Lords Sitting of 3 April 1995

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.

Fishing Quotas: Monitoring Arrangements
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether improvements can be made in arrangements for monitoring and controlling the effects of fisheries agreements on quotas and methods where they apply to international waters outside any country's exclusive economic zone or fishing limit.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, possible improvements to monitoring and control of fishing activity and the setting of quotas and fishing methods in international waters are governed by various regional fisheries management bodies throughout the world. Additionally, those are among the important issues before the United Nations Conference on Straddling Stocks and Highly Migratory Species which meets for its third session in New York from 27th March to 14th April.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his reply. However, how can regional conservation agreements work satisfactorily if fishing boats can only be inspected in international waters by their own country? The referee should surely be neutral. While the Northwest Atlantic Fisheries Organisation, for example, provides for a joint
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inspection scheme, is it not a voluntary one to which Spain is unlikely to accede?
Earl Howe: My Lords, a number of ideas are being discussed which we believe look promising. One is for an observer to be stationed on every fishing vessel with the power to call up an inspection vessel if evidence of a serious offence became apparent. A further suggestion is that that observer should be of a different nationality from the nationality of the vessel in question. If an inspection vessel confirmed the apparent offence, the fishing vessel would be required to submit to a full inspection at the nearest port, and to be held there. Another idea is for satellite transponders to he installed on every vessel to track its movements and activities.
Lord Carter: My Lords, is the Minister aware that about 90 per cent. of the world's fish stocks are under the jurisdiction of developing countries? The sale of licences by these countries to foreign fleets of industrial trawlers is doing immense damage to the indigenous peasant fishermen and to fish stocks. For example, the European Union has 16 agreements with African countries. Do the Government agree that that problem should be addressed by the United Nations fisheries conference?
Earl Howe: My Lords, I am aware that these matters have been raised in press reports recently. The European Union has a number of agreements with various third world countries to, I may say, the mutual benefit of both parties.
We are always concerned about the state of the stocks in the waters of the countries with which we have agreements and, moreover, of the needs of the local fishermen. Whenever possible we seek to promote joint ventures either in fishing or in fish processing and associated industries, again to the mutual benefit of both sides.
Lord Boyd-Carpenter: My Lords, can my noble friend say what can be done to check Spanish intrusion into other people's fishing areas?
Earl Howe: My Lords, my noble friend raises a topical subject. One of the problems of enforcing the common fisheries policy in particular is that a great many national authorities are involved, on the high seas and in national waters, in policing fishing activity and the quantities of fish that are landed. There is every reason, therefore, to seek ways to strengthen the day-to-day co-operation between these authorities and, alongside that, to work towards a strengthened Community inspectorate which would help to police member states' national arrangements more effectively.
Lord Bruce of Donington: My Lords, in pursuing the topical case referred to by the noble Lord, Lord Boyd-Carpenter, is not one of the difficulties that there is no effective inspection at Spanish ports, whereas there is effective inspection at ports in the United Kingdom? In Spain the inspectors seem mainly to be quartered in Madrid, which is somewhat remote from the Atlantic Ocean if my information is correct.
Earl Howe: My Lords, I understand that Spain currently has 50 full-time inspectors working for the Ministry of Agriculture, Fisheries and Food.
Lord Bruce of Donington: Where?
Earl Howe: My Lords, operating mainly from Madrid. However, they are supported by fisheries inspectors from the autonomous regional governments as well as military personnel. The Spanish Naval Marine Unit and the marine Civil Guard undertake fisheries surveillance at sea. So it is important to look at the full picture in Spain and not just part of it.
Lord Shaughnessy: My Lords, in view of the Minister's remarks about the proposed monitoring and enforcement measures being considered, how long will it take to reach a conclusion on the proposed measures? It does not matter what kind of international agreements are arrived at, unless there is a clear and effective method of enforcement the depredations of the world's fisheries will continue.
Earl Howe: My Lords, I can only agree with the noble Lord that effective enforcement is the key to conservation in the future. I cannot say precisely when an agreement might be forthcoming, although I am aware that the talks are proceeding in a thoroughly constructive manner on all sides.
Lord Tebbit: My Lords, can my noble friend say whether at any future conference on a wide scale—for example, under United Nations auspices—Her Majesty's Government would be free to pursue an independent and vigorous line of policy? Alternatively, would we be in any way encumbered by commitments towards our neighbours and partners on the continent?
Earl Howe: My Lords, in many of the fisheries agreements under the spotlight the United Kingdom is represented by the European Union, which is the contracting party to the fisheries agreement. Therefore,
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to an extent we stand to be represented by the European Union, although naturally we make our views known at every opportunity.
Lord Dean of Beswick: My Lords, since Spain appears to be acting in a predatory manner wherever fish are to be found, is not urgency of the utmost importance in applying decisions when they are made? Otherwise, the world's fishing stocks may be damaged beyond repair.
Earl Howe: Yes, my Lords, it is an urgent matter. To a degree, we are hampered by the development of technology. Although it shows promising signs, that technology has not yet been fully tried and tested. I refer principally to the notion of installing satellite transponders in vessels. We see them as having a helpful role to play in the future.
Lord Kennet: My Lords, is the noble Earl aware that the idea of transponders has been urged on the Government for at least 15 years and possibly on previous governments? Does he maintain that transponders are as difficult to develop if the message is to be received only by an aircraft as opposed to being received by satellite? I believe that that is not the case.
Earl Howe: My Lords, unfortunately I cannot give a precise answer to the noble Lord, although clearly the question is pertinent. The installation of satellite transponders is being undertaken on a trial basis by all member states in the Union. Those member states are required to report to the Commission prior to the middle of the year, after which a considered view will be taken.
Lord Campbell of Croy: My Lords, are the British Government preparing for the expected confrontation in the west Atlantic this summer when the tuna season re-opens?
Earl Howe: My Lords, the Government hope that conflict in the tuna fishery this summer can be avoided and we shall work with all concerned to ensure that everything possible is done to avoid provocative actions and that agreed regulations concerning net lengths and so on are complied with.

Maastricht Treaty: Article 189
2.46 p.m.
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
Whether they will ensure that the agenda of the Inter-Governmental Conference includes the discussion of whether Article 189 of the Treaty of Maastricht should be augmented by a provision that directives shall have no legal consequences except in so far as they are implemented in national legislation.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, a number of issues are already on the agenda for next year's IGC. Others may be

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added. The Prime Minister has set out clearly the broad framework of our approach, but our detailed objectives are still under discussion.
Lord Bruce of Donington: My Lords, is the Minister aware that I find that Answer slightly unsatisfactory? According to Article 189, there is a difference in the legal treatment of a regulation and a directive. A regulation issued on behalf of the Community becomes immediately enforceable throughout member states, including our own. A directive does not fall into quite the same category; it has already been the subject of some disputed judgment in which one is informed that the Home Office took one line and the Foreign Office took another—such as with the Van Duyn case. Does the Minister think that, in order to clear up the ambiguity, it would be far better that the matter should be raised for discussion and further clarification at the Inter-Governmental Conference? The consequences for the British legal system—which one hopes are still not to be ignored—ought to be raised on that occasion.
Baroness Chalker of Wallasey: My Lords, the noble Lord is absolutely right. There is a difference between Community regulations which apply directly under the European Communities Act 1972 and directives which leave to member states the form and implementation of legislation under Section 2.2 of the Act.
The important point is that we have real anxieties about some ECJ judgments, particularly where they have had unforeseen or disproportionate cost implications. We are considering ways of addressing those anxieties but have not yet reached any decisions. I should advise the House that not all judgments go against us. A number of recent cases show perfectly well that the European Court of Justice is now more sensitive to member states' anxieties. I shall be happy to acquaint the noble Lord with those cases, should he wish.
Lord Renton: My Lords, is my noble friend aware that, despite the subsidiarity rule, the Commission is still putting forward too many directives? Is she further aware that some countries have no intention of implementing all of them?
Baroness Chalker of Wallasey: My Lords, I am well aware of what my noble friend says. That is why we are examining how well subsidiarity is working—where it is working—and where it is failing. Only by a careful examination of that can we put right the points which my noble friend mentioned.
However, there have been judgments where the Court has ruled in favour of member states and against the Commission, where that has been necessary: for example, in the recent WTO/GATT agreement. It is clear that the proper use of the European Court of Justice can be very much a benefit for member states. That also means that the Court must be used against member states when they refuse to comply. The British Government have been to the fore in bringing forward the wherewithal to do it.
Lord Tebbit: My Lords, my noble friend used an interesting turn of phrase. She said that the Court was becoming more sensitive to member states' interest.
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Surely a court of law should be concerned with implementing the law and not fluctuate one way and the other over whose interests it is sensitive to.
Baroness Chalker of Wallasey: My Lords, in no way did I intend to imply, as my noble friend seems to have misunderstood, that the Court was fluctuating; nor should it do so. The Court, which at one time seemed to be ruling against member states, has at least taken the law properly into account; otherwise, the inter-governmental arrangements in the EDF case would not have been upheld. For instance, the Court would not have given weight to national rules and legislation on Sunday trading. There are a number of cases in this very difficult area where the Court is looking at and dealing with the law, as it should do. We must make sure that it continues to do so.
Lord Wyatt of Weeford: My Lords, what is the Government's attitude towards the proposed ending of 700 years of British hallmarking of gold and silver, so that in future no one will know what is genuinely gold and what is genuinely silver?
Baroness Chalker of Wallasey: My Lords, I am informed that that is not happening, and that the consumer council at its meeting last Thursday did not agree to it.
Lord Annan: My Lords, further to the question of the noble Lord, Lord Tebbit, will the Minister confirm that the European Court is governed by Roman law? Will she further confirm that Roman law asks: what is the principle of the law? Sometimes it will adjudicate one way and sometimes another, but it is not governed, as is English law, by precedent. Will the Minister suggest to her right honourable friend the Secretary of State that, because of the drip, drip, drip of anti-European Union propaganda, the time has come for the Government to issue a clearly worded statement to the general public on the advantages of belonging to the European Union?
Baroness Chalker of Wallasey: My Lords, certainly I personally agree with the last point made by the noble Lord. I have just been listening to businessmen saying exactly what a great and positive difference our membership of the European Union has made to this country. I shall not go into detail about that today. With regard to the specific question, we must be clear that the principle of direct effect—which is what the Question is all about—does not apply to all provisions of directives. It applies only where certain specific provisions are clear. I shall write to the noble Lord about this matter, so that there is no difference of opinion between us.
Lord Richard: My Lords, can the Minister confirm that it is not the intention of Her Majesty's Government at the IGC next year to try to interfere with what is in the treaties in terms of the decision-making process in relation to directives?
Baroness Chalker of Wallasey: My Lords, it has not as yet been decided what will or will not be on the agenda at the IGC. I stand by what I said. We need a strong rule of law in the Community to ensure, as my noble friend Lord Renton asked, that all member states

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comply with their obligations. We went over this matter on 8th March both in a Question from the noble Lord, Lord Clinton-Davis, and in debate. I can say to the House that we are quite clear that any changes to the treaty articles that relate to the European Court of Justice should maintain or strengthen the rule of law in the Community. We must aim for that.

Arrests: Advance Disclosure to the Media
2.55 p.m.
Lord Wigoder Lord Wigoder asked Her Majesty's Government:
Whether it is police policy to disclose in advance to the media details of the time and place of the imminent arrest of suspects, and, if not, what steps are taken to deal with unauthorised leaks of such information.
The Minister of State, Home Office (Baroness Blatch): My Lords, it is not the policy of the police to disclose to the media details of the imminent arrest of named suspects. Any unauthorised disclosure of information by police officers is a disciplinary offence and could lead to dismissal. The responsibility for the authorised disclosure of information to the press is an operational matter for chief officers.
Lord Wigoder: My Lords, I am grateful to the Minister for her reply. Will she confirm that the most recent incident involved a well known footballer? Would she agree that there has been a whole series of such incidents in which persons who are at that time presumed by law to be innocent have been arrested at an unearthly hour in the morning and simultaneously have found that not only they but their wives and children have been surrounded by a horde of photographers and journalists? Does she agree that that is not only a gross invasion of personal privacy but is a very real threat to the public peace?
Baroness Blatch: My Lords, I am able to agree wholeheartedly with the noble Lord. Even where there is not a complaint, the police are so concerned that they start investigations. They do so with or without a complaint. In the case mentioned an investigation is taking place. If it is found that a policeman has breached a confidence, it can lead to his dismissal.
Lord Molloy: My Lords, if there is only a tiny minority of forces in the country which are not behaving in the normal way and which possibly committed the offences outlined by the noble Lord, would it be worth while having them investigated so that the excellent name of Britain's police forces throughout the country is in no way damaged?
Baroness Blatch: My Lords, I agree with the noble Lord. It does not matter whether it is one or many incidents. If there has been a breach of confidence which
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prejudices or intrudes on the privacy of people who are innocent until proven guilty, it will be regarded as a very serious matter and will he investigated.
Lord Campbell of Alloway: My Lords, is my noble friend aware that she gave virtually the same reply to virtually the same Question a little time ago? Is she further aware that nothing has been done about the matter, that something has to be done about it, that these investigations are absolutely futile and useless, and that it is rather like trying to track down government leaks? What do the Government propose to do about this scandal?
Baroness Blatch: My Lords, I am sorry that my noble friend feels that my repeating an answer is somehow or other a sign of weakness. These cases will continue to be pursued. It must be said that it is very difficult to pin down who released the information. Very often there is an assumption that it has come from the police. Indeed, it could come from other people—perhaps journalists on the look-out being very speculative about what may happen. In these days of modern communications, information passes over mobile phones and so on. Where there is a breach of confidence and it leads to intrusion of privacy, or, even worse, prejudices someone's trial, it is regarded as very serious and investigations take place.
Lord Williams of Mostyn: My Lords, will the Minister confirm that, quite apart from the unauthorised disclosure of information, the acceptance of a gratuity in these circumstances is also a disciplinary offence? To take up the point made by the noble Lord, Lord Campbell of Alloway, is the Minister able to indicate how many disciplinary charges have been brought in respect of such matters in, say, the past three years?
Baroness Blatch: My Lords, I am not able to answer the specific question asked. Those statistics are not held centrally. I can confirm what the noble Lord said and that it is indeed a very serious offence under the Public Bodies Corrupt Practices Act. Giving information for money is an offence and receiving it is an offence. It is also an offence and a disciplinary matter if a policeman, or indeed a civilian member of a police authority, gives information, whether or not it is for money.
Lord Avebury: My Lords, if there is no reason whatever to suppose that the person concerned is likely to abscond, why do not the police simply ring him up and ask him to report to the station?
Baroness Blatch: My Lords, matters surrounding the arrest of someone are operationally very much for the police themselves.
Lord Trefgarne: My Lords, am I right to conclude from my noble friend's original reply that there are circumstances in which information is released with the necessary authority? If so, can she say what circumstances create that situation, and when information is released with authority?
Baroness Blatch: My Lords, the best example of authorised information leaking was Operation Bumble-bee. That was a successful operation on the part

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of the Metropolitan Police force when it engaged public support to help in reducing the number of burglaries in London. It was successful. Very often the press, the other media and the general public can help in tracking down a criminal. Sometimes chief constables will authorise the release of information in order to apprehend the people who are guilty. But in every case the protection of innocent people until proven guilty is at the heart of what they do.
Lord Trefgarne: My Lords, I do not think I made my question clear. Can my noble friend say what are the circumstances in which information about the impending arrest of a suspect, as described in the Question of the noble Lord, Lord Wigoder, is released with authority?
Baroness Blatch: My Lords, I refer again to the example of Operation Bumble-bee where people were apprehended in the course of burgling. If that is public information, protecting the anonymity of the person doing the burglary until proven guilty is very much in the public interest to reduce down the amount of criminality in our community.

Israel: Nuclear Non-Proliferation
3 p.m.
Lord Kennet Lord Kennet asked Her Majesty's Government:
Whether they will advise that a state visit be paid to Israel before Israel signs the non-proliferation treaty.
Baroness Chalker of Wallasey: My Lords, there are many competing bids for outward state visits, but there is no reason why one should not be paid to Israel in due course. We shall continue to urge Israel, and other non-members of the nuclear non-proliferation treaty, to allay suspicions about its nuclear activities and accede to the treaty as a non-nuclear weapon state.
Lord Kennet: My Lords, I thank the noble Baroness for that reply; but will she bear in mind the somewhat equivocal background to the position? The Israeli Government said that they will never be the first to introduce nuclear weapons into the Middle East. That does not make sense, first, because they have already done so; and, secondly, before they did so, the Americans, ourselves and probably also the French did so. Beyond that, Israel proclaimed its desire to be the first country to propose a nuclear weapon-free zone in the Middle East. That too is nonsensical because such a zone was proposed for many years by Egypt and Iraq and is now proposed also by Iran.
Baroness Chalker of Wallasey: My Lords, along with many others, we have been concerned for some time, as the noble Lord knows, about reports that Israel has a nuclear weapon programme. However, we have no verifiable evidence of that. The noble Lord went on to say that others have been talking of the creation of a nuclear weapon-free zone hut do not mean it—I believe that that was the sense of his question. We support the establishment of a nuclear weapon-free zone; but the most effective way for states to demonstrate their
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commitment to non-proliferation is to join the NPT. That is why my right honourable friend the Foreign Secretary spent some time last Thursday with the Israeli Foreign Minister, Shimon Peres, urging him to make progress with Egypt. That means allaying international suspicions and acceding to the non-proliferation treaty as a non-nuclear weapon state as soon as possible.
Lord Beloff: My Lords, does my noble friend agree that Iran recently repeated its threat to annihilate the state of Israel? So far as we know, it is on the path to securing nuclear weapons. Iraq is very much of the same mind. Therefore, would it be reasonable for any government to ask the state of Israel not to retain at least the possibility of deterrence to those major threats to its very existence?
Baroness Chalker of Wallasey: My Lords, the difficulty is that both Iran and Iraq are not just a threat to Israel; they are a threat to peace in the Middle East and the wider world as a whole. That does not mean that we should not seek, where we can, to stop nuclear proliferation. That is why this important non-proliferation treaty and the forthcoming review conference is so much in the news at the present time. I understand my noble friend's anxieties in regard to the position of the state of Israel. I believe that signing the non-proliferation treaty is something we should be encouraging worldwide, not only with Israel.
Baroness Blackstone: My Lords, can the Minister say whether the Government will consider going to the national non-proliferation treaty review conference later this month with a clear commitment to make no increase in the number of warheads on Trident over and above the number on Polaris? Would that not be an encouragement to countries such as Israel which, regrettably, refused to be party to the treaty? It would encourage them to take a more responsible position in relation to that treaty.
Baroness Chalker of Wallasey: My Lords, we shall do all we can to halt proliferation. That is why we shall take a positive position at the review conference.
Lord Chalfont: My Lords, I understand and share the anxieties which have been expressed regarding the spread of weapons of mass destruction. Does not the Minister agree that the object of the non-proliferation treaty is to prevent the further spread of nuclear weapons? Does she agree also that four—possibly five—countries in the Middle East other than Israel either already have nuclear capability or are on the brink of acquiring it? They are also on the brink of acquiring the capability of other weapons of mass destruction, including chemical and biological weapons, and are about to obtain the capability to deliver them by ballistic and air-breathing missiles. In the light of that, is it not strange to be concentrating upon the activities of one country in the Middle East?
Baroness Chalker of Wallasey: My Lords, there is genuine anxiety about all countries which have not signed the non-proliferation treaty as well as some of those who have, like Iraq. However, at least if they have signed the NPT there is a legal basis for taking them to

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task, whereas for countries which have not signed the non-proliferation treaty there is no such basis. The solution to all these problems must be to strengthen the International Atomic Energy Authority's ability to detect undeclared activities, to extend the nonproliferation treaty and also to ensure that the treaty not only enshrines commitment to negotiate nuclear disarmament, but also extends its influence over those countries mentioned by the noble Lord.

Jobseekers Bill
3.7 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I beg to move that this Bill be now read a second time.
The Bill introduces the jobseeker's allowance, a single allowance to replace the outdated system of unemployment benefit and income support for unemployed people. It will ensure that the efforts of jobseekers are focused on looking for work. The jobseeker's allowance will improve incentives to work and it will target benefit on those who need it most.
The allowance will be implemented jointly by the Benefits Agency and the Employment Service and will introduce a streamlined and more modem system of delivering benefits to unemployed people. Both the Benefits Agency and the Employment Service have made great improvements over the past few years in delivering benefits and jobsearch advice faster and more efficiently. The introduction of the new allowance will build on that and make further improvements in service.
The change will cut out the duplication caused by paying two benefits and reduce the number of offices with which most people have to deal. From April 1996 most people will be able to claim the jobseeker's allowance, obtain advice about their benefits and discuss jobseeking in the same office—the jobcentre. We provide an unprecedented range of programmes and services to keep people in touch with the labour market, to help them search effectively for work and to improve their skills. In 1995–96 there will be over 1.5 million opportunities on training and employment programmes.
Well over 40 per cent. of unemployed people attending jobclubs are successful at finding work. Almost half find jobs through the job interview guarantee scheme. The jobplan workshop and new restart courses have helped around 90 per cent. of course participants to apply for a job, training or other sources of help. And we continue to offer new initiatives. The jobfinder's grant will be extended to some 25,000 people this year who have been unemployed for two years or more: cash in the hand to people to help with bus fares, clothing or the tools they need for work when they first start a job.
Workwise and 1-2-1 will provide intensive jobsearch help to 18 to 24 year-olds who have been out of work for more than a year. And only last week we launched the new Jobmatch pilot to help long-term unemployed people who have been unable to find a full-time job to use part-time jobs as a stepping stone to full-time work.
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With measures such as these the Employment Service placed more than 1.6 million people into jobs last year; and next year it aims to do even better, facing its toughest ever target of 1.9 million placings.
We are seeing unemployment falling—down by 600,000 since December 1992. For over a year and a half the number of people out of work has been falling at the rate of 1,000 a day—falling in all parts of the UK, falling among both men and women and in all age groups. In particular we have concentrated help on those people who do not leave the register within six months. That is where help is needed most since more than two-thirds of unemployed people leave unemployment within six months.
Again success is evident. The numbers of long-term unemployed people as a proportion of total unemployment are now lower than in the 1980s and far lower than in the majority of our European partners. More than a third of the fall in unemployment over the past year has been among those unemployed for over a year—the group long considered the most difficult to help. We want to support and reinforce this success.
The Government guarantee every young person who wants one a suitable youth training place. We are spending £676 million on youth training this year in England alone. It means there is no reason why young people need to be unemployed. We do not wish to encourage dependency on benefit at such an early age. Sixteen to 17 year-olds are, therefore, in general not entitled to claim benefits.
We recognise, of course, that there are circumstances when young people do need to claim benefits. We provide for them and will continue to do so. Young people who have recently left local authority care, for example, will be able to claim JSA for a period intended to allow them to overcome their temporary difficulties. And young people who are waiting for a suitable youth training place will he able to claim JSA if they would otherwise suffer severe hardship. The requirements to be available for and actively seeking employment will be tailored for young people in recognition of their need to focus on training.
The jobseeker's agreement will be a central feature of JSA. It will also make clearer the link between receiving JSA and looking for work. Each person will agree the steps they intend to take to find work and put them in the agreement. Their agreement will also contain information about the help that the Employment Service can provide to help them back to work. The jobseeker's agreement is the key to ensuring that jobseekers are treated as individuals and receive individual help. But let me explain that it will not mean individual terms and conditions for receipt of JSA. The agreement will set out what that jobseeker intends to do to meet the availability for work and actively seeking employment conditions. In the cases where the employment officer and the jobseeker cannot reach agreement it will be referred to an independent adjudication officer.
There has for many years been a provision whereby Employment Service staff can instruct unemployed people to take certain steps to get a job. We extend that approach in JSA. We believe that that is entirely reasonable. In any system there will always be a

