Employment Subsidies

HC Deb 17 November 1982 vol 32 cc370-88 10.34 pm

The Minister of State, Department of Employment (Mr. Michael Alison)

I beg to move, That this House authorises the Secretary of State to set up, in accordance with section 1(1) of the Employment Subsidies Act 1978, a Scheme (the expected cost of which will be more than £10 million in the year commencing 3rd January 1983) for making payments to employers who split jobs to give employment to persons who are or who might otherwise become unemployed. This motion authorises the Secretary of State for Employment to set up the job-splitting scheme announced by my right hon. and learned Friend the Chancellor of the Exchequer on 27 July. Further details were announced on 7 October. The Employment Subsidies Act 1978 empowers the Secretary of State to set up schemes to give financial assistance to help employers to retain workers who would, or might otherwise, become unemployed, and to take on new employees. This is the aim of the new scheme.

As the scheme is expected to cost more than £10 million, a short statement explaining the proposal was laid before the House on 3 November as a preliminary to seeking authorisation by this motion. A similar scheme will be run in Northern Ireland.

The Queen's Speech underlined the Government's awareness of the hardship, anxieties and distress caused by unemployment. That awareness is matched by our determination to pursue broad economic policies which will secure the growth in output needed to achieve a lasting reduction in the numbers unemployed. The key lies in a continuing fall in the rate of inflation, and our policies to secure this end are already showing some signs of success. At the same time, however, we remain committed to supporting a range of special employment measures to alleviate unemployment. The job-splitting scheme is another weapon in this armoury. It is not a panacea. It is an experiment full of potential which, if realised, could play a vital part in increasing the job opportunities available to the unemployed.

The idea of job splitting is, of course, not new. For several years now there has been an increasing demand for more flexible working arrangements capable of being tailored to individual circumstances. More recently, several organisations have developed the idea of job sharing as a way of forestalling redundancies or recruiting more unemployed young people. It is this theme that we are now seeking to develop.

The job-splitting scheme is a specific type of work sharing aimed at unemployment, as the Chancellor made clear in announcing the scheme. The basic concept rests on giving employers an incentive to split existing full-time jobs in a way which will give work to someone who would otherwise be unemployed and dependent on benefit. As the Chancellor also made clear, there should be no net cost in terms of total public expenditure, since we have designed the scheme to ensure that no more is paid in grants than is saved on benefits.

Some sceptics may well question the attractiveness of a job-splitting scheme to employers and to those taking part-time jobs. My answer would be to refer them to employers—such as GEC who have pioneered job-sharing schemes—and their employees. Their success and the favourable reaction of organisations such as the CBI which have seriously considered the idea is encouraging.

Mr. Jim Craigen (Glasgow, Maryhill)

What is the conceptual difference between job sharing and job splitting?

Mr. Alison

There is no conceptual difference.

For employers, job splitting offers a number of potential long-term benefits. These include higher productivity, particularly—though not exclusively—in routine work, more flexible use of working time, improved job satisfaction, lower staff turnover and absence, and cover for holidays and sickness. It also offers employers an opportunity to build up a pool of trained labour, some of whom might be available for full-time employment when the company expands.

For full-time employees, the scheme may have other attractions. Not everyone necessarily wants a full-time job and this scheme provides scope to tailor part-time jobs to individual needs. Many people, for example, would like to spend more time with their families, and older workers may welcome a gentler and less abrupt approach to retirement. Of course, part-time work means part-time pay, but for many people the savings in travel-to-work costs and the gain in terms of personal time will more than compensate.

For the unemployed, the scheme would offer part-time jobs in the same way as full-time jobs. Clearly, such jobs will pay less than a full-time job, but for many people will compare very favourably with unemployment or supplementary benefit. They will also offer valuable work experience and training, which could prove of lasting benefit. But for the majority of the unemployed, I am sure I do not have to spell out the most obvious and important advantage of all—that some work, albeit part-time is intrinsically better than no work at all.

The choice for employers and employees, both actual and potential, will be to weigh the advantages in each circumstance. The agreement of all participants will be needed before any grant can be paid. Employers will look at the benefits for their organisation; individuals will need to assess carefully the financial and social implications. Guidance on employment and benefit rights will be given to everyone intending to participate in the scheme, but I emphasise that the scheme itself will not affect any existing arrangements applying to existing part-time work.

We envisage that where an employer recognises a union for the grades concerned in the split it should be normal practice for him to inform the union. At the end of the day, however, we are talking about choice, both for the employer and the person taking the part-time job. Our aim is to enable that freedom of choice to be exercised.

The scheme will be open to employers in both the public and the private sectors, except that special consideration is still being given to the position of the Civil Service. Employers will be offered a flat-rate grant of £750, paid in four instalments, to offset the costs incurred in splitting an existing full-time job into two part-time jobs. The first payment of £300 recognises the initial costs involved in splitting a job. Subsequent payments of £150 will be made at three, six and 12-month intervals. The main extra costs will be in recruitment and training.

Employers, for their part, must undertake to keep the job split for a full year and filled with eligible recruits. Any existing job can be split, provided that it has been filled already by full-time employees for three months. It will be for the employer to decide how a job will be split in particular circumstances within a framework of broad criteria laid down by my Department. Those criteria will be framed so as to allow the employer the maximum flexibility consistent with any overall objective that he may have to ensure that a full-time job is split into two comparable part-time jobs. The split jobs must therefore be comparable in terms of hours and duties with those of the originating full-time job; the pattern of work should be such that it could be done by a single full-time worker; and, to ensure that two reasonably substantial jobs are offered, each part-time job must contain at least 30 hours in any two consecutive weeks.

As for recruitment to the scheme, the aim will be to ensure that at least one unemployed person drawing benefit, or one person who would otherwise be made redundant and in consequence would draw benefit, is provided with an opportunity. The jobs created or vacated can be filled by employees facing redundancy, employees wishing to switch to part-time work, and employed people in receipt of benefit.

