Social Security and Women's Role

HL Deb 13 November 1998 vol 594 cc951-72

2.22 p.m.

Baroness Crawley rose to ask Her Majesty's Government what are the implications for social security of the changing role of women in society.

The noble Baroness said: My Lords, while I feel inadequate to say this as a new Member of this House, I should like to welcome the noble Baroness, Lady Amos, to her first debate at the Dispatch Box.

The Labour Government have been celebrating 50 years of the welfare state—celebrating the past, but looking to the future. In the past few weeks we have listened to the noble Baroness, Lady Hollis of Heigham, setting out the next phase of the Government's plans to reform the welfare state, based, as she has said, On that central objective to provide work for those who can and security for those who cannot". We have seen the launch of the consultation paper, Supporting Families. It is the first time that any government have published such a paper on the family. Only the other day, the Leader of the House, the noble Baroness, Lady Jay, as Minister for Women launched the document, Delivering for Women, with its clear emphasis on women's income and employment and on family friendly employment policies.

These are heady days, when the rather creaking structures of 50 years of the welfare state are meeting the commitment of a Government determined to ensure that modern welfare provision responds to modern women's lives and is not based on the assumptions of the lives that women lived in the 1930s and 1940s. We have to get the massive job of welfare reform right—and "right" means in the interests first and foremost of the recipients of welfare provision.

In very many ways, women's lives have changed out of all recognition in the past 50 years. It is to bring oneself up with a jolt to re-visit the famous Beveridge Report, as I did the other afternoon in the Lords' Library, and see how women were viewed in terms of social security provision half a century ago. Beveridge, when discussing the special insurance status of married women, writes: Most married women have worked at some gainful occupation before marriage. Most who have done so, give up that occupation on marriage or soon after". He goes on to record: On marriage a woman gains a legal right to maintenance by her husband as a first line of defence against risks which fall directly on the solitary woman; she undertakes at the same time to perform vital unpaid service … At the last census in 1931, more than 7 out of 8 of all housewives made marriage their sole occupation. It is undeniable that the needs of housewives in general are less than those of single women when unemployed or disabled, because their house is provided either by their husband's earnings or by his benefit". Finally, before leaving Beveridge, a ringing call to arms to the women of 1940s Britain. He states on page 53 of the report: In the next thirty years, housewives as mothers have vital work to do in ensuring the adequate continuance of the British race and of British ideals in the world". Just a small task to do, no doubt, before getting the tea on the table!

So, today, 50 years on, how is welfare responding to the needs and aspirations of women—young, old, from the ethnic minorities, disabled, middle-aged? The changing role of women in society is evident in the huge rise in women in employment. In Britain, most of the new jobs in the past 10 years and the next 10 years will be taken by women. Women now account for more than 40 per cent. of the European Union's labour force.

In this country, women's activity rates generally increased from the early 1970s to reach 72 per cent. by spring 1997, while men's working activity rates in the labour market slowed and decreased in the 1980s and 1990s to 85 per cent. in 1997. By the year 2000, it is estimated that in Sweden, for example, the percentage of active working women will overtake that of men in the 24-to-54 years age group.

But before noble Lords throw their hats in the air—if we had hats—and shout, "Hooray for women's progress towards economic independence", or ask, "Why are we debating this if women are doing so well in the labour market?", let us come back to bumpy reality. Yes, many more women are active in the labour market, but, no, the gender pay gap has not been resolved. Among full-time employees, women's hourly earnings are still only 80 per cent. of those of men. In each occupational group, earnings are lower for women than for men. Women tend on average to earn 73 per cent. of men's weekly average earnings. And age is a factor in the pay gap, because for those who are at the start of their working lives the differential between men's and women's hourly earnings is a small one but this gap widens markedly at older ages. For example, men aged between 50 and 59 years in full-time non-manual occupations earn on average almost £5.30 an hour more than women in the same category.

So for many women, while work outside the home is a major and growing factor in their lives, the low pay, part-time intermittent nature of their work still means that pension prospects are far from rosy. While the introduction of a national minimum wage will take at least 1½ million women out of poverty wages and is to be commended, I ask my noble friend Lady Amos to say what can be achieved through the social security system to tackle the real problem of low paid women being less likely to qualify for contributory benefits.

I also ask the noble Baroness who is to respond to the debate what principles of the Government's welfare reform can be drawn upon to ensure that there will no be generations of older women living in poverty in the 21st century. We know that actuarily and statistically women are more likely than men to face a longer, poorer old age. Affordable and good quality childcare becomes pivotal to women's access to employment. Working mothers still bear the primary responsibility for the care of their children.

The Government's emphasis on family-friendly employment policies is to be welcomed, and I hope that it will result in men as fathers being able to share with their, partners the demands of work and home, a task in which I am sure many men are eager to see equity. However, it is still essential that childcare is made the centrepiece of any modern social security system and responds to the needs of women as mothers and carers.

By 1996 as many as 67 per cent. of women returned to work after having children. That is why the new working families tax credit, with childcare tax credit within it, will offer those in work far greater help with the costs of childcare. As someone who in another place fought for 15 years for British women's access to better childcare facilities, I am proud that my Government are putting childcare at the centre of their policies and second Budget. There needs to be closer monitoring of the progress of working families tax credit, in particular the way in which one-earner couples will be able to choose how to receive payment; namely, via the pay packet or in the form of cash directly to the caring parent. We must ensure that there is no untoward fiscal transfer from purse to wallet.

Another development in the way we live now as opposed to the time when Sir William Beveridge wrote his report is the significant increase in divorce. Nine out of 10 lone parents are women. In 1996 lone parents headed about 21 per cent. of all families with dependent children in Britain—nearly three times as many as in 1971. Britain has the highest number of lone parents in the European Union. The Government's New Deal for lone parents is a welcome breakthrough in the recurring dependency cycles in which lone parents have found themselves. For those women who wish to work a path of advice, training and help to find a job is being custom-built through the New Deal for lone parents.

