Tuesday, 16th June, 1981.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Chancellor.

Dafydd Elystan Elystan-Morgan, Esquire, having been created Baron Elystan-Morgan, of Aberteifi in the County of Dyfed, for life—Was, in his robes, introduced between the Lord Peart and the Lord Cledwyn of Penrhos.

2.48 p.m.

The Question was as follows:

To ask Her Majesty's Government whether trade unions which instruct their members to take industrial action in cases where no dispute exists between those members and their employers are covered by the legal immunities given by current trade disputes legislation.

2.52 p.m.

The Question was as follows:

To ask Her Majesty's Government what are their plans for Access Week of the International Year of Disabled People, beginning on 29th June.

2.59 p.m.

The Question was as follows:

To ask Her Majesty's Government what progress is being made with the introduction of enterprise zones.

3.6 p.m.

The Question was as follows:

To ask Her Majesty's Government who have been appointed to, and what are the terms of reference of, the consultative committee established by virtue of Section 9 of the Wireless Telegraphy Act 1949 to consider the draft Performance Specification for CB Radio issued by the Home Office in April 1981.

3.8 p.m.

Moved, That the House do now resolve itself into Committee.—( Baroness Young.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL of LISTOWEL in the Chair.]

Clause 1 [ Up-rating orders]:

The noble Baroness said: This may seem a very simple amendment: it asks that the word "reasoned" be inserted at page 1, line 13 after "a", so that the sentence would read that the Secretary of State should,

"cause to be made, in each House of Parliament a reasoned statement".

To those who think that all Government statements are both reasoned and reasonable, this may seem a tautologous amendment, but we have tabled it because we think it is absolutely essential that when statements are made to the House they should in fact be reasoned, in the sense that the full background and understanding should be made clear. May I add, not only clear to your Lordships; our anxiety is for the millions of people outside this House whose lives and incomes will be directly affected by such statements made in Parliament. Therefore, I very much hope, because this

is so simple, so obvious, so unexceptionable, that it may be possible to make a good start to this Committee stage by accepting it. I beg to move.

Amendment, by leave, withdrawn.

3.12 p.m.

The noble Baroness said: I beg to move Amendment No. 2. The purpose of this amendment is again linguistic. It is to establish in the statute that a year consists of 52 weeks and not of 54 weeks, because we complain bitterly, and so do many pensioners and many of the poorest people in our country, at what seemed to be a bit of a trick of stretching the year to 54 weeks, which was done recently. It might be said that because of leap years there is a gradual crawling up of year on year and it is difficult to stick to precise dates of uprating. I have been looking at some of the dates that have been chosen, and I find that in 1975 the date was 17th November, in 1976 15th November, in 1977 back to 14th November, and in 1978 13th November; better still in 1979, 12th November; then of course last year's disaster of 24th November, which meant stretching out for another fortnight people's entitlement to increased benefits. This meant that pensioners were deprived, in the case of a single person of £7·70, and for a married couple £12.30.

I believe, and so do most of my noble friends, that this was purely a money saving exercise. This was borne out in Standing Committee in another place (Col. 322, Standing Committee on Social Security (No. 2) Bill, 24/4/80) when the Minister said:

"For the 1980 up-rating of all these items the cost of bringing the up-rating forward by one week or the saving in deferring it for one week would be £60 million.".

So it seems to me quite clearly a money saving exercise, money saved to the Government but depriving those who needed it most. I think that if any business engaged in such shady arrangements they would be in serious trouble. It seems the most extraordinary breach of faith and common understanding that a year should be made, to suit Government's financing, to consist of 54 weeks instead of 52 weeks. Therefore, we have put down again a simple amendment to suggest that a year shall be a year in the sense that everybody means it, and that nobody should have money taken away from them because certain Governments want to pretend that a year lasts 54 weeks. I beg to move.

3.26 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 95; Not-Contents, 105.

Resolved in the negative, and amendment disagreed to accordingly.

3.34 p.m.

The noble Lord said: In the absence of my noble friend Lord Banks, who is in Strasbourg, I beg to move Amendment No. 3 standing in our joint names. In so doing, I think that it would be convenient if I spoke also to Amendment No. 5. This, of course, relates to the 1 per cent. claw-back applicable to pensions and other long-term benefits, including guaranteed minimum pensions, which was the main subject of our debate on Second Reading.

It will be remembered that the ground of the claw-back was that the uprating order of 14th August 1980, which set the rate of 16·5 per cent. for the increase due on 24th November last, turned out to be an overestimate of 1 per cent. of the general increase in prices. Therefore, the Government argued that it would be reasonable to recalculate the basis for the next increase due next November as if the increase for the year from November 1980 to November 1981 had been only 15·5 per cent. and not 16·5 per cent.

It was argued, I thought persuasively, on Second Reading that the expenses of old age pensioners and low income families are not fairly reflected in the general retail price index. In view of these factors, I quote my noble friend Lord Banks at column 1070 of Hansard of 1st June during the Second Reading debate:

"the Government might well have regarded the 1 per cent. over-estimate as a small and fortuitous modification of the cuts already made".