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minority of people who do not play by the rules: people who for no good reason reject the help and advice of the Employment Service; people who will try to avoid work by deliberately making a poor impression to a prospective employer. In these circumstances it is absolutely right that the employment adviser should use this provision. But as a protection, no unemployed person will lose benefit unless an independent adjudication officer decides that it is reasonable in the circumstances.
There has been no fundamental look at the system of benefits for unemployed people since the war. There are currently two benefits for the unemployed: unemployment benefit and income support; and they overlap. At any one time most unemployed people receive income support—a general benefit which is also paid to pensioners, lone parents and sick and disabled people, rather than unemployment benefit, which was designed for unemployed people. The rules are complex. Unemployment benefit was designed for an era when few worked on Sundays, people were compensated for days of unemployment and relatively few married women were in employment. Unemployment benefit excludes Sundays; income support does not; there are different earnings rules, different ways of calculating payments and different claim forms.
By contrast, the jobseeker's allowance will have a single set of rules and one claim form. The new allowance will provide financial support for unemployed people and their dependants according to their income and outgoings and this will be paid as long as they need it, provided they are available for and actively seeking work. Those who have paid national insurance contributions will receive a personal rate irrespective of their capital or partner's earnings for up to six months. We intend to make the structure of the benefit simpler, thus ensuring that unemployed people do not have to become unnecessarily involved in red tape.
One such change is for those who suffer a short spell of sickness. They will be able to remain in receipt of JSA for up to two short spells of sickness a year instead of having to change and make a new claim for income support or incapacity benefit. As the work towards implementation of JSA progresses we shall be considering other possible areas where we can further simplify and improve the service provided to unemployed people.
The vast majority of unemployed people make every effort to find work, but we need effective measures against the minority who do not. Social security law has always included penalties for those who break the rules. It is reasonable that those who pay taxes should not subsidise those who make no attempt to get a job.
The new system will make it crystal clear that those who do not meet their obligations will not receive benefit. However, we will protect vulnerable claimants: claimants with children, those who are sick or disabled or pregnant or who have partners in this position and those with caring responsibilities will be able to receive reduced payments if they would otherwise suffer hardship.
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I turn now to work incentives. The jobseeker's allowance is part of a much larger package of incentives announced in the last Budget and social security statement. The package of measures included in jobseeker's allowance legislation underpins the Government's determination to remove barriers to finding work and helping every unemployed person to find a job quickly. In October 1996 we will introduce the back-to-work bonus. At present most unemployed people who work part-time lose benefit pound for pound, yet if earnings were kept in addition to benefit there would be little incentive to move off benefit into full-time work. So the tax-free back-to-work bonus represents a new incentive.
Jobseekers and their partners who take small amounts of work while on benefit can build up entitlement to a lump sum bonus of up to £1,000. They can cash this in when they move off benefit into work. We will also pay the bonus to people who move off JSA at pension age and at age 60 to income support claimants who have participated in the scheme so the bonus will not be lost. We expect to pay at least 150,000 bonuses to JSA claimants each year once the scheme is up and running. This scheme will encourage people to stay in touch with the world of work while they are on benefit and to keep their skills up to date. And it will give claimants a financial boost at a crucial time by helping them to meet the expenses connected with the move back to work.
As well as offering help in earnings disregards we will provide help for couples, enabling partners of JSA and income support claimants to work up to 24 hours—not 16 as now—which will encourage partners to remain in or to take part-time work. And in addition couples will be able to earn £10 even if only one is working. That should bring extra help to around 70,000 people.
Building on the incentives for the long-term unemployed, we also propose a national insurance holiday for up to 12 months for employers who employ someone who has been out of work for two years or more. This will encourage employers to take on long-term unemployed. Some 120,000 people are likely to be helped in this scheme and it should be worth £45 million to employers in national insurance savings.
We are underpinning the work incentive measure announced by my right honourable friend the Secretary of State for Social Security last November by introducing a power to allow housing and council tax benefits to run on for four weeks for unemployed people who have to move to another local authority area to find work.
Its purpose is twofold. First, it enables authorities to exchange information about HB and CTB details. Secondly, it ensures that local authorities give priority to dealing with claims to these benefits from those who benefit from the run-on so that any ongoing entitlement to benefit is established before the end of the run-on period and there is no gap in housing benefit if an individual is entitled to it. In this way the claimant is protected from the sort of gap in income which currently causes concern and difficulties on returning to work. That fear can sometimes act as a deterrent to taking the plunge back into a job.

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There are other deterrents stopping people taking work: the fear of the unknown; of a job not working out. We intend to ease the rules to help those who find work. Employment on Trial allows jobseekers to try out unfamiliar work without fear of sanction if they give it up. People will be able to take a job on trial after just three months' unemployment and, if necessary, to leave it after four weeks. We estimate that about 200,000 extra people will come within the scope of this measure.
During the passage of this Bill in another place concern was expressed about carers who might wish to return to the workplace. We accept the special circumstances of this group. We will allow them to restrict the hours of their availability so they can work in line with their caring commitments, We will allow them to place restrictions on the locality and nature of work, provided that they retain reasonable prospects of finding a job.
The benefit system must be flexible and capable of adapting to change but it can be difficult to predict how effective some measures will be in improving incentives and affecting people's behaviour. We already pilot new employment services and training schemes and we will be extending this system to provide new powers to use local pilots in benefit regulations, too. These pilots will be used to assess measures which promote employment. All pilots will need specific parliamentary approval. They will be time limited and there will be no power to reduce benefit rates.
The Bill also allows the resettlement agency to complete its task of disengaging the Government from the running of resettlement units. This has been a success story. The resettlement agency has met all its targets and will complete its task in 1996, by funding more appropriate provision delivered by alternative providers such as voluntary organisations or local authorities.
In this Bill we are increasing the incentives for people to find work, widening the range of opportunities that we can offer people who are unemployed and targeting help on those who need it. This is a package of measures which will provide an improved means of delivering benefit to unemployed people. The Bill is a key part of the Government's strategy to tackle unemployment. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Mackay of Ardbrecknish.)
3.24 p.m.
Baroness Turner of Camden: My Lords, this is yet another nasty Bill from a Government which must hold the record for nasty Bills affecting employees and social security claimants. It appears to be based on the Government's oft-stated assumption that the jobs are there and all that needs to he done is to coerce people, many of whom are work-shy, into accepting them. The Government seem to have a bit of an obsession about possible social security fraud. We, on this side of the House, do not condone fraud, but we do believe that its
16
impact has been grossly exaggerated. It is certainly not so grave a problem as to warrant penalising everyone else.
This measure has to be seen against the general background of, and as part of, the Government's employment philosophy. We are constantly told that unemployment is reducing—the Minister told us so this afternoon—but most people simply do not believe it. They do not believe the Government's statistics. Many are aware that the basis of assessment has been consistently changed and will no doubt be altered again as a result of the Bill. They are aware that the level of unemployment is still very high. Even on the Government's own figures unemployment stands at 2.5 million, 1.1 million of whom have been unemployed for over a year. The demise of a lot of UK manufacturing industry has drastically reduced the number of full-time jobs available. In 1971, 41 per cent. of the male workforce was employed in manufacturing. That was down to 28 per cent. in 1994. And this is the direct result of policies pursued by successive Conservative Governments, particularly those of the previous Prime Minister, who it is well known had little time for manufacturing industry and thought that everyone could be employed in the finance and service industries.
Now, as we have seen, unemployment is hitting even employments once regarded as relatively safe, like banking and insurance. As we know, banking is already threatening that 75,000 jobs are to go very shortly. Much of the so-called new employment is part-time and often low paid. One million people now earn less than £2.50 an hour and as many as 328,000 earn less than £1.50 an hour. It is hardly surprising that in these circumstances, the so-called feel-good factor is conspicuously absent and that the Government are just about as unpopular as it is possible to be—perhaps the most unpopular government since the Second World War.
Against that background the Government really have a nerve to introduce a measure of this kind, which will disadvantage yet further the most vulnerable and the poorest in our society. One of the core elements in it, as has been explained, is the provision of a jobseeker's allowance in place of unemployment benefit. Unemployment benefit is a contributory benefit for which people have paid. This new jobseeker's allowance will last for the first six months of unemployment, unlike the present unemployment benefit which runs for a year. Thereafter, after the first six months, entitlement will be means-tested.
I still do not understand how the Government can justify this. I listened carefully to the Minister this afternoon and I did not hear a justification for it in his speech. It is a cut in contributory benefit. Many people—perhaps as many as 90,000—will not be entitled to the means-tested jobseeker's allowance because they have a partner in work, perhaps on a low income, or they have savings or a redundancy payment above the £8,000 limit. Under the new system an unemployed man, if he had a redundancy payment of over £8,000 or if his partner works, would suffer a cut of £1,100 in a year. That really cannot be right. If the Government claim that the interests of the taxpayer have

17
to be considered, they should remember that that unemployed man had been a taxpayer himself when in employment and had paid his national insurance contributions. The Government should not be allowed to change the rules of the game any more than private insurers are entitled to renege on policy promises and conditions.
Then there is the so-called jobseeker's agreement, which I note from what the Minister said this afternoon, is regarded as being a core part of the Bill. Personally, I do not believe that it is. I think that the real objective of this Bill is to try to save money in order to be able to provide some up-front tax cuts just prior to the general election.
I believe that this so-called agreement is all part of the pressure to try to get people to take low-paid jobs and inappropriate ones. On this side of the House we have never said that the unemployed should not attempt to secure other employment. It is part of the deal under which unemployment benefit is paid. For many years the requirement that people should simply be available for work on the day for which benefit is paid, was generally acceptable. Then the Government changed all that in order to specify that the unemployed must be actively seeking work. That has not been in operation for very long. We now have this new and much more detailed, and not very comprehensible, Clause 6 in the Bill which states:
"(2) Regulations may prescribe circumstances in which, for the purposes of this Act—

(a) a person who is not available for employment is to be treated as available for employment;

(b) a person who is available for employment is to be treated as not available for employment;

(c) a person who is not actively seeking employment is to be treated as actively seeking employment; or

(d) a person who is actively seeking employment is to be treated as not actively seeking employment".

Earl Russell: My Lords, signed "H. Dumpty".
Baroness Turner of Camden: My Lords, that particular clause also contains a whole lot of other proposals.
Therefore, we have a situation here where there will be an attempt, as far as we can see, to make it more difficult for people to qualify for benefit for which they have already paid. Obviously it means—indeed, it is stated in the Bill—that if there is a failure to enter into the jobseeker's agreement, in all probability the claimant will not get the jobseeker's allowance.
The agreement itself seems rather a one-sided affair. There is no commitment on the face of the Bill to ensure that the Government and their agencies do everything possible to find a job for the claimant—that is, a job that is appropriate to his or her skills, education and training—or to provide the necessary training (should that be required) to enable the claimant to compete successfully in the jobs market. All the emphasis seems to be on making it as difficult as possible to obtain the jobseeker's allowance—and to maintain it once entitlement has been established.
The Government boast of their new innovation—the back-to-work bonus. Again, everything will be done via regulations, since the Bill is not very specific about what
18
is entailed. We have no objection to the bonus—indeed, it is a good idea—but we would point out that it is not as generous as the Government would have us believe. It might have been better to increase the amount of the "disregard"—the amount of money an unemployed person may earn before benefit is affected. The amount of the disregard stands at £5 a week for a single person and £10 a week for a couple, and it has stood at that figure for a number of years. It might be an idea to raise those amounts at least in line with price inflation. In any event, as was pointed out in the other place, much as the innovation of the bonus is to be welcomed, it assists those who are successful in getting a job. We have also to concern ourselves with the plight of those who, for whatever reason, simply cannot do so.
Here we should say something about training. We have often in this House raised complaints about TECs—some of which do a good job, but not, I fear, all, and most suffer from inadequate resourcing. The Minister referred to training, but a Bill that was genuinely concerned with jobseeking, rather than with simply cutting benefits and saving money, would have devoted much more attention to training and to instituting a more effective system for providing training, both on and off the job. Sadly, the Bill does not do so.
It has, however, perpetuated one of the injustices of the present income support system. I refer to the reduced amount to be payable to the under 25s. I do not understand why this should be so, and the Minister did not explain it. Many young people under 25 have partners and children. Why should a 24 year-old receive £9.70 a week less than a 25 year-old? It simply does not make any sense.
I note the reference in the Bill to young people under the age of 18. The Government seem to have come belatedly to the view that something has to be done to alleviate hardship among such young people since the general entitlement to benefit for 16 and 17 year-olds was withdrawn in 1988. We share the view, which has often been expressed by the Government and which was stated again this afternoon, that young people in that age group should not really be in the workforce at all, but should be either still in full-time education or receiving training. Unfortunately, however, the guarantee of a youth training place has not been entirely fulfilled. There were 15,670 young people on careers service waiting lists in October 1994, of whom 1,060 had been waiting six months or longer. The result has been homelessness and destitution for far too many young and vulnerable people. We shall have to test out in Committee just how far the provisions of the Bill will go to alleviate the distress that clearly exists.
Then there may well be a problem of interface with other benefits—notably incapacity benefit—and there is the position of those who have been carers, mostly women but some men, who have been looking after elderly or infirm relatives in what is known as care in the community. Such people, as we know, save public funds a very large amount of money and they are entitled to have their needs properly safeguarded. I was glad to hear from the Minister that that point has at least

19
been given some consideration by the Government, although I believe that we shall have to test the amount of that consideration in Committee.
Being disabled is also a costly business, and those extra costs must be taken into account, particularly when disabled unemployed people are engaged in jobseeking. It is much more costly for people with a mobility problem actively to seek employment.
So, when taken altogether, it is not a Bill that we on this side of the House can welcome. I feel bound to tell the Government that the unions catering for the staff whose task it will be to administer the Bill are not happy either. There are already benefit offices in some parts of the country where screens have had to be erected to protect the staff from the wrath of occasionally disappointed claimants. There are likely to be far more disappointed claimants once this Bill is on the statute book, and the staff quite rightly fear that there may be an increase in violence at the places where they work and where they will be expected to administer the provisions of the Bill. I have no doubt that such staff are all now on systems of performance-related pay. Is that to be assessed on the basis of the numbers who have been refused JSA and other social benefits? It will be interesting to hear.
Clearly, the main purpose of the Bill is to save money. The Government expect the introduction of JSA to reduce public expenditure by £140 million in the first year and by about £270 million in the next year. The introduction of the back-to-work bonus is said to be cost-neutral. Those savings are to be made at the expense of the unemployed—notably, the longer-term unemployed. These are people who are the victims of 15 years of Conservative policies which have robbed them of employment and often of the prospects of it, and at the same time have gradually eroded public provision of all kinds. Moreover, the collective job protection that was once available via a strong trade union movement has also been deliberately eroded by a Government who see people as a commodity like any other, disposable when no longer profitable.
No: we do not like this Bill. It has been passed in the other place and we must therefore do our best in this House to seek to ameliorate the unacceptable conditions it contains. Had it not been the tradition of your Lordships' House that we do not oppose Bills on Second Reading which have already been through the other place, I would feel strongly inclined to say that we could not accept the Bill.
3.36 p.m.
Earl Russell: My Lords, perhaps the Minister will forgive a moment of levity before we get down to the serious business. When I was listening to him explain that some people in 1995 have succeeded in finding a job I was irresistibly reminded of the line from Beyond the Fringe:
"Some gallant citizens of this country can run a mile in four minutes".
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I admit that unemployment is falling and, like the Minister, I welcome that, but I hope that the Minister appreciates that it is an urgent fiscal necessity that it has to fall a very great deal further than it has yet.
I do not know whether the Minister was listening last Friday night to Any Questions, which was broadcast from Babbacombe in Devon. Sir George Young said very much what the Minister has just said, and it produced such a ribald wave of laughter from the audience that he was barely able to complete what he was saying. He was telling the truth, but it is like saying, "You're only going to be shot six times instead of seven"; it does not give one very much comfort.
I owe the noble Baroness, Lady Turner of Camden, an apology for making an improper intervention in her speech. However, perhaps I may say, as the noble and learned Lord, Lord Hailsham of Saint Marylebone, once said on a similar occasion:
"I was tempted and I did eat"—
Lord Hailsham of Saint Marylebone: My Lords, I was not the first to say that.
Earl Russell: My Lords, the noble Baroness went on to say one thing with which I disagree. She said that this Government are as unpopular as it is possible to be. Once the Bill is brought into effect, I think that the noble Baroness will find that she was mistaken on that point.
Having said that this is a very bad Bill indeed—one of the worst two or three with which I can remember dealing in this House—I must, to be fair, extend a welcome to two clauses. I welcome, first, Clause 24 which deals with a national insurance holiday for those taking on the long-term unemployed. I welcome that doubly because it is our own party policy that has now been adopted. I welcome also Clause 25 on expediting the payment of housing benefit and council tax benefit. That clause was desperately needed. I hope it works. There is common good will, and if we can do anything to help to improve it I hope that we can get together as necessary.
I am interested in the financial memorandum to the Bill; in particular, how the figures have been arrived at. I can well understand how the savings in the cutback on unemployment benefit have been arrived at. As to that, I say only that I agree with the noble Baroness that that is the one bad change in this Bill which is brought in by primary legislation. Therefore, it can be addressed in Committee, and I intend to do so. For today, I will concentrate on the other measures.
In the memorandum the estimated savings are given as £140 million in the first year and £270 million in the second year, of which £70 million in the first year and £220 million in the second year are, according to Mr. Roger Evans in a Written Answer on 24th November, attributable to the change in unemployment benefit. That leaves £70 million in the first year and £50 in the second year to be saved at the expense of the allegedly work-shy. I should like to know how those figures have been arrived at. Is the expectation that the savings will be made by putting people into work or disentitling them to benefit? How are the Government able to know in advance of the Bill how many work-shy there are and what they will do when pressure is put upon them? For

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the Government to make a firm prediction without knowing how they will get there is a little like the young man in the predestinarian limerick, who exclaimed:
"Golly! I am not a taxi or tram, but a trolley."
This forecast has a suspicious resemblance to a target. In that context, I ask for an assurance that the employment officers who administer the Bill will not be on performance-related pay. We intend to put down an amendment in Committee that no employment officer administering this Bill shall have a financial interest in any decision that he takes. Should that amendment not be successful, I have already referred the issue of performance-related pay to the Nolan Committee on Standards in Public Life which will take up a second round of issues after its first report. It is possible that it may also take interest in this point.
The Bill appears to be a long succession of regulation-making powers. I did not count them—the night was not long enough. I mention only a few of the more important ones: Clause 3(2), which deals with regulations to prescribe conditions of eligibility for contributory JSA; Clause 4(1), which deals with contributory JSA (the amounts to be determined by regulation); and Clause 4(3), which deals with income-based JSA (the premiums to be determined by regulation). In this context, does the Minister deny the story, reported under the byline of Donald Macintyre in Friday's Independent, that the Government intend to cut back the single period premium? Can he deny that there is any risk of single parents being required to make themselves available for work? It ought not to be possible to bring in these kinds of measures by regulation.
Clause 6 is nothing but a mass of regulation-making powers: conditions of eligibility and disentitlement and what shall be "good cause" for non-compliance. Clause 7 deals with the jobseeker's agreement. Here we have something more than the ordinary delegation of powers to Ministers. This appears to be suspiciously close to a delegation of the regulation-making power right down the line to the employment officer. I know that the Minister said that the jobseeker's agreement is not a condition, but it looks remarkably like one. If the noble Lord, Lord Inglewood, can convince me when he replies that this is not a condition I will be very relieved indeed. I very much hope that there is no prospect of market testing under that clause. If there were, I believe that there would be market testing of the power to make law. I would find that a bit rich coming from a government which regularly say that they are dedicated to defending parliamentary sovereignty.
I leave out quite a few clauses because there are too many to mention here. I refer to Clause 16 and jobseeker's direction. The length of disentitlement may be fixed by regulation at anywhere between one and 26 weeks. That is an enormous variation to leave to discretion. It does not say that at the end of 26 weeks it will not be done again. It refers to a disentitlement for failure to carry out the directions of the employment officer. In another place Mr. Alan Howarth described that as a profoundly illiberal power. We on these
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Benches do not always agree with other parties' assessments of what is liberal. On this occasion we agree with it from the bottom of our hearts.
These are not merely powers that are likely to have a harmful effect on us. They are provisions which create powers to exercise real cruelty. I am sure that the Minister will say that the Government have no plans to do so, but that is not enough. This Government will not be in office for ever. They will leave those powers on the statute book for anybody to make use of—perhaps years hence. It is like leaving unexploded bombs around. Some of the things that may be done are quite startling. For example, I refer to the regulations under Clause 6 dealing with appearance. That is like giving the employment officer the power to say that he does not like somebody's face.
The noble Lord, Lord Inglewood, will undoubtedly tell me that all will be referred to the adjudication officer to determine whether or not it is reasonable. I do not see how it is possible to have a test of reasonableness on the exercise of an inherently unreasonable power. I believe that we severely underrate the gravity of the penalty of disentitlement to benefit. It is the next thing to a sentence of imprisonment. I have sometimes wondered whether I would rather be sent to prison than be disentitled to benefit. My noble friend Lord Harris of Greenwich will undoubtedly tell me later this evening that that will depend on the prison to which I am sent. I will accept that proviso, but I ask the House to consider the question as an open one.
The Minister may perhaps be familiar with the suicide of Rachel Cain who was denied benefit, wrongly as it turned out. She had already committed suicide before that was discovered. I do not believe that anyone will advocate suicide as a solution. However, I ask both Ministers the following question. If somebody comes to them who has been disentitled to benefit for 26 weeks and asks how he is to make a living, what answer will they give? If the answer is that the person should find a job perhaps I may be told how he can actively seek work when he has no money to pay fares. To actively seek work regularly involves travel. The next step—which is not far beyond this—is the creation of criminal offences by regulation.
The Minister said a great deal about 16 and 17 year-olds. What he did not appear to realise was that what he said has been made out of date by his own Bill. He referred to the danger of benefit dependency, but if the Bill does not remove the danger of benefit dependency then the Bill is being passed altogether in vain, and might as well be withdrawn.
The Bill is intended to stop benefit dependency, so if it does not succeed in doing that, it is useless. That means that the justification, which Ministers have trotted out more times than I care to count, is removed. I know that they keep on repeating it automatically. For that, I must take some share of the responsibility, and I am sorry for it. They should think again, and consider, before they talk about 16 and 17 year-olds living at home, that under the 1991 census, of people aged from 18 to 24, 1,116,000 were living away from home, very often upon the insistence of their parents. That ignores the fact we all know, that in that census there was

