Asylum and Immigration Bill

HL Deb 24 June 1996 vol 573 cc671-738

Consideration of amendments on Report resumed on Clause 8.

The Deputy Speaker (Lord Strabolgi)

My Lords, Amendment No. 67 was pre-empted. Therefore, I call Amendment No. 68 in the name of the noble Lord, Lord McIntosh of Haringey.

Lord Hylton

My Lords, with respect to the Deputy Speaker, I must ask why it is not possible to call Amendment No. 67 at this point? I understood that Amendments Nos. 65 and 66 were pre-empted. Is that the case?

The Deputy Speaker

My Lords, that was my original belief. However, I have since been told that Amendment No. 67 is pre-empted because Amendment No. 64 covers line 30 in the clause, which I believe overtakes "line 29" as referred to in Amendment No. 67. That is my understanding of the matter, but if the noble Lord has something to say then I shall call the amendment.

Lord Hylton

My Lords, if that is the case, perhaps I may speak to Amendment No. 67 when Amendment No. 104 is called.

Lord Strabolgi

My Lords, if that is what the noble Lord wishes to do, it seems to me to be a good compromise.

Lord McIntosh of Haringey moved Amendment No. 68: Page 6, line 31, at end insert— ("( ) Nothing in this section shall apply to an employer who employs fewer than 20 persons.").

The noble Lord said: My Lords, Amendment No. 68 is a serious attempt dramatically to reduce the burden of Clause 8 of the Bill while reducing its scope very much less. I am encouraged to press the amendment now because of renewed support from the Federation of Small Businesses which wrote to me as recently as last Friday to confirm its support for the amendment.

The House will recall that originally, when the White Paper appeared in October of last year, a great deal of concern was expressed by employers about the provision in Clause 8 which states that employers should be required to act in effect as immigration officers and satisfy themselves that they are not employing illegal immigrants. The Federation of Small Businesses, the TUC and the Institute of Directors wrote a joint letter to The Times on 30th October 1995 saying that immigration policing in the workplace is not the job of employers and that checking immigration status is not straightforward and not always indicated by possession of a national insurance number, passport or other such documents.

Following a meeting between employers' organisations and the Home Office, the Minister, Mr. Kirkhope, expressed the Government's preference for a light regulatory touch to be applied in the new legislation. It is certainly not a light regulatory touch in Clause 8; it is a new criminal offence applying to all employers regardless of the size of their organisations.

I need to give the House only two figures to emphasise how serious a burden that would be and how much it could be reduced by the provisions contained in the amendment. Indeed, 97 per cent. of employers in this country employ fewer than 20 employees. Therefore, the burden on 97 per cent. of all employers could be removed by agreement to the amendment. On the other hand, those 97 per cent. of employers employ only 35 per cent. of the workforce. Therefore, 65 per cent. of the workforce would still be covered by this very modest fall-back amendment, if it were carried, at the expense of removing the threat from 97 per cent. of employers. I suggest to the House that that is rather good value for money.

The problem for small employers—and I spent many years of my life as a small employer, though only in the early stages as an employer with fewer than 20 employees—is that they already have enormous difficulty with VAT, PAYE and all the regulations with which they must comply regarding the very simple business of employing any person—that is, even one person, let alone five, six, seven, 15 or 19 employees. They are simply not familiar with the documentation required, which would be called into question if the provisions of the clause were applied to small employers. National insurance numbers, medical cards, old National Health Service numbers, P45s, student cards and even signed P46s are not legal documents in the sense that Clause 8 would require.

Anyone who wishes deliberately to mislead or defraud an employer can easily do so; indeed, there is no difficulty about inventing numbers, handing in the wrong forms or signing incorrectly or fraudulently. I see the Minister shakes her head. I give way.

Baroness Blotch

My Lords, I am much obliged. If someone produces a fraudulent document, the offence is not that of the employer; the offence is that of the employee. If the employer has assured himself that a P45, a national insurance number, a birth certificate or a P46 certificate has been submitted and makes a record of that fact, he has availed himself of the defence in Clause 8. As I said, the offence is that of the employee who has submitted fraudulent documents.

Lord McIntosh of Haringey

My Lords, I accept what the Minister has said about fraudulent employees. Of course, she is right to say that Clause 8 provides an exemption. I am grateful to the noble Baroness for her intervention.

However, even in that intervention, the Minister referred to the fact that an employer may assure himself by means of such documents. It is that question of self-assurance which raises the difficulty. The fundamental point about the amendment is that it is not the job of the employer to check immigration status if, for reasons that we shall deal with in more detail on later amendments, it will lead to increased race discrimination against minority members of the community. The Federation of Small Businesses believes that if the legislation is put on the statute book unamended it will be unworkable.

Indeed, the Federation of Small Businesses goes further than I would go in that respect. It says that the whole of Clause 8 should be deleted. I am asking for a rather simple and modest amendment to be accepted which would remove from the scope of Clause 8 those firms with fewer than 20 employees. I beg to move.

Baroness Williams of Crosby

My Lords, I apologise to the Minister and to the noble Lord, Lord McIntosh, for entering the Chamber a few minutes late. I was detained by what appeared to be an urgent message. I support what the noble Lord, Lord McIntosh, has said. One of the great worries that noble Lords have on Clause 8 is whether it may cause discrimination against legitimate, perfectly settled, non-white members of our community. One of the disturbing points that I believe the federation of small businesses made is that there is a real danger of discrimination arising in this area. That is the belief of the federation, not mine. It points out that an employer with 20 or fewer employees is unlikely to have a great deal of understanding of, or time to study, regulations that may be made, and that he will not know a great deal about the documents that are produced. In that situation such an employer may find it easier simply to say that anyone who looks as if he might conceivably be an illegal immigrant should be excluded at the first stage. I repeat that is not my view; it is the view of the federation of small businesses.

I hope that the Minister will consider carefully that submission, and how far we can simplify the regulations. She has already dealt with that point in previous discussions in Committee. I hope that she can make this exception given the special problems and pressures of small businesses.

Lord Hylton

My Lords, I should declare an interest as an employer of fewer than 20 people. It seems to me quite wrong that the Government should attempt to recruit small employers as unpaid, honorary immigration officers, just as it is quite wrong for the Government to recruit airline companies and ferry companies in a similar kind of role. Those companies which have considerable power and influence have a good deal of support on the Government Benches. I hope that the small employers will find just as much support on those very Benches.

Lord Renton

My Lords, I suggest that this amendment destroys itself on the information which has been given to us by the noble Lord, Lord McIntosh. He has pointed out that a vast proportion of the employers of this country are small employers; that is, with fewer than 20 people. Let us say that the average size of workforce of each of a thousand small employers is 10. If this amendment were accepted, it would mean that 10,000 immigrants would be breaking the law. It is an absurd proposition and I assume that the noble Lord would not dream of pressing it.

Baroness Blatch

My Lords, the worry I have with this amendment is that I believe the noble Lord probably wishes to press it. The noble Lord is condemned by what he said. He claimed that 97 per cent. of companies employed fewer than 20 people. That would mean that this clause would be worthless if the amendment were accepted. As I understand it, 97 per cent. of employers employ 50 per cent. of the workforce. If that is the case, a large percentage of the workforce would be exempt from the measures in Clause 8. A large percentage of companies—I would say the majority—would also be exempt. I certainly could not accept what the noble Lord says.

I may goad the noble Lord slightly when I say that this is a real problem. We have said there are about 10,000 people in the country who are employed illegally. We believe that is a serious problem. We cannot create an exemption thereby allowing that matter to go unheeded and allowing the racketeering to go unheeded whereby often vulnerable people are exploited and taken advantage of. We cannot allow that situation to go unchecked by the measures in this clause. There is a real difference between noble Lords opposite and those of us on these Benches in this matter.

The amendment seeks to restrict the application of Clause 8 to those who employ 20 or more people. The aim is to minimise burdens on those small businesses whose success is of course so important to our economy. I agree wholeheartedly with that. Small businesses are the backbone of economic activity in this country. We do not wish to increase burdens on those companies. To suggest that a P45, a national insurance number or a P46 are alien documents frankly defies my understanding of small businesses where staff have to grapple with tax returns, VAT returns and other documents. Those businesses recruit people properly. They would certainly be familiar with those documents. I suspect that they would deal with those documents on a day-to-day basis while recruiting people to their companies.

We agree that it is vital that the impact of any proposals affecting business are very carefully considered. That is why this Government have introduced a range of measures designed to keep the burden of government regulation to a minimum. It is also why compliance cost assessments are now being prepared in respect of regulations or other legislation which will involve costs to business. We believe that the financial implications of new measures for business must be understood.

We have made clear that a key part of any such consideration must be the effect any regulations will have on small firms. Will they be able to cope? Will the effects of new measures affect small firms disproportionately? In some cases consideration of these questions leads to the conclusion that small firms should be excluded from the scope of a measure. This is particularly likely to be appropriate where there are significant capital or other costs involved which would have an impact in a disproportionate manner on small firms. However, the fact that some measures properly exclude small firms does not mean that it is right or necessary to exclude them from all measures.

The proposals which we outlined in our consultation document and to which Clause 8 would give effect have, as we have made clear all along, been developed with an eye to keeping the burdens on all business to a minimum. Any burden imposed by our proposals will, of course, depend to a large extent on the scale and speed of turnover of staff. For many small businesses, with a stable workforce, any impact would in fact be pretty small and almost negligible.

It may be helpful if I provide an example. If a business has 12 employees and has a 25 per cent. turnover of staff in one year—that is quite a high turnover—checks of some sort will need to be made on only three occasions. If the new members of staff have normal, everyday documents as regards an employer, such as P45s, or otherwise documented National Insurance numbers—which is most likely—compliance costs would be absolutely minimal. They would be insignificant even if other checks had to be made.

We are of course concerned about the compliance costs of this provision. However, the responses which we received to our consultation document from organisations representing smaller firms do not lead us to think that the compliance costs for small businesses will, in the main, be anything other than minimal. Small business organisations chiefly emphasised the importance of clear guidance and welcomed the promise of a telephone helpline facility that could be called in case of difficulty. If a small employer is faced with an unusual document, help will be readily available. We will, of course, make every effort to ensure that the information and guidance which we provide are tailored to the needs of smaller employers.

However, we do not think it would be appropriate to exclude from the scope of this provision such a large proportion of employers. Estimates suggest that between 91 per cent. and 97 per cent. of businesses have fewer than 20 employees. These businesses between them employ millions of people. Any exclusion would clearly undesirably limit the effectiveness of the proposals. However, that, I presume is what noble Lords opposite want to do.

Lord McIntosh of Haringey

My Lords, the Minister has said firmly that there is a great difference between us on this amendment. I glory in that difference. That difference shows the extent to which the Government are now driven by dogma rather than by reason in dealing with immigration matters. The Minister queried our figure of 97 per cent. She herself said in Committee, about 90 per cent. of companies … employ five or fewer employees".—[Official Report, 2/5/96; col. 1825.] That certainly squares with my figure of 97 per cent. which employ 20 or fewer employees. The Minister mentioned the response to consultations with representatives of small businesses. I do not know who they may be, but the Federation of Small Businesses wrote to me as recently as 21st June, to add the support of the Federation of Small Businesses to your Amendment No. 68 aimed at exempting those employing less than 20 workers from the harsh penalty regime embodied in Clause 8 of the Asylum Bill". The Minister and the noble Lord, Lord Renton, seemed to believe that the figures that I quoted about the importance of small businesses in the economy somehow negated the force of my argument. I say the contrary. I say that the fact that we can remove the threat of Clause 8 from all but 3 per cent. of employers in this country, while excluding only 35 per cent. of employees, is good value for money. I repeat what I said in my opening speech. By this modest amendment, we can reduce the requirement on the Government to consult employers by a factor of 100 to 3, while still excluding only 35 per cent. of employees.

The Minister seems to think that there is a known figure of illegal employees in this country. I thought she said 10,000, but I may be wrong. The number of illegal immigrants working in this country is an unknowable statistic. None of us knows because no one can or will answer the question if it is posed. It is a guess. It can be the Government's guess, my guess or anybody else's guess. I am willing to do more than guess. I am willing to assert that the vast majority of illegal immigrants working in this country—however many there may be in total—work illegally in more ways than one. They are not just working illegally in the sense that they are illegal immigrants; they are working for firms which almost certainly do not fulfil the other obligations of employers. Many will be domestic workers. No doubt the noble Lord, Lord Hylton, will return to that on a later amendment. The employers are people who are not collecting or paying PAYE; they do not observe all the other obligations on employers and they will not be affected by Clause 8, whether or not it includes such employees.

In resisting the amendment, the Government have missed an opportunity enormously to reduce the burden and only marginally to reduce the coverage of Clause 8. I think that they are mad. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.30 p.m.

Lord McIntosh of Haringey moved Amendment No. 69: Page 6, line 34, after ("began") insert ("or within 2 weeks of the commencement of the employment").

The noble Lord said: My Lords, Amendment No. 69 refers to another practical issue which anyone who has been a small employer will appreciate. It is the requirement in Clause 8 that all the checks should be made and completed before employment commences. At Committee stage, my noble friend Lord Dubs moved an amendment which would have allowed a period of grace of two months between the start of employment and the completion of the immigration checks. We are more modest in the amendment today. We propose merely a period of two weeks. It means that the threat to the thrust of the Government's intention in Clause 8 is only marginally affected but, as with the previous amendment, the burden on employers is much less.

We are talking here mainly of small companies which have substantial numbers of part-time or casual labour who come in to fill a gap, to complete the need for a plumber, a bricklayer or whoever else it may be on a building site. They provide the small employer with the ability to complete an urgent order which cannot be completed by full-time staff. We must remember that the clause applies to all employees, not just full-time and long-term employees. Frankly, the idea that before filling a gap in the labour market, providing perhaps short-term employment, perhaps part-time employment, an employer should go through the checks which will be required by the regulations set out or envisaged in Clause 8 is ludicrous. The Government argue for flexibility in the labour market. This afternoon the Prime Minister came back from Florence and claimed that he had been protecting flexibility in the labour market by continuing his resistance to the social chapter. Here his own Government encourage the greatest degree of inflexibility with regard to small employers that I can imagine.

What is happening is that the Government have gone overboard for ideology and are determined to apply to all employers penalties which only arise because of a small number of employers, probably illegal themselves in other ways, who employ illegal employees.

I suggest that in Clause 8 the Government are using overkill. This modest amendment would in no way damage the thrust of what the Government want but it would make a huge difference to employers' ability to carry out their business without interference from government. One would expect to hear that kind of argument from the Conservative Benches. It is a shame that we do not hear it from either the Conservative Front Bench or the Conservative Back Benches. Who is on the side of small businesses? Who is on the side of industry? The answer is the Labour Party. I beg to move.

Baroness Gardner of Parkes

My Lords, I find the amendment interesting and in many ways it is a good one. There is a parallel between it and the driving licence. If you are in an accident and cannot produce a driving licence instantly, you are given a little time to do so. Then, listening to the noble Lord, Lord McIntosh, I was concerned because I felt that he argued against himself. He said that an employer might want someone in a hurry who would come in for a short time, a few days, and go again. That would be no use because the person would be gone before the two weeks were up. So it would not apply to someone who came in on short-term or relief employment. That person would have to bring some type of document with him if he were coming for a few days, as the noble Lord suggested. However, for someone entering longer term employment, there is a case. Often people cannot produce documents in an instant, when they should. The parallel with the driving licence after an accident is interesting.

Baroness Blatch

My Lords, the amendment would provide an employer with a defence if he could show that one of the specified documents had been produced to him within two weeks of the employment starting. At present the clause specifies that the document should have been produced to the employer before the employment began.

As I explained when we discussed a similar amendment in Committee, the suggestion that there should be a period of grace allowed to employers within which they could establish their defence was put forward by a small number of those who responded to our consultation document on the prevention of illegal working.

The main reason put forward in support of this amendment is that a period of grace would prevent the introduction of potential delays into the recruitment process while documentation is requested. I know that this has been a concern to some employers, although we believe that that concern has been exaggerated. I can understand why some employers, and others, have found the idea of a period of grace attractive.

However, while I can understand the concerns of those who seek a period of grace, I believe, as I said during our earlier discussion in Committee, that it is not unreasonable to assume that Clause 8 will have an effect on the recruitment process. At present there is no need for a person to carry certain documentation when going for an interview unless it has specifically been asked for. As a result it will therefore rarely be available.

Our expectation is that such documentation will be readily available in many more cases in the future because it will be understood that the offer of employment may be dependent on its production. This will tend to concentrate the minds of those seeking employment. It will be a matter for employers when they choose to request the documentation. But it would be satisfactory for the purposes of this clause if the documentation was presented when the new employee turned up on the first day.

For the vast majority of people it should be a straightforward matter to produce one of the specified documents. Evidence of a national insurance number will be provided by a wide range of different documents, including the P45. If such evidence is not available, most people keep documents like passports or birth certificates in a safe place. Letters issued by the Home Office to asylum seekers and refugees will also tend to be kept in a safe place.

I do not accept the contention put forward by the noble Lord, Lord Dubs, in Committee that it is likely that black people will have more difficulties in arriving with the relevant documents than will white people. Those who will have very real problems will be those who are not entitled to work here—perhaps because they are here illegally or here as a visitor and prohibited from working.

I explained during our previous debate why the then suggested two-month period of grace would seriously weaken the impact of Clause 8. However, even a shorter period of grace would significantly weaken its impact.

It could certainly provide a loophole which could be used by unscrupulous racketeers trying to evade the impact of the clause. If we made it 14 days, they would employ people on a 13-day basis; if we made it seven days, they would employ people on a six-day basis; if we made it 24 hours, they would employ people on an hourly basis. The loophole is there, whatever period of grace is determined by noble Lords opposite.

The noble Lord, Lord McIntosh, referred to my right honourable friend the Prime Minister having come back from the Florence Summit referring to flexibility. I believe he made a point, and I support him in that. But we are protecting jobs in the labour market for the people in this country who have a right to those jobs and not for the racketeers or those who are working here illegally. To the noble Lord's accusation that, "the noble Lord and his friends are on the side of the small employers", I would say that those who are on the side of this amendment are on the side of the racketeers and on the side of those working illegally—

Earl Russell

Order!

Baroness Blatch

My Lords, I am not out of order. We have here an offence against the racketeers who are exploiting very vulnerable people who come here and are taken advantage of, very often at very low wages, and exploited in the workshops of those companies. We are saying that this offence deals quite explicitly with that. Those who oppose making this an offence to catch people like those racketeers, frankly, must be on their side if they are not prepared to support the Government in making it an offence.

More sig—

Earl Russell

My Lords, the noble Baroness has impugned our honour. I will ask her to withdraw that remark.

