Welfare Reform and Pensions Bill

HL Deb 13 July 1999 vol 604 cc260-326

House again in Committee on Clause 52.

Lord Goodhart moved Amendment No. 105:

Page 59, line 31, at end insert—

("() Subsection (1) shall not apply to—

1. (a) a person who has attained pensionable age (within the meaning of the Contributions and Benefits Act), or
2. (b) a person who is entitled to working families' tax credit or disabled person's tax credit (within the meaning of the Tax Credits Act 1999.").

The noble Lord said Amendment No. 105 stands in my name and those of my noble friends Lord Russell and Lord Addington. I hope that I can be brief. Like an earlier amendment, this arises from the report of the Select Committee on Delegated Powers and Deregulation. The committee proposed that the Government's intention for the use of these regulation-making powers—for example, not requiring retired people to attend work-focused interviews—should be stated on the face of the Bill and not left to regulations.

I therefore tabled this amendment, the first part of which deals merely with the exclusion of those of pensionable age. However, my amendment goes a little further. I should therefore like to probe the Government's intentions as to what other categories they might propose to exclude from the work-focused interview on the face of the Bill. As regards people of pensionable age, it is absolutely obvious that it would be absurd to require them to attend a work-focused interview.

In the Explanatory Notes, the Government suggest two categories of people who should clearly be exempted; that is, those of pensionable age and those already in full-time employment but who might be drawing a means-tested benefit at the same time, which in many cases would include housing or council tax benefit.

In drafting the amendment, I therefore considered specifying, as a class to be excluded, those in full-time employment. However, I decided not to do that because of the problems of defining those who are in full-time employment. It might have been necessary to have regulations to define who was in full-time employment, which would rather defeat the object of the exercise.

However, it appeared that there were one, or perhaps one should say two, obvious categories of people who could, simply by reference to a definition in another Act, be excluded; that is, those in receipt of working families' tax credit or disabled person's tax credit. In those cases, the people in question should be working a minimum of 30 hours a week, which is close to full employment for this purpose.

Baroness Hollis of Heigham

Will the noble Lord repeat his last statement about 30 hours a week?

Lord Goodhart

As I understand it, in order to claim the working families' tax credit, the working member of the family must work for at least 30 hours a week.

Baroness Hollis of Heigham

That is why I did a double take; it is like the old family credit rules. The noble Lord may be thinking that, at 30 hours, one clicks into an extra premium of £11.05.

Lord Goodhart

The Government have decided that, if one is in receipt of working families' tax credit, it justifies the provision of a full income. In those circumstances, the requirement to attend a work-focused interview would seem to be inconsistent with the Government's objectives in the working families' tax credit. What are the Government's intentions so far as extending on the face of the Bill exemptions above and beyond those available to people of pensionable age?

Baroness Buscombe

I rise to speak in support of this amendment and to seek reassurance that a person who has attained pensionable age within the meaning of the Social Security Contributions and Benefits Act 1992 and a person who is entitled to working families' tax credit or disabled person's tax credit within the meaning of the Tax Credits Act 1999 would not have to attend an obligatory work-focused interview. We hope that the Minister will confirm that that is the case. We believe that the amendment is important because those two categories of people should be on the face of the Bill.

Baroness Hollis of Heigham

As the noble Lord, Lord Goodhart, explained, the purpose of this amendment is to exclude from the requirement to attend a work-focused interview people who are over state pension age or receiving working families' tax credit or disabled person's tax credit.

I should make it clear that it has always been our intention to exclude those over pension age from this requirement. We originally intended to do that by regulations, but one of the recommendations in the very helpful report of the Delegated Powers and Deregulation Committee was that we should set out this exception on the face of the Bill. I am delighted to say that we shall take up the suggestion and bring forward a government amendment in due course.

In the meantime, I shall explain why we are not able to accept this amendment. We propose to disapply the requirement to attend an interview for any claimant aged 60 or over. This follows the approach that we adopted in the first phase of the pilots. We shall, of course, still offer help and advice under the "one" service to any 60 to 65 year-olds who want help to stay in touch with the labour market. However, that help will be provided on a voluntary basis.

Turning to the second part of the amendment, I reassure the Committee that we have no intention of requiring people in full-time work—that is, those working than 16 hours a week—to take part in work-focused interviews. I should point out that neither the WFTC nor the DPTC appears in the list of benefits covered by this clause. So the requirement to attend an interview will not apply to a claimant of either of those benefits. It is possible that a claimant of either one of those benefits could also claim housing benefit or council tax benefit and so be brought within the provision. However, we intend to use regulations to exclude from the requirement anyone working 16 hours a week or more. I assure the Committee that no one claiming WFTC or DPTC will be required to attend an interview.

We do not intend to place this exclusion on the face of the Bill primarily because it will not be a simple matter to draft such an exemption as different benefits have different rules on what constitutes "full-time work". For example, with income support, one is deemed to be in full-time work if one is employed for an average of 16 hours or more a week. On the other hand, ICA recipients can earn up to £50 a week with no limit on the number of hours worked. With bereavement benefits, there are no earnings rules at all. Because of the complexity and degree of detail, we believe that this subject is better left to subordinate legislation. Therefore, I ask the noble Lord to accept my assurance that those in full-time work will be excluded from the requirement, and I urge him to withdraw his amendment.

8.45 p.m.

Lord Goodhart

I am grateful to the noble Baroness. In so far as it is proposed to exclude everybody over the age of 60—including men who are not yet of pensionable age—that is obviously an improvement on my amendment. As to the exclusion of those who are working full time, I accept that those who are in receipt of working families' tax credit are by no means the only members of that group—which would include, among others, those who do not have families. In those circumstances, I am happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Buscombe moved Amendment No. 106:

Page 59, line 42, at end insert— ("() for determining the training to be provided to persons by whom interviews are to be conducted which shall include training in the principles of personnel management and job placement, and in the types and incidence of mental and physical disability and in recent developments in coping with time;")

The noble Baroness said: I rise to speak to Amendment No. 106, which takes account of the need to clarify the training to be provided for personal advisers in order to equip them properly for this extremely responsible, and I would suggest often onerous, task. We have touched on this subject already this evening, but it is important to outline several points of concern.

I believe that the success of this initiative lies, in large part, with the calibre of ability of the personal advisers. They must be able to perform their function in a competent and, most importantly, sensitive manner. To this end, I shall ask a number of questions.

We should like to know the precise details of the sort of training programme that the Government have in mind. What subjects will be covered? Will the training include medical and psychological training? The Minister has stated that the training undertaken by those involved in the pilot scheme is of seven weeks' duration. I suggest that seven weeks is no time at all when compared with the responsibility that personal advisers will have. Even those who work, or have worked, as interviewers in job centres and so on will have a much more responsible task to perform.

Who will be the trainers? Alternatively, will the Government subcontract from the voluntary or private sectors teams of people who are capable of conducting the interviews? From where will the interviewers come? When full implementation takes place, we will be talking about an enormous number of people and an enormous associated cost. We have adjudged that it will cost about £100 million to provide trainers, based on a seven-week training course.

Will interviewers face tests of their capability? That is tremendously important. What will be the scope for retraining and refresher courses? What arrangements will be put in place for monitoring the interviews? Given the enormous difficulties that are bound to arise in certain circumstances—particularly when interviewees are severely disabled and have trouble communicating, for whatever reason, with the interviewer—those conducting the interviews will face an extremely hard task. Therefore, there should be almost a preliminary process whereby they work with a senior interviewer or someone with more experience in this area.

We also question the long-term motivation of personal advisers. It is important that their motivation is sustained, particularly in the case of claimants with multiple difficulties who will require considerable ongoing advice and counselling.

This amendment is important also in relation to carers. We have already touched on this in some detail this evening. The training of personal advisers to interview carers is extremely important. Carers have great difficulty in judging their responsibilities. It can be difficult for people who have not been carers to understand the pressures and challenges involved.

Before advisers can give carers the right advice, they need to understand those pressures. Failure to understand the difficulties in judging priorities and time issues will result in an insensitive service and inappropriate advice. If carers feel that their caring responsibilities are not properly understood, they will feel undervalued and will perhaps not feel able to seek work at all. Understanding the issues could change all that.

The training process involves training people to understand fully all the issues and all the kinds of people with whom they come in contact; the kinds of disabilities; the breadth of differences and types of people they will come across. It is a difficult, albeit important task, and therefore we ask for clarification on those points. I beg to move.

Baroness Hollis of Heigham

I agree entirely with the spirit of this amendment. Personal advisers will play a crucial role in the "one" service. On their training, their skills and professionalism, the success of "one" will depend. They will support an extremely diverse client group, with very different needs. This calls for a wide range of skills, and a comprehensive programme of training. We have therefore devoted a great deal of time, attention and resources to devising the right programme of learning. However, I hope to convince your Lordships that it is not necessary or appropriate to specify the content of this learning in regulations as this amendment seeks to do; in fact, it is possibly unwise.

First, it is important to remember that we are not starting out with a blank sheet of paper. Many advisers will bring considerable expertise to their role. Those who come from the Employment Service will be well versed in identifying vacancies and matching clients to them. In fact, some will have previously been working as personal advisers in one of the existing New Deal programmes. And, of course, Benefits Agency staff will have experience in the complexities of the benefits system and dealing sensitively with groups such as lone parents and carers. So the training needs of each adviser will be different.

What we require is a flexible programme of learning, tailored to people's individual needs. For example, Benefits Agency and local authority staff are more likely to need additional support in interviewing or submitting clients for jobs, while staff in the Employment Service are likely to need training to improve their knowledge of the benefits system. In other words—to paraphrase—we first need to assess the baggage of skills with which potential personal advisers come to the process—whether they have come from the Employment Service, local authorities or whatever—and then we expose them to the appropriate training module to ensure that at the end of it, whatever their background, they are fully trained and we can have confidence in their capacities.

To give certain areas of training greater weight, as this amendment would do, would therefore be unhelpful. It would remove the essential flexibility at the heart of the "one" service, and make it more difficult to respond to individual training needs. We would not want to spend time and resources training a personal adviser in the principles of job placement who, for example, had come from the Employment Service and had been doing the self-same job for the past three years.

In addition, a key aim of the "one" service is to bring together different sources of expertise at a single contact point. This will give personal advisers ready access to a wide range of specialist support services, such as disability employment advisers and housing advisers. So they will not all need to be experts in every field. They will need to know when they need to bring in extra expertise.

Baroness Buscombe

Perhaps I can ask a question in that regard. Will the advisers be allowed to bring those expert colleagues into the interview or will they be seeking advice outside the interview? That may be difficult. If they have only one opportunity a year to interview a person, they may not know the right questions to ask or how to respond to the interviewee without reference to certain specialist advice. They will not be able to do that if they only find out at that stage what sort of person they have before them.

Baroness Hollis of Heigham

The advisers will have between 200 and 300 hours of training; it is the most extensive training I can recall. We estimate that the training for individual personal advisers will cost on average £2,000 per head. It is a significant investment in training.

We will expect the advisers to be fairly widely competent but where, as we discussed earlier, we were dealing with somebody who had specific disability difficulties but who wanted to go into work and needed to know whether certain types of job may or may not be possible, that would he the point at which an adviser may seek the expert help of a colleague in the disability employment field. They will discuss whether that is done at the point of interview or subsequently. Essentially the personal advisers will be working as a team in an office. What may happen is that in some cases they may need to refer somebody on in the same office in the course of an interview. It may equally be possible that they want to obtain additional information and include it in the interview. We expect the personal advisers to be broadly generically qualified, but we also expect them to recognise occasionally their limitations and at that point to seek additional expert information.

The programme is based on a series of modules and people will take those modules to build up their expertise. We have consulted with personal advisers and their managers in the "one" pilot areas. We have asked them to identify the areas in which they do not already have the necessary skills to operate effectively. In some cases these are the areas mentioned in the amendment—though there are also other areas.

I can reassure the Committee that the personal advisers who are involved in the "one" pilots—that is, the four basic pilots which began on 28th June—have been thoroughly trained and possess the required competencies, knowledge and skills. The Employment Service, Benefits Agency and Child Support Agency have worked together to produce a programme of learning for all staff in the "one" service. Although the amount of training will differ in every case, on average each member of staff will carry out over 200 hours of learning before taking up their post. That equates to 35 days, which is why I came up with seven weeks. Some members of staff may require considerably more than that. This formal programme will be augmented on the ground through the close partnerships which are being put in place with local voluntary organisations. In addition, every adviser has to work towards a professional qualification in advice or guidance, at least to NVQ standards.

External organisations have been closely involved in this process. We have developed training in the needs of special client groups—in association with organisations such as Gingerbread, SCOPE, RNIB, the Carers' National Association, MIND and the National Schizophrenic Fellowship. All of those organisations have spoken at training events. Their involvement has been invaluable, and we will continue to work with them throughout the pilots. For example, several of those groups will be undertaking a review of all existing training material on disability issues and will also be helping the "one" service to design a new training programme on disability awareness, which all staff will be required to undertake. Throughout the pilot scheme we will be testing and refining all aspects of the training package to make sure that it provides the best possible foundation for the "one" service. Where further learning needs are identified, new packages will be developed.

That was the point in relation to the pilots. I have here a summary of the modules to which a personal adviser will be exposed during training. It is in the House of Commons Library and I am happy to put a copy in our Library and send a copy to the noble Baroness. For example, it includes areas starting with knowledge and skills, communication skills, team working, working with outside organisations, how to handle violent clients and the like. Secondly, it gives an overview of various government services, the Employment Service, DSS, BA, CSA and a detailed knowledge of benefits and conditions of entitlement, detailed training in IT systems and in-work benefits, a knowledge of employment service interventions, and so on.

As I say, I am happy to send this information to the noble Baroness, but it is extremely detailed. I hope that I have reassured the Committee that we are addressing the areas identified in this amendment in our overall training package. It is simply that we want the flexibility to respond to individual needs according to the background with which a potential adviser comes into the programme. Not every member of staff will require all aspects of the training, whereas some may require considerably more. Therefore, I do not believe that it is sensible to specify the content of the training in legislation. That would be far too prescriptive. I hope that in light of my explanation that we are taking training extremely seriously; that we are investing considerable effort; that we are working closely with organisations; and that it is a flexible module procedure, the noble Baroness will feel able to withdraw her amendment.

9 p.m.

Lord Rix

Before the Minister sits down, wearing my heart on my sleeve, may I also add that MENCAP is involved with the voluntary organisations in the training process. It was made clear to personal advisers that it was only the beginning of their training. They were given assurances that they would be provided with ongoing support whenever training needs were identified.

Baroness Hollis of Heigham

I am happy to confirm that. I was addressing that point partly to the issue of pilot schemes. MENCAP has been involved and we have found that invaluable. As and when people need more training or identify gaps in their training needs, we shall return to them. It is right to say that the spirit of the amendment will be made or broken on the skill, competence and the sensitivity of the personal advisers.

Baroness Buscombe

I thank the Minister for that full explanation. I believe she will understand that the amendment is a probing amendment. We all appreciate the critical importance of the training programme itself. I am grateful to the Minister for setting out in more detail the processes for the training programme. It may be something to which we shall wish to return at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Buscombe moved Amendment No. 107:

Page 60, line 15, after ("regulations,") insert ("such matters to include the degree of incapacity, invalidity or physical or mental illness of the person, the recent bereavement of such a person or the illness or incapacity of any child, parent, spouse, partner or other person for whom the person claiming benefit has care,")

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 113. At this stage I must point out that I am not sure why they are connected, but no matter. This amendment relates specifically to exempting carers. I admit that some of my remarks will be a repetition of what I said earlier this evening.

I begin with a quote from the most reverend Primate the Archbishop of Canterbury about carers at the Lady Sear Memorial Lecture. He expressed his concern about the impact of the compulsory interview on carers' self-esteem. He said, Some carers will lose out unless new safeguards are introduced".

This is an area where those reviewing the benefit system need to tread with immense caution and sympathy. Those with substantial caring responsibilities will find a compulsory work-focused interview difficult. Many have had to give up work in order to care. They may be in a state of trauma and still trying to cope with an event which has made them a carer: for example, a heart attack or a car accident. They often have feelings of low self-esteem and find it difficult to cope. So pursuing a compulsory work-focused interview could be damaging to their health, self-esteem and ability to cope with caring.

We believe that this intention in the Bill in terms of compulsory interviews for carers is counter to the values in the national carers strategy, which states, Some carers will wish or need to be full time and such wishes should be respected".

Although this amendment relates to all carers, we are particularly concerned with those who provide substantial amounts of care or who are themselves recently bereaved. Therefore, we are talking about any person seeking to claim the main carer's benefit, the invalid care allowance, who already has to satisfy that he or she is providing a minimum of 35 hours of care.

That is already considered to be a substantial amount of care and equivalent to a full working week. The question is how they are expected to take on a job in addition to their role as a carer. Indeed, statistics show that the majority of carers receiving the invalid care allowance, which is currently nearly 80 per cent. of all claimants who are carers, provide over 50 hours of care per week.

As regards Amendment No. 113 and advocacy in support of claimants, we have touched on that this evening in an amendment moved by the noble Lord, Lord Rix. Both the Disability Benefits Consortium and ourselves recognise that interviews will be unworkable for some claimants with intellectual and sensory impairment or claimants with mental health problems unless they are permitted to be accompanied by an appropriate advocate. The Minister has given us reassurances this evening about the ability of a claimant to attend an interview in the company of an advocate.

The only point I wish to make on that is one that has already been made by the noble Baroness, Lady Anelay. It is important that we question or show concern for the cost of advocacy. We support the entitlement to have an advocate. I beg to move.

