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Mr. Hawkins : Hear, hear.

Mr. Meacher : I am glad again for support for that point. It is important. Perhaps the hon. Gentleman would like to have a word with his right hon. Friend. The Bill lamentably fails in that necessary requirement.

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We reject the Government's view that it is sufficient to urge employers and trustees as a matter of good practice to price-index pensions up to 5 per cent. a year. Because company pension schemes are in a healthy financial position and companies continue to enjoy contribution holidays--a position which could last several more years

Mr. Cran : Will the hon. Gentleman give way?

Mr. Meacher : I shall not give way now because I am making a point.

Mr. Cran rose --

Mr. Meacher : I shall give way in a moment.

We shall table amendments in Committee calling for the full inflation- proofing of occupational schemes. I say advisedly to the right hon. Gentleman--perhaps I anticipate the point that the hon. Member for Beverley (Mr. Cran) seeks to make--that it would be far better to offer companies an escape clause to cut pension payments in conditions of real economic crisis than to continue at a time of sustained profitability grossly to underpay pensioners on the grounds that occupational schemes cannot accept an open- ended commitment to inflation-proofed pensions.

For the same reasons we criticise the Bill because it does nothing to stop employers declaring unilateral contribution holidays for themselves while making their employees continue to make contributions from their pay. The British Aerospace scheme, for example, is in surplus to the tune of £300 million. Recently the employers declared a two-year contribution holiday for themselves, yet they continue to require their employees to contribute 6 per cent. from their pay.

Mr. Tim Smith : We do the same.

Mr. Meacher : I am not sure whether the hon. Gentleman is asking what is wrong with that.

Mr. Smith : I am not.

Mr. Meacher : I am glad that the hon. Gentleman is not. It is manifestly unjust that employees should have to contribute towards their deferred pay when employers do not.

The GKN scheme is in substantial surplus and a three-year contribution holiday was declared from 1988. Yet pensions in payment are being uprated only by 5 per cent., which is less than two thirds of the current rate of inflation. The Manufacturers Hanover Trust company scheme, a major banking scheme, has already had four years of contribution holidays which are expected to continue for another three to four years, yet pension rises are not indexed and increases are discretionary.

Mr. Cran : Does the hon. Gentleman recognise that the surpluses of a pension fund can be given away only once, yet the whole point of a pension scheme is to take obligations for liabilities for a long period? That being so, is he not oversimplifying the case and duping employees who happen to be members of a pension scheme by telling them that they can get something for nothing when they cannot?

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Mr. Meacher : The hon. Gentleman, who, before he came to the House, had a position with the CBI, seems to be a spokesman for the pensions industry. It would be helpful if the pensions industry, which has substantial and still growing funds, recognised its proper responsibility to those who made the contributions in the first place.

Mr. Newton : I am sorry to prolong this, but the hon. Gentleman made an important statement. If I understood him aright--I should be grateful if he would confirm whether I did--he said that he would prefer to impose by legislation fresh obligations on occupational pension schemes along the lines that he suggested, but at the same time make legal provision for the schemes not to meet those obligations if circumstances became difficult. If the hon. Gentleman did not say that, he certainly talked about conditions of economic crisis. I do not know how he would define them. If what he said had any meaning, I understood him to say that he would impose new obligations on schemes now because conditions look good--because of nearly 10 years of a good Government--and would give them powers to welsh on or reduce those obligations if conditions became difficult. I am not sure that that would be welcomed by occupational pensioners.

Mr. Meacher : The Secretary of State must explain how he can justify surpluses continuing at their current enormous level without full inflation -proofing being provided.

The Minister for Social Security (Mr. Nicholas Scott) : Answer the question.

Mr. Meacher : I am.

Mr. Scott : The hon. Gentleman is not.

Mr. Meacher : That is what I am proposing. I accept that there could be conditions of real economic crisis--I used those words advisedly--when in some cases it might be impossible for those schemes to meet their obligations. In that limited and marginal case I am prepared to accept that there may be an exception. The vast majority of schemes will not be in that position and they should be given proper standards. There should be a proper benchmark for their obligations. There is none now and there is none in the Bill. That is not fair or right.

