Lords Sitting of 1 February 1994

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

Westminster Council: District Auditor's Report
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What is their view of the actions of Westminster City councillors., as described in the report of the District Auditor a summary of which was published on 13th January 1994.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Arran): My Lords, this is a matter for the council, its auditor and its electors, not for the Government. It would be wrong to comment on any particular case until the legal processes are complete. If the allegations are proved to be true the Government will unreservedly condemn the actions of the councillors responsible.
Lord Dean of Beswick: My Lords, that is the form of reply I expected and I suppose I must be grateful. Is the Minister aware, however, that on 1st July 1991 I asked a specific Question of the Minister at the Dispatch Box about whether what Westminster City Council was doing at that time in its housing policy was in accord with government policy? The following phrases were used by the Minister in her answer:
"those proposals appear to be sensible and they do not conflict with government policy … that can only be a good thing and an imaginative way of addressing the problem … the Question attacks a very good scheme which addresses a difficult problem for West minster".—[0fficial Report, 1/7/91; col. 770.]
I suggest to the Minister that it is now a little too late to say that the matter has nothing to do with the Government. More than once attention has been drawn to it by Members of your Lordships' House other than myself—
Noble Lords: Question !
Lord Dean of Beswick: Does the Minister not agree that according to answers given at that time the Government were involved and knew what Westminster City Council was doing? If there was no collusion, there was certainly agreement that it could carry on with what it was doing.
The Earl of Arran: My Lords, I can say to the noble Lord that, to the very best of my knowledge, the Government were not aware that this was happening. Indeed, it came to the notice of the Government in 1991 through press reports.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the District Auditor published these very serious charges against a number of councillors
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before he had given them any opportunity to reply? Is not that wholly contrary to natural justice and does it riot indicate that the District Auditor is unfitted to his post?
The Earl of Arran: My Lords, no, it does not suggest that the District Auditor is unfitted to his post. He knows exactly what he is doing. What he is allowed to do is laid down perfectly well by statute. It is in the 1982 Act. That statute has passed through both. Houses of Parliament.
Lord Tordoff: My Lords, in the light of the Answer given to the noble Lord, Lord Dean of Beswick, will the Government now retract statements that have been made about other councils which have got up to various shenanigans down the years about which the Government have not been afraid to comment'?
The Earl of Arran: My Lords, I am slightly disappointed that the noble Lord brings party politics into the situation—
Noble Lords: Oh!
The Earl of Arran: This is a set of very grave and serious allegations. They should be totally independent of any form of party politics.
Lord Hailsham of Saint Marylebone: My Lords, is it not absolutely deplorable that before persons charged with serious offences have had the opportunity of making their defence, which they are entitled to do, attempts should be made in this House to prejudge the issue? Where is our sense of natural justice? Where is our sense of common decency? Where is our sense of British fair play?
The Earl of Arran: My Lords, my noble and learned friend is absolutely right. It is important that the Government are seen to be completely independent and completely impartial.
Baroness Gould of Potternewton: My Lords, as someone who has been responsible for following through two district auditors' reports, may I ask the Minister whether he really believes that there is any chance of Mr. John Magill changing his provisional views? Appreciating, from experience, that he is not likely to make claims that he cannot substantiate, is not the evidence of malpractice therefore conclusive?
The Earl of Arran: My Lords, I am not precisely certain what the noble Baroness is asking. Perhaps she can elaborate at some later date.
Lord Harmar-Nicholls: My Lords, does my noble friend think that in view of the fact—
Noble Lords: Order!
The Lord Privy Seal (Lord Wakeham): My Lords, I think that my noble friend should be allowed to ask his question.
Lord Harmar-Nicholls: My Lords, does my noble friend think that, as this is a matter upon which the courts will be asked to adjudicate, both Parliament and parliamentarians should, in the circumstances, show a

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little reticence instead of trying to muddy the waters which can only result in something less than justice being done?
The Earl of Arran: My Lords, my noble friend is right. The courts could be asked to adjudicate. But that is by no means certain. In the meantime, the case is semi-sub judice, so to speak. Perhaps I may make clear that if the case did go to the courts it would of course become sub judice.
Lord Williams of Elvel: My Lords, is the Minister aware that a paper entitled Home Ownership Proposals was produced to a meeting of the chairmen's group of the Westminster City Council on 27th January 1987, and the chairmen's group decided to take the proposals forward? Is he further aware that among the proposals contained in the paper was a paragraph which reads:
"The short term objective must be to target the marginal wards and, as a matter of utmost urgency, redress the imbalance by encouraging a pattern of tenure which is more likely to translate into Conservative votes"?
Are not those precisely the proposals that the then Minister approved on 1st July 1991; those that "appear to be sensible" and do not appear to "conflict with government policy"?
The Earl of Arran: My Lords, I am not aware of those remarks made back in 1987. We would do well this afternoon not to go over government policy on homelessness. It is neither the right time nor the right occasion for that. This Question pertains entirely to the situation surrounding Westminster City Council.
Lord Avebury: My Lords—
Lord Bruce of Donington: My Lords—
Lord Wakeham: My Lords, the noble Lord from the Liberal Benches, I think.
Lord Avebury: My Lords, further to the question of the noble and learned Lord, Lord Hailsham, has it always been the Government's policy to refrain from commenting upon alleged misconduct by local authority members until convictions are secured in a court of law?
The Earl of Arran: My Lords, when the district auditor is called in, that is the case.
Lord Skelmersdale: My Lords, this is an interim report. To my knowledge, no government have ever commented upon interim reports. I hope that this Government will continue that practice.
The Earl of Arran: My Lords, my noble friend is right. That is the machinery laid down in the 1982 Act.
Lord Bruce of Donington: My Lords, is the Minister aware that the use in his first Answer of the word "allegations" is incorrect? It was the District Auditor who acted on the basis of certain allegations that had been made. The procedure that he has since followed conforms fully with the Local Government Finance Act, the shortcomings of which were pointed out to the Government by me and others during its passage through this House.
The Earl of Arran: My Lords, nevertheless the Bill did go through this House. It went through another place as well. As my right honourable friend the Secretary of State has made clear continually, if he believes that there are things which could be improved upon or matters that could be put right, after the case is over he will examine them.
Lord Jenkins of Hillhead: My Lords, is the noble Earl aware that a little while ago he appeared to promulgate a doctrine that when there might be legal action pending, an issue was semi- sub judice? He postulates a position in which almost every issue of public discussion would be precluded from being brought before the public. Will he repudiate that rather extraordinary doctrine which some of his more senior noble and noble and learned friends seem to have accepted in a desperate attempt to defend Westminster City Council, in sharp contrast to the position in which councils of a different political persuasion have been arraigned for sins in the past?
The Earl of Arran: My Lords, the auditor is following procedures laid down by statute and conducted in a quasi-judicial manner. That is how the law stands at the moment. That is how the law will stand unless and until Parliament decides to change it.

British Rail: Off-Peak Fares
2.48 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe asked Her Majesty's Government:
What is their attitude to the reported plan to withdraw cut-price off-peak travel on British Rail prior to privatisation.
Viscount Goschen: My Lords, BR has no plans to withdraw cut-price off-peak travel.
Lord Taylor of Gryfe: My Lords, I am grateful to the Minister for giving that helpful Answer. Is he aware that the Question was prompted by an item in all national newspapers which said that plans to phase out off-peak fares which permit passengers to travel anywhere on the network were in the final stages of preparation? I welcome the Minister's assurance. Since more than 50 per cent. of BR's passengers enjoy the facilities of off-peak travel, have the Government any ideas about how that will operate when the network is fragmented, as I understand that franchisees will observe a network plan for full fares but not for off-peak fares? Will that not result in substantial additions to the cost of travel in this country?
Viscount Goschen: My Lords, we believe that it will be in the commercial interest of private operators to offer discount fares to attract passengers and thereby maximise off-peak revenue. Anxieties have been raised about the issue of inter-availability. However, the flexibility and convenience of commonly-priced inter-available tickets must be balanced against the wider choice of differently priced services.
Lord Clinton-Davis: My Lords, does the Minister agree or disagree with the statement made by Mr. Michael Beswick, when presenting a BR report about through ticketing, that the impression given that railway companies would honour each other's tickets was "a bit of a con" and that phasing out cheap fares was the best way of income-maximising for the railway industry as a whole? Will the Minister also comment on the effect that any such back-door fare increase will have on the travelling public, who were promised that rail privatisation would not involve increased rail fares?
Viscount Goschen: My Lords, we refute the contention of back-door fare rises. The document in question was prepared by BR for a working group. It had not been seen by Ministers and does not represent government policy. However, I believe that the British Rail manager concerned was making the point that a lot of people travel using discounted tickets.

Credit Agencies: Data Errors
2.51 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What further measures they intend to introduce to protect individuals from serious errors in data held by credit agencies.
The Minister of State, Home Office (Earl Ferrers): My Lords, credit reference agencies are subject to regulation and licensing under the Consumer Credit Act 1974. In their use of computerised personal data they are also subject to the provisions of the Data Protection Act 1984. Consumers are entitled to have access to their files and to have incorrect data amended. The present arrangements appear to be working satisfactorily and we have no plans to change them.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that Answer. The Data Protection Act is fine so far as it goes. Has my noble friend seen reports and a particular letter in the press about individuals checking with agencies and finding that they hold information which has serious mistakes in it? Surely, it should not be necessary for members of the public to have to check with every relevant agency in order to ensure that there are no gross errors. That is certainly not in the spirit of the Citizen's Charter.
Earl Ferrers: My Lords, I have seen the letter to which my noble friend referred and I agree that it contains some errors. Under the Data Protection Act 1984 computerised personal data must be accurate and must be kept up to date. It is obviously important that these agencies should do that, but the Government cannot be responsible for what agencies keep on their records.
Lord McIntosh of Haringey: My Lords, the Minister in his first Answer indicated that he was satisfied with the working of the Data Protection Act. Does he recall that the Data Protection Registrar, Mr. Eric Howe, when presenting his last annual report,
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stated that he was anxious about the market in computerised data on individuals—for instance, income tax, bank accounts and credit cards—and he asked the Home Secretary to launch a parliamentary investigation? He stated:
"I have drawn it to the attention of the Home Secretary and it may be that Ministers and Parliament might like to consider a wider inquiry to find out what is this market, how big it is, how easy it is to use".
What response has the Home Secretary given to that request from his own Data Protection Registrar?
Earl Ferrers: My Lords, these matters are kept under review and this is, of course, an expanding part of life. If issues are wrong they will be checked. However, one must remember that in 1992 there were 4,600 complaints to the Data Protection Registrar, 63 per cent. of which were referred to credit reference agencies. The files of the agencies cover several million individuals and so the proportion is small.
Lord McIntosh of Haringey: My Lords, do the recommendations and worries expressed by the Data Protection Registrar cause no anxiety to the Government? Surely, the answer that there will be a continual review is not adequate to that very specific request.
Earl Ferrers: My Lords, of course they cause anxiety and we are addressing ourselves to that. However, that does not mean to say that it is necessarily appropriate to change the legislation.

Radiotherapy Treatment: Standard
2.55 p.m.
Lord Ironside Lord Ironside asked Her Majesty's Government:
Whether they will request the British Standards Institution to develop an interpretation and application of BS5750 quality standard for use by the radiotherapy treatment profession in the United Kingdom, which local health authorities can link to a professional code of practice to prevent permanent injury being caused to those receiving radiotherapy treatment following breast cancer surgery.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, in 1991 the Government commissioned two radiotherapy centres to pilot implementation of a quality standard entitled quality assurance in radiotherapy. The results of that work have now been received and will be disseminated to the National Health Service later this year.
Lord Ironside: My Lords, I thank my noble friend for that encouraging Answer. I thank her in particular for a willingness to look seriously at the whole question of radiotherapy treatment following breast cancer surgery. I thank her too for holding discussions with RAGE, the Radiotherapy Action Group Exposure. She knows my anxieties about that. Will my noble friend ensure that BS5750 assessments are carried out by accredited bodies which are approved and authorised by the President of the Board of Trade?
Baroness Cumberlege: My Lords, I thank my noble friend for the gracious comments he made in the initial part of his supplementary question. I regret that I cannot give him the assurance that he wants. BS5750 is only one system. It offers no guarantee of a quality service or improvement to clinical practice unless the quality systems and clinical protocols are right. All quality systems are based on professional standards.
Lord Dormand of Easington: My Lords, will the Minister confirm that she referred to a trial period? If that is the case, when is the period likely to end? Furthermore, is the Minister aware that BS5750 is internationally accepted and that the British Standards Institution would not have approved it unless it was completely and utterly satisfied?
Baroness Cumberlege: My Lords, I understand that the BS5750 procedures were initially drawn up for the defence manufacturing industry and that they have been interpreted for different forms of quality assurance. We believe that in some instances they are good for the National Health Service. If the initial protocols are flawed BS5750 does not help. However, two centres have been accredited and we are examining those results to see whether they are satisfactory. We shall disseminate those results to other centres so that they can see whether they too wish to adopt the same approach.
Baroness Gardner of Parkes: My Lords, do such incidents have an element of human error? If so, could that be eliminated by computer control? Cases of overdosage and underdosage have been reported in the press. Is that due to human error, incorrect technology or the lack of a code of practice?
Baroness Cumberlege: My Lords, the issue of breast cancer is extremely difficult because there is no definitive or right way to treat it. It depends on factors such as the size of the cancer, the stage it has reached, the site, and the overall health of the individual woman. There is no question of coming up merely with a definitive answer, and that is why we must rely on training, medical audit and the skills of individual radiotherapists.
Lord Rea: My Lords, with regard to these sad cases of post-radiation injury, is the Minister aware that whatever code of practice is adopted the Royal College of Radiologists is willing and wishes to adopt a code of good practice? Does the Minister believe that in this instance the proper role of government is to act as a mediator between the sufferers, who are represented by RAGE, and the Royal College of Radiologists? Does she agree that dialogue is better than confrontation? Will she use her good offices to persuade RAGE to give the Royal College of Radiologists full details of the cases of radiotherapy damage which it has collected throughout the country in order to identify accurately and scientifically the particular radiotherapy regimes and dosage schedules responsible for the injuries sustained and why?
Baroness Cumberlege: My Lords, it is absolutely essential that the National Health Service works with
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those who receive the treatment. I am grateful to my noble friend Lord Ironside for meeting me on 24th January to discuss those issues. I understand that the organisation with which he is closely involved—RAGE—is extremely anxious to co-operate with the department, the Chief Medical Officer and Dr. Karol Sikora, an expert in the field, who together will be meeting the Royal College of Radiologists to pursue the matter. I am grateful to RAGE and I hope that we can work closely with it.

Statutory Sick Pay Bill
3 p.m.
Report received.
Clause 1 [Restriction of employers' right of recovery]:
Lord Jenkin of Rodingmoved Amendment No. 1:
Page 1, line 5, at beginning insert ("Subject to subsections (3) and (4) below,").
The noble Lord said: My Lords, I believe that it would be for the convenience of the House if, in moving this amendment, I speak also to Amendments Nos. 2 and 5 which are part of the same group of amendments designed to achieve our purpose.
I make no excuse for returning to the issue which we discussed both on Second Reading and in Committee; namely, how best to protect small employers from the financial consequences of abnormal sickness among their employees. The House will recollect that government proposals in the Bill involve two tests. First, they define "small employers" as those with annual national insurance contributions of under £20,000. That is an improvement on the present position where the figure is £16,000. In Committee I described the firms which qualify as being within the charmed circle. If you come within the charmed circle, you can move on to the next stage. If you do not, that is the end of the matter.
The second stage is to reimburse statutory sick pay paid to any employee in respect of over four weeks' sickness. I do not wish to go into great detail. I wish merely to recap briefly and describe the three main disadvantages of that scheme. First, it creates an arbitrary barrier or threshold, contrary—I remind the House—to the very first recommendation of the report on deregulation of the committee chaired by my noble friend Lord Sainsbury of Preston Candover. Secondly, it fails to provide relief in cases where many small employers might think that they deserved it. If no employee is off for more than four weeks, however many are sick at the same time—I gave the example of a number of employees being injured in a minibus accident—no reimbursement is made. Thirdly, it manages to provide relief to very wealthy firms, perhaps with a very few highly paid professional staff, when common sense would suggest that that is quite unnecessary. I shall leave the matter there because I spelt it out in Committee.
The scheme proposed in the Bill aims at the wrong target. It is aimed at small firms, when it should be aimed at an exceptional level of sickness in the firm as a whole rather than long periods of individual sickness.

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The alternative system which we discussed in Committee and which has been put forward by the Forum of Private Business is administratively much simpler and hits more accurately the target of exceptional sickness. It triggers reimbursement when in any month the statutory sick pay paid by an employer exceeds a given percentage of his monthly national insurance contributions. He must know both those figures and he merely needs to compare them. The proposal is that the percentage should be fixed by order. As an example, we took the figure of 5 per cent. On that basis, any statutory sick pay paid in a month in excess of 5 per cent. of a firm's monthly national insurance bill is then reimbursed.
That is a trigger. There is no artificial threshold as there is with the £20,000 limit. There is no charmed circle. It catches all exceptional sickness and reduces sharply unnecessary payments to wealthy firms. Simply because of the law of averages, it is extremely unlikely that very large numbers of people in large firms will be off at the same time. It is by no means improbable that half the employees of a small firm may be off sick at the same time. Therefore, in practice, it gives substantial help to small firms.
The percentage figure would be fixed by the Government at a level which ensures that the overall cost is no greater than under the present scheme. I imagine that that would be a requirement of the Treasury, if my noble friend were in discussion with it.
In Committee my noble friend offered two substantial objections to the amendment. He said that the scheme would be open to abuse by unscrupulous employers who might be tempted to shift their statutory sick pay payments from one month to the next in order that, in aggregate, they might reach the 5 per cent. figure, or whatever it is, when in two individual months they would not reach that level.
Secondly—and many of us were impressed by the force of my noble friend's argument on this point—there is not enough time between now and April for either proper consultation or for the necessary steps to be taken to implement the scheme. To some extent those two objections are linked because I have no doubt that, with more time to consult and plan, the risk of abuse could be eliminated substantially.
Therefore, the amendment which I have tabled and to which other noble Lords have added their names aims to meet my noble friend's objections by proposing that the revised improved scheme should come into force not on 6th April of this year but on 6th April 1995. In other words, that gives the Government not two months but 14 months in which to prepare the scheme. It would allow time for wide consultation with employers. It gives firms time to change their payroll systems, including computerised systems. It provides the department with sufficient time to set up its own control and monitoring machinery so as to check the possibility of abuse.
However, the amendment also offers the Government a let-out because it is conceivable, although extremely unlikely, that further consultation and examination might reveal as yet undiscovered snags in the scheme which would make it, in the event, impracticable.
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Therefore, the Government must be able to come to Parliament and say—I put it in the oratio recta—"Sorry, it cannot be done. We have looked at the scheme very thoroughly and most people would prefer to stick to the relief that was originally proposed". I do not believe that that is likely but it is not impossible.
Therefore, the amendment proposes that if the Government can bring forward a report before 30th November of this year, the anniversary of the 1993 Autumn Budget, recommending that the revised scheme is not proceeded with and then, before 31st January, Parliament approves the report, the new scheme would be stillborn. It would not come into effect and the Government's existing scheme would remain in force. If the Government reach the conclusion that the new scheme is wholly practicable and is indeed better—my noble friend made some kind remarks about it at earlier stages—then it will come into operation automatically on 6th April 1995. I believe that that meets the Government's main substantial objections.
The forum's proposal has attracted wide support. We have been told by my noble friend Lord Reay that it is backed by the CBI. It has been backed by the Institute of Directors, although rather more sotto voce, and it is backed by the British Payroll Managers Association, which is a professional body representing the people who will have to operate the system. I am told—and I say that because I have no personal experience—that of the employers' representatives on the department's statutory sick pay panel, none is positively opposed to the scheme. Moreover, as the names to the amendment indicate, it is supported by noble Lords from all parties. Therefore, I hope that on this occasion I can persuade my noble friend to smile on the amendment. It may well require redrafting, despite the best efforts of myself arid the extremely helpful Clerks in the Public Bill Office. However, there will be time for that before Third Reading. Those concerned will have between now and the end of November for wide consultations and all the necessary preparation. I believe that that removes the main objection which my noble friend advanced in Committee. I hope that he will now feel disposed to accept the amendment or, at least, to accept the spirit behind it. I beg to move.
The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor): M y Lords, I believe that it will assist your Lordships if I reply to my noble friend's amendment at this stage. Of course, that does not preclude any noble Lords from speaking thereafter. My noble friend has, again, made a strong case for his amendment. As I explained when we discussed the matter in Committee, I recognise the advantages in principle of my noble friend's proposal for those employers who have an exceptional proportion of their workforce off sick at the same time.
My objections to the amendment were primarily practical and concerned the need to guard against abuse, the lack of statistical data to enable us to set the compensation threshold at an acceptable level and the lack of time to consult industry more widely on the proposal. I am, therefore, most grateful to my noble friend for his understanding and appreciation that those

