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Social Security and the Disabled

6.11 p.m.

Lord Campbell of Croy rose to call attention to the case for rationalising the present structure of social security benefits and allowances while protecting the incomes of severely disabled people and the standards of services available to them; and to move for Papers.

The noble Lord said: My Lords, the Motion is deliberately limited to disablement and, within that, my emphasis is on severely disabled people. The Green Paper of last Thursday restates many principles which have been widely accepted and adopted by the main political parties.

Chapter six on disabled people repeats some of the long-term proposals already announced while the Labour Party was in opposition and later, looking ahead eventually to the year 2020. It is understood that the right honourable gentleman, Mr. Frank Field, was asked to think the unthinkable, not just to spin the spinnable! That was good. No possible options were to be ignored. That should be normal procedure. It was, before leaks became commonplace. I make the passing comment that I hope Ministers and officials will always be able to consider every course of action, in confidence, before conclusions are reached and announced.

There is general agreement in Parliament that the social security system needs reform and rationalisation. The Conservative government had already started replacing and combining some benefits. My Motion endorses that process. The principle underlying the Green Paper is welfare to work. On that, too, there can be little disagreement. The questions that arise, however, are, first, to what extent can this be carried out in practice, especially with severely disabled people? Secondly, will there be enough jobs available, bearing in mind the continuing uncertainty about the size of the minimum wage? It must also be remembered that more

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than two-thirds of disabled people are over working age, according to the 1991 census. Where disabled people are concerned, the scope for moving into work is limited.

In December I was part of a small deputation from the parliamentary disablement group that had a meeting with the Secretary of State for Social Security, the right honourable Harriet Harman. We have had two further meetings. The last was held on Monday. We were led by the noble Lord, Lord Ashley, one of our joint chairmen. He has asked me to explain that he would have spoken in this debate if it had not clashed with a longstanding engagement at the University of Staffordshire, of which he is chancellor.

The main reasons for our first visit to the Secretary of State were the serious worries being expressed by some disabled people on reports that their benefits would be reduced through reviews to be carried out by the Government. Ms Harman was not then able to reassure us on particulars while the wide review preceding the Green Paper was still in progress. Now the published Green Paper tells us more. In all this I urge that the situation for severely disabled people should not be made worse and should be considered with care and sensitivity.

Some disabled people have been worried about the Disability Living Allowance Advisory Board's suggestion that in two-thirds of DLA cases there was insufficient evidence to support the claims for benefit. The board's suggestion is recorded on page 55 of the Green Paper, where it is also proposed that a review be undertaken into the gateways to both DLA and attendance allowance (AA).

I fear apprehension will remain among some of the most handicapped people in the country, for example about possible reduction or means testing of DLA, because they would not be able to meet costs of transport, including to places of work. DLA is not an imaginary example. It featured in the letter from the right honourable gentleman Mr. David Blunkett, objecting to that option, which appeared in the press in December after a leak.

The social security system has developed and expanded into a complex web of benefits and allowances over the past 35 years. Reform and rationalisation are now necessary, and "consolidation" is the right word as regards severely disabled people, so that their income and services are not reduced.

When I entered Parliament in the other place 39 years ago, there were only two categories of disability eligible for special payments: industrial injury and war disability. That was 10 years after the NHS and the National Insurance scheme had started. I declare again an interest, having been severely wounded and partially disabled in World War II.

Since that time various benefits and allowances have been introduced to meet particular circumstances. They have been generally welcomed. Examples are attendance allowance in 1971 and mobility allowance in 1976, introduced by Conservative and Labour governments respectively. There are now so many kinds

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of benefit, with disability benefits overlapping general benefits such as housing or unemployment benefit, that it is a confusing maze for members of the public.

Even by 1981 the miscellaneous benefits were already creating problems for disabled people and their helpers in discovering who was eligible for what. I mention that year because it was the United Nations international year of disabled people and I was chairman of the year for Scotland, and was commissioned by the Nuffield Trust to write a small book on disablement in the UK. In one of the appendices I recorded a list of the benefits and allowances then available to disabled people, showing which were contributory and which were not. Now there are considerably more, and it is not easy to deduce the contributory factor or whether they are tax free, means tested, reduced when combined with a general benefit, or how to apply for them and be examined.

Both the previous government and this one have recognised that action to simplify the system is needed. I welcome those intentions but they will not be easy to carry out. Today I concentrate on one section of the Department of Social Security's clients--an important one--the disabled, as distinct from unemployed young people, or parents tied to their homes by young children, or other able-bodied or mentally able people who are at present dependent on social security benefits. Of course I include the mentally disabled with the physically disabled. I am glad that the noble Lord, Lord Rix, is taking part in this debate as he will no doubt enable me to shorten my speech by addressing that subject himself.

