Lords Sitting of 27 October 1999

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

Lord Grabiner
Anthony Stephen Grabiner, Esquire, QC, having been created Baron Grabiner, of Aldwych in the City of Westminster, for life—Was, in his robes, introduced between the Lord Browne-Wilkinson and the Lord Levy.

Lord Sharman
Colin Morven Sharman, Esquire, OBE, having been created Baron Sharman, of Redlynch in the County of Wiltshire, for life—Was, in his robes, introduced between the Lord Razzall and the Lord Clement-Jones.
Lord Londesborough—Sat first in Parliament after the death of his father.
Viscount Hambleden—Took the Oath.

Rail Safety
2.48 p.m.
Lord Janner of Braunstone Lord Janner of Braunstone asked Her Majesty's Government:
What action they will take to enforce the provisions of Sec Lion 37 of the Health and Safety at Work etc. Act 1974 in relation to the personal responsibility of directors and managers concerning rail safety.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, responsibility for enforcement under Section 37 of the Health and Safety at Work Act 1974 on issues concerning railway safety falls to the Health and Safety Executive (HSE), the executive arm of the Health and Safety Commission. The HSC's published enforcement policy statement sets out circumstances when the enforcing authorities, including the HSE, should consider prosecution. The enforcing authorities should identify and prosecute, or recommend prosecution of individuals, including company directors and managers, if they consider that a conviction is warranted and can be secured. Health and safety prosecutions may be brought only when there is sufficient evidence to offer a realistic prospect of conviction.
Lord Janner of Braunstone: My Lords, I thank my noble friend for that Answer. Does he accept that where it can be proved that a director or manager of
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Railtrack or any other company is personally responsible for the tragedy of Ladbroke Grove, then that individual should be held to account? Do the Government accept that it is not good enough to prosecute the corporation, which will have no problem in paying the penalty? Do they further accept that if we are to have the safety which passengers are entitled to expect, individuals on the boards and senior executives of the companies concerned should accept their responsibilities for safety and should be held to account when they do not perform their duties in a proper way?
Lord Whitty: My Lords, in replying to my noble friend, I should preface my remarks by saying that I am making a general point; I am not referring to any particular company or incident. Clearly in the health and safety area, it is vitally important that managers and directors take responsibility for the health and safety culture and decisions within their companies. If they are found to be directly responsible for breaches of safety procedures, they should be prosecuted. Under the present procedures, matters are more complex and the number of individual prosecutions is relatively limited. We are reviewing the situation.
Lord Campbell of Croy: My Lords, when the Statement about the Ladbroke Grove incident was made in the House on 11th October, I asked what categories of trains carried black-box recorders. At that time the Minister did not know the answer and said that he would write to me. More than two weeks have elapsed and I have not received a reply. So I put again the question. What kinds of trains carry black-box recorders—which were mentioned when the Statement was made—in order to help trace responsibility for accidents?
Lord Whitty: My Lords, I apologise on behalf of my noble friend if the noble Lord has not received a reply. The answer to his question is difficult to ascertain. Black boxes are not standard fitments to all trains and one has to gather the information from the companies. I shall ensure that the noble Lord receives a reply as soon as possible.
Lord Marsh: My Lords, does the Minister accept that even though the railways remain one of the safest forms of transport available, no one will ever provide a totally safe railway system? No one will ever provide a totally safe hospital system, a totally safe farming industry, or even a totally safe private home, no matter how much one spends on it. Is it not high time that we stopped this massive speculation, sat back and waited for the report of a sensible inquiry?
Lord Whitty: My Lords, I have some sympathy with the noble Lord's final remarks. It is very important that these incidents are investigated and that speculation does not prejudice any inquiries. The inquiries into the Southall and Paddington incidents are continuing. We shall need to assess the conclusions that are reached. It is right to underline the noble

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Lord's initial remark that the railway system in this country during recent years has been very safe. Last year there were no fatalities at all on the railway system. While the Ladbroke Grove accident was an absolute tragedy, we need to keep matters in perspective.
Lord Clinton-Davis: My Lords, can my noble friend indicate the last occasion when a director or manager was prosecuted in connection with any incident affecting rail safety?
Lord Whitty: My Lords, I have no record of any individual railway company director being prosecuted. Under the present law and procedures, the total number of directors across the board who have been prosecuted for breaches of health and safety regulations is very small. Understandably, most cases are brought against companies, in the railway sector as elsewhere.
Baroness Thomas of Walliswood: My Lords, I have some sympathy with the trend of the question of the noble Lord, Lord Janner. However, does the Minister agree that there is a danger that the investigation into, and the rectification of, the causes of an accident can be delayed while a prosecution is being pursued?
Lord Whitty: My Lords, that possibility has been taken into account by Ministers and by Lord Cullen. There have been previous instances of delay. That was one of the reasons why we were reviewing the safety aspects of all modes of transport well before the accident took place. We hope to reach conclusions which will take into account the lessons of the current inquiries.
Earl Attlee: My Lords, can the Minister assure the House that when the Secretary of State exercises his functions he will apply the same tests of the ratio of costs versus safety benefits to all modes of transport?
Lord Whitty: My Lords, the noble Earl knows that his question is more complex than it at first sounds. We were looking at the whole aspect of transport safety across the modes precisely because some of the calculations and implications differ. It is an assessment issue as well as a procedural issue on which we hope to reach conclusions before too long.
Lord Islwyn: My Lords, as regards rail safety, has the Minister taken note that following the privatisation of British Rail much of its maintenance work, previously carried out by British Rail employees, was handed over to private contractors? I am reliably informed that this led to a good deal of delay and indecision in dealing with safety issues. This applies particularly to rail safety committees. Will the Minister look into the matter?
Lord Whitty: My Lords, my colleagues and I have received similar reports in regard to maintenance and
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other safety matters. One should not make an ideological point on this issue. As my right honourable friend the Deputy Prime Minister has pointed out, until the tragedy the railway companies were improving their safety record, both through and after privatisation. It is not primarily a matter of the ownership of the companies. However, it is clearly important in this area, as in others, to establish where responsibility lies. If it rests with the board of directors, that should be recognised. More generally, the Law Commission has looked at the possibility of corporate manslaughter and the Home Office will shortly issue a consultation document on that and related issues.

Individual Savings Accounts
2.57 p.m.
Lord Barnett Lord Barnett asked Her Majesty's Government:
What is their policy with regard to advertisements for individual savings account investments.
Lord McIntosh of Haringey: My Lords, advertisements for individual savings account investments are currently regulated either under the Financial Services Act 1986 or are subject to the Banking and Building Society Codes of Conduct. The Financial Services Authority has worked closely with the banking and building society associations to ensure that comparable information is given in all ISA advertisements. The Government welcome this work by the authority in order to protect the financial interests of investors.
Lord Barnett: My Lords, I am obliged to my noble friend for that Answer. Is he aware that at the moment many such adverts seem to be deliberately misleading? I use the term objectively.
I have with me an advert—it is similar to many others—which states in very large bold print that there is a 9 per cent yield, tax free; underneath, in small print, it refers to projected yield; below that, in tiny print, about six lines inform the reader that investment value and income can go down as well as up. Does my noble friend accept that some innocent people—including, perhaps, Members of your Lordships' House—could be persuaded to invest in such an ISA? Does he agree that terrible damage can be done to people who invest without reading the small print? I see the noble Lord, Lord Saatchi, nodding. Perfectly reputable advertising agencies will no doubt draft such adverts. He will know that better than I do.
My noble friend's Answer is not good enough if we are to ensure that innocent people are protected. Will he do something more about the matter?
Lord McIntosh of Haringey: My Lords, I have long ceased to think that Members of your Lordships' House are innocent. However, the Financial Services Authority is aware of this type of advertisement. It will be considering those campaigns as a part of its routine

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supervisory duties. I have seen the advertisement to which my noble friend referred and that, among others, will be considered by the authority.
Lord Saatchi: My Lords, has not the noble Lord, Lord Barnett, as he usually does, put his finger on a most important point about ISAs? Many people in the savings profession believe that ISAs have failed because, quite simply, they are too complicated. Generally, advertisers do not set out to produce misleading advertisements—unless they are for a certain political party, shall we say. However, can the Minister tell us whether the complication of ISAs and their failure are the reasons why the Prime Minister's promise that he would deliver 6 million extra savers as a result of ISAs has failed to be delivered? Instead of delivering that promise, there has been a halving of the savings ratio since the Labour Government took office.
Lord McIntosh of Haringey: My Lords, the noble Lord knows more about misleading advertisements for political parties than I do. I yield to him entirely on that point. However, he is quite wrong to say that ISAs have failed. Despite the fact that there was a rush into PEPs and TESSAs before the end of the financial year, in the first three months of ISAs, £7 billion has been invested in 3.5 million accounts. That compares with only £3.9 billion invested in the same period in the previous year. The punters themselves are giving the lie to the fears expressed by the noble Lord.
Lord Newby: My Lords, notwithstanding what the Minister has just said about the take-up of ISAs, does he accept, first, that a recent survey has found that over four-fifths of all ISAs are being taken up by those in social groups ABC1 and therefore are not being taken up by the people for whom they were specifically targeted?
Secondly, does the noble Lord agree with the view of the Consumers' Association that the rules are unduly complicated and that there are specific measures of simplification which could well lead to a greater take-up, such as abolishing the maxi-ISA, which is immensely confusing, and raising the limit on the mini-ISA?
Lord McIntosh of Haringey: My Lords, evidence on who is taking up ISAs is still anecdotal, but many of the companies issuing ISAs have reported that there has been a considerable increase in take-up among young people in the 18 to 24 year-old age group, and particularly among women. I simply do not accept that there is any evidence that ISAs are failing to meet our objective of extending the number of people who are saving.
On the noble Lord's second question, I am a supporter of the Consumers' Association and my family has subscribed to it since 1957. However, in this case the association has made a mistake. It carried out its investigation in May and June, or even in April and May, which were the first two months of operation. It has drawn the unjustifiable conclusion that ISAs are
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too complicated. The association said, quite reasonably, that there has been a great deal of confusion among bank and building society staff, or at least there was when ISAs were first introduced. However, that does not justify a call for the recipe for ISAs to be changed.
Earl Ferrers: My Lords, is it of any interest to the Minister that when I looked at maxi-ISAs and mini-ISAs the other day, I found the things so complicated that I simply said, "Scrub it"?
Lord McIntosh of Haringey: My Lords, all I can say to that is that the noble Earl has a short fuse. The statistical evidence suggests that other people have a little more application than the noble Earl, are prepared to look at the range of ISAs on offer, and are taking them up.
Baroness Platt of Writtle: My Lords, does the noble Lord accept that ISAs are very complicated? I am quite keen to invest, but I find it difficult to find out all the details that would lead me to decide that one ISA is better than another. Does the Minister agree that we need a much less complicated system?
Lord McIntosh of Haringey: My Lords, we are dealing with two different issues here. The first is how to choose between different ISAs. It is not possible to make a generalisation about that because different people have different needs. Independent financial advisers exist precisely because of those differing needs. However, it does not follow from that that the system is too complicated. There are maxi-ISAs and mini-ISAs. Maxi-ISAs have one provider and up to three elements, while mini-ISAs have one element and up to three providers. It is not terribly complicated.

James Mawdsley and Rachel Goldwyn
3.5 p.m.
Lord Alton of Liverpool Lord Alton of Liverpool asked Her Majesty's Government:
What efforts they are making to secure the release of James Mawdsley and Rachel Goldwyn from Burmese gaols.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, we have expressed our and James's and Rachel's families' concern to the Burmese authorities at the way certain aspects of their separate cases have been handled. We remain in close touch with the families and will continue to provide full consular protection and do all that we properly can to assist both during their detention.
Lord Alton of Liverpool: My Lords, I thank the Minister for all that she personally has been doing to assist Rachel Goldwyn and James Mawdsley. Has she had chance to consider the appeal made by James Mawdsley that Her Majesty's Government should

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respond in two particular ways? First, genocide charges should be brought against those responsible for the suppression of democracy in Burma, especially for violations of human rights against the Karen people, 30,000 of whom have died in the past five years and 300,000 of whom have been displaced. Secondly, have the Government considered the call James Mawdsley has made that economic sanctions should be brought against those British companies such as Premier Oil which continue to be involved in Burma? Does the Minister further agree that the sentences—up to 17 years in the case of James Mawdsley—for simply distributing literature in favour of democracy illustrate more graphically and eloquently than anything that may be said today the nature of that oppressive and brutal regime?
Baroness Scotland of Asthal: My Lords, your Lordships will not be surprised to know that Her Majesty's Government have not ceased to press their complaints about the undemocratic processes in operation in Burma. We have been at the forefront of those wishing to impose sanctions to achieve an appropriate Burmese response. However, your Lordships will also know that there is not total agreement about the way in which that response should be managed. We have endeavoured to do all we can to raise the concerns many have expressed, not least about the length of the sentences imposed. However, we must bear in mind that judicial systems are entitled to operate within their own confines. Every effort is being made on behalf of Rachel Goldwyn in particular by those representing her and receiving her instructions to pursue her appeal. For the moment, James Mawdsley has chosen not to appeal. He has one more month in which to reconsider his position and lodge an appeal, However, that is a matter for his choice.
Baroness Cox: My Lords, I appreciate what the Government are doing on behalf of the two people involved. Is the Minister aware that the very courageous young man, James Mawdsley, went to Burma with the intention of raising in the public arena, particularly with the SPDC, the release of all political hostages, the opening of universities, and respect for the legitimate rights of the National League for Democracy and the ethnic minorities? Has the Minister raised these issues with the SPDC, and if so, what was its response?
Baroness Scotland of Asthal: My Lords, I am not able to tell noble Lords the precise nature of all the conversations that have taken place over many months in regard to these issues. However, I can reassure the House that human rights are an issue that is constantly brought to the attention of Burmese representatives and pursued with vigour. The noble Baroness is right when she says that James Mawdsley went to Burma knowing that he was in breach of a suspended sentence and that the acts he intended to commit would be in contravention of the Burmese position. For the moment, we are in a sensitive
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position. The Burmese authorities have not always responded well to statements made by outsiders. For that reason we must exercise a degree of circumspection, even in this House, in the way we respond. However, I can assure the noble Baroness and the House that this issue is at the forefront of the mind of Her Majesty's Government and that we have not obscured the real difficulties present in Burma.
Lord Moynihan: My Lords, I have listened carefully to the Minister's replies, especially the first. Perhaps the noble Baroness can give an example of how the Government's policy of constructive engagement and dialogue, including our trade links to which she referred, has improved the human rights situation in Burma over the past two and a half years.
Baroness Scotland of Asthal: My Lords, the attempts made by Her Majesty's Government to engage the Burmese have met with resistance. I believe that that is known to all in the House. Burma has set its face against proper engagement. Therefore, we have done all we can to make sure that Burma is aware of the strong disapproval of Her Majesty's Government for its actions. I regret to say that there is little we have been able to do so far to change its obdurate stance.
Lord McNally: My Lords, does the Minister agree that in recent years both the British press and indeed the British Government have striven to have released men and women who perhaps should have stayed in prison under any jurisdiction? However, in this case we are dealing with two young people who have acted with great courage and in the highest traditions of British commitment to liberty and freedom. In her first reply the noble Baroness said that the Foreign Office was doing everything that is proper. I think that the feeling of the House is that the Foreign Office must do more than what is proper. It must strive with everything at its disposal to make clear that we want an extra effort on behalf of these young people.
Baroness Scotland of Asthal: My Lords, perhaps I may respond by saying that Her Majesty's Government have never sought the improper release of any person. I do not accept one of the first statements made by the noble Lord in that regard. Your Lordships' House should be clear that it is not within Her Majesty's Government's gift to secure the release of these two young people. I say without shame that this Government will always act with the utmost propriety. If the noble Lord seeks to persuade us to cross that line, I regret to say that we will not hear his siren call. We are pursuing with vigour every avenue open to us to ensure that both James Mawdsley and Rachel Goldwyn have the best consular support we can provide. We are assisting both of those young people and assisting their families in every way we know. I do not think that either of the families could say that Her Majesty's Government were failing to do anything that they can properly do to assist them.

Chechnya
Lord Ahmed Lord Ahmed asked Her Majesty's Government:
Whether they will take action to discourage Russian troops from entering Grozny and to protect the civilian population of Chechnya.
Baroness Scotland of Asthal: My Lords, Her Majesty's Government are deeply concerned about the situation, and the reported civilian casualties. If the Russians enter Grozny, they risk increasing the human suffering and getting dragged into a military quagmire. Russia has the right to fight terrorism, but its response must be directed solely at those responsible. The Prime Minister has expressed our concern to Prime Minister Putin, a message repeated by Finnish Prime Minister Lipponen at the EU/Russian summit.
Lord Ahmed: My Lords, I thank my noble friend for her reply. Is she aware that there is great concern about refugees? What are Her Majesty's Government doing to alleviate their suffering?
Baroness Scotland of Asthal: My Lords, we are aware of, and are concerned about, the plight of refugees. Many of those refugees—about 150,000 of them—are crossing the border. Her Majesty's Government have plans to route any assistance through the UN High Commissioner for Refugees or the Red Cross. What the EU gives depends on need, but 1.2 million euros of EU money is available. We have successfully lobbied the Russians to allow an international needs assessment mission to go to the region to look at the requirements.
Baroness Williams of Crosby: My Lords, does the Minister agree that to describe a whole region as terrorist is perhaps a rather dangerous definition to enter into? Given how much the Russians weigh their membership of the Council of Europe—it is something they hold very precious—will Her Majesty's Government consider raising this matter with the Council of Europe through the Assembly in order to warn the Russians that their actions, if they involve large-scale deaths of civilians in Grozny, would conflict with then commitment to the European Convention on Human Rights, to which they are now of course a party?
Baroness Scotland of Asthal: My Lords, I agree with the noble Baroness that it is quite improper to suggest that all Chechens are terrorists. Furthermore, Her Majesty's Government will give full and proper consideration to the noble Baroness's very pertinent point.
Lord Moynihan: My Lords, can the Minister say whether the Government, together with our European Union and NATO partners, have received any requests from Chechen leaders—for this is fast becoming a major refugee crisis—either to mediate or to intervene in the current conflict in Chechnya? Can
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she say against which criteria the Government would weigh such a request in view of NATO's intervention in Kosovo on humanitarian grounds?
Baroness Scotland of Asthal: My Lords, we have received no such request. At this stage perhaps I may respectfully suggest that it would be proper for us to await such a request before speculating on the basis on which we would respond.
Lord Hylton: My Lords, does the Minister agree that the indiscriminate use of force by the Russians is in the long run likely to be self-defeating because it will fuel Islamic extremism and put at risk the Russian minorities in central Asia?
Baroness Scotland of Asthal: My Lords, the noble Lord is, of course, right. We have made very strong representations to the Russians that any response made by them should be proportionate and that they should direct their attention at those who are responsible for the incursions and not at others. They should also be very much aware of the civilian casualties that may flow from any such response. We have also made it plain that a military response will never adequately address the issues that are alive and present in this dispute and that that is not an appropriate way forward.
Lord Rea: My Lords, can my noble friend assist me with a case that has come to my notice? Chechen President Maskhadov's representative in Moscow, whose name is Maïerbek Vatchagaer, has been arrested on what appears to be planted evidence. Can our embassy be asked to follow up this case to ensure his safety and a fair trial? I declare an interest in the case because this man ensured my safety and provided generous hospitality during a rather perilous visit that I made to Chechnya four years ago.
Baroness Scotland of Asthal: My Lords, we are aware that the President's envoy has been arrested. The allegation, as far as we have been notified, is that he had an unlicensed firearm. We do not know the precise facts of the matter and we shall continue to monitor the situation.

Welfare Reform and Pensions Bill
3.19 p.m.
Lord Carter: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Welfare Reform and Pensions Bill, has consented to place her prerogative and interests so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Read a third time.
Baroness Strange Baroness Strange moved Amendment No. 1:
After Clause 19, insert the following new clause—

WAR PENSIONS FOR WIDOWS
(" .—(1) A widow in receipt of a widow's pension under any of the enactments mentioned in subsection (2) ("the DSS pension"), and in receipt of a pension paid under the Armed Forces Pension scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex, only retain the Forces Family Pension (attributable).
(2) The enactments referred to in subsection (1) are—

(a) the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order reenacting the provisions of that order,

(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions Act) 1939,

(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),

(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.").

The noble Baroness said: My Lords, 59 years ago I was visiting my aunts in Lambeth. They were both ARP wardens. The street in which they lived had been heavily bombed the night before. There were broken houses, bricks and debris lying everywhere. Walls stood on their own; the rest of the house had been torn away, leaving the bare upstairs fireplace surrounded by pink flowered wallpaper. There was of course no furniture left for anyone to cling to. I could only trust that the occupants were sitting safely in their shelter. It was the end of so many hopes, fears and endeavours, a place once loved, now gone. The corner shop had also had its windows broken, although they still had sticky tape bound across them to minimise the blast. But there was a smile from the shopkeeper, and in the corner a small, very British notice, "Business as usual". I think that small vignette describes how we all feel today.
It is so short a time since I moved a similar amendment that I shall not weary your Lordships further with detail. This amendment does not refer to the pension that all war widows receive from the DSS. It refers only to the attributable forces family pension which post-1973 war widows receive if their husband's death is attributable to his service life: fighting for his country in time of war or working as a peacekeeper, or in training for those activities.
It is a fact that the lives of servicemen are constantly at risk. Since I last spoke on this subject on 11th October, there have been three aeroplane accidents and four young men have lost their lives. It is also a fact that their widows, many of whom may be young, with children, and wish to remarry will lose both the DSS pension and the pension to which their husbands contributed if they remarry. There is an interesting lack of logic here, in that they will also lose the pension if they cohabit. On the other hand, a lady who cohabits before her husband is killed will not be entitled to a pension after his death because she is not married. One of the young Lossiemouth
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pilots left behind a fiancée who was expecting a baby, but because they were cohabiting rather than married she is not entitled to a pension. There is an anomaly of some kind here. We hold that the attributable pension should be for life, regardless of future marital status.
I have said that the amendment would affect about 2,700 ladies. There are in fact in this group only 2,650. Of those, on 1st April this year, one was under 20; 62 were under 30; 394 were under 40; and 806 were under 50. There were only 1,263 under 50 in total, and of those only 457 under 40. I feel that I am beginning to sound like a marriage bureau consultant. However, the point is that there are not many ladies involved. The proposal would cost the Government no new money, and might indeed save them something.
Last Monday, some of those younger ladies came to London with their children for a tour of 10 Downing Street to which the Prime Minister had kindly invited them. We all enjoyed the privilege very much. Later, we came to Westminster Hall, where we all picnicked together, and the ladies also had the privilege of meeting some of your Lordships. They will have put their case much more powerfully and poignantly than I could.
The War Widows Association holds that the attributable forces family pension should be for life, regardless of future marital status. My noble friend Lady Dean described the situation as clearly wrong. She is right. I beg to move.
Earl Russell: My Lords, I am happy to support the amendment, to which I have added my name. In doing so, I should like to congratulate the noble Baroness, Lady Symons of Vernham Dean, on being present to listen to the debate both on Report and today; I am also pleased to welcome the arrival of the first woman to hold office at the Ministry of Defence. It is appropriate and constructive that the appointment comes at the same time as that of the first man to speak in Parliament on women's issues. I have always said that when those two things happened together we should be making progress.
It is precisely that progress which means that we need to re-examine very carefully the attributable forces family pension. The arrangements made by the Ministry of Defence in times past relate to a view of women which is now not merely contrary to experience but positively indefensible. They rest on the view that the function of a woman is to be kept by a man. So, as soon as another man begins either to cohabit or marries the woman, any MoD responsibility to her is assumed to cease.
That is not, as I understand it, what the attributable forces family pension is for. For any spouse it is a very considerable sacrifice to consent to a partner going off to war with a risk of being killed. It has always been a difficult thing for anyone to do. It has always been recognised by governments of all parties that people simply do not do that unless their sacrifice is recognised and some appreciation is shown by those in authority.

