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Lord Mackay of Ardbrecknish: My Lords, the new clause relates to insurance services provided under a group scheme which has been established by an employer through the medium of an insurance company. The noble Baroness asked me about termination of service. That is one of the risks to which this clause applies. It deals with insurance companies which provide group schemes on a wide range of risks that may relate to dismissal or resignation. It is not limited to redundancy. The effect is that an insurance company may not discriminate against employees any more than it can against a disabled member of the public. We come back to the point that when they are grouped they cannot treat them differently from the way they would treat a disabled member of the public separately under, I assume, Part III.

The words "any other prescribed matter" tend to mean what they say. That gives us the power to add additional risks by regulation. I would say to the noble Baroness that if I had some examples I might put them on the face of the Bill with the others. However, as this is a fairly new field, we wish to be able, following consultation, to catch all the problems that may arise.

As I understand the first question, I come back to the "actuarial" point. Would an insurance company be able to refuse to quote for a high risk employee?

Baroness Hollis of Heigham: My Lords, employer.

Lord Mackay of Ardbrecknish: My Lords, I imagine that they can do that at the moment. A company can chose to do business with an employer or not, if it is as general as that. However, the point is that this Bill is directed at disabled people. I am not sure that the noble Baroness is not asking me about discrimination on a rather wider basis than just disability. After all, that is one of the activities of insurance companies. They make decisions about the risks involved in taking on an individual, or groups of individuals, and the premium that they should impose given what they see as the risks. I have indicated that nothing in the Bill would prevent that actuarial risk-taking decision being made. That is the whole basis of insurance. What we are trying to do in the present group of amendments is to ensure that

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insurance companies cannot discriminate against disabled people without justification just because they are disabled. There has to be far better reason than that.

The noble Baroness referred to employers and asked me whether screening was allowed by insurance companies. Insurers can refuse to quote for business provided that they do not screen out potential customers on the grounds of disability. If disability is used to justify a refusal to insure, there would have to be those reasonable grounds for believing that there is a genuine risk involved. We shall regulate on this matter. It is tied in with how insurance companies would behave to an individual under Part III. I hope that I have satisfactorily answered the noble Baroness's three questions.

Baroness Hollis of Heigham: My Lords, before the Minister sits down, will he confirm that he will consult the disability organisations on any guidance that he will be issuing to that effect?

Lord Mackay of Ardbrecknish: My Lords, one thing I have learned in the Department of Social Security is that when we consult we do so quite widely. I can assure the noble Baroness that we shall be consulting disability organisations, insurance companies, pensions, etc.—I have no doubt—before we come to any conclusions.

Lord Rix: My Lords, I am grateful to the Minister for allowing me to say a few words for clarity's sake. There is already the charities consortium of 30 or so major charities which have clubbed together to deal with the problems that arise from insurance and banking procedures with regard to disabled people. I believe that it is already having a marked effect upon the efficacy and the broader church which is now adopted by insurance companies and indeed by banks.

Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord for that intervention. As this is Third Reading, on that final point I commend this amendment to the House.

On Question, amendment agreed to.

Clause 16 [Discrimination in relation to goods, facilities and services]:

Baroness Farrington of Ribbleton moved Amendment No. 22:

Page 14, line 20, at end insert—
("(i) services or facilities used by a disabled child under the pre-education vouchers scheme, in any establishment, whether provided by a private, local or public authority.").

The noble Baroness said: My Lords, in moving this amendment I shall speak also in support of Amendment No. 23.

Amendment No. 22 seeks to add a further example of services to which this clause and Clauses 17 and 18 apply. Whatever reservations there may be—from these Benches there are many—about the Government's proposals for a nursery education voucher scheme, nevertheless it is extremely important that, if such a scheme is brought into being, it ought to protect the interests of children with disabilities and ensure that they are fully encompassed within the protection against discrimination.

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At the moment it is at the pilot scheme stage. It is understood that the Government's intention is to broaden the scheme gradually county by county throughout the United Kingdom, to encompass all areas of the country. Therefore, it is of paramount importance—not only to individual children with disabilities but also so that there can be a rigorous examination of the effects of a pilot scheme—that disabled children be included. Within many local authorities, such children are given priority under the current system of provision of nursery education.

It is inevitably the case that in many, but not all, cases provision for such children is more expensive than the general provision for pre-school education. Therefore it is important that the implications of the proposed scheme of nursery vouchers should be rigorously tested for the impact that it has on the continuing provision of high quality services for all children. I beg to move.

Lord Henley: My Lords, I have to oppose the two amendments spoken to by the noble Baroness. Their intention is to secure that there is no discrimination in services for disabled four year-old pupils under the nursery education scheme announced early in summer, in July, by my right honourable friend the Secretary of State. I hope that the amendments possibly indicate a degree of support from the Benches opposite for that scheme. I live in hope.

I can assure the House that the amendments are neither necessary nor desirable. Existing legislation is powerful and comprehensive and it ensures that full provision can be made for disabled four year-olds. In addition, despite the provision in Amendment No. 23, the measures would cut across the existing treatment of education within Clause 16(5) and would therefore cause immense confusion. Finally, we shall be bringing forward provisions later this year to enshrine the nursery voucher scheme in legislation. It is entirely inappropriate to have this single provision contained within this Bill.