23
particularly gross under-enumeration of young people. That was a restriction that has outlived its justification, and it is time it changed.
Clause 27, and the effect on the homeless, I shall leave to Committee. But we have to think about the powers under Clause 16—arguably the most arbitrary clause in the Bill—of giving the unemployment officer the degree of power he has to decide whether refusal of work is with good cause. Take a case that I have here: a woman of 31, working in a bakery, became incapable of work because of tenosinovitis (an upper limb disorder—restriction of the wrist movement). She was finally found capable of work, though receiving the lowest component of the DLA. She was offered a job as a nude model. She was unwilling to do that because she felt embarrassed and upset at the prospect of sitting nude in front of art students. The Jobcentre staff said to her, "Are you saying that you are not available to work?" They threatened to withdraw her benefit if she refused. Under the old law, she was able to complain to her MP and obtain an apology. Under the new law, the jobseeker's direction will have the force of law.
I know again the Minister will claim referral to the adjudication officer. According to the latest report of the Chief Adjudication Officer, 40 per cent, of adjudication officers' decisions were found to be unsatisfactory; 92 per cent, of cases on refusal of benefit were found to be unsatisfactory. I ask the noble Lord, Lord Inglewood, whether he can tell me, when he replies, how far it can be said that adjudication officers enjoy judicial independence. The question is of importance.
We have in the Bill a series of regulation-making powers. We need to look at what the noble Lord, Lord Rippon of Hexham, said in the Hansard Society report Making the Law. I take this opportunity to pay tribute to the work that the noble Lord has done as chairman of the Delegated Powers Scrutiny Committee, and to wish him good health and a speedy return to the House. What that report had to say was:
"We emphasise that statutory delegation should never leave an Act bare of everything except a framework of ministerial powers, with all real substance being left to ministerial regulations etc. This has been done (see the legislation on student loans in the Education (Student Loans) Act 1990, for example); it should not be repeated".
It was, once, in the Education Act 1993, but thanks to the courage and integrity of Government Back Benchers and the distinguished skills of the noble Baroness, Lady Blatch, the offending provisions were thrown out. I hope that will happen this time. If it does not, I cannot consent to the Bill.
I am not threatening to vote against the Second Reading. I would not do anything so futile. I do not want to be the one noble Lord who murmurs, "Not Content" and looks very relieved when the Lord Chairman does not hear him. I am not throwing a tantrum, I am making a technical statement. There is no procedure in the Bill whereby my consent to its most offensive provisions can be expressed or withheld. I warned the noble Viscount the Lord Privy Seal, when the Bill was published, that it risks putting the convention that we do not vote against
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regulations in this House under intolerable strain. I would rather see the Bill severely altered in Committee than pursue that line of argument any further.
3.55 p.m.
Lord Rix: My Lords, others in your Lordships' House will be dealing with physical and sensory disabilities in relation to the Jobseekers Bill. Indeed, I have received excellent briefs from the Disability Alliance and the Association of Disabled Professionals, which will, no doubt, help a number of your Lordships through this labyrinthine Bill. However, I shall try to wend my way through the problems facing people with a learning disability.
It is a little difficult to object to the principles that those who receive benefit for being incapable of work should be incapable of work; and that those who receive benefit because they cannot work, should be looking for work. The problems lie not with the principles, but with the law and with the practice that stems from the law. The worry is that disabled people who stand little chance of working may not satisfy the new tests of incapacity for work, while disabled people who are pushed towards the new unemployment benefit arrangements may have difficulty in establishing their eligibility for what used to be called unemployment benefits.
However, it is left to MENCAP and its Pathway Employment Service to speak on behalf of people with possibly the most complex problem—those with a learning disability. Our task is made no easier by the drafting of the Bill, apparently employing spirit-writing from the other side through the medium of the long dead Sir William Schwenck Gilbert. In "Ruddigore" we find the following words—and I shall not abuse your Lordships by singing:
"This particularly rapid, unintelligible patter Isn't generally heard, and if it is it doesn't matter"—
while in Clause 9(4) (a), (c) and (d) we find:
"Circumstances may be prescribed in which … a person is treated as possessing capital or income which he does not possess;"
or,
"income is to be treated as capital;"
or,
"capital is to be treated as income".
Unfortunately, that arcane drafting persists throughout the Bill, and one can envisage enormous additional savings being made by the department and its éminence grise (the Treasury) —savings being one of the main objects of the Bill, anyway —just because jobseekers and employment officers alike will be quite incapable of reaching an understanding of the rules and regulations laid before them—even if placed, as we have heard, on one application form, which I imagine will be longer than the Roll of the Lords—thus denying allowances to thousands of would-be applicants.
People with a learning disability fall smartly into that trap. I have been assured by Ministers on earlier occasions —no doubt with the firm intention of being both helpful and honest—that people with a learning disability are not the target of the changes, and should not experience any problems. It is pointed out that

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having a severe learning disability is, truly, a passport to the non-contributory incapacity benefit; namely, severe disablement allowance. But there seem to be too many assumptions by Ministers and their parliamentary draftsmen. The first is that severe learning disability is readily identifiable and already established; the second is that people with a severe learning disability are simply not capable of working; and the third is that those of us who see problems ahead are Jeremiahs, with our heads in the sand or in the clouds, according to taste. Perhaps sand is to be treated as cloud, or cloud is to be treated as sand, as an additional clause to Part I of the jobseeker's jobseeking variation of the jobseeker's agreement.
Perhaps I may stress that MENCAP'S Pathway Employment Service has discerned a number of facts which contradict those gloomy assumptions. To begin with, we have more than 5,000 people in open employment—or in job training, leading to full employment—and often the nature of their disability is not always self-evident. Secondly, some people with very severe and, indeed, multiple disabilities can and do work for a modest living, thus proving that they will not always fit neatly into the boxes assigned to them. I am therefore extremely anxious to ensure that when they appear in the wrong box or move between boxes they suffer as little hardship as possible.
I suspect that in your Lordships' House there will be attempts to improve the Bill in a number of relevant aspects. But perhaps in this early stage in the proceedings I may seek to be helpful by asking four questions. If the Minister is unable to respond today, I would be happy—nay, relieved—to receive an explanatory note a little later. I am all too conscious of the fact that even those whose daily business is social security find it a rather complicated subject. If I had the choice, I should rather have a considered reply than an immediate one—quite apart from the fact that I should then have time to understand the Ouija board messages conveyed by Sir William, or his spiritualist medium in the department.
Question No. 1 is: how does the department propose to monitor what happens to people with severe disabilities who seem to be disadvantaged by the new distinctions between incapacitated and unemployed?
Question No. 2 is: will the Government share their findings with interested organisations and sit down with them to consider any changes that seem to be required?
Question No. 3 is: why is the full range of supportive measures to help people back into work restricted to people labelled "unemployed" and denied to those labelled "long-term sick and disabled"?
If the aim is to encourage employers to take on board people who have not had a foothold in employment for a long time—or indeed ever—and to encourage those people to get on board, it seems to me not to be a matter of any great relevance whether they are unemployed or disabled when it comes to the point of actual employment.
I have already hinted that one of the objectives of the Bill may be to save money. It also seems to have another prime objective—that is, the need to reduce the numbers on the unemployment register. However, the department
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may find that the new incapacity benefit arrangements could in fact swell those numbers. That is a Gilbertian solution indeed!
I shall ask my fourth and final question and then I am finished—for the time being, anyway. I hope that I am not straying too far from the relevance of this Second Reading debate in asking for an assurance that charging employers for access-to-work provisions will not be introduced, for that would negate any improved incentives provided by the Bill, including those for disabled people who are searching for a job as well as those who have been offered a job. I am sure that we all share common ground in believing that disabled people need effective support while not working, and effective support to help them find and retain jobs so that they can be seen to be working in ever greater numbers.
I am sure too that we all share common ground in believing that it is contrary to the interests of disabled people, and to common sense and common decency, to complicate their lives and impede their progress by artificial obstacles. At a recent MENCAP conference, a young woman with a severe learning disability put it very clearly. She said, "I want a job; and I need money to live on". I am certain that your Lordships will agree that those are not unreasonable ambitions.
4.4 p.m.
Lord Trefgarne: My Lords, I welcome the provisions of the Bill. I enjoyed the speech of the noble Baroness, Lady Turner, who referred to the popularity of Her Majesty's Government. It is not fair to say that this Government are the most unpopular ever. I remember that in 1978 the then government appeared to be extraordinarily unpopular; and so it subsequently proved the case when the electorate were given an opportunity to choose.
Be that as it may, the Bill is warmly to be supported. The arrangements surrounding the payment of unemployment benefit, and all that goes with them, are ripe for overhaul. The Bill does exactly that. The jobseeker's allowance is clearly about improving incentives to work, removing the barriers which stop people leaving benefit and focusing the efforts of jobseekers on looking for work. The allowance will operate a simplified and more individually tailored approach to jobsearch and more incentives to find work. Surely that is greatly to be welcomed.
The existing two-tier system is wholly out of date and the introduction of a new single benefit will be simpler and easier to understand and to administer. Therefore, the unemployed will received a better service, financial support and back-to-work advice, generally provided in a single, one-stop service. That will be much to their benefit. As a result of a streamlined administration and closer targeting, the allowance will improve the operation of the labour market by helping people in their search for work, enabling them to secure better value for money for themselves and, above all, for the taxpayers and by providing a better service to unemployed people.

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Much has been made of the Bill's effect on the so-called work-shy; those reluctant to look for work with any kind of vigour or enthusiasm. It is right that the taxpayers should have some protection from those who have no intention of looking for work and who put every obstacle in the path of those who are seeking to help them. Surely taxpayers and national insurance contributors have the right to be protected from those who are not genuinely available for or searching for employment. In that regard, the rules will be clearer and fairer to claimants and to taxpayers.
That will be achieved by the two routes that will be available to the new benefit; that is, the contributory route and the income-based route. As we heard from my noble friend the Minister, those who have worked and made contributions in the relevant tax years will be entitled to benefit, regardless of means, for six months. Surely that is right. Those who remain unemployed after six months will not qualify for a contributory benefit but will become eligible for a means-based benefit. I am certain that that too is right.
I also greatly welcome the introduction of the jobseeker's agreement which will set out the jobseeker's planned jobsearch and activity and the support and guidance which the Employment Service will be able to provide. In return for benefit and advice on finding work, the claimant will be expected to make every effort to find a job. Those provisions too are very much to be welcomed.
I turn more seriously to the speech of the noble Baroness, Lady Turner. She referred to the importance of training and I agree with her. Indeed, I must declare an interest because I am chairman of the Engineering Training Authority, which will have a role to play in these matters. I am not certain that the Bill is the right vehicle for the provision of the various training schemes now in place, and nor does it provide for that. However, I wish to sound a note of warning. There is a risk that we become involved in training merely for the sake of training and as an alternative to gainful employment. It is important that training is tailored to the needs of employers as well as employees. Recently, there has been the risk of many people attending training courses simply as a means of finding something to do but with little hope of being better off at the end of the courses. To send young people on training courses of that kind is a delusion and I hope that there will not be too much of that. My own authority is obliged and concerned to ensure that the training provided relates as closely as possible to the needs of employers. I hope that that thought will continue to be in the Government's mind as they develop training courses now and in the future.
I do not believe that the Bill is an appropriate vehicle for those measures or for other matters relating to training activity. I welcome the provisions in the Bill and hope that it will find its way swiftly onto the statute book.
4.10 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, when the Minister introduced the Bill, he tried to give
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the impression that this was merely a simplification of the payment of unemployment benefits with one or two bolt-on extras which may be of assistance to the unemployed. I do not accept that premise. Indeed, if that were the case, we should not be faced today with the alarm and major opposition that has been forthcoming since the announcement of the Bill's provisions.
I suggest that the Bill has not been introduced out of concern for the unemployed. Indeed, I believe that it is a cruel, mean-minded measure which, whether or not it is intended by the Government, will stigmatise the victims of unemployment and their families. It will not stop there. It will impoverish the unemployed, and young people who have not even started their working lives will be included in that impoverishment and stigmatisation. It will have an impact on the sick, people with disabilities and carers. They will all be caught up in the Bill, which is supposedly a mere simplification. In fact, it is estimated that it will remove from benefits something like a quarter of a million people, with 90,000 people losing benefits altogether. Indeed, the savings on the face of the Bill show that the projected savings for 1996–97 will be £140 million and in the second year, £272 million. I suggest that the Bill does not take us forward as regards the extremely grave problem of unemployment.
Indeed, it takes away from those who have paid their national insurance contributions—insurance against being unemployed. People have paid for those benefits and recently have paid for them at an increased cost.
I believe that there is cross-party acceptance of the fact that unemployment is too high. I question whether Ministers really understand what it means to be unemployed. Have they seen the impact on families? Have they seen the despair, the lack of hope and the loss of self-esteem which unemployment brings with it? If one looks at the statistics in relation to people who are ill and the suicide rate, in the centre of that are large numbers of unemployed people.
I take the point made by the noble Lord, Lord Trefgarne, about protecting against people who are work-shy, but this is not the way to achieve that. It is not correct to imply —and I do not suggest that the noble Lord did so—that the majority of unemployed people are work-shy. They are not. I believe that the number of such people is so small that it cannot even be quantified.
The benefit cut from 12 months to six months is not a simplification. That is taking away money that has already been paid. In the first year of unemployment a couple over 25 years of age, where one partner is out of work, will lose over £1,100 in benefits. Their income will be cut by that amount in 12 months.
Part-time employment in Britain has been growing. There is a large increase in the number of men within that group. They are men who cannot find full-time employment. It is accepted—I believe that even the Government accept it—that part-time employment can be a bridge to full-time employment. But what do we find? The Jobseekers Bill will do absolutely nothing to help those people because all money over the first £5 will be taken away from them. It is no good saying that the compensation is the back-to-work bonus, because

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that is not compensation. If we wish to build that bridge, why do we not make available increments or raise the upper earnings limit? I welcome the change from a daily to a weekly upper limit but it is just too low to be of any real encouragement.
The issue of training always arises when we talk about unemployment. It is not just a case of training for training's sake. The fact is that 38 per cent, of the long-term unemployed in Britain today—that is, those who have been unemployed for over a year—have no qualifications. We need a better trained and more highly skilled workforce to compete in the world economy. At present Britain is 2lst out of 22 countries in the World Economic Forum league table. That is nothing to be proud of.
What should we do? We should help people to train out of unemployment. But what do we do? In the past five years the Government have cut their training budget by 40 per cent. They have cut 55,000 places in the training-for-work programme. And yet there is still a skills shortage which tells us that we need to train people. In 1993 there was a 6 per cent, skills shortage when we were still in the depths of recession. Last year that increased by nearly 100 per cent.—it increased from 6 per cent, to 11 per cent. What will be the skills shortage this year? We desperately need to do something about training, and the Bill does nothing.
Indeed, I suggest that it penalises people who try to educate themselves out of unemployment because of the change from the 21-hour rule to the 16-hour rule. That will have an immediate impact by removing 6,000 students from benefits. Indeed, a recent CBI report called for a balancing of the skills shortage and the skills needed.
I turn quickly to the jobseeker's agreement. That is a misuse of the word "agreement". The Bill condemns people to poverty in the sense that the agreement requires them to be looking for work. It is right that unemployed people should look for work. But what does the Bill condemn them to? The abolition of the wages councils has meant that today in Britain just under one third of a million people are earning less than £1.50 per hour and more than 1 million earn less than £2.50 per hour. We are telling people that if they breach the jobseeker's agreement by refusing to seek any work which is regarded as reasonable by the officer, they will lose their unemployment benefit.
A recent Equal Opportunities Commission report established to look at compulsory competitive tendering, which is the Government's policy, identified the fact that that policy had driven forward the number of people in unemployment. Not only has it done that, but it has also driven down the level of wages which people were being paid.
I do not believe that the Bill does very much at all to get people back into work or to train them for work or, indeed, to understand their individual situations and those of their families.
Perhaps I may deal briefly with the position of carers. I should declare an interest in that I am patron of the carers association on the Fylde coast area of Britain. The savings which carers bring to the taxpayer are absolutely phenomenal. It is important that we do not penalise
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those people further. I welcome the statement made by the Minister indicating that there will be changes in the Bill as it goes through this House. I look forward to debating those changes because we certainly do not wish to have a situation in which carers, who are already penalised through lack of job opportunities, career promotion and costs at the end of their lives, are penalised even further.
The Government say that the Bill has been introduced to help the unemployed. I do not accept that that is a reasonable assessment of the position. I was concerned to read of the reservations expressed by staff in benefit offices. I was also concerned to read a leaked internal departmental report about the changes which would be necessary within those offices to meet the reaction of claimants. The unions have said that they are anxious about the safety of their members because they know that the measures within the Bill will be neither perceived nor accepted as intended to work for the welfare of claimants. I would suggest that that view was accepted in the internal report which was leaked in the Financial Times. The advice in the report said that the department needed to ensure that anything which could be seen as a weapon in the benefits office is kept away from the public; that additional private interview rooms with safety measures—I do not know what they are, whether they are cages, alarm bells or two-way mirrors—should be installed; that there should be provision of closed-circuit TV, personal alarms and also of security guards.
The report also said that Jobcentre managers should have training, that clear escape routes for the employees should be provided and that they should be trained in customer aggression. We are not talking about prisons; we are talking about Jobcentres, where, under the provisions of the Bill, unemployed people will go for assistance to help them get back into work. That is the impact that the Bill will have. That was certainly the view of those who produced the report.
The Bill has many drawbacks. In overall terms, I would suggest that it does nothing in most of its areas of provisions to assist the unemployed get back into work. The unemployed need work, training to apply for such work and counselling and assistance from experienced people who are doing the work, on the basis of a joint agreement; that is, one which is real and not a one-sided agreement.
4.21 p.m.
Lord Dean of Harptree: My Lords, I like the idea of a jobseeker's allowance. It seems to be much more positive than unemployment benefit. It recognises that most people who are out of work want a job and that they should be given every assistance to get one. I am sure that all noble Lords will agree that it must be right to improve incentives to work and remove barriers to people coming off of benefit and going back into work.
I am glad that the Bill proposes one allowance instead of two. Unemployment benefit and income support were run off different engines; indeed, they did not dovetail very effectively. I believe that the new arrangements will prove to be simpler and clearer to operate for everyone concerned. I also welcome the fact that the

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Bill brings together financial support, on the one hand, and, on the other, advice on getting back to work and training. They are part of the same situation. It is only right that they should be dealt with by one organisation.
It seems to me that there is much in the principle of the Bill to commend it. I also welcome the financial incentives in the Bill, and elsewhere, to assist people to return to work. I refer to the back-to-work bonus; the improved provisions for working partners where one member of the household is on benefit; the jobfinder's grant; the job clubs; the national insurance credit improvements and the national insurance contribution holiday for employers who take on someone who has been out of work for two years. Individually, they may be comparatively small improvements, but, taken together, they should provide substantial, additional incentives and ease the passage back to work. Of course, they must also be considered against the background of the £600 million package of work incentives which was announced last autumn in the Budget. I very much welcome those provisions.
I also hope that the new arrangements will help to deal with the abuses involved in the black economy. I am not talking about moonlighting—someone who has two jobs. Such people are very often the most enterprising members of the community and, perhaps, have two jobs for a variety of reasons. For example, such a person may have two qualifications and wish to "keep his hand in" in both of them. Alternatively, in order to earn a better living for their families, such people are often prepared to work unsocial hours and undertake jobs which other people will not do. That is to be commended, provided those people declare their earnings and pay the appropriate level of tax and national insurance contributions.
The black economy is very different. It involves cheating and, sometimes, also lying. There are two aspects to it. The first is working and drawing social security benefits at the same time. Of course, that is fraud on the social security system and the taxpayers who provide the money for the system. The second aspect is that earnings are not normally declared. Therefore, no tax or national insurance contributions are paid. I hope that the new arrangements will make it somewhat easier to deal with those abuses of the black economy.
I turn now to finance, which was referred to by the noble Baroness, Lady Turner. I thought that the new model Labour Party was very keen on trying to find savings in the social security system. However, I was surprised that we did not hear anything like that this afternoon. As my noble friend the Minister mentioned, there will be modest savings in expenditure as a result of the Bill. It surely must be right that Her Majesty's Government—indeed, any government—should look out for justifiable savings in the social security budget which, after all, is very large. It is a budget which grows year by year and this month's uprating will add no less than £1.5 billion to the cost of pensions and benefits. I am one of the lucky ones who will draw a little of that by an increase in pension, for which I am suitably grateful.
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I suggest that we must take into account the fact that the total cost of the social security budget this year will be no less than £84 billion and that that will cost every working person £15 per working day. In the light of those huge and growing figures, it surely must be right for the Government to ensure that the burden on present and future working and taxpaying members of the community is not insupportable.
I note that the main saving is the payment of contributory benefit of six months instead of one year. That seems to me to be sensible when we take into account that two-thirds of those who lose their jobs return to work within six months. However, the reduction of the period of benefit as of right to six months emphasises the need for adequate support for those who are still unemployed after six months, especially those in the vulnerable groups. Concern has been expressed by the noble Lord, Lord Rix, and other speakers that some people might fall through the net after the six-month period is over. There are two obvious groups which come to mind. The first group is the disabled, who have already been mentioned in today's debate, and includes those who will not be eligible for the new incapacity benefit which starts this month.
As has already been mentioned, disabled workers are renowned for being very conscientious and good at their jobs. They often struggle greatly to hold down a job. We have another welcome feature in the Disability Discrimination Bill which has just had its First Reading in this House and which one hopes, again, will assist in that regard. However, if disabled people or those who are not in robust health are still unemployed after six months it is most important that support for them should be adequate. It is equally important that the staff who will be trying to help them understand the particular problems that they have and the difficulties that they face which are not faced by those who are able bodied. I hope that when my noble friend Lord Inglewood replies to the debate he will be able to give the House some reassurance with regard to the disabled.
The second group that I should like to mention is one which, again, has been referred to by several speakers in today's debate. I have in mind the carers; that is, those who are caring for elderly people, sick people or children. They also have special problems and needs. I welcome the big increase in expenditure on various carers' social security benefits in recent years, but it would be helpful if, again, my noble friend could give an assurance that the special needs of carers are adequately catered for in this Bill. With those reservations, this Bill seems to me sensible and practical and I support it.
4.30 p.m.
Baroness David: My Lords, I am going to speak on education and training. I hope that we can start from the premise that it is far better for an unemployed person to be encouraged and supported in his wish to study and acquire knowledge and skills he has not already acquired, and thus make a positive contribution to the needs of the country for a better qualified workforce, than it is for him to be idle or to be pulled out of a good

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training programme to take up a temporary or part-time inappropriate job. This is not what is happening now under income support regulations. The noble Lord, Lord Trefgarne, when he spoke, poured some scorn on certain forms of training. I think it may be true that some of the youth training programmes were not very good. What we want is good training leading to a qualification which will improve the skills of the workforce. That, as several noble Lords have said, is badly needed.
The National Institute for Adult and Continuing Education—an organisation for which I have the greatest respect—suggested in a briefing paper last year that the jobseeker's allowance legislation offered an opportunity to clarify the position, to resolve anomalies, and to change the whole atmosphere in which unemployed people seek to learn and reposition themselves in a rapidly changing economy and labour market. What I want to try to do today is to look at what seem to be the Government's plans and ask the Minister how reasonable, co-operative and flexible they are going to be in framing the regulations and monitoring them; and I hope he will have some positive replies when he winds up.
No one is arguing that full-time students should be eligible for benefit support while studying, nor that part-time study should be an alternative to suitable employment. Most unemployed people do not want or expect such treatment. The existence of a tiny minority seeking to use study as a means of avoiding work—
Earl Russell: My Lords, I beg the noble Baroness's pardon, I wonder whether I could ask her to withdraw one sentence she has just spoken? She said that no one is arguing for full-time students to have benefit while studying. That is not correct; I am.
Baroness David: My Lords, I beg the noble Earl's pardon and certainly withdraw that as far as he is concerned. But I do not think many people are asking for that. Anyway, what I do not want the existence of that tiny minority to do is to frustrate the learning ambitions of up to 100,000 people seeking to hasten their return to the labour market and improve their chances in life by extending their skills and knowledge through learning.
The new proposals to change the regulations from April next year so that,
"people unemployed over three months would be able to undertake further education study for up to 16 guided learning hours per week",
begin to clarify and give substance to the real position of unemployed people wishing to study, and there is confidence that colleges and voluntary organisations have the skills and capacity to design programmes within this new framework, and to offer flexible forms of continued participation to students lucky enough to gain appropriate—I stress "appropriate"—employment during their period of study.
The FEFC considers that the new limit of 16 guided learning hours is broadly equivalent to the old 21 hours of supervised study; but colleges do differ in their estimates, saying it will vary from course to course. One said that the pressure on colleges to drive down the number of guided learning hours per course will
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increase as a result of the rule change. I hope the Minister can give us some reassurance on that when he comes to reply.
But we should at last gain some consistency of interpretation from local employment and DSS officials. There have been any number of very bizarre decisions described by NIACE. The now irrelevant distinction between full and part-time courses will cease. It has been consistently argued that the old rule should apply to the students' hours and not the course—a 15 hour course could under the old system be designated full-time and a student taken off benefit. People will no longer have to declare they will give up a course if a job comes up. They may be able to continue their study by other means. That was announced last week by the DFE. I should like confirmation from the Minister that I have these plus points correct, including naturally that there will be no limit on the number of hours of private study allowed in addition to the 16 guided learning hours.
Now for the anxieties. The new JSA rules seem to be based on the assumption that work is always there if you search for it; the application of the "actively seeking work" regulations appears to be tightening with targets for officials to get people off the register; and the number of low paid, low skill, part-time and temporary jobs is growing. So that, even if a course of study is pursued as the result of advice given at a Restart interview it will not be "a positive outcome"; all the immediate availability for work rules will apply and since the Restart interviewers have positive outcomes to meet, it is unlikely that part-time education will often be the recommended path. Part-time study of 16 hours or under will not be disregarded by the Employment Service in availability for work tests. So just what questions will they, the officials, continue to ask? For example, if the course offers a qualification, will claimants be asked about their continued willingness to take unqualified work? Will they be asked if they can always be contacted by telephone at the college? One fears that such questions, experienced by many poor and vulnerable people as threatening their only source of income, will continue to deter many. Can the Minister give any reassurance that there will be more sympathetic understanding at these interviews? The targets seem to me dangerous, and I would entirely go along with the noble Earl's comment about performance related pay for these people, and would certainly support him in any amendment he puts down to that effect.
There is no serious attempt to define suitable jobs and no assurance that current pursuance of a qualification will be taken into account in considering a job's "suitability". I gather there is something called the "McJobs syndrome" because so many of these young people are asked if they will take a job at McDonald's, that being, I presume, one of the lowest paid jobs available. In the past the pursuit of a qualification has even been interpreted as proving that the claimant was not available for other jobs.
European Social Fund courses (designed for the long-term unemployed) will, unless run under the Training for Work scheme, continue to be subject to the JSA 16 hour rule. This is an absurd anomaly. Sometimes

