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Baroness Williams of Crosby: My Lords, I should like to add to the remarks of my noble friend Lord Russell, and the noble Baroness, Lady Hollis of Heigham, on this extremely important amendment. My first point concerns the operation of a free market.

In a free market the price that is eventually set is one that balances supply and demand and therefore reflects the position of those two forces. Let me draw the attention of the House to what the Bill says. It contains what philosophers call "a prisoner's dilemma". The claimant is asked to say what is the lowest wage for which he would be willing to work. That refers to the documents circulated during the Committee stage of another place where the Minister of State indicated the kinds of question that would be asked in a jobsearch review. I understand that it is already part of the existing procedures.

One of those questions is, "What is the lowest amount of wages before stoppages that you will be willing to accept?" No similar question is asked the other way—such as, "What is the highest wage you would be willing to pay to get this job done?" As I understand it, if the claimant refuses to answer the question he may be in breach of the conditions of the jobseeker's agreement. If he does answer it, how does he do so? If he sets the figure too low his family and his relatives may suffer. If he sets it too high he will be regarded as having imposed an unreasonable condition on his availability for work.

That is not a free market but a coerced market in which one side is being asked to tie itself in advance by stating a condition which immediately changes the whole of the terms of a free market bargain and the other side is being required to say nothing at all. Even from the point of view of the philosophy espoused by many who believe in an unrestrained free market, it has to be said that this is a very strange piece of legislation indeed.

There is a second consideration I wish to bring to your Lordships' attention. It is one which has been very effectively advanced by my colleagues. It reflects the difficulty that will be thrown up, if this amendment is not passed, in trying to move to a reconstruction of the welfare state in which we put the emphasis on subsidising, not people to stay unemployed, but jobs to enable them to be employed. The case deployed by the noble Baroness and by my noble friend is that the route to that much more satisfactory kind of welfare state—one already being explored by a number of research centres and brains trusts —would effectively be barred by the sheer scale of the subsidy required from the state

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unless there is some minimum level which employers need to pay in order to have a job filled. I believe that that is a very sensible route to follow. We need to get away from the culture of dependency to that of self-employment and employment in order to retain one's own self-respect.

If this amendment is not passed, effectively we shall make going in that direction so expensive for the taxpayer that we shall make it virtually impracticable. Therefore, I strongly support my noble friend and the noble Baroness because I believe that the consequences of not passing this amendment are very large indeed. They are consequences which in effect bring us very close to a form of coercive labour.

Lord Inglewood: My Lords, I shall begin with a few words about the amendments themselves before going on to the substantive argument that lies behind the debate of the past few minutes.

Amendment No. 25 seems somewhat muddled. Its purpose seems to be to prevent people being penalised for not being available for work which would pay them less than their means-tested benefit entitlement. The wording of Amendment No. 31 is even more extraordinary. If I am reading it properly, the type of employment that a claimant may or may not refuse to seek is irrelevant. The expression "whether or not" means that whatever the claimant does or does not do, he is to be treated as actively seeking work. In other words, the amendment would appear to us to have the effect of enabling every JSA claimant to be treated as actively seeking work. I accept that that is not the intention of the noble Baroness. Her intention is similar to that of Amendment No. 25, so that claimants could avoid seeking work which would pay them less than their means-tested benefit entitlement.

Baroness Hollis of Heigham: My Lords, I do not wish to bandy words. I know that the Minister understands the point of these amendments, but as regards Amendment No. 31, I believe that his remarks and strictures would only be true if it said,

    "whether or not he refuses to seek employment [and] where the average weekly remuneration".

That is clearly not the case. The amendment states,

    "whether or not he refuses to seek employment",

which is then modified or constrained by the rest of the sentence,

    "where the average weekly remuneration would produce an income less than the amount of means-tested benefits to which he is entitled".

The phrase,

    "whether or not he refuses to seek employment"

is understood in the context of the "average weekly remuneration". It would not be so understood if there were either a comma or an "and" there.

Lord Inglewood: My Lords, I thank the noble Baroness. I am not sure that I agree with the construction of the words on the page, but I do not want to make a point about that because it is important that we address the substantive argument which is why we are here this afternoon.

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We are still very unclear exactly of the compass of these amendments. What exactly do they mean? Do they mean and refer to the amount of income-based JSA that the claimant receives while he is unemployed? That would have unfortunate consequences. I should remind the House that income-based JSA will include amounts to cover claimants' mortgage interest payments, just as income support does now. We have all heard of cases where claimants' benefit entitlement is hundreds of pounds a week because of this rule. Is the noble Baroness suggesting that claimants in this position should be able to refuse work which does not provide them with that sort of money? That really would enable them to remain on benefit forever. That is a matter she must deal with. Perhaps the noble Baroness means her amendments to refer to income-based JSA entitlement, but excluding mortgage interest relief.

I wish to go back and look at the reference to the level of remuneration. That appears not to take account of the in-work benefits such as family credit, which people can claim once they are in work. As my colleagues and I pointed out many times, family credit and other reforms of tax and benefits mean that virtually all claimants are better off in work.

