HL Deb 05 February 1986 vol 470 cc1251-65

11.2 p.m.

Viscount Thurso rose to ask Her Majesty's Government whether they will consider remedying the situation which arises between employed and unemployed Territorial Army soldiers by virtue of the deductions from pay levied on soldiers in receipt of unemployment or supplementary benefit.

The noble Viscount said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and in so doing I should like particularly to thank those noble Baronesses and noble Lords who have shown the stamina and indeed the interest in this important subject to stay on until this late hour to join in the questioning of the Government on it. I am grateful to them all.

It is estimated that approximately 17½ per cent.—that is, about 11,700—of the soldier strength of the Territorial Army are unemployed persons. Of these, 46 per cent. or thereabouts are on unemployment benefit only; 41 per cent. or thereabouts are on supplementary benefit only; and 13 per cent. are probably drawing both unemployment benefit and supplementary benefit. Of course these figures have to be treated with some caution because such figures are not always easy to arrive at, as well as for a number of other reasons. Nevertheless, they provide a fair measure of the problem.

It is also estimated that there are wide regional differences, ranging from as little as 4 per cent. unemployed in Greater London to 18 per cent. in Scotland, 20 per cent. in Northern Ireland and more than 25 per cent. in the North of England and Wales. Some units in these areas have 40 per cent. or more unemployed soldiers on their strength. Although some recruits join from the ranks of the unemployed, it is important to recognise that many have become unemployed since joining the TA. It is towards those people in particular that the army has a special responsibility for welfare and morale. The total number of unemployed in the volunteer reserves of the other services, other than the army, is broadly estimated at some 600.

The rules for the payment of DHSS benefits are highly complex. They are difficult for the volunteer to understand. Some local DHSS offices still interpret them differently from others, despite all the efforts made to ensure consistency throughout the country. That leads to delays in payment and in some cases hardship, particularly as DHSS benefits are often abated some weeks before service pay is credited to the volunteer's account.

Problems and discontent also arise from the fact that no account is taken of the rank pay structure and from the anomaly that those drawing unemployment benefit are able to keep their pay for Sunday training, whereas those drawing supplementary benefit have their pay for Sunday taken into account for deduction. Consequently, within the same unit there tend to be three categories of volunteer, all created by external forces. First, there is the employed volunteer, who keeps all his TA pay, less tax, in addition to his civilian emoluments. Then there is the unemployed volunteer on supplementary benefit, who is allowed a disregard of £8 per week or £32 per month. Finally, there is the unemployed volunteer on unemployment benefit, who has all his benefit deducted whenever he is paid more than £2 on any day except Sunday.

Under present regulations, if an unemployed person participates in any form of remunerative employment and earns more than £2 per day he loses unemployment benefit for that period. The volunteer who gets supplementary benefit can earn £8 a week, or £32 a month, as I have said, before deduction from his allowances. So anomalies arise thus.

If a single private soldier, man or woman, doing a certain amount of training (for example, two Saturdays, two Sundays and four drill nights in one month) is employed, he will get TA pay for four days at £12.78 per day, making £51.12, and four drills at £3.20 per day, making £12.80, giving a total of £63.92. If one deducts tax at 30 per cent., totalling £19.18, that shows net TA pay of £44.74, which he keeps in full in addition to his civilian earnings. If he is unemployed and drawing unemployment benefit, he gets TA pay, as already stated, but from that is deducted six days (two Saturdays and four drills) times £4.74 unemployment benefit, making £28.44, giving the balance which he gets to keep of his TA pay of £ 16.30, as compared with £44.74. But if he is unemployed and on supplementary benefit, he gets TA pay, as already stated, less the maximum that he is allowed to keep per month of £32, and the balance of £12.74 is deducted from his supplementary benefit. In summary, an employed soldier nets £44.74 TA pay; an unemployed soldier on unemployment benefits nets only £16.30 TA pay; and an unemployed soldier on supplementary benefit nets £32 of TA pay.

