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Baroness Turner of Camden moved Amendment No. 101:

Page 24, line 16, at end insert:
("( ) A pilot scheme under this section may be introduced only after consultation with such bodies or organisations in the specified area or locality as seem appropriate, but wherever possible such consultation shall include organisations representative of employers and employees.").

The noble Baroness said: My Lords, I make it clear at the outset that we are in favour of schemes designed to get people back to work. We are in favour of pilot schemes as well—at least I think we are—although we have not had much opportunity to debate them in this House. We want to make sure that these are suitable and successful. If they are not, they will simply be seen as yet another initiative that loses credibility because it does nothing for the unemployed, particularly the long-term unemployed.

We believe that one of the ways of achieving success would be by the involvement of local people, and/or organisations, which have specifically concerned themselves with employment in the area concerned. We believe that this means involving representatives of employers and employees in the area. After all, they have the task on the ground, so to speak, of representing the interests of job providers and job holders, and also

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jobseekers. Most unions nowadays have arrangements for retaining in membership those of its members who become unemployed and providing them with a range of services, normally without requiring a subscription. That is certainly true of my own union. We have been anxious to ensure that those who become unemployed retain their links with the union and are not simply cast out once they lose the job which rendered them eligible for membership. There are other organisations too which might profitably be involved in consultations.

I hope that the Minister will not deride this amendment as being unnecessary or perhaps even undesirable. It has been worded carefully. There may well be places where such bodies do not exist and we have said that,

    "wherever possible such consultation shall include organisations representative of employers and employees".

There is one question which I would like to pose to the Minister as regards these pilot schemes. I understand that they will not be able to vary the amounts of benefit payable. Will the schemes have any role in relation to benefit sanctions? Can they have any part in extending the period during which a JSA will be payable if there are sanctions? I hope that the Minister will be able to respond in a positive way. I hope that he will appreciate that the amendment is well-intentioned and will therefore be prepared to accept it or, if not this wording, at least something similar. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, I certainly would not say that the amendment was wide of the mark, but I hope that I can persuade the noble Baroness that it is not needed. Normal consultation procedures will precede the introduction of any pilot regulation. Proposals for pilot regulations will be submitted first to the Social Security Advisory Committee, in accordance with the provisions of the Social Security Administration Act. Your Lordships will be aware that this is the normal conduit for outside comment on social security legislation. We shall of course consult other organisations in the usual way if we consider that to be necessary. For example, any change involving housing benefit or council tax benefit will necessarily involve consultation with local authority associations. It may on occasion be appropriate to consult bodies representing employers and employees. I am sure your Lordships will appreciate that on the question of who shall be consulted much depends on the nature of the pilot under consideration.

The pilot power is an innovation in social security in that it allows measures to be tested for effectiveness in advance of national implementation. However, regulations drawn under it will be subject to at least the same level of consultation and legislative scrutiny as they would be if introduced nationally. In some cases, the level of scrutiny may even be higher, since all pilot regulations will be subject to the affirmative resolution, whereas for a national change introduced under normal arrangements this might not always be the case.

The noble Baroness asked me whether pilots can be used for benefit sanctions. Regulations can be piloted under all the powers of the Jobseekers Bill. The provision would have to be within the scope of the

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powers and would have to be intended to promote employment, so there are some tests, so to speak, that any pilot proposed would have to obey before anyone could set up an experiment—a pilot—under these pilot regulations in the future. I hope that—

Baroness Hollis of Heigham: My Lords, I am sorry but I simply do not understand that. I was led to believe that within a pilot scheme the Minister (or the Government) may not change or modify the rates of benefit payable; they have to be nationally determined. We were trying to find out whether, nonetheless, within a pilot scheme there may be a dispensation from the existing rules of sanction—either to be more generous or to be harsher. Can the Minister answer that simply? I did not understand the answer as he formulated it.

