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Lord Rix: Like the noble Lord, Lord Campbell of Croy, I shall not go over the ground covered so effectively by the noble Lord, Lord Ashley of Stoke, and other noble Lords. However, it is worth remembering that people who are over the age of 20 when they claim SDA have to demonstrate that they are 80 per cent disabled to qualify. It is difficult to prove that one is 80 per cent disabled and, as a rule, people do

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not slip through the net in a test of that kind. If the Government really believe that the best way to help the more severely disabled people is by abolishing the severe disablement allowance, something must replace it. That something should be more than means-tested income support.

Baroness Hollis of Heigham: This clause and Part IV of Schedule 13 phase out severe disablement allowance. That will mean that from the point of change, no new claims for SDA will be accepted.

I regret that the previous amendment and this clause stand part debate were not grouped together. We have already spent some time discussing our proposals for SDA, so I will not extend this debate unnecessarily. I simply want to remind the House that SDA has failed. It does not help the one group of people who cannot build up a national insurance entitlement because they become disabled before they can enter work. SDA does not protect those people properly. It does not help the poorest, it is out of date and it gives additional money to people who we no longer believe need it.

The Government propose to reform SDA. Nobody now receiving SDA will lose out, but in future younger people will gain through access to incapacity benefit--worth up to £26.40 a week more. Some 175,000 people will gain in the long term. Because of the points of concern expressed by the noble Earl, Lord Russell, we shall ensure--by raising the age cut-off point to 25 for young people who enter higher education or training--that we give them entitlement to the new IB. I hope that we have met his points, but if he feels that we have not I shall be happy to follow it up in correspondence. The disability pressure groups asked us to raise the cut-off age from 20 to 25 for that reason.

People with the lowest incomes who will no longer qualify for SDA will see no difference in their income because, as the House knows, SDA makes no difference to 70 per cent of recipients, because they have to top it up with income support. People who will be in that situation in future will also be eligible for income support.

We should also remember that our reform of SDA is part of our wider package for disabled people. We are introducing the disabled person's tax credit, which will be much more generous and accessible than disability working allowance; doubling the child premium in the working families tax credit for a disabled child; and creating the new disability income guarantee, worth at least £128 a week for most severely disabled people under 60 receiving income support.

Overall, we are spending £2 billion more by the end of this Parliament on benefits for disabled people. As the House saw in the debate last night, we are also building on our commitment to comprehensive civil rights with the disability rights commission. We are also doing more to help people into work--because all those currently on IB were once in a job. We are investing £195 million in the new deal for disabled people; investing a further £80m in the "one" pilots; and replacing the all work test with the new personal

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capability assessment to end the assumption that everyone on incapacity benefit can do no work whatever their skills and their human capital.

All those reforms are an essential part of our approach, but if we want to do more for the people who need help most, we have to ask how best to use our resources. That is why we are modernising disability benefits--so that they provide more help for disabled people in greatest need, as well as providing help and opportunities for disabled people who want to work.

I was asked about the savings that the proposals would generate. We expect from Clause 60 that the savings by year three will be £5 million a year, rising in the long term to some £60 million a year. I am assured that in the £250 million figure I gave in response to the earlier amendment moved by the noble Lord, Lord Rix, income support was taken into account in the calculation of the cost of that amendment and, therefore, it was a net figure, not a gross figure.

Most of the Committee's concerns this evening have focused on the position of married women. Some 35 per cent of the existing SDA caseload are married women who were passported across from the old housewives' non-contributory invalidity benefit, introduced in 1977. The same cohort of people were taken across into SDA.

My noble friend Lord Ashley of Stoke said that we were whisking away the safety net from those married women in the future, but that is not true. A safety net will exist that did not exist in 1977 or in 1984, when SDA was introduced. The addition in 1988 of the disability premium to income support is now the true safety net for people with relatively severe disability who are in financial need.

The noble Earl, Lord Russell, was right. It is a generational issue, and the same arguments came up in relation to widows' benefit, incapacity benefit and SDA. The world has changed since those benefits were shaped in the early 1970s.