Mr. Newton : I shall not seek to intervene again as I do not want to prolong the hon. Gentleman's speech unnecessarily. There will be a great deal of interest, however, in what he has said. When he speaks of conditions of economic crisis, does he mean a broad, generalised crisis affecting the economy or would his dispensation clause let out a particular pension fund that got into difficulties, which is a much more likely eventuality? Often such funds are connected with particular firms. What the hon. Gentleman is seeking to do is to encourage all sorts of hopes and to impose all sorts of commitments on funds to make additional payments at the moment, because things happen to be good, but those commitments would not be worth the paper they were written on as soon as things got less good. That is fundamentally irresponsible.

Mr. Meacher : The right hon. Gentleman has a nerve to say that what I am proposing, which is widely understood to be reasonable and perfectly viable, is something that occupational schemes somehow could not manage. He is

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simply not addressing himself to the size of the current surpluses, which, at £50 billion, represent one-ninth of the entire national income. Those surpluses are colossal. For the right hon. Gentleman to use weasel words about the inability of such schemes to meet those obligations shows a craven feebleness and an unwillingness to accept responsibility on behalf of employees.

Mr. Cran rose--

Ms. Primarolo rose--

Mr. Meacher : I shall not give way again to the hon. Member for Beverley, but I shall give way to my hon. Friend the Member for Bristol, South (Ms. Primarolo).

Ms. Dawn Primarolo (Bristol, South) : Perhaps we should turn my hon. Friend's comments round the other way so that the Minister understands them. I understand my hon. Friend to say that where a pension fund has a surplus it is unreasonable for the employer to have the option to suspend his contribution while compelling the employee to continue to make his. The employer, by suspending his contribution, is spending the surplus to his advantage now instead of paying out from that surplus in the future to the people who contributed to the scheme.

Mr. Meacher : My hon. Friend is right. This is a pipsqueak of a Bill as it allows employers and trustees to go on paying miserly increases in pensions, below the rate of inflation, when pension schemes are in massive surplus. Even then it allows employers-- Mr. Cran rose --

Mr. Meacher : I shall certainly not give way to the hon. Gentleman for a third time--he can make his own speech. I have answered his point at considerable length and if he had a better point to make, I might consider giving way again.

It is not acceptable to allow employers to go on making small increases to pensions, below the rate of inflation, when pension funds are in such enormous surplus. Even then the Bill allows employers and trustees to stop contributing to their funds without consultation. The Labour party believes that that is the opposite of good practice. We shall instead require occupational schemes to meet full inflation-proofing targets and so we shall place a ban on employers' or trustees' unilateral contribution holidays to ensure that they do so.

Mr. Hawkins : I agree with much of the hon. Gentleman's speech. Many funds have allowed employees who have retired in the past to be grossly ripped off by inflation. It is possible for everyone to be offered an index -linked pension and it is possible to invest in index-linked bonds.

Mr. Tim Smith : At what cost?

Mr. Hawkins : I do not care about the cost. I look forward to the day when everyone will be offered the choice of investing in an index- linked pension rather than taking up the absurd Mickey Mouse offers from insurance companies. Such offers speak of £65,000 at the age of 65, but one has no idea whether that £65,000 will be worth 4p or £1 million as that pension is not indexed for inflation. Everyone should have an index-linked pension.

Mr. Meacher : I am glad that at least one Conservative Member is knowledgeable enough and, with genuine

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respect to the hon. Gentleman, brave enough to make that intervention. He is absolutely right that index-linked bonds are one way in which to achieve the desired result.

If it is impossible for occupational pension schemes to manage inflation proofing--the minimum requirement of a good pension scheme--people should reconsider whether SERPS is a better system in terms of providing minimum guarantees in retirement. That system guarantees full inflation-proofing as well as many other important benefits, for example, allowing women to choose the best 20 years of their working lives as the basis for their pensions--at least that is how Labour left it.

The second major issue in the Bill concerns disability benefits. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) will be dealing with this matter in more detail on Wednesday in our Supply day debate. The Secretary of State said that the provisions for the disabled had been widely welcomed, but that must be another Government euphemism, meaning that the provisions have been widely attacked by the disability organisations. The over-trumpeting of the proposals is matched only by their modesty. After 10 years of waiting and six reviews from the Office of Population Censuses and Surveys, churning out more and more information, all the Government have brought forth is a mouse. The proposals were heralded as a comprehensive review, but they represent a narrow tinkering with existing provision without any radical reassessment. Despite overblown claims of substantial new money being available, we are talking about old recycled money, even without the cuts in the package that drain that money away.

