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Baroness Blackstone: I am not sure whether the noble Baroness is opposed to Ofsted having a wider role. It is the Government's intention that it should and that it should begin with nursery education and playgroups, extending right through to the provision of further education. I believe that that will create a more integrated and better system of inspection.

In implying that the present system is not terribly coherent, I was not in any way criticising Ofsted, the FEFC or the Training Standards Inspectorate. I am saying that the structure is poorly integrated. In effect, you have one group of inspectors inspecting A-level provision in schools and a totally different group of inspectors inspecting A-level provision in FE colleges. That is the what the Government are addressing: we want a single group of inspectors taking the lead in

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inspecting 16 to 19 provision and a single group of inspectors taking the lead in inspecting the specialist aspects of work-based training and adult education. They will use their respective expertise but work together in a team.

Perhaps I may also mention something that I meant to pick up earlier. I believe that the noble Baroness suggested that schools would have separate inspections; in other words, that there would be a separate inspection of the sixth form from that applying to 11 to 16 provision. That will not be the case. Schools will have a single inspection right across the whole range of what they provide. For example, if we are talking about a school that provides for 11 to 18 year-olds, the inspection of the sixth form will take place at the same time as the inspection of the 11 to 16 aspect of its work. I hope that I have clarified that point.

Baroness Blatch: If that is the case and inspections will take place exactly as they do at present, the particular nature of such inspection will not change. Therefore, as I understand it from what the Minister has just said, a 16 year-old doing A-levels in school will be inspected in exactly the same way as hitherto. However, someone taking an A-level in an adult learning situation will be inspected differently by the successor to the FEFC inspectorate. You cannot have it both ways: you cannot argue coherence and uniformity on the one hand and then, on the other, argue that nothing will change in an 11 to 18 school.

Baroness Blackstone: I did not say that "nothing will change". The noble Baroness needs to listen to what I say. I said that such a school would not have a separate inspection. It would not be inspected one year as regards the sixth form and then be inspected at a totally different time regarding the 11 to 16 provision. Under the new common framework there may be some changes to the way in which Ofsted carries out its inspections. It will need to take into account the slightly different approach that has been used in the further education sector. That will be all to the benefit of everyone. As I said earlier, we shall benefit from the approaches used by the different inspectors in creating this new system. On the basis of what I have said, I hope that the noble Baroness, Lady Sharp, will feel able to withdraw her amendment.

Baroness Sharp of Guildford: I thank the Minister for her extended reply to the various points that have been raised. However, I am sure she will recognise that I am not convinced by what she said. It seems to me that the Minister fails to understand the point that we on this side of the Committee have been trying to get across; namely, the simplicity of having one set of inspections, led by one group, for a particular type of education provision.

There is a very different ethos in the further education and adult education sector from that in schools. Yes, the Minister is quite right. By not moving Amendment No. 182 (and thereby removing

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Amendment No. 187 from this group) we have withdrawn the earlier suggestion that the adult learning inspectorate should have the right to go into sixth forms. I do not believe that that was a coherent idea. We now have a coherent set of inspections in the schools--indeed, Ofsted now rules from the cradle through to the end of schooling. But the way in which Ofsted looks at such things is very different from the way in which the further education world looks at them.

As regards A-levels, I take the Minister's point that we want a coherence in terms of the standards that are applied. However, I return to the argument that I put before the Minister. The way in which inspections are carried out these days is to bring into one's team people with competence in different areas. In the adult learning inspectorate it is extremely likely that we shall have the same people inspecting A-level provision as we shall have inspecting school A-level provision. Quite frankly, it would make much more sense to have a coherent framework run by the adult learning inspectorate covering the whole of the further education sector, with Ofsted being restricted to the school sector. That is what we propose.

I shall withdraw my amendment for the moment. However, I think it very likely that we shall return to the issue on Report. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 184 and 185 not moved.]

Lord Bach: I beg to move that the House be now resumed. In moving this Motion, perhaps I may suggest that the Committee stage begin again not before 8.45 p.m.

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

House resumed.

Social Security Benefits Up-rating Order 2000

7.58 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham) rose to move, That the draft order laid before the House on 31st January be approved [8th Report from the Joint Committee].

The noble Baroness said: My Lords, as noble Lords are aware, this annual order and the other standing in my name on the Order Paper are an important part of DSS business. The order increases most of the social security benefit rates from this April. Most national insurance and non-contributory benefits will increase by an RPI of 1.1 per cent. Most income-related benefits will increase in line with the Rossi index of 1.6 per cent.

As is usual, the increases are based on the change to the retail prices index from September to September, with the increase for the income-related benefits

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adjusted to remove the element of housing costs. As Your Lordships know, housing costs for those on the income-related benefits are met separately through housing benefit and income support mortgage interest. The Rossi index most closely reflects the spending of these individuals.

Last year our main focus was on helping people of working age move back into work by providing greater employment opportunities and introducing policies that ensured that work paid. This year we are building on our policies to provide real security for the most vulnerable in our society. We are particularly concerned about the levels of poverty and exclusion experienced by children and by pensioners. We recognise the importance of giving young children in the poorest families the best possible start in life so we have decided to equalise the rates of child personal allowances in the income related benefits. Families will now receive as much for a child under the age of 11 as they do for a child aged between 11 and 16.

