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Lord Rix: I hope that the Committee will forgive this commercial. The noble Lord, Lord Renton, will confirm that for a number of years MENCAP has used the Pathway Employment Service. It has been of inestimable value and use to people with learning disabilities. We now have 5,000 people with a learning disability in open employment. The Pathway Employment Service is most efficient and is able to give expert advice and support to people with a learning disability who are able and wish to be employed.

Baroness Lockwood: I have some sympathy with the Minister in the sense that we are straying towards later clauses. His statement on the amendment indicates the complicated system that must be put into operation in order to implement the provisions of the Bill. It underlines some of the points that many of us made on Second Reading; that we require a body with a strategic role which can look at the whole problem, deal with the various aspects of discrimination, establish its contacts and deal with the appropriate organisations in accordance with the problems that have arisen.

We must look most seriously at what the Minister has said tonight. We must bear it in mind when we discuss not only Clause 22 but those clauses relating to the National Disability Council.

Baroness O'Cathain: I thank the Minister for his comments on Amendments Nos. 18 and 21. The Committee has probably lost sight of them by now, with the minor bombshell—perhaps that is the wrong word—that the Minister threw into the middle of the debate. He said, rather elegantly, that he was using the amendment as a coathanger but I believe that it is a little more than that. I also thank the noble Baroness, Lady Seear, for supporting me.

We are trying to do our best for the disabled in every way. I refer not only to employment, because employment in particular in better and larger organisations is well catered for, but also to the provision of goods and

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services. If we want the Bill to work we must ensure that the people out there who will make it work—they are the employers, the providers of services and the disabled—know that they have the comfort of consultation on an ongoing basis.

Although I listened carefully, I cannot understand the mass of objection to putting that on the face of the Bill. However, I was grateful to the Minister for his detailed explanation of the Government's intention about the supporting codes of practice and I take comfort from that. I am also grateful to the Minister for saying that he wishes to maintain and to continue the dialogue. I do not wish to sound ungrateful but I should like to know why the provision cannot be on the face of the Bill.

As regards the Minister's statement attached to the coathanger of Amendment No. 21, it behoves all of us to read Hansard. We have heard a great deal of detail and I tried to scribble down some of the issues. The comments go a long way towards helping me with the remainder of the Bill and I thank the Minister for that. With the proviso that I should like the Minister to look again at putting Amendment No. 18 on the face of the Bill, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 19 not moved.]

Lord Renton moved Amendment No. 20:

Page 2, line 10, leave out subsection (5).

The noble Lord said: In view of his undertaking, my noble friend may wish me to move Amendment No. 20. If his undertaking is to be fulfilled subsection (5) must be removed in any event. Why should we wait to do so?

Lord Mackay of Ardbrecknish: My noble friend is being extremely helpful. However, I plead with him to let us leave the matter with my promise to return with suitable amendments. They will of course go a little wider than the first amendment that we discussed and will take in the consequential amendments, which may or may not include that which he has just mentioned.

I wish to study the matter a little more before my noble friend presses me too far. I hope that he, having made his point, will accept my assurance that we will put forward amendments which will do exactly as I have said and will mean that the negative procedure will come into play.

Lord Renton: I therefore trust that Members of the Committee will grant me leave to withdraw Amendment No. 20.

Amendment, by leave, withdrawn.

[Amendment No. 21 not moved.]

Clause 2 agreed to.

Clause 3 [Discrimination against applicants and employees]:

Baroness Turner of Camden moved Amendment No. 22:

Page 2, line 38, at end insert ("and occupational pensions").

The noble Baroness said: In moving Amendment No. 22 I shall speak also to Amendments Nos. 24 and 37. The purpose of these amendments is to write into the present legislation the requirement that there should be no discrimination in pension provision in regard to people suffering from disability. The wording of the amendments

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is adapted from Part IV of the Social Security Pensions Act 1975, which provides for equal access to occupational pension schemes for men and women. I hope that the Minister will not tell us that the amendment is unnecessary.

A 1988 Office of Population Censuses and Surveys report found that disabled pensioners had a lower average equivalent income—an average of £91.90 per week—than non-disabled pensioners who averaged £93.70 per week. The 1988 changes to the state earnings-related pension scheme encouraging people to opt out of SERPS—the Minister will know very well what we on this side of the Committee think about that—had a particularly negative effect on disabled people. Disabled workers are often at a disadvantage in occupational and personal pension schemes and therefore rely heavily on SERPS. They lost out in the changes that the Government then made to SERPS.

At that time the Government estimated that 80,000 disabled people and 30,000 dependants of disabled people would be adversely affected. However, I understand that the Disability Alliance put the figure much higher at more than 1 million.

We all know that the labour market is changing; employment is now much less secure. Even for those in employment there is insecurity because many people do not know whether they will still be in employment next year or even next month. Part-time work is much more common and temporary and short-term contracts are replacing continuous employment.

I deplore those developments, although I know that the Government believe that they are somehow inevitable and even positive. However, they have an effect on pension entitlement. That means that the number of people who do not build up entitlement to a full national insurance retirement pension will grow. That is already happening. For example, in March 1984, 3.49 per cent. of male retirement pension claimants and 10.59 per cent. of female claimants received a pension at a reduced rate. Ten years later, that number had increased substantially. In fact, the number of claimants on a reduced rate of retirement pension grew by 221,000 to just under 1 million in that period.