Baroness Williams of Crosby

My Lords, as a former Minister of State at the Home Office, I simply cannot accept the allegation that Members of the Front Bench of the Opposition parties are engaged in supporting racketeers. We understand about racketeers; we have no time for them; and we certainly do not wish it to be implied that we will give them any kind of support at all. I must ask the noble Baroness to withdraw that remark.

Baroness Blatch

My Lords, I have to respond to that with a direct retort. If the noble Baroness is serious, and the noble Earl, Lord Russell, is also serious, what are they going to do about the racketeers? What are they going to do about those employers who exploit the vulnerable in the workplace, who do not have to pay them very well or treat them very well because they are not caught by these measures? The intention is to put this measure on the statute book to deal with that explicitly.

We have given an absolute assurance to the small businesses in this country, most of which will not be caught by these measures. Already in their everyday practices most have a defence against this offence and will have no problems with it at all. We will operate a light touch and we will be serious in that. We will produce guidance which will be user-friendly for the majority of small businesses. But the measure is quite specifically to catch the unscrupulous. If the noble Baroness and the noble Earl are serious in that, and if the noble Lord, Lord McIntosh, is serious, they will support us in putting a measure on the statute book that will catch those racketeers. That is what we intend to do; and I stand by that.

Baroness Williams of Crosby

My Lords, before the Minister sits down, it would be perfectly possible to reach agreement on an amendment at Third Reading that would meet both our needs. Many honest and decent small employers represented by the Federation of Small Businesses have asked us to raise this matter since they believe they will be caught by the Government's net. We must ask the Government to consider whether federation representatives would themselves try to allege that small businesses would take part in an attempt to help racketeers. It is a serious allegation, not just against Members on the Front Bench of the Opposition parties but against the Federation of Small Businesses itself. I am sure that the Minister does not wish to make such an allegation.

Baroness Blatch

My Lords, with the leave of the House, I certainly do not want to make that kind of accusation against small businesses. As I began by saying in response to this amendment, I believe they are the backbone of economic generation and activity in this country. I do not demur from that. I also believe that the majority of small businesses have absolutely nothing to fear. I further believe that most small businesses, in their normal recruitment practices, look for a national insurance number or a P45 and they will not be caught by this measure. I also believe that, even if those small businesses accept those documents in good faith and they then turn out to be forged, unlike the way in which the noble Lord initially addressed this amendment, they will not be caught by this provision. They will have a proper defence, because they will have looked at the document. If it is fraudulent, it will be a matter for the applicant to answer. He will be in breach of the law, not the employer.

We have further said that we will do what we can to operate a light touch on employers. And we have said that we will produce the friendliest user-friendly information and guidance to small businesses, and will produce a helpline for them to contact if they are in any difficulty about recognising a bona fide document. We will go a very long way to recognise the difficulties and to reduce the burdens on small business. But we are deadly serious in making sure that people do not use the system to work here illegally. We shall make absolutely certain that we do not have any truck with racketeering in this country. This part of the clause is there because we believe it will catch those who exploit the most vulnerable people.

8.45 p.m.

Lord McIntosh of Haringey

My Lords, I did not intervene in the Minister's speech because I try to avoid that if I can. However, I want her to know that my noble friends and I share the resentment expressed by the Liberal Democrat Front Bench about what is more than an implication that we are supporting racketeers. It was a direct statement that we are supporting racketeering. It was as clear as that, and Hansard will show it to be so. That is not easily forgivable.

I often wonder whether the Conservative Party knows anything at all about the way business operates. I often wonder whether its members are not living in a dream world of what they think is Adam Smith economics but in fact is probably monetarist economics of the most extreme and theoretical sort. Have they ever been to the hotel and catering jobcentre just north of Oxford Street on the Corner of Mortimer Street and Wells Street in the early morning? Do they know how hotel and catering workers are actually recruited? The hotels, restaurants and others send out a call at six o'clock or seven o'clock in the morning for x number of people to do washing up, or to be supplementary waiters, or sous-chefs, or whatever it may be. These people have to be taken on at a minute's notice, not half-an-hour's notice. They have to be there to fill a job. Do the Government know what happens when farmers recruit fruit-pickers? Do they think that fruit-pickers, when they arrive, will come with their passports or their P45s? When the cherries, plums or whatever are ripe, these people have to be recruited at the time; and they will be recruited at the time. For the Minister to tell us that the effect of Clause 8 will be that employees will have to be more responsible in bringing their documents with them when they come for jobs is a denial of common sense and of the way in which the employment market actually works.

Baroness Blatch

The noble Lord has made two points, one about the catering industry and one about the farming industry. He will note at a previous stage of this Bill we made quite a concession to the farming industry, because we recognise that there is an issue there. We have doubled the number of people from abroad who come in on special schemes and work in the farming industry, because we recognise just that.

As for the catering industry, many of the people who go to the organisation in Oxford Street are working for McDonalds, the large hotels or Kentucky Fried Chicken. They are working for all those organisations, none of which will be caught by the noble Lord's amendment.

Is the noble Lord saying that somebody recruited in that sense should be party to the provisions in Clause 8 and those working for the 90 per cent. or so of companies which the noble Lord wishes to be exempt from this provision should count as a different kind of citizen?

Lord McIntosh of Haringey

My Lords, the Minister speaks to the previous amendment. This amendment is not about firms with fewer than 20 employees. It is about the two weeks' grace. I should be grateful if she would withdraw the remarks that she has just made.

Baroness Blatch

My Lords, again with the leave of the House, let me say that the issues are very similar. We are talking about those who will employ people on a sessional basis. If we allow a period of grace, they will resort to a sessional basis. Many of the people described by the noble Lord in his amendment are people who will be taken on in the morning for one, two or three days' work. Many of the people about whom we are talking, many of the employers whom we are trying to catch by the measures in Clause 8, will resort to just that. If the noble Lord makes the period a fortnight, they will resort to periods of less than a fortnight; if he makes it seven days, they will resort to periods of less than a week; and if he makes it 24 hours, they will resort to periods of hours. We believe that the scope for exploitation by the unscrupulous is legion.

Lord McIntosh of Haringey

My Lords, there are some trades in which inflexibility is a virtue. Inflexibility of that kind at the Dispatch Box is no virtue. The Minister has moved away from the thrust of the amendment that we have been arguing to try to talk about small employers. That is an issue which we are not debating at the moment. Even when she is challenged directly on the issue, she refuses to acknowledge that she is in fact reading from the wrong part of her brief.

The Minister shows no understanding of our two fundamental criticisms of Clause 8 of the Bill. One is that to attempt to have a blanket obligation on all employers to be part of the criminal law in pursuing illegal immigrants is a huge burden on employers. The second is a failure of the Government to understand that there is a very considerable black economy which will in no way be affected by this clause.

I had certainly not intended to divide the House on this issue. But in view of the intransigent response that the Government have given to this amendment, I believe that it is my duty to press it.

8.52 p.m.

On Question, Whether the said amendment (No. 69) shall be agreed to?

Their Lordships divided: Contents, 35; Not-Contents, 55.

Division No. 4
CONTENTS
Berkeley, L.	Hylton, L.
Blease, L.	Kilbracken, L.
Brightman, L.	Kintore, E.
Broadbridge, L.	Lockwood, B.
Carmichael of Kelvingrove, L.	McCarthy, L.
Clinton-Davis, L.	McIntosh of Haringey, L.
David, B.	McNair, L.
Dean of Thornton-le-Fylde, B. [Teller.]	Monkswell, L.
	Morris of Castle Morris, L.
Dormand of Easington, L.	Nicol, B.
Dubs, L.	Ripon, Bp.
Elis-Thomas, L.	Russell, E. [Teller.]
Geraint, L.	Sewel, L.
Harris of Greenwich, L.	Taylor of Blackburn, L.
Haskel, L.	Thurso, V.
Hilton of Eggardon, B.	Wallace of Saltaire, L.
Hollis of Heigham, B.	White, B.
Howell, L.	Williams of Crosby, B.
NOT-CONTENTS
Annaly, L.	Bridgeman, V.
Archer of Weston-Super-Mare, L.	Burnham, L.
Balfour, E.	Carnegy of Lour, B.
Barber of Tewkesbury, L.	Carnock, L.
Belhaven and Stenton, L.	Courtown, E.
Berners, B.	Cranborne, V. [Lord Privy Seal.]
Blaker, L.	Crickhowell, L.
Blatch, B.	Dean of Harptree, L.
Boardman, L.	Denton of Wakefield, B.
Brabazon of Tara, L.	Gardner of Parkes, B.

Goschen, V.	Rankeillour, L.
Harlech, L.	Rawlings, B.
Henley, L.	Reay, L.
Hogg, B.	Rennell, L.
Howe, E.	Renton, L.
Inglewood, L.	Renwick, L.
Kimball, L.	Seccombe, B.
Kingsland, L.	Sharples, B.
	Shaw of Northstead, L.
Leigh, L.	Skelmersdale, L.
Lucas, L. [Teller.]	Teviot, L.
Lucas of Chilworth, L.	Trumpington, B. [Teller.]
McConnell, L.	Ullswater, V.
Mackay of Ardbrecknish, L.	Wakeham, L.
Marlesford, L.	Westbury, L.
Miller of Hendon, B.	Wise, L.
Monk Bretton, L.	Wynford, L.
Mountevans, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

9 p.m.

Baroness Blatch moved Amendment No. 70: Page 6, line 35, leave out from beginning to ("a") in line 36.

The noble Baroness said: My Lords, these government amendments simply make some minor adjustments to Clause 8.

Amendment No. 70 will remove from subsection (3) of the clause the requirement that an employer would need to prove that the document which he had seen to provide himself with a defence had been produced with a view to establishing that the employment would not constitute an offence.

On consideration we take the view that that is not a necessary requirement. The important elements are that the document was produced and, where necessary, copied. Furthermore, while in many cases the document will have been produced simply because of the requirements of this clause, that will not necessarily be the case. A P45, for example, will continue to be produced principally for purposes related to income tax.

Amendment No. 71 is a minor but not insignificant drafting amendment which will make clear that employers are only expected to prove that a document that was produced to them "appeared" to be one of the specified documents. The current text specifies that the document, was of a description specified". Theoretically that would not cover a forged document. We made clear in the consultation document that employers would only be expected to satisfy themselves that a document appeared to be one of those specified. The amendment will make sure that there is no doubt about what is expected of employers on this point. I beg to move.

Lord McIntosh of Haringey

My Lords, these amendments are well intentioned. To the minor extent that they go, they are welcome. We have no intention of opposing them.

Baroness Gardner of Parkes

My Lords, a number of small employers have said to me that they have no way of knowing whether or not a national insurance card is genuine. It would be useful if the employers' federation or a similar group had access to the computer in Newcastle so that they could tell whether or not people really existed. I felt that there was a case for such access when I read in the paper recently that a woman who lived a few doors from where I am in London collected pensions for thousands of people—not hundreds—involving £2 million or more in forged pension books. Can my noble friend say whether it is a possible proposition for employers to have access to a simple way of determining whether or not cards are genuine?

Baroness Blatch

My Lords, in our attempt to make it as little burdensome as possible for employers, we are not asking them to be investigators on behalf of the Home Office in this matter. If somebody comes along to whom an employer is prepared to offer a job and he or she produces a P45, P46, a birth certificate or a national insurance number, we expect the employer to take it in good faith unless he has good reason for believing that it may not be genuine, in which case he can ring the help line and make inquiries about that. We are not putting the onus on the employer to worry about it being a fraudulent document. The breach would be on the part of the employee who proffered a fraudulent document.

On Question, amendment agreed to.

Baroness Blatch moved Amendment No. 71: Page 6, line 37, leave out ("was") and insert ("to be").

On Question, amendment agreed to.

Baroness Williams of Crosby moved Amendment No. 72: Page 7, line 2, leave out ("5") and insert ("3"). The noble Baroness said: My Lords, I rise to move Amendment No. 72 and say right away that my concern is with the possibility of making a criminal offence out of what may well be an action on the part of an employer which arises from—to use the terms of the Bill—an issue of neglect, on the part of … any director, manager, secretary or other similar officer of the body corporate". I fully accept the Government's wording with regard to "connivance" because that implies a systematic attempt to avoid the law and falls squarely within the area about which the Minister was talking; namely, that of racketeering. Noble Lords on this side of the House have made it as plain as they possibly can that we do not support racketeering in relation to vulnerable immigrants.

However, it is also the case that a number of employers, and especially small employers—though this may not be a matter of interest to the colleague of the Minister who is clearly engaging her attention—simply through neglect or misunderstanding fail to act in the proper manner to remove themselves from the terms of the Bill. I draw the Minister's attention again to the words of the Bill as amended, which refer to, neglect on the part of … any director … or any person who was purporting to act in any such capacity". My concern is with the high levels of punishment implicit in Clause 8 and in particular the fact that Clause 8 implies a criminal offence. I hope that the Government can distinguish between those who legitimately can be described as being engaged in a criminal offence—namely, systematic attempts to evade immigration legislation—and those who fall within the terms of the clause because of an oversight, a misunderstanding or an act of neglect.

The Minister may say that that would be a matter for the courts. However, I believe that primary legislation should give clear guidance to the courts on such a matter and should distinguish between connivance on the one hand and neglect on the other for the sentences implicit in this Bill are very substantial indeed. As the noble Baroness will know, one of the matters that the Federation of Small Business Employers has continually insisted on is its resentment and concern about the possibility of being charged with a criminal offence when it believes that its members will have tried to meet the terms of the legislation but may inadvertently have failed to do so.

I hope very much that the noble Baroness will consider the distinction between honest and dishonest employers which is rather like the distinction between bogus and real refugees and asylum seekers. The business of the House is to distinguish between the honest and dishonest, the bogus and the real. Just as the Minister asks us to try to get the balance right on Clauses 1 and 2, although we may not agree where the balance should be struck—I for one do not—on this issue I hope that we can strike a balance between the honest employer who is trying to meet the requirements but who, for some reason, has failed to meet them in full, and the dishonest employer who is engaged in an attempt to undermine the legislation and its predecessors.

I hope that the Minister will listen to the examples to be given by my noble friend about the ways in which employers try to meet the requirements and who may fail to do so. Above all, in moving the amendment, I am profoundly concerned about the possibility of employers engaging in a criminal offence. It is always dangerous to criminalise otherwise innocent people. I beg to move.

Viscount Thurso

My Lords, it had not been my intention to speak. However, having listened to the debate on the previous amendment, I feel it necessary to support my noble friend. I have been an employer in the hotel and catering industry all my working life. I have run a number of small and medium-sized businesses. I have discussed the contents of this Bill with a number of my colleagues as it affects those of us who work in the industry. Their reaction is very straightforward. It is to say simply, "We may be publicans, but we do not necessarily want to be sinners. So we shall avoid that risk by taking on white people." In other words, they are worried about the possibility of committing a criminal offence. The worry is such that they will do whatever they can to avoid that.

Baroness Gardner of Parkes

My Lords, I have previously drawn the attention of your Lordships' House to the fact that not all illegal immigrants are coloured. Certainly, one needs to watch out for those with an accent like mine.

Baroness Blatch

My Lords, I find what the noble Viscount has just said quite extraordinary. The defence that an employer can use is simply to ask for some kind of documentation such as a National Insurance number, a P45 or P46, birth certificate or passport. There is a whole raft of documents. Someone may be black, white or halfway between those two colours. It does not matter. That is an absolute defence for the employer who will have "honestly tried", as the noble Baroness put it. That will become a defence. If the document turns out to be fraudulent and the person is an illegal immigrant, the offence will be that of an employee who has sought to gain employment by illegal means. It will not be an offence by the employer at all.

The amendment would set the maximum penalty for the new offence at level 3, which is currently £1,000, rather than at level 5, which is currently £5,000. Again, it is essential that the penalties available for an offence should provide the courts with the powers they need to deal with all offenders who appear before them. As I explained in Committee, in setting the maximum penalty for the new offence the most important consideration must be to ensure that the courts will be able to sentence appropriately for the most serious examples of the offence. Within that maximum penalty it is then for the courts to set the penalty in individual cases, taking account of the seriousness of the particular offence and the financial circumstances of the offender. Noble Lords will know that the offence can be very minor indeed, but it can also be very serious. To have a maximum penalty of just £1,000 makes it almost worthwhile for the unscrupulous not to worry about an offence.

We do not believe that a maximum penalty of £1,000 would allow the courts to deal adequately with, for example, the deliberately exploitative employer who employs people he knows or suspects to be working illegally simply because he can pay them lower wages. We believe that a maximum penalty of £5,000 will allow the courts to deal with such offenders in an appropriate fashion. The courts will still be able to set much lower fines in the less serious cases.

I emphasise that we will be providing guidance to employers and explaining to them exactly what they will need to do to establish a defence. We want all employers to be aware of their new obligations and will therefore use all available channels to ensure that advice and guidance reaches them.

There should therefore be no danger that an employer of good will will find himself without a defence. Even if he does, it is unlikely in practice that the Immigration Service, the police or the Crown Prosecution Service would think it appropriate to take forward a prosecution in the case of a first offence, except in particularly serious cases involving large numbers of people working illegally. Final decisions will, of course, be for the CPS. But as far as the Immigration Service is concerned, the target will be repeated for major abuses. In the majority of cases it will probably be sufficient to caution first offenders, particularly where it is clear that the offence was committed unknowingly.

The maximum penalty will be available in respect of each offence with which an employer has been charged. If five individuals were being employed illegally, five offences would be committed. If the prosecutor chose to charge in the case of all five separately, the maximum penalty available to the court would be £25,000. I believe that that would be a real deterrent for the most unscrupulous. However, it is possible that the prosecution might prefer to bring forward a single specimen charge rather than five separate charges, in which case the maximum penalty would then be £5,000.

It has to be for the Crown Prosecution Service to select the charges which should be brought in particular cases. When selecting charges Crown prosecutors are guided by the general principles set out in the code for Crown prosecutors. This states that Crown prosecutors should select charges which reflect the seriousness of the offending, give the court adequate sentencing powers and enable the case to be presented in a clear and simple way. It is a matter for the discretion of the prosecution to decide which approach to adopt in the public interest, taking account of all the relevant circumstances, including the existence of any previous convictions. The Crown Prosecution Service regularly makes such decisions in respect of other types of offences.

The noble Baroness referred to the word "neglect". It is a standard provision and follows standard language in similar legislation. The penalties are the maximum and the courts can assess the degree of culpability, but we need substantial financial penalties for the most serious offences.

