HL Deb 08 November 1999 vol 606 cc1181-213

42 Clause 57, leave out Clause 57.

The Commons disagreed to this amendment but proposed the following amendments to the words so restored to the Bill— 42A Page 66, line 4, leave out ("two") and insert ("three"). 42B Page 66, line 23, leave out ("For this purpose") and insert— ("(9) In sub-paragraph (8)—

Lord Ashley of Stoke rose to move, That this House do not insist on their Amendment No. 42 to which the Commons have disagreed, do agree with the Commons in their Amendment No. 42B to the words so restored to the Bill, butdo disagree with the Commons in their Amendment No. 42A to the words so restored to the Bill and do propose Amendment No. 42D in lieu thereof to the words so restored to the Bill— 42D Clause 57, page 66, line 4, leave out ("two") and insert ("seven").

The noble Lord said

My Lords, in moving the Motion, I shall speak also to my Motion No. 43D. I shall seek to explain that in a moment. Under the Government's proposals in the Bill no fewer than 310,000 future disabled people will lose their disability and incapacity benefits either in whole or in part. That cannot be justified under any circumstances. The purpose of this debate is to protect disabled people from these unfair impositions, especially as most of them are very severely disabled and poor. Today I do not propose the deletion of the offending clauses dealing with incapacity benefit as I did at Report stage. I do not seek to wreck the Bill. My wish is to reach an honourable compromise with the Government. It is that compromise, and that alone, that we are debating and voting upon today.

The Government have a long list of achievements in relation to disabled people. Those achievements are impressive and the Government deserve congratulations. But they are absolutely irrelevant to this debate. It is no comfort to a disabled person who is denied his benefit, or sees it slashed, to be told about government generosity in helping some other disabled people. As always, it is the individual who counts. Many new invaluable measures have been initiated by Alistair Darling who is an outstanding Minister and one of the great successes of this Government. But I have no doubt that with these clauses dealing with incapacity benefit he has made a major political miscalculation. I understand that. We all make mistakes. However, the consequences of this miscalculation will damage hundreds of thousands of disabled people in future. Despite all the talk about constitutional propriety and the rights of each House of Parliament—some of it loose talk—I believe that it is our right and duty to try to persuade the Government to be more reasonable.

My compromise proposals are modest but important. They seek to change from three to seven the number of preceding years during which claimants need to have paid the appropriate amount of national insurance contributions to qualify for incapacity benefit. They seek to change the disregard from £85 to £128, which is the level of the disability income guarantee, and to change the taper from 50p to 23p—the same as the standard rate of income tax. My proposals would reduce the number of disabled people affected by the Government's original proposal by two-thirds and halve their original intended savings. The proposals do not neuter the effect of the clause, as claimed by the Secretary of State. I believe that to halve the savings which the Government intended to make at the expense of disabled people is a reasonable compromise. The Government would still be able to recoup money from the better off but the poor would be protected.

The question of the starting point of income for the purposes of means-testing—the disregard—is very important. The Government claim that they have made big concessions by changing the disregard from £50 to £85. I am glad that they have backed away from their original figure of £50, but it is incredible that they suggested it. It would have meant reducing incapacity benefit to someone with an income of as little as £6,123 per annum, which is way below the official poverty line. Although Ministers are fond of quoting the figure at which all incapacity benefit is deducted, the crucial matter for most recipients is where means testing begins. That is the matter on which we should focus.

The concession by the Government to change the disregard to £85 is inadequate. It means that a disabled person will start to lose his incapacity benefit when his total weekly income is an £85 pension, plus £67 incapacity benefit, giving an annual income of £7,943. That level of income—approximately £8,000 a year—is below the official poverty figure. That is the Government's latest concession for someone who is below the official poverty level. Some people say that as the Government have now made a concession we should be satisfied. These minor concessions are hopelessly inadequate. Any government who penalise people with an income of £8,000 deserve the opposition that they get.

Not only do the Government begin to hit those at a low income level; they hit hard with an incredible deduction rate of 50 per cent. Incapacity benefit is already taxed at 23 per cent. If one combines that with the additional 50 per cent deduction it means that severely disabled people suffer a marginal tax rate of 73 per cent, while the top rate for a millionaire is 40 per cent. That does not make sense. The Government's provisions turn logic on its head. The position should be the reverse. Millionaires should be taxed at the 73 per cent rate and those on incapacity benefit at 40 per cent. That is the situation with which we are faced.

My proposal for a disregard of £128 means that incapacity benefit is reduced when income starts at £10,179 a year. That income is also low, but it is much more reasonable than the Government's figure and there is greater justification for it. The Government's figure of £85 is not index-linked and therefore would be eroded by inflation. My figure is linked to the disability income guarantee and would automatically rise with inflation.

In the House of Commons the Secretary of State promised an annual review of the figure but made no effort to put that commitment into the Bill. I know that he cannot bind future governments. However, he could make it more difficult for them to backtrack. he has failed to do so. I am pleased with the other concessions: the exemption of those with the severest disabilities—the 20,000 people who get the higher rate care component of the disability living allowance—and the estimated 22,000 people who will get the disabled person's tax credit. But although the concessions are welcome, those people are a tiny proportion of the 310,000 I mentioned earlier. So I suggest that too much should not be made of the concessions for this very small number of the most severely disabled people.

Regrettably, the Government are trailing red herrings to justify their proposals penalising disabled people. As recently as last Wednesday the Prime Minister complained: Since 1979, the number of people claiming incapacity benefit has trebled". He also said: As a result of our reforms, we will bring the system of incapacity benefit under control".—[Official Report, Commons, 3/11/99; co1.289] Let us face those statements head on. I accept, as Ministers allege, that the Tory government encouraged many unemployed people to go off the unemployment register and on to invalidity benefit, as it was then called, before incapacity benefit, via friendly general practitioners who were sympathetic to the people who were disabled. So the figure shot up. I think that that is right; that is probably what happened. But the Tory government turned off the incapacity benefit tap in 1995 and the system changed dramatically.

Since then friendly general practitioners have had no role. Incapacity benefit claimants now have to be certified by two strict Benefits Agency doctors. Some disabled people complain that the tests are too stringent; even paraplegics, double amputees and blind people cannot qualify. That is a measure of how appallingly disabled those recipients are. They are the people we are discussing today.

In 1995, the Tory government also tightened the eligibility test and eliminated the earnings related supplement of £15 week. That was very tough action by the Tory government of that day. But today departmental statistics show clearly that the cost of incapacity benefit is falling. So much for the stories that it is rising out of control. It is not falling just by a small amount. The forecast decline is for as much as £750 million over the lifetime of this Parliament. So contrary to what the Prime Minister said, the system does not need to be brought under control. It is already under control mainly because of the Conservative 1995 Act.

Claims that the numbers of people and the costs of incapacity benefit would escalate without this Bill are therefore groundless. They form no excuse for the Government's proposals. I believe that penalising future disabled people for the alleged sins of the past is hardly a blueprint for welfare justice.

However, there are more examples of creating misleading impressions. By the careful use of selective figures, the Government seek to give the impression that vast numbers of incapacity benefit claimants have occupational pensions and are well off. They impel me to visualise thousands of them driving in their Rolls-Royces to pick up their incapacity benefit. But the Government's claim that nearly half of incapacity benefit claimants are in the top 40 per cent of income distribution makes it sound as though they are well off. It is one of the arguments used constantly by Ministers. But a household with average income is also in the top 40 per cent; so the Government's claim is meaningless.

The significant fact is that very few of the people on incapacity benefit are wealthy. Of those with occupational pensions, over 90 per cent have occupational pensions of less than £5,000, or £100 a week. And even with the addition of incapacity benefit of £3,000 a year, the vast majority hover around the poverty level. Those are the undisputed facts.

The Government are also trying to create an impression that these cuts to the benefits of poor people are essential for modernising the welfare state. Only the naive and the credulous could believe that. Regrettably, the Government's proposal for modernising incapacity benefit in the future is to go back to Michael Portillo's proposal of means testing incapacity benefit—a proposal rejected by his fellow Right-winger, Peter Lilley, as being too difficult for disabled people to stomach. These again are the facts. In looking to the future and in modernising, the Government are harking back to a past which was rejected on reasonable grounds.

It would be highly significant for the future of the welfare state if a means test, such as that to be applied to incapacity benefit, were to be extended to the retirement pension. Is it or is it not to be so extended? Ministers have made announcements. We are now informed officially that there will be no means test for retired pensioners. That is an important and welcome statement by Ministers. But in the light of that statement, perhaps Ministers can explain to the House why those people leaving the workforce because severe disability makes them incapable of work are to be treated so differently and so much more badly than those leaving because of age. What is the difference? Why should those who are leaving because of disability be treated so much more badly than those leaving because of age? I can see no difference. I am open to correction but to me it is a clear case of discrimination against disabled people. Perhaps Ministers can enlighten the House.

The other assurance that would be welcome is a commitment that the Government have no intention of getting rid of incapacity benefit altogether. Ministers say they want to relate incapacity benefit to recent work. So they intend to deny incapacity benefit, except for a tiny category, to all those who have had the misfortune to be unemployed for three years before claiming. They will not receive a single penny of incapacity benefit if they have been so unemployed. But there are various depressed areas in Britain where it has been virtually impossible to obtain a job for many years. I have spoken recently to MPs from Wales and elsewhere. They say that it is impossible to obtain any kind of job in their areas. It is the fate of many depressed areas in Britain. So why should disabled people who live in those areas be denied the benefit given to others in prosperous areas? It is what the noble Earl, Lord Russell, called the geographical lottery—except that in this lottery there are no winners, only losers. There is no "right" figure to provide. We can only make our best judgements. However, I believe that seven years is a more reasonable figure because in some areas people can easily be seeking work for that period.

