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Passporting makes sense where a condition is specific and easily recognised. However, it is not a measure, in any sense of the word, of the severity of a condition. In using the higher rate of DLA as the passport to the benefit, we are seeking to limit and to focus that particular arrangement on the most severely handicapped. I hope that, with that brief response to the points that have been raised, I can welcome the guarded and somewhat limited welcome which has been given to this group of amendments. I certainly believe that they will be welcomed outside the House.

Question put and agreed to.

Lords amendments Nos. 2 and 3 agreed to.

Lords amendment : No. 4, in page 3, line 5, at end insert ("(3A) In the case of a person who has been entitled to short-term incapacity benefit for 196 days or more in any period of incapacity for work and is terminally ill, or, if he is in receipt of the higher rate of the care component of disability living allowance, the weekly rate of short-term incapacity benefit payable, if greater than the rate otherwise payable to him under subsection (2) or (3) above, shall be equal to the rate at which long-term incapacity benefit under section 30A above would be payable to him if he were entitled to it.

For the purposes of this subsection a person is terminally ill if he suffers from a progressive disease and his death in consequence of that disease can reasonably be expected within 6 months.

(3B) References to short-term incapacity benefit at the higher rate shall be construed as including short-term incapacity benefit payable to any person who has been entitled to that benefit for 196 days or more in a period of incapacity for work, notwithstanding that the rate of benefit is determined in accordance with subsection (3) or (3A) above.")

Amendments made to the Lords amendment : (a), in line 4, after "and" insert "--(a)"

(b), in line 4, leave out from "or" to "rate" and insert "(b) he is entitled to the highest"-- [Mr. Scott.]

Lords amendment No. 4, as amended, agreed to.

Subsequent Lords amendments agreed to.

Clause 3 --

Incapacity benefit : supplementary provisions.

Lords amendment : No. 7, in page 5, line 9, leave out ("in such cases as may be prescribed,")

Mr. Scott : I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : With this it will be convenient to take Lords Amendments Nos. 8, 10, 18, 24, 25, 27, 30, 32, 44 to 46, 66 to 71 and 77 to 80.

Mr. Scott : These are all technical amendments and it would be for the convenience of the House if I moved them formally.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Mr. Deputy Speaker : We now come to Lords amendment No. 7. [Interruption.] Sorry, it should be Lords amendment No. 9. I call the Minister.

Mr. Scott : I understand your problem, Mr. Deputy Speaker, as I am sure do other hon. Members.

Mr. Deputy Speaker : Order. I agree that there are too many papers. Before the Minister speaks to the amendment, I must say that I have been rather tolerant this afternoon. The debate on the first group of amendments

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went rather wide. My period of tolerance has now ended and hon. Members should address the amendments before the House.

4.45 pm

Lords amendment : No. 9, in page 6, line 14, at end insert ("or training of such other description as may be prescribed")

Mr. Scott : I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker : With this it will be convenient to take Lords amendments Nos. 40, 41 and 65.

Mr. Scott : I am sure that hon. Members, and certainly those who took part in the Committee stage, will recall our discussions in our earlier proceedings. Concern was expressed about the scope of the long training linking rule introduced as part of the incapacity benefit structure. I said then that that was an issue at which I was prepared to look again with sympathy. I undertook to respond, before the end of the Bill's passage, on the outcome of our deliberations. These four amendments were tabled in another place to give effect to our proposals.

As hon. Members may already be aware, the training linking rule is intended to provide an incentive for people receiving incapacity benefit or severe disablement allowance to try to make a return to work. It provides a safeguard in that if their attempt fails because of their incapacity, they can return to the same benefit that they were previously receiving within two years. Additionally, it protects the position of those people who are assessed as capable of work and who begin, or are already undertaking, a training course. If their condition deteriorates again within the two-year period--as it may in some cases--those people could also return to their previous benefit. I hope that hon. Members will understand that, for people undertaking a training course where a training allowance is not payable, incapacity benefit will remain in payment so long as they continue to satisfy the test of incapacity for work. If at any stage during a person's course of training that person is assessed as no longer satisfying the test of incapacity, as one would reasonably expect, that benefit would cease. Those rules will, as now, apply equally to SDA.

Hon. Members will understand that anyone undertaking a non-Department of Employment course who continues to be incapable of work will have no need of the linking rule. That person's benefit will continue in payment. However, the amendments that I am commending to the House today will benefit people who are undertaking a course of training and fail a test of incapacity and those who begin a training course on leaving benefit.

The amendments expand the use of the term "training for work" as used in the Bill to include

"training of such other description as may be prescribed". That will apply to the long linking rule on both incapacity benefit and SDA.

