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Lord Goodhart: My Lords, I am most grateful to the noble Baroness for giving way. But are not the figures for earnings and pensions that she has just given to us similar to the sort of figures that she mentioned in connection with the working families' tax credit when she defended the fact that government benefits were being given to people on those levels of earnings?

Baroness Hollis of Heigham: My Lords, the working families' tax credit for a couple with two children would taper out at about £15,000 of earnings; that is, for a couple with dependent children. I refer to both partners being in work and eligible to claim childcare allowance. However, I am comparing like with like, not apples with oranges. The childcare allowance is equivalent to DLA, not IB. WFTC tapers out at earnings of between £14,000 and £16,000. My noble friend's amendment would result in IB tapering out at a pension of double that; that is, £39,000. That would have had to be preceded by earnings of £60,000 to £80,000. I am glad that the noble Lord, Lord Goodhart, gave me the opportunity to make that clear.

By any stretch of the imagination my noble friend is not targeting those with the greatest needs. My noble friend says that he is protecting the poor. Since when has someone with a pension of £30,000 plus--and therefore with preceding earnings of double that figure--been deemed poor? My noble friend's amendments are not a compromise. The word "compromise" is a useful one. It has become emptied of meaning tonight because, as my noble friend himself said, his amendments would remove from their reach two-thirds of those affected by the proposals.

Earl Russell: My Lords--

Baroness Hollis of Heigham: My Lords, I did not intervene in other people's speeches and I hope that I shall be allowed to make my speech tonight.

Earl Russell: My Lords, I am most grateful to the Minister for giving way. Does she understand that in the amendment of the noble Lord, Lord Ashley, we have conceded the principle? That is a great sacrifice. Some substantial share of the practice would be an appropriate response.

Baroness Hollis of Heigham: My Lords, to concede the principle and then move amendments which take almost everyone out of its operation is not to my mind a substantial compromise.

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As I say, my noble friend's amendments are not a compromise. They take almost two-thirds of those affected by the measure out of its reach and they hugely reduce the impact on most of the rest. That is why the Government cannot and will not accept them. However, the Government have listened and have moved significantly. I remind your Lordships that the Government have extended the period over which national insurance contributions have to be paid from one out of the last two tax years prior to the claim for IB, to one out of the last three. In practice, that means someone will be able to get IB, given the working of the tax years, even if they last worked four and a half years ago. To qualify, people will need only to have worked for four weeks on average male earnings--or 12 weeks on the national minimum wage--sometime within the past four and a half years. Do your Lordships really believe that is an onerous contribution condition to meet?

The extra year that the Government amendment proposes will particularly help people with progressive diseases, who may lose their jobs some time before they are eligible to claim IB, and others with broken work records. As I promised on Report, the Commons amendment provides that people on disabled person's tax credit earning below the lower earnings limit will be able, like carers on invalid carer's allowance, to qualify on the basis of credits in the last two tax years, provided that they have paid contributions at some point in the past. That offers them real security if they stay in work. Again, the Government have listened, responded and moved.

Turning to occupational pensions, the Government intend to raise the occupational and personal pension threshold by £35 a week, from £50 to £85--which is substantial. That figure, as my right honourable friend the Secretary of State said in the other place, will be reviewed annually so that it keeps its value. Invalidity benefit will not even begin to be reduced for a single person until their income reaches £152 a week. Despite what was said by my noble friend Lord Ashley about the poverty line, that is some £55 a week above what many of us regard as the poverty line--below half average earnings. My noble friend misled the House, possibly because he was comparing a family with children against a single person. Again, that is apples and oranges. I am sure that my noble friend did not intend to mislead the House but he certainly did, and that mistake was repeated by the noble Lord, Lord Rix.

I repeat, the taper on IB does not even begin to come into effect for a single person, and similarly for couples, until their income is at least £55 above the poverty line that has been quoted by my noble friend. That means that single people will continue to get IB until their early retirement pension reaches nearly £11,500 a year, which is £86.50 a week higher than the disability income guarantee. A couple with two children could get £18,500 and child benefit on top of that, before they lost their entitlement to IB. On top of that, they might also qualify for DLA. Under the Government's proposals, unlike those of my noble friend, those people most severely disabled on the

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highest rate of DLA will not be affected at all. As a result of the Government's proposals, 100,000 disabled people will no longer be brought within these changes.

Three additional points were made. The first was that the amendment of my noble friend Lord Ashley was a compromise. Although your Lordships may wish to describe as a compromise something that effectively takes two thirds of the people out of the Bill's reach, do not think that you are somehow negotiating. Your Lordships are not and we are not.