We believe that it is right to distinguish between the honest and the dishonest. That is the whole point of these provisions. An honest employer who finds himself unwittingly caught up by these measures will find that reflected in the way in which his case is handled, but we hope that the dishonest and the really culpable will be dealt with more severely. Magistrates' courts are also accustomed to sentencing offenders who have been found guilty of a number of similar offences on the same occasion. In setting financial penalties in such cases, they are still obliged to take account of the seriousness of the offence. For those reasons, I hope that the noble Baroness will feel that in the more severe cases the flexibility to range up to £5,000 is very important.

9.15 p.m.

Baroness Williams of Crosby

My Lords, I thank the Minister for her response to the amendment and for her kindness in writing to me in advance of the debate to set out clearly the maximum penalty which, as she has rightly repeated tonight, applies to each individual offence. That means that the offence does not just attract a fine of £5,000, but a fine of £5,000 in each case. Therefore, if I am correct, the maximum fine for an employer of, say, 20 people if all those employees were found to be outwith the regulations in some way would be £100,000, which is a sufficient fine to make it difficult for that business to carry on.

I raise this point because the type of employment in which people are employed for short periods, often from an employment agency at very short notice, is found in precisely those areas where our own minority communities seek work because they may not be highly qualified or highly skilled, especially those who are first or second generation. There is a good deal of evidence to show that they tend to go for relatively short-term, low paid jobs of precisely the kind likely to attract employers in, say, the catering or farming industries.

The Minister said—with sincerity, I am sure—that she did not regard the objection made by my noble friend Lord Thurso as one that she could accept. She said that she did not see any reason why an employer should not take on somebody of a non-white skin colour, simply on the grounds of Clause 8. However, long ago the then Minister of Health, Aneurin Bevan, said in another place that there is no need to read the crystal if you can read the book. The "crystal" may suggest—in other words, foresight based on expectations may suggest—that that will not happen, but my noble friend read the book. He gave us an account of what friends in his own industry had told him. Whether or not we approve of it, I hope that the Minister will take seriously the evidence that he has laid before the House because that is the way in which many employers will react, although we might wish that they would not.

I repeat that the idea of being held responsible for a criminal offence which may arise from "neglect" is very different from being held responsible for a civil offence and being fined accordingly. While I fully accept that those engaged in systematic racketeering ought to attract a criminal offence, it does not seem to me that this should be applied to the general run of small business people. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 73: Page 7, line 17, at end insert— ("( ) No order shall be made under this section unless the Secretary of State is satisfied that no racial discrimination contrary to the Race Relations Act 1976 and the Local Government Act 1985 will result from the order, and before making any such order the Secretary of State shall consult organisations appearing to him to be representative of persons concerned and other relevant organisations.").

The noble Lord said: My Lords, in rising to move Amendment No. 73, I should like to speak also to the comparable amendments which arise on later clauses: Amendments Nos. 83, 96 and 102. When I spoke about the hotel and catering industry I had not fully appreciated that the House had the benefit of the presence of the noble Viscount, Lord Thurso. I believe the noble Viscount will agree with me that my reference to the hotel and catering jobcentre is perhaps a gentle example of what happens. One wonders what people in the Conservative Party are like and where they live. Do they not have children who go to pubs? Do they not go to pubs themselves? What happens when one is short of bar staff? One does not go to the jobcentre but to a mate on the other side of the bar. One asks him to help for the evening and pays him cash in return. I am sure the noble Viscount is right in saying that if there is a choice between black and white people, or people with a foreign accent and people with a British accent, white people with British accents will be chosen to do the work. That is true of marginal employment in many sectors, not just the hotel and catering industry.

In relation to these amendments, all those who have experience in employment and race relations say the same as the noble Viscount said based on his experience. They say that there will be a conflict between the obligations on employers and citizens under race relations legislation and the obligations laid down under Clause 8 of the Bill. All but the most scrupulous employers will take the easy way out and will not wish to be involved in any possibility of committing an offence. They will not risk the possibility of being picked up later on for having committed the offence of employing an illegal immigrant. They will cut out the possibility at source and will not employ anyone whose skin is different or who speaks with a different accent, or indeed speaks a different language.

I will not hear again from the noble Baroness, Lady Gardner of Parkes. Of course, I understand that she is an immigrant, and is proud to be one. But I am sure that, based on her knowledge of London—she has lived here for many years and has taken an honourable and active part in London society—she will understand that the difference between someone coming from Australia and working in one of the professions and someone coming from the new Commonwealth, or other parts of the world, and working in very much more marginal occupations than the noble Baroness is very great. Other people will not glory in the name immigrant in the way that she does. Much as I admire and respect her experience, it is not relevant to the case that I argue this evening.

I am not alone in making this argument. Adair Turner of the CBI has said—although this has been said before, I believe that the House should be reminded of it—that the proposed legislation will do nothing to improve equal opportunities and may undermine employers' commitment to implement equal opportunities policies. We do not claim that every employer will have his commitment to equal opportunities policies undermined, nor does Adair Turner of the CBI say it. We simply say that there is a significant danger of a conflict between those who genuinely want to implement equal opportunities policies and those who are genuinely afraid of falling foul of the law. All that has been made clear to the Government, not just in response to the original White Paper, but in response to each stage of the Bill as it has gone through.

Already, black workers in this country suffer from a higher unemployment rate; already, there is a much higher proportion of younger Afro-Caribbean men who are unemployed than those in any other age group or from any other ethnic community; already, young black men are more likely to be long-term unemployed; already, it is more difficult for them to find jobs when they finish the Government's training-for-work programmes. All those factors will be exacerbated if there will have to be a check on employment when they come out of their work programmes or period of unemployment.

As I said, that will not apply to all employers. There will be good employers for whom there is no difficulty, but it will apply to enough employers to exacerbate the already unacceptable differences between the employment of people from black and other ethnic communities and those who are less likely to be questioned under the conditions of Clause 8.

In these amendments we are saying that there should be no action under the clause until there has been a proper investigation, confirmed by the Secretary of State, that there will no be racial discrimination contrary to the Race Relations Act 1976 and the Local Government Act 1985, and that the Secretary of State should consult those organisations which appear to him to be representative of persons concerned and other relevant organisations.

This is not a destructive amendment; it is a protective amendment. It protects the Government from the risk of imposing legislation which is in conflict with the existing law. I beg to move.

Baroness Williams of Crosby

My Lords, at this late hour I believe that the House has already heard almost enough from me, so I shall make my remarks brief. The noble Lord, Lord McIntosh, is attempting to deal with a difficult conflict for employers which arises from the fact that there are now two pieces of legislation, both of which they are supposed to obey. The first, if it receives the approval of the House, will be encompassed in Clause 8. It will require them to satisfy the requirements of the Bill in respect of the employment of illegal immigrants.

There are already on the statute book requirements with regard to the Race Relations Act, and employers are supposed to abide by them. If my noble friend Lord Thurso is right, it will be difficult for employers to walk between the small, tricky space dividing the two pieces of legislation. They are required to obey both.

The amendment would go a long way towards enabling employers to accept and obey both pieces of legislation, because it will allow employers to assure themselves that their actions were not seen to be in contradiction to the existing race relations legislation. I support the amendment, because it will go some way towards assisting employers to say that they were acting in terms that meant that they were in fact upholding both pieces of legislation which might in some way be seen to be in conflict with each other.

Lord Renton

My Lords, Amendment No. 73 and the amendments which go with it, refer to orders which are subject to parliamentary control. When we have orders of that kind, it is unusual that we should lay down that the Secretary of State shall not break the law when making the order: in effect, that is what the amendments do. It is a little unfair—indeed, rather rude—to suggest that any Secretary of State, whatever his party, would engage in racial discrimination when making an order. It would be against the law to do so and it is most ungenerous of the noble Lord to suggest that such an expression needs to be made when Parliament is giving power to a Secretary of State to make an order.

As regards consulting organisations appearing to the Secretary of State to be representative, we know—in particular those who have had experience in government—that there is a great deal of consultation with the organisations involved. They may be other governmental organisations, charities or voluntary bodies. A great deal of thorough discussion takes place between officials of departments and the other organisations whose members may be affected. I should have thought that it was unnecessary to write that into the Bill. I hope that my noble friend will feel free to advise your Lordships not to accept the amendment or those grouped with it.

Earl Russell

My Lords, I believe that the noble Lord, Lord Renton, understands perfectly well, without any respect of party, that Parliament, as a body, should always distrust any Secretary of State of any political colour whatever. The amendment means no more than that. I am also sure the noble Lord can remember many occasions in this Chamber when a great deal of our time has been taken up because a Secretary of State failed to consult. It does happen.

9.30 p.m.

Baroness Blatch

My Lords, as regards this subject it certainly does not happen. The consultation is very full. The Government are committed to maintaining and developing good race relations in this country and to ensuring that all groups are treated equally. Only last week the Council for Racial Equality confirmed the good record of race relations in this country. We are alive to the continuing need for vigilance in ensuring that all legislation does not damage those good relations.

We appreciate that some people are concerned that Clause 8 might operate to the disadvantage of people from the ethnic minorities. But we believe that those concerns are misplaced. If we thought that employers would pick out any particular group for discriminatory treatment on the basis of their colour or race because of this clause or any orders made under it we would be extremely concerned. We have therefore given very careful consideration to this point from the outset. We do not share the fears which have been expressed. We believe that our proposals will not adversely affect the position of people from the ethnic minorities.

There are two order-making powers under Clause 8 which Amendment No. 73 would affect. One will allow the Secretary of State to specify that persons subject to immigration control satisfying conditions other than those outlined in the clause itself can be employed without any offence being committed. The other will allow the Secretary of State to specify categories of document on which an employer will be able to rely for his defence and specify the way in which an appropriate record should be made to establish a defence.

The exercise of neither of these order-making powers will result in unlawful discrimination. Indeed, there would be no question of orders being made by my right honourable friend if that were the result. The amendments would also require my right honourable friend to consult organisations representative of persons concerned and other relevant organisations before making any order under Clause 8.

The Government are committed to proper consultation with employers and others to ensure that the implementation of Clause 8 is as straightforward as possible. But we have made clear that we do not agree that there should be any statutory requirement to undertake such consultation every time the order-making powers are to be used. In our view, such a requirement is unnecessary. Indeed, there could well be occasions where such consultation would achieve nothing except an unhelpful delay.

Consultation will take place where it will be helpful. In particular there will be consultation on the guidance that the Home Office will be providing for employers. If those consulted have any comments on points arising from draft statutory instruments then available we will of course consider amending them. But given the purpose and likely content of the statutory instruments we do not anticipate that such comments are likely.

The key requirement, as we have said all along, will be to keep employers and others informed about Government policy in this area—and to give employers time to prepare for any changes.

In preparing an order under Clause 9, the Department of the Environment, would, as a matter of course, take into consideration the concerns of key players, such as the local authorities associations and the Council for Racial Equality, as well as having regard to legislative requirements such as those in the Race Relations Act 1976.

As your Lordships are aware, there are already restrictions in place on access to the homelessness legislation by certain persons from abroad. The Homelessness Code of Guidance for Local Authorities suggests a screening procedure which is applicable to everyone applying for assistance under the homelessness legislation. The screening procedure and related advice in the guidance was drawn up by the Department of the Environment in consultation with, among others, the Commission for Racial Equality. This procedure has been in place for two years and given rise to no complaints. It is the type of procedure which the Department of the Environment proposes to commend to local authorities in applying the new legislation. The department will also be preparing new guidance to take account of the provisions in the Housing Bill, now being considered in the House, and will, as a matter of course, take account of the concerns of interested parties.

Our administrative procedures for dealing with child benefit applications will establish people's nationality and filter down to people who have spent time abroad in the last few years. Only these people will be asked further questions about their immigration status. This avoids any need for enquiry into an applicant's immigration status based solely on potentially misleading factors such as his ethnic origin or style of his name. This is the same procedure as that applied in the case of other non-contributory benefits and, although the provisions there have been in operation only a short time, they have not given rise to any complaints.

It also needs to be said, in the context of all those points, that there are also laws about paying tax for employees and deducting employees' National Insurance contributions. Without National Insurance numbers or some sort of identification, how can the employer communicate with the Contributions Agency of the Inland Revenue? Those are standard documents required by any employer who is legally employing people in this country. We do not believe that that would constitute an added burden. I hope that that reassures the noble Lord and the noble Baroness who spoke to the amendment.

Lord McIntosh of Haringey

My Lords, in order that I do not forget to do so, perhaps I may refer first to the remarks made by the noble Lord, Lord Renton, who described me or the amendment as being ungenerous in raising the possibility that the Secretary of State might engage in racial discrimination. I said no such thing and the amendment says no such thing. The amendment provides that the Secretary of State should be satisfied that no racial discrimination will result; in other words, that employers should not engage in racial discrimination. There is no question of a suggestion either in what I said or in what the amendment says of the Secretary of State engaging in racial discrimination. However, I must say that I am by no means certain that there might not be a Secretary of State who would engage in racial discrimination, however ungenerous it may be to say so.

The thrust of the amendment is a rather different and more important point than that raised by the noble Lord, Lord Renton. The thrust of the amendment concerns the possibility of conflict between the requirements of Clause 8 and the obligations on employers to support and practise equal opportunities. What we have been saying and what everybody with any practical experience of employment is saying is that the effect of Clause 8 will be that less scrupulous and less careful employers will take the easy short cut to the implementation of Clause 8 and will not employ anybody who is of a different coloured skin or with a different accent.

Nothing that I have heard said by the Government or indeed by noble Lords opposite has persuaded me that that is not highly likely. All the arguments against it have been theoretical rather than practical. All of the practical experience that we have heard about this evening has come from noble Lords on this side of the House who have argued, I believe convincingly, that the danger still exists.

In her closing remarks the Minister said that the Government consult widely with many different organisations concerned with racial discrimination. I do not doubt that the noble Baroness consults; all I can say that she cannot have been listening to what those organisations were saying. They have been saying something very different and very much less supportive of the Government than would appear to be the case from the Minister's comments.

We did not divide in Committee and the issue is not one upon which I wish to divide the House at this time of night. However, it remains a very serious concern for the Opposition. We are by no means convinced with the answers that have been given. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.45 p.m.

Earl Russell moved Amendment No. 74: Leave out Clause 8.

The noble Earl said: My Lords, I believe that the Minister is in no doubt that, in common with other noble Lords on this side of the House, I was considerably distressed by her reply to Amendment No. 68. I do not believe there can be any doubt in other quarters of the House of my dislike of racketeers. But my dislike goes further. I dislike the bankrupting of businesses, the creation of unemployment and the increase in racial discrimination.

As I dislike all those factors, I feel, when considering Clause 8, I should attempt to strike a balance as regards how many of them are involved as well as how much I dislike them. In other words, I must try to strike a balance as to whether Clause 8 is likely to create a worse mischief than the one it prevents. That is a stiff test, and I am not certain that the clause passes it.

The noble Lord, Lord McIntosh of Haringey, dwelt eloquently and powerfully from experience, as did my noble friend Lord Thurso, on the burdens that the clause places on business. If I do not develop that line further, it is not because I do not care about it; it is because the points have already been well made and I need only say that I agree with them.

To my great regret I returned to the Chamber about a minute too late to take part in the debate on Amendment No. 68. Therefore, I take leave to say that one reason why the provisions will be more burdensome on small businesses than on others is that, very commonly, those businesses do not have someone working separately who is in charge of the office and who deals with the paperwork.

If someone is working full time on the paperwork, it is possible that a small business can cope. However, when I think of how the legislation will affect someone like my plumber who is all day on the job and does the paperwork late at night, I believe that the chief effect of the clause will be to deter people like him from ever taking on an assistant. In fact, the Bill will prevent the creation of jobs which would otherwise quite possibly have been created. I think that that is an anathema.

However, more seriously, I am concerned about the effects of the Bill on the employment of black British people. Again, I was extremely disappointed by the Minister's reaction to the evidence produced by my noble friend Lord Thurso. It is first-hand evidence and it is not the only evidence available. Indeed, we have information regarding plenty of other cases, a number of which are contained in a report published as recently as last week.

A citizens' advice bureau discovered a case in December 1995 of a British subject of Pakistani origin who was referred to a bus company by the Employment Service for a work experience course. He was told that he needed to spend £20 to obtain a new passport, which he could not afford to do. The noble Baroness may remember that in Committee I referred her to an almost identical case in the window of my local Jobcentre. I am interested to discover that that case does not stand alone. There is another case of a black British subject, a woman from Surrey, who was told that because she had spent much of her life abroad and had never worked in this country she could not have a national insurance number. That was clearly an erroneous decision but under the Bill it would have prevented the woman from ever obtaining employment.

I do not think the noble Baroness understands quite how intense is the urge to discriminate out there. I take the case reported at the press conference launching the annual report of the Commission for Racial Equality. A major insurance company instructed all those who did business with it that they were to take on no non-nationals. It instructed new staff in training sessions that NNN could be remembered because it stood for "no nignogs". I share the astonishment of Mr. Oustie that that could happen in this day and age. But it did. There are other cases which tend to suggest that this is not as unusual as we might think. There is the case of the black British subject of Asian descent who was called Mr. Birdi. Probably that name was unfortunate, as no doubt mine might be in Gujarat. Mr. Birdi applied for a job and was turned down without an interview and without any consideration. He then applied for the same job with the same qualifications under the alias of John Smith. He was offered the job. The employer was Group 4 security. They really do do it, do they not?

There is another case of an Anglo-Turkish man living in Hertfordshire. He applied for every job in sight. No one would look at him. He was even told he was unqualified for the job of stacking shelves in a supermarket. He then changed his name and used his mother's English name instead of his father's Turkish name. He immediately started picking up job offers all over the place. I think that shows the atmosphere in which these provisions will come into effect. There will be a marginal temptation to discriminate. There will be a tendency to require extra documents. I have said in the past that I think employers are likely to have great difficulty understanding this legislation. The evidence as it is beginning to emerge shows that that is indeed the case. Not only are they having difficulty in understanding the legislation: they are also having great difficulty understanding its commencement date.

I refer not only to casual employers and to ignorant employers. I refer, for example, to the social security Benefits Agency. That agency dealt with a woman from Sri Lanka who had exceptional leave to remain and a national insurance number, and who had already worked for that agency over the past two years. She was told that the Benefits Agency would have to check her employment status with the Home Office when the new regulations were introduced, although she already had all the necessary documentation and her status was in order. Her start date was delayed by three weeks. However, she was a lot luckier than most. Employers seem to have great difficulty with the concept of exceptional leave to remain.

Let us take the example of Mr. Dhatt versus McDonald's hamburgers. Mr. Dhatt was an Indian with indefinite leave to remain and had been in the UK since the age of six. He was subject to no restrictions on employment, he did not need a work permit to work in the UK. He showed McDonald's the stamp in his passport: "Given leave to enter the United Kingdom for an indefinite period". It was not accepted and he was dismissed.

