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Baroness Kennedy of The Shaws: My Lords, when this matter was last before this House, I voted with the Government. I did so because I was reassured that the Secretary of State was looking again at the figures and I was given to understand that concessions would be made which would allay the concerns of many of us on this issue. I know the Secretary of State to be a man with a good heart and a good head. Like my noble friend Lord Ashley, I consider him to be one of the great talents in our Cabinet. However, it has been a source of great disappointment to me and to others that he has not accepted the compromise of my noble friend Lord Ashley.

Like my noble friend Lord Morris, I am a friend of government and I speak to government as a friend. The Secretary of State has raised the level of his means test. However, even that rate fails to take full account of the huge costs incurred by many disabled people. The point about disease and frailty is that even the most powerful people are humbled by it: by not being able to do what one once could and having to rely on others for even small assistance. The depression that comes so often with incapacity creates even greater dependency. Incapacity can come to any of us: chronic arthritis striking down a school teacher or a secretary; an early stroke ending a career in nursing; neurological disease throwing out of work a father of young children.

In his arguments, the Secretary of State has said that if the amendment of my noble friend Lord Ashley is passed, single people could have an early retirement pension of up to £23,000 before entirely losing their incapacity benefit. He went on to state that a parent with two children and a dependent spouse, for example, could have a pension of something over £30,000 before being cut off, as though those sums were extraordinarily high.

The mistake we are making is in turning our welfare system into the American equivalent, which becomes no more than a meagre safety net in which the majority of citizens have no stake. I happen to accept that the universal principle may have to be surrendered in the face of changed circumstances. It was for that reason that I argued for the introduction of fees for higher education but that there would be a means test, set comparatively high, for those who would have to pay.

When replacing thresholds, I believe that they have to be drawn at something other than a mean and miserable level. The reason why we must ensure that thresholds are not drawn too low is because we need to maintain commitment by the many to the welfare

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state. The risk in going down the American road is that the majority have no vested interest in protecting the welfare system; they are no longer stakeholders.

I have every sympathy with our ministerial colleagues who wrestle with the difficult problem of welfare reform. I believe in welfare reform, but I also believe in welfare. When we developed the welfare state in this country, at its heart was the belief that when calamity struck citizens who had contributed to the commonweal, they in their turn should be sustained by the commonweal; not with cap in hand or in ways which removed human dignity but in ways which were decent and fair.

I cannot understand how we can justify a withdrawal rate of 73p in the pound--50p by the means test and 23p in tax--for severely disabled people. Yet, as we have heard the noble Lord, Lord Ashley, say, the top rate for millionaires remains at 40p in the pound. How can we have that kind of disparity? What are we thinking about? What is happening to our values? Are we forgetting who we are? What does "social justice" really mean?

There is much in the Bill that is good and I would not like to see it fall. However, I cannot vote with my Government on this issue.

5.30 p.m.

Lord Davies of Coity: My Lords--

Lord Stewartby: My Lords, I shall be brief. I hope that the noble Lord will be patient for a few moments. I am minded to go into the Lobby with the noble Lord, Lord Ashley, this evening, particularly on one point. I refer to the level of disregard. It seems to me that although the Government have improved the situation from their original proposals, it is still very much on the mean side.

The only other point I make is that the more I listen to debates on this subject, the more it strikes me that incapacity benefit is not well suited to being a general source of "top-up" for income for disabled persons. We have to accept that the structure of welfare benefits generally, and particularly those available to disabled people, is complicated. In the years when one had to advise constituents in another place about benefits and their relationship to each other, particularly for the disabled, I found myself constantly confused and wondering whether I was giving correct advice.

I hope that if the Government face a set-back on this issue, they will not be deterred from reconsidering the relationship between the benefits. In particular, I hope that they will come to a view about whether incapacity benefit should be specifically related to work and the inability of a person because of disability to undertake work, or whether there is a need for a more general supplement of a kind which would assist many of those who appear to be potentially disadvantaged by the proposals introduced by the Government.