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practical considerations and concerns could not adequately be dealt with in the remaining time before the Bill is implemented. My noble friend has found an ingenious way forward. He has very helpfully provided an amended version of his proposal which will allow the Government time to collect data on employers' monthly statutory sick pay and national insurance contributions payments. That will enable us to calculate the level at which to set the reimbursement threshold so as to cost no more than the planned costs under the existing small employers' relief scheme.
Deferment of the proposed change until April 1995 will also enable us to consult employers' and employees' organisations on the basis of a clear and detailed account of the change spelling out its pluses and minuses. Employers' and their representative organisations will be able to compare the benefits of the proposed scheme with the existing small employers' relief scheme. They will be able to judge whether the loss to those employers who would not benefit under the new scheme is outweighed by the gains of those who would.
If, after consultation, industry wanted the proposed new scheme, and the Government were satisfied that it met our concerns, my noble friend's proposal would give us sufficient time to implement it in April 1995. On that basis, I am happy to accept my noble friend's proposal. I would ask him, however, to withdraw the amendment in its present form, so that the Government can table an equivalent amendment on Third Reading which covers all the consequences of introducing a new scheme. For example, the amendment should provide for the repeal of the present small employers' relief scheme in the event of the new scheme's adoption.
However, I must tell my noble friend that I am concerned that subsection (5) of his amendment would put an unnecessary burden on Parliament to approve any report. That goes slightly too far. We believe that a report should be laid before Parliament without requiring formal approval. I hope that my noble friend understands my concerns and I trust that we shall be able to settle the matter between us before Third Reading. In the light of this undertaking, I hope that my noble friend will feel able to withdraw his amendment today. As I said, I shall be happy to bring forward an equivalent amendment on Third Reading.
3.15 p.m.
Earl Russell: My Lords, I should like to thank the noble Viscount most warmly for that reply. On this occasion the Committee stage operated as, in classic theory, it should; namely, as a negotiating process in which points are given and taken. I am extremely glad that the Government have accepted the principle of an exceptional level of sickness. Having investigated and consulted further, I very much hope that they will bring the scheme into effect in 1995.
I should especially like to thank the noble Viscount very warmly for the personal part that he has played in bringing us to the present point. However, I must stress that it is also the responsibility of people on this side of the House to look gift horses in the mouth. I hope that
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one tiny word of reservation may be forgiven. The amendment had only one tooth which was the power of Parliament to approve the report. I am not altogether surprised that the Executive did not find that persuasive. It is part of an argument which has been going on for centuries and which will go on for many more. I was a little disappointed to hear the job of approving a report being described as a "burden" on Parliament. However, I shall not pursue the point. We have achieved nine-tenths of what we asked for and that is much better than the proverbial half loaf. We are extremely grateful.
Lord Carter: My Lords, as my name is also attached to the amendment I should also like to say how extremely pleased I am that the Government have at least accepted the principle behind it. As we said in Committee, the amendment was ingeniously drafted. It has now been even more ingeniously drafted to meet the Government's objections.
I have two short points to make. One concerns the time for consultation. We rely on the Government actually listening to the consultations and allowing themselves to be persuaded if the arguments are strong enough. We have had past experience where that has not always been the case and where the Government have appeared to listen and have then ignored what was said.
Secondly, there are the complications about which we heard in Committee. As it happens, I am involved with a business which runs a payroll bureau. I spent some time with the firm between the Committee and Report stages. The firm undertakes 80 payrolls—some weekly, some fortnightly and some monthly. It covers companies which range from one to 25 employees, with an average of about eight. The firm largely works for the archetypal small employer. As I said, I spent some time with the firm and those concerned told me that they could see that the proposed scheme would certainly be no more complicated than the existing one. The changes to the computer and the software that would be required would- be comparatively straightforward and would be needed just to isolate the employers' national insurance contributions and the amount of sick pay. There would be plenty of time to do so in the allotted time.
The interesting point made by the firm was that the advantage of the scheme is that it relates to the immediate situation reflected in the level of existing employers' insurance contributions and statutory sick pay as it occurs through the year. Of course, the existing scheme relies on the contributions in the previous year. If there is a change in the circumstances of the firm since the previous year, then that is not always reflected in the reimbursement of SSP. In fact, the proposal would bring the scheme into action in line with the existing situation in such firms. In the case of the firm to which I referred, those concerned were quite pleased with the scheme. They thought it was ingenious and that it would work.
I should like to repeat a point made by the noble Earl, Lord Russell. I refer to the matter of not seeking the approval of Parliament. If the Government are persuaded—and the House is already persuaded as, I am sure, the other place will be—of the strength of the argument after consultation, I fail to see why they should be almost scared to ask for the approval of

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Parliament. That would be the proper way to proceed. I hope that they are not removing subsection (5) from their amendment because they have it in the back of their minds that they can ignore the outcome of the consultations if they wish.
Lord Reay: My Lords, as my name is the fourth name attached to the amendment, perhaps I may also join those who thanked my noble friend for having listened to the voice of the House and of industry and for having accepted the amendment. I was pleased that my noble friend emphasised the consultations that he will be having with industry for working out the modalities and the regulations to be introduced. It is most important that they should not be so complex and that, in the Government's desire to prevent fraud, they do not bring in regulations which are so burdensome, onerous and complicated that firms are reluctant to make use of them. That, to some extent, is one of the faults with the present scheme.
The scheme set forth in the amendment has the merit of simplicity. I hope that that will not be obscured by regulation. As I said, it is most important to ensure that the regulations are not such that that becomes obscured. In the meantime, I should like to thank my noble friend very much for having accepted the amendment.
Lord Boyd-Carpenter: My Lords, there are three directions in which congratulations should now be extended. First, they should be extended. to my noble friend Lord Jenkin of Roding who worked extremely hard during the earlier stages of the Bill. He evolved the extremely ingenious development which is now before the House and very patiently negotiated it with the Government. I am sure he is entitled to the warm congratulations of all noble Lords.
Secondly, I congratulate my noble friend the Minister on his flexibility. 'Those of us who have been in government know that he must have had quite a struggle inside the department, and indeed with similar departments of state, and it is a tribute to his determination and strength of personality that he has achieved this agreement. He is warmly to be congratulated. Thirdly, I humbly congratulate your Lordships' House as this has been an extremely good example of the work this House can do and does do as a revising Chamber on highly complicated, difficult and important matters.
Lord Dean of Harptree: My Lords, my noble friend has produced an ingenious scheme and now that my noble friend the Minister has accepted it in principle there is time to go into the pros and cons of the arrangements to see whether this would be a preferable scheme to the one in the Bill. However, I suggest that it is sometimes better to have a bird in the hand rather than two in the bush. As things stand at the moment, I prefer the present proposals in the Bill which come into operation in April 1994. But I should prefer them even more if my noble friend were prepared to reconsider the possibility of reimbursement after three weeks rather than four. I raised that point in the Second Reading debate and the noble Earl, Lord Russell, also referred to it in Committee. It seems to me that this could be a
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simple and practical way of overcoming some of the more difficult situations in exceptional sickness and injury cases which have been mentioned on a number of occasions during our proceedings.
My noble friend the Minister said that it was important in considering this matter to maintain the incentive for employers to take sickness absence seriously. That, of course, is a weighty argument, but, on the other hand, as your Lordships know, small firms tend to have a better sickness absence record than large firms. It is understandable that that should be the case. Often in small firms the boss works alongside his employees. There is a spirit of team work and people know each other well. In those circumstances it is understandable that employees would think twice before going sick and putting additional burdens on their colleagues. I hope that my noble friend will be able at least to say that he will give further consideration to that point in the light of the debates that we have had in your Lordships' House.
Viscount Astor: My Lords, with the leave of the House, I wish to answer three points. First, I am grateful to all noble Lords who have spoken who appreciate that the Government have considered this amendment and have tried to address the concerns of my noble friend. Indeed, my noble friend has restructured his amendment so that it addresses many of our concerns. I can, of course, give an assurance to the noble Lord, Lord Carter, that there will be full and proper consultation on this matter. If the noble Lord does not believe me, he should attend the meetings in my department of the employers' panel. He would then discover that we have hours of frank discussion on SSP and other subjects.
It is important that a report is made available for Parliament, and that Parliament should be able to debate that report if it so wishes. I shall discuss that matter with my noble friend. I made the point that his amendment, in seeking the approval of Parliament, placed a commitment on Parliament.
My noble friend Lord Dean of Harptree has asked about small employers' relief. We have already raised the threshold of national insurance contributions for small employers from £16,000 to £20,000, We have reduced the period from six weeks to four so that small employers will be able to receive 100 per cent. reimbursement. During this period of consultation we shall consider all the aspects of this matter. I am sure that during that period we shall have to examine how well our scheme will work while we consider the scheme proposed by my noble friend Lord Jenkin. We shall have to await the result of the consultation process.
Lord Jenkin of Roding: My Lords, I must add my words of gratitude to my noble friend. He has listened most patiently and has given much of his time, and that of his officials, to hear the arguments and to discuss our proposals. That is an excellent way in which our system can work. I am grateful to him for that. I am also grateful to all those who supported the amendment and to my noble friend Lord Boyd-Carpenter for his kind words.
One group which has not been thanked and which should be thanked is that remarkable organisation, the Forum Of Private Business. This scheme was the

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forum's scheme and it sold it to me. I have sold it to the Government and the forum is entitled to take every credit for that.
This matter constitutes a particular pleasure for me as I initiated the initial policy change that led to the introduction of statutory sick pay when I was Secretary of State at what was then the DHSS. We seem to have come full circle and we are now on the way to getting a good system of relief for small firms. I express again my gratitude to all those who have taken part in the debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Baroness Hollis of Heighammoved Amendment No. 3:
After Clause 1, insert the following new clause:
("Annual report by Secretary of State. —The Secretary of State shall annually publish and lay before Parliament a report on the effects of this Act upon the employment of people with disabilities and upon the level of dismissals connected with sickness or with statutory sick pay.").
The noble Baroness said: My Lords, I hope very much that we can draw on a similar spirit of accord and concord, this time not on behalf of small businesses but on behalf of the disabled. This amendment, if approved by your Lordships, would ask the Secretary of State to bring an annual report to Parliament on the effect of the Bill upon some of the most vulnerable people in the labour market; namely, those in work with a poor health record, and those unemployed people who have a poor health record but who none the less seek to -re-enter work.
We fear—though we hope we are wrong—that the Bill perversely may encourage employers to sack the sick and be even more reluctant to employ the disabled in future. As regards sacking the sick, I should have thought that it was obvious that anyone with a poor health record, who perhaps suffers from asthma or a chronic heart or back condition and who often needs time off work, must, in the eyes of the employer be a less effective and efficient worker. Such people taking time off when they are ill generate problems. Other employees have to cover for them, as the noble Lord, Lord Lucas, said in Committee. Temporary staff have to be employed and extra work is involved in supervision. But at least when 80 per cent. of statutory sick pay was refunded by the Government there was some financial protection to the employer. Now, with even that financial protection stripped away—larger employers will now pay 100 per cent. of statutory sick pay—and with employers facing not only the work disruption presented by employees with poor health but also a financial penalty for keeping them on the books, is there any reason why they should do so? They are not, after all, charities.
The Minister may say that there is no evidence that firms will sack the sick when they have to pick up the bill for 100 per cent. of statutory sick pay. We do not have hard evidence on this matter but we have some anecdotes and assertions. The National Audit Office stated in its report last year:
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"Some employers and organisations representing them told the National Audit Office that they believed that the 1991 changes to the Statutory Sick Pay Scheme had increased employers' costs".
That concern has also been reported quite frequently by citizens advice bureaux. A CAB in South Wales reported the case of a client who had been off work sick for two weeks. Her employer had failed to pay statutory sick pay as she said that she could not afford it. Another CAB in the West Midlands reports the case of a client who was off sick for two weeks whose employer told him he would be dismissed if he took time off work. The CAB comments:
"he has no choice, he either works and exacerbates his injury or loses his job".
A CAB in Avon reports the case of a client who was on sick leave, who was paid less than the full amount and who was told by her supervisor after six weeks off sick that she was to be made "redundant" and that someone was already doing her job. Another CAB in Devon reports that a client was dismissed after being off work for six months while awaiting a major operation. He was dismissed even though the doctors were confident he could return to work after the operation.
CABs around the country are reporting an increasing number of inquiries concerning sick leave, suspension and dismissal from work in connection with illness. I could go on. The CAB has many more such anecdotal stories. They are anecdotal, but they are supported by last Sunday's "Money Programme", which interviewed many employers some of whom said that due to the changes in statutory sick pay they would now be more reluctant to retain in work someone who suffered chronic ill health.
In another place the Secretary of State, speaking of this Bill, made clear that its purpose was to encourage business to police sickness records among the workforce because of the relatively high level of sickness in Britain. I am sure that business will now police those records. Too often the policing will take the form of relieving staff of their services. What are employers expected to do? Are they to introduce gyms or send their staff to health farms? No. Such people will join the ranks of those on invalidity benefit or unemployment benefit, at infinitely greater public expense.
All the anecdotal evidence so far suggests that employers will be increasingly reluctant to retain staff who are chronically sick or disabled now that employers in larger firms are to foot 100 per cent. of any statutory sick pay. Once out of the labour market the disabled or chronically sick find it extremely difficult to re-enter. Many go on to invalidity benefit, unemployment benefit and then income support. If their condition improves and they come off invalidity benefit and wish to re-enter work—as they do —what are their chances? They are slender. Only one in eight of those coming off invalidity benefit who seek work find it-12 per cent. Seven in eight do not find work. They have to go on to unemployment benefit and income support because employers will not take them on.
Of the one in eight who are fortunate enough to find work, two-thirds do so with their previous employer. In other words, if the previous employer will not take that

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person on, very few others will. It is not always easy for those people. Their previous employer may have gone out of business. Given that on average disabled people have lower educational qualifications—only 17 per cent. stay on at school after 16—they are not especially skilled or attractive in economic terms. They are also often handicapped by the attitudes and perceptions of employers. After all, at present 75 per cent. of employers do nothing to help workers who become sick or disabled to remain in work. They do not now adjust their hours and the conditions of work or provide the aids, adaptions and appliances which such staff may need in order to stay in work, even though in approximately a third of cases of people who become chronically sick or disabled the condition was created or exacerbated by work. The chronically sick find that they cannot re-enter the labour market.
Of those who do manage to return to work—and, as I said, only 12 per cent. of those able to work find employment—four-fifths return to the same hours and the same conditions that applied when they left work. In only one case in five does the employer adapt the work situation. That is the position now. In future if employers take on a disabled person after six months 50 per cent. of the cost of any physical adaptation to the work place will have to be paid by the employer and 100 per cent. of statutory sick pay.
Imagine, my Lords, that you are an employer. Indeed, many noble Lords are, or have been, employers. You are faced with a man of 50 with a poor health record who is likely to make claims on statutory sick pay while another 20 younger, fit men are hungry for the job and are less likely to make claims on statutory sick pay. Who are you going to employ? You are not a charity. Yet if, as the former boss, you do not employ that man, almost no one else will.
According to the Spastics Society, the disabled already find that they are six times less likely to be called for interview than an able-bodied person with the same qualifications. The disabled have three times the unemployment level of the able bodied. Now, in addition, they are to be given a negative dowry in that employers are to pick up the whole of their statutory sick pay. Will you, as an employer, take them in preference to somebody who is less likely to make a claim? I cannot believe that you would.
We moved an amendment in Committee which suggested that the negative dowry of statutory sick pay should be reimbursed by government for a limited period, thus removing the negative dowry that someone who is disabled might carry into work. However, there was not enough support in the Committee for that view. I accept that. I recognise also the point that was well made by the noble Viscount, Lord Astor, that your Lordships needed more evidence that there was a problem before such an amendment might be acceptable. I respect that view. That is why the amendment appears in its present form.
The purpose of the amendment is to determine whether the evidence exists, either way, to tell us whether the statutory sick pay proposals in the Bill are an invitation to employers to sack the sick and a disincentive to employers to re-employ the disabled. We
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cannot know if we refuse to collect the information. It is the mildest amendment possible. It asks that the Secretary of State bring a report to Parliament to tell us whether there is a problem. I believe that there is, and that there will be. The disability groups believe that there is a problem and that there will be. But how do we know?
I hope that I am wrong. In Committee the Minister told me that I was wrong. But as he does not have the evidence either, how can he know? I hope that he is right. The only way to find out is to monitor the situation because what we do not monitor we cannot know. We owe it to the sick and disabled to know. The very act of monitoring may persuade less scrupulous employers to behave more honourably towards those in their employ.
Hence the amendment. Technically, it is quite simple. At local level much of the information already exists. Whenever a person applies for unemployment benefit he or she has to give the reasons for leaving the previous job. That information needs to 'be collated and collected in an annual report issued by the Secretary of State. The Secretary of State is quoted at col. 1113 of Commons Hansard for 15th December 1993 as saying:
"There has been no evidence of sick employees being sacked or companies being more reluctant to employ people who have been sick".
RADAR, the group working on behalf of the sick and disabled, says exactly the opposite. It states:
"There is absolutely no evidence that employers will be prepared to pay extra money to retain disabled staff. On the contrary, there is extensive evidence that workers tend to lose their jobs when they are disabled".
Is RADAR right? Is the Secretary of State right? How do we know? How can we tell? It is clear that the Secretary of State cannot have any evidence if he does not collect it. If he is confident of his view, then the evidence, as reflected in the amendment, will support him. If, unfortunately, the Secretary of State is wrong, then the evidence will give him the reason, the justification and the will to change the situation. At least the amendment would allow us to move away from allegation, counter allegation, assertion and anecclote—always a frail basis for statutory policy.
We fear that the Bill may encourage employers to be increasingly zealous in sacking their sick and increasingly hesitant to re-employ them. We truly hope that we are wrong, but we do not know. We need to know and the only way to find out is for the Secretary of State to collect the facts and to bring that report to Parliament. Your Lordships have an honourable record in protecting the rights of the disabled, but those rights have to be based on all our information. It is in that light that I hope noble Lords will support the amendment.
Lord Boyd-Carpenter: My Lords, as always in her speech, the noble Baroness meant well. She always does. However, I wonder whether she realises what a wholly impractical task she seeks to impose upon the Secretary of State. The amendment does not ask for a report as to increases or decreases in unemployment among sick people; it asks for a report on the effects of the Bill on those numbers. If unemployment rises or falls among sick people, how on earth is the Secretary of State to know that that is an effect of the Bill? It would be pure guesswork. It is surely much better to rely

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on the facts as they become known in the ordinary way than to seek to impose a quite impossible task on the Secretary of State. How can anyone know whether changes that take place in future years —changes take place the whole time—are a result of the Bill?
If one considers the amendment, the Secretary of State is supposed to perform this all but impossible task annually. I do not believe that he can do so. It is only misleading ourselves, and perhaps misleading sick people too, to put such a provision on the statute book. I hope that noble Lords will not do so.
3.45 p.m.
Earl Russell: My Lords, the noble Lord is perhaps somewhat severe in what he said to the principles of research in general. It is, of course, true that in every question of research there is ultimate room for doubt about causation. Nevertheless, in every operation of government and of history we look for correlations and investigate whether it seems likely that those correlations imply a logical connection. The process is familiar. The Government act on its results regularly every year, often with great confidence.
I know the attitude that the noble Lord puts forward. It is that which in my profession we describe as source nihilism. However, I did not know that it had extended its territory any later than the sixth century. I am pleased to welcome the noble Lord into this century but I cannot say that I am the least persuaded by what he said.
On these Benches, we are happy to support the amendment. It deals with two points of fact which have been disputed through every stage of the Bill's progress in both Houses. Like the noble Baroness, we should like to know who is right. Even if in deference to the noble Lord, Lord Boyd-Carpenter, I agree that we may not know with infallible and certain knowledge, there may be a much greater degree of probability in what we say. If one brings in changes and the level of dismissals immediately rises rapidly, then it is at least a plausible hypothesis that those factors are connected. On the other hand, if the level of dismissals should suddenly go down, it is a little unlikely that that conceals a rapid increase due to statutory sick pay.
We accept it is perfectly possible that we may be wrong; everyone may be wrong. In saying that, I should like to believe that we are in the same boat as the Government: at they also accept that they may be wrong and that they, like us, may be prepared to take the risk of finding out. There is nothing to be said against accurate information.
First, the amendment deals with disabilities. Two valid points have been made against each other throughout the Bill. There has been no meeting of minds. The first valid point—I believe that it is not contested on any ground—is that the disabled have a more reliable attendance record as employees than the workforce as a whole. The more that we can use this debate to publicise that fact, the better; we agree with it. The other point, sustained by statistics which the noble Baroness quoted about people being called for interview, is that that fact is not generally perceived by employers. We are dealing with an area in which
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perceptions are everything. Every time they read the newspapers, the Government probably recognise that perceptions are not necessarily the same as facts. What matters is whether there is a perception that the disabled are likely to be more costly to employ. If there is that perception, it will make people less likely to employ the disabled and the situation will call for remedial action.
On dismissals, I thank the noble Viscount and his officials for the courtesy with which they listened to us during the meeting last Thursday. I was extremely glad of that chance. We believe that there is a considerable risk that employers may dismiss people because they are sick and because it is a great cost to employ them. I understand that the Government think that dismissals because of sickness are not likely to be due to statutory sick pay. I understand that the Government think that the interruption of production is a much more serious problem. That may well be the case, but I am sure that the Government are familiar with the principle of the last straw that breaks the camel's back. There may be a very heavy load on the camel already; but why put on the extra weight which may be just too much?
The Government who stand by free market principles will find it difficult to deny that, if you increase the price of something, you create a disincentive to use it. Therefore if you increase the price of labour which suffers from sickness, you create a disincentive to employing that labour. That is what concerns us. That is what we hope will be monitored. That is where we should like accurate information. We agree entirely with what the noble Baroness said about the difficulty of re-entry into the labour market for this reason. If you lose a job at over 50 years old, it is hard to become re-employed. If people are not employed beyond 50, the actuarial basis of pensions becomes extremely difficult. If the Government do not accept the amendment, it is pickling a very expensive rod for their own backs. I hope that they will think again.
Lord Milverton: My Lords, I support the noble Baroness's amendment. It seems to me reasonable and practical. The principle and ethic underlying it are sound. I leave the complicated details of the Bill to others. However, in taking note of the arguments from all sides, I support the amendment. Principles and ethics arise in such issues. It is about time that such principles and ethics were heard more clearly in this day and age. I hope that Her Majesty's Government will accept the amendment.
Lord Ashley of Stoke: My Lords, I believe that there are compelling reasons to accept the amendment so eloquently put forward by the noble Baroness. I have neither heard nor read of any substance in the arguments put forward for rejecting the amendment. I am unimpressed by the points made by the noble Lord, Lord Boyd-Carpenter. He said that the amendment is impracticable. That is the last thing to be said about the amendment. The point is that it is practicable to find out precisely what is going on. If we do not find out such information when we are able to do so, we live in ignorance.
The noble Lord also said that we should rely on the facts as they become known in the ordinary way. The

