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Lord Gilbert: My Lords, I am sure that a sensible way will be found to allocate the costs among EU countries, NATO countries and other countries in Europe. We realise that we have to make sensible contributions. While the noble Lord was on his feet, I wondered why he did not take the opportunity to withdraw a couple of remarks he made the last time he intervened when he said that Mr. Milosevic was winning the campaign, that we were losing it and that air power would never win.

The Earl of Onslow: My Lords, from my point of view, the Prime Minister must be congratulated on showing considerable moral courage. He has shown a leadership to which most other parts of NATO have failed to respond. Having said that, will he please give an undertaking never again to say, "I will never use ground forces" because that has prolonged the campaign? I do not say that we should use ground forces, but I am suggesting that he should never again say that he will not use them. Mr. Wilson made that mistake over Cyprus and Rhodesia and Mr. Hague followed in the House of Commons. The criticism is fairly blanket. Will he, please, never do that again?

Can the Minister say how long he believes that this venture will last? Will it be a long imperial adventure lasting forever? On a minor piece of information, is he aware that the 50,000 troops he foresees going into Kosovo are equivalent to the number of British troops who managed to hold the British Empire in the Far East from Hong Kong to Aden in 1935?

Lord Gilbert: My Lords, I shall be happy to convey to the Prime Minister the encomium that the noble Earl delivered in his initial remarks. I was not sure whether he was asking me or the Prime Minister to give all sorts of assurances. He says that the Prime Minister should never have said that we would not use land forces. What on earth makes the noble Lord think that Mr. Milosevic necessarily believed the Prime Minister or anybody else who said that? We happen to know that the Yugoslav forces were deployed in various directions because they thought that a land invasion might come from places from where it did not come. That reduced the number of their forces available in Kosovo. I can assure the noble Earl of the force of what I am saying.

The noble Earl and myself have discussed this privately. Air power did win the campaign. Some people believe that Mr. Milosevic settled when he did because he was afraid of a land campaign. To those who believe that, I say that the prospect of a land campaign was a remote and uncertain one. Mr. Milosevic was really turned around by the prospect of a certain continuation of the bombing for another three months.

Lord Craig of Radley: My Lords, it will be no surprise to the Minister to hear that I welcome the

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Government's confidence in the delivery of success in this campaign by the use of air power alone. Never the less, would it not have been helpful if the use of ground forces could have been considered more firmly and earlier? I believe that that could well have shortened the length of the air campaign.

I add my congratulations to General Jackson and his team on the achievement of a significant agreement. In that agreement, are there any arrangements to renegotiate if hitches occur in the process of moving the Yugoslav forces out, for example, if a bridge that is thought to be safe is found not to be or if there are other matters which mean that the planned move will not occur? It would be helpful to know what arrangements have been made for that. Finally, can the Minister say anything further about the arrangements which may be made to incorporate the command of Russian forces within the overall force structure of KFOR?

Lord Gilbert: My Lords, I am obliged to the noble and gallant Lord for his remarks in relation to the professionalism of our air forces and their success. I did not say that the use of land forces was never considered; I merely said that the idea had been rejected. Of course it was considered very early on and was rejected very early on. In point of fact the air campaign could have been a lot shorter had we not had such bad weather; and had we not been quite so fastidious in our choice of targets, weapons and rules of engagement. But that is history and it is not helpful to carp about details of what was a brilliantly successful, professionally waged campaign in which we should all take pride.

I am afraid I have nothing more to add to what I said a few moments ago in relation to the arrangements for Russian troops. Those matters are being discussed at this time.

Welfare Reform and Pensions Bill

4.20 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I beg to move that this Bill be now read a second time.

Noble Lords will no doubt have followed the progress of this modernising legislation in another place. Reforming the welfare state to meet the needs of the 21st century is one of the biggest challenges facing this Government.

Beveridge's welfare state assumed that men would be in 40-hour, 40-year jobs, which in turn could fund insurance against the risk (not the likelihood) of old age and sickness, while women, their wives, worked at home, depended on and derived their benefits through their husbands. That world has gone for ever. The position of women, employment patterns, family structures, life expectancy have all changed radically. To take just one example. Only one married woman in eight worked in Beveridge's day; now around three-quarters do, earning their own entitlements with

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dramatic implications for employment benefits, widows' and disability benefits, for pensions as well as the more traditional role of carers.

