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

Mr. Dismore: No, there is not time.

I am glad that the Minister will reconsider backdating, especially in the context of the available information on benefits and of the need to encourage claimants to come forward. Backdating will still be needed in some cases.

Examples of such cases would include diseases with a long incubation period and some progressive industrial diseases that would not allow a clear line to be drawn on where someone would qualify for the benefits: asbestos- related diseases, asthma, repetitive strain injury and many of the industrial cancers. I am grateful for the Lords amendment.

Mr. Rendel: The Government will be pleased but not surprised that the Liberal Democrats support the Lords amendment. We, too, are delighted that they have so completely changed course from everything that they said in Committee and on Report. This is the single most important welfare change in the Lords amendments. It is a great pity that the Government did not have the sense to agree to similar amendments that were tabled in Committee.

This year, there have been four attempts to cut benefits: the cut for lone parents was, sadly, not reversed, although some concessions have been made on child benefit; council tax benefits were mostly reversed, and there is absolutely no reason not to reverse the rest; jobseeker's allowance cuts were completely reversed before they were even presented to the House; and now backdating is to be completely reversed.

All those changes are good news, but there are rumours--and, from what the Minister said, they may be true--that there is still a chance that the reversal of the benefit cuts will be reversed in the summer as a result of the overall spending review. That would be very foolish, considering the weight of opposition that has been mounted. I hope that the Government will have the sense not to try the patience not only of the House but of the people of this country, among whom there is a huge majority against the cuts.

Mr. Keith Bradley: We are reviewing the whole social security system through the Green Paper on welfare reform. As we introduce our new modern service and ensure that the claiming process is streamlined and made more efficient, we can more effectively consider how backdating rules affect claimants. In that context, I can assure my hon. Friend the Member for Hendon (Mr. Dismore) that the matters that he brought to the attention of the House will be examined again. I commend the Lords amendment to the House.

Lords amendment agreed to [Special Entry].

Lords amendments Nos. 79 and 80 agreed to.

13 May 1998 : Column 482

New clause

Lords amendment: No. 81, before clause 75, to insert the following new clause--Pilot schemes--
".--(1) Any regulations to which this subsection applies may be made so as to have effect for a specified period not exceeding 12 months.
(2) Any regulations which, by virtue of subsection (1) above, are to have effect for a limited period are referred to in this section as "a pilot scheme".
(3) A pilot scheme may provide that its provisions are to apply only in relation to--
(a) one or more specified areas or localities;
(b) one or more specified classes of person;
(c) persons selected--
(i) by reference to prescribed criteria; or
(ii) on a sampling basis.
(4) A pilot scheme may make consequential or transitional provision with respect to the cessation of the scheme on the expiry of the specified period.
(5) A pilot scheme ("the previous scheme") may be replaced by a further pilot scheme making the same, or similar, provision (apart from the specified period) to that made by the previous scheme.
(6) In so far as a pilot scheme would, apart from this subsection, have the effect of--
(a) treating as capable of work any person who would not otherwise be so treated; or
(b) reducing the total amount of benefit that would otherwise be payable to any person,
it shall not apply in relation to that person.
(7) Subsection (1) above applies to--
(a) regulations made under section 171D of the Contributions and Benefits Act (incapacity for work: persons treated as incapable of work); and
(b) in so far as they are consequential on or supplementary to any such regulations, regulations made under any of the provisions mentioned in subsection (8) below.
(8) The provisions are--
(a) subsection (5)(a) of section 22 of the Contributions and Benefits Act (earnings factors);
(b) section 30C of that Act (incapacity benefit);
(c) sections 68 and 69 of that Act (severe disablement allowance);
(d) subsection (1)(e) of section 124 of that Act (income support) and, so far as relating to income support, subsection (1) of section 135 of that Act (the applicable amount);
(e) Part XIIA of that Act (incapacity for work);
(f) section 61A of the Administration Act and section 31 above (incapacity for work).
(9) A statutory instrument containing (whether alone or with other provisions) a pilot scheme shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House of Parliament."

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

The amendment deals with the circumstances in which a person claiming an incapacity benefit is to be treated as capable or incapable of work. It introduces a new regulation-making power to allow pilot schemes to be set up. The schemes will allow us to test the effect of less restrictive definitions of incapacity in order to improve opportunities for disabled people, and to test different measures to determine the most effective ways of helping those sick and disabled people who want to move towards the world of work so to do.

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This is an entirely benevolent power. It will allow benefits to be extended to those who might otherwise be excluded, but it will not allow for the removal or reduction of benefit for those currently entitled.

That important safeguard will ensure that the power can be used only in a benign manner. It will enable us to test the effects of allowing people to undertake work trials, or to try a small amount of work as preparation for a return to the labour market. It will also allow us to assess the value of enabling those who will never be able to sustain regular full-time employment nevertheless to participate in the world of work.

I commend the amendment to the House.

Mr. Peter Bottomley: I welcome the amendment. It is not only benign but very important for a significant number of people who may suffer from alcoholism or a psychiatric illness--it is more likely to be psychiatric than physical--and who may be able to work for three weeks out of four, or three months out of four, but who are likely and predictably to have collapses, which make them unable to continue in paid employment.

Any Member of Parliament with a mental health project in his or her constituency, who has heard from someone who has moved from income support to being a taxpayer, will know the difference that such a provision would make to that person's life. If re-entry to the benefit system becomes difficult, people will not take the risk.

I commend the Government's proposal and hope that it works well.

Lords amendment agreed to.

New clause

Lords amendment: No. 82, before clause 75, to insert the following new clause--Expenditure for facilitating transfer of functions etc.--
".--(1) The Secretary of State and the Commissioners of Inland Revenue may incur expenditure in doing anything which in his or their opinion is appropriate for the purpose of facilitating either of the following things, namely--
(a) the transfer to the Commissioners of such of the functions of the Secretary of State as are exercisable by the Contributions Agency; and
(b) the exercise by the Commissioners of those functions.
(2) The powers conferred by subsection (1) above--
(a) shall be exercisable whether or not Parliament has given any approval on which either of the things there mentioned depends; and
(b) shall be without prejudice to any power conferred otherwise than by virtue of that subsection.
(3) Any expenditure incurred under this section shall be defrayed out of money provided by Parliament.
(4) In its application to Northern Ireland, this section shall have effect with the following modifications, namely--
(a) for the first reference to the Secretary of State there shall be substituted a reference to the Department of Health and Social Services for Northern Ireland;
(b) for the reference to such of the functions of the Secretary of State as are exercisable by the Contributions Agency there shall be substituted a reference to such of the functions of that Department as correspond to those functions; and

13 May 1998 : Column 484

(c) for the reference to money provided by Parliament there shall be substituted a reference to money appropriated by Measure of the Northern Ireland Assembly."

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

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