To deny disabled people their incapacity benefit on those dubious grounds is bad enough. But the real injustice becomes clear when we consider that, in many cases, those claimants have paid their national insurance contributions for some 10, 20 or 30 years. They have paid in good faith and naturally they expect the benefits, but the Government shift the goalposts and now say that if you do not meet these conditions, you will not receive benefits. How can that be justified? That is a reasonable question and I do not believe there is quite such a reasonable answer.

I have no doubt that the Government have lost the moral argument and are now trying to turn the debate into one on the constitution. Some Members of this House who opposed my proposals complain that the House of Commons has already voted on them and that I put the whole Bill at risk. They should know that that is nonsense. The fact is that the other place voted only on my amendments to delete the damaging clauses and has not voted on the compromise proposals which we are debating today. The House of Commons will only be able to vote on the compromise proposals if this Motion is carried today. If we do not vote for these today, we deprive the House of Commons of the opportunity to vote on these proposals.

As for the allegation that I put the whole Bill at risk, there are precedents for this House returning Bills to the other place and for doing so time and time again. There is no question of the Bill being lost, at least not today, and it is right that the other place should be made fully aware of the cross-party views of this House.

The Government are saying that it is time for this Bill, including these deplorable proposals, to be put on the statute book. I suggest to the contrary. It is time for this House to assert its view; to challenge this unjustified attack on disabled people; to declare that the Government's comment, "No compromise —full stop" is a betrayal of the dialogue of democracy, and to urge the Government, even at this late stage, to think again. I commend the amendment to the House.

Moved, That this House do not insist on their Amendment No. 42 to which the Commons have disagreed, do agree with the Commons in their Amendment No. 42B to the words so restored to the Bill, but do disagree with the Commons in their Amendment No. 42A to the words so restored to the Bill and do propose Amendment No. 42D in lieu thereof to the words so restored to the Bill.—(Lord Ashley of Stoke.)

The Duke of Buccleuch and Queensberry

My Lords, I wish to support the amendment moved by the noble Lord, Lord Ashley of Stoke, in his usual characteristically compelling way. The noble Lord, Lord Ashley, and the noble Lord, Lord Morris of Manchester, have rightly earned a nation-wide reputation as the most respected and knowledgeable champions of disabled people. There are no two people whose honour and integrity I more greatly admire. If they had continued to speak from the green Benches in the other place, I doubt very much whether we would have found ourselves in the mess that we are in today.

I can honestly say that, in my 39¾ years in Parliament—partly in another place, partly in here—for the past 25 years trying, with so many other of my admirable noble friends, to secure a fair deal for disabled people, this is my saddest moment. It is not because this is my last utterance in Parliament but because of the monstrously unjust actions of this Government, made only very marginally better by last week's concessions.

One of the most worrying aspects of this episode is the further proof of the executive's ever-increasing stranglehold over parliamentary democracy. The most remarkable point about last week's rebellion in another place was not that so many defied the pressure of the Whips but that so many succumbed to it. I hope I might be forgiven for thinking that, if the Government's supporters had half as much feeling for disabled people as, they claim to have for foxes, the offending clauses in this Bill would have been strangled at birth.

If a Conservative government had behaved like this, there would have been outraged protests and demonstrations throughout the land. If the Government persist in restricting and resisting the modest offering of the noble Lord, Lord Ashley of Stoke, they will have every reason to dread the judgment of the ballot box in 2002.

On arrival here, one receives a warm handshake from the Lord Chancellor. I wonder whether, on one's enforced retirement from here, one receives a hug from the Leader of the House.

Lord Rix

My Lords, since this Bill was last under discussion in this House, there has been much talk of brokering a compromise on the vexed question of how to reform disability benefits. Scarcely two weeks ago, I signed my name in support of the very proposals which are before us again this afternoon. However, for all the talk of compromise both here and in another place, it is easy to forget that thus far neither House has actually been given an opportunity to accept or to reject these compromises.

Commentators such as Simon Jenkins, who in The Times last Friday urged the noble Lord, Lord Ashley of Stoke, to accept that it is time to give up, are quite mistaken. The debate may be well rehearsed but the options are only just being laid out before us. Only when this House and another place are given a real choice and are offered a viable alternative to the Government's cuts-led agenda, can we say that true consensus has been reached.

Of course, outside this House, we heard the nonsensical view that to lay down a choice here today somehow challenges the democratic status of the other place. How can this be so when the "Lord Ashley/Dr Berry" compromise has never been tested in the other place? There are 8.5 million disabled people in the United Kingdom whom noble Lords on the Government Benches—for instance, the noble Lords, Lord Ashley of Stoke and Lord Morris of Manchester—have endeavoured to represent over many years, as have a steadfast number of hereditary Peers from all sides of the House, some now fortuitously restored to us including the noble Earl, Lord Russell, the noble Lords, Lord Addington, Lord Swinfen and Lord Astor of Hever and, from the Cross Benches, our very own, the indomitable noble Baroness, Lady Darcy de Knayth, as well as a mere lifer, me.

Our postbags are still full of letters from anxious disabled people. We are duty bound to act on these concerns. Why should there be any question over our mandate to attempt sensibly to revise the Bill when fewer than half the Members in another place consented to the Government's own proposals?

Time and again I have stood up in this House and welcomed measures in this Bill which offer more help to young severely disabled people. As president of Mencap, I acknowledge that those who are born with a severe learning disability are likely to be better off under the new dispensation. I do not doubt the Government's commitment to this group and believe they have acted in an exemplary fashion in seeking to improve protection for youngsters in further and higher education and seeking to ensure that the new ONE service really is a service for disabled people. But on incapacity benefit, while I recognise the Government have moved, I do not believe that tightening contribution conditions to three years offers disabled people adequate protection and I do not believe that hitting disabled people living below the poverty line with a means test in order to finance increases for other disabled people is morally justifiable.

As we have heard, the noble Lord, Lord Ashley of Stoke, is advancing a realistic compromise to government proposals. Instead of denying benefit to severely disabled people who have been out of employment for a mere three years, seven years at least guards against penalising those who have made every effort to find suitable work before reconciling themselves to the limitations of their disability, or those who have faced unemployment in difficult economic conditions in advance of the onset of their disability.

As the other proposal stands, as your Lordships have heard from the noble Lord, Lord Ashley, means testing incapacity benefit will hit individuals living below the poverty line, and will withdraw benefit with a taper which is harsher than anything imposed on millionaires—some of whom are sitting on your Lordships' Benches—within our tax system. To start reducing benefit instead at £128 per week, and with a taper of 23 pence in the pound, is not generous; i t is realistic.

It may be worth reminding the House that one of the Government's new indicators in the first annual poverty audit is a reduction in the number of working age people living in families claiming income support for long periods of time. If incapacity benefit is tightened in the way the Minister proposes, and severe disablement allowance is abolished, the Government will find that increasingly hard to achieve.

In the same report, the Secretary of State for Social Security claims that, the right policies are the policies that work". He pledges, to continue to listen to people on the ground, including people who are themselves living in poverty, to make sure our policies are having the right effect". I urge the Government to look again at what they have heard from disabled individuals and their advocates within the 500 strong organisations represented on the Disability Benefits Consortium who are key partners in delivering the fight against poverty and are aware of the situation on the ground.

Furthermore, the report of the National Policy Forum to this year's Labour Party conference claims to "build upon the platform" of getting more help to the most severely disabled people. Perhaps the Minister can reassure the House today that threats to jeopardise this support are empty.

It also strikes me as extraordinary that, if newspaper reports are true, the Government have threatened to trade welfare reform against Lords reform. We are talking about the lives of hundreds of thousands of disabled people, many of whom are among the poorest in our society. Decisions about their future should be taken in all conscience and in a climate of utmost seriousness, not on the basis of political calculation.

Despite all the help that the Government have given to people with a learning disability, as well as those affected by SERPS—for which I am most grateful—and despite my high regard for the care and debating skills of the Minister, the noble Baroness, Lady Hollis, should the House divide on this matter I shall have no option than to vote with my conscience to support the fair and balanced compromises of the noble Lord, Lord Ashley. That will then offer Members of another place a genuine alternative to what is currently on offer from the Government. I urge other noble Lords to do the same.

5 p.m.

Lord Morris of Manchester

My Lords, I was deeply moved, as I know my noble friend Lord Ashley will have been, by the speech of the noble Duke, the Duke of Buccleuch. As ever, he was most kind and spoke as persuasively as he was brief and eloquent. he will be very deeply missed in all parts of your Lordships' House.

Again, I also pay tribute to my noble friend Lord Ashley for his constancy and the clarity of his advocacy in moving his amendment. As he and I are reminded by our postbags every day now, their opposition to means testing incapacity benefit and changing the contribution conditions for entitlement have united the major organisations of disabled people as never before.

Neither my noble friend nor I approach this debate with any feeling of personal animus towards those of our colleagues who were content with the Secretary of State's original proposal in the debate in this House on 13th October. Nor is there any animus on our part towards DSS Ministers. Certainly the Secretary of State knows of the warmth and kindliness of my intentions towards him personally. For as Chairman of the Managing Trustees of the Parliamentary Contributory Pension Fund, elected by the House of Commons as a whole, I looked after Alistair's own pension for 10 of the past 12 years with undeviating concern for his interests.

