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House of Lords

Thursday, 7th December 2000.

The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Southwark): The LORD CHANCELLOR on the Woolsack.

Criminal Defence Service (Advice and Assistance) Bill [H.L.]

The Parliamentary Under-Secretary of State, Lord Chancellor's Department (Lord Bach): My Lords, I beg to introduce a Bill to clarify the extent of the duty of the Legal Services Commission under Section 13(1) of the Access to Justice Act 1999. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Bach.)

On Question, Bill read a first time, and to be printed.

Regulatory Reform Bill [H.L.]

Lord Burlison: My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to introduce a Bill to enable provision to be made for the purpose of reforming legislation which has the effect of imposing burdens affecting persons in the carrying on of any activity and to enable codes of practice to be made with respect to the enforcement of restrictions, requirements or conditions. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Burlison.)

On Question, Bill read a first time, and to be printed.

Special Educational Needs and Disability Bill [H.L.]

Lord Davies of Oldham: My Lords, on behalf of my noble friend Lady Blackstone, I beg to introduce a Bill to amend Part IV of the Education Act 1996; to make further provision against discrimination, on grounds of disability, in schools and in other education establishments; and for connected purposes. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Davies of Oldham.)

On Question, Bill read a first time, and to be printed.

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Private Security Industry Bill [H.L.]

Lord Davies of Oldham: My Lords, on behalf of my noble friend Lord Bassam of Brighton, I beg to introduce a Bill to make provision for the regulation of the private security industry. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Davies of Oldham.)

On Question, Bill read a first time, and to be printed.

Committee of Selection

The Chairman of Committees (Lord Mackay of Ardbrecknish): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That in accordance with Standing Order 63 a Committee of Selection be appointed to select and propose to the House the names of the Lords to form each Select Committee of the House (except the Committee of Selection itself and any committee otherwise provided for by statute or by order of the House) or any other body not being a Select Committee referred to it by the Chairman of Committees, and the Panel of Deputy Chairmen of Committees; and that the following Lords together with the Chairman of Committees be named of the Committee--

B. Amos,

B. Blatch,

L. Carter,

L. Craig of Radley,

L. Harris of Greenwich,

L. Henley,

B. Jay of Paddington,

L. Rodgers of Quarry Bank,

L. Strathclyde,

V. Tenby.--(The Chairman of Committees.)

On Question, Motion agreed to.

Address in Reply to Her Majesty's Most Gracious Speech

3.3 p.m.

Debate resumed on the Motion moved yesterday by the Lord Graham of Edmonton--namely, That an humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign--We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".

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The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, since 1997, the Government's priorities have been to build a strong and dynamic economy and a fair society. In May 1997 we inherited 18 years of boom and bust, which gave us a perpetually devaluing currency as the sole means of enhancing competitiveness. The country was heavily in debt. We were spending more on interest payments than we were on our entire schools programme. Nearly half of government spend was on redeeming the national debt and paying benefits. Since 1979 social security expenditure had doubled, but so had poverty. Inflation was returning; business confidence had been battered by inflation; the productivity gap with our competitors was growing; and hard-working families had been hurt by high interest rates, unemployment and house repossessions.

We took action to lock in low inflation and to cut government debt. We made the Bank of England independent; and we eliminated the deficit. Government borrowing has been reduced by 44 billion in total since the election. Inflation is at its lowest level for 30 years. We have a higher level of business investment as a share of our economy than at any time in 40 years and long-term interest rates are around the lowest for 30 years.

But, as the Chancellor of the Exchequer said, this was for a purpose. A strong economy is the underpinning of a more fair and just society because, crucially, a strong economy expands the labour market. We know that the only secure route out of poverty is to be in work. We know that the only sure way to overcome social exclusion is to be in work. It is not acceptable for our people--inner-city youngsters, lone parents, ethnic minorities, carers, disabled people, men coming from manual trades who have been made redundant in their fifties--to be marginalised into a life lived barely bumping along for years at a time on income support, eked out by occasional forays into undeclared and illicit casual labour.

For those of working age, we want a moral economy based on work, offering prosperity, dignity, fairness and inclusiveness, not a black economy based on social security benefits, yielding only poverty, fiddling, scrounging and social exclusion--a moral economy, not a black economy. That is no way to live, and no way for us to bring up our children. A week may be a long time in politics, but it is endless for children and their parents as they survive--barely--until the next benefit giro.

