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Lord Carter: There are two points on which I can agree with the Minister. It is clear that the Government can alter the rules, and they are doing that with this Bill in the way in which they have reduced the period of time from 12 months to six months before JSA becomes applicable. As we know, this rule is designed, as the Minister said, to meet the current needs, and those are the needs of the Government to fund tax cuts. I can see that I shall be unable to change the Minister's mind. We may wish to come back to this matter at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 14 and 15 not moved.]

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Baroness Hollis of Heigham moved Amendment No. 16:

Page 2, line 32, leave out from ("Act") to end of line 33.

The noble Baroness said: We want to know why there is a different definition of the benefit year than in the usual social security benefit legislation. We worry that there may be some malign intention in terms of needing to build up contribution records. I beg to move.

Earl Russell: I too would like to ask one or two questions about this matter. This issue looks to me suspiciously like a Henry VIII clause. It creates a power to alter by regulation something which is in primary legislation. I understand that it follows Section 21 of the Social Security Contributions and Benefits Act 1992. It has the same power in that legislation because it states:

    "'Benefit year' may by regulations be made to mean such other period (whether or not a period of 12 months) as may be specified in regulations".

It sounds to me like a Henry VIII clause. Clearly, it has been approved by Parliament in the past, so one presumes that there must have been a reason for it. Can the Minister tell me, first, why he needs this power and, secondly, why it was necessary to repeat it.

Lord Mackay of Ardbrecknish: The noble Earl, Lord Russell, rightly identifies Section 21(6) of the Social Security Contributions and Benefits Act 1992 as having similar wording. I can take him further back and suggest that the consolidation Act of 1975 also has the same wording in it. Therefore, the wording has been in legislation for quite a long time.

The purpose of the whole clause is to set out the contribution conditions that the claimant must satisfy. There are some complicated terms in it such as the "relevant tax year" and the "benefit year". It is the latter that we are talking about. To get us into the feel of it, the relevant tax years are the two complete tax years which end on 5th April before the benefit year in which the jobseeking period begins. The benefit year is a calendar year starting on the first Sunday in January.

We intend that the "benefit year" should have the same meaning for the contribution-based jobseeker's allowance as it has currently for unemployment benefit—in other words, the calendar year starting on the first Sunday in January. The subsection would allow for the term to be redefined in regulations if that is ever thought necessary in the future. That would be important if the definition of "benefit year" were changed for the purposes of other contributory benefits.

Having this power avoids the need for primary legislation to achieve what would perhaps be a simple technical change of an alignment nature. I can assure the Committee that the provision has been on the statute book for many years and that neither governments of the Right nor the Left have used it in any devious ways: in fact, I do not think that they have used it at all. However, I believe it is sensible to have this means of changing the definition if ever it becomes necessary to align it with changes that have been made elsewhere in the benefit system for other reasons.

Baroness Hollis of Heigham: With that reply from the Minister I would hate to break a long hallowed and

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well-established tradition. I shall clearly want to read what the Minister has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 17:

Page 2, line 37, after ("period") insert ("to include any period of incapacity for work, itself not interrupted by a period of more than twelve weeks").

The noble Lord said: This amendment is concerned with the linking period of up to 12 weeks for someone who experiences periods of incapacity and is receiving JSA. We know that it is not uncommon for people to have periods of unemployment and periods when they are incapable of work. Indeed, according to DSS research on invalidity benefit, almost one in five people on that benefit have spent some time signing on in the previous two years.

Both unemployment and invalidity benefits could link together to form one period of interruption of employment known as PIE. That means that someone whose invalidity benefit had been withdrawn could sign on as unemployed. If they subsequently fell ill, they could go straight back onto invalidity benefit without having to re-qualify for sickness benefit.

PIEs have also been important for people re-qualifying for invalidity benefit, as it is the first day of PIE which determines the rate of allowance. We know that the Social Security (Incapacity for Work) Act, with which a number of us were involved, replaced PIEs with periods of incapacity for work (PIWs). I cannot think of a convenient acronym for PIWs which does not sound rude. Therefore, I shall have to say "PIW" each time. PIWs change the relevant contribution years for incapacity benefit. In the future, it could be more important for people to link PIWs as it will take 52 weeks to requalify for the higher rate of incapacity benefit.

We know that the Bill removes the reference to the specific period of eight weeks which was used before, and instead refers to a "prescribed period". We feel that there are sound reasons to have a longer linking period between PIWs so that people who are trying out work do not lose out. There is already a precedent in the linking rule of two years to enable people claiming the disability working allowance to requalify for their previous levels of invalidity benefit.

The DSS Research Report No. 19, which has been referred to in connection with other amendments, was a survey of invalidity benefit recipients. It showed an increase in the invalidity benefit caseload as a result of people spending longer on that benefit, rather than because of an increase in the number who are claiming for the first time. Over three-quarters of long-term IVB recipients surveyed no longer saw themselves as attached to the labour market in the sense of looking for work, planning to look for work or thinking that they could look for work.

The amendment is directed at long-term recipients of benefit and will positively encourage individuals to try out employment and to move off benefit altogether. We know that Mr. Lilley stated on 24th January 1994 that the Government want to help people back to work,

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adding that many people who receive incapacity benefit would prefer to work. We can all agree with that. We want the process to work more easily.

I believe that in Standing Committee in the other place the Minister indicated that he would look at the whole question of linking rules in the longer term. He observed that the amendment that was moved there—it was similar to this—would almost certainly have resulted in some savings. I should have thought that that would be attractive to the Government. Indeed, we have had some easement of the linking rules for specific groups of claimants. We know that the period will increase from eight weeks to 12 for people on training courses. However, a similar concession was not given with regard to incapacity benefit, which means that thousands of sick and disabled people will be caught permanently in the benefits trap.

The amendment would encourage people to consider employment and would enable them to attempt it in either the short or longer term. It would appear to be a no-cost amendment but could, in fact, produce considerable savings by enabling individuals to come off benefit and become economically active once more. I hope that the Minister will not reply by saying that it is a good idea, but administratively difficult, which is what the DSS usually says when it cannot think of another answer. I hope that the Minister will look at it constructively. If the amendment is not drafted correctly, we are willing to withdraw it and bring it back. Indeed, the Government might like to draft their own amendment. I believe that there is strength in the argument behind this amendment which, as I have said, could result in some savings for the Government. I beg to move.

Lord Mackay of Ardbrecknish: The noble Lord, Lord Carter, may be surprised to hear that in the dictionary of the Department of Social Security, the words, "Yes, that isn't a bad idea" also occur. Of course, there is a warning that they should not be used too often, but in this case I think that I can use them.

The amendment seeks to ensure that periods of incapacity benefit, where they are not separated by more than 12 weeks, will be included in the linking provisions for jobseeker's allowance. As my honourable friend the Under-Secretary of State announced in another place—in Committee, I think—the linking provisions for jobseeker's allowance will be set out in regulations. Nevertheless, the Government have decided that periods of incapacity benefit will be included in those provisions.

We have further agreed that the linking period of jobseeker's allowance will be 12 weeks. Thus, periods of incapacity benefit separated by up to 12 weeks will link for the purposes of contribution-based jobseeker's allowance.

We propose to achieve that effect in regulations. At the risk of tempting the noble Lord to fall into a severe trap, if he will accept that we shall do that by regulations, I am sure that he will be able to reject—

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