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whole point is that the facts do not become known in the ordinary way. That is why we live in ignorance of all the problems of disabled people. No one knows. Ministers far too often say: "We don't hold this information centrally".
Lord Boyd-Carpenter: My Lords, will the noble Lord allow me to intervene? Will he explain how the Government or anyone else are to attribute to the Bill an increase or decrease in the amount of unemployment among sick people? The Government can undoubtedly obtain the facts as to whether there is an increase or a decrease; but how on earth do they ascertain that the change is a result of this Bill?
Lord Ashley of Stoke: My Lords, I shall be delighted to respond. That can be done perfectly well by social and academic analysis. The reasons for illness and disability are carefully tabulated, all the OPCS reports clearly indicate the causes and the reasons through meticulous, academic analysis. But we have not yet gone far enough; and if the analysis is applied to the Bill, in one year's time we shall find out precisely what is happening and whether the Minister is correct in saying that the Bill has no effect on the employment of disabled people. That is a nonsensical proposition.
I am convinced that this legislation will have a deleterious effect on the employment of disabled people. Employers are not in the business of charity. They want to maximise their profits—understandably so. But there is no point in the Minister saying, as he has already said, that we know that disabled people are good workers. Of course we know that they are good workers, but the employers do not. There are some marvellous employers, and many noble Lords present are associated with fine firms with a good record on disabled workers. However, there are some awful employers, many of whom, it is true, regard disabled workers as being a costly burden. All my experience as Chairman of the All-Party Disablement Group for the past 21 years indicates that that is so, employers do regard disabled people as costly liabilities.
I am also convinced by the high rate of unemployment among disabled workers and by the ignoring and neglect of the quota system. If employers regard disabled workers as a cost liability, it must be a deterrent from taking on and keeping disabled workers. No Minister, in a market-led economy, can deny that—it is impossible.
If my noble friends and noble Lords opposite, as well as the disability organisations who oppose the Bill, are correct, it is crucial that the amendment should be carried so that we can find out the damaging effect of the Bill on disabled people. The amendment is all the more important because of the evasive response of the Minister on Second Reading. The noble Lord, Lord Reay, asked, reasonably, whether the Government would monitor the effect of the Bill. What could be more reasonable than that—to monitor the effects of the Bill? Instead of a direct affirmative to that reasonable request, the Minister merely said that the Government would be considering the effects and would consider whether research should be mounted. That is simply not good enough.
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In view of the deep anxieties expressed in the House by noble Lords, disablement organisations and disabled people themselves, the Government have a moral obligation to monitor the effects of the Bill when it becomes an Act through an annual report. The Minister says that there will be discussions about the consequences of the Act. Again, that is not good enough because the Government should convey to noble Lords all the information they receive. The fate of disabled people should not be buried in Civil Service files. The information should be reported to this House so that noble Lords can decide what should be done and how the Act should be amended, if necessary.
I conclude by giving the Minister some information which has not yet been publicly disclosed. I believe that it destroys one of the main arguments which he put against the amendment when he was trying to answer it. In Committee, the Minister rejected the request by my noble friend Lord Carter for an annual report. One of his main arguments, if not the main argument which he put forward for rejecting an annual report was:
"The Prime Minister has asked my right honourable friend the Minister of State for Social Security and Disabled People to work with the all-party disablement group to identify areas for further action where discrimination could be eliminated at little or no cost".—[Official Report, 25/1/94; col. 927.]
That is marvellous ! The Government are so actively involved with the all-party group in solving the problems; but I have to tell the Minister that I personally have been deeply involved in the discussions with the Prime Minister and all the negotiations with the Minister. Unfortunately for the Minister's argument, after the last negotiations recently, the officers of the All-Party Disablement Group and every member of that group present at the negotiations decided to break off the negotiations and withdraw from them because we were dissatisfied with the progress. My guess is that at the meeting at which I shall be present tonight at five o'clock, when the proposal is put to the All-Party Disablement Group, the members will fully endorse the recommendation of the officers to withdraw from negotiations. So I do not believe that the Minister has any substance in his argument.
The very least we can do for disabled people is to provide an annual report so that this House and another place are able to assess the effects of the Bill. It is a modest, reasonable proposal and I hope that noble Lords will vote for it.
Baroness Elles: My Lords, we have been listening to a confused discussion. So far as I can see, there are two main issues. One is to ask the Government to accept the amendment and to analyse the effects of the Bill on the employment of the disabled as a result of the withdrawal of statutory sick pay. The other is how the disabled will be treated when they are sick, when they return or when they do not return to employment. Those are two completely different issues and I hope that on that ground the Government will reject the amendment.
However, that does not stop the anxiety expressed all round the House of the disabled in employment which I believe is a separate issue. There are a whole lot of reasons why the disabled are employed or not employed. There are many statistics, in particular the

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latest from the Department of Employment which I have obtained which showed that in 1991 there were 500 million absentee days. How many of those were of the disabled? Probably extremely few. A good many noble Lords in this House have worked with the disabled and know that they are often in better health in their jobs than those who skive off and play golf on Friday, Saturday, Monday and Tuesday. I do not think that the figures are comparable.
Therefore, I hope that the Minister will reject the amendment. It is totally impractical, as my noble friend Lord Boyd-Carpenter said. However, I hope that the Minister will give some indication of how the Government and all those interested can monitor how the disabled are fitted into the workforce so that when, for some reason or another, they have to leave, they know what are the opportunities for obtaining a job. That is where I believe monitoring is needed. Everyone would agree that some form of monitoring is needed for the security and working possibilities for the disabled. I think that we all support that.
Perhaps my noble friend the Minister can give an indication of the sympathetic and compassionate way in which his department looks at the problem. This Government have a good record of helping the disabled. I do not believe that refusal of the amendment would in any way detract or denigrate from that record with regard to the disabled. However, I hope that the Minister can help us in dealing with this problem.
4 p.m.
Lord King of Wartnaby: My Lords, the noble Baroness spoke eloquently with compassion and concern for disabled people, which I am sure are feelings shared by the entire House. But it occurs to me that the amendment would create an administrative nightmare.
I believe that 90 per cent. of the people employed in this country are employed by firms whose total labour force numbers around 25. The big firms—as they are described —have little problem with these matters. They are able to organise and deal with them. In a practical sense they must bear in mind what the rest of the employees in a great company think if the matter is not treated seriously and properly. But when one comes to someone with five, 10, 15 or 20 employees—I believe those to be the vast majority —and one says, "Now we impose on you an additional charge of 10 per cent. for employing someone", one creates real difficulty.
The problem arises for the small employer. If a way can be found of monitoring the situation and it can be brought to this House in a way that can be understood, go ahead. Having said that, I have only sympathy, compassion and feeling, as I am sure do other noble Lords, for what the noble Baroness said. However, the solution to the problem must be clearly thought out. It is a wonderful idea. Nobody wants to be oppressive to people who are unemployed and who cannot be re-employed because they were sick. But we must consider whether we are getting into a tangle from which we cannot extricate ourselves.
Viscount Astor: My Lords, I listened carefully to the noble Baroness, Lady Hollis, as she explained the reasons why my right honourable friend the Secretary of State should publish and lay before Parliament an annual report on the effects of this legislation on the employment of people with disabilities and on the level of dismissals connected with sickness or statutory sick pay. It has been claimed that abolition of the 80 per cent. SSP reimbursement arrangements will affect the job prospects of people with disabilities and those with poor health records, and will lead to the dismissal of sick workers. While I can understand and appreciate the anxieties expressed, I must say at the outset that I cannot agree with those claims. The Opposition claimed that people with disabilities would suffer when the statutory sick pay scheme was first introduced in 1983—over 10 years ago—and on subsequent occasions when changes were made to the structure of the scheme. That proved not to be the case.
We do not accept the claim that abolition of the 80 per cent. reimbursement rate will lead to discrimination against people with disabilities or poor health records. Nor do we expect there to be any changes in the pattern of employment of people with disabilities as a result of the change. All the evidence suggests—and the noble Earl, Lord Russell, agrees—that people with disabilities make very good employees and indeed often have a more reliable sickness absence record than other employees.
People with the right attitude to work and who have the necessary skills will always be attractive to employers because those attributes are more important than their past health record. Recent research carried out on behalf of the department by the independent Centre for Research in Social Policy—whose report will be published shortly—indicates that the reduction in SSP reimbursement from 100 per cent. to 80 per cent. in April 1991 had no effect on the willingness of employers to recruit workers with disabilities. Their sick absence records are reported to be no worse, and are often better, than those of their able-bodied colleagues. Furthermore, that study detected a more positive attitude among employers to the recruitment of workers with disabilities. That is an important point.
In the Government's view, there are many other factors of far greater importance in determining job opportunities for disabled people. Both this department and the Department of Employment have developed policies to promote the employment of people with disabilities. Disability working allowance, which we introduced in April 1992, promotes greater opportunities for employees with disabilities by providing them with financial support while in employment.
It has been the endeavour of successive governments to increase awareness that disabled people are good employees and have a valuable contribution to make. The Government share the aim of the All-Party Disablement Group of ending any possible discrimination against disabled people. We believe that the best approach is by a programme of education and persuasion, backed up where necessary by targeted legislation.

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I must say to the noble Lord, Lord Ashley, that if he is right that the group is breaking off negotiations with the Government, that may not help those people about whom he is concerned. Will the breaking off of negotiations help the people with disabilities?
Lord Ashley of Stoke: My Lords, I believe it will help. It will draw the attention of the Prime Minister to the fact that Members on both sides of the House of Lords and in another place feel that the argument about persuasion and education is a bogus one because it simply has not worked. We need the same kind of legislation that exists in the United States and elsewhere; that is, to protect the rights of disabled people.
Viscount Astor: My Lords, it is obviously a decision that the all-party group must make. But it does not seem to me that breaking off negotiations with my right honourable friend the Minister of State will necessarily help the cause of those whose concerns the group aims to promote.
I should point out that nine out of 10 employees work for employers with occupational sick pay schemes which usually pay more than the SSP due. If, as the Opposition are arguing, financial costs are a factor which affects working people with a disability, employers would have already let those employees go. There is no evidence to that effect.
Not only is the amendment not needed, it is also potentially damaging to the interests of those it seeks to help. It would send the wrong message that, far from being excellent employees, people with disabilities needed special monitoring by Parliament. That could serve to undermine our efforts to persuade employers that such workers are well worth employing.
Similar considerations apply to that part of the amendment which deals with the level of dismissals connected with sickness or the payment of statutory sick pay. I should explain that SSP legislation already prevents an employer from ending an employee's contract of service solely or mainly for the purpose of avoiding his SSP liability. In that situation, the law provides that the employer's liability to pay continues until entitlement ends for some other reason—usually when the employee is fit enough to resume working. If that happens, all the employee has to do is to bring the matter to the attention of the Benefits Agency when prompt action will he taken to resolve the issue.
The noble Baroness cited examples given by the National Association of Citizens Advice Bureaux. They should be viewed in context. There are about 1.2 million employers liable to pay SSP. At any given time, some 330,000 employees are entitled to SSP. That is a lot of employers and a lot of employees. It is not surprising that a few cases will come to light where an employer seeks to avoid his legal liability whether it be SSP or any other legal liability. The Government condemn such practices and urge the CAB and any other body or organisation which uncovers such malpractice to bring the matter to the attention of the local social security office at once. That will trigger action to have the matter dealt with promptly. The Government do not however believe that the practice is at all widespread.
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The noble Baroness claimed that of those whose invalidity benefit had ended because they were fit to work, only 12 per cent. were able to find work. I must tell the noble Baroness that she has misunderstood the results of the study of IVB recipients. Twelve per cent. of the entire sample had found work by the end of the study period, not 12 per cent. of those whose benefit had ceased because they were fit for work. The majority of those studied—80 per cent. —were still receiving IV13. We must remember that in any one year about 320,000 people come on to NB and about 200,000 come off it.
The noble Baroness also mentioned the Spastics Society research that showed, she said, that employers are six times as likely to turn down for an interview a person with disabilities as to turn down a person with no disabilities. That report, which was in 1990, involved sending postal applications for secretarial jobs in London. Two letters were sent for each post—one from a fictional disabled person and one from a fiction non-disabled person, both with similar skills arid experience. I do not accept that the responses to fictional job applications for one particular type of employment in one particular area can be used to represent a nationwide picture of employment prospects for disabled people with a variety of skills. The noble Baroness may be interested in the results of research in 1993 by the Institute of Manpower Studies which showed that from a random sample of almost 2,000 employers in the private sector, more than half who responded to the survey said that they employed disabled workers.
The growth in occupational sick pay over recent years demonstrates employers' willingness to accept much of the responsibility for catering for the short-term sickness absence of their employees. If financial costs were the main consideration, employers would have been inclined to react in the way noble Lords opposite have claimed when the reimbursement rate was reduced to 80 per cent. in 1991.
The evidence that the CABs produced and the evidence of the noble Baroness is anecdotal evidence. I do not believe that anecdotal evidence is a sound basis for primary legislation. I can tell the noble Lord, Lord Ashley, and indeed my noble friend Lord Reay, who brought the matter up at an earlier stage, and my noble friend Lady Elles that we shall be monitoring the effects of the change both in the course of the Contributions Agency's routine visits to employers and by other means such as the feedback that we get from employers, employees and their representative organisations. We have already introduced a procedure to monitor the reasons given by an employer for not paying SSP to an employee and will be scrutinising those reasons closely. The Government will also ensure that the results of monitoring will be made available. I hope that my noble friends will be reassured by what I have said on that basis.
In the light of the assurances I have given about monitoring, I hope that the noble Baroness will withdraw her amendment; otherwise I would ask your Lordships to reject it.
Baroness Hollis of Heigham: My Lords, by leave of the House and before the Minister sits down, will he answer one question? Is he saying that the department could not do what the amendment asks?
Viscount Astor: My Lords, the case has been carefully made by my noble friend Lord Boyd-Carpenter as to why the amendment would not work. I have said that the department will monitor the situation. The noble Baroness must accept the Government's commitment to do that monitoring and to make the results available.
4.15 p.m.
Baroness Hollis of Heigham: My Lords, I thank all those who have taken part in the debate. Even if our views around the House are very different, I appreciate the tone of the contributions. We are all seeking the best way forward to ensure that those who are chronically sick and disabled remain in work and can re-enter work. I am sure that we all share that view.
Perhaps I may take up some of the points made by the contributors to our brief debate. To some extent I concede the point made by the noble Lord, Lord Boyd-Carpenter, that the amendment does not go as wide as it would if this were a general Bill about disability. He is right. We are restricted quite properly by the Long Title of the Bill which means that any such report must be based on what the Long Title of the Bill is there to do. But the noble Lord did say—and my noble friend Lord Ashley picked up the point—that instead we could rely on,
"facts as they become known in the ordinary way".
That is precisely the issue. We want to know what the facts are because they do not become known in the ordinary way. If we can persuade the noble Lord, Lord Boyd-Carpenter, that without proper monitoring by the Secretary of State based on local returns to local offices we will not have those facts known to us, perhaps we can hope that he may join us in supporting the amendment.
I would be entirely happy, if it would bring us the support of the noble Lord, Lord Boyd-Carpenter, to withdraw the amendment and accept a redraft, provided only that the Government accepted the principle and would come back at Third Reading with an amendment which would give us the information as to whether the provision will worsen the situation of the chronically sick and disabled. I listened hard but to my great regret I do not think the noble Viscount gave us that assurance.
If in future we were to have wider collection, that would be splendid. However, at the very end of his remarks the noble Viscount said:
"I do not believe that anecdotal evidence is a sound basis for primary legislation".
He used that as an argument against the anecdotal evidence. I was the first to say it was anecdotal. I quoted from the CABs. Again, that is the answer to the noble Lord, Lord Boyd-Carpenter. The Minister answered the noble Lord, Lord Boyd-Carpenter. What can we do if we have nothing other than anecdotal evidence to go on? It is precisely because we believe we owe the disabled the integrity of information that we are moving the amendment.
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The noble Baroness, Lady Elles, quite rightly said that the sacking of the sick in work and the re-employment of the disabled are separate issues. She is entirely right that those are separate constituents but all the longitudinal studies—by Erens and Ghate and so on—for the DSS show that when the chronically sick who go on to become a long-term charge on employers leave work the only opportunity most of them have to re-enter the labour market is with their previous employer. That is where the two groups that the amendment seeks to aid and respond to are conjoined. So while the noble Baroness is conceptually right in practice, if someone loses his job because he is chronically sick—perhaps with repeated asthma or because he has developed multiple sclerosis or mental health problems—his only likely future employer is his past employer. All the statistics show that. If we can help the existing employer to retain someone, that is a much more productive way forward than asking the employer subsequently to re-employ someone whom he has released.
Baroness Elles: My Lords, I am grateful to the noble Baroness for giving way and for agreeing with some of the things that I said. But would she also agree that, as my noble friend the Minister has said that the Government are prepared to monitor the question of the disabled, it is not entirely a question of the effect of SSP, which is the point of the noble Baroness's amendment? Does she accept that, by withdrawing the amendment and accepting the undertaking given by my noble friend the Minister, that might meet her problem?
Baroness Hollis of Heigham: My Lords, if the noble Viscount were to say to the House—I invite him to do so in the spirit of the remarks made by the noble Baroness, Lady Elles—that I should withdraw the amendment and that he in turn would bring back an amendment to put on the face of the Bill a clause to monitor the effects both in general of employment patterns for the disabled and in particular, as far as it can be adduced, the impact of the Bill, I would be delighted to withdraw the amendment. I invite the Minister so to do.
Viscount Astor: My Lords, perhaps I may, with the leave of the House, answer the noble Baroness. I do not believe that that is what my noble friend Lady Elles said. My noble friend said that the noble Baroness should withdraw the amendment because I had given the Government's commitment to monitor the effects. There was nothing about bringing forward an amendment of my own.
Baroness Hollis of Heigham: My Lords, if the noble Viscount is willing to give a commitment that there will be monitoring, what is his hesitation about putting it on the face of the Bill?
Viscount Astor: My Lords, with the leave of the House, I have explained clearly and at quite great length why the amendment is unsatisfactory. If she does not understand all that I have said, I am sure that she will be able to study Hansard.
Baroness Hollis of Heigham: My Lords, with the leave of the House, I have every respect for the Minister, who on a previous amendment did his best to be helpful. I do not think that he advances his position by appearing to patronise us when we indicate to him that if what he says is correct—I am sure that his integrity is unchallenged in this respect—we should be seeking to bind future Secretaries of State to deliver what he is now offering. If what the Minister says is right and the Government propose to do this, he can have no objection to putting it on to the face of the Bill to ensure that there is proper parliamentary scrutiny. Undertakings are well intentioned but they are not the same as primary legislation and the Minister knows that.
I shall pick up a couple more points and then conclude. The noble Lord, Lord King—I am delighted to welcome him to this debate—made the point, which is well taken, that such an amendment might produce an administrative nightmare for small firms, particularly those with 10 or 20 employees. Under the terms of the Bill there will be no financial problem for them because they are precisely the group aided by the amendment that the Government accepted in principle earlier this afternoon where statutory sick pay will be fully refunded for any employees. The problem should be far less for these smaller firms.
However, my understanding is that at the moment most of the information requested—the reason for leaving work and so on—is already held locally by unemployment benefit offices but, because it is held locally, it is not collated nationally, it is not focused and it is not brought to the attention of Parliament. What this amendment—which is quite simple and not expensive; in fact it is very cheap—does is to focus the information we already have and bring it to bear on the position of the disabled and the chronically sick. If in the process it encourages some firms to adopt better practices and discourages less scrupulous firms from going in for bad practices, that is surely to be welcomed.
The noble Viscount, Lord Astor, thought that this would send the wrong message to the disabled. He is right; we said in Committee that the disabled in practice have good work records. We are not dealing with their motivation but with the employer's perception when it comes to employing them. The noble Viscount, as I say, said that this would send the wrong message. All I can say is that the disability organisations are fearful about the Bill. If I may say so, it is no use the noble Viscount saying that they are unwise or foolish to be fearful. They are fearful; but their fears would be allayed if they believed that, conscientiously, the information relating to the disabled was scrutinised, monitored and regularly brought before Parliament for survey.
The noble Viscount went on to say regarding the previous legislation—cutting 100 per cent. down to 80 per cent. —that it proved not to be the case that disabled people were laid off. How does he know? There are now three times as many unemployed disabled people as unemployed able bodied people. So how does the Minister know that? I do not know, and we do not know precisely what this amendment would seek to deliver. The noble Viscount went on to say that he did not expect any changes in the pattern of employment. How does he
1212
know whether there will be changes? How will he know if such changes have occurred unless he accepts this amendment?
I am not saying that the amendment would uniquely protect or improve the situation of the disabled and the chronically sick; the noble Baroness, Lady Elles, is quite right on this point. But it may prevent the position of the disabled being worsened if we find out that 100 per cent. statutory sick pay is, as my noble friend Lord Ashley said, the last straw which breaks the camel's back. I appeal to your Lordships on this. This House, far more than the other place, has had an honourable record in protecting the rights of the disabled. In the short time I have been in the House your Lordships have passed amendments to improve the lot of the disabled, for example, in terms of the council tax and in relation to sufferers from Alzheimer's disease. The Government were generous enough to accept such amendments and have passed amendments improving the situation of the disabled so far as employment legislation is concerned.
Your Lordships have an honourable record. I hope that tonight, given that the Minister could not give us the assurances that we seek, you will continue with that record. The disabled are not looking for charity. They are looking for the dignity of information on which we can all make sound public policy. We cannot do that without the facts, and this amendment is simply saying, "Let us collect the information on which either the Secretary of State's assertions are proved to be correct"—which I hope they are—"or the fears of the disability groups are proved to be valid"—which I hope they are not. But we cannot know unless we have the information. It seems to me that that is the very least we owe the disabled. I propose to seek the opinion of the House.
4.25 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 111; Not-Contents, 158.

