HL Deb 19 May 1994 vol 555 cc355-64

3.37 p.m.

Baroness Trumpington

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Social Security (Incapacity for Work) Bill, has consented to place her prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Bill read a third time.

Clause 2 [Incapacity benefit: rate]:

Lord Swinfen moved Amendment No. 1:

Page 3, line 8, after ("ill",) insert ("or, if he is in receipt of the higher rate of the care component of disability living allowance").

The noble Lord said: My Lords, the purpose of this amendment is to restore benefit entitlement to the long-term rate at 196 days for people receiving the disability living allowance higher rate care component who will not be required to pass the functional element of the all-work test to be eligible for long-term incapacity benefit. A similar, although rather wider, amendment was moved during the Committee stage on 19th April. This time, in the light of the Minister's comments during that debate, the focus has been narrowed to concentrate exclusively on the people with the most severe disabilities who will be exempt from the test.

The Government intend to fast track through the assessment process claimants who are terminally ill or receiving the disability living allowance (DLA) higher rate care component and those whose conditions are featured on the list the Secretary of State read to the House of Commons during its Second Reading debate. People receiving the higher rate care component of DLA are likely to be the most severely disabled of all incapacity benefit applicants and they are, by definition, going to be the most seriously disadvantaged financially. There is ample evidence that the daily costs of living as a disabled person increase with the severity of disability. This is not to suggest that incapacity benefit should be viewed as a benefit to help meet the extra costs of disability. It is, of course, an income maintenance benefit. But the reality is that it can be put under great strain to help meet some of the unavoidable costs of disability because other resources are not available.

Short changed by disability, which was researched and written by the Disablement Income Group in 1990 in response to the Government's own survey of disabled people conducted by the OPCS, revealed that the most severely disabled people in the sample interviewed were spending £87 a week on the extra costs of disability, excluding personal care costs. That exceeded by more than £27 a week the then higher rate of attendance allowance and mobility allowance combined. DIG observed that severely disabled people were using their income maintenance benefit in order to meet their particular needs as disabled people. With incapacity benefit they will be even further adrift during the first year of incapacity because they will have to wait the full 364 days before moving on to the long-term rate of incapacity benefit.

Since the Government have already decided on special treatment for the group of claimants covered by this amendment in the context of assessment with the explicit assumption that such people will not be expected to work again, it is logical to allow them to progress swiftly to the long-term rate, otherwise the consequence for this vulnerable group may well be that severe financial hardship will threaten their early efforts to come to terms with life as disabled people.

The Government conceded that terminally ill people should be able to move on to the long-term rate of incapacity benefit at 196 days. People with a terminal illness had featured in an amendment on this subject both in this House and in another place, so the concession was most welcome. The amendment debated in Committee also included provision for fast-tracking people on the prescribed list. My noble friend the Minister said on that occasion that he was not convinced by the arguments. He said that there would be many people just as severely disabled as someone in the exempt category but not automatically exempt from the test. He said that they might be more severely disabled than someone in the exempt group and that it was difficult to see why they should receive a lower rate of benefit than someone who was exempt from the test.

If my noble friend is arguing on the grounds of equity between people on the prescribed list of conditions and those who are not, there may be some merit in what he says. That is why the present amendment focuses exclusively on people receiving the higher rate care component of disability living allowance.

People on the higher rate cannot really be compared with anyone outside this specific group. Therefore, there is no resulting disadvantage to anyone else. It is the consequence of the disability that is the crucial factor, not the cause. These people are the most severely disabled of all likely claimants. They need personal care during the day and the night. They would have no problem with the test of incapacity even if they were to undergo it.

The justification for the amendment is that delaying the long-term rate for a year for such severely disabled people will cause financial difficulty. The cost of the amendment to the Government is unlikely to be high. Based on the Minister's reply to similar amendments in Standing Committee E in another place on 8th February, I understand that the costs are unlikely to exceed £5 million. Perhaps my noble friend will tell the House what the exact cost will be and how much less than £5 million. That is well within the area of error in calculating the large sum involved in this Bill.

