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Mr. Scott : I should like to start by saying that I found the arguments of the hon. Member for Dunfermline, West (Ms Squire) particularly persuasive. I know that the hon. Lady has much experience of the voluntary sector and I listened carefully to her remarks.

I shall not urge the House to accept the amendment, although I agree warmly with the principle behind most of it. The only part that gives me some concern--I shall return to that matter in the course of my remarks--is the last few words :

"appointment to relevant bodies and committees".

I want to enter a reservation about that.

In practice, the regulations that we have in mind already are intended to include reference to voluntary work, so I see no reason to specify on the face of the Bill that the regulations should do that. It is our intention to provide a regulation-making power to specify that, where a person undertakes more than a prescribed amount of work, he will be treated as capable of work.

The amendment introduces to the regulation-making power a reference to people with disabilities who are involved in voluntary work and the valuable contribution that they can make to it, through appointment to relevant bodies and committees, and states that it should be a fact to take into account when making regulations under the power. It makes no material differance to the regulation-making power as currently drafted because the regulations allow us to specify any category of work.

Hon. Members are already aware of our intentions for the regulations made under this clause. We intend to carry forward the therapeutic work rule, allowing people to undertake work up to a limit of 16 hours and/or £43 a week, where it is accepted as beneficial to their condition. Equally, we are bringing forward special rules for both councillors and disability appeal tribunal members.

As the House is already aware, however, we are extending the special rule for disability appeal tribunal members to members of the disability living allowance advisory board. It will allow the first day of attendance at DLAAB meetings in any one week to be disregarded. Only further days of attendance that week would affect a person's benefit. It recognises the fact that allowances paid for a day's attendance to DLAAB members would consistently take them above the therapeutic work limit.

Mr. Pike : I would be grateful if the Minister could explain how widely he sees the therapeutic benefit being interpreted. It is possible for it to be interpreted extremely

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tightly or fairly liberally. Most hon. Members, and certainly those present at the moment, would prefer a liberal interpretation.

Mr. Scott : It generally is interpreted in a liberal way. If the hon. Gentleman has the details of particular circumstances in which he feels it is being interpreted in a more restrictive way, I would be grateful if he would contact me about them.

Mr. Dewar : I did not have the advantage of serving on the Committee. I just want to follow the Minister's argument. Is he saying that this amendment is unnecessary because everything that it attempts to do is already contained in the Bill, in the regulation-making powers or in the way in which the Government intend to use those powers?

Mr. Scott : I can give the hon. Gentleman that assurance, with the reservation that I have entered about relevant bodies and committees. I would not want to rule out that altogether, but there would be power in the regulations to include them. At the moment we have voluntary work and therapeutic work, and we have the special arrangements for disability appeal tribunals and the disability living allowance advisory board. If we were to go beyond that in specifying relevant bodies and organisations, I should want to consider carefully the extent of it and how particularly relevant it was to the purpose of the special arrangements that we are already making to allow and indeed encourage recipients of incapacity benefit and severe disablement allowance to undertake voluntary work for up to 16 hours a week without any effect on their benefit.

My right hon. Friend the Secretary of State announced at Second Reading our intention to introduce the regulations. I believe that the change is not just consistent with the Government's wider objectives to encourage voluntary work but is regarded highly and supported right across the House and in another place. The work done by charities and voluntary organisations is immensely important. As Minister with responsibility for disabled people, I am constantly in touch with a whole range of voluntary organisations.

I may have told the House on another occasion that the previous holder of the French equivalent of my job always regarded as one of the glories of this country the infrastructure of voluntary and charitable effort and the way in which these bodies supported and worked with the Government at both national and local level in order to achieve their different objectives.

Mr. Alan Howarth : Would my right hon. Friend give way?

Mr. Scott : If my hon. Friend will give me a moment to end the sentence, I shall certainly give way to him.

The work done by those organisations is immensely important and it has a second role that is important, in that it can be an important and significant way of helping people to make a gradual transition back to full -time work.