Mr. Peter Thurnham (Bolton, North-East) : I am not sure when that 10 -year period began. If the hon. Gentleman is referring to the period since the Conservative party has been in government, payments to the disabled have increased at a far greater rate than they were ever increased under the previous Labour Government. What does the hon. Gentleman mean by a 10- year wait?

Mr. Meacher : I am rather surprised that the hon. Gentleman should seek to draw attention to this as it is embarrassing to the Government.

Ten years have elapsed since the Government made a commitment in 1979 to improve benefits for the disabled. Between 1979 and April 1989 there has been a cut in the value of almost all disability benefits--the disabled have been forced to wait 10 years for a mouse. First, the Government said that they needed to be sure that the economy could bear such benefit improvements. By 1984 they said that they were satisfied by the rate of economic growth, but they then said that they needed more information. They set up six OPCS studies, which have now reported, but, as a result, we have got a feeble set of proposals.

There is a huge hole in the middle of the Government's review as it omits the two thirds of disabled people who are elderly, including many of the severely disabled. The Government believe in targeting on those in greatest need, but obviously only as long as it is cheaper to do so ; and if it turns out to be more expensive, they ignore that need. As a result, the needs of seven out of every eight disabled people have been neglected by that so-called comprehensive review.

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The Bill proposes an age-related addition to the severe disablement allowance. Any increase in disability benefits is welcome, but the additions are small and, regrettably, the right hon. Gentleman has not followed the advice of his Social Security Advisory Committee to raise progressively the rates of SDA to the level of invalidity benefit. The new addition does nothing to remove the inherent discrimination in SDA against people who have never been able to pay national insurance contributions, particularly those disabled from birth. Worst of all, most disabled people on SDA are also on income support. The increase that they will receive in severe disablement allowance will simply be offset by an equivalent cut in income support. That is one of the many examples of recycling contained in the package.

The cost of the new benefit is estimated by the Government to be £50 million in 1992-93. But they also calculate that that will be offset by savings on other means-tested benefits for the disabled of £65 million in 1993-94. Therefore, even with this, the disabled will make a net loss.

The right hon. Gentleman's disability statement two weeks ago was more than an exercise in the mysteries of semantics than a guide to the Bill. He said then that the net extra cost of the package would be £300 million by 1993 and all the extra money was new. I can only assume that the right hon. Gentleman is into his Alice-in-Wonderland phase in which words mean what he says they mean. By any normal dictionary definition of new, none of the so- called extra money is new.

In his statement on 10 January the right hon. Gentleman told the House :

"The extra provision for the first three years has been included in the totals for my Department published in the Autumn Statement."-- [Official Report, 10 January 1990 ; Vol. 164, c. 943.]

In other words, it is within the existing budget.

Mr. Newton : I am trying to resist the temptation to intervene, but I cannot when the hon. Gentleman seeks to place on record points that are manifestly misleading. He must know that the Autumn Statement is the outcome of prolonged, sometimes difficult, discussions between Ministers and the Chief Secretary to the Treasury. The result of the discussions was an agreement between the Chief Secretary to the Treasury and me, endorsed by the Cabinet, to increase expenditure on long-term sickness and disability benefits to the extent embraced in the Autumn Statement. That does not mean that it is not new money, but that we did not advertise it to the world until the Autumn Statement was made. It will be clearer when the White Paper on public expenditure is published at the end of the month.

I cannot allow the hon. Gentleman to mislead the House and therefore, while I am on my feet, I shall explain that the hon. Gentleman was given an answer last Friday on the severe disablement allowance invalidity addition, in which it was made absolutely clear that the £50 million which I said will be spent is net of savings on income-related benefits. If he looks at the answer he was given, he will find that the gross expenditure is £115 million and the net expenditure is £50 million. No one is seeking to disguise the fact that there will be an offset. Equally, he should not disguise the fact that there is an increase in expenditure on severely disabled people.

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Mr. Meacher : The right hon. Gentleman seeks to make the point that because the expenditure was mentioned in the Autumn Statement--about which he had already issued a lengthy statement, press notice and departmental brief--when he announces it again, we should assume that when he says that it is new money it really is new money. However, it has already been announced. We have heard for the third time today about the content of the Autumn Statement. He repeated his announcement at the start of his statement on 10 January and repeated it again today--that is the third time. He is talking about exactly the same money which has already been announced. There is absolutely nothing new here.