Then soldiers suffer stoppage of rent, milk tokens and family income supplement when they are at camp. Attendance at camp means that a month is required after camp to re-establish one's status quo with the DHSS. Clearly, this is divisive and very bad for morale. In addition to the complexities referred to earlier, which worry the individual, considerable extra administrative burdens are placed on the unit arising from its involvement with personal problems and its dealings with Department of Health and Social Security officials. If a young man or young woman is fortunate enough to be in gainful employment and is enthusiastic enough to serve his or her country in the reserve forces, their standard of living is enhanced by virtue of the pay and bounty earned. Such people have been described as being "twice a citizen." The community, in the main, applauds such service, is grateful for it and does not complain that the disposable income of such people is greater than that of those who choose not to join. The community at large recognises that these people are giving up their spare time in our service. Certainly, no employer would suggest that a member of the reserve forces in his employment should accept less pay for his civilian work since he is in receipt of military pay during his spare time.

It would seem illogical, if not morally indefensible, to argue that a citizen who perforce is in receipt of unemployment benefit should not be permitted to improve his lot or be encouraged to be "twice a citizen." The state has undertaken to support those who cannot get work and budgets accordingly. If such a citizen wishes to join the reserves forces, what justification can there be for discouraging him? His rights are surely the same as those of his neighbour who is working. The argument that he is not available for employment if he is at a week-end camp is a poor one. Is the employed man who packs his tent and his fishing rod and goes away for the same week-end available for employment? The volunteer who earns a quarter of a day's pay at a drill hall during an evening is as readily available as the man who spends the same time with his friends in a pub.

Nor is there any virtue in the argument that the state may not pay a person twice. For example, a civil servant who is in the TA will quite lawfully be permitted to receive pay in respect of each form of service. Nor would an unemployed person who receives two amounts of pay be costing the state more. He is entitled to his benefit, and the Ministry of Defence expects to pay its reserve servicemen and women regardless of their civilian circumstances. Therefore, neither paymaster is really entitled to any clawback. Can it be that the apparent intransigence of the Government is due to concern that to allow unemployed members of the reserve forces to retain their benefit in full and to receive military pay could lead to abuse? This would be to equate part-time service to the Crown with moonlighting, which I consider to be an insult, indeed. Bearing in mind that the average number of days' service annually given is approximately 50, including annual sea training or camp, and that payment is made by Giro and cannot be falsified, such fears are surely groundless. It should be remembered that the 52 Sundays in each year are not taken into account when considering unemployment benefit. There can be no justification, in my view, for clawing back any element of a benefit entitlement.

If it is suggested that to allow an unemployed citizen to earn service pay without loss of benefit would be to open a floodgate unless the reserve forces were made a special case, the answer, clearly, is that such service is indeed special. There is no such thing as a full-time territorial. But although they may not be the professionals, they are cheap to the country at the price. Not to recognise the true position can cause two situations. Reserve servicemen can omit to advise the Department of Health and Social Security that they are in receipt of service pay but they will inevitably be identified at some stage with serious consequences.

The present system almost encourages this potential abuse. But far more likely is the probability that the unemployed person, knowing that they will be making a personal financial sacrifice (not required by the employed) if they join, will give the idea of joining no further thought. No statistics can be produced showing how many may not have joined up for that reason, but statistics are building up of those who leave because of these anomalies.

The Reserve Forces require to recruit an increasing number of young men and women to replace those who leave and to fulfil the present enhancement programme. The Ministry of Defence will train those whom it recruits, and in this respect it could even be argued that it is of benefit both to the individual and to the state if unemployed young people are given new skills. In the Territorial Army young people acquire many new skills. On occasions those in employment are not available for military training when their employment has to take priority, whereas an unemployed man or woman will nearly always be available to turn out.

It can therefore be shown to be justified on social, moral, political and military grounds to allow unemployed members of the Reserve Forces to train for at least 50 days each year without financial penalty. We should regard them as being twice a citizen, but at present they are being treated as half a citizen.

I ask the Government, not merely to tell me that there is no money to do this, but to say that they will enter into discussions with the Department of Health and Social Security and the Ministry of Defence to see whether something cannot be done to ease this situation and to remove this anomaly.

11.17 p.m.

Lord Chelwood

My Lords, I am sure that the House is most grateful to the noble Viscount, Lord Thurso, for having raised this matter this evening. It was on 3rd July last year that my noble friend Lord Ridley—who, as noble Lords know, is president of the Territorial Army Association—raised this question during a debate on the Defence Estimates. I saw Lord Ridley last week and he told me how very much he regrets his inability to be here today. I am apologising on his behalf.