Mr. Howarth : May I ask my right hon. Friend for additional clarification? He said that it was the Government's intention to ensure that recipients of incapacity benefit and severe disablement allowance would benefit from those concessions. Is it also their intention that the concessions should be applied to recipients of

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invalidity benefit or, if he is not able to say that immediately, will he say that the Government are prepared to look sympathetically at that possibility?

Mr. Scott : At the point of change, although people who are on invalidity benefit at the moment will continue with their existing entitlement to the rate of invalidity benefit that they at present draw, they will be in receipt of incapacity benefit at that point, so they will qualify under the new arrangements. I hope that that deals with my hon. Friend's point.

Mr. Howarth : I am simply asking, are the Government prepared to bring forward that concession?

Mr. Scott : I have had a number of representations about bringing forward the scheme in advance of the April 1995 date. In part for the reason that I have just mentioned, I would want to give careful consideration to the implications. We are studying the scheme. I am not without sympathy for the idea, but I cannot give my hon. Friend a straight answer at this moment.

Certainly, the role of the provision is immensely important to the individuals concerned and to the charities and voluntary organisations that benefit from their important contribution to their work. It is also, I think, important in enabling people to make a gradual transition back to work. I hope very much that recipients of incapacity benefit and severe disablement allowance will be able to take advantage of the new provision to build up their confidence and experience in a range of ways.

I therefore hope that, acknowledging the Government's altitude towards voluntary work, the concessions that we have already made and the fact that I have shown that we are perhaps open to persuasion on a number of other points that might be included if we accepted the amendment as a whole, the Opposition will not feel it necessary to press the amendment.

Mr. Ingram : I reiterate and reinforce the compliment that the Minister of State paid to my hon. Friend the Member for Dunfermline, West (Ms Squire) on her contribution to the debate. I hope that the many strong points that she made will force him just that little bit further--perhaps not tonight, but in his further deliberations. It was a pity that the hon. Member for Stratford-on-Avon (Mr. Howarth) was not on the Committee with us ; we would have welcomed his contributions to our proceedings. It is a mystery that he was not a member, given his expertise and knowledge.

Mr. Scott : It is nothing to do with me.

Mr. Ingram : I notice that the Minister says that it is nothing to do with him, so we can perhaps point the finger elsewhere. The hon. Member for Stratford-on-Avon told us about the deregulation task force. That is a group dealing with volunteers and benefits. I do not know whether it is an expert group of 80 or indeed whether its members are experts at all, but I am apprehensive about what it is likely to come out with at the end of the day. My mother always said to me, "If you can learn something new each day, you are progressing," and I have learnt something new today about the deregulation task force and the group dealing with that area. It is something that I will have to consider further.

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I am perplexed by the Minister's reluctance on the issue. Obviously he supports the weight of the argument. He understands the logic of it. He understands the principle underlying it. We pressed him on the subject of costs. He did not come back and say that there were significant costs there, and obviously it is not a cost argument that is debarring him from accepting the amendment. I listened carefully to what he said about the final part of the amendment, which gives him some cause for worry and concern, and I appreciate that he perhaps needs further time to examine it.

While listening to the Minister's response, we considered whether it would be worth while to push the amendment to a vote. Many groups and individuals outside the House would be glad to know that we were prepared to argue for it and vote accordingly. However, we are prepared to give the Minister a little longer to consider the points that have been advanced, not just in this debate but in all the representations that have been made to him by voluntary groups, his hon. Friend the Member for Stratford-on-Avon and others involved with disabled people.

I hope that what we have argued will become a matter of fact. If the power exists in current regulations, I hope that in the near future we shall see a change accordingly.

Mr. Scott : As the Opposition have been consistently critical of regulation-making powers, I make the point that if we wished to make the change, it would be comparatively easy to do so.

9.15 pm

Mr. Ingram : We have been critical about how the Government use regulations, not about regulatory powers. I do not want to go back over the 48 references to regulations in 11 pages of a 17-page Bill or the increase in statutory instruments since 1985. Until then, an average of 2,000 statutory instruments were used by Labour and Conservative Governments, but, since 1985, there has been an exponential growth and the current figure is now well in excess of 3, 000 and we expect that figure to continue to rise.