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these will need to be short, intensive courses, including work simulation, and will naturally take more than 16 hours in one week. The hours are to be counted per week and not averaged. Some unemployed, and perhaps particularly the long-term, would clearly benefit from full-time study and a total re-orientation of their work path; yet there is no proposal to reintroduce a scheme like "Learning for Work", which offered this opportunity, and, with all its limitations, was welcomed by many education and training providers as a really useful element in any serious strategy to provide comprehensive training and education services for unemployed people.
What one hoped for, probably foolishly, was that there would be real progress in the move to change the whole atmosphere in which unemployed people seek to study from one of concession, inquiry, insecurity and even threat, to one of positive encouragement and support. That we have not got.
Ann Widdecombe's highest claim for the changes is that the same number of people will be able to study as now. That is simply not good enough. If we were serious about building a high skill, high tech. economy, we would not be looking for a pool of unemployed people to put into any part-time, temporary, unskilled jobs that come along, or, alternatively, offering low level, narrowly instrumental training programmes. We should be encouraging and supporting ever increasing numbers of unemployed people (and others yet to reach their full potential for learning) to participate in education and training of all kinds as a major contribution to eliminating the learning and skills deficit from which this country now suffers.
I trust that the hopes some people had that there would be a more liberal, imaginative and understanding scheme for the unemployed, and in particular for the 16 to 25 year-olds, will not be completely dashed. They deserve better than the Bill, and the regulations that go with it, now seem to offer. I hope that the noble Lord, Lord Inglewood, and the noble Lord, Lord Mackay, will use their best endeavours to influence the outcome in this House when we come to Committee stage so that a better Bill will leave the House than has entered it.
4.40 p.m.
Baroness Park of Monmouth: My Lords, I am on unfamiliar territory but my concerns are education and the vulnerable young. I am very sure that I should despair were I to be unemployed and without resources today in the face of the sheer bureaucratic complications that I should face in dealing with the state; and I am deeply sorry for those who will have to administer the Bill. I should also have serious doubts about the common sense of the promoters as regards some parts of the Bill. Not for the first time (the last example was the issue of student unions which the Government believed still to be the same animal as it was in the 1960s) the Government are to some extent legislating to curb an outdated stereotype—those who positively prefer to live in a squat on benefit rather than work—
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and are not considering sufficiently those today who want to work but wish also to secure at least a vocational qualification.
Of course there are still people who want to play the system. I remember two years ago an Oxford taxi driver telling me in justifiable anger about the three young men he had driven from the station to the Oxford United football ground who were discussing the useful tactic that they employed to apply for jobs but never to gain them. It was to attend in filthy jeans with a punk hairstyle and an earring, all designed to put off a prospective employer, which apparently it usually did. There are others drawing benefit and working in the black economy, as my noble friend said. Of course it is right to prevent exploitation of public money by such people. But I hope that we shall not penalise the vast majority of people who honestly want to work and to be valued by the society in which they live. I was very glad to hear the Minister make that very point.
I found great difficulty in wrestling with the acronyms and the professional jargon in the briefing that I received from many well-informed organisations—the CAB, Child Poverty Action Group, the Unemployment Unit, and many others. I freely admit to my noble friend that I may make mistakes in my comments on the Bill. However, I should like to focus briefly on the following issues.
First, in the Employment Service annual performance agreement, why are part-time educational courses not listed as a positive outcome while training for work, jobclubs, and work trials are among the 10 positive outcomes listed? We surely want the unemployed to take positive steps on their own to become eligible for employment. That means qualifications. Why, therefore, is voluntary participation in a course not explicitly recognised as a positive outcome? Since so much depends on the agreement and on the assessment made by the Employment Service officer, I urge that the Bill should clearly and unequivocally spell out recognition that a part-time course leading to a vocational qualification, or positively enhancing the education of the claimant and thus his or her employability, should be regarded as a positive outcome.
My next point concerns the decision to change the existing concession which at present allows the long-term unemployed who receive unemployment benefit or income support to study a part-time course in further or higher education for up to 21 hours of supervised study a week. Those who receive the jobseeker's allowance, which will replace those benefits, are to be allowed only 16 hours of what is now called "guided learning". Moreover, the proposed tightening up yet further of the requirement to be instantly available for work—any work—if notified, even to the point of dropping a course just when a student is about to complete it, represents an extraordinary approach to the idea of increasing the employability of the claimant. It will deal a severe blow to the economic viability of many colleges doing good or vital work in the further education sector. If numbers decrease because claimants have to give up their courses, the fees from the Further Education Council's fee remission scheme will decrease too. That could be

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serious for the institutions. I hope that there will be close consultation between the Department of Employment, the Department of Social Security and the Department for Education to ensure that one aspect of government policy does not torpedo another. It is surely vital to the country to produce as many qualified people as possible. Germany and other European Union citizens take many qualified jobs in this country. Surely we should be doing all we can to produce a skilled workforce ourselves.
It would be a sad day if the very real commitment by the Government to promote education should be negated in this vitally important vocational area by unrelated legislation in another part of the wood. It seems to me that the Home Office, too, may have some concern at the prospect of young people without a job or money on the streets. What will they do to survive?
I feel great concern, as I think we all must, that under the Bill those between the ages of 18 and 24—even those who have paid national insurance contributions— should be losing 20 per cent, of their personal allowance. Surely they eat as much as 25 year-olds—do they not, my Lords?
I am concerned, too, that the over-50s who have tried to provide for time of difficulty by saving and by taking out occupational pensions should be caught in a savings trap and see relatively modest savings depleted, and with that any hope of saving, for instance, to start a self-employed venture. That is taking away their independence.
My last plea to the Government is for really effective training to be given to those officials who will administer the legislation. That is in part where the CSA went wrong. There should, therefore, be at least a year's training before the Act becomes effective. In 1994, as a Member of the Committee of this House which reported on the poverty programme, I visited a project in Pilton in Edinburgh. The Pilton partnership between a deeply impoverished community, the district council and local industry has been very successful. One of its successes has been the setting up of the Granton Information Centre, working closing with the CAB, to help interpret the complex social security legislation so that those who are entitled to benefit could claim it. We saw a 40-page form which had to be completed, often by barely literate claimants, to secure disability benefit. We learned that the DSS officials themselves needed help from the CAB and the centre to understand the immensely complicated regulations which they had to operate.
Now there is to be yet another dense hedge of bureaucratic procedures to break through and more and more regulations on which denial of JSA may depend. The discretion given to officials who may not themselves understand the rules is great. I was glad to hear from my noble friend that everything is to be simplified. But too much power will still be in the hands of individual, overworked officials.
Perhaps I may urge the Minister most strongly to ensure that guidance is indeed clear, that training for officials in the sophisticated techniques which will be required is available, that application of the allowance is uniform, and that the Bill's objective is to help people
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back to good employment and to acquiring real skills. Not least, time must be given for the new legislation to be understood before it is applied.
4.48 p.m.
Lord Ashley of Stoke: My Lords, I could not recognise the Bill from the description given by the noble Lord, Lord Mackay. He is wasting his talent in his department. With his great diplomatic skills and capacity for presentation, he should be in the Foreign Office.
The main purpose of this distasteful Bill is to save money at the expense of unemployed people—the poorest and the most vulnerable in our society. The Bill will have the dramatic and disgraceful effect of reducing benefits for, and even removing benefits from, nearly a quarter of a million people. I cannot envisage how the Government can defend that. Few governments can be as unscrupulous as that, especially at a time when Ministers are permitting greedy executives of companies to line their pockets with millions of pounds in share options.
In the other place, there were smooth ministerial phrases about the Bill which failed to obscure the savage cuts involved. The real motive for them can be glimpsed from the occasional sentence uttered by Ministers there. The Secretary of State for Employment, for example, laid bare the basic premise of the Bill when he said:
"No one has a God-given right to decide to be idle and to live off others".— [Official Report, Commons, 10/1/95; col. 52.]
He is after the popular vote. The Minister thereby reveals an attitude to unemployed people which is not only arrogant but at variance with the facts. Unemployment is a shocking, dismaying and demoralising catastrophe. It is a personal disaster which impoverishes the person and families. It has become a social and economic disease affecting vast swathes of our society. It is not only working class people who are affected, as was the case when I was a young man. All sections of society are affected. Some 40 per cent, of our workforce have been out of work for some part of the past five years. A large number of workers are fearful that they also will lose their jobs.
I admit that unemployment is a worldwide phenomenon, but the Government have little to be proud of. The Minister said, "We don't want any nonsense about figures". I shall give the reality about the figures and not nonsense about them. Britain has lost 40 per cent, of its manufacturing capacity over the past five years. We are the only one of the top seven industrialised nations to have seen no rise in employment since 1979. Unemployment here among the unskilled is still rising. I am open to challenge by the Minister, if he wishes. Has he seen today's report in the Oxford Review of Economic Policy? It makes dismal reading. In 1993 only 36 per cent, of the working population had full-time jobs. We hear all the glowing testimonials to the Government's policy by proud Ministers, but that is a massive drop from the figure of 55 per cent, in 1975. We have a two-tier labour market, with great uncertainty for one tier.

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The economists' ultimate solution is investment as a backcloth to market labour measures. There is a difference of opinion among economists, but those economists give little support to cutting and limiting benefits. The measures which are the central theme of the Bill, contribute far more to poverty than to solving unemployment. Those are not my words; they are the views of the Oxford Review of Economic Policy.
The question today is: would earlier publication of the report have changed the Bill? I do not think so. I can almost see how ministerial minds were working in the other place: "Let's see", said the Secretary of State for Employment. "Let's take a leaf from the book of the Home Secretary. We'll go for a really good populist cause because we're a very unpopular government. All the polls say so; the local government elections will say so; every political realist says so. Let's drop the term 'unemployment benefit' and call it an 'allowance'. That's a good idea. It will then look as though we are being generous", they probably said. "Let's call it a jobseeker's allowance. That would strike a positive, friendly note. We will lose the word 'unemployment'. That is a marvellous idea. We'll just drop the word 'unemployment' from our vocabulary. The great virtue of that is that it will distract attention from the fact that there are no jobs available. It's a marvellous idea, this Bill, so let's peddle it like mad and get someone of the genius of Lord Mackay, with his brilliant presentational abilities, to put it forward in the House of Lords as one of the greatest Bills since Parliament began".
You can see the Government's mind working. All the civil servants say, "Yes, Minister, that's a wonderful idea. Press on with it". There is a phone call to the noble Lord, Lord Mackay, asking whether he will do it. He says, "All right, I'm a loyalist", so he does it. He made a marvellous speech, but it was a little lacking in realism.
I am very serious about the Bill. The Government have now begun the painstaking job of humiliating unemployed people and cutting benefits. Unemployed people now have to parade before officials to prove that they are actively seeking work. They have to draw attention to their availability. They have to write and rewrite their CVs and prove that they are highly motivated for work.
What can they expect? There are currently limits on the conditions claimants can impose, but undoubtedly there will be a tougher regime. That is the reality. Regardless of the circumstances, the unemployed person may have to agree to the dirtiest job with the longest hours, peanuts for pay and possibly even moving away from home.
The final irony of the situation is that the officials may well conclude the interview by saying: "Well, that was a fascinating discussion. There are only a handful of jobs anyhow and we have another 1,999,999 people just like you who are also jobseekers. But we will give you the allowance. If you've paid enough stamps, you can have it as a right, but only for six months, not 12 months. There is nothing for your partner. We're very sorry about that. If you haven't paid your stamps, you may get something provided you are poor enough. You will have to watch it though. If you keep the wrong
40
company at home with someone earning a small fortune like £10 a week, well, you know. Here you are, you can have it, but please keep looking eagerly for a job".
That is what will happen when the House of Commons and the House of Lords pass the Bill. That is why we shall be active in the Committee and Report stages. The marvellous speech by the noble Earl, Lord Russell, posed a number of significant questions for the Minister. I hope that his colleague who is to reply to the debate will give the assurances we are anxious to have on the questions raised.
We have come to a sorry pass under a sorry government—a government unable to refrain from hitting and humiliating unemployed disabled people. An estimated 200,000 people will lose invalidity benefit and will not receive incapacity benefit with its far more stringent conditions. Another estimated 70,000 will suffer the same fate annually. Many of them believe that they are not capable of work, yet it is judged by others that they are. The Government tell such people that if they want to appeal—and to appeal is a great right in a democratic society—they must take a cut of 20 per cent, in their income support. What kind of system is that? Alternatively, they can sign on. In doing so, they must state that they are fit for work. That is entirely the opposite of what they believe; they believe that they are not fit for work and that is why they are called "disabled".
That is a disgraceful choice to impose on disabled people. It is threatening a poverty penalty, to prevent appeals and minimise the number of appeals, even though we know from the citizens advice bureaux that most such appeals are successful. Social security doctors are far from infallible. We must face the fact that many more disabled people will seek jobs in the future—some because they want to and some because they are forced to. Many of them may have been out of the labour market for years. Others will be able to work only under limited conditions because of their disability. The £71 million that will go to the Employment Service to fund specialist help for disabled people is welcome but inadequate.
To make sure that the Minister does not feel unemployed himself and has something to talk about when he winds up, let me add to the questions of the noble Earl, Lord Russell —I want to make sure that he has a very full list when he answers—and put the following questions to him. Who are the people to be trained as advisers? What will be their background and who will train them? What form will the training take and for how long will they be trained? Will the new advisers be sensitive to the great variety of disabling conditions that they may meet? Many disabled people will have chronic but fluctuating conditions or there may be a mental element involved. Will there be training about the ways in which new technology can help to deal with disability? Above all, will there be an understanding of the discrimination which abounds in the workplace and will continue to obtain in the workplace for many years to come? Those are just a few of the questions that arise as a result of the Bill.

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Unless there is extensive help for disabled people, there is a danger that in today's tight employment market they will perpetually lose out to non-disabled people. There will be an army of people who do not qualify for incapacity benefit and yet are not sturdy enough to take part in the job market. It will be a mortifying charade to force such people to sign on fortnightly and go through the motions of job seeking when they and the employment agency know quite well that the chance of their getting jobs is virtually zero. I believe that the provisions of the Bill are unrealistic with the present level of economic activity in our society.
A sense of outrage will be felt when the provisions of the Bill are implemented. Alan Milburn, MP, has revealed advice to Ministers by senior Employment Service health and safety assessors—I am willing to be contradicted by the noble Lord when he replies—who say that Jobcentre staff are at risk of assault and abuse from unemployed claimants about the jobseeker's allowance. The report urges the introduction of "clear escape routes" and personal alarms in some instances when unemployed people receive "unpalatable and unwelcome information". It is one thing for Ministers to present their proposals to Parliament with polite euphemisms; it is quite another for unemployed people who are already suffering poverty to be told the brutal truth of sanctions and cuts. But any government pushing through legislation which provokes angry protests, social unrest and public outrage cannot claim that they have not been warned in this House and elsewhere.
5.3 p.m.
Lord Henderson of Brompton: My Lords, I shall take only two or three minutes and thus reduce the average length of time of speeches so far made in this debate. I shall be able to do so because of the quality of the speeches that have been made, not least that of the noble Lord, Lord Ashley of Stoke.
I have a feeling that we should make greater use of our time in Committee rather than on Second Reading of this Bill. We have recently been considering the way in which our time is spent in order that the House may rise by 10 o'clock at night and not have to sit until the early hours of the morning. On this kind of Bill, for which we are the second Chamber and know we have only limited powers, it might be better to have spent this Second Reading day on an extra day in Committee.
I hope that the Government will listen to the immense amount of persuasion to which they have been subjected and will indeed find another, further day in Committee than has already been allowed—at any rate, I hope that they will keep their mind open on the subject—so that we do not have to spend night after night in the Chamber after 10 p.m.
I have only a few points of general principle to state. I cannot forbear to give them. They are very brief. First, I find it an odd conjunction to consider such a mean Bill as this one, which impoverishes and coerces the most vulnerable members of our society, at the same time as tax cuts seem to he promised in the next Budget for the benefit of middle England. Secondly, I find the increase in powers and the extension of what is in effect the policing of our society to be very worrying. Thirdly, the similarity
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between the Child Support Bill and this Bill in policing powers—which will be given massively by subordinate legislation and not by this House or another place where they can be amended—is deplorable. As this Bill is skeletal, and no more, we shall need an assurance from the Government that its fleshing out by subordinate legislation will be the subject of most minute consultation and be given plenty of time. Indeed, drafts should be laid before the subordinate legislation is brought before Parliament, when either House can say only yes or no; and under the Whips' system in the other place that is always a "yes". The Bill is too important to be treated as a matter of party politics. We shall not be allowed parliamentary procedures whereby we can amend what might otherwise have been two-thirds of the Bill. So I feel that special attention must be paid to the subordinate legislation after the Bill has been enacted.
I believe that, as in other legislation, the discrimination against young people, who as a category (including students) very much demand our support and encouragement instead of treating them as though they were dependent children, is to be deplored in the Bill. Also the element of violence is extremely unpleasant. It is so implicit in the Bill. It must be remembered too that the Child Support Act has already driven several people to commit suicide. It may well be that this Bill will have the same effect, and not merely on several people but very many. I am also alarmed at the possibility of violence in the benefit offices. We have heard evidence of that possibility from the noble Lord, Lord Ashley, and others.
I have made some rather rough comments. There are some credits to be given to the Government, which I am happy to do now. It is a very great achievement to have knocked together two huge bureaucracies. I hope that a great deal of benefit will come from it. I also like the back-to-work bonus scheme and the holiday tax allowance, which no doubt will be of great benefit. Those are imaginative schemes. One should give credit for them.
As I say, although, judging by the extremely fine speeches that we have heard this afternoon, the time of this House has been well spent, I believe that it could better have been devoted to the Committee stage. I therefore propose to reserve any further remarks to that stage.
5.10 p.m.
Lord Swinfen: My Lords, although not a benefit designed to cater for the needs of disabled people, the proposed jobseeker's allowance will affect long-term sick and disabled people who will be expected to sign on following the replacement this month of sickness and invalidity benefit with the more restrictive incapacity benefit, as mentioned earlier by my noble friend Lord Dean of Harptree. I should perhaps declare an interest in the Bill in that I am employed by the John Groom Association for the Disabled and therefore earn my income attempting to help people with disabilities.
The conditions for the jobseeker's allowance are that applicants must be capable of work; they must be available for and actively seeking work, and have entered into a jobseeker's agreement. Disability organisations are concerned that people could fall between the two benefits—not sick enough for

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incapacity benefit but not fit enough for jobseeker's allowance. A narrower incapacity test is estimated to move some 190,000 people from incapacity benefit to jobseeker's allowance in the coming financial year.
The current rules allow for people to place restrictions on their availability for work, such as limiting the type, hours, location or conditions of work where those are reasonable, given the person's physical or mental condition. If the restrictions are accepted as reasonable, the individual is exempt from the requirement applied to claimants with other restrictions; that is, to show that he still has a reasonable prospect of finding work. Though Ministers stated that, as now, people will be able to restrict their availability for work by reference to the type or hours of work, it is still unclear whether the current law will be fully reproduced in respect of other types of restriction such as location or distance to work.
At Report stage in the other place the Minister said that there would be a section in the jobseeker's agreement which would enable disabled people to,
"add extra points that are not necessarily to do with hours or the type of work".—[Official Report, Commons, 22/3/95; col. 371.]
However, to me it is still unclear whether disabled people will remain exempt from the requirement that there must be "reasonable prospects" of finding work despite the restrictions.
At Report stage in the other place Ministers clarified that the claimant's own evidence about restrictions on their availability would normally be accepted. Medical evidence would only be required in a limited number of cases, when general practitioners would be expected to provide a certificate free of charge. My honourable friend Miss Widdicombe said on Report that she would ask the Under-Secretary of State for Social Security to speak to the Department of Health about the matter. Can my noble friend say whether that conversation took place? If so, what was the outcome?
People who move off incapacity benefit onto unemployment benefit after this month stand to lose out financially. There is a difference of over £32 a week between the average weekly invalidity benefit payment, which is £79, and unemployment benefit, which is £46.45. Under the jobseeker's allowance the contributory benefit will be payable for only six months instead of 12, as now. The reason for the change is that many people return to work within six months. However, that rationale does not apply in the case of disabled people, who may take twice as long as able-bodied people to find work.
The contributory jobseeker's allowance will be reduced pound for pound where people receive an occupational or private pension of more than £50 per week. Previously that applied to pensions of more than £35 payable to people over the age of 55. That rule could adversely affect some disabled people taken off incapacity benefit when they have a payment from a previous employer in recognition of their ill-health or disability. For example, a 50 year-old man with an occupational pension of £55 a week will lose £5 weekly
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from his contributory jobseeker's allowance. Under unemployment benefit that would not have been reduced.
Removing the dependant's allowance for a non-working spouse or partner means that contributory jobseeker's allowance will amount to a personal allowance only. An earlier means test could bite particularly hard for people with income or savings above the limit. That could disproportionately affect disabled women, particularly if leaving incapacity benefit, who are more likely than male claimants to have partners or spouses working full-time. It would exclude them from the means-tested jobseeker's allowance. The savings limit of more than £8,000 could exclude disabled people with capital derived from compensation for personal injuries.
The Jobseekers Bill includes provision for back-to-work schemes. That includes a bonus for people working less than 16 hours which, as I understand it, amounts to 50p out of every £1 of earnings above the earnings limit (£5, or £15 for someone with a disability premium). That is payable once someone moves into work of more than 16 hours a week. Another clause provides for a year's national insurance contributions holiday for employers recruiting people who have been unemployed for two years, which is most welcome.
Amendments to extend the provisions to people on incapacity benefits or carers were not accepted during the Commons stages of the Bill. Ministers argued that disabled people who were claiming jobseeker's allowance or income support would be covered, but those who were on incapacity benefits were not the target group for the bonus. The Government expressed some sympathy with the position of carers and promised to consider their position in the development of the back-to-work schemes. Perhaps my noble friend can tell us whether or not he will bring forward suitable amendments at a later stage of the Bill.
The Bill misses an opportunity to assist the movement of disabled people on incapacity benefit from benefit into work. The announcement that ex-carers can use a period on invalid care allowance to link to jobseeker's allowance and therefore qualify for contributory benefit, provided there has not been a break of more than 12 weeks, is welcome. However, despite the indications in Committee in the other place, I understand that that 12-week linking rule will not apply to incapacity benefit. That means that people on incapacity benefit will have only eight weeks in which to try out work and requalify for their previous level of benefit. There was also no acceptance of the use of pilot schemes to test out other models of a partial incapacity benefit.
When opening the debate my noble friend Lord Mackay of Ardbrecknish said that the Government will protect people with disabilities.
I hope, therefore, that he will look kindly upon amendments that I and others will table to improve the position of disabled people as the Bill progresses through your Lordships' House. I took considerable note of what was said by the noble Earl, Lord Russell, in relation to the number of regulation-making powers