I think that it is time for a decision to be made. I strongly support everything said by the noble Viscount, Lord Thurso, who made an excellent case. I hope that we are pressing at an open door. As a regular soldier I served in or alongside territorial regiments during the war. In 1968, when I was a Front Bench spokesman for my party in another place, I co-authored a pamphlet called Twice a Citizen—a phrase used by the noble Viscount during his speech and coined incidentally by Bill Slim. In this pamphlet we recommended that the establishment of the Territorial Army should be raised to 85,000. Our recommendations, I am very glad to say, were very closely followed by the next Conservative Administration.

In October 1969—I wish to make no party point here—the Labour Party took the Territorial Army to pieces. It fell as low as 47,000 in number. But the last figure which I have, for December 1985, is 76,000 or slightly more than that. I think that is a considerable achievement. But we are hoping, as the Government have made clear in reply to a question in another place recently, to reach a target of 86,000. In other words, we want something like another 10,000 volunteers. The Government have said that that will require a significant increase in recruiting. Recruiting in 1984–85 was of the order of 24,000. But it will also require a significant reduction in wastage. Wastage has been running at around 22,000 for each of the last three years. That is much too high and cannot be afforded.

Is there or is there not a principle involved here? I can tell your Lordships that lifeboatmen, part-time firemen and those attending local authority or charity residential work camps for up to 14 days in a year are not subject to the earnings rule which results in deductions in unemployment pay for Territorial Army volunteers after quite insignificant disregards have been made.

Therefore, there does not appear to be any immutable principle involved at all, and I hope that we shall not be told this evening that there is one. These deductions are a major disincentive to recruiting. I am in no doubt at all about that. I am equally sure that they have a significant effect on wastage by increasing it. I have been into this matter with very great care; it is not just hearsay. I have spoken to the commanding officers of a number of territorial regiments and they have all confirmed both those facts.

I assure your Lordships that a great deal of resentment is caused by the different treatment meted out not only as between one territorial who happens to be unemployed and other who is employed, but as between them and the others I have just mentioned, such as the lifeboatmen and the part-time firemen. This is not a very small problem where the strength of the TA is concerned, because more than one in six members of the Territorial Army are unemployed; they come from the ranks of the unfortunate unemployed. I believe that 45 per cent. are on supplementary benefits as well.

Your Lordships know me well enough to know that I am not a great believer in jingo, but I would say without hesitation that at present the Territorial Army in this country is without parallel among volunteer forces in the world in terms of its training, its equipment and indeed its morale. Furthermore, as we all know, the Territorial Army has a key and vital role to play in NATO. The Territorial Army soldier is a very good bargain indeed for the taxpayer. There is no denying that he provides the taxpayer with really good value for money.

Therefore, I ask my noble friend Lady Trumpington personally to pass on the the Chancellor of the Exchequer that many of us on this side of the House—and I know that I speak for many of my noble friends—regard the deductions that are made as niggardly and short sighted. There is no immutable principle involved so far as I can see. I have already said that, but I want to emphasise it. Some rules are made to be bent and some rules are made to be broken. That was the second thing that I learnt after I joined the army. I cannot remember what the first was, unless it was that punctuality is being five minutes in advance of the time, which is perhaps almost as important.

When the figure was last given, which was in another place in, I think, June 1984, the cost of ending the clawback was about £5 million. Perhaps the cost today might be between £6 million and £7 million, but I am not quite sure. We shall of course have to take account of deductions that are not made where new recruits are concerned; there are also those who are already in the Territorial Army and hopefully we would be talking about a force of over 80,000 and not about a figure in the middle seventy thousands.

I think that the Government are running a severe risk—and have done so for several years—of spoiling the barrel (if I may call the Territorial Army a barrel) for a ha'p'orth of tar, and that is a very false economy. I hope that my noble friend Lady Trumpington will at least leave the door ajar, knowing, as I can assure her will be the case, that we shall be hammering on it very hard if we do not get the answer we want today.

11.24 p.m.

Lord Crawshaw of Aintree

My Lords, may I also thank my noble friend Lord Thurso for giving us this opportunity of once again bringing up this subject. I say "once again" because this is a matter that has now been running for four years. What are we talking about? In terms of money, we are talking of £1.2 million. What are we getting in return? One-third of our mobilised army in time of war will comprise territorial soldiers. Although I shall speak of territorial soldiers, these matters apply to the other reserve forces as well. It is without doubt the most cost-effective military force in Western Europe. For four years we have been haggling over whether we can allow people who are doing service for their country the right to keep the pay that they earn as territorial soldiers.

