HL Deb 27 April 1995 vol 563 cc1030-82

3.40 p.m.

Lord Mackay of Ardbrecknish

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Mackay of Ardbrecknish.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 9 [Income and capital: general]:

Baroness Hollis of Heigham moved Amendment No. 111:

Page 8, line 40, at end insert: ("( ) Where a person or the partner of a person is in receipt of earnings of a prescribed description, regulations under subsection (1) shall make provision—

  1. (a) for a minimum weekly amount of those earnings to be disregarded in respect of the person and any partner of his ("the disregard"); and
  2. (b) for the minimum disregard to be applied either weekly (as £10 per week in respect of a person or £20 per week in respect of a couple if both partners have earnings) or quarterly (as £130 per quarter in respect of a person or £260 per quarter in respect of a couple if both partners have earnings).").

The noble Baroness said: In moving Amendment No. 111 I speak also to Amendment No. 171 with which it is grouped.

These are probing amendments which seek to increase the disregard on part-time earnings which may be retained by someone on income support. At present a single person may retain £5 if he or she is on income support; and for a couple the sum is £10. The amendment seeks to explore the implications of raising that disregard from £5 to £10 for a single person and from £10 to £20 for a couple as recommended by the Government's social security advisory committee last year.

We are talking about those in part-time work. I refer to people who work for less than 24 hours a week who also receive income support. Their part-time earnings are deducted pound for pound but they are allowed to retain a modest element—at present £5 or £10. They then go on to income support. Obviously those with children who work more than 24 hours a week are entitled to family credit as an in-work benefit.

We all agree, as we stated in earlier discussions, that part-time work is a valuable way of remaining within the labour market. If we are honest, I believe that we would also agree that £5 for a single person or £10 for a couple is an inadequate incentive for a person on income support to go to work, with the additional costs of travel, clothing, perhaps bought food, and so on.

The Government—we give credit to them—have recognised that lack of incentive by rolling up a proportion of those part-time earnings into a back-to-work bonus when one moves off income support. That is obviously welcome. It will be much appreciated at the time. It comes into play if one moves off income support at 16 hours a week. However, we believe that that scheme is too far into the future and will not operate as the psychological carrot the Government believe that it will.

Our perspective is the same as that of the Government. We wish to encourage people to move into and stay in part-time work. We have the same goals as the Government. However, we believe that the right way to encourage people to do that is to increase the disregard while in part-time work. That is a simple but straightforward proposal. The principle is well established.

Our first argument is that in order to meet the Government's objective of encouraging those on income support to move into part-time work, we should increase the disregard that people can retain before having their net earnings reduced pound for pound.

The second argument is that the proposal is long overdue. In November 1975 the figure was £4. It was not up-rated to £5 until 1988. If the figure of £4 had remained, and had simply been inflation proofed, it would now be worth £16 a week. The £5 figure of November 1988 would now be worth between £7 and £8 a week. Both figures are a more realistic contribution to the additional cost of being in work.

It is the same as with capital rules. If the Government do not inflation proof, and therefore increase, the disregards each and every year, it amounts effectively to a cut. We say that government should rectify that anomaly and thereafter "RPI" it so that a disregard which government intended to be worth £5 in 1988 retains its value. Otherwise the figure will not act as the incentive for work for which we all hope. I beg to move.

Earl Russell

The noble Baroness is quite right about disregards. The Minister knows well my arguments about the matter; I shall not rehearse them again. The noble Baroness is also right about the need for up-rating. Up-rating of capital sums, disregards and savings limits, is done on an irregular basis. Since up-rating is almost of necessity done by regulation, it is extremely difficult for this Chamber to find an appropriate moment to address the issue. If the Minister does not want the general concern about regulations to become more intense, I hope that we shall see some of those capital limits up-rated in the next up-rating statement.

Lord Mackay of Ardbrecknish

The jobseeker's allowance will have common rules for contribution-based and income-based claimants. We have made clear that most claimants will have a £5 weekly disregard, while couples will benefit from a new £10 disregard.

The noble Baroness described the amendment as probing. I understand the attractions of the proposal. Indeed, I put it in the form of a probing amendment to the officials of the Department of Social Security when I joined, as I thought full of fresh ideas, discovering (to no one's surprise, I am sure) that most of the ideas had already been considered.

However, the problem with the proposal is that the costs are considerable. I shall come to them in a moment. It is difficult to quantify how many more people one would encourage—additional to those who are already doing some work while unemployed; and, of course, they do not need additional encouragement.

Increases in the disregard are costly and in incentive terms —because of the point that I have made about what is rather inelegantly called "dead weight"—they are a poor use of resources. It would be difficult not to align the disregard across JSA, housing benefit and council tax benefit. If the amount is raised by £5 per week the cost for that total disregard would be something like £90 million. If it were for JSA alone, the cost would be £25 million. I believe that there are better ways of spending that kind of money, if it were available, than the specific way that we are invited to consider.

We have looked at how to attract and encourage people back to work. One of the ways that we have chosen—the noble Baroness rightly referred to it—is the back-to-work bonus scheme. Through that scheme there will be clear water between out of work benefits and the financial advantage of full-time work. We believe that at least 150,000 people a year will receive payments under the scheme once the scheme is up and running. We shall come to that scheme later. Essentially, above the £5 disregard which anyone is allowed to earn while they are unemployed, half will be rolled up and retained up to a value of £1,000 so that when they go back to work they will receive that back-to-work bonus to help them. We shall discuss that scheme in a little while; I do not wish to go into more detail. However, I believe that that is an important add-on to the straightforward £5 disregard. We have already debated raising the hours which a partner can work from 16 to 24 without removing the entitlement to benefit.

I return to the point that I made in the middle of my remarks. The cost is quite considerable. For JSA only, the sum is £25 million. That would be quite difficult to hold to. One would have to align it across the system, which would cost £90 million. When I made the suggestion, I wondered whether that was the best use we could make of the £90 million. The £5 disregard strikes a balance in providing an incentive to do some work and the back-to-work bonus adds to the incentive without creating a disincentive to take full-time work. I hope that with that explanation the noble Baroness will realise, like me a few months ago, that what sounds a good idea involves problems of an expensive nature. The amount of up to £90 million could be better spent in other ways.

Earl Russell

I understand the Minister's difficulties with quantification. Quantifying the effects of the amendment would quickly sort the optimists from the pessimists, but the pessimists are not always right. Will the Minister try to improve his methods of quantification? While he is doing so, will he agree that the appropriate way to keep his options open is to up-rate in line with inflation?

Lord Mackay of Ardbrecknish

It is extremely difficult to research behavioural aspects of such a matter. In any case, the noble Earl asks me to do the up-rating. I return to my original point: if the up-rating takes us to £16—a point made earlier—it would cost a considerable sum. I do not believe that that is the best use for the amount of money that we can find in the social security system.

Baroness Hollis of Heigham

How does the Minister know that if he has not done the modelling referred to by the noble Earl, Lord Russell? If by increasing the bonus there were X number of additional people willing to work, and therefore not so dependent on income support, the proposal would pay for itself. But we do not know how that balance would work; we are speculating.

The present situation is that a single person working fewer than 24 hours per week is only allowed to retain £5 of that against the income support payment, if he is on low wages. That is £1 per day if he works a few hours every day. I believe that the cheapest single fare on the underground is £1 so if that person travels by underground to a job in London, as I understand it he will have to pay £2 a day just to work there. That is £10 a week on fares at the cheapest rate. That is to say nothing about appropriate clothes. The Minister is very "up front" and gung-ho about appropriate clothes, appearance and behaviour when confronting an employer. Where will the money be found for that from the £5? Where will the underground fare come from? Where will that person find the additional cost of buying a lunch, even from a sandwich shop, as opposed to having lunch at home? Why should anyone seek to work if all they can retain is £5 and, as a result, they are out of pocket?

If the Government assume that people are economically rational—and that is the basis of arguments about targeting, perversity and so on—they must assume that people sit down and say: "How much will it cost me to work? A minimum of £2 a day on underground fares and, say, a modest £1.50 in addition for lunch. I need to retain £15 a week even to be within reach of not being worse off. What am I allowed to retain? Only £5! Why, therefore, does it make sense for me to do what the Minister would like and seek work?"

I am sure that the Committee will regard my argument as unanswerable. I believe that it is. We do not know how many additional people would come into work as a result of the amendment. I believe that we would all agree that we need research and modelling. Only the department can do that.

It is odd that the Minister's enthusiasm for the proposal when he first came into office did not extend so far as seeking adequate information-based answers to allay his anxieties. He was easily deflected by merely being told that it would cost money.

The second government argument was the cost: £25 million for JSA; £90 million if we included housing benefit and council tax benefit. At Committee stage in the other place, the figure given to the Committee by the Minister, Ann Widdecombe, was £75 million. So the figure has increased by £15 million in as many weeks. The cost is £25 million for JSA. So far as I can see at the moment the budget on unemployment benefit is £1,260 million. We are talking about an additional £25 million. The Minister cannot tell me that that figure of £1,260 million is not rounded up, give or take £1 million here, £5 million or £10 million there. Of course it is. The Minister knows that the figure of £25 million on a total unemployment benefit of £1,260 million, before we come to the £16,000 million spent on income support, would be lost in the total equation. It is a rounded off figure by the department and we all know it.

The proposal would mean that the disregard would in future be RPI'd. Everyone in the House and in Parliament accepts that benefits should be RPI'd. Income support is raised each and every year; old age pensions are raised every year according to inflation. Why? If we did not do that, they would effectively be cut. When a disregard is not RPI'd, each and every year, effectively it is cut. So it is unfair because we are cutting the disregard. It is not expensive. The amount would be lost in the small print. So far as I can judge, it would help to encourage people to work who quite reasonably say that they cannot afford to go to work on an extra £1 a day. I repeat, that £1 will not even cover the cost of the single underground fare. I ask the Minister to comment.

Lord Mackay of Ardbrecknish

As all Members of the Committee know, the noble Baroness believes that all her arguments are unanswerable. That is usually the introduction when she replies to me. They may or may not be unanswerable, I believe that most are capable of an answer, but they certainly cost more money. I have not yet kept a tally of the additional expenditure which the noble Baroness would have imposed on the Treasury, if all her unanswerable amendments had been accepted by myself. The till would be ticking up substantially and that is where priorities arise.

I invite the noble Baroness to consider some of her unanswerable arguments and ask herself what priority she would give this proposal. Every suggestion of hers seems to have top priority. I made the point that while I saw some advantages, I was persuaded that if the money were available—which I confirm would be £75 million if up-rated since 1988—it would be better spent in other ways. One of the other ways in which we propose to spend the money is on proposals like the back-to-work bonus. Such suggestions are more sensible than an increase in the disregard.

I notice that the noble Baroness said that the proposal would pay for itself. I do not believe that it would. It would only do so to the extent that someone might take a little part-time work who did none at the time. The dead-weight—as I inelegantly described it—involves the £5 extra which someone already in work would have added to the present £5 disregard. That would cost the Exchequer exactly £5, because £5 more in benefit would have to be paid. So I am afraid that the one thing it would not do is to pay for itself.

The idea that the increase is needed to encourage people to take part-time work when they are unemployed does not hold much water because many people take part-time work. Many unemployed people see the benefits in the longer term of retaining a link with the labour market. I believe that the £5 disregard, which should stay where it is, in addition to the back-to-work bonus, which we will come to later, represents a positive way to encourage people back to work and to help them at the time when they go back to work. With that additional explanation, I hope the noble Baroness will withdraw her amendment.

Lord McCarthy

The Minister said that everything the noble Baroness suggested cost money. He does not know how much, but he is certain that we cannot afford it. If certain things happened, if the elasticities were in a certain direction, it would cost nothing at all. When the noble Lord first went to the department he had a good idea. He was put off by simulations, dead-weight arguments and knock-on effects. Statisticians always back people off with simulations, dead-weight arguments and knock-on effects. The only way to challenge them is by empirical experiment. If the noble Lord would do what we ask or accept the much more modest suggestion of the noble Earl, he may well discover that nothing at all would be lost. But he cannot find out merely by simulations, dead-weight analysis and knock-on effects.

4 p.m.

Earl Russell

The Minister is right when he says that one must count the costs. But if he is going to use his calculator, can he please try to use it correctly? The priorities must depend on the relationship between the costs and the savings. Calculating the savings is extremely difficult, and one may well get it wrong. However, will the Minister agree that a calculation made without the savings is certainly wrong?

Lord Mackay of Ardbrecknish

Elasticity, I regret to tell the noble Lord, Lord McCarthy, tends to pull in both directions, or sometimes in every direction if the elastic is not well held at one end. I have very little to add to the arguments I made. Savings costing is important as well. But the fact is that any logical look at this matter will reveal that the majority of people who would gain from this extra £5 disregard would already be in some form of part-time work. Therefore, if the intention of the amendment is to encourage them to take up part-time work, that encouragement does not seem to me to be needed.

The costs are important. We have increased costs in this field, and some of those increases are in the Bill. I had a number of ideas when I went to the department. We shall come to some of them later today. I believe that they offer better value for money than does this one. Not all one's ideas are good when one looks into matters deeply, although I realise that that is a view that I alone may hold and that the noble Baroness may not.

Baroness Hollis of Heigham

The Minister may regret admitting that he thought that this was a good idea when he first replied since at a later stage we shall obviously wish to pursue the matter. He asks what are our priorities. I would have thought that our priorities are the same as those of the Government; namely, to encourage people back into work. The difference between us is that we believe the most effective way of doing so is to increase the demand for labour and not simply to coerce people into an over-stocked labour market.

Nonetheless, we want to encourage people back into work. One of the well tried and tested ways of doing so is for those who are currently unemployed to acquire a part-time job. They go into the labour market; they learn the skills; they are available to learn about the openings for longer hours and full-time work. We all accept that; it is common knowledge.

The Minister says that the costs would be excessive. I accept that the cost of £25 million on a total budget of £1,260 million would be additional in so far as it would be paid to people already in part-time work. But let us look at the priority; namely, bringing those who are unemployed into part-time work. Let us say that such a person is offered a part-time job paying £40 a week. He currently receives £46.50 a week as a single person over 25 on income support. He would currently lose £35 of that £40 in benefit. He would retain only £5 of it and the rest would he income support. He thinks about it and says, "No, I can't afford it. I can't afford the cost of the fares". It means that the Government are paying out his full allowance for income support (£46.50) instead of paying him just £10, because the rest would have been netted off his part-time earnings. The Minister cannot tell us what the net cost to JSA would be of such people coming into work. All he has given us—the noble Earl, Lord Russell, is absolutely right—is the gross cost of adding it in, assuming that most of that money would go to people already in work. What he has not done is look at the savings on those who are currently unemployed who would come into work and, as a result, to whom the Government would not have to pay the full income support amount because they would themselves contribute £20, £30 or £40 of that amount from their own earnings. Can the Minister give the figure for that? If he cannot, he has not addressed the central issue of the amendment.

