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Social Security

7.14 pm

The Minister for Social Security (Mr. Nicholas Scott) : I beg to move,

That the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990, which were laid before this House on 18th January, be approved.

Madam Deputy Speaker (Miss Betty Boothroyd) : It will be for the convenience of the House to debate this motion together with the following motions :

That the draft Social Security (Recoupment) Regulations 1990, which were laid before this House on 25th January, be approved. That an humble Address be presented to Her Majesty, praying that the Income Support (Transitional) Amendment No. 2 Regulations 1989 (S.I., 1989, No. 2340), dated 12th December 1989, a copy of which was laid before this House on 13th December, be annulled.

That an humble Address be presented to Her Majesty, praying that the Social Fund Cold Weather Payments (General) Amendment Regulations 1989 (S.I., 1989, No. 2388), dated 19th December 1989, a copy of which was laid before this House on 19th December, be annulled. That an humble Address be presented to Her Majesty, praying that the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 (S.I., 1990, No. 73), dated 22nd January 1990, a copy of which was laid before this House on 23rd January, be annulled.

Mr. Scott : The House has before it two affirmative instruments--the draft Social Security (Recoupment) Regulations 1990 and the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990. There are also three negative instruments : the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990, the Social Fund Cold Weather Payments (General) Amendment Regulations 1989 and the Income Support (Transitional) Amendment No. 2 Regulations 1989. I shall deal first with the recoupment regulations. These stem from section 22 and schedule 4 of the Social Security Act 1989. That sets out the scheme by which the compensation paid for personal injury or disease will be reduced by an amount equivalent to benefit paid in respect of the same injury or disease. It will apply to compensation payments made from 3 September this year for injuries or diseases which occur on or after 1 January this year. The recovery scheme will replace the present offsetting rules which have grown up over the past 40 years and which I think were regarded by most commentators as ripe for reform.

Broadly speaking, at present either one half or the whole of benefits paid over five years, or longer in some cases, is deducted from the compensation payment and used to reduce the compensator's liability to compensate the injured person. Therefore, in effect state benefits have been subsidising compensation liability. The new legislation is based on two fundamental principles--that compensation should not be subsidised in this way but that compensators should meet their full liability and, secondly, that the injured person should not receive more from two sources than he could have received from one. The scheme provides that the compensation payment will be reduced by payment of any of the benefits listed in regulation 2 of the draft regulations which have been paid for the same injury or disease. The deduction

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will be in respect only of what has been paid up to the date when the compensation claim is finally settled or five years if that is earlier.

Some 80 per cent. of claims are settled within two and a half years and we expect that the majority of injured people will see no difference whatever or may get more than under the existing rules. The difference will be that the amount formerly retained by the compensator, usually an insurance company, will in future be repaid to the Department. I emphasise that we are not taking away benefit entitlement any more than the current offsetting provisions do. It is the compensation payment that is reduced in either case.

The regulations are affirmative because of the list of benefits and the lower limit of compensation above which recovery will apply. Some hon. Members may remember our discussions last year in Committee, when I set out what the relevant benefits would be. They are listed in regulation 2. They are broadly the same range of benefits to which offsetting currently applies, and are those which the victim of an injury or disease may claim in respect of incapacity, disability or inability to work.

I shall now deal with the small payment limit in regulation 3. The level of £2,500 was announced on 21 December in reply to a question by my hon. Friend the Member for Hereford (Mr. Shepherd). The limit results from a recommendation to us by Touche Ross that in 1987 about 36 per cent. of settlements were at £1,500 or below, and represented about £2 million-worth of benefits. We accepted then that it would make sense to exclude small payments to avoid the paperwork with which insurers and ourselves would have to deal for a relatively modest amount of benefit revenue.

We provided that these small payments would continue to be subject to the existing system, which is 50 per cent. offsetting over five years. That serves a dual purpose. It ensures that injured people are treated in roughly the same way as they are now with some reduction in compensation, and provides some relief to insurance companies in the additional costs that they incur as a result of the new scheme in general. The £2,500 figure is a 60 per cent. increase on the original £1,500 and we estimate that it will obviate the need to deal with about 37 per cent. of all settlements. At the same time, insurers will retain about £2 million to offset their costs.