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within the Bill, which is quite extraordinary. Perhaps my noble friend will bring forward at the next stage an amendment to retitle the Bill the "Henry VIII Bill".
Clause 3 relates to the question of partners. I find that to be a particularly difficult concept. What is a partner? How long does one have to remain in a partnership? Are partners always of the same sex? Can they be changed frequently? There does not appear to be any real watertight legal definition of that term. I would have preferred to see the term left as "spouse".
5.20 p.m.
Lord Monkswell: My Lords, I must crave the indulgence of the House in the presentation of my remarks because I may not be as articulate as I would normally hope to be. I am suffering from 'flu at the moment and so I ask the House to bear with me.
I want to say a few words about the background to the Bill, to touch on what the Government are trying to do and then to suggest what will probably be the result of the Bill. Before I do so I think it is worth reflecting a little on my own experience. I have been unemployed three times during my working life: once for a period of about a week in the 1960s, but I obtained employment fairly quickly thereafter; once in the 1980s for 12 months; and once in the 1990s for 11 months—to date.
The noble Lord, Lord Ashley of Stoke, pointed out how British manufacturing industry had been decimated in the recession to which we have been subjected under the Tory Government of the past 16 years. I can remember a trade union official telling me in the mid-1980s that Margaret Thatcher and Geoffrey Howe had done more damage to British manufacturing industry than Hitler and Goering in the last war. That is a fairly strong statement, but it is quite intriguing to think that after the war this country was capable of building ocean liners. We built quality motor cars for affluent people. We built a number of motor cars —not just Jaguars and Rolls-Royces but Rovers and one or two others. What is the situation now? We seem to be incapable of building ocean liners to the requirements of P&O. There seems to be quite a fashion among rich people in this country to buy prestige motor cars that are not made in this country. I am talking about BMWs, Mercedes and so on.
The whole concept of unemployment benefit as we have known it since the war is built on the basis of trust—the trust that the Government, of whichever party, would run the economy on the basis of full employment. That was part of the bargain. The other side of the bargain was that the individual agreed to work. The payment of unemployment benefit allowed for dislocations in the economy; it provided some fluidity in the economy and it enabled change to take place without undue hardship to the individual. The intriguing point is that it was actually paid for by the individual through national insurance contributions. For the past 15 years this Government have broken that trust. They have said in effect that the job of government is not to run the economy on the basis of full employment; that the job of government is to run the economy on the basis of some modern gold standard and that it does not matter about unemployment. The
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implication of that is mass unemployment. However, the old mechanism—the payment of unemployment benefit—has continued until the advent of this Bill.
Why are the Government introducing the Bill at this time? A number of speakers have mentioned the escalation in the social security budget. The Government would accept that the reason they are introducing the Bill is to save money—the way they put it is that it will save taxpayers' money. But it is money which people have contributed through national insurance contributions. It is not the Government's money; it is the workers' money in the sense that it is an insurance fund.
A number of eloquent contributions this afternoon have dealt with some of the implications of the Bill. The risk of violence in the unemployment offices has been mentioned; the increase in poverty that individuals and their families will experience has been mentioned; the ludicrous situation that, unless changes are made to the Bill, people will be denied a sensible opportunity of gaining education and training has been mentioned. One of the points that has not been mentioned is the effect that the Bill will have on marriage and on people living together. The noble Lord, Lord Swinfen, touched on that point when he suggested that the word "spouse" should be used rather than "partner". What will be the effect on marriage?
When a man is made unemployed it is an enormously stressful time for that person as an individual and for the family at large. With unemployment benefit as we know it today the payment as of right of a non-means tested benefit for 12 months provides a cushion to that feeling of lack of self-worth and the feeling that the spouse or the partner of the man may have that he is not contributing to the household, especially when the Government keep saying that the reason we have unemployment is that people are not prepared to work, as opposed to the fact that they cannot get a job. That has an effect on families and on the relationships between people. For quite a large proportion of families that line is held because the man is contributing something—he is contributing unemployment benefit to that household's income for 12 months. One of the effects of the Bill will be to restrict that to six months.
One of the problems that I can see—I am sure that if the Government were prepared to listen to sociologists who work in the field they would probably see it in similar terms to myself—is an increase in the breakdown of marriage. That is part of the problem, but the position is a little worse than that. One of the other effects is that, in trying to do the best for their families, men may leave their wives and go and live in a flat somewhere in order to ensure that they can claim income support. The flat rent will be covered by housing benefit. They will then have some money of their own which they can contribute. What will be the net effect of that? The net effect will be a waste of national resources. Instead of having a family living in one house there will be a divided family in two houses. It is a wasteful use of housing accommodation.
One of the other effects of the Bill will be to drive down unemployment benefit, income support, national pension provision and student grants. What will the Government do with the money they save? They will

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give it back to rich people in the form of tax cuts. What will be the net effect of that? Those rich people will buy BMWs and Porsches and go on holidays on the "Oriana", which will have a negative effect on the British economy; whereas if those benefits were increased, the people would spend their money on British goods and services. That would increase employment and there would be a virtuous circle.
It is a little too late for this Government, but I hope that we can persuade, as I am sure we can, some noble Lords on the Government Benches—we have heard some interesting contributions today—to make some changes to the Bill in order to make it a little less pernicious than it otherwise would be. But the real salvation will be the next Labour Government.
5.30 p.m.
Baroness Nicol: My Lords, I intervene very briefly. My name was on the list of speakers, but I withdrew it in anticipation of a personal difficulty which, I am happy to say, did not arise. I do not normally take part in employment Bills, but I find some aspects of this Bill so offensive that I am quite unable to remain silent. However, today I shall respect the conventions about speaking in the gap and simply put on record that I hope to be able to support my noble friends in improving this Bill at the later stages.
5.31 p.m.
Baroness Hollis of Heigham: My Lords, since January and through to July, this House has been and will be discussing and debating four social security Bills. We have had already the Pensions Bill; today we have the Jobseekers Bill; soon, there will be a disability Bill and soon after that a Child Support Agency reform Bill. Three of those Bills we on this side of the House will and do broadly support, although I have no doubt we shall wish to amend, strengthen and improve them.
But not this Bill. It contains a sprinkle of small goodies which have been repeated tonight, such as the back-to-work bonus, the national insurance employers' holiday, the roll over of housing benefit and council tax benefit, which we all welcome. But the core of this Bill we believe to be nasty and pernicious because, quite simply, it takes as a starting point the blaming of the unemployed for their unemployment and therefore seeks to make their life on unemployment benefit, to coin a cliché, mean, nasty, solitary, brutish and short.
But, despite the speech of the noble Lord, Lord Mackay, the problem is not those who will not work but could, but those who want to work but cannot. There are probably 5 million people today who are seeking work but cannot find it. There are 3 million fewer full-time jobs in the economy now than there were in 1979. Even though wage rates have fallen for the lower paid—1.25 million people earn less than £2.50 per hour, as many of my noble friends have cited today—there are still eight or 10 claimants for every registered vacancy. As my noble friend Lord Ashley quoted, we have had today the devastating report from Oxford which shows a fall in the number of men in full-time
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work. Having wrecked our manufacturing economy and made the employed unemployed, the Government now finger them for their unemployment, and hence this Bill.
Beveridge said that,
"The only satisfactory test of unemployment is an offer of work".
What we have instead in this Bill is a jobseeker's agreement—not, as Beveridge would have it, that if one seeks work one will obtain it, but that unless one seeks work which is not there one will not get benefit for being unable to find it. That so-called "agreement" is going to be reinforced by a deep cut in benefit. Not only will contributory benefit fall from 12 months to six months, but in all sorts of other nasty ways, including the removal of the adult dependant's allowance, age reductions, the tightening of part-time study work and the harsh treatment of redundancy money, its financial value will be cut. As the noble Lord, Lord Henderson, so rightly said, in the process some of the poorest and most vulnerable members of our society are still further attacked—that is to say, women, the young, the disabled, the homeless, old and redundant men and the longer-term unemployed.
So we oppose this Bill as my noble friend Lady Turner so eloquently argued. We despise its principles—no, they are not principles—we despise the ideology that informs it. We oppose it on four main grounds. First, as many noble Lords and the noble Baroness, Lady Park, have mentioned, we object to the authoritarianism of this Bill. This jobseeker's agreement is not an agreement. As my noble friend Lady Dean said, there is no equity of contract; it is a directive backed by powers to impose benefit penalties covering highly personal matters such as appearance and behaviour at interview. How many holes are there in the jumper and how long does the hair have to be before one risks losing benefit? What many of us find so offensive about the new Right, Tory ideology is that the Bill demonstrates a deeply unpleasant reading of human nature. It assumes the worst about people. They are workshy, scroungers and layabouts unless they are browbeaten or penalised, not into work but into the fruitless and demoralising search for work that does not exist.
The Department of Employment, the DSS and all the major research foundations, have found abundant evidence—and I know the Minister knows it—that the unemployed are desperate to work. We have plenty of research to the effect that single parents, the disabled and the long-term unemployed all want to work not just because of the money but because of the need for sociability and self-esteem. What is stopping them is not lack of moral fibre, the lack of a punitive jobseeker's agreement or a too-generous benefit level, but the lack of childcare for women, the lack of suitable skills for older men with manual skills; discrimination and poor health records for some disabled people, or limited access to and information about the labour market. Above all there is the loss to our economy of about 5 million full-time jobs.
The problem is not because they are workshy, choosy or because they are not accepting wages that are not realistically low enough or because they are receiving benefits which are unrealistically high. Over one half of

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the unemployed receive in benefit less than one half of what they last received when in work. That is some incentive! As the department's own social security advisory committee has argued, in times of high unemployment actively seeking work rules and jobseeker's agreements should be eased and not tightened. Instead this Bill pushes in precisely the opposite direction, to our shame.
The second objection to this Bill is because it increases the poverty of the unemployed. Not surprisingly, the Minister said very little about that. That is because, as my noble friends have said, 90,000 people will lose their benefit and 150,000 will receive between 20 per cent. and 70 per cent. less in benefit. Existing benefits are already far from generous. Already over one half of unemployed men fall behind with their rent, council tax, mortgages and fuel bills. They will now move even deeper into debt. Only a short while ago this House raised the national insurance contribution by about 10 per cent., raising an extra £2.2 billion for the Treasury. Now that same insurance-based benefit is being cut from 12 months to six months and thereafter it will be means-tested.
But is not just that: because the Government are not content they are putting on some pretty unpleasant topspin. If one wants or needs to claim an allowance for one's wife because one has young children and the wife is not in work, then one is not allowed any contributory benefit at all. One moves immediately to means-tested benefit, whereupon one is promptly penalised for any modest savings that one might have, either built up over the years or perhaps a redundancy payment. If a woman, the situation is even worse. Having paid national insurance contributions, 60 per cent. of women will lose their jobseeker's allowance because their partner is in work and it is means-tested. Not, therefore, being eligible for benefit, those persons will usefully disappear from the unemployment count.
This legislation also hurts and damages disabled people, who will find the simplistic and unrealistic "either/or" test of fitness or unfitness to work for incapacity benefit interlocking with a similar simplistic and unrealistic approach in the jobseeker's allowance so that, as many noble Lords such as the noble Lords, Lord Swinfen and Lord Rix, and my noble friend Lord Ashley have argued tonight, those with fluctuating conditions, with less severe mental health problems or with learning disability difficulties or those whose pain and fatigue are cumulative will find themselves barred from incapacity benefit but unable to meet the jobseeker's agreement and may be left with nothing at all.
The Bill deepens the poverty of young people. That was the special concern of the noble Earl, Lord Russell. Although they have paid national insurance at the standard rate, those under 25 will nonetheless see a 20 per cent. cut in benefit whatever their home responsibilities.
The Bill also worsens the poverty of the single homeless, who may be told that their first step, under the jobseeker's agreement, will be to get accommodation. That often requires a month's rent in advance, which they cannot find. So, because they are
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homeless—and remain homeless—they will be deemed to have failed the jobseeker's test. On what then will they live?
I think that I am right in saying that, for the first time in the history of the welfare state, potentially large groups of adults will have no benefit—no legitimate income whatsoever—once the Bill becomes law. I ask your Lordships to think of the implications of that. In the United States, where single men are not entitled to a legitimate benefit, they get their income illegitimately, off the streets, and 2 per cent. end up in prison. One might think that that is a rather expensive form of income support.
Thirdly, we object to the Bill not only because it is authoritarian and demoralising to the unemployed and not only because it deepens their poverty but because, while doing so, it will increase, not decrease, our public expenditure on benefits—the arguments of the noble Lord, Lord Trefgarne, notwithstanding. Such a Bill is not only indecent hut—almost as unforgivable—it is stupid also. I shall seek to follow my noble friend Lord Monkswell in explaining why.
Let us take the case of a husband who is in work and whose wife is in part-time work earning perhaps £80 per week. They have two children. They are work-rich. If the husband loses his job, he will get contributory benefit for the first six months and his wife will remain in work. Some benefit will be paid, such as housing and council tax benefits, totalling perhaps £109. However, after six months, the husband will move on to means-tested benefits if he is among the third who are unable to find work. If his wife remains in part-time work, his benefit will be docked virtually pound for pound. With the extra costs of work, such as clothes and travel, it will not be worth her working, so she will stop work. That household is now work-poor. Both are now on benefit and will need additional allowances, such as full housing benefit, full council tax benefit, free school meals and free prescriptions. Their total benefit bill will increase from £109 per week to £180 per week. Precisely because it had been means-tested, we would be paying more in benefit than would have been the case if the benefit had been contributory. If the wife had remained in work, she could have continued to float them off the benefit trap. Instead, we as taxpayers are paying more than £70 per week more in benefits than would be the case if the family were not means-tested.
That is stupid. Indeed, it is even worse—precisely because both husband and wife have now become so dependent on benefits, the husband would need to earn about £200 per week to spring them off benefits. He cannot—and so they will not be able to come off benefits. They are locked into benefits, and the longer they remain so and the more out of touch with the labour market they remain, the harder it will be for them to get back into work. Means-testing will cost us, as taxpayers, more and for longer. That is perverse. It takes some doing for a government to produce a Bill which simultaneously constructs a poverty trap, a dependency trap and a savings trap, but the Government have managed all three. When will the Treasury learn?
Finally, we object to the Bill because it does not do what it says that it will do in its Long Title, which is,

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"to promote the employment of the unemployed".
As my noble friend Lady David and the noble Baroness, Lady Park, said, nowhere is that more evident than in the 21-hour study rule. We all know that we need to skill and educate our workforce. All of the research shows that general educational qualifications are at least as valuable as vocational training in obtaining work, yet it is proposed not only to cut benefits for those in part-time study for more than 16 hours per week, but, if someone is in part-time study for only five hours per week but nonetheless has paid fees of, say, £100 for a computer course or for lessons to teach them to drive heavy goods vehicles, the fact that they have invested so much of their own savings in that course is taken as evidence that they are not sufficiently committed to seeking work. Again, that is stupid. Such people will be required to take temporary, part-time, insecure, low-paid work rather than being allowed to become skilled (at their own expense) for useful and decent work. Again, that is short-termism of the worst sort. In this Bill, we see not efforts to promote the employment of the unemployed, but efforts to harass, police and coerce them—and to cut their benefits.
Back in December 1992 this House passed the actively seeking work regulations. But that did not produce the effect for which the Government had hoped, which was to reduce benefit levels. That was precisely because the Government found that people were actively seeking work. So, in April 1994, the target for disqualifying people from benefit was doubled to 150,000 per year. I ask your Lordships to note that we are talking not about a target for getting people into work, but about a target to disqualify them from benefit. What a goal at which to aim: "Get 150,000 off the books!" And it is on those new operational targets that staff performance and performance-related pay may be based. The inescapable conclusion, which I am sure is as distasteful to the staff as it is to these Benches, is that benefits staff will earn more if they ensure that benefits claimants and up getting less. That is the ugliest of all social contracts, yet at the same time the chief adjudication officer worries about the quality of the decision-making. As the noble Earl, Lord Russell, pointed out, the annual report of 1993–94 found that 92 per cent. of appeal decisions were unsatisfactory.
There we have it: the Minister professes to be worried by the workshy; we are worried by the work-poor. I ask your Lordships: in what way will the Bill create one extra job'? What we do know is that it will humiliate and impoverish the unemployed while simultaneously adding to the benefits bill that we shall all end up paying. As the Oxford Review of Economic Policy, which was quoted by my noble friend Lord Ashley, shows today, so-called labour flexibility and making benefits conditional upon job search are irrelevant. What matters is investment and the skills bank to exploit that.
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As other noble Lords have said, we have had 15 wasted years and another wasteful Bill. It is wasteful of people, wasteful of opportunity and wasteful of money. We have nothing but contempt for it.
5.48 p.m.
Lord Inglewood: My Lords, the Government are committed to giving unemployed people a better chance of taking a fair share of the increasing number of available jobs. The new jobseeker's allowance will play a vital part in targeting our help on every individual who wants work. It is designed to meet the needs of unemployed people from the time they start to look for a job until they are back in work.
We have had a useful and wide-ranging debate this afternoon about the interface between the labour market and the benefits system. As was made clear by the noble Earl, Lord Russell, and the noble Lord, Lord Henderson, much of our debate has been not about the Bill, which is the skeleton of the new system, but about the policy details which will be attached to it in secondary legislation.
There is a consensus in this House that the priority must be to help people back to work. I agree. I believe that we have shown in this debate that JSA will do this. Nonetheless, a number of important concerns have been raised about the impact of the new benefit. Whilst I believe that those concerns are unfounded, I should like to address some of the points that have been raised. First, the jobseeker's agreement provides a new focus on the experience and actions of unemployed people as individuals. Each has different needs and will follow different paths in the labour market. The jobseeker's agreement will enable each jobseeker, and the Employment Service, to plan the most effective steps back to work for that person.
The agreement will ensure that each jobseeker fully understands his duties and responsibilities in return for the benefit that he receives. At the same time, it will ensure that he receives expert advice and is aware of the help and services that the Employment Service is able to offer for successful jobsearch. To say, as was intimated unintentionally, I believe, that the Employment Service does not put its efforts in to finding work for those it is helping is a calumny. Each agreement will set out the terms of the jobseeker's availability for work, including any restrictions that he wishes to place upon it and the steps he will take to look for work. That will bring greater clarity to the conditions for benefit. But the agreement itself will not change the conditions for benefit. As my noble friend the Minister of State has made clear in his opening, the conditions remain those set out in the legislation.
Earl Russell: My Lords, is the Minister giving an assurance that regulations will not change the conditions of benefit? If so, that is very welcome.
Lord Inglewood: My Lords, referring to Clause 6, it is clear that the subject matter of the regulation is what is contained in subsection (2) (a) and (c). Those paragraphs simply define and interpret the law to the facts of the particular case, according to my understanding.

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In introducing the initiative of the agreement we have sought to ensure that the jobseeker is fully protected against being required to take any unreasonable steps. If an agreement cannot be reached, both the jobseeker and employment officer will be able to refer proposals for an agreement to independent adjudication and appeal.
A number of associated points were raised. For example, the noble Baronesses, Lady Turner and Lady Hollis, raised the question of the Employment Service having a target for disallowing benefit. This is not a target for disallowance or suspension of benefit. It provides a requirement for Employment Service staff to meet high standards of quality and accuracy in the submissions that they make to the independent adjudication officers. A question was also raised about the reduction in the contributory period for the jobseeker's allowance. It is important to appreciate that this is not a contributory scheme. The national insurance scheme is a pay-as-you-go scheme, and it is an established principle that Parliament can alter the rules with reasonable notice.
I turn to the proposals for jobseeker's directions that have received some criticisms. I do not accept them. Of course, there may be occasions when a jobseeker is not prepared to accept the help offered to him and will not agree to make reasonable efforts to secure a job. In those circumstances, it is entirely reasonable that the Employment Service adviser should be able to require the jobseeker to make the most of the available opportunities, whether it be to undertake training or to improve jobsearch skills. It goes without saying that claimants will always be treated reasonably and fairly. Any decisions to impose a benefit sanction will be made by an independent adjudication officer. He will decide whether a direction is reasonable in the light of the claimant's circumstances. No sanction will be imposed on a claimant who can show that he has good cause for refusing or failing to carry out a direction. Benefit will continue to be paid in full until the adjudication officer has made a decision.
The noble Earl, Lord Russell, asked about the status of the adjudication officer. He is an independent officer and is ultimately subject to the rules of natural justice in the exercise of his tasks. We regard it as important that decisions on questions that arise from claims for jobseeker's allowance will be taken by independent adjudication officers. I emphasise that there is no truth whatsoever in the suggestion that decisions on JSA will be privatised.
The introduction of JSA will mean a number of changes to the manner in which adjudication decisions are taken in the Employment Service and in the Benefits Agency. We are currently considering those changes and are continually looking at ways to improve the speed of adjudication decisions. If locating some adjudication decisions closer to the work with individual jobseekers will speed the process of adjudication and give claimants a better service, it is right that such ideas should be properly considered and piloted if appropriate. I hope that your Lordships will welcome such a commitment to improving services.
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The noble Baronesses, Lady Turner and Lady Dean, together with the noble Lord, Lord Ashley, raised the question of the possible danger in Employment Service offices during the exercise of their jobseeker's allowance functions. The functions previously carried out by the DSS and the Employment Service have been brought together. The document to which reference was made was one that was leaked but not taken further forward. Clearly, it is important that there is safety for staff in the offices. That is a matter which must be properly taken into account. At the same time we must make sure that the premises are user-friendly for those who are to go into the offices. I assure my noble friend Lady Park that proper training will be given to those who are involved in administering the new system.
A number of noble Lords, in particular the noble Lords, Lord Rix and Lord Ashley, my noble friends Lord Dean of Harptree and Lord Swinfen and the noble Baroness, Lady Dean, raised anxieties about disability issues. Throughout the planning of the new benefit the Government have been concerned that we should include and not exclude people with disabilities, and that we address their needs specifically and not assume that somehow they will fit in. No disabled person need face exclusion from both incapacity benefit and JSA. There will be no grey area between the two benefits. If a person is found capable of work through the new tests for incapacity benefit that decision will apply also to JSA. Of course, all JSA claimants must be available for employment, but we recognise that some people's mental or physical condition may cause them difficulties in making themselves available for the full range of employment opportunities. Therefore, we will make specific provision in JSA that they should he able to restrict their availability to the hours of work that they are able to undertake within the limits of their condition.
The Employment Service offers a range of specialised services to people with disabilities. Every week they help over 1,000 disabled people into work; and next year they aim to do even better. The new challenging targets for the Employment Service announced last week will call for that service to place 75,000 in jobs, the highest total ever.
The noble Lord, Lord Rix, in Gilbertian mode, asked me four questions. Since I reply in my capacity as captain of the Yeomen of the Guard, I will reply fully to him in writing, if I may.
The noble Lord, Lord Ashley, raised the question of discrimination against disabled people. This is a matter that will be fully and widely dealt with in the context of the disability Bill that will be discussed in this House before too long.
My noble friend Lord Swinfen raised the question of the cost of medical evidence in cases of restricted availability. He referred to some remarks that had been made by my honourable friend the Parliamentary Under-Secretary of State in the other place. This matter is still under consideration, and we shall return to it at Committee stage.
Another group whose special needs your Lordships are concerned about are those jobseekers with caring responsibilities. As my noble friend the Minister of State emphasised, the Government accept the special

