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Earl Russell: This is one of the most important amendments of the day and I agree with practically every word that the noble Baroness said when moving it. I owe her an apology for the fact that my name is not to the amendment, for which there is a reason which the noble Baroness may or may not believe to be a good one. When I considered the amendment, I was in total agreement with what it aimed at, but I could not bring myself to put my name to an amendment which allowed a 40 per cent. disentitlement to benefit to someone who had done no wrong. I understand why the noble Baroness worded it that way. It was good politics. But occasionally one's gorge rises, even at good politics.

We went over some of the ground earlier. We were told that people should lose benefit if they did not meet the conditions of entitlement. That is not in dispute. But if we say that, as soon as the employment officer thinks people do not meet the conditions of entitlement they do not meet them, it is rather like saying that someone is guilty of a crime as soon as a policeman chooses that they should be charged with it. There are certain policemen who occasionally talk as if that ought to be

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the law. Thank God, it is not. No one's suspicion, indignation or firm conviction that someone must have done something is evidence that he has. Taking away from a person something which is still an entitlement is a judicial penalty which should not be inflicted without clear proof, a chance to make a defence and an investigation of the issues. A prima facie assumption of guilt is simply not warranted. The claim that the person does not meet the conditions when that is itself the question which needs investigation is a logical fallacy and a dangerous one.

If people are disentitled to 40 per cent. of their benefit, or indeed the whole of their benefit, we have to consider what they are to do. The noble Baroness, Lady Hollis of Heigham, raised the question of debt. This is at the very centre of the matter. Through catalogues, it seems possible for people on benefit to run up pretty high levels of debt. I have asked many times for the department to investigate levels of debt among people on benefit. I must ask it again to do so.

One of the main effects of being in severe debt when on benefit is that you cannot take on a new housing tenancy; you cannot put down a deposit; you cannot pay rent. If you have a bank account and you try to write a cheque, it will bounce. As a handicap to getting into employment, that is very severe indeed. Therefore when we let people who are on benefit fall deeper and deeper into debt, we make it harder for them ever to get back to work. This is another form of poverty trap, and a very powerful one. If we ensure that people cannot work, we prolong benefit dependency, we increase the cost to the Exchequer and we increase suffering to the person. In fact, we do the very reverse of what we want to do.

If people do not go into debt, the alternatives are perhaps even worse. To be pushed down into an underclass, a twilight world where you may have to conceal your identity, is to be pushed into a situation that it is very hard ever to climb out of. To do that to people who may have done nothing wrong is a criminal waste of potentially law-abiding and hard-working citizens. We do not have so many people in this country who are capable of doing a decent job of work that we should wantonly throw away those that we have. This is a vital amendment, and I hope that the Minister will listen to it.

9.30 p.m.

Lord Mackay of Ardbrecknish: These amendments concern an area that we have debated on other occasions. On previous occasions they have shown up a considerable gulf between this side and the Benches opposite. I fear that they will do exactly the same this evening.

The issue of payment to claimants who have not demonstrated that they meet the conditions for benefit is indeed difficult. Where there is a doubt as to whether someone is entitled to JSA—whether he is a jobseeker or whether he is eligible—the Employment Service must refer the case for decision to an adjudication officer. The payment of benefit cannot be made on the normal basis. Where it appears that a claimant has not been available for work in the previous weeks, he should not receive

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benefit for that period as if he had been. As the noble Earl, Lord Russell, noted, the noble Baroness, Lady Hollis, in her amendment appears to go some way to accepting the principle by providing for reduced payments in such circumstances. To that extent only, we are agreed.

However, unlike the noble Baroness and the noble Earl, we do not accept that everyone should have immediate and automatic access to benefit while the adjudication decision is reached. The jobseeker's allowance is a benefit that is intended to support claimants who are available for work. That is a central condition. If the claimant does not meet it, he has forfeited his right to the allowance.

Our proposals will, however, protect claimants in vulnerable groups by making hardship payments from the outset to those who show hardship. That includes all claimants who have children and cases where the claimant or partner is sick or disabled, pregnant or has caring responsibilities. Other claimants will receive hardship payments after two weeks. We believe that that is a reasonable period in the case of a childless, healthy claimant.

