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Lord Higgins: My Lords, I join with those who have paid tribute to the noble Lord, Lord Ashley, for the way in which he has pursued this matter. When we first discussed it I said that I believed the clauses we are seeking to amend were wrong in principle. Since then he has sought to move various amendments designed to achieve a compromise. That has been so again this evening.

I believe that your Lordships' House was absolutely right yesterday to say that the House of Commons should have an opportunity not only of debating but of voting on the proposals he then made. When I raised this matter with the noble Baroness, Lady Hollis, yesterday, she replied:

With great respect to the noble Baroness, they did not have an opportunity to vote until today. The guillotine Motion which the Government imposed in rather unusual terms prevented them from so doing. Therefore your Lordships were right yesterday to give the other place the opportunity to consider the amendments moved by the noble Lord, Lord Ashley.

I felt it right to listen to the debates that took place as a result of that. In many ways it was an extraordinary debate this evening in another place. As the noble Earl, Lord Russell, rightly pointed out, the Secretary of State made no attempt whatever to address the amendments. His sole object appeared to be to say that the Bill was a good Bill and therefore it ought not to be opposed. That is common ground. The noble Lord, Lord Ashley, myself and others have all said that we do not wish to kill the Bill. But the fact that the Secretary of State put forward that argument in no way meant that there was not scope for improvement.

The reality is that these clauses are inconsistent with the Bill as a whole, particularly in relation to pensions. The Bill is largely designed to promote people taking

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out pensions, but the clause before us from the Government means that if people in receipt of disability benefits take out a pension they will lose out. It is that inconsistency in government policy which is increasingly of concern to the House, not least in the light of developments since yesterday. We find more and more a tendency of the Government to means test--as they do in the clause we are now discussing--contributory benefits and not to means test benefits which are not contributory. We had an announcement this afternoon that there are to be free television licences for the over-75s--not means tested--whereas the people affected by these clauses will be means tested. Similarly, many of us in this House will receive cold weather fuel payments, not means tested, but the people affected by these amendments and these clauses will be means tested even though their incomes are likely to be a great deal lower than the incomes of those who receive cold weather or winter fuel payments.

The Government's policy on these issues has simply not been thought through. That is certainly so in relation to these clauses. Therefore I am sure that the noble Lord, Lord Ashley, is right even at this late stage to suggest that the Government ought to come forward and accept his amendments. Of course I made it clear yesterday and I do so again that at the end of the day it is a matter for the House of Commons to decide. But it is right that we should give them the opportunity of thinking again on these important issues which will affect the disabled, including those who by any standards cannot be regarded as rich.

We wish to reach a conclusion on this matter. It is a matter for the Commons ultimately to decide. The noble Lord, Lord Ashley, is right, in putting forward his amendments this evening, to say that it would be inappropriate to vote on them. I share that view. I made that clear in my remarks yesterday. But I remain puzzled--the sums involved in these amendments are not enormous compared with the kind of figures the Chancellor of the Exchequer was discussing this afternoon--as to why the Government should decide to penalise this particularly disadvantaged group in the way they have in this Bill. Even at this late stage perhaps one may hope that they will be prepared to accept the latest suggestion of the noble Lord, Lord Ashley. If not, then those who have said that the Government will live to regret this are right. It will be shown, against the spin-doctoring statements on the need to help the old, the pensioners, the disabled, the bereaved and so forth, that the reality of the situation is that they should be judged not by what they say, but by what they do. What they are doing in these clauses is wrong.

Baroness Park of Monmouth: My Lords, perhaps the House will allow me to make a brief point. It is extremely important for us to recognise that when we voted yesterday--indeed, whenever we vote in this House--it is irrelevant whether we are hereditary Peers or life Peers. In fact, as I understand, even had the hereditary Peers not voted yesterday, the noble Lords, Lord Ashley and Lord Morris of Manchester, would have won. It is very important that we should

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regard ourselves as Peers; we are all the same. We vote on the merits of the case. It is most important for us to continue to be seen as doing so.

Baroness Hollis of Heigham: My Lords, perhaps I may begin my remarks by saying that, despite the great respect and affection that I and the Government hold for my noble friend Lord Ashley, we cannot accept his amendments tonight. Before I respond, perhaps I may correct something I said last night. I attributed to my noble friend Lord Morris remarks about the incapacity benefit caseload, which were in fact made by my noble friend Lord Ashley. The names got transposed. However, as my noble friends are such solid friends, I know that they will both treat this as a tribute to each other.