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circumstances and needs of these people. We will allow them to restrict the hours of their availability to fit in with caring responsibilities. We have also responded to concerns that carers can lose entitlement to contributory unemployment benefit if they have been receiving invalid care allowance for some years and earned no national insurance contributions during that time. If their caring responsibilities come to an end, their entitlement to contributory JSA will he based on their contributions record before they claimed invalid care allowance. That further underlines our commitment to those people who devote themselves to caring. I very much hope that that will reassure the noble Baroness, Lady Dean, and my noble friend Lord Dean of Harptree who raised those matters.
As has been mentioned, on many occasions the House has debated the help and support which the Government provide for 16 and 17 year-olds. I should like to begin by emphasising once more that the Government guarantee every young person who is not in employment or full-time education a suitable training place if they want one. That comes with an allowance which in many cases is topped up by a trainer. Most young people need not, and should not, look to the benefit system. They should not become dependent upon benefit.
We are spending £676 million on youth training in England—a significant investment in the future of our young people and the nation's economy. My noble friend Lord Trefgarne made the point about the lack of constructiveness of training just for the sake of training as opposed to training to help people, and that was a point that was well taken.
If young people are in a vulnerable group, or if they are at risk of severe hardship because a suitable training place and allowance have not been provided, we will provide for them and continue to do so. There is no change in policy in JSA in that respect. But young people should take any suitable opportunity of training, or work with training, that is offered to them. A minority of young people should not be allowed to abuse the system by rejecting without penalty the help offered. That is why we are ensuring in JSA that there is a clear and fair system of sanctions for young people.
The noble Earl, Lord Russell, and my noble friend Lady Park asked why the allowances for those under 25 are not the same as those for a higher age group. The answer is simple. It is that they do not have the same earning expectations and commitments as those who are older. At the same time, I must emphasise that, where there are families, they of course are entitled to income-based JSA like any other family.
A number of speakers, in particular the noble Baronesses, Lady Dean, Lady David, and Lady Hollis, and my noble friend Lady Park, urged the Government to look further into the matter of benefit provisions to allow unemployed people to study while still receiving benefit. Full-time students are not allowed to claim unemployment benefits, because it is not their first priority to find a job. Those who wish to study full-time should look elsewhere for support. The benefit regime—
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this is an important distinction—should not become an alternative source of funds for education provision. That was a point made by the noble Earl, Lord Russell.
Of course I accept, as the noble Baroness. Lady David, said, that courses of study can help unemployed people to get back to work. That is why unemployed people are currently allowed to study part-time and to continue to claim benefit, provided that they remain available for and are actively seeking work. That will continue under JSA. But the current rules are becoming increasingly difficult to administer.
Baroness David: My Lords, perhaps I may ask the Minister a question. Will they he allowed to continue their course if they are being asked to do an unqualified job, which is something that will interrupt their training and not he worthy of them?
Lord Inglewood: My Lords, the noble Baroness's question is a hypothetical one. The crucial point here is that the way further education is going, as I understand it, means that there is frequently considerable flexibility in how the learning is presented. We understand that in many cases it is possible, if there appears to be a clash, to find a mutually satisfactory outcome by negotiation.
As I said, the current rules are becoming increasingly difficult to administer, and we have faced calls from all sides for greater clarity in the arrangements. That is what we shall achieve with the JSA. People claiming JSA will be able to enrol on FEFC-funded courses of up to 16 guided-learning hours per week. There will be no such change in higher education, where the full-time/part-time distinction is still recognised, and will continue. There will he no restriction on private study, provided that people remain available for work. I hope that that confirms the point raised by the noble Baroness, Lady David.
The debates over those changes, especially in earlier stages of the Bill in another place, have been characterised by misunderstanding, so let me make it clear: this is not an exercise in cutting provision. The same number of unemployed people (about 80,000) will be studying and claiming benefit. On the contrary, it introduces a clear and workable regime, and should he welcomed as such.
The noble Earl, Lord Russell, and the noble Lord, Lord Henderson, expressed concern at the use in the Bill of delegated powers. The House takes very seriously its responsibilities for scrutinising the use of delegated legislation, and it is right to do so. But I think that it will by now have become clear to your Lordships that the Bill deals with extremely complex and detailed issues—issues which it would he inappropriate to draw into primary legislation.
It has long been recognised that the nuts and bolts of social security rules should be issues for regulation and not primary legislation. Social security legislation needs to he flexible to cope sensitively with changes in circumstances; with changes in operational requirements; with a labour market of many facets. That can best be done through secondary legislation.
The Select Committee on Delegated Powers will, I am sure, examine in great depth the Government's proposals for secondary legislation. We have given the

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committee a very detailed account of the Government's policy and our reasons in each instance why we believe secondary legislation is an appropriate vehicle. Where our intentions still remain unclear from the face of the Bill we will of course explain our policy proposals in Committee.
Very many of the powers in the Bill carry across provisions in the 1992 Social Security Acts. As far as possible the Bill proposes the same procedures for control and scrutiny of delegated powers. It seems to the Government sensible to follow what Parliament has found satisfactory in the past. The Bill therefore ensures that all regulations made before the allowance is payable will be subject to affirmative resolution, I am sure that your Lordships will wish to consider the regulations when they are brought before you.
Pilots brought forward under the new power in the Bill to run pilots of regulations under JSA and the income-related benefits will also be subject to affirmative resolutions. I believe that it is right that your Lordships should be given the opportunity to examine and debate on each occasion the Government's proposals under that unprecedented power.
Earl Russell: My Lords, I am grateful to the Minister for what he has said about the opportunity to discuss. Will he tell us how the House can give or withhold its consent?
Lord Inglewood: My Lords, there is a convention on how those matters are dealt with. Let us see what the memorandum says, and then, if noble Lords wish to raise any different matters, that may be the appropriate moment to do so.
The Bill is a comprehensive, coherent and innovative measure, as my noble friend Lord Trefgame said. It is part of a wide-ranging reform of labour market and benefit measures. It is comprehensive because it does what no government of either party have attempted for 80 years. It creates a single system of support for unemployed people while they look for work. Where there have been two benefits, there will be one. One benefit with one set of rules means clarity and simplicity. It means better service for unemployed people.
The Bill is coherent because it is informed by an approach which the Government have applied with consistency and conviction. We have created a climate in which businesses can flourish and so create jobs. We have cut down on the kind of public spending which costs jobs. We have liberated enterprise and the ambition of individuals. We have promoted active labour market policies to increase the responsiveness of the workforce to changes in the world of work and to help people back into jobs.
We should not forget that recently the European Community pointed out that in our country it is no job rather than low pay which is at the root of poverty. The results are clear to see. Unemployment has fallen by over 600,000 over the past two years and is now lower than in all major EU countries.
As my noble friend Lord Dean of Harptree pointed out, the Bill is innovative in the incentives it introduces to encourage jobseeking and the take-up of work. In
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doing so it creates real winners: the 150,000 winners who will benefit from the back-to-work bonus; the 120,000 winners who will be covered by the NICs holiday; the 200,000 extra people who can take advantage of employment on trial; those who will be guaranteed their existing rates of housing benefit and council tax benefit in the first weeks of starting a new job; those whose partners will now be able to work up to 24 hours without the work affecting the family's benefit.
Our proposals for jobseekers will help Britain to generate more jobs. They will help unemployed people to find work; they will strengthen Britain's economy and will give better value for taxpayers' money. They will be welcomed by those who want to sec a prosperous economy, the only source of all benefit payments, and who want to help unemployed people achieve their main goal: a job. I commend the measures to your Lordships and I invite the House to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Charities (Trustee Investments Act 1961) Order 1995
6.10 p.m.
Baroness Blotch Baroness Blotch rose to move, That the draft order laid before the House on 13th March be approved [14th Report from the Joint Committee].
The noble Baroness said: My Lords, this order would use powers in Section 70 of the Charities Act 1993 to modify the effect of the 1961 Act in relation to charities. Central to the purpose of the order is the importance of achieving an appropriate balance between risk and return in relation to a charity's investments. What is at issue here is the best use of charities' assets; in the first instance by way of investment so as at some time in the future to secure effective work by charities. Also relevant are questions of accountability and safe keeping where possibly substantial assets have been donated by the public and are being held on trust by the charity.
Trustees are subject to important obligations of care in relation to such assets and must in general avoid risk. When the Trustee Investments Act was enacted in 1961 it was, therefore, an important liberalising measure, allowing trustees to invest more freely. In particular, it introduced the classifications of "wider-range" investments, such as equities, and "narrower-range", such as government gilts. The Act requires that where trustees divide assets for investment they must do so equally—50:50—into the two classes. The Act also requires trustees to obtain and consider proper investment advice and to have regard for the suitability of investments and the need for diversification.
We recognise that there has been concern in relation to the restrictions these provisions have imposed for charities. In addition, professional investment advice has now been strengthened by regulation under the Financial Services Act 1986. Concerns in relation to charities were voiced particularly by the deregulation task force on charities and voluntary organisations, which reported in July last year. The task force review was an important exercise and the Government have responded very

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positively to its many recommendations. The number of recommendations has meant that to give proper consideration to each we have had to prioritise the action that we take. Already we have made some changes to the Charities Acts of 1992 and 1993 through the Deregulation and Contracting Out Act 1994 and have taken careful account of their relevant recommendations in provisions we brought into force last month and in an important consultation document issued recently.
The deregulation task force also recommended a modification to the effect of the Trustee Investments Act in relation to charities and, indeed, other trusts. The Government accept the case for change. This order would mean that, where charities divide funds for investment in pursuance of the 1961 Act, three times as much money would be invested in typically higher growth, wider-range investments, compared to more secure, narrower-range investments—a change from a 50:50 split to 75:25. This is a good and worthwhile measure.
I can also inform your Lordships that last week the Treasury issued a consultation document inviting views by the end of June on the proposition that a similar change should be made in relation to trusts generally, using powers in the Trustee Investments Act.
The present order does not meet in full the recommendations of the deregulation task force, which proposed a change to a 90:10 split and suggested that consideration should be given to allowing further investment powers beyond those permitted in the definition of "wider-range" powers. I hope that your Lordships will recognise that the current order is, at the least, a substantial move towards that recommendation. The Treasury proposal for further reform is another step in that direction and in that case is the maximum extent to which the relevant modification can be made without amendment to the primary legislation itself.
Further amendment is, of course, possible in principle. I am reasonably sure that those who may wish to argue for such change will continue to do so. However, at this stage, the Government's view is that a change to 75:25 is the one they consider it right to make. In relation to this draft order, there is the additional reason that there is a logic in keeping the rules for charities in line with what is proposed, and it is the maximum possible under the law as it currently stands in relation to trusts generally.
Charities which consider that there is a particular need for wider investment powers in their individual circumstances are, of course, able to apply to the Charity Commission seeking a modification to their trust deed by a scheme. Investments by charities in common investment funds do not need to be taken into account for the purposes of any division into wider and narrower-range funds under the 1961 Act. Perhaps I may allay any fears which charities might have and say that this order would not compel funds long since divided 50:50 to he re-divided if, over time, more than 75 per cent. of their current value were now in wider-range investments. On the other hand, Section 70(2) of the Charities Act 1993 means that, once this
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order has been made, a charity will be able to make one further re-division of funds previously divided 50:50 should it wish to take advantage of the 75:25 split.
Your Lordships may also wish to know that the power in Section 70 of the Charities Act 1993 enables this order to apply not only to England and Wales but also to Scotland. I am pleased to say that, with the agreement of my right honourable friend the Secretary of State for Scotland, the order will also apply there.
I have emphasised the need for a balance in relation to investment and the fact that the Government have accepted the case for considerable change. I recognise that some would like to go further, but I have explained why we are not at this stage persuaded that that would be justified. I invite your Lordships to agree on the current proposals set out in the order.
Moved, That the draft order laid before the House on 13th March be approved [14th Report from the Joint Committee].—(Baroness Blatch.)
6.15 p.m.
Lord McIntosh of Haringey: My Lords, the House will he grateful to the Minister for introducing the order with a good deal more seriousness than it was introduced in another place last week. There the Minister introduced it in a rather cavalier manner and I do not believe that he knew what would hit him. My honourable friend Alun Michael, who had done his homework on the subject, pointed out a number of grave deficiencies in the order. The order is not in itself wrong but it contains inadequacies which Mr. Baker had not considered possible. I am glad to see that today the Minister's brief has been substantially amended to take account a number of the points made by my honourable friend.
Perhaps I may make clear the extent to which the order is inadequate. The 1961 Act was, in its time, a measure of liberalisation. It gave a degree of freedom to charity trustees to balance their portfolios between equities and gilts and between wider and narrower-range investments. However, by 1982 the Law Reform Committee had described it as being no longer a matter of liberalisation but of severe restriction on the ability of trustees to maximise the return on their investments as they are required to do by law. That was confirmed in 1989 by a Government White Paper. It was confirmed again in 1990 by a National Audit Office report and again in 1991 in the debates on the Charities Bill. Finally, as the Minister reminded us, the deregulation task force described the inadequacies of the 1961 legislation in considerable detail. It made detailed recommendations as to how it should be changed.
As the Minister reminded us more successfully than the Minister in another place did there, the scope of the order is more limited than might appear. First, it applies only to charitable trusts and not to charitable companies. Secondly, the disposition of investments which have already been made, and which have resulted in a balance of investment different from the 50:50 provided in 1961 or the 75:25 provided under this order, will not he affected by the order because those investments can remain.

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Thirdly, charities—and this is true for many of the larger charities—may have discretion in their constitutions to make investment activity outside the scope of the order. Even if they do not have discretion in the constitution, they may obtain a scheme from the Charity Commissioners to secure exemption. Therefore, on the whole the order will apply only to a minority of charities or perhaps a minority of charity funds, although it will probably apply to a majority of the smaller charities.
But let us think of the opportunities that are being missed in bringing forward this petty little order now instead of taking the issue seriously and trying to give charity trustees the opportunity and the duty to maximise the return on their investments. The Minister reminded us rightly of the changes that have been made in the role of investment advisers under the Financial Services Act 1986. But the 1961 Act takes no account, of course, of the provisions of that Act. Investment advice—I am looking at the Good Trustee Guide produced by the National Council of Voluntary Organisations—may be given by accountants, bank managers, stockbrokers, members of the charity staff or one of the trustees. That provides no protection.
The Good Trustee Guide reminds us that trustees who give investment advice should consider the extent of any professional negligence liability which they may incur by doing so. Would not this have been an opportunity to make sure that the giving of investment advice to charities was codified; that the advantages of the Financial Services Act 1986 were made available to charities; and that they should be required to seek investment advice from those who are approved to give it under the 1986 Act?
I turn now to what is called the measure of liberalisation. Why have the Government not taken the advice of those bodies to which I referred as reporting on the 1961 Act and their deregulation task force not merely to change the percentage from an arbitrary 50:50 to an arbitrary 75:25 but by removing altogether the restriction? I shall not go into the same detail as Alun Michael. I suspect that he was moving into the arguments of Goneril and Regan about King Lear's need for a train of retainers:
"What need you five and twenty, ten, or five?"
Seriously, there is no magic in 50:50 or in 75:25. Good investment advice, provided by someone qualified to give that advice and who is regulated by the Financial, Services Act to give it, could well be different for different charities and need not follow the same percentage pattern. Therefore, in that sense too, the order is inadequate.
Above all, after the experience of Barings, we know that there is an urgent need to prevent charities investing all their resources in a single institution, even a single hank, as my noble friend Lord Chandos reminded us last week. That opportunity too has been missed.
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Of course we shall not oppose the order. It is no worse and very, very marginally better than the original Act. But it is not the order which should be before your Lordships today.
Lord Harris of Greenwich: My Lords, by and large I welcome the order although, like the noble Lord, Lord McIntosh, I should have preferred it to go further.
The noble Baroness, Lady Blatch, told us about who had been involved in the decisions. She indicated that the Government had accepted that there was a case for considerable change. She referred to the work of the deregulation task force. The only thing missing from her speech was any reference to the discussions we had in Committee on the Charities Bill when we were applying our minds to exactly those issues we are debating today; namely, whether we should give trustees greater authority to make their own investment decisions.
I am sure that the noble Baroness will be astonished to learn that the noble Earl, Lord Ferrers, was wholly opposed to that amendment and the Government were defeated on the issue. In future perhaps the noble Baroness will pay tribute to the work of your Lordships' House on that issue because if the Government's view had been accepted by the Committee we should not be in the position in which we are today.
As I indicated, I have no difficulty with the central thrust of the proposal. The only point I wish to make is as regards the explanatory note. There are two sentences, the first of which consists of 110 words. It is almost wholly unintelligible. I say "almost wholly unintelligible"; it is wholly unintelligible. Its purpose is to tell trustees what are to be their powers. It seems quite unacceptable that the best the Government can do is provide such an unsatisfactory explanatory note. I cite it as an example of how not to do it. The next order we are to debate—the Contracting Out (Functions in relation to the Registration of Companies) Order—has a wholly admirable explanatory note which explains clearly what are the proposals in the order. I hope that in future the Home Office will do rather better.
Baroness Blatch: My Lords, I am grateful to noble Lords for at least saying that they will not oppose the measure, although they would have preferred it to have gone further.
I wish to make only three points in response to what has been said. First, the order does not apply to charitable companies because, as I am sure the noble Lord, Lord McIntosh, knows, the Trustee Investments Act does not apply. I have given an indication that there will be consultations as regards taking that matter further. As regards the Financial Services Act 1986, the order has no power to introduce requirements for that Act in relation to advice. But the point which the noble Lord made is well taken. This is not the measure through which to address that point.
Lord McIntosh of Haringey: My Lords, is the Minister saying that Section 70 of the Charities Act would not allow an order to be made to take into account the provisions of the 1986 Act?
Baroness Blotch: My Lords, as I have been reminded once or twice at the Dispatch Box, I am not a lawyer

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and I shall not give a categorical reply. I shall look into the matter and write to the noble Lord. The point that I am making is that, as I understand it, the Financial Services Act 1986 has no power to introduce a requirement in relation to financial services advice.
I shall not respond to what the noble Lord, Lord Harris, said about my noble friend Lord Ferrers because I do not know the context in which he opposed the amendment or whether any consultation had taken place.
Lord Harris of Greenwich: My Lords, it was quite clear that the noble Earl was speaking on behalf of the Treasury and not on behalf of the Home Office.
Baroness Blatch: My Lords, therein lies another tale—cautious, ever cautious.
The noble Lord, Lord Harris, referred to the explanatory note. I often agree with the sentiments of what the noble Lord says. The explanatory note does not seem to qualify for the plain English award. I should perhaps say in defence of it that it explains the "legalese" contained within the order. The department goes further than that and issues what I hope is plain English guidance which goes a long way towards helping the charity world and the voluntary sector to understand what is very often extremely complex legislation. We shall continue to do all we can to help to make sense of legislation. I commend the order.
On Question, Motion agreed to.

Contracting Out (Functions in relation to the Registration of Companies) Order 1995
6.30 p.m.
Lord Inglewood Lord Inglewood rose to move, That the draft order laid before the House on 6th March be approved [12th Report from the Joint Committee].
The noble Lord said: My Lords, the order is made under Section 77(2) of the Deregulation and Contracting Out Act 1994. This is the first use of the important power which enables certain statutory functions to be discharged by contractors where at present they may only be discharged by public servants.
The power was introduced as part of the Government's drive to ensure improvements in the quality of public services and efficiency in their delivery. The Government's "Competing for Quality" programme has produced a sea change in the way such services are delivered, ensuring better value for money for the taxpayer and higher standards for customers.
Companies House has been part of that success story. Since it became an executive agency in 1988 and achieved trading fund status in 1991, it has shown continuing improvements. In 1992 it received the Charter Mark for excellence in the provision of public service. In 1988 it used to take 30 days for a document to be processed and made available to the public; nowadays it takes less than five. Similarly, the proportion of companies which meet their annual filing
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obligation has risen from 80 per cent. in 1988 to over 90 per cent. this year. Those are very significant achievements. Companies House is now deservedly held in high regard by its users. Of course, that was not always so and I pay tribute to the management and staff of the agency for the improvements that they have already achieved. Like every organisation, Companies House must strive for continuous improvement. The timely incorporation and dissolution of companies, the proper keeping of company records, the pursuit of compliance and the speedy and accurate dissemination of information are essential to our commercial system.
Noble Lords will be aware that it is standard practice to review the status of each agency periodically. The review into the future of Companies House was undertaken to see how best to build on its record.
The Government's decision following the review was announced by my right honourable friend the President of the Board of Trade on 20th December 1994. We have concluded that the best way of achieving further improvements is through the closer involvement of the private sector in the running of Companies House.
However, the business information industry is in the early stages of a major technological change as microfiche is replaced by digital technology. We therefore plan to proceed on a progressive basis. Companies House will remain an executive agency and work in partnership with the private sector to develop the new technology. At the same time it will work through a programme of contracting out a number of specific areas, putting each out to tender to private providers. I envisage that some 270 jobs out of a total of about 950 will have transferred to the private sector by 1996. Just over 100 of them will be in Cardiff, the rest mainly in London and Edinburgh.
The programme involves a number of statutory functions, which is why the order is necessary. They are presently carried out at Companies House London, the satellite offices in Leeds, Birmingham and Manchester, Companies House in Edinburgh and—in the case of postal search—at Companies House Cardiff.
In London and the satellite offices, the statutory functions are to provide facilities for inspecting company records and to receive documents for filing. The offices also undertake same day incorporation and changes of name of companies. The Edinburgh office carries out the full range of Companies House functions in Scotland, including the recording and retention of company information.
It may help the House if I briefly explain the purpose of the main articles in the order and their supporting schedules. First of all, I turn to England and Wales. Article 3 enables any function of the Registrar for England and Wales which is listed in Schedule I to be contracted out. A number of different Acts require documents to be delivered to the Registrar of Companies. Schedule 1, paragraph 1 ensures that they can be delivered to a contractor.
Paragraph 2 covers functions which relate to the incorporation of companies or a change in a company name. It will enable the contractor employed to run the