How many people are involved? Numbers must be of special interest to the Chancellor of the Exchequer. The answer is millions of people, and millions of pounds. Since 1992 the figure of 6.5 million disabled persons has been tossed around. It arose from the 1991 census, which was the first time the census recorded disabled people as a separate category. The definition used included people with minor as well as severe disabilities. Perhaps the most important point is that more than two-thirds of the 6.5 million were over retiring age. That is about 5 million. Of the 1.5 million of working age, 59 per cent. of men and 12 per cent. of women were in full-time employment. Others, men and women, were described as economically active, including part-time jobs.

I have two questions to put to the noble Baroness, Lady Hollis, who I am delighted will reply to the debate. Of the approximately 1.5 million disabled people of working age, a large number were in employment or described as economically active. Therefore fewer than 1 million of working age were left. Page 52 of the Green Paper states that up to 1 million disabled people would like to return to work. That must mean that some of those are over working age and have been included in that figure. Is that the explanation? I say straight away that I am in favour of old age pensioners having jobs where appropriate. But should they be competing for jobs with the younger, able bodied, unemployed from workless households, also discussed in the Green Paper?

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My other question relates to incapacity benefit. In Mr. Field's Statement last Thursday, there was the assertion that the all work test, "writes off all too many people". A few sentences later he said that a different test and changes would reduce significantly the numbers who come on to that benefit. There appears to be an inconsistency there.

The Green Paper asserts the firm intention to eliminate fraud, which one can only applaud. Will the noble Baroness confirm that little fraud has been discovered in the disabled sector, in contrast to other parts of the social security system--for example, housing benefit?

Some of the small but apparently definite changes foreshadowed in the Budget and the Green Paper have already been welcomed by members of the disabled group, including me. I refer, for example, to abolishing the time limit on voluntary work by disabled people, and the disabled working allowance becoming a tax credit towards the end of next year, although the details are not clear.

The last government put through Parliament the Disability Discrimination Act, ably handled by the then Minister for the Disabled, my right honourable friend Mr. William Hague. It was the first Act on disablement to appear as a government Bill. The previous landmark was the Private Member's Bill of the noble Lord, Lord Morris of Manchester, which became the 1970 Act. Later he was the eminent first Minister for Disabled People and he has related that the Secretary of State for Social Security in 1969-70, Mr. Richard Crossman, was opposed to his Bill and tried to strangle it. However, we must thank Mr. Crossman for inventing Green Papers when he was Leader in another place. In those days the paper was green, and I have an example here. It cost only 29p in 1972. It contained proposals for a tax credit system. Subjects do not change much. The present Green Paper is bright red, glossy and costs £11.50 for the public and outside organisations to buy. Nonetheless I, and I am sure my noble friends, will follow closely how the proposals in it are pursued. I beg to move for Papers.

6.25 p.m.

Baroness Pitkeathley: My Lords, I thank the noble Lord, Lord Campbell of Croy, for giving us the opportunity to debate this important issue and for giving me the opportunity to put the case for protecting the incomes of carers as well as those of severely disabled people.

The Carers National Association welcomes the publication of the Green Paper on welfare reforms. Particularly welcome is the intention to keep the disability living allowance national and universal. We also welcome the emphasis on ensuring that people who are severely disabled receive a better deal from social security as this may, in turn, extend the access of carers to the benefits they need.

The Government's view is welcome. It looks at welfare holistically in that health and social services provide vital services to people in need, such as carers. It opens up debate and offers new ideas about how

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vulnerable groups might be supported in the future. The system of tax credits for disabled people and families on low incomes with children, for example, sets out a new framework on which support for working carers could be built in the future. Of course we were delighted with the important concessions that the Chancellor made in the Budget to remove an anomaly which disadvantaged women carers; and indeed with recent announcements on the benefits integrity project.

Disability benefits are important to carers for two main reasons. Eligibility for carers' benefits is based on disability benefits. Disability benefits help the carer and the disabled person together to manage the disability and illness, and the costs associated with that process. Any change in disability benefits can have a profound effect on disabled people's and their carers' lives.

Caring also has a detrimental effect on both present and future income. For example, people give up paid work--caring is often heavy work--because of caring responsibilities. People in paid work have their employment prospects, promotion and earning power limited because caring reduces their flexibility. It often means they cannot work late or cannot work far from home. Carers who take periodic breaks from employment in order to care lose out on income and training, and find it increasingly difficult to return to the workforce once the caring process has finished by reason of the disabled person going finally to residential care, or through death.

Carers shoulder additional costs associated with caring--higher transport and heating costs, clothing and food. That means that they are less able to pay into a second tier pension. Carers who are retired have only their pensions and decreasing capital to pay for the extra costs of care. That causes considerable concern among carers.

Carers' present and future income is affected by having breaks in their employment record, low or no earnings, and low disposable income after additional disability-related expenditure. The tax and benefits system therefore needs to be reformed for carers to give support to those who might be able to work and to help them meet some of the additional costs associated with caring.