There are a great many more cases like that with which I shall not detain the House. However, the Minister may wish to become concerned about the case discovered by the citizens advice bureaux of a woman who produced a German passport. It was not accepted as leave to work. In the present political climate, I can think of a great many people who might wish to take such a case to the European Court. It is not understood that freedom to move within the European Union is exempt from the requirements of the clause. If that is not understood, we run the risk of a great deal of legal action.

There is a depth of incomprehension of the requirements of immigration. As my noble friend Lord Thurso said, people play safe and go white. That is why the clause will do more harm than it prevents. I beg to move.

Lord McIntosh of Haringey

My Lords, it is obvious from the debates we have had over the past one-and-a-half hours that I strongly agree with the arguments which the noble Earl has put forward. We have tabled a number of detailed amendments, one of which was rejected by your Lordships' House on a Division. In these amendments we have covered what seemed to us to be the principal difficulties in this difficult clause. The noble Earl has done the House a service by bringing together these arguments in a single attack on the clause. I offer him my support for his arguments. I only ask him, in pursuit of the orderly conduct of business in this House, whether it would be advisable at the Report stage not to divide the House against the whole clause. We had the opportunity to do that at Committee stage and decided not to. While I agree with what he said, I ask him to consider whether it would be a good idea to take the opinion of the House when he has to make such a decision.

Baroness Gardner of Parkes

My Lords, I disagree with the noble Lord. Clause 8 will be a greater benefit than a disadvantage. It is important that people should have a simple card which they may present to any employer and I believe that there can be nothing better than an identity card. I know that many people are opposed to it even though I believe it to be desirable.

I remember that the building industry suffered from people working on "the lump", as it was called. It was easily dealt with when people had to have a card which proved that they were entitled to be self-employed. That was a taxation issue but there are parallels and it should be possible to have a clear document indicating that a person is entitled to take employment.

The noble Earl, Lord Russell, made a valid point in the phrase about people not understanding the stamp in a passport stating: "Given leave to remain for an indefinite period". I had the stamp in my passport for some years and I never understood what it meant, I used to find it creepy. Employers do not understand it so it would be useful to have some other phraseology introduced to make the wording clearer. However, I support the retention of Clause 8.

Baroness Blatch

My Lords, as the House will know, the amendment proposes to remove Clause 8 from the Bill. I am not certain what the noble Lord, Lord McIntosh, meant by appealing to the noble Earl not to divide the House. He spoke for the amendment and against Clause 8 but asked the House not to divide. I shall ask the House not to divide, but if it does, to support the proposal that Clause 8 shall stand part of the Bill.

The Government have made a clear commitment to addressing the problem of illegal working and have therefore brought forward proposals in this clause which seek to make it more difficult for people to work here without permission. The clause seeks to keep the burden on employers to a minimum. That fact has generally been recognised, and welcomed, by employers and employers' organisations.

The scale of illegal working is not, as suggested by the noble Lord, Lord McIntosh, and from other quarters, insignificant. As we have made clear, the immigration—

Lord McIntosh of Haringey

My Lords, I am sorry; I thought I had made it clear that I believed the scale of illegal working of all kinds, avoiding taxes, PAYE and health and safety regulations, is very widespread. What we are saying is that it is linked with the employment of illegal immigrants and therefore there will be great difficulty in enforcing Clause 8, not that the problem is insignificant.

Baroness Blatch

My Lords, it was in response to the fact that I used the figure 10,000; I think the noble Lord suggested that we did not know. As we have made clear, the immigration service detected more than 10,000 people working here illegally in 1994, compared to 4,000 detected in 1988. But the figure relates only to those detected. We cannot tell what is the full scale of the problem. However, we believe it is substantial. That is the point I wish to make, and which I believe the noble Lord rather belittled, having heard the figure 10,000.

We are not alone in thinking that illegal working is a significant problem. It is an anxiety shared by most of our European colleagues, who already have measures in place aimed to address it. The Government take the view that we, too, must take action; for we are vulnerable if we do not attempt to control illegal working when other countries do.

The noble Earl said that he does not want to see employers bankrupted. I certainly do not want to see that. We want to see not just a healthy and wealthy sector of employment, and particularly of small employers; we wish to see more of them. For that reason I absolutely join with the noble Earl. However, to suggest that Clause 8 will bankrupt employers is to take a very distorted view of what the burdens on employers are likely to prove in practice.

I gave an example earlier of an employer with 20 employees, with a turnover as high as 25 per cent., looking at only three recruited people in any one year. That can hardly be said to be an issue that would bankrupt a person—and, again, using everyday documents such as P45s and P46s.

Earl Russell

My Lords, the case I had in mind was the one I used a moment later; namely that of my plumber, who is a one-man band. If he has to employ a secretary, it will bankrupt him.

Baroness Blatch

My Lords, I will comment on that example in a moment.

The noble Earl also said that he dislikes unemployment. We certainly dislike unemployment. We believe that if this particular issue goes unchecked, then unemployment will continue to be a serious problem, because those 10,000 people who were detected as working here illegally last year were in 10,000 jobs that could be done by people who are here legally and are entitled to them.

The noble Earl went on to say that he dislikes racial discrimination. I wholeheartedly agree with him. He gave some examples that are more a matter for the Race Relations Act 1976 than they are for this Bill. Perhaps I may touch on some of them.

First, I turn to the example of the noble Earl's plumber. If the plumber wished to employ somebody, I hope that he would pay his taxes and pay national insurance on behalf of his new employee. Then, his plumber would have nothing whatever to worry about. If he merely pays his taxes and pays national insurance on behalf of his employee, he has a defence under this clause because he will have the kind of contact and information about his employee that it will be necessary to have as a defence. So the plumber has no worry.

The noble Earl also referred to the CAB case of the lady with the German passport. If the CAB discovered that an employer told that person that the German passport did not allow her to work in this country, that was plainly wrong. It may be that she did not get a job. That is another matter; one does not know why in the end she was not employed. But if it was as a result of holding a German passport, that would simply be wrong.

The Anglo-Turkish person who had applied for every job in sight and was declared unqualified even for packing shelves is probably more a case for the 1976 Race Relations Act. Certainly that would be the situation as regards the examples given by the noble Earl.

We heard the example of the Sri Lankan who had worked for two years and was told by her employer, the Benefits Agency, that if this measure came into effect the employer would have to check her employment status. First, her employer would have her National Insurance number so that no more checks would be needed. But it might well be that that person is time limited on her stay here. I do not know. It is possible that the body employing that lady would simply want to know whether her stay was time limited and whether she had come to the end of that time, in order to make sure that it had a proper defence. However, if that body had employed the lady for two years, it would have all the defence that it would need against the offences in Clause 8. I believe that the black British subject called Mr. Birdi who was turned down for an interview under that name and when he applied for exactly the same job under the name John Smith was taken on, is a very clear case in which the Commission for Racial Equality would be interested.

All the examples given by the noble Earl are, frankly, cases that could be taken to the Commission for Racial Equality. Certainly, it would not be necessary under Clause 8 to spend £20 on a passport. We are asking about people who have proof of identity in some form or other—and the documents will be spelt out—or have a national insurance number, or a P45. It is not necessary to say that it must be a passport and that £20 must be spent in securing one. Those examples are not at all helpful.

The noble Earl asked me about commencement dates. Clause 8 will be brought into effect as soon as suitable preparations have been made—and with the passing of the Act—such as publicising Clause 8, providing guidance for employers, setting up the helpline facility and making that widely known.

The clause also provides that employers should be safe from conviction and in practice from prosecution if they have taken one of a number of steps before taking on a new employee which would establish a statutory defence. Again, I repeat that there is a wide variety of steps that an employer can take to create that defence against the offence.

Much of the concern expressed about this clause has been based on the view that the clause will work to the disadvantage of people from ethnic minority communities who are British or otherwise lawfully resident. We believe that concern is unfounded. Our position is very clear. We oppose discrimination of all kinds. However, it would be wrong if unfounded fears of discrimination by employers prevented us from addressing the problem of illegal working. The effect of our proposals is action against those who are not entitled to live and work in the United Kingdom.

We believe that most employers want to ensure that their selection processes are fair and lawful. Therefore, we shall ensure that employers are provided with any advice and guidance that they might need on how they can recruit staff in ways which will be transparently fair. We shall be happy to provide whatever advice that we usefully can. The Commission for Racial Equality will be advising us of the best ways in which to do that.

Clause 8 will help to discourage illegal working and protect job opportunities for those entitled to work in the United Kingdom. I commend the clause to the House and trust that noble Lords will reject the amendment.

10 p.m.

Earl Russell

My Lords, I believe that there may have been some cross-purposes between us. The noble Baroness argued throughout that the cases that I quoted were ones in which the law was wrongly understood. That point is not at issue. That is precisely the purpose for which I quoted those cases. I quoted them in order to illustrate the proposition, which I profoundly believe to be true, that most employers, and indeed for that matter most subjects, do not understand the details of immigration law. I have tried to argue that if this clause comes into effect, it will be very widely misunderstood and because most people can recognise skin colour much more easily than exceptional leave to remain, that is the way that the clause will be used.

I am sorry that the noble Baroness is so resistant to evidence. She heard my noble friend Lord Thurso tonight; she heard the cases I quoted. She says the Government will listen to the views of the Commission for Racial Equality. Let me quote from its annual report, published last week, in relation to this clause: Employers will face criminal sanctions if they employ any 'immigrant' who is not entitled to work. To avoid prosecution, employers are likely to avoid recruiting anyone who looks or sounds like an 'immigrant'". It also reports in the chairman's introduction that: The campaign related to this Bill has already done very grave harm to race relations in this country". I believe that; the noble Baroness perhaps does not. She says that these fears are unfounded. I ask her: how many cases of this sort will it be necessary to produce before she comes to the conclusion that our fears are well-founded?

The Minister misunderstood also my reference to the case of my plumber. I have no fears of my plumber attempting to break the law. My concern for my plumber is that it may place on him a burden which would force him to take on a secretary or go out of business. Since his profits are too small to enable him to take on a secretary, I believe he would go out of business. The noble Baroness argued at length that the refusal to accept a German passport was wrong. Of course it was wrong; that was exactly my point.

I do not know how much more damage this clause will do. I believe it will do a lot. With the greatest reluctance and after listening to the noble Lord, Lord McIntosh of Haringey, I do not intend to divide the House tonight. But we will be coming back to this over and over again with many more cases of the type I have just produced. I ask the noble Baroness: how many more will we have to produce before we persuade her? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Manuscript Amendment No. 74A not moved.]

Clause 9 [Entitlement to housing accommodation and assistance]:

The Deputy Speaker (Baroness Nicol)

My Lords, if Amendment No. 75 is agreed to, I cannot call Amendments Nos. 76 and 76A.

Earl Russell moved Amendment No. 75: Page 7, line 24, leave out subsection (1).

The noble Earl said: My Lords, Amendment No. 74A became out of date as a result of events that took place after lunch today. We could not have taken account of that in the Marshalled List.

Amendment No. 75 seeks to leave out Clause 9(1) which provides that no housing authority shall provide a tenancy, or licence to occupy, housing accommodation provided under the accommodation Part … to an immigrant"— I presume that word has now changed— who is of a class specified in an order made by the Secretary of State". It is not easy to find housing if one is looking for it on a low income. The noble Lord, Lord Mackay of Ardbrecknish, will recall some of the debates that we were having last week on the Housing Bill on the concept of suitable accommodation. Some of it one cannot afford; a great deal of it still covertly, notwithstanding the law, does not admit people who are black; an increasing proportion of it now will not admit smokers; some will not take children. The housing benefit will not cover the rent. So there is already a very considerable body of people who cannot find anywhere to live. In London as a whole 49 per cent. of those who present as homeless are from ethnic minorities. In the inner London boroughs the figure is 56 per cent.

The only place where such people can get housing at present is through the local authorities. It is the one place where they can be reasonably confident that racial discrimination is not going to take place. That is precisely the point that this clause in the Bill bars. I do not see the justice of that. It is of the essence of being an asylum seeker that, once your claim is registered, the Secretary of State cannot make you go away. So you are here and while you are here you have to live. So we have to consider, if such people are not going to live in accommodation provided by a local authority, where else are they going to live. The general likelihood is that many of them will end up being homeless. I do not believe that that will do us any good.

Housing associations are also concerned about the application of these provisions to them. They point out that they are contrary to their articles of association which say that they should take account only of housing need. If they are to be compelled to take account of immigration status as well, the housing associations will have to re-word all their articles of association. Local authorities will also have to get information out of the Home Office. We all know that that is not the easiest thing in the world to do. Shelter produced the example of 50 cases where such information was sought under the 1993 Act. In only two of those cases did the information appear.

What will be the consequence? It will be homelessness. If I were recruiting for some evilly disposed body of revolutionary anarchists, I would welcome this clause; if I were a TB bacillus, I would welcome this clause; if I were recruiting for the National Front, I would welcome this clause. From these Benches I do not welcome it. I beg to move.

Lord Mackay of Ardbrecknish

My Lords, we have dealt with this matter before; namely, social housing, council housing and housing association housing. As I have explained previously, when someone acquires a tenancy of a council house or a housing association house, he effectively gains housing for life. He can stay there as long as he wants. He also acquires succession rights whereby he can pass on the tenancy to a close relative. He also acquires certain rights of assignment; for example, he can exchange the property with another tenant elsewhere. He can also acquire the right to buy.

I find it hard to understand an argument which says that somebody whose right to be in this country has not yet been properly established ought somehow to have the right to get such long-term housing. I do not understand the logic in that argument at all. As a government we are concerned that such housing should go to those with clearly established, long-term needs; namely, people who have a right to remain in this country indefinitely. The classes of immigrants whom we propose to exclude from council housing are generally here for a limited period only. Their need for housing is temporary and it can be more properly met in the private rented sector.

Most of the groups we are proposing to exclude from entitlement to social housing are already excluded from other forms of social assistance. There is no reason why they should be entitled to housing created with taxpayers' money, particularly when there are people with settled residence in this country who are seeking housing. This applies equally to those immigrants here on limited leave and to asylum seekers; only a tiny proportion of asylum seekers—in the first five months of this year only 6 per cent. of applicants—are actually granted full refugee status. The others are not. Where people are granted leave to remain, they can acquire the same rights to council housing as people with settled residence, people who have always lived in this country.

It is in those parts of the country where housing pressure is greatest, such as London, where we find the vast majority of asylum seekers. It is not fair to established residents in such areas to see temporary immigrants being allocated permanent social housing ahead of them, nor is it conducive to good community relations.

The Government are investing over £2 billion a year in the creation of new housing and the improvement of existing stock. This expenditure should go to meet the needs of the established population, not those who are likely to be leaving in due course and not those who have gained entry to this country by saying that they will not be a burden on public funds or look to the public funds for any help or assistance. I believe that the argument in favour of ensuring that local authority and housing association housing goes to those people with a long-term right to remain in this country is logical and well marries with the fact that the housing itself is of a long-term nature. It seems illogical that somebody should have a longer right to occupy their house than to occupy the country in which the house is situated.

10.15 p.m.

Lord Avebury

My Lords, the Minister implies that the asylum seekers who will be caught by this clause and be denied access to local authority housing are here for only a short time. He implies that the decisions on their cases are made within a matter of weeks, whereas anybody who has had anything to do with asylum cases knows that some cases can take years. I quoted a case at an earlier stage of a Ghanaian asylum seeker who had been in this country since 1988 but whose case had not yet been determined. There are literally tens of thousands of people who were "left behind" by the 1993 Act and put onto the slow-track procedure—

Viscount Ullswater

My Lords, the noble Lord is taking up the time of the House at Report stage when the Minister has already answered. I do not believe that he is asking a question of the Minister; he is wandering into rather more extraneous matters.

Lord Avebury

My Lords, I am asking the Minister whether he is aware that many people who are still here applied for asylum as long ago as 1988 and whether he can tell the House the number who have been on the list for that length of time who, under this provision, would have been deprived of the right to access to local authority housing for as much as eight years.

Lord Mackay of Ardbrecknish

My Lords, without delving through the statistics, I cannot give the noble Lord the answer that he wants, but I do not think that that matters. The fact is that no matter how long they have been here, they do not have a long-term right to remain. What we want to ensure by many of the actions that we are taking with regard to immigration is that people do not have to wait for years before a decision is made. We want decisions to be made expeditiously. If people do not have a long-term right to remain, I do not see why they should have a right to long-term housing which is there for the established population, including those people who gain the right to asylum and who stay here and who then have the right to the same long-term housing as the established population. I should have thought that that was a fairly easy argument.

Earl Russell

My Lords, the last time that I saw a figure on the point, the average length of a mortgage was nine years. An owner-occupied home is surely one which has been undertaken putatively as a permanent home. My noble friend has cited cases of people who have been asylum seekers for eight years. I think that the Minister is making a little bit of a meal of the argument about not having a permanent home. Plenty of people take local authority housing while they hold jobs. They may hope that those jobs will be for life. Sadly, a great many jobs now are not. People may move after four years, or even four months, to the other end of the country.

The argument of the Minister rather prejudges the outcome of the claim for asylum. The Minister said that such people would not be here indefinitely. But those who are successful in their claims may well be here indefinitely. Many of us on these Benches suspect that if cases were heard on a slightly different set of assumptions the proportion who remained here might be a great deal higher than the 21 per cent. it is now. That prejudging of the applications rather strengthens my suspicion as to the Government's argument behind the clause. I did not hear from the Minister any convincing case in reply to the contrary argument as to where these people would go instead. He suggested that they would go to the private sector. Before I decide what to do with the amendment, can the Minister tell me how an asylum seeker without property is able to rent in the private sector when he has taken away that person's right to housing benefit?

Lord Mackay of Ardbrecknish

My Lords, if it is accepted that the Government will restore the position to that which applied last week before the judgment of the Court of Appeal, anyone who applies at the port of entry will be eligible for those benefits until a decision is made by the Home Office. Such a person will be eligible for housing benefit and therefore will be able to get housing. Of course, they will not be eligible for long term social housing. I would have thought that the great majority of people in this country would fully support that view.

Earl Russell

My Lords, all of the cases at the moment involve people who, when they passed through the port of entry, were unaware that their entitlement to benefit was contingent upon claiming it at the port of entry. The noble Lord, Lord Clark of Kempston, shakes his head. How does he know that what I say is false? I am happy to give way if he has any reason for it. I cannot see how this can be done unless it is made crystal clear before these people come in that benefits must be claimed at that point or not at all. However, since that is another argument, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blatch moved Amendment No. 76: 1 Page 7, line 26, leave out ("an immigrant") and insert ("a person subject to immigration control").