Lord Mackay of Ardbrecknish

I do not know whether we shall make much progress in bridging the gap between us. It seems self-evident that if those people who are in part-time work at the moment and benefiting from the £5 disregard receive a further £5 disregard, then that must mean a loss to the Exchequer since they will be paid £5 more in benefit.

I am asked how many people may decide to start part-time work who do not work at the moment. That is difficult to quantify. But logic tells me (it may be that my logic is not very good) that that will be nothing like the same number as those already in part-time work who would receive what I suggested earlier was a deadweight payment.

It is a question of priorities. My right honourable friend the Chancellor of the Exchequer announced in his Budget something like £600 million of added incentives to help people back into work. That is a lot of money. We believe that that is the right priority, the right way to go. If the noble Baroness decides that this is more than a probing amendment and she wants to put it to the Committee, as one might begin to think from the eloquence of her argument, then I invite my noble friends to join me in the Lobby against the proposal and in favour of the proposals we shall debate later in the afternoon which involve encouraging and helping people at the point at which they return to work.

Baroness Hollis of Heigham

I said that this was a probing amendment, and that is why I shall not put it to the vote. The Minister has finally conceded that his figures of £25 million and so on are utterly speculative. As he said, he is relying on logic because he does not have information to show what savings would be achieved in coaxing those who are currently unemployed into part-time work. That is what he said; he does not know. But we know that the amount will certainly be much less than £25 million, because £25 million is the gross cost without any savings set against it. I ask the Minister in all seriousness to ensure that when we return to this amendment on Report his department has done some proper work so that we are not asked to rely on the Minister's intuition, logic, speculation or hypothesis in the absence of hard information from which to see how much the true cost would be of doing something that was decent, fair, civilised and humane. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Burnham)

I have to advise the Committee that if Amendment No. 112 is agreed to, I cannot call Amendments Nos. 113 and 114.

[Amendment No. 112 not moved.]

Lord Swinfen moved Amendment No. 113:

Page 9, line 4, at end insert ("which, in the ease of the income of a disabled person, shall include fees payable for sitting on a Disability Appeal Tribunal for no more than one day a week").

The noble Lord said: In moving this amendment I should also like to speak to Amendments Nos. 114, 115 and 120.

Amendment No. 113 is to ensure that payments made for sitting on a disability appeal tribunal are not taken into account as income. The amendment also relates to the anticipated movement of large numbers of people from incapacity benefit to jobseeker's allowance. Some of these disabled people may have received incapacity benefit at the same time as undertaking types of activity which are "exempt work" and therefore disregarded when entitlement to incapacity benefit is considered. Exempt work for incapacity benefit purposes includes duties undertaken as a member of a disability appeal tribunal or the disability living allowance advisory board, provided that this is not undertaken on more than one day a week.

In the case of sitting on a tribunal, both the activity involved in being a panel member for one day a week, and the fees that are payable are disregarded for the purposes of incapacity benefit. The reason for making this activity "exempt work" was to encourage people with experience of disability to use their expertise on a disability appeal tribunal. That expertise will still be required even if in one week the person is regarded as incapable and in the next is required to sign on for jobseeker's allowance.

I turn to Amendment No. 114. Some disabled people may have savings only because of a lump sum payment made in settlement of a personal injury—possibly the injury that disabled them—which takes them above the limit for the income-related jobseeker's allowance. People can have only £3,000 in savings before their benefit is affected by an assumed return on their capital; and £8,000 is the cut-off point above which no benefit is payable. This level of £8,000 has not been increased since 1990.

Personal injury payments can be distinguished from other kinds of capital in that they are payable for a specific purpose. Current income support rules also allow for the value of a trust fund and the right to receive payments from that fund to be disregarded as capital where such a fund is derived from a payment made in consequence of personal injury. Can my noble friend confirm if the intention is to carry over this provision into the income-related jobseeker's allowance?

Where there is no trust fund, compensation payments do count as capital and can therefore disqualify someone from weekly benefit, so that, for example, someone who was injured at work who had been awarded £15,000 in respect of this injury would only be entitled to six months' contributory jobseeker's allowance, after which time benefit would cease as his savings would take him above the limit. This amendment would allow all such payments to be disregarded, whether or not a trust is in existence. I understand that the Department of Social Security's research, in its Report No. 19, indicates that only around a third of a sample of claimants on invalidity benefit had savings, so it is likely that the public expenditure implications would be limited.

The other two amendments also concern income from capital. Prescribed income levels for disabled people should, in my view, take full account of the extra costs of daily living and the extra cost of job seeking that are incurred by disabled people. All payments of the disability living allowance and all payments of all disability premiums under the income support scheme should be paid in addition to any jobseeker's allowance. All payments from the independent living fund and any payments for personal care that in future may be paid by local authorities should all, in my view, be similarly disregarded in respect of limits imposed on income, and paid in addition to any jobseeker's allowance.

All capital earmarked for expenditure in respect of a person's disability, as I said earlier, should be disregarded. In the past, for example, savings of a mobility allowance to pay for a holiday or a Mutability car used to be disregarded under the old supplementary benefits scheme. That is no longer possible and some disabled people are consequently severely disadvantaged. I beg to move.

Earl Russell

I should like to support all three of the amendments to which I have put my name. In matters to do with disability it is very often the imagination we need to get through to, not the intellect. I have never forgotten the case of Senator John Glenn, as he subsequently became, who went to the moon in the very early days of those activities. He came down safely and almost immediately afterwards broke his leg falling over in his bath. It is said that when one is in the instant of an accident one may sometimes review all one's past life in a few seconds. I have never had that experience but a few days ago I had the experience of slipping very heavily in my bath. I was falling in such a way that I would have landed very heavily on my spine. Having been mentally conditioned by the Minister's calculator, I immediately started totting up in those few seconds, while I, in the event, recovered myself, all the extra expenses which would be needed to convert my house so that I could carry on living and, I hope, working. Before I had succeeded in recovery they had come to quite a large figure in a very short time.

The costs of disability are very real. If they can be met, in some cases one can continue working, one can continue paying income tax, and the Exchequer will benefit. The OPCS, as the noble Lord, Lord Swinfen, has often argued in this Chamber, quite severely under-estimated the costs of disability. On the occasion I described that point was brought home to me very rapidly. Amendment No. 114, which deals with capital as a consequence of personal injury, is simply equitable. I hope the Minister will accept it.

The point about the disability appeal tribunal is an argument we have heard many times before. It is sheer common sense and a non-party matter. I hope the Minister will accept that amendment also.

4.15 p.m.

Baroness Hollis of Heigham

We support these amendments. We all know that disabled people have on average lower incomes and higher costs. We explored that point particularly when we were dealing with the Social Security (Incapacity for Work) Bill. There are additional costs for heating, diet, laundry, clothing and adaptions. We also know from the research of organisations such as RADAR, the Disablement Income Group and the Disability Alliance that on average disabled people have only two-thirds of the income of non-disabled people while their additional living costs are likely to amount to £50 or £60 a week more. That is recognised in the extra disability premiums attached to income support. We hope therefore that this problem of the need for additional income because of the additional costs to be met through disability will be recognised in the JSA both in terms of income and capital disregards. We welcome the amendments.

Lord Rix

My name is not attached to this amendment. I only wish it were. Unfortunately, I use a shower bath and therefore I have not had the chance in the recent past to tot up the figures concerned with disability. But I do know that they are considerable. I support both the previous speakers in that regard.

I should like to point out something to the Minister on which he may care to reflect. In the recent past an amendment put forward by my noble friend Lord Freyberg in your Lordships' House with regard to war widows was agreed to. It was based, perhaps, on emotion, but it was also based on fairness. I am glad to say that your Lordships' House accepted the amendment, as did another place. I believe that fairness applies to Amendments Nos. 113, 114, 115 and 120. It could only redound to the credit of your Lordships' House and to the Government if they were to accept these amendments on behalf of disabled people.

Lord Mackay of Ardbrecknish

It is not often that the noble Earl, Lord Russell, in his amusing historical examples, gives a piece of history that is modern enough to be within my lifetime. If I am right, I do not actually think that Glenn did go to the moon. He may have been the first man to go around the earth. Indeed, he may not even have been that. It may have been a Russian. But he certainly was not the first man to go to the moon. If I am right about that, I am afraid that all my belief in the noble Earl's more distant historical stories will have been shattered. However, I am sure that I can forgive him one small slip of the memory in this case.

Amendment No. 113, moved by my noble friend Lord Swinfen, would allow people with a disability special treatment in JSA. It would mean that any fee received for sitting on a disability appeal tribunal would be ignored in calculating that person's entitlement to both contributory and income-based jobseeker's allowance.

I fully recognise the useful and important service which unemployed disabled people do by sitting on a disability appeal tribunal. However, I do not believe it is appropriate to ignore substantial income received by unemployed people who carry out any work while on benefit, however worth while the nature of the task. The current fee for a lay member of a tribunal is £113. That is a substantial sum which this amendment would allow the claimant to receive in addition to his full benefit entitlement.

Disregarding sums received by those sitting on disability appeal tribunals would lead to inequities between claimants with a disability and other claimants, many of whom could have justifiable, if different, claims for similar special treatments. Indeed, they may also sit on appeal tribunals. The basic principle is that JSA is there to support claimants while they are unemployed and looking for work. That principle is seriously undermined if claimants are able to top up their benefit with earnings which are considerable and which could reduce the incentive for them to move off benefit and back into employment.

There is already special provision in JSA for disabled people who undertake small amounts of work. They will be entitled to a £15 disregard on earnings. That is £10 more than the standard disregard, which we discussed earlier, and £5 more than the couple disregard of £10. In addition, under JSA, as I explained in the previous amendment, half of any amount above the disregard, which includes the £113 fee that I mentioned, will in fact be counted towards the build-up of a new back-to-work bonus. That in its turn will mean that people would be better off; they will get that money when they leave unemployment and find a job. Therefore they will get some of the money back at that point.

I hope that my noble friend accepts that I fully understand the point he makes and very much appreciate the work that people do on such tribunals. But I believe that it would not be right to discriminate—if I may say so—in favour of disabled people against other people in similar circumstances of unemployment or whatever who may sit on appeal tribunals.

I turn to Amendment No. 114, which seeks to allow any capital payment received as a result of a personal injury to be disregarded in assessing entitlement to benefit. I can assure my noble friend that there is no need for this amendment. It is our intention to model the arrangements for income-based jobseeker's allowance closely on the arrangements which apply in income support. Regulations already provide that any capital sums deriving from personal injury payments are disregarded if they are placed in trust. We intend to carry forward that principle in JSA.

The arrangements enable long-term provision to be made for people who have ongoing needs resulting from their injuries. As now, £10 per week of any discretionary income from the trust, plus any discretionary payments for items not covered by benefit, can be disregarded. Any other payments of income (by which I mean payments not out of a discretionary trust)—

Lord Swinfen

Perhaps I may interrupt my noble friend. He said that capital placed in trust would be disregarded. What is the position? Does the disabled person have to put that capital into trust himself? Some people are disabled in such a way that they cannot always handle their own affairs. Alternatively, can that capital be put in trust by someone else acting on their behalf? Or does it have to be put into trust by the person paying the damages for the injury?

Lord Mackay of Ardbrecknish

That is a fairly detailed question but I would guess that the question of by whom the money is put into trust is of no importance. In fact, whether the person himself put it in or whether it was put in on his behalf, the position remains as I stated. So it does not matter.

I was dealing with other payments of income and I had just mentioned the example of payments not out of a discretionary trust. They will be taken into account. We believe that allowing people to benefit from discretionary income strikes the correct balance. It would clearly be a misuse of public funds to ignore significant income available in a system intended to help people whose resources are insufficient to meet their day-to-day needs.

We also believe that to ignore capital deriving from personal injury payments without any restriction would not necessarily encourage long-term provision. Clearly, if the person involved needs long-term care at any level, the sensible thing is to encourage provision to be made for the money to be available in the longer term through a trust. If that was not done, it would be administratively very difficult to separate that capital from any other capital that the person may hold.

Amendments Nos. 115 and 120 seek to allow any income or savings which can be directly attributable to meeting needs associated with a disability to be ignored in assessing entitlement to JSA.

We recognise that people with disabilities can incur increased living costs, which is why the disability premiums which currently apply in income support will be carried forward into income-based JSA. These are paid in recognition of the extra living expenses such as extra heating, special diets, more expensive travel, or laundry costs which people with disabilities can face. In addition, a higher £15 earnings disregard will be payable in recognition of the extra expenses that disabled people might incur while working.

However, income-based JSA, like income support, is intended to help people whose resources are insufficient to meet their day-to-day living expenses. It is only right that, in a system based on means, any income which is available to meet a person's needs should be taken into account, and that those with substantial capital resources should also have their benefit affected by this. As now, capital and most income other than earnings and occupational pensions will not affect entitlement to contributory JSA.

There will, nevertheless, be some exceptions. We intend, when calculating entitlement to benefit, to continue to disregard fully certain social security benefits paid to disabled people, whether to the claimant or his partner. This will include disability living allowance, attendance allowance and constant attendance allowance, which are intended to meet the special needs of disabled people. The first £10 a week of any charitable payment or war disablement pension will also be disregarded.

We also recognise the value which schemes such as Motability—which was mentioned by my noble friend—provide for disabled people. The rules that allow a vehicle to be provided in return for the assignment of any mobility component which a person receives will continue and, in this case, no capital or income will fall to be taken into account for the purpose of JSA.

I appreciate that perhaps I have given my noble friend a mixed bag of replies, some of which I am sure he will find more than satisfactory. I suspect that on the first amendment he may still not agree with me, but I hope that he understands my argument about equity with other people. I hope also that he accepts my assurances on the various points that I have tried to cover in my response to him.

Lord Swinfen

I feel that the whole Committee will be delighted to know that the noble Earl did not damage himself because we benefit very much from what he has to say, particularly the historical anecdotes that he brings out. He may be slightly wrong, as my noble friend suggests, on what happens within our own lifetime but on his own subject no one can better him.

As my noble friend said, he has produced a mixed bag of welcome and possibly not so welcome information in his reply. I shall digest it at greater leisure when I have had an opportunity to read it in the Official Report. It means that I may come back on one or two points at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 114 and 115 not moved.]

Clause 9 agreed to.

Clause 10 [Income and capital: income-based jobseeker's allowance]:

Baroness Hoilis of Heigham moved Amendment No. 116:

Page 9, line 9, at end insert ("of not less than £10,000").

The noble Baroness said: This argument is somewhat similar in nature to the earlier one about earnings disregard. This amendment applies to capital disregards. The £3,000 threshold of capital disregard was fixed in April 1988. If that were up-rated, it would now be worth £4,179 with RPI. The sum of £8,000 determined in 1990 would now be worth £10,119 if RPI-ed. Both figures would be considerably higher if, instead, they were earnings related.