We must rebuild the welfare state to reflect today's world, applying the ethics of Beveridge to today's very different society. The Prime Minister recently described the key principles underpinning our modernisation plans. First, our commitment to tackle social exclusion. It is scandalous that one in five children live in households without a parent at work and therefore the face of poverty in this country is the face of the child. One in three children now live in poverty.

Secondly, the Prime Minister said that we are determined to encourage a relationship of mutual responsibility between the individual and the state. The third principle he enunciated was that our reforms will ensure that security is provided for those in greatest need through a mixture of universal and targeted help. He committed us also to building a system secure from fraud; then, to develop effective and innovative delivery mechanisms, not just to rely on the traditional methods of government.

Finally, we must remember that there is more to the welfare system than just social security benefits. Active welfare is about services too--schools, hospitals, the whole infrastructure of community support. It is about rebuilding employment around the New Deals, the working families' tax credit and the national minimum wage. It is about tackling child poverty, by offering work to workless households, increasing child benefit and reforming the child support system. All of that is part of our society's welfare and well being.

In this Bill we are modernising the benefits, pensions and national insurance system to deliver essential changes in five key areas. First, we are introducing a radical package of measures to keep people in touch with the labour market, including the one service, which is the work-focused interview pilots in the new employment zones. We believe that the only way out of poverty is access to the labour market.

Secondly, we are modernising disability benefits so that they provide more help for disabled people in greatest need, as well as providing help and opportunities for disabled people who want to work. Thirdly, we are modernising and extending entitlement to bereavement benefits to help families with children who need it most. Fourthly, we are starting the process of pension reform to ensure the system provides security in retirement for future pensioners, including people who divorce, through pension sharing. Fifthly, we are modernising the benefits of the national insurance system, extending maternity allowance to low paid expectant mothers and aligning the NICs and tax earnings thresholds.

I should like, if I may, to take your Lordships through the measures in the Bill in greater detail. It seems appropriate to start with the one service--the new single, work-focused gateway to benefit; a radical change in both approach and culture in the benefits system. This change had all-party support when it was discussed in another place.

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For years too many people have been written off, or written themselves off, and been resigned to a lifetime on benefit; and too many children growing up in workless households have come to expect nothing better for themselves. Frank Field once told the story at a meeting I was attending of a school he visited where he said to a 10-year old boy, "What do you want to do when you grow up?". He thought the child might reply, "Drive a train" or "Fly a plane". The 10-year old boy said, "When I grow up I want to claim my giro payment".

The Government are determined to break the cycle of disadvantage by tackling that poverty of expectation. That is why we have focused resources on providing £4 billion of help through a range of New Deal programmes. The one service builds on the New Deal by providing everyone of working age with advice on their options, on work, training and childcare, together with help in claiming the benefits to which they are entitled. Everyone of working age entering the benefit system will, for the first time, get the help that they need and have a right to expect; and they will get it in one place, at a one-stop shop.

In turn, we believe they have a responsibility to take up that help. So they will be required, as a condition of benefit, to take part in an interview to find out about the opportunities open to them. We want these interviews to open windows for people since, as we all accept, people do not know what they do not know. The Government have a responsibility to help them to find out and to empower them with that knowledge.

We will of course be sensitive to people facing specific difficulties. We know that for some people with severe disabilities work will never be an option. So such individuals will not be required to take part in an interview. I must stress that these requirements stop at interviews; it is about empowering with information and choices. Nothing in this Bill will force anyone to take a job or follow a particular course of action. What is important is that they discuss the help available.

The one service is part of a wider strategy to ensure that people have the opportunity to work and to ensure, through the working families' tax credit, for example, that work pays. The Bill provides for two further measures to help people into work. The Bill requires joint claims to jobseeker's allowance from, initially, young couples who do not have children so that both of them get access to support and advice from the Employment Service, and if they have been unemployed for six months, to the New Deal for young people. All our research shows that that will be welcomed.

The Bill provides for the new £112 million programme of employment zones to cut through red tape and focus resources on areas that suffer from persistently high unemployment. By pioneering a different approach, we are doing more to help people get into work. But that is just one part of our reform programme. We are also determined to help people who cannot work.