Given the present high levels of divorce in Britain today, the draft legislation that is being prepared by the Government on pension-sharing is to be welcomed. It will give many divorcing women the right to obtain a share of the pension rights that have accrued to their husbands. We live in a society where demographic change means that an increasing proportion of the population is over 60 years of age. As we get older we become dependent on carers, the majority of whom are women. I ask the Government to share with us their thoughts on what can be done to assist women carers who do valuable unwaged work to ensure that they do not find themselves badly penalised financially in the process.

As the noble Baroness, Lady Amos, will know—we worked together in many of these areas—I spent five years chairing the European Parliament's Women's Right's Committee during the time when the former government attempted to block many proposals such as the maternity leave directive, the childcare recommendation and the parental leave directive. Is it not regrettable that that has happened? How will the Government use their new, positive relationship with Europe to assist British women's changing needs.

Finally, 50 years on from Beveridge many women in Britain are more confident, more educated, more economically independent than ever before. At the same time many women in Britain still suffer from low pay, loneliness in their child-rearing, low self-esteem as teenagers and a beckoning old-age of poverty. A new, reformed welfare state has a job to do for the next 50 years.

2.35 p.m.

Baroness Ludford

My Lords, I warmly welcome the debate. We have great expertise on social security in this House, not least from the noble Baroness, Lady Crawley, and the noble Baroness, Lady Hollis, who is not present. I refer also to the noble Lord, Lord Higgins, and my noble friend Lord Russell. They are recognised as foremost experts in social security. The noble Baroness, Lady Amos, may not be an expert on social security, but I am sure she knows a great deal on the subject from her former work with the Equal Opportunities Commission. I do not have such knowledge, but that does not stop me from venturing into the debate. I learnt quite a lot from working with colleagues, including the noble Lord, Lord Higgins, on the Social Security Bill, especially from the successful attempt to delete the backdating clause.

The changing role of women is already here. Unfortunately, the system has not caught up. But assumptions still run through our social security system which are a century old. To bring those assumptions up to date is long overdue. However, this Government's approach is not up to date. That is in part because there is a mistaken back-to-basics patriarchal echo in government policy and in part because poverty is not high enough on the agenda.

I turn to recent initiatives. The childcare element of the working families tax credit is a welcome initiative, and a good aspect of government policy. Another aspect is minimum pay. I wish that the figure could be varied regionally. I say that not least as a Londoner; London costs are higher. None the less, I have long supported the move for minimum pay. However, as the noble Baroness, Lady Crawley, pointed out, the Government have not addressed the problem of the purse-to-wallet transfer as regards the working families tax credit. The Government's concept is that the working families tax credit is a work incentive to be paid through the pay packet.

I regret that Ministers for women define themselves as not being feminist. To my mind being feminist is not about hating men but about promoting equality in power relations and in allowing choice. An understanding of the dynamics of power in relationships might have led the Government to a different conclusion.

Recent research by the Policy Studies Institute demonstrates that women are more likely to spend income they receive on the family directly while men use some of their income as personal spending money. The same research shows that men as well as women are opposed to having a credit to top up income paid through the pay packet but would prefer it to be paid directly to the person who has the most direct responsibility for caring.

I am concerned about the loss of independence. I hear reassurances that there is not loss of independence for women through the tax credit proposal, but I have not understood why. The justification given for the amalgamation of income and the working families tax credit is that it comes from the benefits rather than the tax stable. I fear that that incorporates a rather deplorable assumption that for poor women who are coming out of the benefits stable it is all right to amalgamate income and lose privacy, which middle-class professional women would not tolerate because of the loss of independence in the tax system. I do not like what that assumption seems to imply.

Another problem which the Government have got themselves into is the emphasis on work as the only way in which people can acquire dignity. The single gateway, which makes an interview a pre-condition to benefit entitlement with limited exceptions, does not answer the question of what happens if a parent fails to attend an interview. Will single parents lose their entitlement to benefit if they decline to attend an interview? The problem about that seems to be that it undermines the legitimate choice of a parent, often but not invariably the woman, to stay at home and care for young children. I have always understood feminism to incorporate choice.

The abolition of the lone parent premium struck at the position of the usually female non-working lone parent. It seems curious that when the Government are launching their policies to support the family, to which the noble Baroness, Lady Crawley, referred, they are attacking the parents who wish to promote family values by not allowing their children to become latch-key kids.

Benefit cuts, which are in the air, are in my opinion a direct assault on the most vulnerable people in our society, usually women. Thinking again of the lone parent premium and its abolition and knowing, as we do, that nine out of 10 lone parents are women, I see no reason to revise the judgment that I made at the time of the Social Security Bill that the well-paid and sleek red braces at the Treasury or at the No. 10 policy unit are putting through the most severe single attack on women's standard of living that I can recall. Over 0.25 million parents—95 per cent. women—were affected by the cuts in the lone parent premium and over half the population of lone parents live in poverty. It would cost only £22 million, a very small amount compared with the total social security budget, over the next three years to exempt lone parents with children under five from the cuts in child benefit for lone parents. It would still cost only £225 million over the same period to restore the situation as regards the other lone parent benefits. I ask the Government to think again about that.

We are concerned also about the hints of cuts in disability benefits which are bound to affect women disproportionately. Plans to restrict the severe disablement allowance to those whose disability occurred before they were 20 will affect women disproportionately as they form two-thirds of SDA claimants. Also, if incapacity benefit is to be available only to those who have paid at least one year's contributions in the past two years, those without a contribution record will be at a disadvantage. Our understanding is that there will be no contribution credits.

The issue of child support has been addressed recently. We, the Liberal Democrats, would apply a maintenance disregard to ensure that a minimum level of the maintenance paid went to the child and was not deducted automatically from social security payments. Thus, it would be the child, not the Treasury, who benefited from the proper enforcement of the responsibility of the parent, usually the father. Surely that is a proper reflection of family values rather than the Treasury pocketing the money.