The plea I shall make to him today is that of a committed supporter of this administration. My purpose is not to hurt the Government, but simply to do whatever I can further to improve the Bill in the interests of disabled people and their carers. Much apart from wanting to hurt the Government, I very much want them to succeed and passionately believe that they are more likely to do so if all of us speak with total candour.

Friendship is not friendship without candour and it is as a candid friend that I ask the Government to look again not just at the detail but also the principle involved in the proposed changes to incapacity benefit. The Secretary of State told the BBC last week that, while he had moved on "points of detail" he would not water down the principle on which his proposals were based. But how principled was it to encourage tomorrow's pensioners to save for their retirement today and, at the same time, try to impose on disabled people who have already saved for their retirement, over 30 or more years, a cut in benefit of 50 per cent of any personal pension over £50 or, as is now proposed, £85 a week?

Ministers have spoken in parliamentary debates, as I also have done, of those who will benefit from the Bill. More especially I welcome the help proposed for 20 to 24 year-olds in full-time education. But we cannot ignore the losers under the Bill as drafted, one estimate of whose ultimate number is that it will total 310,000 disabled people.

The Government have now created the Disability Rights Commission for which my Civil Rights (Disabled Persons) Bill first made detailed provision in December 1991. Naturally I am delighted. This and the appointment of Bert Massie to chair the commission have been welcomed all across Parliament. It was, however, Bert Massie, commenting on this Bill in The Times, who put it to the Government that: cuts in entitlement to Incapacity Benefit do not force people to work if they cannot do so: they just make such people poorer". Even more to the point, he added: If the problem is that people not entitled to Incapacity Benefit are receiving it because of the policy of the last Government … the answer is to identify those people and to improve 'the gateway' to Incapacity Benefit, not to refuse it to those to need it.". Labour Ministers rightly condemn the Major government for their encouragement of unjustified incapacity benefit claims from unemployed people to cut an ever-lengthening dole queue. But the proposals now before Parliament do not dispossess those who allegedly ought not to have the benefit. Instead they make life harder for disabled people who, having paid national insurance for a contributory benefit in good faith over many years while in work, could now lose a substantial part of the amount for which they thought they were insured. Whatever else this might be called, it is not a triumph for high principle. Indeed, the principle involved is no less unwholesome than the detail. In the words of Sir Peter Large, than whom no severely disabled person is more widely respected here at Westminster, why on earth should we have to, take from people in need to give to those in greater need when the rate of increase in total social security spending has already been cut by half of what it was under the Major government?

Again, why should we now cut the benefits of people who become unfit for work if they have saved, year by year, for very modest personal pensions at a time when the Chancellor of the Exchequer insists that the economy has never been stronger nor Britain more prosperous?

Most disabled people are appreciative, as I am, of helpful new steps taken in their interests by Ministers all across Whitehall and, like me, they want the Government to succeed. But they say that the proposals on incapacity benefit confuse reform with retreat. They are not resistant to change, for there are many reforms disabled people want urgently to see. They want ministerial preoccupation to be with value as well as cost and disability benefits to be commended to the taxpayer not as acts of compassion, but of enlightened self-interest and moral right.

In candid and thus—as I said—true friendship, I ask my ministerial colleagues to reflect again and to respond positively 10 this amendment.

It was in that spirit that my good and right honourable friend Tom Clarke spoke and voted on the Government's revised proposals in another place. And let us all remember, on this side of the House, that it was Tom Clarke who led for Labour in explaining our policies for disabled people at the general election. In the House of Commons last week, in a speech of high distinction, he kept faith impeccably with what he told the electorate on our behalf. Let us also keep faith today.

Lord Campbell of Alloway

My Lords, a wholly compelling case has been made out by all noble Lords who have spoken from their expertise, which is acknowledged not only in your Lordships' House, but throughout the whole country. Yet it is reported that honourable Members of another place have threatened to withdraw the Weatherill amendment if we insist tonight. If so, that threat is in grave contempt of your Lordships' House, and it is a slight upon the status and dignity of the bicameral process. It is a threat to which this House should not defer.

Indeed, no second Chamber, however constituted or reconstituted, should be deprived of the option to decline to approve repugnant legislation, in particular on humanitarian grounds such as obtain in this case. As at present constituted, the House acts upon its honour to protect the interests of this vulnerable minority against oppression, for the reasons so eloquently explained by the noble Lord, Lord Ashley of Stoke. The Parliament Acts make provision for another place to have its will in due course if that is what its Members wish.

The business of government has, as is wholly predictable, again hit the buffers towards the end of the Parliament. No acceptable accommodation has as yet been afforded, and as I understand it, none is on offer. Many years ago, the noble Viscount, Lord Ingleby, who sat on the Cross Benches, gave me a book inscribed with gratitude for my work on the Floor of the House on behalf of the disabled. Therefore it would not have been possible for me today to sacrifice their interests on the altar of political convenience at the behest of the usual channels. This Government evince but scant concern for minorities. Their protection has now become the urgent obligation of your Lordships' House, and, I hope, the business of the Loyal Opposition.

To defend those unable to defend themselves from unjustified attack may not be charged as "wanton confrontation". If so charged, it would not be so readily understood by the majority of the people.

5.15 p.m.

Earl Russell

My Lords, it is one of the annual rituals of this place that, come November, Ministers facing the exertions of the ping-pong season get an attack of constitutional heavy breathing. Like other heavy breathing, it is often done down the phone anonymously and no one in this Chamber is accountable for it. I believe therefore that I need to clear the air a little.

So far as I know, no one anywhere in this Chamber questions the supremacy of the elected Chamber. That is true both as a matter of fact—the Parliament Acts see to that—and as a matter of justice. What is at issue between us, and has been an issue in debates for as long as I have been a Member of this House, is whether that supremacy is arbitrary in that another place, whenever it wishes, can say, "I am going to have my way, so there!", or whether that supremacy is governed by the rule of law as set out by another place itself in the Parliament Acts.

What is set out in the Parliament Acts is not a procedure simply for another place to be able to insist, but a procedure that requires the Secretary of State to share with us the responsibility for getting his Bill on to the statute book; to bargain, to negotiate, to compromise and to seek to reach agreement. That is a perfectly fair burden to which to subject any legislator.

This Chamber is not in the business of stopping Whipped government Bills. Whenever any Whipped government Bill fails to become law, we may say that a political misjudgment has taken place. What remains a matter of debate is whose that political misjudgment might be. The answer is usually "both" when that happens, because even if one believes that the other person has been totally unreasonable, it may be a misjudgment to fail to foresee his unreason. Therefore, I hope that we shall not have the rather petulant four year-old's "shan't play" noises that we have been hearing from time to time, but that we have serious scope for a reasonable discussion.

Furthermore, I hope that I shall not hear any more of this mysterious threat to the Weatherill amendment. I agree with the noble Baroness the Lord Privy Seal that that is not the way to proceed. It is a proposal for mutual assured destruction. On that occasion, the acronym is particularly appropriate! In any case, if any of us were to change our policy because of a threat of that sort, we should not deserve to stay here in the first place.

I shall not repeat my arguments in detail against either of the clauses that we are debating. I understand that they are grouped together. I have argued that the first one, on contribution records, is unfair to groups which do not have an equal right to make contributions: people in areas of high unemployment; people from ethnic minorities; and people who suffer progressive disabilities, such as, for example, deafness, which interfere with their ability to work before they finally become eligible for incapacity benefit.

I simply do not understand why the Government have insisted on this clause. It does not make any sense to me. When I listened to Mr Rooker, the Minister of State, replying to the debate on Wednesday evening, all I heard was the equivalent of the famous marginal note in the UN delegate's speech, "Weak point, shout".

I cannot hear any clear principle. I have read what the Minister and the Secretary of State have said. They seem to be desperately worried about people who have had long periods of unemployment and then claim incapacity benefit. I simply do not understand why that worries them so much. The Minister has said that there is no question of fraud. I thank her for that. I am not certain how far that sentiment applies throughout the Government. At the last Prime Minister's Question Time, when my right honourable friend Mr Kennedy asked the Prime Minister why he insisted on this, the Prime Minister replied with a figure from the Green Paper claiming a threefold increase in the number claiming incapacity benefit since 1981.

First, if that was the Prime Minister's reasoning, he is locking the stable door after the horse has been stolen; the horse was stolen by the previous government in the Social Security (Incapacity for Work) Act 1994. I am sure that the House will be relieved to hear that I shall not enter into a debate on that point now. However, it put a stop to that increase in the figures which have since decreased.

Behind much of this debate is the concern of people to explain the increase both in incapacity benefit and in claims for disability benefit as a whole. Many people have been inclined to claim that there has been fraud. Attempts to find it have always come to nothing. The Minister has most generously confirmed that in the case of BIP, in which her record is an extremely honourable one. The recently-published DSS research report no. 94 found that people recognised as disabled in the past few years were recognised according to the same standard as would have applied many years ago, although the numbers so recognised had increased. The incapacity benefit leavers tracking study found that those who had been unemployed before claiming incapacity benefit were less likely to become employed afterwards.

The study also found—this is a very interesting finding—that people's self-perception with regard to their own health was a more accurate predictor of their employment future than the incapacity all-work test. In fact, people are probably better judges of their own health than are the Government. I am not particularly surprised to hear that, but I believe that there are those who would be.