As I understand it, there are categories of people in other branches who do not have it taken back from them. Perhaps the noble Baroness will tell me whether I am correct in saying that reserve ambulance people and reserve firemen come in a category where it is not recouped from them. If that is the case, while I do not decry what they do because in fact they are emergency services, reservists in the Territorial Army not only fulfil their obligations in peacetime but they are the only part of our reserve forces and auxiliary forces which go overseas, and have an obligation to go overseas in time of war. Is that an emergency? I should have thought that one could not face any greater emergency than that. Yet they are being penalised week in and week out.

What kind of units do we expect to have when we have three people in the same category of private taking different money for the same services that they give? Those who are working, as has been explained, keep all except their income tax. Those who are on supplementary benefit have an exclusion of £28 a month. This is something which has been given this past year or so, and we pay tribute to the Minister for doing that. But in doing that it has made the situation of the unemployed man who is not on supplementary benefit even worse. He has two colleagues now who are in a better situation than he is.

The ludicrous situation now is that, having decided that they will pay for drills, if an unemployed man not on supplementary benefit attends a drill he is in fact £2.50 worse off for that drill. He will earn £2.45, which brings him over the £2 by which he loses £4.75 unemployment pay. My Lords, how ludicrous can we get? Here we have people who are willing to serve their country and we are losing them right, left and centre because the Government are not prepared to face up to paying £1.2 million.

We are losing men. Every month when I attend my Territorial Association committee meeting one of the things which cause us great concern is the wastage which is taking place. Many of those who are leaving are people who joined the Territorial Army when they were working, and unfortunately have lost their jobs. They now find that it is ridiculous to stay in the Territorial Army because they are out of pocket by doing so.

If the noble Baroness wishes to have figures on that, one can say that in 1983 it was estimated that there were 13,00 members of the Territorial Army who were unemployed. Two years later, with the large increase in unemployment—and I am not making this as a party point—there were only 11,700 unemployed people in the Territorial Army. Although the percentage of unemployed in the country had gone up tremendously, it had dropped in the Territorial Army. The simple reason is that people are not prepared to serve and lose money at the same time.

It has been suggested that people will make it another source of income. What I want to stress to the noble Baroness is that when people join the Territorial Army they take on certain obligations. Those obligations are to fulfil so many days in camp and so many days' training. That is not just a nice optional extra. These are the obligations that they undertake. Is it not rather ridiculous that they are fulfilling an obligation and yet losing money because they are fulfilling that obligation?

I ask the Minister to look into this again and to discuss it with her friends to see what can be done about it. We are dealing with three people doing the same job, each receiving a different amount. It does not give any inducement for promotion. What is the good of getting promotion? All that does is to enable them to earn more and then lose more from their unemployment benefit. There is no inducement for promotion.

Not only is this wastage, but have we considered how much it costs to train a territorial soldier? What is the good of training them and losing this tremendous number of people every year? Much of this waste is because the Government are not prepared to find £1.2 million to keep up to strength and to keep trained one-third of the Army which will go into Europe in time of war. This is cheeseparing of the worst kind. I hope that we do not have to wait another four years because I assure the noble Baroness that in those four years this subject will be raised time and time again.

11.31 p.m.

The Marquess of Ailsa

My Lords, I am pleased that the noble Viscount, Lord Thurso, has raised this question. I am astonished by the attitude taken by the Department of Health and Social Services to Her Majesty's volunteer reserve. It is utterly disgraceful that a young man, who is prepared to undertake the commitments and training that is required to enable him to take his place alongside his regular counterparts, should be penalised because he is drawing either unemployment or supplementary benefit. I am well aware that he is paid while he is training, either in or out of camp, but his pay is taxed at source. Now we have those who are in the receipt of unemployment or supplementary benefit paying income tax, and then being penalised for doing so by the Department of Health and Social Security.