The noble Baroness, Lady Crawley, referred to the national insurance system and the way in which so many women, because of the contributory principle and the failure to accommodate flexible working patterns, fall outside the social protection of the national insurance system. Many low-paid employees—and most of those are women—are being denied a range of social security benefits: 2.5 million women as well as 600,000 men have weekly earnings below £64 so that they cannot claim contributory benefits or pensions. In addition, many women have fluctuating earnings during the tax year so that they may pay a number of contributions but not enough to qualify for benefit or pension entitlement. Those contributions are not even returnable. In effect therefore those low income women are subsidising the rest of the workforce, including highly paid men whose contributions are capped. Can that be fair?

Could not the Government consider the EOC proposal for a cumulative system, as for income tax, or allowing partial contributions to be carried forward for future years? Surely the Government have a duty to address fundamental questions on national insurance if there is to be increased flexibility in the workplace as the Government want, whether it is job mobility or more temporary and part-time employment.

Pensioner poverty was referred to. The Government are still not addressing that issue squarely. The problem of the missing million income support claimants—70 per cent. of whom are women who do not claim the benefits to which they are entitled—is a real one. As the Minister will be aware, the Liberal Democrats believe it should be addressed by increasing the age addition by £3 a week for the over 75s and £5 per week for the over 80s. That would go a considerable way to addressing the problem of pensioner poverty. We cannot comfort ourselves by saying it is a limited problem of current pensioners; it is also a problem we are storing up for the future.

I should like to say a word about carers. Sixty per cent. of carers are women and only a tiny proportion—0.5 per cent.—of the social security budget is spent on carers. Many do not qualify for ICA, but of those who do three out of four are women. Our proposals to abolish the contributory requirement for the basic state pension would benefit carers in particular.

In conclusion, we on this side support some of the work with which the Government are coming forward, like the child care tax credit. But we believe that the fundamental problem has not been addressed; that is, that the Government are not addressing poverty as a top priority and they have a rather odd view of women's place in society.

2.46 p.m.

Baroness Turner of Camden

My Lords, I welcome the opportunity to participate in this debate on social security and the changing role of women. I too welcome my noble friend Lady Amos to her first debate.

The Government are right to re-examine the welfare state and to attempt to reform social security. There have been vast changes in the 50 years since Beveridge and they have been dealt with already to some degree by my noble friend Lady Crawley. Fifty years ago few women who married continued to work outside the home and divorces were far fewer. To have a child outside wedlock was widely regarded as a calamity and those who did were often treated with callous cruelty.

Public perceptions have changed enormously, largely due to the work of previous generations of women and the introduction of equality legislation over 20 years ago. The Equal Opportunities Commission, of which I was once a member, has done a good job in ensuring that women have been able to enforce the rights given to them by legislation. The Government are right when they say that the social security system has not kept pace with those changes. It is believed that welfare help is not reaching those most in need of it. There are overlapping benefits. People, particularly the elderly, are not always aware of what may be claimed, and there is confusion as to what is available.

Against that background, much of what the Government are proposing seems very much in the right direction. The intention is to put children at the heart of social security provision, so child benefit is to be increased. I am sure we all welcome that. Affordable and good quality child care has been promised. The working families tax credit will benefit working families. Those who can work will be assisted to find it and, through the Single Gateway, the intention is to help people through a first interview when benefits are claimed.

We have been presented with three papers for discussion, including one on rights for the disabled. Those are to include a disability rights commission, which many of us sought at the time of the introduction of the last legislation on disability, but failed to get. With the minimum income guarantee, they are all moves in the right direction. Why, then, do I have doubts about some aspects of the package, doubts which I advance rather tentatively because, in general, I support what the Government are doing?

My concerns centre mostly around the welfare-to-work concept. I am glad that it has been stated that the decision by a lone mother, for example, to take a job will be a voluntary one. Nevertheless, it is clear from the emphasis in the documentation that working is to be a preferred option. So pressure may build up for women with young children to "volunteer" for work. That may be fine for skilled, professional women with good jobs to go to, but it is less of a real option for poorer women, who are in the vast majority.

After 20 years of equality legislation, women's weekly earnings, as we have heard, are still around 72 per cent. of men's—that is according to the latest EOC figures. This is because we still have the phenomenon of women's employment; namely, low status, low paid, although not always low skilled. Even with the minimum wage, which I welcome, it is still likely to be low paid. I question whether a woman—a lone parent—with a child or children is best employed stacking shelves in the local supermarket and having someone paid to look after her children when she may well be better off only to the extent of a few pounds a week. She has the inevitable expense of actually going to work. I have in mind fares, food, clothing and so on. Moreover, perhaps she worries about her children being in someone else's care. In the meantime, of course, she also has to shop and keep house for her small family.

I understand that in a recent pilot scheme a majority of the women did not think that the kind of jobs available to them made this worth while. Incidentally, the few who did were those who had access to professional work. It seems to me that, when we rejig the system we must be careful not to imagine that things have changed more than they actually have. The EOC's recent report makes it clear that we still have quite a way to go.

Another aspect of the proposed reforms to which I should like to refer is the issue of widows. I should declare an interest here, in that I am a trustee of the Widows Advisory Trust. At present, benefits are available to widows on the death of a husband, but they vary according to age. The full benefit is paid only to widows over the age of 55 when the husband dies. Between the ages of 45 and 55 the benefit is graded according to age. A widowed mother can also get a widowed mother's allowance. The benefits are contributory and based on the husband's contribution record.

It is now being suggested that, while benefits presently being paid will be continued, they should not continue in their present form in the future. The issue has been highlighted by the fact of a reference to the European Court of Justice (the ECJ) by a widower claiming that it is unfair that these benefits are not available to widowers. However, to pay widowers' benefits on the same basis as for widows would, we are informed, be too expensive so benefits should perhaps be removed from widows in future and they should be encouraged into work.