This is a probing amendment. We want to tease out the Government's presumed objection to it. At the moment, one may retain capital up to £3,000. Thereafter, as a couple, capital between £3,000 and £8,000 is taken into account and a notional income attributed to it which is docked off—offset—against income support. Above that capital limit of £8,000, one is not entitled to income support and, therefore, presumably, JSA in its entirety.

Perhaps I may be allowed to make some obvious points. First, as we said earlier we accept and the Minister accepts the principle of up-rating in benefits generally. If that is not done, the worth of the benefit is cut by inflation each and every year. In other words, inflation should not be allowed to eat away at the intention of Parliament when it first fixed the limit. Not to index it is to cut it. Therefore, in all fairness, all such disregards should be RPI-ed each and every year, consistent with the benefits; otherwise, it is worth less and, by knock-on consequences, so is the benefit. Therefore, we undermine Parliament's original intention.

The second point is particular to the capital rules and does not apply to earnings. The Government have fixed a very high notional income attached to those savings. One pound a week in benefit is deducted for every £250 of savings one has over £3,000. I believe I am right in saying that that means that there is assumed to be a notional income from one's capital of over 20 per cent. Many of us would like to have a real income from capital of 20 per cent. Yet the most poor of our society who do not have generous savings and who are on income support are, quite notionally, assumed to have capital giving an income flow of 20 per cent. That bears no relation to the real world we inhabit. That is lost altogether if one has savings over £8,000. Therefore, the second reason for up-rating is to defer the point at which that very severe notional flow of income from savings takes people off benefit.

The third concern is that JSA, the contributory benefit in which savings are not taken into account, is being cut from 12 months to six months. Therefore the effect of that very high penal rate on savings is coming into account six months earlier than under present UB rules and savings will be eaten into much earlier. The consequence is that the Government are sending out to people on income support and those who might be eligible for JSA, a signal that it is not worth saving because if one does those savings are sharply penalised, not just in terms of the notional income one is supposedly drawing from it, but at the cut-off point at which one loses JSA. There is an even greater sense of unfairness when those savings have come not just by putting money away weekly into a policy or whatever, but when they have been awarded, say, as compensation for injury or redundancy. In other words, a payment made for a wrong done is then to be treated not as compensation, but as income on which one is expected to live.

I doubt whether there is anyone in this Committee who disagrees with the view that it is a great mistake, in terms of wider social policy, to wipe out people's modest savings. For example, savings in a rural area allow one to acquire a battered car in the absence of public transport with which to jobseek, acquire and then hold down a job. If those savings are wiped out then one does not have a chance of re-entering the world of work in sparsely populated rural areas. It is those savings which, as one approaches old age, will float one off the need for some charity hand-outs and allow one to buy the aids and adaptations which perhaps allow one to remain in the community rather than needing to go into Community Care. It is those savings, modest though they are, which will prevent an unemployed person from slipping into debt on water and fuel bills. All the evidence from the CABs shows that something like half of all unemployed people slip into debt from which it is almost impossible for many of them to recover. It is equally important for those who are losing their jobs in their later 50s and have virtually to exhaust their savings before they can get JSA. They are also only a year or two off retirement with no cushion whatever to take with them.

We are all living in an increasingly insecure society. Is it really wise for government to make it silly to save? That is what the Government's Jobseekers Bill does. If they were minded to indicate that they will accept these amendments the Bill will be a little less perverse than it is at the moment. I beg to move.

Lord Swinfen

When assessing the nominal or supposed income from capital, in what is that capital supposed to have been invested to produce the income suggested by the noble Baroness?

Earl Russell

On behalf of these Benches we support these amendments. I shall not attempt to gild the lily, but I now have authority to say something which I would like the Committee to know. If we are in a position to do so, we shall repeal this Bill. If the electorate should choose to put us in partnership with another party we shall endeavour to persuade that party, whichever it may be, that it should join in repealing this Bill. I hope that the Opposition will be able to join in this commitment.

I watched the Minister's face. I can see him reaching for his calculator, but before he does so, can he try to get it right this time? We need to know what this provision is going to cost. The figure in the financial memorandum is £270 million of which £220 million is attributable to the cutback in unemployment benefit. On that costing I have been entirely persuaded by the very able speech made by the noble Baroness, Lady Hollis of Heigham, at Second Reading. I hope that she is as successful with that speech at persuading the Treasury people in her own party, as she has been in persuading me. In the other part of the Bill there is a saving envisaged of £50 million. I am sure that the Minister understands why it will carry much greater expenses. The assumption that repealing it would be cost-neutral is very pessimistic, but it is the assumption on which I am acting because I am sometimes pessimistic as regards financial matters. I hope that we can get rid of the legislation at some time.

Lord Mackay of Ardbrecknish

That was an interesting intervention. Clearly, the Liberal Democrat Party have been deep in conclave for a day, a week or an hour—I am not entirely sure—to come to the conclusion that, given the opportunity, they will repeal this Bill. However, that should not stop us in our tracks from carrying on with consideration of the Bill.

I never hear figures of costs from the Opposition concerning their amendments. They sometimes counter what I suggest may be the cost and give the Committee the impression that somehow or other their proposals will be "costless". I do not believe that that was the experience of the Treasury Ministers during the time of the last Labour Government.

Baroness Hollis of Heigham

I am not sure if I offend the rules of the Committee by intervening, but I am sure that Members of the Committee will at least temporarily forgive me. I merely looked to the resources which the Minister has in the Box. There is usually nine, 10 or 11 staff and sometimes we have one or two and sometimes none. That may be why the Minister has better resources to carry out the costings than we have. Of course, we hope to enjoy those benefits ourselves in the not too distant future.

Lord Mackay of Ardbrecknish

I thought that the noble Baroness was going to suggest that I should sack the officials and in that way save money, but she was not quite making that jump. It will be an interesting policy if her party puts that forward as one way in which to find some of the additional money which the amendments before us promise.

I return to the amendment. As I said earlier, income-based JSA is intended to help unemployed people whose resources are insufficient to meet their day-to-day living expenses. It is only right that in any system based on need, capital or income which is available, including that of the claimant's family, is not ignored. In the case of a family, benefit is paid for the whole family, taking into account the resources and needs of the family as a whole.

Income-based jobseeker's allowance will closely model income support, as I have said on a number of occasions. The upper limit will be £8,000 and the lower will be £3,000. We believe that it is necessary to preserve alignments of benefits in order to avoid anomalies and inequities and to preserve incentives.

The present lower and upper capital limits strike a balance which allows people to maintain a cushion of savings to fall back on while expecting those with capital to use some of their resources towards their own living expenses before they have recourse to public funds. Part of that is called "saving for a rainy day". If the rainy day comes—and this is obviously one of them—it is right that the taxpayer should expect people to use their umbrella at least to some extent before calls are made on the taxpayers' resources. The capital limits are part and parcel of the fabric of the system and are designed to ensure that people who have some resources make some use of them before they can ask the taxpayer—the general community—to pay an income-related benefit.

Turning to the amendment which seeks to raise the capital limits to a lower limit of £5,000 and an upper limit of £10,000, the cost of implementing such provisions for income support alone—that is, for all income support, not only for unemployment benefit; I do not think that such provisions could be applied to one narrow group—would be £55 million.

At the risk of hearing another story about calculators, my calculator has already totalled over £100 million of Opposition spending this afternoon—and it is only 4.40 p.m. I shudder to think what my calculator might show at the end of the day. As I said, it already shows well over £100 million in Opposition pledges. I am quite content for the Labour Party to promise such additional expenditure on these and other matters, but that bill will suddenly become very large and unsustainable when added to the current very large social security bill.

I believe that increasing the capital limits would represent poor targeting and add an extra £55 million to the social security budget. Our priority has been to maintain benefit levels and improve help for claimants who are most in need rather than increasing disregards for those who have some resources of their own.

I shall leave answers to the questions about "steps" until we reach Amendment No. 118, tabled by the noble Earl, Lord Russell. That is the time to discuss whether there should or should not be steps between the limits of £3,000 and £8,000. I hope that the noble Baroness will withdraw her amendment. I can see that she does not agree with my proposals. Perhaps that keeps some clear blue water—or should it be clear red water?—between our parties. It is evident that the Labour Party has not lost its taste for spending public money.

Baroness Williams of Crosby

Before we move away from Amendment No. 116, perhaps I may draw the Committee's attention to Amendment No. 117, which is linked with it and which relates to subsection (2). That subsection indicates that where a person is claiming an income-based jobseeker's allowance, it is not only his or her capital but that of, any member of that family", which is to be taken into account. I can think of almost nothing more likely to break up families than that provision.

Let us imagine a family which includes a young person over the age of 18 who is living at home. Members of the Committee will know that that situation is much more common nowadays in our world of insecure employment than was the case 30 or 40 years ago. If that young person is unable to get a job and claims an income-based jobseeker's allowance, he or she will be told at the employment office that, unfortunately, they cannot receive the allowance because their mother has savings of more than the prescribed limit. The young person is therefore put into direct conflict with his or her mother, so far as I can tell, on the question of whether the mother will agree to her savings being reduced in order to allow the young person to claim the jobseeker's allowance. If I understand it correctly—perhaps I do not —that seems an absolutely lethal piece of wording and very strange from a Government who have repeatedly said that they believe in sustaining families and the unity of family life.

Perhaps I may give one more example, If a person seeks an income-based jobseeker's allowance within the category that has been so extensively discussed by the noble Baroness, Lady Hollis, and is incapacitated—but not so incapacitated as to receive an incapacity benefit— and is therefore unable to get either a job or a jobseeker's allowance, nobody else in the family can get that either although, by definition, that family is likely to be in considerable need. Given that it is impossible to put a figure on the costs of breaking up a family—as the Minister knows, they are extremely high, as are the costs when young people live alone—I wonder whether the Minister will give further consideration to this point because unless my interpretation of the subsection is wrong, it seems an incredibly unwise piece of wording.

4.45 p.m.

Baroness Seear

Perhaps both the Minister and the noble Baroness, Lady Hollis, are too young to remember that under the National Assistance Act that is precisely what happened. Children and young people left home because of the way in which income was calculated on the basis of the family.

Lord Swinfen

On the same point, how is the claimant (who may not know the capital of other members of his family) going to tell officials about that? If he is unable to tell the officials, will that count against him and will he be refused any allowances? Or will the officials have power to look into the papers and records of relatives of a claimant—relatives from whom the claimant may be estranged? What would be the position of a claimant whose father had recently married for a second time and who did not get on well with his stepmother, which is quite often the case? A whole raft of unpleasant family situations could result.

Lord Mackay of Ardbrecknish

Members of the Committee seem to think that they have stumbled on something new. In fact, it has been a long-standing principle that the capital of family members is taken into account. I have pointed out that the way in which the benefit is calculated includes a claimant's family. If the claimant is a man, the capital of his spouse and children is taken into account because if he is claiming for himself he is claiming for them all. As I said, it has been a long-standing principle from which I do not dissent. It is only right that the capital of a family should be taken into account. I hope that that answers the question. The principle has existed for a long time. It is really the other half of the principle that when a claimant makes a claim he is doing so also for those members of the family who are dependent on him.

On the more general—

Baroness Hollis of Heigham

Perhaps the Minister will give way—

Lord Mackay of Ardbrecknish

Perhaps I can carry on. It would be easier to answer the questions that have been put to me and then give way to the noble Baroness.

The position regarding young people is that the provisions do not apply if the claimant is over 19 and is still living at home, but they do apply to someone under 19.

Lord McCarthy

Would it be honest to say that the Minister would have completely answered our amendment if we were seeking to abolish the capital disregard? Most of the Minister's speech dealt with the fact that the capital disregard cannot be abolished. The noble Lord would substantially have answered our amendment if we were asking for a major increase in the real value of the capital disregard. However, what my noble friend Lady Hollis has been saying is that the capital disregard should be indexed. What is the Government's policy on that? The Minister was asked clearly several times whether the Government believe in indexing such provisions. Some are indexed; others are not. What is the Government's policy on indexing? Are we now seeing a policy of creeping non-indexation?

Lord Mackay of Ardbrecknish

The Government review, but do not necessarily index, a number of payments in the social security field. We decide whether that is a sensible use of additional resources and whether it is the right way to target resources. I thought that I made the Government's position perfectly clear. We do not believe that increasing the limits is the best way to target resources in the system. We do not agree with the Opposition's view—I appreciate that the amendment is a bit of a cockshy—that the limits should be increased to £5,000 and £10,000. I have explained the cost of doing that and I have explained the Government's position. It is perfectly clear. I presume that the Opposition are pledging another £55 million of expenditure.

Baroness Hollis of Heigham

I should like to make two points in reply. First, it is simply not clear to this side of the Committee that the Bill will save the public money. The Minister may well have been trying to calculate the cost every time we propose an amendment. Clearly, the new instruction from a desperate Tory Central Office is to try to put putative costs on probing amendments. Well, the Minister can enjoy himself, but the substance of our criticism of the Bill is that it is perverse. We suspect that the result of the Bill will be to put a married, or other, partner of somebody who is entitled to JSA out of work because of the effect of means testing. Nothing I have heard in this place or the other place has persuaded me that the Bill is not perverse at its very core. By introducing means testing early one pulls more people out of work early, therefore increasing the dependence of benefit of those people early and thus the taxpayers' bill increases.

So it is no use the Minister lecturing us on the cost of the Bill to taxpayers when its very core will increase public expenditure, and while in the process the Government have allowed employers so to push down wages through the abolition of wages councils that the cost of in-work benefits for those in work has doubled to the cost of us all. It ill becomes the Government to lecture us about costs when their social security policies are so perverse that they have added to the social security bill. We should be delighted to explore them in future, and start producing our own calculations of the cost to taxpayers at the cost of unemployed people.

My second point is specific to the issue of capital. The Minister made the point—I accept it—that savings are for a rainy day. "This is a rainy day", he says, "let them spend their savings". The difference is that under the Government's proposal almost all of those savings would be wiped out by the person having to live on them. The result is that they are then not available for those other contingencies which are entirely honourable, decent and respectable, such as acquiring some means of transport to seek a job. Those savings are not available for such items because those items are never covered by the social security system; in other words, if the social security system wipes out savings, which it should not do, those savings are not available for what they should be used for: that is, transport, and the means to enable one to remain in one's own home.

Finally, the Minister claimed that this expenditure puts clear blue water between us. I shall tell him what clear blue water it puts between us: it signals that the Government are so perverse and so shortsighted in their quest for short-term savings, at the expense of long-term savings, that they will penalise the savings and thrift of ordinary, hard working people who, very often through no fault of their own, find themselves unemployed. After six months, instead of 12, their thrift, their savings, are being penalised by the Government. If that is the clear blue water between us, I take pride in it. I beg leave to withdraw the amendment.