This will take place in two stages and the first stage was implemented last October. Full equalisation will take place from this April when the rate for children from birth to age 16 will increase to £26.60. This follows on from a substantial rise in the rate for children under 11 in November 1998 and means that between April 1998 and April 2000 the amount paid in respect of children under 11 will have risen in two years by over 50 per cent.

Last year, in line with our commitment to fight child poverty, there was a significant increase in child benefit, and benefit for the eldest child was increased from £11.45 to £14.40. To allow the poorest families to gain fully from this substantial increase, the family premium in the income-related benefits was increased by the same amount.

A further increase over and above normal RPI uprating will be made for the second year running taking the rate of child benefit to £15 for the eldest child, and £10 for the second and subsequent children. The family premium in the income related benefits will again be raised to reflect this.

Our policies are proving effective. Measures in the previous two Budgets will lift some 800,000 children above half average income levels. However, to be truly effective in changing people's lives we need to ensure that we can help their parents move back into work. Poor opportunities and low expectations lead to poverty in later life. Therefore we also need to tackle those issues and I am sure that we shall debate them tomorrow.

I turn now to the position of today's pensioners. This group is least able to improve their income through employment. Between 1979 and 1996-7 the incomes of the richest 20 per cent of single pensioners rose by 76 per cent. In comparison the incomes of the poorest 20 per cent rose by only 28 per cent in real terms. This difference is mainly due to the increase in occupational pensions and SERPS, with the poorest having least access to pensions other than the basic state pension and income support. We are determined to tackle the current levels of inequality and poverty

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among pensioners. Our strategy is twofold: first, to provide help for today's least well off pensioners; and, secondly, to make sure that people have a decent pension in the future.

Despite the rise in national prosperity, the poorest l million single pensioners and the poorest 1 million couples have been left behind. Therefore we are targeting extra help on the 2 million pensioners who have lost out. All pensioners will benefit from other measures such as the fivefold increase in winter fuel payments, which have been extended to all households with someone over the age of 60.

Later this year we shall introduce free TV licences for the older pensioners who tend to be among the poorest. In addition we have restored free eye tests to everyone over 60 and removed the burden of paying income tax from 200,000 pensioners. Now two-thirds of all pensioners pay no income tax at all. And a 10p starting rate will help many more. Under this Administration the least well-off older pensioner will gain over £500 a year. By the end of this Parliament an additional £5 billion will be spent on pensioners.

This £5 billion also allows us to help the poorest pensioners who need most help. The minimum income guarantee will be increased in line with earnings for the rest of this Parliament. We are setting a decent base for pensioner incomes. By targeting our resources where they are most needed we shall boost the incomes of the least well-off to £78.45 for single pensioners (an increase of £8 since 1998-9) to £121.95 for couples (an increase of £12.60 since 1998-9) and, for the older pensioners, to £86.05 and £131.05 respectively for singles and couples (an increase of £8.50 and £13.15 respectively since 1998-9).

Many people, including some in your Lordships' House, have requested that the earnings link be restored for the basic state pension. However, this would do nothing for the poorest pensioners on means tested benefits because they would lose their income related benefits pound for pound, and would be most advantageous to those individuals whose incomes have already risen dramatically. Uprating the basic pension by earnings would cost £7.5 billion by 2010. However, under that policy pensioners on means tested benefits would still see no gain. But they are already seeing the benefits of the minimum income guarantee. We will have given poorest pensioners at least £5 a week more in real terms since 1998. An earnings uprating of the basic pension would have given the poorest, on income-related benefits, precisely nothing. The guarantee sets a minimum income for pensioners of over £78 a week. Pensioners should not be worse off than this. We want to ensure that all those who are entitled will get it.

Although the basic state pension is the foundation of the pensions system it has never been enough on its own. That is why the graduated pension scheme was introduced in 1961 followed by SERPS in 1978. But even those measures did not do enough because SERPS is earnings related. That is why we are changing it to the state second pension in a Bill which I hope will reach this House before Easter.

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To ensure a better income in retirement, people have always needed to save. That is reasonable. We want to make it easier to save than ever before. Low inflation levels protect the value of savings. We shall provide stakeholder pension schemes that are good value, flexible and secure. Through the state second pension we shall increase the help that the state gives to low earners with incomes under £9,500 a year, to carers and to disabled people with broken work records. We shall help them get a better pension. Someone earning £6,000 a year now would get £14 a week under SERPS. Under our proposals for the state second pension that person would get £54, not £14. That is £40 more and has huge implications for someone's standard of living in old age.

Providing work opportunities remains the main way to tackle poverty. People cannot save if they do not have a wage. The action we are taking now on a whole array of initiatives will get more people into work, will reduce poverty now, and will help prevent them taking poverty from their working years into their old age. We have a strategy for tackling poverty and social exclusion. We are determined to eradicate that in every instance for children, for people of working age and for pensioners. The uprating order, by providing price protection, ensures security and for vulnerable groups such as children and pensioners ensures even greater security. I therefore commend the orders to the House.

Moved, That the draft order laid before the House on 31st January be approved [8th Report from the Joint Committee].--(Baroness Hollis of Heigham.)


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