If the power exists, I hope that the Minister will be prepared to give genuine consideration to changing the regulations. But it still leaves hanging the question of those on invalidity benefit until April 1995. Why cannot they be given that small concession? I hope that the Minister will be prepared to go back and talk to those who hold the purse strings and will make the final decision, and that we shall see a positive development in that regard.

The debate has added to the weight of knowledge on the subject, and I hope that the Minister can use it to good advantage in the future. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made : No. 10, in page 13, line 27, after (3)' insert For the period of three years from Royal Assent'.

No. 11, in page 13, line 28, leave out the first' and insert any'.

No. 12, in page 13, line 32, leave out or (6)' and insert (6) or (7)'.

No. 13, in page 13, line 35, leave out (1)'.--[ Mr. Scott. ]

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Clause 7

Rate of statutory sick pay

Amendment made : No. 14, in page 13, line 42, at end insert-- "(1A) Any order under section 150 of the Social Security Administration Act 1992 (up- rating orders) made by the Secretary of State before the commencement of this section shall include provision making such increase (if any) in the sum specified in the amendment made by subsection (1) above as the amount of statutory sick pay as is necessary to make that sum equal to the higher rate of statutory sick pay payable after the order comes into force.".-- [ Mr. Scott. ]

Clause 11

Transitional and consequential provision

Amendments made : No. 15, in page 15, line 36, at end insert-- "(1A) The power conferred by subsection (1) above is not exercisable in respect of any matter for which provision may be made under section 4 (power to provide for transition to incapacity benefit) or section (Power to provide for the transition to the new test of incapacity for work) (power to provide for the transition to new test of incapacity for work)." ;

No. 16, in page 15, line 37, leave out subsection (2).-- [Mr. Scott.]

Mr. Bradley : I beg to move amendment No. 27, in page 16, line 7, at end insert--

"(2A) Where a person is entitled to a disability premium by virtue only of satisfying the test of incapacity for work--

(a) those so entitled on the day of commencement shall be entitled to a transitional award of income support, housing benefit or council tax benefit, as appropriate on the same basis as awards of incapacity benefit under section 4 of this Act ;

(b) after commencement, he shall be entitled to such a premium from the date of claim, provided that he can produce medical evidence of incapacity for work during the previous 364 days.".

This is the final amendment on Report, and I hope that the way in which the Minister dealt with the previous amendment will flow through to this amendment as it deals with an aspect of transition arrangements which the Government have not dealt with fully to date. I feel confident that the Minister will be able to support it. The amendment seeks to enable people receiving the disability premium to have the same transitional protection as those on incapacity benefit and to allow for immediate entitlement to premiums through backdating.

Some people now claim a disability premium with one of the means-tested benefits without receiving one of the qualifying benefits such as disability living allowance. In such cases, people may be entitled to the premium, provided that they can show that they are incapable of work. The incapacity test is the same as is now used with the invalidity benefit.

The Bill introduces a new test of incapacity to work to be applied across all relevant incapacity benefits. That, of course, will include disability premium. The amendment, therefore, seeks to ensure, first, that there is transitional protection for people on the disability premium at the time of change and, secondly, that an immediate entitlement to the premium is possible, provided that medical evidence is submitted.

I am sure that the Minister is aware that, according to the 1992 figure, the benefits of 424,600 income support recipients include the disability premium, but no mention has been made of transitional protection for claimants of the disability premium.

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Many people qualify for the disability premium through a qualifying benefit, or if they are registered blind, but those most likely to be affected by the introduciton of incapacity benefit are those who qualify only on grounds of the incapacity condition and who have submitted medical certificates to the Benefits Agency. They include people who are unable to qualify for national insurance benefits or who cannot qualify for severe disablement allowance, perhaps because they are not 80 per cent. disabled. Access to the premium via the incapacity condition is therefore particularly important for women.