Apparently there is a belief that widows are no longer poor and that the system is unfair to unmarried partners. But, again, I believe that we are perhaps making policy on the basis of assumptions about changes which have not been as far reaching as many suppose. It is true that the better-off anyway tend to take care of themselves through life insurance and occupational pension schemes. But not all occupational schemes pay very substantial pensions, and the reduced amount awarded to a widow is often not enough by itself to keep her out of poverty.

Moreover, a woman who has spent much of her life looking after a family and housekeeping for them is not likely to find a job outside the home all that easily. After all, these are contributory benefits. I think that there will be resistance to removing them simply because other claimants, including widowers, are being regarded as having an equal entitlement. Although things are changing, the majority of women still get married and there are many who simply cannot afford to make private provision. Indeed, if jobs are available—and it is a big "if"—they will not be very well paid. Far fewer women than men, even now, are in private pension or occupational pension schemes.

I well remember when several years ago I was a member of one of your Lordships' committees on Europe dealing with the whole issue of pensions. At that time we had to consider a draft proposition from Europe to the effect that in future there should not be dependency benefits and pension schemes but that every adult should have his or her own independent pension provision and that the dependency provision should apply only to children.

We gave the proposal some consideration—we thought that it was not a bad idea—but, when we looked at it in connection with British circumstances, we reached the conclusion that it would probably take 30 years before we could work through to such a situation. In those circumstances, we decided that we could not consider it seriously.

The underlying philosophy of the new social security package has a great deal to be said for it. For most people, the way out of poverty is through work. But the work has to be available, as do family support services, and the pay must be worth while for people—women in particular—to be willing to take it up. I thank your Lordships for the opportunity to contribute to the debate. It has been most interesting and I look forward to hearing the Minister's response to some of the issues that have been raised.

2.55 p.m.

Lord Bassam of Brighton

My Lords, I thought that today I would share with your Lordships my happiness. I am happy that I have heard the noble Baroness, Lady Crawley, and am able to participate in this important debate. I am happy that my noble friend Lady Amos will reply to this important debate. I am happy that I do not have the wondrous, if not awesome, command of statistics of the noble Baroness, Lady Ludford. But I am happy most of all because today is Ellen Rose's third birthday. She has opinions on everything. She has opinions on which way round the cereal box should be; what colour tights she should wear; which door she should go out through; and which colour socks she should have. Most importantly, she has opinions about her nursery. She loves it. It is called Bright Start and every day she wants a bright start.

When I was three my mother had to take me to work. She was the last live-in housekeeper in my village and being a single parent she had little choice. She had no nursery to turn to; no child benefit; no lone parent benefit; no income support; and no tax benefit. However, she did have supportive friends and she lived in a village community which, though moral, was very supportive. She would have given much for access to childcare. She could have done with the secure base of income support. The 1950s were not generous times for women workers.

During the past 40 years much has changed. Family break up has increased; women now make up 44 per cent. of the labour force; more families depend on women as the major earner; 43 per cent. of women of working age have children; and 21 per cent. of women of working age are single parents.

The result is that women live in more challenging and demanding times and lead more challenging and demanding lives. Perhaps they lead more stressful but ultimately more fulfilling lives. They perform better than men in education. They now compete harder for jobs, especially among the professions such as law, banking and accountancy. But because of the pressures of parenting, work and caring, they need more effective, better-targeted and more appropriate support to cope with the exacting demands which life brings to us all.

So what should a social security system for the future, for the millennium, offer to enable, help and support women at work, at home and in their communities? First, it should be more flexible. It should help more women to move more easily between education, training, work and parenting. Secondly, it should enable choice: choice in education and training; choice in jobs; choice in childcare provision; and choice in career aspirations. Thirdly, it should provide greater freedom from poverty and fear of poverty; from discrimination; and from frustration and waste of life opportunities. Finally, it should provide for uncapped opportunities for personal fulfilment and development; for a life with meaning and purpose.

For that reason I welcome the Government's commitment to give women a better deal. The publication this week of that document is a major boost for women. My mother could have done with all of that. My two daughters, like their mother, demand it! Measures such as the working time, part-time and parental leave directives will make a significant and lasting difference to their lives, as will the child benefit uplift next year, the national childcare and early years strategies, the New Deal for lone parents, the childcare tax credit and the working families' tax credit. Much more is promised for women: for example, for women pensioners who are often the poorest pensioners in our communities, for women's healthcare, for women at work and for women in public life and in politics.

My mother worked hard. During her working life she was many things. She was a chemist, a florist and she worked in the Land Army. She worked in the national fire service as a fire-fighter. She was a farmworker, a housekeeper, a chef, a cook, and a bookkeeper. She did all of those jobs over 60 years of hard work. She was an intelligent and sensitive woman, public spirited and multi-talented, like millions of other multi-talented women. Like them she never had the chance to progress or to get on in the world of work. Her world was handicapped by circumstance, prejudice and the simple lack of opportunity. Ellen Rose at three has greater opportunities and greater expectations. Let us use our Government's programme and make sure that the social security system of the future helps rather than handicaps, as it did in the past, and provides rather than prevents, so that Ellen Rose and millions like her can use their talents and fulfil their potential, not just for her gain but for the benefit of us all.

3.1 p.m.

Baroness Thornton

My Lords, I intend to speak briefly, not least because I am mindful that this debate takes place on a Friday afternoon and my children will come out of school in half an hour and I have not seen them after school so far this week.

I congratulate my noble friend Lady Crawley on initiating this debate. It is important for a number of reasons. In the midst of the practical business of making government work, it is always useful to reflect upon some of the bigger reasons and philosophy which lie behind the policies and actions that the Government pursue. One of these surely must be the implications of the changing role of women in society.

More women enter the labour market every year. More women choose to mix being mothers with the world of work. The majority of us actually have little choice in taking part in the world of work and being mothers. For example, in 1979 only 24 per cent. of women returned to work after having children. As my noble friend said, this had increased to around 67 per cent. in 1996.