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We are suggesting that in the present climate that appreciation cannot be properly shown unless it is understood to be for the suffering and the sacrifice, and not merely for the lack of a man to keep the woman. It seems to me also a little curious to insist on imposing permanent celibacy on widows in their 20s. It is not easily done, and not kindly received. The Government will have a much better reputation, not only within the forces but within many different circles, if they understand the force of the argument behind the amendment, and if they welcome it. I end my remarks in that hope.
Baroness Turner of Camden: My Lords, I, too, support the amendment moved by the noble Baroness, Lady Strange. I do not know a great deal about pension provision in the forces, but I understand that the pension referred to stands in as a kind of occupational pension. I have some experience of negotiating private occupational pensions in industry. It has become increasingly common over the past 10 or 15 years for such schemes to make arrangements for a widow's pension to be continued even after remarriage. I really do not see why a similar provision cannot be applied in these circumstances. I support the excellent case made by the noble Baroness, Lady Strange, and the noble Earl, Lord Russell.
Lord Craig of Radley: My Lords, I, too, should like to associate myself with the amendment. The case has been strongly put. I wonder whether in the case of two people who had been married but who had divorced, it would have been possible for the wife to inherit part of her divorce settlement, to which she would have had access for the rest of her life.
This is a pension to which the husband makes contributions throughout his service career. There is every expectation that if the two people continue together, the wife will be well supported on the basis of her husband's pay. As a widow, the woman may well have children to support. There is no great financial difference between what is proposed and the current situation. It therefore seems iniquitous that the present arrangement should be allowed to stand. I strongly support the amendment.
3.30 p.m.
Lord Freyberg: My Lords, I too strongly support the amendment moved by my noble friend Lady Strange. Like her, I was shocked and distressed to hear about the fast jet crashes of the past few weeks which have resulted in the deaths of four servicemen under the age of 40. Sadly, there will always be accidents involving high-tech equipment. Many of our servicemen are involved in perilous activities, often on a daily basis. This kind of risk is expected of them. It is part of the job. But although the possibility of death is ever present, we fail to make adequate provision should the worst happen.
The conditions under which the current war widow's pension is paid out fall short of what a serviceman has a right to expect. We fail to face up to the likely future circumstances of a war widow and her family. By
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providing pensions only for as long as war widows remain unmarried, regardless of their husbands' contributions, we circumscribe their personal lives and the kind of families in which their children will grow up.
We provide strong financial reasons for war widows not to remarry or even cohabit. This is all the harder as, given the nature of military service, many are young when they lose their husbands. As the noble Baroness said, currently there are 394 war widows under the age of 40, many of whom are likely to have young children. It seems cruel to expect them not to build up a new family unit; if they do, they risk losing all financial security. The amendment is therefore an opportunity to benefit a comparatively small number of very deserving widows and children. They should not be ignored. Their husbands, and the men currently serving in our Armed Forces, deserve this kind of security. We expect our servicemen literally to put their lives on the line. In return, we must provide their families with a pension scheme that matches their unique circumstances, thus honouring their commitment.
I hope that the noble Baroness, Lady Symons of Vernham Dean, will take this excellent opportunity to impress upon the MoD that it is the will of this House to provide our servicemen with a just pension for their potential widows.
Lord Northbourne: My Lords, I wish to add one further argument in support of the amendment. Recent research published by the Joseph Rowntree Foundation shows that children in happy step-families do as well as children in natural families. However, the evidence indicates that children without fathers can be, and often are, severely disadvantaged. I do not believe that we should do anything to discourage a mother from finding a new father for her children if she is able to do so.
Baroness Park of Monmouth: My Lords, there are some practical issues which should be considered in support of this excellent amendment. Particularly in the Army, accompanied service is the rule. It is difficult enough for an army wife to have a career while her husband is in the UK. When abroad, she becomes nonresident, or not habitually resident, once one tax year has elapsed. If, as in Cyprus, she manages to get one of the very few jobs available in the defence complex and can pay national insurance contributions, that is not recognised on her return until she has secured a job and paid those contributions in the UK for a year. She cannot, incidentally, claim jobseeker's allowance. When the appropriate form about her proposed employment is sent by her employer to the Inland Revenue, that eminent body has no way of recognising her as an army wife who has been making a contribution to service life abroad. Therefore, it sends her a form devised for aliens and visitors which inquires why she wants to work and how long she proposes to stay in the UK.
More than 20,000 spouses accompany service people on overseas postings. Most of them must give up their jobs on posting and can work only part time anyway. They cannot contribute to ISA schemes when

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overseas because under Inland Revenue rules it would be discriminatory to amend the arrangements to allow them to do so. I understand that that issue has been raised at ministerial level. When families are overseas, opportunities for employment are limited. In some cases, they are prevented from working, except as Crown servants in a few instances. Those who do not have jobs as Crown servants and have not taken out a deferred contributory pension will not meet the residence criteria. Incidentally, it would be a major step to improve their position if they could be allowed to take out a deferred contributory policy while overseas and be able to contribute to such a scheme for five years or, because of the many periods of broken employment, even eight years.
I give an example of the difficulty faced by service wives. Mrs A, who is in her 50s, has spent 17 out of her 26 years of married life abroad. She has only begun to establish a career in the UK in the past three years. She will have to work for at least 10 years to qualify for the state pension in her own right; otherwise, she is excluded from it. I add the important point that the stakeholder pension will go far to help such wives in the future, but it comes too late for those already in their late 40s. Thus, army wives who play a vital part in the work of the services both at home and overseas, and who make a major contribution to it, are disqualified by residence abroad from building up ISAs. Because of constant moves they are unlikely to build a career which allows them to save for a private pension, and at the end of the day often they do not qualify for a state pension. Those seem irrational and unjust situations.
I raise these issues because I believe it is essential that the House and, perhaps more importantly, the Government should recognise that army widows are already heavily handicapped, with little prospect of a career structure that gives them the chance either to build a private pension or, in many cases, to qualify for a state pension. It has been assumed that if a widow has the temerity to marry again another man will support her and she has no claim to anything more, even though her first husband earned the right to leave her at least part of his pension and that, in partnership with him, she played a key part in contributing to the work of the services and, in so doing, had to forgo any possibility of a lucrative career of her own. She cannot, thus, establish her independence.
Many widows will remarry if they have children, at least partly for the children's sake. I made reference to that in the previous debate, and I warmly support the noble Lord, Lord Northbourne, who repeated it. They will want to give their children fathers. It seems to me that the dice are loaded against them. They cannot have ISAs or non-contributory pensions and the Revenue treats them as aliens. The country, nevertheless, owes them a great debt. Surely everything possible should be done to enable them to retain a degree of financial independence by keeping the pension which their husbands, rightly, believed they would have. If they had not been service wives, they could have saved for themselves.
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I strongly support the noble Baroness's amendment and hope that the debate will lead to serious consideration by the Government of the issues I have raised. I am aware that the noble Baroness, Lady Symons of Vernham Dean, is concerned about all these issues, and I honour her for that. But it is vital to recognise that these women are, in a thousand different ways, severely disadvantaged.
Baroness Fookes: My Lords, many excellent points have been made, and I shall not rehearse them. I make only two points. First, I congratulate the noble Baroness, Lady Strange, on her ingenuity and persistence in bringing forward this matter again and again. Secondly, in another place I represented a constituency with strong service connections. I am well aware of the difficulties that can arise for the unfortunate minority of women who would benefit from a continuation of this occupational pension. However, I am aware that in this matter the Ministry of Defence is notably stubborn and unyielding. It will take all the persistence of the noble Baroness, who, as a Minister, now has a place at the Ministry of Defence, to get that department to depart from long-established practice. I look to her to carry the matter forward; I have every confidence that she will.
The Countess of Mar: My Lords, I declare an interest as patron of the Gulf Veterans' Association. In recent times perhaps the widows of Gulf veterans are the ones we hear about in any numbers. We hear about those who are widowed because their husbands are killed in aircraft crashes, and so on. The noble Earl, Lord Russell, put it much more succinctly than I ever could. To live in sin is no longer a sin. We must take into account cohabitation, as my noble friend Lady Strange said.
Perhaps I may pay tribute to the noble Baroness, Lady Strange, as the first person who has really taken an interest in the Gulf veterans' widows. They very much appreciate it and are thankful. I heartily support the noble Baroness.
Lord Mackay of Ardbrecknish: My Lords, when I took the Pensions Bill through your Lordships' House the noble Lord, Lord Freyberg, led a reasonably successful attack on my position. As a result of the defences I had to put up, I had to dig very deeply into the various details of those pension arrangements. As I made clear in the debate on Report, I have no problem with the position on the DSS war widows' pension; and neither does the noble Baroness, Lady Strange, whose amendment this is. The Government's position on this amendment and the last ones is perfectly sustainable: that in the DSS system the DSS war widows' pension should be treated in exactly the same way as the other DSS widows' pension; they are lost on remarriage.
However, when we come to the Armed Forces attributable pension, we are entitled to look at other pension schemes of a similar superannuated nature. The majority in the private sector would give a widow a pension for life. I accept that a minority in the public sector do so, but at least some do.

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I think that the Armed Forces pension scheme should be considered entirely differently from schemes for other people working in the public sector. As the noble Baroness, Lady Strange, mentioned in her introduction, in the past two weeks two aircraft have crashed and young men have been killed—young men who left widows and children. That brings home the nature, whether it be in war or peace, of the dangers to which servicemen are always exposed.
I should find it easy to defend the position on the Armed Forces pension scheme against any other sector pension scheme. There are those who have been widowed in Northern Ireland, the Gulf, and the Falklands; and training creates many widows—fortunately not week after week, but it happens. I believe that we should put as much pressure as we can on the Government to make a change in the Armed Forces attributable pension scheme.
It is now even more important to do so because of another part of the Bill; namely, pension splitting on divorce. The noble and gallant Lord, Lord Craig of Radley, introduced the question of divorce. I underline the point. Two armed services families live side by side. In one case, the husband and wife divorce. The wife will receive a share of the pension pot and, frankly, can marry as many times as she likes—consecutively, not concurrently!—and keep the pension pot. Next door, unfortunately the husband crashes his aircraft in practice, and that lady receives her war widow's pension from the attributable pension scheme, but the moment she remarries she loses it. So she has been placed in a worse position than the lady who has divorced. I do not think that that is right.
Some noble Lords are saying, "Why didn't he do something about that when he was in a position to do so?". That is a perfectly fair point. I did try—it is my only defence—but obviously not very successfully. I sent letters to my noble friend Lord Howe. I chased my civil servants across to the MoD. My noble friend Lord Howe and I totally agreed. But the MoD has had a lot of practice at inertia and it is very good at it. I kept being told that it is all under review. The noble Baroness, Lady Hollis, told me on Report that it is all under review. I think that five years of reviewing are more than enough. I am depending on the two noble Baronesses to show (if I may use a Scots term) that the lasses are better than the lads and that they can make progress on this issue.
3.45 p.m.
Baroness Buscombe: My Lords, I speak with considerable sympathy on this amendment. I admire the tenacity of the noble Baroness, Lady Strange, in her continuing hard work to press the Government to support this very special group of people. The forces family pension is an occupational pension, a contributory scheme, and I think that we are all now very aware that it is currently under review by the Ministry of Defence. I am pleased to note the presence here today of the Minister of State, the noble Baroness, Lady Symons of Vernham Dean. It is our firm belief that payment of this pension should not depend on whether or not a widow chooses to remarry or live with
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a partner. It is true that not all occupational pension schemes continue in the event of remarriage—far from it. However, with particular regard to war widows, we feel strongly that an obligation is owed to their husbands who have put their lives at risk to serve this country on a continuing basis.
More than that, it is entirely wrong to assume that just because a widow remarries any loss of income incurred on the death of her husband is naturally restored. We have heard many of the arguments rehearsed, both today, in Committee and on Report. In short, it is our hope that the Government will now take action and support what I believe is a very strong case for the Ministry of Defence to change its policy with regard to war widows who wish to remarry or cohabit and so rebuild their lives.
The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, I have listened to this debate very carefully, and I have had the pleasure of meeting earlier this week with the noble Baroness, Lady Strange, and Mrs Jenny Green of the War Widows Association to discuss the issue as my noble friend Lady Hollis undertook on my behalf in answering Amendment No. 51 at Report stage. I thank the noble Baroness warmly for the way she moved the amendment. I also thank the noble Earl for his kind remarks to me.
Let me say at the outset that we all have sympathy with the case that the noble Baroness argued. At one level, it is of course straightforward. She has argued that in logic and in equity the widow or widower of someone whose death is directly related to their service in the Armed Forces should retain their benefit from their spouse's occupational pension on remarriage or cohabitation. But although that is a straightforward uncomplicated proposition to put to your Lordships, the issues which it raises are far more complex and difficult to resolve. If the House will allow me, I shall try to explain.
Currently, as we have heard, the widow or widower of someone who has died for a reason which is directly attributable to their service in the Armed Forces receives not only the DSS widows' pension but also an occupational pension from the MoD (the Armed Forces Pension Scheme) which is enhanced to take account of the fact that their spouse's death was directly related to his or her service. Currently, both the DSS pension and the enhanced occupational pension are withdrawn if the widow remarries or cohabits.
The proposed amendment does not affect the withdrawal of the DSS pension, which is withdrawn for all widows who remarry or cohabit. However, the amendment, if passed, would ring-fence a war widow's MoD occupational pension for life and make it payable irrespective of remarriage or cohabitation.
In that respect, the noble Baroness, Lady Turner, was right when she argued that the amendment's provisions would reflect a number of private sector occupational pension schemes. The noble Lord, Lord Mackay of Ardbrecknish, made the same point also, I

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think, about public sector schemes. Indeed, the local authority scheme has a similar provision. But that local authority scheme is very differently funded.
The schemes for other emergency services—services where men and women put their lives at risk in pursuit of their public duty, such as the police service and the fire service—also withdraw occupational pensions on remarriage or cohabitation. So, of course, does the Civil Service scheme.
I know that the noble Baroness, Lady Strange, believes that this ring-fence for war widows is justified, but only in the short term. Naturally, she and the association want to see occupational pensions for life for all service widows. Of course they do. However, I am sure that many would immediately make what they perceive to be the entirely justifiable claim on behalf of their own members—their members in the police, their members in the fire service and their members across the public sector. Ring-fencing, while justifiable to some, is rarely justifiable to those on the edge of but outside the ring. Indeed, while doing a great deal of good to some, it may cause a very great deal of bitterness to others.
We cannot make the change that the noble Baroness seeks without taking into account the position of those others outside the immediate ring. We must do our best to treat everyone with equity and look at the needs of all those who are widowed as a result of the dedication to public duty of those they have lost.
We must also consider those other widows in the public services whose spouses have been lost through natural causes. We cannot set their position on one side; we cannot even do it temporarily. They, too, will find themselves outside the ring-fence. They will find themselves in an unfair and embittering position.
The highly persuasive point that the noble Lord, Lord Northbourne, made about children could equally be applicable to widows whose spouses have died through natural causes. However, they are not covered by this amendment. The noble Baroness has told us that 2,650 widows would be covered. There are over 68,000 widows covered by the Armed Forces pension scheme who may also have young children and who may also be in need but who would not be covered by this amendment.
The noble Lord, Lord Mackay of Ardbrecknish, was quite right. My noble friend Lady Hollis and I turned to each other while he was speaking and said, "Why did he not do it when he had the chance?" He said that he tried but that the MoD was inert. I assure the noble Lord that, under New Labour, the MoD is not inert. The MoD has set a personnel strategy for the Armed Forces. It was published in 1997 under New Labour and it covered a wide range of issues for the Armed Forces. It stated that a review of the pension arrangements would be required. The then Minister for the Armed Forces announced a review of the scheme in September 1998. The review is currently under way. It is not going to happen in the future; it is happening now. I also remind the House that my honourable friend the Minister for the Armed Forces,
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John Spellar, is also presently reviewing, on an ongoing basis, with the DSS the compensation arrangements for injury or death resulting from service.
Earl Russell: My Lords, does the Minister understand why her argument reminds me of the people who said, "You cannot give some people the vote; you might have to give it to all of them"?
Baroness Symons of Vernham Dean: My Lords, I am afraid I do not understand that. We are dealing here mostly with real women who are in very difficult positions. While we have an enormous amount of sympathy for the women whom the noble Baroness, Lady Strange, has drawn to our attention, I must in all equity point out to your Lordships that there are many widows whose husbands have died as a result of pursuing their duty and public service in dangerous and difficult circumstances who will feel embittered, upset and angry if this amendment is passed. Therefore, I do not accept the analogy, intellectually clever though it may be, as real in human terms.
I assure the noble Lord, Lord Freyberg, that the issues are not being set on one side or ignored. Not only are they understood, they are under active consideration. Her Majesty's Government believe that the right way to tackle this issue is through the detailed review of the pension scheme, looking at a wide range of possible changes for members of the scheme, including improved pension arrangements for families.
Of course, a number of other options can be considered. There are many different ways of tackling these issues, which are reflected in different pension schemes in the public and private sectors. However, the point is that the review has to be far more wide-ranging and comprehensive than the noble Baroness's amendment. It must be fair, or as fair as it can be, to everybody, not only to those people who naturally command a certain amount of public sympathy.
The noble Baroness, Lady Park of Monmouth, drew our attention to the difficulties faced by women with peripatetic lifestyles in setting up superannuation. These issues are understood. Indeed, it was an understanding of those issues which prompted different arrangements under this Government 18 months ago for spouses in the Diplomatic Service. I remind the noble Baroness that we do understand these issues and that they will be taken into account.
Of course, I cannot give any undertakings about the outcome of the review. It would clearly be premature to do so; nor will I raise expectations that may not be fulfilled. However, I can assure the House that all the options will be considered. In that regard, I very much hope that the War Widows Association will give us the benefit of its advice and experience.
In view of those assurances, I hope that the noble Baroness, Lady Strange, will acknowledge that her very powerful advocacy has had its effect on ministerial thinking and that she will agree to

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withdraw the amendment. However, if the noble Baroness is unwilling to withdraw her amendment, I must ask the House to oppose it.
Baroness Strange: My Lords, I thank all the noble Lords who have spoken today: my noble kinsman, Lord Russell; the noble Baroness, Lady Turner; my noble and gallant friend, Lord Craig of Radley; my noble friends Lord Freyberg and Lord Northbourne; the noble Baroness, Lady Park of Monmouth; the noble Lord, Lord Mackay of Ardbrecknish; the noble Baroness, Lady Fookes; and indeed everyone who has spoken. All the war widows are deeply grateful for their support.
I particularly thank my noble friend Lady Hollis for allowing my noble friend Lady Symons to answer on behalf of the MoD. The MoD is, of course, the payer-out of the attributable forces family pension, although this money comes from the Treasury, whose money comes from us, the taxpayers.
I suspect that the Minister, my noble friend Lady Symons of Vernham Dean, is also a friend of all the war widows. We greatly value her sympathetic and sensitive summing up. We also greatly value the time that she has spent with us. We are very grateful to her for her sympathy, lime and understanding.
However, this issue has gone on for long enough. We heard exactly the same arguments from the MoD in 1995. We are referring to 2,650 ladies, not 68,000, and we hope that there will not be many more. All those beautiful ladies who picnicked in Westminster Hall and were sitting in the Galleries of your Lordships' Chamber on Monday are growing older by the minute. All those lovely children, who some of your Lordships met, are growing up without much chance of a second father. Time is not on their side, nor on ours. I would like to test the opinion of the House.
3.58 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 166; Not-Contents, 107.

Division No. 1

CONTENTS

Ackner, L.

Brightman, L.

Addington, L.

Brookeborough, V.

Alderdice, L.

Buccleuch and Queensberry, D.

Aldington, L.

Cadman, L.

Alton of Liverpool, L.

Calverley, L.

Annaly, L.

Campbell of Alloway, L.

Archer of Weston-Super-Mare, L.

Carlisle, E.

L.

Carver, L.

Arran, E.

Castle of Blackburn, B.

Ashbourne, L.

Chadlington, L.

Ashley of Stoke, L.

Charteris of Amisfield, L.

Avebury, L.

Chesham, L.

Bathurst, E.

Clancarty, E.

Berners, B.

Clement-Jones, L.

Bledisloe, V.

Cochrane of Cults, L.

Bradshaw, L.

Cockfield, L.

314

Cornwallis, L.

Morris, L.

Cox, B.

Mountevans, L.

Craig of Radley, L.