Earl Russell

In supporting this amendment I would also like to speak to Amendment No. 113, which is in my name and that of my noble friends. The common factor between these amendments is that they deal with things that are to be taken as "good cause" for failure to comply with the regulations. The list enumerated in the noble Baroness's amendment is fairly self-evident and so I hope is the one specified in Amendment No. 113, which states, 'good cause' shall include physical or mental impairment which makes it difficult for a person to understand or deal with communications". When I look at those words I remember a particularly effective speech made at one of our party conferences by a sufferer from cerebral palsy. His speech was so impeded that he was able to communicate with the conference only through an interpreter. Had he been summoned for an interview on his own without the benefit of an interpreter, on first meeting, and if they were lucky, they might have understood one word in three. I am not particularly confident of that. An interview conducted under those circumstances might have been rather unfortunate. Therefore, I hope that the noble Baroness will see this case as being reasonably clear.

As regards regulations providing "good cause", I hope that the list which has been tabled will not be regarded as exhaustive and that there will be room left for that necessary formula "or else some other reason why". Usually the best cause of all is one which is so improbable that no one would ever think of foreseeing it.

Lord Rix

I should like to make a few remarks in regard to this amendment and Amendment No. 113. The Minister has already indicated the willingness of the Government to issue comprehensive guidelines. However, if these amendments are not acceptable to the Government and they are not pressed tonight, would it be possible to ensure that the impairments described in them are included specifically in the guidelines which are to be issued by the Government?

Baroness Hollis of Heigham

I very much hope that I shall he able to reassure the Committee. The effect of these amendments would be to set out in primary legislation some specific circumstances in which a person would have good cause for failing to attend a work-focused interview. The noble Baroness, Lady Buscombe, concentrated primarily on the situation of carers. My problem is not that I disagree with anything in her amendment, but it does not go far enough. Indeed, by definition, any amendment of this kind becomes exhaustive. That is why we think it is more appropriate to go through regulations which are not exhaustive, although they may well be prescriptive.

Perhaps I may enlarge upon the latter point. It is our intention to introduce in regulations a comprehensive good-cause provision. This will ensure that where a person's failure to attend an interview is due to reasons beyond his control, there will be no impact on his benefit. We shall use that provision to cover circumstances such as someone being too ill to attend on the day set for the interview or where a person has misunderstood the requirements placed on him because of language, learning or literacy difficulties. Indeed, such persons may need to attend a funeral, and so on.

We are well aware of the importance of having a fair and comprehensive range of good-cause provisions, but we do not think it is necessary to set out everything in primary legislation. The Delegated Powers and Deregulation Committee does not disagree with us. Good-cause provisions already exist elsewhere in the benefits system; for example, regulations have been made under a very similar provision in the Job Seeker's Act. Moreover, we also need to maintain a degree of flexibility in the "one" service, which deals with a wider spectrum of claimants than JSA. That is why we intend to define in regulations the matters to be taken into account in deciding whether someone has good cause. We shall also use regulations to prescribe specific circumstances in which a person will or will not be regarded as having good cause.

However, the matters listed in regulations will not be exhaustive; indeed, there will always be something that no one in this Chamber has thought of but which, when presented to us, will be a perfectly reasonable basis for good cause. I am sure that the noble Lord, Lord Higgins, can think of every possible circumstance of good cause from a sedentary position, but I hope that he will not share that information with Members of the Committee at this hour. It would be a very long list.

Advisers will be given the flexibility to take account of other circumstances not explicitly set out in the regulations. We cannot hope to anticipate—nor, indeed, should we—every situation which could make it difficult for someone to attend such an interview. However, at the end of the day, the essence of good cause is that, given the circumstances of the individual on that particular day, it was reasonable that he or she did not attend. That is the ultimate test: the test of reasonableness.

From my personal experience of seeing advisers work with New Deal claimants, I am sure that personal advisers dealing with lone parents with caring responsibilities, with carers or with disabled people will err on the side of any generosity of interpretation that may arise. Given that explanation, I hope that the noble Baroness and the noble Earl will not press their amendments.

Earl Russell

I thank the Minister most warmly for that response. Indeed, she said everything that I hoped to hear her say.

Baroness Buscombe

I, too, thank the Minister for that full response. I am much encouraged by her reference to the regulations. She said that they will not be exhaustive but that, at the same time, they would be very comprehensive with regard to a good-cause provision. Again, I am sure that the noble Baroness will understand that we introduced this very much as a probing amendment to underline the importance of this aspect of the Bill. I hope that the Minister will appreciate that the sooner we can see the regulations in draft form the better it will be for all of us in that we shall feel comfortable and reassured that what she has said will indeed take place. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 108:

Page 60, line 18, at end insert—

("(g) prescribing that, where an interview has not taken place within three days of the initial claim, and unless this is due to unreasonable behaviour by the claimant, full benefit entitlement be paid until such time as the interview has taken place and entitlement can be reassessed").

The noble Earl said: This amendment deals with interim payments and relates to cases which, again, are too numerous for us to enumerate, especially at this time of night. I refer to cases where, for one reason or another, an interview cannot immediately take place.

If there is a delay in the interview process—there may be circumstances where that is the right thing to do from the point of view of all parties—our concern is that the claimant should not lose benefit because of such a delay, which is not his or her fault. Obviously, if that happens, there is a possibility not only of real hunger but also of the building up of debts, involving crisis loans from the Social Fund, leaving the claimants to start life on benefit carrying a burden which has already built up before they have started.

One needs to start life on benefit if possible with as clean a financial slate as possible. I hope that this amendment will be acceptable. Press publicity has suggested that it might be. I await the Minister's answer with optimism. I beg to move.

9.15 p.m.

Baroness Hollis of Heigham

I am happy to make positive noises. We are concerned here with the amount of time between the claimant making a claim and the work-focused interview taking place. Amendment No. 108 seeks to ensure that a claimant whose interview does not take place within three days of making the claim will have his or her benefit put into payment, unless this delay is caused by unreasonable behaviour.

I have every sympathy with the intent behind the amendment. It is regrettable that at present there are instances of claimants not receiving an appropriate service. We hope that the "one" system will make things better. For example, personal advisers will be able to help clients who have not filled in forms correctly rather than the forms having to be sent to and fro as at present, provide them with information on the evidence they need to show and be a personal point of contact if clients want to check the progress of a claim. As I say, we hope and expect that the "one" system will improve the service to clients. That is why we have made the commitment to the three-day period.

However, we recognise that there are always occasional circumstances—I do not always refer to computers when I say this!—in which we cannot achieve the targets we set. I reassure the noble Earl that, where holding an interview within three days is impossible for reasons unrelated to claimants, they will not lose money. I fully share the noble Earl's opinion that it would be wrong for someone to be penalised because of administrative difficulties, or through no fault of his own. I hope that the noble Earl will accept that his amendment is not necessary and will feel able to withdraw it.

Earl Russell

I thank the Minister for that reply. There is just one circumstance it does not cover on which I hope she can reassure me. That is where the delay in the interview is because of circumstances to do with the claimant but for which the claimant is not to blame. I take, for example, the case of a claimant who is overcome by acute appendicitis and is taken into hospital and immediately operated upon.

Baroness Hollis of Heigham

I shall write to the noble Earl if I am in any sense misleading him, but as far as I am aware, that would count as a deferred interview. The benefit would be in payment and the claimant would be expected to attend an interview at the appropriate point when he is well enough to do so.

Earl Russell

I thank the Minister warmly for filling in that gap. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 108A not moved.]

Baroness Buscombe moved Amendment No. 109:

Page 61, leave out lines 7 to 20

The noble Baroness said: This amendment asks the Government to think again with respect to the designation of the person who would provide services as referred to in this part of the clause. The Bill refers on page 61 to "the designated authority" or "a person providing services". The designated authority or a person providing services could be the Employment Service, the Benefits Agency or the local authority. However, we on these Benches believe that the relevant person is the Secretary of State, as we believe that he or she should be answerable to Parliament. Therefore we ask for clarity as to the identity of "the designated authority". We want a specific reference to the Secretary of State rather than to "the designated authority". I beg to move.

Baroness Hollis of Heigham

I hope the Committee will forgive me for repeating that the "one" service is all about treating people as individuals rather than as categories. That is why we have resisted blanket definitions to exempt particular categories of people from the requirement to interview.

Amendment No. 109 would not allow advisers any discretion to defer or waive the requirement to take part in a work-focused interview. I believe that such discretion is essential. I am sure that the noble Baroness would want advisers to have precisely that discretion. Indeed more discretion was called for earlier today. The heart of the policy is that personal advisers will be able to make decisions about whether an interview is appropriate on a case-by-case basis. Our expectation is that the vast majority of people will have their interview immediately. But the personal adviser must be able to make a judgment as to whether the help and support he or she has to offer will be of immediate use to the client, or whether it might be helpful at a later date. The example that the noble Earl, Lord Russell, gave of someone suffering from sudden appendicitis would be an obvious example. As I say, we want the interviews to be as helpful as possible and for people to approach them as a positive measure where they can seek to explore the opportunities available to them. Personal advisers need the discretion to decide whether an interview is appropriate according to individual circumstances. For these reasons, I hope that the noble Baroness will not pursue Amendment No. 109.

I turn now to Amendments Nos. 110 to 112, which relate to the "designated authority" making decisions to defer or waive work-focused interviews. It may be helpful if I explain the purpose of the term "designated authority". This allows certain decisions in relation to work-focused interviews to be taken not only by the Secretary of State but also by local authority staff or by those contracted to provide services to either.

A key aim of the "one" service is to streamline the delivery of benefits: it is a one-stop shop approach. "One" will provide a single point of entry into the benefits system for those of working age and will improve the level of service we provide. Lone parents may very well have between six or eight sources of income and be juggling five different agencies. That is a full-time job over and beyond their caring responsibilities. By bringing together all those agencies involved in the administration of benefits—the BA, the ES and local authorities—in partnership with private and voluntary sector bodies, claimants will be provided with a seamless, efficient and modern service.

In "one" pilot areas, a claimant whose first point of contact with the benefits system is with the local authority HB office will be able, from that very office, to claim the whole range of social security benefits to which he may be entitled. The local authority staff there—fully trained, of course, like all personal advisers—will also be able to decide whether an immediate work-focused interview is appropriate for the claimant or whether the requirement should be waived or be deferred to a more appropriate time.

The amendments would prevent one set of key players—local authority staff or their contractors—taking decisions in relation to the interviews. Instead, all decisions would need to be taken on behalf of the Secretary of State. So the amendments, if accepted, would leave us with two choices—and both run directly counter to the streamlined service we seek to introduce and which we believe that claimants deserve: either we could exclude local authorities from "one" altogether, which would perpetuate current piecemeal and inefficient delivery mechanisms; or we could implement a regime in which the local authorities, while retaining responsibility for the vast majority of aspects of "one" delivery, would refer all relevant decisions to the Secretary of State. Again, that would be administratively cumbersome and would certainly lead to delays in processing benefit claims.

I hope that Members of the Committee will agree that the amendments would inhibit one of our prime aims; that is, to make "one" an efficient integrated service for benefit claimants which is sensitive to the needs of the individual. In the light of that, I hope that the noble Baroness will be able to withdraw her amendment.

Baroness Buscombe

I still feel somewhat concerned about the reference to the local authority. My understanding is that this is the first reference under this clause to "the local authority". It is therefore very important that the parameters within which it works and its powers are clearly set out.

Baroness Hollis of Heigham

It is not so much that the local authorities will have the powers. We are trying to integrate a range of benefits, from JSA, IS and IB through to housing benefit and council tax benefit. We shall probably include CSA as well. Wherever anyone goes first to claim any one of those benefits—which will normally probably be JSA or IS—they will come into the "one" system. The advisers in the four basic pilots are, for the most part, ES or BA advisers rather than local authority advisers. It is possible that the "one" service could be within a local authority context.

However, the important point is that all personal advisers, whether they come from local authorities, the Employment Service, or the BA, will all have been exposed to the extremely intensive and extensive training I mentioned. So in terms of their skills—apart from some very particular areas of expertise—at the end of the training period they should be virtually interchangeable. I suspect that most local authorities may not be involved in this at all, but where they are so involved and their staff come forward, they will be going through the same training procedures as ES and BA staff. I hope that that explains the position.

Baroness Buscombe

Except that, with regard to these regulations, surely it is the Secretary of State who should be accountable at the end of the day.

I have listened with interest to what the noble Baroness has said. I should like to have the opportunity of reading Hansard. I may well return to this subject at a later stage, but for the moment I am happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 110 to 114 not moved.]

Baroness Buscombe moved Amendment No. 115:

Page 61, line 44, at end insert (", conducted in a location appropriate to the person")

The noble Baroness said: This amendment is designed to ensure that the interviews take place in premises which are appropriate for claimants. It highlights the important obligation on the part of the Benefits Agency and the Employment Service to ensure that interviews are conducted in premises which are accessible to as many disabled people as possible, including wheelchair users and those with sensory impairments. There are other disabled people, including those with learning difficulties, who have essential dietary, toilet and personal care routines that need to be taken into account.

Some people may wish to ensure that they have a companion with them for the interview, and of course we have already touched on that, although, as I would suggest, there may be a difference between having a companion with them and someone who is an advocate. There are also those who may be quite unable to take part in an interview without support. For some people an interview at home at a convenient time might be the preferred option. However, it should not be assumed that just because persons have a particular disability they should automatically be interviewed at home.

We should also perhaps refer to home interviews, in the light of what the noble Baroness has explained to us regarding the interview process this evening. She stated that the personal advisers would be working together as a team within the interview centre; of course that advantage is lost when an interview takes place at home. Many people with mental health problems, for example, find home interviews by the Benefits Agency stressful and intrusive, as their home may be the only place where they can feel safe.

There is no reason to believe that the idea of a work-focused interview would be any less threatening. The claimant should be consulted and given the opportunity to choose between an interview at home and an alternative location. So we shall be looking to the Minister for assurances on that. The single work-focused gateway should be implemented, we believe, as a service to individual claimants. It should take account of individual needs rather than rely solely on what is convenient for the interviewer. Personal advisers must be flexible enough to take account of individual circumstances.

We therefore feel that the location of the interview is very important and that the option should be left entirely with the claimant to decide where the interview should take place. We should bear in mind what the noble Baroness has said in relation to advisers and their ability to work together; if the interviews take place in the home there may be some disadvantage in terms of the amount of expertise available. I beg to move.

Lord Addington

This amendment is interesting in that it seems to be directed at the simple principle of what is appropriate for an individual with certain special needs. I would hope that the Minister would be able to embrace this concept when she replies. We spoke earlier about having pigeon-holes for various people and we are trying to put people into various pigeon-holes according to their varying needs. I would suggest that having this degree of flexibility within the whole process is important. I hope that the Minister will be able to assure us that it will be present and that she will be able to tell us where to find it when we look through the Bill.

Lord Rix

May we also have an assurance that home visits are not a policy of last resort?

9.30 p.m.

Baroness Hollis of Heigham

Again, I hope to persuade noble Lords that this amendment is not necessary. The amendment presses for the interview to be conducted in an appropriate location. The "one" service is designed to improve the service that we provide to clients of the benefits system. It is a central part of what we are trying to do. We see the interviews very much as an opportunity and as important in the life of clients. We want them to take place in appropriate and pleasant surroundings in which they will feel confident and relaxed and will be forthcoming. We are not talking about a situation in which the language of sanctions and the like applies. We are attempting to achieve a totally different culture.

There are many aspects to this. We will ensure that all "one" delivery sites provide access for disabled people, and facilities to enable them to use the service effectively. We will make provision for home visits by personal advisers where that is appropriate. For example, if a client has caring responsibilities that mean it is impossible to leave home, the personal adviser will consider conducting the interview there.

The noble Lord, Lord Rix, asked for an assurance that the home visit would not be a last resort. We do not know what proportion of interviews will be conducted on home visits; it could perhaps be 20 per cent. So it will certainly not be a last resort. The only point at which a home visit will be a last resort is in the case of someone failing to attend, especially for a deferred interview, or for a "trigger" interview, and we are not confident that we have made contact with that person. At that point, a home visit will be a last resort to make sure that the person is at the given address. Only in that context do we see it as a last resort. But we expect the initial interview to take place in an office made available to disabled people. If that is not appropriate, a home visit will certainly follow.

In the pilot areas we have selected sites on the basis of minimising the chances of anyone having to travel more than 45 minutes to their local office. We want the environment to be relaxed, friendly and helpful; and we want people to notice the difference on entering.

As a result of the pressures that noble Lords have properly put on me during the course of discussion to give undertakings about the atmosphere and culture of the "one" interviews, I hope that I have been able to reassure the Committee in terms of the number of specific commitments that I have made. In the light of that reassurance I hope that noble Lords will accept that there is no need to place the requirement for the interviews to be conducted in an appropriate location on the face of the Bill. That is at the heart of what we seek to do. Therefore, I hope that the noble Baroness will be able to withdraw her amendment.

Baroness Buscombe

A great deal is being taken on trust. In relation to so much of what we are asking, we have to wait and see. In that sense, we are dealing very much with a framework. Therefore, I ask the Minister to bear with us. It is important that we raise a number of these amendments. We have no idea merely from reading the Bill what we are in for.

Baroness Hollis of Heigham

I am grateful to the noble Baroness for giving way. That was in no sense a criticism. It is exactly what a probing amendment should do; namely, to extract commitments from the Government by which their pilots and other schemes can be judged. It is entirely appropriate at Committee stage. So I assure the noble Baroness that in no sense is any criticism implied—on the contrary.

Baroness Buscombe

I thank the noble Baroness; no criticism is taken. We seek reassurance. With regard to the location, I hope that the noble Baroness will accept and take on board the importance that we place on accessibility in terms of the interview location being an integral part of the system; and also that, where individuals are invited for interview, the option of interview in the home could be included in all invitation letters. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Buscombe moved Amendment No. 116:

Page 62, line 5 after ("training") insert ("or benefits")

The noble Baroness said: I rise to speak to Amendments Nos. 116 and 117, which we shall take together. These amendments have the support of the Disability Benefits Consortium.

The amendment seeks to broaden the scope of compulsory interviews which new claimants will have to undertake as a condition of receipt of benefits. In the Government's earlier consultation paper, Support for Disabled People (Cm. 4103), the single gateway scheme was described as, The mechanism for ensuring that people, including those with a long-term illness or disability, are given a personal adviser who will help them assess information on work, benefits and other government services".