Mr. John Golding (Newcastle-under-Lyme)

The Minister says that the jobs can be filled by people facing redundancy. Who demonstrates whether it is a genuine redundancy?

Mr. Alison

It would be up to the employer who is applying for the grant to participate in the scheme.

The scheme will open for applications covering existing full-time jobs split on and after 3 January 1983 but not before that date. Estimates of take-up are tentative at this stage, but we are planning on the basis of 50,000 full-time jobs being split in the year ending 31 December 1983. This should rise to 62,500 by 31 March 1984, when the scheme is at present due to close for applications. The operation of the scheme will, however, be carefully reviewed throughout the next year, and a decision taken in due course about its future.

I commend this scheme to the House as an important experiment which would substantially increase the job opportunities available to the unemployed.

10.43 pm

Mr. Harold Walker (Doncaster)

When the Government took office in May 1979 there were regrettably approximately 1,250,000 people unemployed. Today that figure is 3,300,000. For the Minister to have the gall to talk, as he did, about the hardships, anxieties and despair caused by unemployment when the Government, by their policies, have deliberately made over 2 million people unemployed is—I almost used an unparliamentary word, Mr. Deputy Speaker. If you could tell me a substitute for "hypocrisy", I would use it. It is a bit much for the Government to say that this scheme will mitigate those hardships, anxieties and despair. It is a bit much even from the right hon. Gentleman.

The Minister might have acknowledged, as did the Chancellor of the Exchequer on 27 July, that the scheme had its origin in proposals made by a Select Committee in another place. When the Government responded to its proposals, I thought that some consolation had been offered. That was because the Government had started, it seemed, to listen to someone other than the Friedman association or the Institute of Directors. When the Government somewhat coyly and hesitantly showed their hand, my inclination, despite the absence of consultation—there is no evidence that they consulted anyone—and having been given only a flimsy outline, which is all that we have had tonight, was to give the scheme a fair wind.

Since 27 July I have taken the opportunity more closely to examine the scheme and to discuss it with those engaged in industry. Even the half cheer that I was initially disposed to accord it has now become muted. The more that I have studied the scheme and consulted others, the more I have become convinced that it is a shabby device that is intended to obscure the extent of the growth that is bound to occur in unemployment because of the Government's policies. Furthermore, it will jeopardise the hard-won rights of many thousands of workers.

The Minister said that 50,000 to 65,000 workers will be covered by the scheme. I think that they will find themselves disadvantaged by it, not benefiting from it. The scheme will not and is not designed to create extra employment. The Minister has made that abundantly clear. By cutting the take-home pay of job-splitters, the volume of spending power in the economy is likely to diminish. That will tend further to increase the real level of unemployment. The right hon. Gentleman is shaking his head in disbelief, but he has told the House that one of the conditions of the scheme is that there should be no net additional cost to public spending. It follows that there will be no extra purchasing power in the economy and, as a result, no extra jobs. However, it is even worse than that—

Mr. Alison

That may be true of public expenditure, but what employers pay two part-time workers will be up to them. They may pay more to the two halves than they were paying to the one employee. That may be the position after a year or six months.

Mr. Walker

I repeat what was said sotto voce by some of my right hon. and hon. Friends—"Who are you kidding?"

What I have said so far illustrates that the Minister of State's views are consistent with the reported views of the Secretary of State, who I understand has been participating this week in what the media have described as the consideration of unemployment in the member States by the jumbo Council of EC Ministers. On 16 November The Times reported: In the social affairs meeting Mr. Norman Tebbit, the Employment Minister, said that Britain was showing the way to tackle the unemployment problem". God help the unemployed if the Government and the Secretary of State are showing the way to tackle unemployment. The right hon. Gentleman said that it was doing so with its youth training". For years the engineering industry required an annual intake of 20,000 to 25,000 apprentices. This year it has had an intake of 9,000, and only 7,000 have been taken on by employers. Apparently the Government are showing the way to tackle the unemployment problem with its youth training and job splitting schemes. The Government's answer to unemployment is their youth training proposals and job-splitting schemes. He was much less interested in job creation schemes which had no obvious long-term value.

I hope that the Secretary of State will tell me that that is wrong. If it is not, God help the unemployed. However, assuming that such comments are correctly reported—we have all had experience of maltreatment by the press—I hope that we shall be told more about the thinking underlying the scheme than we have so far had in the flimsy outline of both the published and verbal presentations to the House.

Let me try to be a little more specific about some of the criticisms that have been levelled against the scheme from a variety of sources. It is not only the TUC that draws attention to the fact that people who work for less than 16 hours a week are immediately disqualified from a whole range of statutory employment protections, such as protection from unfair dismissal and the right to redundancy pay. For all the representations that must have been made to him the Minister of State has remained silent on that point.

In the outline laid before the House there is no reference to 15 hours per week. However, in the more formalised publication for the benefit and guidance of employers it is made clear that employers can opt for a job split that will involve the workers in working a 15-hour week. Why did the Secretary of State not mention that in his publication or to the House? It is specifically put into the Department's official notification to employers document, as though it is an open guidance to them.

Mr. Golding

Does my right hon. Friend realise that the Minister tried to mislead the House by referring to 30 hours a fortnight? That was a typical sleight of hand by which he tried to avoid making it clear that they were going to give a miserly 15 hours.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. I ask the hon. Gentleman to rephrase that. He must not accuse the Minister of trying to mislead the House.

Mr. Golding

I certainly withdraw it. The Minister acted according to his normal standards by informing the House that it was 30 hours.

Mr. Walker

If "sleight of hand" is an unparliamentary expression, perhaps I may suggest the substitution of "a sleight of tongue". That is what we have had. It is what we regularly get from the Minister and, more particularly, the Secretary of State.