The noble Baroness said: My Lords, Amendment No. 76 is linked with a number of other amendments tabled by the Government, Amendments Nos. 79, 93, 100 and 110. Amendments Nos. 76A, 79A, 93A and 99 will be spoken to by noble Lords opposite. The Government amendments give effect to the undertaking I gave in Committee that the Government would bring forward amendments to remove the term "immigrant" from the face of the Bill. I referred to the amendments in an earlier debate on Clause 8. I reserve the right to respond to the other amendments when they have been spoken to. I beg to move Amendment No. 76.

Lord McIntosh of Haringey moved, as an amendment to Amendment No. 76, Amendment No. 76A: Line 1, leave out ("a person subject to immigration control") and insert ("a relevant person").

The noble Lord said: My Lords, in moving Amendment No. 76A I should like to speak also to the other Government amendments and to our amendments, Amendments Nos. 76A, 79A, 93A and 99. Since this is the first and last occasion on which I shall speak to Clause 9 I should like to say a word about the agreed procedure for consideration of parts of Clause 9 as presaged by the statement of the noble Lord, Lord Mackay of Ardbrecknish, at the outset of our debates today.

I understand that it has been agreed by the usual channels that the Government amendments to which the noble Lord, Lord Mackay, has spoken will be produced as early as possible this week and that they will be considered, not in the first instance at Third Reading, but on re-commitment of Clauses 9 and 10. I suppose that if any of them took the form of new clauses they would also be dealt with according to Committee procedures. We are grateful to the Government Chief Whip for agreeing to that modest improvement in the procedure of the House. It of course means that they will be dealt with under the Committee procedure next Monday afternoon, and that the Third Reading will be taken immediately afterwards. So there will be no delay in the completion of the Bill. It will take place on the same day provided, of course, that the Government do not lose any amendments.

In return for that, as I say, modest improvement in the procedures of the House, I have undertaken, on behalf of my noble friends, that we will not seek to raise under the Committee procedure any matters which are not covered by the scope of the government amendments. To that extent, we can record a small victory for common sense and parliamentary procedure.

In moving Amendment No. 76, the Minister said, rightly, that it was in fulfilment of an undertaking that she made in Committee to remove from the face of the Bill the word "immigrant", to which exception was taken. We have debated this matter already on Amendment No. 64. The reason why I did not suggest that all the amendments be grouped together is that the inadequate scope of the government amendment is clearer when we look at Clauses 9, 10 and 12 than it was on Clause 8.

The Government are doing the absolute minimum as a response to the concerns which were expressed. All they are doing is changing the word "immigrant" to: a person subject to immigration control". All the other dangerous aspects of these clauses are left unchanged. We complained not just about the use of the word "immigrant" but about the fact that there is a definition in Clause 12 which is so wide that it includes those who require: leave to enter or remain in the United Kingdom (whether or not such leave has been given)".

That means that an immigrant or person subject to immigration control is a wider definition and includes a large number of people who have been in this country for many years, who are equal citizens in every respect with those whom the Minister calls the established population—a new phrase, and one which the more I hear him say it the less I care for it. It is approaching talking about the white population, although it does not quite do that.

Then what happens? We have this, presumably, deliberately wide definition of what is meant by immigrant or a person subject to immigration control. We have introduced into the Bill the idea that there should be the possibility of controls for people who have a perfect right to be in this country. Then we return to Clauses 9 and 10, which relate to housing accommodation and assistance, and then to entitlement to child benefit, and we partially restrict those clauses so that they do not apply to all the people who are included in the definition in Clause 12.

In Clause 9 we talk about those who are; of a class specified in an order made by the Secretary of State". And Ministers give us the assurance that that class will not include those who have been given leave to enter or remain in the UK. We widen the definition, we narrow it again and we make it insecure by referring to an order made by the Secretary of State.

The same situation arises in Clause 10(2), which provides: No immigrant within the meaning of the Asylum and Immigration Act 1996 shall be entitled to child benefit for any week unless he satisfies prescribed conditions". We are assured by Ministers that these prescribed conditions will ensure that Clause 10 does not cover those who have leave to enter or remain in the United Kingdom.

What is the point of this round-about procedure? Why do we have this wide definition which we then seek by ministerial assurance to restrict but fail to restrict in the wording of the Act? Is this not a recipe for insecurity and for racial insecurity above all? Is this not a recipe for imprecision and for the possibilities of misinterpretation by housing authorities, housing associations and those responsible for the allocation of child benefit?

Would it not have been better for the Bill to say what it means, which is that housing benefit and child benefit shall be withheld only from those who have no right to be in this country? We do not agree with that objective but at least it would have been clear, whereas the present wording and round-about definition seems to be designed deliberately to create insecurity, uncertainty and the possibility of discrimination.

These amendments do not meet the concerns which were properly expressed in Committee and they leave this part of the Bill in a thoroughly unworthy state. I beg to move.

10.30 p.m.

Baroness Blotch

My Lords, Amendments Nos. 76A, 79A and 93A, in the name of the noble Lord, Lord McIntosh, would substitute the term "relevant person" for the term "immigrant". The noble Lord has indicated that he wishes to prescribe on the face of the Bill categories of persons who are to be excluded from the scope of Clauses 9 and 10. His Amendment No. 99 to Clause 12 lists the categories which he wishes to propose. The Government do not favour this approach.

First, it would mean that the eligibility criteria for council housing, assistance under the homelessness legislation and child benefit would be set out in two separate places. For council housing and assistance under the homelessness legislation there would be a list of eligible categories in the primary legislation and a list of ineligible categories in secondary legislation. For child benefit, there would be two lists of exempted categories, one in the primary legislation and another in the secondary legislation. This is overly complicated and unnecessary. Moreover, it is out of keeping with the approach adopted in other comparable legislation, such as the Social Security Contributions and Benefits Act 1992, under which the criteria for eligibility are left to be prescribed in social security regulations.

The Government see no merit in adopting a different approach for Clauses 9 and 10. Indeed, the Housing Bill, which will replace Clause 9 in England and Wales later this year, follows the same approach; namely, of leaving the details of eligibility criteria to be specified in secondary legislation.

The Government could not have been clearer about the use they intend to make of the order-making powers provided by Clauses 9 and 10. We have made available to the House background notes setting out the details. The background notes make clear the groups from which entitlement is to be removed. In broad terms, they comprise those who are present without valid leave or who have been granted leave on the basis they will have no recourse to public funds. We have made clear that our intention is to align the entitlement of people who are subject to immigration control under the homelessness legislation with their social security entitlement. Indeed, enabling us to do so is the purpose of Clause 9. It follows from this that concerns that the Bill will change the immigration status or housing entitlement of people who have been settled in this country for many years are entirely groundless.

Amendment No. 99 would in paragraph (g) provide an exemption from Clauses 9 and 10 for anyone who is a member of the family of a person who is in one of the other exempted categories. This is entirely unjustified. We would, for example, be excluded from denying council housing entitlement under the homelessness legislation and child benefit to any person who was a member of the family of a person with settled status, regardless of whether that family member had been admitted on the basis that he or she would have no recourse to public funds and regardless of whether he or she was genuinely dependent on the person who is settled here. This would have a far wider scope than would be acceptable to the Government, and also, I suspect, wider than was intended by the noble Lord.

Amendment No. 99 is in any case defectively drafted. For one thing, it refers to British citizens and nationals of European Economic Area countries, who mostly fall outside the scope of this Bill. Secondly, it seeks to exclude from the scope of Clauses 9 and 10: a person named in a letter or other document issued by the Secretary of State on which there is placed no restriction upon … the entitlement to receive housing accommodation or assistance, or the entitlement to receive child benefit, as the case may be". This loose wording could apply to a whole variety of documents issued by almost any government department. And, thirdly, it exempts nationals of countries with which the European Union has concluded Article 238 agreements regardless of the details of the agreement and of whether it applies to the individuals concerned.

For all those reasons, I urge your Lordships to resist Amendments Nos. 76A, 79A, 93A, and 99 on the grounds that they represent an unhelpful approach to clarity of drafting and that any concern about the position of people from abroad who have been settled here for many years is, I repeat, entirely groundless.

Lord McIntosh of Haringey

My Lords, the Minister sought to respond to the criticisms of the government amendments by a critique of our amendments which I consider to be almost entirely misconceived.

She complains that our amendments have a mixture of definitions on the face of the Bill, as indeed they do, in the amendments to government amendments and above all, in Amendment No. 99 as regards secondary legislation. The purpose of our amendments is to remove the necessity for the secondary legislation and to make it absolutely clear on the face of the Bill who is and who is not intended to be covered by the Bill. In our view, the Bill as drafted, even after the government amendments, would leave a fatal insecurity for those who have leave to enter or remain in the United Kingdom who are not intended to be covered by the Bill and yet are covered by the definition in Clause 12. It is for nobody's benefit that those people should be included in the general and then excluded in the particular.

The Minister claims that the Government's intentions are perfectly clear because of the guidelines and the draft notes of interpretation. That is exactly what we are complaining about; that the Bill relies on guidelines, relies on ministerial documents rather than on the force of law.

It is quite unsatisfactory that, despite the concern that was expressed at an earlier stage and repeated now, the Government should still persist in this roundabout way of dealing with the problem.

The Minister says that some of the categories in our substantive Amendment No. 99 are outside the scope of the Bill. Indeed they are, and the reason we put them there is that we wanted to be clear that Clauses 9 and 10 will not apply to British citizens or nationals of a state which is party to the European Economic Area Agreement. That is clear in our amendment, but it is not clear in the Bill as drafted, even with the Government's amendments.

I do not believe that the judgment in the Court of Appeal on Friday raised this matter. Therefore, it is not a matter to which we shall return on re-commitment. However, I can assure the Minister that it is certainly a matter to which we shall have to return on Third Reading. In the meantime, I beg leave to withdraw my amendment.

Amendment No. 76A, as an amendment to Amendment No. 76, by leave, withdrawn.

On Question, Amendment No. 76 agreed to.

[Amendment No. 77 had been withdrawn from the Marshalled List.]

Lord Dubs moved Amendment No. 78: Page 7, line 28, leave out subsection (2).

The noble Lord said: My Lords, in moving the above amendment I shall, with the leave of the House, speak also to Amendments Nos. 86, 87, 88 and 89. The amendment does not deal with entitlement to permanent accommodation as was the case with the previous amendment; it deals with providing emergency accommodation for people who become homeless. I fully appreciate that we discussed the amendment in some detail in Committee, but there are two or three specific aspects of this part of the Bill which were not dealt with at that stage. Therefore, I shall not be repeating old arguments if I raise them at this point in relation to Amendment No. 78. After all, it raises a very important point of principle.

It is already the case that illegal entrants and over-stayers are excluded from the provision of homelessness accommodation by case law and by government guidance. Therefore, we are talking about people who are legally and properly in this country. My concern is about changes of circumstance. In Committee the Minister said—and, indeed, the noble Lord said it repeatedly in relation to similar matters—that people arrive in this country and give an undertaking that they will not have recourse to public funds. It is on that basis that they are admitted.

However, even with the best will in the world, a change of circumstances may take place. I should like to give the House examples of the two specific changes of circumstance which are relevant to my argument. First, there may be people in this country who have a family tragedy, become severely ill or have a disabling accident; or, indeed, they may be the victims of fire. All those situations may place them in serious difficulties and lead them to become homeless, even though, had those unusual changes of circumstances not happened, they would have had no need for recourse to public funds or to request homelessness accommodation from a local authority. By their very nature such circumstances cannot be predicted or planned for: they could happen to anyone.

The second change of circumstance is one which I asked about in Committee, although I do not believe the Minister dealt with it adequately. Let us take, for example, the case of an asylum seeker who, quite properly in the Government's mind, applies for asylum at Heathrow Airport or at Dover on entering the country. He applies for asylum, is then turned down by the Home Office and wishes to appeal against the decision, pending which he has been in homelessness accommodation: what is to happen to him from the date on which the Home Office turns down his claim for asylum until the time when the appeal is heard? Will the local authority say, "Well, of course we quite properly gave you and your family homelessness accommodation, but, because of the legislation, you are no longer entitled to such accommodation because the Home Office has turned down your claim for asylum. However, when you get to appeal, you may get full refugee status in which case you will be entitled to the accommodation again"? That process may take six months or a year. In the meantime, what is to happen? Will a local authority throw such an individual out because the legislation says so? Alternatively, is there some way in which we can soften the blow for such people?

The situation may depend upon the regulations made. It is possible, I suppose—perhaps the Minister will say so—that the regulations would not debar from homelessness accommodation individuals who are faced either with unexpected circumstances like a family tragedy, disabling illness or a fire, or those asylum seekers who are turned down by the Home Office and are awaiting an appeal. If the Minister says the regulations will allow for that, I shall be happy. I wonder whether he could let us know.

Finally, I have many points of unease arising from the Court of Appeal decision in relation to the Minister's powers under this clause. I wonder whether, given the Court of Appeal decision, it is not a sweeping matter for the Secretary of State to be able to make regulations which could have a dramatic effect on the eligibility for homelessness accommodation, without at this stage our knowing fully who those people are to be and whether it is proper for the Government at a subsequent date to determine eligibility when at the present point in time we do not know what decisions the Government will make. We have some sense of that as the Minister has given us some inkling, but we do not have a full sense of it. Is it not running the risk that in turn the High Court and the Court of Appeal may again say that these powers are too wide? I simply utter that as a word of caution.

Of course, I understand that in many Bills the Government seek power by regulation to make further changes, but it seems to me, in the light of the Court of Appeal decision, that it depends how sweeping those changes are. I wonder whether we are not getting rather close to the likelihood that the High Court might take the same line as the Court of Appeal did last Thursday. I beg to move.

10.45 p.m.

The Deputy Speaker

My Lords, if this amendment is agreed to, I shall be unable to call Amendments Nos. 79 or 79A.

Lord Hylton

My Lords, at the previous stage of the Bill I think I referred to people being cast into some kind of housing limbo. That is a serious state of affairs, all the more so, given the reasons explained by the noble Earl, Lord Russell, as to why many kinds of rented accommodation are simply not available to the kind of people we are considering. This amendment calls for a sympathetic reply from the Government.

Earl Russell

I trust that before we go on the noble Lord, Lord Dubs, will not misinterpret me if I say a little about the Court of Appeal decision. The Court of Appeal's decision argued that the Minister could not, by regulations, reverse matters in primary legislation. So the narrow ground of the Court of Appeal decision could not apply to something in primary legislation. But the wider issues apply. The reason why the Court of Appeal reached this judgment also applies to this cause. The Court of Appeal argued that these measures between them reduced asylum seekers to a state of destitution such that no civilized country could tolerate, and that this rendered the right to seek for asylum—as it put it—nugatory. That applies to this clause, but the power to strike down does not. The courts have not struck down a provision of an Act of Parliament in this country since 1610. Personally I am not in a hurry to see it happen again. But in order to ensure that it never does we need restraint not only from the judiciary but also from the executive. But if we should have a hearing in any international tribunal that would be quite another matter because it is not bound to treat our Acts of Parliament as sacrosanct because before it we are simply another litigant to be treated just like anyone else. It is before an international tribunal that the points made by the noble Lord, Lord Dubs, will carry a great deal of weight. If I were the Home Office, I should be very anxious about them and would take legal advice in considerable quantities.

I also wonder what the clause is doing in the Bill. I shall have to ask the Minister's forgiveness for repeating several exchanges we had in the course of the Housing Bill last week. In doing so, I shall explain at least one reason why the provisions are unnecessary. They are to last only until repealed by another Act of Parliament which, as a Bill, is near to completing its Committee stage in your Lordships' House. With the delays resulting from this attempt at amendment, the return to another place and, doubtless, heated exchanges there, there is a real possibility that the Housing Bill may leapfrog this Bill. I wonder why we need it. The answer, I think, is for the sake of the local authorities, because the denial of benefit and the denial of homelessness accommodation has put a heavy burden on local authority social service departments.

The purpose of Clause 9 was to ease the burden of providing accommodation on local authority housing departments created by the withdrawal of benefits. I have here a letter from the director of housing and social services of the London Borough of Sutton. It appears that attempts to provide help for local authorities are not having the desired effect. So the object for which Clause 9 was put in the Bill is also not achieving its desired effect. The formula was support with 80 per cent. of costs above a certain threshold. The House may recall my asking the noble Baroness, Lady Cumberlege, on 4th March what that certain threshold was. She did not know. The London Borough of Sutton now knows. The threshold is to be 5 per cent. of the total social services expenditure. At Sutton the standard spending assessment for children's personal social services is £5.222 millions. That means the authority would have to spend 5 per cent. above that allocation—£261,000—before it would be eligible to claim any grant support. That is an onerous requirement.

It has also been made clear to that authority that any support it gives to housing children will not be allowed to extend to giving support to parents or other adult members of the family. That means that the authority must take children into care which is more inhumane and a great deal more expensive. The Minister keeps telling me about the interests of the taxpayer. I am a taxpayer and I regard that provision as a gross waste of my money. I very much resent the Government undertaking it, both as a citizen and as one who thinks my money is being profligately spent in defence of an abstract principle.

The Government also indicated to the London Borough of Sutton that grant support will not be available to asylum seeking families who subsequently break up. I cannot understand the justice of that provision. They are still people; they are still asylum seekers; and they are still in need. Sadly, it is true that such gross stress frequently tears families apart. If it is to be like the benefit regulations, it is not even to apply to women who leave their partners because of domestic violence, even of the most severe kind. That is a provision wanting equally in common sense and humanity. I see no point in it. The reason for Clause 9 being in the Bill has turned out to be a damp squib.

I wish to draw attention to Clause 9(2)(b), which has caused me intense surprise. It states that any asylum seeker, or whoever else the Secretary of State specifies, shall be disregarded in determining… whether another person … is homeless or is threatened with homelessness; or … has a priority need for accommodation". If noble Lords are not familiar with the law passed at the instigation of my late noble friend Lord Ross of Newport, the significance of that provision may be missed. Married couples—indeed couples—are a priority category and receive help where single people do not. So any British subject who is unwise enough to marry an asylum seeker thereby renders himself, as well as his spouse, ineligible for help under the homelessness legislation. In fact, disentitlement is infectious.

We are frequently told that this Government are the champions of marriage. I believe in it, too. I do not normally go about shouting about it. I do not think the state is the best instrument to preserve it; I believe that couples are. But this sort of wanton tearing apart of a family moves me to very great anger. We shall return to the subject.

Lord Mackay of Ardbrecknish

My Lords, under the homelessness legislation families and other vulnerable individuals who lose their home through no fault of their own are provided with a proper safety net. It is one component of a wider set of welfare provisions that we have in place to help people through a crisis and to continue their normal lives. This legislation focuses naturally and rightly on those people who are settled in this country. People who have sought and gained entry to this country on the grounds that they will have "no recourse to public funds" are not entitled to set aside that undertaking and obtain benefits which are, quite rightly, available to those people who are settled in this country.

