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Earl Russell: Perhaps the noble Lord will allow me to say a few words. I believe that there are slightly greater problems here than the Minister suggests. For example, I know of a case in which someone was required to sign on 15 times a week. The problem here is that most people can only get hold of one idea at a time. Perhaps the Minister will remember the time when 16 and 17 year-olds were first disentitled from benefit. It used to be very difficult to get people to tell them that the right to severe hardship payments existed. In fact, in some cases they were told directly that they did not exist. That is because people had got hold of the idea that 16 and 17 year-olds were disentitled and that idea blotted out everything else.

I rather feel that what is happening here is that people have the idea that students are disentitled and do not think beyond that to all the complexities of which of them is disentitled and which not. A little more guidance in this area might possibly be useful.

Lord Mackay of Ardbrecknish: I am very clear in my own mind that if someone is genuinely undertaking up to 16 hours' guided learning, which it is perfectly legitimate for them to do, it would be unreasonable for an officer to ask him to come 15 times, especially if those times coincided with his study times. That would be unreasonable. I shall discuss the matter with officials to see whether somebody would, indeed, be able to do that. Of course, they may have considerable suspicion that there was a lot more to "study" than study, but that of course is another matter.

Baroness Dean of Thornton-le-Fylde: I do not accept the statements made by the Minister. With all due respect to him, it betrays a lack of knowledge of what is going on in the real world. I do not mean that in any offensive way. The fact is that working patterns have changed considerably. To say that someone could go in to work and be on a course at the same time is not necessarily the case. I chose those 150 workers from the Financial Times because they are a very good example of that. Their normal pattern is to work at night time. If unemployed, they would no doubt go to the unemployment office and sign on. They could well be offered a job with work during the day. That is my point. Someone could be a half or two-thirds of the way through a course and have to give it up because the work that may be available—if there is any available—does not fit into the course time. It is a reality.

When the Bill was discussed in the other place, the government Minister was absolutely clear in her statement to that Chamber. She spoke of:

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"they" being the unemployed persons—

    "remain available for, and actively seeking, employment"—[Official Report, Commons, 21/3/95; col. 133.]

I do not know many employers who would interview an unemployed person and take him into employment if he said, "By the way, I go to college two half-days or two days a week." In today's job market, the reality is that the employer would say, "Good luck to you, but that's not good enough to me. I need someone who can be here for the hours that I want him. I do not have any commitment to you as an individual."

The Minister, when discussing this matter in the other place, went on to speak of:

    "the increasing flexibility of modern courses, to combine work and study. But it will continue to be the case that claimants may not turn down or refuse to apply for a vacancy notified to them merely because it conflicts with their course of study".—[Official Report, Commons, 21/3/95; col. 134.]

For instance, does the heavy goods vehicle driver give up the course? Does the print worker who has paid for a course in modern technology for transferable skills give up the course and become unemployed, staying on the job register in a contracting market? Does the young woman who has paid fees to attend a course to learn other skills to make sure that she can stay in work or get new work, give up the course? I do not press the Minister through any flight of fancy. These are the realities of the job market today.

I ask the Minister if he is prepared to consider whether anything could be done to ease that situation at all.

Lord Mackay of Ardbrecknish: I do not think that I can go any further. There may be a fairly deep chasm between us on this matter. I take the view and have expressed it on a number of occasions that everybody on JSA is there because he is available for work and actively seeking it. The 16-hours' guided learning, as the 21-hour rule was, is a concession to encourage and help those people who wish to study. But I do not believe that we can set aside the principal reason why someone is on JSA —namely, that he is looking for a job—and if a job comes up, he should take that job. I do not think that we should set that aside in order to allow those people in all cases to continue to study. That, I am afraid, goes very close to actually having a special group that are no longer expected to be available or actively seeking work. I think that gets us into much more difficult territory, in which I accept there is a deep division of opinion between the two sides of the Committee.

Baroness Dean of Thornton-le-Fylde: The Minister is right: there is a major division of opinion, and whereas the Jobseekers Bill is there for people available for work, it also has provision within it for exclusions for individual categories. It is one of those categories I am talking about this evening. I hear what the Minister says and I will obviously read his exact words in Hansard. I will not press this amendment at the moment, but I shall wish to come back to it at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Amendment No. 9 not moved.]

Amendment No. 10 not moved.]

Clause 1 agreed to.

Clause 2 [The contribution-based conditions]:

Lord McCarthy moved Amendment No. 11:

Page 2, line 12, leave out ("two complete years") and insert ("complete year").