I wish to consider briefly how the system needs to support women in their dual role of mothers and workers. The two aspects which I want to highlight I think illustrate the importance of working across government departments and, if you like, of the joined up thinking which needs to be brought to bear on resolving problems. Many people, and particularly women, who want to work and who live on benefits or are able to command only low wages are discouraged from pursuing work because of the difficulties of finding adequate childcare and the problem of affording it if they can find it. This lack is a real barrier to work. We know all too well the economic and social price which society pays for children brought up in poverty, for families who are unable to provide adequately and for women who are frustrated and depressed by the seemingly insurmountable problems of going out to work.

I applaud the Government's approach, which recognises that the investment in providing financial support for childcare through the childcare tax credit part of working families' tax credit and through other mechanisms is worth while because it will help those families who are most in need of paid employment. However, all the financial packages and incentives to help women obtain work will come to naught if the childcare provision does not exist. That is why my second point is that the commitment to a national childcare strategy is of equal importance.

It is a truism that, "You only get one shot at your children's childhood", and all parents want to do the best that they can. As a working mother I can testify to the fact that if one's children are not well cared for in a secure environment it is impossible to give of the best to one's working life. For many women, worries about their children's well-being has led to them giving up the struggle to go out to work despite the economic hardship which that decision may visit upon their family, thus depriving the children of the benefits that a working parent brings and also depriving businesses of the skilled and talented people who are unable to take up work.

Many of us who have been involved in childcare campaigns for very many years have always believed that access to decent and affordable childcare is the cornerstone upon which women's effective participation in the labour market must be based. That applies to all women, whether they are high fliers or the low paid. That means that a range of childcare provision needs to be available: formal and informal, nurseries and nursery schools, after-school play centres and school holiday care, and youth centres for secondary school children. It also means ensuring quality in our childcare, which is often uneven. That, I feel, must be a priority. The social security system must take account of, and be sympathetic to, the childcare needs of women who wish to work.

I welcome the initiatives which are being taken. The actions of the Government so far have demonstrated their commitment to support women in the labour market and to help parents to get back to work. I am grateful for the opportunity to participate in the debate and I join others in welcoming my noble friend to her first appearance at the Dispatch Box. I look forward to hearing from her about the Government's progress.

3.6 p.m.

Earl Russell

My Lords, I too should like to welcome the noble Baroness, Lady Amos, to her first debate. I have listened in rapid succession to her first Question and her first Statement. I hope to listen in a moment to her first reply to a debate. She has been so obviously "to the manor born" that many of us have quite forgotten that she was doing it for the first time. I shall try to remember, but she makes it rather difficult.

I warmly thank also the noble Baroness, Lady Crawley, for introducing this very necessary debate in what I found to be an excellent and extremely enjoyable speech. I agree with very nearly all of it. The quotations from Beveridge were illuminating. They make me think that, although an immense change has taken place in this area in my lifetime, nevertheless we are probably about half-way through one of the greatest changes in the social history of the West in the past 2,000 years. That change may be expected, before we are through, to take overall about 300 years. We will shorten that if we can, but we have to get on with it.

I have been thinking of two travellers setting out to drive from London to Lancashire and Yorkshire respectively. For the first 100 or so miles of the journey they drive along the same road. But I think that the noble Lord, Lord Hoyle, who has just this moment left his place, would be the first to agree that the ultimate destinations are very different indeed.

That image seems to describe quite well the relations between our two parties when we discuss many matters, not least social security. There are large and significant areas of agreement. We agree on a fundamental commitment to equality, demonstrated, among many other places, in the right and opportunity to work. We agree with what has been said, most notably by the noble Baroness, Lady Thornton, about good and affordable childcare. We agree on family-friendly employment policies. We agree also on how vital it is that those policies should also give equal opportunities to men who need to take time off work for the purposes of childcare. I say that as one who has done so on many occasions—and I am very glad that I have.

We agree in welcoming warmly the parental leave directive and the working hours directive, although by the time that it had been through the Department of Employment under the last government it had become known as the "Gruyére cheese" because it was so full of holes. One or two of those might be blocked up.

We agree also in our warm commitment to the minimum wage. There are one or two points of detail between us. It could have been a bit more generous to younger people, but on all these matters, I think that we agree pretty thoroughly on the principle.

We agree also in recognising some of the unsolved problems. I have listened to the noble Baroness, Lady Hollis of Heigham, speaking on the Jobseekers Act, deal with the problems of, on the one hand, assessing in terms of household income, which creates poverty traps, and, on the other hand, assessing in terms of individual income, which means paying benefits to Mrs. Cedric Brown. Neither of those is satisfactory—and neither we nor the noble Baroness yet see any solution to those problems. However, we agree at least in recognising them and in many of the assumptions that we bring to try to tackle them.

At the same time, we are two different parties with two different underlying philosophies—and there are a considerable number of differences in assumptions which show up clearly in social security policy as a whole and in relation to issues concerning women in particular. My honourable friend, Mr. Rendel, in a press release which is now just over four hours old, remarked that social security policy emerged as the area with the most glaring gap between our party and Labour.

As my honourable friend stressed in a recent article in the Independent, we are now the party with the greatest commitment to doing something about poverty. We are, for example, considerably concerned about benefit levels which have led in many cases to malnutrition. We are aware of the cost of trying to do anything about that, but we should like to think that the Government may be in a position to commit themselves to saying that, as the number of people on benefit decreases, if it does, some of the savings could be ploughed back into addressing the question of benefit levels.

As my noble friend Lady Ludford said so well, we are concerned about single parents. That has left a scar which will not easily heal. We also look at the question of equality first and foremost in terms of the issue of inequalities of power. Poverty creates inequalities of power. That is seen in the abuse of flexible employment, with employers changing contracts of employment to shorter hours, different working conditions, and hours that are not convenient for families, to which the latest citizens advice bureau social policy bulletin has yet again called attention. One sees it also in the continuing scandal of the illegal dismissal of women because they are pregnant. I have pressed the Government before—I press them again—to do something to ensure that that law actually bites and, in particular, to investigate whether the penalties are large enough to constitute a sufficient deterrent.