With regard to the denial of the statutory protections afforded by Parliament to people who work less than 16 hours a day, Mr. Keith Harper, the respected industrial correspondent of The Guardian, referred to a confidential document circulated by the Confederation of British Industry. It being confidential I have not had access to it, but Mr. Harper has. He says that the scheme is a way of reducing the unemployment statistics—not unemployment—by 150,000 people in what will probably be election year.

According to Mr. Harper, the same memorandum goes on to tell the employers who are affiliated to that organisation how to use the scheme to deprive workers of their statutory employment rights. The article, in common with many others on the subject, goes on to point out that far from the Government being prepared to spend money on helping the unemployed, this scheme is actually saving money for the Government, the amount on offer to employers being more than offset by savings in benefit payments that would otherwise be paid.

I apologise for mentioning press reports, but the press seems to have been given much more information about the scheme then Members of Parliament. Perhaps the Minister will comment on the report that appeared in the Financial Times on 1 November. It states that because of a poor response to the scheme so far, the Government want not only to start the scheme in the Civil Service but to do so with a preference for male participants. I understand that the Equal Opportunities Commission has addressed some angry words to the Secretary of State on that general point. Perhaps the Minister will comment. The article then suggests that Government Departments might even be compelled to take part in the scheme. In the document before us, there is no suggestion anywhere that trade unions should be consulted when the relevant employer intends to introduce the scheme in his establishment. We have evidence of yet another retreat from the Government's commitment—if they ever had one—to collective bargaining.

My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has enormous experience and will correct me if I am wrong, but I believe that in the special measures introduced so far there has always been a requirement that the trade unions should be consulted. We are now witnessing a serious departure from that practice. It should be stipulated somewhere in the scheme that before introducing the scheme, employers should consult, and secure the agreement of the recognised trade unions.

Mr. Craigen

Is not my right hon. Friend somewhat concerned that it is not made clear that an employee will be consulted? He may simply be told about his job being split.

Mr. Walker

To be fair to the Minister, he said that the agreement of those employees affected should be sought. However, that is not in the document or in any of the published items. The Minister should not tell us about what should happen in industry. Those in industry are not avid readers of Hansard. They do not pick it up immediately after looking at page three in The Sun or the Daily Star. He should be talking to the employers, employees and trade unions and making it clear that all this should depend on agreement, not only between employers and employees, but with the unions and their representatives.

I confess that I have not consulted the statute, but I think that it says something about an obligation on the Government, when such schemes are introduced, to consult the TUC. I may be wrong, but I do not think that the Government have consulted. If the Minister is nodding his head to say that they have consulted, I accept that.

Mr. Golding

That provision exists because the Opposition at the time asked us to include it. They stressed the importance of taking great care to consult and to take into account the interests of employers and trade unions.

Mr. Walker

My hon. Friend has been heavily involved in such matters and may have a better recollection of them than me. I have spoken for longer than I originally intended. However, I believe and hope that the Minister received a document that I received this morning. It came from an organisation called New Ways to Work, Job Sharing Project. I have mentioned some reservations about the scheme, but that organisation elaborates further. I assume that it is not affiliated to a party. I do not know of any political party that it is identified with. Its title implies that it has some professional knowledge and understanding of the subject. Therefore, we ought to treat its views with respect. It says: Job splitting could leave workers with families worse off than on the dole". Those workers will not be covered by family income supplement or supplementary benefit. The organisation also makes the point that I raised about employment protection. The document continues: Unemployed people could be forced to accept split jobs or risk having their benefit withdrawn for refusing work. That is an important point. Suppose an employer says "Look chaps, we have 50 employees and only 40 jobs. We shall have to split some." If the workers do not agree to job-splitting, might they be considered to have rendered themselves unemployed and, therefore, to have disqualified themselves from entitlement to unemployment benefit? We need an answer to that question.

The document says: Most unemployed married women will not be eligible for split jobs as they are not registered unemployed, although they may genuinely want part time work. I understand that those women will not be eligible anyway. No provision is made for those seeking employment. Another important point made by the organisation is: No provision is made to protect the pensions of people nearing retirement—another group who might voluntarily wish to split jobs. People whose pensions are determined by final year's service are thus effectively excluded. The House needs to know whether that is so. Will participants in the scheme have their pensions prejudiced? Will they be informed of the possible effect on their pensions? If there is to be no adverse effect on pensions, that should be clearly spelt out. The document concludes: The arbitrary nature of the scheme will prejudice employers who might otherwise have instituted voluntary job sharing schemes. The Minister of State referred to GEC and there may be other employers who, with the agreement and support of their work forces, might wish to introduce voluntary job-sharing schemes, tailored to their own circumstances, which might not conform with the Government's proposed scheme.

I have posed a number of questions to which we must have answers. They are important to those who will be affected by the scheme and to hon. Members, who must be satisfied that the scheme makes sense in current industrial and economic circumstances. I hope that I have shown that I regard the scheme as shoddy, ill-thought out and hastily prepared. I shall not ask the Opposition to oppose it, but we shall carefully monitor the application and development of the scheme and we may wish to return to the matter in the light of experience.

11.3 pm

Sir Anthony Meyer (Flint, West)

The right hon. Member for Doncaster (Mr. Walker) is a lovely fellow and we all have the highest opinion of him, but he is not capable of the great imaginative leap. However, he posed legitimate questions and expressed anxieties, many of which I share, which I am sure that my right hon. Friend the Minister of State will go a long way towards easing.

