overriding importance to get the money to the woman. There are two reasons. In the first place she needs it and we know that in many cases she does not receive it. Secondly, if she does not receive it, the burden falls on the taxpayer.

If the Government can find some way of getting round this problem without troubling the employers, all well and good. But it is difficult to see straightaway how that can be done. The point made by the noble Lord, Lord Mottistone, is that one has to have the consent of the people concerned. The very people who most need attachment to be applied are those who do not consent to it. Those who are willing to have the money sent might even send it without the employer having to do anything. That does not necessarily follow but it is more likely. The people who emphatically will not pay unless the employer does something about it are those who will not give consent if they are asked.

Employers are landed with doing all sorts of things which are the state's job. It is too bad but it is one of the many burdens that they have to put up with. If the Government can find a way round the difficulty, that will be even better.

10.15 p.m.

Baroness Blatch

My job has almost been done for me. This amendment seeks to reduce the scope for action available to the courts in proceedings taken by the Secretary of State to enforce a claimant's private maintenance order when it has fallen into arrears. We understand that employers may be concerned about the possibility that an increase in the number of attachment of earnings orders may increase their role in this sensitive area. But the changes proposed by Clause 8 will not have that effect. In addition, we think that the option that the court has of making an attachment of earnings order in cases where the debtor repeatedly defaults is too important a tool of enforcement to be given up lightly.

Clause 8 includes a number of measures to improve the action taken by the Department of Social Security to obtain maintenance under the current maintenance system when income support is claimed. These are interim steps while the Government examine the working of the maintenance system as a whole and possible alternatives. No decisions have yet been made.

While some maintenance payments are made fully and regularly without any special measures, unfortunately it is true that many fall into arrears. The new Section 24B enables the Secretary of State to take enforcement action on behalf of claimants whose private maintenance orders have fallen into arrears. The intention is that the Secretary of State should be able to take whatever action the lone parent could take to have payment enforced. That includes the possibility of an attachment of earnings order when the court thinks that it is appropriate to make one.

An attachment of earnings order can be made either with the debtor's agreement, or without it if 15 days have passed since the making of the maintenance order and the debtor has failed to make one or more payments due under the order and it appears to the court that default was due to wilful refusal or culpable neglect. Clause 8 does not change that. The court cannot make an attachment of earnings order unless arrears have built up.

The Government appreciate the co-operation given by employers in acting upon attachment of earnings orders. The present arrangements enable employers each time to deduct from salary 50p—as has been mentioned by my noble friend—which they retain themselves in recognition of the extra administrative costs they incur. The procedure is straightforward. They merely have to tell the employee in writing. I understand that arrangements for the charge are being reviewed and employers are being consulted.

It would obviously be preferable for absent parents to pay maintenance voluntarily without the need for courts and employers to be involved. But many absent parents do fail to meet their responsibilities. The cos: therefore of supporting their families falls on the taxpayer. That is wrong. It is precisely such a case where the amendment proposes to restrict the powers of the court. But it is also precisely such a case where the need for firm and effective action arises.

I must remind the Committee that attachment of earnings orders were introduced as a way of dealing with debt without resorting to imprisonment. Clearly that must remain a priority.

I should also point out to my noble friend that the drafting of the amendment itself does not serve his intentions. That is because maintenance orders—which are not the same as attachment of earnings orders—are not made under powers contained in the Attachment of Earnings Act but under other legislation.

While we understand the concern of employers we think it is important to achieve a proper balance between individuals' rights and their responsibilities. That was a point raised by Members of the Committee. This amendment does not do that.

My noble friend Lord Mottistone made reference to compensation from the Government for costs. In 60 per cent. of cases an attachment of earnings order is made because payments have fallen into arrears. It is therefore right that any administrative costs should fall to the debtor and not to the taxpayer.

The amendment is imperfectly drafted. If for no other reason I hope that my noble friend will feel able to withdraw the amendment. I hope that he will also feel that the case against the amendment has been made.

Lord Mottistone

I am not altogether happy with what I regard as a "curate's egg" answer. I shall certainly come back at a later stage. At this stage I shall not bore the Committee by plcking to pieces what we have just been told.

I am not happy. I believe that there may be other ways round such provision. It is important to realise that if one makes companies charge the debtor (as he is seen by the state) the proper rate for the cost of administration he is not a debtor to the company. That is absolute nonsense in industrial relations terms. We must have another think on that. I am unhappy, but at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Amendments Relating to the Recovery from Damages etc of Sums Equivalent to Benefit]:

The Deputy Chairman of Committees

I have to revert back to Schedule 1 to the Bill. I am advised that, following the failure of the Motion that Clause 7 stand part of the Bill, it was correct not to call Amendments Nos. 30, 31, 32 and 33, which were amendments to Schedule 1, but that I must still put the Question on Schedule 1. A note reads that the Question must be put on Schedule 1, the schedule left out as a consequence of leaving out Clause 7. In those circumstances I now put the Question.

Schedule 1 negatived.

Lord Henley moved Amendments Nos. 43 to 45: Page 13, line 22, leave out ("20") and insert ("17"). Page 13, line 40, leave out ("this section applies, the Secretary of State shall") and insert ("by virtue of this section, the Secretary of State commences any proceedings to enforce a maintenance order, he shall, in relation to those proceedings"). Page 13, line 45, at end insert: ("(6A) Where, in any proceedings under this section, the court makes an order for the whole or any part of the arrears due under the maintenance order in question to be paid as a lump sum, the Secretary of State shall inform the Legal Aid Board of the amount of that lump sum if he knows— (a) that the primary recipient either— (i) received legal aid under the Legal Aid Act 1974 in connection with the proceedings in which the maintenance order was made, or (ii) was an assisted party, within the meaning of the Legal Aid Act 1988, in those proceedings; and (b) that a sum remains unpaid on account of the contribution required of the primary recipient— (i) under section 9 of the Legal Aid Act 1974 in respect of those proceedings, or (ii) under section 16 of the Legal Aid Act 1988 in respect of the costs of his being represented under Part IV of that Act in those proceedings, as the case may be.").

The noble Lord said: I spoke to the amendments when speaking to Amendment No. 39. I beg to move Amendments Nos. 43 to 45 en bloc.

On Question, amendments agreed to.

On Question, Whether Clause 8, as amended, shall stand part of the Bill?

Baroness Macleod of Borve

At this late hour I shall be brief. I gave notice of my intention to oppose the Question that Clause 8 should stand part of the Bill because it was not fit and proper when only two amendments had been tabled. Since then we have had a reasonable debate which will continue at length on Report. I thank the Minister for a most helpful and comprehensive letter which I received today.

Although Clause 8 was not discussed in another place it is most important. For more than 25 years I have tried to administer the law in separation orders and so forth. One of the problems related to the amount of money that should be paid by a father whether through an attachment of earnings order or any other means. During that time so much has changed in this country. No longer do we have married couples separating and divorcing but we have young people living together and then separating. That is one of the problems. To my certain knowledge a number of mothers do not know or remember the fathers of their children. They then live with someone else and have other children by that liaison.

The clause is most complicated and when I read it I thought that the drafting was almost impossible to follow. However, having heard the debate tonight, having read the Minister's letter in which he says that the whole maintenance system will be investigated, and despite the fact that there will be many anomalies, I can do no better than to sit down. The night has been long and if I continue I shall be tedious.

Baroness Blatch

My noble friend is never tedious. I am grateful not only for her remarks about the long and involved letter but also for agreeing not to oppose the Question that the clause shall stand part of the Bill. Clause 8 is complex but, as my noble friend has said, very important. The measures form a practical package of short-term improvements to our arrangements. The Government are looking more widely at the whole system and later this year will be bringing forward proposals. In the meantime I hope that the Committee will accept the fact that Clause 8 makes a worthwhile contribution and I commend it to Members of the Committee.

Clause 8, as amended, agreed to.

10.30 p.m.