As currently drafted, the Bill describes the interview as "work-focused". That term has been defined by the Government as an interview, conducted for such purposes connected with employment or training".

It was said earlier this evening—I make no apology for repeating it—that the term "work-focused" was misleading and did not reflect the objectives of the interview or the full range of support that should be offered to a claimant. The aim of these amendments is to make explicit the Government's earlier intention that interviews should perform the dual role of advising people with disabilities of the range of benefits to which they are entitled and, where appropriate, supporting claimants' efforts to find work.

The Disability Benefits Consortium is concerned about the description "work-focused", in that the Government place a disproportionate priority on getting people into paid employment at the expense of the provision of other kinds of support. We suggest that if that is replicated in the training of personal advisers and the evaluation of the success of the scheme, disabled people will be denied individualised support and access to valuable information about benefits.

It is simplistic to assume that welfare and work are either/or choices for many people with disabilities. Where paid work at some stage is a realistic possibility, it will often be necessary to work toward that goal through a support package that involves health, social services, education and training. People with learning disabilities may need job-coaching and the ongoing assistance of social services to take up employment. Those with sensory impairment may require communication support to try out employment. Personal advisers should take account of an individual's circumstances and act as a signpost to other avenues of support.

Severely disabled people who can work also need benefits to compensate for low earnings. They also need help with the extra costs incurred as a result of their-disability. Welfare and work are needed to deliver a degree of equity between disabled and non-disabled people in terms of extra costs and reduced incomes. Personal advisers should encourage people to claim in-work benefits to which they are entitled. For people with profound and multiple disabilities, including mental health problems, the nature and severity of their condition may rule out paid employment. A recent survey by the mental health charity MIND investigated attitudes to employment and benefits among people with mental health problems. The largest category who commented on what would help them to get work said that poor health was the most significant barrier. Comments included, "I would if I was well" and, "I would work if they gave me enough time to finish therapy". We believe that if there is to be an interview for such claimants, it must focus on the welfare of the individual, including access to benefits, rather than solely on paid work. I appreciate that the Minister has given us considerable reassurances on that matter this evening.

In addition, others may find that caring responsibilities rule out paid employment. We believe that an interview will be beneficial to people in those circumstances only if the personal advisers recognise carers' contributions to society and centre interviews on the welfare of the carer. For many claimants, the benefits system is a source of confusion. There is evidence that people with disabilities do not claim the benefits to which they are entitled and perhaps are unaware of the range of support that is available. All claimants need up-to-date personalised advice on the appropriate range of benefits. That should be an integral component of the interview and made explicit on the face of the Bill. To that end, I beg to move.

Earl Russell

I congratulate the noble Baroness on thinking of these particular amendments. The}/ precisely encapsulate the misgivings which many of us, most notably the noble Baroness, Lady Turner of Camden, expressed earlier this evening. People are very individual. Here we are dealing almost entirely with those who are already exempt from the actively-seeking-work rules. Therefore, there can be no question of skiving or scrounging. These are people who have perfectly good reasons for not going to work. They are individuals. Their circumstances are very different. None of us from the outside is able to judge them with great precision.

The language of the Bill, especially on page 62 at lines 7 to 11, explains why a number of us have had misgivings. It states that the interview is for purposes connected, with a person's existing or future employment or training prospects or needs, and (in particular) assisting or encouraging a person to enhance his employment prospects". From one point of view, those words may be viewed as entirely benign, but they sound rather as though everyone, however handicapped, is expected to have employment prospects. That impression may well be misleading. But if it is a misleading impression it might be in the Government's interests to dispel it.

In particular, the word "encouraging" is capable of ambiguity. In the sense that it is used in one-to-one, personal friendship situations, it is entirely benign; but there is another sense, with perhaps a faint suggestion of inverted commas involved, where it becomes very much the same kind of euphemism as the title of the caring Whip in another place.

The amendment encapsulates the difference between those two meanings. If the noble Baroness's amendment were accepted, the benign interpretation would clearly be intended. That, I think, would relieve a great deal of anxiety among a large number of people and might do a great deal to improve the Government's reputation and to persuade people like me to make fewer speeches on the issue. The noble Baroness might think that that was a rather good thing.

Lord Rix

The definition of a "one" interview should accurately reflect the broad range of functions associated with it. Two of the central functions should be simplifying the benefits claims process, and advising claimants what benefits may be available to them. I therefore see no reason why that should not feature on the face of the Bill, or why we should not at least receive one of these splendid assurances that we have heard from the Minister today.

Baroness Hollis of Heigham

Amendments Nos. 116 and 117 seek to widen the definition of "work-focused interview" set out on the face of the Bill. I share the intentions underlying the amendment, but I hope to be able to give noble Lords the assurances that they seek—despite the ironic intervention of the noble Lord, Lord Rix—in order to enable them to withdraw the amendment.

Lord Rix

The intervention was heartfelt, not ironic.

Baroness Hollis of Heigham

Again, I shall consider that. As I say, I agree with the intentions, but it may be worth spelling out a little further how clients will go through the claim process.

When someone of working age who is not in full-time work makes contact with the "one" service to claim benefit, he or she will need to go through an initial stage called "Start-up". This will be prior to taking part in a work-focused interview. The purpose at this stage is for clients to provide basic personal details, register their intention to claim benefit, and be issued with the appropriate claim forms. Giving people integrated, personal support at this stage will make it easier for them to access the benefits system.

One of the key elements of this early stage is for staff to identify whether there are other benefits to which the claimant may be entitled. Considering the training programme and the number of days spent in training staff to familiarise themselves with the full range of benefits and their entitlement, I am sure that that will not be overlooked by them.

Most people will then be required to take part in compulsory "one" interviews with a personal adviser. These interviews will be a more in-depth investigation of an individual's circumstances, and an exploration of the barriers that may prevent participation in the labour market.

Personal advisers will encourage clients to improve their employment prospects where relevant, even if they are some way off from being job ready; for example, if they have a very young child and may not be considering going back to work for several years yet. They will work with their clients to identify and take steps to overcome any barrier so that they are better able to seek work and to that end that second interview could well cover such areas as child care, housing, training and the availability of in-work support.

Although this interview is primarily about identifying the barriers to work which a client may face, it will also provide a second and further opportunity for staff to explore benefit entitlement. For example, personal advisers will ask clients about any caring responsibilities that would make it difficult for them to look for work. I would expect in that situation that the personal adviser will uncover the fact that many people may be entitled to invalid care allowance which they are not currently claiming and will advise the client to make a claim.

Personal advisers will also ensure that clients are aware of the in-work support which is available through the tax and benefits system should they move successfully into work. For example, if a client has a disabled child, if they were to go into work and it was thought appropriate, perhaps because of the child's school hours, that they needed WFTC, then they would be entitled to claim double the level of tax credit under WFTC than if the child was not disabled.

As your Lordships will be aware, Clause 52 also allows for further work-focused interviews to take place throughout a client's time on benefit. These will provide further opportunities for personal advisers to ensure that people are aware of the benefits they may be entitled to claim. The personal adviser will also be the central point of contact for any queries the client may have about benefit.

Talking with lone parents who have gone through the New Deal, what has struck me time and time again is the way that they regard their personal adviser on the New Deal as a friend. This comes up quite spontaneously. "She has helped me do this; she has taken me shopping for work clothes; she has trained me in interviews; she has driven me to the interview; she has looked after the child while I have had the interview; she has been a real friend to me." This comes up time and time again. We hope to get the same culture into "one".

The reference to benefits in this amendment, I take it, must be wider than the relevant benefits referred to elsewhere in the Bill. As I say, both at the initial orientation interview and at the "one" interview we plan to use the interviews to provide advice on any benefits to which an individual may be entitled. If this encourages take-up, for example for ICA which has still not happened, we will be delighted.

I hope that noble Lords will agree that, in the light of these assurances, there is no need for the amendment. Obviously, primary responsibility for claiming the benefits will remain with the client, but staff at all stages of the process already play, and will continue to play, an important role in making sure that people do in fact claim the benefits they are entitled to. As I said, the entitlement conditions for the benefits which are available are an essential part of the training for every member of staff. At a quick look, it looks as though at least 13 days are spent on benefit entitlement and a further five on the CSA as part of the basic training programme.

I do not think it would be appropriate to go further and include a mandatory discussion about benefits within the definition of work-focused interviews. The intention behind the amendment—helping people claim benefit—will already be met through the service we are putting in place. As I pointed out, finis will take place primarily at the start-up stage and further discussion at the work-focused interview may not always be appropriate. I hope that your Lordships will accept that under the "one" service we are ensuring that our staff put emphasis on helping people claim the benefits to which they are entitled. Secondly, joining up the employment service, the Benefits Agency and local authorities on one site will ensure that expertise about the whole range of benefits is available in one place. I hope, with that explanation, that the noble Baroness will feel able to withdraw the amendment.

Baroness Buscombe

I thank the noble Minister for her explanation. I thank also the noble Earl, Lord Russell, for his support and speech, one of the many, and also the noble Lord, Lord Rix, for his support.

I listened to what the Minister said. I regret that she is not prepared to accept these amendments. I shall read with interest in Hansard her reassurances that much of what I have made reference to will happen in practice. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 117 not moved.]

Baroness Buscombe moved Amendment No. 118:

Page 62, line 24, at end insert—

("(1A) Regulations shall be made specifying the maximum period which may elapse between the refusal of benefit and the hearing and determination of an appeal, and shall provide, if the appeal has not been heard and determined within such periods, for the applicant to be deemed to have had his case upheld.")

The noble Baroness said: The amendment relates to the maximum period allowed between the refusal of benefit and the hearing and determination of appeal. We believe that the amendment is straightforward. It seeks to ensure that regulations will be made which will clarify the appeal process for those who have been refused benefit because of non-compliance with procedures for a work-focused interview. We should like to know what will be the maximum period between failure to comply with the requirement to take part in an interview, refusal of benefits on that basis and the hearing of an appeal against refusal.

Secondly, what will the appeal procedure be? Thirdly, how many steps will there be? How many opportunities will there be for a claimant to appeal against refusal of benefit? Who will sit on the appeals board, whatever it is to be called? If the appeals board decides to refuse benefit, what will happen to that person? We referred to that when discussing Amendment No. 92E and the other side of the gateway.

As Mr Edward Leigh asked in another place, will the result of non-compliance after appeals mean that those who refuse to take part in the work-focused interview will be suited only to being wrapped in a blanket? I should hope not and therefore we seek clarification in relation to the appeal process. If, after the final stage, the person does not accept that he or she must attend an interview, what will happen? I beg to move.

Earl Russell

This is a good amendment. It may concentrate the department's mind wonderfully. However, in passing, I must express a slight regret that it is not just that little bit better; that it does not specify that there shall be no loss of benefit before the appeal. That would have been an even better amendment and we might think about it in the future.

Baroness Hollis of Heigham

Yes, I can see the charm of that; anybody who might otherwise lose the benefit will promptly appeal, after which, as regards the passport fiasco, "You have seen nothing yet!".

The amendment proposes a special arrangement for appeals by people who fail to participate in a work-focused interview either at the beginning or during the benefit claim. It proposes that, where an appeal is lodged because a decision has been taken to reduce or refuse benefit, should the appeal not be heard within a given period the appellant's case will be treated as upheld. Regulations would lay down the maximum period which should elapse between the refusal of benefit and the determination of the appeal.

As invited by the noble Baroness, it might be helpful if I briefly set out how the decision-making process for work, particularly as it has changed as a result of the DMA Act. The noble Lords, Lord Higgins, Lord Razzall and Lord Goodhart, and I sparred happily over that during the course of last year. As Members of the Committee will be aware, under Clause 52 entitlement to benefit is dependent on a client participating in the "one" interview both at the point of claim and at various trigger points throughout an individual's time on benefit following the occurrence of certain specified events; for example, when the youngest child becomes five, 11 and so forth.

Depending on whether the decision is made in respect of an initial or a triggered interview, a failure to fulfil this requirement would mean either that the claim was not accepted—that the claim had not been made effectively—or, if it was a triggered interview, that the amount in payment is reduced.

The personal adviser who conducts the interview will take a decision on whether or not someone has attended or taken part in an interview. This is not a decision which will be taken lightly and the personal adviser will ensure that the client understands the consequences of his or her actions and that he or she has every opportunity to play a full part.

As a result of the DMA Act our dispute resolution procedures encourage anyone who is unhappy with a decision to contact the decision-maker within one month of the notification. That allows an opportunity to examine the reasons behind any decision and to correct any error. Those procedures will apply to decisions on a failure to take part in a work-focused interview as well as other decisions. The arrangements form part of the changes that demonstrate the Government's commitment to reducing delays in the appeal system.

They will enable disputes to be dealt with quickly and will avoid formal appeals. In addition, changes to the composition and administration of appeal tribunals will ensure that any appeals that are not resolved at the dispute stage are heard more promptly.

It is appropriate that there should be a further right of appeal, beyond the opportunity to trigger the dispute procedure, against any decision that a client has failed to take part in a work-focused interview. Clause 52 will introduce a new Section 2B into the Social Security Administration Act 1992 to ensure that clients have a right of appeal under Section 12 of the Social Security Act 1998 against a decision that they have failed to take part in a work-focused interview, that they failed to show good cause for such a failure or that they are liable to suffer any particular consequence as a result of failing to take part.

That shows our intention to help and encourage people to meet the requirement placed on them to take part in a work-focused interview when appropriate. We have provided opportunities for those who feel aggrieved to challenge a decision that they have not taken. That can be done within the system inside a month or by using the full appeals procedure.

We do not feel that the amendment would be a sensible way to proceed. A provision that results in all appeals not heard within a specified time succeeding, regardless of whether the original decision was sound, would lead to some perverse outcomes. It would also encourage more people to appeal in the hope that their case would not be heard in time and benefit would be paid. The more people who appealed, the longer it would take for cases to be heard. The system would then be clogged, making it impossible for those with a legitimate grievance to have their case heard promptly. Such a system would serve no one well and would become the classic self-fulfilling prophecy.

The amendment would not result in fair decisions or a good appeals service through the independent appeal tribunal for all clients. I urge noble Lords not to pursue it. Our proposals would give clients every opportunity to participate in the interview, which is not onerous. When a decision is taken that a client has not participated, existing dispute procedures that were introduced under the DMA Act and the appeals procedures, which we hope will now be more streamlined and speedy, will ensure that cases are dealt with promptly and at the right level. I hope that the noble Baroness, Lady Buscombe, will feel able to withdraw her amendment.

Earl Russell

The noble Baroness has enunciated a slightly dangerous principle. She is saying that people should not be given appeal rights because that only encourages them. Where does that principle stop?

Baroness Hollis of Heigham

The noble Earl is unfair. I said that if we continue to pay people benefit while they appeal, there is every encouragement for anyone who has had benefit taken away to appeal so that they continue to have money paid.

Earl Russell

I hear that. Now will the noble Baroness answer my question? Where does that principle stop?

Baroness Hollis of Heigham

I do not know what the noble Earl is asking.

Earl Russell

I am asking how many other legal rights and how many other rights to sue for justice the noble Baroness is going to apply that principle to—the principle that it only encourages people.

Baroness Hollis of Heigham

This is unfair. No one is suggesting that anyone's rights to appeal should be restricted in any way. On the contrary, by introducing the new disputes procedure in the DMA Act, we are strengthening people's ability to have errors corrected speedily and properly. In no part of the social security system does benefit continue to be paid while somebody is appealing against a decision to discontinue benefit for whatever reason. That would give people a reason to appeal irrespective of the circumstances, even if the appeal was hopeless and beyond the range of the law. I am not saying anything beyond that.

Earl Russell

The Minister ought to read some of her speeches on the Jobseekers Act 1995.

10 p.m.

Baroness Buscombe

I thank the Minister for her explanation. Again, this is a probing amendment to try to ensure that there is a proper safety net for claimants. I should like to read in Hansard what she said in relation to the point at which benefits are removed. It has a number of implications. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 agreed to.

Clause 53 agreed to.

Baroness Buscombe moved Amendment No. 119:

After Clause 53, insert the following new clause—

ANNUAL REPORT TO PARLIAMENT ON WORK-FOCUSED

INTERVIEWS

(" .—(1) The Secretary of State shall report annually to Parliament on the operation of the work-focused interviews, with specific reference to—

1. (a) the number of those moved from the interviews into work; and
2. (b) the number who, having moved into work, leave work after—
1. (i) 6 months and
2. (ii) 12 months.

(2) For the purposes of subsection (1), the Secretary of State shall take into consideration the following—

1. (a) the number of interviews which are postponed, deferred or cancelled,
2. (b) any cost implications for businesses, and
3. (c) the levels of fraud detected.

(3) For the purposes of subsection (1) the Secretary of State shall consult—

1. (a) all relevant non-governmental organisations,
2. (b) all businesses involved with the operation of the work-focused interviews, and
3. (c) any organisations which the Secretary of State may think appropriate.

(4) The period for any consultation under subsection (3) shall be three months.")

The noble Baroness said: This amendment is extremely important. It requests an annual report to Parliament on work-focused interviews. Given the importance of that whole process, there should be proper monitoring of how it has developed and of the successes and failures of the initiative.

The Committee will note that the amendment asks for a number of points to be covered in that annual report. We ask that: The Secretary of State shall report annually to Parliament on the operation of the work-focused interviews, with specific reference to—

1. (a) the number of those moved from the interviews into work; and
2. (b) the number who, having moved into work, leave work after—
1. (i) 6 months, and
2. (ii) 12 months".

The amendment states also that: For the purposes of subsection (1), the Secretary of State shall take into consideration the following—

1. (a) the number of interviews which are postponed, deferred or cancelled,
2. (b) any cost implications for businesses, and
3. (c) the levels of fraud detected.

(3) For the purposes of subsection (1) the Secretary of State shall consult—

1. (a) all relevant non-governmental organisations,
2. (b) all businesses involved with the operation of the work-focused interviews, and
3. (c) any organisations which the Secretary of State may think appropriate.