Lord Mackay of Ardbrecknish: My Lords, I thought that I gave that answer. I said that the regulations can be piloted under all the powers of the Jobseekers Bill, and that provision would have to be within the scope of the powers and would have to be intended to promote employment, which is the underlying raison d'être of the pilots. They are supposed to aim to promote employment. As it is a bit late, I shall look into the point that the noble Baroness has made and shall try to come back to her more clearly in the next few days.

In conclusion, as I have explained, we shall be consulting through the Social Security Advisory Committee and it, in turn, will consult all those that it usually consults. We shall also, where necessary, consult with those people we feel appropriate, given the nature of the pilot. As we would want any pilot to succeed, clearly we would want to consult all the people who might be involved in or affected by the pilot-employers, unions, local authorities or whoever.

Perhaps I may clarify one point to the noble Baroness, Lady Hollis. We certainly cannot reduce benefit rates. We have always made that clear. We have never said that pilots can affect overall income levels, and indeed sanctions. However, I shall return to that in the next few days when I examine the questions that the noble Baroness put to me.

Baroness Turner of Camden: My Lords, I am obliged to the Minister for his explanation of the Government's position on this amendment, and I am glad to learn that the intention is to have very wide consultation with all appropriate organisations in relation to pilot schemes. I particularly welcome the involvement of the Social Security Advisory Committee—a broadly based body—the recommendations of which are normally very highly respected. I note what has been said about the inability to reduce rates of benefit. We welcome that assurance. I am glad that the Minister has undertaken to reply to my noble friend Lady Hollis on the sanctions issue that she raised.

In the light of the Minister's statement, which will be in Hansard tomorrow, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 [Interpretation]:

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Lord Inglewood moved Amendment No. 102:

Page 29, leave out lines 19 and 20.

The noble Lord said: My Lords, in moving the amendment I wish to speak also to Amendments Nos. 103 and 107. The amendments make small adjustments to the definitions of "earnings" and "employment" which will apply in JSA. Amendments Nos. 102 and 107 are designed to remove from the definition of "earnings" certain payments which will not be regarded as earnings for JSA purposes, and to ensure that the definition which is used is aligned fully with income support practice.

The new definition retains the reference to Section 3 of the Benefits Act, which provides the basic definition of earnings that will be used in JSA—payments which are,

    "remuneration or profit derived from an employment".

It removes the cross-reference to Section 4 of the Benefits Act. Section 4 provides principally that certain payments, including statutory sick pay and statutory maternity pay, are to be treated as earnings. It is not our intention to regard those as earnings for JSA. Claimants could not receive them because they are incompatible with jobseeking, and where the partner of an income-based claimant receives them they will simply be counted as normal income. I think it is clear that they do not fall within our basic definition.

Your Lordships will not fail to have noticed that we have also made the definition subject to any regulations. That is because the basic definition "remuneration or profit" needs some interpretation and we consider it sensible for the Government to be able to provide that as necessary through regulations. Otherwise, we could find that it was interpreted far more widely or narrowly than we had intended. Perhaps I may give an example. In unemployment benefit at the moment that definition has been taken to include certain payments in kind. For JSA we would wish to be sure that such payments were not taken to be earnings, in line with the practice in income support. It is also the case that employers are adopting increasingly flexible work and remuneration packages. The benefit system needs to keep up with that and to be able to reflect those new patterns in its definitions. The regulation-making provision will enable us to iron out any problems that arise by prescribing what is and is not to be included, and it will also ensure that JSA keeps in step with income support.

I turn now to Amendment No. 103. Clause 7(8) defines "employment" for the purposes of that clause to mean, in layman's language, employment or self-employment. Jobseekers will be able to seek self-employment actively if they prefer instead of, or as well as, employed work. Regulations will be made under Clause 7(6) to provide that, in the case of a young person, "employment", as it applies in the term "actively seeking employment", will include training as well as employment. That will allow young people actively to seek training as well as employment. That requires a consequential amendment to Clause 34 to exclude the general definition of employment from Clause 7.

This is a technical, tidying-up amendment and I urge your Lordships to accept it, together with the other two amendments. I beg to move.

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On Question, amendment agreed to.

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