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Lord Rix: My Lords, being in two minds is not a comfortable position to be in, and I am in two minds in relation to this clause. I have signed my name in full support of the amendment of the noble Lord, Lord Ashley which propose an extension of the contribution conditions for incapacity benefit to ensure that more people who have contributed during their working lives will be entitled to the benefit. I believe this to be a laudable approach that is consistent with the Government's overall strategy of reform, but which nonetheless offsets some of the harsher consequences of the change in policy.

However, I suspect, as we have just heard, that in the context of this debate there will be no third way. I believe we will be asked to vote for polar opposites: either support the clause as originally proposed, or support a wholesale rejection of it. If my suspicions turn out to be correct, then, with great reluctance, I would be unable to vote in favour of the clause.

Testing the opinion of the House in this manner seems to be something of a missed opportunity. It is unfortunate that the Government have failed to table a compromise amendment which could lend credence at this stage. I urge them to do so at the earliest opportunity, and in so doing to consider seriously the suggestions of the noble Lord, Lord Ashley.

I fear that as the Bill progresses the political strategy may begin to overshadow the substantive concerns of the debate. I therefore urge all noble Lords and those in the other place to focus their minds on the impact of these changes on disabled people rather than on what transpires as political victory in the latter stages of this parliamentary timetable.

Earl Russell: My Lords, not for the first time the noble Lord, Lord Ashley of Stoke, has hit the nail on the head. Clause 58 is objectionable because it penalises people for things which are not their fault.

Between two people, both of whom have actively sought work with equal determination, one will be eligible for incapacity benefit having been successful and one will be ineligible as a result of being unsuccessful. The race is not always to the swift if they are not running over an equal course.

We on these Benches think that that is wrong, and that is why we agree so entirely with the noble Lord, Lord Ashley of Stoke, about the clause. We do not regard his amendments as being a satisfactory compromise. I agree with him that there always has to be compromise. Normally, it is true that half a loaf is better than no bread, but there are possible exceptions to that principle, as, for example, when the bread has ergot and is poisonous to eat. We think that that is the case here.

We are familiar in this House with the concept of salami-slicing. Were I the Treasury, I would be making contingency plans at this moment to accept the

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amendment of the noble Lord, Lord Ashley of Stoke, this year and then to take another salami slice off it next year and another salami slice the year after that and so on--I will not add the words “ad infinitum" because there is not an infinite amount of money to take, but for quite a long time.

For that reason I hope that the noble Lord, Lord Ashley of Stoke, will not press the amendments but will press the clause that should not stand part.

One of the ways in which the Bill penalises people for things which are not their fault is that it is geographically discriminatory. There are some areas where we are happily approaching full employment. In Newbury we have an unemployment rate of 1.1 per cent. My honourable friend Mr Rendel happens to be Member for Newbury, but he does know that Newbury is not the whole country. There are many other areas where the unemployment rate is 10 per cent, and sometimes more. In those areas the impact will be very much harsher. I do not see any good reason why it should be easier to get incapacity benefit in Newbury than in Newcastle, easier in Hampstead than in Hartlepool, and easier in Crawley than in Chorley. That seems to me to be an injustice.

It is not only geographical area which makes it harder for some people to get work than others. It is a very clear fact that it is much harder to get work if you are black. The rate of youth unemployment under 25 nationwide is 18 per cent. That is a Labour Force Survey measurement which I think is reasonably reliable. For black men under 25 nationwide the rate is 51 per cent; for black men under 25 in the Greater London area the rate is 62 per cent. So clearly the impact of this clause between black and white will be severely discriminatory. It will be discriminatory between those who have lost work, both under 45 and over 45.

I have already mentioned the lack of any satisfactory legislation against age discrimination and employment. In many areas and in many fields of work, if you lose a job over the age of 45 you have very little chance of getting another. If you thereafter fall ill, as has been known to happen, your chances of getting incapacity benefit drop by the year. I do not see any reason for saying that is fair. It works harshly against those whose disabling condition was weakening their capacity to work before they were diagnosed as eligible for incapacity benefit. Back pain and depression are two very common conditions to which that applies. It is not only that it is discriminatory; it is also that those against whom it is discriminatory are most likely to suffer limiting long-term illness and need to apply for incapacity benefit.