Given the short time available to me, I shall not embark on making for the Minister the excellent case I could make for a radical review of the carers benefit, invalid care allowance, with which she is very familiar, as I would dearly wish to do and as carers certainly deserve. Instead, I shall ask the Minister to consider some simple amendments to the rules surrounding invalid care allowance which I believe are very much in keeping with the Government's welfare-to-work strategies and which would help carers do what many want to do--be helped to remain in paid work.

I wish to make some specific proposals to the Minister. The first concerns the invalid care allowance (ICA) earnings limit. Carers who receive invalid care allowance can earn up to £50 a week after allowable expenses. However, earnings of over £50 a week will disentitle the carer. As a result, earnings of just a few pence over the limit will result in a loss of not only

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£38.70 a week--that is the latest rate--in invalid care allowance but also the loss of a valuable national insurance credit. If the carer earns more than £50 a week, but less than £62 a week, then he or she will lose the credit, but will not earn enough to pay national insurance. That leaves them in an invidious position regarding their future pension and without access to benefits such as incapacity benefit or jobseeker's allowance, should they need them in the future. There is therefore a strong case for raising the ICA earnings limit to £64 a week, in order that no carer is left without adequate national insurance protection. I also suggest that the earnings limit should continue to rise year on year in line with the rise in earnings.

My second proposal concerns a taper on ICA because a further problem arises with regard to the earnings limit. At present, there is no incentive for a carer to increase his or her earnings. The advent of a pay-rise, or the possibility of extra hours may mean that earnings will be taken just over the £50 limit. That will result in the immediate loss of full invalid care allowance worth £38.70 a week. A pay-rise or an extra shift can therefore mean that the carer is much worse off. Frequently, the only option when faced with a small wage rise is to reduce one's hours in order to comply with the earnings rules. Surely that situation cannot sit happily with the Government's welfare-to-work strategy.

I therefore suggest that ICA is tapered off, rather than ending abruptly. There are two options for consideration. In order to promote increasing a carer's income, I suggest that the Government give consideration to a percentage taper. For example, for every extra pound earned, only 50p is lost from ICA. In that way, carers could increase their incomes and ultimately we are certain that there would be savings, as there would no longer be the perverse incentive for carers to alter their hours to keep within the earnings limit and claim full invalid care allowance.

The Government's other option would be that ICA could be lost pound for pound. So, for example, with the current earnings limit of £50, if earnings rose to £64, ICA would still be payable, but at a reduced rate. That would be simple and would at least ensure that people were not worse off by working extra hours, or having a pay-rise. However, it is a less favoured option as it would not provide much in the way of active encouragement to seek out extra work opportunities, or to take promotion, as many carers wish to do.

I firmly believe that the first option I set out is very much in keeping with the Government's welfare-to-work strategy--in combating social exclusion and targeting support where it is most needed. This policy would effectively allow the nation to benefit twice--from the individual's skills being maximised in the employment market and from the support that carers continue to give--and wish to continue to give--to sick, ill and disabled relatives.

6.32 p.m.

Lord Swinfen: My Lords, I strongly agree with the noble Baroness's remarks about tapering off the loss of benefits with the increase in income. It is a point that

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I made frequently from that side of the Chamber when this party was in power. I suspect that the Government will have just as much trouble with the Treasury trying to work that one out as the previous government had.

In their attempt to rationalise the present structure of the social security system, the Government have made a number of announcements of particular relevance to disabled people, and it is important to offer both support and criticism where appropriate. While many of the broad assertions of the Green Paper on welfare reform are difficult to disagree with, I wish to take this opportunity of looking at a number of specific proposals affecting disabled people and to offer one or two suggestions which will help those who can work, and which will better target help for those who cannot.

I am encouraged that disabled people wanting to experiment with work will be able to do so with greater ease because of the extension of the linking rule from eight to 52 weeks. That will allow someone currently on incapacity benefit to accept an offer of employment and will give them one year to decide whether they can manage a job without jeopardising their benefit.

Further, the abolition of the 16-hour rule for voluntary work means that disabled people should no longer fear loss of benefit through working longer hours as a volunteer--very often a process which leads to a full-time or part-time paid job in the long run, since potential employers are encouraged to see that the disabled person can in fact hold down a job.

The Budget announcement that disability working allowance is to become a tax credit from October 1999 recognises that it has not been terribly successful as an incentive to work. The new disabled persons tax credit has the potential to reach thousands more low-paid workers, whose job opportunities are currently restricted by disability.

However, it will be insufficient simply to transfer disability working allowance as it exists into the taxation system, and a number of issues must be addressed: the qualifying benefits rules, which restrict entry; the treatment of partner's earnings; and the disability test itself. The Government must keep their promise to ensure that the disabled person's tax credit will be more generous than disability working allowance in relation to the taper (55 per cent. instead of 70 per cent.) and high earnings thresholds to allow disabled people to keep more of their earnings as they increase.

The Disablement Income Group, of which I am a patron, has been arguing for some years for the need to adopt a different approach to incapacity and has recently proposed a number of measures including the replacement of the all-work test with an assessment of employability. In this context, I welcome the Government's commitment to review the all-work test, which, as it stands, fails to make an adequate distinction between those who are capable of work, and those who are not.