With permission, I shall quote from a letter that I have received from a company sergeant major from the first battalion of the 52nd Lowland Volunteers. A company sergeant major is a senior warrant officer with experience. His letter reads: Sir, In response to your request about information on the effects of the DHSS and the territorial soldier I will give you my statement as a declared soldier in receipt of unemployment benefit and with past knowledge of supplementary benefit and its effects on TA soldiers and families. The letter continues: First, unemployment benefit is paid at the rate of £30.45p per week, but this is paid for Monday to Saturday only. When you work with the TA your benefit is cut by 1/16 for every day you work except Sunday. The cuts in benefit are made right away, when you declare your work on your signing on day at the unemployment office. As you appreciate, for example, your TA pay for January is not paid to you until the end of February. The unemployment office do not take this month in arrears into account, they take what you have declared off your next Giro". He deals, secondly, with supplementary benefit: For those soldiers with a wife and family this benefit is most severe when you declare you are working. For example, the DHSS supplementary benefit is paid for a 7 day week. So if you have a wife and child or children, the DHSS reclaim all but the first £8 in a week. For example, TA earnings [for] 1 [week] gross pay £63.42, less tax and [National Insurance] roughly £42.28 net pay". Out of that, the man will have received only £29.72 and he is not paid his TA pay until the next month: The DHSS take this money off, right away, but this family still have food and bills to pay, and they cannot off £29.72p for that week. The writer says that if this soldier is a private and he has to go on a cadre or annual camp, then this soldier's wages in the TA would be lower than his, as a company sergeant major; that he would still have to sign off for the cadre or camp and his pay would then be a lot less than his supplementary benefit. Also, by signing off, the council would expect him to pay his full rent for those two weeks, which is normally paid by supplementary benefit.

He continues: This is a main reason we lose or have a high turnover of TA soldiers. They cannot support their families while they are…at camp, and also the reduced weekly benefit, when they attend normal training, puts a strain and hardships on their families. Thirdly, by being declared as a TA soldier, there are times you are suspended from benefit until you prove to the DHSS that you are trying to find work. This happened to me at the end of 1985 when, without prior notification, I was suspended from benefit until I proved that I was trying to secure a full time job. The red tape and time wasted in processing a fresh claim involve hardship on those families and single claimants. Until a system is devised to protect the TA soldier from these hardships, we will always have a high turnover of men. I myself find it difficult, financially, as I have no help in paying my bills. I rely solely on my TA pay to pay my bills, as I do not wish to go onto supplementary benefit, but I can be forced to do so after 1 year unemployed. I would then be working solely for £8 per week…with the TA and suffer the hardships [I have referred to] in the second part of this letter. Sir, [I am] your most obedient servant". I have received other letters of a similar nature. I have also heard accounts of those soldiers who, for various reasons, ignorance or otherwise, have failed to declare to the Department of Health and Social Security that they are members of the Territorial Army. I have accounts of their being photographed outside their drill halls in uniform and then subjected to a grilling which one would normally have associated with the Gestapo or other kinds of services.

It has already cost the country a considerable amount of money to recruit these men. It has cost much more to train them. Surely, clawing back and making them wish to leave is not the most cost-effective way of using the taxpayers' money, especially when one realises that, whether they like it or not, these soldiers are themselves taxpayers. I understand that if these men had joined and become volunteer firemen or ambulancemen, or even joined the lifeboat corps, they would be treated in a very different manner by the Department of Health and Social Security. It appears that the department "has it in" for those who serve the volunteer forces of the Crown.

Last autumn we heard a lot about the exercise "Brave Defender". I have always understood that the purpose of that exercise was to see how our volunteer forces could acquit themselves when faced by the special forces from behind the Iron Curtain or elsewhere. But it appears to me that we in this country have more to fear from the work of the DHSS than from any outside hostile force. We seem to have a fifth column within. I hope very much that the noble Baroness who is to answer the Unstarred Question will be able to assure me that I am wrong, and not only that her department recognises the dedication and commitment that is required of, and is given by, those who join the volunteer forces of the Crown, but that her department will do what it can to ensure that no action on its part will hinder or deter those who are prepared to serve their country. Their country needs them now and will need them even more in the future.

11.44 p.m.

Baroness Jeger

My Lords, I think that we are all very much indebted to the noble Viscount, Lord Thurso, who has brought this very important matter before your Lordships tonight. I would only like to say that my noble friends totally agree that there should be a solution for all the problems that have been brought before us. I must say that it is very interesting that it appears to be a crop of old women who are going to deal with this problem of the Territorial Army tonight. But that is how it is.