If there is any genuinely new money, it will be swamped by three major cuts in disability benefit in the Bill. By far the most important is the abolition of the SERPS additional pension to invalidity pension, about which we have already had some exchanges. Disabled people have waited patiently for 10 years for the long-promised improvement in benefits. Frankly, the right hon. Gentleman should be ashamed that the centrepiece of his review is a massive cut which will save the Government £350 million by the end of the century. I tried to make this point earlier : it will save a great deal more because the Government's document, "The Way Ahead : Benefits for Disabled People" states that by 1998 the cost of the additional pension will still be £1.6 billion a year.

Will the right hon. Gentleman comment on the fact that one estimate shows that the eventual saving to the Government from the Bill will amount to no less than £3.5 billion cumulatively over future years, at the expense of disabed people? If that is the result of a review designed to improve benefits for one group in poverty, I only hope that the right hon. Gentleman will treat the other groups to a long period of benign neglect.

The Government's reasons for the destruction of this valuable benefit are instructive. Astonishingly, the right hon. Gentleman repeated them today without any apparent embarrassment. Paragraph 6.8 of "The Way Ahead : Benefits for Disabled People" states that the continuation of the additional pension

"would have been likely not only to inhibit the growth of occupational cover but also, through the constraints inevitably imposed on Government's ability to do more for those with no such entitlement, to have widened yet further the gap between those who have been able to work and those who have not."

In other words, if everyone cannot have it, no one shall have it. That is the classic argument of a Government who prefer to level down rather than up.

The Government's other pretext is no less contemptible. They say that the benefit will inhibit the growth of occupational schemes. There we have it : it is more important for the Government to promote private sector insurance than to leave in place good, existing benefits for disabled people.

The Government's explanation for getting rid of the reduced earnings allowance--another cut in the Bill--does not bear looking into either. They have said, and the right hon. Gentleman repeated it today, that it overlaps invalidity benefit. That is surely to misunderstand the purpose of industrial injuries benefits which are intended to be compensation benefits, not income maintenance benefits. I suspect that having ended 90 per cent. of industrial injuries entitlements, through the Fowler review

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of 1986, the Government have fastened on the pretended and small anomaly as an excuse to pave the way for the ending of industrial injuries benefits.

There is no coherent or comprehensive restructuring of benefits, as the right hon. Gentleman likes to claim, merely a rehash of existing provision, with small extensions, but enough camouflage for a substantial cost-cutting exercise. If only the organisations for the disabled had been consulted. However, it is no accident that they were not. The review was published on 10 January without any invitation to comment on its contents and complete with a timetable for its implementation. The very next day the Social Security Bill was published executing phase 1 of the proposals. To go from White Paper to Bill in one day, after a wait of 10 years, is simply to give the most insulting confirmation that the Government wish to avoid, at all costs, any input from the people most affected. It is a tragedy that this component of the Bill is such a huge missed opportunity. The present framework of disability benefits is a patchwork of disconnected, uneven and jumbled rights. It desperately needs an integrated structure that coherently combines cover for extra daily living costs with a flexible allowance according to either partial or total working capacity. Sadly, in the Bill there is no vision, no sense of measured steps towards a final objective, no sign of the comprehensive disability benefit which is urgently needed. I do not blame the Government for failing to bring forward such a ready-made benefit at one go. However, I roundly condemn them because, after 10 years in which they have not even uprated existing disability benefits in line with prices, let alone earnings, they have failed to show any signs of ever having any intention to move towards such an integrated benefits system. For that, we cannot forgive the Government.

On behalf of the Labour party I pledge that we shall introduce a new and comprehensive disability benefit which will provide assistance with the extra costs of disability matched to the degree of disability. It will also supply a guaranteed income, without a means test, for disabled people of working age who cannot obtain employment because of long-term illness or disability.

For those who can work, the cost element of our new benefit will not be means tested and will not be withdrawn if a person obtains work. When the earnings of those able to return to work are insufficient to meet their basic needs the new disability benefit will supplement their income. We want disabled people to participate in and make their fullest contribution to society, and we have the vision and the drive to bring that about. If the Tory Government will not bring it about, we shall.

The third and last main element of the Bill concerns the proposed new grants for home insulation and for advice on energy efficiency for low- income households. There was a gaping hole in the Secretary of State's comments on this matter, too. He did not tell us how large the grants would be ; what the total funds available will be ; how much of the £12 million that he mentioned will be merely transferred from other budgets ; and how much will be new money. Nor did he tell us whether the new money is once again Department-speak for no new net money, and merely a euphemism for clawback.