Division No. 1

CONTENTS

Acton, L.

David, B.

Addington, L.

Dean of Beswick, L.

Airedale, L.

Dean of Thornton-le-Fylde, B.

Allen of Abbeydale, L.

Desai, L.

Archer of Sandwell, L.

Donoughue, L.

Ashley of Stoke, L.

Dormand of Easington, L

Aylestone, L.

Eatwell, L.

Barnett, L.

Ennals, L.

Beaumont of Whitley, L.

Ezra, L.

Birk, B.

Fisher of Rednal, B.

Blackstone, B.

Fitt, L.

Bonham-Carter, L.

Foot, L.

Boston of Faversham, L.

Gallacher, L.

Bottomley, L.

Gladwyn, L.

Bridges, L.

Glenamara, L.

Broadbridge, L.

Gould of Potternewton, B.

Bruce of Donington, L.

Graham of Edmonton, L. [Teller.]

Carmichael of Kelvingrove, L.

Greene of Harrow Weald, L.

Carter, L.

Harris of Greenwich, L.

Castle of Blackburn, B.

Haskel, L.

Chappie, L.

Healey, L.

Cledwyn of Penrhos, L.

Hilton of Eggardon, B.

Clinton-Davis, L.

Hollick, L.

Cocks of Hartcliffe, L.

Hollis of Heigham, B.

Cudlipp, L.

Howell, L.

1213

Hunt, L.

Ogmore, L.

Hutchinson of Lullington, L.

Perry of Walton, L.

Jay, L.

Pitt of Hampstead, L.

Jay of Paddington, B.

Plant of Highfield, L.

Jeger, B.

Prys-Davies, L.

Jenkins of Hillhead, L.

Rea, L.

Jenkins of Putney, L.

Redesdale, L.

Kagan, L.

Richard, L.

Kennet, L.

Ritchie of Dundee, L.

Kilbracken, L.

Robson of Kiddington, B.

Kinloss, Ly.

[Teller.]

Kirkhill, L.

Rochester, L.

Listowel, E.

Russell, E.

Lockwood, B.

Sainsbury, L.

Longford, E.

Sefton of Garston, L.

Lovell-Davis, L.

Serota, B.

McIntosh of Haringey, L.

Shepherd, L.

Mackie of Benshie, L.

Southwark, Bp.

Mallalieu, B.

Stallard, L.

Mar, C.

Stoddart of Swindon, L.

Mason of Barnsley, L.

Strabolgi, L.

Merlyn-Rees, L.

Taylor of Blackburn, L.

Meston, L.

Taylor of Gryfe, L.

Milner of Leeds, L.

Tenby, V.

Milverton, L.

Turner of Camden, B.

Mishcon, L.

Varley, L.

Morris of Castle Morris, L.

Wallace of Coslany, L.

Mulley, L.

Wharton, B.

Nathan, L.

White, B.

Newcastle, Bp.

Williams of Elvel, L.

Nicol, B.

Williams of Mostyn, L.

NOT-CONTENTS

Aberdare, L.

Elibank, L.

Addison, V.

Ellenborough, L.

Alexander of Tunis, E.

Elles, B.

Allenby of Megiddo, V.

Elliott of Morpeth, L.

Archer of Weston-Super-Mare, L.

Elton, L.

Arran, E.

Ferrers, E.

Astor, V.

Flather, B.

Astor of Hever, L.

Fraser of Carmyllie, L.

Barber of Tewkesbury, L.

Fraser of Kilmorack, L.

Belhaven and Stenton, L.

Gainford, L.

Bellwin, L.

Gainsborough, E.

Beloff, L.

Gardner of Parkes, B.

Birdwood, L.

Geddes, L.

Blatch, B.

Gilmour of Craigmillar, L.

Boardman, L.

Gisborough, L.

Borthwick, L.

Goschen, V.

Boyd-Carpenter, L.

Gray of Contin, L.

Brabazon of Tara, L.

Gridley, L.

Braine of Wheatley, L.

Haddington, E.

Brougham and Vaux, L.

Hailsham of Saint Marylebone, L.

Butterworth, L.

Halsbury, E.

Buxton of Alsa, L.

Harding of Petherton, L.

Cadman, L.

Harvington, L.

Campbell of Alloway, L.

Hayhoe, L.

Campbell of Croy, L.

Henderson of Brompton, L.

Carnegy of Lour, B.

Henley, L.

Carnock, L.

Hesketh, L.

Chalker of Wallasey, B.

Holderness, L.

Charteris of Amisfield, L.

HolmPatrick, L.

Chelmsford, V.

Hood, V.

Chesham, L.

Hooper, B.

Clanwilliam, E.

Howe, E.

Clark of Kempston, L

Hylton-Foster, B.

Cockfield, L.

Jenkin of Roding, L.

Coleraine, L.

Johnston of Rockport, L.

Colwyn, L.

Kenyon, L.

Courtown, E.

Killearn, L.

Cox, B.

King of Wartnaby, L.

Cranborne, V.

Kinnoull, E.

Cumberlege, B.

Kitchener, E.

Davidson, V.

Lauderdale, E.

Dean of Harptree, L.

Leigh, L.

Denham, L.

Liverpool, E.

Dixon-Smith, L.

Long, V.

Dormer, L.

Lucas, L.

Downshire, M.

McColl of Dulwich, L.

Eden of Winton, L.

Mackay of Clashfern, L.

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[Lord Chancellor]

Renton, L.

Marlesford, L.

Rippon of Hexham, L.

Marsh, L.

Rodger of Earlsferry, L.

Merrivale, L.

St. Davids, V.

Mersey, V.

Saint Levan, L.

Middleton, L.

Salisbury, M.

Miller of Hendon, B.

Savile, L.

Monson, L.

Selborne, E.

Morris, L.

Selkirk, E.

Mottistone, L.

Sharples, B.

Moyne, L.

Simon of Glaisdale, L.

Munster, E.

Skelmersdale, L.

Murton of Lindisfarne, L.

Slim, V.

Newall, L.

Stewartby, L.

Norrie, L.

Stockton, E.

O'Cathain, B.

Strathclyde, L.

Orkney, E.

Strathmore and Kinghorne, E.

Orr-Ewing, L.

[Teller.]

Oxfuird, V.

Sudeley, L.

Palmer, L.

Swansea, L.

Park of Monmouth, B.

Swinfen, L.

Pearson of Rannoch, L.

Thomas of Gwydir, L.

Peel, E.

Torrington, V.

Pender, L.

Trumpington, B.

Peyton of Yeovil, L.

Ullswater, V. [Teller]

Plummer of St. Marylebone, L.

Vivian, L.

Prentice, L.

Wade of Chorlton, L.

Pym, L.

Wakeham, L.

Quinton, L.

[Lord Privy Seal]

Radnor, E.

Westbury, L.

Rankeillour, L.

Whitelaw, V.

Rawlinson of Ewell, L.

Young, B.

Reay, L.

Zouche of Haryngworth, L.

Rees, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.33 p.m.
Baroness Turner of Camdenmoved Amendment No. 4:
After Clause 1, insert the following new clause:
("Monitoring of impact of Act on women. —The Equal Opportunities Commission shall include in its annual report consideration whether this Act has had an impact upon the employment of women.").
The noble Baroness said: My Lord, in Committee I proposed an amendment to the effect that the Equal Opportunities Commission should have an obligation to publish an annual report on the effects of the Bill (when it is an Act) on the employment of women. The noble Viscount was not disposed to accept that amendment, pointing out that the EOC issues an annual report anyway. I replied, at col. 930 of the Official Report, that I was well aware of that since I was a member of the EOC for some six years. What I was seeking, however, was a specific commitment to monitor what happens when the Bill is on the statute book.
The House will know from the debate that we have just had that we have been particularly concerned about the possible effect of this Bill on vulnerable people. We have received briefings from NACAB, which has been referred to on a number of occasions, including in the previous debate, which appear to indicate fairly clearly that many vulnerable and poor people do not get their entitlement now when employers can claim back 80 per cent. of what they have paid. A great deal of that avoidance of payment occurs in smaller firms or firms of the less reputable kind—and there are some of those. The people who are thus disadvantaged and deprived of their rights are often those in low-paid or relatively casual employment.

1215
Those are the very people who are likely to be disadvantaged by the disappearance of the wages councils, to which my noble friend Lady Hollis referred yesterday. I cannot help it if certain noble Lords, particularly the noble Lord, Lord Boyd-Carpenter, do not like our constant references to the wages councils. However, the fact remains that they were intended as some form of protection for the poorly paid and they no longer exist as a result of government legislation. Wages for those people are therefore likely to be lower than ever.
Furthermore, women are vulnerable in the sense that they may need to take maternity leave and can suffer from maternity-related illnesses. That may give some employers an incentive to discriminate against their employment as, if such employees are away through illness, employers will in future have to foot the whole bill themselves without recovering anything from the Government.
Incidentally, I see from the most recent report about work-related illnesses that is available from the Health and Safety Executive that staff with a higher risk of particular illnesses include:
"teachers, for whom the reported stress and depression caused by their work was four times the average for other occupations; nurses, who reported a high risk of back problems caused by their work, amounting to three times the average for other occupations; and clerical workers, for whom the reported risk of headache and eye-strain caused by their work was over twice the average for other occupations".
It will be noted that those are all occupations in which women predominate in the workforce. That is also true for the industries that were formerly covered by the wages councils and industries where there is a great deal of low pay and casual and part-time work.
Therefore, there seems good reason to look at the way in which this legislation will affect the employment of women. The Bill is a new departure. For the first time, employers will have to bear the full monetary risk of sickness as well as having to bear the cost of replacements while people are ill, which they have always had to do. I know that it is claimed that they will have lower NI contributions to pay; nevertheless there could well be a temptation not to pay (particularly for less scrupulous employers) if they are not getting any reimbursement from the Government.
We therefore feel that there is a case for monitoring what happens once the Act is in force. We have accepted what the Minister said in Committee and that the EOC has to issue an annual report anyway. The new amendment therefore stipulates that the annual report should in future contain information as to the effect of the Bill on the employment of women. It does not impose any burden on the Secretary of State or require a special report from the Secretary of State to Parliament, but it writes into the Bill a role for the EOC and therefore some means of monitoring whether the employment of women is affected by this new legislation.
As we said in the previous debate, there is no means of knowing now exactly whether or not the legislation will have an effect. We accept that there is a degree of uncertainty about that. It seems to me that that is all the more reason to have some mechanism in place for
1216
monitoring the legislation, and the appropriate mechanism for monitoring the employment of women appears to be the EOC. I hope therefore that this time around the Minister may feel disposed to accept our amendment. I beg to move.
Baroness Robson of Kiddington: My Lords, in the unfortunate momentary absence of my noble friend Lord Russell, I should like to express support for the amendment from these Benches.
Viscount Astor: My Lords, there is no evidence to suggest that the introduction of the SSP scheme in 1983 or any subsequent changes to the scheme have had an adverse impact on the employment of women. Indeed, the percentage of women employees grew from 41 per cent. of all employees to 47 per cent. between 1979 and 1992. I acknowledge that those figures include both full-time and part-time employees. But even if we measure the number of full-time women employees in 1984 against the number in 1992, the growth rate is about 15 per cent. There is no evidence there that SSP has affected women's employment prospects.
I should also remind the House that all the indications are that the job prospects of women are likely to continue to grow. The Institute of Employment Research at Warwick University has produced projections of women's employment trends: o the end of the century. Its research suggests that total employment will increase by about 2 per cent. up to the year 2000. Women are, however, estimated to increase their share of total employment by around 4 per cent. during the 1990s. Furthermore, projections from the Department of Employment suggest the proportion of women in the workforce will continue to grow. Women are projected to account for more than 80 per cent. of labour force growth by the year 2001.
The Government are confident that the changes in this Bill will have no adverse impact on women's job prospects. On the contrary, all the evidence suggests that the employment opportunities for women have increased steadily and will continue to do so. There is no evidence to suggest that they have been or will be affected by measures such all the availability of SSP. As I said in Committee, the amendment in any event is unnecessary. Under Section 56 of the Sex Discrimination Act 1975 the Equal Opportunities Commission is already required to publish an annual report on its activities during the year.
Each report shall include a general survey of developments during the period to which it relates in respect of matters falling within the scope of the commission's duties. The EOC, therefore, already has the ability to include reference to any legislation which may have had an impact on women's employment prospects if it so wishes. The precise content of the commission's annual report, however, is a matter for the commissioners, not the Government. It would be open to the EOC to publish its views on this or any other matter at any other time or to seek a meeting with Ministers. In my view, to prescribe the activities of the EOC in the way suggested would be inconsistent with

1217
its statutory independence to decide for itself how best to achieve its aims and objectives in whatever way it considers appropriate.
It should be for the EOC to decide what it wishes to include in its report. We do not want to go down the road of the Government prescribing in an Act of Parliament what should be included. Therefore we do not consider the amendment appropriate. I realise that the noble Baroness, Lady Turner, has great experience of these matters. She was a member of the commission. I hope that with that explanation she will feel able to withdraw the amendment.
Baroness Turner of Camden: My Lords, I am disappointed that the Minister does not feel able to accept our reworded amendment. It is true, as he said, and as I accepted in Committee, that employment among women has increased. I hope that it will go on increasing. But, as I said earlier, this is a new departure. For the first time employers are being asked to bear the full weight of SSP, whereas previously they were at least able to claim back 80 per cent. We have no idea how that will affect employment in the future of women or vulnerable groups such as the disabled whom we discussed on a previous amendment.
I note that the Government are confident that the scheme will not have an adverse impact upon the employment of women and expect the employment of women to increase. I hope that they are right, but we cannot tell at this point. It is true that the EOC has the obligation to produce an annual report, but it is an annual report of a general nature covering all aspects of its work. I do not think that the EOC would have objected to this nudge from the Government and Parliament in the direction of its paying special attention to the effects of this piece of legislation.
However, I do not believe that there is much point in pressing the amendment to a vote at this stage. I can only hope that what has been said on both sides of the argument this afternoon will prompt the EOC, which of course watches what happens in relation to such matters, to pay attention to this area when it makes its report after the Bill has been in operation for a year. I hope that it will pick up the tabs and tell us what has been happening in the intervening period. With those few remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
In The Title:
[Amendment No. 5 not moved.]

Child Support (Miscellaneous Amendments and Transitional Provisions) Regulations 1994
4.45 p.m.
Viscount Astor Viscount Astor rose to move, That the draft regulations laid before the House on 13th January be approved [4th Report from the Joint Committee].
The noble Viscount said: My Lords, the regulations introduce changes to the child support scheme. As the
1218
House will recall, the Child Support Act 1991 was introduced because of the growing concern about the lack of proper financial provision for children whose parents live apart. Nearly 1 million lone parents and their children were dependent on income support. Three out of four received no regular maintenance at all. The old system of obtaining maintenance through the courts or DSS offices was slow, uncertain and led to low and often inconsistent settlements. It was clearly not working.
The basic principles behind the new system are that both parents should be responsible for maintaining their children where they can afford to do so. The taxpayer should have to help only where parents do not have the means to support their children. Those principles have wide support. But we recognise that there have been genuine concerns about the way the new system is working in detail. We have, therefore, conducted a thorough review of its operation, considered all representations and studied the thoughtful and balanced report of the all-party Social Security Select Committee which was unequivocal in its support for the basic principles of the scheme. We accept the main thrust of the Select Committee report and have acted on the majority of the changes that it recommends on the calculation of liability. Where we have decided not to act on its recommendations we have done so for good reasons. We shall be responding to the report in detail in due course.
We agree with the Select Committee that it is better to leave absent parents more financial choice to meet other demands on them rather than try to incorporate into the formula a whole range of specific costs like travel to work, visiting first families and debts. We also accept the Select Committee's conclusion that there is no sensible way in which the capital value of past settlements could be reflected in current maintenance assessments, even if that were thought desirable. The formula already reflects the consequence of settling a house on the former partner in that the absent parent's costs of rehousing himself and any new children are deducted pound for pound from his assessable income, so reducing his maintenance bill.
As well as introducing some important changes to child support arrangements the regulations also make some technical drafting improvements designed to ensure that our original policy intentions are fully achieved. We propose that the changes will take effect from early February and will affect the way in which child maintenance payable by absent parents is worked out by the Child Support Agency.
The Child Support Agency works out how much an absent parent pays as child maintenance by using a formula. This formula is necessarily detailed as it has to be able to deal with the complexities of people's individual circumstances in a fair and equitable way.
The formula takes into account such things as the cost of looking after children and whether the parent with care or the absent parent has more than one child. It also takes into account the income of both parents, allowing for tax, national insurance and essential expenses such as rent or mortgage costs. There are

