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Baroness Williams of Crosby: Before we move away from Amendment No. 116, perhaps I may draw the Committee's attention to Amendment No. 117, which is linked with it and which relates to subsection (2). That subsection indicates that where a person is claiming an income-based jobseeker's allowance, it is not only his or her capital but that of,

which is to be taken into account. I can think of almost nothing more likely to break up families than that provision.

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

Perhaps I may give one more example. If a person seeks an income-based jobseeker's allowance within the category that has been so extensively discussed by the noble Baroness, Lady Hollis, and is incapacitated—but not so incapacitated as to receive an incapacity benefit—and is therefore unable to get either a job or a jobseeker's

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allowance, nobody else in the family can get that either although, by definition, that family is likely to be in considerable need. Given that it is impossible to put a figure on the costs of breaking up a family—as the Minister knows, they are extremely high, as are the costs when young people live alone—I wonder whether the Minister will give further consideration to this point because unless my interpretation of the subsection is wrong, it seems an incredibly unwise piece of wording.

4.45 p.m.

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

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

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

On the more general—

Baroness Hollis of Heigham: Perhaps the Minister will give way—

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

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

Lord McCarthy: Would it be honest to say that the Minister would have completely answered our amendment if we were seeking to abolish the capital disregard? Most of the Minister's speech dealt with the fact that the capital disregard cannot be abolished. The

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

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

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

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

My second point is specific to the issue of capital. The Minister made the point—I accept it—that savings are for a rainy day. "This is a rainy day", he says, "let them spend their savings". The difference is that under the Government's proposal almost all of those savings would be wiped out by the person having to live on them. The result is that they are then not available for

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those other contingencies which are entirely honourable, decent and respectable, such as acquiring some means of transport to seek a job. Those savings are not available for such items because those items are never covered by the social security system; in other words, if the social security system wipes out savings, which it should not do, those savings are not available for what they should be used for: that is, transport, and the means to enable one to remain in one's own home.

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

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

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