I warn the right hon. Gentleman that, early in the new post, he is already earning himself a dangerous reputation for laundering social security money, with sleight of hand and hidden juggling his specialities. On this occasion he

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has chosen selective silence to protect himself. He did not say a word about the fact that the Government's enforced switch in 1988 from community programme to employment training has caused the number of draughtproofing jobs carried out to plummet by 34 per cent. He did not say a word about the fact tht the Local Government and Housing Act 1989 abolished the 95 per cent. grant to local authorities for roof insulation and draughtproofing for low-income households ; and he said not a word about the fact that, with 5.5 million low-income households estimated to have no draughtproofing, it will take 45 years at the current rate of progress to provide them with this minimal protection. As most of those in such households are elderly, I suspect that not too many are likely to live to see the benefit--or is this another recycling device to reshuffle the costs on to the next world?

There is no overall theme to the Bill ; it is more like an exercise in filling holes in the dyke. The background to the Bill, about which the Secretary of State never breathed a word, is that Government policy is increasingly splitting that dyke open all over the place. It is ironic that this is called a Social Security Bill, given that the one recurring characteristic of Government policy in this area is the production of insecurity.

Nowhere is this more glaring than in pensions. The Government inherited SERPS, which had all the virtues of a first-class pension scheme. It offered very low administration costs, job mobility, comprehensive inflation-proofing and maximum security in old age. Nothing in the private sector can equal this combination of advantages.

The Government tried to abolish SERPS, and when they found that politically impossible, they hobbled it. Then they introduced personal pension schemes which are expensive to administer and which offer no security because, being money purchase schemes exposed to the vagaries of the stock market, investors have no idea of what benefits their contributions will eventually buy.

Then, to encourage people to take a flutter on their retirement, the Government offered a 2 per cent. bribe which has now cost a cumulative total of £1.5 billion, and then forced other national insurance contributors to pay for it. Despite this huge subsidy, a high proportion of the 3.5 million people who have gone on a personal pension gamble will end up with grossly inadequate pensions. It is sheer humbug for the right hon. Gentleman to claim that he is improving protection in pensions when every major act of the Government's pension policy has undermined the long-run financial security of millions of people in our country.

Insecurity is the hallmark of Government policy in other areas that are also conspicuous by their absence from the Bill. The Prime Minister likes to claim that hers is the party of the family, but how can 7 million mothers feel security about their budgeting when the Prime Minister has frozen child benefit for three years running so that it is now worth 14 per cent. less in real terms than in 1979? How can those on the lowest incomes feel security when the social fund is grossly underfunded by the Government and now exhibits refusal rates that top 60 per cent? How can young people obtain security of getting a job when the denial of all benefit rights has turned thousands of 16 and 17-year-olds into an itinerant army of cardboard -box outcasts, unable to get a job until they have a place to stay and unable to get a place to stay until they have income from a job?

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This is a patch-up-and-mend Bill which tackles none of the fundamental insecurities plaguing the lives of millions of our poorest citizens, many of them caused directly by the Government's policy. It is like a medical insurance policy that tidies up a few minor administrative anomalies but neglects to provide cover against all the major illnesses. That is why we shall reject the Bill's feeble ineffectiveness in the Lobbies tonight.

5.36 pm

Sir George Young (Ealing, Acton) : I support the reforms outlined in the Bill, which I know will be warmly welcomed by Conservative Members. The hon. Member for Dagenham (Mr. Gould) adopted a policy that was appropriate for a Labour Front-Bench spokesman last Thursday ; when repeatedly pressed for his policy on local government he chose to say nothing. Today, the hon. Member for Oldham, West (Mr. Meacher) adopted another policy, which was to come up with a commitment that I had never heard before on the future index -linking of pensions. When that policy and commitment are analysed, it may turn out that the hon. Member for Dagenham chose the right approach.

There are two sets of reforms in the Bill, one dealing with pensions, the other with the disabled. At the end of the Bill there are also some useful reforms which are basically tidying-up measures.

I greatly welcome the additional protection afforded by the pensions ombudsman. As responsibility for pensions shifts away from the public to the private sector, as the sums involved become much larger and as the whole subject becomes more complex it makes sense to institute the protection given by an ombudsman to those with pensions, especially as this has been tried and found successful in many other parts of society.

