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Lord Mackay of Ardbrecknish: My Lords, I am delighted, especially in the circumstances of the past week or two, to be able to thank the noble Lord, Lord Williams of Mostyn, for listening to our concerns about emblems. It does not seem much of an issue, but I can assure noble Lords that it could have become a major issue and the noble Lord, Lord Williams, and I might have been in deep water. I realised that the Scottish Conservative Party had its own emblem, different from the torch of the Conservative Party in England. I suggested to the noble Lord that it was not the intention of the Registration of Political Parties Bill to be restrictive, and that perhaps he might take that on board. He did so.

Much to my horror--and I suspect to his embarrassment for obvious reasons as your Lordships will see in a moment--we discovered that the Welsh Conservative Party also had a symbol. The thought of the Celtic divisions of the Conservative Party lining up in battle to decide which would be the second symbol caused me some interest. I am grateful to the noble Lord for preventing me having to buy grandstand tickets for the fight over who could have the second emblem. It is nice to be able to say that I much appreciate what the noble Lord has done.

Lord Williams of Mostyn: My Lords, I am grateful to both noble Lords for their generosity. Your Lordships will realise that there is a deeper agreement here on the basis of quid pro quo because I understand that later on the noble Lord, Lord Mackay of Ardbrecknish, may be able to help me when something comes back from another place.

On Question, amendment agreed to.

Clause 6 [Changes to the register]:

Lord Williams of Mostyn moved Amendment No. 2:

Page 2, line 39, leave out ("two") and insert ("three").

On Question, amendment agreed to.

Lord Williams of Mostyn: My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.--(Lord Williams of Mostyn.)

On Question, Bill passed and returned to the Commons with amendments.

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The Lord Advocate (Lord Hardie): My Lords, I beg to move that the House do adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.

[The sitting was suspended from 3.59 p.m. to 4.1 p.m.]

Support in Bereavement

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, with the leave of the House, I shall now repeat a Statement given in another place by my right honourable friend the Secretary of State for Social Security. The Statement reads as follows:

    "I would like to make a Statement on the next stage of our welfare reform programme.

    "We have already launched the New Deal--the biggest ever investment by government in jobs and training. We have begun to tackle child poverty--with the biggest ever rise in child benefit. We have introduced a national childcare strategy. We are modernising our tax and benefit system to make work pay, with a new working families tax credit that will benefit up to 1.5 million people, underpinned by the national minimum wage. And, three weeks ago I set out wide-ranging reforms to disability benefits, giving more help for severely disabled people and those disabled early in life and modernising the system to ensure that benefits go to those for whom they were intended. All those reforms are driven by our central objective--work for those who can and security for those who cannot.

    "Today I am publishing a consultation paper on our proposals for the reform of bereavement benefits paid to people of working age. Copies of the consultation paper are available in the Vote Office. These reforms apply only to people of working age who lose their husband or wife. Women now widowed, widows over state pension age and war widows will continue to get the support we give them now. They will not be affected by the reforms I set out today.

    "My announcement today is one in a series of long-term reforms that will form the basis of legislation at the earliest opportunity. My proposals today will not be introduced before April 2001, so as to allow time for implementation.

    "The system of bereavement benefits we have inherited is out of date. When it was introduced 50 years ago, most women did not work--certainly not after marriage. Today, seven out of 10 married women work--almost as many as the eight out of 10 married men who work.

    "Today, 1.5 million women benefit from their late husbands' pensions, compared to only 100,000 some 50 years ago. Indeed, about 40 per cent. of the women currently getting widows benefit are in the top half of the income bracket.

    "The world has changed--and the benefits system needs to reflect those changes. The system also fails on four specific counts. First, it is unfair to men.

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    Some 15,000 husbands bereaved each year--many with small children--get no help at all. That unfairness cannot continue. And it is an unfairness that is already being challenged in the European Court of Human Rights. So, doing nothing, as some urge, is not an option.

    "Secondly, it does not provide enough help with the immediate costs of bereavement--such as unpaid bills or funeral costs. Thirdly, money often goes to those who have least need of it. Widows, without children, who have substantial incomes can get benefits for years. But a man, who may have growing children and modest means, gets nothing at all.

    "Finally, the present system fails to help the poorest mothers on income support. Those widows, who have children to care for, lose their benefit pound for pound and so get no financial gain from their widows benefit.

    "The reforms I am announcing today will change all that. Our reforms will, for the first time, get help to men who lose their wives, and on an equal footing with widows. They will provide extra financial help with immediate needs such as funeral expenses.

    "We will continue to help those older people without children during the period immediately after bereavement. And, as with our other reforms, our priority is to provide security for families with children and to get the greatest help to the poorest. Our proposals will ensure the security of families with children, and we will do more for the poorest families and their children.

    "First, I can today announce that men who lose their wives will get help on the same basis as women who lose their husbands. We will go further. Once those reforms are introduced they will apply not only to newly bereaved widowers but also to those husbands, with children, already widowed--for the first time, providing security for around 20,000 men and their children.