Therefore, it is clear that occupational pensions will have to play a vital role in ensuring that people do not have to rely on means-tested benefits in old age. Occupational pensions are largely responsible for the fact that people of retirement age are less likely to be poor now than they were 15 years ago. Therefore, it is extremely important that employers should not be allowed to discriminate against persons regarded as disabled in relation to access to occupational schemes.

Where membership of a pension scheme is one of the prime non-pay benefits of a job, to discriminate against disabled people in terms of entry would surely run counter to the Government's intentions. Quite rightly, the Bill is designed to require employers to take reasonable steps to remove physical barriers or adjust their practices to enable disabled persons to be employed. That cannot be achieved if disabled people are debarred from participating in one of the chief non-pay benefits available in most good employments. I beg to move.

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Lord Inglewood: I am grateful to the noble Baroness for raising this important matter and I trust that she will find my response helpful.

Perhaps I may deal first with Amendment No. 22. The purpose of this amendment is to include "occupational pensions" within the defined meaning of "benefits" in Clause 3. I can tell the noble Baroness that Clause 3 is drafted in the same terms as Section 4 of the Race Relations Act 1976. It has never been suggested that that Act has failed to cover entitlement to occupational pension benefits. It is easy to see why that is so. Clause 3 applies both to "terms of employment" and to "benefits", which is already widely defined. A person's entitlement to a pension from his employment will normally be a term of his contract, and even where it is not a term, it is so plainly a benefit that I cannot believe that courts or tribunals would have the slightest difficulty on the point. I cannot agree to the amendment as it would throw doubt on the existing wording of the Race Relations Act, but I hope that that assurance will enable the noble Baroness to withdraw her amendment.

I turn to Amendment No. 37, which seeks to disapply Clause 5(5) in the case of discrimination relating to benefits in employment. It also disapplies the subsection in relation to occupational payments. The Committee will be aware that Clause 5(5) enables regulations to be made to specify additional circumstances in which less favourable treatment is taken to be justified.

It may be that the noble Baroness intends that the question of justification of less favourable treatment in pensions should be dealt with separately by regulations made under the new regulation-making power which she is proposing in Amendment No. 24. However, we must take great care to understand the possible effect of this Bill upon occupational pensions, and we have to accept that there will be cases where less favourable treatment will occur for wholly justifiable reasons.

There might be two kinds of case in which the occupational pension benefits of a disabled person might justifiably be less than those for a non-disabled person working next to him. The first is that pensions are almost always linked to pay. If there is a justifiable difference in the pay received by the two workers—perhaps, for example, because the disability means the disabled person has to work fewer hours—it must be right that the pension can also reflect that difference. I cannot believe that Members of the Committee would wish to require the employer to have to arrange for a full pension in such circumstances.

The second reason is that the disability may create actuarial risks which the employer or the pension fund should not have to take. For example, depending on the circumstances, we believe that an employer who takes on an employee who is terminally ill can be justified in refusing such a person cover under any scheme he operates for death-in-service benefits. The removal of any justification in the case of these benefits and payments would place quite unwarranted burdens on employers. For that reason, the Government cannot accept this amendment.

I turn now to Amendment No. 24. This provides a power to make regulations to deal with the detailed issues which may arise regarding the application of Part II of the

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Bill to occupational pensions. I have already indicated that the Government accept that Part II applies to occupational pensions. Part III indicates that it applies to the provision of insurance services and enables the details to be set out in regulations. We agree that similar provision is required for Part II. We have received representations about the Bill's coverage of occupational pensions and the important issues that may be involved. We are considering this whole matter carefully including when occupational pension benefits of a disabled person might justifiably be less than those for a non-disabled person, in the context of both Part II and Part III, and will take account of the points that have been made by the noble Baroness in the debate today. It may well be that we need regulation-making powers to deal with the detail of such justifications along the lines I mentioned earlier. I cannot support this amendment but we shall consider this matter further and I shall come back to the House on the point at Report. I hope that that gives the noble Baroness the assurance she seeks.

7.15 p.m.

Baroness Turner of Camden: I am obliged to the Minister for his response to the three amendments. I am not at all satisfied with some of the points that he made—in particular in regard to the points that he made about the possibility of paying a different pension because pensions would be linked to pay. In most pension schemes it is accepted that a pension is linked to the pay that one receives. Of course, a final salary scheme is designed quite specifically to ensure that it is linked to the final pay. I do not see any problem about that and nor would most people concerned with disability or disabled persons in employment.

We are concerned about a situation in which a person may be debarred altogether from participating in the occupational scheme that is available to other employees who are not disabled in the same employment. However, I note that the Minister is considering what has been said and is considering the submissions that have been made by organisations concerned with occupational pensions and with disabled people generally who are worried about whether or not they will have access to occupational pension schemes. Therefore, we shall await with interest to see what the Government propose to do on Report and whether they produce the kind of amendments which we believe will be necessary to protect the interests of disabled persons who will otherwise will not, in our view, be protected adequately and have adequate access to occupational schemes. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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