The amendment seeks to clarify what arrangements are being made to protect, at the time of change, people who receive the disability premium by way of the incapacity condition. We also seek clarification about the full year's wait for benefit. Currently, the disability premium is payable after 28 weeks of incapacity for work. With the introduction of incapacity benefit, which in effect extends the definition of short-term incapacity to 364 days, the qualifying period for the disability premium has likewise been extended to a year. Using the 1994-95 figures, someone under the age of 60 faces a loss of £19.45 per week, which amounts to a loss of £466.80 during the period from 28 weeks to 52 weeks. It is estimated that the change will save £20 million in 1995-96 and £25 million in 1996-97. Those figures were given in column 598 of Hansard on 14 February 1994. At the moment, certificates from a general practitioner have to be presented as evidence, which can includethe backdated medical certificate--Med 5--to prove incapacity to work in a previous period. That could happen when claimants are not aware of their entitlement. Will the Minister clarify whether, as no premium will in future be payable for 52 weeks, there will be provision for backdating, by a Med 5 certificate, for 52 weeks?

At what point will people applying for the disability premium have to undergo the new functional test? Will they have to undergo it immediately? Will they then have to wait a full year before they receive benefit? Will the test be at the 28th week? Will claimants then have to wait a year for payment?

At what intervals is it anticipated that someone will have to be tested or re-tested? Have the Government any estimate of how often the condition of claimants who pass the medical test and who are in receipt of incapacity benefit will be subject to reassessment or be requested to fill in a new questionnaire? Have the Government given general consideration to the review of incapacity cases?

Evidence from citizens advice bureaux already shows that many claimants are not identified by the Benefits Agency at 28 weeks and lose out on the disability premium. How would the Benefits Agency ensure that people on income support were identified and put in the queue for any medical assessment after the first 28 weeks? We are trying to flag up the anomalies that we believe are in the system. I recognise that the Government have already indicated that they recognise that there will be anomalies. In this case, while some people will have to wait a full year before receiving the premium, those who qualify because they receive severe disablement allowance will get the premium from the 28th week. Are there any plans to iron out anomalies in the new incapacity benefit?

The Government have already conceded that they will have carefully to consider transitional arrangements in their framing of the regulations. They have admitted that they may not get them right first time and may have to

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amend the regulations. Having considered the complexities of transitional arrangements, I have some sympathy with the Government. It is important, however, that the amendment identifies a particular issue, and I hope that the Government will respond to it. I see that they may well do so soon and I shall speak slowly to ensure that we get some response. It is an important issue and may be typical of the range of potential difficulties on transitional arrangements because of the complexities of the current system, the interrelation of benefits and the additions to those benefits that apply to disabled people.

Having made those rather brief and technical remarks on the amendment, I should welcome the Minister's comments on the amendment and perhaps some more general comments on the time scale and the way in which he hopes to handle the transitional arrangements.

Mr. Scott : As the hon. Member for Manchester, Withington (Mr. Bradley) has acknowledged, this is a complex matter. I understand that the amendment seeks to protect access to the disability premium for the long- term sick.

I should assure the House that it is very much the Government's intention that there should be consistency of treatment in the application of the new and transitional incapacity arrangements. Existing cases will be protected at the point of change. For sickness and invalidity benefit recipients, protection will take the form of transitional awards of the new incapacity benefit. I do not believe that such a mechanism is necessary or desirable for the income-related benefits. We are not changing the amounts of the income-related benefits in general or the disability premium in particular. The benefits will remain the same ; there will still be a disability premium. We shall simply be amending the rules for the premium to reflect the new incapacity provisions.

We are talking about those who qualify for the disability premium on incapacity grounds alone. The long-term rate of incapacity benefit will replace invalidity benefit as a passport to the premium. It will include those with transitional awards of long-term incapacity benefit.

The new medical test will apply to existing disability premium cases on the same basis for existing contributory benefit cases. It is a test that applies across the benefits system wherever incapacity is an issue.

The hon. Gentleman referred in particular to the reassessment of reviews of people who undertake the medical test. It will depend in essence upon the advice given by a departmental doctor to adjudication officers on the period in which the effects of the disability are likely to persist unchanged. For some people it may be for life ; for others for a relatively short period. It would depend very much on the assessment of the impact of their particular condition on them, and it would be for adjudication officers to decide when any such case might be called forward for review for a reassessment of their entitlement.