I know that it does not seem to be persuading Members of the parties opposite that people have said they will have no recourse to public funds. It seems that that can be set aside just with the wave of a hand. However, it is an important point to bear in mind. Most of the people to whom we refer have come into this country without applying for asylum at the port of entry on the basis that they want no recourse to public funds. One must try to take them at their face value and assume they meant what they said to the officers at the port of entry. On that basis "public funds" includes money that comes, for example, from the Benefits Agency or from a local authority regarding the homelessness legislation. So I do think there is a very firm base in understanding that

Earl Russell

Perhaps I may ask the Minister a question. Suppose he should break a leg in the Cairngorms in winter, a helicopter comes to rescue him, and those in the helicopter ask him, before taking him aboard, for an undertaking that the rescue will be no charge on public funds. Would he regard that promise as obtained under duress?

Lord Mackay of Ardbrecknish

My Lords, as I do not go climbing in the winter or at any other time, the noble Earl's clever question is not relevant. It would lead me into a false comparison. I shall simply not enter into it. We are talking not about British citizens climbing the Cairngorms but about people who came here saying they would have no recourse to public funds while they were here for a limited period. I at least can see a considerable difference in the two questions which makes no read-across possible between the answer to one and the answer to the other. I am sorry to disappoint the noble Earl, but I do not intend to follow him down that particular road.

People who have obtained leave to enter the country would have to satisfy the immigration control that they had the resources to maintain themselves during their stay in the country. The rules state clearly that an application for assistance under the homelessness legislation falls within the definition of public funds. The Home Office is entitled to cancel the leave to remain granted to anyone who entered the country lawfully, but who subsequently breached an undertaking not to have recourse to public funds.

As I explained earlier in Committee, the principle behind the provisions in subsection (2) is not new. The Court of Appeal ruled (in the Tower Hamlets case, in 1993) that a person who is not lawfully in the country because he entered it illegally, or has overstayed his leave, is not entitled to assistance under the homelessness legislation. To that extent what we are doing here is no more than translating a well established principle in the homelessness legislation.

Earl Russell

My Lords, I beg the Minister's pardon. I am most grateful to him for giving way. He quoted the Tower Hamlets case, which I mentioned in Committee. I hope, therefore, that he is not suggesting that asylum seekers and illegal entrants are the same.

11 p.m

Lord Mackay of Ardbrecknish

No, my Lords, I believe I said quite clearly—if I did not, I meant to do so and the record will show whether or not I did—that the Tower Hamlets case showed that a person who is not lawfully in the country because he entered it illegally, or has overstayed his leave, is not entitled to assistance under the homelessness legislation. So we are dealing with those categories; but we are also dealing with those people who sought entry and were given entry to this country on the grounds that they would have no recourse to public funds.

The noble Lord, Lord Dubs, asked me a number of questions. He postulated a number of tragedies and disasters of various kinds and asked what would happen in those circumstances. I do not feel that those events change the fundamental point that the person came to this country on limited leave with no recourse to public funds. I suggest that if I went to a foreign country for a limited period and something happened to me, I should probably try to make my way back to this country as quickly as I could. I suggest that people have that option. They can return to their country of origin or make other arrangements with friends, family or whoever it may be, if they want to stay in this country and deal with the problem that has overcome them.

I was also asked about asylum seekers who apply for asylum at the port of entry and have been granted benefit and dealt with under the homelessness legislation. Then comes the day on which they are turned down—it is well worth remembering that five out of every 100 are accepted—and they appeal. At that point their right to benefit stops, as indeed does their right to be considered by the local housing authority under the homelessness legislation. If they decide to stay in this country to await the outcome of an appeal, anybody giving them advice ought to be looking very carefully at the success rate of appeals, which is three out of every 100.

Baroness Williams of Crosby

My Lords, the Minister has now repeated twice the figure of 3 per cent. of people being accepted. He will know that there is a further substantial additional number who are given exceptional leave to remain here. Will he be kind enough to tell us how the legislation that we are now discussing with regard to housing will apply to those who receive exceptional leave to remain, which is an additional 19 per cent. or so of all those who apply for asylum?

Lord Mackay of Ardbrecknish

My Lords, exceptional leave to remain, which is granted initially for a limited period and has to be renewed every now and then, is not the same as asylum. After all, all the arguments have been about asylum.

In 1995, 16 per cent. were granted exceptional leave to remain. That is the outcome of the Home Office asylum decisions. But the fact still remains that 81 per cent. of all the people who start off gain neither of those categories. So we are still talking about a great number of people who are found not to be eligible for either the asylum test or exceptional leave to remain. And 80 per cent. is a lot of people. I shall not go into the argument tonight that I shall probably use next Monday. But if any other part of the benefit system were paying out to people, and it was found after investigation that 80 per cent. of them were not qualified to receive that benefit, I should be in quite some difficulty at this Dispatch Box. Indeed, I should be and quite rightly so. We have to remember those figures and, if we look at them over the past year or two, 80 per cent. roughly is a great many people. Most of the exceptional leave to remain cases, as I understand it, are actually granted in the first instance by the Home Office.

I was talking about appeals; that is the question about which I was asked. I would be advising people that their chances of winning an appeal in this country were pretty slim and that they would perhaps do better to return to their country of origin rather than stay here and appeal. With regard to the question asked by the noble Lord, Lord Dubs, they would cease to be eligible under the homelessness legislation and therefore, if they decided against the odds that I have just indicated to remain here and appeal, then they would have to look for other accommodation. For example, they might have to look to the local ethnic community with which they are associated, or to the voluntary sector. If they have children then they can look to the Social Services Department for assistance under the Children Act.

Frankly, unless their case is extraordinarily strong, my advice would be that they should consider returning home. As I mentioned earlier this afternoon, my right honourable friend the Secretary of State intends to bring forward measures which will mean that anybody who eventually gains asylum will be able to look back to the date of their original claim. If they were either an in-country applicant or an appeal applicant, they would be able to receive the benefit due to them back to the date of their claim. A voluntary organisation, therefore, which thought there was a particularly strong case could see that, if its judgment was correct, it would receive some of the money back it had used to help the applicant.

To return to the questions, either the noble Lord, Lord Dubs, or the noble Earl, Lord Russell—or both—asked if we were looking at the words in this clause against the background of the Court of Appeal's judgment. We are obviously reflecting carefully on the judgment with regard to a number of issues, one of which is to ensure that we have the wording in this clause correct.

The noble Earl, Lord Russell, talked about children in care. I answered this question the last time. He asked whether, if children were involved, they would have to be taken into care. I made it clear the last time that the local authority, in furtherance of its duty under the Children Act, may decide that housing the family is the best solution to the children's problems. They do not necessarily have to decide that the children must go into care. There are other options, including the one I have just mentioned, open to them.

The noble Earl also asked about the Housing Bill and this Bill. The point is that this Bill will, we trust, be commenced ahead of the Housing Bill. Though the noble Earl does not agree with what we are doing, he understands that if we are doing what we are doing, we need to align the homelessness legislation with the benefits legislation as quickly as possible. We will not repeal everything regarding Clauses 9 and 10 in this Bill and when the homelessness Bill comes in there are probably one or two provisions that we will not repeal in that.

I was also asked about local government finance and threshholds. Threshholds of this kind are quite usual in local government finance. The well-known "Bellwin" principle in meeting a range of disasters has a threshhold.

I was asked if Clause 9(2)(b) disentitles British citizens. It does not. A UK citizen with an asylum-seeking wife and UK-born children will be entitled to assistance under the legislation. As a single person he would not be, but the children and the wife, despite the fact that they may be asylum seeking, will entitle him to be considered under the homelessness legislation.

I believe that I have answered almost every question, but I want to make one point again, which I know that the noble Earl does not agree with because he believes the opposite. A UK citizen appealing against a decision as regards the benefits system does not receive benefit during the course of that appeal. I have said that I do not believe that it is a good argument from me to the noble Earl because he believes that everyone ought to receive benefits during the course of an appeal throughout the whole benefits system. I hope I am not being unfair to the noble Earl. He indicates that that is indeed what he believes.

I am not going to argue about that tonight, but that is not the case at present. We certainly have no proposals to change the situation and I am not sure whether the main party opposite has any proposals to change the provisions in the way that the noble Earl would like. But we certainly have none. As UK citizens do not get benefit during the course of their appeal, frankly, we do not believe that it is fair or logical that people claiming asylum should get benefit during their appeal. Therefore, the decision that we are making on that issue actually squares asylum seekers with UK residents. I hope that I have answered the points which have been put to me and explained why we cannot accept this amendment. I hope that the noble Lord will withdraw it.

Earl Russell

My Lords, before the Minister sits down, perhaps I may thank him for two points that he made. One is the interpretation of Clause 9(2)(b) and the other is the point about helping the family rather than taking the children into care. The Director of Housing and Social Services in the London borough of Sutton was given contrary advice. I shall be grateful if the Minister will tell me that I can convey to him what the Minister said as the authoritative ruling. That would be very helpful indeed.

Lord Mackay of Ardbrecknish

My Lords, I am always careful about being invited by the noble Earl to answer a question like that. I hope I expressed the matter properly at this late hour of the night. I believe that I have expressed it correctly. I shall read Hansard in the morning and whether that is the case or not, I shall write to the noble Earl.

Lord Dubs

My Lords, I have listened carefully to what the Minister said. He has left a few unanswered questions. Perhaps I may put the two difficulties to him because I do not believe that he has dealt with them fairly and squarely. He seemed to be saying this. A family may enter the country on condition that it does not have recourse to public funds. They may be living perhaps in a rented flat. If it burns down and the family is instantly, suddenly and unpredictably homeless, there will be no power for the local authority to provide that family with accommodation. In practice, I believe that it would be difficult for accommodation not to be provided from somewhere. But I do not know how all the families will cope.

The Minister said that such families would have to rely on other organisations and groups. But in each and every instant there may not be someone available to provide accommodation just like that. A block of flats may burn down and half the families may be taken into local authority homelessness accommodation and half may not on the technical distinction drawn by the Minister. The result would be unfair and perverse. I find it hard to believe that that is the Government's intention.

The second question concerns what happens between an asylum application being turned down and the appeal date. It is astonishing that the Minister is saying that the local authority will have to turn the family out and they will have to go somewhere else. The Minister shakes his head. In effect, that is what he was saying: that all benefit stops, which includes homelessness entitlement. If families are in homelessness accommodation and an asylum application is turned down by the Home Office, one can only conclude that the local authority has to throw them out because between the date the Home Office turns them down and the date of a possibly successful appeal there is no entitlement to benefit, including homelessness accommodation. I cannot find any other way of interpreting what the Minister said; and I cannot believe that that is right and fair.

The Minister said that all these matters put asylum seekers and UK residents on an equal footing in that benefit stops while an appeal is under way. I suggest to the Minister that homeless persons who are UK residents, whatever their benefit circumstances and whatever change or appeal is taking place, are not thrown out of their homelessness accommodation by the local authority. That seems to distinguish clearly between UK residents and asylum seekers. The Minister says, "They should do what they ought to do. They should go away and leave the country because so few will win an appeal that it is not worth bothering", but what is the point of having an appeal system if, on the one hand, the Government say, "Here is an appeal system", but on the other hand they say, "Don't bother. You're not going to win so you might as well leave the country"?

11.15 p.m.

Lord Mackay of Ardbrecknish

My Lords, surely an exercise of judgment is required. Not every person who is found guilty in the courts appeals, because judgment is exercised by them and their lawyers as to their chances on appeal. Frankly, in the case of asylum seekers, because of the availability of benefit that simple test is not being applied. When benefit is withdrawn during an appeal, I think that that test may well be applied by asylum seekers and their advisers.

Lord Dubs

My Lords, I hear what the Minister says and of course asylum seekers, like anybody else, can make a judgment as to the likelihood of being successful in an appeal. Not everyone who is turned down by the Home Office will appeal; they have not done so in the past. But the fact is that there is an appeal system and the Minister has said that asylum seekers should look at the statistics on successful appeals. He quoted a figure of 3 per cent. He then said that any asylum seeker looking at that figure ought to draw a conclusion from it—and that that conclusion should be that it is not worth persevering with the appeal. He said, "Don't worry about losing benefit; just leave the country". I am paraphrasing what the Minister said. The noble Lord seems to be nodding—

Lord Mackay of Ardbrecknish

My Lords, I am not nodding.

Lord Dubs

My Lords, that is what the Minister said and I think that it is outrageous. I give way—

Lord Mackay of Ardbrecknish

My Lords, before the noble Lord gets too outraged, what I do think is that given those statistics, people should look carefully at the basis of the case before continuing with the appeal. Clearly, the majority of cases do not have any basis. I think that, logically, people should look at the statistics and at the detail of the particular case to see how strong it is. I should not have thought that people would have to do that for very long before coming to a conclusion about the strength of the case.

Lord Dubs

My Lords, I thank the Minister for that comment, but even if they listen to what the Minister has to say, some individuals will conclude quite properly that they have a good case and they will persevere with their appeal because they fear—this is the strength of their case—that if they return to the country from which they escaped, they will face persecution and possibly serious danger to themselves and their families. In such cases, people will of course try their chance at an appeal—and some of them will be successful.

The principle of giving asylum seekers the right of appeal is not a statistical concept; every individual has the right to exercise that right of appeal against a decision of Home Office officials. Some will win; some will not. However, the Minister is saying that whatever their chances—and they will make a judgment on that—the fact is that they will be thrown out of their accommodation while going through that process. As such appeals can take months if not years, that is intolerable and, yes, I do find it outrageous. It seems totally unfair to subject people to that situation. It makes a mockery of the right of appeal.

Indeed, I could not believe that the Minister meant what he said. I thought that he would soften it a bit by saying that the regulations would make some allowance for people in that situation, but it seems that the Minister is being intransigent and unwilling to make any concession. I wonder whether he has had any further information. He shakes his head. I think that what the Minister has said is intolerable. It is an intolerable dilemma in which to place people. Some asylum seekers may well be forced out of this country by homelessness. They may have to return to the original country and to face consequences which are not pleasant and for which we, as a country, will be held responsible.

I see that the Minister is not to be moved, so it is with great reluctance that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Courtown moved Amendment No. 79: Page 7, line 28, leave out ("An immigrant") and insert ("A person subject to immigration control").

The noble Earl said: My Lords, on behalf of my noble friend who spoke to this amendment with Amendment No. 76, I beg to move.

[Amendment No. 79A, as an amendment to Amendment No. 79, not moved.]

On Question, Amendment No. 79 agreed to.

[Amendment No. 80 had been withdrawn from the Marshalled List.]

Earl Russell moved Amendment No. 81: Page 7, line 35, at end insert— ("provided always that nothing in this section shall be held to disentitle victims of domestic violence to a place in a women's refuge.").

The noble Earl said: My Lords, Amendment No. 81 is—and I hope will remain—a probing amendment. It is designed to discover precisely what is meant by accommodation in Clause 9. In particular, it is designed to discover whether anything in Clause 9 may be quoted to deny a woman who is a victim of domestic violence accommodation in a women's refuge. I hope that the answer to that question is no. These are not matters designed for what the noble Baroness, Lady Blatch, described, in a rather unfortunate phrase, as the established population. This is ad hoc temporary accommodation for those suffering acute need. On occasion it can be very acute and can arise at the most improbable time of the night. What would be available to a casual American tourist ought to be equally available to an asylum seeker. It is in hope that I may receive a reassuring answer that I beg to move the amendment.

Lord Mackay of Ardbrecknish

My Lords, I am sure that the whole House shares the noble Earl's revulsion at domestic violence. As he has rightly said on a number of occasions, there is no excuse for it whatever in a civilised society. I pay tribute, as he has, to the excellent work done by women's refuges in providing safe haven for women of any background who flee domestic violence.

However, I doubt whether the amendment is necessary. Most women's refuges are run by voluntary bodies and are not principally providing accommodation under the homelessness legislation. Indeed, it is accepted under current case law that a person staying in a refuge may still be homeless within the meaning of the Housing Act 1985. In general, there is nothing in the provisions of this Bill that would prevent a woman subject to immigration control being accommodated in a refuge provided by a voluntary organisation, including a housing association. I hope that that assurance helps the noble Earl and that he will feel able to withdraw his amendment. As he is withdrawing it, he may be interested to hear my firming up the advice I gave earlier regarding children. We move from women to children, but it is not too great a distance in relation to some of these matters. Authorities have an obligation to discharge duties under the Children Act. It is for them to decide how they are discharged. Often, it will be more economic to support the whole family rather than take children into care. The special grant rules do not require specific action. I hope that that is helpful and will save correspondence.

Earl Russell

My Lords, I am most grateful to the Minister. It does save correspondence. Much as I welcome what he has said, there is one further point on which I seek reassurance. Some refuges are owned by the local authority. It is those which are the subject of the anxiety which led me to table the amendment. I believe them to be very different from what the Bill envisages. I believe them to be outside the intention of the Act. I would very much like to hear that I am right in my reading of it. If the Minister can reassure me now I shall be most grateful.

Lord Mackay of Ardbrecknish

The noble Earl makes an interesting point. Perhaps we have before us two different examples. One is that a voluntary body may lease its accommodation from the local authority. In other words, the local authority owns the accommodation and the voluntary body runs its service inside that accommodation. We will shortly be considering a Government amendment that will allow us to place specified accommodation leased to third parties outside the scope of an order restricting the use of such accommodation by persons subject to immigration control. That is very much the thinking about universities, but I believe that that provision can be applied to women's refuges when we make that order. To be fair to the noble Earl, perhaps his question goes a little further and envisages the local authority, not the voluntary body, running the refuge. If he knows any such organisations, perhaps he will write to me and I shall consider the matter.

Earl Russell

My Lords, I am even more grateful to the Minister. What he said about leasing may well cover all the cases, but in case it does not I shall check the point and write to him if I need to do so. I thank him very much for his answer, and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mackay of Ardbrecknish moved Amendment No. 82: Page 7, line 36, after ("section") insert— ("(a) may make different provision for different circumstances or for accommodation or assistance of different descriptions; and (b)")

The noble Lord said: My Lords, this is the amendment I mentioned briefly during the course of my answer to the noble Earl, Lord Russell, on the previous amendment.

When this clause was being considered in Committee the noble Earl and a number of noble Lords, including some of my noble friends, raised the issue of the accommodation of overseas students. They pointed out that as the Bill is drafted, an order under Clause 9 would mean that a university would not be able to accommodate overseas students in property that it leased from a local authority. We are content for that to continue, provided the stock is genuinely surplus to the authority's requirements, and I undertook at that time to bring forward an amendment to get around that problem.

