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Lord Dubs: My Lords, can the Minister say whether a person with a British passport, who is entitled to enter and live in this country but who happens to have lived abroad, is able to come to Britain as an asylum seeker?

Lord Mackay of Ardbrecknish: My Lords, that is a neat question, to which the answer is no. The simple reason--which I thought would be obvious to anybody--is that if that person holds a British passport he is allowed to stay in this country. The question is whether such a person is immediately entitled to British benefit. I do not believe that he ought to be.

Baroness Hollis of Heigham: My Lords, is the Minister saying that someone who claims asylum at the port of entry but who is not a British citizen is entitled to British benefits but that a British citizen who is under threat of persecution and applies for asylum at the port of entry, as in the case outlined by the noble Earl, Lord Russell, is not entitled to British benefits?

Lord Hylton: My Lords, I thought that we were discussing homelessness and housing assistance, not benefit.

Lord Mackay of Ardbrecknish: My Lords, I am sorry to say that we are talking about benefits because the two are tied together. If people have lots of money they will not need to be considered under the homelessness legislation. If they do not have lots of money they will need either housing benefit or the local authority to pay for them. They will need benefit from the British taxpayer or the British council tax payer one way or another.

Baroness Gardner of Parkes: My Lords, if a British citizen goes to live in Australia his pension is frozen at whatever the rate is at the time. If that person returns to this country the pension is immediately reinstated at the current rate. I know a number of people who regularly return to England in order to have their pensions upgraded. I wonder how that affects this issue. I am sorry to put a fly in the ointment in this way.

Lord Mackay of Ardbrecknish: My Lords, as my noble friend will know, if a person is entitled to a British pension he will have paid contributions while resident in the United Kingdom. The pension rules allow such an individual to come back and establish himself here, receive an upgrade of pension and then return to Australia--if he must. The pension is then frozen again. However, that is an entirely different issue. The noble Baroness may laugh but I would just like to get it on record that I presume the Labour Party will repeal the habitual residence test if it wins the election and will allow people to come here from wherever it is in the world and link themselves in to the United Kingdom benefit system--whatever that may cost the British

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taxpayer. I presume that is the Labour Party's policy. I certainly know it is the Liberal Democrats' policy because the noble Earl has told me on a number of occasions.

Baroness Hollis of Heigham: My Lords, the Minister asked me a question. I am delighted to see that he is practising for the position of Opposition by interrogating noble Lords on these Benches as to the implications of our policies. I am sure he will get even further practice of that in future. I simply asked him a question which he may go on to answer but I think he thought he had passed by our point. Why is it acceptable that someone coming out of a situation, as outlined by the noble Earl, Lord Russell, in Kuwait or Iran who is not a British citizen would be entitled to means-tested benefits but someone who is a British citizen coming out of the same situation of persecution would not be entitled.

Lord Mackay of Ardbrecknish: My Lords, your Lordships will have noticed that the noble Baroness evaded the question about what the Labour Party's policy would be. I presume that means that it does not have a policy. Maybe it is under review. Or perhaps there is to be a referendum on it. I must conclude that the Labour Party would be prepared to allow all the people we are excluding from benefit to have access to the benefit again. If that is the case, then, in accordance with what I will call the "Brown doctrine", savings will have to be found elsewhere in the British benefit system in order to pay benefits to people from abroad and asylum seekers, presumably, who come here saying they will not live off the British taxpayer and then, when they get here, decide to claim asylum. All that money will have to be found from elsewhere in the social security budget. I imagine that means that other British citizens will have to lose some of their benefit.

I am asked the question about British citizens. I am afraid the noble Lords opposite are becoming confused. All we are discussing with the habitual residence test is whether or not a person who is not an habitual resident here, including an EU citizen--because we must remember that they can be EU citizens as well as British citizens--has a right immediately to claim United Kingdom benefits. We say they should not have. The Opposition clearly say they should. What is the difference between a returning British citizen and an asylum seeker? The difference is that a returning British citizen is immediately entitled to go to work. He does not need to wait for the six months. There are no problems about working immediately he reaches this country. Therefore, if the gentleman from Kuwait comes here, he can use his undoubted talents to start work immediately. He is in quite a different situation from an asylum seeker who, of course, is not allowed to work until at least six months have passed in this country.

