HL Deb 16 December 1992 vol 541 cc551-2

Lord Clifford of Chudleigh asked Her Majesty's Government:

Whether they intend to tax invalidity benefits and whether they consider it justified to withdraw their undertaking to increase invalidity benefits in line with the retail prices index.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde)

My Lords, it remains the Government's intention to bring invalidity benefit into taxation at a suitable opportunity. As for uprating, invalidity benefit is statutorily uprated each year in line with prices and we have no plans to change that.

Lord Clifford of Chudleigh

My Lords, I thank the Minister for that reply. However, is he aware that rumours, reports and leaks are as abstract as the source from which they emanate? That is a thought. Even though it may be described as long-term, Tory thought is commitment to the taxation of invalidity benefits. Does the Minister deny that Mr. Peter Lilley, from the other place, stated that it would be difficult to rule out the principle of taxing disabled people? Is the Minister aware of the Disabilities Act passed in 1990 in the United States and similar regulations introduced in Sweden? Will the Government remove this extraordinary, prejudicial barricade of exclusion from the 6.5 million disabled people in this country and discriminate fairly in their favour when thinking of their livelihood benefits?

Lord Strathclyde

My Lords, I entirely concur with my right honourable friend the Secretary of State for Social Security in not ruling out taxation. With regard to the other points concerning people who are disabled, the benefit is for incapacity and is not necessarily a benefit for those who are disabled. People with disabilities can continue to work and lead fulfilling lives.

Lord Ashley of Stoke

My Lords, the Minister seems confident of the case for taxing invalidity benefit. I presume therefore that he can repudiate the following figures: that in the past 10 years average earnings have increased by 20 per cent. in real terms but in the same period invalidity benefit has increased by only 1 per cent. If he cannot repudiate those figures, does he agree that to tax invalidity benefit now would be like kicking a person when he has already been knocked down?

Lord Strathclyde

My Lords, I certainly do not wish to repudiate those figures. They demonstrate that we have maintained our commitment to uprate invalidity benefit in line with inflation. As I said in my original Answer, we have no plans to change that. We do not want to make life increasingly difficult for people who claim invalidity benefit. We want people to continue claiming but believe that, as with people who claim sick pay, unemployment benefit, retirement pension or maternity benefit, it should be taxed.

Lord Ennals

My Lords, does the Minister accept that the benefit was introduced in order to offset the accepted additional expenses incurred by disabled people? Has the Minister some reason to believe that disabled people do not now have those additional expenses imposed upon them? Would it not be grossly unfair to an underprivileged section of our society to pick on them in that way?

Lord Strathclyde

My Lords, I wish to differentiate between people with disabilities who can continue to work and do so most ably throughout all sections of our society, and those who claim invalidity benefit. That is quite different and is often a top-up to other income. In the long term there is no reason that tax should not be introduced on that benefit.

Lord Richard

My Lords, will the Minister confirm that it is not a question of not ruling out the taxation of invalidity benefit; it is a question of actively wishing to bring in the policy? Will he also agree that in his letter Mr. Lilley said, The taxation of invalidity benefit has been a longstanding policy objective"? Does the Minister agree that if that is the Government's long-term aim, it is inconsistent with the previous statements made by government Ministers that they want to reduce the overall burden of taxation, especially on lower income groups?

Lord Strathclyde

My Lords, none of that is incompatible. Of course we want to reduce taxation. That still remains our long-term aim. We have already reduced taxation for those on lowest pay and indeed reduced the lowest band of taxation to 20 per cent.

Lord Richard

My Lords, if that is the Government's aim, can the Minister say when they are going to try and do it?

Lord Strathclyde

No, my Lords. It has been an outstanding commitment since 1980. It has yet to be introduced and I can give neither the noble Lord nor the House guidance as to when that might be.

Lord Clifford of Chudleigh

My Lords, I am interested in the last reply. Is the Minister aware that there is still a rumour, which again is a thought which must have passed through the Government's mind, that the possibility of introducing such fiscal legislation will come into effect in 1994? Whether one is fully fit or mentally or physically enfeebled from birth or as a result of an accident, or suffering from any other kind of disease, the Minister must be aware that we must all budget.

Lord Strathclyde

My Lords, I cannot confirm the date of 1994.

Back to