The other regulations are largely administrative details which have been worked out by officials in consultation with the private sector, whose co- operation we greatly appreciated. We have tried to place the minimum burden on them, to take their advice very carefully, and to take account of the procedures that are used already in the insurance industry.

I turn now to the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990. The House will recall that last October the Government removed the pensioners' earnings rule. I think that that step was widely welcomed. As a result of that decision, these regulations, which I commend to the House as wholly beneficial, help to clarify the likely entitlement to reduced earnings allowance of people who either are approaching or are over pensionable age. Reduced earnings allowance is payable when earnings are lost as a result of an industrial accident or disease, and since April 1989, when a person reaches pensionable age and retires from regular employment, reduced earnings allowance is

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replaced by retirement allowance. That is payable at 25 per cent. of the rate of the reduced earnings allowance paid at the date of retirement.

Since October 1989, when the abolition of the pensioners' earnings rule took place, those who continue to work past normal pensionable age, and indeed those who previously retired and then decided to return to regular employment, have been able to retain or regain REA. However, regulations are needed to define "regular employment" for the purposes of these entitlements. I believe that the regulations themselves prescribe quite generously the condition of being in regular employment.

Basically, when pension age is imminent, or when someone has retired and decides to return to regular employment and wishes to claim reduced earnings allowance, the adjudication officer will have to be satisfied that the person works, on average, 10 hours a week over a five-week period in order to qualify. Anybody getting reduced earnings allowance while incapable of work, or while unemployed as a result of industrial injury, will be treated as being in regular employment. These regulations are wholly beneficial, and I commend them to the House.

I want to turn now to the instruments that are subject to negative resolution. Regulation 13 of the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 has been around for some time. I see at least one Opposition Member poised on the edge of his seat as I come to this matter. Originally the regulations were to have been laid at the end of October, but, following representations from some Opposition Members, I withdrew them temporarily to give time for further consideration and, in practice, to provide time for the possible revocation of the regulations to be publicised.

A very large number of applications under this regulation have been received by the Department in the intervening period. I hope that, whatever complaints hon. Members may have about the ultimate revocation, they will recognise that I acted in a way that was helpful, both in practice and in theory.

Dr. Norman A. Godman (Greenock and Port Glasgow) : I am obliged to the Minister for showing his usual courtesy in giving way. May I ask him to confirm that any letter concerning a backdated claim for disablement benefit, no matter how rudimentary, will be accepted by officers of the Department of Social Services up to closure of the Department's offices on Monday next? Can he confirm that people living in areas remote from DSS offices will also have their letters of application for such benefits considered if those letters are posted before the evening of next Monday?

Mr. Scott : I can agree with the hon. Gentleman's first proposition. I shall ask my hon. Friend the Parliamentary Under-Secretary of State, who will reply to the debate, to clarify whether the latter proposition can be acceded to. The hon. Gentleman will no doubt accept that in this area, I have tried to be as helpful as possible. Perhaps I should clear up one possible misapprehension. It is not true that from the relevant date there will be no further applications

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under regulation 13. I think that the hon. Gentleman understands that, but it has been suggested that, somehow, the whole operation is being revoked.

The position is simply that any applications received after that date will be treated under the new rules that were introduced in 1986, rather than under the previous rules. Broadly, those cases where it is judged that less than 14 per cent. disability arises from the injury or disease will not be allowed, whereas those in which it is judged that the disability is over 14 per cent. will be allowed. I think that that reflects the intention that help should be concentrated on those who need it.

As I have indicated, regulation 13 was introduced on 1 October 1986 as a transitional measure to help people who suffered an industrial accident or the onset of a prescribed industrial disease before 1 October, but did not claim disablement benefit until after that date. The intention was quite clear : that those people incapable, by physical or mental disability, to make their claims before 1 October 1986 should be safeguarded. But a tribunal of commissioners widened the scope of the intention by asserting that "incapable" could encompass justifiable ignorance that a claim to disablement benefit could be made. But since that commissioners' decision became known--and I suspended the earlier amending regulation at the end of October--a very substantial number of claims have been made.

Mr. Eddie Loyden (Liverpool, Garston) : Does the Minister recognise that, in Merseyside alone, about 5,000 applications were made during the period of the relaxation? Does he agree that 14 per cent., which is the cut -off point, represents a very high proportion of disability, not only in this field but generally? Will he take that into account when he is considering the whole question of the cut-off point for industrial benefit?