I would just like to ask the noble Baroness why unemployment benefit is not payable for any day on which earnings from employment exceed £2. Now, £2 is not very much money. Therefore, if the £2 is to be correlated with TA volunteers, that does not seem to be very generous. Then I gather that there is another rule about Sundays; that pay for Sunday training does not affect entitlement to unemployment benefit, which is a daily benefit not payable for Sundays. I do not know what is special about Sundays in this connection, but I understand that an unemployed volunteer will lose one day's benefit if he was working on a Sunday, but not if he was working on another day.

I do not want to detain your Lordships with all these details, but I should like to submit to the House that there are many anomalies and stupidities connected with the whole question of Territorial Army volunteers' payment and non-payment. I should like to think that it will be possible for the noble Baroness who is to reply to say that the Government are going to look again at the whole question. When volunteers go to their camps or to their weekly processes there must be a fairness for those who are unemployed so that there is not discrimination.

That is all I want to ask of the noble Baroness tonight. I should like to be assured that Territorial Army people will not suffer because of their unemployment and that fairness will be achieved.

11.46 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington)

My Lords, the noble Viscount, Lord Thurso, has given us the opportunity this evening to review the financial situation of a well-loved group of volunteers and we are grateful to him for so doing. Perhaps I may start by setting the scene in a general way. The Government are firmly committed to maintaining and enhancing strong reserve forces, and have embarked on a major expansion programme for all three services since 1979. It is planned that the Royal Naval Reserve should be increased to 7,800 from its level of just over 5,000 at the end of 1984. The Royal Auxiliary Air Force has been steadily expanding over recent years, with auxiliary field squadrons proving a most effective force.

The expansion of the Territorial Army is making good progress towards our target of 86,000; its strength was only some 59,000 when we came to office, and it is now more than 76,000 including an increase of some 4,000 in the past year alone. Equally successful has been the expansion of the Home Service Force, which has already grown to 2,800, over halfway to our initial target strength of 5,000, and we shall be considering whether we can go beyond that figure. In what I say hereafter I shall refer, for convenience, to the TA, but in principle the same factors apply to members of the other reserve forces to which I have referred.

We are the first to acknowledge that there are problems which need to be resolved. Despite the expansion that I have outlined, retention rates are a source of major concern and a great deal of effort is being put into finding ways of improving the situation, for example by better training opportunities, more interesting activities, better terms of service, and better financial rewards for these men and women who (let us not forget the fact) are all volunteers setting aside their spare time for service in the national interest and greatly to be applauded for so doing. I should be the last person to denigrate their efforts.

Tonight's discussion has focused on the question of financial rewards, and I agree with the noble Viscount, Lord Thurso, that this is very complicated. In particular, it is focused on the discrepancy between the position of employed volunteers who get the full benefit of the TA pay they receive and those who have the misfortune to be unemployed and who are then liable to lose part of their weekly benefit because of their TA earnings. Let me say at once that I do not believe that these reservists, all volunteers as I have said, join the TA just for the financial rewards it offers. But equally I believe that they should receive a fair reward, whether they are otherwise employed or are unemployed. That was one of the questions put to me by the noble Baroness, Lady Jeger. A considerable number of volunteers are unemployed and in receipt of benefits and we would not want them to be discouraged from remaining in the TA because of the way their benefit is affected. We must ensure that there is a reasonable incentive for them.

It may be helpful to noble Lords if I start by explaining the way in which earnings affect benefits generally and then show how the rules work in the case of TA members. There are, as the noble Viscount's Question indicates, two different benefits involved: supplementary benefit and unemployment benefit. The earnings rules are necessarily different because supplementary benefit is income-related, designed to bring the recipient's other income, if he has any, up to the level laid down by Parliament, while unemployment benefit is a contingency benefit paid from the national insurance scheme—in this case, to meet the contingency of unemployment.

In common with unemployment benefit, TA pay is liable to tax according to the individual's tax position, and that tax is deducted at the standard rate from TA pay at source, leaving the individual to recover overpaid tax, if any, at the end of the tax year. Virtually all TA volunteers are liable to some tax on their earnings.

Since 1980 the standard supplementary benefit earnings rule has provided for the first £4 per week of net earnings to be disregarded. The balance of earnings are taken into account in assessing entitlement so that they reduce the benefit. It could be argued that all income should be taken into account in a means-related scheme but it is recognised that there must be some incentive to the recipients to be to some extent self-supporting and so to keep in touch with the employment field; and the disregard serves that purpose.