Baroness Williams of Crosby

Before the amendment is withdrawn, perhaps I may take one moment of the Committee's time.

Lord Hailsham of Saint Marylebone

You cannot. The noble Baroness has asked leave to withdraw the amendment. That must be put to the House.

Amendment, by leave, withdrawn.

[Amendments Nos. 117 to 120 not moved.]

Clause 10 agreed to.

Clause 11 [Trade disputes]:

Lord McCarthy moved Amendment No. 120A:

Page 9, line 22, at end insert ("and

  1. (c) the person was eligible to vote in the ballot that authorised the stoppage of work,").

The noble Lord said

I want to speak also to Amendment No. 122 and support Amendment No. 121 tabled by the noble Earl, Lord Russell. I shall not move Amendment No. 123 which has been grouped with these amendments.

I was going to say that this is a probing amendment, except that a probing amendment is one—I take it— upon which one will be wondering to oneself what the Government are going to say. I rather think that I know what the Government will say, but I do not see how the Government can say that these amendments will cost any additional money because they represent what we are doing now and what the Government propose to stop doing. In fact, they will probably cost less and less money as we go on—as the Government believe— because they are all about strikes. They relate to what one might receive or might not receive if one goes on strike or becomes involved in strikes. We all know that the Government believe that strikes will disappear if, in fact, they have not already gone. So we do not have to worry about money.

The clause relates to disqualifications for benefit if one is involved in a trade dispute. We are trying to say that there has been a change in established practice, and Amendment No. 120A deals with the situation where the Government appear to be changing the position from what it was previously, when those involved in a trade dispute were of course not given unemployment benefit. Of course not, and we do not suggest that they should be. But if people were not directly interested in the outcome of the dispute they could appeal and perhaps provide themselves with some benefit.

In our amendment we say that that is a long-winded and much too wide a way of trying to decide whether people are involved in the dispute, and that it should be made clear on the face of the Bill that if people do not vote in a strike ballot it may be assumed that they are not directly involved in the strike. After all, the Government have now made it essential in law, as a result of Section 227 of the 1992 Consolidation Act, that anyone who is involved in a strike—anyone who may be called out on strike—will have to vote in the strike ballot to validate that strike.

Therefore, we have here a simple, straightforward way of bringing into effect what the intention, I should have thought, always was: to distinguish between those who are involved in a dispute and so may benefit from a dispute and are not entitled to unemployment benefit and those who may be laid off as a consequence of the dispute—laid off accidentally or directly, if the employer decides to discipline the strikers for any one of a range of reasons. We believe that there is a straightforward and easy way, without going through an appeal procedure, to distinguish between those who are involved directly and those who are not involved directly in a dispute, which is what appears on the face of the amendment.

Amendment No. 122 seeks to deal with a situation which changes the status quo, because we have changed to a weekly what I still call unemployment benefit and which the Government call a jobseeker's allowance. In the past anyone involved in a strike was not eligible for benefit for the days of the strike, but because we have here an allowance which works for a week, if one is on strike for a day one loses a week's benefit even if for the rest of the week when one is laid off one is not on strike. Nevertheless, because we have created a weekly benefit we say that the striker has to have a weekly disallowance or deduction.

We consider that most of those things are reasonable and that the Government should have an answer. It is in the hope that they have an answer, that I beg to move.

5 p.m.

Lord Rochester

I have sympathy with Amendment No. 120A. In Clause 11(1) it is already conceded that where there is a stoppage of work due to a trade dispute at a person's place of work, that person is not disentitled to jobseeker's allowance if he can prove that he has no direct interest in the dispute. On the face of it, it seems reasonable to suggest, as indeed the noble Lord, Lord McCarthy, has done, that where a person is not eligible to vote in the strike ballot which is needed to validate or make legal the stoppage, he should equally not be disentitled to the allowance. I shall be interested to hear the Minister's response to that amendment.

As regards Amendment No. 122, which is grouped with Amendment No. 120A, it is surely the case that when a person is involved in a trade dispute that person is disentitled to unemployment benefit only in respect of the day or days on which he was involved in it. I too should like to know why the jobseeker's allowance should be treated differently in that respect.

Lord Inglewood

Perhaps I may deal first with Amendment No. 120A. It has been a feature of benefit legislation since the National Insurance Act 1911 that benefit is not payable to people who are not employed because of a stoppage of work due to a trade dispute at the premises at which they are employed. Since 1911 the merits or otherwise of the issues involved in the dispute have been immaterial with regard to benefit entitlement, and the adjudication authorities are not required to take a view on those issues.

Amendment No. 120A would largely have the effect of distinguishing, for benefit purposes, between union members who are eligible to vote in a strike ballot and non-union members who are not. I appreciate that non-union members might find themselves unemployed as a result of a stoppage of work which they did not want to happen. The same could of course be said of those union members who voted against the stoppage. What should happen in relation to a strike not called by a union? This is really irrelevant. The crucial question must continue to be whether they are directly interested in the outcome of the dispute. That has been defined widely by the courts and it may be that that is what the noble Lord, Lord McCarthy, seeks to redefine. For example, if the dispute is over pay, and if any pay rise won by the union would go to union and non-union members alike, then the non-union members are directly interested. It is a long-standing principle of benefit legislation that those who are directly interested in the outcome of a dispute should not be entitled to benefit, and I see no reason to depart from that principle.

I turn now to Amendment No. 122. We are all agreed that people who are unemployed because of involvement in a trade dispute at their place of work should not be entitled to benefit. The original National Insurance Act of 1911—which goes back to a Liberal Government— contained a provision to this effect. Equally, people who withdraw their labour in sympathy with a dispute elsewhere should not be entitled to benefit, and there has been specific provision to that effect since 1986. Clause 11 carries forward these provisions.

The clause is designed to operate in as straightforward a way as possible. If a person is involved in a dispute, or has come out in sympathy with one for any one day in a week, he is not entitled to JSA for the whole of the week. The reasons for any continuing unemployment in the rest of the week do not need to be considered.

In fact, the circumstances in which this amendment would make a practical difference would be very rare. The only circumstances I can conceive of where the amendments would make a difference would be where the jobseeker had been genuinely unemployed for six days and then taken up employment on the seventh, only immediately to come out on strike in furtherance of someone else's trade dispute. Alternatively, he might withdraw his labour for one day in the same circumstances, then immediately be made redundant and be unemployed for the rest of the week. Both are extremely unlikely scenarios.

The amendments would mean that where a week consists of six days of genuine unemployment and one day of unemployment due to a trade dispute, we had to pay six-sevenths of the weekly amount of JSA. That may be an unlikely situation, but I do not consider it an acceptable one. JSA is designed to be a weekly benefit, and any change to this would unnecessarily complicate its operation.

For the avoidance of doubt, it may be helpful to explain that anyone who is disentitled under Clause 11 will continue to be able to claim income support on behalf of any dependants he has.

The noble Lord, Lord McCarthy, said that they are probing amendments and I hope that in the light of the explanation that I have given him he will feel able to withdraw them.

Baroness Williams of Crosby

Before the Minister sits down, perhaps I may ask him to deal briefly with Amendment No. 121 to which I did not speak in order to save the time of the Committee. However, it refers to the specific case of a health and safety dispute where there may be very strong grounds for a dispute and where disentitlement to benefit seems to be a rather harsh penalty.

Lord Inglewood

I am delighted to be able to deal with that amendment because I do not believe that there is any fundamental problem in relation to it.

Amendment No. 121 suggests that that long-standing principle should not apply to disputes concerning health and safety. Of course I fully agree that health and safety are of paramount importance, but giving people what would in effect be a form of subsidy for strikes over health and safety would be an unfortunate and, as I hope to explain, unnecessary development.

Employees are, of course, free to take industrial action, as defined in Clause 31, over any issue, including health and safety; but the decision is theirs and there is no reason to afford them any special protection or privilege if they do so. Taking such action may well be only one among a number of options, including bringing their concerns to the attention of the Health and Safety Executive. Employees already have important rights in that area. For example, the Health and Safety Executive can issue prohibition orders to stop work at unsafe workplace sites.

I should stress that if employees leave the workplace and there is a stoppage of work because of a belief that to remain would expose them to serious and imminent danger that does not, in itself, constitute taking part in industrial action or being involved in a trade dispute and the Clause 11 disentitlement would not apply. Benefit is payable in temporary adverse conditions which stop work, even though the workers may still be employed. If there is a doubt about whether employees were acting in furtherance of a trade dispute, or whether they simply left the premises because of serious and imminent danger, the adjudication authorities would decide the facts in the usual way. But benefit should not be payable when cessation of work was a move in a trade dispute, whether or not health and safety was involved.

Earl Russell

Since the Minister has spoken at such length to Amendment No. 121, perhaps I may be allowed a few words in reply.

I am aware of the provisions of the Trade Union Reform and Employment Rights Act. The word in that legislation which does not occur in this amendment is "imminent". There are situations in which a belief is held sincerely, rightly or wrongly, that a process is, in its nature, unsafe. My amendment provides only for benefit to be available while the matter is under sub judice. It seems to me that where there is a genuine disagreement about whether a process is safe, it is perfectly proper for that to be resolved in the courts. A refusal of benefit in those circumstances may risk interfering with the rule of law.

Lord Inglewood

In the context of the circumstances which the noble Earl describes, where there is a serious situation which may lead to an immediate walkout—and I use the words in a lay sense—from the place of work, the appropriate action is to involve immediately the Health and Safety Executive. That is an extremely effective and immediate way in which to determine the nature of a problem about which there may be anxiety in the workplace.

Secondly, as I explained, if the employees are faced with a situation which they believe is so serious as to merit them having to depart from the place of work, that is outside the definition of a trade dispute and therefore falls within the circumstances that I described in my earlier comments.

Lord Rochester

Would it not be a good idea to clarify the situation by making an addition to the Bill and thus make that point absolutely clear?

Lord Inglewood

As I explained, when one has knowledge of the circumstances, the matter is clear. We can certainly reconsider the matter. However, the basic principle involved is one which is actually straightforward. I suspect that many of the problems about dealing with such legislation lie in the fact that there is so much of it in general. Putting such a provision on the face of the Bill would not necessarily mean that anyone will immediately be much the wiser. I hope that Members of the Committee understand my explanation.

Lord McCarthy

I believe that it is time to withdraw the amendment. Amendment No. 121, not having been moved has nevertheless been answered and further discussed. There is much that I could say about it, but I shall not. It is for those who did not move it to decide what they wish to do.

One of the points I was trying to make with Amendment No. 120A—and one which the Minister does not appear to have engaged in—is whether or not we accept that the direct interest definition is adequate and works well. Some say that it works, while others say that it does not. However, you have to appeal to approve it. You have to say that you have no direct interest. What we are looking for is something, so to speak, factually beyond debate. It is self-evident that a worker did not vote. There is no argument about it: either he voted or he did not. I agree that such a provision may benefit non-unionists; indeed, they are clear straightaway. But I am in favour of that. We are asking for something which is clear and unambiguous. You either vote or you do not. It is a matter of fact. It is not necessary to go somewhere to explain that you were not directly involved and either convince or fail to convince someone. That is the difference.

I turn now to Amendment No. 122. It is rather like the argument about the very small baby. The Minister kept saying that there are not many such people; indeed, Mrs. Widdecombe said the same thing in another place. However, there are a few people like that. There will be a few people who did not go on strike for a week and there will be people who were laid off for a week. Just because the Government, for their own convenience, changed the way that unemployment benefit is calculated so that it is calculated on a weekly basis, it does not seem to us fair to make the unemployed person or the person who was laid off suffer for what is an administrative convenience of the Government. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 121 to 123 not moved.]

Clause 11 agreed to.

Clause 12 [Effect on other claimants]:

[Amendment No. 124 not moved.]

Clause 12 agreed to.

5.15 p.m.

Clause 13 [Severe hardship]:

Baroness Dean of Thornton-le-Fylde moved Amendment No. 125:

Page 11, line 19, leave out ("may") and insert ("shall").

The noble Baroness said: In moving the amendment I shall speak also to Amendments Nos. 127, 130 and 133 and in support of Amendment No. 126. The amendments deal with Clause 13 of the Bill which is specific to young people under the age of 18 and the circumstances under which severe hardship allowance will be paid.

On Clause 13 hangs whether or not a young person between the ages of 16 and 18 will receive any allowance. Yet, as presently worded, the legislation does not even carry the normal elements of equity, balance or fairness. It puts the Secretary of State or, in reality, the employment officer, in a position of tremendous power as regards a young person who may well view such power as omnipotent. That young person is probably inexperienced, with no previous knowledge of claiming welfare benefit.

I wish to address the amendments individually. As presently worded, the clause gives the Secretary of State discretion to decide whether the circumstances are mandatory. Amendment No. 125 would make it a mandatory requirement in the circumstances set out in the Bill. It would provide a safety net for young, potentially vulnerable people in that age group who fall between the criteria of the Bill and who are not entitled either to welfare provision by way of jobseeker's allowance or to income support. Alternatively, to put it another way, as young people they could find themselves destitute, and for what? They have committed no offence. They will be penalised merely because of their age.

Even with the wording of the proposed amendment, the clause would not be an open-ended or risky arrangement for the Secretary of State. All the protections for the taxpayer and the welfare system are there in Clauses 2 and 3. And, indeed, Clause 4 is quite specific concerning the period of time for which benefit will be paid. I suggest that there is also the protection for the Secretary of State in that even "training" and "other assistance" will have such meaning as will be prescribed in the regulations which we have not yet seen.

What circumstances are likely to arise which would signify that a young person in that age group is suffering from severe hardship and should therefore qualify for payment? A young person would have no wage coming in, no benefit, and would probably be registered for training; but he or she may be one of the 15,600 young people who, last October, were waiting for the careers service to give them a course to attend. Alternatively, he may be among the 1,000 young people who have been waiting for over six months. Can Members of the Committee imagine that situation? Such young people are registered for a training course, but there is no course available. That group may well fall within the category under discussion.

Moreover, such young people may well be homeless and, for a whole host of all too-tragic reasons, not living at home. There may be family problems. There may even be unemployment in the family which has driven them to leave home. Indeed, there are many problems that young people of that age group can face. They are all hallmarks of a desperate situation for an extremely vulnerable and immature group. We read all too often of the experiences of those young people.

I should like to express my support for Amendment No. 126, but I turn now to Amendments Nos. 127 and 130 which are similar. They, in turn, would give a young person covered by Clause 13 the right of appeal—not the right of benefit, but the right of appeal—should the Secretary of State refuse to give a direction that this provision applies in his or her circumstances. I remind Members of the Committee that it is a part of the Bill that seeks to recognise that severe hardship can and does apply to that group of young people. Therefore, it is right and appropriate that the right to appeal should be placed within the clause.