So I am delighted to tell the House that over 1.1 million more men and women are in work than in 1997. Claimant unemployment is at its lowest rate since Oct 1975, and through our New Deals we are effectively reaching out to those who for too long have been the somewhat edgy observers of other people's good life. A quarter of a million young people have come into work through the New Deal. We are also reaching out to those who are not unemployed in conventional claimant terms, but who are instead the hidden unemployed, the economically inactive, carers,

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unemployed partners and, above all, lone parents and disabled people--people who very often want to work but who were ignored for a generation, given income support or a disability benefit in order to help massage the unemployment figures.

Only 40 per cent of lone mothers work, whereas 70 per cent of couple mothers work. We know why. It is not about not wanting to work: it is about childcare; it is about education and training; and it is about health and self-esteem. Above all, it is about knowledge of the labour market because you have a partner already in work. Hence the success of our New Deal for lone parents, whose personal advisers have helped nearly 200,000 lone parents to build their future.

Perhaps I may trespass on the time of the House to tell your Lordships about one lone parent in her thirties, with learning difficulties and two children--someone who had never ever had a proper job. Indeed, given her disabilities, she seemed never likely to have one. Her adviser went with her for four Saturdays running to a hygiene course. With her adviser's help, that disabled lone parent is now working in a butcher's shop. For the first time in her life, to her delight, she is holding down a job, supporting her children and living a full, adult life. That New Deal is personally tailored to meet the needs of each client. It is about developing potential and overcoming barriers to work. However, lone parents do not know what they do not know. They cannot make choices when they do not know what opportunities are available to them. In future, the new compulsory work-focused personal adviser meetings for all lone parents will bring them within the knowledge economy. I trust that that will springboard them and their children out of a lifetime in poverty.

We also know that disabled people are seven-times as likely as non-disabled people to be out of work and claiming benefits. Yet 1 million disabled people say that they would like to work, and 400,000 believe that they could work given the right support. Hence our New Deal for disabled people, in conjunction with the Department for Education and Employment. Our pilot schemes have already helped over 5,000 disabled people into work. Early intervention is essential. That is why we are now rolling out nationally a programme of job brokers to offer people receiving incapacity benefit the support and guidance that they need to find paid work.

Carers shoulder responsibilities with enormous courage and grace. They, too, often find themselves edged out of the labour market and then, five or 10 years later, find it very hard to re-enter work. That is why I am so delighted that we were able to unveil just a few weeks ago what I believe to be the best ever package of support for carers. We were able not only significantly to increase the carers premium for those who are in receipt of income support and not in work, but also to extend that premium for the first time to pensioners in that situation. We also raised the earnings ceiling for those on invalid carers' allowance so that they can not only earn more and keep more but for the first time come within the national insurance system.

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Lone parents, carers, disabled people, for all of these, we have, crucially, ensured that work pays. In the past entry wages have not always floated people above benefit levels. Therefore it is not entirely surprising that people have chosen to remain on benefit. Hence our minimum wage, which has benefited 1&189; million people, mainly women; hence our working families' tax credit and disabled person's tax credit, which ensure a minimum weekly income substantially above benefit rates. I give an example. A lone parent with one child on benefit gets 123 a week from income support or JSA; working 35 hours per week at minimum wage levels only, together with working families' tax credit and child benefit, she earns 210 per week: 123 on benefit, 210 in work.

But she will not be better off if that difference goes on childcare. Hence, too, our childcare allowance within working families' tax credit and our national childcare strategy to support lone parents who want to work but, given childcare costs and the lack of a supporting partner, could not otherwise afford to do so.

These are men and women of working age who for the most part can and should be re-included in the labour market: not just lone parents, disabled people and carers, but also young people, the long-term unemployed, the unemployed over 50, the inactive partner in a workless couple--all those who tend to remain beached as the tide of economic prosperity floats the rest of us into a good quality life.

We know that to be in work and in a pension scheme at the age of 25 is the best possible preparation for a comfortable old age. But there are those who are already pensioners or approaching retirement who have no access to a decent occupational pension. The House will recall our work over the past two major social security Bills to reform SERPS into a state second pension which will give double the pension that SERPS would have done to a low earner and for the first time ever give second pensions to carers and disabled people. Alongside that we have proposed stakeholder pensions for those on modest incomes.

But, of course, it takes years for the benefits of a new pension scheme to roll up. In the meantime, we face the problem that some existing pensioners are poor now and cannot, of course, improve their situation. That is why we have increased the minimum income guarantee by nearly 20 a week to 140 for a couple next April and why we are committed to raising it to 100 a week for a single pensioner. As MIG is earnings related, our poorest pensioners will not fall behind national prosperity in future.