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various other elements which make up the total amount of child maintenance. We propose that three of these elements will change.
First, there will be a change to the maintenance requirement which is the amount of money required to provide for the day to day needs of the child or children for whom the child maintenance assessment is being made. It is made up of several parts. One of these parts represents the care provided by the parent with care of the child or children. The proposed change recognises that this need does not end suddenly but reduces gradually as the children grow older. Accordingly, the new measure provides for the amount to be reduced by 25 per cent. when the youngest child reaches age 11, and by 50 per cent. when that child reaches age 14.
Secondly, we propose to amend the part of the assessment known as the additional element. When essential expenses are deducted from an absent parent's income, he or she is left with "assessable income". Where the absent parent has income left from his assessable income after paying the basic maintenance requirement he is required to pay 25 per cent. of that balance in additional maintenance. We propose to reduce the rate of this deduction to 20 per cent. where there are only two children to be maintained and to 15 per cent. where there is only one child. The rate will remain at 25 per cent. where there are three or more children involved. This recognises that extra expenditure on children, over and above their basic needs, is not likely to be as high for one or two children as it is for three or more and will moderate the very high amounts that some absent parents are expected to pay.
Thirdly, I turn to protected income. Protected-income provides that an absent parent retains enough income after paying maintenance to meet his daily needs and that of any second family. The aim is that absent parents should be better off after paying maintenance than they would if they received income support. We propose that the level of protected income be substantially increased. Absent parents will now keep a minimum of £30 above the level of help they (and their new family if they have one) would receive if they were on income support, instead of only £8 as at present, plus 15 per cent. of any other income instead of 10 per cent.
We also propose to streamline the calculation of housing costs in exempt income. Exempt income represents the income which the parent keeps for his or her own personal expenses. It includes housing costs. From the date these regulations take effect the full amount of premiums on an insurance policy intended to discharge the mortgage on a parent's home will be allowed in the calculation of the parent's exempt income where the mortgage does not exceed £60,000.
We also wish to provide for a significant extension to the current arrangements for phasing in the higher awards under the new scheme. Absent parents with second families or care of a child for at least two nights per week and with an existing court order or written maintenance agreement, whose maintenance assessment is over £60, will have any increase in their liability phased in over a period of up to 18 months in six-month steps of £20, or 25 per cent. of the difference between the old and new liabilities if this is higher.
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These new arrangements will help absent parents to adjust to their commitments over a period of time, while gradually increasing the amount that they pay.
I am sure your Lordships will recall the debate held on the charging of fees for the services that the agency provide. We now propose that where a parent with care is in receipt of income support, family credit or disability working allowance and the absent parent is making regular payments direct to the parent with care the Child Support Agency will not make a charge for the collection fee to the absent parent.
The regulations also provide for a child support officer to be able to use a deduction from earnings order for "interim maintenance assessments" issued in cases where the absent parent refuses to give the Child Support Agency proper information to calculate maintenance.
Current regulations lay down charges that bailiffs may make when levying distress in order to collect child maintenance. The Child Support Agency is anxious that a person's goods are only distrained as a last resort. The changes we propose will allow bailiffs to charge £10 for requesting payment of the debt by letter and also reduce the daily charge for a walking possession agreement to 10 pence per day.
A further minor change that affects only absent parents whose liability is modified as a result of a protected income calculation is introduced by these changes; in these cases an assessment must: increase by at least £5 or decrease by £1 before a change has effect on the amount of maintenance he pays.
I believe this package of modifications to the child support scheme meets the major anxieties expressed and at the same time preserves the basic principles of the Act. It has not, of course, met all the recommendations made by critics of the scheme. It is understandable that some absent parents will continue to be dissatisfied, even after these changes have been made. But in framing social legislation it is Government's responsibility to balance the needs of all concerned.
We should not underestimate the extent of the massive task the agency faces to implement these changes, which are likely to cause some difficulties and delays in the normal day-to-day business of the agency. The changes aim to ensure that all parties—children, parents with care, absent parents, second and step families and taxpayers—are treated fairly.
Lord Simon of Glaisdale: My Lords, before the Minister sits down, will he not deal with the important constitutional points relating, to the word "transitional", which have been raised specifically and drawn to the attention of both Houses by the highly admired Joint Select Committee on Delegated Legislation?
Viscount Astor: My Lords, I have not formally moved the regulations. Perhaps when I reply to noble Lords who are to speak on them I shall be able to answer the noble and learned Lord. I beg to move
Moved, That the draft regulations laid before the House on 17th January be approved [4th Report from the Joint Committed.]—(Viscount Astor.)
4.57 p.m.
Lord Kilbracken: My Lords, as a so-called absent father, I wish to intervene for a couple of minutes in order to make two points. First, I object most strongly to being so described because I spend some three-and-a-half months of each year with my 12 year-old son. During that time his mother is the absent parent. It is wrong that fathers who spend as much time as I do with their children should be so described.
Secondly, the formula under which the sums are payable by so-called absent parents is so intricate and complicated that I cannot begin to work out what I should be paying, which is far less than I am paying. Several barristers to whom I have spoken have said that it is possible to work out the sum only if one has a specially programmed computer. I do not know whether the new regulations will make that easier; I believe that they will make it more difficult. However, it is a serious criticism of the Act and the regulations made under it that the formula should be so unspeakably complicated.
4.59 p.m.
Lord Stoddart of Swindon: My Lords, I wish to say only a few words about the regulations. I do so because I have had quite a bit of correspondence with various people up and down the country. I have sent copies of some of those letters to the Minister and he has been good enough to reply. In my view, the replies have not been entirely satisfactory. I thank him, however, for replying and for the résumé of the amended regulations he gave me.
The Minister will be aware that in spite of the regulations, there are still very grave concerns among so-called absent parents. I say "so-called" because often they are absent through no fault of their own. Indeed, they would like to be present with their families. During the Bill's passage through this House, I moved a number of amendments which would have corrected the situation.
There is still widespread anxiety. I must tell the noble Viscount that there was a meeting with parents, mainly fathers and their new partners, at Burghfield. The meeting was packed. The new regulations were found not to be satisfactory. Those attending the meeting were able to convince their Member of Parliament of that fact and I hope that he will put further pressure on the Government.
Clearly, the amendments will not meet the point put by so-called absent parents—I have to use that description —because they will still find themselves in grave financial difficulties. Indeed, they will still find that the new partner of any second family, usually the wife, will be expected to contribute through her income to the previous family, although the reverse does not appear to be the case. I may be wrong, but so far as I can see the income of the new spouse of the caring family is not necessarily taken into account when the assessment is made. I hope that the noble Viscount will clarify that point.
I cannot vote against the amendments because they are an improvement. But they do not go far enough.
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What the noble Earl, Lord Russell, and I said during the passage of the Bill has come all too true. The noble and learned Lord, Lord Simon of Glaisdale, warned time and time again in the watches of the night that the Government would regret the Bill and that it would be another poll tax fiasco. However, as I said, I cannot vote against the regulations because they are an improvement.
A point made to me time and time again by fathers, in particular, who have maintained, and who are prepared to continue to maintain, their children is that sometimes they are refused access to their children. Very often, that is against a court order. In due time the Government will have to take that into account. The Government cannot say to fathers and parents that they must be responsible for their children if they are unable to take an interest in them and play a part in bringing them up if they wish to do so. Many fathers are being prevented from doing that. It is a factor that the Government will need to consider in due course.
5.4 p.m.
Earl Russell: My Lords, I thank the noble and learned Lord, Lord Simon of Glaisdale, and the noble Lords, Lord Kilbracken and Lord Stoddart of Swindon, for their extremely helpful contributions to the debate.
When I was a boy, my parents used to take me to the zoo. In those days there were few restrictions on feeding the animals. One day I remember a large crowd enjoying feeding the hippopotamus. I had with me nothing larger than peanuts. I picked up a peanut and to my intense five year old pride, my throw landed right on the middle of the hippopotamus's tongue. But the hippopotamus simply kept his mouth open waiting to be fed. When I look at these regulations and I compare them with the size of the problem which they must meet, I begin to understand how that hippopotamus felt.
Today we are debating only small grievances. We are debating the regulations and the Select Committee report. We have an Unstarred Question on 9th February when we shall be able to debate the possibility of changes in primary legislation. In the time that I have been in your Lordships' House, I have never received correspondence on any subject on the scale on which I have received it on this matter. I believe that I have now received something in the region of 300 letters. Even in the last week of October when, as some of your Lordships will know, I was involved with another piece of business which received a great deal of attention, the single largest item in my post-bag related to the Child Support Act. Since the announcement of these regulations, that flow of correspondence has shown no sign of easing.
Indeed, the department is becoming overwhelmed. It wrote to me recently saying that it hoped the explanation would reassure my constituent. I ask the department to note that this matter is so serious that even mere Lords are being written to in large numbers.
The universal criticism is that fathers simply do not have enough money to meet the demands made on them under the Act. Mr. Burt's replies that the more that individual claims for expenses are recognised, the further the child slips down the list of priorities is a fair

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point. But I hold to the old-fashioned view that politics is the art of the possible. You cannot get from people money that they do not have.
I give your Lordships one example of the way in which the cost is worked out. I have received a letter last week from a representative of a communications company in Dorset. His monthly income is £1,500 of which he pays £330 income tax and compulsory deductions, national insurance, superannuation, new tax increases, and so on, which amount to a total of £699. Under the formula he will pay £476 which will leave £325 per month for the wife and one child of his second family. Therefore, for an average 50 hour week with no overtime, he is left with £81.25 per week with which to house, clothe and feed his family and to meet the not inconsiderable costs of going to work. He asks why he should go to work and I cannot answer him. I hope that perhaps the noble Viscount can do so.
Of course fathers must contribute. All the people who have written to me agree that fathers should contribute and the vast majority of them are already doing so. The question is how much they should contribute. I propose three yardsticks to indicate when the burdens have become excessive: first, when they move people to emigrate, and so far I know of one case of emigration caused by the Bill but it may not be the last; secondly, when they make people give up their job because they would be better off on benefit, which is clearly not in the public interest; and thirdly, when they break up second marriages, causing great unhappiness to the people involved.
At the beginning of this Session the noble Viscount said to me—it was in private and I am grateful to him for permission to quote it—that people are having second families at the state's expense. I understand what he is saying. I also understand the state's concern. However, the state is misleading itself if it thinks that it can get out of fathers enough money to prevent the state from having to pay anything for second families. If the noble Viscount is concerned with reducing the state's share, that is a legitimate concern; but if he wants to reduce it further, he should look in the way that the Chancellor of the Exchequer did in the Budget in the direction of building upon that very welcome concession on child care. That is a much better way of affording second families than trying to charge fathers what they do not have.
In that context I should like the noble Viscount to give an assurance that it is no part of the Government's purpose to tax second families out of existence and that it is no part of back to basics to ensure that everyone stays with their first wife. I expect the noble Viscount to have no difficulty in giving such an assurance. However, if he does give me that assurance, it must follow that, if the Act is breaking up second families, it has been overdone and is in need of amendment.
I turn now to the regulations. First, we have a concession on phasing which is welcome as far as it goes. It is the concession that Polyphemus made to Odysseus that he should be the last devoured. It is not much use unless you find, as Odysseus did, that Polyphemus is out of office before the time comes. Secondly, there is an increase in protected income. My
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criticism is that it is not targeted. It goes to every family regardless of how many unavoidable expenses they have that they cannot get out of. I merely ask the noble Viscount whether he thinks that the protected income would be sufficient to pay for a season ticket to work from, say, Newbury. Alternatively, would it pay for someone who needs a room—and the cost of an extra room can be very great—for work at home in London? I believe that the answer to both questions must be no.
Thirdly, we have a new taper which is regressive, means that the proportionate burden on the poorest increases. There is also a further point which I hope the noble Lord will seriously consider. The latter can be potentially disastrous for people on family credit, which is assessed only once every six months. Therefore, if you lose some of the income upon which your family credit was assessed and you do not receive any more for six months, you may be in a very bad position. If that is not to cause severe hardship, there must be an ex gratia payment to those who lose as a result.
The concession on fees is welcome as far as it goes. I should be grateful if the department would make its policy consistent on accepting payment of fees in instalments. However, I do not see why there should be any fees at all. A great many of my correspondents have found that the fee amounts to adding insult to injury. I understand that feeling and sympathise with it. There are also certain points which are not included in the regulations but which were referred to in the Select Committee's report.
I hope that the Minister will look again at paragraphs 81 and 82 of the report, which deal with step-children. Step-children, like Mount Everest, are there; you cannot say that they are not entitled to maintenance, because they exist. There is a severe difficulty, if you think that you can rely on the absent natural father, in bringing up, say, four children together, with two of them on one income level and two on another. That can be most invidious.
There is also a phasing problem which I should like to see the Government address. It is one to which the Law Society has also drawn attention. Many people who have written to me are paying the expenses of their natural children and also their step-children because the second wife's children are not coming on stream in the Act until 1996. Therefore, until then the man is clobbered with the cost of supporting two families. If the Act is to last in any form, that is an anomaly which should surely be put right.
I heard with pleasure what Mr. Burt said about the new form involving naming the father and making it clear that the authorisation of an assessment and the naming of the father and authorising pursuit are separate. He said that a few offices were still using copies of the old form. I trust that Mr. Burt—in whom I have in some ways a great deal of confidence—has by now put a stop to that practice. Judging by the noble Viscount's smile, I trust that I shall hear that the answer is yes.
I turn now to one of the biggest problems, that of overthrowing settlements. Here again, I should like to quote from a letter that I have received:

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"My divorce from my ex-wife took place before the Child Support Act or Agency was even thought of. With the full agreement of my ex-wife and myself … we made what we both, at that time, believed to be a full and final settlement and agreement … in which I relinquished my share of the equity in the marital home, with the intent that my ex-wife would realise from the proceeds of this house a substantial sum of money which would then be used for the benefit of both herself and our children. To be now faced with a completely new form of legislation which goes in the face of our Court Agreement, and of which we could not have had any prior knowledge, seems to us to be absolutely unacceptable in a democracy. As I say, I believe the Act is fundamentally misjudged … but even bearing this in mind, I can at least appreciate that people currently getting divorced at least have these facts in front of them and can make their own judgments about their courses of action. For myself and my wife, this unfortunately is not the case, and our entire financial future is now jeopardised by the Act".
That couple's chances of continuing their second marriage depend entirely on the readiness of the Government to accept paragraph 82 of the Select Committee's report on the housing costs of stepchildren. So at least one real marriage depends on that point; it matters.
The noble Viscount repeated today the argument put forward by Mr. Burt to the Select Committee that it is impossible to find a way within the formula to assess the value of capital settlements. I very much hope for the sake of the noble Viscount that he is wrong in that respect. However, if he is not wrong, I believe that he has shot himself not merely in the foot but somewhere very near the heart.
In the first place, the Government are wrong to think that capital settlements are entirely reflected in the absent parent's housing costs. Capital settlements cover many things. Some of the most complicated -involve business debts; for example, where a husband and wife have been running a small business.
There is a serious point involved here; namely, the argument that the man who has a capital settlement and is paying under the Child Support Act is suffering a kind of double jeopardy, for both of them were settlements that were meant to be full and sufficient by themselves, without the existence of the other. It is fundamentally inequitable that anyone should have to face both. Therefore, if it is impossible to feed capital settlements into the formula, in the case of past settlements it must mean either that retroactivity must go altogether and the Act must not apply to people who have already reached settlements or it must be possible (by primary legislation, if need be) to reverse the judgment in the Crozier case and allow them to back out of the settlement.
As with most other things, I have met a case among my pupils. She said—it was "she" and not "he"—that if the capital settlement in her case were overset it would cause grave dismay, and that she would be happy to renounce all the maintenance under the Act if only she could keep the capital settlement. That is a judgment which it seems to me she had the right to make. I do not see why the state should insist that she cannot do so. Before the noble Viscount raises the point, she was not living on benefit. As she was a student, by definition she could not have been living on benefit.
In the case of future settlements, if they cannot be fed into the formula the husband will not make capital
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settlements. That may be a cause of great distress to the wife because often in a divorce what she wants most is to hang on to the roof over her head. That matters more than any recurrent income which she is often perfectly happy to go out and earn. If we cannot feed capital settlements into the formula, the effect of continuing to apply the Act will lead to a large increase in the number of the homeless, which might cause some distress to Sir George Young.
None of this seems at all fair. We in this party are committed to a fundamental review of the Act, but if it is true that we cannot feed capital settlements into the formula we might have to begin discussing among ourselves whether what we ought to be considering is not the fundamental review of the Act but its repeal. When I say that in his own interest the noble Viscount should try to convince me that he is wrong, I mean what I say. Mr. Frank Field said on the radio that this would not be the last change in the Act. I agree with him and that is where we begin the next episode—discussing possible changes in primary legislation—on 9th February.
5.22 p.m.
Baroness Hollis of Heigham: My Lords, we on this side of the House firmly believe that parents may divorce each other but not divorce their children. Therefore, we believe it is right and proper that absent parents should make an appropriate contribution to their children's maintenance in terms of their income, any responsibilities they may have towards their first family and any responsibilities they have incurred with their second family, provided always that the safety and well-being of the first family is safeguarded.
The Labour Party supports the principle of the Child Support Agency. However, like the noble Earl, Lord Russell, we have argued from the beginning that it is deeply flawed and must be radically reformed. Our complaint is that although these regulations are welcome, they do not go far enough, as my noble friend Lord Stoddart of Swindon quite rightly said.
As it stands, the CSA too often impoverishes second families without floating first families off poverty. Children in second families are hurt—we have the evidence for this—and children in first families are not helped. The only beneficiary is the Treasury, which requires the absent partner—usually men—to support two families on earnings that will not stretch far enough. The plain fact is that even with good will all round, men on below average earnings cannot always support adequately two families. To require them to do so pushes both families, and the children of both, onto the poverty line. As the noble Earl, Lord Russell, said, we will explore this matter more thoroughly in the Unstarred Question next week.
Tonight I believe it is appropriate to look instead at the current criticisms of the Child Support Agency and to ask how far the changes in regulations address those criticisms. The criticisms are broadly threefold. First, it is said that the Act is harsh and even threatening to the parents with care. Those parents are usually women. Secondly, it is said that the Act is harsh on the absent parent—usually men—especially if he is part of a

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second family. Thirdly, it is said that the activities of the agency are too often seen as unreasonable and are judged to be aiming at the soft targets of parents who are already paying, and that its administrative arrangements are inflexible and overbearing.
I turn to the first criticism which concerns the situation of parents with care, who are usually women. Some of the early fears that were expressed by organisations such as the National Council of One Parent Families with regard to the threat of violence and compulsion to reveal names appear not to have materialised. I pay tribute to the sensitivity of the agency on that score. There are continuing fears but our initial fears have not been fully realised. Nonetheless, the Act remains harsh on parents with care on at least three counts. First, there is no disregard—these regulations do not address that point—in that a woman receiving maintenance loses, pound for pound, income support until any such maintenance floats her off income support levels or family credit altogether. On family credit such a woman, if she were going to work, would retain £15 a week. I am not at this point arguing that there should be a disregard but that the Government recognise, in the words of the Social Security Advisory Committee, that there is a case to be looked at.
Secondly, there is a real problem for the parent with care that if the maintenance comes from the absent parent and he is on just below average earnings, his contribution may float her almost exactly off income support. As far as I can see, a caring parent with two children—one below 10 and one above 10—will receive both income support plus about £2.30 a week if the absent partner is earning about £19,000. That may replace income support but it will not improve her standard of living. It will not float her off poverty. Indeed, she may be worse off. The Minister, Alistair Burt, said in another place on 2nd December that,
"many lone parents will no longer have to rely on income support as their main source of income".
That is true, but it is irrelevant to those parents as their income will be no higher than it was on income support. Indeed., by losing passported benefits such as free school meals, free prescriptions and dental care, they may be worse off. These regulations do not address that crucial matter.
Thirdly, I wish to re-emphasise a point made by the noble Earl, Lord Russell. If the woman—if it is a woman—is in part-time work and on family credit, that family credit is determined for six months at a time. If there is any faltering in the flow of maintenance payments because the absent parent becomes sick, unemployed, or disappears, nonetheless her family credit remains unaltered and she may find her living standards fall catastrophically. There must be a way to overcome what is essentially an administrative problem.
Do these regulations address these three problems for the parent with care: a disregard as recommended by the Social Security Advisory Committee; the problem that a parent on average earnings may not only float the parent with care off income support, but she may still remain worse off because of the loss of passported benefits; and the problem of family credit? No, they do not. These regulations do not improve one iota the
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position of the parent with care. The regulations do not go sufficiently far enough to enable any of us to say that the Act is beginning to be satisfactory.
On 2nd December the Minister also stated that there should be,
"substantial benefits for children to be derived from regular payments of maintenance".
Again, that is not true unless those payments float the, parent not only off income support but also constitute at least £7, £8 or £10 a week more than that. I have a final question on this matter. We do not object to reducing the maintenance of the parent as carer with older children where that parent may reasonably be assumed to be in work. However, if that parent is assumed to be in work, that is already taken into account in the calculation of her income. We understand the reasoning behind it, but can we have an assurance from the Minister that that formula will not apply to a parent who cannot go to work, perhaps because an older child is disabled? That is a very specific question which needs a specific answer.
The second cluster of problems associated with the Child Support Agency is that associated with the absent parent, usually the father. Here we accept that the changes in the regulations help him to some degree. They allow for phasing in so that men do riot find their maintenance contributions trebled overnight. They are also to be backdated to when the original inquiry forms were sent out. That is sensible, but it could be argued that a longer phasing-in period—perhaps three years—might be more appropriate.
However, the phasing in does not apply to those fathers who are not part of a second family. It does not apply to single absent fathers. It should. Nor does it apply to those who are currently not paying any maintenance because of a clean break settlement. It should. They too need that time to rearrange their finances in order honourably to meet their new obligations. The transitional arrangements should apply to all absent fathers not just to those with second families.
Do the regulation changes take into account the complaint of many men that maintenance assessment takes no account of clean break settlements, past arrangements or current expenses? All noble Lords who have spoken so far have made the point again and again that they do not. In particular, the clean break settlement which forfeits equity in property —sometimes quite substantial equity—is being ignored. Nor am I persuaded by the report of the Select Committee on Social Security that such capital settlements could not be taken into account. The committee was over-impressed by the difficulties and over-persuaded by the Minister. It should distance itself from that position. After all, the calculations are not very different from those in which capital gains are taken into account on a property which has subsequently been revalued.
In another place the Minister made much of the fact that one of the reasons for not taking property settlements into account was that, alongside equity, mortgage repayments might be transferred, and in turn would be picked up by income support, and on the other side replacement housing costs were taken into account