Amendments Nos. 9 and 65 relate to incapacity benefit and amendment No. 40 relates to severe disablement allowance. That broader definition of "training for work" will also apply to the new qualifying benefit rule on DWA. That allows a person to undertake a period of training between leaving a qualifying benefit, whether that be incapacity benefit or SDA, and making a claim for DWA. Amendment No. 41 gives effect to that change.

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We feel that it is essential to use regulations for that provision. I am sure that all hon. Members would agree that training provision has changed dramatically over the past 20 years and will no doubt continue to change in the foreseeable future. Therefore, it is important that legislation in this important area is sufficiently flexible to allow us to keep it up to date when any new relevant initiatives arise.

We have not as yet finalised the drafting of regulations to be made under those powers, but I can tell the House what we intend them to cover. Regulations will specify both additional Department of Employment programmes and the types of non-Government training courses that should be covered. We expect, for example, employment rehabilitation and community action programmes--both run by the Department--to be included. With non- Government training, we intend to include full-time courses, the sole or main purpose of which is the acquisition of occupational or vocational skills. Full-time is defined as "16 hours or more".

As I am sure the hon. Member for Manchester, Withington (Mr. Bradley) will recall, the issue of funding such schemes through the European social fund was raised in Committee. I can assure the House that as long as the sole or main purpose of the course funded by the European social fund is the acquisition of occupational or vocational skills, such courses will be covered by the broader definition. I hope that these changes will be welcomed in the House and outside it.

Mr. Bradley : Clearly, we welcome the Minister's announcement and the amendments that have been tabled. He has looked carefully at the arguments that were put forward in Committee. Our deliberations have borne some fruit today, and we welcome that.

I simply seek clarification not specifically on training but on a related topic, namely, therapeutic earnings. Following our discussions in Committee, a concession was made, and I welcome the correspondence from the Under-Secretary of State.

The way in which the Government have considered the matter is to bring forward the definition of "therapeutic work" as work that is undertaken under medical supervision in a hospital or similar institution. I seek clarification from the Minister as to whether that is as narrowly defined as it would appear to be because, if it is, it clearly seems to fly in the face of the Government's policy on community care.

I should like the Minister to tell the House whether the therapeutic rules will cover people who are living in the community but who are, for example, out-patients of a hospital or other institution, and whether similar rules will cover people who live in the community and attend adult training centres or other similar centres run by local authorities, the voluntary sector or health service authorities. Clearly, that is linked to the views on training. It seemed to us that, although there had been a concession on therapeutic work, it has been extremely narrowly defined. Will the Minister examine the definition in the broader context of community care with a view to extending the scope for an individual to receive therapeutic earnings ?

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Clearly, we welcome the amendment, and I would welcome any further comments that the Minister may have on that point.

Mr. Scott : I think that the hon. Gentleman recognises my anxiety in this whole area, to enable a smooth transition from, as it were, incapacity through into work. Therefore, the whole issue of therapeutic work is something in which I take a continued and constructive interest.

In practice, there are two types of therapeutic work. There is therapeutic work within some sort of institution and under medical supervision. It is also possible for a person living in the community to have the same advantage as someone in an institution, as long as the work is recommended by their doctor as being therapeutic in its effect. I hope that that covers the main point raised by the hon. Gentleman.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Lords amendment : No. 13, in page 6, line 32, at end insert ("(4) There shall be excluded any days in respect of which a person was disqualified for receiving incapacity benefit.")

Mr. Scott : I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker : With this it will be convenient to take Lords amendments Nos. 16, 17, 26, 28, 29, 31, 73 and 81.

Mr. Scott : The amendments in this group are of a technical nature and deal with the action to be taken where a person falls into one of three categories, namely, he has become incapable of work through misconduct, he fails without good cause to attend or submit himself to such medical or other treatment as required or, thirdly, he fails without good cause to observe any prescribed rules of behaviour. In any of those circumstances, a financial penalty will be imposed by stopping the payment of benefit for a period of up to six weeks. At the end of that period, benefit should be reinstated without requiring a further claim to benefit. I hope that these amendments will be acceptable to the House.

Question put and agreed to.

Clause 4 --

Power to provide for the transition to incapacity benefit.

Lords amendment : No. 14, in page 9, line 7, at end insert ("( ) Regulations under this section may provide, in relation to transitional cases where the rate of incapacity benefit falls to be calculated by reference to the rate of dependency allowance paid or payable before commencement, that any old saving provisions shall have effect subject to the regulations or shall cease to have effect in accordance with the regulations.