But apparently this could not be afforded, so provision for the claw-back was written into this Bill.

However, of course, the question immediately arose in a number of people's minds: what about the obverse side of the coin? What would be the position if the Government under-estimated the next time round? Probed on this point on Second Reading in another place the Secretary of State for Social Services, Mr. Jenkin, said:

"I was about to pose the question of what happens if next November it turns out that the increase to be announced at the time of the Budget falls short of the rate of inflation. The answer has already been given by my right hon. Friend the Prime Minister in the clearest possible terms: compensating pensioners fully for price increases over the lifetime of a Parliament means making good any such shortfall should it occur. The reference is in Official Report, 25th November 1980, Vol.. 994, c. 488.

The Government stand firmly by that pledge, which I repeat today."

When asked why it should not be put in the Bill, Mr. Jenkin replied:

"This is a matter which can no doubt be explored in Committee".—[Official Report, Commons, 24/2/81; col. 763.]

So it was, with no end result; though Mrs. Lynda Chalker, the Under-Secretary of State for Health and Social Security, repeated in full on 26th March 1981 in Standing Committee G, at col. 290, the Prime Minister's assurance of 25th November 1980, which reads as follows:

"The full value of the pension in terms of what it will buy will be preserved. Last year, we added to the provision for pensions because the amount that had been provided was not sufficient. This year, we provided more than was warranted by the price increase. The undertaking is to compensate fully for price increases over the lifetime of a Parliament … That means either making up the shortfall or taking into account the over-provision next time"

At the bottom of the same column Mrs. Chalker said:

"I hope that I have made clear exactly where we stand on the matter of making good the shortfall. The power is already there. It will be used to make good the shortfall, because that is what the Prime Minister said".

The power is that contained in Section 125 of the Social Security Act 1975, which, I would remind your Lordships, has already been modified once by this Government when the Social Security (No. 2) Act 1980 introduced into that clause a right to abate by 5 per cent. the uprating of certain benefits. That is the power on which we are asked to rely.

Reverting to our own Second Reading debate, a similar undertaking to those given in another place was given by the noble Baroness, Lady Young, who, at col. 1082 of the Official Report of 1st June, 1981, said:

"I should like to reaffirm … that the shortfall"—

she seems to assume that there will be one—

"will be made good for pensioners, as for other long-term beneficiaries … It is the intention that the provision will cover only this year's 1 per cent. overpayment and will not extend any further than that. So there is no question of this arising under this Bill at another time".

However, there is an inconsistency here, because the claw-back is provided for under subsection (3) of Section 1; but subsections (1) and (2) on any reasonable reading deal with uprating in general. There is no doubt about that in my mind.

There is I submit a danger that an uncompensated shortfall could take place under this Bill, for the Secretary of State is only obliged to uprate by the percentage by which those sums—that is, the benefits—would in his opinion—I repeat "opinion"—have to be increased in order to restore their value as at that date. That date is the date of the uprating order. But this opinion may be wrong, because he is going to make a judgment, probably in August, about what the rate of inflation will have been from November to November. If he is wrong, there is nothing here that I can see to oblige him to remedy his error.

Our first amendment therefore seeks simply to add the words in line 3 on page 2,

"and to compensate for any failure to restore their value at the previous review".

This is, after all, no more than the Government have undertaken to do. But Governments come and go, Ministers change, and this section applies on any reasonable interpretation to uprating in general and not only to the current year. Amendment No. 5, to which I would also speak briefly, simply makes the

same provision for contracted-out guaranteed minimum pensions, which are also covered by Section 125 of the principal Act.

There is another reason why we have tabled these amendments, and this is one of rather greater urgency. The noble Baroness stated in column 1081 that subsection (3) of Section 1 of the present Bill enables the Government to base the November 1981 uprating on the recalculated rates, and she then spoke of increasing those recalculated rates by 10 per cent. But the last available figures for the retail price index and for the tax and price index show that the RPI rose by 12 per cent. between April 1980 and April 1981, and by 6·6 per cent. between November 1980 and April 1981. The TPI rose by 15·7 per cent. and 9·24 per cent. over the corresponding period, owing in the latter case to the failure to increase the tax threshold in the last Budget. If we stick to the RHI, which rose by 6·6 per cent. in the first six months of the period we are immediately interested in, we get a very possible projection of 13 per cent. over the whole period.

But what happens if the Secretary of State comes along, in perfectly good faith of course, with his uprating order in, say, August, proposing 10 per cent., to use the noble Baroness's figure, or perhaps 11 per cent. or 12 per cent. if he is more realistic, but the final outturn is 13 per cent.? Will he come forward with a further supplementary order later on, or will the pensioners and others simply have to abide by his under-estimate until such time as he, or the Government, can find time for another Bill?