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in the calculations of the absent parent's income. So what? Neither of those two points addresses the issue that there is substantial equity, which may have been amicably negotiated between the partners and accepted by the courts as legitimate, which is now being ignored. As the noble Earl, Lord Russell, said, the result will be that in future the property will become the source of bitter and angry rows. If a parent who is leaving knows that any arrangement over the home will not count as part of his maintenance contributions, why should he leave his former wife in that home? He—and the solicitors—will expect her, quite understandably, if not rightly, to sell that home and share any remaining equity.
The result will be that a woman who may have lost her husband to another relationship and has the burden of bringing up two children singlehandedly on levels of income which are not much above income support level, will now be presented with the problem of homelessness. She will lose her home and have to uproot herself and move elsewhere, throwing herself on the mercy of the local authority which at best, given that it cannot build, may find her a new home many miles from where the children go to school and from their friends. That adds to the problem of a broken marriage and low income the problem of the loss of a home. I cannot believe that the department, in all its ingenuity and with its amplitude of numbers, cannot find a response to that problem.
The Minister has rightly taken a more conciliatory attitude towards some of the other costs facing the absent parent—travel to work, travel to see the children of the first family—by raising the disregard from £8 to £30. That is sensible, but I still doubt whether it will be enough. However, it only protects and benefits those absent fathers who are earning enough to benefit from that disregard; namely, the better off. Those below protected income levels will continue to lose 85 pence in the pound to the first family. Those able to meet the basic maintenance requirement—the better off—will lose only 50 pence in the pound. The best off, who are offering additional maintenance, will lose only 25 pence in the pound and less than that if they have three children. That regressive nature of the formula is unfair and must be amended.
As my noble friend Lord Stoddart, rightly said, a fundamental asymmetry remains. The Minister must comment on that. The earnings of the second partner and of any adult in the household of the absent partner are taken into account in determining the second family's ability to pay full maintenance to the first family. Their income is taken into account in assessing the ability to meet the full income support displacement. What is not taken into account is any extra cost incurred by the second family where that family includes step children and, either the absent father of those children has not yet been approached because the mother is not on benefit or the father himself is on income support and therefore contributes only £2.20. That is not a realistic assessment of the costs of the step children in that second relationship. Therefore, the absent father in that second family is being asked not only to pay
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considerable sums for the children of his first family but, in lieu of any support from the father of the step children to provide any compensating offset, to bring up those children. Therefore, he is being asked to support the children of the first relationship and the step children of the second as well as any natural children of that second relationship. Only the very affluent or very altruistic can reasonably be expected to do so. The Minister must tackle that basic asymmetry.
Nonetheless, the position of absent parents, usually fathers, has to some extent been mitigated, but by no means far enough. There is a further set of problems associated with the working of the agency itself. The new forms are welcome and we hope that they may overcome some of the mistakes that have been pilloried in the press in which fathers are accused of having illegitimate children they do not have, putting their marriages under pressure. There have been four such mistakes in five days in January alone.
The main criticism has been that the agency has gone for soft targets. However, as one local DSS official has said, it is undeniable that the name of the game was to maximise the yield, and the staff—all 5,000 of them—were on performance related pay. That meant tracking the men in work, often in the public sector, who were already paying something. The Minister in another place assured the House that more than half the cases identified by the agency—330,000 of 616,000—were not paying maintenance. He used that as evidence that the agency was not going for soft targets. He then went on to confess that in least a third of all cases the fathers were not liable to make maintenance payments in any case. In other words, well over two thirds of those targeted are already paying maintenance. Those were certainly not the feckless, walkaway fathers Parliament believed were to be at the end of the agency's attentions.
Changes in regulations which determine when payments should start are to be welcomed. They may avoid situations such as that reported by the Select Committee on Social Security of a 21 year-old absent father who was asked to pay £65 a week out of a net income of £120. It then took 10 weeks to process that case. As a result he found himself with arrears and a debt of £650, although at the time he was unemployed because he had lost his job. Equally, changes in the arrangements for the payment of fees are sensible, as the noble Earl, Lord Russell, said. The present system is somewhat unreasonable: it is like being burnt at the stake and being asked to pay for the firewood.
None of us is arguing that the old court-based system was always right and that the new agency and administrative formulas are always wrong. Clearly the old court-based system was based on individual cases. That could mean that two individuals in different parts of the country in similar circumstances had different awards made against them. That was unfair. But it is equally unfair that the Child Support Agency, dealing with individuals with very different circumstances, requires them to pay the same when they should pay different amounts. We need to balance the evenhandedness of the CSA with the locally tailored

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discretion that the courts could always offer. These changes in the regulations do not yet get that balance right.
The changes in regulations are welcome in so far as they signal the Government's willingness to learn. They are welcome too for the modest gains they offer to those affected. It is worth noting that all the changes have been made in one direction: to aid the absent parents, usually men, who suddenly for the first time find themselves receiving the attentions of social security. They have shouted, loudly and rightly so, and their plight has been somewhat eased. However, the voices which remain silent—we have not heard much about them tonight either—are the women in poverty in the first families whose source of income may have changed from the taxpayer to the absent father but whose level of income is not only not changed but may have been worsened as a result of that activity. That situation we must amend.
5.45 p.m.
Lord Simon of Glaisdale: My Lords, I must apologise for intervening at this moment through the courtesy of the noble Viscount, and without having put down my name. The noble Lords, Lord Kilbracken and Lord Stoddart, slipped more decorously into the gap. However, I felt that anything I had to say about the impact of these regulations, and indeed of the machinery of the Act itself, would be sure to be said very much better by the noble Earl and the noble Baroness than I could say it, and so it has proved.
A sure avenue to unpopularity is to say, "I told you so". If we in your Lordships' House today say, "We told you so", it is with a definite purpose. The Act which is now having to be altered by regulations was and is the most bureaucratic Act in the statute book, put forward by the most bureaucratic department in Whitehall; and things have turned out exactly as was prognosticated.
Perhaps I may make two preliminary observations. First, we have had the benefit of a clear exposition of the regulations by the noble Viscount. That shows very clearly the benefit of the affirmative regulation procedure over that of the negative regulation procedure. It is true that the noble Viscount has significantly shied away at this stage from dealing, as a preliminary, with what is before us; namely, the report of the Joint Committee on Statutory Instruments, to which I shall come towards the end of my observations. However, we must first look back as a warning to what was done and how it was done in the Act.
The Bill was described by the noble Lord, Lord Mishcon, who dealt with it in principle for the Opposition at the time, as virtually a skeleton Bill; and so it was. It ended up as an Act with over 100 regulation-making powers. The noble Viscount has recently written a letter to me stating that the bulk of those were subject to affirmative resolution. I can only ask him to order a recount. We were left with the impression—it was never contradicted—that of those 100 and more regulation-making powers fewer than 20 were subject to the affirmative resolution procedure. That was the skeleton, the mode, of the Bill and at its heart lay what has done all the mischief; namely, an
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absolutely incomprehensible series of formulae which were to be applied by officials. No one claimed that they were comprehensible to the absent husband or the mother for whom they were intended. Not even a gifted mathematician like my noble and learned friend who piloted the Bill so skilfully was able to satisfy your Lordships that those formulae could be understood. Almost the only thing that can be said in favour of the department putting forward that deplorable Act is that obviously it did not understood the formulae either. If it had, we would not have needed the regulations today.
However, that was only the heart. Surrounding it, of course, was the ulster of the jurisdiction of the courts in favour of officials administering a formula. The noble Viscount said today that the jurisdiction of the courts had been capricious, had shown variations and was unsatisfactory. He is to be complimented on saying that with a straight face because the inference is that the Act itself was satisfactory, uncapricious and consistent. If it had been, we would not have needed these regulations. Nor would there have been the spate of protests which has come about. It says quite a lot for any political managers that they have managed to offend equally the absent fathers and the caring mothers. Both are highly affronted. I would have thought in advance that that was barely possible. But it came about through populous demagoguery at a party conference.
There is another preliminary point to be made. It is very convenient that we discuss a regulation today in the context of the Act itself, arid next week we shall have the opportunity given to us by the noble Earl to look more widely and to include consideration of the point that the noble Baroness today has put so well: are we not largely in the present trouble because our matrimonial law is so unsatisfactory? At the time of the Divorce Reform Act 1969, Lord Hodson, the most experienced matrimonial judge in the kingdom, and Lady Summerskill, who devoted the major part of her political life to women's causes, pointed out that most men's income is quite insufficient to support two families with the result, as the noble Baroness has just said, that both families go down to the poverty line. That is a matter best left, at any rate by me, to be considered next week.
I was dealing with the structure of the Act, but what I said was by no means all in the way of bureaucratic aggrandisement and encroachment on the rights of the individual. The officials were given power, which ordinary citizens do not have, to enter into private premises and to interrogate employers and fellow employees as to the means of an employee.
Then there is the extraordinarily harsh remedy of distraint, self-help. That is carefully safeguarded by the common law, but under the Act officials are able to exercise the right of distraint without regard at all to the common law safeguards.
As if those two things were not sufficient, as the noble Lord, Lord Houghton of Sowerby, pointed out with great force, we had the extraordinary provision that the confidentiality of Inland Revenue communications was to be breached in the interests and at the suit of officials. I wrote to the noble and learned Lord the Lord Advocate, because he replied to the debate on the

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Queen's Speech, but my letter was answered by the noble Viscount who disregarded most of the points. However, he said that the provision as to entry into private premises and interrogation of employers and fellow employees, and the breach of Inland Revenue confidentiality, had a precedent or, in fact, two precedents. I offer no prizes as to where those precedents are to be found because noble Lords will readily conclude that they were in Acts which were promoted by the same department. However, one must go behind the Act in order to understand the constitutional implications.
Last week the noble Baroness mentioned the Statutory Sick Pay Act 1991, but matters are even worse than she thought. That, again, was an Act promoted by the department. When it was introduced in the other place not only did it have a Henry VIII clause as a crucial provision, but that Henry VIII clause applied to a fiscal charge. The Minister was enabled, by a stroke of the pen, to alter the charge from 80 per cent. to any other figure that entered his head.
However, that again was not all, because that power was subject only to the negative resolution procedure. That, of course, was objected to in the other place and the Government were prepared to concede that it should become an affirmative resolution procedure. Nevertheless, they stuck to the Henry VIII clause and it was only removed by a vote in your Lordships' House against the Government—again, a sign of the wisdom, experience and value of your Lordships' House in constitutional matters.
I have mentioned all that because there is an important constitutional point, as your Lordships know, in connection with the regulations. It occurs with the word "transitional". The Minister may make "transitional" regulations. That is a common word, in fact it is commonplace in such circumstances. Where the Act has not yet been applied, the regulation altering the provisions of the Act could be described as "transitional", but certainly not where the Act has already been applied. The Delegated Powers Scrutiny Committee drew attention to that and the answer of the department was that the regulations could be said to be transitional because the problem they address comes from the fact that some absent parents who had been paying a relatively modest amount of maintenance under a court order were suddenly faced with a substantial increase in their maintenance payment when an assessment was made. In other words, the department is saying: "Under the word 'transitional' we can bring in regulations which will alter what has already been done under the Act". If that is the meaning of the word "transitional", it goes far further than anyone had ever accepted or could for a moment have contemplated.
The question is: what are we to do under those circumstances? It is tempting to say that with such bureaucratic aggrandisement and with such constitutional arrogance we should throw the regulations out entirely. There are two reasons why we should not do so. The first is that, as previous speakers have said, at any rate they ameliorate in some measure the harshness of the Act itself. The second reason is that the matter is
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so serious, the claim of the department is so grotesque, that the matter should be considered by the Procedure Committee.
Thus, I do not think that we should throw out the regulations. I have previously argued that your Lordships' self-denial regarding statutory instruments is a weak constitutional convention. The noble Earl, with his great knowledge of constitutional history, has agreed with that. So if we have that kind of claim, the time may well come when your Lordships could condignly throw out some regulation. For the reasons I have given, I did not think it right to go so far today, but a warning shot has, I hope, been fired across the bows of the various warships in Whitehall.
Viscount Astor: My Lords, the noble Earl, Lord Russell, started us off with a visit to the zoo which he had made as a child. After hearing about his visit, I am glad to note that his first name is not Albert and he did not meet a lion but a hippopotamus, otherwise we might not have been able to hear what he had to say this evening.
Of course, I am grateful to the noble Baroness, Lady Hollis, for her support for the principle that parents cannot divorce their children, and for the support for the principle of the work that the Child Support Agency does. I have been asked a number of detailed questions which I shall now attempt to answer.
The noble and learned Lord, Lord Simon, asked about the unusual powers that the Joint Committee on Statutory Instruments commented on in Part III of the regulations. The provisions apply not only to those cases where no maintenance assessment has yet been made, but also to some cases where an assessment has been made and is in force. The department considers that the provisions can nevertheless properly be said to be transitional because the problems they address arise from the fact that some absent parents who had been paying a relatively modest amount of maintenance under a court order were suddenly faced with a substantial increase in their payments when an assessment was made. Accordingly, had the problem been identified before the Act came into force and any assessments made, the department could have made provision for those cases. The fact that it was only with experience of operating the Act that the problem was recognised does not make it any the less a transitional problem. So the provisions of Part III, which are intended to deal with the problem, are themselves transitional.
It is true that much of the detail of the child support legislation was laid down in regulations. That is a desirable situation as the department can respond quickly if defects emerge by laying amending regulations. I wrote to the noble and learned Lord stating that half the regulations were subject to affirmative procedures and were debatable by both Houses of Parliament. I am happy to have a recount on those regulations and should I be wrong, I shall certainly write again to him. I should point out that all regulations pertaining to the formula are subject to affirmative resolution.

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Under the old system, where both spousal and child maintenance were agreed by the courts, there was found to be a marked inconsistency in the level of awards made as a proportion of the absent parent's net income. Processing times varied greatly depending on the type of court which dealt with the case and whether it was made in England or Scotland. Many of the orders made by the courts experienced arrears problems; the powers of the courts in those cases was limited and the use of attachment of earnings orders was not widespread. The agency brings together work handled by the department's local offices and by several parts of the courts system. The Child Support Agency delivers a consistent assessment service by the application of the maintenance formula. Maintenance assessments are reviewed regularly to ensure that the current circumstances of all the parties involved are reflected in the amount of money in payment. The agency also provides an efficient and effective collection and enforcement service.
The noble Lord, Lord Kilbracken, mentioned the term "absent parent". The term was subject to considerable debate and was agreed after consultation. It in no way implies that the parent concerned is not meeting his responsibilities; it merely reflects that he is not resident in the same household. The noble Lord also said that the formula was too complex. But the formula is necessarily detailed because it must deal with the complexities of individual circumstances. If it were less detailed it would create greater inequity.
The noble Lord, Lord Stoddart, talked of access to children. Maintenance for a child and access to that child are totally separate issues. The question of access remains at the discretion of the courts and as such is outside the jurisdiction of the Child Support Agency. The noble Lord also talked of the second wife's income being taken into account A second wife will not be asked to contribute to the maintenance of children of a first family. However, she is expected to contribute to the upbringing of her own children of the new relationship. Details of her income are therefore necessary to determine that. In addition, her income is needed to decide whether any maintenance that the absent parent pays can be reduced under the protected income provisions.
The noble Earl, Lord Russell, and the noble Baroness, Lady Hollis, asked whether we were attempting in some way to tax second families out of existence. A parent's fist duty must be to their own natural children. That duty persists irrespective of changes in the relationship of the parents. Once a parent makes arrangements to meet that responsibility, there is no reason why he should not go on to form a second family. But it is not right that he should expect to do that at the expense of either his first family or the taxpayer.
When any couple—for example, a young couple—are considering starting a family, they must take all factors into account. Many young families do that. High on their list will be the question of whether or not they can afford to start a family. Having said that, the formula makes allowance for any natural or adopted children of a new relationship. The protected income assessment—a proposal your Lordships seek to make
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more generous—provides an important safeguard for all second families by ensuring that their income remains above income support levels.
Baroness Hollis of Heigham: My Lords, can the Minister clarify the situation for stepchildren in the second family, particularly where the mother in that family does not enjoy full maintenance from her absent partner?
Viscount Astor: My Lords, the noble Baroness asked a number of questions. Perhaps she will allow me. the time to attempt to answer them.
The noble Earl asked about absent parents being treated too harshly. The noble Baroness said that the agency was going for "soft" targets. In 96 per cent. of cases dealt with by the CSA last year the parent with care was on benefit. Most absent parents enjoy a much higher standard of living. The protected income assessment ensures that the absent parent remains above the income support level. The measure therefore increases the margin above income support that absent parents will retain. The noble Baroness also asked whether it was a Treasury saving exercise. Taxpayers should only have to support children when their parents are unable to do so. That view was strongly endorsed by the Select Committee, which agreed with the Government.
The noble Earl, Lord Russell, asked about parents with care being compensated for the reduction in their income brought about by the changes. Most parents with care will receive more maintenance under the Child Support Act than under the old courts based system, even after the changes take effect. Some will have current assessments reduced but for those in receipt of income support—the majority—their benefit will be adjusted to compensate for any reduction in income. Family credit is payable for: 26 weeks and not normally adjusted for changes in circumstances. Changes in maintenance will not be taken into account until a renewal claim is made. Income can move either up or down; some will gain because of the rule and others will lose. Other in-work benefit, such as housing benefit, can be adjusted immediately, minimising the effect on losers.
The noble Earl also asked why there is no help for items such as travel-to-work costs and debts and contract costs. Maintaining their children should be the parents' first priority. Allowing for individual items of expenditure in the formula would be to give those expenses a higher priority than child support. The formula leaves most absent parents with more than 70 per cent. of net income after paying maintenance and allowing sufficient flexibility to meet other outgoings. The proposed increase to protected income will provide a further margin of income to help vulnerable absent parents to meet such costs. The old system of allowing a range of other expenses before child maintenance resulted in unrealistically low levels of award. To start including travel-to-work costs would create pressure for more items to be added to the list of exceptional expenses. The Social Security Select Committee endorsed the decision.

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The noble Baroness asked about housing costs of stepchildren. The recommendation runs contrary to one of the fundamental principles of the Child Support Act; that is, that the parents' first responsibility is to their own children. It would be wrong to place the need of stepchildren first.
Earl Russell: My Lords, will the noble Viscount consider the case in a letter I received this morning where the father of the stepchildren is dead? There is no other way for them to be maintained.
Viscount Astor: My Lords, I cannot comment on any specific case. Obviously I do not know of the case cited by the noble Earl. However, if he writes to me I shall of course reply.
Earl Russell: My Lords, I was trying to use the case to refer to a general principle where the stepchildren do not have any other natural father who is capable of supporting them. Ought not their stepfather to have some allowance for the fact that it must become his duty to do so? It cannot be the duty of anyone else.
Viscount Astor: My Lords, if the noble Earl will allow me to finish the point I was on, I shall come later to his point.
When an absent parent sets up home with a new family it is right that the natural parents of any step-children should contribute to their housing costs. In some cases this can mean that the absent parent can afford to pay more maintenance to his own children. The formula ensures that where an absent parent cannot afford to pay the assessed rate of maintenance—for example, because of commitments to a stepfamily—then in those circumstances all the housing costs are taken into account and the needs of the step-family are placed before the needs of the first family. It is important to recognise that the formula assesses the ability of both parents to contribute to the maintenance of their children. Any allowances in exempt income apply equally to both parents. Where the parent with care has repartnered and the new partner has children then the committee's recommendations could result in an absent parent paying more maintenance.
Baroness Hollis of Heigham: My Lords, I am not sure that the Minister has fully understood the point. He keeps referring to the housing costs. We are not talking about the housing costs. We know that those are covered. We are talking about where the step-children in the second family cannot bring with them any maintenance from their natural father either because he is dead or because he is unemployed or missing. As a result the second father is carrying their care in an honourable and decent way and floating that second family off poverty at the price, very often, of impoverishing his first family. If he were to meet his maintenance obligations on the first family, the second family would be impoverished. Will the Minister address that issue please? We have come back to it twice.
Viscount Astor: My Lords, I was about to address the issue before the noble Baroness interrupted me. I
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was attempting to say that step-children are taken account of in the formula. Before any maintenance is paid a calculation is done which includes step-children. In some cases step-children can take precedence over the child of the first family. If, for example, the step-children are adopted, they will be treated as natural children.
Baroness Hollis of Heigham: If they are adopted, my Lords.
Viscount Astor: Yes, my Lords.
The noble Earl asked about the incentive to work. The protected income provisions ensure that absent parents retain enough of their disposable income to ensure that they are always better off than they would be on income support. These amendments mean that absent parents will now keep a minimum of £30 above the level of income support. In addition, they will also keep 15 per cent. of the difference between their basic protected income level and the family's total income. The current provision only provides for the retention of 10 per cent.
The noble Earl also asked about clean-break settlements. We believe that the Select Committee produced a thoughtful and considered report. The all-party committee concluded that there is no sensible way in which the capital value of past settlements could be reflected in current maintenance assessments. The formula already reflects the practical consequence of settling a house on the former partner. In such cases it is likely that the absent parent not able to call upon the equity of the marital home will incur higher housing costs than would otherwise be the case. The absent parent's costs of rehousing himself and any new children are deducted pound for pound from his assessable income, so reducing his maintenance bill.
Moreover, the courts have never accepted the possibility of a clean break between parents and their children, and under the court system parents had the right to seek periodical maintenance for a child or to seek a variation of an existing order following a capital or property settlement. Indeed, it has always been open to the Secretary of State for Social Security to seek such a variation where the taxpayer became involved in supporting the children. This principle has been endorsed in a recent ruling in the High Court—the Crozier case.
It should be remembered that clean breaks are arrangements between spouses. There can be no clean break between a parent and a child. The formula takes account of the practical consequences of property or capital settlements. The Select Committee agreed that it is impractical for the formula to take further account of clean breaks. In fact to do so would amount to double counting in many cases. The Department of Social Security has always had the right to seek a review of child maintenance if the taxpayer is involved. In the Crozier case the judgment confirmed that there can be no clean break between a parent and a child. The judgment also confirmed that there has always been a statutory provision for the Department of Social Security to seek maintenance in these cases if the taxpayer became involved.