Earl Russell moved Amendment No. 46: After Clause 8, insert the following new clause: ("Earnings from employment 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: The effect of Amendment No. 46 is to introduce a child care disregard for income support for single parents who work part time. I am sorry that the noble Lord, Lord Boyd-Carpenter, is no longer in his place because earlier I promised him a further answer to his questions about priorities.

The second priority which I wish to follow throughout this Bill is that it seems to me important to use the benefit system in ways which help people to get back into employment. It is a necessary conclusion from our income support figures that too high a proportion of the population is not in productive employment. In many ways the consequences of that are unfortunate.

By giving a little help at the crucial moment, it is of ten possible to make it easier for people to work if they wish to do so. No one says that single parents must work. We agree with what Mrs. Shephard said in another place on that. The point is not to push people into work but to make it easier for them to work if they so wish. It is to be strictly a matter of choice.

In this amendment we are arguing that the way in which the benefit system is working at present is creating a disincentive to single mothers to work. That is unfortunate. It is keeping people out of productive employment and creating a new poverty trap. The cost of child care is inescapable. If the mother is working the child must be cared for. The proportion of our population who have grandmothers on tap is regrettably lower than it was. That is a necessary result of the mobility of labour and cannot be reversed.

Because the cost is there and because there is inevitably a loss of income when child care costs are to be paid, the result can be that a woman is worse off working part-time than if she were not working at all. I take an example. A woman has part-time earnings of £40. She spends £16 on child care. That is not a particularly generous estimate and it may well come to more. She spends £5 on fares. That estimate was probably arrived at before the latest round of fare increases. There is also a loss of benefit because of earnings. The result is that the woman is £11 worse off because she is working.

The Government do not like poverty traps. We do not like poverty traps. We think that the effect of discouraging people from working is unfortunate and something should be done to change it.

We have discussed the matter in this Chamber before and we have received the reply that this is uncomfortably like the old single payment system. I hope that the Government are capable of thinking beyond that. Here we have a more general way of thinking about tax and benefits which we have come across in other debates in the past.

This Government have an avowed hostility towards allowances. Also, they have an avowed hostility to provisions like single payments which take account of special circumstances. That results from a philosophical hostility to the principle of distorting the market. I can understand what the Government are getting at, but it is worth thinking about who is distorting the market. It seems to me that if you are assessing peoples' incomes, you really should be thinking about the disposable income, the net income, the amount which is free to be spent. That is what makes the difference.

Therefore, if you take necessary expenses out of the calculation, you end up taxing unequally people who have equal incomes. That is a distortion of the market and has unfortunate effects. We have an example of that here. Therefore, I hope that the Government will go somewhat beyond the philosophical framework and look at what is happening.

One can quantify what is happening. Married women rely on their husbands for child care, as I remember. Some 36 per cent. of married women work part-time. Widows do not lose benefit if they work part time. If we compare widows with single parents we have a controlled experiment. Forty-two per cent. of widows work part time, but in the case of single parents who lose benefit, only 24 per cent. work part time. That is a significant discrepancy. It marks the extent to which current policy keeps people oat of employment. That may be costing the Treasury money, which one hopes might concern it. I beg to move.

Baroness Turner of Camden

We on these Benches support the amendment moved by the noble Earl, Lord Russell. I do not intend at this time of night to add to the arguments that he advanced in such detail, so specifically and so well, except to point out to the Government that a number of their own statements and documents recently before both Houses indicate that they are concerned about the provision of child care and wish to encourage women back into the labour market on a part-time or even a full-time basis where appropriate. One of the objectives of the amendment is to put flesh on the bones of that intention. I hope that the Government accept it.

Baroness Blatch

This amendment does not address anything in the current Bill; rather it seeks to amend the way in which certain employment expenses, are treated across the income-related benefits. More specifically, the amendment proposes to disregard any costs of caring for a child or another member of the family if these are reasonably incurred in connection with employment.

The Committee will be aware that the current earnings rules were thoroughly debated in both Chambers when the reforms were introduced, and again last year during the Committee stage of what became the Social Security Act 1989. On both occasions Parliament decided that it was sensible for the income support scheme to be in line with the housing benefit and family credit schemes, neither of which has ever had a statutory disregard of any employment expenses.

That was the proper approach then and it remains so today. People in work who do not receive any income-related benefit are not generally protected from employment expenses. To make such provision for people receiving benefit could create disincentives for them to leave benefit and move into work. For example, a claimant on income support might be tempted to limit the hours he or she works, and so their wages, to remain on income support. Similarly, on family credit, such a disregard could have a negative effect, discouraging independence and improvement so as to remain within the benefit system. That would be taking a backward step.

I suspect that Members of the Committee are particularly concerned about the position of lone parents as they may be the most likely to incur child care costs if they were to take up work. The Government are concerned that lone parents who want to work should be helped to do so. We believe the current structure of benefits goes a long way to achieving that by giving special help to lone parents. The present structure of disregards in income support, housing benefit and in community charge benefit helps lone parents by disregarding the first £15 of their earnings. That gives them a sizeable lead over other claimants, most of whom receive a £5 disregard on their earnings if they are on income support.

In addition, as we have already announced, for lone parents receiving housing benefit or community charge benefit the earnings disregard will be increased from £15 to £25 a week from October. We also increased the lone parent premium in housing benefit and community charge benefit in April, as part of the uprating, from £8.60 to £9.70 a week. For lone parents on family credit there are also special measures. They receive the same adult credit as a two parent family, and their one parent benefit is ignored in the calculation of their income.

I should also mention one other very important issue for lone parents, which is maintenance. Absent husbands and fathers are liable to maintain their dependants and it is quite unfair that the burden so of ten falls upon the taxpayer. Regular payments of maintenance can give a substantial measure of help to lone parents wanting to work and facing perhaps child care costs. Maintenance payments may be the boost that many lone parents need to take up work. Members of the Committee will know that we have announced a review of the maintenance system as a whole; and we are also taking action in the meantime to improve the amount of maintenance recovered. We believe this is good news for lone parents.

The various provisions I have mentioned within the benefit system help all lone parents who wish to work, including those with child care costs. On child care itself, we believe parents are the ones best placed to make decisions and choices about the care of their children. The Government's role is to help them have the greatest possible choice of child care provision and to ensure standards. Voluntary organisations and employers have an important role to play here and employers are increasingly recognising that help with child care can help them recruit and retain staff. The Budget measure recently announced by my right honourable friend the Chancellor which exempts from tax nursery places provided by employers should help to improve availability of child care.

The Committee will also be aware that the Ministerial Group on Women Issues, of which my department is a member, has shown particular interest in child care and has announced a set of proposals to promote the provision of good quality affordable child care. These included the encouragement of partnerships between employers, the voluntary sector and others and encouragement of employers to use the tax reliefs available to provide child care.

Some examples will help to show what is actually happening. First, as the Committee will be aware, the Children Act has now received Royal Assent. The Act should lead to a general improvement in child care standards. The Department of Health is giving £2 million over three years to voluntary organisations to set up and run new projects for pre-school children.

I should also mention here the interest shown by the private sector in child care, including, for example, the Midland Bank. The private sector is probably the fastest growing sector in child care at the moment and a new national association for commercial child care provision has recently been set up.

There is also the Budget measure of my right honourable friend the Chancellor which exempts workplace nurseries from tax as a benefit in kind. This will remove what many employers have argued is an obstacle to the growth of nursery provision by employers. It will help increase the supply of good quality nursery care by employers. That in turn will make it easier for parents at all income levels to combine parenthood and paid employment should they wish to do so. My department too is making headway. In March its first nursery for the children of staff at our local office in Hertford was opened by my honourable friend the Parliamentary Under-Secretary for Social Security.

For all those reasons, the Government believe this amendment is neither necessary nor helpful. It would hinder, not help, claimants who want to move from benefit to greater independence. The benefit system already contains a number of provisions to help lone parents who work and we believe that improvements in the maintenance system will help them further. The Government are active in promoting choice for parents of child care of proper standards. In addition, this amendment would introduce a complexity into the benefit system which needs to be as simple as possible. It would also have considerable benefit and administrative costs. I invite the Committee accordingly to reject the amendment.