Munster, E.

Cross, V.

Naseby, L.

Cuckney, L.

Newby, L.

Dacre of Glanton, L.

Northbourne, L.

Darnley, E.

Norton, L.

Davidson, V.

Norton of Louth, L.

De L'Isle, V.

Nunburnholme, L.

Denham, L.

O'Cathain, B.

Dholakia, L.

Onslow of Woking, L.

Dundee, E.

Oxford, Bp.

Dunleath, L.

Oxfuird, V.

Ebury, L.

Palmer, L.

Eden of Winton, L.

Park of Monmouth, B.

Elibank, L.

Pearson of Rannoch, L.

Erroll, E.

Phillips of Sudbury, L.

Exmouth, V.

Prior, L.

Ezra, L.

Pym, L.

Falkland, V.

Radnor, E.

Ferrers, E

Reay, L.

Fookes, B.

Redesdale, L.

Freyberg, L.

Rees, L.

Gainsborough, E.

Rennard, L

Gardner of Parkes, B.

Renton, L.

Geddes, L.

Ridley, V,

Geraint, L.

Rix, L.

Gilmour of Craigmillar, L.

Rogan, L.

Glanusk, L.

Russell, E. [Teller]

Goodhart, L.

Russell-Johnston, L.

Gray, L.

St. John of Bletso, L.

Greenway, L.

Sandberg, L.

Grey, E.

Sanderson of Bowden, L.

Hampton, L.

Sandwich, E.

Hamwee, B.

Sandys, L.

Harris of Greenwich, L.

Shannon, E.

Harris of Richmond, B.

Sharp of Guildford, B.

Haslam, L.

Shaughnessy, L.

Shaw of Northstead, L.

Holderness, L.

Slim, V.

HolmPatrick, L.

Smith of Clifton, L.

Hooson, L.

Southwark, Bp.

Hylton-Foster, B.

Stair, E.

Ilchester, E.

Stodart of Leaston, L.

Ironside, L.

Strange, B. [Teller]

Iveagh, E.

Strathmore and Kinghorne, E.

Jellicoe, E.

Suffield, L.

Kimball, L.

Swinfen, L

Kinloss, Ly.

Swinton, E,

Kintore, E.

Taverne, L.

Lane of Horsell, L.

Thomas of Gwydir, L.

Lester of Herne Hill, L.

Thomas of Swynnerton, L

Linklater of Butterstone, B.

Thomas of Walliswood, B.

Liverpool, E.

Thurso, V.

Lloyd-George of Dwyfor, E.

Tordoff, L.

Long, V.

Turner of Camden, B.

MacFarlane of Bearsden, L.

Vivian, L.

Mackie of Benshie, L.

Wallace of Saltaire, L.

McNair, L.

Warnock, B.

Mar, C.

Watson of Richmond, L.

Masham of Ilton, B.

Weatherill, L.

Mayhew of Twysden, L.

Westbury, L.

Methuen, L.

Westmorland, E.

Miller of Chilthorne Domer, B.

Wigoder, L.

Milverton, L.

Wilberforce, L.

Molyneaux of Killead, L.

Williams of Crosby, B.

Monro of Langholm, L.

Williamson of Horton, L.

Monteagle of Brandon, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Barnett, L.

Ahmed, L.

Bassam of Brighton, L.

Amos, B.

Berkeley, L.

Archer of Sandwell, L.

Blackstone, B.

Bach, L.

Borrie, L.

315

Bragg. L.

Jay of Paddington, B. (Lord

Brett, L.

Privy Seal)

Brooke of Alverthorpe, L.

Jenkins of Putney, L.

Brookman, L.

Kennet, L.

Burlison, L.

Kilbracken, L.

Carmichael of Kelvingrove, L.

Kirkhill, L.

Carter, L. [Teller]

Lea of Crondall, L.

Christopher, L.

Levy, L.

Cledwyn of Penrhos, L.

Lipsey, L.

Clinton-Davis, L.

Lockwood, B.

Crawley, B.

Lofthouse of Pontefract, L.

David, B.

Longford, E.

Desai, L.

Lovell-Davis, L.

Diamond, L.

Macdonald of Tradeston, L.

McIntosh of Haringey, L.

Donoughue, L.

[Teller]

Dormand of Easington, L.

Mackenzie of Framwellgate, L.

Dubs, L.

Mason of Barnsley, L.

Elder, L.

Merlyn-Rees, L.

Evans of Parkside, L.

Milner of Leeds, L.

Ewing of Kirkford, L.

Molloy, L.

Falconer of Thoroton, L.

Monkswell, L.

Farrington of Ribbleton, B.

Montague of Oxford, L.

Faulkner of Worcester, L.

Murray of Epping Forest, L.

Gale, B.

Nicol, B.

Gladwin of Clee, L.

Northfield, L.

Goldsmith, L.

Orme, L.

Goudie, B.

Peston, L.

Gould of Potternewton, B.

Pitkeathley, B.

Grabiner, L.

Ponsonby of Shulbrede, L.

Graham of Edmonton, L.

Puttnam, L.

Grantchester, L.

Ramsay of Cartvale, B.

Gregson, L.

Rendell of Babergh, B.

Grenfell, L.

Sawyer, L.

Hardy of Wath, L.

Scotland of Asthal, B.

Harris of Haringey, L.

Serota, B.

Shepherd, L.

Harrison, L.

Shore of Stepney, L.

Haskel, L.

Simon, V.

Hayman, B.

Skelmersdale L.

Hilton of Eggardon, B.

Strabolgi, L.

Hogg of Cumbernauld, L.

Symons of Vernham Dean, B.

Hollis of Heigham, B.

Taylor of Blackburn, L.

Howells of St Davids, B.

Taylor of Gryfe, L.

Howie of Troon, L.

Varley, L.

Hughes of Woodside, L.

Wedderburn of Charlton, L.

Hunt of Kings Heath, L.

Whitty, L.

Irvine of Lairg, L. (Lord

Wilkins, B.

Chancellor)

Williams of Elvel, L

Islwyn, L.

Williams of Mostyn, L.

Janner of Braunstone, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
4.10 p.m.
Baroness Castle of Blackburn Baroness Castle of Blackburn moved Amendment No. 2:
After Clause 19, insert the following new clause—

UPRATING OF BENEFITS
(" .—(1) Section 150 of the Administration Act shall be amended as follows.

(2) In subsection (1), after "prices" insert "or earnings".

(3) In subsection (2)—

(a) for "Where it appears to the Secretary of State that the general level of prices" substitute "Where it appears to the Secretary of State that the general level of prices or earnings", and

316

(b) in subsection (2)(a) after "beginning" insert "and, in the case of the first of the sums specified in section 44(4) of the Contributions and Benefits Act and the sum specified in column 3 of paragraph 5 of Part IV of Schedule 4 to the Contributions and Benefits Act, not less than the percentage by which the general level of earnings is greater at the end of the period than it was at the beginning".").

The noble Baroness said: In moving the amendment I shall speak also to Amendment No. 3. Both amendments are tabled in my name and that of Lady Turner. I shall discuss them together, although we shall wish the House to express its opinion on each separately.
Amendment No. 2 is designed to restore the link with average earnings for the annual uprating of the basic state pension. I want to try to interest the House in the far-reaching effects of the present situation and how we deal with it today. Last night, this Chamber was crowded. There was an excited debate in which Members from all sides of the House said that we were "making history". I wish to point out in all seriousness that if Amendment No. 2 is not carried today, we shall be destroying history. That is not an exaggeration because we shall be destroying—I use that word advisedly—the centre of the social insurance schemes in this country; namely, the basic state pension.
What astonishes me is the equanimity with which the Liberal Democrats in this House have visualised this development. After all, two of their giants helped to mould the social insurance system in this country in the past century. First, of course, was Lloyd George, who, I believe in 1906, although I am subject to correction, introduced a five shilling old age pension. He was warned by a Conservative Peer in this House that that would ruin the empire. We do not use exactly that word today, but the assertion will be made, in a slightly different form, that it will "ruin the economy" if we restore the earnings link. I await with interest alarming figures from the Minister to make our blood run cold about the danger we all face economically if we go back to what was Labour's policy in 1974.
The second great Liberal figure was Sir William Beveridge, to whom millions of people must have offered prayers of gratitude, because he took a hotchpotch of private provision, a bit of state help here and a bit of charity there, and moulded it into a comprehensive state insurance system under which everyone in work was compelled to contribute in order to receive a benefit as of right when they retired.
That vision of social cohesion has helped to make our national character. I am desperately afraid that, unless we return to that vision, we shall have the exact opposite—the splintering of society and the breaking up of pension provision into different private schemes or occupational schemes for those who can afford them or who are lucky enough to have them. It will be rather like the Tories' privatisation of the railway system, giving us dozens of bits of responsibility, so that we do not get a comprehensive national transport plan.
I must begin by reminding the Government of what they wrote in their manifesto before the last election. That manifesto declared that the

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Government would continue to provide a basic state pension, not means tested, as of right, for everyone who had contributed. The manifesto added that the Government would also ensure that all pensioners shared fairly in rising national prosperity. It cannot possibly be said that the present system is achieving that. I am astonished at the way the Minister returns time and time again to that pledge. "Oh yes", she says, "it's the building block of our pensions provision." But if we continue to increase the basic pension in line with prices rather than earnings, in 20 years' times it will have shrunk to 7 per cent of average national earnings. Are you going to tell me that that is to allow pensioners to share fairly in rising national prosperity?
Let us take this year as an example. Pensioners are muttering. Indeed, they are becoming almost as angry with this Government as they were with the Tories, despite the Government's many excellent moves to help them, such as the £100 fuel allowance, free eye tests and the attempt to introduce a national plan of concessionary fares. Those provisions are excellent. However, they are not means tested, but needs tested. Thus pensioners keep their dignity. But they are increasingly angry when they see the contrast between price indexing and earnings indexing.
The figures this year show that inflation has gone up by 1.1 per cent. We all applaud that, of course. However, what it means to the pensioner—and this has already been announced by the Government—is 73 pence per week on top of their pension. In the meantime, the wage earner has had an increase of 4.9 per cent, maybe more. I never like to exaggerate.
The Minister cannot say that that is a fulfilment of manifesto pledges; it is not what pensioners believed they were voting for. They believed and trusted that at last Labour would return to its 1974 policy of indexing their pensions in line with growth of earnings. Of course, the rate has varied from year to year because one year price rises may be higher. That is not very often the case, but in some years they will be. Broadly speaking, however, we know that unless there is high unemployment, which keeps wages down, wages tend to rise above prices. The figures show the effect cumulatively. If Lady Thatcher had not abolished in 1980 the earnings link which Labour had introduced, the basic state pension for a single pensioner today would be some £93 per week. Imagine what that would mean to pensioners: a little bit of breathing space; a little feeling that they are not the pauper pariahs of society. They do not want the pension means tested. They want something they have earned as of right.
I hope the House realises what it will be saying if it votes down Amendment No. 2. It will be saying, "We are content that in 20 years' time the basic state pension should be worth 7 per cent of average national earnings." I am sorry, but I believe that this Government's policy, like that of the previous Conservative administration, is designed to allow the state pension to wither on the vine. Increasing numbers of people have a choice between private or company insurance on the one hand and a charitable safety net on the other. In making that choice the
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Government are not only humiliating pensioners; they are saying that the whole state insurance system is out of date. We are always being told that we must think of the future and not be dragged down by our ideological past. To the pensioner, this issue is not ideological; it is very practical.
Lord Higgins has breathed some very sympathetic noises and sensitivities which made me hope at one stage that he would be on our side. I realise that he is a prisoner of his own party's history and that that might be slightly inhibiting. However, perhaps he was listening to Lord Mackay of Ardbrecknish who told us that he had done his best while the Tories were in power to get the policy which is being advocated today for war widows adopted. I hope that Lord Higgins, who is a humane man, will break out of his prison and join us in the Division Lobby when we vote today.
Amendment No. 3 is slightly different because it asks for an immediate increase in the state pension to £75 per week from the £67 which it is at the moment. On what is that based? It is based not on some fancy figure which we produced out of thin air but on the Government's own figure. The Government say they will abolish poverty and thus ensure that no single pensioner should get less than £75 per week. That is all very well but, if it is good enough for those who have not saved, why is it not good enough for those who have—for those who have contributed all their lives?
I shall not bother the Minister with the dozens of letters I have received about means testing to which, of course, the minimum income guarantee, which the Government offer, is subject. People may say, "Well, what have I been up to all these years, scraping and saving to get my own house and stand on my own feet? Now I find that I am not a penny better off." Indeed, in one of our earlier debates the Minister got dangerously near to saying, "It is absolutely fine that that should happen because we have discovered that many of those million pensioners who have been quoted as not drawing the income support to which they are entitled have in fact been saving too much. Of course, they must be penalised, mustn't they?"
I have had a long correspondence with the Minister about the cost of this provision. In our previous debates I pointed out that, based on the Government Actuary's own figures, the National Insurance Fund has a surplus of £5.89 billion. No doubt unintentionally, in her first reply the Minister misled the House. She misled me because she said that the Government Actuary insisted on a balanced basis—that an amount must be achieved by the contributions in order to keep the fund in funds. That figure was, as the Minister told us, nearly £8 billion. She then added, as though this condemned the whole situation, that the surplus was only about £5 billion. The general impression given was that the surplus paid for the balance. When I got home I started to think about those figures and found that the £5.89 billion is over and above that prudent figure demanded by the Government Actuary.
In later letters the Minister admitted that our figures were correct. But she said, "Ah, but you see, there are all sorts of different uses to which we could put the

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money. You have got to take into account our state second pension." How can we? That is not mentioned in the Bill. There is no means of judging it. There are many glossy consultation documents but, of course, they are only consultation documents and the proposals might be changed. The Government may change their mind.
As I have said previously, I deeply deplore the failure to give a balanced picture of what the pensions system of this country will be like when the Government's whole network of different pensions is in place. However, one thing that we do know for sure is that unless the earnings link is restored and unless this minimum guarantee is not means tested, there will be a growing cleavage in our society in which some people will be made to feel poor and therefore outside the ring referred to earlier. This is probably one of the most important issues for social cohesion in our society. The Government's policy pauperises pensioners. I know that child benefit does not do so because it is universal and non-means tested. The same applies to eye tests and fuel benefits. Excellent! But why do it for one person and not another? Do not say that we cannot afford it. Of course, the cost grows steadily. But so does the yield from our contributions. What the Government do not seem to realise is that that surplus in the National Insurance Fund will continue to grow because contributors pay earnings-related contributions for a flat-rate, price-indexed benefit. Therefore, that surplus will grow.
I hope, therefore, that the Minister will listen. This is a very serious subject. It is not just one or two of us saying, "Let's have a bash at the Government". We have thought long and hard about it and worked out our tables just as much as the Government have worked out theirs; indeed more.
In all seriousness, I beg the Opposition to let us, in this Parliament, before the end of this Session, tell the Government that they must restore to pensioners the dignity of an adequate pension as of right. If they do not, they will pay an electoral penalty.
4.30 p.m.
Baroness Turner of Camden: My Lords, I rise to support my noble friend. This is the last opportunity we shall have before the Bill leaves this House to restate the case for pensions as of right based on the contributory principle rather than on means testing.
The vast majority of today's pensioners rely on the basic state pension, which is now £66.75 for a single person. As my noble friend said, we know that had it been uprated in line with the earnings index it would now be in the region of £93 per week. What is being offered instead is the minimum income guarantee of £75 dependent on means testing.
I cannot emphasise enough just how much means testing is disliked, particularly by elderly people. Take-up is low and one does not need expensive research to understand precisely why. Benefits that are not means tested, such as child benefit, have a high take-up and rightly so.
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Today's pensioners believe that they have paid for a decent pension. This is the wartime generation, people who spent their youth in the Armed Forces fighting for their country and afterwards endured the lean years that in so many ways prepared for later prosperity. Moreover, the oldest pensioners are the poorest pensioners. Because they retired some years ago, even if they had occupational pensions, these are based on earnings much lower than those of someone retiring now.
One in four pensioners qualifies for income support; about 700,000 are entitled to it but do not claim it. Of course, it will be said that to increase the basic pension in the way suggested and, incidentally, in the way that previous Labour governments have always supported, would mean that people who do not really need it would benefit. But those who do not need it are already taxed and the Government will get most of it back; that is even supposing that the really wealthy would ever bother to claim what is hardly small change to them.
Governments redistribute through the tax system. They should not seek to do so through the benefits system. As my noble friend Lord Ashley said so eloquently, "If you do it that way, the poor are forced to pay for the really poor people". Pensioners do not want handouts, welcome as they may be to meet fuel bills and other expenses. They want the income they believe they have earned of right.
Let us not again have the argument that lots of white-collar employees have generous occupational pensions. Some do, but by no means all. Most ordinary schemes, as distinct from "top hat" schemes for senior management, are based on the assumption that they top up the basic state pension. That means that the basic state pension is an important part of pension provision for large numbers of people. Furthermore, the pensions are, of course, paid for by the employees themselves. The unions rightly always describe pensions as deferred pay, so people are getting what they have paid for, both through national insurance contributions and the pay packet.
We are not treating our pensioner population very well. It is not surprising that so many feel resentful. One said to me quite recently, "I worked hard for over 50 years, paid my taxes and national insurance and now I am expected to live on a pittance. What have they done with all my money?" I hope that your Lordships will feel constrained this afternoon to support Amendment No. 2.
Amendment No. 3 has been grouped with Amendment No. 2. As my noble friend has already said, £75 per week is the Government's proposed minimum income guarantee for a single person. That is presumably the minimum amount that is estimated can support a single elderly person. However, as has been indicated, it is not all that generous and, as I said before, it is means tested. Not all pensions are generous. Most are based on the assumption that they are second-tier; in other words, the basic state pension is the cornerstone of pension provision for large numbers of people.

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We believe that if we can pay £75 as a basic right to all pensioners and then build in the right to earnings-related increases, we will help to restore a reasonable pension structure for much poorer people. I therefore hope that the House will feel constrained this afternoon to support these amendments.
Lord Haskel: My Lords, I cannot but admire my noble friend Lady Castle. All of us have been treated to many speeches from her over the years and everybody admires the way in which she fights for pensioners. Of course, one can admire her but perhaps not agree. Frankly, I am not sure whether I do agree.
I have an interest to declare. Since Report and Third Reading, I have become a pensioner. As such, my interest is that there should be stability in prices and wages. That is what will benefit society as a whole. The question of pensions has to be looked at within the economy as a whole. If we are to vote for my noble friend's amendment, we are, in a way, voting against the management of the economy. The Government are doing a very good job in managing the economy. The interest of pensioners is the same as the interest of everybody else; that is, that there should be stable prices and wages. That is what the Government are managing to do. I support the Government on this.
Lord Goodhart: My Lords, I do not intend any discourtesy to the admirable speech of the noble Baroness, Lady Turner of Camden, if I say that the speech from the noble Baroness, Lady Castle, was one of the most powerful and persuasive speeches I have ever listened to in this Chamber. On these Benches, we are able to give her some support, although I fear it will not be as much as she would like.
As we know, Amendment No. 2 proposes restoration of the link of basic pensions to earnings. Amendment No. 3 proposes a one-off increase in the basic pension. Both would increase the social security budget substantially. We are in favour of an increase in public spending on pensions. However, we realise that that is potentially very expensive and therefore needs to be carefully targeted.
One problem with restoring the earnings link—a problem that perhaps, in a sense, we should welcome—is that of the increased life expectation of pensioners. If the basic pension is linked to earnings, total pension costs will increase faster than earnings because pensioners are living longer. Therefore, pensions will require an increasing share of GDP to fund them. That problem will be reduced but not eliminated when the pension age for women is raised to 65. Be that as it may, it cart be argued strongly that the cost of the basic pension is now so low that we can afford to restore an earnings link even if, over time, it will significantly increase funding costs as a proportion of GDP.
A forecast given in a Written Answer in the other place within the past two days was that by 2050, if no changes are made to the present system, 30 per cent of pensioners will be below income support or minimum income guarantee levels.
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The cost of pensions in the United Kingdom is very low in comparison with the cost of pensions in other countries. A recent IFS report contained a table of 10 of the leading developed countries. The forecast for state spending on pensions in the United Kingdom as a percentage of GDP in 2000 was 4.5 per cent. Only two countries in that list, the USA and Australia, spent a smaller share of their GDP on pensions. Further, the projection of trends for 2040 shows that United Kingdom spending will have dropped to 4 per cent of GDP while in all other countries in the list spending on pensions will have increased as a percentage of GDP; and by 2040, on the basis of those trends, the United Kingdom will be spending less than any other country on the list. I accept of course that some countries, notably Italy and Germany, have landed themselves with an unsustainable burden of pension costs, but they already spend nearly three times as much as the United Kingdom.
The problem with Amendment No.2 is that this is not yet the right time to discuss it. I believe that the future of the basic state pension cannot be considered without also looking at the second state pension.
The Government are likely to propose that the second state pension should be earnings linked, but it is not clear how firm that undertaking is. We know need to know the plan for the second state pension. What are the long-term projections of its cost; and will there be a firm undertaking to index-link it? It is only when we have detailed information about the second state pension, which will be a very important element in pension provision, that we shall be able to form a judgment on the need for the restoration of either full or partial linking of earnings to the basic state pension.
I am not very hopeful about the effect of the second state pension. Another Written Answer given on Monday to my honourable friend Professor Steven Webb in another place suggests that by 2025 the second state pension will have increased the income of most single pensioners by less than £2 a week and of most married pensioners by £5 a week, which does not seem to be adequate. However, the time for that battle is when we are considering the second state pension next year.
Amendment No.3 proposes a substantial one-off increase in the basic state pension. That would be the new baseline for future increases, whether price or earnings linked. It would not restore the full amount of the loss over the past 20 years as a result of the loss of the earnings link. If the earnings link had been retained, single pensioners would now be getting £93.25 a week. An increase even to £75 would be very expensive: it would cost approximately £3.6 billion a year if a corresponding increase was made in the basic state pension for married pensioners.
There is a surplus in the National Insurance Fund, but that can be spent only once, and, unlike the noble Baroness, Lady Castle, I am not persuaded that there will continue to be a regular surplus of the same amount.
We would be able to support the amendment if the increase was restricted to pensioners aged 75 or over. Those who are now over 75 are, as the noble Baroness,