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There are immense practical problems in ascertaining the actual value of the property at the time of the clean break. There are problems in establishing the amount of equity in the property where there have been loans secured against the property. How is it possible to determine how much of the total equity would have been allocated to the spouse? Even if we were able to overcome these extensive problems, how is it possible to ascertain the amount of maintenance that would have been payable between the date of the court order and the child support assessment had a clean break not occurred? If all this were feasible and the balance was converted into an income stream there would be significant double counting because of the way in which the formula looks at housing costs.
The noble Earl asked me about fees. The purpose of charging fees is to recover the cost of providing the services of making an assessment and putting in place arrangements for the regular payment of maintenance. Under old provisions where the courts may have been involved clients usually had to pay fees to solicitors and other associated court costs. It would not be right to shift the burden from individuals who can afford fees to the taxpayer simply because a government agency now has the responsibility. The noble Earl also asked about forms. The new forms for obtaining the parent with care's authorisation to act were introduced on 12th October 1993. Applications after that date are receiving the new forms and are being processed using the revised procedures.
The noble Baroness, Lady Hollis, asked why there is no maintenance disregard on income support. Regular maintenance will provide a springboard for parents with care on income support who wish to return to work. A disregard would provide a perverse incentive for them to remain on benefit. The majority of lone parents on income support tell us that they wish to work. The Government have therefore placed the disregards in the in-work benefits which will help considerably in achieving that aim.
The noble Baroness also asked about bonuses for agency staff and about encouraging them to pick on soft targets. Agency staff are paid on the same basis as all other staff employed by the department and its agencies. All are eligible for performance-related pay linked to performance judged against a whole range of individual objectives. There is no direct link between the pay of staff and the amount of maintenance they secure.
The noble Baroness said that the carer element should remain if a child is disabled. The carer element represents solely the care needed by the child, not the cost of his or her upbringing, such as food or clothing. These costs may increase but the cost of physical day-to- day care reduces as the child gets older. The part of the maintenance requirement attributed to the child's own costs will increase at the age of 11.
Baroness Hollis of Heigham: My Lords, the Minister has again misunderstood the point. If a child is disabled, the need of the parent with care to continue to care does not reduce as the child grows older. Therefore there should be no reduction in the spousal maintenance
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that is associated with the responsibilities of being the parent with care when that child gets older. That was the point. Will the Minister address it?
Viscount Astor: My Lords, I said that the part of the maintenance requirement attributed to the child's own costs will increase at the age of 11. Where a child is disabled, the parent with care can ask the court to make a top-up award over and above the amount calculated by the formula.
I was also asked about the floaters off income support and the loss of passported benefits. The receipt of maintenance in such circumstances is no different from receiving a new or increased income from another source. We do not believe that maintenance should be treated any differently. Parents with care who are floated off income support will generally still be eligible to qualify for help with National Health charges on income grounds.
Baroness Hollis of Heigham: My Lords, is the Minister saying that parents who receive a maintenance award which is pound for pound the same as they would have received on income support will continue to be eligible for passported benefits? If not, why not?
Viscount Astor: My Lords, I said that: we do not see that there is any difference from receiving a new or increased income from any other source. That was the point I made.
Baroness Hollis of Heigham: My Lords, so the Minister accepts that such a parent, by receiving maintenance from the father in lieu of income support, will actually be poorer off.
Viscount Astor: No, my Lords. I do riot accept that.
We have listened to the views of people from all walks of life and have paid particular attention to the objective analysis of the Social Security Select Committee. The changes we have made will help a wide range of absent parents and the significant increases to protected income will in particular help those who are less well off.
We shall have a further chance to discuss some of the principles of the Bill during the debate in the name of the noble Earl, Lord Russell, next week; but this package of changes, these regulations, preserve the basic principles of the Child Support Act and balance carefully the needs of all parties: the children, the parents and the taxpayer. I commend them to the House.
Earl Russell: My Lords, before the noble Viscount sits down, can I ask if he will lend his support to the very modest proposal of the noble and learned Lord, Lord Simon of Glaisdale, that the vires of these regulations and the general questions arising from them be referred to the Procedure Committee?
Viscount Astor: My Lords, I am not sure how that committee operates. I had understood that the Procedure Committee had a certain freedom to look at what it wants to look at. However, I take the noble Earl's point and I will pass the message along to the appropriate quarter.
Lord Simon of Glaisdale: My Lords, if I may help the noble Viscount, if he does not refer the constitutional point to the Procedure Committee, I shall certainly do so. Moreover, I shall raise the point next week on the Local Government (Wales) Bill, where the word "transitional" appears, as it does in almost every Bill these days, to ascertain whether Whitehall generally concurs with the view apparently held by this department that the word "transitional" is sufficient to allow rectification of Acts of Parliament where a mistake has been found subsequently.
On Question, Motion agreed to.

St. Helenians: UK Employment
6.22 p.m.
Lord Beaumont of Whitleyrose to ask Her Majesty's Government what steps they propose to take to ensure greater access by the people of St. Helena to training and work in the United Kingdom.
The noble Lord said: My Lords, I beg leave to ask Her Majesty's Government the Question standing in my name on the Order Paper.
This is the first time your Lordships have debated the affairs of St. Helena since the noble Lord, Lord Buxton, whom I am delighted to see is to speak again tonight, asked another Unstarred Question exactly 10 years ago.
I hope your Lordships will forgive a little explanation here, because, although I know that most noble Lords in this Chamber will know quite a lot about St. Helena, certainly all your Lordships who are to take part in the debate, if you ask someone in the street about St. Helena you will find a great deal of mystification over exactly where it is. So for the benefit of Hansard perhaps I could start off by giving one or two facts. St. Helena is a dependent territory of the United Kingdom and has itself two associated territories, Ascension Island and Tristan da Cunha to which the present admirable and hard-working Governor of St. Helena, who is himself married to a St. Helenian is at present on his way for his annual visit, Tristan da Cunha being even more isolated than St. Helena.
St. Helena has roughly 6,000 inhabitants, all of whom look to the United Kingdom as their mother country. Their ancestors came and settled in an island which had no aboriginal inhabitants and whose immigrating inhabitants had been guaranteed British citizenship by a charter of Charles II in 1673. Unlike almost every other dependent territory, it has no culture except British culture and their own adaptation of that. It has no airport or airstrip and is several days' sailing from any land mass. All these factors add together to show why it is in a class of its own.
We are shortly to have a debate, I am glad to see, on the dependent territories as a whole, but the day is past when the United Kingdom Government had so many of them to look after that it could make blanket rules for them all. They now can and should be looked at individually and no excuse that "We cannot do this or the others will be wanting it too" can hold water.
As I have said, it is 10 years since St. Helena was debated here and rather longer, I think, since it was
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debated in another place; but I venture to predict that it will not be another 10 years before it is debated again. Noble Lords who are down to speak in this debate—and I am most grateful to those who have agreed to take part—will see to that. I must tell your Lordships that the noble Lord, Lord Shackleton, would very much have liked to have spoken in this debate but, alas, is not yet well enough. Also, the noble Lord, Lord Runcie, rang me last night to say how much he regretted that he could not take part in this debate today.
There are enough urgent matters affecting St. Helena to take up a whole day's debate, even if there are not, alas, quite enough informed noble Lords to fill an afternoon's speaking list. But today I am asking a Question about facilities for training, work experience and jobs off the island; that in effect, largely for the reasons that I have already rehearsed, means in the United Kingdom.
I am not tonight asking about citizenship and the right of abode. That is in the minds of all your Lordships who know anything about St. Helena, and we shall come to it in due course in your Lordships' House, possibly when the affairs of Hong Kong are on a more even keel. Nor am I asking about greater access to the island, although I understand that at least two, if not three, noble Lords will mention the matter this evening. It is time for either a shuttle ship or an airstrip to supplement the monthly calls of the Curnow Shipping Line's "St. Helena", that admirable ship. One of the tragedies of St. Helena is that no one wants to invade it. If anyone wanted to invade it, I am quite sure that there would be an airstrip there within a week and certainly much better methods of communicating with it.
I am merely asking tonight for opportunities for training and work experience for the "Saints", as they call themselves and as I believe they are right to call themselves. In so asking, I know that I am supported by the Governor, the Legislative Council and the people of the island. There is a first-class primary school system on the island. There is, since recently, a very good secondary school, the Prince Andrew school, and while there is room for the upgrading of standards to UK levels in examinations, teaching and so forth, the education system may be regarded as generally satisfactory. And it is worth noting that in a world-wide rating of children being adjusted, or maladjusted, St. Helena is in the very first rank—thus rightly earning its people's sobriquet of "Saints".
There is some work available on the island and, in my view and in the view of others who are qualified to know, there is the opportunity and the possibility for much more. We may turn our attention to that on another occasion. I know that the ODA is investigating this and is indeed taking many steps and taking a lot of trouble over this. There is also work available on Ascension and in the Falklands. What there is not is the opportunity for higher education and training; and that is what the Government must provide. This is particularly so with the phasing out of the work permit scheme for the dependent territories. It is not a complicated matter. There is in place an admirable organisation called St. Helena Link, which was set up by the Government of the United Kingdom and St. Helena

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jointly, to offer pastoral care to those coming from an unsophisticated island. There are over 3,000 St. Helenians already living in this country with their own admirable newspaper, an Anglican Diocesan Association, an Official Government representative, a St. Helena Association and an Organisation of Friends.
There is a strong need. I became involved because my wife visited St. Helena at the behest of the Curnow Shipping Company 18 months ago to take an exhibition of contemporary British art there and she ended up organising a local exhibition as well. I am grateful to her for first teaching me about the island and its inhabitants. I am grateful also to all those friends of St. Helena who have instructed me further.
It is our duty as the Parliament of this country, which is the only Parliament which has power in St. Helena, to look after these people, to pay them more attention than we have in the past and to provide opportunities for its young people as they grow up. I now look forward with some optimism to the Government's solution to this not very difficult but, for the 6,000 subjects of that country, extremely important question.
6.31 p.m.
Lord Braine of Wheatley: My Lords, we must all be grateful to the noble Lord, Lord Beaumont of Whitley, for making it possible for us to have this debate and for introducing the subject in his excellent speech.
I have been concerned about the future of St. Helena—a beautiful island which is sometimes described as the "lost county of England"—ever since I visited it in August 1980. I went there at the request of the then Governor and his Executive Council who hoped that I would draw the attention of Parliament to the anxieties that they felt about British policy and the island's future.
St. Helena has been a British colony for over 300 years. The first "Saints", as the islanders call themselves, came from England in 1659, followed seven years later by refugees from the Great Fire of London. They brought English ways and the Christian religion. When I visited the island there were some 15 churches. For all I know, there may be more now.
In the early part of the last century when we were waging war against the iniquitous slave trade, captured slave ships were brought to the island and the slaves were released there. They somewhat enlarged the population. Then, St. Helena was a fortress, a keypost on the long voyage to India, round the Cape. That was before the Suez Canal was built.
St. Helena's population when I visited was only about 5,000, but it was English-speaking, literate and British in character and allegiance. Alas, when I was there I found many people facing difficulties and beginning to border on despair. Basically, the problem for St. Helena at that time was one of physical communications with its associated dependency of Ascension Island 700 miles to the north—a vitally important place strategically, as the Falklands War was to prove—Tristan da Cunha to the south and, of course, faraway Britain herself.
More recently, there have been some important developments. Since 1991, Cable and Wireless has
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revolutionised links with the world network through the earth satellite system. Satellite communications have brought St. Helena into the data transmission age. Moreover, the Falklands conflict demonstrated the importance of the links with all our South Atlantic dependencies: for example, we could riot have waged that war so effectively without access to Ascension.
Then again, the new RMS "St. Helena", built here with British Government aid and operated by the Curnow Shipping Company of Cornwall, is proving to be of very great value in moving goods and passengers between St. Helena and South Africa and between St. Helena and Britain. This year, for the very first time, regular shipping links have been established between St. Helena and West Africa.
What is still needed, however, is a regular inter-island shipping service linking St. Helena to Ascension which is 700 miles away. 1vloreover, what has happened to the idea that was advanced some years ago that St. Helena might have an airport? Is any thought being given currently to that idea here in London?
There is, however, a much more fundamental question which does not seem to have been properly considered in Whitehall; namely, the importance of linking all our South Atlantic dependencies more closely. With the development of very important oil and fishery resources off the Falkland Islands, surely that will soon open up opportunities for St. Helenian labour which has proved its solid worth in development elsewhere. St. Helenians are a literate and pleasant people, British in their allegiance, dependable workers and Christian in their outlook. Surely, thought should be given now to the opening up of opportunities for them in the Falklands where both oil and fishery development on a large scale will undoubtedly promote a growing demand for reliable labour. join the noble Lord, Lord Beaumont, in asking what thought is being given to the prospect of that happening.
That brings me to the more direct question of the discrimination against these people that British immigration policy has imposed—and here, I speak frankly. If St. Helenians are British, why have the Government here continued to deprive them of the clearest expression of their British ideality; namely, a British passport? What difference does distance or separation by sea really make? It makes no difference at all under American law. Both Alaska and Hawaii enjoy full statehood. It makes no difference under French law: Reunion is a département of France even though it is far away in the Indian Ocean. If the British view is that distance disqualifies, how is it that the Falkland islanders are British citizens—and it is right that they are; thank God that they are—although they are further away from the mother country than St. Helena?
The simple truth is that St. Helenians are not clamouring to become British citizens because they are already British —and always have been British. Yet when their Legislative Council petitioned the Secretary of State for Foreign and Commonwealth Affairs in 1990 for recognition of their inalienable right of entry into Britain, it received a negative reply.

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I hope and I trust that this debate will have the effect of concentrating minds in Whitehall. Perhaps your Lordships will permit me to quote from the concluding paragraph of a detailed report that I made to the Government of the day in August 1980, which I entitled St. Helena—A Case of Enforced Dependence. This is what I said:
"The first objective of British policy in our remaining dependencies should be to encourage the maximum self-reliance. But that is only possible where people are given the confidence that they can earn a reasonable living by their own efforts. Too often the difficulties in a 'colonial situation' are inherent in the society itself, in its attitudes and mores. Not so in the case of St. Helena. Its people are hardworking, intelligent and law-abiding. They have proved themselves resilient and adaptable when given the chance. Most of the obstacles in the way of achieving a confident self-reliance lie outside the colony, not within it".
Unhappily, that is still the situation. It must be changed.
6.39 p.m.
Lord Cledwyn of Penrhos: My Lords, I am grateful to the noble Lord, Lord Beaumont, for raising this important subject and for his impressive speech setting the scene for this short debate. I also appreciate the knowledgeable speech of the noble Lord, Lord Braine, arising from his experience when he visited the island in 1980. Thirty-six years ago I was asked by the late Hugh Gaitskell if I would visit St. Helena. He had received complaints that that small and distant colony was being neglected by the British Government, and he was anxious that that charge should be investigated and the facts brought to light. I knew little of St. Helena then, save that Napoleon was exiled there, and I was not sure why I had been chosen to go there. Perhaps it was because I represented the Isle of Anglesey in Parliament !
I realised how ill-informed I was when I called at the House of Commons Travel Office to book a flight to St. Helena. After studying some papers, Mr. Buchanan, the official in charge, asked me whether I would call again in an hour or so as he wanted to make some inquiries. When I called, he informed me that there was no airfield on St. Helena and no flight there. He said that I would have to go by sea. So it was that I sailed to St. Helena in the "Braemar Castle" of the Union Castle Line, and spent nearly two months away from the other place. It was a factor I had not anticipated when Hugh Gaitskell approached me, but it was made more agreeable when my wife agreed to accompany me.
I was told then that I was the first Member of Parliament to visit St. Helena, and I realised that I had undertaken a considerable responsibility. The community there gave us the warmest of welcomes, and my stay gave me ample opportunity to familiarise myself with the way of life and the problems of the people. I cannot go into great detail in a short speech, but there are some key points that I should like to make. First, the people regard themselves as British, although they were born and bred in the South Atlantic, a point which the noble Lord, Lord Braine, has just made. If it were a little closer to Britain, it could become an ideal unitary authority in the British local government system without any difficulty! Unlike some who come here, they share the British tradition and its way of life completely.
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The inhabitants of St. Helena believe that they are British because they originate from the England of the 17th century. When the Dutch occupied the island, it was uninhabited; the first inhabitants sailed there from these islands, and today, as the noble Lord, Lord Braine, said, their descendants are hurt and offended because the Government refuse to give them the full recognition of a British passport. A report published last August conveys the sense of frustration which exists. It states:
"There is bitter irony that Gibraltar … which has less cause to be regarded as British, nevertheless has received the rights denied to this other island which has a greater and longer claim to the same national identity".
The Commission on Citizenship which has been looking into these matters on behalf of St. Helenians has said that they accept the need for comprehensive immigration legislation although they are very critical, and rightly so, of the British Nationality Act 1981. They say that they are now prisoners on the island, whereas previously they had the right to a British passport. That deep feeling is reflected in the Legislative Council's petition to the Foreign Secretary as recently as 1990 when it said:
"We. the twelve elected representatives of the six thousand loyal, patriotic British people of the South Atlantic Dependent Territory of St. Helena, do hereby again plead on their behalf for the reinstatement of their inalienable rights of entry into the United Kingdom".
The negative response of the Foreign Office was, in my view, quite unacceptable. It refuses to recognise the unique position of St. Helena. It is, presumably for political reasons, more sensitive to the demands of Gibraltar and the Falkland Islands. For example, I understand that the Secretary of State has power by regulation to permit registration in Gibraltar. I hold the view strongly that the right of St. Helena to a passport is stronger than that of any other British dependent territory. Why do I say that? I do so because the people of St. Helena are not a native population of the island; they were settled there by the British Government. The island was populated by the British Government, and was then used as a fortress by the British Government. It is not a happy story because it was later neglected and forgotten by the British Government.
Notwithstanding all that, the members of the community on the little island regard themselves as loyal Britons. Their resources are very limited, as we know, and they must look elsewhere for employment and the means to live, as the noble Lord, Lord Beaumont, made plain. That is why we must thank him for bringing this sad human problem once again to public notice.
During my stay in St. Helena, I formed a great respect and affection for. the law-abiding, friendly and hardworking islanders. They deserve practical assistance today of the type described by the noble Lord, Lord Beaumont. Will the Minister tell us what is the present position of the work permit scheme in relation to St. Helena? If it is to be abolished, we must have a practical and effective alternative. I hope that the Minister will tell us about that and that he will advise his right honourable friend the Foreign and Commonwealth Secretary to consider carefully the speeches in this debate and produce a more just and compassionate policy for St. Helena.
7.46 p.m.
Lord Buxton of Alsa: My Lords, I too am grateful to the noble Lord, Lord Beaumont, for raising this debate. I also feel some sense of inferiority as I speak after three noble Lords who have visited St. Helena. I can almost tear up my notes, because the problem has already been explained so effectively. Not having set foot on St. Helena, my interest derives from considerable familiarity with the Falkland Islands for over 20 years, and with St. Helena. I have always been interested in that part of the world, including the Antarctic. My daughter has been to Tristan da Cunha for some months and—wait for it!—in 1941 I saw St. Helena in the moonlight from a troopship. So it is not totally unknown to me.
I do not regard citizenship as being outside the debate, because I believe that giving full citizenship to the St. Helenians would solve many of the problems and probably the issue raised by the noble Lord, Lord Beaumont. We are all aware that what was holding up things in Gibraltar and the Falkland Islands, and now St. Helena, was the fear in Whitehall that the right to a pas sport would produce an avalanche of mass migration from Hong Kong. I say "Whitehall", because, in fairness to my noble friend the Minister, this matter has been going on for decades: certainly two or three. Therefore we cannot hold Ministers, or any particular government, responsible. It is a permanent issue: the idea that if we were to give anyone full citizenship it would cause a conflagration and the United Kingdom would be inundated with people from dependent territories all over the world. I believe that to be untrue.
The questions I wish to ask my noble friend the Minister are, first, will he tell us, or if he cannot perhaps he will kindly find out, what problems have arisen, what difficulties there have been, how many people, or what percentage of the population of Gibraltar, have arrived here as immigrants since they were accorded British citizenship?
Secondly, may we have the answer to the same question in relation to the Falklands? The Falkland Islanders were given citizenship as a result of the invasion. I was there immediately after this. As the noble Lord, Lord Beaumont, rightly said, it is a bit much if people have to be invaded in order to gain citizenship. Will the Minister tell us in respect of the Falkland Islands what difficulties have arisen, what damage has been done and what percentage of the population has arrived here as immigrants that could cause any problem? I believe that no problems have been raised, no damage has been caused and there have been no immigration difficulties.
The Government may believe that by giving citizenship to those in a dependent territory others will demand the same and cause considerable trouble. However, that has been amply disproved by what occurred in respect of Gibraltar and the Falklands. There is therefore no conceivable excuse for saying that the St. Helenians cannot be given full citizenship—which would answer the noble Lord's Question —simply because the same might happen in another part of the world.
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Hong Kong is off the agenda; St. Helena. is irrelevant as far as the future of Hong Kong is concerned. Is Whitehall going to scratch around looking for somewhere else to point to and say, "We cannot do that in case someone in the Caribbean or elsewhere makes an immediate demand too"?
I do not wish to extend the debate and I am grateful to previous speakers who have covered the issues so effectively. I merely wish to put on record the fact that we want to know about the problems which arose in respect of the Falklands and Gibraltar. I totally reject the notion that in future the St. Helenians can be tied to some other territory some thousands of miles away. That is completely irrelevant.
6.52 p.m.
Lord Greenhill of Harrow: My Lords, we are grateful to Lady Beaumont for prompting the noble Lord to raise the subject of St. Helena tonight. It has long been a problem island and the islanders' access to the UK is currently being discussed in Whitehall. Therefore the timing of the debate is most apt.
I wish to comment briefly on access to the UK and then raise one or two other matters in which I have long been interested. But before doing so, I should like, with others, to pay tribute to the present Governor, Mr. Hoole, for his enthusiasm and helpfulness. He has the advantage of having a wife from the island and a special access to its hopes and fears.
My first point is that the British Government are under an undoubted and inescapable obligation to help this small dependent territory. They have a similar obligation to other dependent territories left over from our former Empire. There is no possibility of independence in the future for St. Helena and many of the other islands and it has special features which must be taken into account in deciding British policy. Our Government do, of course, already subsidise and help the island, but I believe that more should be done not only now but over the next few years.
I visited the island with my wife some few years ago—it was a visit which made a considerable impression on us—although I had some experience of its affairs when I was in the Foreign Office.
As I indicated, there are unusual features of the island which must be kept in mind and which must dictate our policy. First, it has virtually no natural resources and no port. Going from ship to shore can be a distinct adventure. Persons of my age and that of the noble Lord, Lord Cledwyn, are now put ashore by crane. Many attempts have been made, without success, to develop resources since the flax growing collapsed. There is still some hope for the fishing industry, and en route to the island we sailed through large Russian fishing fleets. Whether their ships remain I do not know, but presumably the fish do.
The island is now served by a new passenger/freight ship from Plymouth or Cardiff which appears to he heavily booked. We have the noble Baroness, Lady Young, to thank for it as she overcame the reluctance of the Treasury to place the order. The noble Baroness asked me to say that she very much wanted to speak in the debate tonight but was unable to do so.