Noble Lords will recall that we had a lengthy debate on these amendments yesterday. The House was then concerned that those in the other place had not had sufficient opportunity to express their views on my noble friend's proposals; indeed, that was the point made by the noble Lord, Lord Higgins. As your Lordships accept, the other place has now had a chance to debate and vote on similar amendments put forward by my noble friend. Those amendments were defeated today by 314 votes to 234. So those amendments were given full exposure. At that point, the other place chose to support the proposals put forward by the Government. I suggest to your Lordships that it is now time for this House to accept the views of the elected Chamber.

We have made it clear all along that we believe that incapacity benefit needs to be reformed: the debate between us is in what way that should happen and the degree to which it should be accepted, whether along the lines proposed by my noble friend or by way of the Government's proposals. I believe that the Government's proposals strike the right balance.

Many noble Lords tonight have talked as though, somehow, there has been no compromise and have suggested that the only person offering compromise has been my noble friend Lord Ashley. That is simply not true. Perhaps I may remind your Lordships--

Earl Russell: My Lords, I should like to put the record straight. I did not say that there had been no compromise in the past. I said that the Secretary of State had ceased dialogue at the present time.

Baroness Hollis of Heigham: My Lords, compromising stops at a certain point and you then have an agreed or defined position. The noble Earl, Lord Russell, seems to believe that whenever a compromise has been offered, you then restart the process and negotiate another one. This then continues through the Division Lobbies, incrementally, salami slice after salami slice, as though, somehow, the right and proper way for a government to determine public policy is by haggling in the Division Lobbies, without consideration either to the prudent use of public finances or to the proper read-across to other government policies. We do not believe that that is the right way to proceed.

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I return to the charge from my noble friend Lord Ashley--not that made by the noble Earl, Lord Russell--that our changes have been hopelessly inadequate. They have not. We have made it clear all along that existing claimants will be protected. Indeed, despite some myths to the contrary, there was never any question of taking away benefit from people already receiving it. On the measure to reduce the overlap between IB and early retirement income, we have now made it clear that no one with a private pension of less than £85 a week, not £50, will be affected. Further, as a result of pressure, partly from your Lordships' House, we are exempting altogether people with the most severe disabilities from any of the effects of these tapers.

I turn now to the second part of my noble friend's amendments dealing with the contribution conditions. We have addressed concerns that the original proposal would hit people with limited employment prospects by extending the qualifying test from two years to three years and by extending the protection that we are giving to former carers to people on disabled person's tax credit. So let there be no talk that the Government have neither listened nor compromised. We have. Reducing the numbers as a result of our compromises has taken something like 100,000 people out of the reach of the Government's original proposals and reduced the savings by over £200 million. This is a significant movement, significant compromise, significant concession and I think that the Government are entitled to some credit for having listened to views, including the views of your Lordships' House, and responded to them.

The noble Lord, Lord Rix, said that he felt that in 2001 more people would be coming on to income support as a result of our changes and that as a result the Government would live to rue this day. Of all the people in your Lordships' House tonight the one person who should know that there will be fewer people on income support as a result of what the Government have done is the noble Lord, Lord Rix. Who are the main beneficiaries of the changes among disabled people? They are those same children and young people who have perhaps been born with a disability--it may be Down's syndrome, severe learning difficulty or cerebral palsy--who at the moment "bump along" on income support with never a chance to enter the labour market and never a chance to build up savings. These are the people--the poorest and the most severely disabled--who under the Government's Bill will no longer have to "bump along" on income support but will be passported onto incapacity benefit to the credit of an extra £26 a week.

I hope that my noble friend will acknowledge--I refer to the noble Lord as I would not like to call him my noble friend--that we are doing exactly what he would wish us to do and exactly the opposite of what he fears we are doing. We are helping those on income support to come off it and onto IB.

10 p.m.

Lord Rix: My Lords, I am grateful to the Minister for giving way. I acknowledge that point and I have

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done so consistently through every single debate on incapacity benefit. I have said all along that young people with a learning disability in particular would benefit from the changes in this Bill, as will, I hope, widows benefit from changes to SERPS in this Bill. However, I must point out that many people who will seek incapacity benefit in the future are older people who will become ill, perhaps with multiple sclerosis, ME, or other conditions which will greatly reduce their earning capacity as the years go on. Furthermore, they may have small pensions and their incapacity benefit will be tapered rapidly after that time. Those people will eventually suffer from the clauses in this Bill; not the young people with a learning disability but people who become ill and disabled in their thirties and forties.

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