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Lady Turner, pointed out, are the least likely to have significant income from occupational or personal pension schemes or from SERPS. Old age brings increasing costs, such as the need to spend more on heating. The over-75s are those who find it most difficult and confusing to apply for income support. According to another Written Answer, of the estimated 720,000 pensioners or pensioner couples who are entitled to income support but not drawing it, no fewer than 430,000 are aged 75 or over. That strongly bears out the particular problems of the older pensioners.
We believe, therefore, that there is a very strong case for a substantial increase in the basic state pension for pensioners aged 75 or more, but, reluctantly, we cannot support a blanket increase of this size for all pensioners.
In those circumstances, if the noble Baroness wishes to divide the House, our position is that we are unable to support her because we feel that there is a great deal in principle to be said for the arguments that we are putting forward. We shall also be unable to support the Government.
4.45 p.m.
Lord Shore of Stepney: My Lords, for many of our fellow citizens the state national insurance pension is the only pension that they have. For a very large number of people on low incomes, the lowest 30 per cent, the second supporting pension, from whatever source it comes, is a very small supplement. Therefore, the basic level of the state national insurance pension is very important, and will be so for a considerable time.
Frankly, unless we are simply to accept that a great swathe of our people should have recourse to national assistance or supplementary benefit or income support, we clearly have to try our best to bring up the level of the national insurance pension, and this Bill is perhaps our last opportunity to do so.
I agree with the noble Lord, Lord Goodhart, that on the available information I cannot support the once-for-all large increase, much as I should like to do so. However, I am prepared to keep an open mind on that matter in the light of any further information.
I should have thought that no one, for reasons of fairness and natural justice, could seriously challenge the restoration of the link between pensions and earnings. Why should the pensioner alone be denied the benefit? It is no good my noble friend Lord Haskel saying that their only interest is in stable prices and stable wages, the same as everyone else, because they have a separate interest. The point is that they are not, with the rest of our wage-earners, carried forward by the growth in prosperity of the country as a whole.
Having said that, what can one add? Very little. The only possible answer to the problem is that the new second pension, or the new pension, the stakeholder pension, could conceivably provide a solution. If the stakeholder pension became one of substance and could rescue the lowest 30 per cent of the population from what is otherwise a rather poor prospect in
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retirement, I would go along with that, but the stakeholder pension is wholly untried, as we know. It is almost undefined. A very small stakeholder pension will be available to people on lower incomes who can put money into such a pension. There is no prospect of any significant return for the greater majority of lower-paid people, where there is no employer's contribution and no state contribution.
As the noble Baroness, Lady Castle, reminded us, our manifesto stated that the basic state pension would be retained as the foundation for pension provision. The following sentence in the manifesto is also an important one as it states that the pension will be increased at least in line with prices. I assume that that rather careful caveat was put in because of the general state of panic of my party leadership just before the general election when they were desperately anxious not to give the slightest sign that there would be an increase in public expenditure if the Labour Party won the general election. OK! Responsible stuff. But as it turns out, the economy is really rather good, not in terms of the National Insurance Fund to which reference has been made, but in terms of the national finances as a whole. And this modest amendment is simply asking for an annual uprating which will be linked to earnings rather than prices. One is almost embarrassed to be asking for so little.
I hope therefore that my noble friend, for whom I have the highest regard, will go back to her Secretary of State and say: "Think again. You are not fulfilling what we in the party and the country as a whole have a right to expect on behalf of retired people. Look again at your pledge to at least increase in line with prices. Surely we are entitled to something more than an increase in line with prices, which is all that we are being offered at the present time.
Lord Stoddart of Swindon: My Lords, I congratulate my noble friends Lady Castle and Lady Turner on tabling these two amendments. I was pleased to add my name to the first of them.
I listened to the noble Lord, Lord Goodhart, and felt he made an excellent case in favour of the amendments. I can only say that I am extremely sorry that his vote will not follow his voice in true parliamentary tradition. However, there is still time for he and his colleagues to change their minds before the vote takes place and I sincerely hope they will do so.
I support the new clause which, if accepted by the Government or agreed by the House, will be welcomed not only by pensioners, but also by most other people. They believe that pensioners have not been well treated over a long period of time. I have to tell the House that the prospect of an increase of only 73p on the basic pension this year is causing outrage. It will do the Government and the Labour Party no good if they persist in putting that forward. I hope that they will change their minds.
I had a conversation yesterday with a Labour MP in the House of Commons. He said that he was receiving lots of letters from pensioners regretting that the

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contract which they believed was made between the Government and pensioners in 1948 was not honoured by the Conservative Party and they are extremely sorry that it is not now to be honoured by the Labour Party. That was a contract to ensure that pensioners had a good and continuing standard of living. In fact many people are worried about this and are writing to MPs and to Members of your Lordships' House.
The new clause is very modest. It does not seek to backdate the link between pensions and incomes to 1981. It simply proposes that it should be reinstated from now. So in fact the pensioners are being asked to make a big sacrifice; make no mistake about that. As we have heard, they have lost so much in the past 19 years. I recall, as one or two of my noble friends will recall, the excitement and the satisfaction of the 1975 Act which not only kept pensions in line with the cost of living but also ensured that pensioners shared in the rising standard of living reflected in people's incomes. The Labour Party was proud of that Act. We believed that we had put pensions on a sound and permanent footing.
We are asking now to go back to that Act, of which we were so proud—not to reinstate the amounts that have been lost, but to go back to what was a great scheme put forward by my noble friend Lady Castle, who is as great a person as Lloyd-George and Beveridge. She has contributed so much to this country and to the pension situation.
It is shameful that the link between pensions and incomes was broken by the previous government. For most of our time in opposition, the Labour Party demanded —I was part of the demand, as was my noble friend sitting on the Front Bench—the restoration of that link. However, it seems that things have changed now that new Labour is in office. I suppose the Prime Minister will regard people like me as part of the forces of conservatism for wanting to restore the link—a link fought for by the last Labour government. Apparently the progressives are now those who destroyed the link in 1980—the noble Baroness, Lady Thatcher; a progressive!—and those who do not want to restore it are also progressives.
Those who wish to reduce the value of the state pension, vis-à-vis GDP and living standards, are those who are supposed to be progressive, while those like myself who wish to restore the link and to maintain the living standards of the pensioners are apparently conservatives. That is complete and utter nonsense. Indeed, if that is being conservative, I suppose I must own up on this issue to being conservative. But how odd it is that the noble Baroness, Lady Thatcher, whose government broke the link, are apparently now considered to be the progressives, while my noble friends Lady Turner and Lady Castle and others, including myself, are the new conservatives.
I suppose I must not be too hard on Cabinet Members. After all, the Prime Minister, Mr. Brown, the Chancellor of the Exchequer, Mr. Straw, the Home Secretary, and Alistair Darling, the Social Services Secretary, were not even Members of Parliament at the time of the 1975 Act. I am not even sure that the Prime
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Minister was a member of the Labour Party. So they must be forgiven for not being part of that great fight for decent pensions in 1975. They may not feel the same sense of obligation to pensioners that those of us who fought that Bill through the House of Commons feel, and feel very deeply. They may not understand that those of us who voted for the Act—I was a Whip and helped to Whip it through in 1975—believe that it was a fine Act, designed to remove poverty in retirement by giving pensioners a decent pension by right and not by means test. We believed that fervently, and I still believe that.
This is the time to restore the link and add a little dynamic to the basic pension to bring it up to £75 a week as some compensation for the losses incurred since the breaking of the link in 1980. There will never be a better time. The economy is booming. Living standards are rising. Inflation is steady. The budget is in surplus by at least £5 billion and likely to remain so for as long as income is buoyant from taxation as well as national insurance contributions. As we have heard, the National Insurance Fund is in surplus of £3.8 billion this year. So there is no need to increase contributions or taxes to fund what is being proposed. But even if it did mean a rise in contributions—I say this to my noble friend and indeed to the Conservative and Liberal Democrat parties—or even taxes, the people of this country would be prepared to pay if it meant that pensioners received a decent and ensured standard of living.
Our pension contributions as a percentage of GDP are much lower than those in Germany, France, the United States, Japan or Canada. Further, we do not have the same problems, and are not likely to have such problems, as some of our continental neighbours whose deficits on their pension schemes are horrendous. Indeed, we have no such problems. Therefore, I appeal to the House and I appeal to those in the Conservative Party to redeem themselves. This is the opportunity to redeem the awful mistake they made in 1980. If they want to restore their reputation among pensioners, this is the opportunity to do so. They were the ones who destroyed the link. I ask noble Lords opposite to come with us on this because it is fair and decent. I understand that Conservatives believe that they are decent people, despite what some people may say—though I shall not mention any names. This is the opportunity for them to come along with us.
I say this to Labour Members. I believe it is their duty today to restore that link which Labour gave. Let us not forget that it was a Labour Act. It is for Labour Members today, assisted, I hope, by other Members in the House, to help to restore that link. I also say this. There are Members of Parliament along the road who are dying for the opportunity to have another go at restoring the link. So by voting for these amendments, my noble friends would not only be voting to help the pensioners. They would also be voting to help elected Members of Parliament do their duty. Above all, they would be helping the pensioners of this country have a decent and rising standard of living, which it is our duty to give them and which is something everyone else enjoys.
5 p.m.
Baroness Park of Monmouth: My Lords, I have a particular interest because there was a very distinguished woman called Eleanor Rathbone, whom I think the noble Baroness, Lady Castle, may remember, who sat as a Member for the combined universities. She was one of the first to begin work on just these issues. Therefore, I have a particular interest. I am not an actuary, as are so many noble Lords, so I cannot produce the impressive figures that have been put forward. However, I do know that the honour and the dignity of old people matters not only to themselves but also to their families.
Many people now living alone would at one time have been living in a family environment where the grandmother played a valued part by looking after the small children. None of that—or relatively little—happens now. There are many people who are as concerned for their old aunts, uncles, fathers and brothers as they are for themselves. They care about the dignity and well-being of those people.
On a more practical issue, the health budget is a very large one. I believe that it could be a great deal smaller if people had more money to spend—modest money—to keep warm, to avoid stress and to look after small ailments before they become big ones. That is something which should be in the power of any one of us to do. We should not have to turn to the state for what is, basically, charity, especially if we have spent our whole lives paying into the scheme. I cannot think of any other business or industry into which you would pay and invest and get nothing back. If that was the case, you would be saying that it was bust business and not very impressive.
I strongly support these amendments. I feel that there is a question of human dignity involved here. I conclude my remarks by saying that I am very proud to call the noble Lord, Lord Stoddart of Swindon, a friend; indeed, I would love to call him a noble friend as well.
Lord Bruce of Donington: My Lords, most of us in this House who are members of the Labour Party, of whatever stream we might conceivably belong to, remember quite well the anxiety that was felt at a certain time. We were naturally very pleased that our Government had been returned, but we were under no illusion. Times were going to be difficult before we were able to correct many of the trends that had established themselves in the previous Conservative administration.
We were well aware—even those of us in your Lordships' House—that hard choices would have to be made. I believe that most of us were extremely cautious as to the rate of progress that could be achieved in the years that followed. However, as time has passed—there are many reasons for this, not all of which are disagreeable or disreputable—my party and my colleagues have not made quite as much progress in the direction to which they have normally pointed their political actions. We find that there has been an increasing tendency for hard choices to be made by
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people who have no power to make any choice at all. The hard choices have to be made by them, yet they have no power. Indeed, there are thousands, nay, millions of them, in the United Kingdom.
Therefore, when my noble friend Lady Castle, with whom I have had the privilege of being associated over many years—way back to 1945—came forward with this proposal to insist that my party honoured the obligations which it willingly undertook I naturally thought that she would pursue the campaign that she has. She has done so with courage, tenacity, eloquence and deep feeling for people who are less fortunate than herself.
I was trained as an accountant. I tried to look at the real nature of the contract originally entered into by the state and by the population in 1974. What was that contract? Subject to certain qualifications, clearly laid down in the Act and explained in Parliament at the time, the contract was that employees generally were to make an insurance contribution, which was fixed. Employees had no particular part in framing the rules; they were there and were accepted. In return, employees were offered a pension on retirement—not means tested—which was upgraded year by year in accordance with earnings rather than with prices. That was the contract.
In my view, an insurance contract is a contract of the utmost good faith. I believe it is called in legal terms uberrimae fidei. At least that was what I was told when I had what smattering of legal education it was my fortune to receive. I naturally expect contracts, particularly contracts of insurance, to be carried out. No upward limit was laid down, nor any minimum limit, but the rules were quite clearly there. I expected that to be carried out and, quite frankly, I expect it to be carried out now because it was a contract entered into in good faith.
I willingly concede that circumstances can occur—some national catastrophe or some unforeseen economic misfortune that is manifestly no fault either of the state or of the population of the country—which mean that some possible revision has to be undertaken in spite of undertakings that have been given. But that is a matter for public debate; that is what Parliament is all about—the Parliament which is progressively being stripped of such powers as it once had. This is where my noble friend has pursued her campaign.
What national catastrophe has occurred to justify the breaking of the insurance contract? My noble friend Lord Haskel must make up his mind: either we are prosperous or we are not. It is my understanding that Her Majesty's present administration say that we are doing well. However, I have reservations about that. But has there been anything to justify the state dishonouring a contract that it entered into with the most vulnerable section of our population, the least articulate section of our population and, unfortunately sometimes, the least educated section of our population? In my view nothing has occurred to justify that.
We must now have even greater regard—especially the day after we made an historic decision with regard to the composition of this place which will have

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profound effects upon the whole of the constitution of the United Kingdom—to the esteem in which we are held by the other place, the notice that it is prepared to take of what we say, the authority by which we speak, and the regard in which we are held by the public. These are also important considerations.
I have listened carefully to the arguments. I have been present throughout most of the proceedings on this Bill although I have been silent as this is not my normal subject. I pay tribute to my noble friend the Minister for the great care she has taken in presenting the figures. However, with our national record of public expenditure, our record of investment and so on, there can be no possible reason why the Government whom I have the honour to support should not honour the obligations that were freely entered into.
Lord Milverton: My Lords, I have every intention of supporting this amendment, as I did the previous one. I admire the noble Baronesses, Lady Castle and Lady Turner of Camden, and I have always enjoyed listening to the comments of the noble Lord, Lord Bruce of Donington. I express my last few words here before I find new pastures in which to exercise my mind—
Noble Lords: Fight on!
Lord Milverton: My Lords, I shall fight on in the area where I live and do whatever good hereditary Peers can do, by Jove I shall! I support this amendment as I feel that what it seeks is only right and fair. I hope that Her Majesty's Government will not just listen to what is said but will also respond. There are people in this country who still need the support of this Chamber where they do not receive it from the other place down the corridor. I hope that the Government will not just listen to what is said but will also accept the amendment.
5.15 p.m.
Earl Russell: My Lords, I think that it is time to pull together some of the threads of what has been an interesting and excellent debate. I thank the noble Baroness, Lady Castle of Blackburn, for introducing it and for making us all do some thinking. There seem to me to have been valid points made on both sides. On the one hand, the erosion of the basic state pension is becoming serious. When that erosion falls below income support level, it does not result in any substantial saving of public funds. Also, of course, it is creating a fairly considerable level of hardship among a limited number of people, which is why the Government have felt the need to offer the minimum income guarantee, which is known by the somewhat unfriendly acronym of MIG. The trouble with that, of course, is that although I know that the Minister has been deeply concerned for a long time about the level of take-up—I congratulate her on all she has done—there is no foolproof way to guarantee the delivery of income support to those who do not wish to claim it. Therefore there is a real and serious problem.
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On the other hand, we on these Benches see a real and serious problem in going all the way down the road of the amendment proposed by the noble Baroness, Lady Castle of Blackburn. We have, among other things, a party conference resolution on this subject in which we abandoned the link with earnings. I have a great deal more respect for party conference resolutions than some people do, and I am proud to belong to a party where I think they deserve respect.
On this occasion I must pay particular attention to it because the movers of that resolution were none other than my noble friend Lord Goodhart and myself. I would find those words distinctly indigestible especially as I still think they were right. The trouble is that for as long as I can remember our earnings have grown faster than GDP. We have in fact paid ourselves more than we earn. The effect of that is that the money comes to be worth less over the progress of time. Were we to commit ourselves to compound that mistake by paying pensions also at a rate growing faster than GDP, again the effect could only be that the money actually received by pensioners becomes worth less, as the noble Lord, Lord Haskel, pointed out. That point is one that I do not think it is safe to ignore. But since, as the Minister has pointed out over and over again in debates on pensions, the poverty is concentrated among a particular number of pensioners without occupational pensions, the proper way to address the issue is through the state second pension. What we on these Benches look for with particular interest is how substantial and how secure and how much backed by the necessary element of compulsion the state second pension will be. As we do not know that yet we reserve judgment and therefore we reserve judgment on this amendment.
Baroness Castle of Blackburn: Can the noble Lord help me before he sits down? The state second pension will come too late to benefit millions of those to whom we refer. It will not be granted retrospectively to people who have missed out.
Earl Russell: My Lords, we accept that point. That is why we are committed to an increase especially for the over 80s, which is where we think the worst poverty is concentrated. We do not think that a blanket restoration of the link with earnings meets that need. That is why we have to tell the noble Baroness with regret that we cannot vote for her amendment.
Baroness Jeger: My Lords, I am 84. How many more 80th birthdays have to occur before this measure is granted? The latest increase has the value of a tuppenny ha'penny stamp.
Earl Russell: My Lords, our policy is that that increase should be implemented now. It is not we who are stopping it.
Lord Higgins: My Lords, I think that the whole House will agree that in the course of debates which we have had on this Bill the noble Baroness, Lady Castle, has made a quite extraordinary series of speeches of

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remarkable quality and force. We should pay tribute to the points she has made. She has been admirably supported on many of the more technical points by the noble Baroness, Lady Turner.
These are extremely difficult issues. I have always found them somewhat difficult because of two aspects of my personal involvement in politics. For more than 30 years I represented the constituency with the highest number of pensioners in the country. It has long been said that people went to Worthing to die and forgot what they came for—and it is true. Many years ago, when I made my maiden speech in the other place, I spoke about the need to give pensions as of right to those who had been left out of the national insurance contributory scheme, who were known then as the over-80s. The first thing that we did when we came into office—I was a Treasury Minister in the Heath government—was to deal with that particular problem. I notice that the noble Lord, Lord Barnett, is smiling. Against that, one has to recognise one's long-standing involvement with the Treasury, either as a Minister or as Chairman of the Treasury Committee and so on.
The basic task is to deal with the very great, real problems of pensioners. As far as concerns take up of pensions, one knows only too well that even now people are very reluctant to accept income support. One recognises all the problems but, at the same time, it remains a question of priorities.
The noble Baroness, Lady Castle, and the noble Lord, Lord Stoddart, have been very clear as to their priorities; they are set out in the two amendments we are debating. The noble Lord, Lord Stoddart, rightly reminded us that he used to be a Whip. I did not realise what an orator he was until I came to this House after he ceased to be a Whip.
The Government have sought to meet these real problems by introducing the minimum income guarantee. However, the danger here is that more and more there is a move away from the contributory principle in the direction of means testing. The problem with the minimum income guarantee—unlike the state pension—is that it is means tested. Moreover, the particular problem with the scheme that the noble Baroness, Lady Castle, is so anxious to address is that it is a pay-as-you-go and not a funded scheme.
We must look at the problem against the background of priorities. It is now generally recognised that the state pension is inadequate. The new Minister at the Department of Social Security, Mr Rooker, for whom I have great respect, is reported as saying last week to the National Association of Pension Funds that the state pension will leave one in poverty. In the present circumstances, it is necessarily the case that the state pension has to be topped up by a degree of income support.
The Government are now engaged in a large-scale reorganisation of the overall situation and one needs to put this debate in that context. We have debated the proposals in the Bill for a stakeholder pension—which
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was referred to by the noble Lord, Lord Shore—and the proposals for the second state pension. They are likely to be before the House during the new Session of Parliament. But, as the noble Baroness, Lady Castle, pointed out to noble Lords on the Liberal Democrat Benches in an intervention, it will still not come in soon enough. It is very much a matter for the future.
I do not feel able to support the noble Baroness's amendment, despite the personal and charming way she has asked me to do so. However, we should consider whether there are some areas where we need a degree of amelioration. Inflation is proving to be a real problem, a point made by the noble Baroness, Lady Jeger. Inflation has come down radically—that is to be welcomed—but the implications in arithmetical terms for pension increases cause real difficulties. The proposed pension increase is 73p. Even more importantly, as the noble Baroness pointed out, the supplement for the over 80s is 25p. The pension increases have become derisory and are a cause for grave concern. I know the increase is set against a background of a reduction in inflation—which we all welcome—but once it comes down to such a small amount it can cause real problems.
For the future we should move towards more occupational schemes, more stakeholder schemes, the second pension and so on. In that context, I deplore the fact that the first act of the present Chancellor of the Exchequer was to remove some £4 billion from those in occupational pensions as a result of the ACT tax change. There is a degree of schizophrenia on the Government Benches as far as concerns occupational pensions—witness their proposals with regard to those on disability benefit, on which the House has expressed its view, and the actions of the Chancellor, to which I have referred.
We should do everything we can to move towards a degree of reliance on occupational funded schemes. One must hope that the proposals the Government are to bring forward in that respect are adequate and hopeful for the future. While I cannot support the noble Baroness's amendment, it is right that the Government should give very careful thought to what should be done against the background of the trivial increases we are looking at. I agree very much with the views expressed from the Liberal Democrat Benches about the need to give greater weight to the problems of the over 75s, the over 80s and so on. All the evidence suggests that they have higher costs than those at a lower level.
I turn now to the question of capital limits, which the House debated earlier but on which it arrived at no conclusion. Pensioners who have as little as £3,000 capital will find that their ability to receive income support is eroded. Pensioners who have capital of £7,000 will find that it is eliminated altogether. We should give greater priority to these areas. While fully recognising the passion with which the noble Baroness has spoken, these amendments do not represent the right priority in the present circumstances.
Having said that, against the background which has been outlined by many noble Lords, we should consider whether more cannot be done in the areas