I am sorry if I have wearied your Lordships by expanding on this at some length, but it is an important matter. There are nearly 10 million pensioners, to say nothing of other long-term beneficiaries, waiting to hear what the Government have to say. As I said at Second Reading, this seesaw method of mid-term calculations is thoroughly unsatisfactory and ought to be reviewed. But in the meantime I am convinced that we must at least secure a statutory undertaking that any shortfall that may arise—and they are only too likely to arise under this system—will be made good. That is the purpose of these amendments.

I shall of course listen to what the noble Baroness has to say with the greatest of care, but I should like to repeat the words of my noble ally Lord Banks at Second Reading:

"if future over-estimates are to be dealt with in the same way, then we require cast iron assurances that under-estimates will be made good".—[Official Report, 1/6/81; col. 1069.]

I think I have demonstrated that the undertaking given in this Bill is less than cast iron. I beg to move.

3.44 p.m.

Amendment, by leave, withdrawn.

[ Amendments Nos. 4 and 5 not moved.]

3.54 p.m.

The noble Baroness said: Nobody would be happier than my noble friend and I if this amendment were carried, so saving the Committee a great deal of time and trouble in not having to proceed to the various subsequent amendments which we shall have to deal with in the sad event of this being defeated. I would remind your Lordships that subsection (3), which we propose to delete, is described in the Explanatory Memorandum as providing

"for the up-rating of sums under those sections in 1981 to be adjusted to take account of the fact that they were up-rated in 1980 by 1% more than would have been the case if the estimate of the increase in the general level of prices had been accurate".

I do not want to repeat what was said, I thought effectively, by several noble Lords on Second Reading, but our case is very much on the lines that the estimate of the increase in the general level of prices was not inaccurate; if anything, it was less than would have been needed if pensioners were to have had their income kept in line with general prices.

I remind the Committee that we are dealing in this nasty subsection with a very wide range of benefits covering literally millions of people. When it is maintained that pensioners received too much, we know, even on the basis of the Government's price index, that the amount overpaid was 25p per week. In suggesting that we abandon this mean little provision, we are only asking that people who are deemed to have received 25p a week too much shall be left undisturbed and in sonic enjoyment of that, not feeling that they are to be punished because of that "excess of generosity".

Our case rests largely on the fact that we do not accept that pensioners' expenses are accountable in terms of the general retail price index. I appreciate that there are separate indices for pensioners, and I shall refer to them briefly because when we have disposed of this amendment we shall not be dealing with the subsequent more detailed amendments. For instance, last year gas went up 32 per cent.; electricity, 27 per cent.; and coal between 23 and 28 per cent.

I remind the Committee that the pensioner price index is based on three years of expenditure—it has a three-year expenditure profile—so that it is always lagging behind. Therefore, price increases which tend to level out over three years might in any one particular year present the pensioner with a great shock. While we are working on a three-year basis for the pensioner price index, the Government are asking us to accept a one-year calculation in relation to the general price index, which is based on a much shorter period. In other words, an old person can get a sudden surge in expenses from one item—say, the price of paraffin suddenly going up—while that sudden surge may not appear for three years in an on-going situation, when it might take three years for the full effect to be felt in the figures.

That is why I say we are driving ourselves mad with statistics in that we are not comparing like with like. In some debates we are told about the retail price index, in the Explanatory Memorandum we are referred to general price levels and in other debates we are referred to the pensioner price index. I submit that all these statistics make no sense at all. The very fact that we have a separate index indicates that there is a general acceptance that the retail price index does not wholly apply to pensioners, although it appears that the Government are using it in relation to this subsection.

I have found the Family Expenditure Survey much more reliable. That makes it clear that a single pensioner spends 69·6 per cent. of his income on food, fuel and housing, compared with a single wage earner who expends 43·5 per cent. on those items. Thus, those items have particular relevance to the pensioner's budget. On the other hand, the pensioner price index does not include housing; so those who understand statistics and those who are misled enough to want to be guided by them are in further difficulty because the separate pensioner index leaves out housing altogether. I know that that is partly because of complications in rent and rate rebates, but I would point out that those do not apply only to pensioners. So those factors find their way into the retail price index, and in my unmathematical view the two are certainly not at all consistent.

The retail price index includes all kinds of goods that pensioners would never dream of buying. Pensioners are much less concerned with the increased cost of motor-cars than they are with the increased cost of paraffin, to quote that example again. We know that during the coming months they will still have to face rises in essential goods and services. That will be against a background of decreasing provision of local services, with fewer meal centres where they can get a cheap, subsidised meal and keep warm, while on the other hand home helps will become more expensive; and they will have to face all kinds of financial hardships. Then the Government come along and say that they have had 25p a week too much.

The best thing that we can do is to leave out subsection (3) altogether. I have spent time dealing in particular with pensioners, but as I stated at the beginning of my remarks, the subsection applies to all benefits under the national insurance scheme, and so there is felt not only hardship, but a sense of hardship. I cannot understand why so many noble Lords who are intelligent, kind, gentle people do not realise that what really matters is how people feel about it and that people at the bottom of the heap feel that this is a mean approach. I have not spoken to one old-age pensioner who thinks that he received too much in his pension in the last upgrading. If more of your Lordships did your own shopping, and met more of the people who are living on these miserable allowances—the fact that so many millions of them need to have supplementary benefits in order to live proves that they are miserable—you would not come to the Chamber and go through the Division lobby maintaining that 25p per week was an accidental extravagance and that this hard-faced Government are going to see that it does not happen again.