Therefore, why should there be such an increase in the number of people claiming disability benefits? I believe that this point is crucial to the whole of our argument. First, there is, thank God, far less stigma attached to having a disability than there was even 10 or 20 years ago. Therefore, people are willing to make a claim and to accept the label of being a disabled person when 20 years ago they would not have been. I can only regard that as a good thing. Secondly—and this is a finding of the incapacity benefit leavers tracking study—in the tightened conditions of the labour market, employers are more likely to resist employing people with lowered capacity. Therefore, those people have a greater need to claim incapacity benefit. Thirdly, it is well known that illness is a consequence of unemployment. That case is documented at length in the Acheson report; I do not need to do so now.

The Acheson report has also found that, although mortality has fallen, morbidity has not fallen in proportion, especially among the poorer part of the population. The poverty/ill health link is much clearer than it was before. Again, that is relevant to the number of claims. We also have better diagnosis in relation to mental health illness, depression, and back pain, which accounts for one in every seven days lost from work through sickness. We have the car culture which both makes people take less exercise and puts their backs in uncomfortable postures. Here, I rely on the authority of the orthopaedic surgeon who many years ago treated my own back.

I turn to the other clause concerning occupational pensions. At least I understand what the Government are doing although I do not accept it. They argue that they should concentrate help where it is needed most. That is a good principle, but even good principles cannot exist in monopoly. They have to share the world with other principles. Here, they conflict with other principles. First, they conflict with the contributory principle. That is not absolutely sacrosanct, but anyone who proposes to alter the conditions of a contributory benefit must shoulder the burden of proof. That is a heavy burden.

Secondly, what the Government are doing contradicts the need to encourage private provision for pensions. That is an increasingly urgent need of which the Government are well aware and to which a considerable part of this Bill is devoted. I cannot see that it encourages people to invest money in private pensions if they know that if they become sick, 73 per cent of what they put in will be lost to the Treasury. That does not promote the usual motive for private provision.

Finally, what the Secretary of State has done is not equipped for uprating. The uprating is discretionary, not of right. The Minister knows what has happened to the uprating of capital limits for income support, which are equally discretionary. They have not been uprated since 1988. That is the box into which the Secretary of State proposes to put incapacity benefit for those in receipt of occupational pensions. That box is a coffin. We should not put it there.

Baroness Kennedy of The Shaws

My Lords, when this matter was last before this House, I voted with the Government. I did so because I was reassured that the Secretary of State was looking again at the figures and I was given to understand that concessions would be made which would allay the concerns of many of us on this issue. I know the Secretary of State to be a man with a good heart and a good head. Like my noble friend Lord Ashley, I consider him to be one of the great talents in our Cabinet. However, it has been a source of great disappointment to me and to others that he has not accepted the compromise of my noble friend Lord Ashley.

Like my noble friend Lord Morris, I am a friend of government and I speak to government as a friend. The Secretary of State has raised the level of his means test. However, even that rate fails to take full account of the huge costs incurred by many disabled people. The point about disease and frailty is that even the most powerful people are humbled by it: by not being able to do what one once could and having to rely on others for even small assistance. The depression that comes so often with incapacity creates even greater dependency. Incapacity can come to any of us: chronic arthritis striking down a school teacher or a secretary; an early stroke ending a career in nursing; neurological disease throwing out of work a father of young children.

In his arguments, the Secretary of State has said that if the amendment of my noble friend Lord Ashley is passed, single people could have an early retirement pension of up to £23,000 before entirely losing their incapacity benefit. he went on to state that a parent with two children and a dependent spouse, for example, could have a pension of something over £30,000 before being cut off, as though those sums were extraordinarily high.

The mistake we are making is in turning our welfare system into the American equivalent, which becomes no more than a meagre safety net in which the majority of citizens have no stake. I happen to accept that the universal principle may have to be surrendered in the face of changed circumstances. It was for that reason that I argued for the introduction of fees for higher education but that there would be a means test, set comparatively high, for those who would have to pay.

When replacing thresholds, I believe that they have to be drawn at something other than a mean and miserable level. The reason why we must ensure that thresholds are not drawn too low is because we need to maintain commitment by the many to the welfare state. The risk in going down the American road is that the majority have no vested interest in protecting the welfare system; they are no longer stakeholders.

I have every sympathy with our ministerial colleagues who wrestle with the difficult problem of welfare reform. I believe in welfare reform, but I also believe in welfare. When we developed the welfare state in this country, at its heart was the belief that when calamity struck citizens who had contributed to the commonweal, they in their turn should be sustained by the commonweal; not with cap in hand or in ways which removed human dignity but in ways which were decent and fair.

I cannot understand how we can justify a withdrawal rate of 73p in the pound—50p by the means test and 23p in tax—for severely disabled people. Yet, as we have heard the noble Lord, Lord Ashley, say, the top rate for millionaires remains at 40p in the pound. How can we have that kind of disparity? What are we thinking about? What is happening to our values? Are we forgetting who we are? What does "social justice" really mean?

There is much in the Bill that is good and I would not like to see it fall. However, I cannot vote with my Government on this issue.

5.30 p.m.

Lord Davies of Coity

My Lords—

Lord Stewartby

My Lords, I shall be brief. I hope that the noble Lord will be patient for a few moments. I am minded to go into the Lobby with the noble Lord. Lord Ashley, this evening, particularly on one point. I refer to the level of disregard. It seems to me that although the Government have improved the situation from their original proposals, it is still very much on the mean side.

The only other point I make is that the more I listen to debates on this subject, the more it strikes me that incapacity benefit is not well suited to being a general source of "top-up" for income for disabled persons. We have to accept that the structure of welfare benefits generally, and particularly those available to disabled people, is complicated. In the years when one had to advise constituents in another place about benefits and their relationship to each other, particularly for the disabled, I found myself constantly confused and wondering whether I was giving correct advice.

I hope that if the Government face a set-back on this issue, they will not be deterred from reconsidering the relationship between the benefits. In particular, I hope that they will come to a view about whether incapacity benefit should be specifically related to work and the inability of a person because of disability to undertake work, or whether there is a need for a more general supplement of a kind which would assist many of those who appear to be potentially disadvantaged by the proposals introduced by the Government.

I shall say no more than that. However, it seems to me that many of the arguments which the Government may be using to defend their own position are narrowly focused on the purpose of incapacity benefit whereas many of the arguments of those who have put the contrary case are a recognition that the incomes of disabled people, particularly those who are out of work and may have been so for a long time, are modest. The structure needs to be looked at to see how that can be remedied.

Lord Davies of Coity

My Lords, when dealing with an issue as emotionally charged as this, it is not difficult to support what is seen to be popular. However, we all know that it is often much more difficult to support what is believed to be right.

Some may say that this part of the debate is a watershed, a moment of truth or perhaps a crunch time. As we are likely to have other occasions such as this before 17th November, I feel that such descriptions are not appropriate. However, it would to apt to say, like the Americans, "We are now playing hardball".

I say that because we have now reached a stage in this House where we are challenging a government elected by the British people to a point of unjustifiable conflict. We are perilously close to doing that in two ways. One is in respect of the constitutional role of this House; the other in respect of the Bill and the amendments to it.

As concerns the first point, let us remind ourselves of why we are here. Indeed, we say it so often that we should have it, if not in our hearts, in the forefront of our heads. We are here to scrutinise and revise; to point out to the Government errors in proposed legislation; to nit-pick; to cross "t"s and dot "i"s and to challenge, but only to a certain point. The moment we go beyond that point we become dangerously close to abusing our powers, our authority and the privilege which we have been given to contribute to the lawmaking process of this land and to its people.

If this continues, sooner or later it will become more and more evident that this country can no longer tolerate an unelected House holding the people's chosen government to ransom. Up to this point, this House has made its views known. The Government have considered those views. As we know, they have responded. Enough is enough. Now is the time to cease this protest. The whole House should support the decision of the elected Government. For those reasons alone, the Government should be supported at this stage.

However, it is also important to address the Bill and the amendments. I shall deal with that in two ways. First, I shall say why my noble friends on this side of the House should support the Government, and secondly, why other noble Lords, particularly the Official Opposition, should also support the Government.

I have spent most of my adult life conducting wage negotiations with employers. Never once did I obtain all I wanted, but I never expected to. Once in the realms of negotiation, you recognise that you have to compromise. I knew that I could not secure satisfaction for every demand that every one of my members wished to make; but I sought to secure as much as I could for as many as I could, and, at the same time, to ensure that all those I represented sacrificed the least, in terms of both wages and conditions and job security. That was a discipline I set myself on each and every occasion. That is not universally true throughout the whole of the trade union movement. I am sure we can all remember the miners' strike of 1984–85 when the refusal of the mineworkers' leader to compromise resulted in hardship and agony for so many miners and their families as well as for so many others.

So, what is the relevance of that to the debate on this Bill? I shall tell the House. The Government listened to the arguments advanced by this House; they made concessions and amended the Bill accordingly. Now the Bill, as acknowledged by my noble friend Lord Ashley, is generally a good one. Therefore it should be accepted. Although it may not provide all that is wanted, the vast majority of the Bill is good.

I say to my noble friends that this Bill provides far more benefit for far more people—the vast majority being among the most disadvantaged—than the numbers the amendment seeks to protect. Therefore, if this Bill falls far more people will lose compared with those who will gain because of the insistence on pushing this amendment to a Division and winning. I hope my noble friend will withdraw his amendment. If not, I urge all my other noble friends on this side of the Chamber to vote against him.