I noticed that the building societies ombudsman, who was not initially included in the Building Societies Bill but was added in Committee, was funded by the building societies. This Bill provides that the Secretary of State will pay for the pensions ombudsman. Why is one criterion applied to building societies and another to pensions?

Schedule 3 gives the Secretary of State power to help organisations such as the occupational pensions advisory service. I very much hope that this opportunity will be taken to give it more resources to strengthen its network throughout the country of advisers who give independent advice to people with pension problems.

As hon. Members who have received a briefing today from the Consumers Association will know, that body hopes that the ombudsman will publish his report. It has been helpful in other areas and I see no reason why such an obligation should not be placed on the pensions ombudsman. I hope that that suggestion will be added to the Bill in Committee.

I welcome the additional rights for early leavers. Of course, I understand that an employer will wish to use his pension fund to retain his staff and dissuade them from leaving. However, it seems that there is a countervailing national interest in job mobility. A healthy economy is a changing one. It has to respond to new demands and new technology, and it would be wrong if penalties for early leavers were to pull too hard in the opposite direction, as

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they do at the moment, and inhibit the essential job mobility that the economy needs. I understand the objections of the CBI, and I do not agree with them.

The Government's proposals are much more modest than those advanced by the Opposition. Against the background of most pension funds, the relatively modest extra insurance included in the Bill is such that a well-run pension fund should be able to take it in its stride. A growth rate of 5 per cent. seems a fairly modest target.

I welcome the change of approach by my right hon. Friend on small self- administered pension schemes. I never understood why it was proposed to prevent an SSAP investing in the firm's own freehold, when that might have been a secured loan, while allowing it to invest in somebody else's freehold without any security at all. The change of heart contained in a parliamentary answer before Christmas has been well received by small businesses for which the pension fund has often been a useful source of funds.

I welcome the pension changes in the Bill because they go with the grain of increased reliance on the private sector while underpinning that with useful extra insurances such as the ombudsman and the funding for independent organisations. One cannot ignore the disappointment expressed by many voluntary organisations about the levels of benefit for the disabled. However, one needs to distinguish between the levels of benefit and the new structure. Benefits can be increased. As my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) said in an intervention, the Government have an excellent record on increasing benefits, far better than that of their predecessors. I hope that the debate in Committee and in the House will concentrate on the structure of benefits rather than on the level. Good progress has been made, but we must still try to make the structure more streamlined, simplified, user-friendly and comprehensible.

I am returning to social security matters after a gap of some 10 years and I have been struck by their growing complexity. Hon. Members find the subject complex and so will the disabled. I hope that we can look again at the income of carers. Caring Costs, an organisation which I think has been in touch with most hon. Members, has outlined a number of improvements, many of which involve little structural change but involve increasing the level of benefits. Some of us serving on the Committee considering the National Health Service and Community Care Bill will want to see how the structure of benefits in this Bill interrelate with the implementation of Griffiths, which the Committee is about to discuss. It is important that the philosophy outlined in Griffiths is made reality by any social security reforms that are going through in parallel. I welcome the provisions in clause 1 for the terminally ill. I understand that they will help about 58,000 people. The explanatory memorandum shows that almost 275 more civil servants will be required to administer the provisions. That implies that each employee in the Department will process one case a day, which seems to be a low level of productivity. Perhaps I have misunderstood, but we need an explanation of why so many staff are needed.

The theme running through the reforms for the disabled, coupled with other announcements, seems to be that work is now a real option--more of an option than it was for the disabled. That is partly because the economy is picking up and there is a demand for labour, partly as

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a result of changes made by employers to make their premises more adaptable for the disabled, and partly as a result of changing expectations about the role of the disabled. The Bill seems to tidy up the interface between income in work for the disabled and benefit out of work, and it removes any perverse incentives not to seek employment.

My hon. Friend the Member for Broxbourne (Mrs. Roe) may deal with clause 10 in more detail because she had direct responsibility in the Department for administering the home insulation scheme. That scheme combines wholly worthwhile objectives, such as training the unemployed, saving energy and helping those on low incomes to keep warm. Local newspapers have pictured hon. Members posing with a roll of insulating material under one arm and a pensioner under the other before insulating the loft.