The scheme strikes me as being one of far-reaching significance and I sometimes wonder whther my right hon. Friend the Minister fully understands the implications of what he is proposing. We are moving rapidly towards a society in which it will not be considered sensible for people to spend 40 or 50 hours a week turning wrenches, operating assembly lines or doing other unthinking work. It would be far more sensible for people to spend 20 hours a week on such work, earn a reasonable standard of living and have time off for more worthwhile acitivities. If the earnings that they receive from such part-time work are topped up by the Government, we shall move towards a much more sensible society.

It is a mistake to consider the proposals only in the light of the work and pay to be shared. If people work only a few hours a week normally, they will more readily accept the idea of working those hours at unsocial times. That will provide better utilisation of our capital resources and will open the way towards a society in which people work only 20 or 30 hours a week, but where the factory or plant is operated for more than 100 hours a week. That is a recipe for getting much more from our economy at a lower cost to the work force than any present scheme does.

For those reasons, I welcome what the Government are doing and I hope that they will continue down this path. I recognise the difficulties mentioned by the right hon. Member for Doncaster. They must be resolved, and I await with interest my right hon. Friend's reply.

11.5 pm

Mrs. Shirley Williams (Crosby)

Like the hon. Member for Flint, West (Sir A. Meyer), I approach the Government's proposal with an open mind. I believe, as the right hon. Member for Doncaster (Mr. Walker) implied, that job sharing could contribute to a more flexible and open society. It will meet the needs of some employees who must work more flexible or shorter hours than the normal working week. I welcome the idea of discussing all the ways in which we can try to match the jobs available to those wo are seeking work. I examined the scheme closely and it raised in my mind several questions and doubts that I mention genuinely without trying to grind a party axe.

I am worried, as is the right hon. Member for Doncaster, about the fact that the scheme is clearly directed at the registered unemployed. It is not available to the many married women, as was pointed out in a debate in another place yesterday, who are not registered but who would be especially appropriate people to take part in a job-sharing experiment. The Minister will recognise that previous job-sharing experiments have been mainly in areas such as teaching, where two married women could share one job. However, this scheme is not available to them.

I also considered the poverty trap to which the right hon. Member for Doncaster referred. Perhaps I could give the House a few examples that go some way towards meeting the point raised by the hon. Member for Flint, West in giving the benefit of the doubt to the Government. The average wage is about £165. If one accepts the effects of contributions and tax deductions, the average wage earner who splits his job must earn £91.37 a week in order to make it worthwhile. However, the great majority of employees who are now unemployed earn below the average wage and 3 million people earn less than two-thirds of the average wage. All my remarks refer to male employees. The average wage for women is just below £100 a week, so for women my figure is generous. In order to make job sharing worth while for women, they would need to earn less than they would receive now, if they were the head of the household, from supplementary or unemployment benefit.

Supplementary benefit for an average wage earner with two children aged between 11 and 15, after allowing for rent and rate rebates, is £89 a week. The family man on an average wage would benefit by £2.37 a week on the job-sharing scheme. That is to give the benefit of every possible doubt to the Government. We are taking male workers on an average wage who have a couple of children. However, most workers will be outside that category. They will be earning less than the average wage and will have more dependants. It would be disadvantageous for those people to join the scheme.

We have to assume that the Government have two categories in mind for the scheme—that it is intended largely for single employees and for those who are high wage earners. High-earning single employees do not form a substantial group within our society. The Government are heading straight into the poverty trap in its most acute form. It seems to me—I hope that the Minister will assure us otherwise—that job splitting and accepting half a wage would not be in the interests of millions of workers who are in the greatest need.

I echo the question of the right hon. Member for Doncaster. Is it possible that people who refuse to split jobs, even if it is not to their benefit economically, will be denied unemployment or supplementary benefit? If so, that would be extremely serious. I hope that the Minister will assure the House that that would not be the position.

The second point I want to raise takes a stage further what the right hon. Member for Doncaster said about the elderly. There is no doubt that the idea of job sharing or splitting is an attractive and humane one for many people who are approaching retirement age. Hon. Members feel that it gives scope for creating many more jobs. Many people who are more than 55 or 60 years of age do not want to give up work completely, but they would be interested in taking a reduced-hour week to allow part of that time to be given to somebody who was currently on the dole.

As the CBI pointed out in its study "Work for All", 90 per cent. of occupational pension schemes are based on the final three years' salary. Therefore, anybody who accepted a job split within the last three years of their working life would put their pension at risk. I should have much more respect for the Government if I believed that they had tackled the pension regulations. Without that, their scheme is bound to look fundamentally cosmetic.

I want to consider where job sharing started and where it makes a good deal of sense. It started with GEC and it was directed originally at young workers. The idea was that young workers would spend half their time in a real job—not an invented one—and the other half in training. It was an excellent, imaginative and far-sighted idea that could have gone a long way to meeting the problem of the young person leaving school who wanted a real job, but who was also willing to train.

The trouble is that the scheme is not directed towards those young workers. Those who started the scheme do not come within its scope because anybody who starts a scheme before 3 January 1983 will not be included. Is there any thought in the Government's mind of meeting the training costs of the other half of the week if the scheme is directed towards young workers, or of paying half the present YOP training allowance to those firms willing to split jobs between young workers and make up the balance in training? I am not trying to grind the party axe, because we may be able to do something for youngsters if we allow them to take half a real job and half training, but as I understand it the scheme would not cover that.

The Minister has allowed an overlap of five hours between two part-time jobs. That is reasonable for a job on the assembly line or one that allows a direct split between the jobs. It is not reasonable for people operating a computer or a wage account or for public service jobs such as tax collection. The overlap must be a whole day. Would not a one-day overlap make more sense for such jobs?

The Minister must know that the average cost of two-day-a-week training is a great deal more than £15 a week, where the employer engages in real training. I have made inquiries with local education authorities. Few will provide training for less than £15 a week even for one day, let alone two days. Would the Department consider increasing the allowance if the money is to go for training for the other half of the time?