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So the Bill also reforms and modernises support for disabled people. The Government have made absolutely clear their commitment to improve the opportunity and support available to disabled people; and we have wasted no time delivering on that commitment by investing £195 million in the New Deal for disabled people; by introducing the disabled person's tax credit which, from October, will provide a guaranteed minimum income of at least £150 a week for a single disabled person moving from benefit to full-time work, earning the national minimum wage; by doubling, as those of your Lordships who took part in the WFTC Bill will know, the child premium in working families' tax credit for a disabled child, worth £25 million to 27,000 families: £1,000 a year extra for every low-earning family with a disabled child; by creating the new disability income guarantee, worth at least £128 a week for most severely disabled people under 60 getting income support; by spending £2 billion more by the end of this Parliament on benefits for disabled people--more help for more people who need it; and, of course, by building on our commitment, shared round this House, to comprehensive civil rights with the Disability Rights Commission.

All those reforms are an essential part of our approach. We want to do more to help people into work, and we know that disabled people want to work. Two million already do so and 1 million more have told us that they would like to. We want to provide opportunity where once there was none.

The new personal capability assessment ends the incapacity benefit all-work test, ending the assumption that everyone on incapacity benefit is not able to work. After all, everyone on incapacity benefit was once in work. This new assessment will look at what they can do; not whether they cannot lift a sack of potatoes, but whether they can use a keyboard, for example, or a telephone. I repeat, no disabled person will be forced into work but if they want to work, as they tell us they do, we will do all that we can to help make that possible for them.

If we want to do more for the people who need help most, we have to ask how best to use our resources. There are two further changes to incapacity benefit in this Bill, neither of which will affect people currently getting benefit. Incapacity benefit was and is intended to be an earnings replacement benefit when illness or disability unfortunately forces people to stop work. Over the past 20 years, however, it has become for many an unemployment benefit. Four in 10 of those who receive incapacity benefit were previously unemployed--not in work and becoming disabled while in work, but unemployed. Indeed, someone who worked for only six months over 20 years ago and who has been unemployed ever since would qualify for incapacity benefit now. We do not believe that is right.

Our changes to the contribution conditions make quite clear that entitlement to incapacity benefit is based, as was its intention, on recent work. The new rules will not create onerous requirements. They can be satisfied if someone has done some work in either one of the previous two years. That means only four weeks' work within two years for someone on average earnings, or

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as little as 12 weeks' full-time work for someone on the minimum wage over the two years. That two years may very well--given the difference between social security years and tax years--be more like three and a half years.

The Government are determined to do more for carers. We are therefore making special provision for those getting ICA, to ensure that they can still qualify for IB. We will also protect people who have been off IB for a short spell and have not had the chance to rebuild their national insurance contributions. We will make sure that they do not lose out.

The second change to incapacity benefit introduces a fairer partnership by changing the way that occupational or personal pensions are treated in IB. Fifty years ago very few people had occupational pensions. Today, 86 per cent of men and 77 per cent of women working full-time have an occupational pension. Even so, these changes will not affect four people in five on incapacity benefit in future; but of the one-fifth who will be affected nearly half have occupational pensions which take them into the top 40 per cent of income distribution. Around 100,000 of those who get a pension get one of more than £230 a week, with IB of £66 a week paid on top. Is it reasonable that the state should be paying incapacity benefit to people who already have high pensions?

We are determined to reward thrift and saving. People should see reward from making their own pension provision. There will therefore be a partnership. People will keep the first £50 a week of any early retirement pension paid, but their IB will be reduced by 50p for every additional £1 received.

May I also remind your Lordships that my right honourable friend the Secretary of State for Social Security has made it absolutely clear, both at Second Reading and again at Report stage in the other place, that the £50 threshold will be reviewed to ensure that it is set at a fair and reasonable level? The Secretary of State has emphasised that the principles are right but that the details are not set in stone: they can be reviewed.

We are also increasing help for those disabled people who need it most--those young people who are disabled from birth or early in life who have never had the opportunity to work and save. Currently, the help available to them through severe disablement allowance, SDA, is paid at the rate of £54 a week. It is simply not enough. Seventy per cent of people on SDA have to claim income support because SDA is so low. The changes in the Bill will mean that young disabled people who claim before they are 20--in other words, who have not had the opportunity to build up a contribution record by being in work--will be given a new entitlement to incapacity benefit without requiring them to meet the usual contribution conditions. After a year this will boost their weekly income by over £26 to over £80; for many, floating them off income-related benefits and providing real help to those young disabled people who need it most.

The Government received representations that it would be wrong to penalise disabled young people who stay on after school to go into higher education or

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training. We have therefore amended the Bill to raise the age limit to 25 for claiming incapacity benefit for young disabled people who begin training or higher education before they are 20.