To help the Government--and sometimes from this side of the House we do try to help them--I suggest that they might like to look at the Disablement Income Group's discussion papers and consider, for example, its

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proposal to assess the impact of an individual's impairment in a work setting, using experts in vocational rehabilitation instead of doctors. General practitioners have expressed varying levels of confidence in their judgments over a person's capacity for work as their clinical training focuses on diagnosis, treatment and prognosis, not necessarily the impact of an impairment. So, while doctors may legitimate as "genuine" those claimants who pass the all-work test, in practice, that role does little to promote the abilities of, or work opportunities for, disabled people. The results of an individual's assessment by experts would then be used to formulate an individual action plan so that the disabled person receives individual attention from a personal advisor, to put the plan into operation.

Further, I would ask that consideration is given to providing an employment service that is more pro-active and which focuses on the broader employment environment locally to ensure that sufficient rehabilitation and employment opportunities are available, as well as adequate advice and assistance, especially to small firms. Such proposals offer a radical change in the nature of the benefits system, by replacing pre-determined rules with individual income security for those who need it, so that benefits support the needs of the individual and avoid the old solutions which have tended to tinker with the benefits system and increase its complexity.

I also welcome the Government's recognition in the Green Paper that there needs to be a universal benefit to help with the costs of disability. In a debate in this House on 26th February I detailed research by the Disablement Income Group which outlined the seemingly endless extra costs of disability, and I am surprised and delighted that Ministers have been able to respond so quickly--if not fully--to my concerns.

But while I have welcomed a number of the Government's proposals, I remind Ministers of the importance of getting additional help to the most severely disabled people, particularly those with the greatest needs and the least prospect of being able to work their way off welfare.

6.40 p.m.

Lord Rix: My Lords, I welcome this opportunity for a debate about incapacity and disability benefits initiated by the noble Lord, Lord Campbell of Croy. In doing so, I note, as he has done, that we have moved quickly from a period of suspicion, rumours and accusations of lack of consultation to a period of published proposals and assurances, a plethora of information and the beginning of formal consultation. Against that background, I want to pay tribute to the Minister, on behalf of Mencap, the Disability Benefits Consortium and all those who have benefited, for her willingness to listen at a time when there were no proposals to consult about, and when, if rumour is to be believed, there were some differences within government as to what direction we should take. Those familiar with the tendency for one part of Whitehall--and on this occasion I refer to the government end of Whitehall--to have as little as possible to do with other parts of Whitehall have also been impressed by the effective partnership that the

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Minister has helped to establish with the Department for Education and Employment and its disability role. Furthermore, the combination of collective and individual responsibility, of public and of independent sector activity, and of encouraging self-help through work but respecting the dignity and meeting the needs of those without work, well displayed in A New Contract for Welfare, seem to me a combination that in principle most of us could happily support.

Those of us with memories of the 1970s are pleased to see that the Green Paper acknowledges the radical nature and huge importance of earlier benefit changes. If I may use a theatrical image, we are right to complain that disabled people are still denied a place in the dress circle, but in 1969 they were still outside the theatre queuing for a place in the gallery. There was no recognition of long-term incapacity for work; there was no recognition of the extra costs of disability; and there was no recognition of the role of carers. How pleased I was to hear the noble Baroness, Lady Pitkeathley, deal with that role this evening. Both Labour and Conservative governments have had a hand in changing those benefits, with the noble Lord, Lord Morris of Manchester,--who is unhappily not in his place tonight--having a significant role.

Since we are now embarking on a period of consultation about change, I want to take the opportunity to set out my stall and to emphasise the theme of realism. I choose that theme because it seems to me that some of the campaigners for major improvement have, in their wilder moments, threatened as much damage as those at the opposite end of the spectrum who find the welfare state an unwarranted intrusion on the right of disabled people to go hungry. As I understand the Green Paper on the issue, it confirms recognition of long-term incapacity for work as a contingency which justifies special provision for sick and disabled people and it confirms singling out care and mobility needs as the prime examples of the extra costs of disability. In other words, it confirms that we have got it broadly right. I agree, and I do so because I think this is a realistic assessment both of what those facing the more severe financial implications of disability need and what the traveller on the new Croydon tramcar service is likely to see as a justifiable way of using his or her taxes.

The courts, and to some extent the war pensions and industrial injuries schemes, recognise a much wider range of effects of disability and a much wider range of severity of disability. Personally, I think it is unrealistic to expect to write all that into our universal public welfare provision. If the reality is that we have got it broadly right we need not waste time seeking something radically different, either for those who are already beneficiaries or for those who are not. We can concentrate on how we can improve on what we have got, how we can improve the take-up of what is available and how can reduce still further the already quite modest scale of people getting that to which they are not entitled. I hope that we can also set aside the notion that was trailed recently of handing disability benefits over to the cash-limited mercies of local

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authorities or putting everything on a means-tested basis or taxing benefits which are intended to meet extra costs irrespective of taxable capacity.

