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Lord Higgins: My Lords, my understanding is that if a claimant does not reply within 14 days in relation to whether or not he wants an oral hearing, it will be struck out and that is it.

Baroness Hollis of Heigham: My Lords, an appellant has the right to receive a full decision from the agency, which takes 14 days. He has a month in which to go into dispute and a month in which to appeal. If he does not reply to the request as to whether he wishes an oral hearing, there would normally be a paper hearing. Perhaps we should follow up that matter through correspondence because it may be that there is a misunderstanding.

The other issues raised by both noble Lords were about the proposals for the Child Support Agency. We are expecting to issue a White Paper fairly soon. If parliamentary time permits, we hope to see legislation in due course, but not in this parliamentary Session. However, it will take a couple of years, starting from scratch now, to get the IT system in place on which any reform of the Child Support Agency will depend. Without such an accurate, reliable and robust IT system, it will simply implode on us.

Therefore, because we are several years away from seeing the improvements which we all wish to see, we need to make interim improvements. Part of that is to ensure that where people are self-employed, the basis of the information which is submitted to the Inland Revenue for tax purposes, is the same set of accounts as is produced for the agency. I believe that that has been welcomed.

The noble Lord asked me a question which I certainly cannot answer, and I do not think that anybody in the Chamber tonight could either. I do not know how many people in the reserve forces are affected by this regulation.

I have noticed in the caseload of letters received that there is sometimes what appears to be a disproportionate problem of people in the Armed Forces. This is partly

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because they feel aggrieved that, as members of a disciplined force, they are obviously vulnerable if payments are not made regularly. There is often a dispute as to the appropriate payment. We are determined to ensure that all people, including those in the reserve forces and the Armed Forces, contribute as they should. However, I will write to the noble Lord on the particular point concerning the Armed Forces.

Given the lateness of the hour, I hope that I have answered the questions raised. However, if there is any point which either noble Lord would wish, upon reflection, to follow up in correspondence--these are typically complex regulations--we shall obviously do our best to answer questions and to be helpful. I commend the regulations to the House.

On Question, Motion agreed to.

Social Security (New Deal Pilot) Amendment Regulations 1999

11.35 p.m.

Baroness Hollis of Heigham rose to move, That the draft regulations laid before the House on 22nd February be approved [11th Report from the Joint Committee].

The noble Baroness said: My Lords, these regulations support the New Deal pilot schemes introduced at the end of November to help people aged over 25, who have been unemployed for at least 12 or 18 months, back into work. Building on the New Deal for people aged 25 and over, introduced in June, the purpose of the pilots is to find new and effective ways of helping unemployed people in this age group back into work. The regulations we are debating today enable the pilot providers to try out additional ways of encouraging and supporting people in moving back into work.

We propose that in 10 pilots, those unemployed for 12 months or more are included. In the other 18 pilots, those unemployed 18 months or more are being targeted. We wish to look at this to see what is the most effective point of intervention.

Such pilots will include a gateway period of up to 13 weeks, and exceptionally up to 17 weeks, to offer extra intensive help to assist people in their job search, based on the lessons learnt from the 18 to 24 New Deal. A period of intensive activity, which will usually last 13 weeks, will tackle barriers to work and help job-related training or assistance into self-employment.

In consulting widely on the content of the pilot schemes, partnership and private sector providers expressed a desire for additional flexibilities. That is why we seek to build on the regulations we made last November.

Two consistent requests which emerged from those working with "New Deal people" and which have emerged in consultation were the facility to help people who wish to start their own businesses and wider scope to use top-up payments to assist participants into work. The proposed regulations will enable us to respond positively to both such requests.

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Perhaps I may briefly skim through what is a limited number of regulations. Regulation 1 sets out the coming into force date of the amendment regulations and their duration. Regulation 2(3) to (5) introduces further disregards in the treatment of income and capital to allow top-up payments funded from sources other than those by ES, such as the European Social Fund, to be ignored in the calculation of JSA. Such new disregards will allow partnerships, who wish to extend the period of intensive activity for some people, to continue to pay top-up grants beyond 13 weeks.

Regulation 2(4) contains a technical amendment to the New Deal Pilot Regulations 1998 which corrects a minor drafting error. This amendment will ensure that payments made to participants by the Employment Service in respect of childcare costs are disregarded as intended.

Regulation 2(6), which is substantive, extends the rules for self-employment that already exist in the New Deal for young people, to participants--that is, the over 25s--in these pilots. Where agreed by the participant and the New Deal adviser, the participant will be able to trade as a self-employed person. However, as that person will remain on JSA, special arrangements will apply.

Perhaps I may describe them briefly. The gross receipts and expenses relating to their business will be handled through a special account which will be administered by the New Deal provider. This capital may be held separately from the special account if it comprises additional grants from organisations such as the Prince's Trust.

This "test trading" may continue for a period of up to six months or until participants have accrued £2,000 in their special account after the payment of expenses. The agreements made with the pilot providers will ensure that the proceeds of special accounts--the trading funds--will be payable immediately to people who leave JSA or IS to go into work. If people remain on JSA or IS, the proceeds of the account will be payable 13 weeks after they cease test trading (or immediately if they leave JSA or IS before the end of the 13-week period). If people move off JSA and claim an in-work benefit, the funds in the special account will be treated as capital. These measures are designed to provide people with an extra incentive to leave JSA and go into work.

The focus is firmly on moving people from welfare into work. We need this framework and we are giving those concerned that £2,000 limit which we think mimics realistic self-employment conditions.

Participants will be supported throughout the test trading period by a New Deal adviser. As the enterprise develops, the adviser will be on hand to discuss the viability of the business and, where the business is showing signs of success, to discuss the point at which it is sensible for the participant to leave benefit, possibly before the expiry of the normal JSA period. If, after 26 weeks, a participant has still not achieved a £2,000 profit the participant will need to discuss with the adviser his or her future chances of success. The limit

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also ensures that people do not build up large profits while receiving benefits designed for those unable to sustain themselves from employment. That is why we have provided the £2,000 limit. We want the New Deal to offer the maximum choice possible to people. The self-employment route, which these regulations introduce, adds to this choice.

In asking for briefing, I found a number of heart-warming examples of the success of self-employment for 18 to 24 year-olds. Some people had set up, for example, a removals business or a double-glazing repairs business. That immediate self-employment would not have been open to them in terms of employment capacity. We are seeking to expand the same opportunities for those over 25 for whom this would be even more appropriate, given that they are already more likely to have appropriate skills under their belts, but who, because of what happened to a previous employer, may not now have the opportunity of traditional, employed work. For many, we think that this will be a more promising route than working for an employer. With the introduction of the regulations, people will be able to try out self-employment with the safety net of continuing with JSA.

I hope that your Lordships' House will welcome these regulations which amend, and give added flexibility to, the regulations laid before the House last November. They will offer those 25 and over the same opportunities. We do not expect it to help many--perhaps 5 per cent.; we do not know--but we think that the notion of a trading account and the ability to receive advice from a New Deal adviser, together with the ability to remain on benefit while undertaking this, will produce not only an appropriate safety net, but also an appropriate springboard. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 22nd February be approved [11th Report from the Joint Committee].--(Baroness Hollis of Heigham.)

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