This Bill also extends the higher rate mobility payment in DLA to severely disabled children aged three and four--a measure which I know your Lordships will welcome. It is worth £37 a week in extra support and also gives these children, and importantly their families, access to the Motability scheme, to allow them the vehicles to carry the heavy equipment that some children may require, such as oxygen cylinders and the like.

The Bill also modernises bereavement benefits to focus help on those who need it most. None of these changes will affect existing widows, widows over pension age, or war widows. The current system must be reformed, however. It is out of date. If your Lordships started afresh, we would not devise the present system.

When widows' benefit was introduced 50 years ago most women, certainly married women, did not work. The system now helps many women on good incomes, who have no children to care for and who have no financial need. Yet it does nothing for bereaved husbands struggling to bring up young children. It spends most on those who need it least. Seventy-five per cent of widows' benefit goes to women without dependent children. Forty per cent of women getting this benefit are in the top half of the income bracket. Yet at the same time the 35,000 poorest widows see nothing, because their widows' benefit is deducted pound for pound from their income support.

For the first time, therefore, we will help bereaved husbands and their children on the same basis as bereaved women, through a weekly, non-means tested benefit worth an average of £75 to £80 a week. Because we believe that the current system does not provide enough help with immediate costs, we are doubling the initial lump sum to £2,000. We also recognise the need to provide transitional help to those without children in the period immediately following bereavement. This Bill therefore provides non-means-tested help for widowers and widows alike without children for the six months following bereavement. So it provides an initial lump sum, a six months' bereavement allowance, and a payment to men and women alike if they have dependent children when they are widowed.

We will ensure that older widows, over 55, without dependent children, without income and without the prospect of work--a group I am sure your Lordships are concerned about--are no worse off as a result of these changes by providing extra help through income support.

We will also ensure that the system does more to help the poorest widows and widowers and their children, who, up to now, lose their benefit pound for pound. We will therefore change the regulations, in a move which I very much hope your Lordships will welcome, to give additional help to the poorest bereaved parents worth up to an extra £10 a week--effectively a £10 disregard on their income support for their widows' benefit. These

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reforms look to the long term and to the needs that we know we will face in the future. It is because we are looking to the long term that we are also reforming the pension system.

In December we published proposals for far-reaching reform of the pensions scheme; and this is our first Bill on it. It delivers the commitment made by all of us in this House to enable pension-sharing. I am delighted more than I can say to be here today on behalf of your Lordships to bring forward proposals which I hope and trust will be warmly welcomed. However, my only regret is that the much loved Lady Seear is not here to celebrate with us. She fought so doughtily for us shoulder to shoulder, to coin a phrase.

For the first time, pension rights can be shared like other assets at the time of divorce, providing greater flexibility and choice for divorcing couples and courts. It offers fairness at last to older women who have helped to build their husbands' careers and then have been "traded in", in the phrase used by the noble Baroness, Lady Young, who, along with the noble Baroness, Lady O'Cathain, so powerfully argued the case. It will also help younger women make a fresh start.

We are setting out the framework for the new stakeholder pension schemes, which are central to ensuring that those who can save for their pension do so. We believe that they have a responsibility in that respect and that we ought to offer them the opportunity. For the one-third of employees who do not have the opportunity of joining an occupational pension scheme, a personal pension is currently the only option. However, only about half of the 10.75 million people earning between £9,000 and £20,000 a year--after that, they tend to look after themselves rather better--are in occupational schemes. Personal pensions are not suitable for many, such as low earners or contract workers. So millions of people today do not save towards their pension.

Through the new stakeholder pension schemes this Bill will give millions of people without a second funded pension a better opportunity to save. Up to 5 million people could benefit from these proposals. We are ensuring that they are run in ways that will put the rights and interests of members first, meeting specified standards. Stakeholder pensions will be cheaper with lower charges; they will be safer because of our trust arrangements; and they will be more flexible, thereby ensuring that they are suitable for those who need to take breaks from work, particularly women; those who change jobs frequently, such as the self-employed; or those who are on short-term contracts. We will also ensure that stakeholder pensions are transparent as well as being easy to understand and compare.

Through our radical, structural reform of the pension system and measures to ensure that more people take out a funded second pension, we will ensure that people get better pensions, a better retirement and a better future. We will subsequently be bringing forward measures to ensure that those earning below £9,000 a year have access to the new state second pension in due course.