I take my evidence from a source that I am sure is familiar to the Minister, DSS Research Report No. 94. It shows that the incidence of severe disability varies very much indeed across the country. Indeed, the rate in Wales is as much as twice the rate in the south-east. There is a clear correlation between the poverty and disadvantage of an area and the amount of illness and disability which is found in it. For example, in

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Glasgow Easterhouse 18.3 per cent of the population have a limiting long term illness which hinders their capacity to work.

The interesting argument is this. Which is the hen and which is the egg? Government--I say “government" because it is equally true of the last government in 1993-94 and of this--assume that people claiming incapacity benefit after unemployment use it as a form of early retirement. I have never seen one shred of evidence for that assumption. But there is a large amount of evidence, some of it very powerful and not simply resting on correlation, that unemployment has a negative medical effect and leads to illness.

The most persuasive presentation of this view that I have seen was in a book by Jane Mattinson published by the Tavistock Institute for Marital Studies. It demonstrated bit by bit in individual case studies the deterioration of the state of mind, followed by limited resistance, followed by mild illness, followed by serious illness.

I refer to another specific case: the closure of the Harris bacon factory in Calne. That led to a massive increase in illness in Calne. It came immediately after the closure and was documented in each individual case and often consisted of physical symptoms about which there could be no argument. We still have to answer this question: why are so many more people found to be disabled than used to be? The DSS Research Report No. 94 found that a great many more people were found disabled than in its previous survey. But it concluded that almost all of them would have been found disabled by the criteria of previous surveys. So it is not that the criteria are being used more loosely. It is more a matter of disability coming out of the closet: being prepared to avow itself; not hiding away and refusing to admit. It is also probably the result of the highest levels of unemployment we have seen in this country since the 1930s. When we ask, “Which is cart and which is horse?", I believe that it is the unemployment that leads to the disability.

The people concerned are being doubly punished by this clause. Its philosophy is this: “To him that hath shall be given and from him that hath not shall be taken away even that that he has". It is not the policy of this party. I did not think that it was the policy of the Labour Party either.

Lord Morris of Manchester: My Lords, I pay tribute to my noble friend Lord Ashley for again having let your Lordships hear the authentic voice of disabled people on this clause which, as he said, is strongly opposed by every major disability organisation in Britain.

My noble friend describes himself as a lifelong Labour loyalist. I ask anyone who questions the truth of that to point to the last occasion in my noble friend's 33 years in Parliament on which he voted against a legislative proposal by a Labour Government. Friendship is one of the great tests of loyalty and, by that test, I know of no one more loyal than him. He is my very close and longstanding friend and like him--

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in my case after 35 years in Parliament--I am deeply saddened to find myself unable to accept what the Government are proposing in Clause 58.

I hope that we and other Labour Peers who cannot accept the clause without radical change will today be spared any homilies on the iniquity of disloyalty. In truth we feel more sinned against than sinning. For where in our general election manifesto was there even the vaguest suggestion that 170,000 people who now qualify for invalidity benefit would be denied it altogether? Who among us even hinted to the electorate that vulnerable people with a progressive illness like multiple sclerosis would lose their invalidity benefit even though they had contributed for it from their earnings week by week for 30 years? And how do I reply to the woman who wrote to me last Thursday from Huntingdon to say:

    “Should this proposal pass into law it will bring further distress to those whose lives are already seriously restricted by disability and illness".

What shall I tell her?

No wonder my good and right honourable friend Tom Clarke, who led for Labour in explaining our policy for disabled people at the general election, felt bound to speak and vote against this clause in the Commons. His speech kept faith impeccably with what he told the electorate on our behalf.

No convincing case has been made for the proposal since it was unveiled last October. Labour Ministers rightly condemned the Major government for their encouragement of unjustified invalidity benefit claims from unemployed people to cut their ever-lengthening dole queue. But the proposals now before Parliament do not dispossess those who allegedly ought not to have the benefit.

Instead they pile handicap upon handicap for many thousands of severely disabled people who, having paid national insurance for a contributory benefit in good faith over many years while in work, will lose the help for which they insured themselves.