We must remember that the young people seeking help under the clause will probably be doing so for the first time. They will be suffering hardship; it is probably their first encounter with the welfare system. They are highly likely to have no knowledge at all of the rules, their individual requirements and their responsibilities and even less likely, according to statistics I have been given, to have advice or representation when they make their applications.

In reality, those young people will be on their own. Yet similar evidence shows that awards of severe hardship allowance are more likely to be granted where a young person does have help, advice and representation. Without the right of appeal, the only real alternative is judicial review. That is difficult enough at the best of times. It is hard to imagine a 16 to 18 year-old even knowing about judicial review let alone having the wherewithal to take such proceedings. And, of course, if they did so, they would not qualify for severe hardship payment. That is an avenue that young people would not even know is open to them and, in reality, it is not.

We are dealing with key and serious issues. If the Secretary of State refuses or revokes the application there is no right of appeal, which means that the individual is penniless with no income. Indeed, there is no provision at all in that respect. I suggest that that makes it even more important for young people to have the right of appeal. I am sure that the Minister will agree that no government of whatever colour would wish to see such vulnerable, young people in a position which probably makes them destitute, penniless and even more at risk of the ills of society without an appeals system. I hope that the Minister will indicate acceptance of the amendment.

I now turn to Amendment No. 133. This will require regard to be given to the welfare of a young person in the event of a potential reduction in benefit. It is not intended to protect that small group of people who are always dragged up as examples to show that people are trying to get the most out of the benefit system or are trying to get out of their responsibilities as regards work and training. This amendment is aimed at the vast majority of young people who are genuine, who do not know the rules, who have difficulties and who need protection from the worst elements within society. I suggest that it is a reasonable and responsible amendment. It will ensure that an officer dealing with a young person will be required to have regard to the welfare of that young person in arriving at a decision. I suggest that therein lies the reasonableness of this amendment as regards the age group we are discussing.

I will give the Committee two examples of real young people. The first example is that of a 16 year-old with learning difficulties. Wirral youth services reported that that young person had left training due to a lack of support for his learning disability and difficulties with other trainees. He was homeless and estranged from his family because of his disability. He was also cut off from benefit. I do not believe—I cannot believe—that that is the intention of this Bill. If it is, the Bill has the potential to create a group of young people who have nowhere to go. We know where those young people all too often end up. We see them in our streets day after day.

The second example is of a young woman who was trying to come to terms with her life after having been subjected to abuse at home. She was forced to leave home and, as a result of her home difficulties and the emotional problems she experienced, she found it difficult to sustain her training place. I ask the Minister whether it is appropriate that in that case benefit should be cut. I am sure that cannot be the intention.

Generally there is a problem with young people who must juggle their appointments with housing services, if they are homeless, and their appointments with other services while trying to maintain attendance on a training course, as this Bill will require. I believe that problems may arise which were not foreseen when the Bill was drafted. If they were, the Bill is substantially deficient in this regard. The young people affected by this clause are acknowledged through their receipt of benefit to be facing severe hardship. Many are estranged from their families. Some are care leavers. A young person leaving care is entitled to only eight weeks' allowance before having to prove that he is in severe hardship. I suggest that that eight weeks' period is all too often inadequate to give that person the time to find somewhere to live, to find a training place and to establish a settled way of life. To reduce such a person's benefits because, supposedly, he cannot show just cause, is wrong, punitive and is certainly counter-productive as regards trying to help young people in the manner in which I would hope this Bill is intended to do. I beg to move.

Lord Henderson of Brompton

I break my silence to support the noble Baroness, Lady Dean, on these amendments. I am particularly interested in Amendments Nos. 125 and 127 which concern the right of appeal. I am sure that we have a special responsibility to our young people which the Government share. They can show that they share this responsibility if they will give to young people, if they want it, the right of appeal. That is the first point.

My second point concerns the amendment to Clause 14, Amendment No. 133, which states that, regard shall be had to the welfare of the young person concerned". These people are quite properly called "young" people. They are not yet adults. They need that special regard. I shall say no more than that both the right of appeal and the special regard are necessary for these people who may otherwise, I regret, fall out with their families. Without the resources which they should properly receive from the state, they may enter undesirable activity, either criminal activity or begging. I strongly urge the Government to give these amendments serious consideration and, if possible, to accept them.

Earl Russell

I wish to support all the amendments in this group and to speak most particularly to Amendment No. 126 which is in my name. But, first, I wish to say a word about Amendment No. 133. That has slightly different language. It refers to our old friend, the "welfare" of the child, from the Children Act 1989. The use of that language in this place draws attention to the fact that we are seeing a real problem here as regards the age of majority. Some Members of the Committee may remember the case of the anorexic 16 year-old who was given forcible treatment. There was a great legal problem over whether she was to be treated as a child or an adult. That indicates a general weakness in the law of majority as it relates to 16 and 17 year-olds. In this case, when it comes to claiming benefit, they are children. When it comes to their parents asking for a child premium on their income support for them, then they are adults. It seems that they are getting the worst of both worlds here. I would like to see the law of majority looked at in a much more general way as it relates to 16 and 17 year-olds. In fact I think it is an appropriate subject for the attention of the Law Commission.

Amendment No. 126 deals with the burden of proof in cases of severe hardship. This is really quite frightening. I believe that when people are deprived of the right to means-tested benefits, which, after all, must presume that their means were pretty low in the first place, it ought to be a presumption that if those benefits are taken away, they will be in severe hardship. I admit there may be cases—one or two of which the noble Lord, Lord Inglewood, referred to last Tuesday—where that might not be so, but it is perfectly fair to say that in those cases the burden of proof should rest on the Secretary of State. The treatment of this subject has suffered a certain amount of spill-over from the assumption made in adult cases that the single person can never be in hardship. I think for that reason there has been a good deal more resistance to the idea of hardship than there might otherwise have been. But if you are sleeping on it, the ground feels just as hard whether you are single or whether you are not.

Baroness Seear

It is harder.

Earl Russell

Perhaps my noble friend has a point there but I think that it will still be pretty hard in either case. I also think that a lot of the trouble that 16 and 17 year-olds have suffered as regards severe hardship comes from the complicated procedure in claiming. The Minister is new to this subject. I would ask him, therefore, to look at the speech made by his noble friend Lord Mottistone on 24th July 1991 which put this so well that I have never succeeded, or even attempted, to improve on it. I admit that the procedure is a little simpler than it was, but it is still difficult.

Speed is of the essence here. If you have been thrown out of your home because you have quarrelled with your mother's new boyfriend, which is a very common cause of this problem, you need food instantly. You are in a state of shock. You cannot go anywhere without money. Therefore, speed is important. Presumption in favour of the young person could help, because it would make speed easier to achieve.

Such a presumption would also make the questioning which inevitably occurs a little easier than it sometimes is. If you have dealt with a 16 year-old in a state of shock you recognise that the word "volatile" is appropriate. It is a word which is derived from the handling of explosives, and that is not necessarily an inappropriate analogy. Some of the questioning to discover the circumstances in which people have been thrown out by their parents tends to produce that volatile effect. There are cases—I have some details with me but I shall not quote them—in which the young person rushes off before the questioning is finished. That sense of hostility creates a problem that directs people into an occupation which pushes them into the underclass. Once you get there it is very difficult to get out. Then a whole life is wasted.

An assumption that the burden of proof rested on the Secretary of State would generate a much more appropriate atmosphere for the whole process. It would create some of the soothing effect that is needed. Then the officers, who I admit have to ask questions so long as the law remains roughly as it is, might stand a much better chance of finding out the truth.

5.30 p.m.

Lord Mackay of Ardbrecknish

We have had an interesting debate on a difficult subject involving a small number of youngsters who, the Government accept (by the legislation we already have in place), can be in a vulnerable position or in hardship.

I cannot accept all that has been said about the position of young people in the benefit system. As this is the first of a number of amendments relating to this issue, it may help if I begin my contribution by outlining how the present system works.

The Government believe that young people are better off in education, training and employment. I believe that that is common ground. In support of that view, we guarantee every 16 and 17 year-old who wants one a suitable youth training place with a wage or a training allowance. We shall spend £669 million on youth training and modern apprenticeships this year in England alone. That is a significant investment in the future of our young people and in the nation's economy. To give the Committee some idea of the number of people involved, in January this year 287,100 young people were in training in Great Britain.

The existence of that guarantee means that there is no reason why young people need to be unemployed. We do not wish to encourage dependence on benefit at such an early age, and 16 and 17 year-olds are therefore in general not entitled to claim benefits as unemployed people.

We recognise, of course, that there may always be those who, for one reason or another, face particular difficulties. We therefore make special provision for those circumstances. Certain young people, such as lone parents or those with a disability, are at present eligible, and will in future be eligible, to claim income support without having to be available for work. Certain others, such as those who are married and have a child, will be able to claim JSA on the same basis as an adult. In addition, all other 16 and 17 year-olds who are waiting for a suitable youth training place will be able to claim JSA if it appears to the Secretary of State that they would otherwise suffer severe hardship. That is the purpose of this clause, which carries forward existing arrangements.

In summary, we want to encourage young people to get the best possible start in the labour market by making the most of the opportunities available, while balancing that against the need to provide support for those who are genuinely vulnerable.

When assessing whether a 16 or 17 year-old is at risk of sever hardship a wide range of personal circumstances is considered, including health, vulnerability and the threat of homelessness; a point that may help the noble Earl. A degree of discretion is necessary to allow all the relevant circumstances of a particular case to be taken into account. Some of those circumstances cannot be foreseen and discretion is essential to ensure that only those 16 and 17 year-olds who need help through JSA receive it.

Decisions on severe hardship are made by specially trained officers acting on behalf of the Secretary of State. Every youngster who applies for a severe hardship payment is interviewed by a specially trained officer who will seek information to decide whether the young person is at risk of severe hardship. If the officer feels that a severe hardship direction is not appropriate, that has to be confirmed by a central unit with considerable expertise in this area.

A degree of discretion is necessary to allow all the relevant circumstances of a particular case to be taken into account. Some of those circumstances cannot be foreseen and discretion is essential to ensure that 16 and 17 year-olds who apply are dealt with properly and fairly. Given that these youngsters only claim JSA in exceptional circumstances, we believe that it is right that there should be such discretion as to whether or not to issue a direction.

Amendment No. 125 would limit the Secretary of State's discretion. The exercise of that discretion is more correctly defined by the use of "may" in the Bill rather than "shall", as suggested. It appears to me that the substitution proposed would be seen as reducing that discretion. Indeed, I suspect that that is the aim of the noble Baroness in moving the amendment. I do not believe that that would be sensible.

Amendment No. 126 seeks to switch the burden of proof with regard to severe hardship. At present the burden is on the claimant to satisfy the Secretary of State that he will suffer severe hardship. Under the amendment, the burden would be on the Secretary of State to show why severe hardship would not arise.

I have already explained that every 16 and 17 year-old who applies for a severe hardship payment is interviewed by a specially trained officer who will seek the necessary information to allow him to decide whether the young person is at risk of severe hardship. As I said, if the officer feels that a severe hardship direction is not appropriate, the decision has to be authorised by a central unit.

I believe that that represents a clear and fair system for young people. It is entirely reasonable to ask young people who want to claim benefit because of risk of severe hardship to provide satisfactory evidence that they are in fact at risk. It is not sensible to require the Secretary of State to prove a case in which it is the young person who has the necessary information. Consequently, I cannot accept that amendment.

The purpose of Amendments Nos. 127 and 130 is to provide a right of appeal to a social security appeal tribunal against any decision by the Secretary of State not to make a direction or to revoke one. Severe hardship is an exceptional route into JSA. Consequently, we do not propose to change the present approach, that these arrangements should not include the right of appeal to the SSAT against the Secretary of State's decision. I should, however, like to emphasise the safeguards which are built into the system.

I have already mentioned some of those safeguards. There is the specially trained officer who interviews the 16 or 17 year-old and seeks information in order to help him decide whether the young person is indeed at risk of severe hardship. Those specially trained officers are very well aware of the potential difficulties which young people may suffer. Indeed, a direction enabling the young person to claim income support is issued in 85 per cent. of cases at present. In 1994 there were 132,535 claims for severe hardship payments. A large number of them were repeat claims. Of those claims, 112,241 were successful, representing 85 per cent. Therefore, clearly the officers responsible treat the matter very seriously and carefully.

I am sorry to repeat the point but I wish to reinforce it. I believe that the system in place meets many of the fears of Members on the Benches opposite. If the officer feels that a direction is not appropriate, that has to be authorised by a central unit which itself has considerable expertise in this area. If the young person feels that all the circumstances have not properly been taken into account, he can ask for his case to be considered again.

As with other amendments, I have to say that we do not propose to change the present approach. These are exceptional arrangements to deal with this small—but difficult to deal with—category of young people. We believe that the arrangements should not include an appeal against the Secretary of State's decision to a social security appeal tribunal.

The purpose of Amendment No. 133 is to provide that the welfare of 16 or 17 year-olds will be taken into account before any reduction in the rate of JSA under Clause 14 is applied.

I have already explained the safeguards that we built into the system. I shall add that it is our intention to make the rules clear to 16 to 17 year-olds when they draw up their jobseeker's agreement which, as my honourable friend the Minister for Employment in another place explained, will be specially tailored for young people. That, together with the safeguards that I have described, will ensure that no young person should unwittingly fall foul of the system. However, if people deliberately abuse the system it is right that there should be some penalty.

Accepting that those young people to whom we refer are vulnerable, it means that we must, as I believe that we do, continue to treat them carefully and sympathetically. But we cannot allow them to use their vulnerability and the exceptions made for them as an excuse—that is what we are talking about—for not taking up training places; or, if training places are taken up, not sticking with them. I do not believe that we should remove all sanctions from this group. Without the sanctions, we would omit what for a tiny minority is the only safeguard we have against them simply refusing every means of help.

Those youngsters in such a group, almost above all other groups of young people, need a training place and encouragement to stick with it if they are ever to break out of what must obviously be their very difficult circumstances. I do not believe that we do them any service by removing the modest penalty which is allowed to be imposed in the system—a 40 per cent. reduction for two weeks—for failure either to take up places after two choices, or to abandon places in training schemes after two attempts.

I believe that it is an important issue. I hope that I have not taken too long in seeking to explain the safeguards we already have in the system that we operate at present. I appreciate that some noble Lords opposite would like to go further. Some noble Lords opposite would like the situation where people receive benefit even if they do not meet any of the qualifying conditions. I believe that that would a serious mistake.

This is a serious issue. I invite the noble Baroness to withdraw her amendment. The noble Earl has an amendment on this issue. I understand that there is strong feeling on the matter. The noble Baroness may decide to divide the Comittee. In that case, I hope that my noble friends are convinced by my argument that we are doing the best we can by those young people, and, if a Division is called, that they will join me in the Lobby.

5.45 p.m.