But, regardless of the exact detail of what the amendments are supposed to refer to, I cannot accept them. They stipulate that the average weekly remuneration in the employment is to be taken into account. There may be no great difficulty in determining the probable average amount of weekly income. But do we take into account benefits in kind offered by the job? Do we include travel-to-work costs or child-minding fees? How can a jobseeker know about how such matters would affect his level of income before taking a job?

I pose the questions to make the point that it would be virtually impossible in practice, as well as wrong in principle, to make such a calculation on the basis of the level to which each individual jobseeker could restrict their availability indefinitely. That is why I am not going down some kind of spurious and hypothetical Dutch auction route which the noble Baroness has previously tried to tempt us with.

We believe that people should not hold out indefinitely for a given level of remuneration. On previous occasions we have talked about the permitted 13-week period and how, over time, if the jobseeker cannot find a job within that period restricted to his previous rate of remuneration and sphere of activities, the extent of the job search has to be widened. That is important in the context of the comment made by the noble Baroness, Lady Williams, about the level of remuneration indicated in the relevant documentation. It shows where we are starting from.

Considerable play has been made about levels of remuneration, the number of jobs at a particular rate of pay and other jobs at other rates of pay. It is important, looking at the picture in the round, to identify which sort of jobs one is talking about; full-time, part-time and

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so on. I have mentioned family credit. We have also indicated that we are proposing a pilot scheme in respect of single people and childless couples.

4.45 p.m.

Baroness Williams of Crosby: My Lords, I hope that the Minister will forgive me. I am only addressing the fact that I believe the brief he is referring to does not take adequate note of the fact that the noble Baroness specifically distinguished between those families who were entitled to family credit and those who were not. Indeed, a large part of her remarks were devoted to that aspect. In all fairness to her, I should make that plain to the House. She did not pretend that certain families without children were entitled to family credit, but equally she did not pretend that those with children would not get family credit if they were driven to very low-paid jobs.

Lord Inglewood: My Lords, I thank the noble Baroness. I would not wish to be unfair to anybody. However, I should remind your Lordships that Clause 6(5) enables a claimant with a usual occupation to restrict his availability during the permitted period. In determining the length of the permitted period, which can be up to 13 weeks, a number of matters will be taken into account. As we have discussed previously, these will include the claimant's skills and qualifications, and the length of time he had been engaged in his usual occupation. As I said, after the permitted period, he will not be expected to be immediately available for any rate of pay, but he will certainly need to start widening his horizons, since—quite honestly—there is no point in holding out indefinitely for a rate of pay that may no longer be realistically attainable. After six months, we would expect the jobseeker to place no restrictions concerned with the rate of pay. It is the case that two-thirds of those who lose their jobs are already back in work by that point.

Rates of pay are only directly relevant to Clause 7 for the purpose of the permitted period provisions in Clause 7(5). Claimants can confine their jobsearch to their accustomed rate of pay during the permitted period determined under Clause 6(5), and if they do so they will be treated as actively seeking employment.

Apart from that, Clause 7 simply requires a person to take such of the steps he can reasonably be expected to take in order to have the best prospects of securing employment. There is no mention of pay in this; provided the claimant is taking steps that give him his best prospects of securing employment, the rate of pay is not of immediate relevance. I suggest that the noble Baroness is confusing availability for employment with the actively seeking test. Let me be quite clear. Provided that jobseekers remain available for any work within any restriction imposed, there is nothing to prevent them concentrating their search for work to highly paid jobs in the City, academia, local government or anywhere else, if the steps they are taking to do that give them their best prospects of securing work.

Two points have been raised which I should like to address directly. I turn first to that raised by the noble Earl, Lord Russell, who returned to a matter that we

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debated at some length in Committee. I refer to commission-only jobs —that is, jobs which pay no salary and where the reward comes by commission. I suggest that in many cases the contractual nature of such employment would be self-employment. Jobseekers do not have to make themselves available for self-employment (although they may do so if they wish) nor will they face sanctions under Clause 18 for refusing self-employment. If the adjudication authorities took the view that a person had been offered "employment" even though the work in question consisted only of work that paid no salary, they might also take the view that the reason for refusal was not the level of remuneration but the nature of the employment in question and that the jobseeker therefore had good cause for refusing it.

The fact is that we are not aware of adjudicating authorities ever having had to consider such a case. That is because the Employment Service, while it agrees to display vacancies that offer commission only, instructs its staff that claimants should be warned to consider such vacancies carefully before applying for them. Staff do not refer claimants to such jobs against their wishes. Of course, some claimants would welcome the opportunity to work on that basis and many who do so earn substantial sums of money.

The other point raised related to forcing people into work which was some form of exploitation. As I explained on a previous occasion when we debated this matter, it is axiomatic that the way in which the Employment Service operates is reasonable. The Employment Service does not, for example, try to put people into jobs which would be illegal or where the job would in some way endanger them under the health and safety regulations. Over the course of a year, about 4 million people claim through the Employment Service and we cannot find any example since 1989 (during the period that the present rules have been in place) of the Employment Service placing people in work where it has been, essentially, an instrument of exploitation on behalf of the employer. Bearing in mind all that has been said, I must stress that we cannot find any examples of that.

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