Their resentment is compounded by media suggestions that the proposals are justified by massive fraud in the disability benefits system. Those suggestions persist and are repeated in public debate notwithstanding the conclusive proof of their dishonesty given to your Lordships' House--with all her customary candour and decency--by my noble friend Lady Hollis. As long ago as 15th January 1998, she made it crystal clear that suggestions of massive fraud were,

    “based on old information from the previous government",

and that after over 40,000 cases had been reviewed by DSS investigators in home visits to disabled people they had not found,

    “a single case of confirmed fraud".--[Official Report, 15/1/98; col. 1142.]

What my noble friend's statement to this House demonstrates is that to accuse disabled people of abusing the benefits system is to bark not just up the wrong tree but in the wrong forest. The real story is not that disabled people are abusing the system, but that the system is abusing them. For while the cruise

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missile can now be successfully targeted at a telephone booth in another country, we still seem unable to deliver their statutory entitlements to disabled people in this country. And without them they are left doubly disabled and often in double despair. Yet between £5 billion and £6 billion a year in benefits go unclaimed by the disabled people entitled to them.

A reason often given by disabled people for not claiming their entitlements is fear of being branded as what some commentators call one of the “something-for-nothing merchants". The same reason is given by frail elderly people, more especially single women living alone, for underclaiming £2 billion a year in income support.

Like those who speak for them in this House, disabled people want the Government to be tough on fraud and tough on the causes of fraud, not least when it is caused by administrative incompetence and corrupt private landlords. They point out that failure to tackle low take-up of benefits frustrates the will of Parliament. They are not resistant to change. For there are many reforms disabled people want to see. They are deeply appreciative, as I am, of the helpful new steps the Government have taken and will be taking and want the Government to succeed. But for that to happen Whitehall and Westminster must get the facts straight. And benefits for disabled people should be commended to the taxpayer not as acts of compassion but of enlightened self-interest and moral right. Our preoccupation should be with value as well as cost. And disabled people should be seen as givers, not only as receivers. For there are marked cost savings in humanely assisting them to achieve their potential as full and fully participating members of British society.

6 p.m.

Lord Higgins: My Lords, anyone who participates in a debate on the disabled opened by the noble Lord, Lord Ashley, supported by the noble Lord, Lord Rix, the noble Earl, Lord Russell and the noble Lord, Lord Morris, must do so with very considerable diffidence. But the measure which the Government have included in this clause is fundamentally wrong in principle. In particular it is a further step in the undermining of the contributory principle. If this clause is not amended it seeks to restrict incapacity benefit for those who have only recently been in work and paying contributions. But all the evidence that one receives from outside bodies shows that vulnerable people such as the unemployed, people with progressive illness such as multiple sclerosis and so forth, would lose benefit even though they may have contributed for 30 years. Therefore, I believe that this clause is completely wrong and that it is right to oppose it. It is entirely understandable that it should have been opposed in all parts of the House.

There are those who will say that there are reasons for taking action on incapacity benefit. There was the argument that under the previous government people received incapacity benefit more than was justified in order to take early retirement. That argument is invalid on two grounds. The first is that they were

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subject to severe inspection as to entitlement. In any event, the clause will only affect future claimants who have contributed and therefore it cannot have anything to do with what has happened in the past.

The reality is that the clause should be opposed in toto. The noble Lord, Lord Ashley, has tabled other amendments by way of compromise. I do not take the view that this is a matter on which there can be reasonable compromise. The noble Earl, Lord Russell, referred to half a loaf being better than no bread. But the people who have contributed to the benefit will not receive half a loaf. Unless they have contributed in the previous two years, under these restrictions they will get nothing whatever. That is quite wrong.

Many of the points that I wished to make have already been made. There is one other point. This matter is set against a background of events a couple of weeks ago when there was a large publicity campaign as to what the Government are doing on welfare issues. However, the reality of what they are doing now is contained in this clause, the one which follows and in Clause 61. All three severely endanger disabled people. It is wrong.

Therefore, I cannot go along with the compromise amendments which have been put forward. I very much hope that the House will ask the Commons to think again on this issue and accept the amendment which asks that the clause be deleted. In principle I believe that that is the right thing to do on this occasion.

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