    "Secondly, immediate help on bereavement: the loss of a husband or wife is traumatic and is a time of great need and anxiety. And we recognise the need for immediate financial help. Indeed, it is one of the strengths of the current system that on bereavement a widow gets a £1,000 lump-sum within four days. But, in my view, that payment is no longer high enough--the amount has not changed in 10 years.

    "So today I can announce that we are doubling the lump-sum cash payment to £2,000 to give more help with a range of costs, such as bills, or the cost of a funeral.

    "Thirdly, we want to ensure that we get help to those who need it most. But today long-term widows benefits may go to many who do not need them because they do not have the extra costs of bringing up children or because they have good incomes from jobs, pensions or insurance. Some argue that that is grounds for abolishing the benefit completely, but we do not believe that that would be right because we recognise that financial support is needed in the period immediately after bereavement.

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    "So we will continue to provide a financial breathing space for bereaved spouses aged 45 and over who do not have dependent children, by paying a weekly benefit worth up to £64.70. That new bereavement allowance will be paid for only six months, providing transitional support at a time of particular need.

    "We also recognise that for the generation of older widows and widowers aged 55 or over at the time when these changes are introduced special arrangements are needed because it could be difficult for them to make new plans. I can announce today that anyone from this generation who qualifies for income support and who is widowed in the five years after these changes are introduced will get support worth the same amount as the current widows pension.

    "Fourthly, we are determined to ensure that the greatest help goes to those with greatest needs. So our reforms will continue to provide long-term, financial help to bereaved parents with children. I can confirm that bereaved husbands and wives will continue to get a weekly benefit currently worth on average £85, payable until their youngest dependent child leaves full-time further education.

    "As with our other proposals, this help goes to both men and women who lose their spouse. But we will go further. Because we are determined to do more to help the people who need help most, we will ensure that the system helps the poorest widows and widowers and their children. Today I can announce that the poorest bereaved parents on income-related benefits and getting bereavement benefits will gain additional cash help worth up to an extra £10 a week, providing the greatest help to those with greatest needs.

    "These reforms modernise this benefit; treat men and women equally; give immediate help when it is needed; and give more help to the poorest. And existing widows will not be affected.

    "As with the reforms I announced three weeks ago, the structural changes will deliver significant savings; around £500 million in the long run. But we will do so by ensuring that greatest help goes to those with greatest needs. And in the short-term we are spending £140 million more to meet real need.

    "As society gets wealthier, the amount that we spend on the most vulnerable should increase; but benefits must go to those who need them most. We must give more help to those in greatest need. We are planning now for the needs of the future to ensure that the system is affordable, fair and effective.

    "Some will urge us to do nothing. And, yes, turning our backs on the failure of the current system would have been the easy option. But the real scandal would be for a government committed to social justice to ignore the unfairness--to ignore the needs of

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    children--and to do nothing to help those in greatest need.

    "These are fair reforms, providing real security, providing real help at a time of real need, for bereaved husbands and wives and their children. I commend the proposals to the House".

My Lords that concludes the Statement.

4.13 p.m.

Lord Higgins: My Lords, the House will be grateful to the noble Baroness for repeating the Statement which was made in another place. As is frequently the case with Statements from the Department of Social Security, it is not as simple as one might have hoped. However, it clearly bears the hallmark of all New Labour's approach to the problems--which is more means testing and a consistent policy of undermining the contributory principle on which hitherto the welfare system has been based. Of course we welcome the increase in the lump sum paid to those who are bereaved. Funeral expenses have escalated. Will the Minister confirm that the increased lump sum will not be means tested or taxable?

There are significant downsides in what the noble Baroness has said. The annunciator, no doubt as a result of government information, announced that there would be a support in bereavement, and that is the case. However, it should have mentioned the considerable cut in contributory rights which previously existed.

The Minister referred to the fact that the European Court of Human Rights--not a European Union body--has before it a case with regard to the equal treatment of men and women in the context of the benefits to which she referred today. I do not imagine that those bringing the case before the court originally envisaged that the equal rights would bring changes in the level of benefits. Presumably, those taking the case to court expected that, if the court ruled in their favour, the men and women would receive equal benefit at the level which then existed. That is not the case. There has been a considerable moving of the goalposts in that respect.

In a preamble to the Statement the Minister also referred to the working families tax credit. The Statement stressed that benefits will accrue more to those on lower incomes. There is an intrinsic inconsistency in the Government's policy on this matter. The working families tax credit will provide an increase to some people earning as much as £30,000 a year. On the other hand, the benefits to widows and widowers who may have incomes significantly less than that will be restricted. Therefore, the consistent attitude of the Government is in jeopardy as regards the overall treatment of the two issues.

The main objection is that the Statement clearly undermines the contributory principle. We have already had a number of examples--the noble Baroness previously announced them to the House--where people will receive benefits to which they have not contributed. However, the Statement declares that some benefits to which people have contributed will no longer be paid to the widows or widowers affected. Perhaps the Minister will confirm that. Men who during their working lives contributed to the national insurance scheme expected

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that when they died their widows would receive a certain level of benefit. Many will now find that that is not the case because significant restrictions are imposed. Will the Minister make clear exactly who loses under this operation? Some people will gain, particularly those on a very low income, and we welcome that, but others just above the income support level will find that having contributed all their lives they will suffer under this change. Am I right in believing that widows and widowers without children will suffer under the proposals?