For the purposes of this subsection

"dependency allowance" means an allowance of the kind provided for in Part IV of the Social Security Contributions and Benefits Act 1992, and

"old saving provisions" means provisions of any description, including administrative provisions, in connection with a previous change affecting entitlement to or the amount of dependency allowances, preserving a person's position in any respect.")

Mr. Scott : I beg to move, That this House doth agree with the Lords in the said amendment.

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The amendment will enable regulations to be made which will make it possible to rationalise the existing forms of transitional protection for dependency increases of invalidity benefit from April 1995. The intention is to align the old provisions with new forms of protection, which we intend to create when incapacity benefit is introduced. The House will be reassured to learn that acceptance of the amendment will not lead to cash losses for those whose circumstances remain unchanged.

During the 1970s and 1980s, the structure of dependency increases changed in a number of ways. I do not think that the House would want me to give a detailed account of those changes. A notable by-product of the process has been the creation of six separate forms of transitional protection. The number of affected beneficiaries is very small, and these forms of protection do not operate on a uniform basis. We believe that it is right to use the opportunity presented by the introduction of the new benefit to place them all on the same footing.

I explained that the relevant provisions do not operate in the same way. Some are linked to ongoing entitlement, and others are linked to the continuation of payment. Without going into any further details, I hope that the hon. Member for Manchester, Withington (Mr. Bradley) and the House will accept that these are reasonable proposals which will make a worthwhile reduction in complexity at the inception of incapacity benefit. I hope that the amendments will be acceptable to the House.

Mr. Bradley : I certainly do not want the Minister to go into the details of all the possible transitional arrangements which may be forthcoming. I wonder whether he could simply clarify a comment that was made in another place. I quote :

"The new rules will mean more favourable treatment for some beneficiaries and less advantageous treatment of others when compared with the current arrangements."--[ Official Report, House of Lords , 10 May 1994 ; Vol. 554, c. 1466.]

Is the Minister able to give specific examples of where it will be "less advantageous" than the current arrangements under the new rules for transitional payments ?

Mr. Scott : I shall give an illustration. There is a form of existing transitional protection dating from 1985 relating to the introduction of the current earnings rule for adult dependency increases of invalidity benefit. Under that rule, payment ceases when earnings exceed a prescribed limit. However, the old rule provides for tapered withdrawal of the increase, so when the dependency increase is uprated each year the amount of earnings necessary to extinguish it also rises. That produces a rather bizarre effect. Rather than merely preserving the position of beneficiaries affected by the change in 1985, this form of protection has increased in generosity over time, and would continue to do so at future upratings. Our intention is to place an overriding limit on that form of protection equal to the point at which protection currently ceases. If earnings exceed the limit for more than eight weeks, protection will come to an end. That would allow the existing advantage conferred by that form of protection to be retained, but would not allow subsequent increases in future years. That is one example that I can give the hon. Gentleman of the sort of complexities that have developed. We think that reining back may be necessary in some areas.

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Mr. Bradley : Unfortunately, I have not worked up a similar example to compare with the Minister's, but his example is now crystal clear.

Clearly, the arrangements are complicated and we will have to consider them in detail, case by case, as they come up. While in no way opposing the amendments, we notify the House of our intention to return to the matter, probably through regulation, when the real effects of the legislation are apparent after April 1995. We will consider the matter at a later date.

Question put and agreed to .

Lords amendment : No. 15, in page 9, line 12, leave out ("three") and insert ("four")

Mr. Scott : I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker : With this it will be convenient to take Lords amendments Nos. 33 to 39 and 76.

5 pm

Mr. Scott : The amendments arise as a consequence of the recommendations of the House of Lords Select Committee on the Scrutiny of Delegated Powers. While that Committee was broadly content with the approach taken in the Bill, it drew attention to two matters. The first was the period during which regulations made under clauses 4, 5, 6 and 7 will be subject to the affirmative procedure. Members of the House, as well as members of that Committee, rightly pay close attention to whether powers are subject to the affirmative or negative procedures when they consider Bills that contain powers to make secondary legislation.

As the House will understand, twin pressures must be balanced. On the one hand, we must ensure that the business of the House is not cluttered up with regulations that are of minor import, and, on the other, that major measures are properly scrutinised on the Floor of the House. The Bill attempts to marry those concerns by time limiting the period to which regulations will be subject to the affirmative procedure.

The first few sets of regulations made under the provisions are likely to attract a high level of interest and scrutiny, as is proper. Future regulations, however, are likely to be in less controversial areas of legislation.