We are also deeply concerned about choice in relation to all those with childcare needs who face the question of whether to go to work or to stay at home with the child. If one partner goes to work and the other does not, there is also the question of which sex will go to work. Choice matters vitally. The man should be able to elect to be the family childcarer without falling foul of the penalties of voluntary unemployment. We also strongly recognise the vital importance of the work done by carers.

I do not want to mislead anyone. Many Ministers in this Government are quite as committed to freedom of choice on this as we are—and I honour them—but as the noble Baroness, Lady Turner of Camden, phrased it so well, it is clear in government policy that work is the preferred option. We think that that is extending the power of the state into areas which are really not its business. It falls foul of the principle of subsidiarity. We will bend over backwards to help those who want to work, but to help them to do what they want, not what we want.

We are concerned about the Government's attitude to spending. Once again, I draw attention to the report of the Treasury Select Committee of 27th July, which said about government spending plans all that the Liberal Democrat Treasury team has already said. It is rather less generous than the spending policy of the Major government.

I draw attention to the specific area of domestic violence, which is a concern of mine. The section in the White Paper about that is, on the whole, encouraging. But there is absolutely nothing specific about building more women's refuges, starting them and providing care for children within them. That needs money—and that money must be spent. It would be an economy in the long run.

There is nothing either about attention to rules, such as the ineligible services charge in housing benefit, or the change to which the noble Earl, Lord Listowel, called attention last week about short-stay people not getting housing benefit for less than a week. These things are very inimical to the management of women's refuges. I would like to think that the Government are paying attention to them.

We are also very much concerned about compulsion. We committed ourselves in our manifesto at the last election to helping people to get back into work without compulsion. Once again, I draw attention to the actively seeking work rules and the woman who left a late-night job at a wine bar because she had been assaulted many times in the job. She should not have been found guilty of voluntary unemployment and disentitled to benefit before appeal. We say the same things about CSA benefit penalty. We on these Benches fought that from the very beginning.

We are also utterly committed to individuality. This shows up most clearly in our defined approaches to the CSA. Many things in this Government's approach to changing the CSA are good, but they still believe that they can treat people generally, by the application of a formula which is applied to everybody without regard to individual circumstances. We believe that that is treating people as if they were plasticine, and we do not agree with it.

3.19 p.m.

Lord Higgins

My Lords, I follow the noble Earl in two important respects. First, I join him in welcoming the noble Baroness, Lady Amos, to the Front Bench for her first speech. I have only heard her previously intervene from the Front Bench when acting in the role of a Whip and urging noble Lords to make short speeches. In many respects, no one could be better qualified to reply to this debate than the noble Baroness. She was chief executive of the Equal Opportunities Commission for some years and a council member of the Institute for Employment Studies. Both positions are extremely relevant to this debate. I join enthusiastically with those who welcome her.

Secondly, I join the noble Earl in saying how grateful we are to the noble Baroness, Lady Crawley, for initiating this debate. It is only a short time after her maiden speech—barely a month—in which she spoke about the European Central Bank. I would be happier speaking about the European Central Bank since that does not have the politically correct or incorrect pitfalls that this particular debate has as far as I am concerned. The noble Baroness raised a number of important points, not least with regard to what she described as the gender pay-gap, which is certainly a very relevant consideration.

In addition to the two points that the noble Earl made, perhaps I may make one concerning him. Mr. Matthew Pan-is devoted his whole article today to him, and we are pleased to see that the noble Earl is still in his place on the Front Bench. If it were not so, it would significantly reduce the power of this House to scrutinise the Government on social security matters. Indeed, it would substantially do so. I am very glad to hear his contribution today.

I have only one qualification about the noble Baroness's question. I am not sure that we should not have added at the end "or vice versa". She is asking what are the implications for social security of the changing role of women in society. I am not sure that we should not look at that the other way round. Clearly, social security policy also has a substantial set of implications for the role of women. It cuts both ways in one important respect, which was referred to by the noble Baroness, Lady Thornton, and the noble Baroness, Lady Turner of Camden, with regard to the position of lone parents. It is a slightly strange situation when the pressure of government policy seems to be to encourage lone parents to take work and then find other people to look after their children while they are doing so. This rather circular arrangement is not necessarily an efficient one, as opposed to the people who are otherwise engaged staying with their children and looking after them while the people who look after the children as carers go directly into work.

The crucial point was made by the noble Earl and I do not think there will be any disagreement on this. It must be a question of whether the lone parent wishes to work. There is considerable concern about the single gateway proposals, where the implication is that there will be a degree of compulsion. As was pointed out in the debate the other day, the Single Parent Action Network is opposed to those who say, "You must go along for an interview" because it implies "or else".

This is a very difficult area. The figures show that between 1971 and 1996 there was an increase from about 7.5 per cent. to more than 22.5 per cent. in families headed by lone parents as a percentage of all families with dependent children. That is a very significant change indeed and I think that the points made by the noble Baroness, Lady Turner of Camden, ought to be borne in mind by the Government.

I turn to the question of the working families tax credit. When I made my maiden speech less than a year ago I said that if the Government had sensible proposals to put forward we would welcome them but if we thought that they were deficient we would certainly criticise them. It has become a tendency of the present government, particularly of the Chancellor of the Exchequer, to say, "Today, I can announce such and such" when it has already been done two or three times before. Therefore, with some trepidation, I announce what my honourable friend Mr. Iain Duncan-Smith announced last week. After most careful thought we believe that there is a great deal to be said for a family credit as against the working families tax credit.