Earl Russell

I should deceive the Committee if I said other than that I am disappointed by that reply. Perhaps I would not deceive the Committee but I would certainly surprise it. I am perfectly aware of course that this amendment has previously been debated. I thought that a very powerful case had been made out of it and I brought it back to see whether it might seem a little more persuasive for the Government with the passage of time.

The noble Baroness made a considerable issue of the point of disincentive; that at the ceiling level—the cut- off point, wherever it is—there might be a disincentive to working those few extra hours which involve coming off benefit. Does not that involve conceding the point I made that the loss of money by going to work at all could act as a disincentive? That is a most important point.

The most important point is the first step back into the labour market. It is a step which takes a certain amount of courage and there is the temptation to have cold feet. That is particularly so if the mother has any reason to doubt whether the care the child is receiving is thoroughly adequate. It is something which any responsible mother will thoroughly question.

The noble Baroness also made a great deal of the issue of leaving the matter to employers. I know that employers are doing more than they were and I warmly welcome that fact, but it is still not very much. I also remind the Committee that we are discussing part-time work. Most employers who are concerned to lay on child care are thinking first and foremost of their full-time workers. Here we are thinking of people who, just because they are single parents, are not of ten in a position to undertake full-time work in the labour market particularly in the first few years. They are people who are likely to be moving in and out and who may be undertaking short periods of work. For them it would not be efficient for employers to organise child care. That does not meet our concern in relation to the present case.

The noble Baroness also complained that the burden falls on the taxpayer, and of course it does. However, the argument that I am offering here is that the Government are cutting off the taxpayer's nose to spite his face and that they are actually making it harder for people to come off benefit.

There is another real philosophical difference here. The Government regard benefit very much like smoking in that once one has started one wants to go on. We on this side of the Committee are much more inclined to think that benefit is in the category of a leg up; it gives one the opportunity to get out of an awkward situation; to get moving again; to get back on one's feet and to start looking after oneself. That is a very big difference in our attitudes towards benefits.

We shall have to discuss the matter further, but at this time of night I do not think it is worth pushing it further now. I hope that the Government will think about the matter again. Meanwhile I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.45 p.m.

Clause 9 [Income support in respect of accommodation charges for certain persons in residential care and nursing homes]:

Lord Carter moved Amendment No. 47: Page 14, line 24, 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: In moving this amendment, with the leave of the Committee, I shall speak to Amendments Nos. 48 and 202 which are also in my name and that of other noble Lords. Amendments Nos. 49 to 53 are grouped with these amendments. They are government amendments and I am sure that the Minister will speak to them when he responds.

These amendments seek to address the problems which we now know are being faced by many elderly and disabled people in homes where the charges are in excess of the income support limits. The amendments seek to provide a structure for ensuring that the department has power to make additional payments to individuals to top up the current income support limits where it is reasonable to do so. The debate will have echoes of the debate that we had on the community care aspects of the NHS Bill.

Clause 9 of this Bill was introduced in response to the significant level of concern expressed about the inadequacy of income support limits to meet the charges of many residential and nursing homes. Although the National Health Service and Community Care Bill alters the funding arrangements for residents entering homes after April of next year, it does not address the problem faced by existing residents who are excluded from the provisions of the Bill and who will continue to have to meet the charges from income support.

We know that Clause 9 will help to address this omission by ensuring that the Secretary of State, when setting income support limits for existing residents, will take into account information from local authorities about the level of fees which they have negotiated with homes for residents entering under the new arrangements.

That is a broad-brush approach and, while we think that it will prevent many residents being faced with a shortfall, it is not adequate to ensure that no elderly or disabled person already resident in a home will be faced with receiving a lower standard of care and/or the fear of mounting arrears and perhaps eviction because his or her income support is inadequate to meet the fees charged. We know that Clause 9 will not address the very real problem faced by residents in the period up to April of next year.

The amendments seek to refine the mechanism proposed in Clause 9 to allow for individual assessments to be made, if requested, of the sufficiency of the benefit to pay a reasonable charge. We have been briefed by the National Association of Citizens Advice Bureaux which has quoted to us details of some harrowing cases of elderly or disabled people who face very real problems. I do not propose to take up the time of the Committee by reading out details of these cases although they indicate the very serious situation which exists in certain instances.

We feel that the Government's approach will not do and that they should not be able to shirk their responsibilities to existing residents who are trapped between the effects of market forces on the costs of residential care and the Government's current policy on the containment of public expenditure. As we have said on a number of occasions, if nothing is done, from April of next year these residents will be trapped and forgotten in the cul-de-sac of what is termed preserved rights, which in fact is preserved insecurity.

We know that the residents we are talking about are the poorest of the poor. They qualify for income support because they have low incomes and savings under £6, 000. Many are using up their small savings to meet the shortfall or are relying on family or friends for top-ups. They are terrified of what will happen to them if they can no longer meet the shortfall or if the charges increase still further. We feel that the amendment provides a mechanism which would enable the Government to keep the limits more or less at their current levels and thus avoid the increase in prices about which I know the Government are concerned. In addition, it would provide a mechanism that allowed individuals who were in hardship because their fees were well above the limits to apply to the local Department of Social Security. We feel that that it is a good way to meet the problem.

I know that the Government are aware of it but I fear that their answer will be to leave it to the local authorities as they have a residual authority. I expect that that is what the Minister will say when he comes to reply. The Government know that 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. We feel that that is not the right way to go about it. The amendments are intended to deal with that problem. I beg to move.

Lord Hylton

It is a pity that these important amendments are being discussed in a thin Chamber at a late hour. I know that they affect, for instance, Cheshire Homes and also Servite House, a housing association rather well known to me. There is about the country quite a substantial volume of residential homes and nursing homes. They have been provided over a long period of years. They have been upgraded consistently to meet fire regulations and so on. It would be a great waste of resource, if, because of the financial provisions in respect of them, they were running at much less than capacity. We have to remember also that they cater particularly for the frail elderly and for people with a whole variety of disabilities. The sums provided by local authority top-up payments are still not sufficient to meet the necessary level of charges even when income support has been taken into account. I hope very much that the Government will not brush aside these amendments.

Lord Henley

As the noble Lord, Lord Carter, said, we are on familiar territory. Members of the Committee will remember the important debate on this very subject during consideration of the National Health Service and Community Care Bill only 10 days ago. On that occasion the Committee decided quite rightly not to go ahead with the amendments. I hope that, as before, I shall be able to persuade the mover of the amendments to withdraw them because. I believe that the measured steps the Government are taking in this matter are the right and proper response. In doing so I should like to repeat that the Government share the concern shown by the noble Lord who moved the amendment and recognise the importance of protecting the position of those who will not be covered by the new community care arrangements.

The Committee will by now be familiar with the reasons why the Government have decided to continue the income support system for people who are resident in homes at the point of change to the new arrangements. This decision has met with the approval of most, including the representatives of the local authorities. The Committee will also be familiar with the separate themes in the Government's response to concerns expressed about the position of those with a preserved entitlement. With the leave of the Committee and for the benefit of those who perhaps were not present during our earlier debates, I shall briefly reiterate what we are doing.

First, we have increased the weekly benefit of virtually all existing claimants in homes by £10 a week, at an additional cost of £100 million. Secondly, we have also decided to introduce a second stage to the increase in the limits in 1990-91. So, in addition to the changes already made, there will from 13th August be further targeted increases to all the income support limits to help maintain their value during the coming year. More than 200,000 people will benefit from these additional increases. Thirdly, we have been considering how to carry out future upratings of the income support limits. We aim to get more and better information on the true costs of running residential care and nursing homes.

The fourth part of our strategy is, of course, Clause 9 of this Bill itself. We want to be able to use the information that will become available as a result of practical decisions and negotiations by local authorities after 1991. The new provision confirms powers to set local limits for income support taking into account evidence supplied by local authorities about the charges they will be meeting for residents in homes under the new arrangements.