I must anticipate one argument that I am tired of hearing and this, too, concerns the question of cost. How a country spends its money depends on the principles which underlie its approach to society. I know that many noble Lords must be tired of our pointing out the imbalance in the distribution of resources under the present Government. No one on this side of the Committee is arguing against the fact that the country is in economic difficulties. What we are saying is that given that the cake is not very big, it simply ought to be divided differently. That is the answer to those who say, "Well, when we have a little more money we shall be a little nicer to the poor old people". We are asking those who are least able to carry the load to put up with the difficulties.

There is another question to which I should like an answer. We are talking as if we are giving this money away, as if we have to collect it from somewhere, and give it away, as though we had been holding many flag days. I should like to point out to the Committee that we are talking about national insurance benefits, benefits for which people have paid all their lives. I understand that there is a surplus of over £600 million this year in the national insurance fund and that this is the eigthth successive year that there has been a surplus in the fund. So it is quite irrelevant to talk about the poverty of the Government. The Government are making the situation much worse for the national exchequer, since supplementary benefits are financed from taxation. Forcing increasing numbers of people on to supplementary benefits means that a higher demand is made on taxation.

What are we talking about is people's own money, and it is against that background that I very much hope that the Committee will delete subsection (3), which gives power for this mean adjustment which in effect tells people who are among the most impoverished in the country that they have been enjoying an extravagance of 25p a week too much. I beg to move.

4.5 p.m.

4.14 p.m.

On Question, Whether shall be agreed to?

Their Lordships divided: Contents, 76; Not-Contents, 123.

Resolved in the negative, and amendment disagreed to accordingly.

4.23 p.m.

The noble Baroness said: I think it might be for the convenience of the Committee if, in moving Amendment No. 7, I were to refer briefly to Amendments Nos. 8, 9, 10, 11, 12 and 13. These amendments are consequential on the Division which has just taken place, which means that subsection (3) as a whole stays in the Bill, but by these amendments we are seeking to try to mitigate hardship in certain special cases. For instance, Amendment No. 8 refers to the case of invalidity benefit.

I feel sure that there will be a great deal of sympathy and understanding in the Committee for those who have to live on invalidity benefit, especially over the long term. Many of these people were very adversely affected by the earlier social security provision which virtually reduced their entitlement by 5 per cent., because benefit was reduced to 5 per cent. below what was the agreed rate of increase in prices. I understand and I will anticipate the noble Baroness making references to previous Governments; we have all had our difficulties, as she rightly said, in trying to meet the needs of those who have the greatest problems in coping with life. But these are people, many of them invalidity pensioners, who cannot qualify for the normal rate of supplementary benefit, some not for the long-term rate either, and some who are not even entitled to free prescriptions. There are all sorts of ways in which people get caught in this sort of trap.

I am told—and I take my figures from column 825 of the Hansard of another place for May 13th—that it would cost £15 million to release families from this sort of difficulty and to enable invalidity pensioners to enjoy a slightly better income. I feel that this is a very modest amendment. We are really asking for what is usually called the 5 per cent. abatement to be abandoned and for these people to qualify for a more generous payment. I think we are taking about between 90,000 and 100,000 people, but I am sure that

the noble Baroness has better ways of finding out statistics than I have, and therefore I hope very much that, in this case if not in any other, some sympathetic consideration will be given.

On Amendment No. 9, noble Lords and I myself have referred earlier to the case of retirement pensions. I am sure that if no stony heart has yet been moved, it still will not be moved. On Amendment No. 10, the reference is to Part IV of Schedule 4 to the Social Security Act 1975, which, if I may remind your Lordships, deals with rates of benefits, grants and increases for dependants. The other amendments are, I think, self-evident. We refer particularly to unemployment benefit as well as, once again, to invalidity benefit. There are subsequent amendments on some of these things which will be raised again so that I do not propose to detain the Committee for long, but I think that I must say a word about the unemployment situation, to which Amendment No. 12 refers. We ask that unemployment benefit should again be exempt from the reduction that was brought in on the 5 per cent. basis under previous decisions.

We are talking about a single man living at present on £20·65 a week, a couple on £33·40 and £1·25 for each child—and this at a time when earnings-related benefits are being reduced and when we know that they are going to be phased out. We know also—and there is a subsequent amendment and I touch on it briefly now—that in some cases of payment, people go on to a higher, longer-term rate after one year but that that does not happen in the case of the unemployed. That means that the full impact of unemployment and poverty are cumulative. We could approach this matter differently if we were in a situation where unemployment was going down. However, sadly it is not. That gives urgency to our debate.

