Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Carter moved Amendment No. 56B:


Page 7, line 22, leave out ("company") and insert ("firm"). The noble Lord said: This is a probing amendment. I am not entirely clear why in Clause 9(5) the specification used is "company" or "companies". I have used the word "firm" which I admit is not perfect. However, there are many organisations besides companies—connected persons, partnerships with a controlling partner, unincorporated associations and so on. The purpose of the amendment is to inquire why the Government feel that they must refer only to "companies". I beg to move.

Lord Inglewood: As the noble Lord commented, Clause 9 performs the very important function of making void any term in a contract of agreement which seeks to limit the employment provisions of the Bill, including attempts to prevent a complaint being made to an industrial tribunal. It is clearly right that in general employees should not be able to sign away their rights. However, there is an important and necessary exception made for certain agreements under which people agree not to start or continue with tribunal proceedings. The clause protects the complainant or potential complainant by providing that those agreements are valid only if an ACAS conciliation officer has been involved or the complainant has had independent advice from a qualified lawyer. It is that concept of independence, as the noble Lord, Lord Carter, pointed out, which is addressed in the amendments. It is clearly unacceptable for the same lawyer to provide advice to both the complainant and the person against whom the complaint is made. Therefore, the clause provides that advice from the respondent's lawyer is not independent advice. It goes further by providing that advice given by a lawyer acting for a person connected with the respondent is also not independent. Subsection (5) defines what is meant by "connected" where one of those involved is a company over which the other, directly or indirectly, has a control or both are companies in which a third person directly or indirectly has a control. That is a protection that exactly echoes those in other employment and discrimination legislation. I understand the point which the noble Lord is trying to make. He is trying to make sure that no one slips through the net in that regard. He is trying to include not only

15 Jun 1995 : Column 1930

companies but partnerships and other bodies. The amendment as it stands does not hit that particular target because the word "firm" is too imprecise to be used in that context. The concept of control contained in the subsection is inappropriate to partnerships. I understand the noble Lord's anxiety and his wish to tighten up the existing provision. But, as I have said, the current drafting of the subsection is consistent with existing legislation and we have no evidence that the arrangements are not working satisfactorily or that the gap which the amendment seeks to fill exists in practice. I hope that the noble Lord will withdraw the amendment but if he has evidence of real examples or problems, perhaps he will draw them to our attention and we shall try to address them.

Lord Carter: I am grateful to the Minister. He has answered my point. I was seeking to have on the record why there is the use of the word "company". I shall read what the Minister said and I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 56C not moved.] Clause 9 agreed to. Clause 10 [Charities and support for particular groups of persons]:

Lord Carter moved Amendment No. 56D:


Page 7, line 29, after ("capacity") insert ("provided that such benefits are not granted by a charity which has an associated organisation which remits profits to persons who are not disabled"). The noble Lord said: This amendment seeks to deal with a particular charity, Motability. However, I was advised when tabling the amendment that if I mentioned Motability and the amendment were accepted, that would make the Bill hybrid and I am sure that none of us wants that. However, I have informed the Minister's Private Office that I am dealing only with the charity Motability. Motability is a charity and Motability Finance Limited is a private company. When the Motability organisation was set up in the mid-1970s, its aim was to provide disabled people with cars because the Government were phasing out the disabled person's "trike" or "invacar". The leasing scheme operates by the disabled person signing over a sum of social security benefit to Motability Finance Limited. That benefit is now called the disabled living allowance and used to be called the mobility allowance. In return, for a three or four-year period, the disabled person leases a car which the manufacturer guarantees to service and keep on the road. The problem is that from the outset disabled people have had difficulties with the system. There is a mileage allowance which prohibits frequent use of the car and there are hidden costs. Moreover, only mildly disabled people are able to lease because the scheme does not allow significant adaptation of the car for the use of the severely disabled. Indeed, many disabled people argued that what the scheme was doing was taking a lot of money from disabled people who were then returning used cars in fabulous condition to be resold by the manufacturers. The response was to introduce a hire purchase scheme which worked in a similar way. A disabled person signed over his benefit and, at the end of the hire purchase, he

