HC Deb 26 June 1995 vol 262 cc615-8

Lords amendment: No. 42, in page 30, line 9, leave out ("by virtue of regulations under") and insert ("under regulations made by virtue of").

7.45 pm
Mr. Roger Evans

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker

With this, it will be convenient to discuss also Lords amendments Nos. 43 to 47.

Mr. Evans

Amendment No. 42 and the amendments grouped with it make changes to clause 36 concerning transitional arrangements for the introduction of the jobseeker's allowance. It is normal for the Government to make transitional arrangements when changes are made to the benefits system and we intend to apply that principle to people who move from unemployment benefit or income support to the new jobseeker's allowance.

This group of amendments clarifies the legislative basis for the transitional arrangements. In particular, they correct a drafting error in clause 36(2)(b), improve the clause's clarity by specifying where payments of jobseeker's allowance are made under the transitional arrangements and enable the arrangements to be tailored to reflect more closely current legislation for unemployment benefit and income support.

Amendment No. 42 is simply a drafting amendment to correct the Bill's phraseology. Amendments Nos. 43, 45 and 46 deal with the term "transitional allowance" and explain that it is used to cover payments of jobseeker's allowance made under the transitional arrangements. That clearly identifies where the payment of jobseeker's allowance is to be made.

Mr. Alan Howarth

Presumably, the Government are deferring introduction of the jobseeker's allowance under the transitional arrangements established in part by the amendments. Will my hon. Friend explain why the Government none the less plan to introduce from next April the provision that contributory benefits should cease after six months instead of 12 months?

Mr. Evans

My hon. Friend is correct to say that the transitional arrangements are partly to do with the Government's deferment of the introduction of the jobseeker's allowance. Under those arrangements, the Government have provided a mixture of provisions to be introduced at different times.

My hon. Friend's point is correct; but, taking the Jobseekers Bill and the Budget measures as a total package for dealing with unemployment—one must consider the positive side as well—the one-year national insurance contribution holiday for employers for every person whom they take on who has been unemployed the previous two years will be introduced in April 1996.

Those who take a job after six months of unemployment will be able to keep their housing benefit at their existing full rate for an extra four weeks. We propose that that should begin in April 1996. It is expected that almost all new claims for family credit from April 1996 will be arranged within five working days. The Opposition's suggestion that the carrot will be deferred and that the stick will be introduced at the beginning is not a fair picture of the overall balance of the transitional arrangements.

Mr. Bradley

We know that the Government intend to reduce the payment of contributory benefit from 12 to six months. Why will they not defer that decision until the real carrot, in the Government's terms, of the back-to-work bonus is introduced in October 1996? If there is to be a reduction in benefit, surely the compensating back-to-work bonus should start at the same time.

Mr. Evans

Again, the hon. Gentleman is looking at only part of the picture. We take the view that it is important to introduce these measures as best we can in the way shown.

I intended, before I gave way to my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), to explain the individual amendments. Amendment No. 47 provides that, where a person meets the conditions for contribution-based jobseeker's allowance, any payment under the transitional arrangements shall be a contribution-based transitional allowance. The House will note that amendment No. 43 includes a new provision that would state that the "transitional allowance" shall be of such kind as may be determined in accordance with the regulations". That is important, because, together with amendment No. 44, there is a provision for the transitional process to be tailored to take account of the variation in the operational arrangements for JSA and for the transitional regulations to reflect more closely the current structure of unemployment benefit and income support.

The importance of the proposals is to introduce a large-scale change to social security provision requiring the development and installation of large computer systems in such a way as to ensure that the system works effectively. We have concluded that it would be prudent to examine the change carefully to ensure that JSA can be brought in where it can be effective, and delivered properly, and that the transitional arrangements can be properly tailored to cover the intervening period.

Mr. McCartney

I have a genuine technical question. I wish to apologise in advance if I get things wrong. One area of transitional change is the move from 21 hours to 16 for those who are studying under JSA. What is the position? When will the 16-hour rule come into operation? Will it take effect on 7 October 1996 or will implementation be further delayed?

Mr. Evans

I understand that the answer to the hon. Gentleman's question is October 1996.

Miss Widdecombe

I did say so.

Mr. Evans

As my hon. Friend says from a sedentary position, she made that clear earlier.

The purpose—

Mr. McCartney

October 1996 is rather a wide definition. Will the 16-hour rule come into effect on 7 October, the vesting day for the other changes? That is all that I am asking. Will it be 7 October or later?

Mr. Evans

Perhaps I did not appreciate the precise nature of the hon. Gentleman's question. I apologise. The answer is yes: the 16-hour rule will come into operation on 7 October.

I shall continue to develop my explanation of the powers relating to transitional regulations that we intend to operate. To ease the burden of implementation, we have decided that only new and repeat claims for benefit will be paid by the new JSA payments computer system from October 1996. Unemployed people receiving unemployed benefit and income support at the point of change will continue to be paid under the national unemployment benefit system, known as NUBS2, and the income support computer system.

There will later be phased transference to the JSA system. That will mean that those who remain on the current payments system will receive benefit under many of the current rules relating to unemployment benefit and income support, which will advantage many claimants; for example, part-time workers in receipt of contributory benefit for the transitional period will be subject to more generous earnings rules than those that are applicable to the majority of JSA claimants.

The Government have kept the major project that I have outlined under close scrutiny. In line with our announced intentions—

Mr. Oliver Heald (Hertfordshire, North)

My hon. Friend has said that new and repeat claims will go on to the computer immediately. He has said also that other claimants will be phased into the system. Does that mean that claimants who had been within the income support system for some years would suddenly be moved into a less advantageous position? For a period, would some claimants be within a better regime than others, in a rather piecemeal way? If that is the position, why is there to be phasing? Will it be done for practical reasons? Is it a matter of convenience? What are the details of the practical considerations?

Mr. Evans

The simple answer is no. It is a matter of how we propose to organise the delivery of the new system when it is introduced. It is important to ensure that the administration works smoothly.

Mr. Heald

What are the practical considerations? Is it too difficult to introduce the date into the computer system within a limited time frame, or is there a more complicated reason? Are we dealing with computers and administration or with something else?

Mr. Evans

Perhaps my hon. Friend did not hear my interchange with the hon. Member for Wallasey (Ms Eagle). There is a perfectly respectable constitutional problem. First, Parliament must pass legislation. That is what we are doing now while arguing about specific amendments. Until Parliament has enacted primary legislation, delegated legislation consequent upon it cannot be laid. As my hon. Friend will appreciate, it must be understood that, when it comes to writing computer software, computers are even more literal than lawyers. It is necessary that the legal system, in all its magnificence and complex detail, be spelt out so that the rules of law can be translated into simple statements that can be introduced into computer software.

When the external review took place, the Government were advised by consultants that the design of the computer software and all that goes with it should ensure that at the end of the legislative process the system would work effectively and reliably. On the basis of that expert advice, we decided to defer.

Mr. McCartney

The complexity of the computer system is said to be the reason for deferral. The Government have spent £110 million so far. Has that expenditure been coupled to penalty clauses? Delay will lead to further public expenditure.

Mr. Evans

The hon. Gentleman takes me by surprise in asking about precise contractual arrangements. He should understand that it is not merely a difficulty of drawing software in the correct fashion. The process cannot begin definitively until Parliament has done its duty and completed its work.

Lords amendment agreed to.

Lords amendments Nos. 43 to 53 agreed to [one with Special Entry].

6.59 pm

Sitting suspended until Seven o'clock, there being private business set down by THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 16 (Time for taking private business).