Viscount Thurso

My Lords, if the noble Baroness will allow me to intervene, is she suggesting that those people are remaining unemployed because they are in receipt of Territorial Army pay? That is what it sounded like.

Baroness Trumpington

My Lords, I must make it clear that I was not suggesting that. Perhaps the noble Viscount will allow me to continue. As I have indicated, the unemployment benefit rule is very different. That benefit is not payable for any day when a person earns more than £2. The figure was raised to that level in 1982 having been 75 pence for about 10 years. In principle, unemployment benefit, being founded on unemployment, should not be paid for a day on which a person does any work but the £2 sets a de minimis level so that trivial earnings can be ignored.

The two earnings rules that I have described do not give the full picture so far as TA pay is concerned because the Government have made two changes in the supplementary benefits system to give much more generous treatment compared with that afforded to earnings in general. First, since 1982 TA earnings—which I should explain are paid monthly—have had four weeks disregard applied to them instead of one week, as had been the case before. That is done whether the member earns the pay in one, two, three or four weeks in the month. Secondly, since August 1984 an extra disregard of £4 per week has been allowed on TA earnings. The combined effect of those two changes is that a volunteer's earnings of up to £32 per month are disregarded.

In looking at how those supplementary benefit rules and procedures affect TA members, we need to distinguish between the training given at the annual camp, normally 15 days, and the training undertaken at weekends and in the evenings. I see no reasonable alternative to benefit being withdrawn for the period spent at camp. I remind the noble Viscount, Lord Thurso, that family income supplement is not withdrawn when a man goes to camp. I say also to my noble friend Lord Ailsa that I have never actually thought of myself as a fifth column. We cannot ignore fraud if people do not tell us of earnings, but we do not persecute people and give them the "third degree". We do not prosecute in trivial cases. We must of course ask questions if we find a man who has undisclosed earnings. I am sorry that my noble friend phrased his remarks in the way that he did.

Soldiers cannot realistically be available for work during the period that they spend at camp—a basic condition for benefit—while their earnings, which average more than £100 per week even for the lowest ranks, are well in excess of the sum that many men earn for a week's work in employment generally. However, so far as weekend and evening training is concerned, the position is different. Someone whose training lasts for not more than 72 hours can be accepted as being available for work, while availability is not of course in question for someone involved in evening training. Weekend and evening training is rarely likely to conflict with full-time work and indeed most TA men are in full-time employment. The question therefore is to what extent we should ignore TA pay when assessing benefit entitlement.

I do not think there is a good case for changing the present supplementary benefit rules particularly bearing in mind the recent relatively generous concessions. The Ministry of Defence has told my officials that the average net pay after deduction of income tax for the lowest three ranks is £11.61 a day, and this means that a man would have to be paid for three days in a month before his benefit would be affected. He would then lose about £2.80 for £34.80 earnings. The amount of training a member is obliged to do in order to qualify for this bounty, apart from the annual camp, is at most 19 days. This averages out at just over one and a half days a month so there will not be many months in which pay will affect supplementary benefit. Attendance for the obligatory period earns a TA member a significant annual bounty which is now £455 for all ranks after three years' service. For supplementary benefit purposes this is treated as capital and therefore in effect ignored. That means that the bounty would affect benefit only if, quite exceptionally, when added to the claimant's other capital, it brought the total to over £3,000.

I believe that these special rules about TA earnings ensure that there is a real incentive for the volunteer who is in receipt of supplementary benefit. I would add that when income support replaces supplementary benefit from April 1988 we intend to increase the standard disregard of earnings to £5 a week and to introduce a special disregard of £15 for couples unemployed for over two years. When added to the extra disregard for TA members, all volunteers receiving this benefit will then be able to earn £36 and some as much as £76 a month without any loss of benefit.

As I have said, the unemployment benefit rules are different. This benefit is paid for days of unemployment and so is not paid for days on which the claimant works; though, as I have explained, days on which he works but earns £2 or less are counted as days of unemployment. The effect is that a man loses two weeks' benefit for a fortnight's camp. The standard rates of benefit are £30.45 for a single man and £49.25 for a man and wife so that the maximum loss of benefit is £98.50, but Territorial Army earnings for the same period would be well over £170. So far as a weekend's camp is concerned, a man loses only one day's benefit—£5.07 or £8.27 for a man with a dependent wife—because benefit is paid for only six days of the week and not for Sundays. For this weekend camp he will receive at least £23 pay net. The annual bounty does not affect unemployment benefit because it is averaged over the full year and so is less than £2 a day.