If I may begin with the abuse issue, we have all been aware recently of the polarisation of newspaper headlines between loss of benefits by people with severe and multiple disabilities and the acquisition of benefits by people with apparently minimal disabilities. Whether or not the details are as reported, those with no personal experience of the system must conclude that we have benefit gateways designed to keep out those who should be getting help and to let in those who should not be getting help--and that despite the fact that the gateway systems have been changed on a number of occasions. All this must have a deterrent effect, not just on those who have to pay for the system but on those who could benefit from it or who do benefit but feel uncomfortable about it.

It seems to me that we need at the point of entry both self and independent assessment, a clear statement on the basis of entitlement and a clear onus to report relevant changes, with an appropriate review system, taking account of the possibility of change. The so-called benefits integrity project seems to reveal more about the competence or otherwise of the assessors than any shortcomings among the beneficiaries. We need to replace it with something more routine and more effective. On that theme, may I make a plea that when statistics are published it should be in a form which lends itself a little less readily to misrepresentation. If the reality--I use my theme word again--is that perhaps 10 to 15 per cent. may not be entitled to as much as they are now getting and a rather higher percentage should be getting more or getting something, whereas now they are getting nothing, please let us say so in a fashion that not even newspaper X can present the disability benefit order book as a badge of shame.

As regards improving on what we have, I welcome very much the range of easements proposed to help bridge the transition between incapacity benefits to work, including the pilot experiments announced in the Green Paper. I am not among those who believe that if you modify the benefit system thousands of disabled people who have been away from paid employment for years or those who have never had it will suddenly rush for jobs and find them. But I am among those who believe that existing rigidities make it unnecessarily difficult for those who could work to get into work without losing money or risking losing money. I would add only two items to the list of what has already been taken in hand. It is time after 10 years to restore the original value of the income support earnings disregard. That would mean increasing £15 a week to £25 a week. It is also time to return to the original concept of therapeutic earnings, namely, that doing a little work helps to keep you sane and in touch with the world of work. For many disabled people "therapeutic" in the sense of making you better is nonsense. They are not going to get better, work or no work.

On the eve of the annual uprating of benefits, I will not venture to say much about benefit levels, except that if incapacity benefit costs nearly £8 billion a year it is worth recalling that if those on incapacity benefit were

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on average earnings instead, their annual income would be about £40 billion a year. My point is that benefits are modest in relation to earnings. I am not suggesting that most of those receiving incapacity benefit are capable of work. As is now being admitted, though, the ages and disability/health problems of that group make it inherently unlikely that most of them will find paid employment, whatever carrots are offered or sticks are threatened.

My benefit levels point is a different one. One newspaper seemed to be suggesting that SDA, paid to those who have never been able to work, might be raised to the level of incapacity benefit, paid to those who have managed at least a few weeks' paid employment. The present difference seems hard to justify and if the Minister has good news I hope that she will share it. I realise that no one should believe everything that appears in the newspapers. As that man of words, if not of wisdom, Oscar Wilde, noted:

    "The truth is rarely pure and never simple"--
and might have added that, if it were, the papers would probably not report it.

I turn now to take-up. I warmly welcome the Government's declared intention of doing as much to promote take-up as to reduce wrongful payments. Why not present the investment in the welfare of disabled people as an achievement rather than a burden? I have kept silent on services and dealt only with benefits and I have not specifically concentrated on people with learning disabilities. I hope that that has not disappointed the noble Lord, Lord Campbell of Croy. I am aware that your Lordships are tolerant, but not infinitely tolerant. I believe that rationalising benefits requires the delicacy of springtime gardening and not the flame-gun approach. There is too much that disabled people have and value to risk wholesale change. We have come too far in the past 30 years to turn back the clock.

6.50 p.m.

Lord Rowallan: My Lords, I too thank my noble friend Lord Campbell of Croy for introducing this debate as it gives me the opportunity to raise the subject of the limbless, who are manifestly severely disabled, and the poor standard of care that is unfortunately currently available to them.

I have a friend who lives in Kent with a daughter, Lisa, who was born a Thalidomide child, with half of one leg missing and a deformed hand. She is a lovely girl who has never had a whole body as I have and yet she has coped with the life she has been allotted in the bravest and most natural way. For years, as she grew up, she suffered from poor-quality false limbs that were ill-fitting and uncomfortable and that were very often, when she was younger, similar to the peg-leg made famous by Long John Silver.

Later, Lisa took up showjumping and was so determined to succeed and to compete with able-bodied people that she has represented her country as a junior rider, a young rider and an adult. She has fallen off on many occasions, sometimes comfortably, sometimes in

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pain; but the worst time for her was when, after a particularly spectacular fall, her leg went off with the horse while her body was left lying on the ground as a result of a poorly-fitted false leg. It caused huge concern to the many watchers at the show as they were convinced that a terrible tragedy had occurred. It was also, of course, a source of great embarrassment for herself.