With your Lordships' permission, I shall expand briefly on some of the arguments. As I made clear, the voucher scheme is an exciting policy which will put power into parents' hands to choose the nursery placement for their four year-old that is right for the child and the parents' circumstances. But given that premise, I can assure the House that educational provision for individual disabled four year-olds will invariably be much more far-reaching and specific to their needs than the provision provided for the majority of that age group under the nursery voucher scheme. This is already the case under the Education Act 1993. Although the terminology of that Act speaks of children with special educational needs, this will encompass the disabled child who needs access to specialist facilities.

In the great majority of such cases, the child will have a statement of special education needs maintained in law by his or her local education authority. That statement will be specific to the child, as a result of a careful and detailed assessment. It will denote the exact provision or facilities that the child needs and will name a suitable placement. In principle, the provision can be arranged in the reception class of a maintained primary school, in an LEA nursery school or class, in an independent

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school or sometimes in a playschool. The placement will of course be appropriate to the child's needs. A child with physical disability in a wheelchair or one with sensory impairment should gain access to the placement which best fits those needs.

The voucher will therefore simply be a contribution towards the much greater cost of the placement; that is, the basic cost plus the specified provision documented within the statement, which ensures that the child has access to the facilities that he or she needs. In the majority of cases the placement will be full time.

Moreover, the parental rights of preference under the 1993 Act will apply to the placement. LEAs have a qualified duty (under Section 160) to comply with that preference, provided that three conditions are met: the placement must be appropriate to the child's need; and it must be compatible with the interests of other children and with the efficient use of resources. Parents can appeal to the new SEN tribunal if they believe their preference to be unreasonably rejected by the LEA. If a four year-old child is being assessed to see whether a statement is necessary, it is normal practice for appropriate provision to be made in the meantime. The usual practice is for LEAs to give priority to such children in nursery classes or assessment centres or perhaps in the preferred placement, in anticipation of the completion of the statement.

If a four year-old child has a disability which is not severe enough to warrant a statement, it is impossible to envisage a situation where the provisions of Part III of the Bill would need to be enforced. If a child needs specialist access, a statement should be produced.

I can therefore see no reason why we should insert within this Bill a provision which specifies non-discrimination in goods and services to pre-school children. I believe that the existing legislation is more than sufficient.

I come now to my second fundamental point. The amendments will be incompatible in principle with the Bill's treatment of education. As I stated, pre-school education can take place in maintained primary schools or independent schools. Indeed, we expect the majority of primary schools eventually to make such provision. These measures would, therefore, automatically cut across the carefully crafted provisions of Clause 16(5) and (6) by including establishments funded by LEAs, the funding agencies and voluntary bodies.

I remind the House that extensive debate was given in another place to the education provisions of the Bill. The Government won the argument there on the questions of principle—for example, the fact that our existing legislation in special education is comprehensive and highly regarded. I will, if I may, stress one more point about resources, for these amendments would bring with them formidable financial implications

The potential capital cost of making all mainstream primary schools accessible for disabled four year-olds is very high. It is at present unachievable given current constraints on all public expenditure. We do not want to see a situation, therefore, where an authority which has planned to use its capital resources where they will be most effective—both geographically and with an eye to

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where young pupils have the most pressing needs—has its plans thwarted. Under these amendments such an authority might well be forced into spreading its existing resources so thinly that fewer pupils benefit.

Instead of being able to concentrate existing scarce resources to ensure that, in each area, there are primary schools or nursery classes each with excellent resources, able to take many pupils with a wide range of special needs, we might produce a situation with nearly all primary and pre-school provision with a few ramps, no lifts, and improved access for only a very small minority of pupils. I hope therefore that the noble Baroness will feel able to withdraw the amendment.

6.30 p.m.

Baroness Farrington of Ribbleton: My Lords, before pursuing one point with the Minister, perhaps I can express my grave concern in regard to his reply in relation to the adaptation of primary school buildings. It is clearly the case that since 1979 the expenditure on school buildings and capital allocations for school buildings has been woefully inadequate. It is also the case that for several years the Government have refused to provide enough capital allocation for anything other than basic needs and roofs over heads. It is therefore a tragedy to hear the Government say that access at local level, with parental choice for children for whom adaptation is necessary, is one of the reasons for rejecting the amendment.

Can the Minister explain a little further the difference between the protection under this legislation given to a three year-old child and that denied to a child of four? Is it the case that a child of four with a voucher will be exempt from the Act? Will it be lawful for an early years centre to discriminate against a disabled child with a voucher, but if a three year-old child with a disability attends an early years centre, in principle that child will be covered by the Disability Discrimination Act, as it will be?

It is not clear whether a centre will be allowed to discriminate against a three year-old with a disability if it accepted a four year-old with vouchers. The issue is whether the receipt of vouchers makes an early years centre an educational establishment for all children or just for four year-olds, and whether in this instance the Act will apply to the establishment or to the child with the voucher.

It is clearly the case that three and four year-old children ought to be protected from discrimination. It is equally clear that, with the exception of, in most cases, charitable institutions in the voluntary sector, the majority of provision for children with disabilities is made by local education authorities and that provision is more expensive than the amount that the Government have indicated the voucher scheme will be able to purchase. Is it the case that the local authority can or should be required to make that more expensive provision available? It is clear that it would be better for such children to be included specifically within the remit of this legislation so that any problems that occur during the pilot experiment can fully be taken into account, including the needs of children with disabilities.

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