Exemptions from the medical test for income-related benefits will broadly be on the same basis as that applicable to incapacity benefit cases. Those aged 58 or over at the point of change, the terminally ill, those suffering from a list of specified conditions or those receiving the highest rate of the care component of disability living allowance will not be required to undergo the new medical test. Those who have the premium because they have been incapable

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of work for 28 weeks will be treated as satisfying the new test and will continue to qualify for the premium while they are incapable. If an adjudication officer decides that they are capable of work, the premium will be withdrawn, as now, unless payable on other grounds. 9.30 pm

I can assure the hon. Gentleman that a period of incapacity occurring immediately before a claim for income support, housing benefit or council tax benefit will, as now, count towards the qualifying period for the premium. Such a claim would, of course, be considered in the light of the rules applying at the time. For a claim to be made after the introduction of the new arrangements, the new test will apply. Our aim is to protect existing benefit recipients from a drop in benefit at the time when the new arrangements are introduced. That clearly does not apply where a claim starts after the date of change. There is no reason to give the same protection to them as for existing cases.

The hon. Gentleman spoke about the possibility of backdating. If backdating evidence is provided, immediate entitlement will still be possible. The new all-work test, however, will still be possible. The new all-work test, however, will need to be satisfied at the start of the income support claim. The Benefits Agency medical service judgment will be needed to judge that the person was incapable of all work for the previous six months. That is in addition to the GP's evidence for the six months before that. Pending that evidence, the premium will be paid from the outset of the claim.

I hope that I have covered most of the points of this particularly complex issue. I do not think that our intentions vary widely from those of the hon. Gentleman.

Mr. Bradley : I welcome the Minister's comprehensive explanation. This is an extremely technical matter, and it is incumbent on all of us on the Opposition Benches to look carefully at his explanation to ensure that it covers all the different angles of the complex nature of income-related benefits and their interrelationship with disability premiums and other premiums that may be applicable to them. It would be sensible for us to look carefully at them and to see how they relate to the other transitional arrangements that will be introduced at later stages.

I am sure that when the Bill leaves this House and is considered in the other place, their Lordships also will be concerned to ensure that protection at the point of change is forthcoming on a whole range of complicated individual cases. It would be sensible at this stage to look carefully at this and similar complex matters. In that light, and with your permission, Madam Speaker, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Order for Third Reading read.--[Queen's consent, on behalf of the Crown, signified.]

9.33 pm

Mr. Scott : I beg to move, That the Bill be now read the Third time.

I have no intention of making a lengthy speech at this late hour. I believe that we have had a good and constructive Committee stage, and today we have had a

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good and constructive Report. I am sure that further proceedings on the Bill will be characterised in the same way.

Opposition Members and, indeed, some of my hon. Friends, have pressed me today on a number of commitments that I gave in Committee to consider a number of specific issues, such as linking rules, treatment of the terminally ill and broadening the definition of training, and we had specific mention today of the importance of voluntary work. I warned the Committee that a number of these matters were complex, and would necessarily take some time to explore. I share the disappointment of hon. Members who have taken a particular interest in the Bill that it has not been possible to complete that consideration in time for today's proceedings, but I repeat my commitment to continue to consider the issues carefully and constructively. Let me also remind the House that, if amendments are required, there will be a suitable opportunity for them to be moved in another place ; the House of Commons would then have an opportunity to consider the issues again.

The Bill fundamentally reforms benefits paid to those who are incapacitated for work. First, it introduces a new, more objective medical test. As the House knows, the Government are committed to a test that focuses only on medical factors in determining entitlement to a benefit paid on the grounds of medical incapacity. We consider that logical, right and proper.

Opposition Members have complained that they have been unable to debate the detail of the test ; I think they are aware, however, that the detail is subject to wide-ranging, on-going consultation and evaluation, and in due course will be set out in regulations. What we have been able to do--I pay tribute to the constructive approach adopted by both sides, in Committee and today--is consider the principles underlying the new test. The genuinely sick will satisfy the requirements of the test.

The second element of the reform is consideration of the appropriate level of provision. In Committee and again today, we have debated each component of the benefit. I know that Opposition Members hold different views about the appropriate level, but I believe--and the Government believe--that, with the passage of time, some elements of invalidity benefit, such as additional pension or dependency increases for adults when there are no children to care for, have become anomalous. On the question of additional pension, there is at least some agreement between the Government and the hon. Member for Glasgow, Garscadden (Mr. Dewar).