Mr. Scott : I cannot give an undertaking to reconsider the 14 per cent. cut-off point. This was a sensible rationalisation of the system introduced in 1986, and, four years later, it would take an awful lot to persuade me to reconsider it. If the hon. Gentleman wants to make any representations we shall take account of them, but I do not think that I could consider going in the opposite direction. Of course, the decision was made before I became a Minister in this Department, but I have considered it carefully in the context of my discussions with hon. Members who came to see me, and I certainly do not think that there is a case for resiling from it. It is now about three years since the transitional regulation came into force, and it is about time we revoked it.

I want to turn now to the Social Fund Cold Weather Payments (General) Amendment Regulations 1989. The main purpose of the regulations, which I hope will be welcomed, is to enable elderly people who are receiving income support to qualify for cold weather payments whilst retaining up to £1,000 of their savings. The capital limit is increased from £500, with effect from 1 January 1990. This is the increase in the amount of capital to be disregarded that was announced by my right hon. Friend the Secretary of State on 25 October. It will apply to help from the rest of the social fund for the elderly, except crisis loans, from April this year.

These regulations apply to the cold weather payments and are operable from 1 January. This set of regulations will enable more elderly people to obtain help with the

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extra cost of heating their homes at times of very cold weather. In addition, the regulations put it beyond doubt that a partner's capital is to be treated as the claimant's, as is the practice throughout the social fund, as well as in respect of income support. There are minor amendments to the description of areas linked to certain weather stations necessitated by the closure of Oakhampton station, and to rectify defects that the Joint Committee on Statutory Instruments identified in the original set of regulations. I am slightly surprised that Opposition Members should be seeking to have the Income Support (Transitional) Amendment No. 2 Regulations 1989 annulled. These regulations are wholly beneficial. It may be that hon. Members, simply want the opportunity to have a canter round the course, rather than that they seriously want the regulations to be annulled.

Before outlining the impovement, and the reason for it, I should like to remind the House of the transitional protection arrangements. I think that all hon. Members are well aware of the fact that we reformed all the income -related benefits--income support, family credit, and housing benefit--in April 1988. Also, of course, community charge rebates have been introduced since then. Our aim, in reforming the system, is to provide so far as possible, a sound common basis for all the benefits affected.

To do this, we had to get rid of the complexities of the old supplementary benefit schemes, such as additional requirements, which had grown up piecemeal since the end of the second world war, and the introduction of national assistance, as it was called then, in 1948. That was no easy task. We achieved our aim through a modern system of personal allowances and premiums, which has targeted help more effectively on those in greatest need. Inevitably, with such a major change in approach, some people fared better than others. Therefore, we introduced transitional protection to ensure that such claimants did not suffer a drop in the cash that they had coming into their households.

Our declared intention was to provide a temporary cushion at the point of change, which deflates as claimants' new entitlement catches up with the old one, or their circumstances change. All this was spelt out in the White Paper on the reform of social security as long ago as 1985. Nevertheless, we have made some special exceptions to the general rule for the most vulnerable. For example, we recognised the exceptional needs of severely disabled people in two ways. First, we provided special transitional protection for those who had to pay high charges for domestic assistance. This special protection has been, and is being, increased in line with inflation each year. Secondly, we ensured that increases in benefit arising from spells in certain types of respite care do not reduce protection either. The amendment regulations before the House further demonstrates our willingness to respond to difficult situations. By these regulations, we shall be helping families with children in the care of the local authority. Hon. Members will be aware that such children very often return home for weekend leave or their holidays, and we should all want to encourage this continued link with family life.

Mr. Patrick Thompson (Norwich, North) : Will my right hon. Friend spell out--if he cannot do so now, perhaps my

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hon. Friend the Under-Secretary will do it later--the significance of the eight week period in the amendment regulations and what would happen to a family if a child returned from care and then remained at home and would no longer qualify for this relief?

Mr. Scott : The object of these amendments is not to affect what would happen if a child returned to the family home for a long period and then had to be taken back into care. It is to take account of a child going home for a weekend or being taken away for a holiday, which is still the proper subject of the transitional protection arrangements. I want to ensure that it is possible for children to go back to their own homes or to go on holiday for short periods, but not to undermine the fundamental principles. I accept that at the moment such families could lose transitional protection, which is unfair and could discourage families from having children on home leave. In these regulations, we have taken steps, which I hope that the House will applaud, to remove that disincentive.

