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Lord McCarthy: My Lords, when the noble Lord writes to the Chief Executive, will he ask him, because he does not appear to be able to answer this himself, where the targets come from and why the targets that we do not like are rising at the rate of 50 per cent. per year?

Lord Mackay of Ardbrecknish: My Lords, I am sorry that the noble Lord did not hear me answer his question as to where the targets come from. I said that

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the targets are based on the experience of previous years and the data which are collected from year to year. The targets are based on the experience of previous years. Your Lordships may be interested to know that in the last period for which I have information, which is for the year up to last December, something like 81 per cent. of all the referrals were found by the adjudication officer to be such that benefit should not be paid. That suggests, as I said earlier, that the actual referrals are pretty accurate in identifying people who are not obeying the three conditions of being available for work, actively seeking work and being willing to take a job. In an attempt to try to be helpful—

Baroness Williams of Crosby: My Lords, I am grateful to the Minister for giving way. The noble Lord explained in considerable detail, for which I am sure Members of the House are most grateful, the reasons behind the targets and asked us to accept that their purpose is indeed to make the service as efficient as possible. Therefore, I wonder—and I ask the question genuinely—why the Minister does not feel able to accept the amendment, which, after all, would be wholly compatible with everything that he has said and which would go a very long way towards reassuring Members on all sides of the House.

Lord Mackay of Ardbrecknish: My Lords, I thought I had explained that, when one looks at the targets all together, they can have an effect on how an Employment Service staff member is treated as regards what increments he receives. If he has not done a good job and, obviously, if he has fallen down on a number of the performances that I mentioned, then perhaps he will not receive the increment that he might otherwise have expected. Indeed, he may not be promoted to the next scale as he might otherwise have expected. I believe that the amendment would stop that happening. I actually believe that it might stop people working for the Employment Service because everyone who works for the service pays income tax and, therefore, has some financial interest as regards the amount of government money—that is, taxpayers' money—which is being paid out. Therefore, it might not be a terribly easy amendment to put into effect, even if one were minded to do so. However, I was trying to be helpful and allay the fears of some of your Lordships in that respect when I said that I would write to the Chief Executive of the Employment Service to remind him of the sensitivity of the target.

As I said, Employment Service staff must be absolutely clear in the matter. I see that the noble Baroness wishes to intervene. I give way.

Baroness Turner of Camden: My Lords, I am much obliged. If unemployment goes down, why do the targets go up? I still do not understand.

Lord Mackay of Ardbrecknish: My Lords, as the noble Baroness will know, the targets have just started. The data that we have from the previous year show that we have in fact achieved those targets, and we then move them up. However, if unemployment continues to fall and falls dramatically, then we will, inevitably, begin to see a downturn in some of those targets. But,

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at the moment, with the level of unemployment as it is, the number of people who form its base actually give rise to something over 4 million claims. Therefore, 185,000 referrals does not seem to me to be unreasonable, especially if one goes out into the world and talks to any businessman. Such people will tell many tales of people who were not actually terribly keen on being offered a job, who were not actively seeking work and who did not really want to be very available. I do not not want to pray that in aid very much, but everyone knows that that happens. As I said, I do not believe that the figure of 185,000 is unreasonable.

I return now to what I said I would do as regards the Chief Executive of the Employment Service. Employment Service staff must be absolutely clear that their performance management will relate only to doing their job properly. In the particular case of this target, that means making to the best of their ability accurate and high quality referrals to adjudication and not volumes of referrals which may be ill considered and of poor quality. As I mentioned before, one of the things that we have already noticed about the targets is that the quality of the information upon which the adjudication officer has had to work has actually improved.

I believe that the amendment unfairly questions the professionalism and standards of the Employment Service. I hope that the House will accept the assurances that I have given. However, if the noble Earl decides to press the matter to a Division, I trust that my noble friends will support me in the Lobby.

5.45 p.m.

Lord Campbell of Alloway: My Lords, before my noble friend the Minister sits down, I should like to ask him the following question. I take it that my noble friend is giving an absolute assurance to the House that the employment officer has no financial interest in the decision? If that is so, then the amendment, if it were carried according to its drafting, is, as I believe the noble Baroness suggested, meaningless. Therefore, why continue with it? My respectful answer would be, because it is meaningless. We have reached the stage where we have a categoric assurance. Whatever may be said, thought or objected to about targets—and I understand the concern—is irrelevant to the drafting of the amendment.

Lord Shepherd: My Lords, the Minister has undertaken to write a letter. I am sure that the House will welcome that undertaking. However, will the Minister also undertake that such a letter will be written between now and Third Reading and that a copy of it will be placed in the Library so that those of us who are worried about the matter will be able to read it?

Lord Mackay of Ardbrecknish: My Lords, I am in the hands of the House in such matters. However, I believe that I should reply first to my noble friend, because, to all intents and purposes, I am supposed to be the last speaker in the debate apart from the noble Earl who has to sum up and tell us what he intends to do with his amendment.

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I must tell my noble friend that there is a little difficulty involved here. The person who makes the decision is the adjudication officer. He has no targets in that respect. I had hoped that I had made that absolutely clear. The targets are referred to in the 185,000 submissions that the front line officer must make to the adjudication officer where there is an arguable case, with supporting information, to show that the claimant is not available for, actively seeking or willing to accept work.

So far as concerns the question put to me by the noble Lord, Lord Shepherd, I have indeed said that I will write to the chief executive. However, I am not sure that I will be able to do so before Third Reading, though I will certainly try to do so.

Earl Russell: My Lords, I am grateful to the noble Lord, Lord Campbell of Alloway, for his intervention, but the amendment is fighting a fashion and fashions have a habit of growing and becoming more extreme. Therefore, if the amendment were unnecessary at present, that would be no evidence that it would be unnecessary next year. There is sense in building dykes to ensure that the sea can come so far and no further.

I am grateful to the Minister for the care with which he replied to the amendment. I accept that he spoke entirely according to his conscience and with the greatest care that he could. But I wish that he would not make out that we do not understand what he is saying. I believe that I understood what he said. Having read carefully what he said in Committee, he certainly said exactly what I expected him to say. If that is the criterion involved, I think that I understand it.

The Minister began by saying that he would set out the Government's position clearly. Whenever a Minister utters the word "clearly", one expects obfuscation. The Minister went on immediately to argue that the adjudication officer had no financial interest in the decision. We accept that that is, at present, correct. The burden of my argument was about the target for the employment officer, who, after all, is in the front line and making the first decision about referral.

The Minister said that targets do not relate to the nature of those decisions. For a moment he took my breath away. I went scurrying back to study the Hansard report of what he said during the first day of the Committee proceedings. But then the Minister immediately repeated the point himself, so my checking up was unnecessary. The noble Lord confirmed that there is a target of 185,000 referrals to adjudication officers. We understand that they are referrals and not judgments. However, we think that they are absolutely improper, and we also think that what the Minister said about disentitling people who fail to meet the conditions is begging precisely the question of this amendment. It is assuming precisely what needs to be proved.

The Minister argues that it is an unfair suspicion of the adjudication officer or of the employment officer to think that they might be influenced by a performance target. But here he is on what I might describe as "McCarthy's fork". Either he is not influenced by the target in which case it is unnecessary, or he is influenced by it in which case we believe it is corrupt. I know other

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people do not agree with us but is it wise to have something on the statute book which half the House believes to be a corrupt practice? I ask the opinion of the House.

5.50 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 78; Not-Contents, 135.

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