There is a series of reasons why the working family tax credit causes problems. First, against the background of the Government being committed to cutting the social security bill in order to spend more on education and health, is the increase of no less than £1.5 billion for the working family tax credit as against the families credit. Secondly, there is the tendency for it to increase dependency, not to decrease it, even up to the level of people earning £38,000 a year. That is a quite extraordinary situation for the Government to create. Thirdly, there is a bias in it against the single earning married family which causes various problems. Fourthly, it incurs a number of costs for business which, when the situation in the economy is perhaps not very strong, are a problem. Fifthly, the stigma of applying for working families tax credit is greater than that so far as family credit is concerned. And as Mr. Frank Field has pointed out, the risks of fraud in relation to working families tax credit, given the relationship with employers and so on, is a serious one.

I very much hope, and it is relevant to this debate, that the Government will consider whether this is a sensible proposal compared with the existing situation in regard to family credit. It is vastly more complex than the existing system.

I turn now to the question of demography. In her opening remarks, the noble Baroness, Lady Crawley, referred to Beveridge. I find myself statistically deficient. So far as concerns the life expectancy of men and women, the normal document that one relies on gives the figures for 1901 and those for 1971 but does not provide figures for the situation at the time of Beveridge. At all events, it has changed dramatically. In 1901, the rather precise figures given for men's life expectancy was 45.3 years and the figure for women was 49.2. By 1996—the last figures that are available—life expectancy for men was 74.6 and for women 79.7. It is a dramatic increase. Even at the time of Beveridge the average expectancy for what women would receive by way of pension or how long they would live to collect a pension was considerable. We are presently waiting for the Government's proposals on pensions. We do not yet know what those will be and whether, in the light of today's debate, there will be any proposal for a stakeholder pension, and if it will apply to women as well as to men.

There has been an enormous change since the time of Beveridge, not least, regrettably, in regard to the statistics on divorce. As the noble Baroness on the Front Bench will know, the divorce rate in this country is the second highest in the European Union. Therefore the whole issue of pensions splitting is of considerable importance. It has been helpful to have the Social Security Select Committee in another place examining the matter. However, it raises a number of difficult problems.

I wish to raise one other point that has not been touched upon during the debate; namely, the difficult position of a woman who is widowed with a company pension and who then faces the prospect of remarrying. It is very often the case that such women lose their company pension. Certainly if there is a big age differential, in which case the second husband is likely to live longer than the woman concerned, that is a real deterrent to remarriage. It is a problem that ought to be addressed. We should consider in the context of the pensions Bill what is the appropriate answer to this problem. Pensions splitting is an issue to which we shall undoubtedly return.

Finally, I wish to take up a point arising from a Question raised by the noble Baroness, Lady Turner of Camden, on 22nd October in regard to the position of a woman who becomes entitled to widow's benefit, who automatically loses invalid care allowance even though she may still be caring for a disabled relative. As always on such occasions, the noble Baroness received a detailed response from the noble Baroness, Lady Hollis of Heigham. One understands the arguments that were put forward. Expressing a purely personal view, we need to give more thought to this matter. The argument was that all successive governments have taken that line. That always gives me immediate cause for concern. There must be something wrong somewhere. Indeed, my maiden speech in the other place a long time ago was on the fact that all successive governments had denied to those who were left out of the Beveridge system the right to that part of the national insurance pension that had not been covered by contributions. It was the first thing we did when we came into office in 1970 when I was at the Treasury. It was a classic example of the fact that successive governments said: "That is our advice". One could not help feeling that the officials were determined that it should not be changed. I express a personal view on the point raised by the noble Baroness; it is something that we ought to do.

I fear that I am out of time but I am only too happy to give way to the noble Earl.

Earl Russell

My Lords, am I correct in remembering that the late Lord Wilson of Rievaulx refused to deal with those cases without contributions to which the noble Lord referred on the grounds that they were all over 80 and therefore would soon be dead?

Lord Higgins

My Lords, I do not think that was the reason he gave. At all events, with a number of these issues, longstanding positions have been taken which we need to reconsider. No doubt in the course of doing so we shall have the benefit of the advice and views of the noble Baroness, Lady Amos. I must not detain the House a moment longer from listening to what she has to say.

3.30 p.m.

Baroness Amos

My Lords, I thank my noble friend Lady Crawley for initiating this important debate. As she said, she and I have both campaigned for women's equality over a long time, so it gives me great pleasure to respond to the debate today. I also thank all noble Lords who welcomed me to the Dispatch Box for my first debate.

As usual in this Chamber, the debate today has been thoughtful and knowledgeable. Many noble Lords have spoken from their own experience, reflecting a range of views on a complex and important subject. I shall try to respond to as many points as possible, but I must apologise at the outset because I know that I shall be unable to cover all the points that have been raised in detail. I shall write to noble Lords on any matters which I am unable to cover.

The last seven days have seen two significant initiatives which have women at their heart: last Friday the Equal Opportunities Commission introduced its proposals for the future of sex equality legislation. The Government welcome the EOC's proposals as a contribution to thinking on the promotion of equality between women and men. Of course, I have a personal interest in all this as a former chief executive of the Equal Opportunities Commission.

On Monday, my noble friend the Leader of the House and Minister for Women launched Delivering for Women: Progress so Far, which sets out the Government's achievements to date and outlines the key new policy areas she will be taking forward.

Welfare reform is about developing a social security system that meets the needs of people today. When our present social security system was formed 50 years ago, the world was a very different place. That point was made by the noble Baroness, Lady Crawley, and other noble Lords. The norm then was for male breadwinners who supported their families. Men looked to the state in times of need and women were expected to rely on their men. Couples were expected to remain married, divorce rates were low and cohabitation rare. Social security provided help through pension and widows' benefits to women when they lost their husbands. However, because women were not expected to support themselves, we have the situation today where women make up the majority of our poorest pensioners. Although there have been changes to social security since then, many aspects of the system still reflect society as it was.

The picture for women now is very different and perhaps the biggest change is that more women are in work. This brings greater financial independence, not just while they are working but also by improving their own pension provision. Women are having children later, after achieving greater educational qualifications and establishing themselves at work. They are returning to work after having children, particularly where they are with a partner who works.