As I have explained, for real and sensible practical reasons we shall not be able to use this new source of information from April 1991 but we shall want to start to use this in reviewing and setting the limits as soon as it is sensible to do so. We are mindful of the burden that could be imposed on local authorities and of the time it may take to obtain proper information from them. The noble Lord obviously feels that we cannot wait until this provision comes into effect.

My right honourable friend the Secretary of State has been considering how he should carry out future upratings of the income support limits, including the next one. He has undertaken to make a thorough assessment of the position and to look carefully at the levels and structure of income support limits as they would apply from 1991. He expects to approve the commissioning of the necessary research in the near future. Moreover, I have announced the interim upratings which take effect in August. I repeat what I stated on a previous occasion: they do not in any way pre-empt the usual upratings which will be considered in October to take effect, presumably, next April.

I shall turn now to deal with the amendments in detail. The government amendments tidy up the drafting of Clause 9 to include Scotland by referring to the provisions to be introduced by Clause 54 of the National Health Service and Community Care Bill. They also extend the scope of Clause 9 to ensure that my right honourable friend is able to prescribe income support limits for those people who are also being helped by local authorities, in the same manner as for all other existing residents. I am sure that Members can accept that these amendments are necessary.

The first amendment tabled in the name of the noble Lord would require the Secretary of State to ensure when prescribing income support limits for people in homes that the amounts are sufficient to meet the same cost as would be met by a local authority for any such accommodation.

The second amendment would require the adjudication officers who decide on social security claims to refer claims in homes to a social security appeal tribunal for a review on the grounds that the amount payable was insufficient to meet a reasonable charge. The social security appeal tribunal would then have to adjudicate on what was a reasonable charge in the case in question and, possibly, authorise a higher amount. Adjudication officers could dispense with referral to a tribunal if the question could be settled based on previous tribunal decisions in the same home or by seeking advice of the local authority with knowledge of the home in question. The effect of the third amendment would be that Clause 9 would come into effect on Royal Assent and hence be operative before April 1991.

The first of these two amendments is impractical and would place undesirable restrictions on future decisions of the Secretary of State when he sets the income support limits. As the Committee will know, my right honourable friend is committed by Clause 9 as it stands to take account of information supplied to him by local authorities. What this amendment would do would be to force him to structure the income support system so as to match fairly and precisely the actual amounts paid by local authorities in individual cases. For every income support case we would have to find a more or less perfect twin among cases being funded by local authorities.

I must stress that there cannot be this direct read-across between the levels of support given under the new and the old systems because the two are so very different. Local authorities will be tailoring the amount of support they give to the needs of individuals. They may, for example, pay different amounts for people in the same home. There is in fact no way in which the DSS will be able to mirror all the differences and disparities in treatment that will be a feature of the new arrangements. Moreover, the new system will take some time to settle down. That is why the Secretary of State needs to be able to make judgments about the information he receives from local authorities. He will need to ensure that the system of different limits that results is actually workable by DSS local offices. He will need to watch for possible anomalies between local authorities.

He will need to ensure that other factors, such as evidence from home owners, are also given due weight. I hope that the noble Lord will feel able to withdraw the amendment.

The second of these amendments would place serious difficulties before social security appeal tribunals. They will have to ask, what is a reasonable charge? Is "reasonable" whatever is the going rate in a particular area? The amendment allows proprietors to seek reviews on behalf of their residents. That is merely a further variant on the blank cheque signed by the taxpayer to which I referred previously. I made the point then that DSS offices were not staffed by accountants; nor are the appeal tribunals.

With this proposal, homes would merely be able to increase fees knowing that there is no workable definition of "reasonable". Meeting all "reasonable" fees will lead to a huge escalation of costs with very little control, and we must remember our responsibilities towards all the groups of elderly and disabled people needing care, not just those in homes.

That brings me to the third amendment. I recognise the concern which prompted it: it is to help people who have a shortfall now. However, the new provision in Clause 9, which confirms my right honourable friend's powers to set local limits for income support, is designed to allow him to use, if need be, the information that will become available from local authorities after April 1991. Clearly such information will not be available until after then. The amendment therefore cannot help now. As I have said previously, the upratings announced, together with the new clause in the Bill, constitute a substantial and proper response to the anxieties that have been expressed. The Government's approach is the best way forward. The amendments are unnecessary and impractical.

11 p.m.

Lord Hylton

The Government's reply is depressing and unacceptable. The Minister did not once refer to voluntary bodies providing residential or nursing homes. They are by definition not-for-pr of it organisations. To put them together with commercial operators is unfair and unreasonable. I hope that we can have something better.

Lord Henley

I touched upon that matter in the previous debate, at which the noble Lord may not have been present. It was put to me by one of the noble Lards opposite that evidence provided by the voluntary sector was by definition, because it was not provided for pr of it, evidence of the true cost. I do not necessarily accept that point. Merely because a body does not make a pr of it does not mean that it provides the most efficient and cost-effective service. That is not necessarily the evidence that we need. We must seek proper evidence after April 1991 when local authorities will be negotiating not just with the voluntary sector but with the private sector and any other sector that there happens to be. At that stage we shall obtain the true costs.

Lord Carter

I am obviously disappointed by the Minister's reply. He referred to the measured steps that the Government are taking. Some people feel that the steps are not just measured; they are funereal.

The uprating in April and the proposed uprating in August will merely reduce the shortfall—which can be between £30 to £60 against increases of £15—between income support levels and the fees charged. The Minister said that 200,000 people will benefit. of course they will if they receive some benefit. But in many cases it will merely reduce their shortfall. When we debated this point on the other Bill I asked when the information would be available. We heard again tonight that there will be some research as soon as is sensible in the near future. I propose to finish there.

On the last reply the Minister gave about evidence, I must quote from the briefing we received from the citizens advice bureau. It states: A CAB in Yorkshire undertook a survey of 55 residential and nursing homes in the area, asking about fees charged, of service and projected levels of service for income support claimants. The CAB concluded from the evidence that unless action were taken, homes with a large proportion of income supported residents would be forced to close, particularly those newly established with large mortgages. Some homes would respond by refusing to take in income support claimants. Alternatively, homes would develop the already existing practice of providing different levels of care according to residents' ability to pay, with income support claimants receiving a more basic provision such as shared rooms". That is the kind of evidence which is now available to the Government if they are prepared to act on it. I found the Minister's answer deeply disappointing. I feel that we shall have to return to this at Report stage. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 48 not moved.]

Lord Henley moved Amendment No. 49: Page 14, leave out lines 27 and 28 and insert: (" "local authority"— (a) in relation to areas in England and Wales, has the same meaning as it has in Part III of the National Assistance Act 1948; and (b) in relation to areas in Scotland, has the meaning given by section 1(2) of the Social Work (Scotland) Act 1968; ").

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Henley moved Amendments Nos. 50 to 53: Page 14, line 29, leave out ("such as is mentioned in") and insert ("who falls within— (a)"). Page 14, line 30, leave out ("that Act") and insert ("the National Assistance Act 1948"). Page 14, line 34, at end insert ("or (b) subsection (1) of section 86A of the Social Work (Scotland) Act 1968 (the corresponding provision for Scotland), or who would fall within either of those subsections apart from any regulations under subsection (3) of the section in question; "). Page 14, leave out lines 35 and 36 and insert: (" "relevant premises"— (a) in relation to areas in England and Wales, has the meaning given by section 26A(2) of the National Assistance Act 1948; and (b) in relation to areas in Scotland, has the meaning given by section 86A(2) of the Social Work (Scotland) Act 1968.").

On Question, amendments agreed to.

Earl Russell moved Amendment No. 54: Page 14, line 36, at end insert: ("(2) In paragraph 6 of column (2) of Schedule 7 to the Income Support (General) Regulations 1987, after the words "regulation 17(l)(a)" there shall be inserted the words "and (d)".").

The noble Earl said: With this amendment I should like also to speak to Amendments Nos. 73, 192 and 197. The common factor in these amendments is that they deal with board and lodging for people in hostels for the homeless. Amendments Nos. 173 and 192 deal with the amounts available for meals. Amendment No. 197 deals with charges for breakfast.