There has been some uncertainty about the future of the home insulation scheme and I am delighted to read that Neighbourhood Energy Action, whose work in this field I commend, has been involved. I welcome the fact that my right hon. Friend the Secretary of State proposes to consult before finalising the scheme, as was demanded of him by the hon. Member for Oldham, West. I hope that as soon as the consultation is over, we can put that type of scheme on a firm footing because it has been an outstanding success.

The reforms outlined in the Bill are balanced, realistic, prudent and carefully targeted and I have no hesitation in commending them to the House.

5.45 pm

Mr. Jack Ashley (Stoke-on-Trent, South) : I intend to touch on some of the points of the hon. Member for Ealing, Acton (Sir G. Young), to whom the House always listens with great interest. The Secretary of State is one of the most respected members of the Government, but his Bill lets disabled people down badly. The best way to judge the proposals is from the reaction of disabled people themselves and, of course, from the reactions of organisations for the disabled. They are furious about the provisions in the Bill and feel insulted. I do not know whether the Secretary of State saw Professor Townsend's letter in today's issue of The Independent. It is a fine letter by a great authority on disability. It is careful, authentic, logical and well reasoned. Writing on behalf of the Disability Alliance, Professor Townsend speaks for many millions of disabled people. I am glad to see that the Minister has the letter. Disabled people have waited patiently--too patiently--for the implementation of the 1979 Conservative party promise of a coherent disability income. All that has emerged are these pathetic proposals which will help 850,000 disabled people out of a total of 6.5 million identified by the Office of Population Censuses and Surveys. The Bill will help only 13.5 per cent. of the disabled population. In addition to those disabled people there are 6 million carers. They were mentioned by the hon. Member for Ealing, Acton and identified in a general household survey in 1985.

The proposals will cost £300 million, and that money has been filched from other parts of the benefit system. The Minister knows that. The money will come largely from child benefit and from industrial benefits. My hon. Friend the Member for Barnsley, West and Penistone (Mr.

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McKay) was right to complain about hitting industrial benefits. When the Secretary of State was originally making his statement, I put a point to him and I make no apology for repeating it. The £300 million to help disabled people is minuscule compared with the £23 billion given in tax cuts to top earners. I know that the Secretary of State's Department is not responsible for tax matters, but the Government as a whole have given that disproportionate increase to top earners and only £300 million to the disabled. That means that disabled people are denied the benefits of economic growth. In his foreword to the booklet "The Way Ahead" which, in many ways, is the foundation of the Bill, the Minister of State said that attitudes towards disabled people are changing. He was right. I welcome that, and I know that he does, too. But the attitudes of disabled people are also changing. Disabled people will no longer passively accept such shabby treatment by the Government, and I believe that disabled people are shabbily treated. They are not asking for luxury ; they are not even asking for compensation for their disablement. All that they want is an equal chance to participate in society and a reasonable amount of help from the Government.

In addition to their disability, the biggest burden that disabled people have to bear is that of special costs. I am dismayed that the Secretary of State has not provided for adequate help with extra costs. The Bill could have provided him with a marvellous opportunity to do something about it. That help has been the demand of disabled people since I entered the House in 1956, when Megan du Boisson began campaigning with the Disablement Income Group. That marvellous, fragile, disabled woman, who was a great campaigner, explained then that disabled people needed provision to help them with those extra costs.

What are the extra costs? What does a severely disabled man or woman require? Special heating is imperative. Special diet is vital. Laundry needs to be done. Severely disabled people cannot get out to shop around and shop economically. Many disabled people need unprescribed medication. In addition to those problems, they face the difficulty that they cannot save money by undertaking do-it-yourself repairs and so on. All those items add to the costs borne by disabled people, and none of them is covered by the Bill. That is a failure on the Government's part.

The needs of severely disabled people far exceed those documented by the Office of Population Censuses and Surveys. It would appear from the DIG's survey that the costs of some disabled people are eight times higher than those documented by the OPCS. The Minister is looking somewhat askance at that estimate, but it is the estimate that I prefer. The DIG survey said that many of the disabled people interviewed had described their financial position as "just scraping by" or "permanently in debt". Many severely disabled people are suffering in great debt or living on the margins of poverty as well as bearing the burden of their extra costs. They need very generous provision from the Government. All severely disabled people need that extra help, and they have simply not been given it. I hope that the Secretary of State can be persuaded to think again as the Bill proceeds through the House.

I echo the point made by the hon. and respected Member for Ealing, Acton. The question of the cost of

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