7.33 pm

Ms. Clare Short (Birmingham, Ladywood) : We are discussing a batch of social security regulations that are part of the Government's ever continuing programme to redistribute income from those with least to those with more. I have quoted the figures to the House before, but I intend to continue to do so until every hon. Member and, I hope, many more people outside understand what the Government have been doing. I hope also to correct the false impression given by the Minister for Social Security in his winding-up speech in the previous debate. John Hills has written a book called "Changing Tax : How the Tax System Works and How to Change it" in which he looks at the system over the past 10 years. If we take the old tax and benefit system and see where it would be if everything had been uprated in line with economic growth and compare it with what we have now, we find that those in the bottom 60 per cent. of the income distribution have lost, while those in the top 30 per cent., especially in the top 10 per cent., have gained. The losses to those in the bottom 50 per cent. average out at nearly £8.50 per family. Anyone in that category who feels hard up should be made aware that it is because the Government have taken £8.50 from him.

On the other hand, the top 10 per cent. have gained nearly £40 per family. Overall, those in the bottom half of the population have lost £6.6 billion, of which £5.6 billion has gone to those in the top 10 per cent. Indeed, £4.8 billion has gone to those in the top 5 per cent. That is the reality, and it is important to keep pointing out that reality so that we do not have speeches from those on the Government Benches who pretend to care, who pretend to be concerned about the groups in our society who find it difficult to make ends meet, and who pretend that social conditions are not much more unequal than they have been for a long time.

The Minister admitted as much a moment ago. He said that he thought that greater inequality meant greater economic growth. It is funny that the Government are boasting about economic growth when the economy is in such serious difficulties, with high inflation and a dreadful balance of payments, and when we are heading into a recession, as everybody understands. What the Minister was saying was that homeless young people on the streets

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and pensioners who have managed for years but now find it difficult, produce economic growth. That is morally unacceptable and economically untrue.

Mr. Michael Jack (Fylde) : I have listened carefully to the hon. Lady's line of argument. Is not the greatest scourge to all social security benefits the robber baron--inflation? Will she comment about the effects of inflation during the last Labour Government on the value of a whole range of benefits?

Ms. Short : It is interesting that Tory Members want to draw attention to inflation. The incompetence of the previous Chancellor--now happily gone and being paid far too much elsewhere--led to a big growth in inflation. Compared with the average in Europe, ours is a poor performance. We have to compare the performance of the last Labour Government with the OECD average for inflation, when inflation was high across the world because of the effects of American spending in the Vietnam war.

Inflation is a serious problem, which erodes the value of benefits if they are not updated. It is serious because the Government have used it to erode the value of the income of many people. It is an example of the Government's failure in economic policy and the failure of their policy of using inequality to create economic growth. Instead of producing economic growth, it has produced more and more inequality.

This weekend I was approached in my advice bureau by two 17-year-old girls, both of whom were working and both of whom were homeless. I have not had that experience before, but I am having difficulty in helping them because the Government's benefit changes have resulted in the closure of many hostels that used to provide for such people. I was also approached by two young mothers--competent and able women--who cannot manage to buy enough food for their children and heat their hard-to-heat houses.

I was approached by a number of pensioners who told me--I have had this experience time and again--"I can't understand it, Clare. I've managed for years and now I can't manage. Surely there is something wrong with my benefits as I don't seem to be able to pay all my bills and find the money I need." That is the result of the Government deliberately cutting the value of the state pension and making poorer those who are dependent on that state pension.

We are continuing that process tonight in this the 15th richest country. It is unforgivable and uncivilised that so many people are having such a struggle every week to live decently. The regulations are more bad news for those who are sick or cold or have been injured at work. They are part of the continuing erosion of civilised standards.

I shall deal with the instruments in the order that they are set out on the Order Paper. The first needs little debate and is not contentious. As I understand it, the Government are correcting the law to reflect current practice, as there is a loophole in the law, to allow somebody between the ages of 60 and 65 in regular employment to retain reduced earnings allowance. We support that, but we should note that the Government have recently announced that they are to abolish reduced

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earnings allowance for all new claimants, so although there is a tiny bit of generosity here, they are planning a big dollop of cuts in incomes a little later.