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The island has a long history linking it with the UK. It provided shelter and aid to the vessels of the East India Company centuries ago. Every school child knows of Napoleon's connection and Longwood is a potential attraction for tourists from this country and Europe.
There are important ways in which Her Majesty's Government can help the island. The regulation of permits to come to the UK is the centre of our discussion tonight. That was put most clearly by the noble Lord, Lord Buxton. The present quota is soon to expire but there are strong reasons for it to be extended.
Islanders are of course employed on Ascension and the Falklands. This is a comparatively new development. The development of the oil industry in the Falklands may one day provide further opportunities. But these outlets are no substitute for a closer connection with the UK after which the islanders understandably hanker.
There is now a secondary school on the island which was built after a miserly correspondence with London for over 20 years. In fact, it was only the prospect of a naval visit by His Royal Highness Prince Andrew that caused Her Majesty's Government to yield. Pupils from this school will make it easier for islanders to be usefully employed here and contribute to their economy and our own. Large numbers will not be involved. I hope that the Minister will comment on that.
The second way in which we can help is the provision of an airfield. This has been a hobby-horse of mine for many years. There are difficulties, not only of cost (which have been exaggerated) but of air safety. But they are not insurmountable. A golden opportunity was missed when construction plant which was returning from the Falklands could have been put off at St. Helena to contribute to the building of the airfield.
An alternative is being considered—to provide a boat shuttle between St. Helena and Ascension from which long distance air services could be available. But I do not believe that this would bring a benefit as great as a direct air service. Such a direct service could attract tourists and from not only the UK but also France in particular.
The Minister, I am sure, knows the problems only too well. But in the long run a direct service would reduce the present subsidies to the island and give the population a chance of all-round advancement. I know that the subject has been under close review but I hope that the Government will see the value of an ambitious step forward now rather than the false economy of a more modest sea shuttle. Seven hundred miles between St. Helena and Ascension or Angola is a long journey. St. Helena is also dependent on South Africa, for example, for medical emergencies. The subject of the airfield is a complicated one for which we do not have sufficient time this evening. However, I hope that when the noble Lord, Lord Holderness, returns from his future visit he will give his impressions of that controversy. A direct service must be established one day. Why should that not be done in the last years of this century?
7 p.m.
Lord Holderness: My Lords, I hope that the noble Lord, Lord Beaumont, will forgive me for daring to take part in this well-informed debate without any first-hand knowledge of the island, or, indeed, of the South Atlantic. As the noble Lord, Lord Greenhill, suggested, that is an omission which I intend to put right in 16 days' time. In the light of the noble Lord's speech, I hope that the important crane which could hoist the noble Lord, Lord Greenhill, or the noble Lord, Lord Cledwyn, will be available also for me.
This country's continuing responsibilities to the few colonies which remain have been the theme of the speeches of many noble Lords. This debate concentrates on the particular problems of St. Helena. As I read history, in the past the island seems to have been relatively rich in natural resources but now, as the noble Lord, Lord Greenhill, said, natural resources are sadly scarce as, for other reasons, are human resources. I suppose that one reason is the extensive employment of the Saints in the Falklands, on Ascension and aboard the RMS "St. Helena", for which Her Majesty's Government deserve great credit.
For those reasons, in my opinion and that of all noble Lords who have taken part in the debate, Great Britain has a duty to find some way out of the vicious circle whereby a lack of skills is undoubtedly frustrating development. At the same time, that same lack of skills deprives the inhabitants, the Saints, of the opportunity to use fruitfully their own natural abilities or to acquire new skills or improve them, by being given the chance to visit this country.
If, as the noble Lord, Lord Cledwyn, suggested, the Government remain determined to bring to an end the present scheme of work permits, we must press them hard to propose a constructive alternative, which I hope my noble friend Lord Henley will be able to provide. In my opinion, that would give enormous encouragement to the people of St. Helena who at present, to put it mildly, feel rather left out.
I hope that my noble friend can give encouragement as regards three matters. First, is there scope to put still more emphasis, within the considerable total of aid which Britain continues to provide to the island, on technical assistance, skills training, and so on, and on other means to create and keep in St. Helena the human resources essential for the island's development? I purposely said "create and keep" because I understand that bright young pupils at Prince Andrew School are acquiring skills and their education is good. However, the experts are asking what that education is for. One such expert concludes:
"The talented go away, get qualified; … come back; … rediscover the pitiful money they will earn and go off again".
Therefore, I ask the Government what incentive they can suggest to make it more worthwhile for the bright and energetic, when they return, to remain on the island and to contribute their skills towards its development.
I ask Her Majesty's Government to give urgent consideration to the consequences of bringing to an end the present system. I give one example of its importance, not only to St. Helena but also much more widely. Nearly 40 years ago a young man named James

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Johnson came from St. Helena to Britain with his young wife. They took jobs as domestic servants. Unless there is an effective replacement for the existing system, people like that young couple will be excluded from Britain after next year. It would certainly have been a pity if those two people had been kept out.
A few years after his arrival, James Johnson began his studies for the priesthood while his wife worked to support them and his young son. After ordination he returned to St. Helena. He came back to this country and in 1985 he was consecrated as the Bishop of St. Helena. That reversed the usual trend of Christians because he became the first Saint to turn into a bishop! No doubt that is a rare example. Very few will come here as domestic servants and end up as bishops.
That illustrates a different but important point. If such people are firmly kept out of Britain, it will be a deprivation for them. It will be a deprivation also for a number—I know riot how many—of people in this country who are growing old, whose health is failing and who long for the caring help which, in my observation, a number of the Saints are willing to give. They may not fit easily into the exact requirement for skills which the Government lay down, but they can give to the old and the ill the care that they badly need.
I hope fervently that the new provisions, which I understand the Government are considering, will include those who cannot qualify easily under the scarce skills requirement. The Government should offer not only training leading to an occupational skill and work experience to increase industrial and commercial expertise and improve knowledge of English, but also the opportunity for unskilled people to acquire not specific skills but to give freely, as many already do, of their natural abilities. The offer of such opportunities would bring new hope to hundreds of men and women still living on the island.
7.9 p.m.
Lord Morris: My Lords, like other noble Lords who have spoken in the debate, I am extremely grateful to the noble Lord, Beaumont of Whitley, for giving us the opportunity to speak on this extremely important subject.
I justify my qualification to speak on two grounds, one of which is extremely thin and one of which is not so thin. An ancestor of mine on my mother's side was the officer who escorted Napoleon to the island of St. Helena. It is my ambition to escort a Minister of the Crown to St Helena and keep him in the fortress there until he makes up his mind to do something about this matter.
The other reason is that I bear the burden of being the chairman of a committee of which two extremely distinguished members have already spoken; that is, the South-West Atlantic group, of which my fellow committee members are my noble friends Lord Braine of Wheatley and Lord Buxton of Alsa.
I am speaking last in the debate not as a result of a cruel and overbearing Chief Whip, but because I generally choose to speak in this position for the very good reason that noble Lords who speak before me usually say precisely what I want to say so much better
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than I could possibly say it. Today's debate, which has been superb up until now, is no exception in that regard. I should like to make a few simple points. I agree and follow all the comments made so very well 'by other speakers. Indeed, it has been a most excellent and moving debate. I hope that Her Majesty's Government will bear in mind with precision what has been said.
However, I should like to stress one point. I have studied the problems for some years now. Ai we all know, the island of St. Helena is one of the interests of the committee that was formed by myself, my noble friend Lord Buxton of Alsa and, above all, by the noble Lord, Lord Shackleton, in 1981. The committee has taken an interest in the island for the whole of its existence.
It has now become absolutely clear that an airport on the island would generate revenue in several directions. It would reduce the United Kingdom subsidy which is presently essential to maintain the population. Such a development must be good for the United Kingdom and, above all, good for the Saints. It has been a delight to listen to the contributions to the debate. I thank all those who have taken part.
7.11 p.m.
Lord Harvington: My Lords, I apologise for intervening in the debate. However, I hope that noble Lords will understand why I have done so. I did not realise that the noble Lord's Unstarred Question was tabled for today, and I had very much hoped to be able to listen to the debate. However, by great good fortune I have been able to hear it. I visited St. Helena about 15 years ago. Like other noble Lords, I went there on a cruise ship. I wish that the crane about which my noble friend Lord Holderness spoke had been there then because I fell in the water as I was going ashore and got myself thoroughly wet. However, the island was so nice when I eventually got there that I forgot about the incident. I did a great deal of walking—as I could in those days—so it did not matter.
My daughter now lives in the old house where brought up my family. It is a small Cotswold estate with a number of cottages which need to be looked after. Two St. Helenian families are there taking care of it. They are magnificent people. I believe that they are a fair sample of the people who live on the island. It seems very likely that in a small community—indeed, I believe that someone said that about 6,000 people live there today—people tend to be alike. For example, if they are good at something, then they are all good at it. It is only when size comes into consideration that some people are perhaps not quite so good as others.
However, I want to say that those people are quite magnificent. They look after the estate, they help in the house and are extremely good-tempered. do not know how they manage to do all that complicated estate work, which includes the maintenance of drains, and so on, because they have not had the necessary training and experience. But they have taken to it. They are: good people. I believe that everything possible should be done for them. I am very glad that the noble Lord, Lord

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Beaumont, has raised the Question. I hope that my noble friend the Minister will be able to give him some very satisfactory answers.
7.14 p.m.
Baroness Turner of Camden: My Lords, we are all grateful to the noble Lord, Lord Beaumont, for raising the issue this evening and, in particular, for the background that he gave to the House. I must confess that I know very little about St. Helena, apart from the fact that Napoleon died there. But I suppose that everyone knows that. The reason that I am addressing the issue from this Dispatch Box is because it refers to,
"training and work in the United Kingdom",
among other issues. Regrettably, as I said, I have never been to St. Helena. However, when I realised that an Unstarred Question had been tabled about the island I looked into the matter to see what I could find out. I have learnt that the island which lies in the South Atlantic was governed by the British East India Company from 1673 and came under the direct control of the British Crown in 1834.
Your Lordships will have heard from other noble Lords with a great deal more knowledge than I have much about the history of the island. But, at general elections, the population returns by an overwhelming majority the party that advocates retaining close links with the United Kingdom. The economy depends on economic aid provided by the British Government. As we have heard, the island's main economic activities are fishing, the rearing of livestock and handicrafts. As other speakers have said, the population consists of about 6,000 people. I understand that 2,516 males are in employment but, surprisingly, only 909 females. Perhaps there is not much opportunity for female employment on the island.
It would also appear that there is unemployment on the island with a large part of the population being forced to seek employment overseas. As noble Lords have already said, there is no airstrip. Perhaps that is very unfortunate. If there was an airstrip, there would probably be greater opportunities for development and thus for employing people in St. Helena itself. I understand that some of the population seek employment in neighbouring Ascension Island. It is a dependency of St. Helena and is an important communications centre. That island has no indigenous population, but is inhabited by British and US military personnel, as US forces occupy the airfield which is used as a tracking station for guided missiles. Clearly that island does offer employment to some people from St. Helena, but whether it is sufficient, or the right kind of employment, I simply do not know. Presumably the type of work carried on there would demand a fairly high level of technological skills. Whether such facilities for training exist on St. Helena is, perhaps, a part of the debate. From what other speakers have said, it looks as though the facilities for such training are simply not there.
As I understand the situation—and this has been referred to by other speakers—the work permit scheme operating in the United Kingdom is being phased out for
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dependent territories, including St. Helena. That phasing out was announced in 1991 and takes full effect this year. I am informed that the quota was reduced to only 30 permits in 1993. I support the aim of the noble Lord, Lord Beaumont, in attempting to secure for St. Helenians access to training schemes. It is a small population and one entirely dependent on British economic support; one, moreover, where the population would appear to be very loyal to this country and very intent upon retaining the links. I believe that parties with a different viewpoint—including the Opposition party at the last general election—desire to break the link and to develop a greater degree of autonomy. However, those views were rejected repeatedly by the populace and now the parties advocating such policies appear to be virtually moribund.
It is unfortunate that the Government should have chosen to phase out the scheme for dependent territories such as St. Helena. As a result of the debate, I hope that the Government may feel that they are able to reconsider the situation. I understand that the debate is primarily about access to training and work in the United Kingdom. Nevertheless many speakers have passionately made the case for the whole issue of citizenship and the issue of passports to be considered by the British Government. In particular, I refer to the statement made by my noble friend Lord Cledwyn based on his enormous knowledge of the island and his reference to the frustration that St. Helenians feel because they believe that there has been declining interest in their fate on the part of all British Governments. As a result of the contributions made to this evening's debate by noble Lords with a great deal of expertise in the area, I hope that the Government will feel disposed to look at that issue, even though it is not part of the "training and work" as mentioned in the noble Lord's Unstarred Question.
7.20 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley): My Lords, unlike others, I have still to visit St. Helena, nor have I even seen it, but nevertheless I will take up the suggestion made by my noble friend Lord Morris to escort me —or one other Minister of the Crown—to St. Helena. I have to say that I am very tempted by the offer. I heard the noble Lord, Lord Cledwyn, say that he was away for some two months 36 years ago. Whether my noble friend the Chief Whip would allow me to be away for two months with my wife in the 1990s is another matter.
I also noted that my noble friend Lord Holderness is to visit the island in 16 days' time, and I wish him well, certainly with his arrangements for access and the celebrated crane. We would be most interested to hear the noble Lord's views on his return.
The noble Lord, Lord Beaumont, was asking particularly about training and work matters and not particularly about citizenship, access or other matters. Other noble Lords—I think perfectly properly—have ranged considerably wider and I intend, first of all, to address the particular points of the noble Lord, Lord

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Beaumont, and then, if noble Lords will allow me, to deal briefly with just some of the other points that have been raised.
In recent years citizens of St. Helena, along with those from other dependent territories, have been able to come to this country to take lower-skilled work under a concession within the work permit scheme. This quota scheme is open to all dependent territories; there is no specific quota of permits for St. Helena. In practice, each year 150 of the 200 permits available were taken by Hong Kong and the remainder almost exclusively by St. Helenians.
In 1991 a review of the longer-term position of this special dependent territories quota scheme involving relevant government departments concluded that the quota was anomalous and inconsistent with British immigration control in so far as permits were granted for jobs where the skill level was below that required under the normal work permit scheme rules. It had never been intended that the quota scheme would continue permanently. Therefore, on 24th July 1991, following consultation with all appropriate colleagues, my right honourable friend the then Secretary of State for Employment announced that this concessionary arrangement would end in 1995. In order that the dependent territories should have time to adjust it was agreed that the quota would be phased out so that the numbers available to St. Helena would be reduced from 50 to 45 in 1991, 40 in 1992, 35 in 1993 and 30 this year, the last year of operation of the quota. In recent years the quota available to St. Helena has not been fully taken up, suggesting that it is possibly of declining value to the island.
Nevertheless, Her Majesty's Government recognise that St. Helena has a special relationship with this country and in particular that it is the only dependent territory in receipt of budgetary aid. Consequently, discussions have been held between the government departments involved to consider the likely impact of the ending of the quota scheme on St. Helena with a view to lessening its impact. We realise that the loss of the quota scheme will have an effect on the economy of the island and on the opportunities available to its citizens. There will be some loss of income and it may increase the sense of isolation which St. Helenians already feel. We have therefore been looking into ways in which St. Helenians might be helped to benefit from opportunities in this country which would help individuals and the contribution they make to the economy of the island.
Officials in my department, the Department of Employment, in the Foreign and Commonwealth Office, and in the Home Office have been discussing how the training and work experience scheme operated by my department might be adapted specifically to accommodate the needs of St. Helenians. Following consultation with all concerned, Her Majesty's Government propose to introduce, on a pilot basis, a special arrangement to help St. Helenians benefit from the training and work experience scheme. This will allow St. Helenians to come to Britain to gain valuable skills by undertaking training or work experience which is not readily available to them in their own country.
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In view of the generally lower skill level of people on the island, St. Helenians will be able to qualify for permits for training or work experience at a much lower level than is normally permitted. They could, depending on the opportunities available to them, spend up to four years training towards vocational qualifications, or up to two years gaining valuable work experience while working with British businesses or other organisations. I should also emphasise that St. Helenians will continue to be eligible under the normal rules of the work permit scheme where they do have higher qualifications arid skills.
I should like just to deal briefly with some of the points made by my noble friends Lord Braine and Lord Buxton and by the noble Lord, Lord Cledwyn, relating to citizenship. The British Nationality Act 1981 established the principle that British citizenship should be confined to those with close ties with the United Kingdom, the Isle of Man and the Channel Islands. Dependent territory citizens would have their own citizenship. The extension of entitlement to British citizenship to Falkland Islanders and Gibraltarians, which was referred to by my noble friend Lord Buxton and others, has been due to very peculiar and particular circumstances and is not to be taken as establishing a precedent for citizens of the other British dependent territories.
Under the 1981 Act the majority of Falkland islanders already possessed British citizenship by virtue of descent and the British Nationality (Falkland Islands) Amendment Act, which was introduced as a consequence of the special circumstances of the 1982 conflict, extended British citizenship to BDTCs with a connection with the Falklands who did not already possess that status. Those British dependent territory citizens with a connection with Gibraltar are entitled to registration as British citizens because Gibraltar is a European territory of a European Community member state, and therefore they are United Kingdom nationals for the purpose of Community treaties. I would argue that the case of St. Helena, as compared with Gibraltar, is somewhat different. But I understand the very, very strong views that have been expressed by several noble Lords—the noble Lords, Lord Braille and Lord Cledwyn, and my noble friend Lord Buxton among others. Certainly, I shall take it on myself to pass on those very real concerns to both my noble friend Lady Chalker and my right honourable friend the Secretary of State.
May I just say a word or two generally on St. Helena and our aid? I do not think that it is the case, as I think the noble Lord, Lord Cledwyn, put it, when talking about the situation some 30 years ago, that we could say that they are forgotten by our aid, or by the United Kingdom Government. Our aid programme is running at a level of about £9 million a year. That consists of aid for development projects, budgetary aid" training and manpower assistance and an annual subsidy for the shipping service. I am certainly grateful for the kind remarks of my noble friend Lord Holderness on that particular point.
Within its development programme the St Helena Government have been giving priority to strengthening

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productive capacity, in particular in agriculture, fisheries, forestry and the initial activities leading to the creation of the St. Helena Development Agency. But, certainly, I hope that the points made by my noble friend Lord Holderness about any development programme being designed to encourage people to stay there rather than to acquire skills elsewhere and then leave and stay away will be taken on board by those concerned. But I would hope that that figure of £9 million a year will be some indication of the measure of our commitment. St. Helena, as I said earlier, is unique among our dependent territories in still receiving budgetary aid support to cover the gap between domestic revenue and recurrent expenditure.
Turning to the question of an island shipping service, or shuttle, raised by my noble friend Lord Braine, I have to say that despite considerable efforts over the past four years, including the extensive use of specialist consultants, we have been unable to identify a vessel for the proposed shuttle service that meets the technical requirements at an economic cost. Suitable vessels not requiring disproportionately expensive conversion or operating charges are in very short supply; but I do have to say that our efforts are continuing and we are still in discussion with the St. Helena Government on the way forward.
Perhaps I may say just a word or two about the air service raised by several noble Lords, or the idea of an airport. We are aware of the interest that has been expressed by a private company in the development of an air field and a regular air service. Obviously such a project would carry considerable financial risk. The capital and recurrent costs which the British taxpayer would be expected to fund through the aid programme could be very high indeed. So far my understanding is that only one proposal for the development of an air
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field on St. Helena has been made to the Government; neither we nor the St. Helena Government have any knowledge of the existence of several competing, well researched schemes, as has been argued.
Any proposal for the development of an airfield on St. Helena would have to come from the Government of St. Helena and have its clear support. I also understand that there is currently a division of opinion among some islanders as to whether there should be an airfield. While some see such an airfield as being of benefit others see it as leading to a permanent change in the island's character and existing way of life.
I understand that later this year the St. Helena Government proposes to canvass opinion on the island on this particular matter. If the St. Helena Government were to make an official proposal about an air service we would certainly consider it on its merits, but that would need to involve very close scrutiny of both the technical and financial aspects of the case.
Perhaps I may return to the specific question which the noble Lord, Lord Beaumont, raised and which I believe has generated a very useful and frank debate. We recognise the unique relationship that St. Helena has with this country. Our purpose is to replace the quota scheme, which by and large simply provided for the employment of domestic staff, with something which has the potential to offer more in providing opportunities for citizens of St. Helena to develop themselves. I hope that the special arrangement that I have outlined today, and which I am pleased to say has been welcomed by the St. Helena Government, will be of general benefit to the economy of the island as a whole and will help it in due course achieve greater self sufficiency.
House adjourned at half past seven o'clock.