We debated this at length last year. The noble Lord, Lord Skelmersdale, on behalf of the Government, said that he had accepted that the problem existed. We have heard no more about it since; nothing has been done. Like many other noble Lords, I regret that we have to continue so late at night on this Bill, but if year after year we bring out major problems which are accepted as such and nothing is done about them, it has the effect of clogging up the parliamentary timetable. If it happens again this year, it may put some pressure on the time set aside for the Bill next year.

The situation in hostels for the homeless is thoroughly unsatisfactory at present. In 1989 the Department of the Environment found that 90 per cent. of those in bed and breakfast accommodation either had no cooking facilities or inadequate sharing facilities. There used to be an eating out allowance, which was abolished from April 1989. In addition, people in these hostels normally face a collection of amenity charges. They are told by the Government that this is because they must learn to budget like everyone else. However, if they were like everyone else they would not have the heating on unless they wanted it, they would not pay for it when it was not working and they could send for somebody to repair it if it was not working. But these matters are not under their control. They cannot limit their expenditure in that way.

The effect of the amenity charges is to leave people in board and lodging on average £11.75 per child below income support levels. That does not provide for an adequate diet, particularly in a situation where they find they are eating out regularly. The British Medical Association has reported adults and children suffering from malnutrition—not, one would think, a situation that the Government would wish to continue.

The Government tell us regularly that they are monitoring the effect of changes under the Social Security Act 1986. However, there comes a point beyond which, if nothing is done, one finds this claim increasingly hard to take seriously. I know we shall be told that some people have cooking facilities. But the sharing arrangements are on a scale which is not really very practical. I shall take two typical cases. One concerns 39 families sharing 12 gas rings. That means a round-the-clock shift system. It is quite difficult to get children in particular to wait for their lunch until five in the afternoon. They tend to fuss. Another case involves 35 families sharing one cooker and one fridge.

On the question of cost, the money available simply is not adequate. I shall take a typical case of two adults and five children receiving £112 income support plus £36 child benefit minus £15-90 for amenity charges. That comes to £132 all told which equals £18-91 per week per head. Would any Member of the Committee set out to live, eating out in London, on that amount of money and can he imagine how hungry he would be? The money is not adequate.

On the question of charges for breakfast, a good many complaints are made on the lines of breakfast consisting of rancid eggs. People report regularly that even when they are in a state of extreme hunger they cannot eat such breakfasts. To force people to pay extra charges in that situation when they do not have much money available in the first place does not seem to me to be entirely reasonable. It seems to be an exploitation of a captive market.

We shall, of course, be told about cost. I have tried to do my own costings on this. I am sure they are not entirely accurate and I am sure I shall be cut down for that. However, as far as I can calculate, the cost of the provision is unlikely to be over about £2 million. One has to set that against the cost of not accepting it. Malnutrition is not good for health. If the Government are determined to save these sums on the cost of board and lodging, they will probably find themselves spending those sums and a great deal more on the health service. Malnutrition, high blood pressure, particularly in the case of pregnant women, children born with low birth weights and possibly also clinical depression are things which are likely to cost the Government considerable sums of money.

There is also a concealed loss of money in that such things make it more difficult to float people off benefit and get them back into employment. That has to be the long-term object of the exercise. Floating the water-logged is a very difficult operation. There is also, in not accepting this provision, the possibility of a concealed cost through crime. I have not forgotten that St. Thomas Aquinas, with whom I am not sure I agree, said that it is no sin for the destitute to steal from the rich in order to support themselves. I am not encouraging anyone to do any such thing and I would not dream of doing that. But mothers with very hungry children tend to feel that they have to get them food by hook or by crook.

Anything that encourages crime is unfortunate and expensive. Keeping someone in one of Her Majesty's prisons no doubt means that that person is fed adequately. However, I believe that it costs in the region of £16, 000 a year. That is a great deal more expensive than income support. I think there is a real possibility that if the Government accepted this amendment they might find it a net economy. I beg to move.

Lord Carter

The noble Earl has described the situation extremely well and has drawn attention to the harrowing cases that we all know about which lie at the root of the problem. This amendment is designed to try at least to reduce the number of those cases. I hope that the Government will feel able to accept it.

11.15 p.m.

Lord Hylton

The noble Earl, Lord Russell, is greatly to be congratulated on moving this amendment in addition to the many others to which he has his name attached. It deals with one of the most deprived sections of the population. Anyone who has thought about the problem would readily agree that no family with children should be placed in bed and breakfast accommodation. We are not in an ideal world. It does happen. Therefore, the only way to approach the problem is for the Government to adopt a generous policy on allowances and benefit;. That is what the amendments seek, and that is why I support them.

Lord Henley

Perhaps I may start with the question of costs. My noble kinsman estimated costs at about £2 million. I am not sure how he arrived at that figure. Obviously, it would depend on the additional amount to be paid, but I suggest that costs could be considerably higher.

Amendments Nos. 192 and 73 both suggest increasing income support allowances for people who have to buy meals prepared outside their accommodation. Amendment No. 192 is widely drawn while Amendment No. 73 specifically concerns homeless people housed by their local authorities in bed and breakfast accommodation without self-contained cooking facilities.

The Committee may recall that the matter of allowances for meals for people in board and lodging was debated at some length at both Committee and Report stages of last year's Social Security Bill. I do not propose to rehearse again all the arguments put forward by my noble friend Lord Skelmersdale. It was clearly right for the Government to introduce changes last year to remove the perverse incentives which existed under the old scheme. The changes brought boarders into line with the majority of other claimants who looked to housing benefit for help towards their accommodation and income support for help with normal day-to-day living expenses.

Amendment No. 73 refers particularly to the position of homeless families living in bed and breakfast accommodation. However, I must make it clear that responsibilities in that area lie fairly and squarely in the hands of local authorities. Guidance issued to local authorities by my right honourable friend the Secretary of State for the Environment makes it clear that local authorities should place homeless families in bed and breakfast accommodation only as a last resort when other more suitable accommodation is not available and, if they must, to keep them there for as short a time as possible. It has been possible for some local authorities to avoid using bed and breakfast accommodation altogether.

I have every sympathy for the problems found by homeless families. But the answer to their difficulties lies in the hands of local authorities and the steps which the Government have taken to make additional funds available for a concerted programme of action to get families out of bed and breakfast accommodation.

Amendment No. 73 is more tightly drawn than Amendment No. 192, but it would nonetheless reintroduce the complications and anomalies of the old system. Even if I were predisposed to accept Amendment No. 192 in principle, I could certainly not accept it in practice. I wonder, for example, on what basis the adjudicating authorities would be expected to decide when someone is in the position of having to buy meals outside the home. Would it be the complete absence of cooking facilities or the fact that those facilities were considered inadequate? If the latter, I should be interested to know exactly how one might judge what is or is not to be regarded as adequate in any particular case.

Earl Russell

If that is so difficult, how could it be that the Department of the Environment has already done it?

Lord Henley

Would the noble Earl care to elucidate?

Earl Russell

I referred at the beginning of my speech to the survey of cooking facilities in homes for the homeless carried out by the Department of the Environment. The department found that 90 per cent. of them were inadequate. We are quite happy to accept the department's criteria.

Lord Henley

I was asking whether it would be purely a question of the complete absence of cooking facilities or of cooking facilities being available but inadequate. The noble Earl said that the Department of the Environment spoke of 90 per cent. being inadequate. Obviously there would still be borderline cases where someone would have to judge what was adequate and what inadequate. The noble Earl said that on that occasion it was 90 per cent. There is the other 10 per cent. There will be cases which are borderline between the two.

I am sure that the Committee will appreciate that this amendment would not only be unworkable in practice but would introduce into the benefit system all the complexities and perverse incentives which existed under the old arrangements.