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London and satellite offices to continue to offer same day incorporation, re-registration and change of name services on behalf of the registrar.
Paragraph 3 covers functions in relation to the delivery of documents and the making of them available for public inspection. It has been framed to ensure that, while the receipt and dissemination of information may he carried out by a contractor, decisions as to how the relevant functions should be undertaken are retained by the registrar. For example, the decision as to which medium is used to make information available, presently microfiche, will still be up to the registrar. The paragraph will enable a contractor to run the search room services provided by the London and satellite offices. It also covers the postal search activity carried out from Cardiff, which is included in the contracting out programme. Paragraphs 4 to 8 of Schedule 1 cover duties conferred under other enactments, particularly the provision of certified copies of documents.
I move now to Scotland. Article 4 of the order permits the Registrar for Scotland's statutory functions to be contracted out, with the exceptions of those listed in Schedule 2. The exceptions are limited. They consist of two types of power. First come powers to seek a court order against a company. Those functions are exercised only rarely by the registrar. They entail the exercise of discretion as to whether to commence legal proceedings. We believe it right that they should be retained by the registrar. Secondly, there are powers to decide how functions should he undertaken—for example, decisions as to the form in which documents are presented for registration or the form of numbers allocated to registered companies. Decisions like this, which are fundamental to the design of the companies registration system, will be retained by the registrar.
In addition to the registrars' statutory functions, there also also a number of functions conferred on the Secretary of State which are exercised by Companies House. They apply to Great Britain as a whole. Article 5 of the order and Schedule 3 enable a limited number of those functions to be contracted out. They are ones where the activities concerned can he set out clearly in guidance to a contractor, in line with well established current practice.
As noble Lords may he aware, applications for incorporation or a change of name are checked against a list of restricted words, which are set down by the Secretary of State through regulations. Registration of names which include those words requires the approval of the Secretary of State. In addition, the registration of certain other names which might constitute a criminal offence or he misleading—for example, "pharmacist" or "bank"—is allowed only if the relevant body (such as The Pharmaceutical Society of Great Britain or the Bank of England) confirms that the applicant is entitled to use the name.
Subparagraph 1(a) would enable the contractor to consider applications for incorporation or re-registration against the criteria set for each restricted name and, if the criteria had been met, to incorporate the company. But decisions on which words should be added to the list of restricted words and on the criteria which would need to he met before confirming an incorporation will
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remain with the Secretary of State. That activity will need to be covered in the London, satellite and Edinburgh contracts.
Paragraphs 2 and 3 relate to the approval of business names. Approval is necessary for business names which contain a restricted word. They are assessed in the same way as company names. Inclusion of paragraphs 2 and 3 will enable a contractor to approve business names which meet the criteria set out by the Secretary of State. Subparagraphs 1(b) and (c) relate to the extension of periods allowed for laying and delivering accounts and reports. That is relevant only to the Edinburgh contract. The function is exercised regularly there and the procedures are well established. The contract will lay down precise guidelines.
The order, therefore, sets out the statutory functions which the contractor may be employed to carry out. But it is by no means the whole story. In the first place, under Section 72 of the Deregulation and Contracting Out Act, in all cases where statutory functions are contracted out, the registrar —or the Secretary of State, as the case may be—will remain legally responsible for anything done, or not done, in connection with that function.
Secondly, the extent to which particular functions will be delegated and the procedures and guidance which the contractor will be required to follow will be set out in the contracts. They will also specify the levels of service which a contractor would be required to provide; for example, setting out opening hours and the speed with which activities should be carried out. There will be effective monitoring procedures so that we can be sure that a contractor is performing his duties properly.
Thirdly, the fees and charges to users of Companies House services will continue to be set by the Secretary of State through statutory instrument (subject to affirmative resolution by Parliament if they are increased) whether the services are carried out by the agency or through contractors. Obviously, the contractor will not, therefore, be able to set his own fees for statutory services.
I should also emphasise that contractorisation is a process of testing. Potential bidders will be required to demonstrate that they can offer and deliver better value for money than would be achieved if the activity were not contracted out. By value for money, I do not just mean low prices. It is essential that the contractor maintains and, where possible, improves current levels of service. Unless that can be demonstrated, contracting out will not go ahead.
Our intention is to make rapid progress with the programme and to have completed it by 1996. We expect to issue an information memorandum and invite expressions of interest in respect of the contract for the London and satellite offices soon after the making of the order, with the invitation to tender following before the summer. Details of the contract for postal search and Edinburgh will follow later this year. The information memoranda for the other, non-statutory activities in Cardiff will he published during the spring and summer. Those activities include things like building management and cheque processing.
As I said, we believe that the contracting-out programme offers the best way of building on the excellent record of Companies House. The agency plays a crucial role in the commercial system of this country. Our aim is to ensure that it operates as efficiently as possible and that, as taxpayers and users, we get the best possible value for money.
Moved, That the draft order laid before the House on 6th March be approved [12th Report from the Joint Committed].—(Lord Inglewood.)
Lord Haskel: My Lords, I thank the Minister for introducing the order and explaining to us what it was all about. The Minister told us how Companies House became a Next Steps agency in 1988 and achieved trading fund status in 1991. The Minister implies that this is the reason for the improved performance. I think that is an exaggeration. Any change in business and industry is always caused by a variety of factors. Probably in this case it is largely due to the sensible introduction of information technology, good training, setting proper standards and introducing an ethos of harmony, co-operation and pride so that the service is delivered quickly, efficiently and effectively. That is what has been happening in thousands of companies and organisations throughout the country over the past 15 to 20 years and it is totally unrelated to privatisation.
As the Minister reminded us, this is the first order under the deregulation Act. We recognise that the Government have followed the correct procedure under Part II of the Act and have consulted the registrar. Ironically, he is the last person to consult, because he has a conflict of interests. It is the users who should be consulted as we have suggested in our amendments, but they were rejected by the Government. In fact it was the consultant who consulted the users.
The conclusion of the Government's own consultant seemed to be that the users and customers would clearly prefer Companies House to remain a public sector agency. They value the Civil Service virtues of impartiality, reliability and public service and they were concerned about providing documents to a private sector contractor who might not have these virtues. As consultants usually do, they also have to give their clients what they think the clients want, so there are a couple of rather grudging suggestions that the operation of the London Search Room could be contracted out, as well as certain aspects of the Scottish registry. To cover themselves, the consultancy group pointed out that a company ignorant of the business could make things worse.
It is obvious from the consultant's report that the main essential in Companies House is quality management. It is unclear how this dogma-driven contracting out will achieve this. Perhaps the Minister can tell us. The consultant's report shows overwhelmingly that it is the quality and excellence of the service and accuracy of the information, together with the even-handedness, confidentiality and professionalism of the enforcement, which is important to the users of Companies House. If the profit motive is being introduced in what is essentially a public service,
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the Government have to see that the functions are carried out even-handedly, with adequate concern for the public good and at a sufficiently high standard so that the operation of the nation's business is not inhibited. How will the Government do this?
The Minister referred to some of the functions to be contracted out. I can understand that the users will be concerned. Article 5 of Schedule 3 allows a contractor to take over from the Secretary of State responsibility for prohibiting the registration of certain business names and extending the period for delivering accounts. Has the Minister any idea of the worry it would cause if this crucial power over business was contracted out to a private company open to all the pressures of the marketplace?
The same concern applies to the functions of the registrar in Article 3, Schedule 1. According to the first provision in that schedule, he can contract out the enforcement to receive the documents required by him under the Companies Acts. Is the Minister aware of the power he would be conferring on a contractor and the deep disquiet that this would cause? I would share that concern, Company registration is not like an ordinary service where companies can take their business elsewhere if they do not like the way registration is being handled. UK companies are a captive market and have to register here. Therefore it is no wonder that the consultant's report emphasises even-handedness and quality management. It is no wonder also that there is no requirement in the order to consult the staff, because the Minister knows that from them he will hear good reasons why the service will not be improved by contracting out. In addition he will be given an excellent technical development strategy, including electronic filing and document imaging.
The approach to this order is a good example of the differences between these Benches and noble Lords opposite. It is a difference of vision. On these Benches we have one ambition for Companies House, and that is for it to become a world class centre of excellence satisfying its users and contributing to the efficiency of British industry, and the effectiveness of British Government. What is the vision of the Government? It is sub-contracting, which will involve more supervision, more regulation, less control of standards, more uncertainty and additional layers of management.
This order to contract out parts of Companies House shows how out of touch the Government are with modem thinking in industry and business. Industry has moved on and the search now is for world class centres of excellence. This should be the objective, and not some minor bit of privatisation, discredited and outdated, in order to reduce the Civil Service by some few dozen employees. In view of what he has heard this evening, perhaps the Minister will reconsider this order. He will also perhaps reconsider the action to he taken under the order and even withdraw it altogether.
6.45 p.m.
Lord Inglewood: My Lords, I welcome the recognition by the noble Lord, Lord Haskel, of the improvements—we can all share in commending the staff—gained at Companies House and of what the staff

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and others have achieved there over the past few years. The noble Lord referred to the consultant's report. If one looks at that report, one will see that it paid tribute to and recognised the improvements that have taken place in Companies House recently. The consultant's report very much appreciated the value which was placed on the quality of the operation of Companies House by those who are using the service. Further—this is the important point—the consultant recognised that it would (having taken soundings from other people in the information delivery business) be possible to improve the operation of Companies House by contracting out some elements.
The concern on the part of the users of Companies House was that they were anxious about the unknown. At one time it had been proposed to privatise the whole enterprise. However, it was thought appropriate at this stage simply to see whether contracting out certain parts of the operation might result in delivering the benefits of the service without causing widespread unease and disquiet.
It is important to recognise that this order does not mean that the enterprise will definitely be contracted out—that is, those parts of the enterprise which are subject to that process. On the contrary, it provides for the possibility for that to happen. If contracts are put out to tender and there is an unsatisfactory response, the contracting out process will not go ahead. That seems to me to be the important safeguard. As I said earlier when I was talking about value for money, by that I do not just mean low prices. It is essential that the contractor maintains, and where possible improves, current levels of service. Unless this can be demonstrated, contracting out will not go ahead.
The noble Lord also referred to an anxiety that some may have at the fact that information would he provided to a private contractor rather than to someone on the public payroll. However, just as those on the public payroll are subject to the rule of law as regards how they deal with the information that they receive, precisely the same legal principles will apply to those in the private sector, should they do that job. There is no fundamental difference in that regard. It seems to us that the noble Lord, Lord Haskel, is being quite unnecessarily alarmist about all this—
Lord Harris of Greenwich: My Lords, I hope I may just ask one question. Does the Official Secrets Act apply to private sector employees?
Lord Inglewood: My Lords, I cannot give the noble Lord the answer to that question.
Lord Harris of Greenwich: My Lords, the noble Lord has just said that the rules will he exactly the same, he they for public sector employees or private sector employees. Does the Official Secrets Act apply to private sector employees?
Lord Inglewood: My Lords, as I said, I do not know the answer. But we are talking about Companies House registration services. I am advised that the answer is no.
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The crucial test is this. How does one provide the public with the best service? The order provides the possibility of contracting out services. Those services will be contracted out only if the placing of the contract will be to the benefit of the public. I commend the order.
On Question, Motion agreed to.

Sexual Offences (Amendment) Bill [H.L.]
6.50 p.m.
Lord Hylton: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Hylton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD SKELMERSDALE in the Chair.]
Clause 1 [Sexual offences against children outside the United Kingdom]:
Lord Monson Lord Monson moved the amendment:
Page 1, line 5, leave out ("18") and insert ("14").
The noble Lord said: Because of a long-standing prior commitment I could not take part in the Second Reading debate on the Bill. However, I was able to attend part of the discussion and, of course, I read thoroughly the entire debate the next day in Hansard.
I note that speaker after speaker referred to "children" and to "paedophilia". Indeed, it was clear that it was paedophiliac behaviour which almost all noble Lords saw as the proper target of the Bill. Indeed, at col. 895, my noble friend Lord Hylton stated:
"Child abuse happens to combine elements of both slavery and torture".—[Official Report, 15/3/95; col. 895.]
I wholeheartedly agree with my noble friend and others that paedophiliac abuse of children is dreadful and disgraceful and ought to be combated as vigorously as possible. Unfortunately, by stipulating the designation of "child" to include young people up to the age of 18 the Bill casts the net far too wide and includes cases which could not possibly be described as having anything to do with slavery or torture.
I understand the technical reasons which led my noble friend to fix an upper age limit of 17. However, I suggest that the United Nations categorisation does not conform to present day realities. Whatever was the case 40 or 50 years ago, few people nowadays would describe a young person of 16 or 17 as a child. Certainly no 17 year-old football hooligan would ever be described as a child in the press or elsewhere. It was clear from the debate that few speakers had young people in their mid-teens in mind when supporting the general principles of the Bill. Apart from anything else, young people in their teens would be too old to interest paedophiliacs.
The noble Baroness, Lady Blatch, spoke of the requirements for dual criminality. That is a worthwhile safeguard. However, it is one which has interesting and somewhat quixotic consequences. Even if consensual sexual relations with a 16 or 17 year-old girl took place,

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for example, in Moslem countries where the age of consent was 18, there could be no prosecution in this country because here the age of consent for girls is 16.
However, there is one interesting exception to the rule under the 1956 Act where the girl concerned is an heiress in expectation of inheriting a large fortune. Members of the Committee may remember a famous case 30 or so years ago involving a Bolivian tin mine heiress. No force was involved. I wonder whether the Bill is intended to cover such a case, as it would as it stands. I cannot believe that that is desirable.
In contrast, if the incident of relations with the young person involved a young man of 16 or 17, is it really intended that it would be an offence in this country but not in most other countries? I make no complaint about it; I was one who voted for the homosexual age of majority to he 18. I merely point it out as a possible anomaly.
What about non-consensual sex? One could argue that the upper limit of 18 ought to be retained to cover the rape of a girl of, let us say, 17¾. But if a 17¾ year-old is to be protected in this way—perhaps they should be so protected —so should an 18, 28, 58 or even 88 year-old. How many dreadful cases of the rape of elderly women have we not read about recently!
As drafted, the Bill covers indecent assault of even a relatively trivial kind. Is that intended? There is also the question of female sex tourism which was not mentioned at Second Reading. It is common knowledge that many thousands, perhaps tens of thousands, of women from Western Europe and North America travel to the Caribbean, East and West Africa and elsewhere every year with the specific purpose of finding a virile young sexual partner. In the tropics people mature early and often look and act older than their age. Theoretically, British women could he prosecuted for having sexual relations with a 14 or 15 year-old in Gambia, the West Indies, or elsewhere. Is that really what Members of the Committee wish?
Another anomaly is this. Under the 1956 Act, a 23 year-old male can escape prosecution if he can demonstrate that he genuinely thought that a 14 or 15 year-old girl was 16 years or over. A 24 year-old male, or older, cannot successfully advance that defence.
Finally, in the United States, and perhaps in other federations, different states have different ages of consent, varying quite considerably by several years, down to the age of 12 in Mississippi. That certainly used to be the case. Therefore young British backpackers, when travelling from state to state, doing what young men have always done and will always do, could find themselves in real trouble. If caught by the authorities in the United States, that is entirely their own problem. But I do not see why Britain should become involved once those young people have arrived hack on these shores.
I hope that I have said enough to convince the Committee that a maximum age of 18 is too high in a Bill which very commendably (and I mean that) sets out to curb paedophile abuse. I beg to move.
Lord Hylton: I think that I understand some of the concerns that have moved my noble friend to put down his amendment. However, the age of 18 to which his amendment refers was chosen after consideration and for precise and practical reasons. It corresponds with the definition of a child—in this case "child" includes young person—as laid down in the United Nations Convention on the Rights of the Child. That is a worldwide convention for the protection of children and young people which this country ratified as recently as 1992. The convention places specific duties on states for preventing the exploitation of both children and young people through prostitution, as I mentioned at Second Reading.
I believe that the Committee will be just as concerned about the abuse of people aged 14, 15, 16 and 17 as they undoubtedly are about similar offences against an even younger age group. The dangers of contracting HIV, AIDS, cervical cancer, and possibly an unwanted pregnancy, do not suddenly stop at the age of 14. I suggest that the forced prostitution of young people who should be either in training for lawful work or else in education is a matter of deep concern to Parliament, as is shown by the strong support which the Bill has received not only from Britain but also from overseas countries.
The amendment may well also be unnecessary. I say that because Clause 1(1) (a) and (b) require the offence to be such under the laws of both the country where the act was committed and of the United Kingdom. Therefore, if it is lawful to have sexual relations with a person over 14 in the third country, a person cannot be prosecuted in Britain for such relations, however indecent, brutal or vicious they may have been. I therefore hope that my noble friend will be satisfied with my reply and that, on reflection, he will feel able to withdraw his amendment.
7 p.m.
Baroness Blatch: As the noble Lord, Lord Monson, explained, the amendment would lower the age of children covered under the Bill from 18 to 14 years. The Government would not support the amendment.
If we were to adopt the kind of extra-territorial jurisdiction over sexual offences that the Bill proposes, it would seem sensible for it to apply to all children, not just those aged under 14. We would not wish to have a situation where a 15 year-old child had been sexually abused by a British tourist and the abuse clearly constitutes an offence both under UK law and that of the country where it occurred, but the extra-territorial extent of the Bill would not apply simply because the child was over 14.
As the noble Lord, Lord Hylton, previously explained, a child is defined under the UN Convention on the Rights of the Child as any person under the age of 18. I agree that that sets a reasonable basis for the

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age below which the provisions of the Bill should apply, although I recognise that a case could be made for restricting the Bill to children under the age of 16.
The definition of a child for the purposes of the criminal law obviously varies between different countries, but the Bill already provides that dual criminality would have to exist before an offence would be caught. That is the point which was made by the noble Lord, Lord Hylton. For certain sexual offences under UK legislation, the victim would have to be under the age of 16. That would apply in the case of such offences committed by a British tourist abroad, since the Bill would only cover acts which are offences under our law.
To lower the age to 14 would also create additional problems in terms of practical enforcement. For example, many child prostitutes in South East Asia are in their mid-teens, but it would be difficult to establish a precise age for many of them, since birth records are scarce. A court would, nevertheless, have to establish the age of a victim before being able to determine whether an offence had been committed. An offender should not be able to rely on the defence that he believed the child to be over 14. If the child is 15 or 16, the offender should still he prosecuted. It would be easier for a court to ascertain whether a child was under the age of 18 and more likely, therefore, that offenders could be successfully prosecuted.
For those reasons, I am not in favour of the amendment and the Government cannot support it; although in line with the convention which exists in your Lordships' House, I shall not vote against it.
Lord Monson: I am grateful to both my noble friend and the noble Baroness for their comments on the amendment. My noble friend is right and I agree with him that HIV and pregnancy are no respecters of age when we are talking about the teens. That is a perfectly valid point. Where I not so much disagree with him but return to the points I made in my opening remarks is that we are not only talking about exploitation via organised prostitution but also about illicit relationships with young people who may be slightly below the age of consent. It may not involve any payment, or if it does it may be on a freelance basis. It does not involve the abuse to which the noble Baroness referred: I agree that if we are talking about abuse, it is a different matter. However, as I tried to demonstrate, it covers all kinds of things which do not fall into that category.
Retaining the age of 18 would be less worrying if some filter could be introduced which would weed out prosecutions for minor offences of such a nature which do not involve abuse or exploitation—for example, if the consent of the Attorney-General had to be obtained before any prosecution could be brought.
However, I do not intend to press the matter any further, given the opposition of the Government and the lack of support from any other quarter in this sparsely attended Committee. Nevertheless, the debate has been valuable. It will give Members of another place the opportunity to examine what has been said and possibly they may arrive at a conclusion along the lines
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suggested by the noble Baroness. The age of 16, for example, might be a reasonable compromise. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment.

HM Prisons Blakenhurst and Leeds
7.6 p.m.
Lord Harris of Greenwich Lord Harris of Greenwich rose to ask Her Majesty's Government what action they propose to take following the reports of the Chief Inspector of Prisons on HM Prisons Blakenhurst and Leeds.
The noble Lord said: My Lords, the Chief Inspector of Prisons produces many reports which demonstrate the admirable work which has been carried out by governors and staff in our prisons, often working in the most difficult conditions. The reports seldom arouse a great deal of interest, either in the media or in Parliament. But inevitably when things go wrong the situation is altogether different. In the case of the prisons which we are discussing tonight, a great deal went wrong. Once again, we should all pay tribute to Judge Tumim and his colleagues for having produced the reports which are of high quality, fair-minded and yet rigorous.
One report deals with a brand new Category B local prison for sentenced and remand adult male prisoners which has been handed over to the private sector to manage. The other is an overcrowded local prison in the public sector, constructed nearly 150 years ago, which is in the process of being redeveloped.
I shall deal first with the report on Leeds Prison. It is a deeply disappointing analysis, for although it indicates that there is an impressive strategic plan for the future of the prison—and I recognise that substantial improvements have taken place since the inspection by Judge Tumim and his colleagues last June—the overall impression given is quite dreadful.
Let me ask the noble Baroness a few questions. Why have Ministers tolerated a situation in which little was done to rectify the severe criticisms directed in the Chief Inspector's report on the prisons six years ago? I say "Ministers"; it is not a matter for the director-general of the Prison Service. I hope that we shall not have the business of trying to argue about the distinction between operational questions and policy questions. We are talking about a report by the Chief Inspector of Prisons which goes to Ministers. It is Ministers who must accept responsibility for the unsatisfactory situation.
We all know about the redevelopment of the prison, but how can Ministers justify allowing the lamentable conditions at Leeds to persist over such a long period since the last highly critical report'? Judge Tumim said that many persons were living in grossly unsatisfactory conditions. Precisely the same criticism was made six years ago.
At the time of the recent inspection, working conditions in a number of departments were said to be "appalling". An exercise area was found to be contaminated with human waste and an underground holding and transfer area was said to be,
"filthy, unhygenic and unsuited for its purpose".
Remand prisoners on one wing were crammed into cells for over 22 hours a day, a position said by Judge Tumim to be,
"far removed from the model regime for local prisons promoted by the Prison Service".
The report said that Leeds staff were trapped in a warehouse with apparently no chance to put things right because of unremitting overcrowding and insufficient activity. That is the price being paid as a result of the philosophy of "prison works". Ministers again must accept direct responsibility for the situation at Leeds and, I fear, a number of other local prisons which could be subject to precisely the same criticism.
I do not doubt that the governor and many members of the staff at Leeds are endeavouring to cope with those conditions to the best of their ability. For instance, catering staff—a critically important group at a local prison—have clearly done well, according to Judge Tumim. So have the PE staff. But many serious questions remain. Why have there been so many changes to the planned redevelopment of the establishment? Why, even before the new wings were fully occupied, were significant structural alterations made which the chief inspector found to be unnecessary. I hope that the noble Baroness will deal directly with that question. Ministers speak continually about achieving value for money. How can value for money be secured when changes of such a character, costing significant sums of money, are made, which the Chief Inspector of Prisons says are unnecessary?
The difficulty is that changes of that sort, as I indicated, made at considerable public expense, have had a clear effect on the quality of life in the establishment. The report on Leeds is a disturbing document. Certainly it discloses some welcome shafts of light in an otherwise gloomy landscape. But, overall, I found it one of the most depressing accounts that I have read of conditions in an overcrowded local prison, where we should remember that a significant proportion of the inmates held have not been convicted of any criminal offence.
I turn to the report on Blakenhurst, the private sector establishment. There, the new managers had every apparent advantage. The prison was not overcrowded and facilities were incomparably superior to anything provided at Leeds. The report pays tribute to some of the successes at Blakenhurst. For instance, the education service was said to he outstanding and the treatment of inmates by staff was described as very good. There were other tributes to the character of the regime at Blakenhurst. All that was clearly deserving of praise.
But then came the criticisms, some of them of a fairly remarkable character—not, I may say, that they were set out in the press notice sent out by the prison department's press notice. As is always the case, there
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were two press notices, one summarising the position of the Chief Inspector of Prisons and the other the position of the department.
The press notice from Judge Tumim reads:
"Inspection finds 'confusion of cultures' at Blakenhurst Prison".
That is related to the fact that part of the ownership of the prison is vested in an American company. So far as the Prison Service press notice is concerned, it reads:
"Blakenhurst staff impress HM Chief Inspector of Prisons".
Those two documents make a rather interesting contrast.
Not until we read through the Prison Service press statement do we find, at the foot of the second page, a faint suggestion that there have been some criticisms in the report by Judge Tumim. Until that moment it is difficult to believe that the chief inspector found anything at all to criticise.
I have rarely read a more misleading summary of any government report. Indeed, it reminds me of a headline in the Daily Herald, during the 1947–48 fuel crisis; the Daily Herald at that time being as loyal to the government of the day as the Daily Express is to the present Government. At that time in 1947–48, when factories were being forced to close down all over Britain because of a severe shortage of fuel, the Daily Herald came out with the headline: "Booming Britain outpaces pits". The press notice about Blakenhurst comes well into that category.
Let me present some of Judge Tumim's other findings about Blakenhurst which did not find their way into the Prison Service summary. Judge Tumim said that custody staff were not fully in control of the inmate population. Not fully in control? We are talking about a category B prison; one of the highest categories of security that exist in the Prison Service. It is said that bullying had been a worrying feature in the establishment and conditions for vulnerable prisoners were highly unsuitable. Systems were poor. Inmates were found wandering around the corridors at times when they should have been taking part in purposeful activities. And where were the drug dealing and bullying taking place? It was taking place in the corridors of the prison, where people were wandering around without any adequate form of supervision. That seems to me to be a matter of some concern. I am sure that the noble Baroness will tell us that she shares that concern.
When the staff were interviewed by Judge Tumim and his colleagues, they told the inspectors that the training that they had received before taking up their duties had not been adequate; staffing levels were too low and managers had chosen to ignore the warnings from staff before the major disturbance in the previous year. The managers told the inspectors that they had not received adequate training, communications were poor and there were inadequate constructive activities to keep inmates occupied when out of their cells.
That last point brings me to the question of whether UKDS, the company which runs Blakenhurst, is taking compliance with the contract sufficiently seriously. For instance, in its tender submission UKDS undertook to provide commercial wage rates in one work activity area. Nothing has been done. Why not'? Will the noble Baroness tell us this evening?
But the problem is far wider. Judge Tumim states that the Home Office should have ensured that UKDS was contractually obliged to deliver all that was promised in its tender submission. That sounds unhappily like some of those applications for independent television franchises: much is offered; all too little is delivered. Quite apart from that, UKDS was not even delivering what it was legally contracted to do.
All that being so, what do Ministers propose to do about this matter? If the tendering process is to be taken seriously and not merely as an essay in imaginative journalism, what steps do they propose to take to ensure that UKDS is obliged to fulfil the assurances given at the time of awarding the contract?
I have deliberately avoided discussing the issue as to whether private prisons are acceptable. I have stated my opinions on this matter both in this House and outside on a number of occasions. I have little doubt that if there is a change of government at the next election establishments like Blakenhurst will be returned to the direct control of the state.
Lord McIntosh of Haringey: Yes, my Lords.
Lord Harris of Greenwich: But in the meantime it is essential that the serious inadequacies disclosed in this report are corrected, and at once. No one reading either of these reports can fail to be disturbed by what has been tolerated for far too long in both of those establishments. I hope that tonight we shall hear that action, albeit belatedly, will now be taken.
7.20 p.m.
The Earl of Longford: My Lords, I find it irresistibly tempting to say a few words —and they will be only a few—in a debate on prisons initiated by the noble Lord, Lord Harris, whose wide and deep knowledge of prisons is familiar to us all. He made one of his most deadly speeches tonight, and I am glad that I do not have to respond to it. It was a formidable indictment.
Owing to my inattention to duty, I did not realise that this debate was coming on so soon and therefore have not done what I should like to have done and what I have done before now; that is, to visit the two prisons in question. I visited Leeds Prison years ago and have visited most of the leading prisons in this country. However. I have not visited Blakenhurst. I might say in passing that I have visited The Wolds, which is a privatised prison, and have a pretty good idea of the issues involved. I shall therefore deal with these matters only briefly tonight.
As regards the issue of privatisation, I was glad to hear my noble leader for the night confirming the statement of the noble Lord, Lord Harris; that if and when a Labour Government come to power they will put all this to right. In other words, Blakenhurst will be returned to the public sector. That is good news. But I am bound to say, as I have said before—and others have said before—that privatisation of the prison establishment is an obscenity; I repeat, an obscenity. The idea of trying to make money, possibly for foreigners, out of helpless people under our control is revolting.
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It is no good my pretending that I approach the subject of the privatisations of prisons with an unbiased mind. But one can perhaps stress one point arising out of what the noble Lord, Lord Harris, said. The training is bound to be inadequate. The Government's passion for privatisation is no doubt widespread in other spheres, but in the case of prisons the specific motive is a desire to bypass the Prison Officers' Association. What does that mean in practice? It means recruiting an ignorant staff; throwing away all the knowledge and wisdom acquired over the years by the Prison Officers' Association and prison staff generally, which means we could not expect any result much better than the one indicated by the noble Lord, Lord Harris.
As regards the overcrowding at Leeds, as the noble Lord, Lord Harris, said, we had what can only be called the "Howard revolution" in the autumn of 1993. But it is not fair to say that it is entirely the fault of Mr. Howard. He was appointed by Mr. Major who, at the same Conservative Conference, informed us that we should understand a little less about these matters. The Government have certainly lived up to that promise.
We are faced with the fact that in the Government's view prison works, and works much better in Mr. Howard's view if it is made more austere or unpleasant for prisoners. That is the Government's philosophy and the philosophy which has led to the great increase in the prison population. It is now at record levels and, according to a Home Office projection which I was reading today, it is expected to reach 56,000 some years from now. In other words, it will continue to rise if the present Government have their way.
It is obvious that there will be a lot of overcrowding in the course of the reforms and, as the noble Lord, Lord Harris, said, it is a product of the philosophy of the Government in this last phase. When I say "the Government" I am not referring to Conservatives in general. There have been great Conservative penal reformers—Sir Winston Churchill, though he was a Liberal at the time, and Sir Samuel Hoare when he became president of the Howard League after being Home Secretary. Then there was Rab Butler, later Lord Butler, the noble Lord, Lord Carr, and a Minister of State like the noble Lord, Lord Windlesham. They are all Conservative penal reformers. The last six Home Secretaries, with the exception of the one before Mr. Howard, may be described with a little charity as leaning towards penal reform.
But there has been a revolution. Never let us forget that we are dealing with a revolution produced by the Government as a whole, Mr. Howard being the mouthpiece since the autumn of 1993. We must expect disaster and we are duly getting it.
7.25 p.m.
Lord McIntosh of Haringey: My Lords, I must confess, and it is greatly to my discredit, that until I found myself preparing for this debate this evening, lying on my bed of pain during the day, I had never read any of Judge Stephen Tumim's reports on prisons. They are an eye opener. I had never quite understood the extent to which Her Majesty's Inspectorate of Prisons actually go into a prison and ferret into every single