I repeat the question of the right hon. Member for Doncaster. Can the Minister assure us that where jobs are split on a 15 hour/15 hour basis over two weeks, the Employment Protection Act 1975 provisons will be extended to employees, even though the present regulations lay down a minimum of 16 hours?

Will the Minister also take action about the three-year basis, for pension to avoid the possibility of the scheme falling to the ground for elderly workers? Will there be an allowance for training without which the scheme will fall to the ground for many young workers? Will the Department consider making a payment for supplementary or employment benefit of for family income supplement for workers caught in the poverty trap so that they can benefit from the scheme?

If the Minister can satisfactorily reply to my questions and those of the right hon. Member for Doncaster, I shall welcome the scheme and believe that the Government intend to alleviate the present disastrous unemployment. If he cannot, I shall believe that the scheme is purely cosmetic. Tomorrow the Secretary of State is to brief his right hon. and hon. Friends on the impact on the unemployment statistics of two measures—the decision no longer to count people who cannot register for benefit, and this scheme. The Government can take 200,000 people off the dole by juggling the figures, but can they do that by giving them real jobs, training or an opportunity to retire early? If they can, they deserve our support. If they cannot, the House should condemn the Government for producing a scheme that is not directed to reducing unemployment.

11.18 pm

Mr. John Golding (Newcastle-under-Lyme)

I believe that the measure will come to be known as the "half-a-job scheme". As the Minister said, half a job is better than none, but it is much worse than having a full job, if that is what a person wants.

In a recent Radio Stoke programme a lady asked me whether we would accept two Members of Parliament in each constituency, each doing half the job. The Minister smiles. But that may be the choice facing workers. He would not like half of his job taken from him—although I should like to take it from him! It would be better done. Half his money, status and car would go.

The right hon. Member for Crosby (Mrs. Williams) underlined a serious anxiety. The scheme may become compulsory. There is a place for voluntary half-job schemes not only for the young and the old, but for the disabled. There are many categories of worker for whom a voluntary half-job scheme, with sufficient safeguards, would be beneficial.

We must be careful not to throw the baby out with the bath water that has been dined by the Government's introduction of the scheme. Such a scheme could be beneficial, but what is proposed will not because of the conditions attached to it.

The scheme will not go down well, because many people believe that the Government are using special measures to introduce lower pay. They also believe that the Government are trying to use special measures to undermine employment protection. Workers will react strongly and angrily to any special measure that they regard as a wage-cutting exercise. If that happens, the House and the country will have lost a great deal, because we need special measures to help the unemployed.

The Government are wrong to set out on a wage-cutting policy. They would be right to pursue an increased productivity policy. Britain's salvation lies not in reducing pay, but in increasing productivity so that people can earn high wages. The Government are destroying the morale and attitude of workers in one sector after another by introducing such a scheme as this. I strongly oppose a scheme that workers will regard as compulsory.

I was disturbed to hear the Minister say that the scheme could be introduced and grants given if, on the word of an employer, the need for redundancies was declared. He should reconsider that aspect. Is he really saying that if an employer suddenly declares that a given number of people are to be made redundant, he can inform them that they are to go on to half-jobs and he need only inform the trade unions involved? If so, the Minister is giving employers complete freedom to change the terms and conditions of their employees for the worse.

Is this the best possible subsidy that can be introduced now? I frequently argue for more assistance for the long-term unemployed. More than 1 million people have been unemployed for a year or more. They face intense misery. Their lives have been destroyed. We told the Secretary of State that more ought to be done and that grants should be paid. There should be a benefit to assist the long-term unemployed, but we are told that the country cannot afford it. Apparently we cannot afford a subsidy of £750 to persuade employers to recruit from the long-term unemployed, but we can afford £750 for a half-a-job scheme which will provide jobs for people newly unemployed or about to become unemployed. Has the Minister weighed up the social cost effectiveness of introducing the scheme while continuing to ignore the real burden on hundreds of thousands of long-term unemployed people?

There is a place for job sharing, but this scheme has been badly thought out. It is a gimmick. It is a gesture. I do not believe that it will be successful. Worst of all, it will prejudice the real support that should be given to genuine job-splitting schemes which are needed. especially to provide equal opportunity in employment for women. The scheme will set back the pressure that should exist for job sharing. I am disappointed that it should have been introduced by the Department in this form.

11.26 pm

Mr. Jim Craigen (Glasgow, Maryhill)

I should like to see more opportunities for part-time employment but not at the expense of full-time employment. I agree to a great extent with the hon. Member for Flint, West (Sir A. Meyer) about a shorter working week. That is not, however, the option before the House. The Government, who have put the country on a part-time basis, now seek to make it official. The scheme owes more to the Government's wish to reduce the official unemployment statistics than to the creation of more employment.

Is it necessary to induce employers with £750 to do what, in many instances, is happening anyway? About one worker in five is now in a part-time job. Part-time employment has been growing almost as quickly as full-time employment has been shrinking over the past few years. Do we need to pay employers to split jobs? Nearly 50 per cent. of all part-time workers in the European Community are in the United Kingdom. Ironically, the Brussels directive on non-discrimination over the status and conditions of part-time workers, which I believe is to come into force on 1 January 1984, is effectively pushing Whitehall along the road of employment protection at a time when the Department of Employment seems determined to retreat on the issue.

Will the Minister comment on another potentional European Commission directive giving preference to part-time workers who seek full-time employment within their company? It is suggested that there will be support for giving preference to part-time workers within a company when vacancies arise. About one-fifth of those in part-time employment are near or above retirement age. My right hon. Friend the Member for Doncaster (Mr. Walker) referred to the problem, of pensions and superannuation. This will be a brake on the extent to which the Government's scheme with regard to older workers gets off the ground.