Baroness Seear

Will the Minister clarify an important point in his speech that I raised, perhaps somewhat out of turn, at an earlier stage in the debate? At the heart of the programme is the desire to get these youngsters into training. I am entirely in agreement with that. We want to see far more people trained. Those youngsters who do not have a job need to obtain training rather than be pushed into, or sometimes to accept because they prefer it, a job which has no future, thereby perpetuating the situation.

The Minister made the point that at the centre of the proposal is the fact that there are training places and that those young people are expected to take training places. That is fine provided that the training place is right for the young person. Will the Minister explain how the appropriate training is worked out? From the point of view of the taxpayer, the trainer and the trainee, it is not satisfactory if those young persons are put into the wrong training. What is done to make sure that it is the right training?

Perhaps I may make this subsidiary point. In an earlier programme which a previous Government ran—I cannot remember whether Conservative or Labour—where there was appropriate training but it was not in the locality in which the young person lived it was possible to make provision for the young person identified for such training to be moved, and to have the expenses of the move paid in order that he obtain the proper training.

What steps are being taken to ensure that the training is right? It is a waste of money and time from everyone's point of view to give people the wrong training. Money spent on giving the right advice and instruction, finding training in the right place, and investing enough money to ensure that that training is undertaken is very worthwhile. Will the Minister explain where we stand on this? How is it done?

Lord Mackay of Ardbrecknish

I am happy to explain to the noble Baroness how we set about ensuring that the training is reasonable.

The safeguards in the system on training start first with the careers service, which decides whether or not a training place is suitable for the young person. Under arrangements made under the Employment and Training Act 1973, as amended by the Trade Union Reform and Employment Rights Act 1993, the service is bound to provide impartial guidance to young people. The careers service will not offer the young person a training place unless it meets his or her needs, circumstances and ability. It will take into account anything which might limit the type of training which the young person might accept, including the young person's preference, aptitude, level of approved qualifications at which he aims, and the duration, proximity and availability of the training.

With JSA we are introducing a new system of internal review which may take place before a direction is revoked—I mentioned that earlier in my main contribution—on the ground that the young person has refused a suitable training place. The young person will be given the opportunity to request a re-examination of his case by the Employment Service before a direction is revoked. The service will consider all the circumstances carefully. If it finds in a young person's favour, the direction will not be revoked.

If the young person is in a training place and is not happy with his training, he has a number of courses of action. He can raise the matter with his training provider. I accept that it rather depends upon the complaint; he or she might not be the appropriate person with whom to raise the matter in some circumstances. But the young person can raise the matter with the TEC which arranges for the provision; or he can go to the careers service and raise his concerns about the training course and its suitability. Again, the matter will be looked into very carefully indeed. If it is found that there is a problem and that the course is not suitable, another place will be sought for the young person.

On the question of the quality of training, like everything else in life the quality of training will vary. There will be very good, mediocre and not so good. But that is the same with all education—dare I say? We want to make sure that none of it is downright bad and the TECs are obliged through their contracts to implement quality assurance arrangements according to standards set by the Secretary of State. Those standards (I am sorry to introduce some quite technical jargon) are known as the TEC Quality Assurance: Supplier Management requirements—needless to say, reduced to TQASMs, which apply uniformly to all TECs. TECs are also obliged, through their contracts, to take any action required as a result of the quality audits that they undertake on training. If they find problems they are obliged to take action.

I hope that those assurances will help the noble Baroness to understand that we take seriously the need to ensure that the training course is of a reasonable quality, and that it matches the needs, aptitude, and so on, of the youngster involved.

Baroness Seear

I thank the Minister. However, I raised the point that under previous administrations it was possible for provisions to be made for a youngster, if there was no appropriate training in the area in which he lived, to move in order to take the appropriate training elsewhere. Is it still possible for that to be considered?

Lord Mackay of Ardbrecknish

I am not sure, I need to check. I would not like to give an answer off the top of my head, in case I was wrong. I am receiving indications that the answer is that the provisions still exist and a youngster in the circumstances outlined by the noble Baroness could receive help if he had to move.

Earl Russell

I recognise the Minister's sincerity. It is a pity that he believes everything he reads in the papers and that the only papers he reads emanate from the Department of Social Security. He is new to the subject; we have been here for quite a long while. Has he read the MORI report published by his own department in 1991? Has he read any of the series of reports from the Coalition on Young People and Social Security? Has he read the report of the Scottish Council for Single Homeless, or of Church Action on Poverty, or the series of reports from the citizens advice bureaux?

If what the Minister says is correct, why is it that he has been totally unable to make it clear to anyone else who has studied the subject? The number of expert reports we have had on it has become so large that I gave up counting a long time ago. The half century was up well before I stopped.

The Minister says that we are merely dealing with a small number of people. That is a real example of only believing the figures which come from his department. There are problems with the figures, as the noble Lord, Lord Inglewood, knows. He has been extremely helpful in trying to do something about it. This year's returns from the careers service show that 6 per cent. of 16 and 17 year-olds are unemployed and the whereabouts and occupations of 6 per cent. are unknown. That makes a total of 12 per cent. I ask the Minister whether he has read the report published by South Glamorgan TEC on 16 and 17 year-olds not in education, training or employment. The figure varied from 16 per cent. to 23 per cent. of the age group. That is not a small number.

The Minister says that they would be better off in education, training or employment. So they would. The question is whether we are prepared to give them the choice between starvation and crime, if they are not.

It is also a question of whether training is available for them. The amount that the Government have spent on youth training has fallen. The number of places has fallen. At present, there are 15,000 16 and 17 year-olds waiting for a place. It is no good saying that they should be in training if the training is not there. It is no good if the training is in a place they cannot reach. Since the Government have not uprated the youth training allowance since 1988, it is no good telling youngsters to take training if they cannot live on the allowance.

The Minister mentioned discretion. He may exercise discretion but I am reminded of the remark of Edward Hyde in another place that it sounds as if discretion were but one remove from rage or fury. You cannot eat discretion.

Baroness Dean of Thornton-le-Fylde

I listened with interest to the Minister's reply on Amendment No. 125. I was astonished at some of his comments. It is no comfort to the small number of people—even if it is a very small number—that they are outside the provisions of the Bill. Those people are just as important as a large number. We cannot ignore and forget them. That brings social problems.

We all agree that young people are better off in training. There is no doubt about that. But what about the 15,500 people who were not in training last October and not in training today? What about the 1,000 who have been waiting for a training scheme for over six months and are still waiting? It is no use the Minister continually telling us about the amount spent by the Government on training. Alongside that and balancing it is the fact that throughout the United Kingdom the budget has been considerably reduced. There is no doubt about that.

Perhaps we may examine what the amendment would mean. The clause states: If it appears to the Secretary of State that a person has reached the age of 16 but not the age of 18, is not entitled to a jobseeker's allowance or to income support, and is registered for training but is not being provided with any training or other assistance "— all of which will be defined in regulations, the content of which we do not yet know— and that severe hardship will result to him unless a jobseeker's allowance is paid to him, the Secretary of State may direct". I suggest that in the prescribed circumstances defined in the Bill the Secretary of State shall direct, as suggested in the amendment. That is quite straightforward.

The Minister mentioned appeals and said, "Well, there were 132,000 last year and 85 per cent., 112,000, were allowed. Therefore, you should have total confidence in our system." I do not have confidence that there is such a person as a perfect employment officer, any more than there is a perfect human being who cannot make mistakes. We all make mistakes. We have seen that when appeals take place under various aspects of the law. The Child Support Agency is a good example of no appeal system being provided.

Perhaps we may consider the converse argument. If the number of applicants who succeed is so high and those turned down so few, then the number of appeals under the system which we provide will equally be few. It will be no great burden on the system. However, it will give the opportunity for a second look at a vulnerable group in our society. That is why the amendment has been put down—on the basis of equity, fairness and compassion for that small group.

The Minister says that it is not necessary to have regard for the welfare of a young person because that is exactly what the officer will do. If officers will do that in the course of their work, why not put it on the face of the Bill as a responsibility? "Have trust in me" does not always work. We have reams of statistics to prove it.

The Minister generously said that it is clear that we feel strongly about the aspects affecting young people on this side of the Committee. We do. On that basis, I seek the opinion of the Committee and commend Amendment No. 125.

5.58 p.m.

On Question, Whether the said amendment (No. 125) shall be agreed to?

Their Lordships divided: Contents, 61; Not-Contents, 101.

Division No. 1
Addington, L. Lawrence, L.
Airedale, L. Longford, E.
Beaumont of Whitley, L. Lovell-Davis, L.
Brookes, L. McCarthy, L.
Carter, L. McIntosh of Haringey, L.
Clinton-Davis, L. McNair, L.
Cocks of Hartcliffe, L. Masham of Ilton, B.
Craigavon, V. Merlyn-Rees, L.
Darcy (de Knayth), B. Monkswell, L.
Dean of Thornton-le-Fylde, B. Morris of Castle Morris, L.
Donaldson of Kingsbridge, L. Nelson, E.
Dormand of Easington, L. Oxford, Bp.
Eatwell, L. Perry of Walton, L.
Falkland, V. Richard, L.
Fitt, L. Ritchie of Dundee, L.
Gladwin of Clee, L. Rochester, L.
Graham of Edmonton, L. Rodgers of Quarry Bank, L.
Russell, E. [Teller]
Halsbury, E. Seear, B.
Hamwee, B. Shepherd, L.
Hardinge, V. Stoddart of Swindon, L.
Harris of Greenwich, L. Strabolgi, L.
Haskel, L. [Teller.] Thomson of Monifieth, L.
Henderson of Brompton, L. Tope, L.
Hollis of Heigham, B. Tordoff, L.
Houghton of Sowerby, L. Wharton, B.
Hylton, L. White, B.
Hylton-Foster, B. Wigoder, L.
Jeger, B. Williams of Crosby, B.
Jenkins of Putney, L. Williams of Elvel, L.
Kilbracken, L. Winchilsea and Nottingham, E.
Abinger, L. Cumberlege, B.
Addison, V. Davidson, V.
Aldington, L. Denham, L.
Archer of Weston-Super-Mare, L. Denton of Wakefield, B.
Dixon-Smith, L.
Ashbourne, L. Downshire, M.
Astor of Hever, L. Elton, L.
Balfour, E. Flather, B.
Barnard, L. Fraser of Carmyllie, L.
Beloff, L. Gage, V.
Blaker, L. Geddes, L.
Blatch, B. Gisborough, L.
Blyth, L. Goschen, V.
Boardman, L. Hailsham of Saint Marylebone, L.
Boyd-Carpenter, L.
Brabazon of Tara, L. Harding of Petherton, L.
Braine of Wheatley, L. Harlech, L.
Brougham and Vaux, L. Henley, L.
Burnham, L. Hogg, B.
Cadman, L. HolmPatrick, L.
Caithness, E. Howe, E.
Campbell of Croy, L. Inglewood, L.
Carnegy of Lour, B. Ironside, L.
Carnock, L. Jeffreys, L.
Chalker of Wallasey, B. Killearn, L.
Chesham, L. Kingsland, L.
Clanwilliam, E. Leigh, L.
Clark of Kempston, L. Lindsay, E.
Colwyn, L. Long, V. [Teller]
Cranborne, V. [Lord Privy Seal.] Lucas, L.
Lyell, L.
Crickhowell, L. McColl of Dulwich, L.
McConnell, L. Platt of Writtle, B.
Mackay of Ardbrecknish, L. Prior, L.
Macleod of Borve, B. Quinton, L.
Malmesbury, E. Rawlings, B.
Marlesford, L. Renton, L.
Melville, V. Rodger of Earlsferry, L.
Mersey, V. Seccombe, B.
Miller of Hendon, B. Sharples, B.
Milverton, L. Shaw of Northstead, L.
Montgomery of Alamein, V. Shrewsbury, E.
Mottistone, L. Stewartby, L.
Mountevans, L. Stockton, E.
Munster, E. Strathclyde, L. [Teller.]
Norfolk, D. Sudeley, L.
Northesk, E. Swansea, L.
Oppenheim-Barnes, B. Thomas of Gwydir, L.
Orkney, E. Trumpington, B.
Orr-Ewing, L. Tugendhat, L.
Oxfuird, V. Vivian, L.
Pearson of Rannoch, L. Wakeham, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.6 p.m.

[Amendments Nos. 126 and 127 not moved.]

Earl Russell moved Amendment No. 127A:

Page 11, line 19, at end insert: ("( ) This section shall apply to any person who is pregnant and registered for Youth Training.").

The noble Earl said: This amendment relates to the list of exemptions and changes in the system of severe hardship payments. There are a lot of flaws in this system. I should like to speak to the group of amendments that addresses them. The first directs that a person who is pregnant and registered for youth training and is without other means of support shall be found to be suffering from severe hardship.

I hope that the Minister will not waste the Committee's time by telling us that women who are pregnant up to (I believe) the 29th week in these calculations are normally perfectly capable of work. That is common ground. The question is whether employers or training providers are prepared to employ them. A great many people have a great deal of prejudice against employing or training pregnant women. There was one case in Cardiff of a man who refused to employ a pregnant woman on the ground that it was unnatural. I do rather wonder how he got here! A great many of the cases of really acute hardship that we come across are the result of pregnancy. I remember one in particular of a woman living on the £15 a week bridging allowance who had only one skirt that she was capable of wearing. She had no chance at all of buying another. It must have been extremely difficult to keep it clean.

The next amendment deals with people who have completed a course of youth training or have lost a place through no fault of their own; for example through a training provider going bankrupt. I regret to say that that does happen. It is one of the central difficulties of the reliance on the supposedly guaranteed youth training place that, according to MORI, the median length of a youth training place is three months and the period of time for which a guarantee is supposed to be provided is two years. Clearly, there is a considerable shortfall. We very often come across people who have completed a youth training course and are waiting for another, and for whom there is not one available; all that they can get is the ridiculous £15 bridging allowance which has not been up-rated since 1988. The noble Lord, Lord Henley, when he was Minister, said he thought that MORI had got it wrong, and that the figure of three months for the median length of youth training courses was not correct. I put down a Question to ask what the correct figure was. I got the answer that the Government did not know. If they do not know, how can they deny the claim of MORI that is based upon a piece of research commissioned by the Government themselves?

The third of these exception cases concerns people who want to enlist in the Armed Forces. Any country that wishes to defend itself must have armed forces, and in any country where there are armed forces it must be possible to enlist in them. It is clear enough that somebody who wishes to enlist in the Armed Forces does not seek a life of unemployment and benefit dependency. It is an occupation in which a good deal of training and hard work occur. In particular, the Army recruits by means of a limited series of enlistment days on which people can join up. If one wants to enlist one has to wait for the next enlistment day. A great many of the gross cases of hardship that have arisen have concerned people who have put themselves down to enlist in the Army and the period of time before the next enlistment day has been too short for them to undertake a youth training course. No trainer will take them on because they cannot complete the course. Their claim to severe hardship payment has not been recognised. I admit that the situation is better than it used to be. However, the last case in this category of which I heard emerged last week, and I was distressed to know that it was still going on. If the Government were to accept this amendment, which they could well do within the basic principles of their policy, this situation could never arise again. Amendment No. 127C is about as mild an amendment as can be. If the Government do not accept it, they will need a very good reason. I beg to move.