Oh the other hand, the benefits of the amendment in human terms to the individual claimants and their families would be immense, far outweighing the small amounts of public money involved. I beg to move.

3.45 p.m.

Baroness Darcy (de Knayth)

My Lords, I support the amendment most warmly. The noble Lord, Lord Swinfen, put a strong argument and expressed it very clearly. He said that the amendment applies only to the most severely disabled people. Those are the individuals who would be most seriously disadvantaged. The noble Lord mentioned the Disablement Income Group survey of 1990 which pointed out that this group of people were using their income maintenance benefit to meet their extra daily living costs. Therefore, they will be further disadvantaged if, during the first year, they are on the lower rate of incapacity benefit.

As the noble Lord said, the Government have already decided that special treatment should be given to this group in the context of assessment with the explicit assumption that such people will not be expected to work again. I should like to quote from a letter which the noble Baroness, Lady Cumberlege, wrote to me on 6th May following up an amendment I moved in Committee in relation to exempting further categories of people from the medical tests. In the letter the Minister makes it crystal clear that the Government view the group of people referred to in the amendment as a distinct group. The Minister said: 'A person in receipt of this element of benefit is so severely disabled that they require help from another person 24 hours a day. Such a person is bound to pass the incapacity test, irrespective of the cause of disability". If someone is in receipt of the higher rate of the care component of DLA and is, in the eyes of the Government, bound to pass the incapacity test, is it not logical and right that they should not have to wait a full year before moving on to the higher rate of incapacity benefit? The government amendment to pay the higher rate from six months to people with a terminal illness is extremely welcome. I hope very much that the Minister will agree to do the same for those who are, in the words of the noble Baroness, Lady Cumberlege—who I see is in her place—bound to pass the incapacity test.

Accepting the amendment would achieve that. It would greatly ease the financial strain on people with the most severe disabilities and far outweighs the cost involved.

Baroness Hollis of Heigham

My Lords, we on these Benches very much support this all-party amendment. People who are so severely disabled that they receive the higher rate of disability living allowance will not, under the Bill, have to take the tough new medical test at 28 weeks. Such is the extent of their disability that they are rightly and automatically regarded as being incapable of any work, for the foreseeable future. That is sensible. Therefore, whereas the less severely disabled have their capacity to work tested at 28 weeks and thereafter regularly reviewed, those on the highest rate of disability living allowance are exempt from such tests. What we are trying to achieve with the amendment, should your Lordships accept it, is to provide that at the point when it is recognised that people are so severely disabled that they need not take any further medical test they should receive the full higher rate of benefit.

We are talking, for example, about the person involved in a hideous car accident which may have left him tetraplegic with a spinal injury such that he may have no movement below the neck and is unable to move his arms or legs. Such a man clearly needs continuous attention, day and night. He may need to be turned during the night, for example. Therefore, he rightly qualifies for the highest rate of disability living allowance. He is therefore rightly excused any medical test of eligibility for the new incapacity benefit.

At present, after six months such a person would immediately go on to the full rate of benefit. Unless your Lordships are minded to accept the amendment, in future such a tetraplegic would not go on to the fullest rate of benefit at six months but would have to wait another six months—12 months in all. The amendment would allow him to move directly on to the highest rate at six months.

No one doubts that person's medical situation. As the noble Lord, Lord Swinfen, and the noble Baroness, Lady Darcy (de Knayth), said, few can doubt his financial situation. Only a third of men in this country who are disabled have occupational pensions, whereas two-thirds of non-disabled people have such pensions. Half the number of disabled people have savings of less than £1,000, yet the increase in daily living costs are huge if such people are to remain out of nursing care and in the community, as they and we wish them to be if that is their choice. That has been recognised by paying them the highest rate of DLA. I hope that, if your Lordships agree, we can also ensure that the basic incapacity benefit follows likewise.