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that I have mentioned to help pensioners generally. One hopes that in future it will be possible for pensioners to have a more secure existence than they have under a pay-as-you-go scheme which depends on the decisions of Ministers and the Government.
When they stood for election, the Government said that pensioners will share in rising national prosperity. I am not clear about how the Government propose they will do so— unless the Minister is prepared to accept the noble Baroness's amendment.
5.30 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, my noble friend Lady Castle has explained the purpose of Amendment No. 2, which is to allow for uprating contributory benefits each year in line with the growth of prices or earnings, whichever is the greatest. Amendment No. 3 seeks to increase the basic state pension to £75 a week. We have debated these issues both in Committee and on Report. I am not sure whether your Lordships will expect new arguments from the Government at this late stage.
Basically, the Government's belief and position is that these amendments would prove to be very expensive and are badly targeted. They may help pensioners who are better off, but they will do nothing much for the poorest. That is at the core of our objections to these amendments.
The Government believe that it is right to target help on pensioners where it is needed most, which means extra help when is cold, with healthcare and with travel. We are spending an extra £4 billion—money contributed by tax payers, as has been pointed out by the noble Baroness, Lady Park—by the end of this Parliament to heir today's pensioners.
My noble friend Lady Castle asked whether pensioners will share in rising prosperity; a point also raised by the noble Lord, Lord Higgins. The Government stated that pensioners will have a share in rising prosperity. That is exactly what is happening. Let us remember that since 1979, on average, pensioners' incomes have grown faster than those of any other broad group of the population. I am sure that all noble Lords will welcome that. Their incomes have grown by 70 per cent in real terms, compared to an average of 40 per cent for the rest of the population. The proportion of pensioners on means-tested benefit has fallen by almost one-third, from 57 per cent to 40 per cent. However, that growth has been unequal. The incomes of the top 20 to 40 per cent of the pensioner population have grown by over 70 per cent, but those of the bottom 20 per cent of single pensioners have grown by only 28 per cent. We all know that what has happened is that inequality has widened among pensioners. Four-fifths of pensioners have enjoyed a standard of living which has increased faster than that of the rest of the population. I am delighted that that is so. However, the bottom one-fifth has been left behind. The rate of increase in living standards for those pensioners has been only barely half as much as
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for the rest of us. As the noble Lord, Lord Higgins, made clear in his speech, that is where we have identified that help is most needed.
My honourable friend Mr Rooker was right when he said that we do not expect any pensioner to live on the basic pension alone. We never have expected that. Second pensions, SERPS, in the future the state second pension, occupational and personal pensions have all had the effect, for those pensioners who receive them, of producing a real increase in standards of living nearly twice that of the population as a whole. It is the poorest pensioners on whom we must concentrate our help; namely, those who do not have the resources to support themselves decently and comfortably in retirement.
I ask noble Lords to consider the figures. If we had done as my noble friend asked and increased the basic pension and linked benefits to £75 a week in April 1999, it would have cost over £4 billion gross. However, raising the state pension across the board is not the way to help the poorest pensioners. To restore the earnings link to today's rate of pension would make virtually no difference to the better off and would not be enough for the poorest. But it would cost the country over £1 billion next April, rising to £7.6 billion in 2010. Increasing a £75 pension by linking it to earnings would be even more expensive and would cost £10 billion by 2010.
Those are significant amounts of money, but for the most part that money would go not to the poorest pensioners, who would see it docked off their income support levels, but to those who have generous occupational pensions, savings and the like. That is what my noble friend's amendment would do. It would mean that £10 billion would be spent on pensioners who already have seen a welcome generous increase in their living standards, and whose current living standards are supported and augmented by occupational pensions and savings. However, that £10 billion would do little or nothing for the poorest pensioners—those who have not participated in the improvements in living, standards—because it would be taken off their income support. Is it right to spend £10 billion to help those above the benefit level and to do nothing for those below it?
My noble friend and other noble Lords have referred to the increase of 75p in the basic pension. I hope that noble Lords are not arguing for a return to the days when high inflation meant that there had to be compensating cash increases in the state pension. I have said cash increases, because those were not real increases. They compensated for the increase in the cost of living. In 1991, for example, pensions went up in cash terms by more than £5, but inflation was running at nearly 11 per cent. It may have been a large cash increase, but it gave pensioners no increase in buying power and, because the economy was failing badly, pensioners lost out because high inflation eroded their savings. Low inflation is part and parcel of our aim of ensuring long-term economic stability rather than the boom and bust of the past. It may mean smaller increases in the basic pension, but it also means

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that pensions and savings better hold their value and it offers much better prospects for sustained capital growth, which means much better prospects for tomorrow's pensioners.
My noble friend Lady Castle suggested that the proposed amendments could be paid for from the surplus in the National Insurance Fund and through taxation. I regret that my noble friend misunderstood the figures I set out in a previous debate on the National Insurance Fund. It did not occur to me that, with my noble friend's huge experience of this area, she would not already know of the sums held in the National Insurance Fund, especially as the amendments she is proposing would have been funded by it. However, we must maintain a significant working balance in the fund to cover forecasting errors—for example, on the numbers in employment who pay contributions—and the risk of disruption in receipt of revenue due to unexpected events.
I believe that the noble Lord, Lord Goodhart, identified that the surplus over and above that working balance would be eliminated in two years if we increased the pension to £75 a week. In addition, the Chancellor will of course already have taken account of this surplus in determining his fiscal stance. It could not be spent without altering that fiscal stance or raising equivalent revenue elsewhere. If we raised pensions now along the lines of my noble friend's amendment, it would mean an annual spending commitment now and every subsequent year into the future, and that would have to be funded.
My noble friend Lady Turner suggested that we would claw back much of that expenditure through the tax system. I regret that I do not think that that would be the case. The Chancellor of the Exchequer's recent changes have lifted 200,000 pensioners out of tax, so that two-thirds of all pensioners—some 7 million people—will pay no tax at all. Only 2.5 million pensioners pay tax at 23 per cent and only 150,000 are higher rate taxpayers. In practice, very little of the enormous cost of these amendments would be clawed back through the tax system. Indeed, I am sure that noble Lords would not want to extend taxation to pensioners in order to claw back expenditure.
The noble Lord, Lord Goodhart, raised several issues, including a point that he quoted from a Written Answer given to his honourable friend Professor Steven Webb. I fear that the noble Lord may have seriously misunderstood the Answer, although that may be the fault of the drafting of the Government's reply, when he said that the state second pension would not be of much help. The £1 or £2 figure that he suggested would be the roll-up figure is in fact the annual figure for each year of credits so that, for example, a carer who had taken on care duties for 30 years would receive a state second pension of £30 or more as an annual figure and not a full figure.
I turn now to the foreign comparisons made by the noble Lord and by my noble friend Lord Stoddart, who said that the UK and the US lagged well behind foreign countries in the contribution the state made to pensions as a percentage of GDP. That is quite true,
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precisely because in this country—and all credit is due to the previous administration who supported such measures—pensions are largely funded by the private £60 billion occupational pension industry. So far as I am aware, the only other country with a comparable funded pension industry in the private sector is the United States. As a result, in both countries, through the development of partnership, pension poverty has been addressed by the private and the public sectors working together. In most of continental Europe, it has not. That is precisely why those countries are facing a pension funding crisis, as indeed they are.
Baroness Turner of Camden: My Lords, I thank my noble friend for giving way. If it is true, as of course it is, that we have a funded pension system in this country, that relieves the state of the enormous burden of supporting pensioners who are not looked after by the private sector. In those circumstances, surely we can afford to do better by those people.
Baroness Hollis of Heigham: My Lords, these are the figures. Those private occupational pensions, in turn, are heavily supported, and rightly so, by recycled rebates, as my noble friend will know. She will also know that around 60 per cent of personal pensions are funded only by recycled state rebates. So there is a question of whether one is talking about direct state funding or indirect state funding—by not requiring from employers and employees the contribution they would otherwise have made into SERPS. The package has to be seen in its totality. It is a partnership. I know that my noble friend believes in the rightness and propriety of private pensions. But, as a result, compared with most of Europe, we have a £60 billion private pension funded industry, which is therefore meeting the needs that elsewhere in continental Europe—unwisely, in my view—have to be met by the state and taxpayers in a pay-as-you-go system so that such countries are now having to contemplate raising their state pension age beyond ours, cutting back their pension levels and undoing the contract. They are having to contemplate doing that precisely because they do not enjoy the partnership that both we and the United States have had over many years.
We are already giving real help to all of today's pensioners. Winter fuel payments have been increased fivefold to £100 this year and for the first time will be paid before Christmas. We have cut VAT on fuel from 8 per cent to 5 per cent. There are free eye tests, concessionary travel and extra help with energy efficiency. Those are all measures that will have an impact on pensioners' lives. Above all, as the noble Lord, Lord Higgins, rightly said, we are introducing in this Bill the stakeholder pension and in the new Bill that I hope will come through, a state second pension which together will in future lift pensioners out of poverty.
My noble friend Lord Shore referred to stakeholder pensions failing to address the problem of the poorest and the lowest paid. He is absolutely right. But stakeholder pensions are not intended for them. Stakeholder pensions are intended for those earning

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between £9,000 or £10,000 and £20,000 upwards and can be run alongside personal pensions, occupational pensions and so on, up to Inland Revenue ceilings. The pension designed to help the poorest, which I hope to have the pleasure to bring before your Lordships later this year if the Queen's Speech so determines, will be the state second pension which is the reformed SERPS and is a funded pay-as-you-go scheme. It means that people earning between the lower earnings level of £3,500 and £9,000 will receive a pension as though they were earning £9,000. It is a redistribution to the poorest that was never contemplated in my noble friend's SERPS, under which those who earned the most received the highest pensions. On the contrary, under our proposals there will be a stakeholder pension for those who can afford a funded pension, which is cheap, fair, portable and transparent—in contrast to some of the personal pensions that have been mis-sold over the years—and for the poorest, about whom my noble friend is concerned, a state second pension which will redistribute heavily to the poorest, including women, the low paid and the chronically sick and disabled, who have not been able to build up a generous occupational pension record.
Lord Shore of Stepney: My Lords, I am most grateful to my noble friend for clarifying the situation. The difficulty, as am sure she will recognise, is that that second state pension is not part of the Bill. We have great difficulty in envisaging quite what it contains. In order just to clear up one further point, can my noble friend tell me how many pensioners who are entitled to draw income supplements do not, for whatever reason, do so? That raises the question of human dignity and the natural reluctance of so many people to resort to that procedure.
5.45 p.m.
Baroness Hollis of Heigham: My Lords, that is a very pertinent question. Around 1 million pensioners have incomes below the income support level. Some of those cases, as the noble Lord, Lord Higgins, identified—it is a matter of concern to your Lordships—arise because their capital takes them over that ceiling. We think that between 400,000 and 700,000 pensioners may be entitled under present rules to income support but do not claim. That is precisely why, in answer to previous questions in your Lordships' House when pressed by my noble friends Lord Hughes and Lady Castle, we have been trying to explain how we are ensuring that extra take-up. We are becoming successful at it. We are seeking to do it automatically. Our research shows that between a quarter and a half of all pensioners are not claiming income support but want to claim it within two years. We are making in-roads into that problem. If we do not target, the alternative is to spread the same bundle of money thinly over everyone so that those of us in this House would enjoy a modest increase but the poorest would get very little, if anything at all.
My noble friend Lady Castle referred to pensioners as pauper pariahs. That is simply not the case any more. I want to quote from the research of Professor
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Robert Walker of Loughborough University which was quoted fairly extensively in The Times on 14th September 1999. As I said at col. 175 of Hansard on 11th October, Professor Walker said that the public misunderstanding of pensioner poverty was an obstacle for the Government in attempting to reform the pensions and benefits system. He stated that times have changed:
"A generation ago, the stereotype of the poverty-stricken pensioner was grounded in truth. Not so today. Some pensioners are very poor but most are not".
Professor Walker added that the Government's political problem is that public opinion,
"has not caught up with the mass of changes that have occurred".
He went on to say:
"Raising the state pension"—
that is what the amendments would do —
"would make richer pensioners richer and would not help the poorest",
because they would just lose out on their other benefits. That is the dilemma facing the House. Your Lordships can support my noble friend's amendment, but what you will do is ensure, as Professor Walker has said, that richer pensioners will become richer while poorer pensioners will not benefit at all.
The noble Lord, Lord Higgins, was right when he said that we have a long-term strategy—the state second pension and stakeholder pensions—to deal with long-term pensioner poverty by floating people off into good and decent occupational pensions. He is also right, as other noble Lords have identified, that in the mean time we have the problem of poorer pensioners. The noble Earl, Lord Russell, is right. They tend to be older, usually widowed or single women, who have not built up an occupational pension. We are seeking to ensure that such people take up automatically—through the postal system or by telephone, without ever having to go into a benefit office—the minimum income guarantee to which they are entitled. However, if you depart from the Government's strategy and go for my noble friend's strategy what you will do—I quote Professor Walker—is make "richer pensioners richer" while doing nothing to help the poorest. I cannot believe that my noble friends behind me would feel that such a policy was consistent with the philosophies by which they have lived their lives. I hope that the House will reject the amendments.
Baroness Castle of Blackburn: There is one fatal flaw in the Minister's argument about cost. As I expected, she pointed, as have others, to the enormous burden there would be—there would have to be increases in contributions and all the rest of it—if either of these two resolutions was put into effect. As the Minister has now admitted, a surplus does exist in the National Insurance Fund over and above the prudent basic level upon which the Government rightly insist.
The Minister fails to recognise two things that are happening. One is that national wealth is on a kind of escalator of affordability in terms of social wealth,

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simply because it will be financed through earnings-related contributions. In return, the Government are offering price-indexed flat rate pensions. So there will be an increasing surplus. If there is not going to be a surplus, why are the Government proposing to cut the contribution rate?
Baroness Hollis of Heigham: My Lords, the basic problem with my noble friend's argument, as I attempted to say earlier, is that the current surplus of some £5 billion or so over the balances proposed by the Government Actuary would pay for her proposal for two years only. She has failed to take into account the fact that across Europe, including the UK, there is a growth in the number of pensioners, and they are living longer. The ratio of pensioners to workers—particularly as young people now stay longer in education—is worsening across Europe. I agree that the position in the UK is probably better than that of many of our European contemporaries, but it is not good enough. The position will worsen and the National Insurance Fund will have to pay. We know that to be the case: pensioners are living longer; younger people are out of the labour market for longer; therefore, the workers have to support more people. That is why there is long-term pressure on the National Insurance Fund.
Baroness Castle of Blackburn: The Minister has still not answered my question. Why are the Government proposing to cut contribution rates, to provide lower rates, so that there will be a smaller income out of which to meet the needs of the rising generation of old age pensioners?
Baroness Hollis of Heigham: We are not.
Baroness Castle of Blackburn: I am sorry, but a cut in rates is proposed by the Government. It is part of a strategy that the noble Baroness, Lady Turner, and I, and those of my colleagues who have supported our amendments with such excellent speeches, are trying to point out to the House. The Government's strategy is to reduce the role of contributory pensions and increase the role of means-tested benefits, or benefits negotiated through private insurance—
Baroness Turner of Camden: That is right.
Baroness Castle of Blackburn:—and the declining number of those who have a good occupational pension scheme. It is that approach that we are fighting. That is what we face at this crucial stage of the Bill.
The Government have indicated that they will restore the earnings link in the longer term for minimum income guarantee. So we face the prospect of a contributory pension that is shrinking all the time under price indexing, and guaranteed means-tested income will go up under the earnings rule. It is true that the Government have not given a date yet. We are rather used to that. But they have conceded the point
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that there will not be a guarantee unless the amount is uprated in line with the movement of incomes generally. That is the position that some of us are trying to fight.
I am extremely grateful to all those in the House who have supported what we are trying to do through these amendments. If we fail, this country will move inexorably towards the destruction of state insurance in its entirety. A contributory pension which is worth only 7 per cent of average national earnings can only be a pauper's pension. I repeat the word "pauper". We are talking about the people whom the Minister says the Government want to target. Pauperism is not just about quantity of money. It is about one's stature in society. It is time that those old age pensioners who are too old to benefit from the promised, not yet received, second state pension were acclaimed with the affection and dignity that they deserve, and not told that they are being targeted as "the poorest pensioners". How many of us would like to be labelled "the poorest pensioners", deserving of charity?
If it is money the Government are worried about, the most expensive way of helping anybody is through means-tested benefit. Government figures have shown that it costs £5 a week more per recipient to administer income support than it does to administer the contributory state pension. That is what we are fighting today. We could go on arguing the figures. I challenge many of the Minister's figures. She is a bit of a slippery eel—
Noble Lords: Order.
Baroness Castle of Blackburn: Yes, she is. I say it in affectionate admiration. I must say —
Baroness Hollis of Heigham: My Lords, only deference and respect for my noble friend's long experience and great seniority stop me replying in kind.
Baroness Castle of Blackburn: You are very welcome to, if you want to. I do not mind. I am thankful that this debate has come alive, and thankful that this Chamber is at last trying to face up to one of the crucial challenges of this century. Are we deliberately going to move to a divided society in which those who can enjoy a private or occupational pension, and the rest are dependent on means-tested charity? That is something I have always fought, and will continue to fight.
As I listened to the debate, and particularly to the Minister's speech, as regards targeting—"We're hard up, so we can't throw money about; fancy giving money to people who don't need it. What a waste of public funds"—I could not help thinking what our National Health Service would be like if that principle animated it. Do we ask what a patient's income is before offering treatment? They do in America. Yes, there are a lot of things that we admire in America. We are galloping after them as fast as we can. No, we say, "You are a citizen, you are human being, and we must so organise society that you can get some of the basic essentials of a decent life as of right".

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The whole world admires our National Health Service, as I am sure do Members on all sides of the House. They do now; they did not like it when it started. Look at the National Health Service and the principles behind it. The targeting of income is not one of them, but targeting of clinical need, yes. Regardless of income, people receive treatment when a problem is discovered. I cannot see the National Health Service surviving very long in its present form if we allow this to happen to the state insurance, the great Beveridge scheme. I should think that he and Lloyd George are turning in their graves.
I want to thank all those who have spoken in support of our amendments. I want to thank noble Lords opposite, who have been courteous in saying nice things about me. Of course I like it; I appreciate it very much. But I should like far fewer compliments and more action. And who is following us into the Division Lobby today? I say advisedly that those who vote the other way will have deliberately chosen the destruction of the whole essence of our post-war society, which, for all its failings, has been the envy of the world.
6 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 52; Not-Contents, 111.

Division No. 2

CONTENTS

Aldenham, L.

Longford, E.

Ashley of Stoke, L.

Masham of Ilton, B.

Bruce of Donington, L. [Teller]

Milverton, L.

Cadman, L.

Mishcon, L.

Castle of Blackburn, B.

Molloy, L.

Clancarty, E.

Molyneaux of Killead, L.

Cochrane of Cults, L.

Monro of Langholm, L.

Darcy de Knayth, B.

Morris, L.

Davidson, V.

Murray of Epping Forest, L.

Dunleath, L.

Oppenheim-Barnes, B.

Elibank, L.

Oxford, Bp.

Gardner of Parkes, B.

Park of Monmouth, B.

Glanusk, L.

Pearson of Rannoch, L.

Hanworth, V.

Rix, L.

Holderness, L.

Rogan, L.

Hoyle, L.

St. John of Fawsley, L.

Inchyra, L.

Sefton of Garston, L.

Jeger, B.

Selsdon, L.

Jenkins of Putney, L.

Shore of Stepney, L.

Kilbracken, L.

Stoddart of Swindon, L. [Teller]

Laird, L.

Strathcarron, L.

Lawrence, L.

Swinfen, L.

Layton, L.

Taylor of Blackburn, L.

Lindsey and Abingdon, E.

Turner of Camden, B.

Linklater of Butterstone, B.

Walker of Doncaster, L.

Long, V.

Wedderburn of Charlton, L.

NOT-CONTENTS

Acton, L.

Bach, L.

Ahmed, L.

Barnett, L

Ailesbury, M.

Bassam of Brighton, L.

Amos, B.

Berkeley, L.

Ampthill, L.

Blackstone, B.

Archer of Sandwell, L.

Borrie, L.

342

Bragg, L.

Hunt of Kings Heath, L

Brett, L.

Islwyn, L.

Brooke of Alverthorpe, L.

Jay of Paddington, B. (Lord

Brookman, L.

Privy Seal)

Burlison, L.

Kennet, L.

Carter, L.[Teller]

Kintore, E.

Charteris of Amisfield, L.

Kirkhill, L.

Christopher, L.

Lea of Crondall, L.

Clinton-Davis, L.

Lipsey, L.

Cocks of Hartcliffe, L.

Lockwood, B.

Currie of Marylebone, L.

Lofthouse of Pontefract, L.

David, B.

Londesborough, L.

Davies of Coity, L.

Lovell-Davis, L.

Davies of Oldham, L.

Macdonald of Tradeston, L.

Desai, L.

McIntosh of Haringey, L.

Diamond, L

[Teller]

Donoughue, L.

McIntosh of Hudnall, B.

Dormand of Easington, L.

Mackenzie of Framwellgate, L.

Dubs, L.

Marlesford, L.

Dunrossil V.

Marsh, L.

Elder, L.

Mason of Barnsley, L

Evans of Parkside, L.

Merlyn-Rees, L.

Ewing of Kirkford, L.

Milner of Leeds, L.

Falconer of Thoroton, L.

Monkswell, L.

Farrington of Ribbleton, B.

Monson, L.

Faulkner of Worcester, L.

Montague of Oxford, L.

Filkin, L.

Montrose, D.

Gale, B.

Nicol, B.

Northfield, L.

Gilbert, L.

Orme, L

Gladwin of Clee, L.

Ponsonby of Shulbrede, L.

Goldsmith, L.

Prys-Davies, L.

Gordon of Strathblane, L.

Puttnam, L.

Goudie, B.

Ramsay of Cartvale, B.

Grabiner, L.

Reay, L.

Graham of Edmonton, L.

Rendell of Babergh, B.

Grantchester, L

Sainsbury of Turville, L.

Grenfell, L.

Sawyer, L.

Hacking, L.

Scotland of Asthal, B.

Hardy of Wath, L.

Shepherd, L.

