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Earl Russell: My Lords, I am very glad to hear what the Minister says about disabled person's tax credit, but can she tell us the number of people affected by that concession?

6.30 p.m.

Baroness Hollis of Heigham: My Lords, we expect some 20,000 people to come onto DPTC. That is the broadbrush figure. Within that, I would not be able to tell the noble Earl who would qualify automatically--because even on DPTC there will not be a lower earnings limit--and those who might. However, we are expecting a figure of that order, although we hope to bring it up to 30,000. That is the best advice I can give to noble Lords at the moment.

To return to the point. If people are not receiving IB, where do they go? If someone is unemployed and becomes disabled, there is an alternative benefit which is in fact more generous than IB; that is, income support with a disability premium. Income support with the disability premium is worth £73 per week compared to £66 or £67 for IB. There is no question of hardship arising as a result of the change to the contribution conditions. That is the alternative benefit for someone who becomes unemployed and then after some years becomes entitled to help because they have become disabled. The benefit, according to household circumstances, is actually more generous than IB. Certainly, anyone who is unemployed--which comprises more than half of those coming on to IB--would normally have been receiving as their basic benefit the means-tested JSA. If someone qualifies for

13 Oct 1999 : Column 419

JSA and then becomes disabled, that person will qualify for IS with the disability premium and therefore will be better off.

Our approach recognises that where someone has been unemployed for an extended period and has not paid contributions, income support with the disability premium is the right benefit rather than incapacity benefit. We are not stripping away benefits and thus leaving people in hardship. We are trying to ensure that IB returns to the function for which it was always intended; namely, to be a replacement for those who become sick and disabled at work rather than those who have been long-term unemployed, who are currently on JSA and who would qualify for IS.

The Government believe that their approach is the right one. Of course, on top of all those benefits, people will qualify for DLA. Some noble Lords have tried to argue today that it is wrong to change the rules at all. However, in reality the rules for contributory benefits have changed numerous times over the years, and that is probably understandable.

Finally, I would remind your Lordships that the new contribution conditions are not difficult to satisfy. As now, contributions on earnings equivalent to 25 times the lower earnings limit, currently £66 a week, will suffice. To qualify, this is equivalent to just four weeks' earnings for someone on average male full-time earnings, or 12 weeks for someone on the national minimum wage. That period of 12 weeks' work on the national minimum wage to build up the qualification for a national insurance IB need not be continuous. The conditions can be satisfied by people with broken work records and intermittent health problems.

It has been suggested again tonight that the rules will create particular difficulties for people with deteriorating conditions like MS, for whom incapacity is preceded by a period of unemployment. But there is no question of people losing eligibility for IB after short periods of unemployment. Contributions need only to have been paid in one of the last two years. As I say, my right honourable friend in the other place is reflecting on that two-year rule. If the rules applied now, someone claiming benefit in 1999 following a period of unemployment would have been able to qualify on the basis of contributions paid as long ago as April 1996. I believe that that would normally be expected to cover a wide variety of the kind of circumstances your Lordships have properly raised tonight.

I said at the beginning that the Government fully understood the concerns that have been raised about the proposed changes to the contribution conditions for IB. Safeguards need to be provided--noble Lords raised some of those concerns at Committee stage--and I am glad to be able to announce that low earners on DPTC will be protected, as well as carers and former IB recipients, and indeed those who currently are on SDA and who are the poorest and most disabled who have never had the chance to enter the labour market.

13 Oct 1999 : Column 420

But the Government also believe that there is a principle at stake here, and that it would be wrong to allow the current situation to continue where IB goes to many thousands of people who have no recent record of working and paying contributions. I hope that I have responded to the very real worries that noble Lords have addressed. We are reflecting on the two-year rule, and we have made important announcements tonight. However, at the end of the day, my noble friend's compromise is not a compromise. The Government cannot accept it and therefore I must say to my noble friend that the Government cannot support him.

Lord Ashley of Stoke: My Lords, my noble friend has treated the House to a first-class contribution which is typical of her eloquence. She is a marvellous government spokesman. Nevertheless, it may not have escaped her attention that in this House she was in a minority of one in advocating those policies. The noble Lord made a very ambiguous speech. I did not hear any strong advocacy of the Government's policy other than in the contribution of my noble friend.

The point I wish to make is this. The noble Baroness has spoken of what has gone wrong in the past, and no doubt she was, as usual, accurate. However, Clause 58 does not deal with the past. It deals only with the future. My noble friend was unable to contradict my allegation that 170,000 severely disabled people will lose their £66 incapacity benefit. She was unable to contradict my assertion that those people may have paid their contributions in good faith for 20 or 30 years, and then in the future they will be denied this crucial benefit. She failed to deny the fact that this will cause immense suffering to those people. When you are poor, £66 is a fortune. Valiantly though she tried, my noble friend has failed to deal with these problems.