The costs are not high. As I understand it—perhaps the Minister will confirm it—they will be about £5 million. The Government expect to make savings of £1.5 billion on the Bill. If my calculations are right, £5 million would represent less than one-third of 1 percent. of savings. It is margin of error stuff to the Treasury; it is very real and significant to the families.

If noble Lords were to accept the amendment today, it would mean that those who were so severely disabled that they are on the highest rate of DLA, and therefore do not need a medical test, would immediately move on to the full rate of benefit. But if your Lordships were to reject it, we should be saying that those who are so severely disabled, such as tetraplegics, that they need no further medical test nonetheless have to wait a full year to receive full benefit.

We believe that your Lordships want such people to receive their benefit at six months rather than 12 months. That is the thrust of the amendment. I very much hope that your Lordships will support it.

Earl Russell

My Lords, the noble Baroness, Lady Darcy (de Knayth), hit the nail on the head when she pointed out that these are people most of whom cannot be expected ever to work again. If there is any logic —and I say "if—in the Government's position of delaying the long-term rate of benefit, it must be on the assumption that for the first few months the benefit is to be treated like sickness pay, which is temporary, rather than a disability benefit, which is permanent. I cannot think what other logic there can be in the Government's insistence on a lower rate for the first six months.

However, that principle, which is the only possible intelligent principle that could underlie the Government's position, is completely inapplicable to this group of people. I cannot see what possible logical justification there can be for paying them a lower rate of benefit, especially during the early period of disability which is when all the expenses of getting used to a new way of life —with need for new equipment, new facilities, or for new guiderails—are at their highest. At the time of the highest expense, the benefit is lowest. It does not make sense.

Lord Zouche of Haryngworth

My Lords, I, too, support my noble friend's amendment. We have heard from various speakers that the cost will probably not be in excess of £5 million. No doubt the Minister will verify that figure. I believe that there is an argument that the money will be well spent. We know how difficult it is for the family when the breadwinner unexpectedly becomes severely disabled. The stress is enormous. We heard during Report stage of families breaking up under the strain. That can lead to demands of the state elsewhere. Let us not impose further financial strains if we can possibly avoid it. I urge the Government to accept this modest amendment.

Lord Thurlow

My Lords, I, too, support the amendment. I do so as one who did not support the amendment of the noble Lord, Lord Swinfen, when we discussed it in Committee. On that occasion I shared the doubts of those who have been worried by the enormous escalation of expenditure under this provision and the doubt about whether, in marginal cases, there is an extensive range of what amounts to abuse.

As has been pointed out today in regard to the cases covered by the amendment, there is no question of misunderstanding or of abuse in marginal cases. We are dealing with a situation that is absolutely clear. In Committee we discussed the general case and it seemed to many of us that there were no means of dealing with the contingent problem of abuse in marginal cases without damaging the interests of those whom one would be very sorry to damage. The amendment meets that problem. It makes the necessary exceptions. I very much hope that the Minister will consider it.

Lord Milverton

My Lords, I hope that Her Majesty's Government will feel able to accept the amendment. It provides for specific exceptions. Therefore, it would be rather nice if the Government felt that it would not break them to accept it. If there is to be the saving that has been referred to, and if this provision were to cost only £5 million, it should be feasible for the amendment to be accepted.

Lord Butterfield

My Lords, I support the amendment. The worst time for the very severely disabled is the first few months after they suddenly find how dreadfully disabled they are. I hope the Government will feel that they can give the disabled a start towards obtaining extra equipment to get them rehabilitated as soon as possible.

Viscount Astor

My Lords, as my noble friend Lord Swinfen explained, the amendment would bring forward the highest rate of long-term incapacity benefit for people who receive the highest care component of disability living allowance to the 29th week of incapacity for work. I can confirm to my noble friend that the cost of the amendment would be £5 million or less; but I do not know the exact cost.