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The Bill also contains measures to modernise the structure of national insurance, building on the improvements already made in this House, such as the transfer of the responsibility for national insurance from the Contributions Agency to the Inland Revenue. The changes we propose to make to the national insurance threshold will ensure that it is fully aligned with a single person's tax allowance. More importantly, we will be taking about a million people out of national insurance altogether. Seventy per cent of the working population (16½ million people) will see a cut in their contributions. However, at the same time, we are ensuring that entitlement to contributory benefits is protected for people with low earnings. We are also closing a loophole in the current legislation to ensure that people disguising their employment through the use of service companies pay the same tax and NICs as those people employed directly.

Finally, as well as helping women by introducing pensions sharing, stakeholder pensions, providing extra help and support in finding work and modernising bereavement benefits, the Bill delivers on the Budget commitment of the Chancellor of the Exchequer to provide better help for working mothers. We are extending entitlement to state maternity allowance to pregnant women on low earnings who currently find themselves in the ridiculous position that they have the right to take time off work to have their baby but do not get any financial support to do so. Indeed, 14,000 low-paid women will be provided with this money for the first time--a major and much-welcomed step forward.

We are ending the second-class status of the self-employed. Self-employed women will now receive the full rate of benefit--£59.55 instead of £51.70. We are also helping self-employed women with low earnings. If they hold a certificate exempting them from paying national insurance contributions, they will be treated as having notional earnings of £30 a week and will receive maternity allowance.

Taken together, the measures in this Bill represent substantial modernisation of the welfare system. We believe that we are planning for the long term, meeting the needs of our society, which have changed over the past 50 years, and seeking to anticipate the changes of the next 50 years. As a result, we believe that we are contributing towards a popular and modern welfare state, modernising universal, contributory and means- tested support to deliver effective help where and when it is needed most. We believe that this will help people to help themselves and that it will provide them with opportunities for independence. But, above all, and equally importantly, it will provide greater security for children and the elderly and, indeed, for those who need it most. I commend the Bill to the House.

Moved, That the Bill be now read a second time.--(Baroness Hollis of Heigham.)

4.44 p.m.

Lord Higgins: My Lords, before I respond to the elegant speech of the noble Baroness, I must immediately declare an interest as I am chairman of a

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company pension scheme which may, to some extent, be affected by the provisions of this Bill. At all events, the Bill now before us is in may ways typical of other legislation because it tends to disregard to a significant extent the question of parliamentary scrutiny and the way in which the legislative process ought to work.

The Bill is not, in reality, a single Bill. It could certainly be represented as being two or three Bills, wrapped up in a single Bill. Indeed, one could argue that it is five or six Bills, each of which would deserve a Second Reading, a Committee stage, a Report stage and a Third Reading of its own, if it were to be properly scrutinised. That will create considerable problems for your Lordships' House because the extent of the measures in the Bill is very wide. First, we have some major provisions, which the Minister outlined, as far as concerns the stakeholder pension. This raises a whole series of issues on which there have been many representations from outside bodies.

Secondly, there are the provisions for pension splitting and pensions as regards divorced people. That is a provision which we have welcomed in many respects, although the more the proceedings went on in the House of Commons the more doubt we had about some of the measures. Thirdly, there is the whole structure for the single work-focused welfare gateway, on which the noble Baroness put such considerable stress. Then there are a number of measures which gave rise to great controversy in another place and which will penalise those who are bereaved, on incapacity benefit or, indeed, severely disabled. Again, those provisions will require very careful examination, which I am sure noble Lords in all parts of the House will wish to give them. In addition, extensive changes are proposed to the whole question of national insurance contributions.

Finally, there is a provision to which I believe the Minister devoted only one sentence--namely, that contained in Clauses 70 and 71--which was introduced in the most extraordinary way in another place. If noble Lords were to peruse the House of Commons Official Report of 17th May, they would see that it is quite clear that the reason for the provision suddenly appearing at the very latest stage was that the Government were anxious to change the timing of the proceedings in order to ensure that an embarrassing vote on some of these other controversial matters did not take place at a time when the matter was likely to receive maximum attention. In the event, that attempt failed. However, it seems to me quite extraordinary. We are in a era where spin-doctors are now so pervasive that whether a clause is introduced in this Bill rather than in some other way--and at the very latest stage in a Bill--appears to be a matter of presentation rather than content.

