HC Deb 20 May 1996 vol 278 cc42-6
Dr. Reid

I beg to move amendment No. 4, in page 18, leave out lines 13 to 15.

The amendment would delete subsection (3), which refers to the powers of the Secretary of State to make regulations to provide as to when a contract of service is to be treated for the purposes of this Part as normally involving or not involving employment for 14 hours or more weekly. We have a number of questions about the clause, and a number of concerns to do with the relationship between this provision and the recent legislation on the jobseeker's allowance.

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Despite having received an explanation in Committee of where the 14-hour period comes from, we would like to hear it again. The Minister said in Committee that it was not wholly arbitrary, but had been chosen because it represented two working days. For most people, I should have thought, that would be 16 hours. Certainly that is the number used by the Department of Social Security, but for some reason the Ministry of Defence prefers 14 hours. The basic Territorial Army commitment is for more than 16 hours a week, pro rata, so why is there no TA part-time employment protection?

We also seek explanations of several other issues to do with the relationship between unemployed reservists and state benefits. Under the current rules, travelling and other expenses, allowances or bounty are disregarded when assessing unemployment benefit and income support. While daily earnings above a certain amount affect unemployment benefit and income support entitlement, the first 16 training nights are excluded from such calculations for reservists under current—that is to say, pre-jobseeker's allowance—legislation.

Weekly net earnings above £61 negate a full week's benefits; but the benefit week for DSS purposes usually runs from Sunday to Saturday. That means that pay earned by a TA soldier over a training weekend will affect his or her benefits in two consecutive weeks; hence the benefit entitlement in both weeks will be affected by any money received by weekend training.

Reservists attending camps are usually allowed to sign off the register and re-sign when they return. As far as I know, jobcentres acting as agents of the DSS have the flexibility to amend benefit weeks. There is also evidence, under current implementation of DSS benefit regulations, that different offices interpret regulations in different ways when dealing with reservists.

In response to some of our inquiries, we were grateful to receive a letter, from the Minister to me, dated 21 April. It reassured us on some points; it is worth noting them here since it is always useful to put these things on the record in Hansard. We welcome the fact that the Minister pointed out that the DSS had agreed that reservists claiming jobseeker's allowance should be able to benefit from a number of special rules. First, most jobseeker's allowance claimants will be able to keep the first £5 of weekly earnings, but it has been agreed that reservists— after all, they serve their country—will be able to keep the first £15.

We also welcome the fact that any annual bounty will be treated as capital, not income; so, for the vast majority of claimants, bounty will have no effect on their benefits. No doubt the Minister will confirm that today.

Most important, reservists will be exempt from the 16-hour remunerative work rule that will operate with the jobseeker's allowance. If that exemption were not offered, entitlement to the jobseeker's allowance would automatically be lost if the claimant spent 16 hours or more on his duties in any week. We agree that these arrangements provide for what the Minister called a significantly more generous treatment of the earnings of reservists. That is only right, as they are prepared to sacrifice their free time to the service of their country and, on occasion, to make the ultimate sacrifice.

One or two other small points in the great scheme of this 132-clause Bill will affect individual reservists. I refer to the idea of travel expenses being regarded as income when entitlement to the JSA is assessed. This would badly affect reservists who had to make long journeys to their units. It would be particularly unwelcome to Territorial Army Volunteer Reserves that recruit over large areas. In any case, the money will not go into the pocket of the reservist. If it is deemed under DSS regulations to be income for most people, it certainly should not be for reservists.

Although the fine details of the jobseeker's allowance have not been finalised, we believe that the Sunday to Saturday benefit week will again be the norm. If so, that will affect reservists' benefits if they are unemployed for two consecutive weeks. We would consider that unfair. Furthermore, I hope that the Minister will confirm today what he outlined to me in writing about the £5, for a single person, and £10, for a married couple, disregard for earnings. The benefit week should be rephased for reservists, and travel expenses should be disregarded. They are bona fide expenses, not income. We hope, too, that jobcentres will be given a clear rule for dealing with reservists who attend camps. That would allow for parity of treatment. It is wrong that claimants should be treated differently according to the part of the country in which they reside.

Reassurances on these matters would enable us to withdraw our probing amendment in the knowledge that the rights of unemployed reservists had been safeguarded as far as lies within our power.