Now, as a result of her parents spending a great deal of money, she has found through the Dorset Orthopaedic Company Limited, a firm of limb providers based in Ringwood in Hampshire, a leg that she did not know she could get and which her local health authority never advised her she could get. She says that it is comfortable and looks like the real thing, even having freckles and hair follicles on it, and now for the first time she can go on holiday and wear a swimsuit or simply wear shorts in the summer. It has given her confidence, and she trusts her prosthetist, Bob Watts, completely. In short, she can finally do with confidence what I do, and have always been able to do, as an able-bodied person. For the first time since I have known her, she does not have a limp and, if I did not know her circumstances, I would not know that her leg was false. It looks so real and, importantly for Lisa, feels like skin, too.

I believe that in this so-called caring society of ours the limbless should be looked after in a much more adult, sensitive and helpful way. The prosthetist is the most valuable person for an amputee. A Helen Nash has told me that without the expertise of her prosthetist she could not hold down her full-time job as an auditor. She has developed over 10 years a relationship with him and feels that to change would cause her to lose confidence and the faith necessary to cope with her able-bodied colleagues.

My father, who was always a fit man, although a heavy smoker and latterly a diabetic, had both his legs amputated near the end of his life as a result of gangrene. Despite having wonderful treatment from hospitals and homes, he could not find any limbs or a prosthetist with whom he could get on and trust. He therefore decided to cope without any legs at all and eventually found the whole process so difficult and painful that he gave up the will to live.

Why is the artificial limb service so unequal as between one region of this country and another? The whole system is controlled by bureaucrats at the National Health Service supplies centre in Reading. It is administered by centre managers in each rehabilitation centre. These so-called experts do not give enough information to their clients, the amputees and the limbless. The "we are the experts and we know best" syndrome is evident everywhere.

In 1988 there were only three companies supplying prosthetic services. In 1989 that was increased to 13, largely thanks to a report by my noble friend Lord McColl of Dulwich, who I am delighted to see is in his place. Now, in 1998, there are only six, and it is virtually impossible for any new ones to enter the market. The McColl Report said that in 1983-84 the budget for the artificial limb service was £38½ million. In 1997 that was reduced to £30 million, a reduction of

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£8 million. From these figures it can be seen that there has been a dramatic reduction in the amount spent on artificial limbs. Is the noble Baroness, Lady Hollis of Heigham, aware of this reduction in costs and services for the limbless, and is she happy with it?

Component hardware costs have risen dramatically in the same period, so it is obvious that the savings have come from the service side. Cutting the service side means cutting the number of staff, and thus the quality of service is being lessened. The prosthetists do not have the time to do their job properly and can only stop waiting times rising by reducing the amount of time they spend with patients. The consequence of that is ill-fitting limbs without comfortable sockets as they are not designed properly. Thus government money, the taxpayers' money, my money, your Lordships' money, is being wasted.

The only chink of light in this autocratic system--what a sorry state of affairs that we should have such a thing--is the extra-contractual referral, known unsurprisingly as ECR, and run by Kevin Shinkwin of the Limbless Association. He helps people choose a specific prosthetist. But some health authorities will not send amputees across their borders in order to obtain a comfortable limb. ECR referrals are also an expensive way to get a false limb, with prices being raised by 20 per cent. to 40 per cent. on top of the normal price to cover overhead costs. But most people do not know of ECR and, more importantly, are not informed of its existence and just accept what is on offer. That is great if your option is at a good centre, but it is very bad luck if it is not. It makes me angry to think what my father had to go through and what he might have had if I been told of the alternatives.

The competitive tendering system that exists in the service can result in a change of prosthetist, which, as I have said, is unnerving for the amputee and the limbless person and results in a poorer service for them. As any prosthetist will tell you, it takes at least two years to gain the full confidence of a client and fully to understand his or her individual needs.

I finish by asking the noble Baroness, Lady Hollis of Heigham, to give an assurance that the Government accept that the way forward must be a voucher system for the limbless whereby they can go to the prosthetist of their choice and either take the NHS limb on offer or upgrade it to one of a higher specification, if they have the finances and the inclination so to do. It would not cost any more and indeed could actually save money as there would be no waste from ill-fitting limbs. I could not help but notice that in a Written Answer on this subject to my noble friend Lord Howe on 12th March the noble Baroness, Lady Jay of Paddington, stated that the Government did not think this was a good idea. Why? It is already working with Motability, where it is allowable to upgrade the size of your motorcar, if you wish. It is also working with wheelchairs, where you may upgrade your wheelchair if you wish.

Surely it must be possible to give these unfortunate limbless people a chance to improve the quality of their lives by introducing such a system? After all, it is not their fault that they are limbless. It would also have the

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effect of creating centres of excellence, because companies would invest long term to produce the best product. Surely a voucher or prescription system would be a more accurate way of giving the limbless the same service countrywide instead of the take-it-or-leave-it attitude that prevails at the moment?