I repeat that the housewife's contributory benefit was introduced one year before the abolition of the reduced stamp for married women. That meant that women such as me were allowed to coast through on a reduced stamp and never build up an entitlement to IB. That has not been the case for the past 20-odd years.

In 1988, when income support replaced supplementary benefit, a new disability premium was introduced. Seventy per cent of those on SDA already receive income support. I pay tribute to the previous administration for introducing in 1992 new lower rates for disability living allowance.

In discussing married women with a disability who have no access to any income, the missing words are disability living allowance. Eighty per cent of people on SDA access and claim disability living allowance if they have extra costs of caring which need to be financed.

Furthermore, as a result of the changes to the minimum wage and LEA, approximately 90 per cent of women who work more than 16 hours a week and 60 to 70 per cent of women who work fewer than 16 hours a week will now qualify for incapacity benefit by building up their benefit entitlement.

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I believe that the world has changed. Perhaps I may give an example of a woman I know. She is Australian by birth and is married. She has never worked in this country and therefore has never built up a contribution record. She has no extra cost needs by virtue of her disability and therefore is not receiving DLA. Her illness is one of fatigue rather than an extra-cost illness. Her husband is a highly paid local government officer. That woman has not contributed; she has no extra costs; and a generous household income is going into the family. Why is she receiving a benefit when the money could be more appropriately spent on helping young people? I refer to young people perhaps known to the noble Lord, Lord Rix, through Mencap who, by virtue of cerebral palsy, spina bifida or the like, will never have the chance to join a labour market, will always be poor and for whom most of these savings are being recycled to help lift them.

These are choices. If money were endless, all right. None the less, in seeking to determine who needs help most we are looking at a degree of disability matched by the financial capacity to cope. We believe that people who cannot cope are those unable to build up any means of a contributory benefit by access to the labour market and who have no access to other forms of capital. In future, that group will be passported from SDA to IB. I believe that that is the right focusing of the benefit--not continuing to give it to people who have chosen not to build up a contributory record, as in the case of some married women, or who do not need access to means-tested benefit because they have sufficient finances coming into the household. I do not believe that they have the prior claim on disability benefits over young people who were disabled in their childhood and have no such access. That is the reason for Clause 60. I realise that this is a generational matter, but I hope that in the light of my explanation Members of the Committee will be able to support the Government's position.

4.30 p.m.

Lord Higgins: The Minister said that the benefit would go to people who had chosen not to build up a contribution record. Is she saying that all the people who will lose out as a result of the clause chose not to build up a contribution record; that is to say, they had a choice?

More particularly, the Minister did not refer to a government estimate showing that 16,000 people, 10,000 of them women, would be excluded from benefit as a result of the abolition of SDA. Is she saying that all those 16,000 people will receive benefit in some other way, or not?

The Minister said that the Government believe that those people have adequate resources. What is their evidence that that is the case? Presumably, the evidence is based on a statistical foundation. That statement implies that no personal benefits shall be paid to anyone without a health or means test.

Baroness Hollis of Heigham: People such as myself chose to pay the reduced married women's stamp or we chose not to go to work. In some comfortably-off

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families, the women chose not to work. That is their choice. However, if there is a choice not to work, and therefore not to build up a contribution record, unless there is financial need the state has no obligation to make good the choice from taxpayers' money. It is not necessarily right that taxpayers on a modest income of £10,000 or £12,000 a year should contribute to a non-means-tested benefit for someone whose household income may be four or five times that.

If a person has additional costs by virtue of his disability, yes, there is a commitment by society. That is precisely why 80 per cent of those on SDA are entitled to disability living allowance. However, as an income replacement--that is SDA--it is not necessarily right that society should replace an income where a household is comfortably off as opposed to the extra costs of disability, which is generated by DLA.

The point is that women have a choice now and they make good use of it. In fact, seven out of 10 married women and eight out of 10 married men work. More widows than widowers are in work. The number of women going into the labour market is the same as the number of men. Given that, if a woman chooses not to work and therefore not to build up entitlement to contributory benefit, presumably by reason of the relative affluence within the family, that is her choice. However, it is not necessary that other taxpayers on lower incomes should support that choice. If she has extra needs by virtue of her disability, DLA should meet it. Alternatively, if she is in financial need, there is income support with disability premium.

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