Harmar-Nicholls, L.

Simon, V.

Harris of Haringey, L.

Smith of Gilmorehill, B

Harrison, L.

Strabolgi, L.

Haskel, L.

Symons of Vernham Dean, B.

Hayman, B.

Taylor of Gryfe, L.

Hilton of Eggardon, B.

Warner, L.

Hogg of Cumbernauld, L.

Warwick of Undercliffe, B.

Hollis of Heigham, B.

Whitty, L.

Howells of St Davids, B.

Williams of Elvel, L.

Howie of Troon, L.

Williams of Mostyn, L.

Hughes of Woodside, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.10 p.m.
Baroness Castle of Blackburn Baroness Castle of Blackburn moved Amendment No. 3:
After Clause 19, insert the following new clause—

WEEKLY RATE OF BASIC PENSION
(" . In section 44(4) of the Contributions and Benefits Act, for "£66.75" there shall be substituted "£75".").
On Question, amendment negatived.
Earl Russell Earl Russell moved Amendment No. 4:
Before Clause 53, insert the following new clause—

REQUIREMENT TO STATE NATIONAL INSURANCE NUMBER: PARTNERS OF ASYLUM-SEEKERS
(" . The Verification Project under section 19 of the Social Security Administration (Fraud) Act 1997 shall not be applied to the partners of asylum-seekers.").
The noble Earl said: My Lords, I think I can undertake that this amendment will not detain the House quite as long as the last amendment. It is technical; at points it is extremely technical. But people's liberties and chances of livelihood in this field depend on technical points. I hope, therefore, that it will be worthy of some attention. I am grateful to the Minister for the attention she has given the point already.
I apologise for introducing this matter at this late stage but it is a story that is only just beginning to break. It goes back to the Social Security Administration (Fraud) Act 1997. Section 19 of that Act set up a project of verification that claimants are who they say they are. There are pilots in progress now. Reports from the pilots are beginning to come in. The key point of the Act was that it required the production of a national insurance number and evidence establishing that the national insurance number had in fact been allocated to that person.
There is nothing in that Act about the requirement to produce the national insurance number for the claimant's partner, but in fact partners as well as claimants are being required to produce national insurance numbers under those pilot projects. That raises the problem between individual claimants and individual responsibility as regards household benefit. In a number of situations the claimant's partner may not be in a position to produce a national insurance number while the claimant can do so. The situation is arising quite frequently in the London area with partners of asylum seekers, some of whom have been claiming asylum here, with their claim undetermined, for a considerable number of years. The record about which I heard was in the London borough of Westminster about three years ago. The claimant had been claiming for about 10 years. That gives plenty of time for people to marry.
National insurance numbers are not normally given to asylum seekers. The effect is that if a person happens to be married to an asylum seeker and makes a claim he produces his own national insurance number. He cannot produce the partner's number because she does not have one. The effect is that the partners of asylum seekers are being disentitled, in my view accidentally, to benefit.
I remember that when we debated the Bill the Minister and I were concerned about some of the possible effects of this clause. I do not think either of us ever envisaged that what I have described could be an effect. I am not certain whether the issue should be discussed on this Bill or on the Immigration and Asylum Bill. As the Minister knows, I have tabled the amendment on both Bills and await a lead from Government on which is the most appropriate Bill. Having received no such lead, I now take the
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opportunity to move it. I shall be interested to know what the Minister thinks about it and of other situations in which people may be disentitled to benefit accidentally because of the status of the partner.
It is a situation where problems are arising. I am grateful to the Minister for her interest. I look forward with considerable interest to her reply in due course.
6.15 p.m.
Lord Astor of Hever: My Lords, the House will be grateful to the noble Earl for raising this important point. Like the noble Earl, I, too, look forward to the Minister's response. Perhaps I may ask two questions. Do the Government feel that the amendment would involve significant cost implications either through an increase in fraudulent claims or administrative costs? And do the Government feel that the amendment could be beneficial to those local authorities which have to support the partners of asylum seekers who fail the evidence of identity test?
Baroness Hollis of Heigham: My Lords, I am grateful for the prior notice that the noble Earl gave. I have sought information which may take the House forward. I am intrigued that he has tabled the amendment on both Bills. Does the noble Earl think that he will receive the same answer from two different governments departments? I know that he would go for whichever answer was more favourable to his point.
The amendment seeks to exempt partners of asylum seekers from the requirement to provide sufficient information to allow their national insurance number to be traced or a number allocated to them. The requirement under Section 19 of the Social Security Administration (Fraud) Act 1997 was one of a number of measures introduced to reduce the opportunity for fraudulent claims for benefit. The aim of Section 19 was to verify the identify of benefit applicants and to ensure that benefit goes only to those entitled to benefit who can prove that they are the person they say they are.
In answer to the question of the noble Lord, Lord Astor, the reason we went that far was because we had some evidence—some, no doubt, anecdotal and not scientifically established, although to my knowledge there have been cases—of people fraudulently claiming benefit under false names to which they were not entitled, sometimes involving extended families, or whatever. This is one of the ways in which we have sought to ensure that the money goes to those who are rightly entitled to claim it.
The requirement also extends to the partners of claimants for any benefit where the claim is made on behalf of both people or where extra money is paid in respect of a partner. For example, in respect of benefit, if you have larger accommodation by virtue of there

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being two or more people it is important to guarantee the identify of that second person by which you qualify for the housing benefit.
Earl Russell: My Lords, I am most grateful to the Minister, but can she tell me where the vires are for the extension to partners? I cannot find the words in the Act.
Baroness Hollis of Heigham: My Lords, I shall have that checked. I do not have the Social Security Administration (Fraud) Act with me.
If you are to identify the accuracy of entitlement to benefit where the benefit is based on more than one person you have to check all elements. For example, if you are claiming for three children, it is reasonable to ensure that there are three children and not one. It seems straightforward. If someone is claiming benefit as a single person, only that single person needs to have his entitlement checked. If you are claiming for two, three, four or five people, you need to check that entitlement. It seems straightforward. Given that the benefit will be what I call a multi-person benefit, I am not sure whether the question of vires arises. I shall have that checked. It is done for both people because without that condition it would be difficult to prevent or detect cases of fraud where the partner is independently claiming benefit at the same time, or even where the partner or alleged children do not exist.
I believe that a particular case may have influenced the noble Earl. If that is so, and if he will provide me with further details, I shall be happy to take it further. If he feels that anything we have said needs to be further discussed with organisations such as the CAB, so that people may know how to gain access to benefits in that situation, we shall be very happy to hold such discussions.
I am told that the vires is in Regulation 10, which states:
"In the Income Support (General) Regulations 1987(c) after regulation 2 there shall be inserted the following regulation
'Section 1 … shall not apply—

(a) to a child or young person in respect of whom income support is claimed;

(b) to a partner in respect of whom a claim for income support is made or treated as made before 5th October 1988'".

I thank the noble Earl for his copy of the statutory instrument. I believe that the copy he has provided answers, in Regulation 10, his own question.
I believe it may be useful to emphasise that the requirements of Section 19 should be neither onerous nor a barrier to genuine claimants.
It may be worth while outlining the processes by which national insurance numbers are issued. For most people who are born and brought up in this country in respect of whom parents have been receiving child benefit, the national insurance number is issued automatically at age 15. Their identity has been verified when their parents first claimed child benefit and by way of checks over the years.
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However, there are people who, for one reason or another, have not been allocated a national insurance number through the child benefit route, the vast majority of whom are from abroad. When such people need a national insurance number, they are interviewed in person and must complete an application form. This is likely to be either when they want to start work and start paying national insurance contributions, or when they or their partners claim a benefit.
The main aim of the face-to-face interview is to establish the identity of the person applying for a national insurance number by requiring them to produce a range of evidence sufficient to support their account of themselves. No one document is regarded as conclusive proof of identity. Only a range of evidence in support of a person's life history can provide the necessary assurance. In other words, this is essentially about the credibility of the account.
We accept, of course, that many asylum seekers will have difficulty in producing a range of documents in support of their identity. If they had had ease of access to the documents, they might not have needed to be asylum seekers in the first place. That is why we do not rely on any specific document. A story can be verified, however, even in the absence of any documents at all. by means of intelligent questioning and by building up a consistent picture of the person. Our staff are fully aware of the reasons why asylum seekers may have little or no documentation. However, by using a combination of sensitive questioning and such evidence as is available, we believe that they can verify a story to the extent to which it is safe to issue a national insurance number.
If the noble Earl has experience to the contrary, I should be very grateful to hear of it. If, for example, he feels that we need to give extra guidance to the obvious ports of call to which people might go, such as a citizens' advice bureau, on how they can best do it, we shall be very happy to look at that. We want to be helpful in this respect. If, by virtue of not getting a national insurance number, some people are failing to qualify themselves and their partners for various benefits to which they are entitled, that would obviously be a matter of concern. We want to overcome those bureaucratic obstacles, while at the same time ensuring against the possibility of fraud. If the noble Earl has any proposals to put to us, I shall be very willing to follow them up with, for example, the NACAB to establish whether it has had similar experiences and how we can address them.
Given that, we do not believe that this amendment is necessary. The aim of Section 19 is to verify persons' identities, not for bureaucratic neatness but in order to prevent fraud. Without Section 19, a loophole would be left in our procedures which would enable claims to be made for non-existent partners or multiple claims for the same person. We see no reason why an exception should be made for the partners of asylum seekers. Such a measure would simply lower the standards of evidence needed for them and would weaken the rationale behind Section 19. We believe that our procedures are flexible and sensitive enough

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to cope with these issues. However, if the noble Earl has any further concerns, we shall be very happy to follow them through.
I do not believe that hardship would be caused to asylum seekers without this amendment. I do not believe that their cause would be served by adopting it. Therefore, in the light of the explanation that I have given, I hope that the noble Earl, Lord Russell, will feel able to withdraw his amendment.
Earl Russell: My Lords, I am most grateful to the Minister for the care of that reply. This is not, of course, the sort of amendment which one considers pressing. One raises this sort of amendment in an attempt to gain clarification, of which I have gained a good deal. I am most grateful to the Minister for the information about the vires on partners. I did not actually supply her with the regulation. I supplied her with the text of Section 19. I believe that the regulation reached her by the usual process of osmosis!
Baroness Hollis of Heigham: My Lords, I stand corrected. Following his generosity to contribute to the intellectual level of the debate, I was crediting the noble Earl with even more expertise on social security than is customarily the case.
Earl Russell: My Lords, I am flattered. I entirely understand the point made by the Minister about non-existent partners. It is a valid point and I accept it. However, we need to distinguish between the claimant's own claim and the household claim on behalf of a partner. I do not understand why, because it is difficult to verify the identity of the partner, the claimant's own entitlement to benefit as a single person should also be threatened. I believe that this is a matter which calls for some thought.
I am also extremely grateful to the Minister for what she has said about help with regard to national insurance numbers. However, my information is that this does not relate to a single case, but to a whole sequence of cases in a number of local authorities. That suggests that the system is not working particularly well. It may be possible to get a national insurance number within a matter of weeks for those who are extremely fortunate. However, for most people, it takes a great longer than that. Indeed, one of our social security researchers in another place recently needed to claim another national insurance number, and it took no fewer than six months to get it. In my experience, that is by no means exceptional. If the Minister can think of any way of improving that, I shall be extremely happy to talk to her. However, I do not believe that I need to detain the House waiting while we do so. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 [New allowances for bereaved spouses]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 5:
Page 60, line 26, at end insert—
("( ) At the conclusion of the two year period, the surviving spouse shall be entitled to an allowance, based on the contribution record of the deceased spouse (subject to the conditions in subsections (4) and (5) below), until he or she attains pensionable age or dies, whichever happens first.").
The noble Baroness said: My Lords, I return again, as I said I would on Report, to the matter of widows' benefits. At Report stage, the House agreed, with a substantial majority, to an amendment to extend the period of the bereavement allowance from the six months proposed by the Government to two years. That is, of course, an improvement. No one who knows anything about the trauma of bereavement believes that it can be overcome in six months or even a year. Therefore, this is a very welcome improvement. I said at the time, however, that I did not believe that it went far enough. After all, what the Government are proposing is the removal of a benefit to which widows over the age of 45 have hitherto been entitled as of right, based on the contributions of the deceased spouse.
My amendment seeks to restore the benefit to widows, taking account of the two-year amendment, and also extends the benefit to widowers, but on precisely the same terms as it is today paid to widows. It makes it quite clear that both sexes will benefit equally to the extent that the deceased spouse paid national insurance contributions. In other words, as happens now, it is a contributory benefit.
I expect that it will be argued again that this will result in benefits going to those who do not need them, but that is true of all contributory benefits. The Government redistribute through the tax system. They should not seek to do so through the benefits system, since this automatically impacts on poorer and more vulnerable people.
My major argument is that this is a contributory benefit and the Government are seeking to remove it from people who believe that they have a right to it because it has been paid for. To remove it would be a breach of contract, just as much as it would be were a private insurance company to refuse to pay out when policy conditions had been met.
The other argument against what I am proposing is that times have changed; most women work and are working at the time of bereavement and therefore have no need of the benefit. I believe that some of the statistics advanced in support of that argument are rather suspect. It is true, of course, that of the 17 million women of working age, approximately 12 million work. There is, therefore, a large proportion of women who work. However, there are 6 million part-time workers, and the overwhelming majority of those—about 5.4 million—are women.
There has been a slight narrowing of the gap between female and male earnings, but that is due to the impact of the minimum wage of £3.60 per hour. The minimum wage, which I welcome, has in fact

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benefited mostly women; £3.60 per hour is certainly not a fortune. It is not within striking distance of the £15,000 a year which my noble friend the Minister has from time to time claimed to be the average earned by married women in work.
Moreover, about 5 million women do not work at all, either part time or full time. Presumably, they are spending their time bringing up their children. And no real research has been undertaken to see just what the effect will be of the removal of this benefit. There has been no challenge to my contention that households in which women are the main earners are in a minority. The loss of the wages of the principal earner in a household is bound to lead to hardship and a drastic reduction in living standards in many cases.
Nor is it true that many women will benefit from generous white-collar pensions. In support of her argument, on one occasion my noble friend quoted bank managers. Not all white-collar workers are bank managers, and pensions are not always all that generous. The average white-collar worker not at managerial level is likely to qualify for a pension of around £7,000 a year. His widow will qualify for about half of that. So for someone receiving a generous white-collar pension of £3,500 a year, the widow's benefit is a useful, indeed necessary, addition, even if she is successful in obtaining full-time employment at the rate of £3.60 an hour.
I repeat that much occupational pension provision, apart from top-hat provision for people at managerial level, is based on the assumption that there will also be a state benefit. That includes survivor's benefits as well as the basic state pension paid at normal retirement age.
I understand that the Government will make a profit from this scheme, even with the two-year amendment, of around £500 million a year. Why is it necessary to make this small profit at the expense of the bereaved? I beg to move.
6.30 p.m.
Lord Higgins: My Lords, the noble Baroness moved the amendment with her customary technical expertise. The House has already decided to amend the Bill by extending the proposed 26-week period to two years. The origin of the matter is in the fact that the Government lost their case in the Court of Human Rights and they then extended the benefit to widowers as well as to widows. The Treasury, in a classic Treasury clawback, is seeking to recover the money it has to pay by penalising some other group. In short, the widower's benefit is to be paid for by a reduction in the duration of the benefit paid to widows.
Moreover, there is a degree of overkill to the extent of some £500 million. I presume that part of that arises because although the change will take place rapidly in respect of widows, due to computer problems there will be a technical delay in payment to widowers.
The noble Baroness rightly stressed the importance of the contributory principle in this context and the fact that contributory benefits are not normally means tested. However, while it is right to raise the matter
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today I believe that we should wait and see what happens in another place. I profoundly hope that it will accept the amendment that has been made, but either way the Bill will return to this House when we can reconsider this issue. It is right to raise it at this stage because we believe that the Government's solution to the decision of the Court of Human Rights is not correct.
Baroness Hollis of Heigham: My Lords, the amendment seeks to extend entitlement to bereavement allowance well beyond the two-year time limit currently on the face of the Bill. It would extend payment of the allowance to men and women alike right up until pension age.
My noble friend Lady Turner made her position clear on Report. I respect her views, although they are not the same as mine. However, I am baffled by the fact that the noble Lord, Lord Higgins, not only supported the amendment from the Opposition Front Bench but put his name to it. When we debated the issue a fortnight ago, he seemed to be wedded to a different proposition. On that occasion, the noble Lord successfully secured an amendment to extend entitlement to the bereavement allowance to two years. He has now joined my noble friend Lady Turner in tabling an amendment which would annul his earlier one by allowing bereavement allowance to be paid beyond the two-year limit. I find that deeply perplexing.
He clearly accepted at Report the principle of a time limit and, indeed, pressed to the vote his proposal to set it at two years. Yet in a matter of only two weeks he has decided that there should be, in effect, no time limit at all. I realise, because the noble Lord has told us on many occasions, that in sitting on the Front Bench as Opposition spokesperson on social security he takes no responsibility at all for any policies expressed at the Dispatch Box by his Conservative predecessors at the DSS while they were in government on the ground that "it was nothing to do with him". However, I had hoped that he might take responsibility for his own policies of just a fortnight ago. But apparently not. When can we hope from consistency from the noble Lord?
Lord Higgins: My Lords, I understand the noble Baroness's puzzlement. It seemed to me that although we had a discussion on the matter at the Report stage some of the issues were not fully debated. It seemed to be not inappropriate that we should have the opportunity of returning to them now, for the reasons that the noble Baroness, Lady Turner, mentioned. However, I do not believe that it would be appropriate to press the matter to a Division.
Baroness Hollis of Heigham: My Lords, I hope that the noble Lord will not think I am being personal if I say that, as answers go, to say that some issues were not dealt with is fairly weak. We had a substantial debate and two votes. For the noble Lord to believe that issues remain outstanding which should be raised for the first time at Third Reading on the ground that

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he did not get round to them at Second Reading and during the Committee and Report stages after two votes seems to me to be thin. He nods; he agrees.
I had hoped that the debate had moved on. On numerous occasions, the Government have made the case that it is not right to pay a benefit for life regardless of circumstances. The amendment takes us back. It would undermine the Government's strategy of focusing support where and when it is most needed—on families with children and on the period immediately following bereavement. The amendment will do nothing to ensure that help goes to those in greatest need. It would provide continuing support for widows up to pension age, regardless of their circumstances or income and extend this support to widowers, regardless of their circumstances or income; whether it be the MP earning £45,000 or the banker earning £450,000 in the City. They will all receive widower's benefit for life whether or not they have financial need, a job or children.
There is no reason why men and women without dependent children, many of whom will have well-paid jobs or generous occupational pensions, should receive a benefit for the rest of their working lives. Our reforms will extend bereavement benefits to men and remove the assumption that widows, simply because they are women, should have to rely on benefits throughout their working life.
We have always said that we recognise that people need a breathing space to come to terms with the emotional and practical upheaval caused by the loss of their spouse. That is why we are proposing that the new bereavement allowance should offer financial support for a limited period following bereavement.
It is not easy to decide when that time limit should end. When we considered the needs of working age widows and widowers without dependent children—the majority of whom are in the labour market already—we weighed up all the arguments. I believe that we have made the case that it is not right that they should receive a benefit for the rest of their working lives regardless of their financial need, employment situation or dependent children.
At the Report stage I recognised that the original proposal for a six-month time limit in bereavement allowance was causing concern and I offered to accept an amendment put down by my noble friend Lady Crawley to extend that period to one year. We then had two Divisions. Noble Lords opposite voted for the two-year provision before the House had had a chance to express its view on one year. That was the way the procedure operated. Many noble Lords approved of the Government's position on the proposal for a one year period. It was supported not only by my noble friends on this side, but by the right reverend Prelates, Liberal Democrats, most of the Cross-Bench life Peers who voted, and even some noble Lords on the Opposition Benches.
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However, that amendment was lost. We are now where we are and it is for the House of Commons to consider what it will do. Now the noble Lord and my noble friend Lady Turner are asking the House to go much further. Effectively, this amendment would provide a benefit for the entirety of a widow or widower's working life, regardless of their need. It would cost over half a billion pounds every year in the long term and, incidentally, would add to the cost of the Conservative amendment which has been supported so far, bringing it up to nearly £4 billion.
I cannot believe that the House would wish to see a benefit of this sort going to men and women irrespective of income, financial need, employment situation and whether they have children attached to them. Are we really in the position of approving an unlimited benefit to women and men who may have six-figure salaries? That is what this amendment proposes. I very much hope that your Lordships will not accept such an amendment.
Baroness Turner of Camden: My Lords, I hear what the Minister is saying, and I simply do not agree. She has not answered my main argument. We are talking about a contributory benefit for which people have made contributions in their working lives. The deceased spouse made contributions believing that if he died—it is the case that we are mostly talking about widows—there would be some form of contribution from the state for the support of his widow. That widow may have spent most of her time with her spouse bringing up children and then will have to cope somehow or other with a much-reduced household income when he dies, perhaps in his late forties or early fifties.
The argument of the right of people to have a benefit for which they have contributed has not really been answered by my noble friend. I have to say that there is no meeting of minds on this point at all. I do not agree with the Government's position here, and I am sure my noble friend acknowledges that. We simply do not agree. I pointed out the fact that the main wage earner in most households is still the male. My noble friend has not answered the point that the position of women has not changed so drastically that the state contribution is no longer needed.
However, I see that there is really no point in calling a Division on the amendment as it has been thoroughly debated in the House. I simply put on record once again my dissatisfaction with the arguments advanced from the Dispatch Box this evening. I very much regret that the Government appear to be departing from the social insurance principle in which many of us have believed for many years. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
6.45 p.m.
Clause 57 [Claim or full entitlement to certain benefits conditional on work-focused interview]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 7:
Page 63, line 26, at end insert —
("(1A) Regulations under this section may not impose any condition or requirement in respect of a person who—

(a) is in receipt of disability living allowance or attendance allowance;