(4) 'The period for any consultation under subsection (3) shall he three months".

We note that the pilots presently being conducted will last for three years, but we think it is very important to have a proper and full evaluation of those pilot schemes before full implementation takes place. We stressed that earlier this evening, but in relation to this clause, it is extremely important that a number of points should be set out clearly on an annual basis, starting with the results of the work-focused interview pilot schemes in the first three annual reports to Parliament.

I stress that we welcome the work-focused gateway. It builds on the principle behind the jobseeker's allowance which we instituted. But we question a number of practices and procedures which have not been set out on the face of the Bill. We want to know that this initiative will acheve what it sets out to achieve.

In relation to local authorities, we believe that the proposals as they stand give too much scope to local authorities to show discretion in postponing interviews or simply not having them at all.

At present, claimants have to spend a minimal amount of time in contact with Benefits Agency workers. This new system will place an enormous amount of additional work on those workers. Under the new system, Benefits Agency staff must allow up to an hour for interviews with claimants. That will put a massive strain on an already over-burdened system. With the opt-out provisions in the Bill, the choice which will face Benefits Agency staff will be either to undertake the interviews and have a huge backlog or to postpone, defer or cancel them. We believe that that is an uncomfortable choice for them to have to make.

We have consistently pointed out that compelling people to attend interviews, although welcome, is not the panacea Ministers pretend. It is what lies on the other side of the "one" initiative that matters. The whole idea of the work-focused gateway depends on the availability of jobs. We believe, therefore, that our reference in the amendment to reporting on how the interviews impinge on the workforce and on the success of placing people in work is important.

Over the past two years, policies implemented by the Government have increased the burden on business by nearly £40 billion. The introduction of the minimum wage, the social chapter, the working time directive, working families' tax credit and the new Employment Relations Bill are all increasing costs for employers.

We believe that we should know those costs on an annual basis. Over the lifetime of this Parliament, this Labour Government are introducing around £40,000 million in taxes and regulatory burdens on business. Those burdens relate to the windfall tax, the Budgets of 1997 and 1998, the national minimum wage, the working time directive, the introduction of works councils and parental leave. That all adds up to a total of £39.3 billion. Again, that has a direct impact on the whole focus of getting more people into work. We want more people in work, but we believe that the cost implications for businesses cannot be ignored. We believe that the costs should be stated in an annual report to Parliament.

The figures that I have given represent an average of £10,788 for each business in the UK. As 98 per cent of all businesses employ fewer than 20 people, that represents a significant burden for most. We believe that these measures are all working counter to the Government's alleged objective of getting people back into work and we severely question how effective the work-focused single gateway will be.

Further—I referred to this earlier—although in theory the New Deal for lone parents was a good idea, we do not believe that it has been the success described by the noble Baroness. However, many among the minority of employers who have recruited staff through the scheme admit that they would probably have taken on the youngsters anyway without the need for an expensive state subsidy. We therefore have to question the extent to which we pay in order to get people into work. Tesco, for example, has opened 23 new stores in the past 12 months and recruited around 14,000 staff but only 22 "New Dealers".

We believe that there is a contradiction in terms. Again, that is the reason for our Amendment No. 119. On the one hand, we have a work-focused interview while on the other hand provisions in the Bill include recipients of incapacity benefit and severe disablement allowance being compelled to attend interviews. Those benefits, however, are, by definition, for people who are not able to work. We certainly believe that engaging disabled people in the gateway and encouraging them to work is important and right, as do the disability organisations. However, it is also crucial to ensure that genuinely disabled people are not pushed into situations and interviews for which they are not well enough. We have referred to that already tonight, but I stress that an annual report to Parliament should make reference to whether such initiatives are a success in terms of the compulsory aspect of the interview.

It is therefore essential that sensitivity and care are taken in calling genuinely disabled people to interview and ensuring that they do not simply receive a letter stating that they have to attend a work-focused interview or they will not receive any benefit. I appreciate that the Minister has given us some reassurance on that point tonight, and we are grateful for it.

We believe that cost and training should be monitored on an annual basis. We suggest that the cost of implementing the "single gateway" will be huge. We have estimated that employing the personal advisers alone could cost up to £100 million. The Government will also have to ensure that the personal advisers are fully trained and qualified in order to advise properly the range of individuals with whom they will be in contact. Too many existing job centres are inaccessible to disabled people and do not have the facilities to provide information in Braille or on tape. This, together with the fact that untrained staff are trying to assess the potential of people with a wide variety of disabilities, could lead to a shambles.

Baroness Hollis of Heigham

I do not want to invade the noble Baroness's speech, but we discussed whether premises will be accessible to disabled people when we considered a previous amendment. I thought that I gave assurances then that the noble Baroness found satisfactory.

Baroness Buscombe

I do not mean to be too repetitive, but it is important to explain why we have moved Amendment No. 119. It is important to monitor the success, or otherwise, of the whole process. We accept the Minister's reassurances about access, but an enormous cost will be involved. That cost factor—forgive me if I have not been clear on this point—will make an enormous difference to the overall cost of the initiative and we believe that we should have access to that information.

We have a right to receive a report on an annual basis. It is important to amend Clause 53 to allow Parliament to scrutinise closely the effectiveness of this welfare reform. That is why we believe that the amendment should be placed on the face of the Bill. We must ensure that all the aspects to which we have referred are expressed and monitored through an annual report to Parliament. I beg to move.

Lord Campbell of Croy

I support the amendment. The discussions in Committee today have made clear that this new kind of interview is not yet completely clear and it is not easy to predict how it will be operated. It is something new and experimental. I believe that it is especially necessary that there should be an annual report in the first few years to see how the system proposed is operating in practice.

If the Government, for some reason, oppose having an annual report on this new system of interviews—I recognise that they may not find the wording of the amendment satisfactory—what do they propose to introduce in its place? How do they intend to inform Parliament and the public about how the system is operating?

Lord Hardy of Wath

I have no objection to an annual report if my noble friend wishes to produce one. However, much of the information it contained could be obtained easily in due course from answers to parliamentary questions. One would also expect Select Committees of this House or the other place to examine the matter very carefully.

I was puzzled by the noble Baroness's reference in her excellent speech to the burdens that the Government are placing upon businesses. She mentioned the large number of small businesses that exist in this country and then proposed imposing yet another burden on them by requiring the Government to consult them—thus adding to the grumbles that small businesses make about being distracted from their business purposes by more consultation with a government department.

10.15 p.m.

Lord Addington

I like the idea of an annual report to Parliament. If the matter is discussed on the Floor of the House, it enables other bodies to see what the report contains and to add other information to the argument. That should not be overlooked. If the Minister casts her mind back to when she was in Opposition, she may remember how helpful it often was to have those outside bodies, as it were, "feeding the flames of the argument".

However, the noble Lord, Lord Hardy of Wath, found a flaw in this amendment—it was spotted by one of my noble friends. I suggest therefore that the principle is fine, though the wording may need changing.

Baroness Hollis of Heigham

This new clause seeks to formalise the process for reporting progress on the introduction of work-related interviews. It seeks to place on the face of the Bill a requirement for the Government to publish specified information in relation to the operation of the "one" service.

Before I develop what we intend to do, perhaps I can respond to a couple of the points made by the noble Baroness. I am puzzled, as was my noble friend Lord Hardy, about the propriety of why collecting statistics from business—apparently related to such issues as the national minimum wage, the WFTC, DDA and all the other matters she clearly regards as an unacceptable burden on business—should be part of the dimension of this debate concerning the statistics of the "one" programme.

The noble Baroness also spoke of 1;he New Deal not being successful. I know in some detail what is happening with the New Deal for lone parents. If we can persuade lone parents to come into the New Deal, n will be extremely successful. But it is voluntary. Lone parents do not necessarily come forward in response to letters and, because there is not the "one" interview to bring them into the scheme, they do not know what they are missing. I am also worried about that aspect.

Twice tonight the noble Baroness said that we will be spending £100 million on personal advisers. As a piece of entirely personal curiosity, can she write to me and tell me where that figure comes from? I do not recognise it from any of my sources. However, I understand and share the desire of Members of the Committee to ensure open access to information on the progress of the "one" service. It is entirely reasonable that Parliament should wish to judge the effectiveness of such an important and radical initiative. That is why we are placing great emphasis on the evaluation of the pilots. We will be collecting and publishing not only information sought by this amendment—my criticism would be that the amendment does not go far enough in that respect—but a whole range of other information. That will be crucial in evaluating whether the introduction of work-focused interviews improves the extent of labour market participation and provides claimants with a more efficient service tailored to their individual needs.

In response to the noble Baroness, we will be publishing information on the number of people who get jobs, the number who are referred onto training programmes and claimants' views of the service they received. We will be collecting data on an ongoing basis on all the key stages of the new process, including the numbers taking part in work-focused interviews, the number of interviews which are deferred and the number of referrals to specialist help.

Over and beyond the bare statistics, we will also be conducting a full, in-depth evaluation. It will have qualitative as well as quantitative elements, remembering that by the time pilots are finished around 450,000 will have passed through them. For example, it will assess the experience of both clients and employers, and explore their views on the effectiveness of the "one" service. We intend to evaluate the policy, its delivery, the costs and benefits of the programme and all aspects of benefit claiming through the "one" service. We will also identify—a point that has not been raised tonight—the extent to which the "one" service maintains the security and integrity of the benefit system.

So details of the evaluation will start to become available as the pilots progress. I can assure the Committee that information will be available at the appropriate time. We expect the summer of next year for the qualitative assessments of the non-compulsory pilots; probably summer or thereabouts for the more quantitative evaluation. But to place the requirement on the face of the Bill risks being unduly restrictive both as to the timing of the publication and the nature of the material provided. In the light of the assurances that I have given today and the enthusiasm of the Government to publish their findings and share melt research, I hope that the amendment will be withdrawn.

Lord Addington

I believe that the most important part of this amendment is the report to Parliament and that it allows for debate within Parliament. Can the Minister give me some indication that the Government expect to have a debate on the findings on a regular basis which will allow input from outside bodies to be fed to those who are not involved directly in the parliamentary machine in order to raise new points that will be helpful to the whole system?

Baroness Hollis of Heigham

Apart from all other ways of drawing attention to the content of the research, the noble Earl, Lord Russell, is an expert in tabling Unstarred Questions as opposed to Starred Questions drawing attention to recent reports such as those from Shelter, Mind, the Nuffield Foundation and others which over the years he has asked the House to debate at, I am sure, appropriate length. I expect no less stringent scrutiny of the Government's research than the noble Lord asks us to attach to the reports of other organisations.

Baroness Buscombe

I thank the Minister for her explanation. I am surprised that she was puzzled by my reference to business. It is tremendously important that we have the cost implications for business not least because of the burdens which have been placed on it since this Government came to power. There is no question but that this initiative will have implications for business.

As regards the training programme, I have stated that we estimate the cost as being £100 million. As the Minister believes that that is not in any way an accurate figure, can she say what she believes the cost will be?

Baroness Hollis of Heigham

The noble Baroness has mentioned that twice tonight. On what basis does she produce her figures? At the moment we are talking about 200 personal advisers and there will probably be 2,500 of them in due course. I have already spoken about training. We estimate that the average cost will be about £2,000 per head. Obviously, they will be earning EO salaries, which is approximately between £16,000 and £18,000 each.

Most of them will be currently in service. Some will be drawn from the New Deal. Most of them already exist within the employment service. They will be doing a lot of the work in any case. If the noble. Baroness has some basis for her figures other than speculation, I would like to hear it. We have no figures of that kind. I shall be interested to know. On the ground of the diffusion of useful knowledge, perhaps the noble Baroness will share with us the kind of information that I am doing my best to share with her.

Baroness Buscombe

I am happy to provide the Minister with that information. As regards the level of professionalism that we are asking for on the part of the personal advisers, £2,500 is not a lot of money.

Baroness Hollis of Heigham

The training programme that we have been talking about over 35 days or seven weeks means that the upfront investment in their skills is around £2,000. I am trying to give the Committee an indication of how seriously we treat the training element and how much we are investing in human capital in the personal advisers in what we all accept is an important initiative.

Baroness Buscombe

I am not sure that the Minister has understood. I was suggesting that as regards the level of professionalism and training which we have been reassured this evening will take place, £2,500 per person is not much money. We suggest that it will cost more. That figure does not pay for a lot of training.

I am sorry that the Minister is not prepared to accept this amendment and have on the face of the Bill a requirement for an annual report. I thought that this Government were keen on annual reports to Parliament. I am pleased that the noble Baroness has reassured us that we shall be receiving ongoing information as regards the cost implications and the successes and failures concerning both the pilot schemes and full implementation if the scheme goes ahead on the results of those schemes.

I revert to a statement I made earlier this evening which was a plea on our behalf that we may all have the opportunity to debate the successes and failures and evaluate the results of the pilot schemes before the scheme is fully implemented. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 54 agreed to.

Schedule 7agreed to.

Clause 55 agreed to.

Clause 56 [Incapacity for work: personal capability assessments]:

Lord Higgins moved Amendment No. 120:

Page 65, line 17, at end insert ("provided that in making the assessment under paragraphs (a) and (b) above. account shall he taken of the types of jobs available in the locality")

The noble Lord said: This amendment stands in my name and that of my honourable friends—

Baroness Hollis of Heigham

Did the noble Lord refer to his "honourable friends"?

Lord Higgins

I meant to say "noble friends", but perhaps at this time of night I can refer to both.

When making an assessment under paragraphs (a) and (b) of subsection (2) of this clause, our amendment seeks to ensure that, account shall be taken of the types of jobs available in the locality". This matter was debated at considerable length in another place. This clause is concerned with personal capability assessments as far as concerns people taking jobs. We shall deal with that aspect in greater depth when we discuss the Question on whether this clause should stand part of the Bill. After a personal capability assessment had been carried out and a person had been told that he was regarded as being fit for work, it would be unfortunate if it then turned out that there was no job appropriate to that level of capability in the particular location. It seems to us that that is something which ought to be taken into account. I beg to move.

Baroness Hollis of Heigham

I have a very full answer in front of me, but I wonder whether there is a basic misunderstanding here. A person's incapacity benefit will depend, as now, on whether he satisfies the all-work test, which is the 15-point score. That situation will not change. I cannot believe that the noble Lord really wants the question of whether someone receives IB to depend on whether, for example, he lives in Croydon or Cumbria as regards the local job prospects. As I have said many times before, that will remain unchanged.

When it comes to the personal capability assessment—for example, looking at what people may be able to do and what training they may be able to have—that will, of course, involve some consideration of the local job prospects in the sense that it would be foolish to train people for jobs that had become obsolete in various ways. However, the point is that their benefit does not hinge on anything to do with the employment situation. Indeed, under this assessment, we shall be talking about what people may do, what training they may have, what childcare needs they may have, and so on. That will be independent of the local employment situation in so far as those skills or those needs for information are generalist. Obviously, it may equally be appropriate to take into account the local job situation in terms of the opportunities available to people; but that cannot affect their benefit level.

Therefore, before I read out a long speech, I wonder whether there is some basic misunderstanding between myself and the noble Lord. The benefit is a national one which depends on a national test. It does not matter where a person lives; it is not related to employment prospects. However, it may be relevant to consider such prospects when dealing with the personal capability assessment as regards what people can do, what opportunities are available, and what training may be appropriate. But surely that should be seen as an opportunity and not as a threat. Obviously, once in receipt of benefit, any disabled persons entitled to IB need take no further action if they do not wish to do so.

Lord Higgins

The issue may become clearer if the Minister were to refer to the Hansard report of the debates in another place. Essentially, if someone is found to have the ability to take a job, we are saying that that needs to be related to the type of job available in the locality.

Baroness Hollis of Heigham

If someone receives IB, he is neither expected nor required to take a job. Whether people receive that benefit depends on the all-work test and not on the employment situation in the area. The personal capability test has nothing to do with whether or not someone is expected to take a job; it is a compulsory interview but any action following it is entirely up to the person involved.

10.30 p.m.

Lord Higgins

We are clearly somewhat at cross purposes here. We shall need to consider what the noble Baroness said. I still think it is appropriate in assessing whether someone is capable of doing a job that the kind of job he or she is considered capable of doing should be a relevant consideration. However, at this hour of the night I do not wish to delay the Committee further. There are other extremely important amendments for which people have been waiting a long time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Addington moved Amendment No. 120A:

Page 65. line 17, at end insert— ("(c) for the doctor conducting the personal capability assessment to provide both the claimant and the person who shall conduct the claimant's work-focused interview under section 2A of the Administration Act (work-focused interviews) with an assessment of the claimant's future incapacity for work based on a medical prognosis of the claimant's disability or disease.")

The noble Lord said: I shall speak as briefly as possible. The amendment suggests that a copy of the assessment of a person's capacity under the all-work test should be given to that person. On the grounds that some 60 per cent of people who fail this test appeal, and half of that number have their appeals upheld either by the appeals tribunal or the adjudication officer, I should have thought that allowing them to have a copy of the doctor's assessment might be appropriate. I beg to move.

Baroness Hollis of Heigham

My concentration may have slipped but what benefit was the noble Lord referring to when he gave the figures for appeals? Was he talking about IB, DLA or SDA? He could not have been talking about the personal capability assessment because it has only just come in in the past fortnight.

Lord Addington

I was talking about the all-work test.

Lord Hardy of Wath

I express some sympathy with the approach which the amendment suggests. I speak from my experience as a Member of the other place some years ago. At that time a doctor was practising in my area and was causing a number of people considerable anxiety and their Member of Parliament considerable rage. I refer to one case where the doctor arrived at a constituent's house to examine a lady who was very ill. He did not take his coat off and he did not stay in the house more than two minutes. Nevertheless, he decided that the lady was fit and well despite the fact that her weight had dropped from 12 to seven stone in the previous week. Three weeks later she died of cancer. I received a letter of remorse, apology and regret from a Minister in the previous government, although that did not bring the family involved much comfort.