The draft Social Security (Recoupment) Regulations 1990 are designed to implement the provisions of the Social Security Act 1989 to take back from anyone who has received compensation for an accident or injury at work up to 100 per cent. of that compensation. Since 1948, the Government have had power to take back up to 50 per cent. of such compensation.

Mr. Scott : That is not true. They can take back 50 per cent. of some benefits but up to 100 per cent. of others. A patchwork arrangement has been built up over the years. We are seeking to have a common rule.

Ms. Short : I think the Minister misguides the House when he suggests that the Government are not increasing the proportion of compensation that they can take back. What they propose is a contentious move, and those who served in Committee on the 1989 Act recall that the Government were honest enough to make it clear that everyone they had consulted about the change was opposed to it. The consequence of the change is that there will be further delays for victims of accidents and industrial injuries receiving compensation. Money will be clawed back from compensation given for things other than loss of income--for pain, hurt and suffering--in lieu of benefits paid by the state to make up for loss of income. The regulations implement that unfair and unpopular move. The Government are cutting benefit payments at the expense of those who have suffered serious accidents or injuries at work.

Mr. Scott : It is not true to say that what is proposed will damage the interests of those who have been compensated. What we are doing at the moment is, in effect, allowing insurance companies to reduce the amount of money that they pay to claimants because of the benefits that they are being paid. We are anxious to make sure that the claimant will not suffer and that those who accept the contract for insurance should pay the full amount of money and not shift some of that burden on to the state. That is the principle behind it.

Ms. Short : My understanding is different from that of the Minister's and I shall be grateful if the right hon. Gentleman will tell me if I am wrong. He and I served on the Committee which considered the relevent measure. The Government are taking power to take back money--to make up for income paid out in state benefit by way of basic family income credit, unemployment benefit, income support or whatever the case might be- -from compensation paid, even if part of the compensation is given not for loss of income but for pain, hurt or suffering. We, and most people, believe that it is wrong for the Government to take power to do that, and that is one of the major reasons why we are objecting to the regulations.

The Minister is right to say that we do not object to the Income Support (Transitional) Amdt. No. 2 Regulations 1989. We accept that it is a good idea that families who have had children taken into care should have those children back to stay. I agree with the hon. Member for Norwich, North (Mr. Thompson) that it is sad that they

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can have them for only up to eight weeks and that, should they have them for longer than that, they will lose their transitional protection.

It is shocking that special exemption must be made in such a case. The whole provision for transitional protection mislead the public and hid the vicious cuts that were introduced under the last re-organisation of social security benefits. The truth is that the Government could not bear the idea of individuals suddenly seeing a massive cut in their benefits. They knew that such awareness would be deeply unpopular and would make people angry.

So while they said that nobody would lose in cash, they knew that, with the passage of time, inflation would erode the value of the transitional protection and that people would become poorer. That is happening and that is why many pensioners are hurting, for with the passage of time the value of the transitional protection has diminished, their incomes are lower and they are finding it difficult to manage.

Mr. Patrick Thompson : The hon. Lady has failed to explain why the Opposition are seeking to annul the regulations which will benefit families by up to £10 a week.

Ms. Short : Had the hon. Gentleman been listening to the Minister, he would have heard the answer to that question. The right hon. Gentleman said that he thought it unlikely that we would oppose the regulations, but appreciated that we wished to discuss the question of transitional arrangements and to criticise the fact that such provision was necessary. I am doing that now, and the hon. Gentleman will note later the way in which we vote on this issue. The regulations themselves are not objectionable, but the need for them reveals an objectionable feature in the way in which the Government made provision for transitional protection, when they were cutting benefits.

The Social Fund Cold Weather Payments (General) Amendment Regulations 1989 slightly modify a wholly unacceptable scheme of providing help to people on very low incomes in times of extremely cold weather. The Minister explained that they allowed for a capital limit of £1,000 instead of £500. In the past, some poor pensioners who had saved more than £500 for their funerals could not apply for help, to the tune of £5 a week, when it was severely cold in their areas.