I shall say no more than that. However, it seems to me that many of the arguments which the Government may be using to defend their own position are narrowly focused on the purpose of incapacity benefit

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whereas many of the arguments of those who have put the contrary case are a recognition that the incomes of disabled people, particularly those who are out of work and may have been so for a long time, are modest. The structure needs to be looked at to see how that can be remedied.

Lord Davies of Coity: My Lords, when dealing with an issue as emotionally charged as this, it is not difficult to support what is seen to be popular. However, we all know that it is often much more difficult to support what is believed to be right.

Some may say that this part of the debate is a watershed, a moment of truth or perhaps a crunch time. As we are likely to have other occasions such as this before 17th November, I feel that such descriptions are not appropriate. However, it would to apt to say, like the Americans, "We are now playing hardball".

I say that because we have now reached a stage in this House where we are challenging a government elected by the British people to a point of unjustifiable conflict. We are perilously close to doing that in two ways. One is in respect of the constitutional role of this House; the other in respect of the Bill and the amendments to it.

As concerns the first point, let us remind ourselves of why we are here. Indeed, we say it so often that we should have it, if not in our hearts, in the forefront of our heads. We are here to scrutinise and revise; to point out to the Government errors in proposed legislation; to nit-pick; to cross "t"s and dot "i"s and to challenge, but only to a certain point. The moment we go beyond that point we become dangerously close to abusing our powers, our authority and the privilege which we have been given to contribute to the law-making process of this land and to its people.

If this continues, sooner or later it will become more and more evident that this country can no longer tolerate an unelected House holding the people's chosen government to ransom. Up to this point, this House has made its views known. The Government have considered those views. As we know, they have responded. Enough is enough. Now is the time to cease this protest. The whole House should support the decision of the elected Government. For those reasons alone, the Government should be supported at this stage.

However, it is also important to address the Bill and the amendments. I shall deal with that in two ways. First, I shall say why my noble friends on this side of the House should support the Government, and secondly, why other noble Lords, particularly the Official Opposition, should also support the Government.

I have spent most of my adult life conducting wage negotiations with employers. Never once did I obtain all I wanted, but I never expected to. Once in the realms of negotiation, you recognise that you have to compromise. I knew that I could not secure satisfaction for every demand that every one of my

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members wished to make; but I sought to secure as much as I could for as many as I could, and, at the same time, to ensure that all those I represented sacrificed the least, in terms of both wages and conditions and job security. That was a discipline I set myself on each and every occasion. That is not universally true throughout the whole of the trade union movement. I am sure we can all remember the miners' strike of 1984-85 when the refusal of the mineworkers' leader to compromise resulted in hardship and agony for so many miners and their families as well as for so many others.

So, what is the relevance of that to the debate on this Bill? I shall tell the House. The Government listened to the arguments advanced by this House; they made concessions and amended the Bill accordingly. Now the Bill, as acknowledged by my noble friend Lord Ashley, is generally a good one. Therefore it should be accepted. Although it may not provide all that is wanted, the vast majority of the Bill is good.

I say to my noble friends that this Bill provides far more benefit for far more people--the vast majority being among the most disadvantaged--than the numbers the amendment seeks to protect. Therefore, if this Bill falls far more people will lose compared with those who will gain because of the insistence on pushing this amendment to a Division and winning. I hope my noble friend will withdraw his amendment. If not, I urge all my other noble friends on this side of the Chamber to vote against him.

I turn now to noble Lords opposite. I appreciate that the role of the Opposition is to oppose. That they have done. But there comes a time in this House when that opposition must cease and I believe that that time has now come. If that is ignored, then in my view the Opposition are no longer acting as a responsible opposition. From their records and from the statements made by the Tory spokesman on social security at this year's Conservative Party conference, it is clear that this Bill is not to the liking of the party opposite, despite the advantages it will bring to many people. So it would seem that any support given to the amendment of my noble friend Lord Ashley by the Opposition will only be for the purpose of jettisoning the whole Bill. That being so, it is a very undignified stance. Indeed, it would be contrary to the understanding reached in respect of the Government's legislative programme when agreeing the Weatherill amendment.

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