(b) has caring commitments of 35 hours per week or more; or

(c) is in receipt of widow's and bereavement benefits falling within section 20(1)(e) and (ea) of the Contributions and Benefits Act (other than a bereavement payment);

but may make provision for a person who falls within paragraph (a), (b) or (c) to be invited to take part in a work-focused interview on a voluntary basis.").
The noble Baroness said: My Lords, on Report I moved an amendment designed to remove from those in receipt of widows' benefits the necessity to attend for work-focused interviews as required by this clause. It will be recalled that the clause stipulates that failure to attend for such an interview can result in the removal of benefit. In other words, there is a measure of compulsion.
I tabled my previous amendment because present widows had been assured by the Government that they would continue to receive their benefit unaffected by the new legislation and that the new arrangements would apply only to individuals widowed in the future. The present widow's benefit is paid as of right, based on the contribution record of the deceased spouse. It is not means tested, as it is a contributory benefit, and no other conditions whatever are attached.
To introduce the further condition of attendance at work-focused interviews on pain of losing the benefit seemed to me a breach of the undertaking given by the Government that the benefits to present widows would not be affected. I was told by the Minister on Report that work-focused interviews were not only about getting people back to work, but also for giving advice and counselling. I said then that I would think about what had been said. I have since done so, and I must point out that bereavement counselling is already readily available from a number of organisations specialising in that area whose counsellors are probably far more expert than officials involved with the administration of benefits, however well trained.
Furthermore, it seemed to me that there were other categories of benefit recipients who should not be put under compulsion to attend for interviews on pain of losing benefits. As the amendment states, they are those in receipt of disability living allowance or attendance allowance, and those with caring commitments of 35 hours per week.
However, there is no reason why such people should not be told about the availability of such interviews and invited to attend on a purely voluntary basis. It is the element of compulsion to which I object. From what the Minister has said, I am hoping that she may find what I am suggesting here reasonable and sensible. I therefore tabled the amendment, even at this
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late stage, in the hope that she may perhaps feel inclined to accept it, if not in this wording, then at least in similar terms. I beg to move.
Baroness Buscombe: My Lords, I begin by reaffirming our support for the principle of the work-focused interview. It is our belief that everything should be done to help and encourage into work anyone and everyone who can work. But this amendment allows a narrow and carefully defined category of certain individuals, not a broad range of people, the choice of whether or not to attend a ONE interview.
Those individuals already face considerable challenges in their everyday lives. They include individuals who, if they were able to work, would not be work-shy. Others, as carers, are already working arduous uncertain hours, often undertaking extremely difficult tasks. These individuals are constrained from working because of their disability, bereavement or caring duties, not because they do not want to work. We believe that for those individuals, compulsion is simply not necessary, appropriate or justifiable.
Those individuals should be encouraged to attend a ONE interview, but on an entirely voluntary basis. We urge the Government to encourage them and thereby afford them the same opportunity as everyone else. If that is done on a voluntary basis, it will contribute to their self-worth and self-esteem, and that must be right. It would give them confidence, a crucial ingredient for entering the world of work, through choice as opposed to making it a requirement of the law to attend.
We are already aware and expressed in Committee our real concern that the whole thrust of ONE has conjured up fear and raised considerable alarm among many people who are terrified at the prospect of not performing in an interview which is work-focused due to their disability. They fear that they will somehow fail, be penalised, and perhaps lose their benefits.
Noble Lords may recall that I suggested in Committee that the terminology "work-focused interview" is not at all helpful. "Personal development interview" would, in my view, be much better a way of describing what is at hand, not least because the Minister has striven to reassure us that the interview in fact concerns rights and benefits as much as work.
Indeed, the ONE learning assessment framework manual for advisers concentrates almost entirely upon benefits. In Committee and on Report we rehearsed the arguments against compulsory attendance at a ONE interview, particularly for the disabled. There was suggestion that we were somehow seeking to deny opportunities to those individuals. This amendment would provide them with choices—not threats—and with opportunities.
Further, I recall, for example, that the noble Lord, Lord Haskel, believed that we were questioning the very value of interviews. Far from it, my Lords. We are extremely aware of the value of interviews. We do not support the dragooning of certain individuals who, if they are in receipt of disability living allowance or

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attendance allowance, have already had to face a raft of medical panels and been signed off as incapable of work; or, if they are carers with commitments of 35 hours per week or more, are probably already coping with the logistics of juggling those caring commitments with meeting other family commitments which may impinge upon their daily and—dare I say?—nightly lives. Is it fair or indeed cost effective to insist that those categories of individuals attend a ONE interview on a compulsory basis? Where is the value in that compulsion?
In conclusion, I fear that it seems to me quite clear that the most vulnerable people in the country are having to meet the most demanding criteria relative to their condition.
Earl Russell: My Lords, this is a good amendment. I believe that nothing goes deeper in the divisions between this party and new Labour than the issue of compulsion. When we discussed this matter in Committee, the Minister put forward an extremely powerful and carefully argued defence of compulsion to which I listened with great interest. The central principle of what the Minister said was, "You don't know what you don't know". She argued that people should be made to attend in order to receive information. But the Minister's principle that "You don't know what you don't know" cuts both ways. Of course, there is a great deal about people who have disabilities, who are carers, who have carers to look after them, or who have been recently bereaved which cannot be within the knowledge of those arranging the interviews.
The case against compulsion comes under two headings. The first is the compulsion to attend the interview, which, formally, is all that is in the Bill. The other is the possibility of mistaken decisions being reached at that interview. I agree entirely with the Minister that many people with disabilities are capable of doing extremely valuable work. Any Member of this House who denies that has not attended recently. But we need to know each disabled person as an individual because we all know that what two people with an outwardly identical handicap can manage to do despite that handicap is not the same. There is a mental factor in this which is perfectly genuine and not always understood.
Similar reasoning applies when one is dealing with pain. Nobody really knows how much pain other people are suffering. I have even known family doctors make quite grave errors on this point. It is very difficult indeed for someone who has never before met a person who is in pain to reach an accurate decision on whether that person feels too much pain to be able to do what is required of them.
When we deal with carers, we must consider not only the interests of the carer but also the person who is being cared for. If your mobility is limited or if your mental state is disturbed, you have a very high degree of dependence on your carer. You may be faced with the fear of an interview which may take your carer away from you and cast you into a quite unknown
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situation. I observe the Minister shaking her head. But were she to explain that to someone who suffers perhaps from acute depression, I believe she would find that, although her reassurance is rational, it might not be enough. One cannot put forward policy on the assumption that everybody who needs to be cared for is rational all the time. Apart from anything else, acute pain makes one irrational from time to time.
With regard to bereavement, I refer to the extremely powerful speech made by the noble Baroness, Lady Pitkeathley, when we discussed the bereavement allowance in Committee about the length of time it may take in some cases to make the necessary adjustments. One cannot know without being inside somebody else's skin which people can make it quickly and which people make it slowly. Lady Seear once said that it is not right to require people to go straight from graveside to job centre. That is one reason why we on these Benches support this amendment.
Baroness Pitkeathley: My Lords, I have considerable sympathy for, particularly, the second part of this amendment which refers to carers. I wish to add a few comments to what noble Lords have said. I shall speak briefly and only to that part of the amendment.
I believe it is sometimes difficult for people to understand that those with heavy caring commitments are still extremely interested in having a job outside the home. That is not only for financial reasons but, perhaps even more importantly, for psychological reasons. It is not always easy to remain in that type of relationship at home, constrained as one often is. Therefore, carers want to move into the job market. However, that has to be handled extremely sensitively.
I made the point previously to your Lordships about sensitivity and training that the people who conduct the interviews must have. Also, the way in which the interviews are—if I may put it this way—marketed to those who may be involved is extremely important. I believe that we must be very careful how we deal with such interviews.
On the other hand, however, I can think of some instances in which compulsion to attend an interview has been beneficial to carers. In particular, I think of carers in a New Deal programme in the north west which the Carers National Association conducted in partnership with Centrica. They specifically targeted carers to persuade them to enter Centrica's workforce. Their first efforts to bring in the carers were not at all successful because the carers could not understand that they were the people who should be encouraged to come into the workforce. It took much more aggressive marketing to say, "Yes, we do need you", to involve the carers in that particular programme. I am happy to say that it is now extremely successful.
Therefore, as the noble Lord said, it seems that the key issue is to treat people as individuals, to think about their psychological as well as their financial needs, and to think about the way in which the

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interview is operated. That is much more important than whether the interview is voluntary or compulsory.
Baroness Hollis of Heigham: My Lords, this has been a short but very thoughtful and scrupulous debate.
The amendment seeks to exempt from compulsory work-focused interviews three groups of claimants: those who receive disability living allowance or attendance allowance; those with caring responsibilities of 35 hours per week or more; and those in receipt of widows' and bereavement benefits.
The arguments for inclusion of those groups in the provisions of this clause are essentially those that I have used with your Lordships throughout the course of this Bill. It is a key principle of our welfare reforms that people should be treated as individuals and not be put into a box, as my noble friend said, which carers do not believe applies to them. We want to move away from that rigid categorisation which says, "If you are a disabled person you have no interest in working. Therefore we shall not encourage you to think about the opportunities", and so on. Yet we know that 8 per cent of those on DLA are in employment.
If we are to make progress in moving those at risk of falling into the twilight or the edges of our society because they live on benefits which do not give them the full quality of life that they would wish, we cannot afford to deny them the help that our reforms will offer them.
I turn now to the amendment. I shall speak to each of the three groups in turn. First, obviously the reference to attendance allowance is unnecessary because attendance allowance is payable only to those who have attained pensionable age. The clause does not apply to anyone over the age of 60. As we made clear when we introduced an amendment on Report, there is no requirement that pensioners should attend work-focused interviews. Only pensioners are eligible for attendance allowance.
DLA is payable to people who, because of their disability, incur additional costs in relation to their care or mobility needs. Its recipients include, but are not limited to, those with the most severe disabilities. For example, someone who receives DLA may have acute intelligence, acute skills and enjoy general good health, but may be a paraplegic and may therefore need higher rate DLA in order to qualify for a Motability car, which then gives him the very mobility he wants. That person may be an extraordinarily effective addition to the labour force but the amendment would wipe out the invitation to that person to come in to the work-focused interview.
7 p.m.
Lord Higgins: What about DLA?
Baroness Hollis of Heigham: My Lords, DLA is a broad sweep of category in the amendment. In the same way that we included attendance allowance,
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which can only be paid to pensioners and therefore is not relevant, although I accept that among those who receive DLA there may be those who are so severely disabled that they need constant care and attendance, it also includes people who are receiving a motability car which then gives them exactly the independence they need to enter the labour market. To categorise people because they receive DLA as not to be on the receiving end of a requirement to attend an interview does them no kindness.
While people who receive DLA as their only benefit will not be subject to the provisions of this clause, people with DLA who then claim a benefit which is covered—for example, income support—will be subject to the requirement to participate in a work-focused interview.
The fact that this clause could apply to recipients of DLA does not mean that all recipients of this benefit will be subject to work-focused interviews. Advisers will be trained and guided to consider each case individually using all the information available to them. They will consider whether a client will benefit from an immediate interview or not. If not, that interview may be waived or deferred. Clearly, if somebody is on DLA, on highest rate care, on what I call the six months or under special rules—that is, they are regarded as having a terminal illness—of course no one is suggesting that compulsory interviews apply.
I can assure your Lordships that these provisions will be applied with appropriate sensitivity. We are working with all the voluntary organisations to ensure that they guide us not only in training staff but in continuing to train and advise staff once the schemes are up and running so that they may stay up-to-date with the knowledge they need.
The argument for including carers within the scope of this clause is the same as that for people with disabilities. Of course we respect and value the role performed by carers. We are emphatically not suggesting that carers give up their caring responsibilities and take a job.
What we are saying is that caring duties do not last for ever. My noble friend Lady Pitkeathley knows infinitely more about this than I ever will. Caring for a child who, for example, will be dependent as an adult may well be a lifetime commitment. Caring, say, for an elderly parent or a seriously ill spouse may not be. We know that the median length of time that someone is on ICA is two years. One quarter of all carers care for around six months or less. Only one-fifth care for more than five years. There is a wide range of experiences here according to whom the carer is caring for.
I therefore endorse the remarks of my noble friend. Carers who are permanently outside the labour market not only become poor but socially and emotionally isolated. When they, in turn, come to need care they may well find that there is no one to care for them. One of the best ways to ensure that carers re-enter full society is to ensure that they remain sensitively and properly in touch through an adviser with the potential to re-enter the labour market as and when they are ready.

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As I have said, around 10 to 15 per cent of carers work in spite of the fact that they have heavy caring commitments. Others may wish to do so. We would not want to deny them that opportunity. The same argument applies with respect to widows and widowers. Recently bereaved people must and will be treated with appropriate respect, consideration and compassion. But we must have regard to the individual circumstances of each claimant. In my view, a blanket exclusion of those on attendance allowance or DLA, of carers, widows and widowers would do absolutely nothing to address, meet and reveal individual needs. It would deny many the very help and support they need at a difficult time.
As I have tried to make clear in earlier discussions, the ONE service is not just about jobs, although work for those who can is a central aim. It is also about providing an holistic approach to the welfare needs of each claimant based upon their individual circumstances. If those needs are best met by helping individuals to move towards the labour market, that is what will be provided. If they have different needs, such as help in stabilising their financial position or bereavement counselling, we will provide that help and ensure that those who can at least help them are available to them. Each person will be treated according to their personal needs, which is the basic tenet of ONE.
Many widows and widowers choose to work. Those who have given up work to provide care for their spouses may move back to work quite quickly. Others, if they have children, may wish to stay in touch with the labour market to improve their future employment prospects. We will offer tailored help via their adviser.
The core of the debate is whether access to the additional service of ONE that we wish to provide should be on a voluntary or compulsory basis. In my view the argument here is clear. The noble Earl, Lord Russell, in putting words into my mouth did so entirely accurately. If people have not had the advantages of a new system explained to them, how can they arrive at a sensible conclusion as to whether or not they should volunteer? How can people decide whether or not they want the help the ONE service can give them until someone has told them what help is on offer?
As I said to the House on a previous occasion, I have changed my mind on this issue so far, for example, as concerns lone parents. When I first started at the Dispatch Box I thought that voluntary interviews for lone parents were all that was necessary. I thought that those who were ready would take them up and those who did not come for interview were those with caring responsibilities who would not want to enter the labour market and it was not right to encourage them to do so. I have to say that I have changed my mind. The evidence is overwhelming that the element of compulsion for new lone parents will be essential.
Where interviews are voluntary, we know that 80 per cent of those to whom we extend an invitation do not respond. Yet, of the 20 to 25 per cent of those who do respond, 90 per cent choose voluntarily to join
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the programme. It is perhaps worth repeating those figures. On a voluntary basis, 80 per cent of lone parents do not respond to the letter. Of the 20 to 25 per cent who do respond, over 90 per cent choose voluntarily to join the programme. How on earth do we reach the other 80 per cent unless we can bring them within the corral of a preliminary interview? Overwhelmingly, of those who do respond, over 90 per cent go on to join the programme by choice.
That is why I say that people do not know what they do not know. When lone parents come in for an interview for the first time they realise what is available to them, as do disabled people, carers, widows or widowers who have perhaps been out of the labour market for some time. Only then can they make an informed choice as to what they want to go on to do. That has been my experience in trying to address the identical issue with lone parents who may have come out of a bad relationship and have dependent children. They need to know. When they do know, they voluntarily make informed choices that suit their needs.
I hope your Lordships will accept that we mean such interviews to be holistic, not just work-focused; to offer a range of information, services and advice about benefits to which they may be entitled; counselling support; debt counselling support; bereavement support that may be necessary; training and childcare opportunities or whatever is appropriate. Most people cannot know that sort of information unless they have come within the purview of that interview.
I take the point about the work-focused interview in relation to the comments expressed by the noble Baroness, Lady Buscombe, some of which I rather sympathise with. In future we shall describe the interviews as "personal adviser meetings" in order to lower the possibility of stress and tension associated with the word "interview". That point was sensitively made and we are, indeed, taking that on board.
The noble Baroness is right to emphasise the need for sensitivity in training among personal advisers. She has seen the training pack. We are working closely with the voluntary organisations to ensure that that training is delicately and sensitively done and, as I say, is holistic.
However, I ask your Lordships not to effectively write off those on DLA with another benefit, widows, widowers and those who are carers, from coming within the range of this service. From my experience with lone parents, if such a "personal adviser meeting" is voluntary, people do not attend. Yet, if they do attend, 90 per cent want and choose to go on the programme and are glad that they do so. Had we not sent the letters out, they would not have come.
My concern is how we reach the rest. If noble Lords were minded to support the amendment there would be a repetition of the same experience. These people would be confined to the edges of society, living on inadequate income and support, with an inadequate social life, because they had not learned of the opportunities that exist.

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It is not an onerous requirement. They will attend a simple meeting. If that meeting is inconvenient, if it is deferred because of a person's health or recent bereavement, or if the meeting needs to take place in the person's home in the presence of a friend or a carer, that is acceptable. It is not meant to be threatening or create barriers. It will ensure that people who are pushed to the edges of society as a result of their responsibilities or experiences, have the information with which to join mainstream society. Knowledge is power, and the Government wish to empower people. If the amendment were to be accepted, there would be a risk that they would not have that knowledge and they would effectively be disempowered. I hope that noble Lords will not accept the amendment.
Baroness Turner of Camden: My Lords, I thank my noble friend for her very detailed and compassionate response to the amendment, and I thank noble Lords who have contributed to this very interesting debate. I share the views that were expressed by the noble Baroness, Lady Buscombe, that "work-focused interviews" is not a very good name for what my noble friend has described. If personal development were the key issue, the situation might be different.
My problem is that I do not like the notion that the people referred to in the amendment, who are rather vulnerable, should have to attend an interview on pain of losing their benefits if they do not do so. It is that element of compulsion that I dislike about this section of the Bill, but if the administration of this section will be as described by the noble Baroness, then it is unobjectionable. It is reasonable that people should be encouraged to come in and be spoken to about their personal development and training opportunities. The problem is that that would be against the background that if they do not come in for the interview they could conceivably lose their benefits.
In view of the very detailed explanation given by the Minister, and the fact that there will be no further opportunity to consider this matter under this section of the Bill, I feel inclined to see how it works out in practice. If the interview is a personal development interview instead of a work-focused interview and if the emphasis is not on people losing benefits if they do not show up, then that will be a very good move.
A great deal more could be done to market what is available. People do not always realise what opportunities are available. There should be marketing of the interviews and an explanation of what they involve. Sometimes people are wary and afraid when summoned to an interview. We do not want people to stay away because they are afraid and then lose benefits as a result. If the Government intend to pursue this in the way indicated by the Minister, that would be satisfactory to most noble Lords, including my noble friend Baroness Pitkeathley, whose support I value. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.15 p.m.
Lord Addington Lord Addington moved Amendment No.8.
Page 64, line 25, at end insert—
("(g) for carrying out a full review of the effects of the interviews and decisions connected with them on specific groups of claimants, to ensure equality of treatment and consistency of standards and to disseminate examples of good practice, such review to—

(i) include consideration of the effects on those with disabilities, black and ethnic minorities, and those whose first language is not English, and

(ii) include consultation with relevant bodies, to include the Disability Rights Commission, the Commission for Racial Equality and organisations of, or representing, people with mental health problems;

and to take place not less than one year and not more than two years after the day on which this Act is passed.").
The noble Lord said: My Lords, we are returning to the idea of obtaining the right type of information from these compulsory interviews, and the question of training and support for the people who conduct the interviews. We have been round this course several times. The amendment will enable the correct information to be extracted from those people who are being interviewed.
We propose a review process whereby the information gathered is assessed by those who know it from the special groups. I have always said that these interviews potentially have two edges. I should like to see the right type of interviews conducted for the right groups.
We can talk about this for a long time, but I have consistently expressed the fear that the people who conduct the interviews will not be properly trained. The noble Baroness has assured me that they will be well trained. I have countered that assurance by asking whether they will be trained in the right areas and asking about groups with mental health problems. The noble Baroness has addressed this point, for which I thank her. She has been in touch with charities which have in turn been in touch with me.
The amendment would extend the process further in identifying best practice and where it does not work. I am asking for a process of review that would identify where things are going wrong. If the process is carried out properly, we shall be able to enhance it. The problem that we all fear is that, if we get it wrong, people's lives could be utterly destroyed. The noble Baroness has acknowledged that potential danger. The amendment would allow a review of the process as it develops.
I hope that the noble Baroness will respond favourably to the amendment. I beg to move.
Baroness Buscombe: My Lords, we welcome the amendment. It adds a safeguard for cross-cultural awareness. It is vital to consider the training of advisers and the effect of the process upon black and ethnic minorities, which have not yet been mentioned