I turn now to noble Lords opposite. I appreciate that the role of the Opposition is to oppose. That they have done. But there comes a time in this House when that opposition must cease and I believe that that time has now come. If that is ignored, then in my view the Opposition are no longer acting as a responsible opposition. From their records and from the statements made by the Tory spokesman on social security at this year's Conservative Party conference, it is clear that this Bill is not to the liking of the party opposite, despite the advantages it will bring to many people. So it would seem that any support given to the amendment of my noble friend Lord Ashley by the Opposition will only be for the purpose of jettisoning the whole Bill. That being so, it is a very undignified stance. Indeed, it would be contrary to the understanding reached in respect of the Government's legislative programme when agreeing the Weatherill amendment.

Earl Russell

My Lords, has the noble Lord forgotten that these proposals were turned down by the Conservatives when they were in office?

Lord Davies of Coity

My Lords, it is true that they were turned down. It was put forward by Mr. Portillo and turned down by Mr Lilley. I am wondering whether it was with an eye on the general election that they were turned down at that time.

As I said at the outset, the Government have been driven to play hard ball. In the circumstances, no one could blame this Government, if their proposed legislation on welfare reform and pensions is further frustrated, for being less than forgiving in the wake of such destruction.

Baroness Masham of Ikon

My Lords, I take this opportunity to pay tribute to the noble Duke, the Duke of Buccleuch and Queensberry, for all the support he has given disabled people within and without Parliament. For years the noble Duke has been president of RADAR (the Royal Association of Disability and Rehabilitation). Many people thank him for all he has done.

Many people are becoming concerned about the meanness of spirit of the Government towards unfortunate people who have to struggle to survive. I should like the Minister to say how much it will cost to administer the means test to these severely disabled people. They will feel let down unless the House supports them tonight in asking the Government to try and understand their needs more closely than they have so far been able to do.

5.45 p.m.

Lord Swinfen

My Lords, the noble Lord, Lord Davies of Coity, suggested that, in what we may be proposing to do this evening, this House could be exceeding its constitutional duty. I take issue with him on that point. The House in fact is performing its constitutional duty. If this House feels that the other place should think again, it has a duty to ask it to think again. The noble Lord has not been in this House as long as I have. I can remember that when this party was in government, the House asked the government of that day—the Members in the other place—to think again.

It may be unwise; it may be inadvisable to try and delay matters. I do not know how difficult it is to arrange government business—I have never been in the position of trying to do so. But as far as I am aware there is no constitutional reason why Prorogation, which I gather is planned for Thursday, could not be postponed. I am sure that the Government will want to get their Bill through and I for one do not want to stop them, but it may be necessary for this Bill to be amended yet again. If the noble Lord, Lord Ashley, takes this matter to a Division, I am strongly inclined this evening to vote with him in his Lobby.

I have one question for the Minister. Why, when the Government are attempting to get people to produce their own private pension arrangements to back up what is acknowledged to be a rather low state pension, are they means-testing disabled people for incapacity benefit which is exactly the same sum as the state pension?

Baroness Darcy de Knayth

My Lords, I shall be extremely brief. I support these amendments. It is important that there is some method of uprating, as the noble Earl, Lord Russell, clearly demonstrated.

I reiterate something that the noble Lord, Lord Ashley, said when he so persuasively introduced these amendments; that is, the other place has not been asked its opinion on the compromise amendments. In any case, the Bill has to go back to the other place because of the successful amendment of my noble friend Lady Strange.

Lord Rowallan

My Lords, I apologise for taking up the time of the House after one and a quarter hours on this debate. However, I want strongly to speak on it.

When I was eight I had polio and was paralysed for 18 months. Luckily, I recovered. So I know what it is like to be disabled. Many more, 8.5 million people, as the noble Lord, Lord Rix, pointed out, certainly know what it is like to be disabled. The National Health Service looks after everybody equally. So should the social security system. That is the problem with which we are dealing today.

My father was a double amputee. As a result, I have worked for the past 10 years for all those who suffer from various disabilities. I am a life member of the Limbless Association; I am a director of SANE, the mental health charity; I am a patron of Depression Alliance, which deals with people who suffer from depression. Sadly, I shall not be able to do that too much longer from within your Lordships' House, but I shall continue my work outside.

The disabled did not choose to be disabled. Unfortunately, they are disabled. They must be treated fairly in all ways. Because I have lost my franchise to be here, I shall not become a hooligan; I shall not vote against this Government willy-nilly until Wednesday or Thursday. But in this case I feel it is the duty of this House to ask the other place to look seriously at this problem, which has not been debated there. It is the duty of this House to revise extreme measures of any government. We have done that successfully for many years. I urge your Lordships, if this matter comes to a vote—I feel sure it will—to support the noble Lord, Lord Ashley, so that it can be seriously examined again.

Lord Higgins

My Lords, anyone speaking in your Lordships' House in a debate on the disabled, which has had as participants those who have already spoken this afternoon, must do so with great diffidence. I speak not only of the noble Lords, Lord Ashley, Lord Rix, Lord Morris, and my noble friend the Duke of Buccleuch, but also of the noble Baronesses, Lady Masham and Lady Darcy. They have devoted their lives, in large measure, to helping the disabled. Therefore on this occasion I speak with great diffidence.

Perhaps I may remind your Lordships that we are now dealing with two sets of amendments, which have been grouped together. One group relates to the effect on the disabled if the restrictions on contribution requirements imposed by the Government are carried through, and the second group deals with the question of whether the disabled should have their benefits reduced because they happen to have occupational pensions. I believe that the grouping of the amendments is appropriate but, none the less, it is important for us to bear in mind the fact that we are discussing two issues here. Although they may be related they are, to some extent, separate. Therefore, I hope that noble Lords will feel that it is right to oppose both sets of amendments, as proposed by the noble Lord, Lord, Ashley.

We have before us some amendments on which the House of Commons has got to support the noble Lord, Lord Ashley—

Noble Lords


Lord Higgins

My Lords, I beg the noble Lord's pardon. Let there be no doubt on the matter: we will certainly support the noble Lord, Lord Ashley.

I want to stress most strongly a point which has been made by a number of noble Lords, not least the proposer of the amendments himself; namely, that the House of Commons has not yet had an opportunity to vote on these amendments. When we discussed the matter during earlier stages of the Bill, we voted on and carried amendments to remove these two clauses, which I believe to be fundamentally wrong in principle. The matter then went to the other place and the Government came forward with totally inadequate amendments as a form of compromise. It is that on which the House of Commons has so far voted. The noble Lord, Lord Davies of Coity, seemed completely unaware of the fact that the other place has not yet had an opportunity to vote on these specific issues.

Although I continue to take the view that these clauses are wrong in principle, I recognise the fact that there is a case for compromise. I certainly believe that the compromise put forward by the Government is totally inadequate and that that put forward by the noble Lord, Lord Ashley, is one which the House as a whole should support. It is an entirely reasonable basis on which the House may proceed. Therefore, it does not seem to me that the issue of the constitutional position of the House, or whatever, actually comes into question at this point. Indeed, it is something quite separate.

Nevertheless, at the end of the day—and this is important—I feel bound to say that the matter rests with the House of Commons. We should give Members in the other place the opportunity to vote on these amendments. I do not take the view that it would then be right constantly to reject them. Indeed, as the noble Lord, Lord Ashley, pointed out, it is not his intention to kill the Bill. Similarly, it is not our intention to kill the Bill. Although there are a number of objectionable features in the legislation, I believe that, overall, it does things which ought to have support. Our task is to remove these particular clauses from the Bill.

I do not think that these clauses can conceivably be regarded as reform. They are fundamentally flawed. In addition, it has been said that this is a matter upon which there will be a conspiracy of hereditary Peers, and so on. However, one has only to look at the results of the voting on the last occasion when the matter was before the House. If no hereditary Peers had voted against these clauses, the amendments against the Government and in favour of knocking out the clauses would still have been carried by a substantial majority. I believe that there is great opposition throughout the House as regards what the Government are doing; indeed, it is all-party opposition.

My next point is equally important. It has been reported, not least in some press articles, that this is a measure to increase expenditure on the disabled. It is not so. These clauses do not represent a measure to increase expenditure on the disabled; they represent cuts in what has already been previously agreed for the disabled. That is the crucial difference between the two positions. In effect, we have been told by the Government, "Oh well, we have made a concession". But what has actually happened is that the Government have come forward with these proposals, which propose to take away benefits from the disabled. They have then said, "You can hang on to a little bit of what remains". That is not a reasonable deal. However, the proposition put forward by the noble Lord, Lord Ashley, would strike a reasonable balance between the two sides of the House.

I should like to say a few words on the substance of the matters now before the House. The first set of amendments is concerned with a contribution condition. It has been the hallmark of the Government's so-called "reforms" that, as an overall effect of policy, they have undermined time and again the contributory principle. Indeed, they have extended the question of means testing time after time. What we object to most strongly in the first clause that we are discussing and which the noble Lord seeks to amend is the proposition that people who have contributed for many years but have not done so recently—very often for good reasons—should suddenly find that they lose their disability allowance. We believe that to be wrong in principle. At any rate, one should go for the compromise which the noble Lord, Lord Ashley, has proposed; namely, that it should at least be a question of whether such people have contributed over a seven-year period.