6.15 p.m.

Lord Swinfen

I support this group of amendments, and in particular the first one. It is absolutely essential that a pregnant woman is able to feed herself properly for her own health and that of her unborn child. If she is not able to feed herself properly she may create problems for herself and perhaps greater health problems for the rest of the child's life, which may last 70, 80 or 90 years. The pure economics are such that from the point of view of the public purse it is an investment to pay a severe hardship allowance to the mother so as to make a considerably greater saving to the National Health Service for the rest of the child's life.

I also support Amendment No. 127C too. Quite obviously, the Army needs a certain number of people at each intake for the training programme to be viable. Therefore, until they are ready to start a new intake they cannot enlist an individual. Obviously, that individual is desperate to get a particular job. He will probably have been accepted and is only biding his time until he is allowed to start work.

Lord Mackay of Ardbrecknish

I am grateful to the noble Earl for his explanation of the three amendments. His purpose in tabling the first amendment is to make special provision in JSA for pregnant 16 and 17 year-olds. I can well understand his concerns. I welcome this opportunity to look at the issue and explain to your Lordships what will happen under our proposals. The amendment before the Committee seeks to provide that, if a pregnant 16 or 17 year-old who is registered for youth training makes a claim for JSA, a direction to allow her to claim JSA should automatically be made without it being necessary for her to prove that there is a risk of severe hardship. I understand the thinking behind such a proposal, but I believe that it is inappropriate to make such special condition.

Perhaps I may explain the position to your Lordships so that the arguments on both sides are understood. I appreciate that the noble Earl does not need my explanation because he knows about it. Pregnant 16 and 17 year-olds are able to claim income support for the period starting 11 weeks before the expected week of confinement, and ending seven weeks after the confinement, without having to be registered for training or having to be available for, or actively seeking, employment. That is provided for in income support regulations and will continue to be so after the introduction of JSA. Outside that period, in which they may claim income support, pregnant 16 and 17 year-olds—just like other 16 and 17 year-olds—will be able to claim if they will otherwise suffer severe hardship. To do that, they must apply for a direction under Clause 13. Indeed, that direction will be issued if it appears to the Secretary of State that the conditions discussed earlier in Clause 13(1) are satisfied. The guidance in the severe hardship directions makes clear that all relevant circumstances must be taken into account. This guidance, which is publicly available, deals specifically with pregnancy. It states that, if a young person is pregnant, a note of any health problems should be taken and consideration given as to whether they may increase the risk of severe hardship. I hope that that helps to explain why I cannot accept Amendment No. 127A.

I deal next with Amendment No. 127B. By this amendment the noble Earl seeks to make special provision for 16 and 17 year-olds whose training places come to an end, or who have left such a place with good cause. I understand the point that is made. I hope that I can offer him some reassurance that young people in that position will not be left stranded. If such a young person re-registers for training and is at risk of severe hardship, he will be able to seek a direction. If he is not at risk of severe hardship, a direction will not be issued. I do not believe that it would be right to make special provision for this group of young people. Of course, when they come back on to the scheme, the training providers and the careers service will take immediate steps to try to find them another training scheme in order to replace the one that they have had to leave for whatever reason. The noble Earl mentioned the bankruptcy of the training provider as one such case. Clearly, that would be a case where efforts would be made immediately to try to find the young person another training course. But that young person would not fall to be paid money unless a direction was given on the ground that he was at risk of severe hardship.

I deal next with Amendment No. 127C. I do not believe that there is any disagreement between us on the importance of the Armed Forces and the career opportunities that they provide to many young people. This amendment seeks to provide that a direction should automatically be made for those youngsters who are waiting for an enlistment date to join the Armed Forces without it being necessary for them to prove that there is a risk of severe hardship. I confirm that it is our intention to ensure that that happens. I believe that this amendment was tabled only on Tuesday. As with many matters dealing with social security legislation, it is slightly more complicated than it may appear at first sight. Arrangements for recruitment to the Armed Forces are undergoing some changes at present. This is an example of why it is appropriate to deal with matters in secondary legislation. The complexity and variability of this issue is quite considerable. I appreciate the noble Earl's concern and that he will want to have a more detailed assurance once I have had the chance to consider the points that he has made and looked into the issue. Perhaps if he is content to leave this amendment at that, I shall reflect on what he says and take the opportunity to look into what I understand is a complicated issue and see whether there is indeed a problem.

Lord Boyd-Carpenter

Before my noble friend sits down, is he aware that to many of us, and certainly to me, the previous amendment seems to be the only sensible one of the lot.

Earl Russell

I am grateful for that small mercy. I am also extremely grateful to the Minister for an even smaller but very genuine mercy. It is the first chink of light that I have seen on any amendment on this subject since 1988 and I must welcome it. I had been just about to say that I began to suspect that if I tabled an amendment to the effect that the Government should go into the next election with an advantage of 100 seats, the Government would resist it, and not for the right reasons either.

I asked the Minister not to repeat the argument about pregnant women being able to take training. That is not because I was not prepared to listen to it—I have listened to that argument at least 20 times already and not one syllable has changed in it since 1988, so it does indeed need updating—but because it was not relevant to the point at issue. The point at issue is not whether pregnant women can take youth training. Most of them can do so and, if they can get it, good luck to them. The point is that it is very difficult for them to get it. Before I decide what to do about this amendment, I should like to ask the Minister at least to address that point. I have been trying to get the Government to address that question since we debated the Social Security Bill of 1989. Before leaving the subject, I should like to have my first answer.

In the case of the person whose youth training course is complete, I do not understand why the Minister does not think that severe hardship is automatic. If you have no income other than a £15 bridging allowance, I simply do not understand how it is possible not to be experiencing severe hardship. I am in genuine difficulty with that and again I should like to be helped.

A young person may be on his own. Once again I must remind the Minister that in the MORI sample 65 per cent. of 16 and 17 year-olds who were living away from home were doing so because their parents had thrown them out and they could not go back if they wanted. In the Centrepoint sample taken last year, that was true of 86 per cent. of the sample. If you are in that situation, you are completely self-supporting. You have no work and no benefit. It is no good just waiting awhile to see whether something will turn up in a few weeks. Most of us cannot live for several weeks without eating. So there has to be something available instantly and it can only be available instantly if it is a right. Again, I should be very grateful if that argument could be addressed before I decide what to do with the amendment.

Lord Mackay of Ardbrecknish

The noble Earl raises a number of issues. I hope that I noted them all in order to cover them in my reply. Sometimes it is difficult to give more than a general answer. Neither of us has the young person concerned in front of him to look at all the circumstances. First of all, I do not have any evidence one way or the other on the noble Earl's question about the difficulty of a young woman obtaining youth training if she is pregnant, but I shall certainly look into that matter.

Earl Russell

Can the Minister guarantee to have that information before we discuss this matter in the next session?

Lord Mackay of Ardbrecknish

No, I cannot guarantee that. I suspect that it is the kind of information that is quite difficult to obtain. The reason why a youngster is not on youth training may not be the kind of information that is collected centrally. We may know the numbers of those who are having trouble getting on to a youth training scheme but not the reasons. By the law of nature, a youngster in that situation who cannot get a youth training scheme may very quickly fall out of the necessity to look for one, having arrived at 11 weeks before the expected date of confinement. It might be a fairly moving target, but I shall look at it—or look at the point about the resources that the young person may have.

As I have introduced some hilarity into the proceedings, perhaps I may move on from that to the point that the young person may have a partner who is still with her, as opposed to a partner who is not with her any more. That person may well have an income and, I accept, may well be on JSA, but may also be on a training scheme and so on. The youngster may have supportive parents—but the noble Earl rather snookered me on that argument by narrowing it down even further to people who were living away from home because of a threat of physical and sexual abuse at home.

There are circumstances in which 16 year-olds are in those conditions, and those would be some of the factors that could be taken into account in deciding whether they are entitled to jobseeker's allowance.

Earl Russell

I am grateful to the Minister for giving way. I did not say that this was necessarily a matter of physical or sexual abuse. I said that this was a category of people whose parents had thrown them out. I did not go into the reasons. There are a great variety of them.

Lord Mackay of Ardbrecknish

If the noble Earl wants to move on, I think one has to look into the reasons why the youngster is not at home. Those are the kind of matters that are taken into account. But there has to be some reason why they are living away from home—either they are estranged from their parents, in physical or moral danger or perhaps there is a risk to their physical or mental health. There are a number of factors. It is difficult to say without an almost dry-run case in front of us and the people who make those decisions. I like to think that I am good at some things, though the Committee may not think so. But the one thing that I know I am not is a trained employment officer; someone trained in the kind of work that is undertaken in order to make such judgments. I do my best to try to illustrate the factors that such an officer takes into account and I have indicated some of them. On that judgment he decides whether or not the youngster in front of him is in the category of either vulnerable or in severe hardship. It is on that basis that the awards outside the periods pre- and post- the confinement are given.

I do not think that I can be any more helpful to the noble Earl than I have tried to be.

Lord Monkswell

Perhaps I may ask the Minister to elucidate the matter a little more. As I understand it, the amendment refers to a 16 or 17 year-old who is pregnant. Almost by definition that refers to a single female. The Minister shakes his head but I cannot imagine that men get pregnant - but never mind that.

The Minister raised the point of such a person having a partner. I can see the logic of that point of view. But, we have been talking about a single person who is pregnant. The Government have raised the issue of a partner. Am I to understand that if a 16 or 17 year-old pregnant person has a partner who is also 16 or 17 years old and unemployed, the social security system will provide for the couple?

Lord Mackay of Ardbrecknish

I am not sure that I was expressing surprise about the fact that the person pregnant would be female. But clearly there are three or four categories that may come into play thereafter; I can think of three. The person may be alone because the father has simply pushed off or is not known or whatever it may be; the persons may be a couple who are not married; or they may be married. So there are at least three broad categories which would be encompassed. In a way it depends in the second and third case on the partner and what the partner's eligibility is for benefit or, indeed, if the partner or husband—to cover both of them—is in work. That will depend on their age. They may well be in a training scheme. I do not think I can go any further than that. I have explained what I meant by the different circumstances in which the young person might find herself.

If I may revert to the question about training, I am advised that we certainly do not have any knowledge or information about any particular difficulties. A research programme is currently being conducted on early leavers which is due to produce its results in the summer. It may be that it will throw up some information on the points made by the noble Earl. I shall try to put to the back of my mind the noble Earl's interest—I do not mean to say "to the back of my mind" but "in the back of my mind—in this issue so that I can draw his attention to yet another publication on this subject.

6.30 p.m.

Earl Russell

I thank the Minister, especially for that concluding remark. I shall touch briefly on the point about partners. A number of them have partners. The commonest category is other 16 and 17 year-olds in exactly the same difficulties. If the Minister really wanted to do one thing to encourage family life it might be by recognising a hardship category of cohabiting or married fathers—two 16 and 17 year-olds living together with a child. That really could be constructive.

I do not think that we shall get much further tonight. However, before we have our return fixture at the next stage, perhaps I may ask the Minister to try to familiarise himself with some of the immense wealth of learning and research on this subject which is done outside the walls of the Department of Social Security, especially on the point of difficulty of pregnant women getting training. Perhaps he will consult the National Association of Citizens Advice Bureaux which has a very large number of such cases. Perhaps he will also remember that if the Government really do change their policy on this point it will do a great deal to ease the pressure on parliamentary time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 127B to 127E not moved.]

Baroness Dean of Thornton-le-Fylde moved Amendment No. 128:

Page 11, line 27, after ("failed") insert ("without good cause").

The noble Baroness said: In moving this amendment I wish to speak also to Amendment No. 129. This is a straightforward amendment. It provides that the question of good cause must be considered before a young person loses his severe hardship allowance for failing to pursue an opportunity for training or employment or rejecting an offer of assistance, training or employment. The principle of good cause is not a new one to this Bill. It is specifically provided for in Clause 14. We welcome that. We think it is appropriate that it should appear in Clause 13, which is a much more punitive clause affecting young people than Clause 14.

The amendment is modest. It would place a statutory requirement on the Secretary of State to consider a 16 or 17 year-old's reasons for failing to pursue an opportunity for training or employment or other assistance, or rejecting such an offer, before a direction is revoked. In another place the Minister of State for Employment has, I gather, already announced a new review procedure to be followed before the Secretary of State will revoke a direction. If that is to take place, we shall welcome it. We also think it assists us in asking the Committee to support the amendment.

It will be a general requirement. It will allow a dialogue with the young person and allow him or her to establish where there has been good cause. For instance, a young person in the South-East obtained a training place on youth training through a training agency. The young person had arthritis but was nevertheless employed as a shop assistant, which involved standing up all day from 9 a.m. to 6 p.m. five days a week. She was required to meet her own travelling expenses, which is normal. That left her with £3.50 a week for all her necessities. The training agency understandably acknowledged that the placement was not suitable. The system worked—"good cause" under this amendment. The amendment seeks to introduce into Clause 13 that good cause will be taken into account just as it is in Clause 14. I beg to move.

Baroness Williams of Crosby

In rising to support the amendments I wish to ask one or two questions. As the Minister will recognise, the position is one in which a direction may be revoked if the young person concerned decides not to take up an offer of training or employment or rejects such an offer. I wish to pursue with the Minister the issue of good cause.

The Secretary of State—probably in most cases in the person of an official in his department—when he comes to consider the revocation of a direction will have before him certain facts. Without the addition of the words "with good cause" those facts will be limited to the actual physical facts of the case. He will not be required to produce the arguments that may arise—they may be in good faith arguments—for having rejected or refused to pursue an opportunity of employment or of training.

I would be less concerned about this failure to mention the words "good cause" if we had not at an earlier stage, when we were talking about availability for work and actively seeking work, failed to amend the Bill to list a series of requirements which apply to people with specific positions —for example, people with religious objections to working on Sunday, people with learning difficulties, people with difficulties with the language, and so on. What that means is that in the case of a 16 to 18 year-old whose severe hardship allowance may be removed he or she will not have the safeguard that would have been provided by that earlier amendment.

In that case "with good cause" must in effect stand for apparently those reasonable conditions that the Minister in responding agreed were reasonable conditions—ones to be taken seriously into account. But they would not even appear on the Minister's desk as something he or she had to bear in mind unless the words "with good cause" applied. Speaking as someone who, like Ministers themselves, has been involved in the discretionary judgment that has to be made, the absence of the words "with good cause" simply means that the arguments that might be legitimately advanced by the claimant will not need to be advanced when that case is put in the Minister's Red Box for final judgment.