I shall refer to this matter a little more than the noble Baroness did later because it has given rise to a considerable degree of protest in the past few days from myself and many of my noble friends, who no doubt will be joined by those on both sides of the House, as regards the way in which the provision has been put forward. I believe that the Government will live to regret putting through this amount of legislation in the form in which it appears before the House. If the legislation is

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not properly scrutinised, the reality is that sometimes such measures may cause considerable problems later on.

Today we are concerned with the principles of the Bill. Those principles are clear, but not those which were put forward by the noble Baroness. After half a Parliament of this Government, we are familiar with the general way in which they work. The Government have tended to transfer power and responsibility in many matters away from the Department of Social Security to the Treasury. In that context one cannot but note the way in which the Government have failed to achieve the objectives which were clearly set out by the Prime Minister before and immediately after the election when he said that the intention was to reduce welfare bills and spend the money that was saved on education and health. The Government have clearly failed in that objective. The noble Baroness shakes her head. But instead of cutting expenditure on welfare, the Government now propose an increase of some £38 billion over the next three years. While there are some increases in expenditure contained in this Bill which we welcome, it also includes measures--for example, on the disabled--where small sums of money by national standards are to be saved to the considerable disadvantage of people who are ill able to cope with the consequences of the legislation, and in particular the consequences of Clauses 58 and 59, to which I shall return in a moment.

As I say, the first objective of this Government is a shift of power to the Treasury. The second is the undermining of the contributory principle. We have stressed this on a number of occasions. I refer in this connection to the transfer of responsibility for the Contributions Agency from the DSS to the Treasury. As the noble Lord, Lord Goodhart, has frequently reminded us, although the national insurance scheme is not an insurance scheme in the normal sense, the fact that one receives benefits because one has paid contributions has had considerable importance since the time of Beveridge. I believe it is still an important principle.

This Bill further attacks the contributory principle from both ends. On the one hand there are proposals to deny contributory benefits to those who have contributed. I refer in particular to the measures on pensions and incapacity benefit. On the other hand, the Bill will enable people who have not contributed to receive contributory benefits. The principle is being eroded from both ends. There is wide concern, I believe, about the way in which the contributory principle is being undermined. That is seen as dangerous. There are obvious implications for the national insurance pension. The noble Baroness, Lady Castle, is not present at the moment but I know that she will be concerned about its status. As a contributions benefit, it has, of course, already been eroded to a considerable extent by the extension of the so-called minimum pension guarantee.

That brings me to the third objective; namely, that the Government are extending the principle of means testing with regard to a number of different provisions in the Bill. I refer to incapacity benefit, widows' benefit and so on. Fourthly, the Government are increasing dependency. We discussed this at length earlier in the week in relation to the working families' tax credit. The

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Bill not only increases dependency but it penalises the prudent and deters people from saving. We shall need to examine the matter carefully in the later stages of the Bill. As I say, the Bill is based on the principles of shifting power to the Treasury; undermining the contributory principle; means testing, increasing dependency and deterring prudence. The Bill, I repeat, comprises a number of individual Bills.

I turn to pensions. The stakeholder pension constitutes a major proposal on the part of the Government. We waited and waited for the Green Paper. Eventually it emerged. But we are still not much further forward. Consultation papers are still appearing. We shall need to probe this matter carefully. Certainly, people outside who are involved are deeply concerned about the Government's proposals.

The Green Paper states that occupational pension schemes are the great welfare success story of this country. I stress the words "this country"--as the Green Paper does--because I believe that the total amount of funded pensions in this country is greater than the total of the funded pension funds in the rest of the European Union. The noble Baroness indicates assent. However, in their first Budget the Government altered the situation with regard to advance corporation tax, penalising such occupational pensions by some £5 billion a year.

I refer to the stakeholder pension and the rather vague proposals for a government second pension to replace SERPS and the lifelong individual savings accounts (LISAs) which the Government seem to talk about even less. There are considerable problems with these proposals. I shall outline one or two of them. There is grave concern among the business community with regard to the ability of individual small firms--many small firms will be affected by stakeholder pensions--to select a suitable stakeholder pension provider and to take responsibility for saying to employees, "You ought to choose this one rather than another".

