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Lord Higgins: My Lords, no doubt we shall return to that point later, but are we right in understanding the Minister to say, in line with what the ombudsman was apparently saying, that what would be required would be evidence of loss rather than of being misled?

Baroness Hollis of Heigham: No, my Lords. What I was saying is that we are seeking to establish that someone was misled and that as a result he acted to his detriment, or could have acted in a way that would have avoided that detriment, but that if he does not have documentary evidence to that effect, the case will not necessarily fail. It will be investigated and discussed in the usual way.

I turn to a shopping list of smaller items. The noble Baroness, Lady Strange, gave notice that she was going to raise the question of war widows. I see my noble friend Lady Symons on these Benches. I am sure that she was pleased to hear that news. The noble Baroness, Lady Fookes, and the noble Lord, Lord Goodhart, said that they were going to raise the question of overseas pensions again. We know our positions on that matter. I can say only that my position is the same as the previous government's position: that that was not a priority. I did not challenge the noble Lord, Lord Mackay, at any time when he was also resisting claims to that effect.

The question of ACT was raised. The noble Lord, Lord Higgins, pressed me about how it was to be paid. I believed that I had answered that point, but I am sorry if he felt that I did not. Basically, the expectation is that from 2003--the noble Lord will understand that, being three years off, not all the fine print has as yet been worked out; that is the whole point of having consultation and discussions with POCL and the sub-postmasters--to 2005, schemes will come in so that either the Post Office will be acting as a bank for other banks, such as Lloyds TSB, which will effectively be treating the Post Office as an outpost, given the new electronic transmission claims--and, incidentally, paying them more than we would pay them--or, alternatively, the Post Office will be acting as a credit account or holding a credit account for someone in their own right as a form of universal bank.

We shall be receiving the PIU report in early summer, but I do not see why there should be any difficulty in getting one's head around the concept that the Post Office will hold that account. The advantages for people who currently do not have a bank account will be huge. They will be able to write cheques; they will not need to go to cheque changing agencies; they will be able to pay in their money; they will be able to

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draw part of their benefit; there will be greater security against fraud; and they will be brought in from those grey areas of dependence on pawnbrokers, money changers and credit catalogues, which have been so costly to so many of our people.

There are points about annuity rates but, given the time, I shall pass those by for a moment if I may and return to them in writing. My noble friend Lord Brookman asked several questions about mandatory pensioner trustees and whether I agree that pensioner trustees added value. Yes, of course I do, but we believe it unwise to suggest that pensioner members should be there in a representative capacity any more than anyone else. That was one of our concerns. We are conscious that pensioner members feel in some cases that they have been unfairly excluded from involvement in some schemes. That is why the revised provisions go further to ensure that pensioner members cannot be unfairly treated; unlike the current prescribed appropriate rules, pensioner members will be involved at all stages of the trustee route.

It will still be possible for the employer to propose arrangements that do not involve pensioner members in the nominational selection of member-nominated trustees. However, those proposals are subject to member approval and all pensioner members would have to agree to them. If approval is not gained, the alternative is the trustee route which guarantees that pensioners can make nominations and stand for selection. My noble friend asked questions about the 10 per cent being excessive. It is in the existing legislation; we have no evidence of any particular problems with it. But if my noble friend has and he cares to write to me, I shall do my best to answer him.

Finally, I return to a question which, perhaps more than any, was of concern to your Lordships this evening; that of community punishment. I assure the noble Earl, Lord Russell, that there will be pilots and that they will be carefully evaluated by independent external researchers funded by the DSS, the Home Office and the DfEE, particularly on behavioural points. I am expecting that external independent research to be as scrupulously handled as any research which comes through the department. I should certainly expect nothing less.

On the more substantial point raised by the noble Lord, Lord Windlesham, the right reverend Prelate the Bishop of Lincoln, and my noble friend Lady Kennedy, we have taken legal advice and I am assured that our proposals are compatible with the ECHR. I have checked and checked again and I am told that that is the case on legal advice. If that advice is inaccurate or those cases are tested and it is found to be incorrect, so be it, but I have checked on many occasions and that is the assurance I have been given and the legal advice I have obtained.

A number of your Lordships said that we were offering double punishment. If I may say so, anyone familiar with social security legislation would know that that is not an acceptable description of what we are doing. Benefit entitlement in this country has always been conditional. Even David Rendel, an

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honourable Member in another House, has said that no one believes that people should receive benefit for doing absolutely nothing. It has always been conditional; for example, we have benefits sanctions if someone is on JSA, is supposed to be actively seeking work and fails to do so. We have benefits sanctions if someone is supposed to come to a ONE interview and has no good reason for not doing so. We have benefits sanctions if women who should co-operate with the CSA have no good cause for not doing so and still fail to do so. In the whole array of DSS benefits it is accepted that there are grounds for benefits sanctions, which may or may not be challenged in your Lordships' House in any particular case, and that benefits are not unconditional.

We are attaching another condition to benefit, not offering a second punishment. That is the Government's position. The situation will be clearly explained to anyone concerned. A sanction would occur only after a second offence. Essentially, the provision would be about entitlement to benefit, not a second punishment. My noble friends said that that would be harsh, particularly on women and on black members of our society and so on--

Earl Russell: My Lords, I should be grateful if the Minister could explain why that condition is relevant to the receipt of benefit.

Baroness Hollis of Heigham: My Lords, I do not understand the noble Earl's question.

Earl Russell: My Lords, why is the question whether or not people breach community service orders relevant to their entitlement to social security benefits? I can understand, if not always accept, social security conditions; these I do not understand.

Baroness Hollis of Heigham: My Lords, the Government believe that if a person seeks benefit from society, as taxpayers we have a right to attach conditions to that seeking of benefit. I refer obviously to the day-to-day conditions of benefit entitlement; for example, one cannot claim for children if one does not have any; but it is also the case that if someone is required by the courts to observe a community sentence and he fails to do so and, if after the first offence where he is warned, he still persists in failing to accept that community sentence and to observe by its rules, we believe that it is reasonable that society should say that the other part of its contract with him to support benefit is not upheld; that he has broken it and therefore, as a result, the sanctions on benefit have come into play.

Earl Russell: My Lords, does the same principle allow withdrawal of benefits for those found speeding?

Baroness Hollis of Heigham: My Lords, it is interesting that the noble Earl is pushing me on that point. At the moment, I understand that something like 130,000 community sentences per year are passed.

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Something like 30,000 per year are breached. Some of those sentences are for quite serious offences, but they are being breached. As a result, we want to ensure that such young offenders--they are often young and mainly men--observe community sentences. If society as a whole and taxpayers offer benefit to people who in turn renege on their obligation to society--that is what they are doing if they fail to observe a community sentence--we have a right to consider entitlement to benefit. That is the approach of the Government.

It is not the case that women, in particular, will be affected. Of those on community sentences, 89 per cent are men. Nor will it affect, in particular, the ethnic minority community, although they have a slightly higher representation than in the population as a whole. We do not believe that the incidence of this will be unfair either on women or on black and ethnic minority communities.

I realise that your Lordships have dissatisfaction with different aspects of the Bill. I can appreciate where noble Lords are coming from. However, I return to what my noble friend Lord Haskel said. At the core of the Bill are two proposals: first, to tackle the poverty of children who do not receive maintenance, and, secondly, to tackle the poverty of pensioners who do not receive the minimum income guarantee and who in future will remain reliant on means-tested benefits unless we can lift them off that by the state second pension that we propose in the Bill.

This Bill is a good Bill. It tackles the poverty of two or more sections of our society. I hope your Lordships will support it.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

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