The best reason of all for introducing such a system is that it is what the industry itself wants. It is wanted by the patients, who want freedom to choose a limb; it is wanted by the prosthetists, who want to give their clients the best possible limb; and it is wanted by the manufacturers of the limbs, as it would allow them to invest in the future. At no cost, and possibly with great savings to the National Health Service budget, this must be the way forward. I earnestly ask the Government to think again about this very important subject.

6.57 p.m.

Lord McNair: My Lords, I ask for the patience of the House in making this brief intervention; I believe that we are running a little ahead of time. I do not expect the Minister to respond to what I say. I should like to put on record the contribution to the matters that we are discussing today that a unified national indirect taxation based on a once-only tax on primary energy could make to easing these difficulties. That is a very simple, if radical, change to our tax system which would give the Government a great deal more flexibility and make it easier to fund all the things that we want. It would enable the payment of a basic income, which I believe would make life much easier for those whose plight is being discussed today and for many other people in this country. I mentioned this matter in a debate on sustainability. I do not expect the Government to respond to this point; it is something which I shall bring to the attention of many Members of your Lordships' House.

6.59 p.m.

Lord Addington: My Lords, I thank the noble Lord, Lord Campbell of Croy, for initiating the debate. However, it really does have the feel of a rearguard action after a major campaign. We have gone through a period in which many groups representing the disabled and disabled people themselves have been unnecessarily frightened about what was going to happen. I suspect that this was by accident--I am very much in favour of the cock-up school of history as opposed to the conspiracy one. Many people have been frightened by expressions such as "only those who are severely disabled" or "only those in real need" should receive benefit. A series of subjective judgments have been shouted around.

Indeed, certain leaked documents have come to public knowledge. I quote from a document of December last year:

    "The Government has made clear its aim to release resources from social security in order to spend more on health and education. It is likely that a high proportion of the necessary savings will have to come from benefits paid to sick and disabled people".
Those words come from the discussion paper, Thinking the Unthinkable. While those things may have to be thought, I do not think they have to be said. There

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should have been more guidance in that document stating what the Government were aiming to do in their reforms. That would have helped.

The final document is not terribly frightening. Most of us gave a huge sigh of relief when it came out. Indeed, some groups who take a more aggressive stance said, "Oh dear, we were looking forward to that fight. We thought that we might win it". There is a great clanging noise receding behind this whole area of discussion. Terrible anxiety has been generated by the way the Government have handled it. I hope that the Government will in future handle this area with considerably more sensitivity. When all is said and done, what happened was totally unnecessary.

Today we are discussing the case for rationalising the current structure of social security benefits while protecting the interests of severely disabled people. I have always felt that any system which deals with the variety of individual needs in a series of regulations that say, "Thou shalt fit X regulation" will immediately become complicated because it will have to have 56 caveats attached to it. When we talk about the disabled we cover a vast number of groups--those who have a learning disability and those who lack limbs. Both have different needs and both in certain circumstances are severely disabled.

In their Green Paper the Government have taken steps to address this point. They talk about individual rights and individual needs. Anyone who works within this field knows that that is the only effective way of dealing with the subject. A restructuring of the system must take into account the individuals in the system. More freedom must be given to those implementing the reforms to allow them to take into account individual needs. There is a great mass of regulations on this matter and different types of allowances. I shall not even try to go through them. In my speech today I have already displayed my capacity for mixing up words when dealing with them. I would not like suddenly to give the wrong figure for the wrong type of allowance. All I will say is that this subject is immensely complicated. If we could change to a system where the first statement is "Let us look at the individual", we could then move forward.

There has been one important step already. The all-work test for incapacity benefit is to be reviewed and, it is to be hoped, made more appropriate for the jobs that people can do. This will take into account their skills, training and aptitude. If that happens, a huge area of inexactitude will be removed. To help people through an individually-based system greater investment in staff and expertise will be needed. That will have to happen.

What we have discovered from a series of tests is that at least as much money is not claimed within the benefits system as is inappropriately claimed, either through dishonesty or mistakes. The second category has been fairly conclusively proven by the Government's own testing to be the higher one. We have to look at what people need. We have to make sure that the social security system gives disabled people the benefits they are entitled to. If this happens, we will suddenly find that more people are brought into work.

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We will then be able to achieve the savings the Government are talking about. If, however, we carry on groping our way forward with voluntary groups with a few over-stretched workers helping out, on a case-by-case basis we will probably end up giving most time to those who can handle the forms best themselves. Benefit offices will be struggling desperately to try to get through to the people they should be helping while people who have read every form will come through and get assistance. We can cut down on this--let us be honest, we will never get rid of it--if we have more people supporting those who are making the claims.

There is a great danger here of going into specific cases. We do not have the time--and I do not have the patience--to give these matters the attention they deserve. However, unless we have at the back of our minds what we are trying to achieve in any change to the social security system, and also the fact that we are dealing with individuals, we are bound to repeat the mistakes of the past. Any new system that merely puts out new categories and new bands and is not flexible enough to change in regard to individual cases will ultimately re-create a new set of problems which are almost identical to the old ones.