We have also introduced a new definition of long-term incapacity--52 weeks, which I consider a more appropriate measure and a reasonable definition. It is important to emphasise at this stage, lest there be any misunderstanding outside the House, that the Government have fully protected existing recipients of invalidity benefit : there will be no cash losers at the point of change.

Mr. Flynn : Does not the Minister agree that, although the Bill has been sold as an attempt to rid the system of abuse, it reduces in three ways the amount that people will receive in future--people who, as the Government admit, are incapable of work?

Mr. Scott : I have just said that there will be no cash losers at the point of change. That is very important. A number of speeches made in Committee may well have

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misled people outside the House into believing that they will lose money at that point, which is why I wanted to emphasise on Third Reading that they would not.

We remain committed to a contributory income replacement benefit paid on the ground of sickness. I believe that our reforms will help to make benefits for those who are incapacitated for work affordable and sustainable into the next century. I also believe that the Opposition's approach to the Bill manifests their lack of will to achieve that aim.

Without the Bill, expenditure would continue to grow without being clearly focused on the long-term sick. I remind the House that, in 1979, expenditure on invalidity benefit was £2.4 billion ; in 1993, it was £6.1 billion. It is forecast to rise to £8 billion by 1997. Governments across Europe, in North America and in Australasia are all considering or implementing reforms in this regard.

I believe that any responsible Government would have to take steps to deal with the rapid and sustained growth in expenditure and the number of recipients, and the fact that the benefit is no longer focused solely on those who are sick. I commend the Bill to the House.

9.39 pm

Mr. Wallace : I shall be brief. The Minister said that there will be savings for the Treasury, and the Opposition parties understand that that is the whole purpose of the Bill. He said that there will be no cash loss during the period of change for those currently in receipt of invalidity benefit but, as I understand it, those who are not today incapacitated for work but who are so incapacitated after 1995 will be worse off as a result of the introduction of the new benefit than they would otherwise have been.

As the hon. Member for Newport, West (Mr. Flynn) said in his intervention on the Minister, we are talking about people whom, even under the new strict test, the Government accept are incapacitated for work.

It is interesting to note that, although it is an undeniable fact that the number of people currently receiving invalidity benefit has increased threefold since 1975, work done by the Policy Studies Institute has shown that, among men of working age, the number starting a period of invalidity benefit has fallen from 465,000 in 1977-78 to just under 200,000 a year in the late 1980s and early 1990s.

One of the explanations for the overall increase is the number of people who continue on invalidity benefit longer than they would have done in earlier times. Of course, one of the big differences between 1975 and 1994 is the unemployment rate.

We now fear that, under what the Minister called a "medical" test, which is more like a mechanistic test, more people will be deemed capable of work but will nevertheless not be able to find it. I believe that we shall be condemning the most vulnerable members of our community to suffer as a result ; and, as has been said, this measure will bring people to our constituency surgeries in 1995 and beyond.

We shall do our best for them, but we shall at least be able to say that we warned the Government what would happen ; I hope that Conservative Members who vote for Third Reading tonight will be able to look their constituents in the eye with an easy conscience when the time comes.

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9.42 pm

Mr. Flynn : There are three methods by which the Government are introducing massive cuts--and they are cuts, because the Bill is about saving £1.5 billion.

The first method is the change in the second six months, the reduction of benefit from the 29th to the 52nd week. It will affect people who have passed the Government's incapacity test. They will lose up to £1,000 in that time during the second six months. The second method involves the abolition of the earnings-related additional benefit. It is not a handout, but an insured benefit, for which people paid from 1978 to 1991. They are entitled to it. If an insurance company announced that it was not going to pay out its premiums, it would be in court on a charge of fraud. The Government are perpetrating a deceit.

The third method is the introduction of the new test. Having listened to the debate in Committee and here today, I do not see how it could possibly work, as it is wholly impractical. It is impossible for a set test to ascertain whether a person--a bricklayer, barrister or brain surgeon--is incapacitated for work. Such a system cannot possibly work.

9.43 pm

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