The Minister touched briefly on training, but as I understand it, the order does not state that the £750 is conditional on a training element for part-time workers. Those who have had experience in personnel management know that few part-timers have opportunities for promotion in their companies. Their conditions of service will be altered substantially as a result of these proposals.

The parts of the economy where the order will be most effective are unlikely to be the parts with the most rapid decline in employment. It will not make a significant dent in manufacturing. Most part-time jobs are in the distributive, banking or financial sectors. These industries, which, over the next few years will be the most vulnerable to new technologies, already have reduced in working hours.

The talk of "two jobs for the price of one" ignores the problem of income maintenance. The right hon. Member for Crosby (Mrs. Williams) spoke about average wages. However, the people with the top jobs and salaries will be the least likely to split their jobs. Often they have a second job on the side. Those in below average, low-paid jobs, with large family commitments, will be asked to share their jobs and to give away 50 per cent. of their pay. That is what makes the scheme unacceptable to the majority of the people that we represent. We are effectively asking them to take a reduction in their wage or salary.

I agree with the hon. Member for Flint, West, who was absent when I said that he made the valuable point that we have to move to a shorter working week. However, this order will not bring that about. It will create more confusion and uncertainty over the existing system of social security.

Mention has already been made of the problems that face some disabled people. For example, the Multiple Sclerosis Society has advanced the case for those who can do a part-time job, as long as it is flexible and not too demanding. However, those people may come up against the problem of forfeiting their social security benefits.

The right hon. Member for Crosby spoke about the GEC scheme that was designed for young workers. The Government want to deny social security benefits to young people who spend more than 21 hours a week studying. That is nonsense. The Government are at sixes and sevens about the operation of this policy on part-time employment and its effect on the social security system.

Job splitting—frankly, that is what we are talking about—by the Thatcher Administration is taking over where the three-day week under the Heath Administration left off. I emphasise the point made by my hon. Friends—that the Government should think out the logic of their approach. Otherwise, they will be paying out money for precious little return, when, with a little more imagination, they could create employment by directing the subsidies elsewhere.

11.35 pm

Mr. George Foulkes (South Ayrshire)

The hon. Member for Flint, West (Sir A. Meyer) and the right hon. Member for Crosby (Mrs. Williams) made helpful contributions to the debate. However, they were far too generous, and gave far too much credit to the Minister and the Government. We must all face the relevant and important problems of job sharing and increased leisure time. The right hon. and hon. Member were generous in raising those important issues on what is clearly a shoddy expedient to reduce the unemployment statistics. The right hon. Lady and others dwelt on that matter. It arrogates to the Government far too much importance to enter into a relevant and important discussion on this shoddy measure. The right hon. Lady mentioned the change in the presentation of statistics. It is a deliberate attempt, not to reduce the number of unemployed, but the number of those registered as such and who appear in the statistics.

I listened carefully to the various speeches, and I learnt a great deal. I was not aware of some of the details of the scheme. I tried to imagine what jobs could be shared. When the Minister replies, rather than talking about the regulations, the statistics, the £750, the date of payment and other bureaucratic aspects, will he tell us which industries and jobs are involved? I have nearly 4,000 miners in my constituency. I tried to imagine job sharing for them. The men will go to the mines, change, go to the pit bottom, walk two miles to the pit face, set up the machinery and, when they have done that, it will be time to go back to let the next half go down. It does not make sense. Perhaps one day one group will go down the pit and the next day another group. That would create tremendous problems in the mining industry. I have many farm workers in my constituency who live on the farms. Will they share their farm cottages and jobs on the land? What of the fishermen? When the boat is halfway to the fishing grounds it will have to return to let the next group go half way. They will not catch many fish. The hon. Member for Hertford and Stevenage (Mr. Wells) is an old sparring partner of mine in Committee. I can imagine him saying that my remarks are exaggerations—examples chosen to ridicule the scheme. They may be, but I could mention instance after instance, job after job, and show the difficulties that will be created by the scheme.

What about the lower-paid workers? We recently debated the National Health Service dispute. I saw pay slips for trained people working in hospitals, showing payments of under £60 or even £50 a week. Someone in charge of the stores for five hospitals received only £45 a week take-home pay. How do we split that? Will two people receive only £22.50 a week? The right hon. Member for Crosby, in her excellent analysis, raised that point.

Conservative Members are not talking about stock-brokers sharing their jobs, nor lawyers, nor even doctors. It is appalling tht 1,500 qualified doctors cannot find a job under the Tory Government. They are talking about ordinary working people having to give up some of their income so that they can alter the statistics to make them appear more attractive. I cannot think of any areas where there will be real opportunities.

My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) has already said that where part-time working is possible, it has already been introduced. there is far too much short-time working in many of the manufacturing industries.

Like many of my hon. Friends, I had written down dozens of questions about the scheme. The right hon. Member for Crosby gave the Government far too much benefit of the doubt on the scheme. I am worried about its effect on family income supplement and supplementary benefit. There may also be implications for mortgages. I am worried about its effect on rent and rate rebates, the entitlement to pensions, superannuation and what happens at the end of the year if there are no full-time jobs. Question after question arises.

The right hon. Member for Crosby said that she would not support the Government if those questions remained unanswered but that if the Minister was able to answer the questions—she was being optimistic—she would go ahead and support the Government. If the Minister could have answered the questions, why are those answers not in the document? Why could he not answer them during his introduction? The truth is—we shall hear it in a moment—he cannot answer the questions because it is a botched-up, cobbled-up scheme. It represents an admission of defeat by the Government. They have tried all sorts of schemes and special measures to cover up the unemployment statistics because they cannot, or will not, create jobs.

I believe that they will not create jobs because part of the Government's policy is to use unemployment to put the unions under their thumb. The scheme is an admission of defeat by the Government. The unemployment level is rising. They can do nothing to help to provide real jobs, which is why they want to cover it up.