Mr. Soames

For a Jock, the hon. Gentleman bowls a jolly good googly: he is plainly a cricketer. That was rather a low ball at this stage of our proceedings. I shall answer his points as well as I can, and write to him about any on which I cannot give him satisfaction this evening.

I have listened to the hon. Gentleman's points with great interest. Perhaps it would clarify clause 37(3) if I explained the thinking behind it. First, the terminology. The Bill refers to a contract of service—the legal term for what we might more loosely call a contract of employment. The purpose of subsection (3) is to cope with the fact that a contract of service need not specify the hours to be worked in terms of hours per week. An individual may be on a flexible working hours agreement, or may have to work a certain number of hours or days a month rather than hours a week. A contract may even specify work measurement by output, like the old system of piecework. In many cases work could be performed for more than 14 hours a week even though the contract did not stipulate that.

Individuals with such flexible working patterns might find the high-readiness reserve particularly attractive, and we would not want to inhibit them from joining. The reasons why an employer's consent should be obtained are equally valid in those circumstances. We would not want to place an employer whose employees were on a more flexible working pattern at a disadvantage to another employer whose work force worked a set number of hours a week. Regulations under the subsection would require an individual who worked in a flexible employment pattern broadly equivalent to 14 hours a week to obtain his employer's consent in the same way as if his contract specified 14 hours a week or more. That should serve to reassure the employers affected. All I can say is that I hope that they understand it more than I do.

I should like to cite an example that was used in Committee, as the hon. Member for Motherwell, North (Dr. Reid) will remember. It would be inappropriate if a reservist who had a part-time job working behind a bar for a few hours occasionally had to obtain the consent of the publican. That is why clause 28 introduces the concept of qualifying employment. It provides that only employers for whom the reservist works for more than a threshold of 14 hours a week are required to give their consent. That is wholly preferable to requiring a reservist to obtain consent from every employer for whom he may work only casually or intermittently. We chose 14 hours as a good period, equivalent to just under two normal working days of eight hours.

The points that the hon. Member for Motherwell, North made about the jobseeker's allowance are important. As he will understand, there is a close dialogue between Ministers and officials in the Departments for Education and Employment and of Social Security and the MOD on the special arrangements for reservists receiving jobseeker's allowance. That dialogue has focused on the impact of part-time service on eligibility for the allowance. My understanding is that a period of called-out service, during which the reservist would of course receive full service rates of pay, would be treated under the JSA rules in just the same way as any period of full-time employment. A person who had been called out for service could not receive JSA in that period. At the end of his service, his eligibility for JSA would be reassessed on the basis of his national insurance contributions record. The detailed rules are—thank God— too complex to explain here.

It is possible for the benefit week to be adjusted. DSS officers have flexibility to do that. I am grateful to the hon. Member for Motherwell, North for giving me a chance to clarify the matter. Any cases of difficulty should be referred at once to the MOD, and they will be taken up with the DSS. In fact, we have just resolved one such case, and a benefit week has been changed so that a weekend's pay affects only one week's benefit.

I am aware that reservists who are claiming unemployment benefit and/or income support feel aggrieved that their travel expenses from home to their unit are treated as income. That causes particular difficulties for reservists who travel long distances to attend training at their units. My noble Friend the Under-Secretary of State for Defence raised the matter with my hon. Friend the Under-Secretary of State for Social Security, the hon. Member for Monmouth (Mr. Evans), and asked him to review the matter when drawing up detailed regulations for the JSA. I can give a categorical assurance that the power will be used solely to clarify the position where the contract of employment is not specific about hours.

I hope that I have been able to deal with the points raised entirely fairly by the hon. Member for Motherwell, North, and that, in the light of what I have said, he will withdraw his amendment. If there are other points with which he wants me to deal, I would be happy to do so formally by letter.

Dr. Reid

For all the Minister's modesty, he batted— if that is the correct expression, since I am not a cricketer—very well. He dealt with the two main points and gave me assurances on both of them. I take it that that is a result of what he called an extremely close liaison between the Departments for Education and Employment and of Social Security and the Treasury. I am glad to see that that goes on. We in the Labour party make such liaison a practice between our shadow Departments. Such practice has obviously reaped some fruit for the Minister. Given his assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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