15 Jun 1995 : Column 1931

owned the car. But huge down payments were necessary before a disabled person could take out a hire purchase agreement because the mobility allowance—now the disabled living allowance—did not cover the cost of the repayments. The other problem was that adaptations to the car meant another massive expense. Therefore, Motability, the charity, became involved in the adaptations. The charity absorbs practically every penny in the charity field in connection with disabled people and motoring. It was supposed to fill the gap and ensure that significantly disabled people became mobile. However, it has not worked out that way. There has been a level of complaint about the lack of service. Most people complained that all that Motability really did was to provide cars for the relatives of disabled people rather than the disabled people themselves. The current financial position is that each year the Government pay Motability Finance Ltd.—as I said, a private company—£360 million of disabled people's social security benefits. Motability Finance Ltd. is the only lender in the world to have no bad debts. The money is guaranteed by the Government because it is a social security benefit which is paid over. Yet the rates of interest it charges disabled people and its car leasing arrangements are not that advantageous. In addition to the £360 million, the Government also pay Motability Finance and the charity £5.5 million a year to cover their administrative costs. Two years ago, a disabled person called Mr. Ralph Irwin Brown began to write to Motability, the Minister for Disabled People, and the Chancellor of the Exchequer, asking dozens of questions. I have read much of that correspondence which seems to cross between, "You're giving disabled people a lousy deal" and "Who is making the profits?" and "Where are they going?" In an interview, Mr. Simon Willis, a director of Motability, said that there was some money available for adaptations. It was significant that after saying that—I am sure that there was no connection—he was moved back to his position in the DSS within a few weeks. It was then said on the disabled grapevine that £10 million was going from the finance company to the charity to help it pay for adaptations to vehicles. I should point out that that happened comparatively recently and not at the time when all the problems arose. The charity then announced that it was setting up a sub-committee of disabled people to look at the service being provided. For years the charity had refused to do so. Those concerned claimed that they were always doing as much as they could with limited resources. We also know that two weeks ago Mr. Peter Lilley, Mr. William Hague, and relevant government Ministers—in effect, the paymasters of the scheme—decided to send in the National Audit Office. Last Friday, Motability's director of finance resigned. I understand that over the years a number of officials have been alerting the Government that the whole system has been riddled with minor fraud. Although it is not a minor fraud, the most obvious example of that is that certain car manufacturers have been excluded from the scheme—for example, Honda and Renault—while others, like Ford, have entire,

15 Jun 1995 : Column 1932

very big, departments which are devoted to the work and which employ major advertising agents to handle their publicity. People are now asking: how far will it go? How profitable is Motability Finance? And where do the profits from that company go? All of us in the disabled world have believed for a long time that if the corporate side of Motability made profits, the profits would go to Motability. But has that actually been happening? How much profit do the clearing banks make from financing the leasing of cars via Motability? It is a very big business for them. For example, 220,000 vehicles, about 5 per cent. of the new car market, are involved. One leasing expert commented that people with disabilities are paying about £150 too much per car and that "surplus" profits made in that way amounted to £12.5 million a year over the past few years. The Daily Telegraph obtained accounts of the partnerships with banks set up by Motability to handle its finances—namely, Barclays, Nat West, Midland, Lloyds, the Royal Bank of Scotland and the Bank of Scotland. Such accounts showed that in 1993 the operating profit from leasing cars was £85.4 million on a turnover of £375 million. Informed sources say that the operating profit last year stood at more than £100 million. There is also the Motability Tenth Anniversary Trust, formed as a company and a registered charity in April 1989. It appears to have no office or staff of its own, but the DSS contributed £5 million to the trust and nominated two of its trustees. Can the Minister explain why that second charity was formed and why the £5 million was donated to it and not to Motability? Will the noble Lord also confirm that the value of the trust's funds in April 1995 was over £40 million? Further, will the Minister confirm that over £35 million has been received from Motability Finance Ltd. or the banks being a proportion of the surpluses or profits which are generated from disabled people by their use of Motability HP and lease schemes? Is the Minister satisfied that the sole beneficiary of the trust is Motability, or is there another charity? From all that I have said, it seems to me that Motability and its associated companies have proved to be a very nice big earner for someone on the back of disabled people. There are many questions that need to be answered. I beg to move.