The second set of issues relates to the question of incapacity benefit and pension contributions. I do not wish to burden the House by repeating the excellent exposition made by the proposer of these amendments as regards the way in which this will operate. It will do so by applying a ludicrously high, effective marginal rate of tax to people who cannot conceivably be regarded as well off. But there is an even stranger situation here. Under this clause, and at this very high rate of marginal tax, incapacity benefit will be taken away from people because they have an occupational pension. The whole thrust of the rest of the Bill is to say that people should make provision by way of pension. But what do we find? If you are disabled and have been fortunate enough to find a pension, you will suddenly find that you are penalised for so doing. The clause is totally inconsistent with what remains in the rest of the Bill.

However, there is something even more curious about this proposal. If you have an occupational pension at a relatively low level, your incapacity benefit will begin to be withdrawn. Indeed, after not very large increases in the level of income at which this happens, it will then be withdrawn altogether. If another individual on incapacity benefit had an income from stocks and shares of, say, £2 million a year, his incapacity benefit would not be affected at all. It is a truly lunatic situation. I really do not understand why it should be so.

There are many other arguments to deploy but, as many have already been put forward this afternoon, I do not wish to burden your Lordships' House by repeating them. However, there is perhaps one that is worth mentioning. I have in mind the question of public expenditure. We have been told, "Well, we have to make these cuts on the people who are incapacitated"—who are certainly not among the richest members of the community—"in order to pay for some of the improvements which have been made elsewhere in the welfare system". Indeed, some of those improvements will affect people who are better off and less incapacitated, if incapacitated at all. That is not a reasonable way to assess priorities.

I conclude on this note. Like most noble Lords, I am genuinely puzzled as to why the Government should persist in retaining these two clauses. I find them completely incompatible with the overall approach which they seem to be adopting. They cannot conceivably be regarded as reform. However, as I say, while they are wrong in principle I recognise that a compromise should be agreed. I do not think that this is something which should go back and forth and endanger the Bill. However, it is tremendously important that this House should carry out its duty, which is to ensure that those in another place, who must at the end of the day have ultimate responsibility for these matters, should have an opportunity to vote on the amendments which have been put forward by the noble Lord, Lord Ashley. I very much hope that your Lordships will support them.

6 p.m.

Baroness Hollis of Heigham

My Lords, in supporting Amendments Nos. 42A and 42B to Lords Amendment No. 42, I shall speak also to Amendments Nos. 43A to C. Of course I am asking the House therefore to reject the amendments of my noble friend.

It always gives me great pleasure to reply to such a balanced debate with such a variety of views as we have heard tonight. There have been three main themes advanced tonight. First, that what is being offered by my noble friend Lord Ashley is a compromise; secondly, that what the Government are doing affects people below the poverty line and, thirdly, that the other House should have a chance to consider—which it has not yet done—the amendments of my noble friend.

My honourable friend Mr Rooker in the other place said that he was engaging with myths as much as with information. I am afraid that I am about to do the same thing tonight. First, although this measure has been alleged to be a compromise, it is not. Secondly, we have been told that it affects people below the poverty line, but it does not The statistics are quite misleading.

Thirdly, we are told that the Commons have not had a chance to consider this matter when they have and have made their position already clear. I shall return to that point.

The Government have made it clear all along that the incapacity benefit reforms are based on principle, helping the 1 million disabled people who say they want to work to do so while providing the right support for those who cannot. The Government are already spending more than £24 billion a year on benefits for long-term sick and disabled people. During the course of this Parliament we expect to spend nearly £2 billion more. I repeat that this is not a cuts agenda, even though that has been alleged by some, including the noble Lord, Lord Higgins, tonight. As I say, we are spending nearly £2 billion more on disabled people in the course of this Parliament. But we believe that in doing so the greatest resources should be spent on those with the greatest needs. If we are to meet that challenge, incapacity benefit needs to be reshaped and reformed.

I remind the House that despite some suggestions to the contrary—again from the noble Lord, Lord Higgins—no one who is currently disabled and on incapacity benefit will be affected by these changes. In response to my noble friend Lady Kennedy I also remind the House that in future 90 per cent. of those on incapacity benefit will not be affected by these changes. I say to my noble friend Lord Morris, who has alleged that incapacity benefit expenditure is not out of control because the numbers on it are falling, that that is simply a result of measures taken in 1995. When someone now reaches retirement age he or she comes off IB and goes onto old age pension. That is the reason for the fall in numbers. It has nothing at all to do with the actual caseload.

The Government clearly have not gone as far as my noble friend Lord Ashley would like. I accept that. My noble friend presents his amendments as a compromise. That word has been much used tonight. However, his amendments are not a compromise by any definition of that word. They neuter most of the effect of this Bill, as I do not doubt that my noble friend intended they would. IB was devised as an earnings replacement benefit for those who became sick and disabled while in work and who might otherwise have remained in work. As people have said tonight, incapacity benefit was never intended to massage the unemployment figures, although it was so used by the previous government. IB was never intended to be a top-up for early retirement, although it is now being used in that way too. We are bringing back IB to its original intent, an earnings replacement benefit for those disabled while in work and unable to continue to work.

My noble friend's proposals for the contribution conditions would allow someone to qualify for 113 who did one year's work as long as 81 years ago. That is not creating a link with recent work. That is not compensating someone who has had to leave work recently because of incapacity. Instead it makes incapacity benefit a latent unemployment benefit.

My noble friend's proposals on occupational pensions would enable a single person to get IB with a pension—not an income—of up to £23,000 a year which would have been provided by earnings of £45,000 plus, or a couple with two children to get incapacity benefit with a pension of up to £39,000—I repeat that that is not income, wages or earnings but pension—implying preceding earnings of £60,000 to £80,000. No one in your Lordships' House—

Lord Goodhart

My Lords, I am most grateful to the noble Baroness for giving way. But are not the figures for earnings and pensions that she has just given to us similar to the sort of figures that she mentioned in connection with the working families' tax credit when she defended the fact that government benefits were being given to people on those levels of earnings?

Baroness Hollis of Heigham

My Lords, the working families' tax credit for a couple with two children would taper out at about £15,000 of earnings; that is, for a couple with dependent children. I refer to both partners being in work and eligible to claim childcare allowance. However, I am comparing like with like, not apples with oranges. The childcare allowance is equivalent to DLA, not IB. WFTC tapers out at earnings of between £14,000 and £16,000. My noble friend's amendment would result in IB tapering out at a pension of double that; that is, £39,000. That would have had to be preceded by earnings of £60,000 to £80,000. I am glad that the noble Lord, Lord Goodhart, gave me the opportunity to make that clear.

By any stretch of the imagination my noble friend is not targeting those with the greatest needs. My noble friend says that he is protecting the poor. Since when has someone with a pension of £30,000 plus—and therefore with preceding earnings of double that figure—been deemed poor? My noble friend's amendments are not a compromise. The word "compromise" is a useful one. It has become emptied of meaning tonight because, as my noble friend himself said, his amendments would remove from their reach two-thirds of those affected by the proposals.

Earl Russell

My Lords—

Baroness Hollis of Heigham

My Lords, I did not intervene in other people's speeches and I hope that I shall be allowed to make my speech tonight.

Earl Russell

My Lords, I am most grateful to the Minister for giving way. Does she understand that in the amendment of the noble Lord, Lord Ashley, we have conceded the principle? That is a great sacrifice. Some substantial share of the practice would be an appropriate response.

Baroness Hollis of Heigham

My Lords, to concede the principle and then move amendments which take almost everyone out of its operation is not to my mind a substantial compromise.

As I say, my noble friend's amendments are not a compromise. They take almost two-thirds of those affected by the measure out of its reach and they hugely reduce the impact on most of the rest. That is why the Government cannot and will not accept them. However, the Government have listened and have moved significantly. I remind your Lordships that the Government have extended the period over which national insurance contributions have to be paid from one out of the last two tax years prior to the claim for IB, to one out of the last three. In practice, that means someone will be able to get IB, given the working of the tax years, even if they last worked four and a half years ago. To qualify, people will need only to have worked for four weeks on average male earnings—or 12 weeks on the national minimum wage—sometime within the past four and a half years. Do your Lordships really believe that is an onerous contribution condition to meet?

The extra year that the Government amendment proposes will particularly help people with progressive diseases, who may lose their jobs some time before they are eligible to claim IB, and others with broken work records. As I promised on Report, the Commons amendment provides that people on disabled person's tax credit earning below the lower earnings limit will be able, like carers on invalid carer's allowance, to qualify on the basis of credits in the last two tax years, provided that they have paid contributions at some point in the past. That offers them real security if they stay in work. Again, the Government have listened, responded and moved.

Turning to occupational pensions, the Government intend to raise the occupational and personal pension threshold by £35 a week, from £50 to £85—which is substantial. That figure, as my right honourable friend the Secretary of State said in the other place, will be reviewed annually so that it keeps its value. Invalidity benefit will not even begin to be reduced for a single person until their income reaches £152 a week. Despite what was said by my noble friend Lord Ashley about the poverty line, that is some £55 a week above what many of us regard as the poverty line—below half average earnings. My noble friend misled the House, possibly because he was comparing a family with children against a single person. Again, that is apples and oranges. I am sure that my noble friend did not intend to mislead the House but he certainly did, and that mistake was repeated by the noble Lord, Lord Rix.