This amendment introduces additional flexibility into the order-making power and will allow us to provide for this case. I can assure noble Lords that the order we will be making under this power will not prevent local authorities from leasing housing held under Part II of the Housing Act 1985 to universities or colleges which may wish to use it to accommodate overseas students who are here lawfully, provided that the accommodation is genuinely surplus to the authority's requirements. I hope the amendment can receive a warm welcome. I beg to move.

Earl Russell

My Lords, the amendment can indeed receive a warm welcome. I shall even allow the Minister the amusement, which I am certain that he feels, at his chance to teach me the virtues of flexibility, as he has been trying to do for a very long time. I have always admitted that it does have virtues, and this amendment is one of them. It seems to me, as far as I can tell, to meet entirely the original case that I raised.

There is just one further question that I have to ask the Minister. I am sure that he will be expecting it. How do those powers impact on the Housing Bill? In the long term, of course, and even in the short to medium term, it is the Housing Bill and not this Bill which will govern the matter. My recollection is that there is an identical clause in the Housing Bill which will meet the case. Perhaps the Minister will assure me that that is the case.

Lord Mackay of Ardbrecknish

My Lords, although the Housing Bill will generally be taking over from this Bill so far as concerns restrictions on housing entitlement, as I think mentioned a little while ago, we are minded to keep some of the provisions in this Bill, in particular this one which limits the use an authority can make of its Part II stock other than through its allocation scheme. We shall do that by limiting the extent of our repeal of the Asylum and Immigration Act. That is our present thinking on how to deal with the problem.

Earl Russell

My Lords, perhaps I may thank the Minister warmly before he sits down.

On Question, amendment agreed to.

[Amendment No. 83 not moved.]

Baroness Hollis of Heigham moved Amendment No. 84: Page 7, line 38, at end insert— ("( ) No order shall be made under this section unless the Secretary of State is satisfied that no disproportionate extra costs will be incurred by local authorities fulfilling their social services responsibilities under the Children Act 1989 or providing services as community care services within the meaning of section 46 of the National Health Service and Community Care Act 1990 as a result of the order, and before making any such order the Secretary of State shall consult organisations appearing to him to be representative of the authorities concerned and other relevant organisations.").

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 97 and 103 standing in the names of my noble friends Lord McIntosh and Lord Dubs. I am sure that the Liberal Benches will speak for themselves.

This is an amendment about costs. The Government grudgingly accepted that removing housing benefit, income support, council tax benefit and child benefit from asylum seekers will throw costs onto other bodies, especially local authorities, which, unlike the Government, cannot and will not walk away.

The person from abroad special grant report, which will require parliamentary approval, makes temporary arrangements for housing benefit from February to September 1996 for those eight months during which local authorities continue to have a housing responsibility under the homelessness legislation, until it is removed, if the Government get their way, by the Housing Bill. The other part of the grant reimburses local authorities for the cost of aiding children under the Children Act 1989. We understand that that grant will run from 5th February 1996 to 31st March 1997. Presumably, the Government intend then to review the situation and, if appropriate, continue the grant.

Local authorities, especially the London boroughs, are extremely unhappy about these proposals. They estimate that there are more than 4,000 families in temporary accommodation in London awaiting a Home Office decision. The majority have children and the rest are vulnerable and in priority need, with mental and physical health problems. They may have to wait a year or more for a decision about their status.

Already the Association of London Government estimated that some 300 asylum seekers came to it between the beginning of February and the end of April this year; that is a couple of months. It estimates that it is likely to face more than 7,000 claims in the current financial year, at a cost to the local authorities of cash support and service support of well over £50 million, perhaps even £100 million. The local authorities will be required to pay housing costs as well as provide enough money to pay for heating, food, light and possibly some clothing.

Local authority social services departments are not geared up for that because, as the Minister has on other occasions reminded us, they are not social security departments. Yet they will have to assess each claim separately and individually and, where the asylum seeker speaks no English and lacks the support of a family or refugee network, the pressures on a social services department will be substantial.

Why are the financial arrangements so unfair? First, the grant kicks in only above a certain threshold of expenditure. For instance, Barnet has to bear the first £131,000; Barking the first £50,000; Westminster the first £107,000; and Wandsworth the first £112,000. Those are extremely substantial sums which will fall on local council tax payers. Overall, the London boroughs will have to find approximately £5.5 million out of their existing capped expenditure before any government help comes their way. The problem is not confined to London, although the bulk of it is there. I checked this morning and found that asylum seekers are being supported by the local authorities in Dover, Cardiff, Reading, Berkshire and East Sussex. A considerable charge for all of those will fall on local council tax payers. Therefore, the first concern is that the grant kicks in only above a threshold which is far too high and will put an unacceptable burden on local council tax payers.

Secondly, when the grant does kick in it will cover only 80 per cent. of additional costs. Again, that is quite unreasonable. These additional costs are falling on local authorities because central government are seeking to save £200 million of taxpayers' money from the DSS, a national decision, which is then being off-loaded on to a few local authorities and therefore a limited number of local council tax payers. It is not fair that some local council tax payers in some authorities should see their bills rise to meet the cost of government savings for all income tax payers. That is simply unfair. If that is to happen it should be topsliced across the country as a whole.

Thirdly, while grants help local authorities meet temporary housing and longer term children's costs under the Children Act, there is no reimbursement for costs to local authorities incurred under the community care provisions of the 1990 Act. That is as we understand the situation, and we hope that the Minister will comment on that. Some asylum seekers will be vulnerable because of physical or mental health problems, especially if they come from places where their situation has been life threatening; where they have been victims of torture. They will not be eligible for help under the Children Act 1989 but they will require help under the National Health Service and Community Care Act 1990. That falls on the local authority but the Government have not arranged reimbursement for that expenditure. The Government need to clarify the position on that.

Finally, I understand that the Government are going to reimburse only the housing costs which fall on the general account; that is, where local authorities use bed and breakfast accommodation. But most local authorities use their own local authority stock, the older unmodernised properties, as it is cheaper for the local authorities and, as the Minister said earlier, it is more civilised for the family because it keeps it together.

But the costs involved in funding housing in unmodernised, older council properties are borne not by the general council taxpayer but by the housing revenue account and by rent payers. If the Government will not reimburse local authorities for housing revenue account expenditure but only for housing expenditure falling on the general account, local authorities, understandably, will be pressed into using those mechanisms for housing which are funded by the general account and therefore supported to some degree by government; that is, the more expensive but also the poorer value for money and deeply uncivilised form of help which is bed and breakfast accommodation. They will do that in order to gain grant.

Therefore, the financial arrangements which the Government have made are unsatisfactory because they kick in at too high a threshold. Secondly, when they do kick in, only 80 per cent. of the costs are recovered, which is something like £100 million of additional costs, the local authorities estimate, which will fall on a few selected authorities in order to save all income tax payers. The Government seem to have omitted the cost that will fall on local authorities for community care and seem to be unaware, perhaps, of the implications of only funding housing expenditure on the general account, not on the housing revenue account, which will have a perverse, expensive and deeply uncivilised effect on seeking to house homeless families under the Children Act. The House would be grateful to the Minister if he would address those points. I beg to move.

Lord Mackay of Ardbrecknish

My Lords, the Government's policies on housing assistance and child benefit for asylum seekers and certain other persons subject to immigration control will reduce pressure on public expenditure overall. I would reassure your Lordships that we have addressed the impact of these measures on local authorities responsible for providing social services, and that we will continue to do so in the future.

Officials of the Department of Health and of the Department of the Environment have met representatives of the local authority associations to discuss possible costs on several occasions and will continue to liaise with them on this subject as necessary. This is in addition to the regular programme of meetings between central and local government that consider all aspects of local government finance.

I have already dealt with the question of thresholds when I pointed out to the noble Earl that thresholds are not new in central-to-local government financial aid and I quoted the Bellwin formula for disasters as one example of where there are thresholds.

Earl Russell

My Lords, the Minister is quite right to quote the Bellwin formula. But is he also aware that that is why the Bellwin formula is no use?

Lord Mackay of Ardbrecknish

No, my Lords, I am not aware of that and I do not agree with the noble Earl. I was going on to explain why there are thresholds. There are thresholds because frankly, central government have a general reluctance to pay 100 per cent. grant for anything because it does not encourage financial prudence on the part of the local authority which has absolutely no interest in the cost outcomes of whatever it is doing. Therefore there is a very good case for thresholds and they will certainly be used in this example.

Baroness Hollis of Heigham

My Lords, the Minister said that the reason for not meeting the full cost was to encourage financial prudence on the part of local authorities. The Government do not seem to understand that there is a straight transfer of central government expenditure to local government expenditure except that, having done so, central government refuse to pick up the tab. That is not analogous with the normal argument for ensuring that local taxpayers contribute in order to keep down costs. It is not a question of value for money here. It is a straight transfer. The Government are exporting their costs—they are churning—and it is unreasonable to expect local taxpayers to pick up the bill for the Government's savings.

Lord Mackay of Ardbrecknish

My Lords, I am sorry to say that I do not agree with the noble Baroness. Indeed, if one followed her argument there would be no incentive for a local authority to be financially prudent, so far as concerns this expenditure. It would simply see such expenditure as a free gift in respect of which it could push up the price which would be met by Whitehall and Westminster.

In any case, if the noble Baroness is really worried about this issue she should be supportive of the Government in their desire to reduce the number of people coming to this country under the guise of being asylum seekers when they are really economic migrants. The noble Baroness has heard all the arguments before and has seen all the figures showing the way in which the number of asylum seekers has increased in this country, in contrast with most of the rest of Europe where it has declined. Indeed, she is well aware of how that growth has been particularly prevalent in the past two or three years. The way to deal with the problem as regards local authorities—and, indeed, as regards the UK taxpayer who is seldom, if ever, mentioned by the parties opposite—is to ensure that the people who come here seeking asylum are much more likely to be genuine asylum seekers than is frankly the case at present.

I turn now to the idea that all asylum seekers will virtually present themselves before local authorities under the Children Act, or whatever it is. I have a table of figures in front of me which gives me the breakdown of the principal applicants. It shows that 88 per cent. of them have no dependants—none. Therefore, I do not see them presenting themselves in that way. The other 12 per cent. do have dependants, but not all of them will need to present themselves. Indeed, some of them may actually be able to find a way to fulfil the undertaking that they gave; namely, that they would not be a burden on the UK's public purse and on the UK taxpayer. Only a minority of people will actually fall to be supported either under the homelessness legislation or the Children Act.

So far as concerns community care grants, the costs and duties under the legislation are not affected at all by the asylum seekers' regulations. Therefore, the question of a change in any direction in that respect simply does not arise. I give way to the noble Baroness.

Baroness Hollis of Heigham

My Lords, is the Minister saying that any costs incurred under the community care Act 1990 will be reimbursed in the same way?

Lord Mackay of Ardbrecknish

My Lords, I am saying that the costs under the community care Act that we have at the moment as regards asylum seekers—and I doubt that there will be very many of them—will not be affected one way or the other by the asylum seekers' regulations. I know that the noble Baroness likes to pretend that virtually all the world, bar "thee and me", I suppose, is in need of some kind of help or is traumatised and so on. However, the great majority of those people will never need the application of the community care legislation. As I said, it will not change or be affected by the asylum seekers' regulations at all. That is perfectly clear.

Therefore, if there are one or two people—and it is hard to envisage very many because the age profile of the people who come here asylum seeking tends to show that they are fairly young, male and pretty active—I do not believe that many of them will end up needing the kind of services provided by community care. However, those who do need them in the future will be treated in the same way as applies at present; in other words, they will be treated under the community care Act. They will not be excluded by virtue of the asylum seekers' regulations. It is not a case of our not paying for them at the moment and of our shifting the expense to local government. I do not understand the argument of the noble Baroness regarding the community care Act.

On 6th June we laid a special grant report before Parliament containing our proposals for a special grant to reimburse local authorities for their additional costs in social services and in providing services to asylum seekers denied benefit under the provisions of the benefits regulations made in February. Of course, in the light of the Court of Appeal judgment which found that the social security regulations which withdraw benefit are unlawful, we are considering the position further. But, clearly, there is likely to be some continuing burden on local authorities for the cost of social services functions. Our commitment given earlier in the year to provide assistance with those costs remains unchanged. The terms of the grant are likely to be similar to those set out in the report which was laid before Parliament on 6th June.

In addition, our decision to propose the grant demonstrates our more general concern to ensure that local authorities have the resources that they require to discharge their statutory functions. With that explanation and assurance, I hope that the noble Baroness will feel able to withdraw her amendment.

11.45 p.m.

Baroness Hollis of Heigham

My Lords, I found that reply disappointing. I do not think the Minister answered any of the questions I asked. Perhaps the questions were obscure or maybe he will write to me. He made the point that thresholds were not new and were a way of being financially prudent. We have already argued that. The Minister is simply failing to acknowledge that the Government are seeking to cut £200 million in asylum seekers' benefits by exporting some of the costs onto local authorities. This morning local authorities estimated that about £100 million would fall on them. I do not know whether that figure is correct; I merely repeat it for what it is worth. Having exported their costs, the Government are failing to pick up the tab for so doing. That is different from the traditional arguments about financial prudence.

The Government consistently underestimate the degree of responsibility that will fall on local authorities. The Minister said that 88 per cent. of the principal applicants have no children. The Minister must correct me if I am wrong, but I understand that 25 per cent. of all asylum seekers are children and will come within the terms of the Children Act 1989. Of those who are not—those who are single—a proportion of them (I would not like to say how many) will have come to this country precisely because they have suffered extreme distress, stress and possibly even physical torture. They will come within the provisions of the community care Act. That will be an additional responsibility for local authorities with no reimbursement from central government. Again the Minister has not helped us on that. I asked a specific question about the housing grant and the refunding of moneys spent out of the housing revenue account as opposed to the housing general account. I believe the Minister did not reply to that point. Perhaps he can help us on that.

Lord Mackay of Ardbrecknish

My Lords, frankly, I find that the figures of £100 million and a saving of £200 million beggar belief. If that is the best that can be produced, it underlines the need for thresholds. If that is the kind of money that would be sought from the British taxpayer, the threshold is well justified. The figures will be much less than that and the noble Baroness knows it. She should not believe these extravagant claims. I am sorry that I did not mention the position as regards the housing revenue account. I hope I may write to the noble Baroness because housing revenue accounts—as I remember from my days in local authorities—are complex.

Baroness Hollis of Heigham

My Lords, obviously the Minister must write to us and make the position clear. One of the differences between us is that the Minister seems to think that people seek asylum status in this country because of the generosity of our benefits system as opposed to having any sense at all of the situations from which they come: the torture to which some of them have been exposed, the fear of killings and assassination, or of detention of relatives and the like that many of them have experienced. They come therefore, as a client group, to put severe and heavy strains—rightly so—on our community care services. The Minister does not seem to understand that at all. In all his comments this evening he seems to suggest they are coming here for a holiday and he cannot see why the British taxpayer should support them. The gulf of misunderstanding on the Government Benches of the situation from which asylum seekers come, and the reception—thanks to this Government—that they are likely to get, beggars belief. However, it is late and, with the leave of the House, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 85: Page 7, line 38, at end insert— ("( ) Nothing in this section shall apply to any person who has applied to a housing authority as a homeless person either—

1. (a) before the date of commencement of an order made under this section; or
2. (b) before becoming an immigrant of a class specified by the Secretary of State by an order made under this section.").

The noble Earl said: My Lords, this amendment seeks to ensure that we should not have retroactive effect here. That applies to Clause 9(3) and to the order-making power. It would attempt to provide that, ("( ) Nothing in this section shall apply to any person who has applied to a housing authority as a homeless person either—

1. (a) before the date of commencement of an order made under this section; or
2. (b) before becoming an immigrant of a class specified by the Secretary of State by an order made under this section.").

I do not know how many classes the Secretary of State may specify. If I knew how many the present Secretary of State was to specify, I would not know how many a future Secretary of State would specify. The measure deals with two separate points of retroactivity. The Minister no doubt will tell me that Parliament has been known to pass retroactive legislation. I have known it happen while I have been in the Chamber, which, in terms of parliamentary history, is the twinkling of an eye. But it does not happen often. Every time it does, it is given the most careful scrutiny and serious consideration. Attempts are made to ask the Minister to produce the justification for the retrospective power. Normally, the proper procedure is the one set out in this House by the Earl of Strafford in 1641: Let the mark be set on the door where the plague is and then let him that will enter in die".

The Minister has made much of the deterrent power of the cuts. I cannot help thinking that Lord Justice Simon Brown must have known what the noble Lord was going to say, because he has illustrated with the greatest precision the point that Lord Justice Simon Brown made. It is that the measures are designed to deter legitimate asylum seekers. The Minister may recall admitting to me last Wednesday that he cannot tell whose appeal will succeed. That is by the way, and we shall return to it another time.

I wish to ask the Minister to recognise that anyone who came into this country before the measure was law could not have been deterred by a penalty which was not then in place. Therefore it would be unjust and unnecessary to attempt to apply the proceedings of the clause to them. If the Minister must do it, let him do it according to the ordinary fair procedures which we use in parliamentary legislation. I can see no reason for an exceptional claim to the use of retrospective powers. I hope that the Minister does not intend to make one. If he does, I shall listen to it with great care. I beg to move.

Baroness Hollis of Heigham

My Lords, perhaps I misunderstood the Minister's statement earlier today. I believe that he said that because of the court ruling all those for whom benefit has been suspended or stopped since February would now have it reinstated. Therefore it would not be retrospective and benefit would be paid up to and until the point at which the Government's proposed changes became law in primary legislation. If that is the correct reading, I am not sure that the issue of retrospection applies.

Lord Mackay of Ardbrecknish

My Lords, I am trying to find my way through the paper placed in the Library when the Bill was first committed to the Lords, in which various background notes were given. The noble Lord's question was how many categories will be specified. The answer will be found in the paper, I believe at G or H, but I need to read the document.

Returning to the general point, Amendment No. 85 would prevent the provisions of an order made under subsection (2) of Clause 9 being applied to asylum seekers who had been accepted as homeless by local authorities either before an order was made or before they came within the scope of an existing order. This would result in housing authorities being required to house individuals who Parliament has already decided should not receive public assistance through the payment of housing benefit.

The Government's position on using this order-making power is very clear: we propose to align the scope of the local authorities' homelessness duties under Part III of the Housing Act 1985 with the rules on housing benefit.