We look for a number of factors in deciding whether somebody is habitually resident: a claimant's future intentions, the reasons for his coming to the UK, his employment record, and the continuity of residence in another country. All claimants are subject to the habitual residence test when making application for benefits.

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It is only fair that British subjects who may have lived abroad for a great many years--and in some of the examples we have had even retain property and interests abroad--should be required to establish whether they are habitually resident here when they wish to claim assistance provided by resident British taxpayers.

As I explained to the noble Lord, Lord Hylton, earlier, local authorities normally rely on housing benefit to defray a considerable part of the costs of their homelessness duty. Nevertheless, providing assistance under the homelessness legislation still involves them in expense. Were this amendment to be passed it would prevent our aligning entitlement under the homelessness legislation with entitlement to social security benefits and could result in an even greater cost to the local authorities.

I understand the noble Earl's concern about the habitual residence test. I understand that the noble Earl is opposed to it absolutely and that he would be prepared to live with what, when this issue first came to our attention, were called "benefit tourists".

Earl Russell: My Lords, the Minister is putting words into my mouth. He knows perfectly well that, like the Social Security Advisory Committee, I believe that the actively seeking work rules are much better designed to catch those people than the test. I ask him to withdraw the remark he has just made.

Lord Mackay of Ardbrecknish: My Lords, I am sorry if I misquoted the noble Earl. I am happy to withdraw my remark. I am not entirely sure how the actively seeking work test would help in the cases that we saw last summer and the summer before that.

However, be that as it may, the position is that the habitual residence test is a clear test which must be applied to United Kingdom citizens returning here just as it must to European Union citizens and other people with settled status here. I believe that it is a perfectly sensible protection for the British taxpayer. I am sure that the majority of my fellow countrymen agree with me, although I accept that others do not. It seems to me that we should make sure that we use our benefit system and the considerable amount of money which the taxpayer entrusts to us to run that benefit system for the purpose for which it was intended; namely, to help those of our fellow citizens resident in this country who have fallen on hard times.

9.15 p.m.

Earl Russell: My Lords, I really rather enjoyed that. I am grateful for the support that I received from all sides of the House. I am grateful to the noble Lord, Lord Hylton, for giving more information about the case of Mr. Hussein. I am grateful to those on the Opposition Front Bench for their extremely useful questions about the relationship between an asylum seeker and a British person suffering under the habitual residence test.

I am grateful to the noble Baroness, Lady Gardner of Parkes, for reminding us of the problem of the Australian resident pensioners. That is a serious problem

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to which we must return. However, I fear that the noble Baroness was perhaps unwise to draw the Government's attention to the practice of people returning from Australia to up-rate their pensions. The Government will stop that next. If the noble Baroness wishes to join me in challenging them when they do that, I shall be happy to have her support.

Before moving the amendment, I should have declared a non-pecuniary interest because for a period of five years or more, I have twice been resident outside the United Kingdom. Therefore, if I had returned home destitute as a result of any misfortune, if it had been in place then, I would have been caught by this test. Therefore, when the Minister says that British subjects returning from abroad who are caught by this test have a very tenuous connection with this country, I find those words personally offensive and I should be grateful if the Minister would also withdraw that allegation.

As always, the Minister had a great deal to say about the taxpayer, who is, of course, not singular. Of course the interests of taxpayers need to be taken into account but the Minister's success in doing that has not been very great, in particular in relation to the people whom we are considering. If they are denied benefit, they become homeless, destitute and probably patients in a hospital where they will be a charge on public funds.

But if they are able to obtain work--and hardly anybody can do so who is sleeping rough on the street--they will become taxpayers. The Minister knows perfectly well that that is the way in which I believe the interests of the taxpayer should be served.

The Minister is right about our policy but he must not put into our mouths what he believes the consequences of that policy will be. We believe that he is very deeply mistaken in that calculation. I was very surprised by what the Minister said when he referred to the advice clause to which the noble Lord, Lord Hylton, drew attention. The Minister said that persons from abroad will be entitled to advice about how to avoid homelessness. But when they are not entitled to work and have no money--

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