I repeat, the taper on IB does not even begin to come into effect for a single person, and similarly for couples, until their income is at least £55 above the poverty line that has been quoted by my noble friend. That means that single people will continue to get IB until their early retirement pension reaches nearly £11,500 a year, which is £86.50 a week higher than the disability income guarantee. A couple with two children could get £18,500 and child benefit on top of that, before they lost their entitlement to IB. On top of that, they might also qualify for DLA. Under the Government's proposals, unlike those of my noble friend, those people most severely disabled on the highest rate of DLA will not be affected at all. As a result of the Government's proposals, 100,000 disabled people will no longer be brought within these changes.

Three additional points were made. The first was that the amendment of my noble friend Lord Ashley was a compromise. Although your Lordships may wish to describe as a compromise something that effectively takes two thirds of the people out of the Bill's reach, do not think that you are somehow negotiating. Your Lordships are not and we are not.

The second point made and repeated concerned the poverty line. Given that the taper kicks in at some £55 a week over the poverty line and, on the Government amendments, would not be withdrawn for a couple with children until some £18,500 be fore child benefit and DLA, we are not talking about people below the poverty line.

The third point—made emphatically by the noble Lord, Lord Higgins—was that the other place did not have the chance to consider the amendments and that therefore we would be doing them a favour by returning these proposals for further consideration. I do not agree. I sat in the Gallery in the other place, as did one or two other noble Lords—not for the whole debate, but I went to and fro. It was clear to me and to the House that the entire debate on incapacity benefit, which went on for some three hours, was on the whole range of amendments thereto, as well as on the government amendments. My honourable friend the Member for Kingswood, Mr Roger Berry, stated in the other place on 3rd November: I have supported a compromise position, which is on the Order Paper".—[Official Report, Commons, 3/11/99; col. 321.] And he went on to describe it. That was just one part of an extensive debate on incapacity benefits. The other place had a proper opportunity to debate the noble Lord's amendment. It chose instead to support the Government rather than defeat them and to support the amendment of my noble friend, there advanced by Mr Roger Berry. The Commons have considered these amendments. They chose to support the Government. They considered this matter as part of the wider debate. They do not need these matters to be sent back to them.

6.15 p.m.

Lord Higgins

My Lords, if the Minister will allow me, the other place did not have the opportunity to vote on these amendments.

Baroness Hollis of Heigham

My Lords, if the other place had wanted these amendments, it could have voted down the Government's proposition and voted for the other amendments on the Order Paper put by Mr Roger Berry, which were basically the same as my noble friend's amendments. The other place chose not to do so. To suggest that the Commons had neither the wit nor the intelligence to see that strategy is deeply condescending to Members of the other place. They knew what they were doing. It is an act of self-deception by your Lordships to suggest that they did not.

The Government have a good and strong record of supporting disabled people. The Government are spending up to £2 billion more this Parliament. This is not about cuts. It is about seeking to respond to real, new and emerging need. The Government have delivered the Disability Rights Commission and are delivering the disabled person's new deal and the disabled person's tax credit—all in two years of a Labour Government. We are continuing that work in this Bill, strengthening the help given to the most severely disabled, the poorest disabled people, and to children and young people. That is a record of which we are proud.

We believe that what we are doing in the Bill is right. We are focusing help on people who need it most. For example, children born with a severe disability—not people retiring on a generous white-collar pension of £30,000 or more. That is why, although the Government have listened and have moved quite considerably, they will not be moving any further. The Government have sought to meet reasonable concerns. They have done so and should receive credit for that. Given that the Government's concessions and compromise have taken something like 125,000 people out of the changes in the Bill, to dismiss them as some noble Lords have done tonight—including some of my noble friends—as being somehow trivial and insignificant is deeply churlish.

The Government have listened. It is time that your Lordships listened. Ping-ponging the Bill will not bring anything further for disabled people. My noble friend Lord Ashley may believe that, but he is wrong. Ping-ponging the Bill will not bring forward any further concessions. I quote the Secretary of State: There are no further changes to come. The Lords must understand that". Ping-ponging could delay and endanger other aspects of the Bill affecting millions of people; not just extra help for the poorest and most severely disabled but the right of bereaved men to receive for the first time widower's benefits. Ping-ponging the Bill would also risk delaying and endangering the protection of SERPS widows, which we discussed earlier this evening. Let your Lordships be in no doubt that it would also risk the right of women who divorce—as, unfortunately, half of all married women will—to receive shared pension rights, which is something for which your Lordships called. Finally, it might risk or endanger the opportunity for several million low-paid people to enter a good, cheap, safe, funded stakeholder pension scheme.

I do not exaggerate when I say that millions of people—women, low-paid people, widowers and the poorest disabled people—will benefit from the Bill. So why are your Lordships proposing to ping-pong it when no further concessions are to be had? The House of Commons has twice—I repeat, twice—made its views clear that it supports the Government and that it supports the Bill. Ping-pong will delay the Bill; it could endanger it. It will not extract any further concessions; there are none to be had.

As your Lordships acknowledge, the Government have the right to get their legislation through—not my noble friend's legislation; not the Tory legislation; but the Government's legislation. I ask your Lordships and my noble friend: is it not time to acquiesce with grace to the considered decision of the elected House and send a Bill, which will benefit millions of our people, on to Royal Assent?

Lord Ashley of Stoke

My Lords, I wish to thank all the speakers who have participated in this splendid debate. We have had some marvellous contributions, nearly all of them well informed. I congratulate all speakers who have taken part. I need refer only to the brilliant speech made by the noble Lord, Lord Davies of Coity. Assuming that we were in a general election mode, it was a wonderful, rabble-rousing speech; it would have been a highly successful contribution to the hustings. Unfortunately, he got the date wrong, the time wrong and the place wrong. Apart from that it was a marvellous speech.

The only other comment I have on the noble Lord's speech is that he boasts about having been a trade union leader. If I may say so modestly, as a young man I was too. If I belonged to a trade union with a leader who was prepared to penalise severely disabled, poor people—living on a poverty level income, on £8,000 or whatever—I would join a different trade union.

The Minister has spoken with her usual eloquence. My noble friend is a great expert in this field. She is far more expert than anyone else in the House—with, perhaps, the exception of the noble Earl, Lord Russell. Both of them are exceptional speakers. However, I must pick her up on one or two small points.

She began her contribution by saying that there had been a splendid variety of views. I heard no variety of views at all; all I heard was unanimous condemnation.

Baroness Hollis of Heigham

My Lords, that will teach me to indulge in irony.

Lord Ashley of Stoke

My Lords, there was unanimous condemnation in the House of the Government's policies—except from our great friend, the noble Lord, Lord Davies of Coity.

The Minister said that my amendments were not really compromise. I know that my noble friend is good at fiddling figures—

Baroness Hollis of Heigham

Never! Never!

Lord Ashley of Stoke

My Lords, playing with figures perhaps. All I shall say is this: my amendments halve the money that the Government tried to save and squeeze out of disabled people.

Baroness Hollis of Heigham

My Lords, that is not correct. The Government's original proposals were for £700 million. My noble friend's proposals will bring that down to approximately £190 million.

Lord Ashley of Stoke

My Lords, the last Government proposals that I saw were £500 million. They were left with £350 million if my amendments were accepted. We could not lean over backwards further than that to be more compromising. I was against the principle—as was the noble Lord, Lord Higgins—of hitting severely disabled people in this way. As the noble Earl, Lord Russell, said, we gave way on the principle; we tried to compromise and to be reasonable because we recognise that the Government have this great majority in the House of Commons. That is the point.

Another point is that my noble friend mentioned those great examples of people on incapacity benefit who have marvellous pensions of £23,000 or £30,000. For her to quote those kinds of extreme examples shows the desperation of the Government. The wages necessary to receive a pension of that kind will be somewhere in the region of £100,000 or £200,000—I do not know. It requires an enormously high salary. How many severely disabled people applying for IB will have earned that kind of vast fortune? Maybe a dozen; maybe two dozen; maybe 100; maybe 1,000—but, out of the 310,000 people that we are talking about, that is nothing.

My noble friend seemed to be proud of excluding people from the measures in the Bill. It is a strange Bill where one has a Minister standing up to say "I am proud that this Bill does not cover these people and does not cover those people". The Bill is supposed to help people; it is to make specific provisions for IB to help people.

Perhaps I may round off in this way. My noble friend did not dispute that the Government's concessionary position leaves some disabled people in poverty of one kind or another. Someone receiving £8,000 is not a wealthy person to be hit by these proposals. She did not deny that the tax rate for these people is 70 per cent compared with 40 per cent for millionaires. She did not deny that the concessions given by the Government relate only to some 20,000 people with the high rate of DLA and 22,000 people with the disabled person's tax allowance.

Speeches have been made in the House by various speakers. I do not intend to go through them all. The Minister has failed to deal with them adequately. When she tries to frighten the House by mentioning all the good things in the Bill that are at risk, I shall say this: she knows that no one has been a stronger supporter of this Government than me; no one has been a stronger supporter of this Bill than me; no one has been a stronger supporter of welfare reform than me. I started my speech by saying that I admired the Secretary of State; I said how good he was and how wonderful was the record of the Government. But on incapacity benefit the Government are acting disgracefully by hitting these people. We are not jeopardising the good things in the Bill; we are simply challenging the Government for hitting people on incapacity benefit.

I hope that the House will support my amendments. As far as concerns the future, my options are open. I commend my Motion to the House.

6.28 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 260; Not-Contents, 127.