We are talking about thousands of our fellow citizens and their children. I hope I may be forgiven for mentioning a local figure. In the borough of Camden, where I live—which is not usually looked on as one of the deprived parts of the country—I find from the employment exchange that at March 1981 we had 5,993 registered unemployed and 234 vacancies. Those are the figures that are the background to our consideration of an amendment like this. We are talking about thousands and thousands of people—and the number is increasing—who are having to face a lower standard of living, many of them after a long time out of work when poverty accumulates.

Among them are quite a number of disabled people who are anxious to get work and are very often those least able to get it in spite of efforts that the noble Baroness and her department have made with the full support from all sides of the Committee to encourage the employment of disabled people. It is a fact that we are now thinking about a situation where it seems inevitable that the number of unemployed, especially the older unemployed, will be increasing. We are not now talking about people changing their jobs and figures on the unemployment register for just a short while. There are many people in this country who are not going to get a job again. It is for the sake of many of the older unemployed that we are particularly anxious that the Committee should give consideration to this amendment.

I know that the Social Security Advisory Committee are at work. I hope we shall hear when we might have a report from them and what proposals are likely to be made. Again, we have come back to the matter of costs. I do not know how the Government have estimated the cost of this amendment, but we shall be told that it is a matter of financial stringency, and we shall have to say that there are people who can afford to be taxed more in order that others may get better benefits. There is again the question of social responsibility in sharing the assets of the nation.

I understand that at the beginning of January 1980 there were over 335,000 people who had been unemployed for over 52 weeks. The figure for January 1981 was over 430,000. This situation is becoming endemic in our society. We can no longer look on unemployment benefit as a payment just to tide people over a bad patch while they look for another job. We are having to face the problem of men and women and their families who are being asked to accept poverty and a lower standard of living which is totally unfair and which really ought to make the rest of us feel ashamed. This is where children are affected and where older people are affected. It is where all the good things of life are the first that have to go by the board. I hope that so far as the unemployed are concerned, as they have become the major problem of our time, the Government will give this amendment special consideration.

I have not spoken at length on the other amendments which have either been referred to before or are self-evident. In looking at our attempts to make some ameloriation in regard to subsection (3) I hope that the noble Baroness will be able to bear in mind our genuine concern for certain groups of people and that the Government will be able to share it. I beg to move.

4.35 p.m.

Amendment, by leave, withdrawn.

[ Amendments Nos. 8 to 13 not moved.]

4.50 p.m.

Page 3, line 24, at end insert—

"(6) The Secretary of State shall request the Social Security Advisory Committee to investigate and report on the inadequacy of the current level of child support provided through the child benefit, supplementary benefit and social security schemes and this report shall be laid before Parliament ".)

at end insert—

"(6) The Child Benefit Act 1975 shall be amended as follows—

(a) at the end of section 17(1) there shall be inserted the words "provided that no regulation to take effect on annual uprating shall have the effect of increasing the total child support by less than the figure for inflation adopted by the Secretary of State for the purposes of section 125 of the Social Security Act 1975."

(b) in section 17 there shall be added a new subsection—

"(1A) In subsection (1) above the words "total child support" shall mean the combined total of child benefit and any increase equal of benefit payable under section 41 and Schedule 4 Part IV to the Social Security Act 1975."").

The noble Lord said: I think it will be for the convenience of the Committee if Amendments Nos. 14 and 15 are taken together, because they deal with the same subject. They deal with support for the children of parents who are sick, unemployed, disabled or widowed. Before November 1980, such children received £5.70 per week, made up of £1.70 for the person who was sick or unemployed and £4 for the mother in child benefit. When the uprating of 16½ per cent. was made last November, the £5.70 should have been increased by approximately 95p. That would have taken the weekly payment from £5.70 to £6.65. Actually, the child benefit went up to £4.75, but the dependency addition was reduced to £1.25—an increase of 30p per week for each child.

For the majority of people, social security benefits will increase by 9 per cent. next November. For the parents of about 500,000 children, the child benefit will increase by 50p. National insurance payments for the sick, unemployed and industrially injured will be reduced from £1.25 to 80p per week. Taking into account the two increases between November 1979 and November 1981, the total increase for the child of someone who is sick or unemployed will have risen from £5.70 per week to £6.05—an increase of 35p over two years; well below the other benefit rates.

The cost of keeping a child has risen by more than 35p over two years, as those with children or grandchildren will realise. That is obvious, because of rising prices and so on, and I do not think anybody can doubt it. But there is an even more disturbing factor in this rather sorry picture, which affects not only the benefits that I am talking about, but others as well. I refer to the unfortunate possibility—and the somewhat clear possibility—of inflation rising to 12 or 13 per cent. in the final quarter of the year, whereas the social security benefit uprating is based on an estimate of 12 per cent.

A lot of people who are more experienced than I have already forecast this and, apart from the drop in the value of the pound—and, I admit, that the value can fluctuate—raw material costs over the past six months have been increasing at an annual rate of 23½ per cent., which, in turn, indicates an increase in retail prices in about nine months' time. What I want to ask, apart from the general question about child benefits, is: what will be the Government's action if the estimate of inflation proves to be too low in November next? This is a question which is very relevant and very much in the public mind at the moment. It calls for a clear-cut and honest answer from the Government.