The second point made and repeated concerned the poverty line. Given that the taper kicks in at some £55 a week over the poverty line and, on the Government amendments, would not be withdrawn for a couple with children until some £18,500 before child benefit and DLA, we are not talking about people below the poverty line.

The third point--made emphatically by the noble Lord, Lord Higgins--was that the other place did not have the chance to consider the amendments and that therefore we would be doing them a favour by returning these proposals for further consideration. I do not agree. I sat in the Gallery in the other place, as did one or two other noble Lords--not for the whole debate, but I went to and fro. It was clear to me and to the House that the entire debate on incapacity benefit, which went on for some three hours, was on the whole range of amendments thereto, as well as on the government amendments. My honourable friend the Member for Kingswood, Mr Roger Berry, stated in the other place on 3rd November:

    "I have supported a compromise position, which is on the Order Paper".--[Official Report, Commons, 3/11/99; col. 321.]

And he went on to describe it. That was just one part of an extensive debate on incapacity benefits. The other place had a proper opportunity to debate the noble Lord's amendment. It chose instead to support the Government rather than defeat them and to support the amendment of my noble friend, there advanced by Mr Roger Berry. The Commons have considered these amendments. They chose to support the Government. They considered this matter as part of the wider debate. They do not need these matters to be sent back to them.

6.15 p.m.

Lord Higgins: My Lords, if the Minister will allow me, the other place did not have the opportunity to vote on these amendments.

Baroness Hollis of Heigham: My Lords, if the other place had wanted these amendments, it could have voted down the Government's proposition and voted for the other amendments on the Order Paper put by Mr Roger Berry, which were basically the same as my noble friend's amendments. The other place chose not to do so. To suggest that the Commons had neither the wit nor the intelligence to see that strategy is deeply condescending to Members of the other place. They knew what they were doing. It is an act of self-deception by your Lordships to suggest that they did not.

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The Government have a good and strong record of supporting disabled people. The Government are spending up to £2 billion more this Parliament. This is not about cuts. It is about seeking to respond to real, new and emerging need. The Government have delivered the Disability Rights Commission and are delivering the disabled person's new deal and the disabled person's tax credit--all in two years of a Labour Government. We are continuing that work in this Bill, strengthening the help given to the most severely disabled, the poorest disabled people, and to children and young people. That is a record of which we are proud.

We believe that what we are doing in the Bill is right. We are focusing help on people who need it most. For example, children born with a severe disability--not people retiring on a generous white-collar pension of £30,000 or more. That is why, although the Government have listened and have moved quite considerably, they will not be moving any further. The Government have sought to meet reasonable concerns. They have done so and should receive credit for that. Given that the Government's concessions and compromise have taken something like 125,000 people out of the changes in the Bill, to dismiss them as some noble Lords have done tonight--including some of my noble friends--as being somehow trivial and insignificant is deeply churlish.

The Government have listened. It is time that your Lordships listened. Ping-ponging the Bill will not bring anything further for disabled people. My noble friend Lord Ashley may believe that, but he is wrong. Ping-ponging the Bill will not bring forward any further concessions. I quote the Secretary of State:

    "There are no further changes to come. The Lords must understand that".

Ping-ponging could delay and endanger other aspects of the Bill affecting millions of people; not just extra help for the poorest and most severely disabled but the right of bereaved men to receive for the first time widower's benefits. Ping-ponging the Bill would also risk delaying and endangering the protection of SERPS widows, which we discussed earlier this evening. Let your Lordships be in no doubt that it would also risk the right of women who divorce--as, unfortunately, half of all married women will--to receive shared pension rights, which is something for which your Lordships called. Finally, it might risk or endanger the opportunity for several million low-paid people to enter a good, cheap, safe, funded stakeholder pension scheme.

I do not exaggerate when I say that millions of people--women, low-paid people, widowers and the poorest disabled people--will benefit from the Bill. So why are your Lordships proposing to ping-pong it when no further concessions are to be had? The House of Commons has twice--I repeat, twice--made its views clear that it supports the Government and that it supports the Bill. Ping-pong will delay the Bill; it could endanger it. It will not extract any further concessions; there are none to be had.

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As your Lordships acknowledge, the Government have the right to get their legislation through--not my noble friend's legislation; not the Tory legislation; but the Government's legislation. I ask your Lordships and my noble friend: is it not time to acquiesce with grace to the considered decision of the elected House and send a Bill, which will benefit millions of our people, on to Royal Assent?

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