Turning to Amendment No. 197, this would have the effect of preventing local authorities from making any deduction from housing benefit on account of meals for people living in board and lodging accommodation where the only meal provided is breakfast. It is an established principle of the social security system that housing benefit is designed to help meet reasonable accommodation costs, whereas, as I said before, income support is available to help with day-to-day living expenses. For that reason, the cost of meals included in a board and lodging charge has always been ineligible for housing benefit.

As the Committee is no doubt aware, until April last year the majority of people living in board and lodging accommodation had their rent and living expenses met through special rates of income support. But boarders who were not entitled to income support, such as those in full-time work, could not get help with their housing costs through housing benefit on the same basis as anyone else. In those cases local authorities had to make a judgment about the value of the meals included in the boarding charge and deduct that amount from the rent eligible for housing benefit.

Because of the wide variation in the nature of meals provided by landlords and to help local authorities in the administration of benefits, it was decided to introduce standard weekly amounts to be deducted from housing benefit where meals are provided. For a person over 16 these currently range from £13.15 a week for full board to £1.60 where breakfast only is provided. That £1.60 weekly deduction for breakfast in hardly draconian. But it makes proper recognition of the fact that people living in accommodation on a bed and breakfast basis receive, as part of their rent, a service for which most people have to pay out of their earnings, income support or other benefit income. It is not unreasonable to expect people in bed and breakfast accommodation to pay £1.60 weekly from their income support or other income for the breakfasts that they receive. It would be inequitable and illogical to give double provision for the cost of meals by allowing housing benefit to meet bed and breakfast charges in full.

Turning to Amendment No. 54, successive governments have taken the view that people without accommodation should be entitled to basic benefit to provide for their immediate needs. In April 1988 those without accommodation became entitled to claim the personal applicable amount of income support instead of a meals allowance. Most gained financially from the change. They are not entitled to premiums nor indeed were they entitled to additional requirements under the pre-1988 system.

Premiums replaced the plethora of additional requirements allowances which so complicated supplementary benefit. Premiums are appropriate for the special extra needs of particular groups, such as pensioners, when they are in a settled environment. They are inappropriate for people without a fixed pattern of expenditure and might militate against resettlement efforts. Vulnerable people, such as the disabled and the elderly, generally fall into the priority category for rehousing under the homelessness legislation and would then be entitled to claim premiums.

For those reasons and those I outlined earlier, I hope that the noble Lords will be able to withdraw their amendments.

Lord Carter

Before the noble Earl decides what to do with the amendment, perhaps I may refer to an answer given by the Minister which I found extremely puzzling. The noble Earl referred to a survey conducted by the Department of the Environment which found that 90 per cent. of the facilities were inadequate, which presumably implies that 10 per cent. were adequate. The noble Lord said that a borderline existed between them. Would he agree that such a borderline would fall somewhere between 90 per cent. and 90.1 per cent?

Lord Henley

The noble Earl, Lord Russell, quoted a Department of the Environment report which stated that 90 per cent. of services were inadequate. One still has to decide as regards the others whether or not the facilities are inadequate. There is always a borderline. That is all. The noble Lord may try to be clever with percentages. I am trying to suggest that it is a difficult matter of judgment.

Earl Russell

I become very puzzled by this doctrine of perverse incentive. If my noble kinsman suggests that the homeless have faced a perverse incentive in putting themselves in such accommodation, he is crediting them with a good deal more masochism than is the norm. What evidence do the Government have that anybody has voluntarily chosen to go into board and lodging accommodation rather than remain in their own home? We have a large theoretical superstructure erected on a foundation of evidence that has not been made known to us. I should like to hear it.

I also find it surprising to blame local authorities for the housing shortage. Local authorities which could perfectly well provide accommodation for some of these people are not allowed to spend their capital receipts for that purpose. Local authorities are subject to capping. They are subject to spending limits.

This is not the moment to discuss those matters. However, the Government should not reproach local authorities for not doing what they have stopped them doing. That is what John Stuart Mill described as "the inability of the unanalytic mind to recognise its own handiwork".

The Minister spoke at great length about difficulties of administration. That applies to income tax; it costs a great deal to administer. I do not believe that the Government propose to withdraw it for that reason, although I sometimes wonder.

We were told that proper recognition must be given to the cost where breakfast is provided. That is fair enough if breakfast is genuinely provided. In that case there must be a mechanism of regulation. There must be an equivalent mechanism to that with regard to the National Rivers Authority. However, that would be immensely cumbersome. It seemed to us simpler to remove the charge for breakfast.

We have heard a great deal about how difficult the position is for the Government. I do not think that we have heard much in the reply about the difficulties for the families concerned who live in board and lodgings and who are not getting enough to eat. I thought that the system was in place to prevent that.

It would not be an answer simply to divide the Committee. However, I warn my noble kinsman that the issue will not go away. It will take up a great deal more of our time until we get something done about it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9, as amended, agreed to.

11.30 p.m.

Baroness Seear moved Amendment No. 55: After Clause 9, insert the following new clause: ("Carer's premium. In section 22 of the 1986 Act, after subsection (9) there shall be inserted— (10) In respect of a carer, the applicable amount shall include a carer's premium. (11) For the purposes of subsection (10), a "carer" is a person— (a) who is entitled to invalid care allowance ie including a person who would receive invalid care allowance except for the provisions of the Social Security (Overlapping Benefits) Regulations 1979; or (b) who would be entitled to invalid care allowance if he were not of pensionable age".").

The noble Baroness said: In moving this amendment, I speak also to Amendment No. 56. I am very sorry indeed that these amendments are being discussed at this hour of the night with so few people in the Chamber. The amendment raises a large issue. I hope that the Government—if they are listening to what I am saying—will say that they are prepared to give the issue of the invalid care allowance very serious consideration.

The Committee will be aware that the Crossroads organisation—a very responsible and valuable body—has only today produced a very alarming report about the conditions under which carers are trying to do the job of caring and the extremely devastating situation in which a large number of carers find themselves. I do not wish to exaggerate. Many carers are coping. But far too many are operating under very great restraints and limitations which put a quite unbearable burden on them.

It is important that the Government consider this issue. The burden will become a great deal heavier as the Government's policy of emptying the institutions and sending people into community care is carried out. It is clear that those who will carry the burden are the families, people in their own homes and of ten women on their own, attempting to cope with people who are unable to look after themselves. Presumably the individuals coming out of institutions will be more difficult to look after and a greater burden on the carers than the kind of people they are looking after at present, because one must assume that they are more seriously handicapped.

The Crossroads report has reemphasised the fact that one of the greatest difficulties—by no means the only one—under which carers operate is sheer shortage of money. Looking after infirm, frail and confused people in an expensive business. It is expensive in terms of money, energy and stress. As Joad said, money does not make for happiness but it does ease the pain. It would ease the pain of a number of

In the past the attitude towards a community care allowance was that it was to some degree a replacement for the lost earnings of the carers. Behind the amendments is the claim that carers are entitled to remuneration for their work. It is not just a matter of income replacement. I recognise that, if accepted, the amendment would mean a change of policy. However, if the Government are serious about community care and accept the burden that they are putting on the carers, it is a change about which they must think seriously.

The amendments propose that in cases where benefits are already paid—that is, income support, housing benefit, community charge rebates and so forth—there should be a carer's premium, say, of £10. That would ease the burden laid on the carer and give a larger spending power to people operating under such extreme difficulties. It is also suggested that the invalid care allowance should be made available to any carer and that the limitation which was previously placed on it—that they should not receive it if they are over pension age—should be removed. Carers over pension age are not losing earnings. We are asking for a return for the work being done and not merely compensation for the loss of earnings. Therefore, carers over pension age who do not at present receive any invalid care allowance can be in straitened circumstances. They may be receiving a pension or some form of income support but they will receive nothing more. The costs and the additional payments that they must make are the same, whether they begin caring when they are over pension age or younger. In our view, the question of age should not be taken into account.

In tabling the amendments, we take the view that the well-established principle, much beloved of governments, that it should not be possible to benefit from two kinds of state payment should be ignored in this case. Certain people will not be eligible for a premium on additional benefits because they are above the income support or housing benefit level. However, they too have heavy costs. In Amendment No. 57 we ask that the invalid care allowance should be uprated along the lines suggested for those who are not eligible for any other kind of benefit. I beg to move.

