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Baroness Hollis of Heigham: My Lords, I do not accept the assertion behind the second part of the noble Baroness's question. The Chancellor has announced that from April 1999 we shall spend £2.5 billion on pensioners in terms of the take-up of income support and increasing the top-up from retirement pension to income support by three times what would have been the normal uprating, so that the minimum guaranteed income for pensioners will be £75 for an individual and £116 for a couple. In addition, we shall repeat the winter fuel payments and restore free eye tests--which should never have been stopped--and concessionary fares. A substantial package will go to the poorest pensioners, as a result of which they will enjoy a much greater hike in their real income than they have had at any point since the previous Labour administration.

Vickers: Tank Factory Job Losses

3 p.m.

Lord Calverley asked Her Majesty's Government:

What is their response to the laying off of 450 workers at the Vickers tank factory in Leeds.

Lord McIntosh of Haringey: My Lords, job losses are always regrettable. It is very sad that Vickers has been unable to sustain its current workforce in Leeds, especially as it has had a long association with the city. I am therefore pleased that the Government Office for Yorkshire and Humber has announced that it is establishing a rapid response unit to bring together the city council, the Leeds training and

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enterprise council, the Employment Service and the company to ensure that every possible help with retraining and redeployment is available. I am sure that the skills of these employees will prove attractive to other employers. This help is in addition to the out-placement services which Vickers will offer to all staff who are made redundant.

Lord Calverley: My Lords I thank the Minister for his reply. But is he aware that the Strategic Defence Review of 11th July this year stated that,

"substantial work [is assured] ... for the next three years"?

Just two months later these cuts were announced. Does he agree with the Governor of the Bank of England that this is an acceptable price to pay?

Lord McIntosh of Haringey: My Lords, the Strategic Defence Review provided a clear basis for the aerospace and defence industries to plan for the future. That does not mean that every single job at every single location is automatically protected.

As to the noble Lord's second question, I have to remind him that the Governor of the Bank of England is not a Minister of the Crown, unlike the previous Chancellor of the Exchequer who said that unemployment was a price worth paying. If the noble Lord looks at the Governor's remarks as reported in the Newcastle newspaper, The Journal, he will see that he said:

"My anxiety is to try to keep unemployment lower than it has been in earlier phases of slowdown and earlier phases of recession. I am very hopeful that any rise in unemployment that we will see will be nothing like the kinds of rises we have seen in the past".

Lord Merlyn-Rees: My Lords, we know in Leeds why there is a decline in the number of tanks needed by the Army. We understand and confirm the steps that have been taken by the local authority. In Leeds we do not have the incentives that are offered in other parts of the country to attract new industry into the area. Given what has happened at Vickers, formerly Barnbow and the ROF, which has provided work in Leeds for many decades, we should look again at possible incentives to bring work back to that part of Leeds.

Lord McIntosh of Haringey: My Lords, I cannot deny what my noble friend said about incentives. The economy in Leeds is diverse and buoyant. Leeds is one of the fastest growing cities in Europe. We recognise that there are areas of severe deprivation in Leeds and for that reason the Government are investing over £60 million in the city through the single regeneration budget up to and including the year 2004-2005.

Lord Vivian: My Lords, can the Minister assure the House that the proposed reduction in the number of workers at the Vickers factory will not affect the numbers and times of issue of Challenger 2 tanks to our armed forces?

Lord McIntosh of Haringey: My Lords, Vickers, rather than the Government, is responsible for meeting

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its contractual obligations to government. I understand that it made its decisions as to its workforce in Leeds for commercial reasons. I have no reason to suppose that it is putting its contractual obligations at any risk.

Lord Dean of Beswick: My Lords, does the Minister accept that, though the number of those who will lose their jobs in Leeds--namely, 450--is a lot fewer than the losses predicted at Rover, it is as big a blow to every man who loses his job in Leeds and to his family as it would be to anyone working in the car industry? Can the Minister assure us that the Government will treat this issue as seriously as that in relation to Rover?

Lord McIntosh of Haringey: My Lords, my noble friend is right. Every time a job is lost in engineering, whether it is in cars or defence manufacturing, ancillary jobs of suppliers are also at risk. That is why I said in my first Answer that a rapid response unit was being set up to tackle problems of that kind. That does not gainsay the fact that my noble friend is right. Job losses are serious for the economy and a tragedy for those involved.

Lord Gillmore of Thamesfield: My Lords, I should first declare an interest as a non-executive director of Vickers. Does the Minister accept that the job losses at Leeds would have been far greater had not the company decided to use about half the existing site to establish a centre of excellence for the maintenance, re-equipment and support of the tanks now in service with the British Army?

Lord McIntosh of Haringey: My Lords, with the greatest respect, I am not sure that a non-executive Director of Vickers should be asking questions about that matter in this House. These matters are for Vickers, not the Government.

Lord Burnham: My Lords, is it not the case that at present we have a substantial number of the heavy tanks in which Vickers has specialised? Is it not also the case that the need is for a lighter and different type of armoured fighting vehicle and that so far Vickers has proved unable to succeed in competition for contracts to produce such a vehicle on which it should now be advised to concentrate?

Lord McIntosh of Haringey: My Lords, I do not think it is for the Government to advise Vickers as to what type of vehicle it should concentrate on. It must make commercial decisions. What the Government can do, and have done, is to try to set out as clearly as possible for a number of years ahead their defence strategy and, therefore, the procurement policies which follow from that.

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Social Security Benefits

3.19 p.m.

Baroness Turner of Camden asked Her Majesty's Government:

Why, when a woman becomes entitled to widow's benefit, she automatically loses the invalid care allowance, even though her caring role for a disabled relative may continue.

Baroness Hollis of Heigham: My Lords, it is a basic principle of the social security system that only one benefit at a time can be paid to a person for income maintenance. Widow's benefit is designed as an income replacement benefit for women who lose their means of support through being widowed. Invalid care allowance provides a measure of financial support to those who give up the opportunity of full-time paid employment to care for a severely disabled person. To pay both benefits in full at the same time would duplicate provision for that need because they are both income replacement benefits. I understand that this has been the case ever since the social security system was established in 1948. It was applied to carer's benefit when my noble friend Lady Castle introduced ICA in 1975 from which so many carers have subsequently benefited.

Baroness Turner of Camden: My Lords, I thank my noble friend for her response, is she aware that the Question is based upon a case reported to me as a trustee of the Widows' Advisory Trust? The case involved a woman who had spent her life looking after a Down's Syndrome child. She had had the support, financially and otherwise, of a husband. He died and she received a widow's benefit which replaced the financial support that she had had from her husband, but at the same time she lost ICA. I believe that that was a rather harsh decision. Can these kinds of cases be looked at carefully in future? This view is supported by the Carers' Association, of which I am also a member.

Baroness Hollis of Heigham: My Lords, I am happy to assure my noble friend that this matter will be drawn to the attention of both the National Carers Strategy Forum which is being chaired by my honourable friend Mr. Paul Boateng and our forthcoming review of widows' benefits. If there is an income or earnings replacement benefit, two benefits are not paid at the same time if they overlap for the same purpose. For example, if a widow was on incapacity benefit, which is an earnings replacement benefit for an individual who has become disabled, she would not get that plus widow's benefit but she could get housing benefit or disability living allowance to meet extra costs. That is the basic principle of the social security system. But I shall be very happy to look at the case to which my noble friend has referred to make sure that that family claims every benefit to which it is entitled. There is a full range of other benefits, from disability living allowance to carers' premiums and so on, to which such a family is entitled. It is worth ensuring that that family is claiming its entitlement.

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