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Lord Clinton-Davis: My Lords, there can be no doubt that it is vital to be able to restructure and consolidate the aerospace industry so that we can compete internationally. The Government are using all their endeavours to achieve that purpose within Europe. In reply to my noble friend's second question, we shall of course use our best endeavours to ensure that in this respect our own defence industry is protected properly and is globally competitive. I believe that that is the objective to which my noble friend is alluding.

Lord Tebbit: My Lords, does the Minister agree that it is not clear that the best options are partnerships within Europe principally because the restructuring which has occurred in this country has not been followed in France? While it is possible to do deals with the Germans which are generally honoured, it seems to be extremely difficult to do deals with the French. Would it not make more sense in many cases to have partnerships with the United States?

Lord Clinton-Davis: My Lords, the partnership which has been created in relation to the aerospace industry has been spectacularly successful. The Airbus has been successful internationally; it has been flown by a wide range of airlines, including American airlines. The allusion which the noble Lord draws is both unfair and inaccurate. Questions of consortia with the American aerospace industry are a matter for the industry to determine.

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Disability Benefits

3.20 p.m.

Lord Ashley of Stoke asked Her Majesty's Government:

    Whether their review of disability benefits includes tax, means-testing or replacement of benefits by services.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, as part of our comprehensive review of spending we are undertaking a fundamental re-examination of the social security system, including those benefits paid to people who are long-term sick or disabled and their carers. The review will inevitably produce a wide range of possible options which we will need to consider very carefully.

Lord Ashley of Stoke: My Lords, is my noble friend aware that I appreciate her long-standing commitment to disabled people and that I support the Government's attempts to help them back to work when they are able? The review is examining the possibility of lowering disability benefits and therefore there is a great wave of anger and anxiety among many disabled people. One can gain an idea of the feeling that exists by looking at the letters I have received from disabled people, not from the organisations. The most common words in the letters are "frightened", "anxious", "distressed", "disbelief", "horrified" and "betrayal". The reason is that the benefits cover the extra costs of disability. Those have not reduced for the individual disabled person; consequently, the benefits should not be reduced.

Baroness Hollis of Heigham: My Lords, I share the concern expressed by my noble friend about the anxieties which may be experienced by disabled people. However, in our view there is a need to review the network of benefits for three reasons. First, the existing benefit system for disabled people has grown up piecemeal. It is a tangle. There are different benefits, with different rates, at different ages and with different linking rules. Some layer on to each other and some are mutually exclusive. Some are contributory and some are not. Some are means tested, some are taxed and some are neither. Most disabled people do not understand their entitlements.

Secondly, I am not confident that money is always properly focused. It is clear from our research that some disabled people continue to receive benefit after they have recovered, while the needs of other disabled people are not met. In some cases, life awards are paid to people who are predicted by their GPs to recover. We must examine that.

Finally, the existing disability structure presumes that disabled people are either sick, in which case they receive one set of benefits, or well, when they receive unemployment benefit. We all know that many disabled

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people are between the two. We need to review the benefits because we are trustees of £25 billion and we must ensure that it is wisely and appropriately spent.

Baroness Gardner of Parkes: My Lords, I applaud the idea of reviewing benefits because regular reviews are desirable. However, may I make a special plea for funds which enable disabled people to go to work? Often, young disabled people need not only the moral support but also the therapeutic value involved in being useful in paid or unpaid employment. The mobility allowances have made a great difference in that respect.

Baroness Hollis of Heigham: My Lords, I agree with the noble Baroness. Not only do we accept her comments about the need to encourage people into work by ensuring that they have access to work, but the Government have recently announced their £195 million programme for welfare to work for disabled people. We are working with the organisations to ensure that the right projects are taken on board. Furthermore, my colleagues in the Department for Education and Employment are anxious to ensure the extension of civil rights for disabled people so that employers do not shelter behind false perceptions of their inability to work. Therefore, there can be no dispute around the House that the practice is entirely acceptable.

Lord Higgins: My Lords, I wish to ask the Minister a specific question. She will be well aware that the Social Security Advisory Committee recommended that lone parents losing a disability premium should be treated as still having an entitlement to the lone parent family premium for transitional protection purposes. The Government's answer to that was, "There seem to be very few of them so we won't worry about them." Surely, these people must be among the most distressed of any group in the country. Will the Minister review the matter immediately and do something to help them?

Baroness Hollis of Heigham: My Lords, as the noble Lord will know, people who lose a disability premium because they become fit and well are treated as new claimants.

Lord Campbell of Croy: My Lords, on the principle that employment where possible is better than receiving benefit--a principle to which the Government subscribe--will the Government continue the successful access to work scheme which was launched about four years ago, or is that also under review?

Baroness Hollis of Heigham: My Lords, the access to work scheme is run by the Department for Education and Employment. As the noble Lord will know, partly as a result of the work of the All-Party Disablement Group of which he is a distinguished member, my

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colleagues in the DfEE have recently widened the eligibility of that scheme because they believe it has such an important part to play.

Lord Higgins: My Lords, the Minister totally failed to answer the question!

Noble Lords: Baroness Williams!

Baroness Williams of Crosby: My Lords, will the Minister accept that some people are genuinely disabled and unable to work full time or for more than a short period of time? Will she reassure people who are genuinely disabled that their standard of living will not be undercut as a result of the review?

Baroness Hollis of Heigham: My Lords, I accept the point made by the noble Baroness. We are anxious for disabled people to have the opportunities to work which they tell us they want. But many disabled people are sick; they may have fluctuating conditions, progressively deteriorating conditions and so forth. It is unrealistic and inappropriate to expect that they will re-enter the labour market and it is extremely important that they receive decent and appropriate levels of benefit.

Lord Swinfen: My Lords, will the Minister confirm that direct payments will continue to be made to disabled people so that they may maintain their independence and control their own lives?

Baroness Hollis of Heigham: My Lords, that is a matter for the Department of Health. However, like the noble Lord, I believe that the direct payments issue, which received the support of the entire House, was an important step forward in putting disabled people at the centre of the care system and not dependent on it. Therefore, I have no reason to believe that there is any threat to it. On the contrary, most local authorities are seeking to expand their provision.

Lord Ashley of Stoke: My Lords, my noble friend mentioned the expenditure on the benefits of disabled people. Is she aware that there are two reasons for that? One is demographic and the other is greater awareness. The Government can do nothing about the demographic factors and they should welcome the greater awareness.

Baroness Hollis of Heigham: My Lords, I too am most anxious that disabled people should have the opportunities to work when they can and decent and appropriate benefits when they cannot. However, there is a clear problem in that in some cases there is a mis-targeting of benefit. That is not because disabled people are in any sense abusing the system but because the structures adopted by the department--for instance, life awards--mean that some people are not receiving the money that they should while others are receiving money which they should not continue to receive, perhaps because they have become well, which is good news for us all. That is why we need the review. Given

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the amount of money that is being spent on disability benefits--£25 billion--I am sure that your Lordships would expect us properly to scrutinise that expenditure.

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