There is also grave concern with regard to advice on pensions. The Government have blown hot and cold on this matter. Successive Answers to Parliamentary Questions, the Green Paper and statements in another place reveal that the Government appear to be fluctuating widely as to whether advice is essential or whether it should be paid for by the individual who is taking it and so on. When we look at the range of pension provision which now exists and the additional provisions which the Government are introducing, it is absolutely clear that good advice will be essential if we are not to have further mis-selling in the future. We all deplore the mis-selling that occurred in the past. The situation is not in the least clear. Therefore, even at this early stage, I ask what is the Government's position with regard to people obtaining advice on pensions.

Some people are particularly concerned about the Government's uncertainty--they switch back and forth and we do not know where they will end up--with regard to whether people who take out stakeholder pensions will also be able to take out other pensions such as personal pensions or occupational pensions. Again, it can be seen in Parliamentary Answers and statements by the Government that one week they say

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one thing but another week they say another. I again ask the noble Baroness whether the Government are now in favour of people who have stakeholder pensions also taking out other pensions.

There is considerable doubt as to where the Government stand on the issue of compulsion. On the issue of trustees the Government have switched back and forth. Should stakeholder pensions have trustees or should they not? This is a serious matter. However, it will be difficult to find effective trustees. As I know from my own experience, the responsibilities of trustees are considerable and indeed not without dangers in some respects. I believe that even at the moment a criminal case is being pursued against the trustees of a charity who are alleged to have breached existing regulations. One cannot say that it is easy to appoint trustees. Having said that, perhaps the noble Baroness will tell us whether the situation now is that stakeholder pensions are to have trustees or are not to have them.

All these are matters which we will need to examine very carefully. But the real problem is the danger that because of the provisions the Government are making for means-tested benefits people may subscribe to a stakeholder or other pension and then find at the end of the day that they have really gained nothing because the pension they will get will be offset in such a way that they receive no more than someone who has never contributed.

That is a very real danger which I think we need to examine further. Those who say, "That is no danger at all because of course the Government would not dream of doing such a thing", have only to look at Clause 58 where we find that those who are in receipt of incapacity benefit are to be penalised because they have made provision for their pensions. These are major issues which we will need to examine very carefully so far as pensions provision is concerned. This is the first big opportunity we have had for doing so. Certainly we on this side of the House will do everything we can to ensure that the legislation is properly scrutinised.

The noble Baroness referred to pension sharing. I have already done so, and my noble friend Lord Astor of Hever will hope, during our debates on the Bill, to cover this and other points. There is a real problem, given the scope of the Bill, as to what one should focus upon. I think that the noble Baroness recognises that.

Similarly, the single-focus gateway is something we shall need to examine in considerable detail. It raises particularly the question of compulsion. The noble Baroness will know only too well that many outside bodies are gravely concerned, particularly as regards the disabled, that there will be a degree of compulsion concerning the interviews. There may be too much emphasis on the possibility of obtaining work or the ability to take work. Again, we will need to look at that carefully.

I am conscious of time, but I want to say a word or two more about Clauses 70 and 71, of which the noble Baroness made only passing mention. It is really quite extraordinary that the Government should have introduced this matter at the very last moment in the other place for the reasons that I have mentioned:

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namely, a tactical question of presentation and whipping. It would have been far more appropriate for it to be included, since it reflects the Chancellor of the Exchequer's own proposals in his Budget, in financial legislation rather than in legislation here. We shall nonetheless have to examine it very carefully.

It is a classic example of the Government again, contemptuous, I think, of the proceedings, taking powers to deal with a great deal of matter through Henry VIII clauses, statutory instruments and so on rather than spelling out the detail. The representations that one is already receiving express grave concern about the repercussions which these clauses may have, not on those against whom they are apparently directed but on many other people who have small limited companies and so on.

The difficulty with this Bill will be to get the right balance between the various controversial points that it contains. I am conscious of that situation. We are concerned about the question of widows' benefits and the bereavement allowance. The noble Baroness did not refer to what had prompted some of the changes; namely, the question of the human rights decision with regard to widowers. Perhaps it might have been appropriate to mention that in passing. At all events, we are concerned about the way in which the Government, instead of facing that particular challenge, have decided to curtail the amount of money spent by cutting widows' benefits rather than dealing with the matter in the way that perhaps the court might originally have envisaged.

I turn finally to the question of disability benefits, and in particular Clauses 57, 58, 60 and also 61 and 62. These matters caused great distress to honourable Members in the other place and indeed resulted in a considerable rebellion. I am sure it is right that this House should scrutinise the clauses very closely. Indeed the noble Baroness held out some hope of change in her remarks, I noticed, as far as----


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