Despite these changes there is considerable evidence to show that women's incomes over their lifetimes are significantly lower than those of men of comparable age and occupation. Having children is possibly the most significant factor that affects women's income and earning opportunities. It can mean a drop in personal income, a loss of momentum on the career ladder or leaving employment for several years. This can exclude some women from contributory benefits and occupational pensions and often sits unhappily with the rules for means-tested benefits.

Women increasingly find themselves as the sole head of the family and less able to look to partners or husbands' work records to support them now or in old age. Social security must reflect these changes and provide a framework within which women can make informed choices about their lives. We shall be doing that with the personal gateway interviews. I repeat the comment of my noble friend Lady Hollis that the single gateway is a recognition that the knowledge of opportunity is itself about empowering somebody to make choices and lone parents will not be compelled to work. I draw that particular point to the attention of the noble Baroness, Lady Ludford, and the noble Lord, Lord Higgins, both of whom have expressed concern. It is about choice. However, the action that is needed and being taken goes beyond the boundaries of social security. For the first time we see proper co-ordinated activity across Whitehall and beyond to make the changes that women in society need and want.

Before I turn to the specific areas of employment, women's role as carers and women's needs in old age, I should like to touch on one point raised by the noble Earl, Lord Russell, in respect of women refuges. This is one of the priority areas for the Women's Unit. Only this week this was reaffirmed by the Minister for Women in terms of the safety and protection of women from violence. As part of this process, the Government have commissioned research to obtain a comprehensive picture of the current provision of accommodation and support services. This includes a survey of refuges, detailed exploration of the sources of funding and a comprehensive review of provision by local authorities. Once we have that information we shall look at the policy implications.

We want to remove the barriers to women getting employment and make sure that work pays. We have already announced a number of initiatives which, taken together, will build a flexible workforce and employment opportunities. We have to provide an easy route for women to get the information they need to help them make decisions about work. This is part of the thinking behind the New Deal for Lone Parents. Through personal advisers women can get practical advice about the work and training opportunities that exist for them as well as help with childcare information.

However, action in social security alone would never be sufficient. The Government understand how important affordable, accessible and high quality childcare is for women in making decisions about work. That is why the national childcare strategy must be seen as a key element in responding to the needs of women. That point was made by my noble friend Lord Bassam and my noble friend Lady Thornton. It is about recognising the needs of women but also putting children first.

We want to make work pay. The fact is that 1.3 million women earn less than the national minimum wage and the gender pay gap remains a serious issue. The average hourly rate for women in full-time employment is only 80 per cent. of that for men. The combined effects of the benefits system, tax, low earnings and the cost of work can make work simply not worth it for many women, even though they want to help to support their families in this way; or it can subject women to a lifetime of very low incomes without the opportunity to safeguard their own financial future.

I am sure that the noble Baroness, Lady Ludford, and the noble Earl, Lord Russell, will agree with me that there is no single answer to the problem of poverty. We have put in place a number of initiatives to tackle the issue, including the New Deal, the working families tax credit—to which I shall return—the national childcare strategy, pension sharing and help for the poorest pensioners to claim their entitlement.

The national minimum wage will increase the wages of up to 800,000 women earning less than the current threshold for national insurance. Working families tax credit will provide an income guarantee so that every family working full time will be guaranteed an income of at least £190 per week. And no family with earnings of less than £220 (half average earnings) will pay net income tax, reducing the wasteful overlap between the tax and social security systems. Families on lower incomes will be able to receive up to 95 per cent. of their childcare costs through the combined effect of the working families tax credit, housing benefit and council tax benefit.

In response to the point raised by the noble Baroness, Lady Ludford, that the working families tax credit will lead to a transfer from purse to wallet, that is wrong. Government have already said that there will be no compulsory transfer from purse to wallet. Couples will be able to choose which partner receives the working families tax credit.

Earl Russell

My Lords, perhaps I may elaborate my noble friend's point. Accepting the family choice as the Minister has just set it out, is there a risk that the money is least likely to go to the woman in those families where she needs it most?

Baroness Amos

My Lords, as far as we are able to ascertain, in around half of the families receiving working families tax credit the main wage earner will be the mother; and for the other half where the main earner is the father, there will be no compulsory transfer from the mother to the father.

On the working families tax credit, the noble Lord, Lord Higgins, pointed out that it will waste money on higher earning families. In fact scrapping the working families tax credit would penalise families. It would mean a tax increase of £17 a week for up to 1.5 million hard-working families on low to middle income.

We want to recognise the needs of women as carers. We must acknowledge that women have caring responsibilities and wish to spend time caring for their children or dependent relatives. For whatever proportion of their time they choose to do that, they play a valuable role in society. The social security system has to respond flexibly to that by providing direct support to mothers. That is made through maternity benefits and the universal provision of child benefit, and a benefits system which supports women in work and recognises their role as carers, through carers' benefits and providing protection of pension entitlements. Those points were raised by the noble Baronesses, Lady Ludford and Lady Crawley.

We want to improve women's income in retirement. We need to narrow the pensions gap between men and women to give women more security and independence in retirement.

Perhaps I may say this to the noble Baroness, Lady Turner. The Government do not intend to abolish the widows' benefit scheme. The Government are considering reform of the current system of bereavement benefits as part of the welfare reform review. We hope to make an announcement shortly on that policy.

I am rapidly running out of time. Before concluding, I wish to take issue with the noble Baroness, Lady Ludford, who stated that the Government do not have a clear sense of women's place in society. We are committed to looking at society's values, taking an integrated approach, looking at women's income over a lifetime, and at what happens to women at different phases and stages of their life. This Government recognise that women are not all the same. We want to build an inclusive society where independence is the goal. To do that, equality issues must be at the heart of policy development. Taken together, the initiatives upon which the Government have embarked will make it easier for women to enjoy economic security and independence. That is our goal.

House adjourned at a quarter before four o'clock.