I believe that from time to time governments need to ensure that those engaged in the public service should recognise that their job is not to defend the taxpayer or to save public spending. The amendment may not he acceptable but the compassion and care which I think is suggested in the amendment should be encouraged.

Baroness Hollis of Heigham

This amendment does two things. First, it provides for both the claimant and the personal adviser to receive a report following a personal capability assessment. Secondly, it states that the report must consist of a medical assessment of the person's future incapacity for work.

The key issue here—I think that it is an important one—is the question of providing information to claimants. It may help if I put the matter in context by dealing with the other issues first. In response to the previous amendment I explained the whole thrust—I hope—of our proposals for the personal capability assessment which is to provide personal advisers with information about what the person can do despite his or her medical condition. We want to do this in a way that will be relevant, useful and helpful in the "one" interview.

To recap, the PCA will be a single medical assessment process which will produce two entirely separate things: first, advice for the benefit decision-maker on whether the entitlement criteria for incapacity benefits are met—the all-work test—and, secondly, a capability report for the personal adviser.

The provision of the capability report to the personal adviser is already fully covered in the Bill. Clause 67 provides all the necessary powers for information relevant to work-focused interviews to be passed to personal advisers. It is complemented by provisions in Part II of Schedule 8 which ensure that the PCA can go beyond what is strictly necessary for the purposes of determining entitlement to benefit. However, I do not think that that is where the noble Lord's concerns lie. Nor do I think it necessary to specify that the capability report should provide an assessment of the claimant's future incapacity for work based on medical prognosis. It assumes that the personal adviser needs to know whether the person is incapable of work for benefit purposes now and whether that is likely to remain the case in future.

The personal adviser clearly needs to know whether the medical condition is likely to change so as to make particular types of work more or less likely. But the personal adviser really needs to know what the person can do despite his condition—or what he could do with the right help and support. That is what the report is about.

It is also important that we do not set its precise content in legislative stone. We are carrying out development work on this and it will be on trial in the "one" service pilots over the course of the year.

I shall now return to the main issue. I do not think the question raised was really about the information going from the medical assessment to the personal adviser. I suspect that the noble Lord is pressing—certainly I would in his situation—for the information to he available to the claimant when he or she sees the PCA.

We believe that it may be unhelpful for the Bill to specify that the claimant must he sent a copy of the capability report by the doctor. There is no question of these reports being kept secret. The requirements of open government are set out both in the current code of practice and in the Government's proposed freedom of information legislation. We shall ensure that people are able to see the contents of the report. Access to information is not the issue.

It seems to me that, in a way, the question is a second-order one. It is whether people should routinely be given a copy of the capability report and, if so, whether they should get it before their work-focused interview. That is something on which the Government have a genuinely open mind and are considering carefully as a part of the development work. It is not perhaps as straightforward as it may seem. One could have information, for example, which related to a terminal illness or a prognosis which is not already known to the claimant, whether because he has not been informed by his GP or whatever.

It is worth reminding ourselves that the personal advisers will have that report. It may be right that all claimants should have copies as a matter of course. My own view at the moment—but obviously we are considering the matter—is that the right way may be to make it clear that people can have a copy, and then it may be appropriate for them to be sent a copy if they signal that they would like one. It is clear that it would be most usefully done in the context of the interview itself. As 1 have said, we have an open mind on that.

There is no question of the claimant not being entitled to see the report. I am not sure whether sending it out routinely is the right approach. It may be that we should indicate that people are entitled to see it, in which case that may meet the noble Lord's concerns. In the light of that explanation, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Addington

I thank the Minister for that answer. It is one of the more helpful I have received. It is also very important, of course, that the Government ensure that everyone knows that they are entitled to see the report. When one is dealing with any form of bureaucracy, most of the problems start with what one can do and what one knows one can do. I hope that the Minister will be pushing the matter forward. We may bring forward further amendments to see how far she has got in the process of ensuring that the information is available to people and that they know it is available to them. But, having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 120B not moved.]

The Chairman of Committees (Lord Boston of Faversham)

Amendment No. 121, the Lord Higgins.

Earl Russell

I am sorry. Should it not first be the Question on Clause 56 stand part?

The Chairman of Committees

I shall be coming to that.

Lord Higgins

I was under the impression that the clause stand part debate was linked with Amendment No. 120B. Am I mistaken?

The Chairman of Committees

The noble Lord, Lord Higgins, is perfectly correct. I am very grateful indeed for the information from the noble Earl, Lord Russell, who did not seek to move Amendment No. 120B. I shall therefore be calling Clause 56 stand part as on the order of the Marshalled List. Amendment No. 121, the Lord Higgins.

Baroness Hollis of Heigham

I, too, am baffled. I thought Amendment No. 121 was after Clause 56 and that, therefore, the Clause 56 stand part debate should go ahead.

The Chairman of Committees

If it is of help to the Committee, according to the Marshalled List, after Amendment No. 120B, which was not moved, come Amendments Nos. 121, 122 and 123. We then come to Clause 56, as amended or not, stand part.

Lord Higgins

I am as baffled as the Minister. I was under the impression that clause stand part was linked with Amendment No. 120B.

Earl Russell

I think I owe the whole Committee an apology. I took the decision not to move Amendment No. 120B at short notice. I had not noticed—and should have done—that there were several amendments in Clause 56 to come before clause stand part which the groupings had taken out of order. If I have caught people short, I am sorry to have done so but, having not moved Amendment No. 120B, I cannot go back on it. We will come to clause stand part in due course. It is all my fault and I am sorry.

Lord Carter

I think we have to take it in order now and so we have to dispose of Amendments Nos. 121, 122 and 123 and then deal with Clause 56.

The Chairman of Committees

I have already called Amendment No. 121. In view of what the noble Earl, Lord Russell said, he has no need at all to apologise to your Lordships. I, for one, from the Chair am very grateful to him for the indication he was kind enough to give me just now. Amendment No. 121.

Lord Higgins moved

Amendment No. 121:

Page 65, line 36, at end insert? ("() Before exercising any power to make regulations under this section the Secretary of State shall consult organisations representing disabled people and shall take reasonable account of their submissions and concerns.")

The noble Lord said: The amendment suggests that before the Government take any powers to make regulations under this clause the Secretary of State should consult with organisations representing disabled people and take reasonable account of their submissions and concerns. This is an important amendment. It is well known that the voluntary organisations in the field of social security have immense expertise and perform an incredibly valuable function. Therefore it is entirely appropriate that they should be consulted on these matters before any change is advocated.

We will come to the kind of changes that might be advocated when we reach clause stand part. My understanding is that the Social Security Advisory Council is somewhat restricted in the extent to which it can advise on these matters. So it is most appropriate that machinery should exist for this consultation. It is also most important that the Government should take such views into account. As will become apparent in a moment or two. they are not doing so at the moment. I beg to move.

Baroness Hollis of Heigham

This amendment would introduce a specific requirement for the Secretary of State to consult with groups representing disabled people before making regulations under Clause 56. As I am sure your Lordships know, the provisions for PCA simply mirror the provisions for the all-work test. There is no change in the way the test operates as the gateway to benefit. The regulations to be made under the clause will re-enact unchanged the regulations that currently set out the detail of the test.

This detail was the subject of intensive consultation when it was introduced by the previous government, and we see no reason to repeat that exercise. I should stress that the Government believe that we have a general responsibility to consult widely on our proposals. We have done so up to now and I can assure your Lordships that we shall continue to do so in future without any need for a statutory requirement to consult specific groups. We are talking to organisations which represent disabled people in a number of contexts across the whole of our agenda and across many departments of government, and we shall continue to do so.

We fully realise that these organisations often do not agree with us but we value their contributions to the policy debate and we think carefully about what they say. We have consulted widely on all the measures in the Bill which relate to benefits due to sick and disabled people. We sent the consultation document out to a wide range of people and we discussed details on several occasions with the Disability Benefits Forum. We considered their responses, particularly where they were critical of the proposals, as well as all other points made to us.

On the positive side, one of the issues about which the Disability Benefits Forum was specifically concerned was the age 20 cut-off for young disabled people's entitlement to incapacity benefit, which would disadvantage those entering higher education or training. In response to those concerns, we have brought forward the amendment to allow us to extend the age cut-off to 25 for those people.

The work of the forum has now ended following the resignation of some of its members. The Government regretted the decision. I certainly did, as I was involved some time ago in helping to set it up. We found it helpful, and it made an important contribution to our thinking. But the end of the Disability Benefits Forum as a result of the movement of the forum members does not mean that the department has turned its back on consultation. On the contrary, the DSS continues to work with disability organisations on detailed issues affecting sick and disabled people. For example, we are exploring with colleagues across government the implications of the Disability Rights Commission for future consultation arrangements. We also meet regularly, on an informal basis, to discuss these issues.

The noble Lord was right. There was a general statutory requirement to submit most draft social security regulations to the Social Security Advisory Committee. When the committee considers it appropriate, it will put the regulations out for public consultation. At that point the Social Security Advisory Committee will routinely consult disability organisations.

I have made clear that the Government already have frequent and wide-ranging contacts with organisations representing disabled people. I hope and believe that they will continue to give us the benefit of their advice and expertise. I hope that I have shown to the satisfaction of the Committee that a statutory requirement to consult disability organisations is unnecessary. I therefore hope that the noble Lord will withdraw his amendment.

10.45 p.m.

Lord Higgins

I thank the Minister for that response. Will she clarify two points? First, so far as concerns the Social Security Advisory Committee, is it right that it has no remit to deal with regulations made within a stated period—I believe it is usually six months—of a newly made Act of Parliament and therefore would not necessarily be consulted on these issues? Secondly, has the forum now ceased to exist altogether?

Baroness Hollis of Heigham

The noble Lord is correct on the first point. Normally, the Social Security Advisory Committee does not scrutinise regulations made within six months of Royal Assent on the relevant primary legislation. That is for the reason that there has usually been extensive consultation and debate during the preparation and passage of a Bill. So the effort is to avoid a repeat debate.

On the second point, yes, the members of the Disability Benefits Forum have left the forum; so it no longer exists.

Lord Higgins

In the light of those remarks, we can pursue some of the points that arise later. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman of Communities

I must point out to the Committee that if Amendment No. 122 is agreed to, I cannot call Amendment No. 123.

[Amendment Nos. 122 and 123 not moved.]

On Question, Whether Clause 56 shall stand part of the Bill.

Earl Russell

I told the Minister when I gave notice of my intention to oppose the clause that my intention was probing in the first instance. I regret that the Minister has told me in the past few minutes some of the points I was probing to discover. She said in relation to Amendment No. 120 that the substance of the all-work test and the regulations under which it is imposed would remain unchanged. And in relation to Amendment No. 119, she said that the score is quantitative—15 points and you pass. That will remain unchanged. In effect, the Minister has told me that the points that I regard as the worst features of the all-work test are to continue. I was very sorry to hear that.

Of course, we agree on the point that the Minister has just invoked. We agree that it is a good thing that a test should look at what people can do as well as what they cannot do. However, the Minister may not quite understand that my objection to the all-work test has always been its formulaic quality. It is qualitatively very much the same line of argument as exists between us, and will continue to do so, on the CSA.

The record of the all-work test is an extremely poor one. The Minister is familiar with the incapacity benefit leavers tracking study. That indicates that it is a very poor predictor indeed of people's future chance of obtaining work. People who are found unfit to work are just as likely over the next few years to obtain work as those who are found fit to work. That does not suggest to me that the test is doing its job very effectively. My noble friend Lord Addington referred a moment ago to the number of appeals. Some 60 per cent of those who have their benefit disallowed appeal. Of those who appeal, more than 52 per cent have their benefit reinstated. Apart from the tracking study evidence, that alone suggests that the test is not doing its job particularly well.

There are a number of good reasons for this. Some of the main reasons that people are prevented from working are ones that a quantitative test cannot measure. In particular, a quantitative test cannot measure pain. There are days when one feels that pain can be measured in decibels, but unfortunately that is not true. Pain is probably one of the biggest factors that prevent people from working. I do not see how one can quantify by a test acute back pain or migraine, yet those ailments prevent people from working.

The test cannot quantify fatigue. However, with acute respiratory illness, which is one of the conditions that frequently prevents people from working, fatigue over a period of time usually makes work impossible, unless it is carried out in small amounts. A test cannot measure endurance. A test by its very nature can test only once the capacity to perform a certain function over a limited period of time, but any attempt to do serious work must involve the ability to go on conducting the function over a period of hours, days, weeks and months. No quantitative scoring test can possibly assess these matters. These are quite important defects.

The other problem, which the noble Lord, Lord Higgins, attempted to address in Amendment No. 120, is that there is not a single activity known as work. I apologise to the noble Lord for not assisting him, but I did not think that I should say the same things twice. If one looks at the occupants of the mobile Bench in this House, to say that they are incapable of work is manifestly absurd, yet there are many types of work for which they are unfit. One can assess a person's fitness for work only in terms of the work of which he or she is physically and mentally capable. I take the case of the unemployed former miner or ship-builder referred to by my noble friend Lord Goodhart at Second Reading. It is no use telling him that there is a lectureship in Egyptology at the University of Newcastle-upon-Tyne. He is not qualified for it. It is probably no use telling him that there is a vacant job as a computer operator.

Training can do many things, but as years go on it becomes true that one cannot teach an old dog new tricks. There are exceptions to that, but one will not know in advance what they are. Therefore, there is no such thing as being fit for work. One may be fit for particular types of work while one is totally unfit for other types of work. One must consider whether the person is fit for any work that he or she is capable of doing. One must give up using a formula and, like it or not, face up to the fact that people are individuals and are very different from one another. If one is to test for fitness to work and regard people as individuals, even if one uses a scoring system—although I have deep misgivings about such a system, it may be part of a relevant assessment—one must rely on an assessment of the individual by a medical practitioner, or practitioner, at rather greater length than is usually possible in the all-work test. One must look at the whole person in the whole situation. If one does not do so, one will continue to make mistake after mistake.

Lord Higgins

Perhaps I may add to the remarks of the noble Earl. I understand that Clause 56 ensures that the Government will replace the all-work test with a personal capability assessment. The assessment will effectively consist of the existing test plus some additional questions on the person's capability for work. But it is well known that the all-work test as it stands—the Government will continue that as part of the assessment—is open to considerable criticism. So much so, that, for example, the National Association of Citizens' Advice Bureaux has suggested that the proposals in the clause should be rejected and a more satisfactory test introduced which is more related to the work situation and less stressful for the claimants. In support of that view the CAB produces considerable evidence which states that some 60 per cent of people have had their benefit disallowed as a result of failing the all-work test and have appealed against the decision. Of those who appealed more than half had their benefits reinstated either as a result of the appeal tribunal or because the adjudication officer changed his view.

In addition, it cites a number of examples. I shall not weary the Committee at this time of the night by quoting them at length. It refers, for example, to a client who failed the all-work test, but the examining doctor insisted that his answer to every question relate to a good day when in fact he had some days when he felt well and others when he felt unwell. A London CAB reported a client who failed the all-work test after an interview which lasted only five minutes. The situation reported to me by former constituents suggests that the integrity of the test is open seriously to doubt. It is not unusual for it to he conducted in a less than sensible manner and that is unsatisfactory.

It would be helpful if we could have the views of the Minister on how this fits in with the lengthy debates on the single focus gateway. It arose on a previous amendment. We are told that these interviews will be very extensive and may last up to an hour. The staff will he heavily trained, and so on. In comparison, these interviews seem to be conducted on a superficial basis. Perhaps the Minister can tell us to what extent she has received reports that those investigations are not carried out satisfactorily. Can the noble Baroness also tell us in simple terms how the continuation of the all-work test, now called personal capability assessment, will fit in with the arrangements for the single focus gateway intervals? I am not clear how this fits together. It would be helpful to know.

Baroness Hollis of Heigham

I was not surprised that the noble Earl, Lord Russell, criticised the all-work test. I was a little surprised at the stringency of the criticism of the noble Lord, Lord Higgins. He was deeply critical of something his own government introduced—was it only four years or so ago?

The basic criticism of the noble Earl, Lord Russell, was that the all-work test was formulaic: that it analysed matters which could be counted rather than those which could not. It is true that the test is based on the mechanical functional capacities of individuals: whether one can lift a bag of potatoes, climb the stairs, and so on. The noble Earl is right on that. Where I think he is not necessarily correct is in his belief that doctors are not required—they are—to take full account of pain, fatigue, and fluctuating conditions. It is because the existing all-work test, with its points score of 10 for mental health problems and 15 for physical health problems, emphasises what people cannot do and therefore does not see the whole person and is not holistic that we seek to introduce the other half, the personal capability assessment, in order to ensure that we have full and proper information about what a person can do as well as their functional capacities and what they cannot do.

It is true that the survey referred to by the noble Earl shows that we have to do more. That is right and it is why the Government strengthened not only the Disability Rights Commission, which was long overdue, but has introduced a new deal for disabled people, the disabled person's tax credit, linking rules from eight to 52 weeks and so forth. We take the criticisms that disabled people still find it hard to go into work even if they are coming off incapacity benefit. That is why we are seeking to make those avenues possible.

Thirdly, the noble Earl criticised the doctors' interviews, based on the CAB reports. I have no reason to criticise the CAB's statement that a certain interview took only five minutes, but my information is that the average doctor's interview lasts for 40 minutes. If there is criticism that the interviews have been cut short, or the claimant feels that he has not been treated properly, or his condition not properly assessed, that person should seek to complain through his MP, the CAB and so forth.

I asked to see in what proportion of interviews there was a follow-up complaint by the person or his carer that medical examination by the doctor was inadequate, incomplete, failed to consider certain functions and so forth. I found that about 500 complaints were made, or less than half of 1 per cent of all interviews conducted by those doctors. Perhaps people were inhibited about making those complaints, but it shows that, with obvious exceptions, for the most part people regard those medical interviews as basically satisfactory.

I hope that I have addressed the points raised by the noble Earl, but if I have not I should be happy to write to him with further details.

11 p.m.