We need to set the proposed improvement in the context of what has been happening in help for heating costs to people on low incomes. The organisation Neighbourhood Energy Action has a fine record of work in this sphere. It points out that the figure of £5 a week has remained at the same level since its introduction at the end of 1986. So inflation has been eroding the value of that payment to those who are poor and who need extra help because the weather is severely cold.

Neighbourhood Energy Action also points out that the system of payment is wrong. It claims that the payment should be made automatically to all income support claimants, which would obviate the need for people to make individual claims and would avoid money being wasted on advertising campaigns and so on. It would mean that women such as the two who came to my advice bureau, who live in bad housing that is hard to heat, would receive some help, whereas at present they receive none.

Before April 1988, supplementary benefit claimants received more than £400 million a year by way of

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additional payments for heating. That was in addition to severe weather payments. That £400 million was supposedly absorbed into income support premiums. That meant that help that had been directed at specific problems--cold homes, expensive heating systems and so on--was lost.

The result is that many people living in badly built and poorly insulated homes are having to spend on heating money that was meant for their children's food. The alternative for them is to allow their children to be cold. The cold weather payments system is an outrage and must be changed. The minor change that we have before us is, of course, acceptable, but it is not good enough, and that is the basis of our case.

The Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 represent a further cut in benefit for people injured at work. It comes on top of the previous cut to which I referred. In 1986, the Government abolished compensation for those whose injuries had a less than 14 per cent. disability determination and who previously received a lump sum. It had also been provided that, if one failed to claim before the cut-off date--before the benefit was abolished-- because one was misled by the DSS or was ignorant of one's rights, one could claim. In December 1986, Mr. Kenneth Potts successfully claimed under that provision. He was awarded compensation for contracting vibration white finger disease, which was recognised only in 1985 as an industrial disease. He had left his job in the shipyard in 1980 having no knowledge, of course, of the availability of the benefit. The Government were furious. They appealed to the Tribunal of Commissions in August 1989, and lost. Now we witness the Government's respect for the rule of law. The law went against them, so now they are changing the law so that others in Mr. Potts' position will not benefit in future. We should also note that those with an injury causing more than 14 per cent. disability who had the capacity to receive a reduced earnings allowance will lose that entitlement under the current social security legislation.

Mr. Jack Thompson (Wansbeck) : Is my hon. Friend aware that we in the mining industry have a dual problem? Not only are we losing benefits, but there is an increase in the rate of serious injuries caused by new production methods and a reduction in manpower.

Ms. Short : I appreciate the point that my hon. Friend makes A cynical package has recently been announced that is meant to give the impression of increasing benefits for people with disabilities. Announcements about such matters are made by the Government every few days in the hope of proving that what is, in fact, a paltry package is a big improvement for people with disabilities. It has partly been paid for by cuts in benefits. People injured at work who in the past could claim reduced earnings allowance will in future lose that right in order that other deserving people with disabilities, who of course need help, can receive something. It is not right that one group of disabled people should pay for the benefits of other groups of disabled people.

The package represents another series of sordid little cuts and unfair provisions from a Government that is busy still, at this late stage and even given their current level of popularity, to redistribute money from those with less to

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those with more. That is making our country more unfair and more unequal. The Labour party opposes that--and so do the British people, who are showing more and more their deep concern at Britain becoming an increasingly divided, unequal, unfair, and economically inefficient society. We look forward to the return of a Labour Government and to values of fairness and reasonableness, to protect people who are old, sick or cold in the decent way that the British people would like to see them protected.

7.50 pm

Sir George Young (Ealing, Acton) : I was amazed by the speech of the hon. Member for Birmingham, Ladywood (Ms. Short), who described the measures before the House as "another series of sordid little cuts" that was part of some package of promoting inequality. She tried to link the orders to a broader debate about the redistribution of wealth. However, having listened to the measures being described by my right hon. Friend the Secretary of State, and having examined them myself, I find that they contain some relatively minor but useful social reforms. Many of them will help claimants, some are neutral, and one of them does reduce benefits but in a way that was trailed four years ago, when transitional provisions were introduced. To link the measures before the House tonight with some so- called grandiose and sinister package is incredible.

I believe that the hon. Member for Ladywood misunderstood the recoupment provisions. My right hon. Friend clearly said that he is not taking away any benefit entitlement. Instead of the insurance company pocketing the recoupment, it will be returned to the taxpayer, which is neutral so far as the beneficiary is concerned. I do not comprehend how any responsible right hon. or hon. Member could object to that change.