Those who fail to qualify for MIG usually have either capital or income just above the limit. They feel, rightly, that their saving and hard work are being penalised. That is why we have lifted the savings cap from 8,000 to 12,000 and why from 2003 we are introducing the pension credit. The average occupational pension in this country is 44 a week; the pension credit will benefit those with occupational pensions of up to 55 a week. As the pension credit is earnings linked, again it will ensure that those with a

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modest pension wrapped around in the pension credit remain above MIG. In that context I am so pleased that we have been able to address the appalling blunder of inherited SERPS--existing pensioners will know that their spouse will inherit their full SERPS on widowhood.

All this is on top of the biggest increase, 5 and 8 a week, in the state pension since July 1974, the first budget of the 1974 Labour government, more than 25 years ago. We want all pensioners to share in rising national income. Next year we will be spending 4.5 billion a year extra in real terms on pensioners as a result of our policies since 1997. By 2002-03 this will rise to over 5 billion; that is 3 billion more than if the basic state pension had been linked to earnings since April 1998.

Most people of working age are not poor, though some--those on benefit for a long time--are; hence our work to reconnect them with the labour market. Most pensioners are not poor, though some are; hence our pensions reforms. However, the face of poverty in this country is not that of a pensioner, not that of an unemployed working man, not that of someone who is disabled; it is instead the face of a child. In my view, one of the most shameful stains on our society bequeathed us by the previous government was the growth in child poverty. One million children were poor in 1979; nearly 4 million children in 1997. That is one child in three. The poorest children of all are the children of lone parents, who are two or three times more likely to suffer prolonged poverty than other children. They are particularly likely to be poor for two reasons. They are poor because their mother is unlikely to be in work--hence our new deals--and they are poor because they are in a fractured family and are unlikely to be receiving child support; hence our reforms of the Child Support Agency last summer to ensure that 1 million more children get the maintenance that they should. But we need to do more.

Measures announced in our first four Budgets will lift over a million children out of poverty. Tax and benefit changes together will mean that by April 2001 all families with children will, on average, be better off by more than 15 per week and severely disabled children by more even than that. I give one statistic. The income support rate for a child under 11 was some 16 in 1997; from next April it will be about 32, nearly double that--just think, doubling the income support rates for children under 11 in one Parliament. The Prime Minister is determined that we shall eradicate child poverty in 20 years and halve it in 10. To my delight we are on target to achieve that.

As we know, the poverty that scars is the poverty that persists, which is why the Sure Start programme for children will, I hope and believe, break the all too usual link between poverty and poor outcomes for children. Our Sure Start programmes now number over 100; by 2004 they will number over 500, embracing well over a third of all poor children in the country. We shall not know the results for 10 or perhaps 20 years--whether those children enjoy improved health and suffer less injury; do better at school; avoid truancy, petty crime and teenage

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pregnancy; and find jobs. It is an act of faith in the future of our children, but one which I am confident every Member of this House will endorse.

But we shall do more. From 2003 we shall introduce an integrated child credit which will bring together the different strands of support for children currently available in working families' tax credit, disabled person's tax credit, income support and children's tax credit--a kind of basic citizen's income for children which can be ported from benefit to work without penalty. This will be backed up by an employment tax credit which will broadly replicate the support currently provided to adults in WFTC.

So we are using the strength of our economy to rebuild the welfare state: helping adults of working age to re-engage with the labour market; ensuring that pensioners share fairly in the rise in national prosperity; and lifting children out of a poverty that can scar them for life. But that welfare state has to have the confidence of the people it supports and serves. It cannot do that if it is itself not secure against fraud.

We spend over 100 billion each year on social security and we know that social security fraud costs at least 2 billion a year and perhaps much more. We owe it to the country as a whole, and in particular to the vast majority of people who claim benefits honestly, to drive fraud out of the system.

For the first time we have set out a comprehensive plan to secure the system from the first claim to the final payment by investing in information technology; by paying benefits directly into bank accounts by 2003--this is not only cheaper but will also eliminate almost at a stroke 140 million a year of fraud in lost order books and giros--and by setting up a national intelligence unit to make better use of our information and cross-checking of information held on different computer systems. This has already saved us 150 million.

We have set a target for reductions in fraud and error in the system so that people can judge our success for themselves. We aim to reduce fraud and error on income support and jobseeker's allowance by 25 per cent by March 2004 and by 50 per cent by March 2006. We are winning. New figures released last week showed the first fall in fraud since measurements began.

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