Earl Russell

I thank the Minister for that reply. She was a little ungenerous to criticise the noble Lord, Lord Higgins, since if she had listened carefully to what he said she would know that he was confessing plainly to having learnt from experience through cases in his constituency. That is something all of us have to do and if the noble Lord has done it I am glad that he has.

I am aware of the instructions the Minister quotes about the need to take account of pain and fatigue, but it seems to me to be in potential conflict with the assessment of incapacity simply by a numerical score on the list. I do not see how those issues can be reconciled, and in practice the numerical score takes priority.

I understand and respect the Minister's determination to do better. It is exactly what she says on the CSA. In both cases, she will not do better, however hard she tries, because she is barking up the wrong tree. You simply cannot do it by this formulaic approach.

The clause stand part debate has been an ideal vehicle for probing what the Government wanted to do, but a Division deleting the clause would not achieve my objectives. Therefore, I must think hard before the Report stage about the drafting of an appropriate amendment to get rid of a test which was from the beginning misconceived and has been proved by experience to be a disaster. Therefore, looking forward to a better amendment and a new engagement, I beg to withdraw my opposition to the Question that the clause shall stand part of the Bill.

Clause 56 agreed to.

Clause 57 [Incapacity benefit: restriction to recent contributors]:

[Amendment No. 124 not moved.]

On Question, Whether Clause 57 shall stand part of the Bill?

Lord Ashley of Stoke

I oppose Clause 57. It makes a major change that could devastate the lives of the many severely disabled people who would be affected. It could deny them £66 a week in incapacity benefit, for which they may have paid national insurance contributions for many years. Amazingly, the Government have produced no valid reason for the change. It is unjustified.

Severely disabled people currently get incapacity benefit if they have worked and paid the required amount of national insurance contributions for any—I repeat any—period of their working life. The clause says that the person needs to have done so in one of the past two years. The Government say that they are returning to the original intention of linking incapacity benefit to recent work. Where is the evidence that that was the original intention? The Government are merely proclaiming that it was. I doubt that there is a mention of it in the original debates. If there is a mention, I assume that the Government will quote it this evening. If that was the intention, why was it not mentioned in the legislation? Why were the conditions different from those now proposed?

My noble friend Lady Hollis is a superb advocate of government policy and we all greatly admire her. I look forward to her quoting chapter and verse in response to my invitation. What was said in the original debate? Why are the Government now proclaiming that incapacity is linked to recent work? Where is the evidence? Where is the justification?

When Ministers talk about linking incapacity benefit to work and original intentions, they should bear in mind the massive difference between now and Beveridge's time: the disparity between regional unemployment rates. The decline of heavy industry has led to high rates in some areas but not others. The Government have not answered and cannot answer the point made by the noble Earl, Lord Russell, on Second Reading that the clause is geographically discriminatory. For those who live in one place where they can get a job it is fine, but for those who live in another place where they cannot get a job it is just too bad. It is a lottery.

The Government are adopting a fairground lucky dip scheme for the payment of incapacity benefit. The clause gives a clear message to severely disabled people. It is metaphorically shouted from the rooftops, but it is never articulated by Ministers. The message is that those who are doubly unlucky—unlucky enough to become disabled and unlucky enough to have lived in a high unemployment area for the past two years and been unable to get a job—will lose their full incapacity benefit of £66. Ministers will say, "We are terribly sorry about this, but it is your bad luck, not ours. All that we can do is enforce the law passed by Parliament". That is a probable scenario for the future if this House and another place passively accept this deplorable clause.

Those who are unlucky enough to become so severely disabled that they are too incapacitated to work but who live in a prosperous area and have a job can have their incapacity benefit. Is that not a fantastic scenario? It is like the goats and the sheep. It has nothing to do with incapacity. Those people may be gravely incapacitated. In fact, by medical definition, they are too incapacitated to work. But some receive the benefit and some do not. Where is the rhyme, reason or justification?

The sad irony is that the people denied their incapacity benefit have been paying national insurance contributions for many years, trusting that they would benefit if disability or illness made them unable to work in the future. That trust will be betrayed if this clause stands part of the Bill.

That calculating of the moral contract between government and people cannot be justified. The Government have failed to justify it. Somehow, I believe that the Government know that it cannot be justified. Why else should my noble friend Lady Hollis produce ludicrous examples in an effort to excuse the proposal? For example, on Second Reading, my noble friend scorned a person's right to claim incapacity benefit if he had made a minimal contribution some 20 or 30 years previously. She somewhat mockingly, perhaps jokingly called it a "down payment", giving entitlement to national insurance benefits for life.

I am afraid that providing extreme examples is an easy game. Everyone can play that game. For example, how about a person paying contributions for 40 years who then becomes unemployed for a mere two years and then becomes severely disabled? That person will receive absolutely no incapacity benefit if this clause is agreed to. I cannot believe that there is any justification for that.

My noble friend also displayed her unease about the clause by saying that the period in which a disabled person should have worked could—not "would"—be three and a half years rather than two years if he was fortunate enough to have had the right mix of tax and social security years. That is fine. But we are back to the fairground lucky dip. It is a lottery rather than a rational, social policy. Why is it that the three and a half years does not apply to everybody or, better still, five or six years? Then we should have a fairer and more equitable system instead of the good-luck, bad-luck syndrome.

I conclude by saying that if the Government want to make fundamental changes to a well-established and accepted system, that is fine. But they need to put forward a fair system which is buttressed by arguments based on justice and logic. They also need to give disabled people far more time to absorb the changes and react appropriately, as they wish.

I hope that the Government will think again about this clause between now and Report stage. If they do not, I shall table the Motion again and seek the opinion of the House on the matter.

Lord Higgins

I deferred to the noble Lord, Lord Ashley, because he has such a long-standing record in these areas of disability, incapacity benefit and so on. But that should not in any way suggest that on this side of the Committee we do not entirely share his views which we believe, on the merits of the case, suggest that the clause should be withdrawn.

First, it is extremely unfortunate that this debate and the one which is to follow on whether Clause 58 shall stand part should take place at this hour of the night. In another place, ahead of the rebellion which took place there on these issues, the Government sought to time the matter so that it did not arise at prime time. That is why we have Clause 70 in this Bill. The Government totally failed in that. This evening, the Government have succeeded. There is widespread interest in these particular issues and it does not seem to me appropriate that we should be debating them now.

I have argued on many previous occasions that, to a large extent, the Department of Social Security has been taken over by the Chancellor and the Treasury. The reality is that before the election, and indeed afterwards, the Prime Minister made statements which said very clearly that they would reduce the cost of the welfare budget and were to use the money on education and health. There are a number of quotations from the now Prime Minister to that effect. Meanwhile, the social security bill is expected to rise by some £38 billion over a period of three years.

The reality of the situation is that the Government, the Treasury and the Department of Social Security now have three clauses in the Bill designed to claw back some of that money by measures which we, on this side of the Chamber and I think in all parts of the Chamber, regard as wrong. The Minister can, no doubt, tell us to what extent the Government expect to save money as a result of Clause 57. They have advanced various arguments, but the effect is to prevent long-term unemployed people claiming incapacity benefit. Even if it is true that in the past, as pointed out by the Disability Benefits Consortium, too many unemployed people had wrongly claimed incapacity benefit, the problem would be among the existing claimants. The provisions in the Bill apply only to future claimants. If the Government believe that there are people on IB who should not be, the proper way to deal with that is to introduce an appropriate test.

I have already indicated, and I make no apology for it, that it seems to me that the all-work test is not appropriate. We have to do better than that. However, at all events, that is the way to deal with this problem as regards the future, and not by penalising those who have contributed in the past. They may have contributed for many years and have only in the past couple of years not been in a position to do so. The Government will now withdraw benefit from them at the very moment they may find it important.

I shall not delay the Committee further. The noble Lord, Lord Ashley, spelt out the basic arguments. We believe that this is wrong. I do not think it is possible to amend the clause in a way which is satisfactory. I think that it should be dropped from the Bill. I believe that there is a general feeling across the entire Chamber, that that is the appropriate thing to do. I support the noble Lord's comments. I believe it is a bad clause and that it should be rejected.

11.15 p.m.

Lord Morris of Manchester

I am grateful to my good and noble friend Lord Ashley and his co-signatories for facilitating this important debate.

Like my noble friend, I acknowledge the Bill's many good features about which I have spoken in previous debates; but also like my noble friend, I believe that the Bill would be much improved by the deletion of Clause 57.

All that governments do in office is compared with what they told the electorate in seeking office. But where in Labour's general election manifesto was there the vaguest suggestion that 170,000 people who now qualify would lose their entitlement to incapacity benefit?

No wonder my right honourable friend Tom Clarke, who led for Labour in explaining our policies for disabled people at the election, felt bound to speak and vote against the clause in another place. His speech kept faith impeccably with what he told the electorate on our behalf.

No convincing case has been made for what this clause proposes. Labour Ministers rightly condemn their predecessors for encouraging unjustified IB claims from unemployed people to cut an ever-lengthening dole queue. But the Bill's proposals on IB do not dispossess those who allegedly ought not to have the benefit.

Instead they pile handicap on handicap for many thousands of severely disabled people who, having paid national insurance for a contributory benefit, in good faith and over many years while in work, will lose the help for which they insured themselves.

Currently a person must have paid either Class I (employed) or Class 2 (self-employed) national insurance contributions, or a combination of both, on earnings equal to at least 25 times the lower earnings limit (currently £66) in any one tax year prior to the benefit claim. Under this clause a person will need to have made such a contribution in one of the last two tax years before the benefit year in which a claim is made. The result is that someone who has been unemployed for two years but who had paid contributions for 30 years before then will not qualify. However, someone: unemployed for 30 years who has worked for one of the: last two years will qualify for the benefit. This must be unjust.

Progressive illnesses often mean that people struggle on in work for the sake of their mental health, even though they are not earning sufficient wages to maintain a contribution record. They often have many years of full-time employment, paying national insurance contributions, before illness strikes. As the illness progresses, they stay in work as long as they can but, with frequent absences, this may become part-time work.

A citizens' advice bureau in the Midlands reported on the case of a schoolteacher with multiple sclerosis. He eventually had to give up his job as his illness made it impossible for him to continue full-time work. He then worked part time marking exam papers. This disqualified him from claiming incapacity benefit since he was not considered to be undertaking therapeutic work and his earnings were below the level for paying national insurance contributions. The proposals in Clause 57 would mean that if, after two years, he had to give up his part-time work because of ill health he would not be eligible to re-claim incapacity benefit. This must be unacceptable to noble Lords in all parts of the Chamber.

The deep resentment felt by disabled people about Clause 57 is compounded by media suggestions that its proposals are justified by massive fraud in the disability benefits system. These suggestions persist, and are repeated in public debates, notwithstanding the findings of the benefit integrity project—BIP—inherited from the Major government, which involved DSS investigators in visits to the homes of more than 40,000 disabled people to check every detail of their entitlement to the benefits they were receiving. BIP's findings—about which my noble friend Lady Hollis has so helpfully reported to the House—are striking testimony to the honesty of disabled people in relation to the benefits system.

Frank Field, the then Minister for Welfare Reform, emphasising the Government's top priorities on 26th March 1998, told the House of Commons in a ringing declaration: Our commitment to the vulnerable is not negotiable".—[Official Report, 26/3/98; col. 686]. But current reality is that disabled people and the elderly poor, among other vulnerable groups—not least IB recipients—have fared much worse than most others over recent years.

In fact, the incomes of people dependent on disability benefits were frozen for 18 years after 1979 when the link forged by the last Labour government between benefits and average earnings was broken by the Thatcher government. Had that link been kept, IB would now be £24.15 a week higher. By breaking the link, the Treasury saved £18 billion on this benefit between 1980 and 1997—a brutal switch of resources from vulnerable to more fortunate groups. That, too, helps to explain the depth of resentment felt by disabled people about this proposed cut in spending on IB. They see it as a still further redistribution of resources from the less well-off to the least well-off; from those in need to those in greater need. They say it confuses reform with retreat and they ask, "What justice is there in penalising people who save and forego pleasure today in order to pay for safeguarding their future?"

For their part, Ministers talk of their concern that the social security system has become unsustainable. But what are the facts? The UK is bumping along the bottom—in the relegation zone, as it were—of the league of 21 OECD member states in terms of the proportion of GDP spent on health, education and social security. And while it is true that social security costs more in Britain than health, education and law and order combined, the same is true also in most other developed countries.

Hype about social spending being out of control in Britain is contradicted also by highly expert recent advice from Christopher Daykin, the Government Actuary, that due to relatively low benefits here: Future costs of social security in the UK look more manageable than in other European countries". There is no one more familiar with the facts or more skilled in interpreting them than the Government Actuary. And to clinch the argument he goes on to say that such countries, … also have a more significant problem of ageing than the UK, since we have already made significant changes which will keep future costs down". Most disabled people want the Government to be tough on fraud and tough on the causes of fraud, not least when it is caused by administrative incompetence and corrupt private landlords. They say that failure to tackle low take-up frustrates the will of Parliament. They are not resistant to change. For there are many reforms disabled people want to see. They are appreciative, as I am, of helpful new steps that the Government have taken and will be taking and want them to succeed.

For them to succeed, they argue, Whitehall and Westminster must get the facts straight. And benefits for disabled people should be commended to the taxpayer, not as acts of compassion, but of enlightened self-interest and moral right. Ministerial preoccupation should be with value, as well as cost. And disabled people should be seen as givers, not only receivers. For there are marked cost savings in humanely assisting them to achieve their full potential as full and fully participating members of British society.

Lord Rix

There are Members of the Committee on all sides of this Chamber, and those who declare no political affiliation—myself included—who profoundly disagree with the Government's policy with respect to restricting incapacity benefit to recent contributors. Like the noble Lord, Lord Higgins, I, too, am sad that such an important debate is taking place so late at night.

Over the various stages of this Bill we have heard many detailed expositions of the problems relating to this clause. I shall summarise the three aspects of the clause which are of most concern to me and indeed of those who have written to me on this matter over recent months. First, this measure does not represent a strengthening of the contributory principle; it represents an erosion of it, hitting hardest those who worked for a long period of time before unemployment and those who have intermittent work patterns for other reasons such as caring or looking after children. At Second Reading I gave an illustration of the way this change would impact upon a carer I know.

Secondly, this rule does nothing to help people with disabilities back to work. Worse still, the cuts will penalise those trying to go back to work—the very opposite of what welfare reform should aim to achieve. The Government claim that they wish to reduce the inactivity rate among older workers. That is a measure which I am sure bears no reflection on your Lordship's Chamber, particularly in this latter Session. However, I should like to explain briefly the way in which the effects of this clause run counter to that claim.

Many people, particularly towards the end of their working life, find their health giving way and consequently their national insurance record becomes fragmented. Currently a year's full rational insurance contribution at any one time during a working life ensures eligibility to incapacity benefit. People whose health is giving out know, therefore, that they can keep trying for work in the knowledge that no matter how chequered their work record becomes, their entitlement to incapacity benefit remains. Not so under the proposals in this clause. A person will need to have a fully paid contribution record during one of the previous two years before claiming benefit. Claimants will rapidly become aware that the only way to guarantee incapacity benefit is to give up aspirations to work and to claim benefit as quickly as possible as soon as one's health begins to deteroriate.

Finally, to my mind this clause does not help to restore incapacity benefit to its original intention or restore the link between benefit and work; rather it takes away a contributed benefit from people who may have worked for many years. As something of a double whammy the fallback benefit, the severe disablement allowance, is being abolished later on in this Bill, consigning those who may have worked for 40 years or more but who happen to become sick at. the wrong time to a future on means-tested benefits.

The Minister may be satisfied that with this situation on the ground that it is theoretically possible for some individuals, although undoubtedly fewer of them, to receive broadly the same amount of money from the state via means-tested income support. It is worth remembering that not everyone will be eligible for income support. A working spouse is sufficient to prevent that. Furthermore, the means-tested provision is something from which we spent nearly 30 years trying to escape because benefits of that kind carry with them the very disincentives which prompted the need for welfare reform in the first place.

11.30 p.m.

Earl Russell

Any amendment on a matter to do with disability which comes before us in the names of the noble Lords, Lord Ashley of Stoke, Lord Morris of Manchester and Lord Rix, is one to which we on these Benches would listen very seriously indeed. When they say exactly what we thought already, we join with them with alacrity. We have more reasons for supporting the noble Lord, Lord Ashley of Stoke, than I am going to give to the Committee at this time of night.

I shall mention one only. This clause leaves out altogether those with earnings below the national insurance lower earnings limit and therefore with no contributions. Many people make do with a portfolio of part-time jobs, showing a great dedication to the principle of work and making a living somehow, but not building up a contributions record. An extremely high proportion of those people are women. This clause is severely discriminatory in effect.

Baroness Hollis of Heigham

I was particularly startled by the noble Earl's last point. I am slightly out of order on the comments I was going to make. I make it clear that already 30 per cent of claimants for invalidity benefit are women. Over the next 15 years or so, we expect it to be about 50 per cent. So in saying that it is discriminatory against women I wonder whether the noble Earl is on the right clause. I assure him that by virtue of the national minimum wage an extra 250,000 people, mostly women, will be going over the lower earnings level and will be credited into the system. As a result, they will be entitled to incapacity benefit when they are not at the moment.

Whatever else is wrong with this clause in the view of the noble Earl, it is certainly not true to say that it is discriminatory against women. As I have said, women will form the biggest growth in the number of claimants partly because of the ending of the reduced married woman's contribution and in future because of the national minimum wage. I hope that the noble Earl will accept that point at least, even if our minds do not meet on other points.

Earl Russell

I accept that the minimum wage has made the position less discriminatory than it was before and I welcome that.

Baroness Hollis of Heigham

I am grateful to the noble Earl.

I go back to the substantive point. The Committee has expressed anxieties about Clause 57 which amends the entitlement conditions for incapacity benefit to require payment of some national insurance contributions in one of the previous two tax years.