Division No. 2
Ackner, L. Denham, L.
Addington, L. Desai, L.
Addison, V. Dholakia, L.
Ailsa, M. Dundee, E.
Alderdice, L. Eden of Winton, L.
Allenby of Megiddo, V. Elles, B.
Alton of Liverpool, L. Elliott of Morpeth, L.
Anelay of St. Johns, B. Elton, L.
Annaly, L. Exmouth, V.
Ashbourne, L. Ezra, L.
Ashley of Stoke, L. Falkland, V.
Astor, V. Feldman, L.
Astor of Hever, L. Ferrers, E.
Attlee, E. Fitt, L.
Avebury, L. Flather, B.
Banbury of Southam, L. Fookes, B.
Barker, B. Forsyth of Drumlean, L.
Bathurst, E. Fraser of Carmyllie, L.
Belhaven and Stenton, L. Gage, V.
Bell, L. Gardner of Parkes, B.
Berners, B. Geraint, L.
Bethell, L. Glanusk, L.
Biddulph, L. Glasgow, E.
Biffen, L. Glentoran, L.
Birdwood, L. Goodhart, L.
Blatch, B. Gormanston, V.
Blease, L. Gray, L.
Blyth, L. Gray of Contin, L.
Boardman, L. Greenway, L.
Bowness, L. Grey, E.
Bradshaw, L. Hampton, L.
Bridgeman, V. Hamwee, B.
Bridges, L. Harding of Petherton, L.
Brougham and Vaux, L Hardinge of Penshurst, L.
Bruntisfield, L. Harmsworth, L.
Buccleuch and Queensbarry, D. Harris of Greenwich, L.
Buckinghamshire, E. Harris of Peckham, L.
Buscombe, B. Harris of Richmond, B.
Byford, B. Higgins, L.
Cadman, L. Home, E.
Caithness, E. Hood, V.
Calverley, L. Howe, E.
Campbell of Alloway, L. Howell of Guildford, L.
Carlile of Berriew, L. Hutchinson of Lullington, L.
Carlisle, E. Hylton-Foster, B.
Carnegy of Lour, B. Ironside, L.
Charteris of Amisfield, L. Jacobs, L.
Chesham, L. Jeger, B.
Clancarty, E. Jopling, L.
Clark of Kempston, L. Kemsley, V.
Clement-Jones, L. Kennet, L.
Clwyd, L. Kilbracken, L.
Cochrane of Cults, L. Kingsland, L
Coleridge, L. Kinloss, Ly.
Cope of Berkeley, L. Kintore, E.
Cowdrey of Tonbridge, L. Kirkwood, L.
Craig of Radley, L. Lamont of Lerwick, L.
Cranborne, V. Lane, L.
Crickhowell, L. Lauderdale, E.
Cross, V. Lawrence, L.
Cumberlege, B. Layton, L.
Darcy de Knayth, B. Leigh, L.
Davidson, V. Lester of Herne Hill, L.
Dean of Harptree, L. Limerick, E.
Lincoln, Bp. Redesdale, L.
Lindsey and Abingdon, E. Rees-Mogg, L.
Linklater of Butterstone, B. Rennard, L.
Listowel, E. Renton, L.
Liverpool, E. Richardson of Calow, B.
Lloyd-Webber, L. Rix, L.
Long, V. Roberts of Conwy, L.
Longford, E. Rochester, L.
Lucas of Chilworth, L. Rodgers of Quarry Bank, L.
Luke, L. Roll of Ipsden, L.
Lyell, L. Rotherwick, L.
McCarthy, L. Rowallan, L.
McColl of Dulwich, L. Russell, E. [Teller]
Mackay of Ardbrecknish, L. Ryder of Warsaw, B.
McNair, L. St. John of Fawsley, L.
McNally, L. Saltoun of Abernethy, Ly.
Maddock, B. Sandberg, L.
Mancroft, L. Sandwich, E.
Mar and Kellie, E. Sandys, L.
Marsh, L. Seccombe, B.
Masham of Ilton, B. Sefton of Garston, L.
Massereene and Ferrard, V. Selsdon, L.
May, L. Shannon, E.
Mayhew of Twysden, L. Sharman, L.
Miller of Chilthorne Domer, B. Sharp of Guildford, B.
Miller of Hendon, B. Sharples, B.
Mills, V. Shaughnessy, L.
Molloy, L. Shaw of Northstead, L.
Monro of Langholm, L. Shore of Stepney, L.
Monson, L. Slim, V.
Montagu of Beaulieu, L. Smith of Clifton, L.
Monteagle of Brandon, L. Soulsby of Swaffham Prior, L.
Morris, L. Steel of Aikwood, L.
Morris of Manchester, L. Sterling of Plaistow. L.
Mountevans, L. Stewartby, L.
Munster, E. Stoddart of Swindon, L.
Murton of Lindisfarne, L. Strafford, E.
Napier and Ettrick, L. Suffolk and Berkshire, E.
Newall, L. Swansea, L.
Newby, L. Swinfen, L. [Teller]
Nicholson of Winterbourne, B. Taylor of Warwick, L.
Noel-Buxton, L. Temple of Stowe, E.
Norrie, L. Tenby, V.
Northesk, E. Teviot, L.
Norton, L. Teynham, L.
O'Cathain, B. Thomas of Gresford, L.
Ogmore, L. Thomas of Swynnerton, L.
Onslow, E. Thomas of Walliswood, B.
Oppenheim-Barnes, B. Thurso, V.
Orme, L. Tordoff, L.
Oxfuird, V. Torrington, V.
Palmer, L. Trenchard, V.
Park of Monmouth, B. Trumpington, B.
Pender, L. Turner of Camden, B.
Perry of Walton, L. Waddington, L.
Peyton of Yeovil, L. Wade of Chorlton, L.
Phillips of Sudbury, L. Walpole, L.
Pilkington of Oxenford, L. Weatherill, L.
Plumb, L. Westbury, L.
Prentice, L. Wharton, B.
Prior, L. Wigoder, L.
Quirk, L. Williams of Crosby, B.
Rathcavan, L. Wise, L.
Rawlings, B. Wright of Richmond, L.
Razzall, L. Wynford, L.
Reay, L. Young, B.
Acton, L. Bassam of Brighton, L.
Ailesbury, M. Berkeley, L.
Alli, L. Blackstone, B.
Amos, B. Borrie, L.
Archer of Sandwell, L. Bragg, L.
Ashton of Upholland, B. Brett, L.
Bach, L. Brooke of Alverthorpe, L.
Brookman, L. Jay of Paddington, B. (Lord
Brooks of Tremorfa, L. Privy Seal)
Burlison, L. King of West Bromwich, L.
Carmichael of Kelvingrove, L. Kirkhill, L.
Carter, L. [Teller] Lea of Crondall, L.
Chandos, V. Lipsey, L.
Christopher, L. Lockwood, B.
Clarke of Hampstead, L. Lofthouse of Pontefract, L.
Cledwyn of Penrhos, L. Lovell-Davis, L.
Clinton-Davis, L. Macdonald of Tradeston, L.
Crawley, B. McIntosh of Haringey, L.
Currie of Marylebone, L. [Teller]
David, B. Mackenzie of Framwellgate, L.
Davies of Coity, L. Mallalieu, B.
Davies of Oldham, L. Marlesford, L.
Dean of Thornton-le-Fylde, B. Mason of Barnsley, L.
Diamond, L. Massey of Darwen, B.
Donoughue, L. Merlyn-Rees, L.
Dormand of Easington, L. Milner of Leeds, L.
Dubs, L. Mishcon, L.
Elder, L. Monkswell, L.
Evans of Parkside, L. Murray of Epping Forest, L.
Evans of Watford, L. Nicol, B.
O'Neill of Bengarve, B.
Falconer of Thoroton, L. Pitkeathley, B.
Farrington of Ribbleton, B. Plant of Highfield, L.
Faulkner of Worcester, L. Ponsonby of Shulbrede, L.
Filkin, L. Prys-Davies, L.
Gale, B. Puttnam, L.
Gavron, L. Ramsay of Cartvale, B.
Gilbert, L. Randall of St, Budeaux, L.
Gladwin of Clee, L. Rendell of Babergh, B.
Goldsmith, L. Richard, L.
Goudie, B, Sainsbury of Turville, L.
Gould of Potternewton, B. Sawyer, L.
Grabiner, L. Scotland of Asthal, B.
Graham of Edmonton, L. Serota, B.
Grantchester, L. Shepherd, L.
Gregson, L. Simon, V.
Grenfell, L. Smith of Gilmorehill, B.
Hacking, L. Smith of Leigh, L.
Hanworth, V. Strabolgi, L.
Hardy of Wath, L. Symons of Vernham Dean, B.
Harris of Haringey, L. Taylor of Blackburn, L.
Harrison, L. Thornton, B.
Haskel, L. Thurlow, L.
Uddin, B.
Hayman, B. Varley, L.
Hilton of Eggardon, B. Walker of Doncaster, L.
Hogg of Cumbernauld, L. Warner, L.
Hollis of Heigham, B. Warwick of Undercliffe, B.
Howells of St Davids, B. Wedderburn of Charlton, L.
Howie of Troon, L. Whitaker, B.
Hoyle, L. Whitty, L.
Hughes of Woodside, L. Williams of Elvel, L.
Hunt of Kings Heath, L. Williams of Mostyn, L.
Irvine of Lairg, L. (Lord Chancellor) Winston, L.
Woolmer of Leeds, L.
Islwyn, L. Young of Old Scone, B.

Resolved in the affirmative, and Motion agreed to accordingly.