The Standing Committee welcomed time limiting the application of the affirmative procedure, which was a novel method, but one that responded to concerns expressed when we discussed the matters there. The Government had felt that three years from Royal Assent would be a suitable time for such regulations to be subject to the affirmative procedure. The Committee suggested commencement rather than Royal Assent, in cases where regulations were not made immediately. Regulations will, however, be made before the full commencement of the Act.

In all probability, a commencement order will commence clauses 4 and 7 of the Act in full, but clauses 5 and 6 only to the extent that regulations can be made. A later commencement order will fully commence clauses 5 and 6, along with the rest of the Act. As clauses 4, 5 and 6 will not be commenced until April 1995, any regulations made under powers contained in those clauses would, if subject to the affirmative procedure only after commencement, automatically revert to the negative procedure. That was not the Committee's or the Government's intention, but we are sympathetic to the

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Committee's concerns. We introduced amendments to extend the period in which amendments are subject to the affirmative procedure from three to four years.

Most social security regulations are subject to the scrutiny of the Social Security Advisory Committee. The two main exceptions are regulations made within six months of the Act and regulations that concern rates of benefit. We had originally thought that regulations made under the appropriate section would only set out the rates of age additions. Accordingly, those would not fall to be scrutinised by the SSAC and paragraph 52 was included in schedule 1 of the Bill. The regulations will be broader than just the rates of benefit. It is appropriate, therefore, that the SSAC should consider those regulations. I commend the amendments to the House.

Mr. Bradley : We, of course, welcome the fact that the amendments have been tabled. My memory of the Standing Committee is not that we were all leaping up and down, full of exhaltation and pleasure because of the time limit on the affirmative procedure. We were expressing pleasure because we had the affirmative procedure and because it would last for a longer period than had originally been intended, rather than at the novelty of time limiting, as the Minister put it.

We also welcome the fact that the regulations will be scrutinised by the Social Security Advisory Committee. I assure the Minister that the Opposition will pay great attention, at every stage, to all the regulations that are introduced. As we have said on many occasions, we do not intend generally to accept that legislation should be by regulation, rather than primary legislation. The Bill is a classic case of more and more of the detail of legislation being pushed towards regulation and so we intend to scrutinise that at every turn, and by every means possible, to ensure proper parliamentary scrutiny of this crucial legislation for disabled people. However, we welcome the amendments.

Clause 5 --

Test of Incapacity for Work

Lords amendments Nos. 16 to 18 agreed to.

Lords amendment : No. 19, in page 10, line 41, leave out ("12") and insert ("21")

Mr. Scott : I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker : With this it will be convenient to take Lords amendments Nos. 20 to 23.

Mr. Scott : These amendments extend the own-occupation test to make it more reasonable and to clarify its application.

The Bill introduces two tests of incapacity. The own-occupation test will apply to most people at the onset of their period of sickness and will be applied for the first 28 weeks of incapacity. In essence, it is a test of whether people can do their own job and it mirrors the present system.

We will have to decide who can qualify for the own-occupation test. When the Bill was considered in Standing Committee we proposed that if someone had

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worked for more than eight weeks in the past 12 they should undergo the own-occupation test. If someone did not fulfil that requirement, they should undergo the all-work test at the beginning of their incapacity--the latter is the new, functional medical test, with which those hon. Members who have taken part in our discussions will be familiar.

In Committee, the argument was advanced that the qualifying period for the own-occupation test was unreasonable and I undertook to consider the matter further. On reflection, we came to the conclusion that the qualification was less than totally reasonable. It would have meant that someone who had been in work for 20 years and was made redundant would face the all-work test immediately if he or she fell sick after only five weeks of redundancy.

In deciding the qualification for the own-occupation test, our aim was to produce a simple, workable definition that would ensure that as many people as possible underwent the own-occupation test when they became sick. Only in exceptional circumstances did we expect anyone to have to undergo the all-work test at that stage. The amendment means that someone who has undertaken an occupation for more than eight weeks in the past 21 weeks will face the own-occupation test at the onset of incapacity, which is a much more reasonable approach.

Amendment No. 20 is purely technical and serves to clarify the drafting of section 171B(4). It applies either to disability working allowance or the training long-linking rule, as it applies to a person, where we do not want the long-linking rule to affect the test of incapacity that is applied. Section 171B(4) as it stands could be interpreted to have the effect that, where a person had been working and receiving DWA and made a further claim to benefit, he would be subject to the all-work test even though he had clearly been working for more than eight weeks prior to the claim. That is not what we want and amendment No. 20 puts the issue beyond all doubt, ensuring that the own-occupation test is applied where appropriate. That will be the second beneficial move.