I should like to have an opportunity to vote against the motion but I realise that we shall not have it. My hon. Friends have expressed their total opposition to the scheme. My right hon. Friend the Member for Doncaster (Mr. Walker) said that we will keep it under review. I am sure that we shall be proved right. It is a shoddy scheme and it will have no future in the employment regime.

11.44 pm

Mr. Derek Foster (Bishop Auckland)

The hon. Member for Flint, West (Sir A. Meyer) said that my right hon. Friend the Member for Doncaster (Mr. Walker) was incapable of taking the imaginative leap that was necessary in considering the scheme. My right hon. Friend is quite right not to take the imaginative leap into the dark that the Government are inviting us to make. If we did that, we would have to have complete faith in the Government. Unfortunately, the Government have forfeited all the faith that the Opposition might have ever considered giving them a few months after May 1979.

The Government tell us how much they regret mass unemployment, how it gives them sleepless nights and how they weep their crocodile tears into their gin and tonics every moment of the day. They tell us ad nauseam how much they are worried about the problem. Unfortunately, they do not ever give us any evidence of their concern. All we have is the wind and water—the symptoms of flatulence—rather than the genuine concern of those who are trying to devise schemes to solve problems.

The scheme before the House shows all the symptoms. The Government have bent over backwards to devise a scheme which will be beneficial to employers and to provide bits of cosmetic which appear to have certain benefits for employees. The benefits to employees are meagre.

The hon. Member for Flint, West excited us with his description of a brave new world where everyone had more leisure time and people flitted from one job to another. Perhaps people will have four or five jobs, doing five hours here and five hours there, 20 hours here and 20 hours there. The hon. Gentleman seemed to be talking about part-time directors collecting £4,000 here and £4,000 there. He fails to explain that the people who will be sharing jobs will not have the money to spend on increased leisure time. It would be a brave new world for people with an abundance of money to take part in exciting activities such as travelling, but for people on low incomes it does not look so inviting.

In my constituency one man in two is out of work. We are not talking about 16 per cent. unemployment, or even 30 per cent. unemployment. In some estates in my constituency, in West Auckland, Campden and Woodhouse close, one man in every two does not have a job. Estates are stricken with despair. There is no hope because the people in work have low paid jobs and lose their jobs more frequently than people in most other jobs. When they lose their jobs, they are unemployed for longer. We are talking about a different world. I wish that some hon. Members would take the trouble to go to the North and experience the deprivation and suffering of our people.

Is it surprising that my right hon. and hon. Friends look upon the measure as a pathetic little response, ingenious as it seems to hon. Members who can contemplate it from lives of ease and luxury?

Sir Anthony Meyer

The hon. Gentleman talks as if I represent an area where there is no unemployment. The hon. Member for Flint, East (Mr. Jones) knows that North Wales has a level of unemployment which is as appalling as anywhere in the United Kingdom. That is why I take part in the debate and welcome any action which will help to bring down that appalling level of unemployment.

Mr. Foster

I withdraw anything that I said which gave the impression that the hon. Gentleman has no knowledge of unemployment. I had the impression that he had no knowledge of employment when I listened to him.

The measure is a pathetic, cosmetic attempt to massage the unemployment statistics, just as voluntary registration is expected to remove about 100,000, perhaps 500,000, people from the unemployment register to make it look as though a serious attempt is being made to address the problem.

The scheme does not deserve our support. I shall be guided by my right hon. and hon. Friends and will not divide against the measure, but many serious questions have been asked by the right hon. Member for Crosby (Mrs. Williams) and my right hon. and hon. Friends which deserve detailed answers. I hope that the Minister will give them.

11.49 pm

Mr. Alison

I shall do my best to satisfy the hon. Member for Bishop Auckland (Mr. Foster).

To set the tone, and in an attempt to reflect the general atmosphere of the debate, I start by reminding the House that there are 4 million part-time jobs in Britain at present. Therefore, part-time work is not necessarily unpopular.

We are not taking a negative or undersirable step in advancing as an experimental scheme with subsidy an opportunity that will enable more people to join the large body of people doing part-time work, and to do so direct from the unemployment register. That is a positive step. Although criticism and doubt were expressed, I detected at least some understanding of the worthwhile nature of that step.

I shall try to answer the queries and anxieties, first, about employee rights, the 15-hour week point, and second, about redundancy. I shall then deal with one or two specific questions about the voluntary basis of the scheme, and so on. I shall answer any further queries if I can, but time is limited.

I start with the anxiety expressed by the right hon. Member for Doncaster (Mr. Walker) that the 15-hour minimum of the scheme may lead to abuse. I disagree. In my view, it is right to give employers the maximum flexibility in working out patterns for part-time work, for example, in dividing the hours unevenly between two part-timers. It is also right to encourage employers to take on new, untried workers from the unemployment register. We shall, of course, monitor carefully what happens. The right hon. Gentleman will know that the minimum number of hours worked, for example, to qualify for family income supplement is 30 hours. Therefore, that is the definition of a full-time job in that context. A full-time job for job release scheme purposes is 30 hours. It is not unreasonable to have as a minimum for a part-time job exactly half of the minimum that is already prescribed in legislation for full-time work.

The hon. Member for Newcastle-under-Lyme (Mr. Golding) thought that I was guilty of unparliamentary practice in referring to the 30 hours in two consecutive weeks. I assure him that I was not trying to trick the House. There is no point in trying to do that with sharp-eyed sheriffs like him on the Opposition Benches, ready to draw a gun and shoot me if I try to be too clever. I mentioned 30 hours in two consecutive weeks because I thought that it might help both employers and employees to allow a pattern of one week on and one week off. That option may be attractive. It would certainly allow workers to work 30 hours in one week, followed by a free week. The hon. Member for Newcastle-under-Lyme had rather a good cachet for the scheme—if I may borrow it from him. He called it a "half-a-job" scheme. That is a good description. In many cases, that is precisely what will happen. The employer will divide the full-time job into half, both jobs with more than 16 hours. So the worries that were expressed about employment protection legislation will not apply. That is the philosophy. We hope that an employer will split the existing number of hours of a job into two. We are prescribing only a minimum. I think that a lot of part-time jobs will score more than the minimum.