We believe that these proposals strike a fair balance. They reflect our basic principles; namely, to reinforce claimants' obligations in return for benefit, but also to protect the vulnerable. Both principles are important. The amendments of the noble Baroness do not give due weight to both principles, since they seek to continue to make payments automatically to everyone, even in cases where there is a clear doubt as to whether benefit conditions have been met.

The amendment would require us to make payments simply because a person chooses to make a claim to JSA, irrespective of whether he satisfies any of the basic conditions or whether he is in financial need. It would require us to make a payment to a claimant whose benefit is suspended in the course of a claim simply because in the past he received JSA, irrespective of any changes in his circumstances. As I have said before, the Government do not accept that proposition.

Members of the Committee questioned why we felt able to introduce a significant easement on current arrangements and pay benefit in full for sanctions when we are not proposing to do that for cases of doubt over entitlement. The point I made before is that we are dealing with two quite separate issues. In the case of a sanction the claimant has shown that he is genuinely unemployed, available for and actively looking for work. He is a jobseeker and has satisfied the entitlement. The only question at stake—it is an important one—is whether he has left or refused a specific job or refused to carry out a specific jobseeker's direction without good cause. They are one-off occurrences, serious in themselves, but do not necessarily mean that the claimant has failed to make himself available for or to look for work. We therefore consider it right to continue to make payments until the issue of doubt has been cleared up. That is quite different from saying that, just because someone is claiming JSA, we should pay him even though we believe he is not meeting the basic conditions for eligibility.

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The noble Earl argued on a number of occasions that any person who qualifies for a means-tested benefit must automatically be in hardship if he is denied that benefit. The extent to which a claimant suffers hardship must depend on his specific circumstances. The current guidance to adjudication officers points out that they should take into account a whole range of factors, including the presence of particularly vulnerable family members and the length of time for which funds have been withdrawn. I should remind the noble Earl, for example, that it is possible for unemployed claimants to possess capital resources up to £8,000, wages from previous employment or access to pay from part-time work which they or their partner undertakes.

The key point is that we do not accept that claimants who do not satisfy their obligations should have automatic access to benefit financed by the taxpayer. They are not jobseekers and are therefore entitled to benefit only to provide protection against hardship. We accept that we should provide for claimants in particularly vulnerable situations—those defined in our vulnerable groups. I must say again that childless healthy claimants have a choice. If they want to receive JSA they must make themselves available for and look for work.

I appreciate that the noble Earl and the noble Baroness will not be satisfied by my answer. I suspect that they will also not be surprised—they have heard it on a number of occasions. But I fear that we shall have to continue to disagree on what I appreciate is an issue about which the noble Earl and the noble Baroness—but particularly the noble Earl—feel very strongly.

Earl Russell: The Minister is right that there is a gulf between us. I should like us to be able to understand each other's arguments well enough to be able to continue discussion across this gulf. At the moment I confess that I find the Minister's reply totally unintelligible. I observe what his position is but I simply cannot understand why.

I want to ask him, first, whether he recognises the concept of benefit as an entitlement. That may possibly be the hub of the whole debate. Secondly, I want to ask whether he recognises that the results of appeals show that the denial of benefit may be undertaken in error. I cannot see how else one can explain the fact that a large number of appeals are successful. Thirdly, he says that a claimant's hardship must depend on his circumstances. Clearly we all accept that. If he tried to define hardship in ways that said one could not be in hardship if one had savings, one could not be in hardship if one had wages left over from a previous employment, we might have argued about the details but we would at least have understood what the Minister was saying. We would have been on ground where some common criteria were possible.

What I simply do not understand is how it can be possible for somebody who has no income except his benefit, to lose his benefit and not be in hardship. It is a little like a proposal to suspend him from a sky-hook and leave him there until something further is done. It is a kind of dropping out of the world. It does not make any sense to me at all.

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I do not understand, either, why the Minister is so convinced that a person can be said to have broken the conditions of eligibility when what is being investigated on the appeal is precisely whether he has broken the conditions of eligibility. I said earlier that this sounded like the wrong kind of policeman, and unless I get a better explanation, I really cannot withdraw that description. It seems like an assumption that a person is guilty the moment he is charged with something.

It seems as if the Minister does not regard this judicial analogy as a fair one. If not, he must have some reason for not regarding it as a fair one. He must have some way of discriminating between the cases. I would love to understand what that is because then we might understand each other well enough to talk about this. That would at least be a comfort.

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