The Government's proposals are based on the clear principle that there should be a link between incapacity benefit entitlement and recent work. However, the contribution conditions are a particularly complex area of the benefits system and it may be helpful if I begin by clarifying some keys points about the practical effects of the Government's approach.

First, as I am sure Members of the Committee know well, the new rules do not affect current claims. Therefore, there is no question of benefit being taken away from existing recipients who remain on incapacity benefit.

More importantly, future claims which link back to a previous period of entitlement will also be unaffected. So people who leave incapacity benefit will be able to do so with a guarantee that if they have to return within the linking period, which this Government extended from eight weeks to a year for people in work, they will be able to do so without having to resatisfy the contribution conditions. To reinforce this we also intend to make a general exemption for people on IB in the previous tax year. This will help people who try to work for more than a year and find that they cannot reclaim IB immediately because their contributions are in too recent a tax year.

The arrangements will ensure that there is no question of people trying to go back to work and being unable to get back on to IB because they have had no opportunity to re-establish their contribution record. That will be particularly helpful to people with intermittent or deteriorating conditions, and other people whose prospects of sustained employment are poor.

When people are in work they will, in any case, not have to work for all that long in order to satisfy the new requirements. As now, contributions on earnings equivalent to 25-times the lower earnings limit, currently £66 a week, will suffice. This is equivalent to just four weeks' earnings for someone on average male full-time earnings, or 12 weeks for someone on the national minimum wage. That period of work need not be continuous. So, here again, there is recognition of the needs of people with broken work records and intermittent health problems.

Where someone has met the minimum requirement for paid contributions in one of the previous two tax years, he can have been unemployed for the rest of the time and still qualify. Because of the time lag between tax years ending in April and the benefit year starting in January, it will be possible, as my noble friend Lord Ashley said, for some people to qualify for IB as long as three and a half years after leaving work. So there is no question of people losing eligibility for IB after a short period of unemployment.

The Government recognise that there are situations where it is unreasonable to expect people to have worked and contributed in the previous two tax years. The reforms in Clause 59, which will enable young disabled people to claim IB without having to satisfy the contribution conditions, are the clearest example in that respect. We have also made it clear all along that we shall maintain the status quo for carers. We shall provide in regulations for carers who currently qualify for IB after receiving invalid care allowance to continue to do so on the same basis as now—that is, through contributions paid in any tax year. I should emphasise that it will not be necessary for the person to have been working immediately before he or she started caring.

Therefore, to sum up, the Government's proposals include full protection for existing beneficiaries and people who go off IB for periods of a year or more. People will be able to qualify on the basis of just 12 weeks' work at the minimum wage and on the basis of work done as long as three and a half years ago. The current position of ICA recipients will be maintained.

However, the Government's proposals will not extend IB to groups other than the young disabled who are not eligible under the current rules. There is no doubt that the contributory system is complex. Indeed, some noble Lords may not realise exactly which groups do or do not currently qualify. I should explain that there are in fact two national insurance contribution conditions for IB. The first, which Clause 57 amends, requires contributions to have been paid in one tax year. Currently, that can be any tax year, however long ago.

The second contribution condition for incapacity benefit requires contributions or credits equivalent to 50-times the lower earnings limit in both of the previous two tax years. Clause 57 leaves this position unchanged. People will continue to be able to satisfy this condition by credits alone; but, as now, if they have neither paid contributions nor received credits in both of the previous two tax years, they will not qualify. In this respect, the Bill does not alter the position of groups whose circumstances do not attract credits, including most people who are in work but earning below the lower earnings limit.

There was some confusion in the other place about the position of mothers with children who receive HRP (home responsibilities protection) for pension purposes. Perhaps I may make it clear that HRP is not the same as national insurance credits. Mothers with children cannot use it to claim IB. In order to get credits, mothers need to meet other requirements, such as signing on as unemployed, or being in receipt of statutory sick pay or ICA.

Because the second contribution condition already imposes a requirement which relates to the two most recent tax years, it is already possible for someone to have contributed in earlier years but fail to qualify for IB. It can be possible under the current rules for someone to have paid contributions for 30 years but fail to qualify due to failing the credit test of the past two years. That is not a situation created for the first time by Clause 57, as perhaps some noble Lords may believe.

As there has always been a second contribution condition, albeit not quite in the current form, it might even be said that the possibility of someone paying contributions for many years and then failing to qualify for benefit was foreseen by Beveridge. Certainly the founders of the national insurance scheme saw a distinction between retirement pension, where entitlement builds up over many years, and what used to be called short-term benefits for sickness and unemployment, which depended on more recent tests of eligibility. Of course the basis for that distinction is that whereas everyone needs to provide for their eventual retirement, benefits for unemployment and incapacity are intended to provide for people who have recently been working and whose income has been interrupted.

I know that my noble friend Lord Ashley found it difficult to accept that IB and its predecessors have always been intended as a replacement for earnings from recent work. I remind him—I am sure he knows this—that under the National Assistance Act 1948 the full rate of sickness benefit was not payable unless there were a certain number of contributions or credits in the last complete contributions year. That rule changed over the years; none the less since 1948 the contribution tests for short-term contributory benefits have always included a test of recent contact with the labour market. Over time, this test developed into what is now the second contribution condition which required contributions or credits in both of the two most recent tax years. Therefore, it has always been the case that people who have paid contributions in the past but have no contributions or credits in the two most recent years will be unable to qualify for incapacity benefit.

The debates when IB was introduced in 1995 did not focus on the contribution conditions because the previous government decided simply to carry forward the existing rules for sickness benefits. I hope that I have established that it has always been the case that IB and its predecessor benefits were always intended as a replacement for earnings from work. It follows therefore that IB is not intended for people who are in other situations. Yet at the moment half of those on IB came on to benefit from unemployment. The way the existing contribution conditions work mean that a person could have been signing on as unemployed for many years but would still qualify for IB as long as they had paid the minimum amount of contributions in just one year before becoming unemployed. I know that my noble friend does not like this example, but currently it is possible for someone to do six months' work and then be unemployed for 20 years and still qualify for IB. We do not believe that that was in the expectations of Beveridge when the system was first set up. It has not been the expectation since and we do not think it right for this to continue.

That is not to say—I wish to emphasise this—that an unemployed person who becomes sick should be left without income or support. But in those circumstances the right benefit is not incapacity benefit which is always meant to be related to recent experience in the labour market; the right benefit is income support which already goes to many thousands of people who satisfy the medical test of incapacity but not the contribution conditions. In fact, most of those who do not satisfy the new contribution conditions and were previously unemployed will already be getting income-based JSA which is paid at the same rates as IS and therefore to that extent has the same qualifying income tests. They will also be able to qualify for the disability premium in due course. IS with a disability premium of £73.30 a week is more generous—or certainly higher in income—than basic long-term IB. Some 70 per cent of those who fail to satisfy the new contribution condition will get IS rather than IB and will experience no financial loss.

The. noble Lord, Lord Higgins, asked me what sort of savings we envisaged. The savings for the first year are expected to be £25 million and in the third year £60 million. But these proposals are not about cutting expenditure because spending on incapacity and disability benefits will continue to rise by more than £2 billion in real terms over the life of this Parliament.

As I said at the beginning, the Government's approach is based on the clear principle that there should be a link between IB and recent work, as was envisaged by Beveridge. That link has been lost in recent years, primarily because of the growth in long-term unemployment which Beveridge, frankly, did not anticipate. Restoring that link is an essential aspect of the reform of the benefits system that the Government are determined to achieve. Within that framework safeguards need to be made, and are being made, for certain groups. We believe that the overall approach is right in principle and, despite what has been said tonight, we do not believe that it will place unreasonable barriers in the way of people establishing their entitlements. We believe that it is right that IB should be related to recent work, and that is what Clause 57 will ensure.

11.45 p.m.

Lord Ashley of Stoke

I am grateful to my noble friend for responding to some of the points raised in the debate. She has heard the unanimous condemnation of Clause 57 that has been expressed on all sides of the Committee. I simply repeat the situation I have already mentioned—I am being quite frank with the Government, quite honest with the Committee—the Government must reconsider and think again. If they do not, this amendment will be brought forward on Report and we will call for a Division in the House.

Lord Higgins

Perhaps I may add that much of the noble Baroness's defence of the clause was listing people who will not be hit by it. I find the justification for those who are to be hit by it wholly unconvincing. I very much hope that we shall return to this matter on Report. I do not think the clause is amendable:; it must simply be eliminated. I hope that it will be brought before the House at a reasonable hour on that occasion.

Clause 57 agreed to.

Clause 58 [Incapacity benefit: reduction for pension payments]:

On Question, Whether Clause 58 shall stand part of the Bill?

Lord Ashley of Stoke

I wish to oppose this clause as well. The clause introduces means testing for the first time for a major long-term contributory benefit. That is a very significant change. It is based on the clarion call from my noble friend of directing help to those in greatest need. That is a fine objective and a fine principle with which few of us would disagree. It is easy to argue that those who can afford it should help those who cannot. But we should look carefully at the consequences.

We are moving away from universal provision for everyone who pays contributions. That will damage trust in the Government. People will undoubtedly resent paying and not receiving the expected benefits. They will see this as a case of, to change a prime ministerial phrase, "nothing for something".

We should not forget that expectations are rising in this country and few will accept that poverty should be the automatic consequence of being unable to work. That is why occupational pensions are so numerous. In olden times, many people lived for the day because they could not afford to do otherwise. Now they are more able and willing to prepare for the future. But attitudes will change very quickly and very radically if the prudent find themselves little or no better off. That would be a major consequence of this clause.

The Government deserve credit for their new provisions for disabled people, but the poor should not be made to pay for the very poor. That is a fundamental principle in objecting to this clause. We need to look at the income levels of those whose occupational pension will be reduced to pay for other reforms. I am sorry to challenge my noble friend again on this issue, but the Government's proposal is that anyone with an occupational pension of more than £50 a week loses part of incapacity benefit for every extra pound of that pension. The consultation document indicated that that would be at the rate of 50p in the pound.

Any attempt to justify means-testing severely disabled people, and at a penal rate which is higher than the highest tax rate paid by millionaires, is to be deplored. The Government seek to give the impression that those with incapacity benefits are well off and that they are receiving a state benefit which they can do without. Nothing could be further from the truth and I think the Committee should scrutinise the figures with very great care.

Ministers, including my noble friend Lady Hollis, talk of "almost 100,000 people" getting occupational pensions of more than £230 a week and having incapacity benefit of £60 a week on top. Those are the figures which appear in Hansard and the press, but according to my noble friend's Written Answer on 30th June, this is just not true. The Written Answer says that £230 is the average pension of the 90,000 incapacity benefit recipients who have a pension of £150 a week or more. But £230 is the average figure: some will be above and some below, but we cannot be sure how many will be above. However, we can be sure that there will not be 100,000. The estimate I have been given is that some 40,000 people have occupational pensions of more than £200 a week.

I am afraid I must challenge the Government here. Does my noble friend accept that her figure of almost 100,000 people is wrong? Does she accept that only some 40,000 people have an occupational pension of more than £200 a week? If my figure is correct, just 6.6 per cent of a total of 600,000 people have both occupational pensions and incapacity benefit. That is a very small percentage: yet it is being used to justify the means-testing of a far larger group whose pension is very much lower. Forty-six per cent of incapacity benefit recipients with occupational pensions have a pension income of between £50 and £150 per week.

These are the people who in future will be hit the hardest. When the occupational pension income is as low as £2,652 a year, the incapacity benefit would be cut. It would be taken away completely when the occupational pension is £9,542 a year. These figures are for a single person and they are very, very low indeed. This is a blatant case of the poor paying to help the poorest, and I simply cannot agree with that. Far too many other people on middle incomes and well-off people should be doing it; taxpayers should be doing it, not poor, disabled people.

That is what is wrong with this clause. The message that this Government are giving to the vast majority of people is, "If you become disabled, beware. As far as the Government are concerned, you will have a low income. You won't be the poorest in the land but you will be poor, and all the super-rich will be all right". For those people struggling to work despite a disability or an illness, as mentioned earlier, which they know will eventually incapacitate them, it is a really terrifying prospect.

This Government argue that there is double provision of pension and incapacity benefit. The facts are these. The Thatcher government removed the earnings-related element of the former invalidity benefit, claiming that there was double provision. The same tired old argument is being used again now. This Government refer to double provision. The idea was used again in our debates today. It is as if the previous cut never occurred, and the Government are rushing in brandishing a new idea. However, rather than double provision, it is a case of double jeopardy.

I hope that the Government will think again about the clause between now and Report stage. I repeat: if they do not, I shall again give notice of my intention to oppose the clause and, on Report, the House will be divided.

Lord Higgins

Incapacity benefit is a national insurance benefit awarded to people who are incapable of work and who, having contributed to the scheme all their working life, have entitlement to a payment to replace their earnings when they become too ill or disabled to work. The effect of Clause 58 is to remove that entitlement for people who happen to have pensions.

It is difficult to envisage any clause that would be objectionable on so many different grounds. I have already complained that we ought not to be debating this issue at five minutes to midnight. One can only hope that the BBC parliamentary channel will transmit the debate at a better time. In that context, I must say that the captions that appear at the bottom of the screen, impartial as they are, are done in a most extraordinary way. They are very effective indeed. I wish that I had similar research facilities.

This is a matter of very great concern to people outside this Chamber. This provision abuses the contributory principle. People who have contributed may find, in the circumstances described in the clause, that they do not receive their benefits. It is an extension of means testing, but in a curious way. Most strange is the fact that the clause is a positive deterrent to having a pension. As I said, this legislation is about five Bills rolled into one, but much of it is devoted to encouraging people to take out pensions. Yet in the same Bill, what do the Government do? They say that if people happen to have an occupational pension—a type of pension that the Government believe is the best thing that ever happened in the pensions field—they suddenly find themselves clobbered and their pension reduced at a rate of 50p for every £1 of pension income over £50 a week.

As I say, it is difficult to envisage any proposal that offends so many different principles at the same time. As with the previous clause, I do not believe that Clause 58 is amendable. The only thing for this place to do is to reject it. I hope that when we return to the matter on Report, it will do exactly that.

Lord Morris of Manchester

In the debate on Clause 57, I asked where, in our general election manifesto, it was suggested that 170,000 people who now qualify for incapacity benefit would lose entitlement. I ask now where it was stated that disabled people would be forced to take a cut in benefit of 50 per cent of any personal pension worth over £50 a week so that someone who has saved for years to provide a weekly pension of £75 will have their benefit cut by £12.50 a week.

Again, the proposals are justified by reference to "massive fraud" in the disability benefits system. The most precise figure used for the extent of such fraud was that given by the Prime Minister in an article in The Times on 15th January 1998. He wrote: We spend more on disability and incapacity benefits than we do on the entire school system. Benefit fraud, estimated at £4 billion a year, is enough to build 100 new hospitals". But the figure of £4 billion, used also by the National Audit Office, was quickly shown to be entirely bogus. Indeed, it was dismissed that same day by my noble friend Lady Hollis, speaking for the DSS, who told this House that it was, based on old information from the previous government", and that in the tens of thousands of cases investigated under BIP her department had, not found a single case of confirmed fraud". After her disclosure—

Midnight

Baroness Hollis of Heigham

Perhaps my noble friend will allow me to intervene. It is right that reference was made to about 50 cases of suspected fraud. I am happy to confirm that, to the best of my knowledge, not one single case of fraud was confirmed. But I am sure that my noble friend will accept that when I made that statement I tried to set it in the context that the benefit integrity project revealed a very high level of error—of the order of 15 per cent—in the accuracy of entitlement to DLA. That was understandable because people got better and continued to draw their benefits without necessarily understanding that a change in circumstances triggered a change in benefit. I was very careful to emphasise that it was not about fraud. But that is not to say that there has not been, and there is not, a high level of error.

Lord Morris of Manchester

I am grateful to my noble friend. She will also recall that what BIP demonstrated was that there was a vast amount of under-claiming of their entitlements by disabled people. I shall document that as I proceed.

After my noble friend's disclosure, many thousands more disabled people were investigated in DSS swoops on their homes, bringing some to the brink of suicide, but not a single case of proven fraud was found. Yet the bogus figure of £4 billion in benefit fraud is still quoted as one of irrefutable truth. As recently as 19th May, in an article prompted by strong resistance by Labour MPs to the Government's proposals to cut spending on IB, one distinguished journalist went further: Benefit fraud", he said, still runs at £4 billion a year. Benefit abuse must be many times that sum". As with fraud, however, so with abuse, the truth will out. Again, it came from my noble friend Lady Hollis. In a recent debate she revealed that there was, an under-claim of £5-£6 billion by disabled people", of disability living allowance and attendance allowance alone. With her customary candour and decency, and notwithstanding the effect on her departments budget, she also said that she personally, would be cheering if that happened", all of which shows that the real story is not that disabled people abuse the system, but that the system abuses them for they miss out on £5-£6 billion in help that Parliament intended them to have. Without it many of them are left doubly disabled and in double despair.

It is also disturbing that a reason often given by disabled people for not claiming their entitlements is fear of being branded as what some commentators call "something for nothing merchants". The same reason is given by frail elderly people, more especially single women living alone, for not claiming income support. For not only disabled people under-claim: over £2 billion a year in income support goes unclaimed by the most vulnerable of elderly people.

Higher take-up means higher spending, but it is for help that Parliament has approved for vulnerable people, and failure to deliver it frustrates the will of Parliament. Clause 58 does nothing to remedy under-claiming; indeed, it makes life harder for disabled people who, in saving and striving to help themselves out of poverty, deserve our admiration. I hope very much that this clause will be removed from the Bill.

Lord Rix

The decision to means test incapacity benefit against pension payments is one which I, like other noble Lords, have difficulty in accepting. This measure will directly penalise people who save sensibly for their future. Many people took government advice and have been paying into personal pension schemes. They feel deeply betrayed to discover that they are being penalised for doing this. The proposal undermines government efforts to persuade people of the need to make their own financial provision for retirement. I am also concerned because the principle behind the amendment may set a dangerous precedent that signals the end of universal entitlement to the basic state pension.