Mr. Craigen

If the employer did not, would the Government say "You are not getting your £750"?

Mr. Alison

If the employer did not do what?

Mr. Craigen

Provide more than 16 hours' work.

Mr. Alison

We are merely laying down a minimum. We are not prescribing the alternative or the various mutations or permutations of hours worked which may be suitable in a situation, because only the employer and participants can judge.

I am not sure whether it was the hon. Member for Glasgow, Maryhill (Mr. Craigen) who said that the idea of the scheme was to try to reduce wages.

It has been suggested that the idea behind the scheme is to reduce wage levels. That is not remotely part of the scheme. We want employers and employees who are involved in the scheme to work out what suits them and to implement it by agreement. The idea of a £750 subsidy is to enable an employer to meet all the extra costs that are involved in job splitting and retraining—there may, for example, be extra clerical work—without having to say to those involved "As it is costing us something to split the job, you will have to take a little less pay". We are providing a subsidy to offset that response. It is not the scheme's aim unnaturally to force down wage levels. It is up to employers and those who voluntarily enter the scheme to arrive at an arrangement that suits them best by means of collective bargaining.

A leaflet is being prepared that is designed to draw the attention of all likely participants in the scheme to the potential effect on their legislative rights if they find themselves being offered 15 hours a week only. They will need to sign a declaration that they are accepting a part-time job and acknowledge reciept of the leaflet that will warn them accordingly. They will definitely have the opportuity of seeing what the hazards are.

Mr. Harold Walker

rose—

Mr. Alison

I hope that the right hon. Gentleman will not interrupt me. My time is running very short and I must try to do justice to the various issues that have been raised.

The hon. Member for Newcastle-under-Lyme interrupted my opening speech with a question on redundancy. We shall accept as eligible workers in the same firm who are under formal notice of redundancy. The employer will have to be prepared to provide appropriate evidence on request.

The right hon. Member for Doncaster asked whether a refusal of an offer of a split job and subsequent redundancy would render the individual who had been made redundant subject to a loss of benefit. It is not our intention that individuals should lose benefit in such a way in any circumstances. That is not the idea of the scheme and we are not trying to open up a trap for the unsuspecting. The intention is to provide an alternative to redundancy. If the right hon. Gentleman feels that I have not picked up all that he raised on this issue, I shall write to him.

It is our intention that participation in the scheme should be voluntary. It is not our intention to launch a campaign of sanctions against those who refuse a part-time job under the scheme. The normal availability arrangements will be taken into account under the scheme. It is not thought that someone who is unsuitable for a part-time vacancy will be put forward. Consideration of suitability would include the claimant's wishes and a comparison of his income in and out of work if he raises the issue himself. I hope that those remarks will reassure the right hon. Member for Crosby (Mrs. Williams) about the scheme's genuine voluntariness. No pressure will be brought to bear on individuals.

It is true that the scheme is directed at the registered unemployed. I concede that it is no interest to those who are not registered. This is an acknowledged limitation. The aim of the scheme is to break even financially, and I make no apology for that. This means that more Government money will be available to be spent on other schemes. The right hon. Member for Crosby cited several individual cases and their relative position in the light of the likely hours that a person might be offered, the relevant rates and the likely entitlement to supplementary or unemployment benefit.

The essential point that the right hon. Lady noted correctly is that the scheme will be most attractive to the single unemployed person on the register. As 60 per cent. of the long-term unemployed are single, it is particularly relevant to such people, who are the most vulnerable and who should be offered the biggest and most immediate opportunity for taking work.

To select a case at random, a single non-householder who works for three days a week—or the equivalent number of hours spread over two weeks—and who takes home £45, will be £15 a week better off than if he were drawing supplementary benefit. Therefore, the scheme has some attraction to the single unemployed non-householder, the most vulnerable group among the long-term unemployed.

There is no doubt, and we make no apology in acknowledging it, that an unemployed person who takes a part-time job under the scheme is unlikely to continue to receive any unemployment or supplementary benefit in general. However, it is difficult to be certain that one has covered every case. Broadly, the earnings of participants in the scheme will be too high for them to get unemployment benefit on days when they are working. They will not normally be eligible for benefit on the days when they are not working because of the rules about availability and about a person not being able to obtain benefit in any week when the normal amount of work is done.

It is likely that most participants will not be eligible for supplementary benefit because they will be earning more than their supplementary benefit requirements level. Those participants with income less than their requirements level will be eligible for supplementary benefit only if, again, they satisfy the rules about availability for full-time work.

As we know, the decision on a specific participant's entitlement to unemployment or supplementary benefit is always a matter for the independent adjudicating authorities and I should not like to say specifically what will happen in any one case.

The right hon. Member for Doncaster also mentioned pension rights. Again, it is difficult to be specific, because it depends to some extent on how many hours an individual is working whether he comes within the limit of £29.50 a week which means that he pays no contributions under the national insurance scheme. It depends entirely upon the individual's position. It would be rash for me to generalise on employers' occupational pension schemes. However, we shall be advising—

It being one and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker put the Question, pursuant to Standing Order No. 3 (Exempted business).

Question agreed to.

Resolved, That this House authorises the Secretary of State to set up, in accordance with section 1(1) of the Employment Subsidies Act 1978, a Scheme (the expected cost of which will be more than £10 million in the year commencing 3rd January 1983) for making payments to employers who split jobs to give employment to persons who are or who might otherwise become unemployed.