I wish to make one other point and then, because of the shortage of time, I shall not pursue the matter further. As my noble friend Lady Seear pointed out, the truth of the matter is that some training schemes do not deserve those words. I say that having spent some part of last year looking at training schemes in my capacity as chairman of my party's employment commission. Some training places are simply a joke. Some are excellent. What we are doing at the moment is removing that best known of all market responses to a bad product—the right to be able to withdraw one's custom. That is a very troubling thing to do. The phrase "without good cause" will allow young claimants to be able to urge that they had good reason to refuse the product. Of all things, a Conservative government should sustain the customer's right to say, "I am sorry, the product was no good".

Lord Swinfen

In my own mind I am quite certain that the Government have the intention that no direction should be revoked without good cause. That is the intention. However, those words should be on the face of the Bill. To take the example which the noble Baroness, Lady Dean, gave of a young person with arthritis having to give up her training place, the vast majority of people in this country do not understand that some severe arthritic conditions can afflict very young people. Most of us consider arthritis to be a disease of the elderly. However, it can strike, sometimes in its most severe form, among the young of this sort of age. In my work with the John Grooms Association for Disabled People I have come across it on more than one occasion.

A young, inexperienced person dealing with a young teenager who came back to say that they had given up their job, would not understand about arthritis and could recommend revocation of the direction without really going into the facts. This provision is a safeguard. In my own mind I know that it is intended to be there, but it should be written into the Bill. Without it, the ordinary person in the street will not have any opportunity to come hack and say that their case had not been properly dealt with.

Lord Mackay of Ardbrecknish

The purpose of these amendments is to provide that a direction may be revoked under Clause 13(3) (b) only if the 16 or 17 year-old has refused or failed to pursue training without good cause. Young people wishing to claim JSA on severe hardship grounds, because that is what we are talking about, must register with the careers service. As a result, most will be quickly offered and accept suitable training or other assistance. If a 16 or 17 year-old receiving JSA on severe hardship grounds fails to take up such opportunities and thereby fails to remove himself from severe hardship, then it is surely right that his direction should be revoked. That is why Clause 13 gives the Secretary of State the power to revoke the direction if it appears to him that the 16 or 17 year-old has failed to pursue or has rejected training places or other assistance.

I recognise that some Members of the Committee are concerned that this system must be operated fairly. I can assure your Lordships that young people will be able to reject unsuitable opportunities. As my honourable friend the Minister for Employment made clear on more than one occasion in another place, the Government recognise that young people may not always be completely clear as to their vocational needs and aspirations. That is why we intend that those newly covered by the Government's youth training guarantee should be allowed, without penalty, to turn down one offer of training or to leave one training place early for any reason whatsoever. The regulations will provide that if they turn down two suitable training places or leave two such places early, or a combination of those, they will receive a penalty of a 40 per cent. reduction in the personal rate of JSA for two weeks. I addressed the reasons why I think that is correct policy in my original speech on this clause.

Baroness Hollis of Heigham

I am grateful to the Minister for giving way. He said that the distinction between his reply and the wording on the face of the Bill was "suitable training". Is the Minister saying that he would be prepared to sponsor or accept an amendment from us as regards subsection (3)(b)? It would then read: it appears to him that the person concerned—

  1. (i) has failed to pursue an opportunity of obtaining suitable training or other assistance … or
  2. (ii) has rejected an offer of suitable training or other assistance".
Will the Minister accept such an amendment? Those were the words the Minister used which seem to take up the point made by his noble friend Lord Swinfen of "good cause" or "suitability". As the Minister used that word to gloss the words of the Bill, will he either accept our amendment or move one of his own to make the matter clear? In that event some of our fears will be allayed.

6.45 p.m.

Lord Mackay of Ardbrecknish

That is a good try by the noble Baroness. If she re-reads my superior speech this afternoon she will be wanting me to qualify the training with a lot of other adjectives or whatever they are. I am sorry, I am concentrating on the Bill and not on the grammar. She will want a number of other descriptions of the training. I have already mentioned "suitable".

In reply to the noble Baroness, Lady Seear, I referred to the quality controls which are in the Bill. I believe that we could go on at length on this matter, but perhaps I may try to continue my remarks. I hope to be able to persuade the Committee that we do not need any description such as "without good cause" or "suitable" or "reasonable" or any other words like that. As I said, if a youngster receives a penalty and subsequently returns to the guarantee, a reduction will be applied on each occasion when a suitable training place is turned down or one such place left early. That will apply similarly to other returners to guarantee.

Perhaps I may now turn to the safeguards in the system. I have already mentioned some of them. There is a risk that we repeat ourselves quite a good deal. I make no apology because I appreciate that this is a serious point and I should try seriously to address it.

The careers service will decide whether or not a training place is suitable for that young person. They are bound, under arrangements which I described earlier, to provide impartial guidance to young people. They will not offer a young person a training place unless it meets his or her needs, circumstances or ability. They will take into account anything else which might limit the type of training which the young person can accept, including their preferences, aptitude, level of approved qualification and so on.

In the example which the noble Baroness, Lady Dean, read out, I must say that the Machiavelli in me watched carefully to see if she read out the last sentence and I acknowledge that indeed she did. The example that she gave was a justifiably worrying example. The last sentence of the example states that the training agency acknowledged that the placement was not suitable. I hope that that is the kind of conclusion to which we shall come.

Baroness Seear

The Minister gives the impression that the people making these judgments are perfect. I am most certainly not perfect and even the noble Lord is not. On occasions we all make mistakes. It is because we do that people must have safeguards in being able to say that there was just cause why what has been decided is wrong. It is against the minority decisions which are wrongly made that we need to have this safeguard. They may simply not have taken into account some aspect of the personality or physique of the youngster concerned when the judgment was made. The judgment may be wrong. The law has to recognise that we can all get it wrong.

Lord Swinfen

The Minister told the Committee how the system will operate and what the process is likely to be. In my view he has not answered the amendment. He has given no reason to the Committee why the words "without good cause" should not appear on the face of the Bill. There are many Acts of Parliament where similar words appear. They have gone through this House and the other place. I can see no reason why these words cannot be on the face of the Bill.

Lord Mackay of Ardbrecknish

I hate to tell the Committee, but I am only halfway through my observations on this matter. If my noble friend will give me the opportunity and then examine the point I am putting in its entirety, he may see why those words are not necessary. Dare I say to the noble Baroness who made the first intervention that the same applies to her? However, I should like to put on record some of the safeguards that exist because I appreciate that we are not perfect. I certainly would not like to test in the Division Lobbies the question of whether I was perfect. Indeed, I might not even manage to get all of my noble friends into the same Lobby as myself!

I should now like to return to the amendment, having picked up the point about the CAB. That was an example of where it was acknowledged that the person was wrongly placed. I hope that that will happen rarely, but I accept that, in the real world, it will happen on occasions. With JSA, we are introducing a new system of internal review which may take place before a direction is revoked on the ground that the young person has refused a suitable training place. The young person will be given the opportunity to request a re-examination of his case by the Employment Service before a direction is revoked. The service will consider all the circumstances of the case carefully. If it finds in the young person's favour, the direction will not be revoked.

If a young person is in a training place and is not happy with his trainer—I have already mentioned this, but will have to do so again because I have been asked about it—a number of courses of action are open to him. He can raise the question with his training provider. I concede, however, that the nature of his complaint may be such that the training provider may not be the best person with whom to do that. Failing that, the young person can raise the matter with the TEC which is, after all, responsible for ensuring that the places are provided, or he can raise the matter with the careers service. Again, the facts of the case will have to be looked into carefully and, if appropriate, the young person will have to be found another place.

But if the young person does leave a training place early and feels that he had good cause for doing so, he will be able to put his side of the case to the Employment Service. The circumstances of the case will be re-examined, and, where good cause is established, a certificate will be issued by the Secretary of State and a copy given to the young person. If he reapplies for severe hardship under JSA, the certificate will entitle him to receive the full amount. If, however, he does not have a certificate when he applies for a new direction, he will receive the reduced amount of benefit. But if he later gets a certificate, he can apply for a review, under the Social Security Administration Act, in order to get back the amount of the reduction already made.

I believe that, taken together, the youth training guarantee, backed up by the sanctions, safeguards and protections that I have described now and previously, represent a fair and balanced package of measures for young people. Therefore, I do not believe that we need to put any qualifying words into the Bill—whether they be those suggested by the noble Baroness in this amendment or any others that she may prefer from the contributions that have been made. I do not think that we need to add such words to the Bill. With that explanation, I hope that the Committee and the noble Baroness will accept that there are safeguards, that they work, and that we do not need to put other words on the face of the Bill.

Baroness Williams of Crosby

Before we conclude this debate, perhaps I may ask the Minister about one point. He has dealt to some extent with some of our concerns, particularly with regard to the consideration that will be given by the Employment Service to objections raised by a young person about the hardship allowance being withdrawn.

However, I was interested that the Minister did not deal with the point that I tried to make about a difference in approach if the case goes all the way up to the Minister. If the words "without good cause" are included, the Minister will be obliged to consider whether there has been good reason for a young person leaving a training place. The Minister's arguments have essentially been that the Employment Service is judge and jury in its own cause. Many of us have great respect for the Employment Service—I certainly do—but to be judge and jury in one's own cause does not meet the point that was made by my noble friend Lady Seear about the minority of cases which are not satisfactorily resolved. Therefore, I have to join the noble Lord, Lord Swinfen, in saying that it is beyond my comprehension why those words cannot be included in the Bill if the provisions are as thorough and objective as the Minster has just argued.

Lord McCarthy

I am glad that we have now listened to the whole of the Minister's answer, but if he will not put something into the Bill, could he take something out of it or even think about doing so? What is so worrying about the Minister's refusal to include such provisions in the Bill is that the Bill states that such directions may be given, If it appears to the Secretary of State or to a member of the Employment Service. I repeat that the words are "If it appears". The Minister says that many other things, such as suitability, will be taken into account, but that is below the line because the Bill simply states: If it appears to the Secretary of State". Cannot we have something slightly more reassuring for the applicant than those words?

Lord Mackay of Ardbrecknish

I am not entirely sure that I understand that point. I cannot think of who else it must appear to other than the person having to make the decision. In most cases, that will be the official at the Department of Employment.

Lord McCarthy

The point is that it should appear to someone else besides the Minister. Most importantly, it should appear fair to the applicant. That is why the conditions and circumstances which the Minister actually takes into account should appear on the face of the Bill.

Lord Mackay of Ardbrecknish

The circumstances will be many and varied and I do not think that they can all appear on the face of the Bill because the question will depend rather upon the applicant and his aptitude, ability and circumstances. The case that we were considering related to disability and arthritis. However, it is also a question of the kind of training place that is provided. A place that is suitable for one person may not be suitable for another. It is a question of judgment.

I think that the system contains checks and balances that will ensure that in the limited number of circumstances where a young person refuses or leaves not only the first place but also a second place, he or she will have received plenty of warning about the consequences of that action. Indeed, I not only "think" that; I am confident that that will be the case. If the issue goes right up to ministerial level, Minsters will have to take all the same judgments into account as the officer, but will take a second look at the case. I am not sure to what extent things will get that far, but that sometimes happens through ministerial correspondence, as the noble Baroness will recall. One does have an opportunity to look at cases and one can ask questions if one is unhappy.

However, I think that that is a slightly different argument from the question of whether we need to add those words to the Bill. I am honestly not going to go to the stake on whether we need some qualifying words—

Baroness Hollis of Heigham


Lord Mackay of Ardbrecknish

Don't be too keen! I shall reflect on the points that have been made about this issue—

Baroness Seear

Does not the Minister understand and accept that, with the best will in the world, the employment officer may misinterpret what he is being told? He may think, "This chap is just belly-aching" whereas the chap had appendicitis. A perfectly legitimate mistake would be made, but in the end it could be shown that the claimant had appendicitis and therefore had "good cause".

Earl Russell

Before the Minister replies, may I ask him whether he has ever heard of what is known in the London Borough of Brent as "Stonebridge syndrome"? Stonebridge is the most undesirable council estate in Brent. If Brent does not want to house somebody it offers him a place in Stonebridge and can then say that he has refused it. That has been known to happen with training places.

I also wanted to say that occasionally one finds something happening in the past which could have happened yesterday. In 1610, in another place, a Member was discussing a case at the court of King Cambyses in Persia. His Ministers were asked, "What law have you got for what you are doing?" They replied, "None at all, but we have a law that the King may do whatever he likes". Our complaint is that that law is still in force.

7 p.m.

Lord Mackay of Ardbrecknish

I shall attempt to answer those two points. If the noble Earl has any evidence that there is the equivalent in the training system of the kind of council estate he mentioned —that there are a number of training places so awful that no one in his right mind will accept them—I hope he will let me know, because that is in no way within the meaning of the Bill or the desires of Ministers. So I hope that his example is not true. However, if there are such examples, I need to know.

I am not sure that the noble Baroness, Lady Seear, used a good example because for me the proof of the pudding would be on the operating table. The mistake that had been made would be quickly realised, and the youngster could make the point.

Baroness Seear

He may have a grumbling appendix.

Lord Mackay of Ardbrecknish

It was quite a long time ago, I grant, but I remember what it was like to have a grumbling appendix. It seemed to object, in particular, to bananas. It put me off bananas for life. I understand the points being made, although I am not sure that I understand what significance adding those words, or the clever intervention of the noble Baroness with regard to some other words, would have to the point made by the noble Baroness, Lady Williams, about the matter reaching the Minister.

I do not expect that the Committee will divide on this matter. I am prepared, without any commitment, to say that I shall reflect on the points made in the debate—as I reflect on all points, of course—with special interest, and consider what has been said.

Baroness Dean of Thornton-le-Fylde

My noble friend has just said to me that that is a victory. I shall believe that when it happens. I listened to the appendix case, and I suppose a reality is better than an assumption. I can remember as a trade union officer being called into a factory on behalf of someone who had lost his job. The manager had asked him to go to a printing machine and he said that he could not because he had a rupture. I negotiated for him and got back his job on condition that he had a medical examination. He said, "I had better come clean. I haven't really. I just didn't want to go on that machine". I told him that he had a week to get one.

I have listened to the debate with great interest. I thank noble Lords who have been so generous in their support of the amendment. I heard what the Minister said. I noted carefully many statements that I would have challenged, but I take a great deal of comfort from his last point. I was concerned when he said that he would not go to the stake over this matter. To go along while being dragged screaming is never a satisfactory conclusion. He said that he would like to think about the matter, and I grasp that offer with both hands. I am happy to discuss it with him before we return to the issue on Report. On the basis of the Minister giving an undertaking that he will consider the matter—an offer which I should like to accept in the spirit in which I am sure it is intended—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 129 and 130 not moved.]

Lord Inglewood

I beg to move that the House do now resume. I suggest that the Committee stage begin again not before 8 p.m.

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

House resumed.