I must be fair and say that I do not expect the two Ministers on the Government Front Bench to be in a position to answer the question now; that lies further ahead. I do not think it lies with the dead hand of the Treasury; it lies with the dead hand of the Prime Minister. In the old days, we used to refer to the dead hand of the Treasury, but, from information received from various sources, it looks to me as if it is the dead hand of the Prime Minister. I beg to move.

Amendments, by leave, withdrawn.

Clause I agreed to.

5.2 p.m.

(" Review

The Secretary of State shall review the relationship of the Retail Price Index (as at present constituted) to the needs of Social Security Beneficiaries and shall submit to Parliament a revised index based on such needs.").

The noble Lord said: In the absence of my noble colleague Lady Jeger, who is undertaking certain matters which would interest me if I had the time, I beg to move Amendment No. 16, which I hope is couched in parliamentary draftsman's terms. I drafted it myself. It is based on the remarks made by my noble friend Lady Jeger during the Second Reading debate. A great deal of argument is taking place—in fact, there has been argument this afternoon—on what indices shall be used for various purposes.

Without forcing the issue—we are not asking the Government to make sensational moves—we believe that there is a case for a general review. Having had this review, the Minister will in due course report to Parliament. The present situation on indices is mixed. Therefore I recommend the Committee to accept the amendment. I hope the Government will give me the shock of my life by doing so.

Amendment, by leave, withdrawn.

5.11 p.m.

(" Take up of Benefits

At the same time as the Secretary of State makes any statement under the provisions of section 1(1) he shall make or cause to be made in each House of Parliament a statement of the actions which he is taking and propose to take to acquaint persons eligible to claim benefits to which they are entitled, their right to claim and to encourage them to do so.").

The noble Lord said: This is quite an important new clause—I say that with the greatest of respect to myself! In fact, as the noble Baroness, Lady Young, or her advisers will have spotted, it is a modified version of an amendment that was moved in another place. In my candid opinion the one moved in another place asked for too much of the Government. It wanted statistics and all sorts of things which would take up much valuable time. I personally realised that it would be pointless to ask the Government to produce masses of statistics in the present situation.

Having said that, I would say that this simple clause deals with the issue of social security benefits, means-tested benefits where, except in the case of child benefit, the take-up of such benefits is not as high as is socially desirable. It means that a considerable number of people are not availing themselves of benefits to which they are fully entitled and which in fact they need. In the case of supplementary pensions it is estimated to be in the region of 700,000 people or more. In most cases the take-up is about 70 to 75 per cent. of those entitled. Some are just a shade lower.

I frankly admit that the situation is not new, as previous Governments have not tackled the problem effectively. Perhaps the most worrying instance is the failure to take up the attendance allowance, the benefit available for disabled people who need frequent or constant assistance from others. One could quote a number of other examples, but I shall not take the time of the Committee to do so. It is a situation which is worrying many voluntary bodies such as the National Association of Citizens' Advice Bureaux, the Disability Alliance and others, including—as I indicated in my Second Reading speech—the local authorities.

There is the distinct possibility that many more fully entitled people will not claim because of the fear generated by the Government's anti-scrounger campaign. I can understand the Government taking action against fraud but it is being carried out on a scale which may put people off. I say "may" because it is my opinion that it would do so, but there may he a difference of opinion on that. It may be arguable but it is my own experience as a former constituency MP that many people, honest and straightforward, are sensitive and fearful of authority when placed in the position of needing help.

With elderly people particularly, pride enters into the question. To them it is seeking charity or public assistance; to them their financial affairs are private and straitened circumstances produce an agony and a determination to manage and to do without. That is the position. I go right back to my youth, when I became one of the unemployed in the depression of the early years after the First World War. I was faced with going on to the dole and my pride would not let me, but my mother had to have some help. So I went to a company and got a job addressing in my room envelopes for sale catalogues, working day and night, with my mother keeping the fire burning in the grate to keep me warm, because it was in the winter. At the end of the week I had earned 18s.—which was one shilling less than the dole, but I had maintained my pride. Of course my mother had expended money on maintaining the fire. I only mentioned that, not in any soft way of my own experience, but because this is the attitude particularly in the minds of many elderly people, and it is worrying.

Leaflets and forms are not always simple. Some are all right, but not all elderly people can really understand what on earth it is all about. Some of them are just scared stiff. Many of us have had to help people to fill in such forms and to get advice. I readily accept that the remedy is not an easy one, and the new clause does not attempt to tie the Secretary of State down to exact detail. Consultations with voluntary bodies, local authorities and others would be worth while; and perhaps a little more help from the media, with more attention on the needy rather than on scroungers, which has been a tendency which has caused a great deal of public alarm and Government reaction, would be very much worth while. Without running the Government into a great deal of expenditure there is something here about which we could all get together and do something.