Ms. Short : I was listening, and I served on the Committee on the Social Security Bill 1986 that introduced the powers being implemented by regulations. There is no dispute between us that claimants should not be paid twice, and that if they have received a state payment for loss of income, the insurance payment for loss of income should balance it out. However, the Government are taking the power to claw back money that is paid as compensation for pain, injury and hurt, to make up for the payment of unemployment benefit, family credit or income support. We believe that that is wrong.

Sir George Young : We can all read Hansard tomorrow, but my understanding of my right hon. Friend's remarks is that he is not taking away benefit entitlement any more than the existing offset provisions do. The compensation payment is reduced in each case. My right hon. Friend went on to explain that the money pocketed by insurance companies will be returned to the taxpayer. I see nothing objectionable in that arrangement, which is neutral so far as the claimant is concerned.

The hon. Member for Ladywood did not mention the 60 per cent. increase in the small payments limit--a useful reform that might have found a place in her speech. As to cold weather payments, she did not mention the useful

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increase from £500 to £1,000 in the capital disregard, which I hope signals more general examination by the Government of the whole question of capital cut-offs.

The removal of any disincentive to a child returning home for the summer holidays is also to be welcomed. However, in the light of the intervention by my hon. Friend the Member for Norwich, North (Mr. Thompson), it will be helpful if my hon. Friend the Under-Secretary of State for Social Security will explain, when she winds up, what would be the financial implications for child benefit entitlement, for example, if a child remained at home. One could then think through the consequences if what was originally planed as an eight-week visit transpired to be the prelude to the child returning home permanently.

All right hon. and hon. Members must surely accept that, unless transitional arrangements are eventually brought to an end, there can never be a move to the new structure. We all remember the debates of two years ago when the new scheme was introduced, when argument centred not so much on structure but on the level of benefits and the transitional arrangements. If one argues against transitional arrangements being phased out, the logical consequence is that the new structure will never be introduced.

I happen to believe that the new structure is better and fairer. Transitional arrangements must be truly transit-ional, and those right hon. and hon. Members who supported their introduction did so in the acceptance that, as benefits moved up, those of people enjoying transitional protection would stand still until they in turn benefited from general upratings.

I find no difficulty in supporting the package, but I find it impossible to relate the measures before the House to the rather emotional speech by the hon. Member for Ladywood.

7.55 pm

Mr. Bob Clay (Sunderland, North) : In speaking mainly on the revocation of regulation 13, I want to make it clear that in no way do I make light of the other squalid and appalling cuts that the regulations impose, but that I have a particular constituency interest in regulation 13.

It is generally acknowledged that most of the people who will be disadvantaged by the revocation of regulation 13 are those suffering from vibration white finger. I trust that Conservative Members in particular do not imagine that vibration white finger is some sort of minor technical disability. Even in its early stages, it can cause numbness, leading to a considerable loss of facility and of ability to work in particular trades. It can lead also to the end of participation in a number of social or cultural activities. A darts player, for example, may no longer be able to throw darts, and a pianist will be unable to play. I shall not go through all the condition's ghastly stages, but eventually it can cause, through gangrene, the loss of the use of the hand, or something worse. Very often, the level of disability exceeds 14 per cent. When the Minister says that the new arrangement will deny people whose disability is determined at less than 14 per cent. the right to a payment, in fact he is talking about well over 90 per cent. of people suffering from vibration white finger.

The Secretary of State referred to the decision of the commissioner in respect of my constituent, Kenneth Potts, which he said widened the law. That is an interesting

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concept. The law is the law. Initially, it was not the commissioner but the social security appeal tribunal that found in favour of Mr. Potts, and it did not widen the law but merely interpreted it. Its decision was upheld by the commissioner, who also interpreted the law. It is wrong for the Government to regard that decision as a widening of the law and now to put a stop to that benefit, simply because many more people would be entitled to claim it.

It is worth considering why the commissioner concluded that Mr. Potts--and, now, many thousands of others--have good cause to make late claims. It has been established that vibration white finger did not become a classified industrial disease until 1985. Not a great deal of time elapsed between then and 1 October 1986, when the Social Security Act 1986 took effect.