During the previous stages of the Bill I explained why the Government believe that 52 weeks is a more reasonable measure of long-term incapacity—indeed, your Lordships accepted those arguments—and the point at which the highest rate of benefit should be paid. I recognise that by seeking to bring forward the long-term benefit in some cases my noble friend is trying to safeguard the position of the most severely disabled claimants. We have listened to the arguments both in this House and in another place very carefully and sympathetically. We have moved a long way towards addressing your Lordships' concerns by bringing forward the highest rate for claimants who are terminally ill. However, we do not think it would be right to go further than that.

The noble Baroness, Lady Darcy (de Knayth), suggested that payment of the higher care rate of DLA was an indication of severe disablement. I agree with the noble Baroness on that point. However, it cannot in all cases be seen as a direct measure of the severity of disability. Not all claimants who are severely disabled receive the highest care component. Some may be equally disabled but receive the middle rate care component because they require a lower level of care. For example, many people with learning difficulties require continuing supervision throughout the day but sleep perfectly well at night. For others, sleep is disturbed giving rise to day and night needs. Therefore, it would be inequitable to award the claims mentioned in the amendment at the higher rate of benefit while denying it to other equally disabled claimants.

The terminally ill are a special case. Because of the nature of their illness, a 52-week limit is not fair. Having paid national insurance contributions, they would never have the opportunity to benefit from the higher rate. It is only fair that this group should benefit. However, those in receipt of DLA would get the higher rate of benefit after 52 weeks.

The highest rate of DLA encompasses a wide range of disabilities since eligibility for the benefit is based on needs and not on any particular disability. This wide range extends from tetraplegics to much less severe disabilities such as the effects of diabetes which require the same frequency of care or supervision.

I do not agree with the noble Earl, Lord Russell, that logic suggests that short-term rates of benefit should be higher than the long-term rate. With the short-term rate, most claimants have other resources to draw on.

Earl Russell

My Lords, will the noble Viscount indicate to me when I said that short-term rates should be higher than long-term rates?

Viscount Astor

My Lords, what the noble Earl said was that long-term rates should be paid instead of short-term rates. I am sorry if I did not put it as clearly as perhaps I ought. As I have explained, for those who do not have resources it is important that they can claim on income support, which is available.

My noble friend has argued that people who receive the highest rate of the care component of DLA have extra needs associated with their disability and should therefore receive the highest rate of that benefit. I do not dispute that disability can incur specific costs, but I have two slight difficulties with my noble friend's argument. First, incapacity benefit, like sickness benefit and IVB, is not designed to meet extra costs associated with disability. It is designed instead to provide a basic -income to those who cannot work. DLA is the benefit designed to help with extra costs. It is not taxed or means tested and it can be worth up to £45.70 a week.

Secondly, and perhaps more important, payment at the highest rate of the care component of DLA cannot in all cases be seen as a direct measure of the severity of disability. Not all claimants who are severely disabled receive the highest care component. Some may be equally disabled but receive the middle rate care component because they require a lower level of care. For example, many people with learning difficulties require continual supervision throughout the day but sleep perfectly well at night. With others, sleep is disturbed, giving rise to day and night needs.

We have identified receipt of the highest rate of the care component solely for the purposes of exempting as many severely disabled people as possible from the medical test. Nevertheless, I am sure that your Lordships will recognise that there will always be some severely disabled people who will be subject to the medical test because they do not fall into an exempt group. For those claimants, we can be certain that, like those who are exempt from the test, they will continue to be treated as incapable of work. But if your Lordships accept the amendments, some severely disabled claimants would receive a higher rate of benefit early but at the same time other equally disabled claimants would continue to wait 52 weeks before they received the highest rate.

We have looked carefully at this and we do not think that the amendment could be reasonably justified. I therefore urge my noble friend to withdraw the amendment.

Earl Russell

My Lords, before the noble Viscount sits down, could he explain to the House the priorities behind causing so much hardship for a saving as small as £5 million?

Viscount Astor

My Lords, I do not think that that is a valid argument. I have explained quite clearly how the amendment would affect different groups. It would make it unfair for some people. We should not argue about the cost of the amendment. We should argue about its validity.