I turn to some of the complexities of the system. Am I right in believing that people between 45 and 55 will receive only transitional relief? Am I also right in believing that that transitional relief will be taxable? If so, that is a significant innovation in our welfare arrangements. Perhaps the noble Baroness will confirm that people between 45 and 55 will receive transitional relief and that that relief will not be taxable?

I turn now to the issue of people aged 55 and over. Am I right in believing that there appears to be a strange gap in the proposal? Apparently, people aged 55 will continue to receive their benefits for the next five years. However, the pension age for widows and widowers is to be harmonised at the level of 65 years. Is there a gap in between? If so, it is an extraordinary arrangement. Before people become entitled to their national insurance pension they will suddenly lose their widows' or widowers' pension too. Could the Minister clarify the position?

And then there are those who are receiving--I think the exact expression is--a weekly benefit of £85 per week on average but, presumably, not if they do not have children. Indeed, that is the position, although those whose husbands who have contributed throughout their lives may have expected that to be so. Certainly if one compares the national insurance scheme and the obligation which governments have previously had to pay benefits in relation to contributions with the private sector, that certainly would not apply. If private pension schemes were suddenly to declare that they were altering benefits in that way, they would face an absolute public outcry.

The fact is that this proposal is Treasury driven--£500 million saving. Perhaps the Minister will tell us how that £500 million is broken down between the various groups which will lose as a result of the proposals. Clearly a number of people gain and that is to be welcomed. We appreciate the needs of those particular groups. But we believe also that it is important to recognise the entitlement of those who have contributed to the scheme and who had reasonable expectations that when they retired, they would find that their benefit was at the level which they had expected during the course of their working life.

4.20 p.m.

Earl Russell: My Lords, I thank the Minister for repeating the Statement. I begin by paying tribute to David Thomas, a former solicitor of the Child Poverty Action Group since it is he who is responsible for the case before the European Court of Human Rights which has led to this Statement.

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On these Benches, we warmly welcome the principle of equal treatment for widows and widowers. I have addressed this House several times recently on the need for equal treatment for men in the area of care of children. Those two principles are closely related. Apart from being required under the European convention, we believe that it is positively good.

I have one or two questions about how it is being carried out. Does it apply to those who are already widowers while bringing up young children or does it apply only to those who are to become widowers hereafter? What is to be done for those who are widowed over 55? At the end of receiving their pensions, are they to be required to return to the labour market or are they to be protected from the rigours of the actively seeking work rules under the jobseekers regulations? I am relieved to see the Minister nodding her head.

For the widows' benefit, we believe that six months is rather short. It takes quite a lot of adjustment to rearrange a life, especially with children. We wonder whether a slightly more generous statement might have been possible.

We are rather inclined to share also the concerns of the noble Lord, Lord Higgins, about how far that may undermine the contributory principle. One cannot have the contributory principle everywhere and yet it is an important part of maintaining consent for the social security system. Whittling it down too far could tend to produce the feeling that the social security system was just for them over there and therefore was not to be worried about. That could be a pity. While each individual case may be perfectly well justified, we might begin to become concerned if there were too many of those cases and they were to become a general trend.

The question of funeral costs is something which needed addressing very badly. However, I should have preferred the Minister to address them rather more constructively by bringing back and amending the funeral costs social fund regulations which my noble friend Lord Falkland, on my behalf, addressed shortly after this Government came into office. We have there a problem of a cap on funeral costs and, as my honourable friend Mr. Chidgey has argued several times, funeral costs are escalating well beyond that cap. It is always a problem when caps are imposed.

There are a number of other problems about those regulations into which I shall not go now. However, I should be grateful for the Minister's assurance that she will look again at the working of those regulations to see whether she thinks that all is well.

I take the point made by the noble Lord, Lord Higgins, about the saving of £500 million. It is quite a large saving to be achieved from a very limited area. I too look forward to hearing the breakdown of how that saving is arrived at. It is another reason for wondering whether the changeover to means-testing in that area is entirely justified. It is really quite a feat of spin to present a saving of £500 million as being an act of warm generosity to claimants. In fact, I am interested in how much skill was put into the performing of the trick. I rather admire it as an exercise.

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The uprating of the lump sum is a consequence of the fact that it had not been uprated for the past 10 years. Almost every year I address the failure to uprate capital lump sums. We see here what happens. You move like a mountain ridge in a series of unpredictable first and second steps which makes some rather awkward climbing. Would it not have been better simply to uprate that by the usual little bit each year and then the lurch to the Treasury would have been rather less intense when it came?

I ask the Minister one precise, specific question. If you take that lump sum over the 10 years in which it has not been uprated and compare what it is now with what it was 10 years ago, is it now bigger or smaller than it was then? That is an interesting question and may demonstrate how generous this Statement really is. I shall be very interested in the answer.

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