When the Minister mentioned income support, she must know of--she is an experienced Minister--its shortcomings. There is no excuse for saying, “Income support is available", because you lose your savings beyond a certain amount. My noble friend knows that people's pride is involved here and the take-up is poor.

I do not wish to speak at length. However, I repeat: this Government have an outstanding record of helping disabled people. This clause is one of the few blots on their record. I hope that it will now be removed. At the beginning I said that if the Government do not accept my compromise amendments, I would withdraw Amendments Nos. 131 and 132. I said that I would press to a vote Amendment No. 133 to delete the clause.

I beg leave to withdraw Amendment No. 131 and to test the opinion of the House on Amendment No. 133.

Amendment, by leave, withdrawn.

[Amendment No. 132 not moved.]

Lord Ashley of Stoke moved Amendment No. 133:


Leave out Clause 58

The noble Lord said: I beg to move.

13 Oct 1999 : Column 421

6.37 p.m.

On Question, Whether the said amendment (No. 133) shall be agreed to?

Their Lordships divided: Contents, 251; Not-Contents, 95.

Division No. 3

CONTENTS

Ackner, L.
Addington, L.
Addison, V.
Alexander of Tunis, E.
Allenby of Megiddo, V.
Anelay of St. Johns, B.
Ashley of Stoke, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Barnett, L.
Bath and Wells, Bp.
Bathurst, E.
Belhaven and Stenton, L.
Bell, L.
Berners, B.
Biddulph, L.
Birdwood, L.
Blatch, B.
Blease, L.
Blyth, L.
Bowness, L.
Brabazon of Tara, L.
Bradford, Bp.
Bradshaw, L.
Brentford, V.
Bridgeman, V.
Brookeborough, V.
Brougham and Vaux, L.
Buccleuch and Queensberry, D.
Burnham, L.
Buscombe, B.
Byford, B.
Cadman, L.
Caithness, E.
Campbell of Croy, L.
Carlile of Berriew, L.
Carnegy of Lour, B.
Carnock, L.
Carr of Hadley, L.
Castle of Blackburn, B.
Cathcart, E.
Charteris of Amisfield, L.
Clanwilliam, E.
Clark of Kempston, L.
Clement-Jones, L.
Clwyd, L.
Cocks of Hartcliffe, L.
Courtown, E.
Cox, B.
Cranbrook, E.
Crathorne, L.
Crickhowell, L.
Cross, V.
Darcy de Knayth, B. [Teller]
Davidson, V.
De L'Isle, V.
Dean of Harptree, L.
Denbigh, E.
Denham, L.
Dholakia, L.
Dixon, L.
Dixon-Smith, L.
Donegall, M.
Downshire, M.
Dunleath, L.
Dunrossil, V.
Eccles, V.
Eden of Winton, L.
Effingham, E.
Ellenborough, L.
Elton, L.
Ezra, L.
Falkland, V.
Feldman, L.
Fitt, L.
Flather, B.
Fookes, B.
Fraser of Carmyllie, L.
Freyberg, L.
Gage, V.
Gainsborough, E.
Garel-Jones, L.
Geddes, L.
Geraint, L.
Gilmour of Craigmillar, L.
Gisborough, L.
Glanusk, L.
Glenarthur, L.
Glentoran, L.
Goodhart, L.
Gray, L.
Hambro, L.
Hamwee, B.
Hanningfield, L.
Harding of Petherton, L.
Harmsworth, L.
Harris of Greenwich, L.
Harris of Peckham, L.
Hayhoe, L.
Henley, L. [Teller]
Higgins, L.
Hogg, B.
Holderness, L.
Holme of Cheltenham, L.
HolmPatrick, L.
Hooper, B.
Hunt of Wirral, L.
Hutchinson of Lullington, L.
Hylton-Foster, B.
Inchyra, L.
James of Holland Park, B.
Jenkin of Roding, L.
Jenkins of Hillhead, L.
Jenkins of Putney, L.
Jopling, L.
Kimball, L.
Kintore, E.
Kirkhill, L.
Knutsford, V.
Laing of Dunphail, L.
Lane of Horsell, L.
Leigh, L.
Lester of Herne Hill, L.
Lindsey and Abingdon, E.
Linklater of Butterstone, B.
Liverpool, E.
Lofthouse of Pontefract, L.
Long, V.
Longford, E.
Lucas of Chilworth, L.
Luke, L.
Lyell, L.
Mackay of Ardbrecknish, L.
Mackay of Drumadoon, L.
McNair, L.
McNally, L.
Maddock, B.
Mancroft, L.
Mar and Kellie, E.
Marlesford, L.
Marsh, L.
Masham of Ilton, B.
Mayhew of Twysden, L.
Merrivale, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Molyneaux of Killead, L.
Monk Bretton, L.
Monro of Langholm, L.
Montagu of Beaulieu, L.
Monteagle of Brandon, L.
Montrose, D.
Morris, L.
Morris of Manchester, L.
Mountevans, L.
Mowbray and Stourton, L.
Moynihan, L.
Munster, E.
Murton of Lindisfarne, L.
Napier and Ettrick, L.
Nathan, L.
Nelson, E.
Newby, L.
Newton of Braintree, L.
Northbrook, L.
Northesk, E.
Norton of Louth, L.
Nunburnholme, L.
O'Cathain, B.
Ogmore, L.
Onslow, E.
Oppenheim-Barnes, B.
Orme, L.
Oxfuird, V.
Palmer, L.
Park of Monmouth, B.
Patten, L.
Pender, L.
Phillips of Sudbury, L.
Prentice, L.
Radnor, E.
Rawlings, B.
Razzall, L.
Redesdale, L.
Rennard, L
Renton, L.
Rix, L.
Roberts of Conwy, L.
Rogan, L.
Rodgers of Quarry Bank, L.
Rotherwick, L.
Rowallan, L.
Russell, E.
St. John of Fawsley, L.
Saltoun of Abernethy, Ly.
Seaford, L.
Seccombe, B.
Selsdon, L.
Sempill, L.
Sharp of Guildford, B.
Sharples, B.
Shaughnessy, L.
Shaw of Northstead, L.
Shore of Stepney, L.
Skelmersdale, L.
Slim, V.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Stewartby, L.
Stodart of Leaston, L.
Stoddart of Swindon, L.
Strange, B.
Strathcarron, L.
Strathclyde, L.
Swansea, L.
Swinfen, L.
Taverne, L.
Taylor of Gryfe, L.
Tebbit, L.
Tenby, V.
Teviot, L.
Teynham, L.
Thomas of Gresford, L.
Thomas of Gwydir, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Thurso, V.
Tope, L.
Tordoff, L.
Torrington, V.
Townshend, M.
Trefgarne, L.
Turner of Camden, B.
Ullswater, V.
Vivian, L.
Wallace of Saltaire, L.
Walpole, L.
Waterford, M.
Watson of Richmond, L.
Weatherill, L.
Wharton, B.
Wigoder, L.
Wilcox, B.
Williams of Crosby, B.
Williams of Elvel, L.
Wise, L.
Young, B.