Lord Carter

I am pleased to support this amendment, which is also in my name. The noble Baroness referred to the survey which has only been published today, Caring for Carers, conducted by the Sunday Times and Crossroads Care and which highlights the urgent need for better support facilities. The survey was of 1, 000 carers. It says that carers want a decent income on which to live. They want to be heard and to have the resources to care. Two-thirds of the respondents felt that no one ever listened to them or cared for them. Nearly all wanted extra resources to continue to care and care effectively for their loved ones. They were pessimistic about obtaining those vital resources. These amendments go some way towards overcoming that pessimism and dealing with the problem of income and resources. I hope that the Government will accept them.

Lord Henley

I have not yet had an opportunity to read the report which has been referred to but I shall do so as soon as possible. I hope that the noble Baroness will feel able to withdraw the amendments, but I should like to say something about the Government's proposals for carers. The new carers premium worth up to £10 per week will provide significant extra help for less well off carers. As the sponsors of this amendment propose, the money will go to people entitled to receive invalid care allowance or who have a more valuable benefit which overlaps it.

However, it is not possible to support the second string to this amendment which would provide the premium to people who start caring after pensionable age. The significance of that proposal is that such carers cannot obtain invalid care allowance. The reason for this is that invalid care allowance is an income maintenance benefit intended to compensate carers of working age who have lost earnings opportunities. Once people reach pension age the relevant income maintenance benefit is of course retirement pension. Once people have already claimed and received that benefit, they cannot then obtain in addition another income maintenance benefit such as ICA. The carers premium will not be available to people who start caring after they reach pension age.

We will of course be monitoring the impact of this new premium once it is introduced and will listen to what people say about it. In the meantime, I hope that the noble Baroness feels able to withdraw Amendment No. 55.

Amendment No. 56 seeks to increase the weekly rate of invalid care allowance to the basic rate of retirement pension. It seems to me that this amendment is seeking an independent income for carers to be achieved by a substantial increase in invalid care allowance. Aligning non-contributory invalid care allowance with contributory retirement pension would mean an increase in the rate of invalid care allowance of 40 per cent. The problem is one of cost. With 120, 000 people currently receiving ICA, the cost of accepting this amendment could be very high indeed. In the current year the net cost, even after allowing for savings on other benefits, would be over £100 million. That sort of expenditure is not an option given the competing priorities in the area of social security benefits. Bearing that in mind, I hope that the noble Baroness will feel able to withdraw her amendments.

Lord Hylton

I ask the Government to think rather more deeply about the situation of elderly parents of pensionable age who are continuing to care for sons and daughters who are either physically or mentally handicapped.

Lord Henley

As I said, we shall continue to monitor the situation.

Baroness Seear

I am extremely disappointed by the Government's reply. I said that I had no intention of pressing the amendment at this hour. I beg the Government to think again. It is a basic principle which I was asking the Minister to reconsider. An invalid carer premium should not be regarded as a replacement for earnings but should be seen as a payment made to those who are doing the caring. I repeat that it will be an extremely heavy burden, especially as the community care programme of emptying institutions becomes more of a reality. I do not wish to be dramatic, but if we leave carers with extremely limited resources, we shall be killing them. They will not be able to continue under the new additional burdens being imposed upon them.

As I said at the beginning, I ask the Government to look again at their attitude that it is only replacement of earnings. Will they not recognise that the people caring are doing a substantial job? If these frail, infirm, confused, difficult, and elderly people were in institutions, the taxpayer would be paying for them. Surely some of that taxpayers' money can be diverted to the people who are doing the work of caring in their own homes. It would not be full payment or anything like it; but there could be something.

I have no intention of moving Amendment No. 56, but I assure the Minister that I shall return to it. I beg leave to withdraw Amendment No. 55.

Amendment, by leave, withdrawn.

[Amendment No. 56 not moved.]

Lord Carter moved Amendment No. 57: After Clause 9, insert the following new clause: ("Disregard of income support .—(1) Section 22 of the 1986 Act (calculation of income related benefits) shall have effect subject to the amendments specified in subsection (2) below. (2) Where a person has been provided with accommodation under Part III of the National Assistance Act 1948 in premises managed by a local authority or a person other than a local authority or is a patient in hospital or nursing care but it is reasonable to consider that he may at some future date be able to return to his previous home, the Secretary of State shall prescribe that the following shall be disregarded in calculating his entitlement to income support (a) the capital value of that previous home; (b) a sum of income equivalent to such charges as are necessary for the retention of that previous home, as the authority considers appropriate; (c) a sum of income equivalent to any proportion of a personal or standard community charge which remains payable by that person after all community charge benefits and any exemptions from payment have been obtained for such period as the local authority deems appropriate.").

The noble Lord said: This amendment seeks to ensure that when people enter hospital or go into residential care, they have sufficient income to cover the overheads on their home in the community until it is clear that they will never return to that home. When people are away from home temporarily they can claim housing benefit to cover rent payments. There are also a number of charges on their home for which they continue to remain liable—water rates and other fixed charges. Those weekly charges can be quite substantial, particularly when the individual lives in sheltered accommodation. They can amount to as much as £15 or £16 per week.

Without the amendment the income support regulation will act as a disincentive to the Government's objectives on community care. It is essential that where elderly or disabled people are admitted into residential care or hospital, every step is taken to ensure that if possible the individual will be able to return to independent life in the community. It is important therefore that their home in the community remains available to them.

I turn to subsection (2) of the proposed new clause. When someone claims income support the value of any home which they no longer occupy is taken into account and treated as a capital asset. While someone is in a home or hospital on a temporary basis the value of their home is disregarded, because it is assumed that they will want to return there. The difficulty arises when someone who owns their own home needs the care to be permanent. In that case the home is immediately treated as a capital asset which will push the assets of the person over the limit. That can be a tremendous problem if a carer is living in the home. The carer may be a friend or relative who has given up their own home to live with and care for the person.

The income support and the present legislation allows the home to be disregarded as a capital asset if it is occupied by the claimant's spouse or someone who is elderly or incapacitated. That disregard, however, does not apply to a carer who is under pension age and is neither chronically sick nor disabled. The practical effect is that the value of the home prevents the carer from receiving any income support. The carer is faced with either providing financial support for the resident or moving out of the home so that it can be sold and the value realised.

The amendment is intended to ensure that the value of the home is ignored when it is owned by a claimant but a carer living there had been caring for the claimant before the admission into care or into the long-stay hospital. I beg to move.

Earl Russell

I should like to add a brief word in support of the amendment. A house is a capital asset, but the point about the asset is that it is extremely difficult to realise. The amendment is abbreviated in my notes to "not selling house" which is really what it is all about.

If carers who have perhaps given up a good deal of their life looking after a relative, saving the state a good deal of money in the process, are forced to sell the house, then they are put into a position where they are more likely to become dependent. I do not believe that that is in the Government's interests. A house is a notional asset. Its financial value comes into effect only after one's death. It is of value to your descendants but not to yourself.

On Amendment No. 58, I should like to remind the Committee that local authorities are trying to draw up their public expenditure bids for community care without knowing how the system involving housing benefit is to be calculated and with the distinct possibility that it may result in something very like the old rateable value; a notional market rent which, like every other spending limit fixed by this Government, is a great deal too low to be useful. There is a problem which needs to be addressed with some urgency. I am happy to support the amendment.

11.45 p.m.

Lord Carter

As the noble Earl has spoken to Amendment No. 58 and said all that I had intended to say, perhaps it would assist the Minister if he replied to Amendments Nos. 57 and 58 together.

Lord Henley

Provided my voice survives I shall reply to both amendments. I listened carefully to what the noble Lord and the noble Earl had to say on the amendment which seeks to introduce further concessions for people in income support. I say "further concessions" because I think the Committee will want to know the full nature of the help already provided to people in these circumstances. I can assure the Committee that people entering this type of accommodation are not immediately required to give up their previous home. Indeed many, if not all of them, will have every intention of returning home to take up where they left off before they moved. Quite understandably they or their relatives on their behalf may not want to commit themselves too quickly to living permanently in residential accommodation, so for some their stay in that accommodation may at first be temporary.