I am not introducing the point as such, but some people will say that they will not accept this simply because it will cost more money. But that is not the point at issue. I think the noble Baroness and her colleague, who are very kindly people at heart, will accept that there are a number of very worrying cases of people who have not taken up that to which they are entitled. Deal with the scroungers, yes, and deal with them ruthlessly. I have no argument about that and I would not disagree; but here is something where we can have a joint operation, whether we be in public service or volunteers in social organisations. We can do something about a social problem that exists and something which I am sure, in the way in which I have worded this amendment, the Government can accept. If the wording is wrong I will change it, but I do not think they will disagree with the principle; indeed, I shall be very surprised if they say otherwise. So I sincerely hope that this clause, which I am sure in general terms is acceptable to all sides of the Committee, will have some acceptance from the Government, and that is the very least I ask. I beg to move.

Amendment, by leave, withdrawn.

5.35 p.m.

(" Benefits for the Long-Term Unemployed

The Secretary of State shall request the Social Security Advisory Committee to report on the adequacy of current benefit provision for the long-term unemployed with special reference to the level and duration of unemployment benefit and the level of supplementary benefit paid to the long-term unemployed and this report shall be laid before Parliament.").

The noble Baroness said: I beg to move Amendment No. 18. This amendment is a very modest amendment—in fact, in my view it is far too modest considering the enormity of the subject. However, we thought that if we asked for something small we might get a crumb or two, as we have had such an unsuccessful afternoon. The amendment asks only that:

"The Secretary of State shall request the Social Security Advisory Committee to report on the adequacy of current benefit provision for the long-term unemployed with special reference to the level and duration of unemployment benefit and the level of supplementary benefit paid to the long-term unemployed".

We are quite well aware that the Social Security Advisory Committee must have a degree of independence. It was set up as a very experienced body to get on with its work and I am sure that we shall be told that it is, of course, already looking at this problem. However, I do not think that that goes far enough. At the end of the day, however, many experienced and wise committees we set up, it is Parliament which must take responsibility. We are only asking this afternoon that there shall be written into the Bill a request for a report to be made to Parliament on this subject.

I am encouraged in that request because, reading through the last report of the Supplementary Benefits Commission before it was dissolved, paragraph 3.20, on the subject of the long-term unemployed, states:

"We regard this discrimination against the unemployed and their families as wrong and its removal is our highest priority for the improvement of the supplementary benefits scheme".

I very much hope that the successors to the commission have taken that on board, as I am sure they will have done, and therefore I cannot see any possible objection to writing it into the Bill so that it is clearly a statutory responsibility to make such a report.

Why is it so important? Reference was made earlier this afternoon to the question of unemployment and I must emphasise again that it is the question of the long-term unemployed that concerns us so greviously. In January 1980 there were over 335,000 people who had been unemployed for over a year. In January this year the figure had increased to 430,000 people who had been out of work consistently for over a year. We have been worried often in your Lordships' House about the young unemployed. I find that 10 per cent. of the unemployed under 25 years have been out of work for over a year. We all know some of the sad social consequences of the long-term unemployment of young people. In the age group of 25 to 54 years, 20 per cent. of the unemployed have been without a job for over a year. Sadly, in the over 55 age group, 37 per cent. have been without a job for over a year.

When we look at those long periods of unemployment we must wonder why long-term benefits which apply to the disabled and other recipients of social security benefits, are not made available for the long-term unemployed who are specifically excluded from the long-term benefits which other beneficiaries are entitled to claim. Looking at the picture as a whole, with the phasing-out of earnings-related supplements, the position becomes very sad and worrying indeed.

There is the added hardship to these families of the less than generous uprating of children's additions. In my calculation, for an unemployed family with two children the changes that have already taken place have done them out of about £145 a year. That has happened against the background pressure on local authorities, the welfare services and the social serivces to cut their budgets, to make even less and less provision and to make less of what one might call "the social wage" available to those whose actual financial income has already suffered.

Asking only for a report means that we hope that the Government will come back when they have received this report—and may it be soon—and resolve to make some legislative changes that will increase the long-term benefits to include the unemployed. I am sure that everyone here is sympathetic and imaginative and can think of what it must mean to be out of work year in, year out. At first there is a shock; often there is some redundancy pay to help; sometimes there are savings to help. But as the year goes on, and the next year and the next year, the savings disappear and the redundancy money goes, and real poverty bites, and it bites at the whole family. It increases; it is a sort of geometric progression because things wear out and inflation means that they cost more to replace; the children get bigger and their clothes cost more. As they get older at school they want to join in more activities; they want to go on school journeys and they want more money in their pockets for their evening pastimes of sport and recreation, which we all agree that they need and deserve and which make such a difference in their lives.

We then reach a situation where the savings have gone and where, in fact, a man gets no more after he has been out of work for four or five years; how many years has a man of 55 to wait before there is any real improvement in his income to help him catch up on the fact that household equipment is wearing out and that life, in all sorts of ways, is wearing out for him? We would not expect a car to stay in good condition without any servicing, yet we seem to expect men and women to carry on without the wherewithal to keep their homes going and to keep their lives even in some modest state of enrichment and pleasure.