This case illuminates two wider aspects of Government policy. First, if one decimates every industry--shipyards, coal mining, heavy engineering--which cause this disease, the people who worked in them are scattered to the winds. There was a community of information in which shop stewards, health and safety representatives and others could go around and say, "By the way, Ken, that vibration white finger that you already claimed for, or maybe you were told not to bother because it was not a prescribed industrial disease, is now a prescribed industrial disease." But the ability to do that in the workplace is limited if the workplace has gone or been significantly reduced.

Some of the people displaced from the workplace because of redundancies or closures have taken the advice of the right hon. Member for Chingford (Mr. Tebbit) and got on their bike. They are now working somewhere else, where they do not have mates who will say, "By the way, did you know that vibration white finger is now a prescribed industrial disease?" There is very good reason, as the commissioner found, for them not to have heard the good news that they could now claim

Secondly, there is the Government's attitude towards trade unions. People affected by the disease are most likely to find out that the law has changed through their trade union. I do not think that we would expect to find the Government publishing notices in the press, warning all trade union members that if they do not regularly attend trade union branch meetings, they might miss out on information to their benefit. But that is precisely what has happened in this case. Members of the GMB, the Amalgamated Union of Engineering Workers, or the National Union of Mineworkers, who were regularly in contact with and active in their trade unions found out that they could now claim for vibration white finger. Workers who had been scattered by the four winds, had become apathetic or had found it difficult to keep in touch with the trade union, particularly while they were unemployed, did not find out. The Government, who are so hostile to trade unions, are taking advantage of the fact that it is more and more difficult for trade unions to carry out the job of communication. But if the information had been communicated more effectively, with Government assistance, it might not have meant that so many people had good cause, as the commissioner found, to make a late claim. That is the position now--we have a large number of late claims.

In one social security office in my constituency--Dunn house--in early January there were already 1,500 requests

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to review old cases and 2,000 new claims. That number will have increased significantly by tonight, and will no doubt continue to increase until a week on Monday.

The Government cannot have it both ways. If they find that there are an alarmingly large number of claims, surely they have to accept that that means that a significant number of people had good reason for not claiming and, in justice, since it is therefore a widespread and serious problem, they should not revoke the regulation and they should allow more late claims. If the claims are coming in by the thousand now, they will not all be dealt with by the cut-off point ; indeed, they will not all have been made by that date.

If the Government take the view that most people who have good cause to claim will now have done so, and only a handful of peculiar cases are left, why do they revoke the regulation? Surely there is no problem. If they are expecting only a handful more claims after a week on Monday, they could leave the regulation and allow all the time in the world for the few remaining claims to come in. After all, this case is a closed universe, because those who started suffering from vibration white finger since 1986 are in a different position. In this instance we are talking only about people who developed the disease before 1 October 1986, and that is a limited number. The Government ought to accept that.

It comes down to this--I think that this is an illustration of what my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said earlier. What is the point of the regulations and what is the point of the social security system? Is it to provide justice for people who are genuinely entitled to it, or is it to provide an obstacle race, in which the best- informed, the cleverest and the most persistent finally get over the obstacles and win? If the Government deny that it is the latter, and say that the purpose of the system is to provide justice for those entitled to it, the fact that there are now thousands of claimants with this disability ought to lead the Government to say that they will not put another obstacle in their way, as they have already suffered enough.

Many of the late claimants have suffered because they have been made redundant, and they have had to change their place of work and move their home. They have suffered many times over, and now they suffer the final insult of an unnecessary cut-off date.

I repeat that the Government cannot have it both ways. Justice means that all those who have vibration white finger, or any other disease that became a prescribed industrial disease at a later date, ought to be able to claim, provided that they can show good cause, in line with the commissioner's decision.

If the Government are trying to limit claims because of the amount of money, why do they revoke the regulation now, when it will not cost very much and they might as well leave things as they are? I genuinely cannot make my mind up why the Government are doing this. I attended a meeting with the Minister last October with some of my hon. Friends. We were told that this policy had nothing to do with the commissioner's decision in the Potts case. It was only a temporary regulation to allow fairly late claims after 1 October. The Government had meant to revoke the regulation earlier, but they had somehow overlooked it, and now they were tidying up. I think that the Minister may have said that if it was causing a lot of problems, they would reconsider and give people a few months more.

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