Perhaps I may take up a point made by my noble friend Lord Ailsa and tell him that supplementary benefit is not reduced until the earnings are received. Unemployment benefit is, as I said, reduced for days worked, no matter when paid, but supplementary benefit can be paid to avoid hardship. If my noble friend Lord Ailsa can give me details of the rent problems he mentioned, I shall gladly take up these matters.

I agree with the noble Lord, Lord Crawshaw, that there is one area where territorial pay does of course cause a problem as far as the recipients of unemployment benefit are involved, and that concerns payment for evening training. Before April 1985 territorials received only an expense allowance for evening attendance and benefit was unaffected, but from that date they have been paid a quarter-day's pay for each attendance. This results in the volunteer losing a day's benefit because his pay—frequently only £2.90 net—exceeds the £2 a day earnings rule.

We are reluctant to amend the unemployment benefit regulations to cover this situation. To make such a change for Territorial Army pay in isolation would inevitably lead to pressure for similar favourable treatment for other special groups, such as special constables, and for the ordinary earnings limit to be raised, which is a move that we do not consider to be justified.

My noble friend Lord Chelwood brought up the question of money earned by lifeboatmen and part-time firemen, and before I deal with that point I would just say to the noble Lord, Lord Crawshaw, that this does not include part-time ambulancemen. The complete disregard of the earnings of lifeboatmen and part-time firemen started in wartime in recognition of the hazardous duties they performed. Over the years there have been many representations on behalf of people performing a wide variety of public services on a part-time basis for similar treatment to be afforded to them, but we have always taken the view that the special rules for lifeboatmen and part-time firemen were anomalies and should not be extended.

Of course, just to cover another point made by my noble friend Lord Chelwood, my right honourable friend the Chancellor of the Exchequer will be well aware of the sentiments addressed through me to him by my noble friend Lord Chelwood.

Lord Chelwood

My Lords, may I put one very brief point to my noble friend? Is she able to update the figure, which was last given about 18 months ago, of what would be the cost to the taxpayer? With total disregard for territorial volunteers, it was £5 million at June 1984, I think. If my noble friend cannot tell me now, could she write to me about it?

Baroness Trumpington

My Lords, I could tell my noble friend if I turned it up, but it will take too long and I do notice an air of weariness in some parts of the House. I would say especially to my noble friend Lord Chelwood and to the noble Viscount, Lord Thurso, that of course I fully understand that a reservist feels aggrieved when the benefit he loses is more than his earnings. At present my officials are consulting those of the Ministry of Defence to see what can be done to help territorials in this position. The £2 earnings rule for unemployed benefit was increased to that level in 1982 after being 75p for 10 years, mostly under the previous Administration, as I said in answer to the noble Baroness.

I am of course aware that wastage in the Territorial Army and indeed the other reserve forces is higher than we would wish it to be, but I am not persuaded that this is a result of the problems which have been referred to tonight. I would submit to the noble Lord, Lord Chelwood, that some wastage—I would prefer to call it turnover—is inevitable, though I agree that the loss rate in earlier years is a matter for concern. But there are many causes for these losses—such as family pressures and employment pressures—and all are receiving attention, though as I say there will always be a natural and inevitable outflow. But as my noble friend Lord Trefgarne pointed out on 3rd July last year, recruitment is going well and we do not see any reason why the planned target of 86,000 by 1990 should not be reached.

Lord Crawshaw of Aintree

My Lords, can the noble Baroness say whether she thinks a case can be made out in respect of that training which they are obliged to do, as opposed to anything in excess of it—that is, the camp and so many 10-day attendances? They are obliged to do that by the very fact that they are in the Territorial Army. Obviously one cannot give carte blanche to people who wish to go and spend weeks and weeks that they are not obliged to fulfil, but can the noble Baroness make out a case in respect of the obligation which they have?

Baroness Trumpington

My Lords, I feel that that is a matter for those who operate the TA and not for me to discuss this evening. The noble Lord's remarks will have been noted.