NOT-CONTENTS

Acton, L.
Ahmed, L.
Alli, L.
Amos, B.
Bach, L.
Bassam of Brighton, L.
Berkeley, L.
Blackstone, B.
Bledisloe, V.
Borrie, L.
Brett, L.
Brooke of Alverthorpe, L.
Brooks of Tremorfa, L.
Burlison, L.
Carter, L. [Teller]
Christopher, L.
Clarke of Hampstead, L.
Cledwyn of Penrhos, L.
Clinton-Davis, L.
Crawley, B.
David, B.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Diamond, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Elder, L.
Evans of Watford, L.
Falconer of Thoroton, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gilbert, L.
Gladwin of Clee, L.
Gladwyn, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Grenfell, L.
Hacking, L.
Hanworth, V.
Hardy of Wath, L.
Harris of Haringey, L.
Haskel, L.
Hayman, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L. (Lord Chancellor)
Janner of Braunstone, L.
Jay of Paddington, B. (Lord Privy Seal)
Kennedy of The Shaws, B.
King of West Bromwich, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
Mackenzie of Framwellgate, L.
Mason of Barnsley, L.
Merlyn-Rees, L.
Milner of Leeds, L.
Molloy, L.
Monkswell, L.
Montague of Oxford, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prys-Davies, L.
Ramsay of Cartvale, B.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rogers of Riverside, L.
Sawyer, L.
Scotland of Asthal, B.
Smith of Gilmorehill, B.
Strabolgi, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Thornton, B.
Thurlow, L.
Varley, L.
Warner, L.
Warwick of Undercliffe, B.
Whitty, L.
Williams of Mostyn, L.

Resolved in the affirmative, and amendment agreed to accordingly.

13 Oct 1999 : Column 423

Clause 59 [Incapacity benefit: reduction for pension payments]:

6.53 p.m.

Lord Ashley of Stoke moved Amendment No. 134:


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