If governments were to take incapacity benefit from people who have saved to give themselves peace of mind for the future, what is to stop the Government doing the same for those who save for their retirement?

There are also problems with the way in which this aspect of the Bill is set to be implemented. A threshold of £50 means that someone in their late forties who has to stop work would start to lose incapacity benefit when his income reaches just over £5,500. He loses all benefits once his income reaches £9,300 per annum. That hits people with very modest incomes. It is a myth that the means test will impact only on the wealthy.

I urge the Minister to think carefully about negotiating the threshold and the corresponding taper so that the system is more equitable for sick and disabled people.

Lord Goodhart

From these Benches, I strongly support everything said by each of the previous speakers in this debate. I add two brief points.

First, this clause creates a form of partial means testing. It is only partial because it goes only against one form of income—pension income. If one is lucky enough to have a substantial investment income, one is entitled to claim incapacity benefit and none of it is set off against one's investment income. That seems to be wholly inequitable. Indeed, the particular kind of income which is targeted here seems the one which is most actively to be encouraged: pension income. It would be more honest of the Government simply to say that incapacity benefit is to be abolished; and maintenance is to be claimed only by way of income support. I do not suggest that; far from it. But I think that this is a particularly unattractive form of means testing, and more so than the conventional means testing.

Secondly, this proposal will not only hit those who become incapacitated. It will hit many other people as well. It will do so because many who have mortgages to pay off now insure themselves against becoming incapacitated in order to ensure that they will be in a position to maintain their mortgage payments if they are unable to work through illness or injury.

The effect of these proposals is that those payments will be among the payments which lead to a reduction in the right to income support. The Minister looks a little doubtful about that. Perhaps I may refer her to that provision. The Bill states: In this section 'pension payment' means a payment of any specified description, being a payment made under an insurance policy providing benefits in connection with physical or mental illness, disability, infirmity or defect". Quite clearly that would cover the mortgage protection policy that I describe. In those circumstances, individuals who now have that kind of policy will be well advised to increase their policy premiums because of the loss of incapacity benefit which they will face if they become incapacitated.

For those reasons, as well as for the reasons so clearly and strongly put forward by the previous speakers, we, too, most strongly object to the clause. In due course, we hope to be able to support a vote that the clause should be removed from the Bill.

Baroness Hollis of Heigham

The Government are well aware of the concerns that have been raised about the proposals in Clause 58 under which some account will be taken of the income from occupational and personal pensions when future claims are made for IB.

In order to clear up any possible misunderstanding, I should stress that, as with the change to the contribution conditions, people who are already on IB will not be affected. They will continue to receive IB in full, as well as their pensions, for the duration of the current claim and any future claim which links to it.

However, for new claimants there will, under Clause 58, be a reduction in the amount of IB payable where the income from an occupational or personal pension exceeds a certain amount. The Government have proposed a reduction equivalent to 50 per cent of the pension income over £50. But the exact sums will be set out in regulations and the Secretary of State has always made it clear that he will review the level of the disregard before the introduction of the measure to ensure that it is fair and reasonable. I repeat that these figures are not set in stone. The Secretary of State made that clear at the Report and Third Reading stages in another place. In addition, the Secretary of State will be reflecting on the points made tonight.

What is at issue today is the principle of reducing IB, not the precise level of the reduction. I know that the principle troubles my noble friend Lord Ashley and many of your Lordships. IB is a contributory benefit and in the main the practice has been that it is paid in full regardless of other income. I say "in the main" because, contrary to some assertions made tonight, there have always been some income tests and earnings rules in the contributory system. For example, entitlement to adult dependency increases and child dependant increases in IB and retirement pension is subject to a test of the partner's earning and occupational and personal pensions. Equally, contribution-based JSA takes account of the full amount of occupational and personal pensions above £50 a week. Equally, in IB there are rules on therapeutic earnings, counsellors' allowances and so forth. So there have always existed some income tests and earnings rules within the contributory system. Furthermore, contributory benefits for unemployment have been abated for pension income for many years and at a taper of 100 per cent as a result of the policy of the previous administration.

What, then, is the principle behind the Government's proposal? The principle is the need to ensure that the IB rules reflect modern conditions and establish a fairer partnership between different types of support for people who are unable to work.

The post-war Labour government created a structure of benefits for working people below pension age which was intended to provide an alternative income if earnings were interrupted by sickness or unemployment. At that time it could generally be assumed that if people were not working they had no income. The benefits were therefore clearly designed to meet financial need—to defeat Beveridge's giant of want.

The essential purpose of IB and JSA remains the same today, but the circumstances have changed very significantly, both because of the very large increase in the coverage of occupational and personal pension provision and because of the increased prevalence of early retirement. Today, 86 per cent of men in full-time work are members of either an occupational or personal pension scheme, as are 77 per cent of women in full-time work. This compares with just over a quarter of men in 1953. Another significant change is that today far more people take early retirement. These changes are recognised in JSA, but not in IB.

As a result, IB is increasingly providing a top-up for pension income. That is indisputable. Over 600,000 current IB recipients—around one third—have income from an occupational or personal pension as well as their IB. Nearly 400,000 have pension income of £50 a week or more averaging £120 a week. Nearly 100,000 have pension income worth £150 a week or more, averaging £230 a week. Those amounts are substantial. I should be happy to go into greater detail about the breakdown of the holdings of occupational pensions alongside IB, but full details were given in an answer to Dr Roger Berry on Thursday, 17th June 1999 in the other place, where your Lordships can check the figures.

12.15 a.m.

Lord Higgins

What is the overall saving to the Exchequer?

Baroness Hollis of Heigham

We do not anticipate much in the first few years, but over the next 10 or 15 years the savings will grow considerably. The total savings from the occupational and personal pensions changes are estimated at £190 million in year three.

The amounts received in occupational and personal pensions are substantial. Nearly half the IB recipients who also receive an occupational pension are in the top two quintiles of income distribution. Before any noble Lord points out that disability living allowance is counted in assessing people's position in income distribution even though the benefit is intended for specific additional costs, let me say that even if DLA is excluded from the calculations, nearly half of those with occupational pensions are still in the top two quintiles.

The growth of pension provision affects the degree to which people today face want, which is the contingency that IB is designed to meet. In Beveridge's day it could be assumed that inability to work meant lack of income, but that Is no longer the case. Many people who take early retirement regard their occupational pensions as their main source of income and the true replacement for their earnings. For people with substantial pensions, IB is a secondary form of income—a supplement that the retired person may not even have anticipated in planning for retirement and that they may regard as an unexpected, though no doubt welcome, bonus.

The benefit is not performing the income-replacement role for which it was designed. There is considerable overlap and duplication with a form of income that is also intended to provide a replacement for earnings. The position is quite different from that which applies after pension age, when there is a clear and deliberately constructed relationship between occupational and second-tier pensions and the basic state pension.

The noble Lord, Lord Rix, asked me what the implications would be for the state pension. The state pension comprises the basic pension and an earnings-related element in SERPS. People can choose to have an occupational or personal pension instead of SERPS, so account is taken of occupational pensions in the state scheme. They are designed to be complementary. The basic state pension is a secure foundation and we believe that it is right that it should continue to be the foundation on which to build a second pension.

The Government's proposals are intended to inject some logic into the interaction between IB and private provision, to create a proper partnership that recognises that people with occupational and personal pensions are not in the same position as other IB claimants. Once a person has pension income above a certain level it is no longer appropriate for them to have IB as well. Below that there should be a gradual taper so that there are no clip-edge effects. The amount at which IB ceases to be payable will depend on the level of the disregard and taper, which the Secretary of State will keep under review, and the amount of IB entitlement in individual cases. For a single person on the basic long-term rate of IB, a £50 disregard and a 50 per cent taper would mean that some IB remained payable until the pension income was nearly £10,000. Someone with an age addition and increases for a partner and one child would need a pension of nearly £16,000 a year before IB was withdrawn completely. We believe that that strikes a fair balance between state and private provision while still providing an incentive to people to save for retirement. It is considerably more generous than the JSA. arrangements.

As the noble Lord, Lord Goodhart pointed out, as well as providing for pension income to be taken into account, the clause also provides for regulations to be made that would enable permanent health insurance linked to the ending of employment to be treated in the same way.

Our intention in taking payments from PHI policies into account against IB is to create a level playing field with the treatment of payments into occupational and personal pensions. Therefore, we shall take account of PHI only where it has been arranged by an employer and the contract of employment has ended with that employer. We have discussed that with the Association of British Insurers and it agrees that that is the right approach.

Therefore, I should make it clear that occupational sick pay or its PHI equivalent will not be deducted from incapacity benefit; nor is it the intention to take account of other forms of health insurance; nor mortgage protection payments. The only sort of insurance that will be taken into account is permanent health insurance and then only when it has been arranged by an employer and the contract of employment has ended. It will not apply to personal health insurance, nor mortgage protection payments.

I should add that any regulations providing for new forms of income to be taken into account will be subject to the affirmative procedure and so will be guaranteed close scrutiny by Parliament.

We also recognise that there will be circumstances in which it will not be appropriate for occupational and personal pensions to be taken into account. Therefore, Clause 58 provides power for occupational and personal pensions not to be taken into account where the pension payments are in connection with the death of a member of the scheme or where an occupational pension scheme is in deficit or has insufficient resources to pay the full pension. It includes a power to assume a notional income where a claimant deliberately fails to avail himself of an available pension payment so as to increase and maximise his benefit, which is a long-standing social security provision to prevent abuse.

I said at the beginning that the Government recognise that there are genuine concerns about the proposals in Clause 58. However, the Government believe that it is essential to modernise the rules of IB. I suspect that if Beveridge had anticipated the growth in private provision, he would have agreed. The Secretary of State has made it clear on several occasions that he will consider carefully the level at which pension income will be taken into account. But the principle of partnership and producing duplication between IB and occupational and personal pensions, which was not anticipated when IB and its predecessors were devised, is not something on which the Government feel they should compromise because they do not believe it would be right to do so.

Lord Ashley of Stoke

I thank my noble friend for her response to the debate. No one does it better on behalf of the Government. But she has heard the condemnation of Clause 58 from all sides of the Committee. She knows where we stand. We want the Government to reconsider this matter. If they do not, we have spelt out clearly the course of action that we intend to take on Report. I stand by that, but I thank the Minister for her reply.

Clause 58 agreed to.

Clause 59 [Incapacity benefit: persons incapacitated in youth]:

Lord Rix moved Amendment No. 124A:

Page 68, line 1. leave out ("20 or, in prescribed cases,")

The noble Lord said: In moving this amendment, I must express my pleasure at enjoying a last waltz with the Minister. Such is my anticipation of the pleasures ahead that I insist on at least three circuits of the floor.

Baroness Hollis of Heigham

Is the noble Lord, Lord Rix, suggesting that we should dance to "Strangers on the Shore"?

Lord Rix

I begin by paying tribute to the Minister and the Government for raising non-contributory incapacity benefit to the level of contributory incapacity benefit for young entrants. Back in 1975, some of us, particularly those at MENCAP, were less than wholly convinced by the logic of giving someone with a few weeks' of work and contributions one level of benefit for long-term incapacity and giving someone whose ill health or disability prevented him ever working a much lower rate of long-term incapacity benefit.

The Government have partially corrected that anomaly and what they have done deserves credit and thanks. But having paid that tribute to the work that no doubt went on behind the scenes to secure that plus in the tally of welfare reform plusses and minuses, when the Minister responds, I anticipate a general rebuke to the effect that an agenda for change which was all plusses and no minuses would be inconsistent with the Government's commitment to maintaining tight control of public expenditure.

Reading the debates in another place, I am conscious that among the critics of some of the proposals in the Bill are those who want much more radical cuts in the welfare budget and certainly do not favour all plusses and no minuses. I need, therefore, to show my colours which are, I hasten to add, not party political colours, unless a disability party has emerged while I was not looking. My starting point is not that we are spending too much money on sick or disabled people, or that the wrong people are entitled to benefits, or that some people are entitled to too much benefit; my starting point is that benefits are too low, that too many people who are entitled to benefit are not receiving them, and that too few people are entitled to benefits. All research evidence seems to bear me out, as do the rates of benefit when contrasted with earned incomes and the costs of disabled living.

That is the background to what I want to say; but on this amendment to this clause I am saying something much more modest. The Government's proposals started with a cut-off age of 20. Below that age, people would qualify for the non-contributory incapacity benefit if they satisfied all the other conditions. Below that age, if receiving severe disablement allowance when the new rules came into force, they would transfer across to non-contributory incapacity benefit. The Government were quick to recognise the argument for catering for those studying between the ages of 20 and 25, and they raised the cut-off point selectively to 25 for that particular group, and only for that group, and only for new entrants.

So, as the Bill stands, for most people the cut-off point is 20. It is 20 for those already on SDA and at college and aged between 20 and 25. It is 20 for those at a social education centre receiving outreach education, but not actually at college. It is 20 for those who have had a gap in their education before the age of 20, perhaps looking for work, and who then go on to college. The magic age is 25 only for a quite narrowly defined although important group of continuous college students.

I have to say that for those young people with severe learning disability who follow the traditional route of recent years through special school and then into a specially designed college course, benefit is likely to be claimed and received from age 16. However, even those young people will not benefit from the transfer from SDA to non-contributory incapacity benefit and the extra income that goes with this if they are on SDA and over 20 when the rules change. For those who follow a mainstream route and do not claim benefit, and for whom recognition of the reality of being unable to work comes later, the age-25 concession would be really valuable, were it not so tightly limited.

My amendment is designed to simplify what is potentially a confusing and unfair situation by making age 25 the cut-off point for all purposes. Keeping to my main concern—young people with severe learning disability who are born with that disability, live with it and die with it—my amendment will mean that there are no uncomfortable distinctions made between them according to where they happen to be educated, or gaps in their education while agencies fight over whether they can continue their education. If they satisfy the other conditions, they will be able to claim incapacity benefit at any time under age 25 and be able to transfer from SDA to IB if they are under 25 when the rules change.

All cut-off points are to a degree arbitrary. My amendment will not help those who have been on SDA since schooldays because of congenital disability but who are aged 25 or over when the rules change. However, it provides a fairer, tidier and more consistent approach than does the Bill as it now stands.

Perhaps I should conclude by noting that learning disability is, by definition, a condition in which extended education in a variety of settings is very much what is needed to help people to fulfil their potential. Indeed, a right to education up to age 25 is something for which we have long argued. Alongside that, I note the reality that no more than 10 per cent of people with severe learning disability of working age are in any kind of paid employment and most of those are in low paid and often part-time work. The benefit needs that I have touched on cannot be answered realistically by the argument that all of those concerned should be working. I beg to move.

Baroness Hollis of Heigham

Clause 59 provides improved help for young people disabled early in life. Amendment No. 124A seeks to extend the age limit for access to this new help.

I would like to take the opportunity to explain why we are proposing to make the changes in Clause 59. Severe disablement allowance is currently paid to people who do not qualify for incapacity benefit because they have not paid sufficient contributions. The original philosophy was to help people who never had the opportunity to establish themselves in the insurance scheme—particularly young people disabled at birth or at an early age.

However, SDA does not work. It does not provide many young people with the secure income they need. Because of the low rate at which it is paid, 70 per cent of recipients have to claim income support to top it up, and their SDA is taken into account pound for pound. So SDA does not provide any additional help—which means that it is of least help to those in greatest need This is why we are reforming the system to increase the benefits that we pay to people born with a disability or who incur a disability early in life and become disabled before the age of 20. As a result of the proposed change, people who are disabled early in life and are therefore unable to qualify for IB will gain by up to £26.40 a week. Some 175,000 people will gain in the long term, many of whom will never work in their lives. They will enjoy far greater security than they have known before.

Our main concern in reforming SDA is to help young disabled people, for the reasons that I have given. This is why the clause provides that, in most cases, people must have become incapable of work and made a claim before they reach the age of 20. However, as your Lordships will know, following consultation, we decided that the age cut-off should be extended to 25 in certain circumstances. We recognise that an age 20 cut-off could penalise young people who go into higher education or training. We therefore intend to prescribe in regulations that young people who go into higher education and training before they are 20 can make a claim to benefit up to the age of 25. To qualify, they would need to make a claim within two tax years of leaving their course.

I know that the noble Lord has some concerns that this extension is still not wide enough to cover certain groups. However, we believe that our proposals strike the right balance. The amendment before us seeks to make age 25 the cut-off point for all claims. My Lords, we do not consider that to be justified; we believe that age 20 is a reasonable cut-off point in most cases. To extend it as suggested would run counter to the principle behind our reform since it would not concentrate help on those in greatest need.

By the age of 20, the vast majority of people who do not go into higher education or training will have had the opportunity to build up a contribution record for IB. With any age cut-off, there is the potential for someone to fall foul of the rules, but we believe that such cases will be rare. The noble Lord may be concerned about disabled people who remain in mainstream education beyond the age of 20. However, I hope that I can reassure him that disabled people who are in full-time education of any sort will be able to make a claim at the age of 19, providing they meet the other qualifying conditions. In addition, young disabled people may also be able to qualify between the ages of 16 and 18 if they attend a course specifically designed for disabled students.

We believe that the provisions already in the Bill, together with the commitments we have made regarding the use of the regulation-making powers, provide more than an adequate safeguard for the people whom we wish to help—namely, young disabled people who have not had the opportunity to work and build up a contribution record for IB.

Clause 59 represents a significant step forward in providing a more secure future for young disabled people, and we do not believe at present that there is any justification for extending the provisions further. Therefore, I hope that the noble Lord will not pursue his amendment tonight.

Lord Rix

I am sorry that my arguments have not persuaded the Minister to accept this amendment. Equally, her arguments have not persuaded me to drop it. However, I do not propose to proceed any further at this hour of the night. I shall return to the matter at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 59 agreed to.

Lord McIntosh of Haringey

In order to prove that the last waltz does not last forever, I beg to move that the House do now resume.

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

House resumed.

House adjourned at twenty-six minutes before one o'clock.