During this period their property can continue to be regarded as their home and as such it is fully disregarded for income support purposes. Only when the adjudicating authority has evidence that their stay has become permanent does this particular disregard cease to have effect. Even then the value of the property can be ignored under other provisions; for example, where it is occupied by a partner. Meanwhile, if they are responsible for any charges on the property help can be given towards their mortgage interest and certain other housing costs for up to 52 weeks provided they intend to return home and have not sublet that part of the home they normally occupy.

I believe these concessions are both generous and sensible. The amendment before us today seeks to extend those concessions. Its starting point is to impose on adjudicating officers a test of reasonableness to decide whether the resident may be able to return home some time in the future. I am sure the Committee will agree that this test is itself a difficult one which can only complicate the present scheme and perhaps give rise to uncertainty and dissatisfaction especially among the elderly.

The suggestion is also that the charges on the previous home should be set off against any other income the person may have provided the adjudicating authority considers these appropriate. The Committee is asked to compare this suggestion with the current rule which enables the outgoings on the property to be met for up to 52 weeks.

There is another reason why the disregard is not a good idea, and that is one of equity. I do not think it would be right to treat some people living in Part III accommodation, hospital or a nursing home more favourably than others sharing that same accommodation but with no income to cover the outgoings on their previous home, or more favourably than people in similar circumstances but living with friends or relatives. Nor would the amendment be fair to the taxpayer, who would have to pay for these disregards and subsidise empty housing for what could be an indefinite period.

Many of the arguments heard today apply equally to the proposal that people's liability to community charge should also be offset against any other income they may have. It is a fundamental principle of the community charge that almost all adults should make a contribution to meeting the costs of local services and in that way local authorities should be made more accountable to the whole electorate. Exemption is granted only where accountability clearly cannot work—in the case of severe mental impairment, for example, or where particular groups of individuals have for one reason or another no income and no access to state benefits and so could not be expected to pay the community charge.

The effect of this new clause would be to exempt anyone on income support from the personal community charge. That would run counter to the principle of the community charge and it is wholly unnecessary. I hope that I have said enough on that amendment. I am sure that noble Lords would not wish to press it at this time of night.

I now turn to Amendment No. 58. An amendment identical to this new clause was debated recently during the Committee stage of the National Health Service and Community Care Bill. Its purpose is to prescribe the way in which housing benefit should be calculated after April 1991 in cases where people are provided by the local authority with a place in a private or voluntary residential care or nursing home.

Housing benefit helps to meet reasonable accommodation costs. Broadly, that means rent and any compulsory service charges which are clearly related to the provision of accommodation. If the rent includes ineligible items such as meals, fuel or personal care, their value must be deducted to work out how much benefit is payable. Where a claimant occupies accommodation, such as a residential care home, which provides a wide range of services that are ineligible, calculating the amount of benefit payable can become a complex operation requiring a detailed apportionment of the fee between eligible and ineligible items.

The Government made a commitment in the White Paper Caring for People to consult with the local authoritiy associations on the way in which housing benefit should be calculated for this new category of cases from April next year. Those consultations are still under way. Bearing in mind the complexity of assessing housing benefit for this type of accommodation under the normal rules, we propose that housing benefit for people in residential care and nursing homes should be based on a notional rent. That means that maximum housing benefit in such cases would be a fixed sum, perhaps based on the average cost of rented accommodation in the area. There would be considerable administrative advantages in such an approach. The amendment before the Committee prescribes a way of arriving at a notional rent for homes not run by a housing association. For the housing associations the normal rules would continue to apply.

I appreciate the concerns behind this amendment. Housing associations are anxious about any discrepancy between the basis on which housing benefit is awarded to their tenants and their actual rent costs. We are aware of these concerns and intend to address them in our final decision on this subject.

The method proposed for assessing housing benefit in other residential care homes is to place a notional rent on average eligible rent and services for all residential area and nursing homes in the relevant area. I still believe, as I did when we last discussed this proposal, that that approach will not be viable in practice.

I appreciate the continuing concern that the housing benefit paid to people in residential care and nursing homes should reflect the actual rent charged. But many of the examples cited by critics of the concept of notional rents concern extra costs connected with things which clearly relate to care rather than accommodation.

As I said during the Committee stage of the National Health Service Bill, we are currently considering all these points as part of the process of consultation with the local authority associations. That is still the position and I do not think that I can go further at this stage. I hope that in the light of what I have said the noble Lords will feel able to withdraw the amendments.

Lord Carter

I am grateful to the Minister. He is aware that as regards the second amendment the main purpose is to bring home to the Government the urgent need for the housing authorities and associations to plan for the resources that they have to provide after April of next year. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 58 not moved.]

Earl Russell moved Amendment No. 59: After Clause 9, insert the following new clause: ("Unemployment, Sickness and Invalidity Benefits Regulation 7(1)(o) of the Social Security (Unemployment, Sickness and Invalidity Benefit) Regulations 1983 shall cease to have effect.").

The noble Earl said: I shall not detain the Committee for very long on this amendment, which concerns the unemployment benefit means test. It deals with the regulation by which anyone earning more than £46 a week is not eligible for benefit. That sum is not a living wage. The effect is to create a disincentive to part-time work. As I have been reiterating all evening, our concern is for floating people off benefit and getting them into employment. It is unfortunate that we have a benefit system which thrusts people back into benefit, but it is something that can be changed.

There is a point of some importance here. We do not believe, as the Government seem to believe, that people are going to run around trying to get benefits because they crave them. The Government overrate the attractiveness of their benefits. It is worth while giving people a leg-up because we believe that they are capable of taking advantage of it and getting back into work. I beg to move.

Baroness Turner of Camden

At this time of night I do not intend to say any more than that we on these Benches fully support the amendment.

Baroness Blatch

The effect of this amendment would be to remove the weekly earnings rule from unemployment benefit. The purpose of the rule is an important one. It is to ensure that unemployment benefit is paid only to those who are unemployed. That is a reasonable proposition and one which I think commands general support.

In order to establish whether or not a person is unemployed it is necessary to have a measure of that person's return to employment. There has to be a point at which a person is considered to have returned to work and is no longer entitled to unemployment benefit. That measure should be fair, objective and easily understood. Prior to the introduction of the weekly earnings rule a person's return to work was established using the "full extent normal" rule—known in the jargon as FEN. This was a clumsy rule which could result in some very unfair disallowances. It was widely criticised by a number of authorities, including noble and learned Lords. I refer, for example, to the case heard by Lord Justice Templeman of Blunt v. Chief Adjudication officer and to two cases heard by Lord Justice Glidewell—Whelans v. Chief Adjudication officer and Worthy v. Chief Adjudication officer. This rule relied on establishing at what point a pattern of work had become normal for a particular person and paid no regard to the level of earnings. This meant that some people earning very little could be disallowed benefit while others earning larger sums could continue to receive benefit. Earnings, on the other hand, provide an objective measure of return 1o work and allow different people to be treated in a fair and consistent manner. The level at which earnings affect benefit is aligned with the National Insurance lower earnings limit. This again is consistent and means that a person is regarded either as employed and liable for contributions or unemployed and able to claim benefit.

We are aware that this rule is not the complete answer to the complex problems involved in the relationship between unemployment benefit and work. We are continuing to monitor its effects and to consider options for a more complete solution. It has, however, been a step forward and I would therefore urge the Committee not to accept the amendment.

Lord Hylton

Is the £46 weekly earnings rule reviewed annually; and, if not, will it not very soon become out of date and obsolete?

Baroness Blatch

Yes, it is.

Earl Russell

The noble Lord, Lord Hylton, has raised the point that I was just about to make. At the next up-rating order I shall ask the Government to think very hard about this limit. With those words, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 60 not moved.]

Lord Denham

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.