The noble Lord said: This is the most reasonable of all the amendments put forward from this side of the Committee. Simple equity demands that this amendment be accepted. There are in fact three amendments which are linked: Nos. 11, 12 and 14. The substance of what I am suggesting is that because the benefit period has been cut in half the contribution period should be cut in half. Instead of having two complete years, we should have one complete year —the last complete year—and as long as the applicant for benefit has one year's contributions he gets six months' benefit. As I say, I shall find it hard to understand how on earth the Government could resist this amendment, but of course I hope they will not resist it.

It must be stressed that a number of things are happening as a result of what the Government are intending to do. I would ask your Lordships to remember what is happening. As a result of halving the period in which the unemployed person gets unemployment benefit, for example, a person with a working partner loses £1,200 as a result of the Government's proposals and a person with a non-working partner and savings of £8,000 will lose £2,700. That is the effect of cutting the benefit period in half. We know that since 1979 there has been a strong and steady reduction in the value of the benefit. In 1979 the benefit was worth 31 per cent. of average earnings, and now it is worth 14 per cent. of average earnings. So, even if the Government have not decided to cut benefit in half, the value of the benefit is reducing steadily and no doubt if the Government were to stay in office for a lengthy period it would be reduced still further.

However, naturally enough, the contribution rate continues to rise. It has just been increased from 9 per cent. to 10 per cent., and so we have a consistent reduction in the value of the benefit and an increase in the contribution rate required to produce that benefit. Now we have a sudden cutting in half of the benefit period and people are being told that for the succeeding six months, or whatever, they must go on to a means-tested benefit. I will not go through all the consequences of that. This matter has been dealt with in other amendments by other people at other times. The question is: how can it be defended that the period of contribution should not be reduced when the period of benefit has been reduced? That is the argument behind this amendment and I look forward to hearing what the Government have to say. I beg to move.

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8.45 p.m.

Lord Mackay of Ardbrecknish: The noble Lord, Lord McCarthy, certainly started off in a very optimistic state of mind, and I hope I shall not disappoint him too much. This is one of a series of amendments which is really moving towards the principal amendment which, I do not doubt, the Opposition wish to move regarding the reduction of the period for unemployment benefit from a year to six months. The reality of the job market is that today something like two-thirds of people looking for work find a job well within six months, and indeed many people, because of their family situation, are eligible for income support at present rather than unemployment benefit, because in fact unemployment benefit does not give them as much as income support would give them in their particular family situation.

The noble Lord made the point I expected—I thought it might come a little later—that if you have reduced the period from 12 months to six months then you ought in some way to reduce some other part of the equation, so to speak. But of course national insurance contributions pay for a great deal more than just unemployment benefit, or in the future for JSA. They pay, for example, for pensions and a very significant part of the benefit system. I do not myself believe that you can trade off one benefit against a contribution without actually looking at the total amount that we all pay for the potential benefits that we get in return for paying our national insurance contributions.

It is not an assurance: people do not necessarily get out of it what they put into it. Probably all that many people get out of it is their retirement pension, and in some ways they are fortunate. Those who are perhaps less fortunate become ill or unemployed and they have to fall back on the benefits that are there under the national insurance system. But there is not a direct link between the contributions paid and the rate or length of entitlement to benefit. It is not a personal insurance scheme. Even the people who become unemployed and find that the benefit is only for six months and not for a year will perhaps in the fullness of time be claiming the not insignificant benefits that arise from old age pensions, retirement pensions and the like.

So while I think it is a nice argument that the noble Lord has used, I do not really think it is one that the Committee should take on board. We shall probably return to other parts of this debate but I think that Amendment No. 12 is linked with this one and perhaps I could say a word or two about it because it addresses an important point. It would remove the need for contributions to have been paid before a claim for jobseeker's allowance is made. The effect of that would be that a small number of people could simply pay the contributions when they make the claim, and thus satisfy the contribution condition. I think it could be open to abuse in a small number of cases where people pay their own contributions. I did wonder if there was a concern here about people who perhaps found that, although they thought their contributions were being paid—they had certainly been stopped from their wages—in fact that was not the case.

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I can assure the Committee that that is the concern behind Amendment No. 12. This clause allows contributions to be treated as paid. It protects an employee whose employer has evaded his national insurance responsibilities without the employee's knowledge. This could occur, as I have said, if a person dealing with national insurance contributions is dishonest or if an employer has gone into liquidation and cannot meet his national insurance obligations. In such cases, if there is no negligence on the employee's part he is not penalised and his contributions are treated as having been paid. I thought I would say that, because Amendment No. 12 could have been directed at that concern. I hope, that although I did not need to say what I said, I have allayed at least one concern, even if I might not perhaps have entirely satisfied the noble Lord's optimistic view at the beginning of his contribution.

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