Lord Swinfen

My Lords, I wish to thank all those who supported me on the amendment. The figure of £5 million or less, which my noble friend confirmed, is well within the margin of error on the total cost or total savings that the Bill is intended to create. When those in the Treasury use their individual digits to calculate the sums that they need to, this amount uses only a few fingers, not even four fingers and a thumb. The amount is infinitesimal. The suggestion that those who need to can claim on income support rather than using this allowance is, I believe, quite unjustified because it merely means paying out of one pocket rather than another. My noble friend's argument has not convinced me in any way at all. I believe that if I were not to press the amendment I should be morally failing disabled people. I therefore commend the amendment to your Lordships.

4.5 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 132; Not-Contents, 117.

Division No. 1
Ackner, L. David, B.
Airedale, L. Dean of Beswick, L.
Annan, L. Dean of Thornton-le-Fylde, B.
Archer of Sandwell, L. Desai, L.
Ashley of Stoke, L. Donaldson of Kingsbridge, L.
Atholl, D. Donoughue, L.
Attlee, E. Dormand of Easington, L.
Beaumont of Whitley, L. Ellenborough, L.
Beloff, L. Ennals, L.
Blackstone, B. Ewing of Kirkford, L.
Bonham-Catter, L. Ezra,L.
Borthwick, L. Falkland, V.
Boston of Faversham, L. Foot, L.
Bottomley, L. Gallacher, L.
Brightman, L. Geraint, L.
Brookes, L. Gladwyn, L.
Bruce of Donington, L. Gould of Potternewton, B.
Butterfleld, L. Graham of Edmonton, L.
Callaghan of Cardiff, L. Grantchester, L.
Campbell of Eskan, L. Greene of Harrow Weald, L.
Carmichael of Kelvingrove, L. Halsbury, E.
Carter, L. Hanworth, V.
Charteris of Amisfield, L. Harris of Greenwich, L.
Cledwyn of Penrhos, L. Haskel, L.
Clinton-Davis, L. Hayter, L.
Craigavon, V. Hilton of Eggardon, B.
Croham, L. Holderness, L.
Darcy (de Knayth), B. [Teller] Hollick, L.
Hollis of Heigham, B. Rea, L.
Holme of Cheltenham, L. Richard, L.
Hughes, L. Richardson, L.
Hylton, L. Rix, L.
Hylton-Foster, B. Robson of Kiddington, B.
Ilchester, E. Rochester, L.
Jay of Paddington, B. Rodgers of Quarry Bank, L.
Jay, L. Russell, E.
Jeger, B. Sainsbury, L.
Jenkins of Hillhead, L. Saltoun of Abemethy, Ly.
Jenkins of Putney, L. Seear, B.
Judd, L. Sefton of Garston, L.
Kagan, L. Serota, B.
Kilbracken, L. Shannon, E.
Lawrence, L. Shaughnessy, L.
Llewelyn-Davies of Hastoe, B. Stallard, L.
Longford, E. Stedman, B.
Lovell-Davis, L. Stoddart of Swindon, L.
Lytton, E. Strabolgi, L.
Mackie of Benshie, L. Strathcarron, L.
Mallalieu, B. Swinfen, L. [Teller.]
Masham of Ilton, B. Taylor of Blackburn, L.
McCarthy, L. Tebbit, L.
McIntosh of Haringey, L. Thomson of Monifieth, L.
Milner of Leeds, L. Thurlow, L.
Milverton, L. Tonypandy, V.
Molloy, L. Tordoff, L.
Monkswell, L. Turner of Camden, B.
Monteagle of Brandon, L. Varley, L.
Mulley, L. Wallace of Coslany, L.
Murray of Epping Forest, L. Wharton, B.
Nathan, L. White, B.
Nelson, E. Wigoder, L.
Nicol, B. Wilberforce, L.
Oppenheim-Barnes, B. Williams of Crosby, B.
Oxford, Bp. Williams of Elvel, L.
Pearson of Rannoch, L. Wise, L.
Peston, L. Zouche of Haryngworth, L.

Resolved in the affirmative, and amendment agreed to accordingly.