However, if noble Lords agree to Amendment No. 85, this would mean that persons from abroad who are here on limited leave, such as visitors and overseas students, who have not been entitled to social security benefits since 1994, would continue to be entitled to assistance under the homelessness legislation and the entire cost of meeting this obligation would fall on the housing authority. It is important that we are able to make the scope of the homelessness legislation consistent with the rules on housing benefit.

We have a clear policy that visitors and other persons who are given limited leave to remain in this country should have no recourse to public funds. The definition of "public funds" includes entitlement to assistance under the homelessness legislation. Amendment No. 85 would weaken this policy by exempting certain people with limited leave and enable such people to avail themselves of assistance not intended for them.

This is not just a matter of ensuring that those people who have entered this country on the basis that they would not have recourse to public funds do not receive that benefit. It is equally to ensure that local housing authorities are not faced with further additional costs.

I am advised that it is Paper G that I was looking for in the document lodged in the Library. The groups are listed there. The main groups affected are: those without leave; those admitted with no recourse to public funds; and asylum seekers who claim after entry into the country.

I was not entirely sure what help the noble Baroness was trying to be to the noble Earl, but I believe—

Baroness Hollis of Heigham

I was asking a question.

Lord Mackay of Ardbrecknish

Yes, my Lords, but the noble Earl was exploring a much wider point than merely the reference to those who have made a claim since 5th February and whose claim was disallowed under the regulations. The claim they made under the regulations which have now been set aside by the Court of Appeal will now be honoured. Anyone who was not eligible under the regulations last Thursday would be eligible if he or she claimed today. However, as I made perfectly clear, we shall ensure that the benefits gained as a result of the decision of the Court of Appeal end when we receive legislative powers from Parliament.

Lord McIntosh of Haringey

My Lords, that is fine so far as it goes; but what about those who did not make a claim after 5th February because they were told that they could not claim?

Lord Mackay of Ardbrecknish

My Lords, I thought I made that clear. If someone makes a claim today, the claim runs from today, as it does for any other claimant.

Lord McIntosh of Haringey

From today?

Lord Mackay of Ardbrecknish

My Lords, I shall rephrase that as I understand that my words were misinterpreted. If a person makes a claim, the claim runs from the day of the claim. If the claim was made today, it would run from today. That is perfectly clear.

Lord McIntosh of Haringey

My Lords, that does not meet the point. There are people who were told that they could not claim because the regulations came into force on 5th February. Retrospectively, following the Court of Appeal judgment, they would have been eligible for the period between 5th February and now. Will their claim apply retrospectively over the period in which they would have been eligible if the law had been as the Court of Appeal has decided it is?

Lord Mackay of Ardbrecknish

My Lords, I think the noble Lord is asking about people who did not make a claim but can make a claim today. They could ask for it to be back-dated to an earlier period. Under the normal rules, such back-dating can be done only if the claimant shows good cause for not having claimed earlier. In this case the existence of the regulations, now deemed ultra vires, which excluded the person from claiming would constitute good cause.

Lord McIntosh of Haringey

My Lords, I am most grateful—

Noble Lords

Order.

Lord McIntosh of Haringey

My Lords, the Minister has clarified a point that was not clear and I am expressing my sincere appreciation to him.

Baroness Hollis of Heigham

Will they receive the money in a lump sum?

Lord Mackay of Ardbrecknish

The noble Baroness likes spending taxpayers' money.

Earl Russell

I must confess that I am disappointed with the Minister's reply. It would have been the effect of this amendment to ensure that people who have already presented as homeless and who have already been housed would be able to stay where they were and the local authority would not need to evict them. I do not see why that is so very terrible.

The Minister said a great deal about persons from abroad and all the rest. But it never seems to occur to him that occasionally British subjects go to other countries. Occasionally British subjects may even experience misfortunes in other countries. Increasingly we live in a world in which people travel around, and in which their business is not confined to one country. If all of us are to be so strictly nationalistic about the help we are prepared to give to people, we are all going to find that we are in very great danger whenever we step outside our own frontiers. It is not the way to run a world. We shall have to clarify this matter further. I do not believe that we shall do it tonight. For the time being, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 86 to 92 not moved.]

Clause 10 [Entitlement to child benefit]:

12 midnight

Baroness Blatch moved Amendment No. 93: Page 8, line 21, leave out ("immigrant") and insert ("person subject to immigration control").

The noble Baroness said: My Lords, I spoke to this amendment with Amendment No. 76. I beg to move.

[Amendment No. 93A, as an amendment to Amendment No. 93, not moved.]

On Question, Amendment No. 93 agreed to.

[Amendment No. 94 had been withdrawn from the Marshalled List.]

Baroness Hollis of Heigham moved Amendment No. 95: Page 8, line 23, at end insert (", but he shall he taken to have satisfied any such prescribed conditions if—

1. (a) he is an asylum seeker,
2. (b) it is at least six months since he claimed asylum,
3. (c) no decision has been made by the Secretary of State upon his claim for asylum, and
4. (d) he satisfies the conditions required in any case to be satisfied for payment of child benefit to any person.".").

The noble Baroness said: My Lords, I should like to move this amendment because child benefit is enshrined in primary legislation and so the amendment is rather different from those amendments which no doubt we shall discuss to be brought forward by the Government at the recommittal stage.

Child benefit is about the well-being of the child. It is not about the ethnic origin of the parents, or their legal status as asylum seekers, or whether or not they applied at the port of entry or four hours later. It is about children. I hope that no one in this House believes that the faults or sins of omission of the parents should be visited upon their children. This House has a proud record of care for children and protecting them against abuse. I hope that tonight we shall respond to the amendment in the same way.

Ironically, given the events of the past few days, child benefit is one of the few benefits that cannot be obliterated by regulation. It has to be obliterated for asylum seekers by primary legislation. So important a benefit for children was it that Parliament wisely decided to protect it by primary legislation rather than leave it to the whim of the Secretary of State. It is therefore different from other benefits because it is enshrined in law.

It is also—this also is a significant difference of which I ask the Minister to be aware—different from other benefits because to a degree it is an earned benefit. One is not eligible for it until one has been here for six months and from then on it may well be, given that the asylum seeker has been given permission to work, that he will be paying national insurance and taxes. Child benefit, as your Lordships will recall, started life as a combination of both a tax allowance and family allowance.

Child benefit recognises that those who have children are entitled to pay less tax (or have an equivalent allowance) than those without children. It is a kind of horizontal redistribution. It is applied equally to all British citizens. It should apply equally to communities of immigrant people.

Child benefit is also different because, if an adult is denied income support the state need take no further responsibility for that individual, but the state, even if it wishes to do so, cannot walk away from children, though it denies their parents child benefit. Under the 1989 Children Act the local authority will have to pick up the pieces and either take the child into care at enormous expense—something like £800 a week for each child. Yes, my Lords, £800 a week is the going figure for a child going into care. It is a well established figure. If the Minister wishes to intervene, as opposed to a contribution from a sedentary position, I shall give way. The figure is £800 per week as the cost of taking a child into care and that will fall under the Children Act to the local authority. Or more probably the local authority will seek to prevent further trauma to that child by keeping the family together and putting them into bed and breakfast accommodation at an average cost of between £250 and £300 a family.

If that family does not receive child benefit while they come under the purview of the Children Act, the local authority must make good that shortfall quite directly by providing the family with enough money or food in kind to support the child. It is cheaper as well as more civilised to pay child benefit. Child benefit is one of the cheapest of all DSS benefits to administer; it has a 98 per cent. take-up; it is successful. If instead we have to furnish the same sum through a social worker to help that family pay for food and clothing under the Children Act, and then we claim that sum again from the Government, almost as much will be spent on administration as would have been spent on child benefit in the first place. The cost will be doubled and its effectiveness will be reduced.

Child benefit is not only a benefit to be paid to the mother; it belongs to the child. What is the situation of a child born of parents who are treated as persons from abroad, but the child has British nationality? Will the child qualify for child benefit in its own right? I hope the Minister will be able to tell us tonight. Can we assume that the nationality of the parents will not deny British children access to child benefit? We have not heard from the Minister on that point.

This is a compromise amendment. It does not say that child benefit should be paid to all asylum seekers after six months. It says that it shall be paid only after six months and only until the date of the decision on the application for asylum. That means that if the Government, as they should, make a speedy decision and decide to grant or not to grant asylum status or leave to remain, then the cost in child benefit will be negligible; the cost is driven by the Government's tardiness. If the Government are not tardy and do not accept the status of the asylum seeker, they will not pay any child benefit.

This is an amendment about rights, laws, administrative costs and administrative delays. But it is also about something more profound; it is about child destitution. Child benefit would give an asylum-seeking family with two children £25 a week. That is not much, but it may be enough to keep them from utter destitution. No one here, in a private capacity, would knowingly let a child go hungry, see a child endure malnutrition, expose a child to TB, rickets, anaemia or asthma deliberately—all diseases that come from being undernourished. I am confident that none of us would tolerate it as private individuals; yet collectively we appear to be willing to tolerate it as public individuals.

We are not an elected Chamber. We are an appointed and hereditary House. If there is any justification for that state of being it is because our personal experiences, our work with charities and voluntary organisations, and our private convictions can serve to inform a public policy. If the elected Chamber does not like it, it can overturn it. But if this House will not stand up for destitute children, who else will? I beg to move.

Lord Mackay of Ardbrecknish

My Lords, we have heard a compelling defence of child benefit and a compelling argument from the noble Baroness. But would it not be really compelling if it were an argument being used against someone who wanted to take away child benefit from 16 and 17 year-old children of United Kingdom citizens who have full residence here? Yet that is what the party opposite would like to do. It wants to take away child benefit from 16 and 17 year-olds and I do not know how the noble Baroness can square her argument with that policy.

Baroness Hollis of Heigham

My Lords, I am grateful to the Minister for giving way—I rather assumed he would. We are not taking child benefit away from 16 and 17 year-olds. We are conducting a review of all the expenditure on 16 and 17 year-olds, including child benefit and educational maintenance allowances, to ensure that it goes to those who need it.

Lord Mackay of Ardbrecknish

My Lords, if I tried that sort of argument the noble Baroness would tell me that it was very weak.

Baroness Hollis of Heigham

My Lords, the Minister uses that argument all the time.

Lord Mackay of Ardbrecknish

My Lords, it is a very weak argument. It would seem to me that the Labour Party is now walking away from what I thought was a pretty firm commitment to stop child benefit for 16 and 17 year-olds. Perhaps the noble Baroness has managed to convince her colleagues in the Front Bench team—

Baroness Hollis of Heigham

My Lords, will the Minister kindly give a reference?

Noble Lords

Order!

Baroness Blatch

My Lords, this is Report stage. This is wholly out of order and the Minister must have his way.

Baroness Hollis of Heigham

My Lords, if the Minister misrepresents the position of the Labour Party I am entitled to correct it for the record.

Baroness Blatch

My Lords, this is Report stage and this is a misuse of standing orders.

Baroness Hollis Of Heigham

My Lords, Report stage does not permit the Minister to mislead as regards the position of the Opposition Benches.

Lord Mackay of Ardbrecknish

My Lords, if I am misrepresenting the Opposition Benches, I am happy to check tomorrow morning what Mr. Gordon Brown said in his original statement. I appreciate that it has been qualified a bit since then through review. But that does not detract from the question that if the benefit is just being reviewed, has not the noble Baroness given a compelling argument for keeping it for 16 and 17 year-olds and concluding at the end of her review that we were right and the initial proposal that the benefit should be removed was simply wrong?

But, once again, one of the problems of this argument is that it is bedevilled by a great overstatement of the numbers of people involved. I said earlier this evening that 88 per cent. of asylum seekers were people with no dependants. The fact is that 12 per cent. of asylum seekers have dependants but many of them are just one wife and do not include children. The idea that the great bulk of asylum seekers are families with children who are, in the word of the noble Baroness, "destitute" is not true.

That is also true of a statement that the noble Baroness made a second time today, which I ignored the first time but I cannot ignore the second time. She conjured up a picture of people flocking into the United Kingdom and within four hours applying for asylum. A few might do that but the great majority apply for asylum in-country a great deal longer than four hours after their arrival. For example, in the first quarter of 1996 there were 15 per cent. within a week; a week to a month, 17 per cent.; one to two months, 9 per cent.; two to six months, 31 per cent.; six to 12 months, 6 per cent.; and over 12 months, 23 per cent. That is the Home Office analysis of the applications that come in from in-country applicants.

There are three pieces of extravagant language that I want to knock on the head at the beginning. The purpose of this clause is to bring child benefit into line with the provisions for people from abroad we intend to apply in the other non-contributory social security benefits and which have operated since February. This amendment would undermine that purpose. It would mean that entitlement to child benefit was no longer in line with the intended entitlement to other non-contributory benefits. It would fix the entitlements for some asylum seekers in primary legislation, whereas for others regulations would continue to be needed to confer entitlement.

The aim of the amendment is to align with the discretionary provision in the Immigration Rules to allow asylum seekers to take work where they have been in the country for six months without a decision on their application. They would then receive child benefit when they begin to work and pay taxes.

Superficially, this sound plausible but there are a number of reasons why the argument is unsound. First, permission to work is not granted automatically and application has to be made. Secondly, although child benefit is financed from general taxation, so are other benefits. There is no direct link between taxes paid and benefits received. Thirdly, the amendment would apply to all asylum seekers, whether working or not. Fourthly, the amendment would create inequity between groups of people from abroad, allowing asylum seekers to receive child benefit and others not.

People granted entry on the basis that they have no recourse to public funds may well be working. Many in this category come here specifically to pursue their profession, and pay income tax here. But we shall not be allowing them entitlement to child benefit and are holding them to their undertaking to be self-supporting. Asylum seekers may or may not be granted the discretionary permission to work and they may or may not obtain a job and pay income tax. This amendment is indiscriminate and allows everyone in the group access to benefit. I submit that there is no justification for paying them child benefit while their application is under consideration when the decision, which may follow within a short time, may refuse them both refugee status and exceptional leave to remain. We should not forget, as I was reminded earlier on this evening, that that applied in 79 per cent. of cases in 1995. So the position is that 79 per cent. of the cases turn out not to be eligible in any shape or form.

We have made clear how we intend to use the powers under Clause 10 and we have given the House details of the groups who will retain entitlement to child benefit. They include all those accepted as genuine refugees and those granted exceptional leave to remain, as well as those people from abroad covered by reciprocal and other EU agreements. It seems to us logical and consistent to have all of the conditions for entitlement to child benefit for people from abroad set down in one place in regulations rather than partly in primary legislation and partly in secondary legislation.

I do not believe that the amendment is justified. Our approach is simple and straightforward. It aligns child benefit with other benefits. It ensures that people from abroad who come here on the firm undertaking that they will not be a burden on the UK taxpayer do not turn up asking for child benefit until and unless they receive permission to stay here as asylum seekers or have exceptional leave to remain. I hope that the noble Baroness will feel able to withdraw the amendment.

12.15 a.m.

Baroness Hollis of Heigham

My Lords, first, the Minister first said that my statements were extravagant and then that the argument "superficially sounds plausible." Which is it to be? I shall stay with my argument superficially sounding plausible—and the best explanation for that is that it is a valid argument. My valid argument is what "superficially sounds plausible" to the Minister. I suppose that that is at least some acknowledgement, however grudging, of the case being made from these Benches.

I asked the Minister some questions which he did not answer although I repeated them. I should appreciate any intervention the noble Lord cares to make. My point is that, unlike every other benefit, child benefit started partly as a tax relief. Had it remained a tax relief, every asylum seeker who was working after six months would be paying a lesser tax bill than another asylum seeker without children. The logic of that is to continue to recognise that child benefit is therefore different from all other benefits because it originated in the tax relief that was abolished and incorporated with family allowances into child benefit. It is no use the Minister saying, "We want to align it with all the other benefits". He cannot align it with all the other benefits when it has traditionally served a different function. That is the point about lateral, horizontal distribution from those without children to those with children even at the same level of income. That is why it is different from all the other means-tested benefits.

I am sure that the Minister in his heart of hearts—or even in his word of words—recognises that that is more than superficially plausible; that is a fact. Child benefit has always been partly a tax relief. The Minister is saying that if you are an asylum seeker, you can pay your taxes but you will not get the tax relief that comes from having children which you would get if you were a British citizen in the same job, earning the same money and with the same number of children. That is unfair by any tax law in any tax regime.

Secondly, if the decision of the Government follows in a short time—the Government have said, "Why bother?"—the expenditure will then be very low. However, the amendment is targeted. It states that child benefit shall continue after the six months, which is when a British citizen would be eligible for it, until a decision is made. If the Government are as efficient as Ministers would no doubt like, that decision will be made within the first six or seven months, so there will be only a few weeks of child benefit. But if the Government are tardy and inefficient and if the destitution of the asylum seeker is because of government delays, the Government then owe some responsibility back to that family and those children. The amendment would help to bridge that.

The third argument is that where destitution occurs because of government tardiness and delay, the cost will fall directly onto social services departments under the Children Act 1989. The Government can either pay child benefit direct to the family or they can pay twice that amount to the local authority social services department to help to support those children. Take your pick. I can tell Ministers which is the cheaper, the more targeted, the more cost effective and the more civilised. It is to pay the money direct to the parents rather than loop it through the local authority which will have to pay for food and clothing.

Finally, although I asked the Minister the question twice he has not answered once. I would accept one answer to two questions. What would happen in the situation of a British child born of foreign national parents? Would that child and therefore the parents be eligible for child benefit? Can the Minister help me?

Lord Mackay of Ardbrecknish

My Lords, with the leave of the House, I am happy to try to help the noble Baroness. If she thinks back to her logical position on the tax system, she will appreciate that child benefit is claimable by the person responsible for looking after the child. The child cannot claim on its own behalf. The person caring for the child does not have to be the parent. As the noble Baroness is aware, ordinary child benefit can be claimed by citizens of this country—grandparents and others—with the financial responsibility and care of the child. They can in some circumstances claim child benefit. But that claim is made usually by the parent, although certainly it can be made by the person responsible for looking after the child.

Baroness Hollis of Heigham

My Lords, the Minister appears to be saying, heads the Government win, tails the asylum seeker loses. If one sees child benefit as an amalgamation of family allowance, on the one hand, and tax relief, on the other, it cannot be claimed as a tax relief, even though if the child was British it could be claimed because it is a child and therefore the tax relief belongs to the parent. If it is said that it is a tax relief, on my argument the parents should be entitled to it but the Minister says that they will not get it. But if it is family allowance they may not have it because that is a general form of benefit. This will not do. It is a deeply unfair system. However, it is late at night, and I am confident that we will return to this at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 96 to 98 not moved.]

Baroness Flather moved Amendment No. 98A: Before Clause 11, insert the following new clause— (".—(1) Section 13 of the 1971 Act shall be amended as follows.