7.6 p.m.

Lord Higgins: My Lords, the whole House will be grateful to my noble friend Lord Campbell of Croy for initiating this debate. In many ways it is a follow up to the debate we had on 26th February. But between those two events we have had, if I may put it this way, the meat in the sandwich of the Government's Green Paper, which deals with many of the points that were raised in the earlier debate and which again are relevant today.

As on the previous occasion, I speak with great modesty because all those who have taken part in the debate have spoken with very considerable expertise. I was particularly interested in the points made about invalidity care allowance by the noble Baroness, Lady Pitkeathley. I noted with interest the need of the Government Front Bench to take immediate advice on those points. We shall listen with interest to the answers, although I am absolutely sure that the noble Baroness, Lady Hollis, knows the answers in any case.

All of us were greatly moved by the speech of my noble friend Lord Rowallan with regard to the limbless. At a constituency level I remember very well an individual who manufactured appliances for the limbless coming in one day and saying how difficult it was for him to remain in business because of the way in which all the time the department tried to drive down profit levels to a level which would not enable him to develop new products. On the other hand, I can also recall going to an exhibition by the Royal Society a couple of years ago and being immensely impressed by the high technology involved in helping those who have had their legs amputated.

I think it is worth stressing that in the general policy of the Government, of cutting back social security and transferring money to education and the health service, the distinction between the health service and social security is a confused one. Indeed, as far as concerns

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the limbless, it may well be that what happens on the social security side can have an impact on health and vice versa. All those are important points that need to be considered.

In an earlier exchange in this House on 4th December the noble Baroness, Lady Hollis, referred to the way in which the system has grown up piecemeal. She said,

    "It is a tangle. There are different benefits, with different rates, at different ages and with different linking rules ... Most disabled people do not understand their entitlements".--[Official Report, 4/12/97; col. 1479.]
Since the Green Paper is a long-term document, it is reasonable to ask to what extent the noble Baroness is satisfied that the system has been simplified because even now, and in the light of the Green Paper, it is a very complicated system bedevilled by jargon. As the noble Lord, Lord Addington, said it is very difficult to understand all the different allowances at any one time. But simplification in this context is important.

I turn next to the budget. Taken overall, I believe that the disability budget is about 25 per cent. of the social security budget. So if there are to be changes and cuts in the social security budget in order to achieve the redistribution to which I referred a moment or two ago, it is very unlikely indeed that the disability budget as a whole will survive uncut. Although getting the disabled into work is not likely to result in massive savings, it is a desirable objective which we on this side would wish to support.

In that context, can the noble Baroness state the exact intentions of the Government as regards the expansion in disability benefits? The previous government, under the chancellorship of Mr. Clarke, said that it would be 5 per cent., then 7 per cent. in the present year and the year after. When I looked at the Government's famous "focus files" I was rather worried to find that the one for benefits for sick and disabled people showed a diagram--they are always generalised--which made it absolutely clear that after 1999 the budget would flatten out and become absolutely horizontal. Perhaps the Minister could confirm whether that is the case. If so, it is rather worrying.

The next matter is the benefits integrity project which has been mentioned. It is very interesting that the Green Paper on this issue is very explicit indeed. At page 55 it says,

    "The Benefits Integrity Project--which is designed to check the validity of DLA claims--is not working well. It has a series of structural flaws which we are dealing with one by one in consultation with disability organisations".
Given the importance of that programme, the way in which it has been presented and the fact that it is a massive programme, as I understand it, over a period of two years from July 1997 onwards, that seems to be a serious admission on the part of the Government. Perhaps the noble Baroness could give some indication exactly what step-by-step measures she has in mind to improve it. One step, which has already been taken, is that there must be corroborating evidence and reliance should not just be placed on the individual making a claim. We have already welcomed that and we shall continue to do so.

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As the Green Paper specifically says that there are going to be step-by-step improvements, it is not unreasonable to ask what they will be. One of the allegations is that the people carrying out these checks on the disabled receive only four days training. I understand that it is five days training, which is a 25 per cent. increase. It is not a very significant one. For the benefit of Hansard I should indicate that the noble Baroness corrected me by means of a gesture. At all events as regards the disabled, the benefits integrity project has caused very considerable concern. That needs to be taken into account.

As regards the all-work test being a stop-go or a black and white test, that could not be defended completely. If improvements can be made, they will certainly be welcomed. The Statement on the Green Paper referred to legislation at the earliest possible moment on a disability rights commission,

    "to protect, enforce and promote the rights of disabled people".
The noble Baroness will recall that the other day she repeated the Statement made in another place on this point. As the Statement referred to legislation at the earliest possible moment, can the Minister say whether there is any possibility of including that in the Social Security Bill? If so, that would seem to be the earliest possible moment.

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