Amendments Nos. 21 and 22 are also designed to clarify the application of the own-occupation test. As I explained before, in the majority of cases, for the first 28 weeks, a person's incapacity will be measured against his own occupation. We want as many people as possible to undergo the own- occupation test at the start of their period of sickness. We always intended that people on training courses--whether paid or unpaid--and who would return to their previous job or employer would be covered by the provision.

Amendment No. 22 is designed to ensure that we have such powers, and amendment No. 21 is a small technical amendment required for the paragraph proposed by amendment No. 22 to be inserted. Amendment No. 23 ensures that we have the necessary powers to ensure that the provision to apply to people who had more than one job during the 21-week period, or who had more than one job at the same time, are also included within this provision.

I understand the concerns which hon. Members have about the own-occupation test and the all-work test, but I hope that they will at least agree that the amendments are important improvements to the own-occupation test.

Mr. Bradley : We have now come to the amendments where I thought that we would be having the debate on the

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medical test. But as we had a mini-debate on that--with your indulgence, Mr. Deputy Speaker--I do not intend to range over all the issues of concern which were raised by the hon. Member for Stratford-on-Avon (Mr. Howarth), which I fully support. However, it seems yet again that this matter has become a great yawning gap in the legislation.

It is the most difficult area for us to debate effectively, even at this late stage in the passing of the legislation, because as yet we have no details of what the medical test will be. We do not know whether it will apply to the own-occupation or to the all-work test, or whether it refers to work at all. As we know, yet again there is no definition of work in the Bill, let alone the other definitions about which we previously expressed concern as they were not on the face of the Bill.

I shall not range over all the concerns about the medical test to which we will clearly return when the medical test is published and goes out for further consultation. I would just seek some clarification about where work on the medical test itself has got to. I am aware that the so-called panel of experts has had meetings. Has that panel now completed its deliberations, or is it having further meetings to consider and refine further this document for which we are awaiting ?

Will the revised medical test which is to go out for consultation still be published in August of this year ? If and when it is published, how will consultation on the revised document be undertaken ? What organisations and individuals will be consulted on that test ?

5.15 pm

Crucially, can the Minister give me some guidance on how the Government intend to respond to the clear divergence of opinion within the so-called panel of experts about the way in which the test is being put together ? The Minister is well aware of a letter which was sent to the noble Lord Astor from a number of organisations which are involved in the new medical test. They have sought clarification on one point upon which the Minister may want to comment. The letter, dated 6 May 1994, states :

"It really will not be acceptable if panellists' concerns about various aspects of the test are not acknowledged in the final report of the consultation and departmental evaluation of the new test". Will their differing views about how the test can operate in practice be presented in the final report ? The letter continues : "We seek your assurance that there will be an opportunity to address our concerns, for example in a special section of the report."

If the deliberations have moved on to a point where the revised medical test is about to be finalised--it is clear that there are a lot of differences of opinion about how the functional test will apply in practice --will those panellists be afforded the opportunity before the report is published to express their views further ? Will those differences of opinion be expressed in the report or do the Government intend to try to impose their consensual view upon the panel of experts to come out with a report which they believe reflects all the issues that the 80 panellists are expressing ? These are very important matters on which we must judge the medical test within the legislation.

I hope that the Minister can give the House some assurances about the progress and presentation of that test

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and how it will be then further debated, and the issues of concern brought back to the Floor of the House through regulation for our further consideration.

Mr. Scott : The hon. Member for Manchester, Withington (Mr. Bradley) acknowledged that the work has been proceeding. The results of the work-- that is to say, the consultation process, the assessment panels and the evaluation study phases have already been completed--are now being analysed, and the detail of the tests will be revised to take account of the outcome of the consultation, development and evaluation processes.

Our next step is still to publish the results with our final proposals in a report in August. Only after all that will we present our final proposals on the test to Parliament for approval in the form of regulations. The earlier publication of our final proposals should allow interested parties to make their views known before the regulations are laid, and should ensure that we develop a test that is fair. The panel's task has been to advise on the details of the test, although of course not on the basis of the policy. Nobody was asked in any sense to sign up to the basis of the policy when they agreed to take part in the panel's work.

I must say that it has been an almost unique and very useful exercise to have the panel involved in the important work. I should emphasise, perhaps particularly at this point, that no decision has yet been made about the setting of thresholds which will determine whether or not a person is found capable or incapable of work. Nor will any decisions be made until the development and evaluation work is complete.

Once we have published our findings, regulations will be laid, and it will then obviously be up to any organisation to come forward with their comments on those proposals. We will obviously take account of those as the final shape of the test is decided.

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