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activity, every corner of the building, every corner of the minds and lives of the inmates and staff in those prisons. I have never read anything more impressive in their perspicacity and perseverance than the two reports by Judge Stephen Tumim and his team that I read today. Having read them, I endorse everything said by the noble Lord, Lord Harris, about the two prisons.
In relation to Leeds Prison, it is truly shocking that, having made a report in 1989 which was so critical of the regime at Armley at that time, the sort of macho spirit which says, "We can receive any numbers at any time: we will take them in and tame them", appears to have been the dominating ethos in the prison. In the result, Leeds took in 250 prisoners out of Wymott. It managed to open a new wing which was prepared to be opened but had never been opened. It was not prepared to spend the money to open the wing when it was really needed for the continuing care of the prisoners already under its care.
At the same time the physical conditions in Leeds Prison; the way in which a large number of prisoners are still slopping out; the degree of overcrowding; the physical conditions of the recreation area for vulnerable prisoners which the noble Lord, Lord Harris, described; the inadequacy of the education provision—not its bad quality when it is provided, but the fact that not enough of it is being provided—and many other aspects of the prison are appalling to read about. And, as the noble Lord, Lord Harris, said, the situation in Blakenhurst, which should be such a shining contrast, is no contrast at all.
It is profoundly disappointing that a prison which starts up in May 1993 can be inspected in May 1994 when virtually all the custody officers (as they are called in privatised prisons) have been recruited from outside the Prison Service. I am not referring to the managers; they came from within the Prison Service. The custody officers come from outside and may be thought to be open to persuasion that there are better ways of dealing with prisoners than those which are so often current in the Prison Service. Yet still it is a deeply disappointing report. It is disappointing in the quality of the care provided, but even more, I suggest to the Government, it is deeply disappointing in the way in which the bid document—the document which was the basis of the contract being awarded to UK Detention Services—is being so widely flouted. Indeed, it appears only from a careful reading of the report that schedule 2 to the contract, which is the guts of it, is not a legal requirement on UK Detention Services. The company is required only to act in the spirit of schedule 2. That is stated in paragraph 2.13 of Judge Tumim's report. It is an extraordinary state of affairs that we have a legal contract, on the basis of which people are being paid to do a job, and then we find that the contract which the Government have drawn up with this private sector company does not require it to conform with the conditions laid down in its own tender document. How can the Government explain that? How can they justify that kind of relationship with the private sector?
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That does not in any way get round the profound moral repugnance, which I share with the noble Lord. Lord Harris, at the idea of private companies being responsible for the compulsory detention of our fellow citizens. I gladly confirm what he said, and what my noble friend Lord Longford said, that it will be the policy of the next Labour Government that there will be no more privatised prisons and that the existing contracts for privatised prisons will not be renewed when they expire. It is both morally repugnant, and, from the point of view of contractual relationships, the policy seems to me to be profoundly wanting.
Underlying the situation in both Leeds and Blakenhurst and the reason why the Question before your Lordships this evening is more important than what is happening in either is the whole issue of overcrowding in prisons. It is the overcrowding which on the surface has led to the riots and the disturbances that have taken place in prisons; but even where riots have not erupted overcrowding has led to the bad conditions, the ineffectual regimes and the ineffective reformation being provided in our prisons. That must he laid fairly and squarely at the door of government. The Criminal Justice Act 1991 very properly set statutory restrictions on the extent to which custodial sentences should be applied. As a result of that, there was, when the Act came into force in 1992, a quite rapid drop of between 5 and 10 per cent. in a few months in the proportion of those convicted of offences being sent to prison. As a result of that, there was an actual decline in the total numbers in our prisons, to 40,000 or so in December 1992.
Then what happened? We had Mr. Howard, who thinks that prison works and is prepared to pander to the worst instincts of Conservative Party conferences by boasting of his willingness to see the expansion of prisons and to provide for the expansion of prison places, although he knows, as we all know, that one can by acting tough increase the prison population but one cannot increase the provision for the prison population anything like as fast as one can expand the numbers inside. The present plan is for six additional prisons, of which two will open in 1997. That is not much consolation for those in prison now or for those who are suffering the effects of the lack of reformatory influence in our prison system.
The former Director-General of the Prison Service, Mr. Joe Pilling, said to the Woolf Inquiry after Strangeways in 1991 that overcrowding dominated the prison system. It was correct then and it was put right to a modest extent by the 1991 Act. All of that has gone by the board. We now have an increase in the prison population from just over 40,000 to more than 50,000 in February 1995. We have 8,500 prisoners two to a cell where the cells were designed for not more than one person. We have very large numbers of prisoners in the wrong category of prison—a direct cause of the Everthorpe riots in January this year. We have many prisons—the Whitemoor prison visitors' report of last year gives evidence of this—being stretched to breaking point by capricious and excessive transfer and entry policies. We have riots such as that at Wymott which

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can only be explained by the wrong category of prisoner being in the wrong prison at the wrong time and brought from the wrong place.
One recommendation out of the 12 which the noble and learned Lord, Lord Woolf, made to the Government which was not accepted was to my mind the most important. The noble and learned Lord said that there should be a legal ceiling on the number of prisoners in individual prisons. I ask the Government to recognise that their rejection of that recommendation can be held directly responsible for so much of the trouble that has taken place in the prisons in the past two years. I can do no better than quote the noble and learned Lord in the debate on prison overcrowding on 2nd February last year. He said:
"As a result of a change of climate, the importance of avoiding custody when it is appropriate to do so has been forgotten. A factor which has undoubtedly contributed to this change of climate is that the Government, who give a lead in these matters, have abandoned preaching the need for restraint in the use of prisons…It is that policy which is resulting in the bulk of the increase in the population of our long-suffering local prisons. It is people who previously could expect, for example, to be remanded on bail who are now being remanded in custody".
Later in his speech he said:
"It needs to be reiterated repeatedly that if prison is used when it is not necessary, then it is frustrating, not furthering, the objectives of the criminal justice system. It is an expensive way of making the criminal justice system less effective".—[Official Report, 2/2/94; cols. 1276–1277]
I suggest that that is a truer reflection of what our penal policy should be than the facile comment that prison works. I suggest that that is the lesson of the reports we have been reading about Leeds and Blakenhurst prisons and the justification for the noble Lord's Question.
7.38 p.m.
Baroness Blatch: My Lords, I am grateful to the noble Lord, Lord Harris of Greenwich, for providing this opportunity to debate the reports of Her Majesty's Chief Inspector of Prisons on Blakenhurst and Leeds prisons and to describe the action which the Prison Service is taking in response to both.
Blakenhurst is a new local prison. It is the second prison to be managed by the private sector and was the first to hold sentenced prisoners. The prison was inspected in May last year when it had been open for just one year. It would be wrong for your Lordships to go away from this debate with the impression that the inspectorate's view of Blakenhurst was a damning one. And in no sense can it be taken as a basis for an argument against private sector involvement in the Prison Service. Indeed, the report—and subsequent developments—provide evidence of the benefits of privately managed prisons which have led to better value for money and higher standards both in those prisons and in the public sector.
The inspectorate's overall impression of Blakenhurst was that prisoners were being held securely in good modern conditions with staff treating them in a humane manner. The report also acknowledged the positive developments in the regime and the achievements of a committed staff who were growing in confidence during
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a difficult first year of operation. It also praised the quality of -activities provided for vulnerable prisoners and the "outstanding" education service, which was mentioned by the noble Lord, Lord Harris. Also highlighted were a number of other significant achievements, such as the provision of an out-of-cell regime for 13 to 14 hours a day for three-quarters of prisoners; the provision of employment for more than 400 prisoners for 35 hours a week; and the availability of prison visits from 1 p.m. to 8 p.m., seven days a week. All these achievements indicate solid work on the part of staff at Blakenhurst in its first year to build good quality regimes for prisoners with the right focus on purposeful activity.
There were, as has been said, weaknesses identified by the inspectorate. Many of these flow primarily from the newness of the prison and are being addressed as the operation of the prison beds down. The inspection team identified a need for better systems to ensure that the level of service outlined in the operational specification and tender submission for the prison are actually being provided.
The contract for Blakenhurst preceded the establishment of the Prison Service as an agency, and the subsequent introduction of performance indicators for the work of the service generally. If I may answer one of the points raised by the noble Lord, Lord Harris of Greenwich, it is for this reason that performance measurement criteria were not included in the contract for Blakenhurst. This shortcoming has, however, now been addressed. All subsequent contracts for private sector prisons have included performance measurement criteria and they will be built into the Blakenhurst contract from May 1995, which is the beginning of the next contract year. These performance measures will enable the Prison Service to ensure that Blakenhurst continues to provide secure and humane conditions for prisoners at a competitive price to the taxpayer.
The inspection team also commented on what they considered to be inadequate systems for controlling inmates and the lack of challenge to prisoners' offending behaviour, both of which the team thought were caused by the inexperience of staff. It is common in new institutions for prisoners to test the staff. That it happened at Blakenhurst is perhaps not surprising, but it did highlight the lack of experience of some staff. The weaknesses in control early in 1994 underline the inherent difficulties in opening any new prison, whether in the public or private sector, and much has been done to rectify them.
Considerable staff resources at Blakenhurst have been concentrated on improving control and, as staff have naturally gained experience and confidence, the situation has improved greatly, as is evidenced by the dramatic drop in the number of assaults at Blakenhurst since the inspection. Prisoners' movements are carefully monitored and no prisoner is allowed to change his cell without the permission of staff. The management at Blakenhurst has also been strengthened by the appointment of an experienced prison middle manager.
Technology has also been deployed at Blakenhurst to improve control and security. Closed circuit television is used extensively to monitor prisoner movements, and

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bar-coded wrist bands are used to identify them. Hand recognition equipment and an ultraviolet light scanner are also used to improve security during visits. A number of additional programmes to address prisoners' offending behaviour have also been introduced since the inspection report. These include sex offender assessment, drugs and alcohol awareness, and stress management.
The inspection team also commented that Blakenhurst was required by the Prison Service to absorb too many prisoners too quickly which did not allow a culture to develop in the prison and contributed to control problems.
Even with the provision of other new accommodation, the alternative to making full use of Blakenhurst would have been to house prisoners in police cells. That option is costly and places prisoners in accommodation with unsatisfactory conditions and facilities. It is not therefore one which ought readily to commend itself either to your Lordships or to the Prison Service.
Blakenhurst Prison has made a good start. It has overcome the problems identified in the inspection report and its performance compares favourably with the public sector. An average of 28 hours a week per prisoner are spent in constructive activity, compared to an average of 20 hours for publicly managed prisons. Prisoners are held in secure, good quality accommodation. Blakenhurst is an active, positive, well controlled prison which, at a cost of about 15 per cent. less than comparable prisons in the public sector, represents good value for money. We have had a spending pledge today of what it will cost to revert to publicly-owned prisons. No doubt that is a promise which the noble Lord is happy to make.
In terms of accommodation, Leeds Prison is in marked contrast with Blakenhurst. Leeds is an early Victorian local prison to which additional accommodation has been added over the years. There is no ducking the fact that the report on Leeds Prison is a critical one. The inspectors were concerned that conditions for both prisoners and staff were unsatisfactory. They pointed to the poor standard of the accommodation and facilities; to overcrowding; and to the failure to provide enough activity for the number of prisoners being detained. But the prison is currently undergoing the largest redevelopment programme in its history.
There have been major improvements at Leeds over the intervening years. The most important of these has been the opening in the autumn of last year of two new wings together with a new hospital. The new wings have provided an extra 427 places complete with integral sanitation, association and facility rooms, and a new kitchen, library and gymnasium.
In addition to the two new wings, slopping out has been ended for 600 prisoners; no prisoners are held three to a cell; and new suicide awareness routines have been introduced, which have led to a significant fall in the number of suicides.
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In addition to these improvements, a major redevelopment programme, on which the substantial improvements to both the conditions and the regime at Leeds largely depend, is currently under way. The main elements of the redevelopment are the refurbishment of the four Victorian wings; the provision of a new inmate activity building; and the construction of a new entry complex, which will include new reception and visiting areas, and a new communications centre and administration unit. As I said, this work has already started. The prison's A wing was taken out of commission for full refurbishment, including the provision of integral sanitation, in January this year and is due to become operational again in February 1996.
Plans are also advanced for the refurbishment of C and D wings. Work on these wings will start in February 1996 and will be completed around the end of 1997. Again the refurbished cells will all have integral sanitation.
Schemes are also being prepared for the work on the inmate activity building and entry complex which will begin as soon as funding allows.
This programme of work is a clear signal of the Prison Service's commitment to complete the refurbishment of Leeds, and to bring its accommodation up to a fully acceptable standard, and to do so as quickly as possible. The work which has already been completed has cost over £33 million, and the remaining work is likely to cost a further £20 million. This level of investment is evidence of the priority that the Prison Service attaches to Leeds.
It is really very unfortunate that neither of the two Front Bench noble Lords opposite thought fit to make any reference whatever to this substantial programme of work.
Lord Harris of Greenwich: My Lords, will the noble Baroness give way? What she has just said is nonsense. I specifically referred to the programme at the prison. I very much wish that in future she actually listens to speakers in this House rather than make a comment of that sort which indicates that she did not pay the slightest attention to what was being said.
Baroness Blatch: My Lords, I take exception to what the noble Lord has just said. I listened extremely carefully to what he said. I can say that the overall tone of the noble Lord's speech is that almost nothing has happened. In fact, he said, "How have Ministers stood by for six years and seen nothing done?" I have just given a substantial catalogue of what has been done. Ministers have not stood back in those six years and done nothing.
Lord Harris of Greenwich: My Lords, I did not say that Ministers had done nothing. When I receive—as I am sure I will—a letter of apology from the noble Baroness at the end of this week, in that letter she will be able to confirm that I did not say that Ministers had done nothing. I said that six years ago a highly critical report was produced by the Chief Inspector of Prisons. In that situation the record of Ministers was lamentable

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because some of the criticisms in the most recent report were precisely the same criticisms made in the report six years before.
Baroness Blatch: My Lords, I shall be just as robust in my answer. Ministers have presided over a programme of work costing £33 million and they have in train expenditure of a further £20 million. A great deal is being done and a great deal has been achieved. I have also put on record that a great deal more needs to be done. I believe that the overall tone of the noble Lord's speech hardly recognised any of that work.
The inspection report observes that progress at Leeds has been hampered by overcrowding at the prison. The population pressures have been increased by the need to maintain the major refurbishment programme of Victorian prisons in order to bring them up to modern standards and, in particular, to fulfil our commitment to provide all prisoners with 24-hour access to sanitation within the next year.
Any reduction in the capacity at Leeds would almost certainly have the effect of placing prisoners in police cells, where the conditions and facilities would be substantially worse than would be available at Leeds.
The noble Earl, Lord Longford, and the noble Lord, Lord McIntosh, said that the answer to this particular conundrum is easy: we should simply imprison fewer people. The Government's position in this respect is, however, quite clear: it is for the courts to determine the appropriate sentence in any particular case. Our job, which we are undertaking with vigour, is to ensure that prisoners are held securely and humanely, and that appropriate programmes are provided to tackle prisoners' offending behaviour and to prepare them for release. I must defend my right honourable friend who has said that prison works. He has said that prison works for some people, but he is also robust and vigorous in making sure that non-custodial sentences also work.
Lord McIntosh of Haringey: My Lords, is there not a contradiction in this in that, on the one hand, the Government are boasting, as at the Conservative Central Council this weekend, about the fall in the crime rate while, on the other hand, the Minister is recognising that the prison population has increased from around 40,000 to around 50,000? Are magistrates and courts being perverse and ignoring the wisdom of the Government or is there some truth in what we are saying: that the Government have been encouraging more custodial sentences and that that is the major cause of the increase in the prison population?
Baroness Blatch: My Lords, all that I can say is that the Government hope and wish to see appropriate sentencing. However, the Government have no locus in court when sentences are passed by judges and magistrates.
Lord McIntosh of Haringey: My Lords, what is the explanation? Why is the prison population increasing while the crime rate is falling?
Baroness Blatch: My Lords, it is because people are being sentenced to custody by the courts. The fall in crime has happened over the past two years. All that I
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can say is that my right honourable friend believes that prison works—perhaps I should add that many members of the public believe the same. It is important that some people are put into custody to protect the general public. It is also the case that my right honourable friend supports robust non-custodial sentences where appropriate.
Despite the ongoing redevelopment work at Leeds, and the population pressures, credit should be given to the staff there for their achievements. They have been able to double the number of prisoners who have access to daytime education, and to offer prisoners group work schemes covering areas such as substance abuse, anger control and personal development, and provide access to the job club.
There remains much to be done at Leeds. But the Prison Service, both nationally and locally, is investing considerable money and energy in addressing the shortcomings. The inspections were carried out in May and June last year. Much has happened at both establishments since then to address the shortcomings identified by the inspection and to build on the prisons' strengths.
The noble Lord, Lord Harris, was concerned about contracting out. All contracts for privately managed prisons include penalty clauses for failure to deliver contracted services. Those are being enforced. The noble Lord also asked why nothing was being done in response to the 1989 report. Much was done between 1989 and 1994 and I have reported already that slopping out ended for 600 prisoners. Two new wings have been opened, with increased ancillary services. It is not right to say that either Ministers or the director general of the Prison Service have taken no action.
The noble Lord was concerned about the chief inspector's criticism of design features. If the noble Lord will allow me, I shall write to him on the detailed criticisms that he made. I shall give him a comprehensive reply and make a copy available to all who have spoken in the debate, as well as placing a copy in the Library.
I have been asked whether contracted-out prisons have to reach the Prison Service's performance targets. The answer is that they do. Performance targets are being introduced across the Prison Service, but at contracted-out prisons there are financial penalties for not achieving the targets.
To answer a point raised by the noble Earl, Lord Longford, the aim of privately managed prisons is to raise standards and improve value for money throughout the Prison Service. Every pound saved by efficiency is another pound that can be spent in the public sector. There are encouraging signs that competition is proving to be a spur to higher standards and greater cost efficiency throughout the Prison Service. Traditional attitudes and work practices are having to change to improve competitiveness. The private sector will provide sustained competition and a source for comparison with the directly managed sector. Private sector prisons are under more scrutiny than those operated by the public sector. Apart from the usual

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oversight by HMCIP and the board of visitors, a Prison Service controller is based at each prison to ensure that the contract is being delivered.
The Earl of Longford: My Lords, I used to be considered the fastest speaker in the House, but the noble Baroness has outdistanced me by a mile. However, I should like to ask her whether she feels any moral objection to putting people (perhaps rightly) into custody and then allowing other people to make a profit out of it. I know that the Minister is a moral woman, so does she have any moral qualms at all about that?
Baroness Blotch: My Lords, the most important thing is that the prisons should be properly run. If they can be run more cost-effectively, that will benefit the Prison Service, the public sector and those who have to pay, the taxpayers. Staffing levels are a matter for UKDS, the company, to determine. The Prison Service monitors the service which UKDS provides. If it fell below the standard required because of a shortage of staff, the company would need to employ more staff to bring the level of service up to what is required.
The noble Lord, Lord Harris, mentioned staff training. Initial training for uniformed staff is based on the required Prison Service model, with strong emphasis from UKDS on maintaining good relationships with prisoners. However, experience has shown a need for more assertiveness training, and that has been incorporated.
The noble Lord, Lord McIntosh, referred to the criticisms about conditions for vulnerable prisoners. The unit for vulnerable prisoners which was seen by the inspectorate was closed in November, and a new one was opened in B-Wing, ending slopping out for that group of prisoners. The noble Lord also referred to
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schedule 2 of the company's contract and suggested that it was not enforceable. That is precisely the problem that we shall be overcoming from May by introducing performance measures into the contracts. The companies will then be held fully accountable.
Much has been said about overcrowding. Overcrowding has been virtually eliminated. The number of prisoners sharing a cell has been cut dramatically, and trebling has been eliminated altogether. The largest prison building programme since Victorian times is taking place, and 21 new prisons have been opened since 1985. That programme has created over 11,000 new prison places at a cost of £1,200 million. Furthermore, 8,000 new places have been built at existing establishments since 1979. Those new places have allowed poor quality accommodation to be closed, and have ensured that the growth in the prison population has not been reflected in overcrowding. In 1987–88, an average of over 5,000 prisoners shared three to a cell designed for one. That has now been totally eliminated. In 1987–88, an average of nearly 13,400 prisoners shared two to a cell designed for one. By 27th February this year, that had been reduced to 7,900 and is improving all the time.
Prisoners are now spending more time in regime activities. Average hours spent by prisoners in constructive activity increased from 23.7 hours per week in 1992–93 to 26.2 hours in the period April 1994 to January 1995. That is an 11 per cent. increase. The proportion of prisoners who remain "unlocked" for 12 hours or more on weekdays has increased from 24 per cent. in March 1993 to 36 per cent. in January 1995.
I have agreed that much needs to be done, but I appreciate this opportunity to place on the record what is being achieved and how the issues are being addressed.
House adjourned at two minutes before eight o'clock.