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in discussion of the Bill, as well as those with disabilities and those whose first language is not English.
Much depends on the administration of the Bill and particularly the training of advisers and the sensitivities displayed by those advisers. As the noble Baroness, Lady Turner of Camden, stated, it is very important to see what happens in practice.
If the Government decide to reject the amendment, what guidance will be given to personal advisers on how to respond to people from minority communities with such problems as those highlighted in the amendment, particularly those whose first language is not English?
Baroness Hollis of Heigham: My Lords, I am not sure that the noble Lord, Lord Addington, and I are reading Amendment No.8 in the same way. It seeks to place an obligation on the Government to undertake a review of the impact of work-focused interviews and the decisions taken by one's staff and asks us to consider the effect on people with disabilities, those from ethnic minorities and those whose first language is not English. The amendment, as I understand it, is concerned with reviewing information on the progress of this initiative and ensuring that it is handled professionally and made available. However, the noble Lord also spoke about the adequacy of training of personal advisers.
Lord Addington: My Lords, if we do not take on board what is going on, we shall not know how to change the training. That is what we are getting at. If mistakes are being made in training, or one party has it right and another has it wrong, we shall not know. It is a matter of disseminating information about training.
Baroness Hollis of Heigham: My Lords, I take it that the noble Lord is saying that we need the research in order to get back a learning loop. The simple answer to that —I can cut a couple of pages here—is yes; we are placing great emphasis on collecting and publishing a whole range of information. It will be one of the most closely monitored initiatives I can think of, other than perhaps the Child Support Agency.
We shall be collecting information on areas such as the number of people who go through the service and are referred to a job vacancy; the number having their interviews deferred; why the deferral occurred; how long for; information on those failing to take part in an interview; the appeals decisions and so forth.
In addition—this is more pertinent because the first is simply a collection of numbers—we shall be conducting a full and comprehensive evaluation of the pilots which will have qualitative as well as quantitative elements. It will assess whether the pilots led to an increase in the sustainable level of employment by getting more people into work; it will also—this is pertinent to what the noble Lord, Lord Addington, was saying—seek the views of clients regarding the actual level of service that they received.
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Personal advisers will be interviewed to ensure that lessons are learnt to help to make the service we offer more effective. Again, much of the qualitative information will be broken down so that we understand whether the impact on the ONE service for each of the main client groups differs from that overall picture. We shall also be monitoring the effect of disentitlement. The evaluation data and the current survey will allow us to see what is happening.
The amendment also seeks to ensure that key organisations, representing people with disabilities, ethnic minorities and people with mental health problems are consulted in the review process. That is already happening now with the training and will continue to happen as we roll out the scheme. We shall get their advice and experience as we look back at our work. For example, the ONE consultation forum gives national organisations representing disabled people, carers, lone parents and people with mental health problems the opportunity to discuss emerging issues with Ministers and senior officials. At a national level, the BA Annual Forum and the Disability, Homelessness and Ethnic Minority Forum have begun to run two-way sessions on the operation of the ONE project, bringing together officials and delegates of all the major organisations representing those clients.
We also have local networks of supervision. I could go on and on. But I hope that noble Lords will be assured that not only are we collecting what I call the traditional statistical material of numbers, outputs, through-puts, sustainable job levels and so forth, but we are also going into the area which quite rightly concerned the noble Lord, Lord Addington, and the noble Baroness, Lady Buscombe, in relation to the quality of service to clients; their views on the quality of that service; the degree to which we are being supported and sustained by the voluntary organisations and the degree to which all that can be fed back into training. Yes; we are doing it in spades! I hope that when we see some of that research coming through noble Lords will be able to join with us in feeling that this is a worthwhile new development by government.
Lord Addington: My Lords, I have one brief question for the noble Baroness. Will that process involve bodies receiving back reports? This is one of the reasons the amendment was tabled. Most people go to an organisation if they have a problem. That is generally the way with which these matters are dealt. People look for support. Primarily for the record, can the noble Baroness tell us what would be the process and how a person or group who is not in that loop, can get into it?
Baroness Hollis of Heigham: My Lords, again I am not entirely sure I understand the noble Lord. What is it that the individual client would want to know? I can then perhaps help as to how that information might come to them. Statistics, for example, will be in the annual reports, the quarterly reports, the PQs and so forth. Guidance notes would go through to CABs and voluntary organisations. If information is required

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about the consultation that has taken place with the voluntary organisations, that may be in the voluntary organisations' annual reports. Perhaps the noble Lord can help me further.
Lord Addington: My Lords, what I am trying to get at—it is like pulling teeth and I apologise to the House for this— is that when people have problems, they tend to go to help groups; groups that exist outside the Government, such as the voluntary organisations. People go there for support when they feel they have a problem. The amendment seeks to bring those groups into the legislation. and this is by no means an exhaustive list. They would then be able to tell the Government if they have a problem. The process is extremely important to people's lives. If the Government go to the groups straightaway, it simply tightens the link. Will the Government have a format whereby people will know where to go to become involved in the link?
Baroness Hollis of Heigham: My Lords, if any group is not involved but would like to be, perhaps it will contact us because we are working closely with all the major national organisations; those for disabled people; those for people who have a language other than English as their first language; those for ethnic minority groups, and so forth. We believe that our trawl was extensive, and the DSS has a lot of experience in this. But if the noble Lord feels that any specific organisations should have a voice but may have been overlooked, I shall be grateful if he will let me know. I shall ensure that they are embraced within the procedures.
Lord Addington: My Lords, being told in Parliament that there will be a constantly open door is probably what I was seeking. Having been offered that invitation on the Floor of this Chamber is about as good as it is going to get and I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved. Amendment No. 9
Page 67, line 41, at end insert—
("(2) This section is subject to section 84(4A).").
The noble Earl said: My Lords, we return to the same issue we were discussing in Amendment No. 7; that is, the issue of compulsion. We have had two theoretical cases competing with each other put fairly powerfully on both sides. Amendment No. 9 asked for evidence. To obtain evidence to choose between two rival sets of principles is not an ignoble ambition.
The question is: when people are actually disentitled to benefit, what happens to them? We know very little about that. I do not see how we can consider the effect of a policy of disentitlement when we do not know what happens. We get then a contest between two opposite moral principles without any way of anchoring either of them in experience.
We know a limited amount. There is government research in the MORI report on 16 and 17 year-olds and the incapacity benefit leavers tracking study, both
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of which show a significant percentage of those affected as having no income. Those people are not actually dead, so they must be keeping alive in some other way. It could be of interest to find out in precisely what way they are keeping alive; to find out in particular how many of them are suffering ill health. Anyone who has read the Acheson report knows perfectly well that there is a clear link between poverty and ill health, and a clear link between being on benefit and ill health. One would expect, therefore, that there might be an even clearer link between having no benefit and ill health.
It is no good simply asserting that as a hypothesis. We ought to have some evidence on it. We know also that a number of people who have got into drug running have done so because they were disentitled to benefit and because it was the only way they could make a living. The MORI report on 16 and 17 year-olds documented that, among other pieces of research. Amendment No. 9 suggests that, when compulsion is brought in under this Bill, the Government should set up pilot studies into the effect of the compulsion and what happens over the next year to the people who have been disentitled to benefit. Presumably those who hold for the idea that it is a short, sharp, salutary shock suppose that those to whom it happens decide to reform their ways and return to actively seeking work and generally conform. Whether that is the case, or whether those concerned sink into an underclass, disappear from the records without trace and do things which would not stand very much inquiry, is a question of some importance.
You cannot judge whether a policy is justified until you know the nature of its actual effects. On the one hand, it is asserted that it is not right to pay people benefit for doing nothing, while, on the other hand, it is asserted that all these people are human beings and we should not starve them. Why cannot we have some decent information? I have been asking for this for a long time; and I am still asking. I beg to move.
7.30 p.m.
Baroness Buscombe: My Lords, we fully support a proposal for a full review of the pilot schemes, in particular the gathering and publication of information regarding the outcome of those who do not attend personal adviser meetings. I should say here that I am very pleased to be referring to the ONE interview as that; indeed, I am grateful to the Minister for that change. What happens in relation to the benefits of these claimants if they fail to turn up three times? What happens to those people? Are the procedures introduced at the pilot scheme stage flexible enough in practice to deal with all those who must attend?
The amendment proposed highlights the diverse situations which the interviewer may find himself or herself in as a personal adviser coping with those interviews. Can the Minister say whether the processes for communicating with the Benefits Agency are sufficient to cope with what one might describe as "exceptional cases"?

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We welcome the pilot schemes. However, we believe that the Government have, in large part, accepted the enormity of the challenge of introducing the personal attendance meetings. Indeed, they have undertaken the pilot schemes to see how the process works. Therefore, it would surely make sense to evaluate the workings—the successes and the failures—before bringing Clause 57 into force.
Baroness Hollis of Heigham: My Lords, part of the answer to evaluating what we are doing with the ONE programme was, I hope, given to your Lordships in reply to the previous question; namely, that we are monitoring both quantitatively, in terms of the number of people coming through, and qualitatively, in terms of the experience from the perception of the client, the personal adviser and the voluntary organisations. We seek to feed that back into the training and learning experience of the personal advisers who, as I believe all noble Lords recognise, will be at the heart of this process.
In terms of monitoring what is happening with the ONE programme, I hope that noble Lords will accept that, as regards the previous amendment moved by the noble Lord, Lord Addington, monitoring and evaluation will continue. However, the second part of the amendment is a worry, as expressed very powerfully, as always, by the noble Earl, Lord Russell, concerning what will happen to those who are disentitled. There are two separate issues here: first, the degree of monitoring of the scheme overall; and, secondly, what will happen to those who are disentitled.
The noble Earl referred particularly to the lack of evidence as regards the withdrawal of other benefits which would enable us to see what is happening. We believe that clients will be keen to participate in the meetings that we propose. Of the two pieces of research that are to hand on those who have come off benefit, one of them, which relates to those who leave incapacity benefit as a result of no longer meeting the eligibility conditions, was quoted by the noble Earl, Lord Russell. However, I wonder whether the noble Earl is also familiar with the research regarding those who have been disentitled to JSA and what happened to them, which was published in 1998. The findings in that respect were mixed. The research did not indicate that the respondents had ended up in prison, but—
Earl Russell: My Lords, I am grateful to the Minister who actually recommended that research to me at the time. I have indeed read it. There is information on the availability or not of income, but not on how people succeeded in making a living. That is what we need to know.
Baroness Hollis of Heigham: Possibly, my Lords. However, what the research also showed—and I think this is pertinent to our discussion this evening—was that respondents wanted more face-to-face treatment; that is to say, someone to explain what was happening to them. They also said that they needed better
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explanations and more consistent information, which is precisely what ONE aims to provide. In other words, of those JSA claimants who became disentitled, one of the consistent complaints was that they had not had the face-to-face service that the ONE programme is designed to introduce.
We believe that the vast majority of people will want, and recognise, the propriety of having an interview as a pathway into their benefit. We expect the numbers regarding those disentitled to be very small. We want to elicit co-operation, not impose sanctions. We want to remind people of the safeguards, especially those who may be vulnerable. First, the personal advisers have the ability to waive or defer meetings. Secondly, clients will have three opportunities to attend a meeting before a decision is made that they have failed to take part. Thirdly, clients will get numerous clear verbal and written reminders of the need to have a meeting as part of the condition of claiming benefit, which will be drafted with the help of the lobby groups.
There will also be a comprehensive good-cause provision to ensure that those who fail to attend with good cause are not penalised. Clients will be able to dispute or appeal against decisions that they failed to take part, and they can have those decisions overturned. I repeat what I said earlier. We will visit people in their homes when this is appropriate. Moreover, if we have failed to make any contact with someone, we will ensure that we make a home visit first before there is any move to disentitle him or her from benefit. At the end of the day, I really believe that the numbers of those disentitled will be extremely small. I hope that it will be a wilful choice and not one caused by either lack of information on the side of the client or lack of effort on the side of the agency.
In light of the fact that we are, on the one hand, tracking very carefully through research what is happening to the ONE process and, on the other hand, putting in place an abundant array of safeguards for those who might be at risk of losing a benefit, such as those I have just itemised to the House, I hope that the noble Earl will feel able to withdraw his amendment.
Earl Russell: My Lords, I thank the Minister for a long and careful reply. However, there is rather more to be done here than she suggested. In order to have any serious tracking of what happens to people who are disentitled to benefit, we will obviously have to have joined-up use of records between different government departments. We must, for example, break down the Chinese wall between the social security statistics and the criminal statistics; and we must break down the Chinese wall between the benefit statistics and the health statistics. It is only when we can see what correlation there is, or is not, between disentitlement to benefit and effects in either health or criminal matters that we can really know what we are dealing with.
I accept that I have received a very serious and sympathetic reply, but I do not believe that it has met what I am asking for; indeed, I do not think that the Minister really expected that it would. This is not the

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right moment to take the matter further, but the noble Baroness can take it for granted that I will do so on other occasions—I fear, on many other occasions. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 10 not moved.]
Clause 62 [Incapacity benefit: persons incapacitated in youth]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 11:
Page 71, line 37, leave out from ("to") to ("notwithstanding") in line 39 and insert ("incapacity benefit shall, in prescribed circumstances, be entitled to short-term incapacity benefit under subsection (1)(b) above").
The noble Baroness said: My Lords, this amendment makes a slight revision to an amendment to which the House agreed on Report. It is entirely beneficial. The changes that we introduced to Clause 62 were intended to protect two specific groups of people. The two groups were those who take up employment and earn below the LEL for a lengthy period before becoming incapable again of work, and those who return to the UK after a long period abroad. In neither case would they have had the opportunity to establish a contribution record to qualify for IB in the normal way.
The amendment will improve the original wording to reflect our intention that, in addition to new claimants who are awarded IB as a result of Clause 62, existing SDA recipients aged under 20 at the point of change who will transfer to IB a year later, will also be covered by this concession. I hope that noble Lords will be happy to agree to the amendment. I beg to move.
Earl Russell: My Lords, I thank the Minister warmly for the exemplary care and courtesy with which she has kept us informed of the content of government amendments at all stages of this Bill. That has done a great deal to save the time of the House and, in order not to refute myself, I shall sit down.
On Question, amendment agreed to.
Clause 80 [Transitional provisions]:
Baroness Hollis of Heigharn Baroness Hollis of Heigharn moved Amendment No. 12:
Page 84, line 12, at end insert (", or under section 31(7B) of that Act if the marriage was dissolved by a decree granted in proceedings so begun").
The noble Baroness said: My Lords, in moving Amendment No. 12, I wish to speak also to Amendments Nos. 18, 19 and 20. This is a small group of technical amendments relating to pension sharing. As pension sharing is extremely complex, I hope that noble Lords will allow me to seek their agreement to some final important touches to the legislation.
Amendment No. 12 is required to make clear the policy intention that pension sharing should be available only where divorce proceedings begin after the pension sharing provisions come into force. As the Bill is currently drafted, there is no provision for
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pensions which have been shared and then uprated to be paid at the new rate. Amendment No. 18 puts this right.
Amendment No. 19 is necessary to ensure that any additional administrative expenditure of the Secretary of State in connection with the supply of information for pension sharing can be met from the appropriate vote. Amendment No. 20 extends Section 178(a) of the Pension Schemes Act, with which I am sure your Lordships are entirely familiar. The amendment extends to earmarking cases in Scotland the power under Section 178(a) to say who are the managers of an occupational pension scheme. I hope that your Lordships will accept these amendments. I beg to move.
On Question, amendment agreed to.
Clause 84 [Commencement]:
[Amendments Nos. 13 to 15 not moved.]
Clause 85 [Extent]:
Lord Higgins Lord Higgins moved Amendment No. 16:
Page 86, line 28, leave out from ("70") to end of line.
The noble Lord said: My Lords, the amendments in this group are not only technical but are also consequential. They remain in the Bill rather like the smile on the face of the Cheshire Cat in Lewis Carroll's Alice in Wonderland after the cat itself had disappeared.
I shall not detain the House more than a moment or two but I shall make just two points. First, at Report stage I expressed some concern at a particular passage in an employees' bulletin issued by the chairman of the Inland Revenue. He has with great courtesy written to me about this and stated in the clearest terms that it was certainly never intended that the statement should be read in any other way than as a factual statement. I fully accept what he says and would like to place that on the record.
Secondly, as regards the cat which has disappeared, it remains to be seen what steps the Government now propose to take with regard to IRS35, whether in the Finance Bill or by way of further amendment. Clearly some of the consultations in which the Government took part have been helpful in improving what was originally proposed. However, there is still quite considerable concern among smaller operators in the IT industry, in particular that they may find themselves disadvantaged by what was further suggested in relation to their larger competitors. All I say at this stage is that I hope very much that the Government will carry out further consultations, because everyone has the same objective; namely, to ensure that tax avoidance does not occur. However, it is important that that should be done in a way which does not damage industry or the state of the economy. I beg to move.
7.45 p.m.
Lord McIntosh of Haringey: My Lords, I accept that these amendments are consequential on the removal of Clauses 71 and 72 and we shall not oppose them. However, in view of what the noble Lord, Lord

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Higgins, has just said, I should say a little more about the Government's intentions. I sent a letter to the noble Lord today which he will not have received because he has been on duty in the Chamber. I have sent copies of the letter to all other noble Lords who took part in the debate on this subject, including the noble Lord, Lord Goodhart, who also probably has not seen the letter. We shall seek to reverse in the other place the vote at Report stage on the service companies measures. I shall not repeat the debate any more than the noble Lord did but I wish to respond in public to a point that he made about the use of a Finance Bill because, although that point is mentioned in the letter I have sent to him, it is important that that should be placed on public record.
The reference that the noble Lord, Lord Higgins, made to an Order in Council of 1987 concerned a specific and limited circumstance which has not been regarded as creating a precedent. It was in the context of what is now Section 649 of the Income and Corporation Taxes Act 1988. Briefly, this section covers the delivery of tax relief on minimum contributions from the National Insurance Fund to personal pension schemes under Section 86 of the Social Security Act 1986. It provides that the Government should make the payments to the pension scheme grossed-up to take account of basic rate tax, and that the National Insurance Fund should be recompensed for the tax relief from the Consolidated Fund. So it covers a payment in respect of tax from the Consolidated Fund into the National Insurance Fund. That seems to be a very specific circumstance of NICs legislation being included in a Finance Bill. It is completely different from the current case, which is a substantial and important change to the rules governing NICs.
I am advised that the House authorities would not agree that such an example provides a precedent for including other NICs changes, such as the NICs service provision proposals within a Finance Bill. In the meantime, as I said, I accept the amendments which the noble Lord is moving.
Lord Higgins: My Lords, the House will be grateful for the noble Lord's clarification as regards both Finance Bills and also the Government's intention. I repeat that as regards this clause our objectives are the same as the Government's. However, we are anxious that the matter should be even-handed as between various participants in any particular industry. Technical points have been made which suggest that this is not the case. However, I very much hope that before the measure reaches another place the Government will have further discussions. I have received a document from the Professional Contractors Group which states,
"All we have ever asked for were meaningful discussions and we still believe that given the opportunity we can with good will arrive at a solution that will address the Government's concern without damaging the knowledge-based sector".
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I hope very much that it is possible to achieve that objective. We shall of course watch with interest what happens in another place and then consider the situation carefully. I beg leave to withdraw the amendment.
Noble Lords: Oh!
Lord Higgins: My Lords, I beg the pardon of the House. I have moved the amendment. It is so unusual to have an amendment accepted. I am grateful to the Government for having indicated their approval of this amendment. I commend the amendment to the House.
On Question, amendment agreed to.
Lord Higgins Lord Higgins moved Amendment No. 17:
Page 87, line 11, leave out from ("71") to first ("and") in line 12.
On Question, amendment agreed to.
Schedule 12 [Consequential amendments]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 18 to 20:
Page 145, leave out lines 18 and 19 and insert—
("25.—(1) Section 155A is amended as follows.
(2) In subsection (1)(a)(i), after "retirement pension" there is inserted "or shared additional pension".
(3) In subsection (2), after "retirement pension" there is inserted ", a shared additional pension".").
Page 145, line 25, leave out from beginning to (", and") in line 28 and insert (" 24 of the Welfare Reform and Pensions Act 1999,"").
Page 147, line 16, after ("1973") insert (", section 12A of the Family Law (Scotland) Act 1985").
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 21:
Page 155, line 37, at end insert ("the").
The noble Lord said: My Lords, in moving Amendment No. 21, I wish to speak also to Amendment No. 22. These are two small amendments to the measure on pensions and bankruptcy. They change the two remaining mentions in the text of "unfair contributions" to "the unfair contributions". We did all the rest at Report stage but we missed these two, for which I apologise. I beg to move.
Lord Astor of Hever: My Lords, I am sure the Minister will be heartily relieved to hear at this late stage of the Bill that we shall not seek to embarrass the Government with our depleted troops over the word "the".
Lord McIntosh of Haringey: My Lords, I am sorry to have kept the noble Lord away from Hatfield House.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 22:
Page 159, line 15, at end insert ("the").
On Question, amendment agreed to.
Baroness Hollis of Heigham: My Lords, enough of speeches—at least for the time being. I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Baroness Hollis of Heighem.)
Lord Higgins: My Lords, I am inclined to agree with the noble Baroness about speeches. I make only this point. At Second Reading I suggested that this Bill was really four or five Bills rolled into one. I believe that is the case. The noble Baroness and the noble Lord, Lord McIntosh, have been throughout extremely helpful in their explanations of what is happening. It is fair to say that the noble Baroness has been brilliant, expert and comprehensive and the noble Lord has been expert and impressive. The Bill is vastly better than it was when it arrived at this House. I suspect that we have not heard the end of it. It may be that the other place will accept all our amendments, but, should that not be so, no doubt we shall have an opportunity to go into the matter further. Meanwhile—whether by way of an interim thank you or otherwise—I express my thanks to the Ministers for the courteous and helpful way in which they have responded. I particularly thank my noble friends Lady Buscombe and Lord Astor of Hever, who have been very helpful in improving the Bill.
Lord Ashley of Stoke: My Lords, I believe that it is out of order to refer to participants in the debate, according to the Committee. I will not do that but I recognise that the noble Lord, Lord Higgins, tried to do so.
All I wish to say in 20 seconds is that we have had very good debates on this excellent Bill, shorn of the three amendments which defaced the Bill. I understand that Ministers will now make detailed changes. All I ask is that the changes are not only detailed but substantial, so that when the Bill comes back to this House there can be agreement all round. The Government will make a serious mistake if they fiddle only with details in the Bill in another place.
Earl Russell: My Lords, we have here a not uncommon story of a good Minister and a bad Bill. I wish to express my thanks to the one, and to value the parliamentary opportunity to criticise the other. I hope that our remaining proceedings will be conducted according to all the normal parliamentary freedoms.
Baroness Hollis of Heigham: My Lords, I am grateful to your Lordships for your kind words. I acknowledge my appreciation of the courtesy shown by all those present in the exchanges that we had often in the course of the Bill. I am very grateful. Even when
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I was resisting amendments that I sensed might have significant support in the House, the style of the House was always open, listening, attentive and courteous. Of that I am deeply appreciative. As my noble friend suspects, this may not be the entire end of the Bill. We shall leave those speeches for another day. With that, I hope the House will now agree that the Bill do now pass.
On Question, Bill passed, and returned to the Commons with amendments.

London Local Authorities Bill [H.L.]
A message was brought from the Commons, that they made the following orders:
That the Promoters of the London Local Authorities Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all Fees due on the Bill up to that date be paid;
That, if the Bill is brought from the Lords in the next Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;
That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);
That all Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill, shall stand referred to the Committee on the Bill in the next Session;
That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited, or has been the subject of a Resolution of this House to dispense with Standing Order 171A within the present Session, or has been deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
That, in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words "under Standing Order 126 (Reference to committee of petitions against Bill)" were omitted;
That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
That these Orders be Standing Orders of the House.
House adjourned at eight minutes before eight o'clock.