Earlier I gave some figures for the number of people who have been out of work for over a year. For those who were registered in April as being out of work for more than six months, which is long enough, especially for young people, the figure was over 1 million. I only remind your Lordships of the gravity of these figures because they back up our argument in asking for at least a report on what is happening to these people and to their children, how they are managing; and what are the adverse effects on their lives and the effects on other branches of the social services which might be forced into higher expenditure when the fabric of home life breaks down. It seems to me that we are always more ready to put a child into care because of some family breakdown than to spend a little more to prevent that family breakdown. All of us who do any work in this field know of many families where the stains of long-term unemployment have led to severe breakdowns either in health or in matrimonial happiness.

In discussing this with employers, I have found that the longer a man has been out of work, the less likely he is to get another job. The other day an employer told me that if two men applied for a job, with all things being equal, and one had been out of work for a year and the other for three months, he would always take the one who had only been out three months because he was afraid that the first man, with over a year sitting around at home, would have lost his work pattern and would have become demoralised. He said that he finds himself wondering, subconsciously, whether the fact that the chap could not get a job for over a year meant that he was not up to much. The employer admitted that this was totally unfair and totally subjective; but I am sure that if one employer thinks like that, others must have the same kind of reaction.

Even more important, the unemployed themselves feel like it. I have spoken to men of 55 and 56 years of age who do not believe that they will get another job. They go off in a dreary, sad way when there is a chance of an interview, with very little confidence and with even less hope. Therefore, there are many reasons why we cannot simply tackle long-term unemployment as a fact that a man has been out of work for a little longer than another man. It is a separate social problem which eats deep into family life and which causes all sorts of side effects which I do not believe happen in very short-term unemployment, but which certainly happen in areas of the country where people are increasingly feeling not only that they have to change their jobs, but that they will never get a job again.

Of course, we know that this is all tied up with other problems of economic recovery. Meanwhile we have the Social Security Advisory Committee at work, and all we are asking is that this part of their work should be put into statute so that it is laid on them as a duty. I am sure that this would be helpful to them, and it will at least be something that this Government can say they are doing for the long-term unemployed. For too long the unemployed have been used as a tool in this Government's economic policies. They have already paid grievously with loss of jobs and broken careers. Certainly the sort of help which they so badly need is little enough to ask, and I very much hope that, instead of putting a heavier load on them, the Government will accept this modest amendment and ask the Social Security Advisory Committee to report at the earliest possible time, and later on a regular basis. I beg to move.

Amendment, by leave, withdrawn.

5.55 p.m.

(" Long-term Benefits

Within six months of the passing of this Act the Secretary of State shall consider and report to Parliament whether persons who have been in receipt of a national insurance benefit for longer than 12 months and whose resources are less than their requirements as measured by the long-term supple- mentary benefit rates (including housing requirements and any additional requirements) should be deprived of entitlement to supplementary benefit by virtue of the fact that they do not qualify for supplementary benefit at the ordinary rate".)

The noble Lord said: I beg to move the new clause, Amendment No. 19 on the Marshalled List. This clause deals with what is generally known as the invalidity trap. The trap arises because many invalidity pensioners have an income which is too high for them to qualify for supplementary benefit at the ordinary rate, yet it falls below what they would receive were they eligible for supplementary benefit at the long-term rate. Because they do not qualify for the former they can never qualify for the latter, though their situation is a long-term one and their income is less than the minimum regarded by the Government as necessary for people in that situation.

The 5 per cent. abatement of invalidity benefit in 1980 reduced its value relative to the long-term rate of supplementary benefit, and will therefore have increased the number of people who were caught in the trap. Even before the 5 per cent. abatement the Government's estimate was that the people involved numbered about 100,000 individuals. The invalidity trap has many ramifications for those caught in it. The total financial help forgone in a particular case will depend on the particular circumstances, but it could be substantial. The long-term rate of supplementary benefit is intended to represent the minimum acceptable level of income for people who are unable to work and whose situation is a long-term one. Yet at least 100,000 chronically sick and disabled people who are in such a situation are receiving lessthan they would receive if they were eligible for the long-term rate.

There can be no justification for refusing to extend entitlement to the long-term rate of supplementary benefit for those who are now caught in the trap. The Government cannot justify the position. In fact, they do not attempt to, but have indicated that they will put it right when the economic situation permits. We have heard that so often. In other words, that it would cost too much for the moment. The £15 million involved is only 7½ per cent. of the £200 million saving resulting from Clause 1 of the Social Security Bill in a full year, and a mere £1 million more than the amount saved in a full year on invalidity benefit alone as a result of the 1 per cent. clawback.

That is the situation. The Government do not deny that the situation exists. They say that it will be put right when the economic situation permits. I would submit that this situation is one that does not permit of waiting for some future date if and when the economic situation allows it. I submit to the Committee that here is an outstanding moral case for the Government to think again and accept the amendment. I beg to move.

6.4 p.m.

On Question, Whether the said amendment (No. 19) shall be agreed to?

Their Lordships divided: Contents, 56; Not-Contents, 98.