Lord Inglewood: I must begin by congratulating the noble Lord, Lord Carter, on his ingenuity in tagging the point that he wanted to make on to the amendment. It is, of course, a matter of public interest with which I shall deal in a moment. However, perhaps I may actually talk for a few moments about the subject matter of the clause which I also believe to be most important. As many Members of the Committee will be aware, there are a number of charities and organisations which help particular groups of disabled people in preference to other groups. Obvious examples are the RNIB, which concentrates its efforts on helping the visually impaired and the RNID which helps people with hearing impairments. Such organisations sometimes wish to employ people with those particular disabilities because of their experience or the techniques they have learned in coping with their specific impairment. They may also

15 Jun 1995 : Column 1933

wish to encourage the employment of people with such disabilities by setting a personal example of doing so themselves. Clause 10(1) ensures that such activities would not become unlawful where they meant rejecting people with other kinds of disabilities. As the noble Lord, Lord Carter, said, he advised my right honourable friend's private office that he wanted to talk about Motability. Perhaps I may just make a brief comment or two about Motability in general and some of the points that he made. We will respond in detail to the noble Lord in letter form. I should like to begin by stating that the Motability scheme has been a great success. During the past 17 years, around 500,000 disabled people have become mobile through the scheme. A good many of those people would be unlikely to become mobile without the vehicles obtained through the scheme. Indeed, the keys to the half-millionth vehicle will be handed over by Her Majesty the Queen at the end of July. Notwithstanding that success, we obviously realise that there is no room for any complacency. Motability is an independent charity which was set up in 1976. It operates under a Royal charter whose governors are responsible for the operation of the scheme. They have a duty to ensure, through suppliers, that they are securing the best value for money for the disabled customer. The organisational and financial arrangements among the department, Motability and Motability Finance Ltd., have been reviewed to ensure that both disabled customers and taxpayers receive the best value for money. The noble Lord, Lord Carter, referred to the involvement of the National Audit Office. I must emphasise that my right honourable friend the Secretary of State did not ask the NAO to undertake a study of Motability. The office decided over a year ago to look at payments to Motability as part of its programme of reviewing DSS grant-in-aid bodies. Of course, there is nothing unusual in that process. We welcome the study and are fully co-operating with the office. The noble Lord also made reference to profit levels. While they are matters for which Motability has direct responsibility, I can assure Members of the Committee that there is no question of the banks making £85 million profit. Motability annually reviews the agreed return taken by the banks. The figure quoted is not profit but includes items such as interest on borrowings which amounts to over £1 billion. The National Audit Office, which is obviously a fully independent organisation, is currently investigating the Motability scheme. We are co-operating fully with its inquiries. I hope that that sets the scene. As I said, I shall write to the noble Lord, Lord Carter, in answer to the very considerable number of detailed questions that he posed. I am sure that the noble Lord will understand why I have been unable to reply to him now with the detail that he seeks.

6 p.m.

Lord Carter: I am grateful to the Minister. I shall not extend the discussion now. It can be seen from the evidence I have now put on the record that there is a

15 Jun 1995 : Column 1934

situation which needs to be considered. I do not think it was just accident that the National Audit Office examined the charity at this time. I do not wish to refer to all the talk there has been of scandal, misfeasance and the rest of it, but there is much suspicion about what is happening with this charity. It is welcome that the position is being looked at and I hope that now it is in the public domain it will be looked at properly. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 10 agreed to. Clause 11 [Advertisements suggesting that employers will discriminate against disabled persons]:


Next Section Back to Table of Contents Lords Hansard Home Page